Exhibit 10.1
PURCHASE AGREEMENT
This Agreement made this 3rd day of January, 2000 (the "Agreement") by and
between Spectrum Information Technologies, Inc. doing business as Xxxx-Xxxxx.xxx
("SITI") and Xxxxxxxx Xxxxxx ("Xxx") is intended to provide for the purchase of
an e-commerce business and website owned and operated by Xxx, known as Hungry
Xxxxx.xxx, and his employment thereafter as an executive of SITI, on the terms
and conditions hereinafter set forth.
Now Therefore, in consideration of the mutual covenants and understandings set
forth herein, the parties do hereby agree as follows:
1. Purchase of Business and Website. Xxx hereby sells, assigns and transfers
the e-commerce business and website of Hungry Xxxxx.xxx to SITI,
including, without limitation, all of their assets, properties, contracts,
client lists, artist contracts, inventories, service contracts,
receivables, proprietary information, website and related software,
servers, computer equipment, records and other properties and assets in
any form, subject to all existing liabilities, for future operation by
SITI. A current balance sheet for such business and website, including
XX.xxx, has been furnished to SITI and has been approved for this
transaction, annexed as exhibit A. Among other assets, Hungry Xxxxx.xxx is
represented and warranted to include at least 1,500 bands under artist
contracts, although some 1,000 thereof have not yet been uploaded into the
website, and is currently attracting approximately 6,000 unique internet
"hits" per month to its website.
2. Payment in Shares of SITI. Xxx shall be entitled to receive in payment
50,000 shares of SITI common stock, on January 15, 2000; after transfer
and ongoing operations of the website are secure and in working operation
by SITI ( expected by February of 2000), Xxx shall receive an additional
50,000 shares of such common stock, and provided he has performed and
complied with all the terms and conditions hereof, an additional 50,000
shares thereof on June 30, 2000.
3. Services. SITI shall hereafter employ Xxx as its Vice-President/Technical
Director to manage theHungry Xxxxx.xxx website, and SITI's other websites,
supervising the day to day operation thereof under the direction and
control of SITI's management. Xxx shall be employed at a salary of $68,000
annually the first year, with increases contemplated based on his
performance, along with bonuses and stock option or stock grants similarly
based, all reviewable by SITI's management each six months, in a format
further elaborated below.
SITI has advanced Xxx $4,000 during the past weeks, and expects to advance
him $8,000 more within three months, to assist him in clearing personal
debts to his last employer, all repayable in one year from the date
hereof, unless SITI grants bonuses or other compensation to him which
satisfies such obligation earlier. After two months, Xxx shall also be
included in SITI's insured medical/dental plan for employees and their
families. Xxx manages other website ventures, but has represented he is a
full-time executive, and will devote all necessary time and attention to
SITI's business during his employment hereunder, to maximize results at
its several websites and other ventures.
Xxx will join with SITI's management in developing a series of goals for
the coming year and each succeeding year, for all of SITI's websites for
which Xxx shall be responsible, including number of unique hits,
integration of software from various sources, number of artists or similar
benchmarks added to each site, additions of technical personnel, revenues
and operating earnings or losses, acquisitions facilitated by Ted's
efforts, and other corporate objectives within his executive control and
attainment. An annual bonus in cash and/or stock shall be agreed upon by
weighting each objective, and distributed each six months based upon the
results achieved on such agreed goals at that point, by Xxx and his team,
each member thereof to share therein based on their respective
contribution, as determined by Xxx in conjunction with SITI management.
4. Confidentiality Covenant. Xxx agrees that while employed by SITI, he will
not engage in any other business activity which, after his full disclosure
thereof, conflicts with his obligations to build SITI as Technical
Director of its websites. Any potentially competitive activities to SITI's
operations shall be reviewed with its management. Furthermore, Xxx shall
keep confidential, and not use for his own account, all of the trade
secrets, know-how, software, and other proprietary information and
materials of SITI and its subsidiary and affiliated operations, including
artists, promotions, customer or contact lists and other data which comes
into his purview as a result of his activities on behalf of SITI. Xxx
acknowledges that the covenants set forth above are necessary for SITI's
protection and that the nature and scope thereof are reasonable.
5. Representations and Warranties. Xxx makes the representations and
warranties to SITI set forth herein and in exhibit B annexed hereto, which
also contains representations and warranties by SITI to Xxx as to its
common stock and other matters.
6. Piggy-Back Registration Rights. The shares being issued to Xxx hereunder
are not registered under the Securities Act of 1933, and will bear a
legend restricting their marketability as set forth in exhibit C. SITI
will xxxxx Xxx customary registration rights, on a pro-rata basis, along
with other executives on all future SITI registered share offerings,
subject to any underwriters' restrictions or conditions imposed thereon.
7. Good Faith and Fair Dealings. The parties acknowledge that SITI's several
websites and business plans are all start-ups with high risks and growth
potential, and anticipate changes in focus or strategy. The parties
foresee a continuing requirement of good faith, fairness and full
disclosure in their dealings with each other , and each party agrees that
such standards shall apply to all of such dealings.
8. Miscellaneous. This Agreement and the exhibits annexed thereto contain the
entire understanding of the the parties with respect to the subject matter
hereof. No amendment or modification of this Agreement shall be valid or
binding unless in writing and executed by the parties. This Agreement
shall be governed by, construed and enforced in accordance with the laws
of New York. Xxx shall not assign any of his rights or obligations
hereunder without the written consent of SITI.
In Witness Whereof, the parties have executed and delivered this Agreement as of
the day and year first above written.
Spectrum Information Technologies, Inc. Xxxxxxxx Xxxxxx
d/b/a Siti-Sites. com
By /s/ Xxxxxxxx X. Xxxxxx /s/ Xxxxxxxx Xxxxxx
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Xxxxxxxx X. Xxxxxx, Chairman/CEO 00 Xxxxxxxx Xxxxxx
594 Broadway, Xxxxx 0000, X.X., X.X.00000 Xxxxxx Xxxxxx, X.X. 00000
