SHARE PURCHASE AGREEMENT
--------------------------
THIS AGREEMENT is made as of the 4th day of October, 2002.
AMONG:
THE UNDERSIGNED SHAREHOLDERS OF
TRANSWORLD BENEFITS INC.
(hereinafter called the "Vendors")
OF THE FIRST PART
AND:
THINKA WEIGHT LOSS CORPORATION, of
------------------------------
0000 Xxxxx-XxXxxx, Xxxxx 0000
Xxx Xxxxx, Xxxxxx 00000
(hereinafter called the "Purchaser")
OF THE SECOND PART
AND:
TRANSWORLD BENEFITS INC. of
-----------------------
00000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
(hereinafter called the "Company")
OF THE THIRD PART
WHEREAS:
A. The Purchaser has offered to purchase all of the issued and
outstanding shares of the Company;
B. The Vendors have each severally agreed to sell to the Purchaser all
of the issued and outstanding shares of the Company held by each such Vendor on
the terms and conditions set forth herein;
C. The parties intend that the Purchaser's acquisition of the Company
from the Vendors qualify as a tax-free reorganization within the meaning of
Section 368 of the Internal Revenue Code of 1986, as amended, and shall modify
the transaction contemplated herein as may be necessary to
1
conform to the requirements of Section 368, provided such modifications are
consistent with the basis of the bargain of this Agreement.
D. In order to record the terms and conditions of the agreement among
them the parties wish to enter into this agreement;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the foregoing
and of the sum of $1.00 paid by the Purchaser to each of the Vendors and to the
Company, the receipt of which is hereby acknowledged, the parties hereto agree
each with the other as follows:
1. INTERPRETATION
--------------
1.1 Where used herein or in any amendments or Schedules hereto, the
following terms shall have the following meanings:
(a) "Business" means the business in which the Company is engaged, namely:
(i) the sale of contracts for emergency assistance for travellers on
worldwide basis;
(ii) any other enterprise that is directly related to the foregoing;
(b) "Closing Date" means that business day on which the Purchaser completes
that private or public financing referred to in Article 5 or such other
date as may be mutually agreed upon by the parties hereto but in any event
not more than 90 days from the date of this agreement;
(c) "Company Financial Statements" means those financial statements of the
Company as at April 30, 2002, and those financial statements of the Company
prepared by management as at August 31, 2002, both of which are attached
hereto as Schedule "A";
(d) "Company Shares" means the 5,600,000 common shares in the capital of the
Company held by the Vendors, being all of the issued and outstanding shares
of the Company;
(e) "Purchaser Financial Statements" means those draft unaudited financial
statements of the Purchaser as at June 30, 2002 attached hereto as Schedule
"B";
(f) "Purchaser Shares" means those fully paid and non-assessable
post-consolidated common shares of the Purchaser to be issued to the
Vendors by the Purchaser pursuant to this agreement.
1.2 All dollar amounts referred to in this agreement are in United
States funds, unless expressly stated otherwise.
2
1.3 The following schedules are attached to and form part of this
agreement:
Schedule A - Company Financial Statements
Schedule B - Purchaser Financial Statements
Schedule C - Employment, Service & Pension Agreements of the Company
Schedule D - Real Property & Leases of the Company
Schedule E - Encumbrances on the Company's Assets
Schedule F - Company Litigation
Schedule G - Purchaser Litigation
Schedule H - Registered Trademarks, Trade Names & Patents of the
Company
2. SHARE EXCHANGE AND PURCHASE OF SHARES
------------------------------------------
2.1 The Vendors each hereby covenant and agree to sell, assign and
transfer to the Purchaser, and the Purchaser covenants and agrees to purchase
from each of the Vendors the Company Shares held by each Vendor.
2.2 As consideration for the sale of the Company Shares, the Purchaser
shall allot and issue to the Vendors the Purchaser Shares.
2.3 The total number of Purchaser Shares to be allotted and issued to
the Vendors shall be 4,500,000 shares.
2.4 The Purchaser Shares shall be allotted and issued to the Vendors in
the following proportions:
--------------------------------------------------------------
Approximate
Percentage of
Total Number of Purchaser
Vendor Purchaser Shares Shares
--------------------------------------------------------------
Flax-Flex Fabricators, Ltd. 4,467,000 99.3
--------------------------------------------------------------
Xxx Xxxxxxxxx 33,000 0.7
--------------------------------------------------------------
3
3. COVENANTS, REPRESENTATIONS AND WARRANTIES
OF THE VENDORS AND THE COMPANY
-----------------------------------
The Vendors and the Company jointly and severally covenant with and
represent and warrant to the Purchaser as follows, and acknowledge that the
Purchaser is relying upon such covenants, representations and warranties in
connection with the purchase by the Purchaser of the Company Shares:
3.1 The Company has been duly incorporated and organized, is validly
existing and is in good standing under the laws of Nevada; it has the corporate
power to own or lease its property and to carry on the Business; it is duly
qualified as a corporation to do business and is in good standing with respect
thereto in each jurisdiction in which the nature of the Business or the property
owned or leased by it makes such qualification necessary; and it has all
necessary licenses, permits, authorizations and consents to operate its Business
in accordance with the terms of its business plan.
3.2 The authorized capital of the Company consists of 10,000,000
shares, of which 5,600,000 of such shares have been duly issued and are
outstanding as fully paid and non-assessable.
3.3 The Company Shares owned by the Vendors are owned by them as the
beneficial and recorded owners with a good and marketable title thereto, free
and clear of all mortgages, liens, charges, security interests, adverse claims,
pledges, encumbrances and demands whatsoever as follows:
Number of Approximate
Company Percentage of Issued
Name of Principal Shareholder Shares Company Shares
--------------------------------------------------------------------------
Flax-Flex Fabricators, Ltd. 5,560,000 99.3
Xxx Xxxxxxxxx 40,000 0.7
3.4 No person, firm or corporation has any agreement or option or any
right or privilege (whether by law, pre-emptive or contractual) capable of
becoming an agreement or option for the purchase from the Vendors of any of the
Company Shares held by any of them.
3.5 No person, firm or corporation has any agreement or option,
including convertible securities, warrants or convertible obligations of any
nature, or any right or privilege (whether by law, pre-emptive or contractual)
capable of becoming an agreement or option for the purchase, subscription,
allotment or issuance of any of the unissued shares in the capital of the
Company or of any securities of the Company.
3.6 The Company does not have any subsidiaries or agreements of any
nature to acquire any subsidiary or to acquire or lease any other business
operations and will not prior to the Closing Date acquire, or agree to acquire,
any subsidiary or business without the prior written consent of the Purchaser.
4
3.7 The Company will not, without the prior written consent of the
Purchaser, issue any additional shares from and after the date hereof to the
Closing Date or create any options, warrants or rights for any person to
subscribe for or acquire any unissued shares in the capital of the Company.
3.8 The Company is not a party to or bound by any guarantee, warranty,
indemnification, assumption or endorsement or any other like commitment of the
obligations, liabilities (contingent or otherwise) or indebtedness of any other
person, firm or corporation.
3.9 The books and records of the Company fairly and correctly set out
and disclose in all material respects, in accordance with generally accepted
accounting principles, the financial position of the Company as at the date
hereof, and all material financial transactions of the Company relating to the
Business have been accurately recorded in such books and records.
3.10 The Company Financial Statements present fairly the assets,
liabilities (whether accrued, absolute, contingent or otherwise) and the
financial condition of the Company as at the date thereof and there will not be,
prior to the Closing Date, any increase in such liabilities.
3.11
(a) The entering into of this agreement and the consummation of the
transactions contemplated hereby will not result in the violation of any of
the terms and provisions of the constating documents or bylaws of the
Company or of any indenture, instrument or agreement, written or oral, to
which the Company or the Vendors may be a party;
(b) The entering into of this agreement and the consummation of the
transactions contemplated hereby will not, to the best of the knowledge of
the Company and the Vendors, result in the violation of any law or
regulation of Nevada or of any states in which they are resident or in
which the Business is or at the Closing Date will be carried on or of any
municipal bylaw or ordinance to which the Company or the Business may be
subject;
(c) This agreement has been duly authorized, validly executed and delivered by
the Company and the Vendors.
3.12 The Business has been carried on in the ordinary and normal course
by the Company since the date of the Company Financial Statements and will be
carried on by the Company in the ordinary and normal course after the date
hereof and up to the Closing Date.
3.13 Except in connection with the real property leases described on
Schedule D hereto, no capital expenditures in excess of $5,000 have been made or
authorized by the Company since the date of the Company Financial Statements and
no capital expenditures in excess of $5,000 will be made or authorized by the
Company after the date hereof and up to the Closing Date without the prior
written consent of the Purchaser.
5
3.14 Except as disclosed in the Schedules hereto, the Company is not a
party to any written or oral employment, service or pension agreement, and, the
Company does not have any employees who cannot be dismissed on not more than one
months notice without further liability.
3.15 Except as disclosed in the Schedules hereto, the Company does not
have outstanding any bonds, debentures, mortgages, notes or other indebtedness,
and the Company is not under any agreement to create or issue any bonds,
debentures, mortgages, notes or other indebtedness, except liabilities incurred
in the ordinary course of business.
3.16 Except as disclosed in the Schedules hereto, the Company is not
the owner, lessee or under any agreement to own or lease any real property.
3.17 Except as disclosed in the Schedules hereto, the Company owns,
possesses and has good and marketable title to its undertaking, property and
assets, and without restricting the generality of the foregoing, all those
assets described in the balance sheet included in the Company Financial
Statements, free and clear of any and all mortgages, liens, pledges, charges,
security interests, encumbrances, actions, claims or demands of any nature
whatsoever or howsoever arising.
3.18 The Company has its property insured against loss or damage by all
insurable hazards or risks on a replacement cost basis and such insurance
coverage will be continued in full force and effect to and including the Closing
Date; to the best of the knowledge of the Company and the Vendors, the Company
is not in default with respect to any of the provisions contained in any such
insurance policy and has not failed to give any notice or present any claim
under any such insurance policy in due and timely fashion.
3.19 Except as disclosed herein the Company does not have any
outstanding material agreements (including employment agreements) contracts or
commitment, whether written or oral, of any nature or kind whatsoever, except:
(a) agreements, contracts and commitments in the ordinary course of business;
(b) service contracts on office equipment;
(c) the employment, services and pension agreements described in the Schedules
hereto; and
(d) the lease described in the Schedules hereto.
3.20 Except as provided in the Schedules hereto, there are no actions,
suits or proceedings (whether or not purportedly on behalf of the Company),
pending or threatened against or affecting the Company or affecting the
Business, at law or in equity, or before or by any federal, state, municipal or
other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign and neither the Company nor the Vendors are
aware of any existing ground on which any such action, suit or proceeding might
be commenced with any reasonable likelihood of success.
6
3.21 The Company is not in material default or breach of any contracts,
agreements, written or oral, indentures or other instruments to which it is a
party and there exists no state of facts which after notice or lapse of time or
both which would constitute such a default or breach, and all such contracts,
agreements, indentures or other instruments are now in good standing and the
Company is entitled to all benefits thereunder.
3.22 The Company has the right to use all of the registered trade marks
and trade names, both domestic and foreign, in relation to the Business as set
out in the Schedules hereto.
3.23 To the best of the knowledge of the Company and the Vendors, the
conduct of the Business does not infringe upon the patents, trade marks, trade
names or copyrights, domestic or foreign, of any other person, firm or
corporation.
3.24 To the best of the knowledge of the Company and the Vendors, the
Company is conducting and will conduct the Business in compliance with all
applicable laws, rules and regulations of each jurisdiction in which the
Business is or will be carried on, the Company is not in material breach of any
such laws, rules or regulations and is or will be on the Closing Date fully
licensed, registered or qualified in each jurisdiction in which the Company owns
or leases property or carries on or proposes to carry on the Business to enable
the Business to be carried on as now conducted and its property and assets to be
owned, leased and operated, and all such licenses, registrations and
qualifications are or will be on the Closing Date valid and subsisting and in
good standing and that none of the same contains or will contain any provision,
condition or limitation which has or may have a materially adverse effect on the
operation of the Business.
3.25 All facilities and equipment owned or used by the Company in
connection with the Business are in good operating condition and are in a state
of good repair and maintenance.
3.26 Except as disclosed in the Company Financial Statements and
salaries incurred in the ordinary course of business since the date thereof, the
Company has no loans or indebtedness outstanding which have been made to or from
directors, former directors, officers, shareholders and employees of the Company
or to any person or corporation not dealing at arm's length with any of the
foregoing, and will not, prior to closing, pay any such indebtedness unless in
accordance with budgets agreed in writing by the Purchaser.
3.27 The Company has made full disclosure to the Purchaser of all
aspects of the Business and has made all of its books and records available to
the representatives of the Purchaser in order to assist the Purchaser in the
performance of its due diligence searches and no material facts in relation to
the Business have been concealed by the Company or the Vendors.
3.28 There are no material liabilities of the Company of any kind
whatsoever, whether or not accrued and whether or not determined or
determinable, in respect of which the Company or the Purchaser may become liable
on or after the consummation of the transaction contemplated by this agreement,
other than liabilities which may be reflected on the Company Financial
Statements, liabilities disclosed or referred to in this agreement or in the
Schedules attached hereto, or liabilities incurred in the ordinary course of
business and attributable to the period since the date of the Company Financial
Statements, none of which has been materially adverse to the nature of the
Business, results of operations, assets, financial condition or manner of
conducting the Business.
7
3.29 The Articles, bylaws and other constating documents of the Company
in effect with the appropriate corporate authorities as at the date of this
agreement will remain in full force and effect without any changes thereto as at
the Closing Date.
3.30 The directors and officers of the Company are as follows:
Name Position
---- --------
Xxxxxxx Seven CEO, Chairman & Director
Xxxxx Xxxxxx President & Director
Xxx Xxxxxxxxx Vice President & Director
Xxxxxx Xxxxx Operations Officer
Xxxxx Xxxxxx Secretary & Director
4. COVENANTS, REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
----------------------------------------------------------------
The Purchaser covenants with and represents and warrants to the Vendors and
the Company as follows and acknowledges that the Vendors are relying upon such
covenants, representations and warranties in entering into this agreement:
4.1 The Purchaser has been duly incorporated and organized and is
validly subsisting under the laws of the State of Nevada; it is a reporting
issuer under the United States Securities Exchange Act of 1934 and is in good
---------------------------------------------
standing with respect to all filings required to be made under such statutes
with the United States Securities and Exchange Commission; it has the corporate
power to own or lease its properties and to carry on its business as now being
conducted by it; and it is duly qualified as a corporation to do business and is
in good standing with respect thereto in each jurisdiction in which the nature
of its business or the property owned or leased by it makes such qualification
necessary.
4.2 The authorized capital of the Purchaser consists of 100,000,000
common shares, par value $0.001 per share, of which 14,534,600 shares are
currently issued and outstanding as fully paid and non-assessable.
4.3 No person, firm or corporation has any agreement or option, including
convertible securities, warrants or convertible obligations of any nature, or
any right or privilege (whether by law, pre-emptive or contractual) capable of
becoming an agreement or option for the purchase, subscription, allotment or
issuance of any of the unissued shares in the capital of the Purchaser.
4.4 The Purchaser will not, without the prior written consent of the
Vendors, issue any additional shares from and after the date hereof to the
Closing Date or create any options, warrants or rights for any person to
subscribe for any unissued shares in the capital of the Purchaser, except for
any shares to be issued to complete the financing described in Article 5.
4.5 The directors and officers of the Purchaser are as follows:
8
Name Position
---- --------
Xxxxxx Xxxxxxxx President & Director
Xxxxx Xxxxxxxx Chairman of the Board & Director
Xxxxx Xxxxx Secretary, Treasurer & Director
Xxxxxx Xxxx Director
4.6 The Purchaser Audited Financial Statements present fairly the
assets, liabilities (whether accrued, absolute, contingent or otherwise) and the
financial condition of the Purchaser as at the date thereof and there will not
be, prior to the Closing Date, any material increase in such liabilities.
4.7 There have been no material adverse changes in the financial
position or condition of the Purchaser or damage, loss or destruction materially
affecting the business or property of the Purchaser since the date of the
Purchaser Audited Financial Statements except as disclosed in the Company's Form
8K filed with the United States Securities and Exchange Commission on August 23,
2002.
4.8 The Purchaser has made full disclosure to the Company of all
material aspects of the Purchaser's business and has made all of its books and
records available to the representatives of the Company in order to assist the
Company in the performance of its due diligence searches and no material facts
in relation to the Purchaser's business have been concealed by the Purchaser.
4.9 The Purchaser is not a party to or bound by any agreement or
guarantee, warranty, indemnification, assumption or endorsement or any other
like commitment of the obligations, liabilities (contingent or otherwise) or
indebtedness or any other person, firm or corporation.
4.10 Except as disclosed in the Schedules attached hereto, there are no
actions, suits or proceedings (whether or not purportedly on behalf of the
Purchaser), pending or threatened against or affecting the Purchaser or
affecting the Purchaser's business, at law or in equity, or before or by any
federal, state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign and the Purchaser is not
aware of any existing ground on which any such action, suit or proceeding might
be commenced with any reasonable likelihood of success.
4.11 The Purchaser's common shares are quoted on the NASD OTC Bulletin
Board and the Purchaser is not in breach of any regulation, by-law or policy of,
or any of the terms and conditions of its quotation on the NASD OTC Bulletin
Board applicable to the Purchaser or its operations.
4.12 The Purchaser does not currently have any employees and is not
party to any collective agreements with any labour unions or other association
of employees.
4.13 The Purchaser does not have any subsidiaries or agreements of any
nature to acquire any subsidiary or to acquire or lease any other business
operations and will not prior to the Closing Date acquire, or agree to acquire,
any subsidiary or business without the prior written consent of the Company.
9
4.14 The business of the Purchaser now and until the Closing Date will
be carried on in the ordinary and normal course after the date hereof and upon
to the Closing Date and no material transactions shall be entered into until the
Closing Date without the prior written consent of the Vendors.
4.15 No liability, cost or expense will be incurred or payable by the
Purchaser in connection with the disposition of any of its properties.
4.16 No capital expenditures in excess of $5,000 have been made or
authorized by the Purchaser since the date of the Purchaser Audited Financial
Statements and no capital expenditures in excess of $5,000 will be made or
authorized by the Purchaser after the date hereof and up to the Closing Date
without the prior written consent of the Vendors.
4.17 The Purchaser is not indebted to any of its directors or officers
nor are any of the Purchaser's directors or officers indebted to the Purchaser.
4.18 The Purchaser has good and marketable title to its properties and
assets as set out in the Purchaser Audited Financial Statements and such
properties and assets are not subject to any mortgages, pledges, liens, charges,
security interests, encumbrances, actions, claims or demands of any nature
whatsoever or howsoever arising.
4.19 The Corporate Charter, Articles of Incorporation and Bylaws and
any other constating documents of the Purchaser in effect with the appropriate
corporate authorities as at the date of this agreement will not have been
materially changed as at the Closing Date other than to effect any changes set
out in Article 5.
4.20 There are no material liabilities of the Purchaser of any kind
whatsoever, whether or not accrued and whether or not determined or
determinable, in respect of which the Purchaser or the Company may become liable
on or after the consummation of the transaction contemplated by this agreement,
other than liabilities which may be reflected on the Purchaser Audited Financial
Statements, liabilities disclosed or referred to in this agreement or in the
Schedules attached hereto, or liabilities incurred in the ordinary course or
business and attributable to the period since the date of the Purchaser Audited
Financial Statements, none of which has been materially adverse to the nature of
the Purchaser's business, results of operations, assets, financial condition or
manner of conducting the Purchaser's business.
4.21 (a) The entering into of this agreement and the consummation of the
transactions contemplated hereby will not result in the violation of
any of the terms and provisions of the constating documents or bylaws
of the Purchaser or of any indenture, instrument or agreement, written
or oral, to which the Purchaser may be a party;
(b) The entering into of this agreement and the consummation of the
transactions contemplated hereby will not, to the best of the
knowledge of the Purchaser, result in the violation of any law or
regulation of the United States or of Nevada or of any local
government bylaw or ordinance to which the Purchaser or the
Purchaser's business may be subject;
10
(c) This agreement has been duly authorized, validly executed and
delivered by the Purchaser.
4.22 The Purchaser has no contracts with any officers, directors,
accountants, lawyers or others which cannot be terminated with not more than one
month's notice.
4.23 No agreement has been made with Purchaser in respect of the
purchase and sale contemplated by this Agreement that could give rise to any
valid claim by any person against the Company or any Vendor for a finder's fee,
brokerage commission or similar payment.
5. ACTS IN CONTEMPLATION OF CLOSING
------------------------------------
The Purchaser and the Company covenant and agree with each other and the
Vendors to do or cause to be done the following prior to or on the Closing Date:
5.1 The Purchaser will:
(a) call an extraordinary general meeting of its shareholders to seek
approval to the change of the name of the Purchaser to "Transworld
Benefits, Inc." or such other name as is approved by the directors and
the Vendors;
(b) complete a debt or equity financing to raise net proceeds of not less
than $500,000 US.
(c) cause the Purchaser Financial Statements to be audited.
5.2 The Company will cause the Company Financial Statements to be reviewed
and commented upon or audited as may required by Item 310 of SEC Regulation SB
in order to permit the Purchaser to make the SEC filings required in respect of
the purchase and sale of the shares of the Company in accordance with this
Agreement.
6. CONDITIONS OF CLOSING
-----------------------
6.1 All obligations of the Purchaser under this agreement are subject
to the fulfilment, at or prior to the Closing Date, of the following conditions:
(a) Except as affected by the completion of the acts set out in Article 5, the
respective representations and warranties of the Vendors and the Company
contained in this agreement or in any Schedule hereto or certificate or
other document delivered to the Purchaser pursuant hereto shall be
substantially true and correct as of the date hereof and as of the Closing
Date with the same force and effect as though such representations and
warranties had been made on and as of such date, regardless of the date as
of which the information in this agreement or any such Schedule or
certificate is given, and the Purchaser shall have received on the Closing
Date certificates dated as of the Closing Date, in forms satisfactory to
counsel for the Purchaser and signed under seal by the respective Vendors
and by two senior officers
11
of the Company to the effect that their respective representations and
warranties referred to above are true and correct on and as of the Closing
Date with the same force and effect as though made on and as of such date,
provided that the acceptance of such certificates and the closing of the
transaction herein provided for shall not be a waiver of the respective
representations and warranties contained in Articles 3 and 4 or in any
Schedule hereto or in any certificate or document given pursuant to this
agreement which covenants, representations and warranties shall continue in
full force and effect for the benefit of the Purchaser;
(b) the Company shall have caused to be delivered to the Purchaser either a
certificate of an officer of the Company or, at the Purchaser's election,
an opinion of legal counsel acceptable to the Purchaser's legal counsel, in
either case, in form and substance satisfactory to the Purchaser, dated as
of the Closing Date, to the effect that:
(i) the Company owns, possesses and has good and marketable title to its
undertaking, property and assets, and without restricting the
generality of the foregoing, those assets described in the balance
sheet included in the Company Financial Statements, free and clear of
any and all mortgages, liens, pledges, charges, security interests,
encumbrances, actions, claims or demands of any nature whatsoever and
howsoever arising;
(ii) the Company has been duly incorporated, organized and is validly
existing under the laws of Nevada, it has the corporate power to own
or lease its properties and to carry on its business that is now being
conducted by it and is in good standing with respect to filings with
the appropriate governmental authorities;
(iii) the issued and authorized capital of the Company is as set out in
this agreement and all of the issued and outstanding shares have been
validly issued as fully paid and non-assessable;
(iv) all necessary approvals and all necessary steps and corporate
proceedings have been obtained or taken to permit the Company Shares
to be duly and validly transferred to and registered in the name of
the Purchaser; and
(v) the consummation of the purchase and sale contemplated by this
agreement, and specifically the transfer of the Company Shares to the
Purchaser, will not be in breach of any laws of Nevada, and, in
particular but without limiting the generality of the foregoing, the
execution and delivery of this agreement by the Vendors and the
Company has not breached and the consummation of the purchase and sale
contemplated hereby will not be in breach of any laws of Nevada or of
any state in which a Vendor is resident or the Company carries on
business;
and, without limiting the generality of the foregoing, that all corporate
proceedings of the Company, its shareholders and directors and all other
matters which, in the reasonable opinion of counsel for the Purchaser, are
material in connection with the
12
transaction of purchase and sale contemplated by this agreement, have been
taken or are otherwise favourable to the completion of such transaction.
(c) At the Closing Date there shall have been no materially adverse change in
the affairs, assets, liabilities, or financial condition of the Company or
the Business (financial or otherwise) from that shown on or reflected in
the Company Financial Statements.
(d) No substantial damage by fire or other hazard to the Business shall have
occurred prior to the Closing Date.
(e) The Company shall have completed or be able to complete on the Closing Date
those acts required to have been done in contemplation of closing as set
out in Article 5.
6.3 In the event any of the foregoing conditions contained in paragraph
6.2 hereof are not fulfilled or performed at or before the Closing Date to the
reasonable satisfaction of the Purchaser, the Purchaser may terminate this
agreement by written notice to the Vendors and in such event the Purchaser shall
be released from all further obligations hereunder but any of such conditions
may be waived in writing in whole or in part by the Purchaser without prejudice
to its rights of termination in the event of the non-fulfilment of any other
conditions or conditions.
6.4 All obligations of the Vendors under this agreement are subject to
the fulfilment, at or prior to the Closing Date, of the following conditions:
(a) The representations and warranties of the Purchaser contained in this
agreement or in any Schedule hereto or certificate or other document
delivered to the Company and the Vendors pursuant hereto shall be
substantially true and correct as of the date hereof and as of the Closing
Date with the same force and effect as though such representations and
warranties had been made on and as of such date, regardless of the date as
of which the information in this agreement or any such Schedule or
certificate is given, and the Vendors shall have received on the Closing
Date a certificate dated as of the Closing Date, in form satisfactory to
the Vendors and signed under seal by two senior officers of the Purchaser,
to the effect that such representations and warranties referred to above
are true and correct on and as of the Closing Date with the same force and
effect as though made on and as of such date, provided that the acceptance
of such certificate and the closing of the transaction herein provided for
shall not be a waiver of the representations and warranties contained in
Article 4 or in any Schedule hereto or in any certificate or document given
pursuant to this agreement which covenants, representations and warranties
shall continue in full force and effect for the benefit of the Vendors.
(b) The Purchaser shall have caused to be delivered to the Vendors either a
certificate of an officer of the Purchaser or, at the Vendor's election, an
opinion of legal counsel acceptable to counsel to the Vendors, in either
case, in form and substance satisfactory to the Vendors, dated as of the
Closing Date, to the effect that:
(i) the Purchaser has been duly incorporated and organized and is validly
subsisting under the laws of Nevada, it has the corporate power to own
or
13
lease its properties and to carry on its business that is now being
conducted by it and is in good standing with respect to all filings
with the appropriate corporate authorities in Nevada and with respect
to all annual and quarterly filings with the United States Securities
and Exchange Commission;
(ii) the issued and authorized capital of the Purchaser is as set out in
this agreement and all issued shares have been validly issued as fully
paid and non-assessable;
(iii) all necessary approvals and all necessary steps and corporate
proceedings have been obtained or taken to permit the Purchaser Shares
to be duly and validly allotted and issued to and registered in the
name of the Vendors;
(iv) the consummation of the purchase and sale contemplated by this
agreement, and specifically the issuance and delivery of the Purchaser
Shares to the Vendors in consideration of the purchase of the Company
Shares, will not be in breach of any laws of Nevada and, in particular
but without limiting the generality of the foregoing, the execution
and delivery of this agreement by the Purchaser has not breached and
the consummation of the purchase and sale contemplated hereby will not
be in breach of any securities laws of the United States of America;
and, without limiting the generality of the foregoing, that all corporate
proceedings of the Purchaser, its shareholders and directors and all other
matters which, in the reasonable opinion of counsel for the Company, are
material in connection with the transaction of purchase and sale
contemplated by this agreement, have been taken or are otherwise favourable
to the completion of such transaction.
(c) At the Closing Date there shall have been no materially adverse change in
the affairs, assets, liabilities, financial condition or business
(financial or otherwise) of the Purchaser from that shown on or reflected
in the Purchaser Audited Financial Statements.
(d) The Purchaser shall have completed or be able to complete on the Closing
Date those acts required to have been done in contemplation of closing as
set out in Article 5.
6.5 In the event that any of the conditions contained in paragraph 6.4
hereof shall not be fulfilled or performed by the Purchaser at or before the
Closing Date to the reasonable satisfaction of the Vendors then the Vendors
shall have all the rights and privileges granted to the Purchaser under
paragraph 6.3, mutatis mutandis.
7. CLOSING ARRANGEMENTS
---------------------
7.1 The closing shall take place on the Closing Date at the offices of
Cane O'Xxxxx Xxxxxx, LLC at Xxxxx 000, 0000 Xxxx Xxxxxx Xxxxxx, Xxx Xxxxx,
Xxxxxx.
14
7.2 On the Closing Date, upon fulfilment of all the conditions set out
in Article 6 which have not been waived in writing by the Purchaser or by the
Vendors, as the case may be, then:
(a) the Vendors shall deliver to the Purchaser:
(i) certificates representing all the Company Shares duly endorsed in
blank for transfer or with a stock power of attorney (in either case
with the signature guaranteed by the appropriate official) with all
eligible security transfer taxes paid;
(ii) the certificates and officer's certificate or opinion referred to in
paragraph 6.2; and
(iii) evidence satisfactory to the Purchaser and its legal counsel of the
completion by the Company and the Vendors of those acts referred to in
paragraph 5.2.
(b) the Vendors and the Company shall cause the transfers of the Company Shares
into the name of the Purchaser, or its nominee, to be duly and regularly
recorded in the books and records of the Company;
(c) the Purchaser shall issue and deliver to the Vendors:
(i) share certificates representing the Purchaser Shares duly endorsed
with legends, acceptable to the Purchaser's counsel, respecting
restrictions on transfer as required by or necessary under the
applicable securities legislation of the United States or any state,
including the non-transferability of such shares for a period of one
year from the Closing Date;
(ii) the certificates and officer's certificate or opinion referred to in
paragraph 6.4;
(iii) evidence satisfactory to the Vendors and their legal counsel of the
completion by the Purchaser of those acts referred to in paragraph
5.1; and
(iv) sequential resignations and directors resolutions such that all of the
directors of the Purchaser and all of the Officers of the Purchaser
other than Xxxxx Xxxxx will have resigned and the following will have
been appointed directors of the Purchaser immediately following
closing:
Xxxxxxx Seven
Xxxxx xxx Xxxxx
Xxxxx Xxxxxx.
8. GENERAL PROVISIONS
-------------------
8.1 Time shall be of the essence of this agreement.
15
8.2 This agreement contains the whole agreement between the parties
hereto in respect of the purchase and sale of the Company Shares and there are
no warranties, representations, terms, conditions or collateral agreements
expressed, implied or statutory, other than as expressly set forth in this
agreement.
8.3 This agreement shall enure to the benefit of and be binding upon
the parties hereto and their respective successors and permitted assigns. The
Purchaser may not assign this agreement without the consent of the Company which
consent may be unreasonably withheld.
8.4 Any notice to be given under this agreement shall be duly and
properly given if made in writing and by delivering or telecopying the same to
the addressee at the address as set out on page one of this agreement. Any
notice given as aforesaid shall be deemed to have been given or made on, if
delivered, the date on which it was delivered or, if telecopied, on the next
business day after it was telecopied. Any party hereto may change its address
for notice from time to time by notice given to the other parties hereto in
accordance with the foregoing.
8.5 This agreement may be executed in one or more counter-parts, each
of which so executed shall constitute an original and all of which together
shall constitute one and the same agreement.
8.6 This agreement shall be construed and enforced in accordance with,
and the rights of the parties shall be governed by, the laws of the State of
Nevada, and each of the parties hereto irrevocably attorns to the jurisdiction
of the Courts of the State of Nevada.
8.7 No claim shall be made by the Company or the Vendor against the
Purchaser, or by the Purchaser against the Company or the Vendors, as a result
of any misrepresentation or as a result of the breach of any covenant or
warranty herein contained unless the aggregate loss or damage to such party
exceeds $5,000.
[signatures begin on the following page]
16
IN WITNESS WHEREOF the parties hereto have executed this agreement as of the day
and year first above written.
THE COMMON SEAL OF
TRANSWORLD BENEFITS INC.
was hereunto affixed in
the presence of: c/s
_/s/___________________________
Authorized Signatory
THE COMMON SEAL OF
THINKA WEIGHT LOSS CORPORATION c/s
was hereunto affixed in
the presence of:
__/s/__________________________
Authorized Signatory
SIGNED, SEALED AND DELIVERED
BY XXXXXXX SEVEN in the presence
of:
__/s/__________________________ __/s/XXXXXXX SEVEN____________
Signature of Witness XXXXXXX SEVEN
_______________________________
Name
_______________________________
Address
17
SIGNED, SEALED AND DELIVERED
BY XXX XXXXXXXXX in the presence
of:
__/S/__________________________ __/S/XXX ROBERTSON_____________
Signature of Witness XXX XXXXXXXXX
_______________________________
Name
_______________________________
Address
18
SCHEDULE "A"
-------------
to that Share Purchase Agreement dated as of October 4, 2002
PURCHASER FINANCIAL STATEMENTS
June 2002 US FS (Revised).doc
THINKA WEIGHT-LOSS CORPORATION
(Formerly Encore Ventures, Inc.)
(A Development Stage Company)
FINANCIAL STATEMENTS
JUNE 30, 2002
(Stated in U.S. Dollars)
AUDITORS' REPORT
To the Shareholders of
Thinka Weight-Loss Corporation
(Formerly Encore Ventures, Inc.)
(A development stage company)
We have audited the balance sheets of Thinka Weight-Loss Corporation (formerly
Encore Ventures, Inc.) (a development stage company) as at June 30, 2002 and
June 30, 2001, and the statements of loss and deficit accumulated during the
development stage, cash flows and stockholders' equity for the year ended June
30, 2002, for the two month period ended June 30, 2001, for the year ended April
30, 2001, and for the period from September 14, 1999 (date of inception) to June
30, 2002. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with United States of America generally
accepted auditing standards. Those standards require that we plan and perform
an audit to obtain reasonable assurance whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, these financial statements present fairly, in all material
respects, the financial position of the Company as at June 30, 2002 and June 30,
2001, and the results of its operations, cash flows, and changes in
stockholders' equity for the year ended June 30, 2002, for the two month period
ended June 30, 2001, for the year ended April 30, 2001, and for the period from
September 14, 1999 (date of inception) to June 30, 2002, in accordance with
United States of America generally accepted accounting principles.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 1(c) to the financial
statements, the Company incurred a net loss of $497,371 since inception, has not
attained profitable operations and is dependent upon obtaining adequate
financing to fulfil its development activities. These factors raise substantial
doubt that the Company will be able to continue as a going concern.
Management's plans in regard to these matters are also discussed in Note 1(c).
The financial statements do not include any adjustments that might result from
the outcome of this uncertainty.
Vancouver, Canada
September 30, 2002 Chartered Accountants
THINKA WEIGHT-LOSS CORPORATION
(Formerly Encore Ventures, Inc.)
(A Development Stage Company)
BALANCE SHEETS
(Stated in U.S. Dollars)
--------------------------------------------------------
JUNE 30
2002 2001
--------------------------------------------------------
ASSETS
Current
Cash $ 14,654 $ 15,198
Prepaid expenses 1,979 -
---------------------
16,633 15,198
---------------------
Equipment (Note 4) 2,470 -
Intangible Asset (Note 5) 250,000 -
---------------------
$ 269,103 $ 15,198
=====================================================
LIABILITIES
Current
Accounts payable and
accrued liabilities $ 11,100 $ 9,516
Notes payable (Note 6) 89,500 -
---------------------
100,600 9,516
---------------------
STOCKHOLDERS' EQUITY
Capital Stock
Authorized:
100,000,000 Common shares,
par value $0.001 per share
Issued and outstanding:
14,534,600 Common shares
at June 30, 2002 and
3,380,000 Common shares
at June 30, 2001 14,534 3,380
Additional paid-in capital 651,340 91,120
Deficit Accumulated During
The Development Stage (497,371) (88,818)
---------------------
168,503 5,682
---------------------
$ 269,103 $ 15,198
=====================================================
THINKA WEIGHT-LOSS CORPORATION
(Formerly Encore Ventures, Inc.)
(A Development Stage Company)
STATEMENTS OF LOSS AND DEFICIT
(Stated in U.S. Dollars)
--------------------------------------------------------------------------------
TWO INCEPTION
YEAR MONTHS YEAR SEPTEMBER 14
ENDED ENDED ENDED 1999 TO
JUNE 30 JUNE 30 APRIL 30 JUNE 30
2002 2001 2001 2002
--------------------------------------------------------------------------------
Expenses
Consulting fees $ 191,615 $ 5,000 $ 1,000 $197,615
Depreciation 692 - - 692
Grants 10,000 - - 10,000
Mineral property
option payments - - 666 25,666
Office administration
and sundry 79,058 2,016 10,049 95,189
Professional fees 116,834 736 35,424 158,528
Stock transfer services
12,770 - 1,390 14,160
410,969 7,752 48,529 501,850
-------------------------------------------------
Income
Interest (2,416) (103) (1,960) (4,479)
-------------------------------------------------
Net Loss For The Period 408,553 7,649 46,569 $497,371
=========
Deficit Accumulated
During The Development
Stage, Beginning Of Period 88,818 81,169 34,600
--------------------------------------
Deficit Accumulated
During The Development
Stage, End Of Period $ 497,371 $ 88,818 $ 81,169
====================================================================
Basic And Diluted Loss
Per Share $ (0.02) $ (0.01) $ (0.01)
====================================================================
Weighted Average
Number Of Shares
Outstanding 22,980,050 3,380,000 3,380,000
====================================================================
THINKA WEIGHT-LOSS CORPORATION
(Formerly Encore Ventures, Inc.)
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Stated in U.S. Dollars)
-----------------------------------------------------------------------
TWO INCEPTION
YEAR MONTHS YEAR SEPTEMBER 14
ENDED ENDED ENDED 1999 TO
JUNE 30 JUNE 30 APRIL 30 JUNE 30
2002 2001 2001 2002
-----------------------------------------------------------------------
Cash Flows From
Operating Activity
Net loss for the period $(408,553) $(7,649) $(46,569) $(497,371)
Adjustments To Reconcile
Net Loss To Net Cash
Used By Operating Activity
Depreciation 692 - - 692
(Increase) Decrease in
prepaid expenses 49,262 - - 49,262
Increase (Decrease) in
accounts payable and
accrued liabilities 1,584 (453) 7,952 11,100
-------------------------------------------
(357,015) (8,102) (38,617) (436,317)
-------------------------------------------
Cash Flows From Investing
Activity Purchase of
intangible asset (250,000) - - (250,000)
-------------------------------------------
Cash Flows From Financing
Activities
Proceeds from issuance
of notes payable 89,500 - - 89,500
Proceeds from issuance
of common stock - - - 94,500
-------------------------------------------
89,500 - - 184,000
-------------------------------------------
(Decrease) In Cash (517,515) (8,102) (38,617) (531,625)
Cash, Beginning
Of Period 15,198 23,300 61,917 -
Cash Acquired On
Asset Acquisition 516,971 - - 516,971
-------------------------------------------
Cash, End Of Period $ 14,654 $15,198 $ 23,300 $ 14,654
======================================================================
Supplemental Disclosure
Of Non-Cash Financing
And Investing Activities
Stock issued for
asset acquisition $ 577,874 $ - $ - $ 577,874
======================================================================
Stock cancelled
related to asset
acquisition $ (6,500) $ - $ - $ (6,500)
======================================================================
THINKA WEIGHT-LOSS CORPORATION
(Formerly Encore Ventures, Inc.)
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
JUNE 30, 2002
(Stated in U.S. Dollars)
COMMON STOCK DEFICIT
---------------------------------- ACCUMULATED
ADDITIONAL DURING THE
PAID-IN DEVELOPMENT
SHARES AMOUNT CAPITAL STAGE TOTAL
----------------------------------------------------------
Shares issued for cash
at $0.001 (December 1999) 1,500,000 $ 1,500 $ - $ - $ 1,500
Shares issued for cash
at $0.01 (January 2000) 1,500,000 1,500 13,500 - 15,000
Shares issued for cash
at $0.10 (February 2000) 280,000 280 27,720 - 28,000
Shares issued for cash
at $0.50 (April 2000) 100,000 100 49,900 - 50,000
Net loss for the period - - - (34,600) (34,600)
----------------------------------------------------------
Balance, April 30, 2000 3,380,000 3,380 91,120 (34,600) 59,900
Net loss for the year - - - (46,569) (46,569)
----------------------------------------------------------
Balance, April 30, 2001 3,380,000 3,380 91,120 (81,169) 13,331
Net loss for the period - - - (7,649) (7,649)
----------------------------------------------------------
Balance, June 30, 2001 3,380,000 3,380 91,120 (88,818) 5,682
Forward stock split
3.8:1 (July 2001) 9,512,300 9,512 (9,512) - -
Shares issued for
acquisition of
assets (July 2001) 12,892,300 12,892 564,982 - 577,874
Shares cancelled
(June 2002) (11,250,000) (11,250) 4,750 - (6,500)
Net loss for the year - - - (408,553) (408,553)
----------------------------------------------------------
Balance, June 30, 2002 14,534,600 $ 14,534 $651,340 $(497,371) $ 168,503
==========================================================
THINKA WEIGHT-LOSS CORPORATION
(Formerly Encore Ventures, Inc.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2002
(Stated in U.S. Dollars)
1. NATURE OF OPERATIONS
a) Organization
The Company was incorporated in the State of Nevada, U.S.A. on September 14,
1999. During the period ended June 30, 2001, the Company's year end was changed
from April 30, 2001 to June 30, 2001.
On July 19, 2001, the Company completed a forward stock split at a ratio of
3.8:1 which increased the issued and outstanding common shares from 3,380,000
shares to 12,892,300 shares.
On August 8, 2001, the Company changed its name to Thinka Weight-Loss
Corporation.
b) Development Stage Activities
Thinka Weight-Loss Corporation (the "Company") is currently a development stage
company under the provisions of Statement of Financial Accounting Standards
("SFAS") No. 7. The Company holds the proprietary rights to a weight loss
product that acts as an appetite reducing agent while providing proper
nutritional requirements. Management's intention is to market the product to
the mild to moderately overweight individual.
In prior years, the Company had been primarily engaged in the acquisition and
exploration of mining properties, and was classified as an exploration stage
company.
c) Going Concern
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern.
As shown in the accompanying financial statements, the Company has incurred a
net loss of $497,371 for the period from September 14, 1999 (inception) to June
30, 2002, and has no sales. The future of the Company is dependent upon its
ability to obtain financing and upon future profitable operations from the
development of its new business opportunities. Management has plans to seek
additional capital through a private placement and public offering of its common
stock. The financial statements do not include any adjustments relating to the
recoverability and classification of recorded assets, or the amounts of and
classification of liabilities that might be necessary in the event the Company
cannot continue in existence.
THINKA WEIGHT-LOSS CORPORATION
(Formerly Encore Ventures, Inc.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2002
(Stated in U.S. Dollars)
2. SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Company have been prepared in accordance with
generally accepted accounting principles in the United States of America.
Because a precise determination of many assets and liabilities is dependent upon
future events, the preparation of financial statements for a period necessarily
involves the use of estimates which have been made using careful judgement.
The financial statements have, in management's opinion, been properly prepared
within reasonable limits of materiality and within the framework of the
significant accounting policies summarized below:
a) Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all highly
liquid investments purchased with original maturities of three months or less to
be cash equivalents.
b) Office Equipment
Office equipment is recorded at cost and amortized on a straight line basis over
its estimated economic life of five years.
c) Intangible Asset
The Company continually monitors its intangible assets to determine whether any
impairment has occurred. In making such determination with respect to these
assets, the Company evaluates the performance on an undiscounted cash flow
basis, of the intangible assets or group of assets, which gave rise to an
asset's carrying amount. Should impairment be identified, a loss would be
reported to the extent that the carrying value of the related intangible asset
exceeds the fair value of that intangible asset using the discounted cash flow
method. The Company has not amortized intangible assets as operations have not
commenced.
THINKA WEIGHT-LOSS CORPORATION
(Formerly Encore Ventures, Inc.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2002
(Stated in U.S. Dollars)
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
d) Basic and Diluted Loss Per Share
In accordance with SFAS No. 128 - "Earnings Per Share", the basic loss per
common share is computed by dividing net loss available to common stockholders
by the weighted average number of common shares outstanding. Diluted loss per
common share is computed similar to basic loss per common share except that the
denominator is increased to include the number of additional common shares that
would have been outstanding if the potential common shares had been issued and
if the additional common shares were dilutive. At June 30, 2002, the Company
has 1,642,300 of common stock equivalents that were anti-dilutive and excluded
in the earnings per share computation.
e) Income Taxes
The Company accounts for income taxes under SFAS No. 109 - "Accounting for
Income Taxes". Under the asset and liability method of SFAS No. 109, deferred
tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases. Deferred tax
assets and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to
be recovered or settled. Under SFAS No. 109, the effect on deferred tax assets
and liabilities of a change in tax rates is recognized in income in the period
the enactment occurs. A valuation allowance is provided for certain deferred
tax assets if it is more likely than not that the Company will not realize tax
assets through future operations.
f) Financial Instruments and Concentration of Risk
Financial instruments that potentially subject the Company to concentrations of
credit risk consist primarily of cash, accounts payable and accrued liabilities,
and notes payable. At June 30, 2002, the fair market value of these instruments
approximated their financial statement carrying amount due to the short-term
maturity of these instruments.
g) Mineral Property Option Payments and Exploration Costs
The Company expenses all costs related to the maintenance and exploration of
mineral claims in which it has secured exploration rights prior to establishment
of proven and probable reserves. To date, the Company has not established the
commercial feasibility of its exploration prospects, therefore, all costs are
being expensed.
THINKA WEIGHT-LOSS CORPORATION
(Formerly Encore Ventures, Inc.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2002
(Stated in U.S. Dollars)
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
h) Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed of
The Company reviews long-lived assets and including identifiable intangibles for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Recoverability of assets to
be held and used is measured by a comparison of the carrying amount of an asset
to future net cash flows expected to be generated by the asset. If such assets
are considered to be impaired, the impairment to be recognized is measured by
the amount by which the carrying amount of the assets exceed the fair value of
the assets. Assets to be disposed of are reported at the lower of the carrying
amount or fair value less costs to sell.
i) Recent Accounting Pronouncements
In July 2001, the Financial Accounting Standards Board ("FASB") issued SFAS No.
141 - "Business Combinations", and SFAS No. 142 - "Goodwill and Other Intangible
Assets". SFAS No. 141 eliminates the pooling-of-interests method of accounting
for business combinations, except for qualifying business combinations that were
initiated prior to July 1, 2001. Under SFAS No. 142, goodwill and
indefinite-lived intangible assets are no longer amortized, but are reviewed
annually, or more frequently if impairment indicators arise, for impairment.
The Company is required to adopt SFAS No. 142 on July 1, 2002. The Company does
not believe the adoption of SFAS Nos. 141 and 142 will have a material effect on
its financial statements.
In August 2001, the FASB issued SFAS No. 143 - "Accounting for Asset Retirement
Obligations". SFAS No. 143 requires that the fair value of a liability for an
asset retirement obligation be recognized in the period in which it is incurred
if a reasonable estimate of fair value can be made. The associated asset
retirement costs are capitalized as part of the carrying amount of the
long-lived assets. The Company is required to adopt SFAS No. 143 on July 1,
2002, and it does not believe the adoption of SFAS No. 143 will have a material
effect on its financial statements.
In October 2001, the FASB issued SFAS No. 144 - "Accounting for the Impairment
or Disposal of Long-Lived Assets", which supersedes SFAS No. 121 - "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
of", and provides a single accounting model for long-lived assets to be disposed
of. The Company is required to adopt SFAS No. 144 on July 1, 2002, and it does
not believe the adoption of SFAS No. 144 will have a material effect on its
financial statements.
THINKA WEIGHT-LOSS CORPORATION
(Formerly Encore Ventures, Inc.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2002
(Stated in U.S. Dollars)
3. ACQUISITION OF ASSETS
On July 30, 2001, the Company entered into an Asset Purchase and Sale Agreement
to acquire all the assets of Six Forty-Nine Incorporated ("649"), a Nevada
corporation, by issuing 12,892,300 common shares of the Company.
The asset acquisition is summarized as follows:
Current assets (including cash of $516,971) $ 568,212
Equipment, net 3,162
Intangible asset - Medslim Program 6,500
---------
Total consideration $ 577,874
Since the July 30, 2001 transaction resulted in the former shareholders of 649
acquiring control of Thinka Weight-Loss Corporation ("Thinka"), the transaction,
which is referred to as a "reverse take-over", was treated for financial
reporting purposes as an acquisition by 649 of the net assets and liabilities of
Thinka. 649 was deemed to be the purchaser for accounting purposes.
Consequently, the quarterly unaudited interim financial statements were
presented on a consolidated basis for the periods ended September 30, 2001,
December 31, 2001 and March 31, 2002.
On June 28, 2002, the Company entered into a stock redemption agreement with 649
to have 11,250,000 common shares returned and cancelled. As consideration for
the redemption and cancellation of the 11,250,000 common shares, the intangible
asset comprising the "Medslim Program" was returned to 649.
As a result of the June 28, 2002 transaction, the former shareholders of 649 are
no longer deemed to have acquired control of Thinka and the financial statements
are now presented on a non-consolidated basis.
4. EQUIPMENT
A summary of equipment is as follows:
2002 2001
---------------------
Office equipment $ 3,162 $ -
Less: Accumulated depreciation (692) -
---------------------
$ 2,470 $ -
=====================
THINKA WEIGHT-LOSS CORPORATION
(Formerly Encore Ventures, Inc.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2002
(Stated in U.S. Dollars)
5. INTANGIBLE ASSET
On January 31, 2002, the Company entered into an Asset Purchase Agreement to
acquire all the rights to the intellectual property known as "Carb Fighter".
The total cash consideration paid was $250,000.
The intangible asset represents the purchase of all the license rights, title,
patents, and interest to certain proprietary formulas.
6. NOTES PAYABLE
Notes payable are unsecured, due on demand and bear interest at Bank of America
prime rate less 2%.
7. COMMITMENTS
On July 31, 2001, the Company assumed the obligation from Six Forty-Nine
Incorporated ("649") to issue up to 1,642,300 common shares of the Company on
the exercise of 1,642,300 warrants issued by 649 with an exercise price of $1.00
per share, expiring December 2, 2002.
The Company had entered into an agreement with its former president to provide
management services for a one year term at $750 per month, expiring December 31,
2001. During the year ended June 30, 2002, this agreement was terminated.
8. INCOME TAXES
At June 30, 2002, the Company has accumulated net operating losses totalling
$497,000 which are available to reduce taxable income in future taxation years.
These losses expire as follows:
2022 $ 408,000
2021 56,000
2020 33,000
------------
$ 497,000
The future income tax asset related to these losses have not been recorded in
the financial statements as it is more likely than not that the assets will not
be realized and a full valuation allowance has been made.
THINKA WEIGHT-LOSS CORPORATION
(Formerly Encore Ventures, Inc.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2002
(Stated in U.S. Dollars)
9. RELATED PARTY TRANSACTIONS
During the year ended June 30, 2002, the Company incurred the following expenses
charged by entities controlled by either shareholders, directors and officers,
or by individuals in their capacity as directors or officers:
2002 2001
-----------------------
Consulting $ 118,490 $ -
Management fees - 1,500
-----------------------
$ 118,490 $ 1,500
=======================
These charges were measured by the exchange amount, which is the amount agreed
upon by the transacting parties, and are on term and conditions similar to
non-related entities.
10. MINERAL PROPERTY INTEREST
The Company held an option agreement to acquire a 90% interest in a mineral
claim block located in the Xxxxxx Lake Mining District, Yukon Territories,
Canada, for consideration consisting of staged cash payments ($25,000 paid) and
exploration expenditures totalling $200,000 by December 31, 2002.
The option agreement was terminated on July 16, 2001 with the agreement of both
parties. The Company is no longer pursuing mineral exploration activities and
has focused on developing new business opportunities.
SCHEDULE "B"
-------------
to that Share Purchase Agreement dated as of October 4, 2002
COMPANY FINANCIAL STATEMENTS
SCHEDULE "C"
-------------
to that Share Purchase Agreement dated as of October 4, 2002
EMPLOYMENT, SERVICE & PENSION AGREEMENTS OF THE COMPANY
EMPLOYMENT AGREEMENT
(Xxxxxx Xxxxx)
This EMPLOYMENT AGREEMENT (this "Agreement") is dated and entered into effective
as of ______, 2002 (the "Effective Date"), by and between TRANSWORLD BENEFITS,
INC. (fka Skyway Home, Inc.), a Nevada corporation (the "Company"), and XXXXXX
XXXXX, an individual ("Employee").
R E C I T A L S
- - - - - - - -
WHEREAS, the Company is a corporation formed and duly qualified in the
State of Nevada.
WHEREAS, the Company desires to engage Employee to perform certain
services, and Employee desires to provide such services to the Company, upon the
terms and conditions of this Agreement.
A G R E E M E N T
- - - - - - - - -
NOW, THEREFORE, for and in consideration of the foregoing recitals, the mutual
covenants, provisions and terms set forth in this Agreement and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and Employee agree as follows:
1. Engagement. The Company hereby employs Employee, and Employee hereby
accepts such employment, to provide the "Services" (as defined below) upon the
terms and conditions set forth in this Agreement.
2. Services. During the "Term" (as defined below) of this Agreement,
Employee shall perform those services and duties as more described in Schedule 1
----------
attached hereto (collectively, the "Services"). Employee shall have, subject to
the direction, supervision and control of the Board of Directors of the Company
(the "Board"), the Chief Executive Officer of the Company ("CEO") and the
President of the Company (the "President"), and Employee agrees to faithfully
perform, such additional duties consistent with such office as may be assigned
from time to time by the Board or the CEO. During the Term, Employee shall
report to the Board, the CEO and the President.
3. Term. Unless terminated earlier as provided in this Agreement, the
Company retains Employee to provide the Services for a term beginning on October
1, 2002 (the "Start Date") and ending on September 30, 2005 (the "Term").
Thereafter, the Term shall be automatically extended for successive periods of
one (1) year unless either the Company or Employee gives the other a written
notice electing not to extend the Term, given not less than three (3) months
prior to the date upon which any such extension would otherwise begin. As used
herein, the term "Term" means the original term and any extension thereof.
4. Time and Effort. Employee shall perform the Services under this
Agreement in a diligent and competent manner. During the Term, Employee shall
perform the Services for the Company on a full-time basis.
5. Compensation. In consideration of Employee's performance of the Services
hereunder and other covenants and agreements of Employee hereunder, the Company
shall provide to Employee the compensation set forth in this Section 5.
5.1 Advancements. During the Term and subject to the terms and conditions
set forth in Section 5.2 hereof, Employee shall receive advancements against
future "Commissions" (as defined in Section 5.2 hereof) (each, an "Advancement")
as follows, payable in accordance with the Company's payroll procedures:
(i) During the first year of the Term, Employee shall receive
total Advancements equal to One Hundred Twenty Thousand Dollars ($120,000); and
(ii) During the second year of the Term and during each subsequent
year thereafter, Employee shall receive Advancements in a total amount equal to
One Hundred Twenty Thousand Dollars ($120,000) per year.
5.2 Commissions. During the Term, the Company shall pay to Employee the
-----------
"Commissions" in the amounts set forth and as calculated pursuant to the terms
of Schedule 2, attached hereto and incorporated herein by this reference (the
-----------
"Sales Territory Business Plan"), subject to the following terms and conditions:
(i) During the first year of the Term, fifty (50%) of any
and all Commissions earned and payable to Employee during any such payment
period shall be used to reduce the Advancements made to Employee pursuant to
Section 5.1(i) above. Notwithstanding the foregoing to the contrary, during the
first year, Employee's total compensation shall not be reduced to less than One
Hundred Twenty Thousand Dollars ($120,000). For example, if no Commissions were
earned and payable to Employee during the first year of the Term, Employee shall
be entitled to retain the entire $120,000 of Advancements received by Employee
pursuant to Section 5.1(i) hereof.
(ii) After the first year of the Term, one hundred percent (100%)
of any and all Commissions earned and payable to Employee during any such
payment period shall be used to reduce any outstanding balance of the
Advancements made by the Company to Employee during the term of this Agreement
(excluding the Advancements made by the Company to Employee during the first
year of the Term as set forth in Section 5.1(i) hereof), until such time as such
outstanding balance is reduced to zero.
(iii) In the event that Employee's employment is terminated by
the Company with "cause" (as defined in Section 8.4.2 hereof) or terminated by
Employee with or without cause, Employee shall repay to the Company the
outstanding balance of the Advancements made by the Company to Employee during
the term of this Agreement (excluding the Advancements made by the Company to
Employee during the first year of the Term as set forth in Section 5.1(i)
hereof), by no later than seven (7) days following such termination.
(iv) Employee hereby acknowledges, understands and agrees that
(A) any and all Commissions shall be calculated pursuant to the terms of the
Sales Territory Business Plan as set forth in the attached Schedule 2, subject
----------
to the terms and conditions set forth in this Agreement; and (B) Employee shall
perform such duties and obligations set forth in the Sales Territory Business
Plan, including, without limitation, hiring and paying the salaries and expenses
of employees.
5.3 Right of First Refusal. In the event that the Company is involved in
------------------------
any future offering of shares in the Company, Employee shall have the right of
first refusal to purchase, at the purchase price offered to other investors,
such number of shares of the Company under such offering so that Employee's
total interest in the Company will not be less than two percent (2%) of the
total issued and outstanding shares of capital stock in the Company (as
determined on a fully diluted, as converted basis).
5.4 Stock Option Plan. A stock option plan (the "Plan") is being
-------------------
established by the Company. Employee shall be entitled to receive options to
purchase shares under the Plan equal to two percent (2%) of the total issued and
outstanding shares of capital stock in the Company as of the Start Date (as
determined on a fully diluted, as converted basis) (the "Optioned Shares").
Subject to the terms set forth herein and in the Plan, Employee shall have the
right to purchase 1/3 of the Optioned Shares at each anniversary of the Start
Date. Employee shall be entitled to receive such other shares under the Plan as
determined by the Company's board of directors in its discretion. Employee
hereby acknowledges that
Employee's right, title and interest in and to any option granted under this
Section 5.4 shall be subject to the terms and conditions set forth in the Plan.
6. Other Benefits. Employee shall be entitled to the following:
6.1 Reimbursement of Expenses. The Company shall reimburse Employee
-------------------------
for all business-related expenses and costs actually incurred by Employee in the
performance of the Services under this Agreement pursuant to the terms set forth
in the Sales Territory Business Plan. In addition, the reimbursement of all such
costs and expenses shall be subject to reasonable policies and procedures
established from time to time by the Company, including, without limitation, as
those set forth in the Company's Employee Handbook, as amended.
6.2 Paid Vacation. During the Term, Employee shall be entitled to such
-------------
period of paid vacation as available to other employees of the Company as set
forth in the Company's Employee Handbook, as amended. Notwithstanding the
foregoing, during the first three (3) years of the Term, vacation shall not be
taken more than two (2) weeks consecutively.
6.3 Car Allowance. During the Term, the Company will provide
--------------
Employee with a car allowance of Seven Hundred Dollars ($700) per month pursuant
to the terms set forth in the Sales Territory Business Plan.
6.4 Insurance. During the Term, Employee shall receive full medical
---------
coverage generally available to the Company's other executive and managerial
employees. In addition, Employee shall be entitled to receive all other benefits
of employment generally available to Company's other executive and managerial
employees when and as Employee becomes eligible for them, including dental, life
insurance and disability plans.
7. Work Products/Confidentiality/Non-Competition.
7.1 Work Products. Employee hereby acknowledges and agrees that any
--------------
and all "Work Products" (as defined below) which may have been or are made,
developed or conceived of in whole or in part by Employee, or any of Employee's
Representatives, in connection with services provided on behalf of the Company
or relating to the business of the Company, shall belong solely and exclusively
to the Company. Employee shall assign or cause its Representatives to assign to
the Company such Employee's or Representative's entire right, title and
interest, including all patent, copyright, trade secret, trademark and other
proprietary rights, in any and all Work Products. The term "Work Products"
means and includes, without limitation, a discovery, a development, a design, an
improvement, an invention, a know-how, technical or non-technical data, a
formula, a pattern, a compilation, a program, a device, a method, a technique, a
drawing, a process, financial data, financial plans, product plans, business
plans, software programs (including the object and source code thereto) or a
list (whether in written form or otherwise) of actual or potential customers or
suppliers, which is not commonly known by or available to the public and which
information (i) derives economic value, actual or potential, from not being
generally known to and not being readily ascertainable by proper means by other
persons who can obtain economic value from its disclosure or use and (ii) is the
subject of efforts that are reasonable under the circumstances to maintain its
secrecy.
7.2 Business Opportunities. Employee covenants and agrees that any
-----------------------
business opportunity which Employee or Employee's "Representatives" (as defined
herein) might have during the term of this Agreement which relates to the
business of the Company shall first be offered to the Company. If the Company
rejects such offer, Employee shall be free to pursue such opportunity. The term
"Representative" means and includes, with respect to any person or entity, each
shareholder, director, officer, manager, constituent member, constituent
partner, trustor, beneficiary, trustee, successor-in-interest,
predecessor-in-interest, "Affiliate" (as defined in Section 7.4 hereof),
employee, agent, attorney or other representative of such
party, expressly excluding however, with respect to each party to this
Agreement, the other party to this Agreement.
7.3 Proprietary Information. In the course of Employee's employment by
-----------------------
the Company, each of Employee and Employee's Representatives, has had, and will
continue to have, access to confidential and proprietary information regarding
the Company and its business, including, but not limited to, information
regarding the Company's technologies, methods and techniques, product
information, specifications, technical drawings and designs, trade secrets,
know-how, sources of supply, product and market research data, customer lists,
marketing plans, and financial information regarding the Company and its
operations. Such information shall be referred to hereinafter as "Proprietary
Information" and shall include any and all of the information of the type
described and shall also include any and all other confidential and proprietary
information relating to the business to be conducted by the Company, whether
previously existing, now existing or arising hereafter, whether conceived or
developed by others or by Employee alone or with others, and whether or not
conceived or developed during regular working hours. Proprietary Information
which is released into the public domain during the period of Employee's
employment under this Agreement, provided the same is not in the public domain
as a consequence of disclosure directly or indirectly by Employee in violation
of this Agreement, shall not be subject to the restrictions of this Section.
7.3.1 Fiduciary Obligations. Employee acknowledges that the Company
----------------------
has taken all reasonable steps in protecting the secrecy of the Proprietary
Information, that said Proprietary Information is of critical importance to the
Company and that a violation of this Section of this Agreement would seriously
and irreparably impair and damage the Company's business. Accordingly, Employee
agrees that it shall keep (and shall use its commercially reasonable best
efforts to cause its Representatives to keep) all Proprietary Information in a
fiduciary capacity for the sole benefit of the Company.
7.3.2 Non-Disclosure. Employee shall not, directly or indirectly, use
--------------
or disclose (except as Employee's duties may require and except as required by
law) any Proprietary Information to any person other than the Company, any
employees of the Company who are authorized, at the time of such disclosure, to
receive such information, or such other persons to whom Employee has been
specifically instructed to make disclosure by the Board of Directors of the
Company and in all such cases only to the extent required in the course of
Employee's employment by the Company. At the termination of this Agreement,
Employee shall deliver to the Company all notes, letters, documents, records,
computer files, programs and other media which may contain Proprietary
Information which are then in its possession or control and shall not retain or
use any copies or summaries thereof.
7.4 Non-Competition. During the Term and for the two year period
---------------
following the termination or expiration of the Term (such periods referred to
collectively as the "Restriction Period"), neither Employee nor any of
Employee's "Affiliates" (as defined below) shall, directly or indirectly, engage
in, become employed by, serve as an agent or consultant to, or become a
constituent member, partner, principal or stockholder (other than a holder of
less than 5% of the outstanding voting shares of any publicly-held company) of,
or receive any interest in or from any person or entity which engages directly
or indirectly in any business or activity competitive with any business or
activity engaged in by the Company or any of its subsidiaries. "Affiliates"
shall mean and include, with respect to any other person or entity, any person
or entity that directly or indirectly through one or more intermediaries
controls or is controlled by, or is under common control with such person or
entity.
7.5 Non-Solicitation of Employees. During the Restriction Period,
-------------------------------
neither Employee nor any of Employee's Affiliates shall, directly or indirectly,
for Employee's own account or for the account of any other person or entity with
which Employee is or shall become associated in any capacity, (a) solicit for
employment, employ or otherwise interfere with the relationship of the Company
or any of its Affiliates, any person who at any time during the six months
preceding such solicitation, employment or interference is or was employed by or
otherwise engaged to perform services for the Company or any of its Affiliates,
other than any such solicitation or employment during Employee's employment with
the Company on behalf of the Company, or (b) induce any employee of the Company
or any of its Affiliates who is a member of management to engage in
any activity which Employee is prohibited from engaging in under any of this
Section hereof or to terminate Employee's employment with the Company.
7.6 Non-Solicitation of Customers. During the Restriction Period,
-------------------------------
neither Employee nor any of Employee's Affiliates shall, directly or indirectly,
solicit or otherwise attempt to establish for Employee or any other person, firm
or entity any business relationship of a nature that is competitive with the
business or relationship of the Company or any of its Affiliates, with any
person, firm or corporation which, during the twelve-month period preceding the
date Employee's employment with the Company and its Affiliates terminates, was a
customer, client or distributor of the Company or any of its Affiliates, other
than any such solicitation during Employee's employment with the Company or on
behalf of the Company.
8. Termination.
8.1 Termination Upon Death. If Employee dies during the Term, this
------------------------
Agreement shall terminate. Upon such termination, Employee shall be entitled to
all accrued and unpaid compensation due under Section 5 above and the other
obligations of the Company under this Agreement shall cease as of the date of
the termination.
8.2 Termination Upon Permanent Disability. In the event of the
----------------------------------------
"Permanent Disability" (as hereinafter defined) of Employee, the Company may
terminate this Agreement pursuant to the terms and conditions set forth in the
Company's Employee Handbook, as amended. For the purposes of this Agreement,
Employee shall be deemed to have suffered "Permanent Disability" in the event
that Employee has become disabled by physical or mental illness or injury to the
extent that the Board of Directors of the Company reasonably believes,
notwithstanding such reasonable accommodations as the Company may make in
response to such disability, that Employee cannot carry out or perform
Employee's duties hereunder. In the event that the Company terminates this
Agreement following Employee's Permanent Disability, other than accrued and
unpaid compensation due to Employee, the compensation obligations of the Company
under Section 5 hereof and any other obligations of the Company under this
Agreement shall cease as of the date of the termination.
8.3 Termination by Employee.
-------------------------
8.3.1 Employee may terminate this Agreement without cause at any time
and for any reason upon sixty (60) days' notice to the Company.
8.3.2 Employee may immediately terminate this Agreement for cause
at any time by written notice to the Company. For purposes of this Agreement,
the term "cause" for termination by Employee shall be (a) a breach by the
Company of any material covenant or obligation hereunder; or (b) the voluntary
or involuntary dissolution of the Company. The written notice given hereunder by
Employee to the Company shall specify in reasonable detail the cause for
termination, and, in the case of the cause described in (a) above, such
termination notice shall not be effective until thirty (30) days after the
Company's receipt of such notice, during which time the Company shall have the
right to respond to Employee's notice and cure the breach or other event giving
rise to the termination. In the event that the Company is able to cure, this
Agreement shall continue in full force and effect.
8.4 Termination by the Company.
-----------------------------
8.4.1 The Company may terminate this Agreement without cause at any
time and for any reason upon sixty (60) days' notice to Employee.
8.4.2 The Company may terminate this Agreement for cause at any time by
written notice to Employee. For purposes of this Agreement, the term "cause"
for termination by the Company shall
be (a) a conviction of or plea of guilty or nolo contendre by Employee to a
felony; (b) any action or activity of Employee which could reasonably be
expected to have a material adverse effect on the Company, its business, its
goodwill or its prospects; (c) the refusal by Employee to perform its material
duties and obligations hereunder; or (d) Employee's gross negligence or willful
and intentional misconduct in the performance of its duties and obligations. The
written notice given hereunder by the Company to Employee shall specify in
reasonable detail the cause for termination. In the case of a termination for
the cause described in (a) above, such termination shall be effective upon
receipt of the written notice. In the case of the causes described in (b)
through (d) above, such termination notice shall not be effective until thirty
(30) days after Employee's receipt of such notice, during which time Employee
shall have the right to respond to the Company's notice and cure the breach or
other event giving rise to the termination. In the event that Employee is able
to cure, this Agreement shall continue in full force and effect.
8.5 Effect of Termination. Upon any termination of this
-----------------------
Agreement, the obligations and covenants of the parties hereunder shall be of no
further force and effect, except as provided in Section 11.7 below and as set
forth in this Section 8.5. Upon any termination of this Agreement by Employee
or the Company pursuant to Section 8 hereof, (a) the Company shall pay to
Employee all accrued and unpaid compensation as of the date of such termination
subject to the terms and conditions set forth in this Agreement; (b) if
termination by the Company based on "cause" or by the Employee, Employee shall
repay to the Company any outstanding balance of the Advancements made to
Employee pursuant to Section 5.1(ii) hereof; and (c) all other obligations of
the Company under this Agreement shall cease as of the date of such termination,
including, without limitation, the right of Employee with respect to any
unvested rights or shares granted or any future offering by the Company.
8.6 Effect of Combination or Dissolution. This Agreement shall
---------------------------------------
not be terminated by the voluntary or involuntary dissolution of the Company, or
by any merger or consolidation in which the Company is not the surviving or
resulting entity, or any transfer of all or substantially all of the assets of
the Company, or upon any transfer of a majority of the ownership interests of
the Company by one or more members in one or more transactions, or upon the
issuance of units of membership interests of the Company constituting a majority
of the outstanding units immediately following such issuance. Instead, subject
to Employee's right to terminate this Agreement pursuant to Section 8.3 above,
the provisions of this Agreement shall be binding on and inure to the benefit of
the Company's creditors, the surviving business entity or the business entity to
which such units or assets shall be transferred.
9. Remedies.
9.1 Injunctive Relief. Employee acknowledges and agrees that (i) the
------------------
covenants and the restrictions contained in Section 7 above are necessary,
fundamental, and required for the protection of the Company's business; (ii)
such covenants relate to matters which are of a special, unique, and
extraordinary character that gives each of such covenants a unique and
extraordinary value; and (iii) a breach of any of such covenants will result in
irreparable harm and damages to the Company which cannot be adequately
compensated by a monetary award. Accordingly, it is expressly agreed that in
addition to all other remedies available at law or in equity, the Company shall
be entitled to seek injunctive or other equitable relief to restrain or enjoin
Employee from breaching any such covenant or to specifically enforce the
provisions of Section 7 above.
9.2 No Limitation of Remedies. Notwithstanding the provisions set
----------------------------
forth in Section 9.1 of this Agreement or any other provision contained in this
Agreement, the parties hereby agree that no remedy conferred by any of the
specific provisions of this Agreement, including without limitation, this
Section 9, is intended to be exclusive of any other remedy, and each and every
remedy shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute or
otherwise.
10. Representations and Warranties. Employee hereby represents and
warrants to the Company as follows:
10.1 Acquisition Entirely for Own Account. Employee agrees that
----------------------------------------
Employee is acquiring the shares of the Company ("Shares") for investment
purposes only, for Employee's own account, and not for sale or with a view to
distribution of all or any part of such Shares. Employee has no contract,
undertaking, agreement or arrangement with any person or entity to sell,
hypothecate, pledge, donate, or otherwise transfer (with or without
consideration) the Shares or any portion thereof, and Employee has no present
plans or intention to enter any such contract, undertaking agreement or
arrangement.
10.2 Accredited Investor. With respect to the acquisition of the
--------------------
Shares, Employee qualifies as an "accredited investor" as that term is defined
in Rule 501 of Regulation D under the Securities Act of 1933, as amended (the
"Securities Act").
10.3 Investment Experience. Employee acknowledges and understands
---------------------
that an investment in the Company is speculative in nature and involves a high
degree of risk, and that the Company has no financial or operating history.
Employee acknowledges that Employee is able to fend for himself/herself, can
bear the economic risk of Employee's investment, and has such knowledge and
experience in financial or business matters that Employee is capable of
evaluating the merits and risks of the investment in the Shares.
10.4 Restricted Shares. Employee acknowledges that Employee was
------------------
informed that the Shares are not registered under the Securities Act or
applicable state laws, and that such Shares are "restricted Shares" and may not
be transferred or otherwise disposed of unless subsequently registered under the
Securities Act or such laws, or unless an exemption from such registration is
available.
11. Miscellaneous.
11.1 Successors and Assigns. This Agreement is in the nature of a
------------------------
personal services contract; and neither party shall assign this Agreement
without the prior written consent of the other party. This Agreement shall be
binding on and inure to the benefit of the parties hereto and their respective
successors, assigns, heirs and legal Representatives.
11.2 Governing Law. This Agreement shall be construed under and in
--------------
accordance with, and governed in all respects by, the laws of the State of
California (without giving effect to principles of conflicts of law).
11.3 Waiver. The failure of the Company to insist on strict compliance
------
with any of the terms, covenants, or conditions of this Agreement by any other
party shall not be deemed a waiver of that term, covenant or condition, nor
shall any waiver or relinquishment of any right or power at any one time or
times be deemed a waiver or relinquishment of that right or power for all or any
other times.
11.4 Notices. Any notice or other communication required or permitted
-------
hereunder (each, a "Notice") shall be in writing, and shall be deemed to have
been given (a) two (2) days following deposit of such Notice in the United
States mail, certified, postage prepaid, return receipt requested, or (b) upon
receipt if delivered personally, or delivered by reputable, recognized third
party overnight delivery service or courier service or (c) the next business day
following receipt, if transmitted by facsimile (provided that such facsimile is
followed by the deposit of the original Notice, or a copy thereof, in the United
States mail, certified, postage prepaid, return receipt requested, no later than
the next business day following transmission of such facsimile), addressed to
the parties as follows:
To Employee: Xx. Xxxxxx Xxxxx
-----------------------------
-----------------------------
-----------------------------
To the Company: TransWorld Benefits, Inc.
Attn: _________________________
0000 Xxxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Either party may require such Notices to be delivered and given to any address
different from or additional to the address set forth above, by delivering
Notice thereof to the other party pursuant to this Section.
11.5 Arbitration. Any controversy arising out of or relating to this
------------
Agreement shall be settled by arbitration in Orange County, California in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association before a single arbitrator agreed to by the parties. If no
agreement can be reached regarding the selection of such arbitrator, the
American Arbitration Association shall deliver to the parties a list with the
names of three qualified arbitrators. Each party shall select a single name.
The name not selected by either party or, in the alternative, selected by both
parties shall be the arbitrator of such controversy. The decision of the
arbitrator shall be binding and non-appealable. The parties hereto consent to
the jurisdiction of the Superior Court of the State of California for the County
of Orange and of the United States District Court of the Southern District for
all purposes in connection with such arbitration, including the entry of
judgment on any award.
11.6 Amendments. This Agreement, together with the attached
----------
Schedule(s), constitutes the entire agreement of the parties hereto with respect
to the employment and retention of Employee by the Company, and supersedes any
and all prior and contemporaneous agreements, whether oral or in writing,
between the parties hereto with respect to the subject matter hereof. This
Agreement may not be amended, modified, altered or supplemented except by
written agreement executed and delivered by the parties hereto.
11.7 Survival of Certain Rights and Obligations. The rights and
------------------------------------------
obligations of the parties hereto pursuant to Sections 7, 8.5, 9 and 10 of this
Agreement shall survive the termination of this Agreement.
11.8 Severability. If any provision of this Agreement is held by a
------------
court of competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions shall nevertheless continue in full force without being
impaired or invalidated in any way. If any court of competent jurisdiction
holds any provision of this Agreement to be invalid, void or unenforceable with
respect to any state, region or locality, such provision shall nevertheless
continue in full force and effect in all other states, regions and localities to
which such provision applies.
11.9 Further Assurances. The parties agree that, at any time and from
-------------------
time to time during the Term, they will take any action and execute and deliver
any document which the other party reasonably requests in order to carry out the
purposes of this Agreement.
11.10 Counterparts. This Agreement may be executed in one or
------------
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
11.11 Attorneys' Fees. If any action at law or in equity is necessary
----------------
to enforce or interpret the terms of this Agreement, the prevailing party shall
be entitled to recover any and all reasonable attorneys' fees, expert witness
fees, costs and necessary disbursements in addition to any other relief to which
such party may be entitled.
11.12 No Third Party Beneficiary. This Agreement is made and entered
----------------------------
into between the parties solely for the benefit of the parties, and not for the
benefit of any other third party or entity. No third party or
entity shall be deemed or considered a third party beneficiary of any covenant,
promise or other provision of this Agreement or have any right to enforce any
such covenant, promise or other provision against either or both parties.
[signatures follow on next page]
IN WITNESS WHEREOF, each of the parties hereto has duly executed this Agreement
as of the date first above written.
"Company"
TRANSWORLD BENEFITS, INC., a Nevada corporation
By: ----------------------------------------
Name: ---------------------------------------
Title: --------------------------------------
"Employee"
---------------------------------------------
XXXXXX XXXXX, an individual
AMENDMENT TO EMPLOYMENT AGREEMENT
(Xxxxxx Xxxxx)
This AMENDMENT TO EMPLOYMENT AGREEMENT (this "Agreement") is dated and entered
into effective as of June ______, 2002 (the "Effective Date"), by and between
TRANSWORLD BENEFITS, INC. (fka Skyway Home, Inc.), a Nevada corporation (the
"Company"), and XXXXXX XXXXX, an individual ("Employee").
R E C I T A L S
- - - - - - - -
WHEREAS, the Company and Employee have executed and entered into that
certain Employment Agreement, dated as of the Effective Date hereof (the
"Employment Agreement").
WHEREAS, the parties desire to amend the Employment Agreement as set forth
herein.
A G R E E M E N T
- - - - - - - - -
NOW, THEREFORE, for and in consideration of the foregoing recitals, the mutual
covenants, provisions and terms set forth in this Agreement and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and Employee agree as follows:
1. Amendment. Pursuant to Section 7 and other related sections of the
Employment Agreement, Employee has agreed not to engage in any business or
activity competitive with the business or activity of the Company, as more
particularly described in Section 7 of the Employment Agreement. The Company
hereby agrees to amend the Employment Agreement to permit Employee to engage in
the activities described on Exhibit 1, attached hereto, for the permitted period
---------
set forth in Exhibit 1. Employee hereby agrees as follows: (a) not to engage,
---------
directly or indirectly, in any business or activity with any person or entity
other than those described on Exhibit 1; and (b) following the expiration of the
---------
applicable permitted period described on Exhibit 1, Employee shall immediately
---------
cease engaging in such activity or business.
2. Effect of Amendment. Except as amended and modified by this
Amendment, the Employment Agreement shall remain in full force and effect.
3. Miscellaneous.
(a) Successors and Assigns. This Amendment is in the nature of a
------------------------
personal services contract; and neither party shall assign this Amendment
without the prior written consent of the other party. This Amendment shall be
binding on and inure to the benefit of the parties hereto and their respective
successors, assigns, heirs and legal Representatives.
(b) Governing Law. This Amendment shall be construed under and in
--------------
accordance with, and governed in all respects by, the laws of the State of
California (without giving effect to principles of conflicts of law).
(c) Waiver. The failure of the Company to insist on strict compliance
------
with any of the terms, covenants, or conditions of this Amendment by any other
party shall not be deemed a waiver of that term, covenant or condition, nor
shall any waiver or relinquishment of any right or power at any one time or
times be deemed a waiver or relinquishment of that right or power for all or any
other times.
(d) Counterparts. This Amendment may be executed in one or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, each of the parties hereto has duly executed this Amendment
as of the date first above written.
"Company"
TRANSWORLD BENEFITS, INC., a Nevada corporation
By: ----------------------------------------
Name: ---------------------------------------
Title: --------------------------------------
"Employee"
---------------------------------------------
XXXXXX XXXXX, an individual
"Company"
Exhibit 1
Permitted Activities
--------------------------------------------------------------------------------
Permitted Activity. Permitted Period: Employee may engage in the
------------------- -----------------
corresponding permitted activity during the period set
forth below. Following the expiration of such period,
Employee may not engage in such activity either
directly or indirectly:
--------------------------------------------------------------------------------
1. 1. 60 days from October 1, 2002
--------------------------------------------------------------------------------
Schedule 1
Description of Duties
During the Term, Employee shall perform the following services:
(1) Serve as Vice-President of the Division of Insurance Group for the
Company, including, without limitation, the following:
(a) managing insurance underwriting and product administration.
(b) providing administrative services and insurance and corporate
sales.
(c) managing the sales and marketing of such division in accordance
with the Sales Territory Business Plan;
(d) managing direct mail and other programs for such division in
accordance with the Sales Territory Business Plan; and
(e) hiring and supervising vice presidents of sales in accordance
with the Sales Territory Business Plan.
(2) Serve as a member of the Company's Executive Committee.
Schedule 2
Sales Territory Business Plan; Schedule of Commissions
(See attached pages)
EMPLOYMENT AGREEMENT
(Xxxxx Xxxxxx)
This EMPLOYMENT AGREEMENT (this "Agreement") is dated and entered into effective
as of ______, 2002 (the "Effective Date"), by and between TRANSWORLD BENEFITS,
INC. (fka Skyway Home, Inc.), a Nevada corporation (the "Company"), and XXXXX
XXXXXX, an individual ("Employee").
R E C I T A L S
- - - - - - - -
WHEREAS, the Company is a corporation formed and duly qualified in the
State of Nevada.
WHEREAS, the Company desires to engage Employee to perform certain
services, and Employee desires to provide such services to the Company, upon the
terms and conditions of this Agreement.
A G R E E M E N T
- - - - - - - - -
NOW, THEREFORE, for and in consideration of the foregoing recitals, the mutual
covenants, provisions and terms set forth in this Agreement and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and Employee agree as follows:
1. Engagement. The Company hereby employs Employee, and Employee
hereby accepts such employment, to provide the "Services" (as defined below)
upon the terms and conditions set forth in this Agreement.
2. Services. During the "Term" (as defined below) of this Agreement,
Employee shall perform those services and duties as more described in Schedule 1
----------
attached hereto (collectively, the "Services"). Employee shall have, subject to
the direction, supervision and control of the Board of Directors of the Company
(the "Board") and the Chief Executive Officer of the Company ("CEO"), and
Employee agrees to faithfully perform, such duties as are typically performed by
the president of a comparably-sized company engaged in activities comparable to
the business of the Company, and such additional duties consistent with such
office as may be assigned from time to time by the Board or the CEO. During the
Term, Employee shall report to the Board and the CEO.
3. Term. Unless terminated earlier as provided in this Agreement, the
Company retains Employee to provide the Services for a term beginning on
November 1, 2002 (the "Start Date") and ending on October 31, 2005 (the "Term").
Thereafter, the Term shall be automatically extended for successive periods of
one (1) year unless either the Company or Employee gives the other a written
notice electing not to extend the Term, given not less than three (3) months
prior to the date upon which any such extension would otherwise begin. As used
herein, the term "Term" means the original term and any extension thereof.
4. Time and Effort. Employee shall perform the Services under this
Agreement in a diligent and competent manner. During the Term, Employee shall
perform the Services for the Company on a full-time basis.
5. Compensation. In consideration of Employee's performance of the
Services hereunder and other covenants and agreements of Employee hereunder, the
Company shall provide to Employee the compensation set forth in this Section 5.
5.1 Advancements. During the Term and subject to the terms and
------------
conditions set forth in Section 5.2 hereof, Employee shall receive advancements
against future "Commissions" (as defined in Section 5.2 hereof ) (each, an
"Advancement") as follows, payable in accordance with the Company's payroll
procedures:
(i) During the first year of the Term, Employee shall receive
total Advancements equal to: (a) One Hundred Twenty Thousand Dollars ($120,000);
plus (b) a signing bonus of Fifty Thousand Dollars ($50,000); and
(ii) During the second year of the Term and during each subsequent
year thereafter, Employee shall receive Advancements in a total amount equal to
One Hundred Twenty Thousand Dollars ($120,000) per year.
5.2 Commissions. During the Term, the Company shall pay to
-----------
Employee the "Commissions" in the amounts set forth and as calculated pursuant
to the terms of Schedule 2, attached hereto and incorporated herein by this
-----------
reference (the "Sales Territory Business Plan"), subject to the following terms
and conditions:
(i) During the first year of the Term, fifty (50%) of any and all
Commissions earned and payable to Employee during any such payment period shall
be used to reduce the Advancements made to Employee pursuant to Section 5.1(i)
above. Notwithstanding the foregoing to the contrary, during the first year,
Employee's total compensation shall not be reduced to less than One Hundred
Seventy Thousand Dollars ($170,000). For example, if no Commissions were earned
and payable to Employee during the first year of the Term, Employee shall be
entitled to retain the entire $170,000 of Advancements received by Employee
pursuant to Section 5.1(i) hereof.
(ii) After the first year of the Term, one hundred percent (100%)
of any and all Commissions earned and payable to Employee during any such
payment period shall be used to reduce any outstanding balance of the
Advancements made by the Company to Employee during the term of this Agreement
(excluding the Advancements made by the Company to Employee during the first
year of the Term as set forth in Section 5.1(i) hereof), until such time as such
outstanding balance is reduced to zero.
(iii) In the event that Employee's employment is terminated by the
Company with "cause" (as defined in Section 8.4.2 hereof) or terminated by
Employee with or without cause, Employee shall repay to the Company the
outstanding balance of the Advancements made by the Company to Employee during
the term of this Agreement (excluding the Advancements made by the Company to
Employee during the first year of the Term as set forth in Section 5.1(i)
hereof), by no later than seven (7) days following such termination, from any
Commissions due and payable to the Employee pursuant to Schedule 2.
(iv) Employee hereby acknowledges, understands and agrees that
(A) any and all Commissions shall be calculated pursuant to the terms of the
Sales Territory Business Plan as set forth in the attached Schedule 2,
----------
subject to the terms and conditions set forth in this Agreement; and (B)
Employee shall perform such duties and obligations set forth in the Sales
Territory Business Plan, including, without limitation, the hiring and paying
the salaries and expenses of employees.
5.3 Right of First Refusal. In the event that the Company is
-------------------------
involved in any future offering of shares in the Company, Employee shall have
the right of first refusal to purchase, at the purchase price offered to other
investors, such number of shares of the Company under such offering so that
Employee's total interest in the Company will not be less than two percent (2%)
of the total issued and outstanding shares of capital stock in the Company (as
determined on a fully diluted, as converted basis).
5.4 Stock Option Plan. A stock option plan (the "Plan") is being
------------------
established by the Company. Employee shall be entitled to receive options to
purchase shares under the Plan equal to two percent (2%) of the total issued and
outstanding shares of capital stock in the Company as of the Start Date (as
determined on a fully diluted, as converted basis) (the "Optioned Shares").
Subject to the terms set forth herein and in the Plan, Employee shall have the
right to purchase 1/3 of the Optioned Shares at each
anniversary of the Start Date. Employee shall be entitled to receive such other
shares under the Plan as determined by the Company's board of directors in its
discretion. Employee hereby acknowledges that Employee's right, title and
interest in and to any option granted under this Section 5.4 shall be subject to
the terms and conditions set forth in the Plan.
6. Other Benefits. Employee shall be entitled to the following:
6.1 Reimbursement of Expenses. The Company shall reimburse
---------------------------
Employee for all business-related expenses and costs actually incurred by
Employee in the performance of the Services under this Agreement pursuant to the
terms set forth in the Sales Territory Business Plan. In addition, the
reimbursement of all such costs and expenses shall be subject to reasonable
policies and procedures established from time to time by the Company, including,
without limitation, as those set forth in the Company's Employee Handbook, as
amended.
6.2 Paid Vacation. During the Term, Employee shall be entitled to
-------------
such period of paid vacation as available to other employees of the Company as
set forth in the Company's Employee Handbook, as amended. Notwithstanding the
foregoing, during the first three (3) years of the Term, vacation shall not be
taken more than two (2) weeks consecutively.
6.3 Car Allowance. During the Term, the Company will provide
--------------
Employee with a car allowance of Seven Hundred Dollars ($700) per month pursuant
to the terms set forth in the Sales Territory Business Plan.
6.4 Insurance. During the Term, Employee shall receive full medical
----------
coverage generally available to the Company's other executive and managerial
employees. In addition, Employee shall be entitled to receive all other
benefits of employment generally available to Company's other executive and
managerial employees when and as Employee becomes eligible for them, including
dental, life insurance and disability plans.
7. Work Products/Confidentiality/Non-Competition.
7.1 Work Products. Employee hereby acknowledges and agrees that any
--------------
and all "Work Products" (as defined below) which may have been or are made,
developed or conceived of in whole or in part by Employee, or any of Employee's
Representatives, in connection with services provided on behalf of the Company
or relating to the business of the Company, shall belong solely and exclusively
to the Company. Employee shall assign or cause its Representatives to assign to
the Company such Employee's or Representative's entire right, title and
interest, including all patent, copyright, trade secret, trademark and other
proprietary rights, in any and all Work Products. The term "Work Products"
means and includes, without limitation, a discovery, a development, a design, an
improvement, an invention, a know-how, technical or non-technical data, a
formula, a pattern, a compilation, a program, a device, a method, a technique, a
drawing, a process, financial data, financial plans, product plans, business
plans, software programs (including the object and source code thereto) or a
list (whether in written form or otherwise) of actual or potential customers or
suppliers, which is not commonly known by or available to the public and which
information (i) derives economic value, actual or potential, from not being
generally known to and not being readily ascertainable by proper means by other
persons who can obtain economic value from its disclosure or use and (ii) is the
subject of efforts that are reasonable under the circumstances to maintain its
secrecy.
7.2 Business Opportunities. Employee covenants and agrees that
-----------------------
any business opportunity which Employee or Employee's "Representatives" (as
defined herein) might have during the term of this Agreement which relates to
the business of the Company shall first be offered to the Company. If the
Company rejects such offer, Employee shall be free to pursue such opportunity.
The term "Representative" means and includes, with respect to any person or
entity, each shareholder, director, officer, manager,
constituent member, constituent partner, trustor, beneficiary, trustee,
successor-in-interest, predecessor-in-interest, "Affiliate" (as defined in
Section 7.4 hereof), employee, agent, attorney or other representative of such
party, expressly excluding however, with respect to each party to this
Agreement, the other party to this Agreement.
7.3 Proprietary Information. In the course of Employee's employment by
-----------------------
the Company, each of Employee and Employee's Representatives, has had, and will
continue to have, access to confidential and proprietary information regarding
the Company and its business, including, but not limited to, information
regarding the Company's technologies, methods and techniques, product
information, specifications, technical drawings and designs, trade secrets,
know-how, sources of supply, product and market research data, customer lists,
marketing plans, and financial information regarding the Company and its
operations. Such information shall be referred to hereinafter as "Proprietary
Information" and shall include any and all of the information of the type
described and shall also include any and all other confidential and proprietary
information relating to the business to be conducted by the Company, whether
previously existing, now existing or arising hereafter, whether conceived or
developed by others or by Employee alone or with others, and whether or not
conceived or developed during regular working hours. Proprietary Information
which is released into the public domain during the period of Employee's
employment under this Agreement, provided the same is not in the public domain
as a consequence of disclosure directly or indirectly by Employee in violation
of this Agreement, shall not be subject to the restrictions of this Section.
7.3.1 Fiduciary Obligations. Employee acknowledges that the Company
----------------------
has taken all reasonable steps in protecting the secrecy of the Proprietary
Information, that said Proprietary Information is of critical importance to the
Company and that a violation of this Section of this Agreement would seriously
and irreparably impair and damage the Company's business. Accordingly, Employee
agrees that it shall keep (and shall use its commercially reasonable best
efforts to cause its Representatives to keep) all Proprietary Information in a
fiduciary capacity for the sole benefit of the Company.
7.3.2 Non-Disclosure. Employee shall not, directly or indirectly,
--------------
use or disclose (except as Employee's duties may require and except as required
by law) any Proprietary Information to any person other than the Company, any
employees of the Company who are authorized, at the time of such disclosure, to
receive such information, or such other persons to whom Employee has been
specifically instructed to make disclosure by the Board of Directors of the
Company and in all such cases only to the extent required in the course of
Employee's employment by the Company. At the termination of this Agreement,
Employee shall deliver to the Company all notes, letters, documents, records,
computer files, programs and other media which may contain Proprietary
Information which are then in its possession or control and shall not retain or
use any copies or summaries thereof.
7.4 Non-Competition. During the Term and for the two year period
---------------
following the termination or expiration of the Term (such periods referred to
collectively as the "Restriction Period"), neither Employee nor any of
Employee's "Affiliates" (as defined below) shall, directly or indirectly, engage
in, become employed by, serve as an agent or consultant to, or become a
constituent member, partner, principal or stockholder (other than a holder of
less than 5% of the outstanding voting shares of any publicly-held company) of
any person or entity which engages directly or indirectly in any business or
activity competitive with any business or activity engaged in by the Company or
any of its subsidiaries. "Affiliates" shall mean and include, with respect to
any other person or entity, any person or entity that directly or indirectly
through one or more intermediaries controls or is controlled by, or is under
common control with such person or entity.
7.5 Non-Solicitation of Employees. During the Restriction Period,
-----------------------------
neither Employee nor any of Employee's Affiliates shall, directly or indirectly,
for Employee's own account or for the account of any other person or entity with
which Employee is or shall become associated in any capacity, (a) solicit for
employment, employ or otherwise interfere with the relationship of the Company
or any of its Affiliates, any person who at any time during the six months
preceding such solicitation, employment or interference is or was
employed by or otherwise engaged to perform services for the Company or any of
its Affiliates, other than any such solicitation or employment during Employee's
employment with the Company on behalf of the Company, or (b) induce any employee
of the Company or any of its Affiliates who is a member of management to engage
in any activity which Employee is prohibited from engaging in under any of this
Section hereof or to terminate Employee's employment with the Company.
7.6 Non-Solicitation of Customers. During the Restriction Period,
-----------------------------
neither Employee nor any of Employee's Affiliates shall, directly or indirectly,
solicit or otherwise attempt to establish for Employee or any other person, firm
or entity any business relationship of a nature that is competitive with the
business or relationship of the Company or any of its Affiliates, with any
person, firm or corporation which, during the twelve-month period preceding the
date Employee's employment with the Company and its Affiliates terminates, was a
customer, client or distributor of the Company or any of its Affiliates, other
than any such solicitation during Employee's employment with the Company or on
behalf of the Company.
8. Termination.
8.1 Termination Upon Death. If Employee dies during the Term, this
------------------------
Agreement shall terminate. Upon such termination, Employee shall be entitled to
all accrued and unpaid compensation due under Section 5 above and the other
obligations of the Company under this Agreement shall cease as of the date of
the termination.
8.2 Termination Upon Permanent Disability. In the event of the
----------------------------------------
"Permanent Disability" (as hereinafter defined) of Employee, the Company may
terminate this Agreement pursuant to the terms and conditions set forth in the
Company's Employee Handbook, as amended. For the purposes of this Agreement,
Employee shall be deemed to have suffered "Permanent Disability" in the event
that Employee has become disabled by physical or mental illness or injury to the
extent that the Board of Directors of the Company reasonably believes,
notwithstanding such reasonable accommodations as the Company may make in
response to such disability, that Employee cannot carry out or perform
Employee's duties hereunder. In the event that the Company terminates this
Agreement following Employee's Permanent Disability, other than accrued and
unpaid compensation due to Employee, the compensation obligations of the Company
under Section 5 hereof and any other obligations of the Company under this
Agreement shall cease as of the date of the termination.
8.3 Termination by Employee.
-------------------------
8.3.1 Employee may terminate this Agreement without cause at any time
and for any reason upon sixty (60) days' notice to the Company.
8.3.2 Employee may immediately terminate this Agreement for cause at
any time by written notice to the Company. For purposes of this Agreement, the
term "cause" for termination by Employee shall be (a) a breach by the Company of
any material covenant or obligation hereunder; or (b) the voluntary or
involuntary dissolution of the Company. The written notice given hereunder by
Employee to the Company shall specify in reasonable detail the cause for
termination, and, in the case of the cause described in (a) above, such
termination notice shall not be effective until thirty (30) days after the
Company's receipt of such notice, during which time the Company shall have the
right to respond to Employee's notice and cure the breach or other event giving
rise to the termination. In the event that the Company is able to cure, this
Agreement shall continue in full force and effect.
8.4 Termination by the Company.
-----------------------------
8.4.1 The Company may terminate this Agreement without cause at any
time and
for any reason upon sixty (60) days' notice to Employee.
8.4.2 The Company may terminate this Agreement for cause at any time
by written notice to Employee. For purposes of this Agreement, the term "cause"
for termination by the Company shall be (a) a conviction of or plea of guilty or
nolo contendre by Employee to a felony; (b) any action or activity of Employee
which could reasonably be expected to have a material adverse effect on the
Company, its business, its goodwill or its prospects; (c) the refusal by
Employee to perform its material duties and obligations hereunder; or (d)
Employee's gross negligence or willful and intentional misconduct in the
performance of its duties and obligations. The written notice given hereunder by
the Company to Employee shall specify in reasonable detail the cause for
termination. In the case of a termination for the cause described in (a) above,
such termination shall be effective upon receipt of the written notice. In the
case of the causes described in (b) through (d) above, such termination notice
shall not be effective until thirty (30) days after Employee's receipt of such
notice, during which time Employee shall have the right to respond to the
Company's notice and cure the breach or other event giving rise to the
termination. In the event that Employee is able to cure, this Agreement shall
continue in full force and effect.
8.5 Effect of Termination. Upon any termination of this
-----------------------
Agreement, the obligations and covenants of the parties hereunder shall be of no
further force and effect, except as provided in Section 11.7 below and as set
forth in this Section 8.5. Upon any termination of this Agreement by Employee
or the Company pursuant to Section 8 hereof, (a) the Company shall pay to
Employee all accrued and unpaid compensation as of the date of such termination
subject to the terms and conditions set forth in this Agreement; (b) if
termination by the Company based on "cause" or by the Employee, Employee shall
repay to the Company any outstanding balance of the Advancements made to
Employee pursuant to Section 5.1(ii) hereof; and (c) all other obligations of
the Company under this Agreement shall cease as of the date of such termination,
including, without limitation, the right of Employee with respect to any
unvested rights or shares granted herein or any future offering by the Company.
8.6 Effect of Combination or Dissolution. This Agreement shall not
---------------------------------------
be terminated by the voluntary or involuntary dissolution of the Company, or by
any merger or consolidation in which the Company is not the surviving or
resulting entity, or any transfer of all or substantially all of the assets of
the Company, or upon any transfer of a majority of the ownership interests of
the Company by one or more members in one or more transactions, or upon the
issuance of units of membership interests of the Company constituting a majority
of the outstanding units immediately following such issuance. Instead, subject
to Employee's right to terminate this Agreement pursuant to Section 8.3 above,
the provisions of this Agreement shall be binding on and inure to the benefit of
the Company's creditors, the surviving business entity or the business entity to
which such units or assets shall be transferred.
9. Remedies.
9.1 Injunctive Relief. Employee acknowledges and agrees that (i)
------------------
the covenants and the restrictions contained in Section 7 above are necessary,
fundamental, and required for the protection of the Company's business; (ii)
such covenants relate to matters which are of a special, unique, and
extraordinary character that gives each of such covenants a unique and
extraordinary value; and (iii) a breach of any of such covenants will result in
irreparable harm and damages to the Company which cannot be adequately
compensated by a monetary award. Accordingly, it is expressly agreed that in
addition to all other remedies available at law or in equity, the Company shall
be entitled to seek injunctive or other equitable relief to restrain or enjoin
Employee from breaching any such covenant or to specifically enforce the
provisions of Section 7 above.
9.2 No Limitation of Remedies. Notwithstanding the provisions set
----------------------------
forth in Section 9.1 of this Agreement or any other provision contained in this
Agreement, the parties hereby agree that no remedy conferred by any of the
specific provisions of this Agreement, including without limitation, this
Section 9, is intended to be exclusive of any other remedy, and each and every
remedy shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute or
otherwise.
10. Representations and Warranties. Employee hereby represents and
warrants to the Company as follows:
10.1 Acquisition Entirely for Own Account. Employee agrees that
----------------------------------------
Employee is acquiring the shares of the Company ("Shares") for investment
purposes only, for Employee's own account, and not for sale or with a view to
distribution of all or any part of such Shares. Employee has no contract,
undertaking, agreement or arrangement with any person or entity to sell,
hypothecate, pledge, donate, or otherwise transfer (with or without
consideration) the Shares or any portion thereof, and Employee has no present
plans or intention to enter any such contract, undertaking agreement or
arrangement.
10.2 Accredited Investor. With respect to the acquisition of the
--------------------
Shares, Employee qualifies as an "accredited investor" as that term is defined
in Rule 501 of Regulation D under the Securities Act of 1933, as amended (the
"Securities Act").
10.3 Investment Experience. Employee acknowledges and understands
---------------------
that an investment in the Company is speculative in nature and involves a high
degree of risk, and that the Company has no financial or operating history.
Employee acknowledges that Employee is able to fend for himself/herself, can
bear the economic risk of Employee's investment, and has such knowledge and
experience in financial or business matters that Employee is capable of
evaluating the merits and risks of the investment in the Shares.
10.4 Restricted Shares. Employee acknowledges that Employee was
------------------
informed that the Shares are not registered under the Securities Act or
applicable state laws, and that such Shares are "restricted Shares" and may not
be transferred or otherwise disposed of unless subsequently registered under the
Securities Act or such laws, or unless an exemption from such registration is
available.
11. Miscellaneous.
11.1 Successors and Assigns. This Agreement is in the nature of a
------------------------
personal services contract; and neither party shall assign this Agreement
without the prior written consent of the other party. This Agreement shall be
binding on and inure to the benefit of the parties hereto and their respective
successors, assigns, heirs and legal Representatives.
11.2 Governing Law. This Agreement shall be construed under and in
--------------
accordance with, and governed in all respects by, the laws of the State of
California (without giving effect to principles of conflicts of law).
11.3 Waiver. The failure of the Company to insist on strict compliance
------
with any of the terms, covenants, or conditions of this Agreement by any other
party shall not be deemed a waiver of that term, covenant or condition, nor
shall any waiver or relinquishment of any right or power at any one time or
times be deemed a waiver or relinquishment of that right or power for all or any
other times.
11.4 Notices. Any notice or other communication required or
-------
permitted hereunder (each, a "Notice") shall be in writing, and shall be deemed
to have been given (a) two (2) days following deposit of such Notice in the
United States mail, certified, postage prepaid, return receipt requested, or (b)
upon receipt if delivered personally, or delivered by reputable, recognized
third party overnight delivery service or courier service or (c) the next
business day following receipt, if transmitted by facsimile (provided that such
facsimile is followed by the deposit of the original Notice, or a copy thereof,
in the United States mail, certified, postage prepaid, return receipt requested,
no later than the next business day following transmission of such facsimile),
addressed to the parties as follows:
To Employee: Xx. Xxxxx Xxxxxx
___________________________
___________________________
___________________________
To the Company: TransWorld Benefits, Inc.
Attn: _________________________
0000 Xxxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Either party may require such Notices to be delivered and given to any address
different from or additional to the address set forth above, by delivering
Notice thereof to the other party pursuant to this Section.
11.5 Arbitration. Any controversy arising out of or relating to this
------------
Agreement shall be settled by arbitration in Orange County, California in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association before a single arbitrator agreed to by the parties. If no
agreement can be reached regarding the selection of such arbitrator, the
American Arbitration Association shall deliver to the parties a list with the
names of three qualified arbitrators. Each party shall select a single name.
The name not selected by either party or, in the alternative, selected by both
parties shall be the arbitrator of such controversy. The decision of the
arbitrator shall be binding and non-appealable. The parties hereto consent to
the jurisdiction of the Superior Court of the State of California for the County
of Orange and of the United States District Court of the Southern District for
all purposes in connection with such arbitration, including the entry of
judgment on any award.
11.6 Amendments. This Agreement, together with the attached
----------
Schedule(s), constitutes the entire agreement of the parties hereto with respect
to the employment and retention of Employee by the Company, and supersedes any
and all prior and contemporaneous agreements, whether oral or in writing,
between the parties hereto with respect to the subject matter hereof. This
Agreement may not be amended, modified, altered or supplemented except by
written agreement executed and delivered by the parties hereto.
11.7 Survival of Certain Rights and Obligations. The rights and
-----------------------------------------------
obligations of the parties hereto pursuant to Sections 7, 8.5, 9 and 10 of this
Agreement shall survive the termination of this Agreement.
11.8 Severability. If any provision of this Agreement is held by a
------------
court of competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions shall nevertheless continue in full force without being
impaired or invalidated in any way. If any court of competent jurisdiction
holds any provision of this Agreement to be invalid, void or unenforceable with
respect to any state, region or locality, such provision shall nevertheless
continue in full force and effect in all other states, regions and localities to
which such provision applies.
11.9 Further Assurances. The parties agree that, at any time and from
-------------------
time to time during the Term, they will take any action and execute and deliver
any document which the other party reasonably requests in order to carry out the
purposes of this Agreement.
11.10 Counterparts. This Agreement may be executed in one or
------------
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
11.11 Attorneys' Fees. If any action at law or in equity is necessary
----------------
to enforce or interpret the terms of this Agreement, the prevailing party shall
be entitled to recover any and all reasonable attorneys' fees, expert witness
fees, costs and necessary disbursements in addition to any other relief to which
such party may be entitled.
11.12 No Third Party Beneficiary. This Agreement is made and entered
----------------------------
into between the parties solely for the benefit of the parties, and not for the
benefit of any other third party or entity. No third party or entity shall be
deemed or considered a third party beneficiary of any covenant, promise or other
provision of this Agreement or have any right to enforce any such covenant,
promise or other provision against either or both parties.
[signatures follow on next page]
IN WITNESS WHEREOF, each of the parties hereto has duly executed this Agreement
as of the date first above written.
"Company"
TRANSWORLD BENEFITS, INC., a Nevada corporation
By: _______________________________________
Name: _____________________________________
Title:_____________________________________
"Employee"
__________________________________________
XXXXX XXXXXX, an individual
Schedule 1
Description of Duties
During the Term, Employee shall perform the following services:
(1) Serve as President of the Company.
(2) Serve on the Company's Executive Committee.
(3) Manage matters in connection with Company's personnel and human
resources.
(4) Manage, supervise, oversee, and handle the Company's day-to-day
operations.
(5) Serve as supervisor to the Company's Communications Director, subject to
guidance from the Company's Vice President.
(6) Supervise and manage Company's division for Travel and Credit Card
Industries, including, without limitation, (a) managing the sales and marketing
of such division; (b) managing direct mail and other programs for such division;
and (c) hiring and supervising vice presidents of sales, in accordance with the
Sales Territory Business Plan.
Schedule 2
Sales Territory Business Plan; Schedule of Commissions
(See attached pages)
EMPLOYMENT AGREEMENT
(Xxxxxx Xxxxxxxxx)
This EMPLOYMENT AGREEMENT (this "Agreement") is dated and entered into effective
as of ______, 2001 (the "Effective Date"), by and between TRANSWORLD BENEFITS,
INC. (fka Skyway Home, Inc.), a Nevada corporation (the "Company"), and XXXXXX
XXXXXXXXX, an individual ("Employee").
R E C I T A L S
- - - - - - - -
WHEREAS, the Company is a corporation formed and duly qualified in the
State of Nevada.
WHEREAS, the Company desires to engage Employee to perform certain
services, and Employee desires to provide such services to the Company, upon the
terms and conditions of this Agreement.
A G R E E M E N T
- - - - - - - - -
NOW, THEREFORE, for and in consideration of the foregoing recitals, the mutual
covenants, provisions and terms set forth in this Agreement and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and Employee agree as follows:
1. Engagement. The Company hereby employs Employee, and Employee
hereby accepts such employment, to provide the "Services" (as defined below)
upon the terms and conditions set forth in this Agreement.
2. Services. During the "Term" (as defined below) of this Agreement,
Employee shall perform those services and duties as more described in Schedule 1
----------
attached hereto (collectively, the "Services"). Employee shall have, subject to
the direction, supervision and control of the Board of Directors of the Company
(the "Board") and the Chief Executive Officer of the Company ("CEO"), and
Employee agrees to faithfully perform, such additional duties consistent with
such office as may be assigned from time to time by the Board or the CEO.
During the Term, Employee shall report to the Board and the CEO.
3. Term. Unless terminated earlier as provided in this Agreement, the
Company retains Employee to provide the Services for a term beginning on October
1, 2001 (the "Start Date") and ending on September 30, 2005 (the "Term").
Thereafter, the Term shall be automatically extended for successive periods of
one (1) year unless either the Company or Employee gives the other a written
notice electing not to extend the Term, given not less than three (3) months
prior to the date upon which any such extension would otherwise begin. As used
herein, the term "Term" means the original term and any extension thereof.
4. Time and Effort. Employee shall perform the Services under this
Agreement in a diligent and competent manner. During the Term, Employee shall
perform the Services for the Company on a full-time basis.
5. Compensation. In consideration of Employee's performance of the
Services hereunder and other covenants and agreements of Employee hereunder, the
Company shall provide to Employee the compensation set forth in this Section 5.
5.1 Advancements. During the Term and subject to the terms and
------------
conditions set forth in Section 5.2 hereof, Employee shall receive advancements
against future "Commissions" (as defined in Section 5.2 hereof) (each, an
"Advancement") as follows, payable in accordance with the Company's payroll
procedures:
(i) During the first year of the Term, Employee shall receive
total Advancements
equal to: (a) One Hundred Twenty Thousand Dollars ($120,000); plus (b) a signing
bonus of Thirty Thousand Dollars ($30,000) paid over the first twelve (12)
months commencing on October 1, 2001; and
(ii) During the second year of the Term and during each subsequent
year thereafter, Employee shall receive Advancements in a total amount equal to
One Hundred Twenty Thousand Dollars ($120,000) per year.
5.2 Commissions. During the Term, the Company shall pay to Employee
-----------
the "Commissions" in the amounts set forth and as calculated pursuant to the
terms of Schedule 2, attached hereto and incorporated herein by this reference
----------
(the "Sales Territory Business Plan"), subject to the following terms and
conditions:
(i) During the first year of the Term, fifty (50%) of any and all
Commissions earned and payable to Employee during any such payment period shall
be used to reduce the Advancements made to Employee pursuant to Section 5.1(i)
above. Notwithstanding the foregoing to the contrary, during the first year,
Employee's total compensation shall not be reduced to less than One Hundred
Fifty Thousand Dollars ($150,000). For example, if no Commissions were earned
and payable to Employee during the first year of the Term, Employee shall be
entitled to retain the entire $150,000 of Advancements received by Employee
pursuant to Section 5.1(i) hereof.
(ii) After the first year of the Term, one hundred percent (100%)
of any and all Commissions earned and payable to Employee during any such
payment period shall be used to reduce any outstanding balance of the
Advancements made by the Company to Employee during the term of this Agreement
(excluding the Advancements made by the Company to Employee during the first
year of the Term as set forth in Section 5.1(i) hereof), until such time as such
outstanding balance is reduced to zero.
(iii) In the event that Employee's employment is terminated by the
Company with "cause" (as defined in Section 8.4.2 hereof) or terminated by
Employee with or without cause, Employee shall repay to the Company the
outstanding balance of the Advancements made by the Company to Employee during
the term of this Agreement (excluding the Advancements made by the Company to
Employee during the first year of the Term as set forth in Section 5.1(i)
hereof), by no later than seven (7) days following such termination.
(iv) Employee hereby acknowledges, understands and agrees that (A) any
and all Commissions shall be calculated pursuant to the terms of the Sales
Territory Business Plan as set forth in the attached Schedule 2, subject to the
----------
terms and conditions set forth in this Agreement; and (B) Employee shall perform
such duties and obligations set forth in the Sales Territory Business Plan,
including, without limitation, the hiring and paying the salaries and expenses
of employees.
(v) Notwithstanding any provision contained herein to the contrary,
Employee shall be compensated at the rate of ten percent (10%) until such time
as Employee has received a total of $100,000 in bonus payment.
5.3 Right of First Refusal. In the event that the Company is
-------------------------
involved in any future offering of shares in the Company, Employee shall have
the right of first refusal to purchase, at the purchase price offered to other
investors, such number of shares of the Company under such offering so that
Employee's total interest in the Company will not be less than two percent (2%)
of the total issued and outstanding shares of capital stock in the Company (as
determined on a fully diluted, as converted basis).
5.4 Stock Option Plan. A stock option plan (the "Plan") is being
-----------------
established by the Company. Employee shall be entitled to receive options to
purchase shares under the Plan equal to two and half percent (2 1/2%) of the
total issued and outstanding shares of capital stock in the Company as of the
Start
Date (as determined on a fully diluted, as converted basis) (the "Optioned
Shares"). Subject to the terms set forth herein and in the Plan, Employee shall
have the right to purchase 1/3 of the Optioned Shares at each anniversary of the
Start Date. Employee shall be entitled to receive such other shares under the
Plan as determined by the Company's board of directors in its discretion.
Employee hereby acknowledges that Employee's right, title and interest in and to
any option granted under this Section 5.4 shall be subject to the terms and
conditions set forth in the Plan.
6. Other Benefits. Employee shall be entitled to the following:
6.1 Reimbursement of Expenses. The Company shall reimburse
---------------------------
Employee for all business-related expenses and costs actually incurred by
Employee in the performance of the Services under this Agreement pursuant to the
terms set forth in the Sales Territory Business Plan. In addition, the
reimbursement of all such costs and expenses shall be subject to reasonable
policies and procedures established from time to time by the Company, including,
without limitation, as those set forth in the Company's Employee Handbook, as
amended.
6.2 Paid Vacation. During the Term, Employee shall be entitled to
-------------
such period of paid vacation as available to other employees of the Company as
set forth in the Company's Employee Handbook, as amended. Notwithstanding the
foregoing, during the first three (3) years of the Term, vacation shall not be
taken more than two (2) weeks consecutively.
6.3 Car Allowance. During the Term, the Company will provide
--------------
Employee with a car allowance of Seven Hundred Dollars ($700) per month pursuant
to the terms set forth in the Sales Territory Business Plan.
6.4 Insurance. During the Term, Employee shall receive full medical
----------
coverage generally available to the Company's other executive and managerial
employees. In addition, Employee shall be entitled to receive all other
benefits of employment generally available to Company's other executive and
managerial employees when and as Employee becomes eligible for them, including
dental, life insurance and disability plans.
6.5 Moving Expenses. The Company shall pay Employee moving
----------------
expenses as follows: (A) a total of Twenty Thousand Dollars ($20,000) for moving
expenses; (B) approximately One Thousand Seven Hundred Dollars ($1,700) per
month for six (6) months for payment on Employee's home in Pennsylvania,
provided, however, such payments shall cease in the event that such home is sold
during such six-month period; and (C) upon termination of Employee's services
hereunder, a severance payment equal to the actual cost of moving less payments
made by the Company pursuant to the foregoing subsection (A).
7. Work Products/Confidentiality/Non-Competition.
7.1 Work Products. Employee hereby acknowledges and agrees that any
--------------
and all "Work Products" (as defined below) which may have been or are made,
developed or conceived of in whole or in part by Employee, or any of Employee's
Representatives, in connection with services provided on behalf of the Company
or relating to the business of the Company, shall belong solely and exclusively
to the Company. Employee shall assign or cause its Representatives to assign to
the Company such Employee's or Representative's entire right, title and
interest, including all patent, copyright, trade secret, trademark and other
proprietary rights, in any and all Work Products. The term "Work Products"
means and includes, without limitation, a discovery, a development, a design, an
improvement, an invention, a know-how, technical or non-technical data, a
formula, a pattern, a compilation, a program, a device, a method, a technique, a
drawing, a process, financial data, financial plans, product plans, business
plans, software programs (including the object and source code thereto) or a
list (whether in written form or otherwise) of actual or potential customers or
suppliers, which is not commonly known by or available to the public and which
information (i) derives
economic value, actual or potential, from not being generally known to and not
being readily ascertainable by proper means by other persons who can obtain
economic value from its disclosure or use and (ii) is the subject of efforts
that are reasonable under the circumstances to maintain its secrecy.
7.2 Business Opportunities. Employee covenants and agrees that any
-----------------------
business opportunity which Employee or Employee's "Representatives" (as defined
herein) might have during the term of this Agreement which relates to the
business of the Company shall first be offered to the Company. If the Company
rejects such offer, Employee shall be free to pursue such opportunity. The term
"Representative" means and includes, with respect to any person or entity, each
shareholder, director, officer, manager, constituent member, constituent
partner, trustor, beneficiary, trustee, successor-in-interest,
predecessor-in-interest, "Affiliate" (as defined in Section 7.4 hereof),
employee, agent, attorney or other representative of such party, expressly
excluding however, with respect to each party to this Agreement, the other party
to this Agreement.
7.3 Proprietary Information. In the course of Employee's employment by
-----------------------
the Company, each of Employee and Employee's Representatives, has had, and will
continue to have, access to confidential and proprietary information regarding
the Company and its business, including, but not limited to, information
regarding the Company's technologies, methods and techniques, product
information, specifications, technical drawings and designs, trade secrets,
know-how, sources of supply, product and market research data, customer lists,
marketing plans, and financial information regarding the Company and its
operations. Such information shall be referred to hereinafter as "Proprietary
Information" and shall include any and all of the information of the type
described and shall also include any and all other confidential and proprietary
information relating to the business to be conducted by the Company, whether
previously existing, now existing or arising hereafter, whether conceived or
developed by others or by Employee alone or with others, and whether or not
conceived or developed during regular working hours. Proprietary Information
which is released into the public domain during the period of Employee's
employment under this Agreement, provided the same is not in the public domain
as a consequence of disclosure directly or indirectly by Employee in violation
of this Agreement, shall not be subject to the restrictions of this Section.
7.3.1 Fiduciary Obligations. Employee acknowledges that the Company
----------------------
has taken all reasonable steps in protecting the secrecy of the Proprietary
Information, that said Proprietary Information is of critical importance to the
Company and that a violation of this Section of this Agreement would seriously
and irreparably impair and damage the Company's business. Accordingly, Employee
agrees that it shall keep (and shall use its commercially reasonable best
efforts to cause its Representatives to keep) all Proprietary Information in a
fiduciary capacity for the sole benefit of the Company.
7.3.2 Non-Disclosure. Employee shall not, directly or indirectly, use
--------------
or disclose (except as Employee's duties may require and except as required by
law) any Proprietary Information to any person other than the Company, any
employees of the Company who are authorized, at the time of such disclosure, to
receive such information, or such other persons to whom Employee has been
specifically instructed to make disclosure by the Board of Directors of the
Company and in all such cases only to the extent required in the course of
Employee's employment by the Company. At the termination of this Agreement,
Employee shall deliver to the Company all notes, letters, documents, records,
computer files, programs and other media which may contain Proprietary
Information which are then in its possession or control and shall not retain or
use any copies or summaries thereof.
7.4 Non-Competition. During the Term and for the two year period
---------------
following the termination or expiration of the Term (such periods referred to
collectively as the "Restriction Period"), neither Employee nor any of
Employee's "Affiliates" (as defined below) shall, directly or indirectly, engage
in, become employed by, serve as an agent or consultant to, or become a
constituent member, partner, principal or stockholder (other than a holder of
less than 5% of the outstanding voting shares of any publicly-held company) of
any person or entity which engages directly or indirectly in any business or
activity competitive
with any business or activity engaged in by the Company or any of its
subsidiaries. "Affiliates" shall mean and include, with respect to any other
person or entity, any person or entity that directly or indirectly through one
or more intermediaries controls or is controlled by, or is under common control
with such person or entity.
7.5 Non-Solicitation of Employees. During the Restriction Period,
-----------------------------
neither Employee nor any of Employee's Affiliates shall, directly or indirectly,
for Employee's own account or for the account of any other person or entity with
which Employee is or shall become associated in any capacity, (a) solicit for
employment, employ or otherwise interfere with the relationship of the Company
or any of its Affiliates, any person who at any time during the six months
preceding such solicitation, employment or interference is or was employed by or
otherwise engaged to perform services for the Company or any of its Affiliates,
other than any such solicitation or employment during Employee's employment with
the Company on behalf of the Company, or (b) induce any employee of the Company
or any of its Affiliates who is a member of management to engage in any activity
which Employee is prohibited from engaging in under any of this Section hereof
or to terminate Employee's employment with the Company.
7.6 Non-Solicitation of Customers. During the Restriction Period,
-----------------------------
neither Employee nor any of Employee's Affiliates shall, directly or indirectly,
solicit or otherwise attempt to establish for Employee or any other person, firm
or entity any business relationship of a nature that is competitive with the
business or relationship of the Company or any of its Affiliates, with any
person, firm or corporation which, during the twelve-month period preceding the
date Employee's employment with the Company and its Affiliates terminates, was a
customer, client or distributor of the Company or any of its Affiliates, other
than any such solicitation during Employee's employment with the Company or on
behalf of the Company.
8. Termination.
8.1 Termination Upon Death. If Employee dies during the Term, this
------------------------
Agreement shall terminate. Upon such termination, Employee shall be entitled to
all accrued and unpaid compensation due under Section 5 above and the other
obligations of the Company under this Agreement shall cease as of the date of
the termination.
8.2 Termination Upon Permanent Disability. In the event of the
----------------------------------------
"Permanent Disability" (as hereinafter defined) of Employee, the Company may
terminate this Agreement pursuant to the terms and conditions set forth in the
Company's Employee Handbook, as amended. For the purposes of this Agreement,
Employee shall be deemed to have suffered "Permanent Disability" in the event
that Employee has become disabled by physical or mental illness or injury to the
extent that the Board of Directors of the Company reasonably believes,
notwithstanding such reasonable accommodations as the Company may make in
response to such disability, that Employee cannot carry out or perform
Employee's duties hereunder. In the event that the Company terminates this
Agreement following Employee's Permanent Disability, other than accrued and
unpaid compensation due to Employee, the compensation obligations of the Company
under Section 5 hereof and any other obligations of the Company under this
Agreement shall cease as of the date of the termination.
8.3 Termination by Employee.
-------------------------
8.3.1 Employee may terminate this Agreement without cause at any time
and for any reason upon sixty (60) days' notice to the Company.
8.3.2 Employee may immediately terminate this Agreement for cause
at any time by written notice to the Company. For purposes of this Agreement,
the term "cause" for termination by Employee shall be (a) a breach by the
Company of any material covenant or obligation hereunder; or (b) the voluntary
or involuntary dissolution of the Company. The written notice given hereunder by
Employee to the Company
shall specify in reasonable detail the cause for termination, and, in the case
of the cause described in (a) above, such termination notice shall not be
effective until thirty (30) days after the Company's receipt of such notice,
during which time the Company shall have the right to respond to Employee's
notice and cure the breach or other event giving rise to the termination. In the
event that the Company is able to cure, this Agreement shall continue in full
force and effect.
8.4 Termination by the Company.
-----------------------------
8.4.1 The Company may terminate this Agreement without cause at any
time and for any reason upon sixty (60) days' notice to Employee.
8.4.2 The Company may terminate this Agreement for cause at any time by
written notice to Employee. For purposes of this Agreement, the term "cause"
for termination by the Company shall be (a) a conviction of or plea of guilty or
nolo contendre by Employee to a felony; (b) any action or activity of Employee
which could reasonably be expected to have a material adverse effect on the
Company, its business, its goodwill or its prospects; (c) the refusal by
Employee to perform its material duties and obligations hereunder; or (d)
Employee's gross negligence or willful and intentional misconduct in the
performance of its duties and obligations. The written notice given hereunder by
the Company to Employee shall specify in reasonable detail the cause for
termination. In the case of a termination for the cause described in (a) above,
such termination shall be effective upon receipt of the written notice. In the
case of the causes described in (b) through (d) above, such termination notice
shall not be effective until thirty (30) days after Employee's receipt of such
notice, during which time Employee shall have the right to respond to the
Company's notice and cure the breach or other event giving rise to the
termination. In the event that Employee is able to cure, this Agreement shall
continue in full force and effect.
8.5 Effect of Termination. Upon any termination of this
-----------------------
Agreement, the obligations and covenants of the parties hereunder shall be of no
further force and effect, except as provided in Section 11.7 below and as set
forth in this Section 8.5. Upon any termination of this Agreement by Employee
or the Company pursuant to Section 8 hereof, (a) the Company shall pay to
Employee all accrued and unpaid compensation as of the date of such termination
subject to the terms and conditions set forth in this Agreement; (b) if
termination by the Company based on "cause" or by the Employee, Employee shall
repay to the Company any outstanding balance of the Advancements made to
Employee pursuant to Section 5.1(ii) hereof; and (c) all other obligations of
the Company under this Agreement shall cease as of the date of such termination,
including, without limitation, the right of Employee with respect to any
unvested rights or shares granted herein or any future offering by the Company.
8.6 Effect of Combination or Dissolution. This Agreement shall
---------------------------------------
not be terminated by the voluntary or involuntary dissolution of the Company, or
by any merger or consolidation in which the Company is not the surviving or
resulting entity, or any transfer of all or substantially all of the assets of
the Company, or upon any transfer of a majority of the ownership interests of
the Company by one or more members in one or more transactions, or upon the
issuance of units of membership interests of the Company constituting a majority
of the outstanding units immediately following such issuance. Instead, subject
to Employee's right to terminate this Agreement pursuant to Section 8.3 above,
the provisions of this Agreement shall be binding on and inure to the benefit of
the Company's creditors, the surviving business entity or the business entity to
which such units or assets shall be transferred.
9. Remedies.
9.1 Injunctive Relief. Employee acknowledges and agrees that (i) the
------------------
covenants and the restrictions contained in Section 7 above are necessary,
fundamental, and required for the protection of the Company's business; (ii)
such covenants relate to matters which are of a special, unique, and
extraordinary character that gives each of such covenants a unique and
extraordinary value; and (iii) a breach of any of such
covenants will result in irreparable harm and damages to the Company which
cannot be adequately compensated by a monetary award. Accordingly, it is
expressly agreed that in addition to all other remedies available at law or in
equity, the Company shall be entitled to seek injunctive or other equitable
relief to restrain or enjoin Employee from breaching any such covenant or to
specifically enforce the provisions of Section 7 above.
9.2 No Limitation of Remedies. Notwithstanding the provisions set
----------------------------
forth in Section 9.1 of this Agreement or any other provision contained in this
Agreement, the parties hereby agree that no remedy conferred by any of the
specific provisions of this Agreement, including without limitation, this
Section 9, is intended to be exclusive of any other remedy, and each and every
remedy shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute or
otherwise.
10. Representations and Warranties. Employee hereby represents and
warrants to the Company as follows:
10.1 Acquisition Entirely for Own Account. Employee agrees that
----------------------------------------
Employee is acquiring the shares of the Company ("Shares") for investment
purposes only, for Employee's own account, and not for sale or with a view to
distribution of all or any part of such Shares. Employee has no contract,
undertaking, agreement or arrangement with any person or entity to sell,
hypothecate, pledge, donate, or otherwise transfer (with or without
consideration) the Shares or any portion thereof, and Employee has no present
plans or intention to enter any such contract, undertaking agreement or
arrangement.
10.2 Accredited Investor. With respect to the acquisition of the
--------------------
Shares, Employee qualifies as an "accredited investor" as that term is defined
in Rule 501 of Regulation D under the Securities Act of 1933, as amended (the
"Securities Act").
10.3 Investment Experience. Employee acknowledges and understands
---------------------
that an investment in the Company is speculative in nature and involves a high
degree of risk, and that the Company has no financial or operating history.
Employee acknowledges that Employee is able to fend for himself/herself, can
bear the economic risk of Employee's investment, and has such knowledge and
experience in financial or business matters that Employee is capable of
evaluating the merits and risks of the investment in the Shares.
10.4 Restricted Shares. Employee acknowledges that Employee was
------------------
informed that the Shares are not registered under the Securities Act or
applicable state laws, and that such Shares are "restricted Shares" and may not
be transferred or otherwise disposed of unless subsequently registered under the
Securities Act or such laws, or unless an exemption from such registration is
available.
11. Miscellaneous.
11.1 Successors and Assigns. This Agreement is in the nature of a
------------------------
personal services contract; and neither party shall assign this Agreement
without the prior written consent of the other party. This Agreement shall be
binding on and inure to the benefit of the parties hereto and their respective
successors, assigns, heirs and legal Representatives.
11.2 Governing Law. This Agreement shall be construed under and in
--------------
accordance with, and governed in all respects by, the laws of the State of
California (without giving effect to principles of conflicts of law).
11.3 Waiver. The failure of the Company to insist on strict compliance
------
with any of the terms, covenants, or conditions of this Agreement by any other
party shall not be deemed a waiver of that
term, covenant or condition, nor shall any waiver or relinquishment of any right
or power at any one time or times be deemed a waiver or relinquishment of that
right or power for all or any other times.
11.4 Notices. Any notice or other communication required or permitted
-------
hereunder (each, a "Notice") shall be in writing, and shall be deemed to have
been given (a) two (2) days following deposit of such Notice in the United
States mail, certified, postage prepaid, return receipt requested, or (b) upon
receipt if delivered personally, or delivered by reputable, recognized third
party overnight delivery service or courier service or (c) the next business day
following receipt, if transmitted by facsimile (provided that such facsimile is
followed by the deposit of the original Notice, or a copy thereof, in the United
States mail, certified, postage prepaid, return receipt requested, no later than
the next business day following transmission of such facsimile), addressed to
the parties as follows:
To Employee: Xx. Xxxxxx Xxxxxxxxx
_____________________________
_____________________________
_____________________________
To the Company: TransWorld Benefits, Inc.
Attn: _________________________
0000 Xxxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Either party may require such Notices to be delivered and given to any
address different from or additional to the address set forth above, by
delivering Notice thereof to the other party pursuant to this Section.
11.5 Arbitration. Any controversy arising out of or relating to this
------------
Agreement shall be settled by arbitration in Orange County, California in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association before a single arbitrator agreed to by the parties. If no
agreement can be reached regarding the selection of such arbitrator, the
American Arbitration Association shall deliver to the parties a list with the
names of three qualified arbitrators. Each party shall select a single name.
The name not selected by either party or, in the alternative, selected by both
parties shall be the arbitrator of such controversy. The decision of the
arbitrator shall be binding and non-appealable. The parties hereto consent to
the jurisdiction of the Superior Court of the State of California for the County
of Orange and of the United States District Court of the Southern District for
all purposes in connection with such arbitration, including the entry of
judgment on any award.
11.6 Amendments. This Agreement, together with the attached
----------
Schedule(s), constitutes the entire agreement of the parties hereto with respect
to the employment and retention of Employee by the Company, and supersedes any
and all prior and contemporaneous agreements, whether oral or in writing,
between the parties hereto with respect to the subject matter hereof. This
Agreement may not be amended, modified, altered or supplemented except by
written agreement executed and delivered by the parties hereto.
11.7 Survival of Certain Rights and Obligations. The rights and
-----------------------------------------------
obligations of the parties hereto pursuant to Sections 7, 8.5, 9 and 10 of this
Agreement shall survive the termination of this Agreement.
11.8 Severability. If any provision of this Agreement is held by a
------------
court of competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions shall nevertheless continue in full force without being
impaired or invalidated in any way. If any court of competent jurisdiction
holds any provision of this Agreement to be invalid, void or unenforceable with
respect to any state, region or locality, such provision shall nevertheless
continue in full force and effect in all other states, regions and localities to
which such provision applies.
11.9 Further Assurances. The parties agree that, at any time and from
-------------------
time to time during the Term, they will take any action and execute and deliver
any document which the other party reasonably requests in order to carry out the
purposes of this Agreement.
11.10 Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
11.11 Attorneys' Fees. If any action at law or in equity is necessary
----------------
to enforce or interpret the terms of this Agreement, the prevailing party shall
be entitled to recover any and all reasonable attorneys' fees, expert witness
fees, costs and necessary disbursements in addition to any other relief to which
such party may be entitled.
11.12 No Third Party Beneficiary. This Agreement is made and entered
----------------------------
into between the parties solely for the benefit of the parties, and not for the
benefit of any other third party or entity. No third party or entity shall be
deemed or considered a third party beneficiary of any covenant, promise or other
provision of this Agreement or have any right to enforce any such covenant,
promise or other provision against either or both parties.
[signatures follow on next page]
IN WITNESS WHEREOF, each of the parties hereto has duly executed this Agreement
as of the date first above written.
"Company"
TRANSWORLD BENEFITS, INC., a Nevada corporation
By: __________________________________________
Name: _________________________________________
Title: ________________________________________
"Employee"
___________________________________
XXXXXX XXXXXXXXX, an ndividual
Schedule 1
Description of Duties
During the Term, Employee shall perform the following services:
(1) Vice President of the Company
(2) Serve as President of the Division of Cemetery and Funeral Industry
Sales of the Company, including, without limitation, the following:
(a) managing the sales and marketing of such division in accordance
with the Sales Territory Business Plan;
(b) managing direct mail and other programs for such division in
accordance with the Sales Territory Business Plan; and
(c) hiring and supervising vice presidents of sales in accordance
with the Sales Territory Business Plan.
Schedule 2
Sales Territory Business Plan; Schedule of Commissions
(See attached pages)
EMPLOYMENT AGREEMENT
(Xxxxx Xxxxxx)
This EMPLOYMENT AGREEMENT (this "Agreement") is dated and entered into effective
as of June 1, 2001 (the "Effective Date"), by and between TRANSWORLD BENEFITS,
INC. (fka Skyway Home, Inc.), a Nevada corporation (the "Company"), and XXXXX
XXXXXX, an individual ("Employee").
R E C I T A L S
- - - - - - - -
WHEREAS, the Company is a corporation formed and duly qualified in the
State of Nevada.
WHEREAS, the Company desires to engage Employee to perform certain
services, and Employee desires to provide such services to the Company, upon the
terms and conditions of this Agreement.
A G R E E M E N T
- - - - - - - - -
NOW, THEREFORE, for and in consideration of the foregoing recitals, the mutual
covenants, provisions and terms set forth in this Agreement and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and Employee agree as follows:
1. Engagement. The Company hereby employs Employee, and Employee
hereby accepts such employment, to provide the "Services" (as defined below)
upon the terms and conditions set forth in this Agreement.
2. Services. During the "Term" (as defined below) of this Agreement,
Employee shall perform those services and duties as more described in Schedule 1
----------
attached hereto (collectively, the "Services"). Employee shall have, subject to
the direction, supervision and control of the Board of Directors of the Company
(the "Board") and the Chief Executive Officer of the Company ("CEO"), and
Employee agrees to faithfully perform, such additional duties consistent with
such office as may be assigned from time to time by the Board or the CEO.
During the Term, Employee shall report to the Board and the CEO.
3. Term. Unless terminated earlier as provided in this Agreement, the
Company retains Employee to provide the Services for a term beginning on June 1,
2001 (the "Start Date") and ending on May 31, 2005 (the "Term"). Thereafter,
the Term shall be automatically extended for successive periods of one (1) year
unless either the Company or Employee gives the other a written notice electing
not to extend the Term, given not less than three (3) months prior to the date
upon which any such extension would otherwise begin. As used herein, the term
"Term" means the original term and any extension thereof.
4. Time and Effort. Employee shall perform the Services under this
Agreement in a diligent and competent manner. During the Term, Employee shall
perform the Services for the Company on a full-time basis.
5. Compensation. In consideration of Employee's performance of the
Services hereunder and other covenants and agreements of Employee hereunder, the
Company shall provide to Employee the compensation set forth in this Section 5.
5.1 Base Salary. During the Term, Employee shall receive a base salary
-----------
of Seventy-five Thousand Dollars ($75,000) annually, payable in accordance with
the Company's payroll procedures.
5.2 Right of First Refusal. In the event that the Company is involved
-----------------------
in any future offering of shares in the Company, Employee shall have the right
of first refusal to purchase, at the purchase price offered to other investors,
such number of shares of the Company under such offering so that Employee's
total interest in the Company will not be less than 0.25% of the total issued
and outstanding shares of capital stock in the Company (as determined on a fully
diluted, as converted basis).
5.3 Stock Option Plan. A stock option plan (the "Plan") is being
-------------------
established by the Company. Employee shall be entitled to receive options to
purchase shares under the Plan equal to 0.40% of the total issued and
outstanding shares of capital stock in the Company as of the establishment of
the Plan (as determined on a fully diluted, as converted basis) (the "Optioned
Shares"). Subject to the terms set forth herein and in the Plan, Employee shall
have the right to purchase 1/3 of the Optioned Shares at each anniversary of the
Start Date. Employee shall be entitled to receive such other shares under the
Plan as determined by the Company's board of directors in its discretion.
Employee hereby acknowledges that Employee's right, title and interest in and to
any option granted under this Section 5.3 shall be subject to the terms and
conditions set forth in the Plan.
6. Other Benefits. Employee shall be entitled to the following:
6.1 Reimbursement of Expenses. The Company shall reimburse Employee
---------------------------
for all business-related expenses and costs actually incurred by Employee in the
performance of the Services under this Agreement. The reimbursement of all such
costs and expenses shall be subject to reasonable policies and procedures
established from time to time by the Company, including, without limitation, as
those set forth in the Company's Employee Handbook, as amended.
6.2 Paid Vacation. During the Term, Employee shall be entitled to such
-------------
period of paid vacation as available to other employees of the Company as set
forth in the Company's Employee Handbook, as amended. Notwithstanding the
foregoing, during the first three (3) years of the Term, vacation shall not be
taken more than two (2) weeks consecutively.
6.3 Insurance. During the Term, Employee shall receive full medical
----------
coverage generally available to the Company's other executive and managerial
employees. In addition, Employee shall be entitled to receive all other
benefits of employment generally available to Company's other executive and
managerial employees when and as Employee becomes eligible for them, including
dental, life insurance and disability plans.
7. Work Products/Confidentiality/Non-Competition.
7.1 Work Products. Employee hereby acknowledges and agrees that any
--------------
and all "Work Products" (as defined below) which may have been or are made,
developed or conceived of in whole or in part by Employee, or any of Employee's
Representatives, in connection with services provided on behalf of the Company
or relating to the business of the Company, shall belong solely and exclusively
to the Company. Employee shall assign or cause its Representatives to assign to
the Company such Employee's or Representative's entire right, title and
interest, including all patent, copyright, trade secret, trademark and other
proprietary rights, in any and all Work Products. The term "Work Products"
means and includes, without limitation, a discovery, a development, a design, an
improvement, an invention, a know-how, technical or non-technical data, a
formula, a pattern, a compilation, a program, a device, a method, a technique, a
drawing, a process, financial data, financial plans, product plans, business
plans, software programs (including the object and source code thereto) or a
list (whether in written form or otherwise) of actual or potential customers or
suppliers, which is not commonly known by or available to the public and which
information (i) derives economic value, actual or potential, from not being
generally known to and not being readily ascertainable by proper means by other
persons who can obtain economic value from its disclosure or use and (ii) is the
subject of efforts that are reasonable under the circumstances to maintain its
secrecy.
7.2 Business Opportunities. Employee covenants and agrees that any
-----------------------
business opportunity which Employee or Employee's "Representatives" (as defined
herein) might have during the term
of this Agreement which relates to the business of the Company shall first be
offered to the Company. If the Company rejects such offer, Employee shall be
free to pursue such opportunity. The term "Representative" means and includes,
with respect to any person or entity, each shareholder, director, officer,
manager, constituent member, constituent partner, trustor, beneficiary, trustee,
successor-in-interest, predecessor-in-interest, "Affiliate" (as defined in
Section 7.4 hereof), employee, agent, attorney or other representative of such
party, expressly excluding however, with respect to each party to this
Agreement, the other party to this Agreement.
7.3 Proprietary Information. In the course of Employee's employment by
-----------------------
the Company, each of Employee and Employee's Representatives, has had, and will
continue to have, access to confidential and proprietary information regarding
the Company and its business, including, but not limited to, information
regarding the Company's technologies, methods and techniques, product
information, specifications, technical drawings and designs, trade secrets,
know-how, sources of supply, product and market research data, customer lists,
marketing plans, and financial information regarding the Company and its
operations. Such information shall be referred to hereinafter as "Proprietary
Information" and shall include any and all of the information of the type
described and shall also include any and all other confidential and proprietary
information relating to the business to be conducted by the Company, whether
previously existing, now existing or arising hereafter, whether conceived or
developed by others or by Employee alone or with others, and whether or not
conceived or developed during regular working hours. Proprietary Information
which is released into the public domain during the period of Employee's
employment under this Agreement, provided the same is not in the public domain
as a consequence of disclosure directly or indirectly by Employee in violation
of this Agreement, shall not be subject to the restrictions of this Section.
7.3.1 Fiduciary Obligations. Employee acknowledges that the Company
----------------------
has taken all reasonable steps in protecting the secrecy of the Proprietary
Information, that said Proprietary Information is of critical importance to the
Company and that a violation of this Section of this Agreement would seriously
and irreparably impair and damage the Company's business. Accordingly, Employee
agrees that it shall keep (and shall use its commercially reasonable best
efforts to cause its Representatives to keep) all Proprietary Information in a
fiduciary capacity for the sole benefit of the Company.
7.3.2 Non-Disclosure. Employee shall not, directly or indirectly, use
--------------
or disclose (except as Employee's duties may require and except as required by
law) any Proprietary Information to any person other than the Company, any
employees of the Company who are authorized, at the time of such disclosure, to
receive such information, or such other persons to whom Employee has been
specifically instructed to make disclosure by the Board of Directors of the
Company and in all such cases only to the extent required in the course of
Employee's employment by the Company. At the termination of this Agreement,
Employee shall deliver to the Company all notes, letters, documents, records,
computer files, programs and other media which may contain Proprietary
Information which are then in its possession or control and shall not retain or
use any copies or summaries thereof.
7.4 Non-Competition. During the Term and for the two year period
---------------
following the termination or expiration of the Term (such periods referred to
collectively as the "Restriction Period"), neither Employee nor any of
Employee's "Affiliates" (as defined below) shall, directly or indirectly, engage
in, become employed by, serve as an agent or consultant to, or become a
constituent member, partner, principal or stockholder (other than a holder of
less than 5% of the outstanding voting shares of any publicly-held company) of
any person or entity which engages directly or indirectly in any business or
activity competitive with any business or activity engaged in by the Company or
any of its subsidiaries. "Affiliates" shall mean and include, with respect to
any other person or entity, any person or entity that directly or indirectly
through one or more intermediaries controls or is controlled by, or is under
common control with such person or entity.
7.5 Non-Solicitation of Employees. During the Restriction Period,
-----------------------------
neither Employee nor any of Employee's Affiliates shall, directly or indirectly,
for Employee's own account or for the account of any
other person or entity with which Employee is or shall become associated in any
capacity, (a) solicit for employment, employ or otherwise interfere with the
relationship of the Company or any of its Affiliates, any person who at any time
during the six months preceding such solicitation, employment or interference is
or was employed by or otherwise engaged to perform services for the Company or
any of its Affiliates, other than any such solicitation or employment during
Employee's employment with the Company on behalf of the Company, or (b) induce
any employee of the Company or any of its Affiliates who is a member of
management to engage in any activity which Employee is prohibited from engaging
in under any of this Section hereof or to terminate Employee's employment with
the Company.
7.6 Non-Solicitation of Customers. During the Restriction Period,
-----------------------------
neither Employee nor any of Employee's Affiliates shall, directly or indirectly,
solicit or otherwise attempt to establish for Employee or any other person, firm
or entity any business relationship of a nature that is competitive with the
business or relationship of the Company or any of its Affiliates, with any
person, firm or corporation which, during the twelve-month period preceding the
date Employee's employment with the Company and its Affiliates terminates, was a
customer, client or distributor of the Company or any of its Affiliates, other
than any such solicitation during Employee's employment with the Company or on
behalf of the Company.
8. Termination.
8.1 Termination Upon Death. If Employee dies during the Term, this
------------------------
Agreement shall terminate. Upon such termination, Employee shall be entitled to
all accrued and unpaid compensation due under Section 5 above and the other
obligations of the Company under this Agreement shall cease as of the date of
the termination.
8.2 Termination Upon Permanent Disability. In the event of the
----------------------------------------
"Permanent Disability" (as hereinafter defined) of Employee, the Company may
terminate this Agreement pursuant to the terms and conditions set forth in the
Company's Employee Handbook, as amended. For the purposes of this Agreement,
Employee shall be deemed to have suffered "Permanent Disability" in the event
that Employee has become disabled by physical or mental illness or injury to the
extent that the Board of Directors of the Company reasonably believes,
notwithstanding such reasonable accommodations as the Company may make in
response to such disability, that Employee cannot carry out or perform
Employee's duties hereunder. In the event that the Company terminates this
Agreement following Employee's Permanent Disability, other than accrued and
unpaid compensation due to Employee, the compensation obligations of the Company
under Section 5 hereof and any other obligations of the Company under this
Agreement shall cease as of the date of the termination.
8.3 Termination by Employee.
-------------------------
8.3.1 Employee may terminate this Agreement without cause at any time
and for any reason upon sixty (60) days' notice to the Company.
8.3.2 Employee may immediately terminate this Agreement for cause
at any time by written notice to the Company. For purposes of this Agreement,
the term "cause" for termination by Employee shall be (a) a breach by the
Company of any material covenant or obligation hereunder; or (b) the voluntary
or involuntary dissolution of the Company. The written notice given hereunder by
Employee to the Company shall specify in reasonable detail the cause for
termination, and, in the case of the cause described in (a) above, such
termination notice shall not be effective until thirty (30) days after the
Company's receipt of such notice, during which time the Company shall have the
right to respond to Employee's notice and cure the breach or other event giving
rise to the termination. In the event that the Company is able to cure, this
Agreement shall continue in full force and effect.
8.4 Termination by the Company.
-----------------------------
8.4.1 The Company may terminate this Agreement without cause at any
time and for any reason upon sixty (60) days' notice to Employee.
8.4.2 The Company may terminate this Agreement for cause at any time by
written notice to Employee. For purposes of this Agreement, the term "cause"
for termination by the Company shall be (a) a conviction of or plea of guilty or
nolo contendre by Employee to a felony; (b) any action or activity of Employee
which could reasonably be expected to have a material adverse effect on the
Company, its business, its goodwill or its prospects; (c) the refusal by
Employee to perform its material duties and obligations hereunder; or (d)
Employee's gross negligence or willful and intentional misconduct in the
performance of its duties and obligations. The written notice given hereunder by
the Company to Employee shall specify in reasonable detail the cause for
termination. In the case of a termination for the cause described in (a) above,
such termination shall be effective upon receipt of the written notice. In the
case of the causes described in (b) through (d) above, such termination notice
shall not be effective until thirty (30) days after Employee's receipt of such
notice, during which time Employee shall have the right to respond to the
Company's notice and cure the breach or other event giving rise to the
termination. In the event that Employee is able to cure, this Agreement shall
continue in full force and effect.
8.5 Effect of Termination. Upon any termination of this Agreement,
---------------------
the obligations and covenants of the parties hereunder shall be of no further
force and effect, except as provided in Section 11.7 below and as set forth in
this Section 8.5. Upon any termination of this Agreement by Employee or the
Company pursuant to Section 8 hereof, (a) the Company shall pay to Employee all
accrued and unpaid compensation as of the date of such termination subject to
the terms and conditions set forth in this Agreement; and (b) all other
obligations of the Company under this Agreement shall cease as of the date of
such termination, including, without limitation, the right of Employee with
respect to any unvested shares and any future offering by the Company.
8.6 Effect of Combination or Dissolution. This Agreement shall not
---------------------------------------
be terminated by the voluntary or involuntary dissolution of the Company, or by
any merger or consolidation in which the Company is not the surviving or
resulting entity, or any transfer of all or substantially all of the assets of
the Company, or upon any transfer of a majority of the ownership interests of
the Company by one or more members in one or more transactions, or upon the
issuance of units of membership interests of the Company constituting a majority
of the outstanding units immediately following such issuance. Instead, subject
to Employee's right to terminate this Agreement pursuant to Section 8.3 above,
the provisions of this Agreement shall be binding on and inure to the benefit of
the Company's creditors, the surviving business entity or the business entity to
which such units or assets shall be transferred.
9. Remedies.
9.1 Injunctive Relief. Employee acknowledges and agrees that (i) the
------------------
covenants and the restrictions contained in Section 7 above are necessary,
fundamental, and required for the protection of the Company's business; (ii)
such covenants relate to matters which are of a special, unique, and
extraordinary character that gives each of such covenants a unique and
extraordinary value; and (iii) a breach of any of such covenants will result in
irreparable harm and damages to the Company which cannot be adequately
compensated by a monetary award. Accordingly, it is expressly agreed that in
addition to all other remedies available at law or in equity, the Company shall
be entitled to seek injunctive or other equitable relief to restrain or enjoin
Employee from breaching any such covenant or to specifically enforce the
provisions of Section 7 above.
9.2 No Limitation of Remedies. Notwithstanding the provisions set
----------------------------
forth in Section 9.1 of this Agreement or any other provision contained in this
Agreement, the parties hereby agree that no remedy
conferred by any of the specific provisions of this Agreement, including without
limitation, this Section 9, is intended to be exclusive of any other remedy, and
each and every remedy shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing at law or in equity or
by statute or otherwise.
10. Representations and Warranties. Employee hereby represents and
warrants to the Company as follows:
10.1 Acquisition Entirely for Own Account. Employee agrees that
----------------------------------------
Employee is acquiring the shares in the Company ("Shares") for investment
purposes only, for Employee's own account, and not for sale or with a view to
distribution of all or any part of such Shares. Employee has no contract,
undertaking, agreement or arrangement with any person or entity to sell,
hypothecate, pledge, donate, or otherwise transfer (with or without
consideration) the Shares or any portion thereof, and Employee has no present
plans or intention to enter any such contract, undertaking agreement or
arrangement.
10.2 Accredited Investor. With respect to the acquisition of the
--------------------
Shares, Employee qualifies as an "accredited investor" as that term is defined
in Rule 501 of Regulation D under the Securities Act of 1933, as amended (the
"Securities Act").
10.3 Investment Experience. Employee acknowledges and understands
---------------------
that an investment in the Company is speculative in nature and involves a high
degree of risk, and that the Company has no financial or operating history.
Employee acknowledges that Employee is able to fend for himself/herself, can
bear the economic risk of Employee's investment, and has such knowledge and
experience in financial or business matters that Employee is capable of
evaluating the merits and risks of the investment in the Shares.
10.4 Restricted Shares. Employee acknowledges that Employee was
------------------
informed that the Shares are not registered under the Securities Act or
applicable state laws, and that such Shares are "restricted Shares" and may not
be transferred or otherwise disposed of unless subsequently registered under the
Securities Act or such laws, or unless an exemption from such registration is
available.
11. Miscellaneous.
11.1 Successors and Assigns. This Agreement is in the nature of a
------------------------
personal services contract; and neither party shall assign this Agreement
without the prior written consent of the other party. This Agreement shall be
binding on and inure to the benefit of the parties hereto and their respective
successors, assigns, heirs and legal Representatives.
11.2 Governing Law. This Agreement shall be construed under and in
--------------
accordance with, and governed in all respects by, the laws of the State of
California (without giving effect to principles of conflicts of law).
11.3 Waiver. The failure of the Company to insist on strict compliance
------
with any of the terms, covenants, or conditions of this Agreement by any other
party shall not be deemed a waiver of that term, covenant or condition, nor
shall any waiver or relinquishment of any right or power at any one time or
times be deemed a waiver or relinquishment of that right or power for all or any
other times.
11.4 Notices. Any notice or other communication required or
-------
permitted hereunder (each, a "Notice") shall be in writing, and shall be deemed
to have been given (a) two (2) days following deposit of such Notice in the
United States mail, certified, postage prepaid, return receipt requested, or (b)
upon receipt if delivered personally, or delivered by reputable, recognized
third party overnight delivery service or courier service or (c) the next
business day following receipt, if transmitted by facsimile (provided that such
facsimile is followed by the deposit of the original Notice, or a copy thereof,
in the United States mail, certified, postage
prepaid, return receipt requested, no later than the next business day following
transmission of such facsimile), addressed to the parties as follows:
To Employee: Xx. Xxxxx Xxxxxx
______________________________
______________________________
______________________________
To the Company: TransWorld Benefits, Inc.
Attn: Xxxxxxx Seven
00000 Xxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Either party may require such Notices to be delivered and given to any address
different from or additional to the address set forth above, by delivering
Notice thereof to the other party pursuant to this Section.
11.5 Arbitration. Any controversy arising out of or relating to this
------------
Agreement shall be settled by arbitration in Orange County, California in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association before a single arbitrator agreed to by the parties. If no
agreement can be reached regarding the selection of such arbitrator, the
American Arbitration Association shall deliver to the parties a list with the
names of three qualified arbitrators. Each party shall select a single name.
The name not selected by either party or, in the alternative, selected by both
parties shall be the arbitrator of such controversy. The decision of the
arbitrator shall be binding and non-appealable. The parties hereto consent to
the jurisdiction of the Superior Court of the State of California for the County
of Orange and of the United States District Court of the Southern District for
all purposes in connection with such arbitration, including the entry of
judgment on any award.
11.6 Amendments. This Agreement, together with the attached
----------
Schedule(s), constitutes the entire agreement of the parties hereto with respect
to the employment and retention of Employee by the Company, and supersedes any
and all prior and contemporaneous agreements, whether oral or in writing,
between the parties hereto with respect to the subject matter hereof. This
Agreement may not be amended, modified, altered or supplemented except by
written agreement executed and delivered by the parties hereto.
11.7 Survival of Certain Rights and Obligations. The rights and
-----------------------------------------------
obligations of the parties hereto pursuant to Sections 7, 8.5, 9 and 10 of this
Agreement shall survive the termination of this Agreement.
11.8 Severability. If any provision of this Agreement is held by a
------------
court of competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions shall nevertheless continue in full force without being
impaired or invalidated in any way. If any court of competent jurisdiction
holds any provision of this Agreement to be invalid, void or unenforceable with
respect to any state, region or locality, such provision shall nevertheless
continue in full force and effect in all other states, regions and localities to
which such provision applies.
11.9 Further Assurances. The parties agree that, at any time and from
-------------------
time to time during the Term, they will take any action and execute and deliver
any document which the other party reasonably requests in order to carry out the
purposes of this Agreement.
11.10 Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
11.11 Attorneys' Fees. If any action at law or in equity is
----------------
necessary to enforce or interpret the terms of this Agreement, the prevailing
party shall be entitled to recover any and all reasonable attorneys'
fees, expert witness fees, costs and necessary disbursements in addition to any
other relief to which such party may be entitled.
11.12 No Third Party Beneficiary. This Agreement is made and entered
----------------------------
into between the parties solely for the benefit of the parties, and not for the
benefit of any other third party or entity. No third party or entity shall be
deemed or considered a third party beneficiary of any covenant, promise or other
provision of this Agreement or have any right to enforce any such covenant,
promise or other provision against either or both parties.
[signatures follow on next page]
IN WITNESS WHEREOF, each of the parties hereto has duly executed this Agreement
as of the date first above written.
"Company"
TRANSWORLD BENEFITS, INC., a Nevada corporation
By: __________________________________________
Name: ________________________________________
Title: _______________________________________
"Employee"
______________________________________________
XXXXX XXXXXX, an individual
Schedule 1
Description of Duties
During the Term, Employee shall perform the following services:
(1) Serve as the Controller of the Company.
(2) Serve as the Secretary of the Company, whose duties include, without
limitation, the maintenance of all of the Company's books and records.
EMPLOYMENT AGREEMENT
(Xxxxxxx X. Seven)
This EMPLOYMENT AGREEMENT (this "Agreement") is dated and entered into effective
as of ____________, 2000 (the "Effective Date"), by and between TRANSWORLD
BENEFITS, INC. (fka Skyway Home, Inc.), a Nevada corporation (the "Company"),
and XXXXXXX X. SEVEN, an individual ("Employee").
R E C I T A L S
- - - - - - - -
WHEREAS, the Company is a corporation formed and duly qualified in the
State of Nevada.
WHEREAS, the Company desires to engage Employee to perform certain
services, and Employee desires to provide such services to the Company, upon the
terms and conditions of this Agreement.
A G R E E M E N T
- - - - - - - - -
NOW, THEREFORE, for and in consideration of the foregoing recitals, the mutual
covenants, provisions and terms set forth in this Agreement and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and Employee agree as follows:
1. Engagement. The Company hereby employs Employee, and Employee
hereby accepts such employment, to provide the "Services" (as defined below)
upon the terms and conditions set forth in this Agreement.
2. Services. During the "Term" (as defined below) of this Agreement,
Employee shall perform those services and duties as more described in Schedule 1
----------
attached hereto (collectively, the "Services"). Employee shall have, subject to
the direction, supervision and control of the Board of Directors of the Company
(the "Board"), and Employee agrees to faithfully perform, such additional duties
consistent with such office as may be assigned from time to time by the Board.
During the Term, Employee shall report to the Board.
3. Term. Unless terminated earlier as provided in this Agreement, the
Company retains Employee to provide the Services for a term beginning on October
1, 2000 (the "Start Date") and ending September 30, 2005 (the "Term").
Thereafter, the Term shall be automatically extended for successive periods of
one (1) year unless either the Company or Employee gives the other a written
notice electing not to extend the Term, given not less than three (3) months
prior to the date upon which any such extension would otherwise begin. As used
herein, the term "Term" means the original term and any extension thereof.
4. Time and Effort. Employee shall perform the Services under this
Agreement in a diligent and competent manner. During the Term, Employee shall
perform the Services for the Company on a full-time basis.
5. Compensation. In consideration of Employee's performance of the
Services hereunder and other covenants and agreements of Employee hereunder, the
Company shall provide to Employee the compensation set forth in this Section 5.
5.1 Base Salary. During the Term, Employee shall receive a base
------------
salary of One Hundred Twenty Thousand Dollars ($120,000) annually, payable in
accordance with the Company's payroll procedures.
5.2 Bonus Compensation. During the Term, the Company shall pay to
-------------------
Employee an annual bonus compensation equal to one percent (1%) of the Company's
total gross sales for such fiscal period, pursuant to the terms of Schedule 2,
----------
attached hereto and incorporated herein by this reference.
5.3 Right of First Refusal. In the event that the Company is
-------------------------
involved in any future offering of shares in the Company, Employee shall have
the right of first refusal to purchase, at the purchase price offered to other
investors, such number of shares of the Company under such offering so that
Employee's total interest in the Company will not be less than forty percent
(40%) of the total issued and outstanding shares of capital stock in the Company
(as determined on a fully diluted, as converted basis).
5.4 Stock Option Plan. A stock option plan (the "Plan") is being
------------------
established by the Company. Employee shall be entitled to receive options to
purchase shares under the Plan equal to a minimum of forty percent (40%) of the
total issued and outstanding shares of capital stock in the Company as of the
establishment of the Plan (as determined on a fully diluted, as converted basis)
(the "Optioned Shares"). Employee shall be entitled to receive such other
shares under the Plan as determined by the Company's board of directors in its
discretion. Employee hereby acknowledges that Employee's right, title and
interest in and to any option granted under this Section 5.4 shall be subject to
the terms and conditions set forth in the Plan.
6. Other Benefits. Employee shall be entitled to the following:
6.1 Reimbursement of Expenses. The Company shall reimburse
---------------------------
Employee for all business-related expenses and costs actually incurred by
Employee in the performance of the Services under this Agreement. Reimbursement
of all such costs and expenses shall be subject to reasonable policies and
procedures established from time to time by the Company, including, without
limitation, as those set forth in the Company's Employee Handbook, as amended.
6.2 Paid Vacation. During the Term, Employee shall be entitled to
-------------
such period of paid vacation as available to other employees of the Company as
set forth in the Company's Employee Handbook, as amended. Employee shall be
entitled to no less than three (3) weeks of paid vacation annually.
Notwithstanding the foregoing, during the first three (3) years of the Term,
vacation shall not be taken more than two (2) weeks consecutively.
6.3 Car Allowance. During the Term, the Company will provide
--------------
Employee with a car allowance of Seven Hundred Dollars ($700) per month.
6.4 Insurance. During the Term, Employee shall receive full
----------
medical coverage generally available to the Company's other executive and
managerial employees. In addition, Employee shall be entitled to receive all
other benefits of employment generally available to Company's other executive
and managerial employees when and as Employee becomes eligible for them,
including dental, life insurance and disability plans.
7. Work Products/Confidentiality/Non-Competition.
7.1 Work Products. Employee hereby acknowledges and agrees that any
--------------
and all "Work Products" (as defined below) which may have been or are made,
developed or conceived of in whole or in part by Employee, or any of Employee's
Representatives, in connection with services provided on behalf of the Company
or relating to the business of the Company, shall belong solely and exclusively
to the Company. Employee shall assign or cause its Representatives to assign to
the Company such Employee's or Representative's entire right, title and
interest, including all patent, copyright, trade secret, trademark and other
proprietary rights, in any and all Work Products. The term "Work Products"
means and includes, without limitation, a discovery, a development, a design, an
improvement, an invention, a know-how, technical or non-technical data, a
formula, a pattern, a compilation, a program, a device, a method, a technique, a
drawing, a process, financial data, financial plans, product plans, business
plans, software programs (including the object and source code thereto) or a
list (whether in written form or otherwise) of actual or potential customers or
suppliers, which is not commonly known by or available to the public and which
information (i) derives
economic value, actual or potential, from not being generally known to and not
being readily ascertainable by proper means by other persons who can obtain
economic value from its disclosure or use and (ii) is the subject of efforts
that are reasonable under the circumstances to maintain its secrecy.
7.2 Business Opportunities. Employee covenants and agrees that any
-----------------------
business opportunity which Employee or Employee's "Representatives" (as defined
herein) might have during the term of this Agreement which relates to the
business of the Company shall first be offered to the Company. If the Company
rejects such offer, Employee shall be free to pursue such opportunity. The term
"Representative" means and includes, with respect to any person or entity, each
shareholder, director, officer, manager, constituent member, constituent
partner, trustor, beneficiary, trustee, successor-in-interest,
predecessor-in-interest, "Affiliate" (as defined in Section 7.4 hereof),
employee, agent, attorney or other representative of such party, expressly
excluding however, with respect to each party to this Agreement, the other party
to this Agreement.
7.3 Proprietary Information. In the course of Employee's employment by
-----------------------
the Company, each of Employee and Employee's Representatives, has had, and will
continue to have, access to confidential and proprietary information regarding
the Company and its business, including, but not limited to, information
regarding the Company's technologies, methods and techniques, product
information, specifications, technical drawings and designs, trade secrets,
know-how, sources of supply, product and market research data, customer lists,
marketing plans, and financial information regarding the Company and its
operations. Such information shall be referred to hereinafter as "Proprietary
Information" and shall include any and all of the information of the type
described and shall also include any and all other confidential and proprietary
information relating to the business to be conducted by the Company, whether
previously existing, now existing or arising hereafter, whether conceived or
developed by others or by Employee alone or with others, and whether or not
conceived or developed during regular working hours. Proprietary Information
which is released into the public domain during the period of Employee's
employment under this Agreement, provided the same is not in the public domain
as a consequence of disclosure directly or indirectly by Employee in violation
of this Agreement, shall not be subject to the restrictions of this Section.
7.3.1 Fiduciary Obligations. Employee acknowledges that the Company
----------------------
has taken all reasonable steps in protecting the secrecy of the Proprietary
Information, that said Proprietary Information is of critical importance to the
Company and that a violation of this Section of this Agreement would seriously
and irreparably impair and damage the Company's business. Accordingly, Employee
agrees that it shall keep (and shall use its commercially reasonable best
efforts to cause its Representatives to keep) all Proprietary Information in a
fiduciary capacity for the sole benefit of the Company.
7.3.2 Non-Disclosure. Employee shall not, directly or indirectly, use
--------------
or disclose (except as Employee's duties may require and except as required by
law) any Proprietary Information to any person other than the Company, any
employees of the Company who are authorized, at the time of such disclosure, to
receive such information, or such other persons to whom Employee has been
specifically instructed to make disclosure by the Board of Directors of the
Company and in all such cases only to the extent required in the course of
Employee's employment by the Company. At the termination of this Agreement,
Employee shall deliver to the Company all notes, letters, documents, records,
computer files, programs and other media which may contain Proprietary
Information which are then in its possession or control and shall not retain or
use any copies or summaries thereof.
7.4 Non-Competition. During the Term and for the two year period
---------------
following the termination or expiration of the Term (such periods referred to
collectively as the "Restriction Period"), neither Employee nor any of
Employee's "Affiliates" (as defined below) shall, directly or indirectly, engage
in, become employed by, serve as an agent or consultant to, or become a
constituent member, partner, principal or stockholder (other than a holder of
less than 5% of the outstanding voting shares of any publicly-held company) of
any person or entity which engages directly or indirectly in any business or
activity competitive
with any business or activity engaged in by the Company or any of its
subsidiaries. "Affiliates" shall mean and include, with respect to any other
person or entity, any person or entity that directly or indirectly through one
or more intermediaries controls or is controlled by, or is under common control
with such person or entity.
7.5 Non-Solicitation of Employees. During the Restriction Period,
-------------------------------
neither Employee nor any of Employee's Affiliates shall, directly or indirectly,
for Employee's own account or for the account of any other person or entity with
which Employee is or shall become associated in any capacity, (a) solicit for
employment, employ or otherwise interfere with the relationship of the Company
or any of its Affiliates, any person who at any time during the six months
preceding such solicitation, employment or interference is or was employed by or
otherwise engaged to perform services for the Company or any of its Affiliates,
other than any such solicitation or employment during Employee's employment with
the Company on behalf of the Company, or (b) induce any employee of the Company
or any of its Affiliates who is a member of management to engage in any activity
which Employee is prohibited from engaging in under any of this Section hereof
or to terminate Employee's employment with the Company.
7.6 Non-Solicitation of Customers. During the Restriction Period,
-------------------------------
neither Employee nor any of Employee's Affiliates shall, directly or indirectly,
solicit or otherwise attempt to establish for Employee or any other person, firm
or entity any business relationship of a nature that is competitive with the
business or relationship of the Company or any of its Affiliates, with any
person, firm or corporation which, during the twelve-month period preceding the
date Employee's employment with the Company and its Affiliates terminates, was a
customer, client or distributor of the Company or any of its Affiliates, other
than any such solicitation during Employee's employment with the Company or on
behalf of the Company.
8. Termination.
8.1 Termination Upon Death. If Employee dies during the Term, this
------------------------
Agreement shall terminate. Upon such termination, Employee shall be entitled to
all accrued and unpaid compensation due under Section 5 above and the other
obligations of the Company under this Agreement shall cease as of the date of
the termination.
8.2 Termination Upon Permanent Disability. In the event of the
----------------------------------------
"Permanent Disability" (as hereinafter defined) of Employee, the Company may
terminate this Agreement pursuant to the terms and conditions set forth in the
Company's Employee Handbook, as amended. Notwithstanding the foregoing or any
other provision contained herein or in the Employee Handbook to the contrary, in
the event of Permanent Disability, Employee shall receive no less than fifty
percent (50%) of such Employee's base salary immediately prior to Permanent
Disability for a period of no less than three (3) years following such Permanent
Disability. For the purposes of this Agreement, Employee shall be deemed to
have suffered "Permanent Disability" in the event that Employee has become
disabled by physical or mental illness or injury to the extent that the Board of
Directors of the Company reasonably believes, notwithstanding such reasonable
accommodations as the Company may make in response to such disability, that
Employee cannot carry out or perform Employee's duties hereunder. In the event
that the Company terminates this Agreement following Employee's Permanent
Disability, other than accrued and unpaid compensation due to Employee, the
compensation obligations of the Company under Section 5 hereof and any other
obligations of the Company under this Agreement shall cease as of the date of
the termination.
8.3 Termination by Employee.
-------------------------
8.3.1 Employee may terminate this Agreement without cause at any time
and for any reason upon sixty (60) days' notice to the Company.
8.3.2 Employee may immediately terminate this Agreement for cause
at any time by written notice to the Company. For purposes of this Agreement,
the term "cause" for termination by Employee shall be (a) a breach by the
Company of any material covenant or obligation hereunder; or (b) the voluntary
or involuntary dissolution of the Company. The written notice given hereunder by
Employee to the Company shall specify in reasonable detail the cause for
termination, and, in the case of the cause described in (a) above, such
termination notice shall not be effective until thirty (30) days after the
Company's receipt of such notice, during which time the Company shall have the
right to respond to Employee's notice and cure the breach or other event giving
rise to the termination. In the event that the Company is able to cure, this
Agreement shall continue in full force and effect.
8.4 Termination by the Company. The Company may terminate this
-----------------------------
Agreement for cause at any time by written notice to Employee. For purposes of
this Agreement, the term "cause" for termination by the Company shall be (a) a
conviction of or plea of guilty or nolo contendre by Employee to a felony; (b)
any action or activity of Employee which could reasonably be expected to have a
material adverse effect on the Company, its business, its goodwill or its
prospects; (c) the refusal by Employee to perform its material duties and
obligations hereunder; or (d) Employee's gross negligence or willful and
intentional misconduct in the performance of its duties and obligations. The
written notice given hereunder by the Company to Employee shall specify in
reasonable detail the cause for termination. In the case of a termination for
the cause described in (a) above, such termination shall be effective upon
receipt of the written notice. In the case of the causes described in (b)
through (d) above, such termination notice shall not be effective until thirty
(30) days after Employee's receipt of such notice, during which time Employee
shall have the right to respond to the Company's notice and cure the breach or
other event giving rise to the termination. In the event that Employee is able
to cure, this Agreement shall continue in full force and effect.
8.5 Effect of Termination. Upon any termination of this
-----------------------
Agreement, the obligations and covenants of the parties hereunder shall be of no
further force and effect, except as provided in Section 11.7 below and as set
forth in this Section 8.5. Upon any termination of this Agreement by Employee
or the Company pursuant to Section 8 hereof, (a) the Company shall pay to
Employee all accrued and unpaid compensation as of the date of such termination
subject to the terms and conditions set forth in this Agreement; and (b) all
other obligations of the Company under this Agreement shall cease as of the date
of such termination, including, without limitation, the right of Employee with
respect to any unvested Shares and any future offering by the Company.
8.6 Effect of Combination or Dissolution. This Agreement shall
---------------------------------------
not be terminated by the voluntary or involuntary dissolution of the Company, or
by any merger or consolidation in which the Company is not the surviving or
resulting entity, or any transfer of all or substantially all of the assets of
the Company, or upon any transfer of a majority of the ownership interests of
the Company by one or more members in one or more transactions, or upon the
issuance of units of membership interests of the Company constituting a majority
of the outstanding units immediately following such issuance. Instead, subject
to Employee's right to terminate this Agreement pursuant to Section 8.3 above,
the provisions of this Agreement shall be binding on and inure to the benefit of
the Company's creditors, the surviving business entity or the business entity to
which such units or assets shall be transferred.
9. Remedies.
9.1 Injunctive Relief. Employee acknowledges and agrees that (i) the
------------------
covenants and the restrictions contained in Section 7 above are necessary,
fundamental, and required for the protection of the Company's business; (ii)
such covenants relate to matters which are of a special, unique, and
extraordinary character that gives each of such covenants a unique and
extraordinary value; and (iii) a breach of any of such covenants will result in
irreparable harm and damages to the Company which cannot be adequately
compensated by a monetary award. Accordingly, it is expressly agreed that in
addition to all other remedies available at law or in equity, the Company shall
be entitled to seek injunctive or other equitable relief to
restrain or enjoin Employee from breaching any such covenant or to specifically
enforce the provisions of Section 7 above.
9.2 No Limitation of Remedies. Notwithstanding the provisions set
----------------------------
forth in Section 9.1 of this Agreement or any other provision contained in this
Agreement, the parties hereby agree that no remedy conferred by any of the
specific provisions of this Agreement, including without limitation, this
Section 9, is intended to be exclusive of any other remedy, and each and every
remedy shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute or
otherwise.
10. Representations and Warranties. Employee hereby represents and
warrants to the Company as follows:
10.1 Acquisition Entirely for Own Account. Employee agrees that
----------------------------------------
Employee is acquiring the shares in the Company ("Shares") for investment
purposes only, for Employee's own account, and not for sale or with a view to
distribution of all or any part of such Shares. Employee has no contract,
undertaking, agreement or arrangement with any person or entity to sell,
hypothecate, pledge, donate, or otherwise transfer (with or without
consideration) the Shares or any portion thereof, and Employee has no present
plans or intention to enter any such contract, undertaking agreement or
arrangement.
10.2 Accredited Investor. With respect to the acquisition of the
--------------------
Shares, Employee qualifies as an "accredited investor" as that term is defined
in Rule 501 of Regulation D under the Securities Act of 1933, as amended (the
"Securities Act").
10.3 Investment Experience. Employee acknowledges and understands that
---------------------
an investment in the Company is speculative in nature and involves a high degree
of risk, and that the Company has no financial or operating history. Employee
acknowledges that Employee is able to fend for himself/herself, can bear the
economic risk of Employee's investment, and has such knowledge and experience in
financial or business matters that Employee is capable of evaluating the merits
and risks of the investment in the Shares.
10.4 Restricted Shares. Employee acknowledges that Employee was
------------------
informed that the Shares are not registered under the Securities Act or
applicable state laws, and that such Shares are "restricted Shares" and may not
be transferred or otherwise disposed of unless subsequently registered under the
Securities Act or such laws, or unless an exemption from such registration is
available.
11. Miscellaneous.
11.1 Successors and Assigns. This Agreement is in the nature of a
------------------------
personal services contract; and neither party shall assign this Agreement
without the prior written consent of the other party. This Agreement shall be
binding on and inure to the benefit of the parties hereto and their respective
successors, assigns, heirs and legal Representatives.
11.2 Governing Law. This Agreement shall be construed under and in
--------------
accordance with, and governed in all respects by, the laws of the State of
California (without giving effect to principles of conflicts of law).
11.3 Waiver. The failure of the Company to insist on strict compliance
------
with any of the terms, covenants, or conditions of this Agreement by any other
party shall not be deemed a waiver of that term, covenant or condition, nor
shall any waiver or relinquishment of any right or power at any one time or
times be deemed a waiver or relinquishment of that right or power for all or any
other times.
11.4 Notices. Any notice or other communication required or
-------
permitted hereunder (each, a "Notice") shall be in writing, and shall be deemed
to have been given (a) two (2) days following deposit of such Notice in the
United States mail, certified, postage prepaid, return receipt requested, or (b)
upon receipt if delivered personally, or delivered by reputable, recognized
third party overnight delivery service or courier service or (c) the next
business day following receipt, if transmitted by facsimile (provided that such
facsimile is followed by the deposit of the original Notice, or a copy thereof,
in the United States mail, certified, postage prepaid, return receipt requested,
no later than the next business day following transmission of such facsimile),
addressed to the parties as follows:
To Employee: Xx. Xxxxxxx X. Seven
____________________________
____________________________
____________________________
To the Company: TransWorld Benefits, Inc.
Attn: ____________________
00000 Xxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Either party may require such Notices to be delivered and given to any address
different from or additional to the address set forth above, by delivering
Notice thereof to the other party pursuant to this Section.
11.5 Arbitration. Any controversy arising out of or relating to this
------------
Agreement shall be settled by arbitration in Orange County, California in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association before a single arbitrator agreed to by the parties. If no
agreement can be reached regarding the selection of such arbitrator, the
American Arbitration Association shall deliver to the parties a list with the
names of three qualified arbitrators. Each party shall select a single name.
The name not selected by either party or, in the alternative, selected by both
parties shall be the arbitrator of such controversy. The decision of the
arbitrator shall be binding and non-appealable. The parties hereto consent to
the jurisdiction of the Superior Court of the State of California for the County
of Orange and of the United States District Court of the Southern District for
all purposes in connection with such arbitration, including the entry of
judgment on any award.
11.6 Amendments. This Agreement, together with the attached
----------
Schedule(s), constitutes the entire agreement of the parties hereto with respect
to the employment and retention of Employee by the
Company, and supersedes any and all prior and contemporaneous agreements,
whether oral or in writing, between the parties hereto with respect to the
subject matter hereof. This Agreement may not be amended, modified, altered or
supplemented except by written agreement executed and delivered by the parties
hereto.
11.7 Survival of Certain Rights and Obligations. The rights and
------------------------------------------
obligations of the parties hereto pursuant to Sections 7, 8.5, 9 and 10 of this
Agreement shall survive the termination of this Agreement.
11.8 Severability. If any provision of this Agreement is held by a
------------
court of competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions shall nevertheless continue in full force without being
impaired or invalidated in any way. If any court of competent jurisdiction
holds any provision of this Agreement to be invalid, void or unenforceable with
respect to any state, region or locality, such provision shall nevertheless
continue in full force and effect in all other states, regions and localities to
which such provision applies.
11.9 Further Assurances. The parties agree that, at any time and from
-------------------
time to time during the Term, they will take any action and execute and deliver
any document which the other party reasonably requests in order to carry out the
purposes of this Agreement.
11.10 Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
11.11 Attorneys' Fees. If any action at law or in equity is necessary
----------------
to enforce or interpret the terms of this Agreement, the prevailing party shall
be entitled to recover any and all reasonable attorneys' fees, expert witness
fees, costs and necessary disbursements in addition to any other relief to which
such party may be entitled.
11.12 No Third Party Beneficiary. This Agreement is made and entered
----------------------------
into between the parties solely for the benefit of the parties, and not for the
benefit of any other third party or entity. No third party or entity shall be
deemed or considered a third party beneficiary of any covenant, promise or other
provision of this Agreement or have any right to enforce any such covenant,
promise or other provision against either or both parties.
[signatures follow on next page]
IN WITNESS WHEREOF, each of the parties hereto has duly executed this Agreement
as of the date first above written.
"Company"
TRANSWORLD BENEFITS, INC., a Nevada corporation
By: ____________________________________________
Name: __________________________________________
Title: _________________________________________
"Employee"
___________________________________________
XXXXXXX X. SEVEN, an individual
Schedule 1
Description of Duties
During the Term, Employee shall perform the following services:
(1) Serve as the Chief Executive Officer of the Company.
(2) Serve as Chairman of the Company's Executive Committee.
(3) Serve as Chairman of the Company's Board of Directors.
(4) Perform such other duties as consistent with the office of the Chief
Executive Officer of a comparably-sized company engaged in activities comparable
to the business of the Company.
Schedule 2
Business Plan
(See attached pages)
SCHEDULE "D"
-------------
to that Share Purchase Agreement dated as of October 4, 2002
REAL PROPERTY & LEASES OF THE COMPANY
Sublease dated May 16, 2002, by and between DHR International, Inc. and
Transworld Benefits, Inc., as amended by that certain Amendment No. 1 to Office
Building Lease and Consent of Landlord to Sublease dated September 2002.
SCHEDULE "E"
-------------
to that Share Purchase Agreement dated as of October 4, 2002
ENCUMBRANCES ON THE COMPANY'S ASSETS
None.
SCHEDULE "F"
-------------
to that Share Purchase Agreement dated as of October 4, 2002
COMPANY LITIGATION
None.
SCHEDULE "G"
-------------
to that Share Purchase Agreement dated as of October 4, 2002
PURCHASER LITIGATION
SCHEDULE "H"
-------------
to that Share Purchase Agreement dated as of October 4, 2002
REGISTERED TRADEMARKS, TRADE NAMES & PATENTS
OF THE COMPANY
None.
