Exhibit 10.21
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of the
12th day of October 1998 by and between Stonehouse Graphics (Pty) Limited
("Company") and Xxxxx Weight (Weight).
WHEREAS, the Company desires to employ Xxxxx Weight (Weight) as the
"General Manager" of the Company;
WHEREAS, Weight has agreed to provide such services in accordance with the
terms and conditions of this Agreement;
NOW THEREFORE, in consideration of the mutual promises herein made and of
other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:
1.00 Employment terms
1.01 Engagement.
The Company shall employ Weight as General Manager during the term of this
Agreement and Weight hereby accepts such employment. Weight shall be
responsible for the day-to-day operation and management of the Company,
and shall have such other duties regarding the Company as shall be
determined from time to time by the Board of Directors of the Company
("Board").
1.02 Term of Employment.
The term of employment of Weight shall be for a term of 2 (two) years from
the date of this Agreement ("Initial Term") and shall automatically extend
for additional terms of 2 (two) year(s) ("Renewal Term") unless this
Agreement is terminated as of the last day of the initial Term or as of
the last day of any Renewal Term upon not less than ninety (90) days prior
written notice by either party to the other, subject to earlier
termination as provided in paragraphs 2.01, 2.02 and 2.03 hereof.
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1.03 Compensation.
Base Salary. Weight shall be paid a base salary at the annual rate of R200
000 (two hundred thousand rand) payable in equal monthly installments,
commencing on the 16th October 1998. In addition Weight shall be paid the
sum of R100 000 (one hundred thousand rand) per annum likewise payable in
equal monthly installments commencing on the 16th October 1998 in
consideration of the limitations and restraints on termination of this
agreement as imposed upon him as hereinafter recorded. The base salary
shall be reviewed after a period of 1 (one) year.
1.04 Cash Bonus.
Weight shall be paid a cash bonus, if any, within the sole discretion of
the Board. Such bonus shall be paid within a reasonable period of time
after the Board in its discretion awards such cash bonus, but not to
exceed a period or 90 (ninety) days of the end of the Company's accounting
period during which the cash bonus was declared.
1.05 Vacation.
Weight shall be entitled to paid vacation and paid public holidays in
accordance with the vacation policy of the Company then in effect, but no
less than 20 (twenty) working days of vacation each year.
1.06 Other Benefits.
Weight shall be entitled to participate in all benefit programs made
generally available to other management employees of the Company, on the
same terms and conditions as they are offered to others, including but not
limited to medical, dental, and term life insurance benefits. Weight shall
in the discretion of the Board also be entitled to a motor allowance in
respect of all motor expenses incurred for business purposes.
1.07 Stock Option Grants/Employee Stock Ownership Plan.
Weight shall be entitled to participate and receive stock option grants
from the Company's Employee Stock Option Plan ("ESOP") during his
employment with the Company, at the discretion of the Board of Directors
or committee of the Board responsible to administer
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the ESOP, in amounts which are proportional to and at the same time as
option grants are made to other members of the Company's senior management
and according to terms and conditions which are comparable to such ESOP
option grants received by other members of the Company's senior
management.
2.00 Termination of Employment.
2.01 Termination for Cause.
The Company may terminate the employment of Weight at any time for cause (as
hereinafter defined) upon written notice. The term "for cause" shall mean: the
continued failure by Weight to substantially perform his primary duties as
General Manager of the Company in a reasonable professional manner other than
due to temporary or total disability or death, after a written demand for such
substantial performance is delivered to Weight by the Board of Directors of the
Company; the unauthorized dissemination of significant trade secrets or other
proprietary property of the Company: the commission of a crime involving
dishonesty or moral turpitude; the commission of any act or acts of dishonesty
which acts are intended to result or do result directly or indirectly in gain or
personal enrichment of Weight or a related person or affiliated company or when
such acts are intended to cause harm or damages to the Company; the continued
use of alcohol so as to have an adverse effect on the performance of his duties;
the misappropriation or embezzlement of Company assets; the knowingly furnishing
of material false reports or information to the directors or officers of the
Company; or the making of serious disparaging remarks regarding the Company
publicly or to suppliers and/or customers or potential customers of the Company.
2.02 Default.
Either party may terminate this Agreement upon the breach of any material
provision of this Agreement by the other party upon 30 (thirty) days prior
written notice; provided, however, that such termination notice shall not be
effective if the defaulting party corrects such default prior to the date of
termination. Termination by Weight of his employment hereunder by reason of the
default of the Company shall be deemed for all purposes of this Agreement a
termination by the Company without cause.
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2.03 Disability.
The Company may terminate the employment of Weight under this Agreement by
written notice upon the total and permanent disability of Weight. Total and
permanent disability shall mean the inability of Weight to substantially perform
the essential functions of his position, with or without reasonable
accommodations, due to sickness or other physical or mental disability, for 30
(thirty) days in any 90 (ninety) day period or a period of time which exceeds
the time for medical leave provided by law, whichever period is longer. The
Company shall give Weight written notice of any termination hereunder.
2.04 Death.
The employment of Weight under this Agreement automatically terminates upon his
death.
3.00 Limitations.
3.01 Non-Compete.
Weight agrees that during the term of his employment with the Company hereunder
and for a period of 2 (two) years thereafter he shall refrain, directly and
indirectly, jointly and severally, from managing, operating, financing,
participating in the ownership, management or operation of or be employed by,
consult with, advise or be otherwise engaged in any manner with, any business
engaged in the providing of services or products competitive to those provided
by the Company in the Republic of South Africa or in any geographic area in
which the Company operates as of the date that Weight leaves the Company's
employment. Ownership of less than 2% of companies whose securities are publicly
traded is not prohibited by this Agreement.
3.02 Non-solicitation of Customers.
Weight agrees that during the term of his employment with the Company hereunder
and for a period of 2 (two) years thereafter he shall not, on his own behalf, or
on behalf of another, directly or indirectly, solicit, contact, call upon,
communicate with or attempt to communicate with any customer or prospective
customer of the Company with a view to the providing of services or products
which are competitive with those that are marketed or provided by the Company as
of the
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date that Weight leaves the Company's employment, provided that these
restrictions shall apply only to customers or prospects of the Company which
have been customers or prospects with whom Weight has had contacts on behalf of
the Company.
3.03 Non-solicitation of Employees.
Weight agrees that during the term of his employment hereunder and for a period
of 2 (two) years thereafter, he will not directly or indirectly solicit or in
any other manner encourage employees of the Company to leave its employ for an
engagement in any capacity with any other company or entity.
3.04 Limitations.
Notwithstanding the foregoing, the covenants of Weight pursuant to this
paragraph 10 shall terminate upon the termination of Weight's employment by the
Company without cause or by Weight by reason of the Company's breach of its
obligations hereunder.
3.05 Dispute Resolution.
Any dispute regarding the interpretation, breach, damages or otherwise related
to the interpretation or construction of this Agreement shall be resolved by
binding arbitration before one or more arbitrators appointed by the Chairman of
the Law Society of Gauteng in the city of Johannesburg according to the
arbitration laws of the Republic of South Africa. Either party may institute the
action by notice to the other party. Prior to the filing of any complaint, the
parties shall meet and attempt to resolve the dispute, and if necessary appoint
a mediator who shall be an attorney of at least 10 (ten) years standing to
assist in such dispute resolution. The cost of such arbitration shall be borne
equally by the parties. Any decision or award by said arbitrator(s) shall be
binding on the parties. Notwithstanding the foregoing, any party hereto may
apply to any court for a temporary or permanent injunction or restraining order
to specifically enforce any provision hereof.
4.00 General
4.01 Expense Reimbursement.
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Weight shall be reimbursed, upon a proper accounting, for all expenses
reasonably incurred in connection with this employment hereunder, including all
reasonable travel and entertainment expenses pursuant to Company policy.
4.02 Confidential Information.
During the Initial Term or any Renewal Term of this Agreement, Weight shall not
use or disclose to others, without the prior written consent of the Company, any
customer lists, trade secrets, secret know-how, or other confidential
information relative to the business of the Company obtained by Weight in the
course of rendering services pursuant to this Agreement. The obligation of
Weight with respect to any item of such information shall terminate if that item
of information becomes disclosed in published literature or otherwise becomes
publicly available, provided that such public disclosure did not result,
directly or indirectly, from any act or omission of Weight. Upon the leaving the
employ of the Company for any reason, Weight shall continue to be bound by this
Paragraph 8 for a period of 2 (two) years, and shall not take with him any
customer lists, confidential data, or other documents and instruments which are
the property of the Company. All such data, documents and instruments and all
copies thereof shall be surrendered by Weight to the Company on or prior to the
termination of his employment.
4.03 Notices.
All notices, requests, demands and other communications required or permitted
hereunder shall be in writing and shall be deemed to have been given when
delivered by hand or upon delivery to the address set forth below, if delivered
by any other means, addressed to the party and delivered to the address set
forth below or to such other address as such party gives written notice in
substitution therefor.
4.04 Binding Effect.
This Agreement shall inure to the benefit of and be binding upon Weight and his
estate and personal representatives and upon the Company and its successors and
assigns. This Agreement may not be assigned, pledged or otherwise hypothecated
by Weight.
4.05 Successors and Assigns.
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The Company shall cause any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the assets or
outstanding securities of the Company, by written agreement in form and
substance reasonably satisfactory to counsel to Weight to perform the
obligations of the Company pursuant to this Agreement in the same manner and to
the same extent that the Company would be required to perform if no such
succession had taken place. In the event the Company has a parent, the parent
shall guaranty the obligations of the Company hereunder. The rights and
obligations of the Company under this Agreement shall inure to the benefit of
and be binding upon the successors and assigns of the Company regardless of
whether such successor or assign consents in writing thereto. The rights of
Weight hereunder shall inure to the benefit of and be enforceable by Weight and
his estate and legal representative.
4.06 Severability.
In the event of the invalidity, in whole or in part, of any term or provision of
this Agreement, the parties agree that such invalidity shall not affect the
validity of any other term or provision of this Agreement and that such
provision shall be subject to partial enforcement to the extent permitted under
applicable law.
4.07 Entire Agreement.
This Agreement constitutes the entire understandings of the parties with respect
to the employment of Weight by the Company and supersedes all prior agreements
and understandings, oral or written.
4.08 Amendments.
This Agreement may not be amended or modified except in a writing signed by both
parties.
4.09 Waiver.
The failure by a party to insist upon strict performance of any provision hereof
shall not constitute a waiver of such provision. All waivers must be in writing
to be enforceable hereunder.
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4.09 Governing Law.
This Agreement shall be made and in all respects shall be interpreted, construed
and governed by and in accordance with the laws of the Republic of South Africa
without giving effect to the rules governing conflicts of law.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.
STONEHOUSE GRAPHICS (PTY) LIMITED
By: /s/ Xxxxx X. Xxxxxxx, Xx
---------------------------------------
Chief Executive Officer
/s/ Xxxxx Weight
------------------------------------------
XXXXX WEIGHT
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*Prepared by Lams (Pty) Ltd 1st September 1998
Revised 11th October 1998
Page 1
DEED OF PLEDGE
between
Colorsmart, Inc.
(Colorsmart) a Nevada Corporation of 000 Xxxxx Xxxxx, Xxxxxxx, Xxxxxxxxx, X.X.X.
and
Xxxxx Weight
(Weight) of Xxxx 00, Xxxxxxxxx Xxxx, Xxx Xxxx Xxxxx, Xxxxxxxxxxx Xxxx
1. Recitals
WHEREAS:
1.1 Colorsmart has purchased from Weight for the sum of R15 000 000.00
(fifteen million rand) the total issued shares and loan claims in
Stonehouse Graphics (Pty) Limited (Stonehouse) in terms of a Sales
of Shares Agreement dated the 12th October 1998 and amended on the
4th and ... November 1998;
1.2 The Effective Date of the purchase and sale referred to is the close
of business on the 30th November 1998.
1.3 Transfer of the shares and cession of the loan claims purchased will
be delivered and ceded by Weight to Colorsmart on the Effective
Date;
1.4 Payment of the purchase consideration will be effected by way of the
delivery of a Promissory Note due and payable on the 28th February
1999 drawn by Colorsmart in favour of Weight
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1.5 Pending discharge of the Promissory Note and as security for the
payment thereof, Colorsmart has agreed to pledge and cede to Weight
respectively the shares and loan claims.
2. Definitions
In this document:
2.1 "Shares" mean the shares in Stonehouse purchased by Colorsmart in
terms of the Agreement dated the 12th October 1998.
2.2 "Claims" mean the loan claims in Stonehouse acquired by Colorsmart
from Weight.
2.3 "Agreement" means the agreement referred to in 1.1.
3. Pledge and Cession
3.1 As security for the payment of the Promissory Note referred to above
Colorsmart does hereby
(i) pledge to Weight the shares, and
(ii) cede, assign and transfer to Weight all its right title and
interest in the loan claims;
and undertakes to deliver the said shares to Weight together with a
duly signed cession of loan claims when executing this Deed of
Pledge.
3.2 The pledge and cession herein recorded shall operate as a continuing
covering security in favour of Weight for such sum or sums of money
as may now or hereafter be indebted to him by Colorsmart in terms of
the Agreement.
3.3 Against payment of the Promissory Note in respect whereof this
Pledge has been given as security, the Pledge shall be deemed to be
automatically cancelled and shall be null and void. Weight hereby
agrees
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and undertakes to return both the shares and claims forthwith to
Colorsmart against such payment.
3.4 Should the Promissory Note not be paid by the 28th February 1999 or
any extended payment date to which the parties hereto may have
agreed, ownership in the shares and loan claims shall likewise
automatically revert to Weight.
3.5 Colorsmart hereby constitutes Weight irrevocably and in rem suam,
with power of substitution, as its agent to execute all such
documents and do all such other things as may in Weight's discretion
be necessary to give due and proper effect to the terms hereof,
particularly should the Promissory Note not be paid on the 28th
February 1999 or any extended payment date, to transfer the shares
and loan claims to his name.
THUS DONE AND SIGNED AT ______________ ON THIS THE ________ DAY OF NOVEMBER 1998
IN THE PRESENCE OF THE UNDERSIGNED WITNESSES.
AS WITNESSES:
1 --------------------------
Colorsmart
2 --------------------------
Weight
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*Prepared by Lams (Pty) Ltd 22 November 1998
[LETTERHEAD OF STONEHOUSE GRAPHICS]
13 October 1999
Xxxxxxxxxx.xxx.xxx
Fax 000 000 0000
Attention Reg Xxxxxxx,
We are prepared to extend the date of our agreement to January 2000.
All financials will then run to that date and be subject to an audit.
Kind regards,
/s/ Xxxxx Weight
Xxxxx Weight.
