AMENDED AGREEMENT
THIS AMENDED AGREEMENT (the "Amendment") is made effective the 30th day
of June 1999, between Xxxx-Xxx.xxx, Inc., a Florida corporation (the "Company"),
Phon- Net Corp., a Nevada corporation (Phon-Net Nevada), Quad-Linq Software,
Inc., a British Columbia corporation ("Quad-Linq") and, as to Section 11, those
individuals identified on Exhibit A hereto.
W I T N E S S E T H :
WHEREAS, Phon-Net Nevada is a wholly-owned subsidiary of the Company;
and
WHEREAS, Phon-Net Nevada and Quad-Linq entered into an agreement dated
January 6, 1999 (the "Initial Agreement");
WHEREAS, the Company, Phon-Net Nevada and Quad-Linq desire to amend
certain terms of the Initial Agreement as set forth herein.
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, and other good and valuable consideration, the receipt of
which is hereby acknowledged, the Company, Phon-Net Nevada and Quad-Linq hereby
agree as follows:
1. Section 1.2 of the Initial Agreement and any companion sections are
hereby deleted, except the parties agree that Quad-Linq will develop all future
software and source code for any future iterations of the Software. The
Software, including source code, and any future enhancements to or iterations of
the Software, shall be the sole and exclusive property of the Company. At the
Company's request and expense, Quad-Linq shall consult the Company to enable the
Company to establish servers in other locations, including without limitation,
the United States, Great Britain, Europe and Japan, and the Company shall supply
all hardware in connection therewith.
2. Section 1.3 of the Initial Agreement and any companion sections are
hereby deleted, except the parties agree that Quad-Linq relinquish's all of its
right, title, and interest in and to the Software.
3. Sections 2.2 and 2.3 of the Initial Agreement and any companion
sections are hereby deleted in their entirety.
4. Section 4 of the Initial Agreement and any companion sections are
hereby deleted, except the parties agree that, simultaneous with the execution
of this Agreement, a complete operation and technical manual, as well as the
source code for the Software,
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will be delivered to the Company. To the extent that Quad-Linq modifies the
Software at the Company's request, updated copies of the operation and technical
manual, as well as the related source code, shall be delivered to the Company.
5. Section 5 of the Initial Agreement and any companion sections are
hereby deleted, except the parties agree that all decisions concerning
ownership, marketing and development of the Software shall be made solely by the
Company. Quad-Linq, however, will receive recognition as the developer of the
Software.
6. The Initial Agreement is hereby amended to add thereto Section 10
which reads in its entirety as follows:
Section 10: As full compensation for all services rendered
hereunder, and in lieu of any and all amounts that may have been payable to
Quad-Linq under the Initial Agreement, the Company (i) agrees to issue to those
persons identified on Exhibit A hereto ("Exhibit A"), an aggregate of three
million (3,000,000) shares of the Company's Common Stock (the "Common Shares"),
on or prior to July 15, 1999, and (ii) hereby grants to those persons identified
on Exhibit A hereto, options (the "Options") to purchase two million (2,000,000)
shares of the Company's Common Stock (the "Option Shares"), exercisable at $.40
per share beginning on the date hereof and continuing for a period of two (2)
years hereafter.
7. The Initial Agreement is hereby amended to add thereto Section 11
which reads in its entirety as follows:
Section 11: In order to induce the Company to issue the Common
Shares and grant the Options, Quad-Linq and each of the individuals identified
on Exhibit A (each, a "Subscriber"), hereby severally represents and warrants to
the Company, as follows:
Section 11.1: Subscriber has a preexisting business
relationship with the Company and is familiar with the Company, its business and
financial condition. Subscriber understands that the Company is in its
development stage, has not generate substantial revenues to date, and the
Company's financial condition does not justify a conclusion that the Company
will operate profitably in the future. Accordingly, Subscriber acknowledges that
acceptance of the Common Shares and Options is a speculative investment, and
that there is no assurance that the Common Shares or Option Shares can be resold
at a particular price, or at all.
Section 11.2: The Company has not made any representations or
warranties to Subscriber with respect to the Company or rendered any investment
advice to Subscriber.
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Section 11.3: Subscriber has such knowledge and experience in
financial, investment and business matters that it is capable of evaluating the
merits and risks an investment in the Company. Subscriber has consulted with
such independent legal counsel or other advisers as it has deemed appropriate to
assist it in evaluating the proposed investment in the Company.
Section 11.4: Subscriber represents that it (i) has adequate
means of providing for its current financial needs and possible personal
contingencies and has no need for liquidity of investment in the Company; (ii)
can afford (a) to hold unregistered securities for an indefinite period of time
as required; and (b) sustain a complete loss of the entire amount of the
subscription; and (iii) has not made an overall commitment to investments which
are not readily marketable which is disproportionate so as to cause such overall
commitment to become excessive.
Section 11.5: Subscriber has been afforded the opportunity to
ask questions of, and receive answers from, the officers and/or directors of the
Company acting on its behalf concerning the terms and conditions of this
transaction and to obtain any additional information, to the extent that the
Company possesses such information or can acquire it without unreasonable effort
or expense, necessary to verify the accuracy of the information furnished; and
has availed itself of such opportunity to the extent it considers appropriate in
order to permit Subscriber to evaluate the merits and risks of an investment in
the Company. It is understood that all documents, records and books pertaining
to this investment have been made available for inspection, and that the books
and records of the Company will be available upon reasonable notice for
inspection by Subscriber during reasonable business hours at its principal place
of business.
Section 11.6: Subscriber acknowledges that the Shares have not
been registered under the Securities Act of 1933, as amended (the "Act"), or the
securities laws of any state.
Section 11.7: The Shares are being acquired solely for the
account of Subscriber for investment and not with a view to, or for resale in
connection with, any distribution in any jurisdiction where such sale or
distribution would be precluded. By such representation, Subscriber means that
no other person has a beneficial interest in the Shares. Subscriber does not
intend to dispose of, encumber, pledge or hypothecate in any manner all or any
part of the Shares, except in compliance with the provisions of the Act and
applicable state securities laws.
Section 11.8: Subscriber acknowledges and agrees that the
following or similar legend will be placed on the face of the certificates
evidencing the Common Shares and Option Shares:
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"These securities have not been registered under the
Securities Act of 1933, as amended, or any state securities
laws, and may not be sold or otherwise transferred or disposed
of except pursuant to an effective registration statement
under the Act and any applicable state securities laws, or an
opinion of counsel satisfactory to counsel to the Company that
an exemption from registration is available."
8. The Initial Agreement is hereby amended to add thereto Section 12
which reads in its entirety as follows:
Section 12: The Company agrees to include the Common Shares
and the Option Shares in its contemplated form SB-2 registration statement. The
preparation of such registration statement shall be at the cost and expense of
the Company. The Shareholders agree to provide such information and to execute
such documents as may reasonably be required by the Company in order to effect
the registration of the Common Shares and Option Shares.
9. The Initial Agreement is hereby amended to add thereto Section 14
which reads in its entirety as follows:
Section 14: Quad-Linq will provide the Company, at no
additional cost, with maintenance and support, in the North American and
Japanese markets, including AOL operational use (with a maximum use of 240 hours
annually), for the twelve (12) months following the execution of this Agreement.
After the expiration of such twelve (12) month period, the parties will, in good
faith, negotiate a new service contract.
10. The Initial Agreement is hereby amended to add thereto Section 15
which reads in its entirety as follows:
Section 15: Simultaneous with the execution of this Agreement,
and as a material inducement to the Company to issue its securities to each
Subscriber, as contemplated by paragraph 6, above, Quad-Linq and each individual
Subscriber shall execute and deliver to the Company a Confidentiality and
Non-Compete Agreement substantially in the form of Exhibit B hereto.
11. The Initial Agreement is hereby amended to add thereto Section 16
which reads in its entirety as follows:
Section 16: Quad-Linq shall provide the additional services
with respect to the Software as are described on the attached Exhibit C.
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11. In the event of any inconsistency between this Amendment and the
Initial Agreement this Amendment shall govern. Except as specifically amended
hereby, the terms of the Initial Agreement shall remain in full force and
effect.
12. This Amendment may be executed in one or more counterparts, each of
which will be deemed an original and all of which together will constitute one
and the same instrument.
13. The parties, as evidenced by their signatures below, acknowledge
that this Amendment has been presented to their attorneys and that their
attorneys have had the opportunity to review and explain to them the terms and
provisions of the Agreement, and that they fully understand those terms and
provisions.
IN WITNESS WHEREOF, the parties have respectively caused this Agreement
to be executed on the date first above written.
Xxxx-Xxx.xxx Inc.
By:/s/ Xxxxx Xxxxxxx
---------------------
Name: Xxxxx Xxxxxxx
Its: President
Phon-Net Corp.
By:/s/ Xxxxx Xxxxxxx
--------------------
Name: Xxxxx Xxxxxxx
Its: President
Quad-Linq Software, Inc.
By: /s/ Xxxxx X. Xxxxxxxxx
--------------------------
Name: Xxxxx X. Xxxxxxxxx
Its: President
/s/ Xxxxxxxxxxx X. Georgelin
----------------------------
Xxxxxxxxxxx X. Georgelin
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/s/ Seidmehdi Seidbagherzadeh
-----------------------------
Seidmehdi Seidbagherzadeh
/s/ Xxxxx X. Xxxxxxxxx
----------------------
Xxxxx X. Xxxxxxxxx
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EXHIBIT A
Number of Number of
Name Common Shares Options
---- ------------- -------
Xxxxxxxxxxx X. Georgelin 480,000 320,000
0000 Xxxxxxxx Xx.
Xxxxxxxx, XX X0X 0X0
Seidmehdi Seidbagherzadeh 480,000 320,000
00-000 Xxxx 0xx Xxxxxx
Xxxxx Xxxxxxxxx, XX X0X 0X0
Xxxxx X. Xxxxxxxxx 1,040,000 693,333
XX 0, Xxx 000
Xxxx, XX 00000
S.S. No.: _____________
Quad-Linq Software, Inc. 1,000,000 666,667
000-000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, XX X0X 0X0
EXHIBIT B
In order to induce Xxxx-Xxx.xxx, Inc. (the "Company") to issue
securities to the undersigned pursuant to an agreement of even date herewith
(the "Agreement"), and as partial consideration therefor, the Undersigned hereby
agrees as follows:
I. Covenant Not to Compete.
(A) The Undersigned acknowledges and recognizes (1) the highly
competitive nature of the Company's business and the substantial goodwill
developed by the Company through considerable time, money and effort expended by
it, and (2) that the Undersigned, by reason of my relationship to Quad-Linq
Software, Inc., will have access to proprietary information relating to the
Company and its products, and will enjoy the certain benefits to be derived by
Quad-Linq under the Agreement.
(B) Accordingly, for a period of ten (10) years following the date
hereof, the Undersigned will not, individually or in conjunction with others,
directly or indirectly,
(1) engage in any Business Activities (as hereinafter
defined), whether as an officer, director, proprietor, employer, partner,
independent contractor, investor (other than as a holder solely as an investment
of less than one percent (1%) of the equity of an entity), consultant, advisor,
agent or otherwise;
(2) solicit, induce or influence any of the Company's
Customers to discontinue or reduce the level of business conducted by such
customer with the Company;
(3) (a) recruit, solicit or otherwise influence any the
Company's Employees to discontinue its employment or agency relationship with
the Company, or (b) employ or seek to employ, or cause or permit any business
which competes directly or indirectly with the Business Activities of the
Company (the "Competitive Business") to employ or seek to employ for any
Competitive Business, any of the Company's Employees; or
(4) interfere with, or disrupt or attempt to disrupt any past,
present or prospective relationship, contractual or otherwise, between the
Company and any of the Company's Customers or any of the Company's Employees.
II. Non-Disclosure of Information.
(A) Employee acknowledges that the Company's customer list, trade
secrets, private or secret processes, methods and ideas, as they exist from time
to time, information concerning the Company's products, services, training
methods, development, technical
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information, marketing activities and procedures, credit and financial data
concerning the Company and/or the Company's Customers (the "Proprietary
Information") are valuable, special and unique assets of the Company, access to
and knowledge of which may be acquired by the Undersigned by reason of my
relationship to Quad-Linq Software, Inc. In light of the highly competitive
nature of the industry in which the Company's business is conducted, the
Undersigned agrees that all Proprietary Information, heretofore or in the future
obtained by the Undersigned shall be considered confidential.
(B) In recognition of the foregoing, the Undersigned agrees not to use
or disclose any of such Proprietary Information for the Undersigned's own
purposes or for the benefit of any person or other entity or organization
(except the Company) at any time, under any circumstances. Promptly upon request
by the Company, all physical Proprietary Information in the custody or under the
control of the Undersigned shall be returned to the Company.
(C) The foregoing to the contrary notwithstanding, Proprietary
Information shall not include (1) any information which (a) the Undersigned can
establish was already in my possession prior to my receipt from the Company of
the Proprietary Information, or (b) was then generally known to the public, or
(c) became known to the public through no fault or participation of the
Undersigned; or (2) information disclosed by the Undersigned in accordance with
an order of a court of competent jurisdiction.
III. Definitions.
(A) "Company's Customers" shall mean any person(s), partnership(s),
corporation(s), professional association(s) or other organization(s) or
entity(ies) to whom the Company has performed Business Activities at any time
commencing one year prior to the date hereof.
(B) "Business Activities" shall mean the development, sale,
distribution or marketing of phone direct connect software, with connect
directory to and over the Internet.
(C) "Company's Employees" shall mean any person who was employed by, or
served as an agent of, the Company at any time commencing one year prior to the
date hereof.
IV. Injunctive Relief. The Undersigned acknowledges that monetary damages will
not compensate the Company for a breach or attempted breach by the Undersigned
of my obligations under this Agreement. Accordingly, the Undersigned agrees that
in the event I breach or attempt to breach any of my obligations hereunder, the
Company shall be entitled to obtain injunctive relief or specific performance.
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V. Miscellaneous. This Agreement shall be governed and construed in accordance
with the laws of the State of Florida without regard to the conflicts of laws
provisions thereof. This Agreement may not be amended except in a writing signed
by Employee and the Company.
/s/ Xxxxx X. Xxxxxxxxx
----------------------
Signature
Xxxxx X. Xxxxxxxxx
------------------
Print Name
July 8, 1999
Date
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EXHIBIT C
Quad-Linq agrees to provide 20 hours of support and maintenance per month for 1
full year, for a total of 240 hours.
The following three points have already been agreed upon by Quad-Linq for
immediate development:
1. INSTALLING
a) Double-clicking the Direct Connect desktop icon creates an explorer
window: (Install which Directory?)
b) This window supplies a default directory: "c:\Program Files\Direct
Connect".
2. UNINSTALLING
A) Ctrl + double-clicking on "phon-net_double_click.exe" creates
an uninstall wizard: (Are you sure you want to uninstall
Direct Connect?)
B) Clicking Yes will remove "c:\Quad-Linq Autodialer.js" and all
registry items, but not the executable file.
THIS AGREEMENT dated the 6th day of January, 1999;
BETWEEN:
PHON-NET CORP., a Nevada corporation, with an office located
at 0000 Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0
(hereafter "PHON-NET")
AND
QUAD-LINQ SOFTWARE INC., a British Columbia corporation with
an office located at Suite 102 - 1198 Xxxx Xxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0
(hereafter "QUAD-LINQ")
WHEREAS:
A. PHON-NET has developed marketing expertise in the telecommunications
field and currently owns and markets a number of products under the
PHON-NET trade name.
B. QUAD-LINQ have certain expertise and contacts in the area of software
development.
C. QUAD-LINQ will develop a software product for a plug-in for Netscape
and MS Internet Explorer (the "Software") that will be jointly owned by
QUAD-LINQ and PHONE-NET.
D. PHON-NET shall establish a marketing channel for the Software.
NOW THEREFORE IN CONSIDERATION of the mutual covenants, obligations and benefits
the parties hereby agree as follows:
1 QUAD-LINQ shall:
1.1 develop the plug-in software to e used in conjunction with
Netscape and Microsoft Internet Explorer (the "Software"). The
Software shall incorporate the following design
considerations:
(a) a transparent disconnection from the Internet;
(b) a transparent dial-up of a telephone number specified
in the HTML code; and
(c) transparent reconnection to the Internet.
1.2 develop all future software and source code for any future
iterations of the Software, which shall be jointly owned by
PHON-NET and QUAD-LINQ on a 51%/49% basis;
1.3 transfer a 51% ownership share in all right, title and
interest of the Software to PHON-NET.
2 PHON-NET shall:
2.1 market the Software as it, in its sole discretion, sees fit;
2.2 shall pay to QUAD-LINQ, an amount equal to 49% of the net
revenues received by PHON-NET for marketing the Software;
2.3 pay to QUAD-LINQ the sum of $2,980.14 in consideration of a
51% interest in the Software.
3 QUAD-LINQ and PHON-NET shall operate independently of each other and
neither party shall have the power or authority to bind the other.
4 The source code will be retained by QUAD-LINQ to enable it to carry out
its obligations under paragraph 1.2 hereunder.
5 The software shall be owned jointly PHON-NET and QUAD-LINQ, with
PHON-NET owning 51% interest in the software and QUAD-LINQ holding a
49% interest in the software. All decisions concerning marketing and
development of the Software shall be made solely by PHON-NET.
6 QUAD-LINQ may not assign or transfer any of its rights or obligations
under this agreement without the prior written consent of PHON-NET.
7 This agreement is the entire agreement between the parties regarding
its subject- matter and supersedes all prior agreements between the
parties relating to its subject-matter. No modification or variation of
this agreement shall be effective unless in writing and signed by all
parties.
8 Time is of the essence of this agreement.
9 This agreement shall be governed by the laws and jurisdiction of the
Province of British Columbia and shall enure to the benefit of and be
binding on the parties to it and their respective successors and
permitted assigns.
10 Any notice to be given under this agreement shall be delivered to the
respective address first above written unless a notice of a change of
address has been given.
IN WITNES WHEREOF the parties have executed this agreement on the day, month and
year first written above.
The Corporate Seal of PHON-NET CORP. )
was hereunto affixed in the presence of )
)
) c/s
/s/ Xxxxx Xxxxxxx )
--------------------- )
Authorized Signatory )
President )
The Corporate Seal of QUAD-LINQ )
SOFTWARE, INC. was hereunto )
affixed in the presence of: )
)
) c/s
Xxxxx X. Xxxxxxxxx )
--------------------- )
Authorized Signatory )
)
)
Xxxxxxxxxxx X. Georgelin )
--------------------- )
Authorized Signatory )
