Exhibit 2.1
PLAN AND AGREEMENT OF REORGANIZATION
This Plan and Agreement of Reorganization (this "Agreement") is entered into on
this 29th day of June, 2001, by and among E-STREET ACCESS, INC., a New Jersey
corporation ("Street"), HIGHLAND HOLDINGS INTERNATIONAL, INC., a Delaware
corporation subject to the reporting requirements imposed pursuant to Section
15(d) of the Securities Exchange Act of 1934, as amended ("Highland"), and
certain stockholders of Street signatory hereto ("Shareholders" or "Street
Shareholders").
PLAN OF REORGANIZATION
The transactions contemplated by this Agreement are intended to be a
reorganization under both sections 351 and 368(a)(1)(B) of the Internal Revenue
Code, as amended. The Street Shareholders shall contribute to Highland at
Closing not less than 70% of Street's issued and outstanding Common Stock. The
result of such reorganization shall be that if all Street Shareholders
participate in the reorganization, they shall receive at the Closing, more than
an 95% ownership interest in Highland. The share exchange shall be on a
one-for-one basis.
AGREEMENT
1. Status of Street Shares; Transfer of Street Shares; Lack of Encumbrances
(a) The Street Shareholders represent that, as of the date of this
Agreement, the Street Shareholders own, in the aggregate, not
less than 66.9% of all of Street's issued and outstanding Common
Stock, and their share holdings, are listed on Exhibit A-1
attached to this Agreement. If any Street Shareholders transfer a
portion of their respective holdings of Street Stock to other
persons or entities, prior to the Closing (as defined in Section
3), they, as a condition of such transfer, shall execute a
counterpart of this Agreement as a Street Shareholder.
(b) The Street Shareholders shall transfer, assign, convey and
deliver to Highland at the Closing certificates representing, as
of the Closing Date (as defined in Section 3), the Street Shares.
(c) The transfer of the Street Shares shall be made free and clear of
all liens, mortgages, pledges, encumbrances, or charges, whether
disclosed or undisclosed, except as the Street Shareholders and
Highland shall have otherwise agreed in writing.
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2. Issuance of Exchange Stock to Street Shareholders and Others.
(a) As consideration for the transfer, assignment, conveyance and
delivery of the Street Stock, Highland shall, at the Closing,
issue, to the Street Shareholders, certificates representing the
number of shares of Highland common stock and the number of
shares of Highland convertible Preferred Stock equal to the
number of shares of E-Street common stock tendered for exchange
on the basis of one share of Highland stock (the "Exchange
Stock"), immediately following the Closing. In calculating the
above mentioned percentage, it is presumed that subsequent to the
Closing, Highland will increase its authorized number of shares
of Common Stock to accommodate the conversion of preferred stock
into Common Stock.
(b) The issuance of the Highland Exchange Stock shall be made free
and clear of all liens, mortgages, pledges, encumbrances, or
charges, whether disclosed or undisclosed, except as the Street
Shareholders and Highland shall have otherwise agreed in writing.
(c) As provided herein, and immediately prior to the Closing,
Highland shall have issued and outstanding 1,272,326 shares of
Common Stock, and shall not have any shares of preferred stock
issued and outstanding.
(d) None of the Exchange Stock issued or transferred to the
Shareholders and none of the Street Stock transferred to Highland
hereunder shall, at the time of Closing, be registered under
federal securities laws but, rather, shall be issued pursuant to
an exemption therefrom and be considered "restricted stock"
within the meaning of Rule 144 promulgated under the Securities
Act of 1933, as amended (the "Act"). All of such shares shall
bear a legend worded substantially as follows:
The securities represented by this certificate have not been
registered under the Securities Act of 1933 (the "Act") and
are "restricted securities" within the meaning of Rule 144
under the Act. The securities may not be offered for sale,
sold or otherwise transferred except pursuant to an
effective registration statement under the Act, or pursuant
to an exemption from registration under the Act, the
availability of which is to be established to the
satisfaction of the Company.
The respective transfer agents of Highland and Street shall
annotate their records to reflect the restrictions on transfer
embodied in the legend set forth
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above. There shall be no requirement that Highland register the
Exchange Stock under the Act, nor shall Street or the
Shareholders be required to register any Street Shares under the
Act.
3. Closing. The consummation of the exchange described in Sections 1 and 2
(the "Closing") shall take place on a date (the "Closing Date") chosen by mutual
agreement of Street and Highland within thirty (30) days from the date of this
Agreement, unless a later time shall be mutually agreed upon by the parties.
4. Deliveries at Closing.
(a) Street and the Shareholders shall deliver to Highland, at
Closing:
(1) certificates representing the shares of Street Stock as
described in Section 1, each endorsed in blank by the
registered owner,
(2) an agreement from each Shareholder that is a director or
officer of Street or a family member of any such director or
officer, substantially in the form of Exhibit B-1 hereto,
agreeing to restrictions on the transfer of the Exchange
Stock as described in Section 11(c) hereto, providing
certain investment representations and agreeing to the terms
of a lock-up set forth in Exhibit B-1.
(3) a copy of a consent of Street's board of directors
authorizing Street to take the necessary steps toward
consummation of the transactions described by this
Agreement, and
(4) a copy of a Certificate of Good Standing for Street issued
not more than sixty days prior to Closing by the New Jersey
Secretary of State.
(b) Highland shall deliver to the Street Shareholders, at Closing,
certificates representing the Exchange Stock (or convertible
preferred stock), in the names of the appropriate Shareholders,
each in the appropriate denomination, as described in Section 2.
(c) Highland shall deliver to the new Highland Board, appointed
pursuant to Section 11(k) below, at Closing, all of Highland's
corporate records.
(d) Highland shall execute and deliver of Xxxx Xxxxxxx, Xxxxxxxx
Xxxxxx and Xxxxxx Xxxxxxx employment agreements substantially in
the forms of Exhibits I-1, I-2 and I-3, respectively.
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(e) Highland shall deliver to Street at Closing:
(1) a copy of a consent of Highland's board of directors
authorizing Highland to take the necessary steps toward
consummation of the transactions described by this Agreement
and electing the new directors designated by Street one of
whom shall be Xxxx Xxxxxxxx effective as of the Closing; and
(2) a copy of a Certificate of Good Standing for Highland issued
not more than thirty days prior to Closing by the Secretary
of State of Delaware.
5. Covenants, Representations and Warranties of Street. Subject to the
schedule of exceptions, attached hereto as Exhibit C and incorporated herein by
this reference, which schedule shall be acceptable to Highland, Street
represents and warrants to Highland as follows:
(a) Organization and Standing of Street. Street is a corporation duly
organized, validly existing, and in good standing under the laws
of the State of New Jersey Street's books and records are
complete and correct and have been maintained with good business
practice and accurately reflect in all material respects the
transactions to which they relate.
(b) Subsidiaries and Ownership of Securities. The following are
wholly owned subsidiaries of Street: ESA Securities, Inc. d/b/a E
Street Access; Global Tradesoft, Inc. and E Street Ventures
Partners Group, Inc.
(c) Capitalization. The aggregate number of shares of stock which
Street is authorized to issue is 50 million shares, all of which
are shares of Common Stock, $.005 par value, of which 25,654,252
shares are issued and outstanding as at June 22, 2001. All of
such outstanding shares are validly issued, fully paid and
non-assessable;
Street has outstanding the number of warrants to purchase Common
Stock as are scheduled on Exhibit A-2.
According to Street's books and records, each of the persons or
entities that is to be a shareholder at Closing is domiciled in
one of the jurisdictions listed on Exhibit A-2. All securities
issued by Street as of the date of this Agreement have been
issued in compliance with all applicable state and federal laws.
(d) Financial Statements. Street will deliver to Highland, prior to
Closing, copies of Street's financial statements for the year
ended April 30, 2000 as compiled
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by Street's accountants and Street's unaudited financial
statements for the year ended April 30, 2001 as prepared by
Street. Street shall deliver to Highland, 45 days after the
Closing, financial statements of Street for the years ended April
30, 2000 and April 30, 2001 as audited by Street's accountants
and prepared in accordance with generally accepted accounting
principles.
(e) Absence of Undisclosed Liabilities. Except to the extent
reflected in this Agreement or in Street's unaudited balance
sheet at April 30, 2001, Street has no actual knowledge of any
liabilities of any nature, whether accrued, absolute, contingent,
or otherwise, including, without limitation, annual franchise
taxes or other corporate charges in the normal course of
business, in existence as of such date.
(f) Absence of Certain Changes. Except as disclosed in Exhibit C,
since April 30, 2001, there has not been, and as of the Closing,
there will not be (i) any change in Street's financial condition,
assets, liabilities, or business other than changes in the
ordinary course of business, none of which, taken individually or
considered together with other changes, has been materially
adverse, or (ii) any damage, destruction, or loss, whether or not
covered by insurance, materially and adversely affecting Street's
properties or business.
(g) Title to Properties. Street has good and marketable title to all
of its properties and assets, real and personal, tangible and
intangible, none of which is subject to any security interest,
mortgage, pledge, lien, encumbrance, or charge, except for liens,
if any, shown on Street's financial statements as of April 30,
2001, or on Exhibit D prepared in compliance with subsection (j)
below as securing specified liabilities set forth therein (with
respect to which no default exists) and, except for minor
imperfections of title and encumbrances, if any, which are not
substantial in amount, do not materially detract from the value
of the properties subject thereto, or materially impair Street's
operations and have arisen in the ordinary course of business.
(h) Litigation and Complaints. Except as disclosed in Exhibit C,
there is no litigation or proceeding pending, or to Street's
knowledge threatened, against or relating to Street, its
properties, or business, nor does Street know or have reasonable
grounds to know, of any basis for any such action, or of any
governmental investigation relative to Street, its properties, or
business. In addition, except as disclosed in Exhibit C, Street
is not aware of any outstanding complaints filed against them
with the Securities and Exchange Commission or the NASD in
connection with the operation of their securities business.
Street is not, and on the Closing Date will not be, in default
under or with respect to any judgment, order, writ, injunction or
decree of any court or
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of any federal, state, municipal or other governmental authority,
department, commission, board, agency or other instrumentality;
and Street has, and on the Closing Date will have, complied in
all material respects with all laws, rules, regulations and
orders applicable to it and to its business, if any.
(i) Exhibits Relating to Certain Matters. Exhibit D contains a
complete and accurate recitation of the following documents: a
description of all liens, mortgages, charges, and encumbrances
that are outstanding with respect to any of the properties and
assets of Street; a list of all leases wherein Street is either
lessor or lessee, a list of all other material written or oral
contracts, commitments, agreements, and other contractual
obligations to which Street is a party, a list of all insurance
policies carried by Street; a description of all bonus, pension,
profit sharing, retirement, stock purchase, stock option,
hospitalization, insurance, and other executive or employee
compensation or benefit plans to which Street is a party, a list
of all notes payable of Street, and, a list of all notes and
contracts receivable of Street.
(j) Taxes. Street has filed in correct form, or has received proper
extensions to file, all federal and state income tax returns due
with respect to all periods through the end of its last fiscal
year, and all real and personal property tax schedules,
franchise, sales or use tax returns, and all federal and state
employment and withholding tax returns that are required to be
filed, and has paid all taxes as shown on the said returns and
all assessments received by it to the extent that such taxes and
assessments have become due.
(k) Authority to Execute Agreement The Board of Directors of Street,
pursuant to the power and authority legally vested in it, has
duly authorized the execution and delivery by Street of this
Agreement, and has duly authorized each of the transactions
hereby contemplated to be performed. A copy of the Consent of
Board of Directors of Street authorizing such action is attached
hereto as Exhibit E and incorporated herein by this reference.
Street has the power and authority to execute and deliver this
Agreement, to consummate the transactions hereby contemplated by
it and to take all other actions required to be taken by it
pursuant to the provisions hereof Street has taken all actions
required by law, its Articles of Incorporation, as amended, its
bylaws, as amended, or otherwise to authorize the execution and
delivery of this Agreement. This Agreement is valid and binding
upon the Shareholders in accordance with its terms. Neither the
execution and delivery of this Agreement nor the consummation of
the transactions contemplated hereby will constitute a violation
or breach of the Articles of Incorporation, as amended, or the
bylaws, as amended, of Street, or any agreement, stipulation,
order, writ, injunction, decree, law rule or regulation
applicable to Street.
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(l) Finder's Fees. Street is unaware of any finders or brokers fees
which are due in connection with the transaction contemplated
herein.
(m) Disclosure. No representation or warranty by Street in this
Agreement, nor any statement or certificate hereto, or in
connection with the transactions contemplated hereby, knowingly
contains or will contain any untrue statement of a material fact,
or omits or will omit to state a material fact necessary to make
the statements contained therein not misleading.
(n) Compliance. To the best of its knowledge, Street has complied in
all material respects with all applicable laws, orders and
regulations of federal, state, municipal and/or other governments
and/or any instrumentality thereof domestic or foreign, currently
applicable to its assets and to the business conducted by it.
(o) Lockup. In the event that any shareholder of E Street, other than
a Shareholder required to execute and deliver an agreement in the
form of Exhibit B-1 or Exhibit B-3 hereto hereto, participates in
the exchange of such shareholder's E Street common stock for
shares of common stock of Highland hereunder, such shareholder
will enter into an agreement, substantially in the form of
Exhibit B-2 hereto, containing certain lock-up provisions and
investment representations.
6. Access and Information. Subject to the protections provided by Xxxxxxx
00, Xxxxxx shall give to Highland and to Highland's counsel, accountants, and
other representatives full access, during normal business hours throughout the
period prior to the Closing, to all of Street's properties, books, contracts,
commitments, and records, including information concerning products and customer
base, and patents held by, or assigned to, Street, and furnish Highland during
such period with all such information concerning Street's affairs as Highland
reasonably may request.
7. Covenants, Representation and Warranties of Highland. Highland
represents and warrants as follows:
(a) Organization and Standing of Highland. Highland is a corporation
duly organized, validly existing and in good standing under the
laws of the State of Delaware. Highland's books and records are
complete and correct and have been maintained with good business
practice and accurately reflect in all material respects the
transactions to which they relate. The same shall be subject to
the review and approval of counsel for Street.
(b) Subsidiaries. Highland Resources Hondouras, S.A.
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(c) Capitalization. As of the date of this Agreement, the aggregate
number of shares of Common Stock, par value $.001 per share,
which Highland is authorized to issue is 20,000,000 of which
1,272,326 shares are currently issued and outstanding. No options
or rights to purchase Common Stock or preferred stock are
currently outstanding, or will be outstanding as of the Closing.
The aggregate number of shares of preferred stock, par value
$.001 per share, which Highland is authorized to issue is
5,000,000, of which no shares are issued and outstanding.
(d) Financial Statements. Highland will deliver to Street, prior to
Closing, copies of all of Highland's audited and unaudited
financial statements, including but not limited to Highland's
audited 12 month statements for the year ending December 31,
2000, and first quarter statements as at March 31, 2001. All of
Highland's audited and unaudited financial statements through
March 31, 2001 shall be true and complete and have been prepared
in accordance with generally accepted accounting principles and
Regulation S-X appearing in title 17 of the Code of Federal
Regulations ("Regulation S-X").
(e) Absence of Undisclosed Liabilities. Except to the extent
reflected in this Agreement or in Highland's balance sheet at
March 31, 2001, Highland has no actual knowledge of any
liabilities, as of such date, of any nature, whether accrued,
absolute, contingent, or otherwise, including, without
limitation, annual franchise taxes or other corporate charges in
the normal course of business.
(f) Absence of Certain Changes. Highland is engaged in the
exploration of mining interests in Honduras through a 95% owned
subsidiary. Since March 31, 2001, there has not been any material
change in Highland's financial condition, assets or liabilities,
except the incurring of expenses in connection with the
acquisition of Street or in the exploration of the mine in
Honduras or as reflected in this Agreement.
(g) Litigation. There is no litigation or proceeding pending, or to
Highland's knowledge threatened, against or relating to Highland,
nor does Highland know or have reasonable grounds to know, of any
basis for any such action, or of any governmental investigation
relative to Highland. Highland is not, and on the Closing Date
will not be, in default under or with respect to any judgment,
order, writ, injunction or decree of any court or of any federal,
state, municipal or other governmental authority, department,
commission, board, agency or other instrumentality; and Highland
has, and on the Closing Date will have, complied in all material
respects with all laws, rules, regulations and orders applicable
to it, if any.
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(h) Contracts. Highland is not a party to any contract, nor is
Highland a party to any written or oral commitment, for capital
expenditures. Highland has in all material respects performed all
obligations required to be performed by it to date and is not in
default in any material respect under any agreements or other
documents to which it was a party and has no further on
continuing obligation under any agreements or contracts.
(i) SEC Filings. As of the date of this Agreement, Highland has
accurately and timely filed with the Securities and Exchange
Commission ("SEC") all registration statements, financial
statements, applications, reports, schedules, forms, proxy
statements and all other instruments, documents and written
information (collectively, the "SEC Filings") required to be
filed by Highland under the Act and the Securities Exchange Act
of 1934, as amended. At the date hereof, none of the SEC Filings
contains or, on the Closing Date, will contain any untrue
statement of a material fact or omits or, on the Closing Date,
will omit to state a material fact necessary in order to make the
statements contained therein, in light of the circumstances in
which they were made or shall have been made, not misleading.
(j) Authority to Execute Agreement. The Board of Directors of
Highland, pursuant to the power and authority legally vested in
it, has duly authorized the execution and delivery by Highland of
this Agreement and the Highland Exchange Stock, and has duly
authorized each of the transactions hereby contemplated. A copy
of the Consent of Board of Directors of Highland authorizing such
action is attached hereto as Exhibit F and incorporated herein by
this reference. Highland has the power and authority to execute
and deliver this Agreement, to consummate the transactions hereby
contemplated and to take all other actions required to be taken
by it pursuant to the provisions hereof. Highland has taken all
the actions required by law, its Certificate of Incorporation, as
amended, its bylaws, as amended, or otherwise to authorize the
execution and delivery of the Highland Exchange Stock pursuant to
the provisions hereof. Not less than a majority of the holders of
the outstanding stock of Highland entitled to vote has approved
this Agreement. This Agreement is valid and binding upon Highland
in accordance with its terms. Neither the execution and delivery
of this Agreement nor the consummation of the transactions
contemplated hereby will constitute a violation or breach of the
Certificate of Incorporation, as amended, or the bylaws, as
amended, of Highland, or any agreement, stipulation, order, writ,
injunction, decree, law, rule or regulation applicable to
Highland. Upon issuance, the Highland Exchange Stock shall be
validly issued, fully paid and non-assessable.
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(k) Finder's Fees. Highland is unaware of any finders or brokers fees
which are due in connection with the transaction contemplate
herein.
(l) Disclosure. No representation or warranty by Highland in this
Agreement, nor any statement or certificate furnished or to be
furnished to Street or the Shareholders pursuant hereto, or in
connection with the transactions contemplated hereby, knowingly
contains or will contain any untrue statement of a material fact,
or omits or will omit to state a material fact necessary to make
the statements contained therein not misleading
(m) Taxes. Highland has filed in correct form all federal and state
income tax returns due with respect to all periods through the
end of its last fiscal year, and all real and personal property
tax schedules, franchise, sales or use tax returns, and all
federal and state employment and withholding tax returns that are
required to be filed, and has paid all taxes as shown on the said
returns and all assessments received by it to the extent that
such taxes and assessments have become due. The Internal Revenue
Service has not examined any income tax return of Highland.
(n) Registration Rights. Highland has not granted any registration
rights to holders of restricted Common Stock.
(o) Exhibits Relating to Certain Matters. Exhibit I contains a
complete and accurate recitation of the following documents: a
description of all liens, mortgages, charges, and encumbrances
that are outstanding with respect to any of the properties and
assets of Highland; a list of all leases wherein Highland is
either lessor or lessee; a list of all other written or oral
contracts, commitments, agreements, and other contractual
obligations to which Highland is a party; a list of all insurance
policies carried by Highland; a description of all bonus,
pension, profit sharing, retirement, stock purchase, stock
option, hospitalization, insurance, and other executive or
employee compensation or benefit plans to which Street is a
party, a list of all notes payable of Highland, and, a list of
all notes and contracts receivable of Highland.
(p) Lock-up of Highland Common Stock. (i) At Closing, Highland and
Xxxx Xxxxxxxx shall deliver to Street a duly executed agreement,
substantially in the form of Exhibit B-3 hereto, pursuant to
which such number of shares of Highland Common Stock held by Xxxx
Xxxxxxxx will be subject to certain restrictions on transfer and
lock-up provisions set forth in such Exhibit. The "lock-up"
provisions contained in such agreement shall be the same as the
"lock-up" provisions contained in the agreements executed by the
directors of
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Street upon their acquisition of Highland shares and contained in
Exhibit B-1 hereto.
(q) Offices and Directors. There is set forth on Exhibit G, offices
and directors of Highland at the time of closing.
8. Access and Information. Subject to the protections provided by Section
14, Highland shall give to Street and to Street's counsel, accountants, and
other representatives full access, during normal business hours throughout the
period prior to the Closing, to all of Highland's properties, books, contracts,
commitments, and records, if any, and shall furnish Street during such period
with all such information concerning Highland's affairs as Street reasonably may
request.
9. Conduct of Street Business Pending Closing. Street and each of the
Shareholders, to the extent within each Shareholder's control, covenant that
pending the Closing:
(a) Except as described in, or as may be necessary to effect the
transactions contemplated by, the next sentence, no change will
be made in Street's Certificate of Incorporation or bylaws and no
change will be made in Street's issued shares of stock.
(b) No dividends shall be declared and no stock options shall be
granted.
(c) Except as otherwise requested by Highland, Street will use its
best efforts (without making any commitment on Highland's behalf)
to preserve Street's business organization intact, to keep
available to Street the services of its present officers and
employees, and to preserve the goodwill of those having business
relations with Street.
10. Conduct of Highland Pending Closing. Highland covenants that, pending
the Closing:
(a) No change will be made in Highland's Certificate of Incorporation
or bylaws or in Highland's authorized or issued shares of stock.
(b) No dividends shall be declared, no stock options granted and no
employment agreements shall be entered into with officers or
directors of Highland, except as contemplated by this Agreement
or as may be first approved in writing by Street.
(c) Highland will not issue any stock or other securities, including
any right or option to purchase or otherwise acquire any of its
stock, or issue any notes or other evidences of indebtedness.
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(d) Highland shall continue to conduct its exploration business of
the mining of property at its current level and devote time and
effort in furtherance of this Agreement.
11. Conditions Precedent to Closing. All obligations of Highland, Street
and the Street Shareholders under this Agreement are subject to the fulfillment,
or waiver by the party or parties to be benefitted, prior to or at the Closing,
of all conditions elsewhere herein set forth, including, but not limited to,
receipt by the appropriate party of all deliveries required by Section 4 herein,
and fulfillment, prior to the Closing, of each of the following conditions:
(a) The respective representations, warranties and covenants of
Street, of the Shareholders, and of Highland contained in this
Agreement shall be true at the time of Closing as though such
representations, warranties and covenants were made at such time.
(b) Street, the Street Shareholders and Highland shall have performed
and complied with all agreements and conditions required by this
Agreement to be performed or complied with by each prior to or at
the Closing.
(c) Each Street Shareholder acquiring Exchange Stock will be
required, at Closing, to submit an agreement, substantially in
the form of Exhibit B, confirming that all the Exchange Stock
received will be acquired for investment and not with a view to,
or for sale in connection with, any distribution thereof, and
agreeing not to transfer any of the Exchange Stock for a period
of two years from the Closing Date. The foregoing provision shall
not prohibit the registration of those shares at any time
following the Closing. Each Street Shareholder acquiring Exchange
Stock will be required to transfer to Highland at the Closing his
or her respective Street Shares, free and clear of all liens,
mortgages, pledges, encumbrances or changes, whether disclosed or
undisclosed.
(d) Highland shall have been presented with, and shall have approved,
an updated version of Exhibits C and D, prepared by Street,
current as of the Closing.
(e) Each party shall have received favorable opinions from the other
party's counsel on such matters in connection with the
transactions contemplated by this Agreement as are reasonable,
including an opinion from counsel for Street that the Exchange,
if consummated, will not in any manner violate corporate or
securities laws of any states where any Street Shareholder
resides.
(f) Each party shall have satisfied itself that since the date of
this Agreement the business of the other party has been conducted
in the ordinary course except to
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the extent otherwise contemplated by this Agreement. In addition,
each party shall have satisfied itself that no withdrawals of
cash or other assets have been made and no indebtedness has been
incurred since the date of this Agreement, except with respect to
services rendered or expenses incurred in connection with the
consummation of the transactions contemplated by this Agreement,
unless said withdrawals or indebtedness were either contemplated
by the terms of this Agreement or subsequently consented to in
writing by the parties or were incurred in the ordinary course of
business by Street.
(g) Each party covenants that, to the best of its knowledge, it has
complied in all material respects with all applicable laws,
orders and regulations of federal, state, municipal and/or other
governments and/or any instrumentality thereof, domestic or
foreign, applicable to their assets, to the business conducted by
them and to the transactions contemplated by this Agreement.
(h) Highland shall have provided to Street all audited and unaudited
financial statements, including but not limited to Highland's
audited 12 month statements for the year ending December 31,
2000, and first quarter statements as at March 31, 2001. All
audited and unaudited financial statements shall be prepared in
accordance with generally accepted accounting principles and
Regulation S-X, and the audited statements certified as such by
independent accountants of Highland.
(i) Street shall have provided to Highland audited consolidated
financial statements of Street for its most recently completed
fiscal year or prepared in accordance with generally accepted
accounting principles, together with consolidated unaudited
financial statements in the same form which have been prepared
subsequent to its most recently completed fiscal year.
(j) Each party shall have granted to the other party (acting through
its management personnel, counsel, accountants or other
representatives designated by it) full opportunity to examine its
books and records, properties, plants and equipment, proprietary
rights and other instruments, rights and papers of all kinds in
accordance with Sections 6 and 8 hereof and each party shall be
satisfied to proceed with the transactions contemplated by this
Agreement upon completion of such examination and investigation.
(k) Effective as of the Closing Date, all of the members of
Highland's current board of directors and each and every person
serving as an officer of Highland shall resign their respective
positions and/or offices by tendering written resignations except
Xxxx Xxxxxxxx shall remain as a director. Immediately prior to
said resignations, Highland's board of directors shall appoint
those persons listed on
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Exhibit G as members of Highland's new board, such appointments
to be effective as of the Closing.
(l) All press releases, shareholder communications, SEC Filings and
other publicity generated by Highland or Street regarding the
transactions contemplated by this Agreement shall have been
reviewed and approved by the other party before their release to
the public or any governmental agency.
(m) Each party shall have satisfied itself that all transactions
contemplated by this Agreement, including those contemplated by
the exhibits attached hereto, shall be legal and binding under
applicable statutory and case law of the State of Delaware
including, but not limited to Delaware's securities laws and all
other applicable state securities laws.
(n) Each of the Street Stockholders shall have tendered his or her
stock certificate or certificates to Highland, endorsed in blank,
to permit the transfer of the Street's Stock at Closing as
contemplated by Section 2(b).
12. Post Closing. Within forty five (45) days after Closing, Street shall
deliver to Highland an audited copy of its April 30, 2001 financial statement
referred to in paragraph 5 (b) above.
13. Standstill Agreement. Prior to the Closing or termination of this
Agreement pursuant to Section 13, neither Highland, Street, nor any of the
Shareholders may discuss or negotiate with any other corporation, firm or
person, or entertain or consider any inquiries, or proposals relating to the
possible disposition of their shares of capital stock of either Street or
Highland, and each of them will cause Street or Highland, respectively, to
conduct business only in the ordinary course except that Street may undertake
investigation, discussion and/or negotiations with potential acquisition
candidate companies and/or strategic investors, provided that such negotiations,
discussions and investigations are in furtherance of Street's business plan, and
further, Street Shareholders shall be authorized to sell his stock to employees
and/or others prior to Closing, so long as such transferee becomes a Street
Shareholder by executing a counterpart of this Agreement as a condition thereof.
Notwithstanding the foregoing, each party shall be free to engage in activities
mentioned in the preceding sentence which are designed to further the mutual
interests of the parties for the contemplated consolidation of the companies and
advancement of Street's business plan.
14. Termination. This Agreement may be terminated prior to Closing, and the
contemplated transactions abandoned, without liability to either party, except
with respect to the obligations of Highland, Street and the Street Shareholders
under Section 15 hereof:
(a) by mutual consent of the parties;
14
(b) by Highland, if in its reasonable belief there has been a
material misrepresentation or breach of warranty on the part of
Street or any Shareholder in the representations and warranties
set forth in the Agreement;
(c) by Street or a majority in interest of Shareholders if, in the
reasonable belief of Street or such Shareholders, there has been
a material misrepresentation or breach of warranty on the part of
Highland in the representations and warranties set forth in the
Agreement;
(d) by either Highland or by a majority in interest of the
Shareholders if the Closing shall not have occurred by the
Closing Date;
(e) by Highland if in its opinion or that of its counsel, the
transactions contemplated by this Agreement do not qualify for
exemption from registration under applicable federal and state
securities laws, or qualification, if obtainable, cannot be
accomplished, in Highland's opinion or that of its counsel,
without unreasonable expense or effort;
(f) by Highland if, in its opinion or that of its counsel, the
transactions contemplated by this Agreement cannot be consummated
under Delaware or other relevant state corporate law or, if
consummation is possible, that it cannot be accomplished, in
Highland's opinion or that of its counsel, without unreasonable
expense or effort;
(g) by Highland or by a majority in interest of the Street
Shareholders if Highland in its sole discretion or such
Shareholders in their discretion shall determine that any of the
transactions contemplated by this Agreement have become
inadvisable or impracticable by reason of the institution or
threat by state, local, or federal governmental authorities or by
any other person of material litigation or proceedings against
any party;
(h) by Highland if the business or assets or financial condition of
Street, taken as a whole, have been materially and adversely
affected, whether by the institution of litigation or by reason
of changes or developments or in operations in the ordinary
course of business or otherwise, or, by a majority in interest of
the Street Shareholders if the business or assets or financial
condition of Highland, taken as a whole, have been materially and
adversely affected, whether by the institution of litigation or
by reason of changes or developments or in operations in the
ordinary course of business or otherwise;
(i) by Highland if it shall appear to Highland that Street shall not
be able to obtain within a reasonable amount of time after
Closing all consents and approvals of
15
all governmental authorities having any jurisdiction over the
business of Street, or if such authorities shall withdraw any
approvals, licenses, or permits given to Street or to any other
entity with which Street is affiliated or in which Street has an
interest;
(j) by Street if Highland fails to perform material conditions set
forth in Section 11;
(k) by Street if examination of Highland's books and records pursuant
to Section 8 uncovers a material deficiency, and
(l) by Highland if Street fails to perform material conditions set
forth in Section 11.
In the event of a bad-faith termination of this Agreement, the
non-terminating party shall be limited solely and exclusively to recovery of its
attorney's fees expended in the preparation and reporting of the transaction
Highland and the Shareholders expressly waive all other damages, fees, costs,
and lost opportunity costs (consequential damages) against each other as a
result of termination of this Agreement.
15. Confidentiality. While each party is obligated to provide access to and
furnish information in accordance with Sections 6 and 8 herein, it is understood
and agreed that such disclosures and information subsequently obtained as a
result of such disclosures are proprietary and confidential in nature. Each
party agrees to hold such information in confidence and not to reveal any such
information to any person who is not a party to this Agreement, or an officer,
director, key employee, or shareholder, counsel or auditors thereof, and not to
use the information obtained for any purpose other than assisting in its due
diligence inquiry precedent to the Closing. Upon request of any party, a
confidentiality agreement, acceptable to the disclosing party, will be executed
by any person selected to receive such proprietary information, prior to receipt
of such information.
16. Nature and Survival of Representations. All statements contained in any
certificate or other instrument delivered by or on behalf of Street, the Street
Shareholders or Highland, pursuant hereto, or m connection with the transactions
contemplated hereby, shall be deemed representations and warranties by Street,
the Street Shareholders or Highland, respectively, and shall survive the closing
for a period of twenty-four (24) months.
17. Binding Agreement.
(a) This Agreement shall become binding upon the parties when, but
only when, it shall have been signed by or on behalf of all
parties.
(b) Subject to the condition stated in subsection (a), above, this
Agreement shall be binding upon, and inure to the benefit of, the
respective parties and their legal representatives, successors
and assigns. Subject to the last paragraph of
16
Section 13, this Agreement, in all of its particulars, shall be
enforceable by legal action for the recovery of damages or by way
of specific performance and the terms and conditions of this
Agreement shall remain in full force and effect subsequent to
Closing and shall not be deemed to be merged into any documents
conveyed and delivered at the time of Closing.
18. Construction. This Agreement has been prepared, negotiated and
delivered in the State of New York and shall be governed by, and construed in
accordance with, the laws of that State.
19. Notices. All notices, requests, demands, and other communications
hereunder shall be in writing, and shall be deemed to have been duly given if
delivered or mailed, first class postage, prepaid, to Street, at 000 Xxxxx 0
Xxxxx, Xxxxxxxxxxx, XX 00000, Attention: Xxxxxxxx Xxxxxx, Executive Vice
President, or if to Highland, at, 000 Xxxxx 0 Xxxxx, Xxxxxxxxxxx, XX 00000,
Attention: Xxxx Xxxxxxxx, X.X. Xxx 000 Xxxxxxx, Xxx Xxxxxx 00000 or if to the
Shareholders, to the respective addresses indicated beneath each Shareholder's
name on the signature page of this Agreement.
20. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which, taken
together, shall constitute one and the same document.
21. Arbitration. Any dispute arising pursuant to or in any way related to
this Agreement or the transactions contemplated hereby shall be settled by
arbitration, provided, however, that nothing in this Section shall restrict the
right of either party to apply to a court of competent jurisdiction for
emergency relief pending final determination of a claim by arbitration in
accordance with this Section. All arbitration shall be conducted in New York,
New York, in accordance with the rules and regulations of the American
Arbitration Association then obtaining. The law of New York shall govern. The
decision of the arbitrator shall be binding upon the parties and judgment in
accordance with that decision may be entered in any court of competent
jurisdiction.
22. Enforceability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. To the extent permitted by applicable law, the parties
hereto hereby waive any provision of law which renders any provision hereof
prohibited or unenforceable in any respect.
17
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
first above written.
E-Street Access, Inc. Highland Holdings International, Inc.
By:/s/ Xxxx Xxxxxxx By: /s/ Xxxx Xxxxxxxx
---------------------------- ------------------------------------
Xxxx Xxxxxxx, President Xxxx Xxxxxxxx, President
THE UNDERSIGNED SHAREHOLDERS OF E-STREET ACCESS, INC., COLLECTIVELY OWN 66.92%
OF THE CURRENTLY OUTSTANDING SHARES OF E-STREET ACCESS, INC., APPROVE OF THE
FOREGOING AGREEMENT AND THE TRANSACTION THEREIN DESCRIBED, AND FOR THE LIMITED
PURPOSE OF THEIR AGREEMENT TO SECTIONS 7(p)
/s/ Xxxxxx Xxxxxxx /s/ Xxxx Xxxxxxx
------------------------------- -----------------------------
Xxxxxx Xxxxxxx Xxxx Xxxxxxx
/s/ Xxxxxx X. Xxxxxx /s/ Xxxxxxxx Xxxxxxxxx
------------------------------- -----------------------------
Xxxxxx X. Xxxxxx Xxxxxxxx Xxxxxxxxx
18
EXHIBIT LIST
Exhibit A-1 Names and Respective Share holdings in Street of the
Individuals and Entities that are Street Shareholders as of June
22, 2001.
Exhibit A-2 Names and Anticipated Respective Share Holdings in Street of
the Individuals and Entities That Currently Hold Options and
Warrants to Acquire Shares of Street; and Jurisdictions of
Residence of E-Street Shareholders.
Exhibit B-1 Form of Investment Letter and Lock-Up Agreement of Street
Shareholders that are Officers or Directors or of Street or
Members of Their Families.
Exhibit B-2 Form of Investment Letter and Lock-Up Agreement of Other
Shareholders of Street.
Exhibit B-3 Form of Lock-Up Agreement of Xxxx Xxxxxxxx.
Exhibit C Schedule of Exceptions to Covenants, Representations and
Warranties of Street
Exhibit D Description of Liens, Mortgages, Charges and Encumbrances of
Street
Exhibit E Consent of Board of Directors of Street
Exhibit F Consent of Directors of Highland
Exhibit G Persons to be Appointed Directors and Officers of Highland
Exhibit H Description of Liens, Mortgages, Charges and Encumbrances of
Highland
Exhibit I-1 Employment Agreement between Highland and Xxxx Xxxxxxx
Exhibit I-2 Employment Agreement between Highland and Xxxxxxxx Xxxxxx
Exhibit I-3 Employment Agreement between Highland and Xxxxxx Xxxxxxx
19
EXHIBIT A-1
NAMES AND RESPECTIVE SHARE HOLDINGS IN STREET OF THE INDIVIDUALS AND ENTITIES
THAT ARE STREET SHAREHOLDERS
AS OF JUNE 22, 2001
COMMON STOCK, $.005 PAR VALUE
-----------------------------
NAME # OF SHARES
----
Xxxx Xxxxxxx 4,633,334
Xxxxxx X. Xxxxxx 5,266,667
Xxxxxx Xxxxxxx 5,266,667
Xxxxxxxx Xxxxxxxxx 2,000,000
E Street Access, Inc. Shareholders June 22, 2001
Name
----
Xxxxx Xxxxxxx 16,668 0.06%
Xxxxx Xxxxx 4,000 0.02%
Xxxxxxx Xxxxx 61,000 0.24%
Xxxxxxxx Xxxxx 14,000 0.05%
Xxxxx Xxxxx, Xx. 133,334 0.52%
Xxx Xxxxxx 83,336 0.32%
Xxxxx Xxxxxxx 26,668 0.10%
Xxxxx Xxxxxxx 13,334 0.05%
Xxxxxxxx Xxxxxxxx 6,668 0.03%
Xxxx Xxxx 6,668 0.03%
Xxxxxx Xxxxxx 50,000 0.19%
Xxxxx Xxxxxxxxx 106,668 0.42%
Xxxxx Xxxxxxxx-Cit Bank 33,334 0.13%
Xxxx Xxxx 33.334 0.13%
Xxxx Xxxxxxxx 13,334 0.05%
Xxxxxx/Xxxx Xxxxxxxx 13,334 0.05%
Xxxxx Xxxxxx 280,000 1.09%
Selloy Limited Partnership 33,334 0.13%
Xxxxx Xxxxx 100,000 0.39%
Xxxx Xxxxxx 6,668 0.03%
Xxxxxx Xxxxxx 16,668 0.06%
Xxxxxx Xxxxx 33,334 0.13%
Xxxx Xxxxxxx 33,334 0.13%
Xxxxxx Xxxxxxxx 16,668 0.06%
Xxxxxx Xxxxx 16,668 0.06%
Xxxxxxx Xxxxx 16,668 0.06%
Xxxx Xxxxxxxxx 20,000 0.08%
Xxxxxxx Xxxxxxx 210,000 0.82%
Xxxx Xxxxx 56,668 0.22%
Xxxxxx Xxxxxx 169,000 0.66%
Xxxx Xxxxxx 207,000 0.81%
Xxxx Pitcairn 30,000 0.12%
Xxxxxx Xxxx 3,000 0.01%
Xxxxxx Xxxxxxx Xxxxx 10,000 0.04%
Xxxxxxxxxxx Xxxxxx 25,000 0.10%
Xxxx Xxxxxxx 2,000 0.01%
Xxxxx Xxxx 150,000 0.58%
Xxxx Xxxxx - MMI Abstract 43,334 0.17%
Xxxx Xxxxxx 17,500 0.07%
Xxxxx Xxxxxxx 15,000 0.06%
Xxxxxx Xxxxxx 3,000 0.01%
Xxxxx Xxxxxxxx 6,000 0.02%
Xxxxxxx Xxxxxx 60,000 0.23%
Xxxxxx Xxxxxx 70,000 0.27%
Xxxxxx Xxxxxx 20,000 0.08%
X.X. Xxxxxxxxxx 20,000 0.08%
Xxxxxx Xxxxx 70,000 0.27%
Xxxxxxx Xxxxxx 10,000 0.04%
Xxxxxx Xxxx 6,667 0.03%
Lingo Platter 7,500 0.03%
Xxxxxx Xxxxx 20,000 0.08%
Xxxxxxx Xxxxxxx 20,000 0.08%
Xxxxxxx Xxxxxxxxx 20,000 0.08%
Xxxxxxxx Xxxxx 5,000 0.02%
Xxxx Xxxxxx 70,000 0.27%
Xxxxx Xxxxxxxx 274,000 1.07%
Xxxx Xxxxx 700,000 2.73%
Xxxx Xxxxxxx 16,668 0.06%
Xxxxx Xxxxx 16,668 0.06%
Xxxxx XxXxxxxx 16,668 0.06%
Xxxx Xxxxxx 16,668 0.06%
Xxxxxxx Xxxxxxxx 116,668 0.45%
Xxxxxxxx Xxxxxx 6,668 0.03%
Xxxxxxx Xxxxxxxxxxx III 6,668 0.03%
Xxxx X'Xxxxxx 10,000 0.04%
Xxxxx Xxxxxxx 996,668 3.77%
Xxxx Xxxxxxx 16,668 0.06%
Xxxxx Xxxxxxx/Xxxxx Xxxx 66,668 0.26%
Xxxxxxx Xxxxx 16,668 0.06%
Xxxxxx Xxxxxx 100,000 0.39%
Xxxx Xxxxxx 35,334 0.14%
Xxx Xxxxxxx 66,668 0.26%
Xxxxxxx Xxxxx 6,668 0.03%
Xxxxxxx Xxxxx 50,000 0.19%
Xxxxx Xxxx 531,664 2.07%
Xxxx Xxxxxx 30,000 0.12%
Xxxxxx Xxxxxx 16,668 0.06%
Xxxxxxx XxXxxxxx 302,334 1.18%
Xxxxxx Xxxxxxx 33,334 0.13%
Xxxxx Xxxxx 6,668 0.03%
Xxxxxx Xxxxxxxxx 33,334 0.13%
Xxx Xxxxxxx 33,334 0.13%
Xxxxxx Xxxxxx 33,334 0.13%
Xxxxx Xxxxx 58,334 0.23%
Xxxxxx Xxxxx 8,334 0.03%
Xxxx Xxxxxxxx 133,334 0.52%
Xxx Xxxxxx 98,335 0.38%
Xxxx Xxxxxxx 4,633,334 18.06%
Xxxxxxxx Xxxxxx 5,266,667 20.53%
Xxxxxx Xxxxxxx 5,266,667 20.53%
Xxxxx Xxxxxxx 1,000,000 3.90%
Xxxxxx Xxxxxxx 5,000 0.02%
Xxxxxx Xxxxxxx 5,000 0.02%
Xxx Xxxxx 100,000 0.39%
Xxxxxxxx Xxxxxxxxx 2,000,000 7.80%
Thunder Management 100,000 0.39%
Xxxxxxx Xxxxx 700,000 2.73%
Xxxx XxXxxxx 30,000 0.12%
1st Xxxxxxx.xxx 53,534 0.21%
Xxxxxxx Xxxxxxxxx 50,000 0.19%
Xxxxxx Xxxxxxxxx 50,000 0.19%
Xxxxx Xxxxxxx 33,334 0.13%
0.00%
Sub Total 25,654,252 100.00%
--------- ==========
Share Total 25,654,252
----------- ==========
EXHIBIT A-2
NUMBER OF SHARES OF STREET SUBJECT TO WARRANTS
and
JURISDICTIONS OF RESIDENCE OF STREET SHAREHOLDERS
AS OF JUNE 22, 2001
WARRANTS 43,371
Arizona
California Colorado
Connecticut
Maryland
Michigan
Minnesota
New Jersey
New York
Ohio
Pennsylvania
Texas
Utah
Wisconsin
EXHIBIT B-1
FORM OF INVESTMENT LETTER AND LOCK-UP AGREEMENT OF STREET
SHAREHOLDERS THAT ARE OFFICERS OR DIRECTORS OF STREET
OR
MEMBERS OF THEIR FAMILIES
Dear E-Street Shareholder:
In connection with your acquisition of shares of Highland Holdings
International, Inc. (the "Exchange"), a Delaware corporation (the "Company"),
you are required to make certain representations and to enter into certain
covenants and agreements set forth below. By countersigning this letter in the
space provided below, you acknowledge and agree to the following restrictions
and acknowledge the representations, undertakings, agreements and
acknowledgments set forth below are yours:
1. The Shares have not been registered under the United States Securities
Act of 1933, as amended (the "Act"), or the securities or blue sky laws of any
state. Moreover, the Company has no current plan to undertake any such
registration in the future. In connection with the issuance of Shares pursuant
to the Exchange without registration, the Company is relying upon exemptions
from registration provided by the Act including Section 4(2). These exemptions
are based on, among others, that the Exchange is a transaction not involving any
public offering. You have been advised and understand that the Company's
reliance upon such exemptions from registration is predicated in part upon your
representation to the Company that you are acquiring the Shares for your own
account, with no present intent to resell or distribute any or all of the
Shares, in addition to the representations made by you below. The Shares are
"restricted securities" within the meaning of Rule 144 of promulgated under the
Act ("Rule 144"). You have acknowledged and you understand that the Shares are
unregistered and must be held indefinitely, unless (i) they are subsequently
registered under the Act and under any applicable registration provisions of
state securities laws or (ii) an exemption from registration is available.
2. You understand and agree that the Shares are further subject to a
"lock-up" for a period commencing on the date of the Closing (as defined in that
certain Plan and Agreement of Reorganization, dated June 29, 2001, with respect
to the Exchange) and continuing for a period of two years, ending on the date
which is the second anniversary of the date of the Closing (the "Lock-Up
Period"). Pursuant to this lock-up, you agree not to offer, sell, transfer,
pledge, hypothecate or otherwise encumber, assign, distribute or otherwise
dispose of any of the Shares without the prior written consent of the Company,
which may be withheld in the Company's discretion.
3. You have agreed that any and all certificates which may be issued
representing the Shares shall contain a legend substantially in the form set
forth below, which you have read and understand:
The securities represented by this certificate have not been
registered under the Securities Act of 1933 (the "Act"), and are
"restricted securities" as that term is defined in Rule 144 under the
Act. The shares may not be offered for sale, sold, or otherwise
transferred (a "Disposition") except pursuant to an effective
registration statement under the Act, or pursuant to an exemption
from registration under the Act, the availability of which is to be
established to the satisfaction of the Company, provided that the
two-year lock up to which such securities are subject has expired or
the issuer of the securities, Highland Holdings International, Inc.,
has consented in writing to the Disposition.
4. You agree and acknowledge that If, during the Lock-Up Period, the
Company consents to a Disposition of any Shares by you, you further agree that
such Disposition cannot be made except:
(a) a Disposition to those persons approved by the Company's legal
counsel as falling within an exemption from registration under Section
4(1) of the Act and any applicable state securities laws, which
Disposition does not constitute a public distribution of securities,
and in which the transferees execute an investment letter in form and
substance satisfactory to Company counsel; or
(b) a Disposition pursuant to (i) an effective registration statement
under the Act and (ii) an effective registration, or an available
exemption from registration under, the securities laws of each
applicable state.
You further acknowledge your understanding that, if (1) the Company
consents to a Disposition, (2) the Shares have been held for a period of at
least one year and (3) Rule 144 is available (there being no representations by
the Company that Rule 144 will be available), then you may make only routine
sales of the Shares in limited amounts in a specified manner in accordance with
the terms and conditions of Rule 144. If Rule 144 is not available, any sales
made by you can be made only pursuant to an effective registration statement or
an available exemption from registration, provided that the conditions set forth
in clauses (1) and (2) of this paragraph have been met.
You further acknowledge that you are aware that only the Company can file a
registration statement or a Form 1-A Notification under Regulation A, and that
the Company has no obligation to do so or to take steps necessary to make Rule
144 available to you. You also have been advised and acknowledge your
understanding that, in the event Rule 144 is not available, the circumstances
under which you can sell the securities, absent registration or compliance with
Regulation A, are extremely limited.
5. You further acknowledge and represent to the Company that you are a
knowledgeable, sophisticated investor and can fend for yourself and have
adequate means to make the investment contemplated herein; that, in connection
with this investment, you have obtained any necessary investment advice from
outside sources, including your broker, banker, investment adviser, and private
attorney or accountant.
6. You further acknowledge that you are able to bear the economic risk of
your investment in the Shares and to maintain such investment for an indefinite
period of time, and,
2
further, that you could bear a total loss of this investment and not change your
standard of living as it exists at the time of this investment.
7. You hereby covenant and agree to protect, indemnify, and hold the
Company, and each of its officers, directors, and shareholders, harmless from
and against any and all claims, demands, causes of action, judgments, orders,
decrees, damages, liabilities, court or other costs, attorney fees, reasonable
costs of investigation, and other costs and expenses whatsoever (i) arising out
of or attributable to any breach or violation of, or the falsity, inaccuracy, or
failure of, any representation, warranty, or covenant made by you in this
letter, and (ii) arising from or related to the acquisition, ownership, or
disposition by you of any or all the Shares.
8. If you are an individual, you represent that you are a resident of the
state set forth below, or if you are a corporation, partnership, limited
liability company or other entity, you maintain a principal offices at the
address set forth below.
9. You have made all the above acknowledgments, representations, and
covenants to induce the Company to permit the transfer of the Shares to you and
understand that the Company is relying thereon and would not issue any
securities to you absent such acknowledgments, representations, and covenants.
WE ARE FURNISHING YOU WITH TWO COPIES OF THIS LETTER. IF THE FOREGOING CORRECTLY
EXPRESSES YOUR INTENT, UNDERSTANDING, AND ACKNOWLEDGMENTS, PLEASE SIGN THE FORM
OF CONFIRMATION APPEARING BELOW ON THE COPY OF THIS LETTER AND RETURN IT TO THE
UNDERSIGNED. YOU SHOULD RETAIN THE COPY FOR YOUR FILES.
Dated: ____, 2001.
Very truly yours,
Highland Holdings International, Inc.
By: ______________________________________
TO HIGHLAND HOLDINGS INTERNATIONAL, INC.
WE (I) CONFIRM THAT WE (I) HAVE READ THE FOREGOING AND AGREE TO THE TERMS
THEREOF AND ACKNOWLEDGE THAT IT EXPRESSES OUR (MY) AGREEMENT, UNDERSTANDING,
REPRESENTATIONS AND UNDERTAKINGS.
If subscriber is an individual: ______________________________________
(Subscriber)
3
Print Name: _______________________________
Address: _______________________________
-------------------------------
Telephone: _______________________________
If subscriber is an entity:
-------------------------------
(Name of Entity)
By: _________________________
Title:_________________________
Address: _______________________________
-------------------------------
Telephone: _______________________________
4
EXHIBIT B-2
FORM OF INVESTMENT LETTER AND LOCK-UP AGREEMENT OF OTHER
SHAREHOLDERS OF STREET
Dear E-Street Shareholder:
In connection with your acquisition of shares of Highland Holdings
International, Inc. (the "Exchange"), a Delaware corporation (the "Company@),
you are required to make certain representations and to enter into certain
covenants and agreements set forth below . By countersigning this letter in the
space provided below, you acknowledge and agree to the following restrictions
and acknowledge the representations, undertakings, agreements and
acknowledgments set forth below are yours:
1. The Shares have not been registered under the United States Securities
Act of 1933, as amended (the "Act"), or the securities or blue sky laws of any
state. Moreover, the Company has no current plan to undertake any such
registration in the future. In connection with the issuance of Shares pursuant
to the Exchange without registration, the Company is relying upon exemptions
from registration provided by the Act including Section 4(2). These exemptions
are based on, among others, that the Exchange is a transaction not involving any
public offering. You have been advised and understand that the Company=s
reliance upon such exemptions from registration is predicated in part upon your
representation to the Company that you are acquiring the Shares for your own
account, with no present intent to resell or distribute any or all of the
Shares, in addition to the representations made by you below. The Shares are
Arestricted securities" within the meaning of Rule 144 of promulgated under the
Act ("Rule 144"). You have acknowledged and you understand that the Shares are
unregistered and must be held indefinitely, unless (i) they are subsequently
registered under the Act and under any applicable registration provisions of
state securities laws or (ii) an exemption from registration is available.
2. You understand and agree that the Shares are subject to a "lock-up" for
a period commencing on the date of the Closing (as defined in that certain Plan
and Agreement of Reorganization, dated June 29, 2001, with respect to the
Exchange) and continuing for a period of two years, ending on the date which is
the second anniversary of the date of the Closing (the "Lock-Up Period").
Pursuant to this lock-up, you agree not to offer, sell, transfer, pledge,
hypothecate or otherwise encumber, assign, distribute or otherwise dispose of
any of the Shares without the prior written consent of the Company, which may be
withheld in the Company's discretion; provided, however, that if the Company
consents to the release of any shares of its common stock issued to another
shareholder of E-Street in the Exchange that is subject to a lock- up, other
than any shareholder that is an officer or director of the Company immediately
following the Exchange (an "Investor"), then, the Company shall release a pro
rata portion of the Shares of each of the other Investors, including you. Thus,
by way of example only, if the Company consents to the release from the Lock-Up
of 25,000 of 50,000 shares of its common stock received by Investor A in the
Exchange, then you shall be entitled to a release of 50% of your Shares. You
agree that the Company shall notify you and each of the other Investors in
writing within three (3) business days of the Company's consent to the release
from the Lock-Up of any Investor's shares received in the Exchange. You further
agree that each such notice will be sent to the address you provide below unless
you give the Company written notice, by certified or registered mail, return
receipt requested, postage prepaid, of a different address for notices to you.
3. You have agreed that any and all certificates which may be issued
representing the Shares shall contain a legend substantially in the form set
forth below, which you have read and understand:
The securities represented by this certificate have not been
registered under the Securities Act of 1933 (the AAct@), and are
Arestricted securities@ as that term is defined in Rule 144 under the
Act. The shares may not be offered for sale, sold, or otherwise
transferred (a "Disposition") except pursuant to an effective
registration statement under the Act, or pursuant to an exemption from
registration under the Act, the availability of which is to be
established to the satisfaction of the Company, provided that the
two-year lock up to which such securities are subject has expired or
the issuer of the securities, Highland Holdings International, Inc.,
has consented in writing to the Disposition.
If, during the Lock-Up Period, The Company consents to a Disposition of any
Shares by you, you further agree that such Disposition cannot be made except:
a. a Disposition to those persons approved by the Company=s legal
counsel as falling within an exemption from registration under Section 4(1)
of the Act and any applicable state securities laws, which Disposition does
not constitute a public distribution of securities, and in which the
transferees execute an investment letter in form and substance satisfactory
to Company counsel; or
b. a Disposition pursuant to (i) an effective registration statement
under the Act and (ii) an effective registration, or an available exemption
from registration under, the securities laws of each applicable state.
You further acknowledge your understanding that, if (1) the Company
consents to a Disposition, (2) the Shares have been held for a period of at
least one year and (3) Rule 144 is available (there being no representations by
the Company that Rule 144 will be available), then you may make only routine
sales of the Shares in limited amounts in a specified manner in accordance with
the terms and conditions of Rule 144. If Rule 144 is not available, any sales
made by you can be made only pursuant to an effective registration statement or
an available exemption from registration, provided that the conditions set forth
in clauses (1) and (2) of this paragraph have been met.
You further acknowledge that you are aware that only the Company can file a
registration statement or a Form 1-A Notification under Regulation A, and that
the Company has no obligation to do so or to take steps necessary to make Rule
144 available to you. You also have been advised and acknowledge your
understanding that, in the event Rule 144 is not available, the circumstances
under which you can sell the securities, absent registration or compliance with
Regulation A, are extremely limited.
2
4. You further acknowledge and represent to the Company that you are a
knowledgeable, sophisticated investor and can fend for yourself and have
adequate means to make the investment contemplated herein; that, in connection
with this investment, you have obtained any necessary investment advice from
outside sources, including your broker, banker, investment adviser, and private
attorney or accountant.
5. You further acknowledge that you are able to bear the economic risk of
your investment in the Shares and to maintain such investment for an indefinite
period of time, and, further, that you could bear a total loss of this
investment and not change your standard of living as it exists at the time of
this investment.
6. You hereby covenant and agree to protect, indemnify, and hold the
Company, and each of its officers, directors, and shareholders, harmless from
and against any and all claims, demands, causes of action, judgments, orders,
decrees, damages, liabilities, court or other costs, attorney fees, reasonable
costs of investigation, and other costs and expenses whatsoever (i) arising out
of or attributable to any breach or violation of, or the falsity, inaccuracy, or
failure of, any representation, warranty, or covenant made by you in this
letter, and (ii) arising from or related to the acquisition, ownership, or
disposition by you of any or all the Shares.
7. If you are an individual, you represent that you are a resident of the
state set forth below, or if you are a corporation, partnership, limited
liability company or other entity, you maintain a principal offices at the
address set forth below.
8. You have made all the above acknowledgments, representations, and
covenants to induce the Company to permit the transfer of the Shares to you and
understand that the Company is relying thereon and would not issue any
securities to you absent such acknowledgments, representations, and covenants.
WE ARE FURNISHING YOU WITH TWO COPIES OF THIS LETTER. IF THE FOREGOING CORRECTLY
EXPRESSES YOUR INTENT, UNDERSTANDING, AND ACKNOWLEDGMENTS, PLEASE SIGN THE FORM
OF CONFIRMATION APPEARING BELOW ON THE COPY OF THIS LETTER AND RETURN IT TO THE
UNDERSIGNED. YOU SHOULD RETAIN THE COPY FOR YOUR FILES.
Dated: ____, 2001.
Very truly yours,
Highland Holdings International, Inc.
By: _______________________________________
3
TO: Highland Holdings International, Inc.
WE (I) CONFIRM THAT WE (I) HAVE READ THE FOREGOING AND AGREE TO THE TERMS
THEREOF AND ACKNOWLEDGE THAT IT EXPRESSES OUR (MY) AGREEMENT, UNDERSTANDING,
REPRESENTATIONS AND UNDERTAKINGS.
If subscriber is an individual: _______________________________________
(Subscriber)
Print Name: ____________________________________
Address: ____________________________________
------------------------------------
Telephone: ____________________________________
If subscriber is an entity:
------------------------------------
(Name of Entity)
By: ________________________________
Title: _____________________________
Address: ____________________________________
------------------------------------
Telephone: ____________________________________
4
EXHIBIT B-3
FORM OF LOCK-UP AGREEMENT OF XXXX XXXXXXXX
LOCK-UP AGREEMENT
LOCK-UP AGREEMENT, dated _____, 2001, by and between Xxxx Xxxxxxxx, having
an address at ______________________ ("Shareholder"), and Highland Holdings
International, Inc., a Delaware corporation (the "Company").
RECITALS:
WHEREAS, Shareholder is the holder of 1,111,617 shares of common stock (the
"Shares") of the Company, par value $.001 per share ("Common Stock"); and
WHEREAS, the parties have agreed that an aggregate of 124,951 Shares shall
be subject to a lock-up for a period of ninety (90) days (such shares, the "90
Day Shares");
WHEREAS, the parties have agreed that up to 233,500 of the Shares shall be
transferable by Shareholder one (1) time to members of his family and close
business associates who enter into a written agreement with the Company,
substantially in the form of Schedule 1 hereto, providing for their respective
Shares to be subject to a lock-up for a period of two years from the date of
transfer by Shareholder (the shares so transferred, the "Transfer Shares"); and
WHEREAS, the parties have agreed that the balance of 753,166 Shares, plus
any of the Transfer Shares not actually transferred by the date hereof shall be
subject to a lock up for a period of two years (collectively, the "Two Year
Shares");
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements set forth herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties, intending
to be legally bound, do hereby agree as follows:
1. The Two Year Shares shall be subject to a lock-up for a period of two
years commencing on the date of the Closing, as defined in that certain Plan and
Agreement of Reorganization, dated June 29, 2001, by and between the Company,
E-Street Access, Inc. ("Street") and certain shareholders of Street (the
"Agreement"), and continuing for a period of two years, ending on the date which
is the second anniversary of the date of the Closing (the "Lock-Up Period").
During the Lock-Up Period, Shareholder shall not offer, sell, transfer, pledge,
hypothecate or otherwise encumber, assign, distribute or otherwise dispose of
(each of the foregoing, a "Disposition") any of the Two-Year Shares without the
prior written consent of the Company granted pursuant to action of the Board of
Directors thereof, and which consent may be withheld in the discretion of the
Board of Directors; provided, however, that in the event the Company acting
through its Board of Directors, releases any shares from a two-year lock-up of
the Company held by Xxxx Xxxxxxx, Xxxxxxxx Xxxxxx or Xxxxxx Xxxxxxx, a pro rata
number of Two Year Shares shall be released from the lock-up imposed thereon
hereunder, subject to compliance with the terms Section 5 hereof.
2. Shareholder acknowledges and agrees that a legend, in the form set forth
below, shall be affixed to any and all certificates representing the Two Year
Shares:
The securities represented by this certificate are subject to
restrictions on transfer provided in that certain Lock-Up Agreement,
dated ______, 2001, by and between Highland International Holdings,
Inc., and Xxxx Xxxxxxxx ("Shareholder"), pursuant to which Agreement,
Shareholder may not offer, sell, transfer, pledge, hypothecate or
otherwise encumber, assign, distribute or otherwise dispose of any of
the securities for a two- year period commencing on _____, 2001 and
continuing until _____, 2003, without the prior written consent of the
Company, acting through its Board of Directors, which consent may be
withheld in the sole discretion of the Board of Directors.
3. The 90 Day Shares shall be comprised of the 124,951 shares of Common
Stock issued to Shareholder pursuant to stock certificate numbers 05110, 05206
and 05231 of the Company and shall include 9,365 shares of Common Stock issued
to Shareholder and being held for Shareholder in a brokerage account at Xxxxxx
Brothers. All of the 90 Day Shares shall be subject to a lock-up for a period
commencing on the date of the Closing and continuing for a period of 90 days,
ending on September _____, 2001 (the "90 Day Lock-Up Period"). During the 90 Day
Lock-Up Period, Shareholder shall not offer, sell, transfer, pledge, hypothecate
or otherwise encumber, assign, distribute or otherwise dispose of any of the
Shares (each of the foregoing, a "Disposition") without the prior written
consent of the Company, granted pursuant to action of the Board of Directors
thereof, and which consent may be withheld in the discretion of the Board of
Directors.
4. Shareholder acknowledges and agrees that a legend, in the form set forth
below, shall be affixed to any and all certificates representing the 90 Day
Shares:
The securities represented by this certificate are subject to
restrictions on transfer provided in that certain Lock-Up Agreement,
dated ______, 2001, by and between Highland Holdings International,
Inc., and Xxxx Xxxxxxxx ("Shareholder"), pursuant to which Agreement,
Shareholder may not offer, sell, transfer, pledge, hypothecate or
otherwise encumber, assign, distribute or otherwise dispose of any of
the securities for a 90-day period commencing on ________, 2001 and
continuing until September ______, 2001, without the prior written
consent of the Company acting through its Board of Directors, which
consent may be withheld in the sole discretion of the Board of
Directors.
2
5. If, during the Lock-Up Period or the 90-Day Lock-Up, the Company
consents to a Disposition by Shareholder of any Shares subject thereto,
Shareholder further agree that such Disposition cannot be made except:
(a) To those persons (i) approved by the Company's legal counsel as
falling within an exemption from registration under Section 4(1) of
the Act and any applicable state securities laws, which Disposition
does not constitute a public distribution of securities, and (ii) who
execute an investment letter in form and substance satisfactory to
Company counsel;
(b) Pursuant to (i) an effective registration statement under the Act
and (ii) an effective registration, or an available exemption from
registration under, the securities laws of each applicable state; or
(c) In compliance with the applicable provisions of Rule 144
promulgated under the Act ("Rule 144").
6. Shareholder acknowledges that only the Company can file a registration
statement or a Form 1-A Notification under Regulation A, and that the Company
has no obligation to do so or to take steps necessary to make Rule 144 available
to Shareholder. Shareholder has been advised and hereby acknowledges his
understanding that, in the event Rule 144 is not available, the circumstances
under which he can sell the securities, absent registration or compliance with
Regulation A, are extremely limited.
7. This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York, without giving effect to the principles
thereof pertaining to the conflict of laws.
8. This Lock-Up Agreement and the Reorganization Agreement constitute the
only agreements between the parties relating to the subject matter hereof and
supersede all other contemporaneous and all prior agreements and understandings,
whether written or oral, pertaining to the subject matter hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year first above written.
HIGHLAND HOLDINGS
INTERNATIONAL, INC.
By: __________________________ ____________________________
XXXX XXXXXXXX
3
SCHEDULE 1 TO EXHIBIT B-3
LOCK-UP AGREEMENT, dated ________, 2001, by and between___________ having
an address at ______________________ ("Shareholder"), and Highland Holdings
International, Inc., a Delaware corporation (the "Company").
RECITALS:
WHEREAS, ________ shares of common stock (the "Shares") of the Company, par
value $.001 per share, are being transferred today to Shareholder on the
condition that Shareholder consent to a two-year restriction on transfer of the
Shares by Shareholder (the "Lock-Up");
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements set forth herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties, intending
to be legally bound, do hereby agree as follows:
1. The Shares shall be subject to a lock-up for a period of two years
commencing on the date hereof and continuing for a period of two years ending on
the date which is the second anniversary of the date hereof (the "Lock-Up
Period"). During the Lock-Up Period, Shareholder shall not offer, sell,
transfer, pledge, hypothecate or otherwise encumber, assign, distribute or
otherwise dispose of (each of the foregoing, a "Disposition") any of the Shares
without the prior written consent of the Company granted pursuant to action of
the Board of Directors thereof, and which consent may be withheld in the
discretion of the Board of Directors.
2. Shareholder acknowledges and agrees that a legend, in the form set forth
below, shall be affixed to any and all certificates representing the Shares:
The securities represented by this certificate are subject to
restrictions on transfer provided in that certain Lock-Up Agreement,
dated _______, 2001, by and between Highland Holdings International,
Inc., and __________ ("Shareholder"), pursuant to which Agreement,
Shareholder may not offer, sell, transfer, pledge, hypothecate or
otherwise encumber, assign, distribute or otherwise dispose of any of
the securities for a two- year period commencing on ________, 2001 and
continuing until _________, 2003, without the prior written consent of
the Company, acting through its Board of Directors, which consent may
be withheld in the sole discretion of the Board of Directors.
3. If, during the Lock-Up Period, the Company consents to a Disposition by
Shareholder of any Shares subject thereto, Shareholder further agree that such
Disposition cannot be made except:
(a) To those persons (i) approved by the Company's legal counsel as
falling within an exemption from registration under Section 4(1) of
the Act and any applicable state securities laws, which Disposition
does not constitute a public distribution of securities, and (ii) who
execute an investment letter in form and substance satisfactory to
Company counsel;
(b) Pursuant to (i) an effective registration statement under the Act
and (ii) an effective registration, or an available exemption from
registration under, the securities laws of each applicable state; or
(c) In compliance with the applicable provisions of Rule 144
promulgated under the Act ("Rule 144").
4. Shareholder acknowledges that only the Company can file a registration
statement or a Form 1-A Notification under Regulation A, and that the Company
has no obligation to do so or to take steps necessary to make Rule 144 available
to Shareholder. Shareholder has been advised and hereby acknowledges his
understanding that, in the event Rule 144 is not available, the circumstances
under which he can sell the securities, absent registration or compliance with
Regulation A, are extremely limited.
5. This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York, without giving effect to the principles
thereof pertaining to the conflict of laws.
6. This Lock-Up Agreement constitutes the entire agreement between the
parties relating to the subject matter hereof and supersedes all other
contemporaneous and all prior agreements and understandings, whether written or
oral, pertaining to the subject matter hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year first above written.
HIGHLAND HOLDINGS
INTERNATIONAL, INC. SHAREHOLDER:
By:__________________________ ____________________________
Signature of Shareholder
----------------------------
Print Shareholder Name
2
EXHIBIT C
SCHEDULE OF EXCEPTIONS TO COVENANTS, REPRESENTATIONS AND
WARRANTIES OF STREET; ABSENCE OF CERTAIN CHANGES; LITIGATION AND
COMPLAINTS
Coretech Consulting Group, Inc. has made a demand for payment of
$115,650 for services rendered and RLM Public Relations, Inc. has
demanded arbitration relating to its claim for $35,000 for breach of
contract for services rendered. Summary of these proceedings is set
forth in letter from Xxxxxxx, Xxxxxxx & XxXxxxxx, LLP dated June 28,
2001 annexed hereto.
EXHIBIT D
DESCRIPTION OF LIENS, MORTGAGES, CHARGES AND ENCUMBRANCES OF
STREET
NONE
MATERIAL CONTRACTS
1. Service Bureau Agreement by and between Automated Securities Clearance,
Ltd. and E Street Access, Inc. dated July 28, 1999.
2. Subscription Agreement between Track Data Corporation and E Street Access,
Inc. dated July 13, 1999.
EXHIBIT E
E- STREET ACCESS, INC.
We the undersigned, being all of the directors of E-Street Access, Inc., a
New Jersey corporation (the "Company"), do hereby consent to and adopt the
following preambles and resolutions this 28th day of June, 2001.
WHEREAS, the Company entered into a letter of intent in May 2001 with
Highland Holdings International, Inc., a Delaware corporation, whereby Highland
Holdings, Inc. intends to issue shares of common and preferred stock in exchange
for shares of the Company's common stock owned by certain shareholders of the
Company; and
WHEREAS, the Company prepared a definitive agreement consistent with the
letter of intent, which agreement is entitled "Plan and Agreement of
Reorganization" ("Agreement"), a copy of which is attached hereto; and
WHEREAS, it is in the Company's best interests to approve the terms and the
execution of the Agreement, now be it
RESOLVED, that the terms and conditions of the exchange as set forth in the
Agreement be, and the same are, ratified and confirmed, and be it
FURTHER RESOLVED, that the officers of the Company be and they hereby are
authorized to execute all documents necessary to carry out the foregoing
resolutions into effect and to perform any other acts as may be necessary from
time to time to carry out the purpose and intent of the above resolutions.
By signing this written consent, each of the undersigned hereby waives
notice of meeting and consents to the above resolutions as if adopted at a duly
convened meeting of the Board of Directors, such consent to be effective by the
execution of this written consent.
---------------------
Xxxx Xxxxxxx
---------------------
Xxxxxx Xxxxxxx
---------------------
Xxxxxxxx Xxxxxx
EXHIBIT F
CONSENT OF DIRECTORS OF HIGHLAND
See Certificate of President of Highland annexed hereto
EXHIBIT G
PERSONS TO BE APPOINTED DIRECTORS AND OFFICERS OF HIGHLAND
DIRECTORS:
Xxxx Xxxxxxx
Xxxxxx Xxxxxxx
Xxxxxx Xxxxxxxx Xxxxxx
Xxxx Xxxxxxxx
EXHIBIT H
DESCRIPTION OF LIENS, MORTGAGES,
CHARGES AND ENCUMBRANCES OF HIGHLAND
(NONE)
EXHIBIT I-1
EMPLOYMENT AGREEMENT BETWEEN HIGHLAND AND XXXX XXXXXXX
EMPLOYMENT AGREEMENT, dated as of the ____ day of July 2001, between Highland
Holdings International, Inc. corporation ("Employer"), and Xxxx Xxxxxxx
("Executive")
W I T N E S S E T H
WHEREAS, Executive possesses an intimate knowledge of the business and affairs
of Employer, its policies, methods, personnel, opportunities and problems;
WHEREAS, Employer desires to assure itself of Executive's continued employment
by Employer and to compensate him for such efforts; and
WHEREAS, Executive is desirous of committing himself to serve Employer on the
terms herein provided;
NOW, THEREFORE, In consideration of the covenants herein contained, the parties
hereto hereby agree as follows:
1. Employment. Executive is hereby employed as the President and Chief Executive
Officer of Employer and President and Chief Executive Officer of E Street
Access, Inc., a subsidiary of the Employer. Executive, shall have supervision
and control over, and shared responsibility for, the operations and affairs of
Employer, and shall have such other powers and duties as may be from time to
time assigned to him by the Board of Directors of Employer (the "Board"), and
Executive hereby accepts such employment, all subject to the terms and
conditions herein contained. Executive hereby agrees that during the period of
his employment hereunder he shall devote substantially all of his business time,
attention and skills to the business and affairs of Employer and its
subsidiaries.
2. Place of Performance. In connection with his employment by Employer,
Executive shall be based at Employer's principal executive offices where same
may be located from time to time.
3. Compensation.
a. Base Salary. Employer shall pay to Executive, and Executive shall
accept, for all services which may be rendered by him pursuant to this
Agreement, a base salary ("Base Salary") as hereinafter set forth. The
Base Salary during the first six months of the term of this Agreement
shall be at the annual rate of $130,000 per year. The Base Salary
during the second six months of the term of this Agreement shall be at
the annual rate of $175,000 per year. The Base Salary after the first
12 months of the term of this Agreement shall be at the annual rate of
$250,000 per year.
Any increase in Base Salary or other compensation granted by Employer,
the Board or any committee thereof shall in no way limit or reduce any
other obligation of Employer hereunder and, once established at an
increased specified rate Executive's Base Salary hereunder shall not
thereafter be reduced, other than as necessitated by Employer's
adverse financial condition. Executive's salary shall be payable in
accordance with Employer's payroll practices as from time to time in
effect.
b. Bonus. (i) In addition to Base Salary, Executive shall be entitled to
a minimum annual performance bonus as set forth in paragraph (ii)
hereof. (ii) Executive shall receive a minimum performance bonus in
January of each year during the term of this agreement payable at the
rate of no less than $75,000 per annum. The first and last payment of
the performance bonus shall be pro-rated as to amount based on the
number of months for which Executive perform services from the date of
this agreement through December 31. By way of example, if this
agreement takes effect on July 1, 2001, Executive would be entitled to
a minimum performance bonus in January of 2002 of $37,500.
c. Life Insurance. During the term of his employment hereunder, Employer
shall purchase and keep in effect life insurance in the amount of
$500,000 on the life of the Executive. Such life insurance will name
as beneficiaries those individuals designated by the Executive.
d. Expenses. During the term of his employment hereunder, Executive shall
be entitled to receive prompt reimbursement for all reasonable
expenses incurred by him in performing services hereunder, provided
that Executive properly accounts therefor in accordance with
Employer's policy relating thereto. Without limiting the generality of
the foregoing, the parties agree that any travel Executive undertakes
in connection with the performance of his duties hereunder shall be in
business class or better, and Employer shall reimburse Executive for
such expenses.
e. Benefit Plans. Executive shall be entitled to participate in or
receive benefits under any employee benefit plan or arrangement
currently available, or made available by Employer in the future, to
its executives and key management employees, subject to and on a basis
consistent with the terms, conditions and overall administration of
such plan or arrangement. Employer shall not make any changes in any
employee benefit plans or arrangements in effect on the date hereof or
during the term of this Agreement in which Executive participates
(including, without limitation, any pension and retirement plan,
supplemental pension and retirement plan, savings and profit sharing
plan, stock ownership plan, stock purchase plan, stock option plan,
life insurance plan, medical insurance plan, disability plan, dental
plan, health-and-accident plan or arrangement) which would adversely
effect Executive's rights or benefits thereunder, unless such change
occurs pursuant to a program applicable to all executives of Employer
and does not result in a proportionately greater reduction in the
rights of or benefits to Executive as compared with
any other executive of Employer. Any payments or benefits payable to
Executive hereunder in respect of any calendar year during which
Executive is employed by Employer for less than the entire such year
shall, unless otherwise provided in the applicable plan or
arrangement, be prorated in accordance with the number of calendar
days in such calendar year during which he is so employed.
f. Vacations, Holidays and Sick Leave. Executive shall be entitled to the
number of paid holidays, personal days off, vacation days and sick
leave days in each calendar year as are determined by Employer from
time to time for its senior executive officers, but not less than four
(4) weeks in any calendar year (prorated, in any calendar year during
which Executive is employed under this Agreement for less than the
entire such year, in accordance with the number of calendar days in
such calendar year during which he is so employed) . Vacation may be
taken in Executive's discretion, so long as it is not inconsistent
with the reasonable business needs of Employer. Executive shall be
entitled to accrue from year to year all vacation days not taken by
him.
g. Perquisite. Executive shall be entitled to continue to receive the
perquisites and fringe benefits appertaining to the office of the
President and Chief Operating Officer of Employer in accordance with
present practice and appropriate to the industry.
h. Key Man Life Insurance. Executive shall cooperate with Employer to
secure, for Employer, a key man life insurance policy on the life of
Executive in the amount of $1,000,000, to be paid to Employer upon
Executive's death.
i. Base Salary Not Effected by Other Benefits. None of the benefits to
which Executive is entitled under any of the provisions of Sections 3
(b) - 3 (g) hereof shall in any manner reduce or be deemed to be in
lieu of the Base Salary payable to Executive pursuant to Section 3(a)
hereof.
4. Term of Employment. The employment by Employer of Executive pursuant hereto
shall commence as of the effective date (the "Effective Date") and, subject to
the provisions of Section 5 hereof, shall terminate three (3) years after the
Effective Date (the "Termination Date") . This Agreement shall automatically be
extended for one additional year beyond the Termination Date (the "Extended
Termination Date") unless at least thirty (30) calendar days prior to the
Termination Date, Executive or Employer shall have given notice that he or it
does not wish to extend this Agreement.
5. Premature Termination. Anything in this Agreement contained to the contrary
notwithstanding:
a. Death. Executive's employment hereunder shall terminate forthwith upon
the death of Executive.
b. Disability. Executive's employment hereunder shall terminate, at the
option of Employer, in the event that the Board makes a good faith
determination that Executive suffers from Disability (as hereinafter
defined) so as to be unable to substantially perform his duties
hereunder for an aggregate of one hundred and eighty (180) calendar
days during any period of twelve (12) consecutive months. As used in
this Agreement, the term "Disability" shall mean the material
inability, in the opinion of three-fourths (3/4) of the entire
membership of the Board set forth in a resolution giving the
particulars thereof, of Executive to render his agreed-upon services
to Employer due to physical and/or mental infirmity, which opinion is
concurred in by a physician or psychiatrist reasonably satisfactory to
Employer and Executive or his duly appointed representative or
guardian.
c. Cause. Employer may terminate Executive's employment hereunder for
Cause. For purposes of this Agreement, Employer shall have "Cause" to
terminate Executive's employment hereunder upon (i) the willful,
intentional and continued failure by Executive to substantially
perform his duties hereunder (other than any such failure resulting
from Executive's incapacity due to physical or mental illness) after
demand for substantial performance is delivered by Employer
specifically identifying the manner in which Employer believes
Executive has not substantially performed his duties and a continued,
intentional disregard of such demand or (ii) the willful engaging by
Executive in conclusively proven misconduct which is materially
injurious to Employer, monetarily or otherwise, or (iii) the willful
violation by Executive of the provisions of Section 7 hereof provided
that such violation results in material injury to Employer. No act, or
failure to act, on Executive's part shall be considered "willful"
unless done, or omitted to be done, by him not in good faith and
without reasonable belief that his action or omission was in the best
interest of Employer. Notwithstanding the foregoing, Executive shall
not be deemed to have been terminated for Cause unless and until there
shall have been delivered to Executive a copy of a resolution, duly
adopted by the affirmative vote of not less than a majority of the
entire membership of the Board at a meeting of the Board called and
held for such purpose (after reasonable notice to Executive and an
opportunity for him, together with his counsel, to be heard before the
Board), finding that, in the good faith opinion of the Board,
Executive conducted, or failed to conduct, himself in a manner set
forth above in clause (1), (ii), or (iii) of this Section 5(c), and
specifying the particulars thereof in detail.
d. Termination by Executive. Executive may terminate his employment
hereunder Ci) for Good Reason (as hereinafter defined) or (ii) if his
physical or mental health becomes impaired to an extent that makes the
continued performance of his duties hereunder hazardous to his
.physical or mental health or his life, provided that Executive shall
have furnished Employer with a written statement from a doctor or
psychiatrist to such effect, and provided further, that, at Employer's
request and expense, Executive shall submit to an examination by a
physician or psychiatrist selected by Employer and such physician or
psychiatrist shall have concurred in the conclusion of Executive's
physician or psychiatrist.
Until Executive terminates his employment pursuant to clause (ii) of
this Section 5 Cd), he shall continue to receive his full Base Salary,
payable at the time such payments are due.
e. "Good Reason" Defined. For purposes of this Agreement, "Good Reason"
shall mean Ci) a Change in Control (as hereinafter defined) of
Employer, or (ii) any limitation of the powers of Executive, or (iii)
any removal of Executive as, or any failure to re-elect Executive to
his title hereunder except in connection with termination of
Executive's employment for Cause (as hereinafter defined) or
Disability; provided, however, that any removal of Executive as, or
any failure to re-elect Executive (except in connection with
termination of Executive's employment for Cause or Disability) shall
not diminish or reduce the obligations of Employer to Executive under
this Agreement. or (iv) the failure of Employer to obtain the
assumption of the agreement to perform this Agreement by any successor
to Employer, as provided for in Section 8 hereof.
f. "Change of Control" Defined. For purposes of this Agreement, a "Change
in Control" (as hereinafter defined) of Employer shall be deemed to
have occurred if (i) any "person" (as such term is used in Section 13
Cd) of the Securities Exchange Act of 1934 (the "Exchange Act"), other
than Employer or any "group" (as such term is defined in Section 13(d)
(3) of the Exchange Act) of which they are a member, is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of Employer representing thirty
percent (30%) of more of the combined voting power of Employer's then
outstanding securities, or (ii) during any period of two (2)
consecutive years during the term of this Agreement, individuals who
at the beginning of such period constitute the Board cease for any
reason to constitute at least a majority thereof, unless the election
of each director who was not a director at the beginning of such
period has been approved in advance by directors representing at least
two-thirds (2/3) of the directors then in office who were directors at
the beginning of the period.
g. Notice of Termination. Any termination of Executive's employment by
Employer or by Executive (other than termination pursuant to Section
5(a) hereof) shall be communicated by written Notice of Termination to
the~other party hereto. For purposes of this Agreement, a "Notice of
Termination" shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set
forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive's employment under the
provision so indicated.
h. Date of Termination. "Date of Termination" shall mean (i) if
Executive's employment is terminated by his death, the date of his
death, (ii) if Executive's employment is terminated pursuant to
Section 5(b) hereof, thirty (30) calendar days after Notice of
Termination is given (provided that Executive shall not have returned
to the performance of his duties on a full-time basis during such
thirty (30) day period), (iii) if
Executive's employment is terminated pursuant to Section 5(c) hereof,
the date specified in the Notice of Termination, and (iv) if
Executive's employment is terminated for any other reason, the date on
which a Notice of Termination is given; provided, however, that if,
within thirty (30) calendar days after any Notice of Termination is
given, the party receiving such Notice of Termination notifies the
other party that a dispute exists concerning the termination, the Date
of Termination shall be the date on which the dispute is finally
determined, either by mutual written agreement of the parties, by a
binding and final arbitration award or by a final judgment order or
decree of a court of competent jurisdiction (the time for appeal
therefrom having expired and no appeal having been perfected)
6. Payments and Benefits Upon Early Termination.
a. Early Termination for Death, Disability or Cause. Upon the termination
of this Agreement prior to the Termination Date (or, if this Agreement
shall have been extended to the Extended Termination Date, as provided
in Section 4 hereof, prior to the Extended Termination Date) (X) by
Employer as a result of death, Disability or termination of Executive
for Cause or (Y) by Executive for any of the reasons set forth in
clause (ii) of Section 5(d) hereof, Employer shall pay Executive:
i. his Base Salary through the Date of Termination at the rate in
effect at the time of Notice of Termination is given or, in the
case of the death of Executive, the Date of Termination, payable
at the time such payments are due; and
ii. all other amounts to which Executive is entitled, including,
without limitation, expense reimbursement amounts accrued to the
Date of Termination or amounts under any benefit plan of
Employer, at the time such payments are due.
b. Early Termination Other than for Death, Disability or Cause. Upon the
termination of this Agreement prior to the Termination Date (or, if
this Agreement shall have been extended to the Extended Termination
Date, as provided in Section '4 hereof, prior to the Extended
Termination Date) (X) by Employer other than for death, Disability or
Cause or (Y) by Executive for Good Reason or as a result of a breach
of this Agreement by Employer, Employer shall pay to Executive:
i. this Base Salary through the Termination Date at the rate in
effect at the time Notice of Termination is given, payable at the
time such payments are due (or, if this Agreement shall have been
extended to the Extended Termination Date, as provided in Section
4 hereof, his Base Salary through the Extended Termination Date
at the rate in effect at the time Notice of Termination is given,
payable at the time such payments are due);
ii. all other amounts to which Executive is entitled, including,
without limitation, expense reimbursement amounts accrued to the
Date of Termination or amounts under any benefit plan of
Employer, at the time such payments are due; and
iii. In addition, for the thirty-six (36) month period after
termination for any of the reasons specified in this Section 6
(b), Employer shall arrange to provide Executive with life and
health insurance benefits substantially similar to those which
Executive was receiving immediately prior to the Notice of
Termination.
c. Mitigation Not Required. Executive shall not be required to mitigate
the amount of any payment provided for in this Section 6 by seeking
other employment or otherwise, nor shall the amount of any payment
provided for in this Section 6 be reduced by any compensation earned
by Executive as the result of employment by another employer after the
Date of Termination, or otherwise.
7. Non-disclosure;
a. Confidential Information. Executive shall not, to the detriment of
Employer, knowingly use for his own benefit or disclose or reveal to
any unauthorized person, any trade secret or other confidential
information received by Executive in the course of his employment or
engagement in any capacity by Employer which relates to Employer or to
any of the businesses operated by it, including, but not limited to,
any customer lists, customer needs, price and performance information,
specifications, hardware, software, devices, supply sources and
characteristics, business opportunities, marketing, promotional,
pricing and financing techniques, or other information relating to the
business of Employer, and Executive confirms that such information
constitutes the exclusive property of Employer. However, said
restriction on confidential information shall not apply to information
which +5:Ci) generally available in the industry in which Employer
operates, (ii) disclosed in published literature or (iii) obtained by
Executive from a third party without binder or secrecy. Executive
agrees that, except as otherwise expressly agreed to by Employer, he
will return to Employer, promptly upon the request of the Board or any
executive officer designated by the Board, any physical embodiment of
such confidential information.
b. Remedies. Executive recognizes that the possible restrictions on his
activities which may occur as a result of his performance of his
obligations under this Section 7 are required for the reasonable
protection of Employer and its investments, and Executive expressly
acknowledges that damages alone will be an inadequate remedy for any
breach or violation of this Section 7, and that Employer, in addition
to all other remedies at law or in equity, shall be entitled, as a
matter of right, to injunctive relief, including specific performance,
with respect to any such breach or violation, in any court of
competent jurisdiction. If any of the provisions of this Section 7 are
held to be in any respect an unreasonable restriction
upon Executive, then they shall be deemed to extend only over the
maximum period of time, geographic area, and/or range of activities as
to which they may be enforceable.
c. Nonexclusive. The undertakings of Executive contained in Sections
7(a), 7(b) and 7(c) hereof shall be in addition to, and not in lieu
of, any obligations which he may have with respect to the subject
matter hereof, whether by contract, as a matter of law or otherwise.
8. Successors; Benefits.
a. Successors. Employer shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of Employer, by
agreement in form and substance satisfactory to Executive, to
expressly assume and agree to perform this Agreement in the same
manner and to the same extent that Employer would be required to
perform it if no such succession had taken place. Failure of Employer
to obtain such agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement and shall entitle
Executive to compensation from Employer in the same amount and on the
same terms as he would be entitled to hereunder if he terminated his
employment for Good Reason, except that for purposes of implementing
the foregoing, the date on which any such succession becomes effective
shall be deemed the Date of Termination. As used in this Agreement,
"Employer" shall mean Employer as hereinbefore defined and any
successor to its business and/or assets as aforesaid which executes
and delivers the agreement provided for in this Section 8 or which
otherwise becomes bound by all the terms and provisions of this
Agreement by operation of law.
b. Benefits. This Agreement and all rights of Executive hereunder shall
inure to the benefit of and be enforceable by Executive's personal or
legal representatives, executors, administrators, successors, heirs,
distributes, devisees and legatees. If Executive should die while any
amounts would still be payable to him hereunder if he had continued to
live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to Executive's
devisee, legatee, or other designee or, if there be no such designee,
to Executive's estate.
9. Miscellaneous Provisions.
a. Execution in Counterparts. This Agreement may be executed in one or
more counterparts, and by the different parties hereto in separate
counterparts, each of which shall be deemed to be an original but all
of which taken together shall constitute one and the same agreement.
b. Notices. All notices, requests, demands and other communications
hereunder shall be in
writing and shall be deemed to have been duly given or made as of the
date delivered, if delivered personally, or three (3) calendar days
after having been mailed, if mailed by registered or certified mail,
postage prepaid, return receipt requested, as follows:
If to Employer, to:
000 Xxxxx 0 Xxxxx
Xxxxxxxxxxx, XX 00000
If to Executive, to: Xxxx Xxxxxxx
0 Xxxx Xxxxx
Xxxxxxxxxxx, XX 00000
or to such other address as either party hereto shall have designated
by like notice to the other party hereto (except that a notice of
change of address shall only be effective upon receipt)
c. Amendment. This Agreement may only be amended by a written instrument
executed by each of the parties hereto.
d. Entire Agreement. This Agreement constitutes the entire agreement of
the parties hereto with respect to the subject matter hereof, and
supersedes all prior agreements and understandings of the parties
hereto, oral and written, with respect to the subject matter hereof.
e. Applicable Law. This Agreement shall be governed by the laws of the
State of New Jersey applicable to contracts made and to be wholly
performed therein.
f. Headings. The headings contained herein are for the sole purpose of
convenience of reference and shall not in any way limit or affect the
meaning or interpretation of any of the terms or provisions of this
Agreement.
g. Waiver, etc. The failure of either of the parties hereto to at any
time enforce any of the provisions of this Agreement shall not be
deemed or construed to be a waiver of any such provision, nor to in
any way affect the validity of this Agreement or any provision hereof
or the right of either of the parties hereto to thereafter enforce
each and every provision of this Agreement. No waiver of any breach of
any of the provisions of this Agreement shall be effective unless set
forth in a written instrument executed by the party against whom or
which enforcement of such waiver is sought; and no waiver of any such
breach shall be construed or deemed to be a waiver of any other or
subsequent breach and delivered by the parties hereto as of the date
first above written.
By:
---------------------------
Name:
-------------------------
Title:
------------------------
EXHIBIT I-2
EMPLOYMENT AGREEMENT BETWEEN HIGHLAND AND XXXXXXXX XXXXXX
EMPLOYMENT AGREEMENT, dated as of the ____ day of July 2001, between Highland
Holdings International, Inc. corporation ("Employer"), and Xxxxxx X. Xxxxxx
("Executive")
W I T N E S S E T H
WHEREAS, Executive possesses an intimate knowledge of the business and affairs
of Employer, its policies, methods, personnel, opportunities and problems;
WHEREAS, Employer desires to assure itself of Executive's continued employment
by Employer and to compensate him for such efforts; and
WHEREAS, Executive is desirous of committing himself to serve Employer on the
terms herein provided;
NOW, THEREFORE, In consideration of the covenants herein contained, the parties
hereto hereby agree as follows:
1. Employment. Executive is hereby employed as the Executive Vice President and
Chief Operating Officer of Employer and Co-chairman and Chief Operating Officer
of E Street Access, Inc. a subsidiary of the Employer. Executive, shall have
supervision and control over, and shared responsibility for, the operations and
affairs of Employer, and shall have such other powers and duties as may be from
time to time assigned to him by the Board of Directors of Employer (the
"Board"), and Executive hereby accepts such employment, all subject to the terms
and conditions herein contained. Executive hereby agrees that during the period
of his employment hereunder he shall devote substantially all of his business
time, attention and skills to the business and affairs of Employer and its
subsidiaries.
2. Place of Performance. In connection with his employment by Employer,
Executive shall be based at Employer's principal executive offices where same
may be located from time to time.
3. Compensation.
a. Base Salary. Employer shall pay to Executive, and Executive shall
accept, for all services which may be rendered by him pursuant to this
Agreement, a base salary ("Base Salary") as hereinafter set forth. The
Base Salary during the first six months of the term of this Agreement
shall be at the annual rate of $130,000 per year. The Base Salary
during the second six months of the term of this Agreement shall be at
the annual rate of $175,000 per year. The Base Salary after the first
12 months of the term of this Agreement shall be at the annual rate of
$250,000 per year.
Any increase in Base Salary or other compensation granted by Employer,
the Board or any committee thereof shall in no way limit or reduce any
other obligation of Employer hereunder and, once established at an
increased specified rate Executive's Base Salary hereunder shall not
thereafter be reduced, other than as necessitated by Employer's
adverse financial condition. Executive's salary shall be payable in
accordance with Employer's payroll practices as from time to time in
effect.
b. Bonus. (i) In addition to Base Salary, Executive shall be entitled to
a minimum annual performance bonus as set forth in paragraph (ii)
hereof. (ii) Executive shall receive a minimum performance bonus in
January of each year during the term of this agreement payable at the
rate of no less than $75,000 per annum. The first and last payment of
the performance bonus shall be pro-rated as to amount based on the
number of months for which Executive perform services from the date of
this agreement through December 31. By way of example, if this
agreement takes effect on July 1, 2001, Executive would be entitled to
a minimum performance bonus in January of 2002 of $37,500.
c. Life Insurance. During the term of his employment hereunder, Employer
shall purchase and keep in effect life insurance in the amount of
$500,000 on the life of the Executive. Such life insurance will name
as beneficiaries those individuals designated by the Executive.
d. Expenses. During the term of his employment hereunder, Executive shall
be entitled to receive prompt reimbursement for all reasonable
expenses incurred by him in performing services hereunder, provided
that Executive properly accounts therefor in accordance with
Employer's policy relating thereto. Without limiting the generality of
the foregoing, the parties agree that any travel Executive undertakes
in connection with the performance of his duties hereunder shall be in
business class or better, and Employer shall reimburse Executive for
such expenses.
e. Benefit Plans. Executive shall be entitled to participate in or
receive benefits under any employee benefit plan or arrangement
currently available, or made available by Employer in the future, to
its executives and key management employees, subject to and on a basis
consistent with the terms, conditions and overall administration of
such plan or arrangement. Employer shall not make any changes in any
employee benefit plans or arrangements in effect on the date hereof or
during the term of this Agreement in which Executive participates
(including, without limitation, any pension and retirement plan,
supplemental pension and retirement plan, savings and profit sharing
plan, stock ownership plan, stock purchase plan, stock option plan,
life insurance plan, medical insurance plan, disability plan, dental
plan, health-and-accident plan or arrangement) which would adversely
effect Executive's rights or benefits thereunder, unless such change
occurs pursuant to a program applicable to all executives of Employer
and does not result in a proportionately greater reduction
in the rights of or benefits to Executive as compared with any other
executive of Employer. Any payments or benefits payable to Executive
hereunder in respect of any calendar year during which Executive is
employed by Employer for less than the entire such year shall, unless
otherwise provided in the applicable plan or arrangement, be prorated
in accordance with the number of calendar days in such calendar year
during which he is so employed.
f. Vacations, Holidays and Sick Leave. Executive shall be entitled to the
number of paid holidays, personal days off, vacation days and sick
leave days in each calendar year as are determined by Employer from
time to time for its senior executive officers, but not less than four
(4) weeks in any calendar year (prorated, in any calendar year during
which Executive is employed under this Agreement for less than the
entire such year, in accordance with the number of calendar days in
such calendar year during which he is so employed) . Vacation may be
taken in Executive's discretion, so long as it is not inconsistent
with the reasonable business needs of Employer. Executive shall be
entitled to accrue from year to year all vacation days not taken by
him.
g. Perquisite. Executive shall be entitled to continue to receive the
perquisites and fringe benefits appertaining to the office of the
President and Chief Operating Officer of Employer in accordance with
present practice and appropriate to the industry.
h. Key Man Life Insurance. Executive shall cooperate with Employer to
secure, for Employer, a key man life insurance policy on the life of
Executive in the amount of $1,000,000, to be paid to Employer upon
Executive's death.
i. Base Salary Not Effected by Other Benefits. None of the benefits to
which Executive is entitled under any of the provisions of Sections 3
(b) - 3 (g) hereof shall in any manner reduce or be deemed to be in
lieu of the Base Salary payable to Executive pursuant to Section 3(a)
hereof.
4. Term of Employment. The employment by Employer of Executive pursuant hereto
shall commence as of the effective date (the "Effective Date") and, subject to
the provisions of Section 5 hereof, shall terminate three (3) years after the
Effective Date (the "Termination Date") . This Agreement shall automatically be
extended for one additional year beyond the Termination Date (the "Extended
Termination Date") unless at least thirty (30) calendar days prior to the
Termination Date, Executive or Employer shall have given notice that he or it
does not wish to extend this Agreement.
5. Premature Termination. Anything in this Agreement contained to the contrary
notwithstanding:
a. Death. Executive's employment hereunder shall terminate forthwith upon
the death of Executive.
b. Disability. Executive's employment hereunder shall terminate, at the
option of Employer, in the event that the Board makes a good faith
determination that Executive suffers from Disability (as hereinafter
defined) so as to be unable to substantially perform his duties
hereunder for an aggregate of one hundred and eighty (180) calendar
days during any period of twelve (12) consecutive months. As used in
this Agreement, the term "Disability" shall mean the material
inability, in the opinion of three-fourths (3/4) of the entire
membership of the Board set forth in a resolution giving the
particulars thereof, of Executive to render his agreed-upon services
to Employer due to physical and/or mental infirmity, which opinion is
concurred in by a physician or psychiatrist reasonably satisfactory to
Employer and Executive or his duly appointed representative or
guardian.
c. Cause. Employer may terminate Executive's employment hereunder for
Cause. For purposes of this Agreement, Employer shall have "Cause" to
terminate Executive's employment hereunder upon (i) the willful,
intentional and continued failure by Executive to substantially
perform his duties hereunder (other than any such failure resulting
from Executive's incapacity due to physical or mental illness) after
demand for substantial performance is delivered by Employer
specifically identifying the manner in which Employer believes
Executive has not substantially performed his duties and a continued,
intentional disregard of such demand or (ii) the willful engaging by
Executive in conclusively proven misconduct which is materially
injurious to Employer, monetarily or otherwise, or (iii) the willful
violation by Executive of the provisions of Section 7 hereof provided
that such violation results in material injury to Employer. No act, or
failure to act, on Executive's part shall be considered "willful"
unless done, or omitted to be done, by him not in good faith and
without reasonable belief that his action or omission was in the best
interest of Employer. Notwithstanding the foregoing, Executive shall
not be deemed to have been terminated for Cause unless and until there
shall have been delivered to Executive a copy of a resolution, duly
adopted by the affirmative vote of not less than a majority of the
entire membership of the Board at a meeting of the Board called and
held for such purpose (after reasonable notice to Executive and an
opportunity for him, together with his counsel, to be heard before the
Board), finding that, in the good faith opinion of the Board,
Executive conducted, or failed to conduct, himself in a manner set
forth above in clause (1), (ii), or (iii) of this Section 5(c), and
specifying the particulars thereof in detail.
d. Termination by Executive. Executive may terminate his employment
hereunder Ci) for Good Reason (as hereinafter defined) or (ii) if his
physical or mental health becomes impaired to an extent that makes the
continued performance of his duties hereunder hazardous to his
.physical or mental health or his life, provided that Executive shall
have furnished Employer with a written statement from a doctor or
psychiatrist to such effect, and provided further, that, at Employer's
request and expense, Executive shall submit to an examination by a
physician or psychiatrist
selected by Employer and such physician or psychiatrist shall have
concurred in the conclusion of Executive's physician or psychiatrist.
Until Executive terminates his employment pursuant to clause (ii) of
this Section 5 Cd), he shall continue to receive his full Base Salary,
payable at the time such payments are due.
e. "Good Reason" Defined. For purposes of this Agreement, "Good Reason"
shall mean Ci) a Change in Control (as hereinafter defined) of
Employer, or (ii) any limitation of the powers of Executive, or (iii)
any removal of Executive as, or any failure to re-elect Executive to
his title hereunder except in connection with termination of
Executive's employment for Cause (as hereinafter defined) or
Disability; provided, however, that any removal of Executive as, or
any failure to re-elect Executive (except in connection with
termination of Executive's employment for Cause or Disability) shall
not diminish or reduce the obligations of Employer to Executive under
this Agreement. or (iv) the failure of Employer to obtain the
assumption of the agreement to perform this Agreement by any successor
to Employer, as provided for in Section 8 hereof.
f. "Change of Control" Defined. For purposes of this Agreement, a "Change
in Control" (as hereinafter defined) of Employer shall be deemed to
have occurred if (i) any "person" (as such term is used in Section 13
Cd) of the Securities Exchange Act of 1934 (the "Exchange Act"), other
than Employer or any "group" (as such term is defined in Section 13(d)
(3) of the Exchange Act) of which they are a member, is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of Employer representing thirty
percent (30%) of more of the combined voting power of Employer's then
outstanding securities, or (ii) during any period of two (2)
consecutive years during the term of this Agreement, individuals who
at the beginning of such period constitute the Board cease for any
reason to constitute at least a majority thereof, unless the election
of each director who was not a director at the beginning of such
period has been approved in advance by directors representing at least
two-thirds (2/3) of the directors then in office who were directors at
the beginning of the period.
g. Notice of Termination. Any termination of Executive's employment by
Employer or by Executive (other than termination pursuant to Section
5(a) hereof) shall be communicated by written Notice of Termination to
the~other party hereto. For purposes of this Agreement, a "Notice of
Termination" shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set
forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive's employment under the
provision so indicated.
h. Date of Termination. "Date of Termination" shall mean (i) if
Executive's employment is terminated by his death, the date of his
death, (ii) if Executive's employment is terminated pursuant to
Section 5(b) hereof, thirty (30)
calendar days after Notice of Termination is given (provided that
Executive shall not have returned to the performance of his duties on
a full-time basis during such thirty (30) day period), (iii) if
Executive's employment is terminated pursuant to Section 5(c) hereof,
the date specified in the Notice of Termination, and (iv) if
Executive's employment is terminated for any other reason, the date on
which a Notice of Termination is given; provided, however, that if,
within thirty (30) calendar days after any Notice of Termination is
given, the party receiving such Notice of Termination notifies the
other party that a dispute exists concerning the termination, the Date
of Termination shall be the date on which the dispute is finally
determined, either by mutual written agreement of the parties, by a
binding and final arbitration award or by a final judgment order or
decree of a court of competent jurisdiction (the time for appeal
therefrom having expired and no appeal having been perfected)
6. Payments and Benefits Upon Early Termination.
a. Early Termination for Death, Disability or Cause. Upon the termination
of this Agreement prior to the Termination Date (or, if this Agreement
shall have been extended to the Extended Termination Date, as provided
in Section 4 hereof, prior to the Extended Termination Date) (X) by
Employer as a result of death, Disability or termination of Executive
for Cause or (Y) by Executive for any of the reasons set forth in
clause (ii) of Section 5(d) hereof, Employer shall pay Executive:
i. his Base Salary through the Date of Termination at the rate in
effect at the time of Notice of Termination is given or, in the
case of the death of Executive, the Date of Termination, payable
at the time such payments are due; and
ii. all other amounts to which Executive is entitled, including,
without limitation, expense reimbursement amounts accrued to the
Date of Termination or amounts under any benefit plan of
Employer, at the time such payments are due.
b. Early Termination Other than for Death, Disability or Cause. Upon the
termination of this Agreement prior to the Termination Date (or, if
this Agreement shall have been extended to the Extended Termination
Date, as provided in Section '4 hereof, prior to the Extended
Termination Date) (X) by Employer other than for death, Disability or
Cause or (Y) by Executive for Good Reason or as a result of a breach
of this Agreement by Employer, Employer shall pay to Executive:
i. this Base Salary through the Termination Date at the rate in
effect at the time Notice of Termination is given, payable at the
time such payments are due (or, if this Agreement shall have been
extended to the Extended Termination Date, as provided in Section
4 hereof, his Base Salary through the Extended Termination Date
at the rate in effect at the time Notice of Termination is
given, payable at the time such payments are due);
ii. all other amounts to which Executive is entitled, including,
without limitation, expense reimbursement amounts accrued to the
Date of Termination or amounts under any benefit plan of
Employer, at the time such payments are due; and
iii. In addition, for the thirty-six (36) month period after
termination for any of the reasons specified in this Section 6
(b), Employer shall arrange to provide Executive with life and
health insurance benefits substantially similar to those which
Executive was receiving immediately prior to the Notice of
Termination.
c. Mitigation Not Required. Executive shall not be required to mitigate
the amount of any payment provided for in this Section 6 by seeking
other employment or otherwise, nor shall the amount of any payment
provided for in this Section 6 be reduced by any compensation earned
by Executive as the result of employment by another employer after the
Date of Termination, or otherwise.
7. Non-disclosure;
a. Confidential Information. Executive shall not, to the detriment of
Employer, knowingly use for his own benefit or disclose or reveal to
any unauthorized person, any trade secret or other confidential
information received by Executive in the course of his employment or
engagement in any capacity by Employer which relates to Employer or to
any of the businesses operated by it, including, but not limited to,
any customer lists, customer needs, price and performance information,
specifications, hardware, software, devices, supply sources and
characteristics, business opportunities, marketing, promotional,
pricing and financing techniques, or other information relating to the
business of Employer, and Executive confirms that such information
constitutes the exclusive property of Employer. However, said
restriction on confidential information shall not apply to information
which "5: Ci) generally available in the industry in which Employer
operates, (ii) disclosed in published literature or (iii) obtained by
Executive from a third party without binder or secrecy. Executive
agrees that, except as otherwise expressly~agreed to by Employer, he
will return to Employer, promptly upon the request of the Board or any
executive officer designated by the Board, any physical embodiment of
such confidential information.
b. Remedies. Executive recognizes that the possible restrictions on his
activities which may occur as a result of his performance of his
obligations under this Section 7 are required for the reasonable
protection of Employer and its investments, and Executive expressly
acknowledges that damages alone will be an inadequate remedy for any
breach or violation of this Section 7, and that Employer, in addition
to all
other remedies at law or in equity, shall be entitled, as a matter of
right, to injunctive relief, including specific performance, with
respect to any such breach or violation, in any court of competent
jurisdiction. If any of the provisions of this Section 7 are held to
be in any respect an unreasonable restriction upon Executive, then
they shall be deemed to extend only over the maximum period of time,
geographic area, and/or range of activities as to which they may be
enforceable.
c. Nonexclusive. The undertakings of Executive contained in Sections
7(a), 7(b) and 7(c) hereof shall be in addition to, and not in lieu
of, any obligations which he may have with respect to the subject
matter hereof, whether by contract, as a matter of law or otherwise.
8. Successors; Benefits.
a. Successors. Employer shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of Employer, by
agreement in form and substance satisfactory to Executive, to
expressly assume and agree to perform this Agreement in the same
manner and to the same extent that Employer would be required to
perform it if no such succession had taken place. Failure of Employer
to obtain such agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement and shall entitle
Executive to compensation from Employer in the same amount and on the
same terms as he would be entitled to hereunder if he terminated his
employment for Good Reason, except that for purposes of implementing
the foregoing, the date on which any such succession becomes effective
shall be deemed the Date of Termination. As used in this Agreement,
"Employer" shall mean Employer as hereinbefore defined and any
successor to its business and/or assets as aforesaid which executes
and delivers the agreement provided for in this Section 8 or which
otherwise becomes bound by all the terms and provisions of this
Agreement by operation of law.
b. Benefits. This Agreement and all rights of Executive hereunder shall
inure to the benefit of and be enforceable by Executive's personal or
legal representatives, executors, administrators, successors, heirs,
distributes, devisees and legatees. If Executive should die while any
amounts would still be payable to him hereunder if he had continued to
live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to Executive's
devisee, legatee, or other designee or, if there be no such designee,
to Executive's estate.
9. Miscellaneous Provisions.
a. Execution in Counterparts. This Agreement may be executed in one or
more counterparts, and by the different parties hereto in separate
counterparts, each of
which shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
b. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly
given or made as of the date delivered, if delivered personally, or
three (3) calendar days after having been mailed, if mailed by
registered or certified mail, postage prepaid, return receipt
requested, as follows:
If to Employer, to:
000 Xxxxx 0 Xxxxx
Xxxxxxxxxxx, XX 00000
If to Executive, to: Xxxxxx X. Xxxxxx
000 Xxxxx Xxxxxxxxx Xxxx
Xxxxxxx, XX 00000
or to such other address as either party hereto shall have designated
by like notice to the other party hereto (except that a notice of
change of address shall only be effective upon receipt)
c. Amendment. This Agreement may only be amended by a written instrument
executed by each of the parties hereto.
d. Entire Agreement. This Agreement constitutes the entire agreement of
the parties hereto with respect to the subject matter hereof, and
supersedes all prior agreements and understandings of the parties
hereto, oral and written, with respect to the subject matter hereof.
e. Applicable Law. This Agreement shall be governed by the laws of the
State of New Jersey applicable to contracts made and to be wholly
performed therein.
f. Headings. The headings contained herein are for the sole purpose of
convenience of reference and shall not in any way limit or affect the
meaning or interpretation of any of the terms or provisions of this
Agreement.
g. Waiver, etc. The failure of either of the parties hereto to at any
time enforce any of the provisions of this Agreement shall not be
deemed or construed to be a waiver of any such provision, nor to in
any way affect the validity of this Agreement or any provision hereof
or the right of either of the parties hereto to thereafter enforce
each and every provision of this Agreement. No waiver of any breach of
any of the provisions of this Agreement shall be effective unless set
forth in a written instrument executed by the party against whom or
which enforcement of such waiver
is sought; and no waiver of any such breach shall be construed or
deemed to be a waiver of any other or subsequent breach and delivered
by the parties hereto as of the date first above written.
By:
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Name:
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Title:
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EXHIBIT I-3
EMPLOYMENT AGREEMENT BETWEEN HIGHLAND AND
XXXXXX XXXXXXX
EMPLOYMENT AGREEMENT, dated as of the ____ day of July 2001, between Highland
Holdings International, Inc. corporation ("Employer"), and Xxxxxx Xxxxxxx
("Executive")
W I T N E S S E T H
WHEREAS, Executive possesses an intimate knowledge of the business and affairs
of Employer, its policies, methods, personnel, opportunities and problems;
WHEREAS, Employer desires to assure itself of Executive's continued employment
by Employer and to compensate him for such efforts; and
WHEREAS, Executive is desirous of committing himself to serve Employer on the
terms herein provided;
NOW, THEREFORE, In consideration of the covenants herein contained, the parties
hereto hereby agree as follows:
1. Employment. Executive is hereby employed as Managing Director of Employer and
as Co-chairman and Managing Director of E Street Access, Inc. a subsidiary of
the Employer. Executive, shall have supervision and control over, and shared
responsibility for, the operations and affairs of Employer, and shall have such
other powers and duties as may be from time to time assigned to him by the Board
of Directors of Employer (the "Board"), and Executive hereby accepts such
employment, all subject to the terms and conditions herein contained. Executive
hereby agrees that during the period of his employment hereunder he shall devote
substantially all of his business time, attention and skills to the business and
affairs of Employer and its subsidiaries.
2. Place of Performance. In connection with his employment by Employer,
Executive shall be based at Employer's principal executive offices where same
may be located from time to time.
3. Compensation.
a. Base Salary. Employer shall pay to Executive, and Executive shall
accept, for all services which may be rendered by him pursuant to this
Agreement, a base salary ("Base Salary") as hereinafter set forth. The
Base Salary during the first six months of the term of this Agreement
shall be at the annual rate of $130,000 per year. The Base Salary
during the second six months of the term of this Agreement shall be at
the annual rate of $175,000 per year. The Base Salary after the first
12 months of the term of this Agreement shall be at the annual rate of
$250,000 per year.
Any increase in Base Salary or other compensation granted by Employer,
the Board or any committee thereof shall in no way limit or reduce any
other obligation of Employer hereunder and, once established at an
increased specified rate Executive's Base Salary hereunder shall not
thereafter be reduced, other than as necessitated by Employer's
adverse financial condition. Executive's salary shall be payable in
accordance with Employer's payroll practices as from time to time in
effect.
b. Bonus. (i) In addition to Base Salary, Executive shall be entitled to
a minimum annual performance bonus as set forth in paragraph (ii)
hereof. (ii) Executive shall receive a minimum performance bonus in
January of each year during the term of this agreement payable at the
rate of no less than $75,000 per annum. The first and last payment of
the performance bonus shall be pro-rated as to amount based on the
number of months for which Executive perform services from the date of
this agreement through December 31. By way of example, if this
agreement takes effect on July 1, 2001, Executive would be entitled to
a minimum performance bonus in January of 2002 of $37,500.
c. Life Insurance. During the term of his employment hereunder, Employer
shall purchase and keep in effect life insurance in the amount of
$500,000 on the life of the Executive. Such life insurance will name
as beneficiaries those individuals designated by the Executive.
d. Expenses. During the term of his employment hereunder, Executive shall
be entitled to receive prompt reimbursement for all reasonable
expenses incurred by him in performing services hereunder, provided
that Executive properly accounts therefor in accordance with
Employer's policy relating thereto. Without limiting the generality of
the foregoing, the parties agree that any travel Executive undertakes
in connection with the performance of his duties hereunder shall be in
business class or better, and Employer shall reimburse Executive for
such expenses.
e. Benefit Plans. Executive shall be entitled to participate in or
receive benefits under any employee benefit plan or arrangement
currently available, or made available by Employer in the future, to
its executives and key management employees, subject to and on a basis
consistent with the terms, conditions and overall administration of
such plan or arrangement. Employer shall not make any changes in any
employee benefit plans or arrangements in effect on the date hereof or
during the term of this Agreement in which Executive participates
(including, without limitation, any pension and retirement plan,
supplemental pension and retirement plan, savings and profit sharing
plan, stock ownership plan, stock purchase plan, stock option plan,
life insurance plan, medical insurance plan, disability plan, dental
plan, health-and-accident plan or arrangement) which would adversely
effect Executive's rights or benefits thereunder, unless such change
occurs pursuant to a program applicable to all executives of Employer
and does not result in a proportionately greater reduction
in the rights of or benefits to Executive as compared with any other
executive of Employer. Any payments or benefits payable to Executive
hereunder in respect of any calendar year during which Executive is
employed by Employer for less than the entire such year shall, unless
otherwise provided in the applicable plan or arrangement, be prorated
in accordance with the number of calendar days in such calendar year
during which he is so employed.
f. Vacations, Holidays and Sick Leave. Executive shall be entitled to the
number of paid holidays, personal days off, vacation days and sick
leave days in each calendar year as are determined by Employer from
time to time for its senior executive officers, but not less than four
(4) weeks in any calendar year (prorated, in any calendar year during
which Executive is employed under this Agreement for less than the
entire such year, in accordance with the number of calendar days in
such calendar year during which he is so employed) . Vacation may be
taken in Executive's discretion, so long as it is not inconsistent
with the reasonable business needs of Employer. Executive shall be
entitled to accrue from year to year all vacation days not taken by
him.
g. Perquisite. Executive shall be entitled to continue to receive the
perquisites and fringe benefits appertaining to the office of the
President and Chief Operating Officer of Employer in accordance with
present practice and appropriate to the industry.
h. Key Man Life Insurance. Executive shall cooperate with Employer to
secure, for Employer, a key man life insurance policy on the life of
Executive in the amount of $1,000,000, to be paid to Employer upon
Executive's death.
i. Base Salary Not Effected by Other Benefits. None of the benefits to
which Executive is entitled under any of the provisions of Sections 3
(b) - 3 (g) hereof shall in any manner reduce or be deemed to be in
lieu of the Base Salary payable to Executive pursuant to Section 3(a)
hereof.
4. Term of Employment. The employment by Employer of Executive pursuant hereto
shall commence as of the effective date (the "Effective Date") and, subject to
the provisions of Section 5 hereof, shall terminate three (3) years after the
Effective Date (the "Termination Date") . This Agreement shall automatically be
extended for one additional year beyond the Termination Date (the "Extended
Termination Date") unless at least thirty (30) calendar days prior to the
Termination Date, Executive or Employer shall have given notice that he or it
does not wish to extend this Agreement.
5. Premature Termination. Anything in this Agreement contained to the contrary
notwithstanding:
a. Death. Executive's employment hereunder shall terminate forthwith upon
the death of Executive.
b. Disability. Executive's employment hereunder shall terminate, at the
option of Employer, in the event that the Board makes a good faith
determination that Executive suffers from Disability (as hereinafter
defined) so as to be unable to substantially perform his duties
hereunder for an aggregate of one hundred and eighty (180) calendar
days during any period of twelve (12) consecutive months. As used in
this Agreement, the term "Disability" shall mean the material
inability, in the opinion of three-fourths (3/4) of the entire
membership of the Board set forth in a resolution giving the
particulars thereof, of Executive to render his agreed-upon services
to Employer due to physical and/or mental infirmity, which opinion is
concurred in by a physician or psychiatrist reasonably satisfactory to
Employer and Executive or his duly appointed representative or
guardian.
c. Cause. Employer may terminate Executive's employment hereunder for
Cause. For purposes of this Agreement, Employer shall have "Cause" to
terminate Executive's employment hereunder upon (i) the willful,
intentional and continued failure by Executive to substantially
perform his duties hereunder (other than any such failure resulting
from Executive's incapacity due to physical or mental illness) after
demand for substantial performance is delivered by Employer
specifically identifying the manner in which Employer believes
Executive has not substantially performed his duties and a continued,
intentional disregard of such demand or (ii) the willful engaging by
Executive in conclusively proven misconduct which is materially
injurious to Employer, monetarily or otherwise, or (iii) the willful
violation by Executive of the provisions of Section 7 hereof provided
that such violation results in material injury to Employer. No act, or
failure to act, on Executive's part shall be considered "willful"
unless done, or omitted to be done, by him not in good faith and
without reasonable belief that his action or omission was in the best
interest of Employer. Notwithstanding the foregoing, Executive shall
not be deemed to have been terminated for Cause unless and until there
shall have been delivered to Executive a copy of a resolution, duly
adopted by the affirmative vote of not less than a majority of the
entire membership of the Board at a meeting of the Board called and
held for such purpose (after reasonable notice to Executive and an
opportunity for him, together with his counsel, to be heard before the
Board), finding that, in the good faith opinion of the Board,
Executive conducted, or failed to conduct, himself in a manner set
forth above in clause (1), (ii), or (iii) of this Section 5(c), and
specifying the particulars thereof in detail.
d. Termination by Executive. Executive may terminate his employment
hereunder Ci) for Good Reason (as hereinafter defined) or (ii) if his
physical or mental health becomes impaired to an extent that makes the
continued performance of his duties hereunder hazardous to his
.physical or mental health or his life, provided that Executive shall
have furnished Employer with a written statement from a doctor or
psychiatrist to such effect, and provided further, that, at Employer's
request and expense, Executive shall submit to an examination by a
physician or psychiatrist
selected by Employer and such physician or psychiatrist shall have
concurred in the conclusion of Executive's physician or psychiatrist.
Until Executive terminates his employment pursuant to clause (ii) of
this Section 5 Cd), he shall continue to receive his full Base Salary,
payable at the time such payments are due.
e. "Good Reason" Defined. For purposes of this Agreement, "Good Reason"
shall mean Ci) a Change in Control (as hereinafter defined) of
Employer, or (ii) any limitation of the powers of Executive, or (iii)
any removal of Executive as, or any failure to re-elect Executive to
his title hereunder except in connection with termination of
Executive's employment for Cause (as hereinafter defined) or
Disability; provided, however, that any removal of Executive as, or
any failure to re-elect Executive (except in connection with
termination of Executive's employment for Cause or Disability) shall
not diminish or reduce the obligations of Employer to Executive under
this Agreement. or (iv) the failure of Employer to obtain the
assumption of the agreement to perform this Agreement by any successor
to Employer, as provided for in Section 8 hereof.
f. "Change of Control" Defined. For purposes of this Agreement, a "Change
in Control" (as hereinafter defined) of Employer shall be deemed to
have occurred if (i) any "person" (as such term is used in Section 13
Cd) of the Securities Exchange Act of 1934 (the "Exchange Act"), other
than Employer or any "group" (as such term is defined in Section 13(d)
(3) of the Exchange Act) of which they are a member, is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of Employer representing thirty
percent (30%) of more of the combined voting power of Employer's then
outstanding securities, or (ii) during any period of two (2)
consecutive years during the term of this Agreement, individuals who
at the beginning of such period constitute the Board cease for any
reason to constitute at least a majority thereof, unless the election
of each director who was not a director at the beginning of such
period has been approved in advance by directors representing at least
two-thirds (2/3) of the directors then in office who were directors at
the beginning of the period.
g. Notice of Termination. Any termination of Executive's employment by
Employer or by Executive (other than termination pursuant to Section
5(a) hereof) shall be communicated by written Notice of Termination to
the~other party hereto. For purposes of this Agreement, a "Notice of
Termination" shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set
forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive's employment under the
provision so indicated.
h. Date of Termination. "Date of Termination" shall mean (i) if
Executive's employment is terminated by his death, the date of his
death, (ii) if Executive's employment is terminated pursuant to
Section 5(b) hereof, thirty (30)
calendar days after Notice of Termination is given (provided that
Executive shall not have returned to the performance of his duties on
a full-time basis during such thirty (30) day period), (iii) if
Executive's employment is terminated pursuant to Section 5(c) hereof,
the date specified in the Notice of Termination, and (iv) if
Executive's employment is terminated for any other reason, the date on
which a Notice of Termination is given; provided, however, that if,
within thirty (30) calendar days after any Notice of Termination is
given, the party receiving such Notice of Termination notifies the
other party that a dispute exists concerning the termination, the Date
of Termination shall be the date on which the dispute is finally
determined, either by mutual written agreement of the parties, by a
binding and final arbitration award or by a final judgment order or
decree of a court of competent jurisdiction (the time for appeal
therefrom having expired and no appeal having been perfected)
6. Payments and Benefits Upon Early Termination.
a. Early Termination for Death, Disability or Cause. Upon the termination
of this Agreement prior to the Termination Date (or, if this Agreement
shall have been extended to the Extended Termination Date, as provided
in Section 4 hereof, prior to the Extended Termination Date) (X) by
Employer as a result of death, Disability or termination of Executive
for Cause or (Y) by Executive for any of the reasons set forth in
clause (ii) of Section 5(d) hereof, Employer shall pay Executive:
i. his Base Salary through the Date of Termination at the rate in
effect at the time of Notice of Termination is given or, in the
case of the death of Executive, the Date of Termination, payable
at the time such payments are due; and
ii. all other amounts to which Executive is entitled, including,
without limitation, expense reimbursement amounts accrued to the
Date of Termination or amounts under any benefit plan of
Employer, at the time such payments are due.
b. Early Termination Other than for Death, Disability or Cause. Upon the
termination of this Agreement prior to the Termination Date (or, if
this Agreement shall have been extended to the Extended Termination
Date, as provided in Section '4 hereof, prior to the Extended
Termination Date) (X) by Employer other than for death, Disability or
Cause or (Y) by Executive for Good Reason or as a result of a breach
of this Agreement by Employer, Employer shall pay to Executive:
i. this Base Salary through the Termination Date at the rate in
effect at the time Notice of Termination is given, payable at the
time such payments are due (or, if this Agreement shall have been
extended to the Extended Termination Date, as provided in Section
4 hereof, his Base Salary through the Extended Termination Date
at the rate in effect at the time Notice of Termination is
given, payable at the time such payments are due);
ii. all other amounts to which Executive is entitled, including,
without limitation, expense reimbursement amounts accrued to the
Date of Termination or amounts under any benefit plan of
Employer, at the time such payments are due; and
iii. In addition, for the thirty-six (36) month period after
termination for any of the reasons specified in this Section 6
(b), Employer shall arrange to provide Executive with life and
health insurance benefits substantially similar to those which
Executive was receiving immediately prior to the Notice of
Termination.
c. Mitigation Not Required. Executive shall not be required to mitigate
the amount of any payment provided for in this Section 6 by seeking
other employment or otherwise, nor shall the amount of any payment
provided for in this Section 6 be reduced by any compensation earned
by Executive as the result of employment by another employer after the
Date of Termination, or otherwise.
7. Non-disclosure;
a. Confidential Information. Executive shall not, to the detriment of
Employer, knowingly use for his own benefit or disclose or reveal to
any unauthorized person, any trade secret or other confidential
information received by Executive in the course of his employment or
engagement in any capacity by Employer which relates to Employer or to
any of the businesses operated by it, including, but not limited to,
any customer lists, customer needs, price and performance information,
specifications, hardware, software, devices, supply sources and
characteristics, business opportunities, marketing, promotional,
pricing and financing techniques, or other information relating to the
business of Employer, and Executive confirms that such information
constitutes the exclusive property of Employer. However, said
restriction on confidential information shall not apply to information
which "5: Ci) generally available in the industry in which Employer
operates, (ii) disclosed in published literature or (iii) obtained by
Executive from a third party without binder or secrecy. Executive
agrees that, except as otherwise expressly~agreed to by Employer, he
will return to Employer, promptly upon the request of the Board or any
executive officer designated by the Board, any physical embodiment of
such confidential information.
b. Remedies. Executive recognizes that the possible restrictions on his
activities which may occur as a result of his performance of his
obligations under this Section 7 are required for the reasonable
protection of Employer and its investments, and Executive expressly
acknowledges that damages alone will be an inadequate remedy for any
breach or violation of this Section 7, and that Employer, in addition
to all
other remedies at law or in equity, shall be entitled, as a matter of
right, to injunctive relief, including specific performance, with
respect to any such breach or violation, in any court of competent
jurisdiction. If any of the provisions of this Section 7 are held to
be in any respect an unreasonable restriction upon Executive, then
they shall be deemed to extend only over the maximum period of time,
geographic area, and/or range of activities as to which they may be
enforceable.
c. Nonexclusive. The undertakings of Executive contained in Sections
7(a), 7(b) and 7(c) hereof shall be in addition to, and not in lieu
of, any obligations which he may have with respect to the subject
matter hereof, whether by contract, as a matter of law or otherwise.
8. Successors; Benefits.
a. Successors. Employer shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of Employer, by
agreement in form and substance satisfactory to Executive, to
expressly assume and agree to perform this Agreement in the same
manner and to the same extent that Employer would be required to
perform it if no such succession had taken place. Failure of Employer
to obtain such agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement and shall entitle
Executive to compensation from Employer in the same amount and on the
same terms as he would be entitled to hereunder if he terminated his
employment for Good Reason, except that for purposes of implementing
the foregoing, the date on which any such succession becomes effective
shall be deemed the Date of Termination. As used in this Agreement,
"Employer" shall mean Employer as hereinbefore defined and any
successor to its business and/or assets as aforesaid which executes
and delivers the agreement provided for in this Section 8 or which
otherwise becomes bound by all the terms and provisions of this
Agreement by operation of law.
b. Benefits. This Agreement and all rights of Executive hereunder shall
inure to the benefit of and be enforceable by Executive's personal or
legal representatives, executors, administrators, successors, heirs,
distributes, devisees and legatees. If Executive should die while any
amounts would still be payable to him hereunder if he had continued to
live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to Executive's
devisee, legatee, or other designee or, if there be no such designee,
to Executive's estate.
9. Miscellaneous Provisions.
a. Execution in Counterparts. This Agreement may be executed in one or
more counterparts, and by the different parties hereto in separate
counterparts, each of
which shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
b. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly
given or made as of the date delivered, if delivered personally, or
three (3) calendar days after having been mailed, if mailed by
registered or certified mail, postage prepaid, return receipt
requested, as follows:
If to Employer, to:
000 Xxxxx 0 Xxxxx
Xxxxxxxxxxx, XX 00000
If to Executive, to: Xxxxxx Xxxxxxx
000 Xxxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
or to such other address as either party hereto shall have designated
by like notice to the other party hereto (except that a notice of
change of address shall only be effective upon receipt)
c. Amendment. This Agreement may only be amended by a written instrument
executed by each of the parties hereto.
d. Entire Agreement. This Agreement constitutes the entire agreement of
the parties hereto with respect to the subject matter hereof, and
supersedes all prior agreements and understandings of the parties
hereto, oral and written, with respect to the subject matter hereof.
e. Applicable Law. This Agreement shall be governed by the laws of the
State of New Jersey applicable to contracts made and to be wholly
performed therein.
f. Headings. The headings contained herein are for the sole purpose of
convenience of reference and shall not in any way limit or affect the
meaning or interpretation of any of the terms or provisions of this
Agreement.
g. Waiver, etc. The failure of either of the parties hereto to at any
time enforce any of the provisions of this Agreement shall not be
deemed or construed to be a waiver of any such provision, nor to in
any way affect the validity of this Agreement or any provision hereof
or the right of either of the parties hereto to thereafter enforce
each and every provision of this Agreement. No waiver of any breach of
any of the provisions of this Agreement shall be effective unless set
forth in a written instrument executed by the party against whom or
which enforcement of such waiver
is sought; and no waiver of any such breach shall be construed or
deemed to be a waiver of any other or subsequent breach and delivered
by the parties hereto as of the date first above written.
By:
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Name:
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Title:
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