SETTLEMENT AGREEMENT
This Settlement Agreement (hereinafter, the "Agreement") is entered
into this 1st day of December, 2000 by and among XxxxxxxxXxxx.Xxx, Inc., a
Nevada corporation (hereinafter, "BusinessMall"), XxxXxxxxxXxxxXxxxxxxxx.Xxx,
Corp., a Delaware corporation (hereinafter, "TheYPD"), Xxxxxx Xxxxxxx
(hereinafter, "Xxxxxxx"), CCC Communications Corporation, a Nevada corporation
(hereinafter, "CCC"), StormTel, Inc., a Nevada Corporation (hereinafter
"StormTel"), XxxxxxXxxxxx.xxx, Inc., a Florida corporation (hereinafter,
"ForcedMatrix"), ITS Billing, Inc., a Nevada corporation (hereinafter, "ITS")
and Xxxxx Xxxxxxx (hereinafter, "Xxxxxxx"). All the parties to this Agreement
are collectively referred to as the "Parties."
BACKGROUND
A. BusinessMall and TheYPD are jointly and severally indebted to CCC,
ForcedMatrix and ITS in the amounts set forth in Exhibit "A" attached hereto and
incorporated herein by reference, as evidenced by certain promissory notes,
copies of which are attached hereto as Exhibit "B" and incorporated herein by
reference (hereinafter, the "Original Notes"). The Original Notes are, (or in
the case of the Original Note issued to ITS, will be upon consummation of the
transactions contemplated herein), secured by liens on all of the assets of
BusinessMall and TheYPD. Such liens have been or will be perfected by the filing
of certain UCC-1 financing statements, filed with the State of Florida and/or
County of Pinnellas, Florida.
B. CCC, ForcedMatrix, ITS, and StormTel are each separate and distinct
entities, each of which has separate, distinct and unrelated claims against
BusinessMall.
C. ForcedMatrix has previously purchased all of the issued and
outstanding shares of stock of StormTel from BusinessMall for a purchase price
of One Dollar ($1.00), the receipt of which is hereby acknowledged by
BusinessMall.
D. CCC, ForcedMatrix and ITS commenced an Involuntary Petition under
Chapter 11 of the United States Bankruptcy Code against BusinessMall in the
United States Bankruptcy Court for the Middle District of Florida, Tampa
Division (Case # 00-12564) (the "Chapter 11 Petition").
X. Xxxxxxx and Xxxxxxx were formerly employed by BusinessMall under
certain written employment agreements.
F. BusinessMall terminated Xxxxxxx'x and Xxxxxxx'x employment
agreements and a dispute arose as to whether these terminations were proper
pursuant to the terms of the respective employment agreements, and Xxxxxxx has
filed for arbitration of certain claims in connection therewith, in arbitration
number 33 160 00161 00 filed with the American Arbitration Association (the
"Xxxxxxx Arbitration").
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G. BusinessMall, TheYPD, CCC, ForcedMatrix, StormTel, et. al., entered
into a Stock Purchase Agreement and Agreement with Respect to Other Matters on
the 14th day of June, 2000 (hereinafter, the "Stock Purchase Agreement"), which
has resulted in various disputes among the Parties.
H. BusinessMall has filed an action against Xxxxxxx regarding the
domain name, "XxxXxxxxxXxxxXxxxxxxxx.xxx", in the Circuit Court for Pinellas
County, Florida, case number 00-003515-CI-007 (the "Xxxxxxx Lawsuit").
I. Various other disputes have arisen between BusinessMall and/or
TheYPD on the one hand, and Xxxxxxx, CCC, ForcedMatrix, ITS, StormTel and/or
Xxxxxxx on the other hand.
J. After lengthy negotiations, the Parties have agreed to settle and
release all claims (except as hereinafter set forth) by each of them against the
others to avoid the risk, expense and inconvenience of litigation in accordance
with the terms and conditions set forth below.
NOW THEREFORE, for good and valuable consideration, the Parties
intending to be legally bound, agree as follows:
1. Background Statements; Factual Matters regarding BusinessMall and
TheYPD. The background statements set forth hereinabove are true and correct,
are an integral part of this Agreement, and are specifically incorporated into
this Agreement as the statements and representations of BusinessMall and TheYPD.
BusinessMall and TheYPD represent and warrant that all of the information set
forth in Exhibit "C" and Exhibit "D," both of which are attached hereto and
incorporated herein by reference, is true, complete and correct in all respects.
2. Return of Furniture and Equipment. BusinessMall is in possession of
the furniture, equipment and other property identified on Exhibit "E," attached
hereto and incorporated herein by reference (hereinafter, the "Property"). A
dispute exists between BusinessMall and ITS as to the ownership of such
Property. BusinessMall has also agreed to transfer and assign to ITS the assets
described in Exhibit "E-2", attached hereto and incorporated herein by reference
(hereinafter, the "Assets"). Concurrently with the execution of this Agreement,
BusinessMall shall turn over possession of such Property and Assets to ITS at
00000 X.X. Xxxxxxx 00 Xxxxx, Xxxxxxxxxx, Xxxxxxx, and ITS shall be permitted to
immediately remove such Property and Assets from such location. If ITS does not
immediately remove the Property and Assets from such location at the time of
execution of this Agreement, ITS will, in any event, remove the Property and
Assets between the hours of 9:00 a.m. and 5:00 p.m. on a date specified by ITS,
not later than December 10, 2000, and in doing so, shall give BusinessMall at
least one hour's notice of the intention of ITS to remove such Property and
Assets. Such Property and Assets shall be transferred to ITS free and clear of
all liens, encumbrances, and claims, and BusinessMall hereby indemnifies ITS
against any loss, liability, obligation, cost or expense incurred or asserted as
a result of any such lien, encumbrance, or claim with respect to such Property
and Assets. Except as set forth in this Section 2, BusinessMall makes no
representation or warranty as to such Property and Assets, which ITS accepts "AS
IS" and "WHERE IS".
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3. Deposits; Mobile Office Link Division; IWATSU Contract. BusinessMall
and TheYPD hereby acknowledge and agree that neither BusinessMall, TheYPD, or
any related entities have any claim to any security deposits posted in
connection with the issuance of any letters of credit issued for the benefit of
CCC or StormTel, including but not limited to the security deposits described in
Exhibit "F" attached hereto and incorporated herein by reference. To the extent
that any of such security deposits are issued in the name of, or are otherwise
legally the property of BusinessMall and/or TheYPD, BusinessMall and TheYPD
agree to immediately upon request execute any and all documents and take such
further actions as may be necessary to transfer ownership of such security
deposits to CCC. In addition, BusinessMall and TheYPD hereby appoint Xxxxxx
Xxxxxxx as their attorney-in-fact, for the purpose of executing such documents
and taking such further actions as may be necessary to transfer the ownership of
such security deposits to CCC. This appointment is coupled with an interest and
is irrevocable. Concurrently with the execution of this Agreement, BusinessMall
shall execute and deliver three letters (one addressed to QWEST Communications,
one addressed to SunTrust Bank, and one addressed to "To Whom It May Concern"),
each in the form attached hereto as Exhibit "G" and incorporated herein by
reference, reaffirming the fact that neither BusinessMall, TheYPD, nor their
related entities have any claim to any security deposits posted in connection
with the issuance of any letters of credit issued for the benefit of CCC or
StormTel, including but not limited to the security deposits described in
Exhibit "F". The Parties acknowledge and agree that the obligations of the
Parties under Section 10 of the Stock Purchase Agreement, regarding the GTE
Letter of Credit, Mobile Office Link Division, and IWATSU Contract, are hereby
released and canceled. Accordingly, CCC shall not be required to cause the
underlying security for the GTE Letter of Credit to be paid to BusinessMall or
as otherwise directed by BusinessMall, and said underlying security may be
retained by CCC. Further, CCC is not obligated to transfer or assign to
BusinessMall the trade name "Mobile Office Link" and/or the cellular customers
and contract with GTE which constitutes the Mobile Office Link division of CCC,
and/or the IWATSU Contract and/or related hardware customers.
4. Settlement of Xxx Xxxxxxx' Claims. BusinessMall acknowledges that
Xxx Xxxxxxx (hereinafter, "Xxxxxxx") has made certain claims regarding sexual
harassment and/or employment discrimination and/or other matters in connection
with her employment at BusinessMall. BusinessMall hereby indemnifies and holds
Xxxxxxx and Xxxxxxx harmless from and against any loss, liability, obligation,
action, cause of action, claim, cost, or expense incurred or asserted against
Xxxxxxx and/or Xxxxxxx by Xxxxxxx in connection with any sexual harassment
and/or employment discrimination and/or any other claim. BusinessMall agrees to
settle, at its sole expense, all such claims, and as a condition to such
settlement shall cause Xxxxxxx to execute a full, complete and unconditional
release of any and all claims which Xxxxxxx may have against Xxxxxxx and/or
Xxxxxxx. Such release shall be in form and content acceptable to Xxxxxxx and
Xxxxxxx. BusinessMall shall not enter into any such settlement, and shall not
make any payments to Xxxxxxx in settlement, unless and until all amounts due and
payable under the Original Notes, the Compensation Note, the Rent Note, and the
Property Note (all hereinafter defined), are paid in full. Xxxxxxx and Xxxxxxx
agree to answer questions privately posed by Xxxxx Xxxxx concerning such claims,
and agree not to communicate with Xxxxxxx while such claims are pending
resolution. Xxxxxxx and Xxxxxxx shall not be obligated to otherwise participate
in obtaining a settlement of such claims. The settlement of such claims shall
not include any admission of guilt, and shall not be construed to be an
admission of guilt, with respect to such claims.
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5. Sale of Call Center Assets. BusinessMall is actively negotiating
with a bona-fide purchaser for its call center and other assets (hereinafter,
the "Call Center Assets"), located at 00000 X.X. Xxxxxxx 00 X., Xxxxxxxxxx, XX
00000 (the "Call Center"). The Parties understand and agree that the Call Center
Assets do not include the Property described in Exhibit "E". BusinessMall agrees
that if the entire principal balance and all accrued interest with respect to
the Original Notes, the Rent Note, the Property Note, and the Compensation Note
have not been paid in full, BusinessMall shall not enter into any such sale of
the Call Center Assets unless the net proceeds of such sale are sufficient to
pay in full the amounts owed pursuant to the Original Notes, the Rent Note (as
hereinafter defined), the Property Note and the Compensation Note (as
hereinafter defined). At the closing of the sale of the Call Center Assets,
subject to the receipt of the full and timely payments provided for in the
following sentence, Xxxxxxx, CCC, ForcedMatrix and ITS shall deliver to
BusinessMall and TheYPD UCC-3 Termination Statements releasing all security
interests they have with respect to all of BusinessMall's and TheYPD's assets,
including but not limited to a release of the security interest contemplated in
Section 8 hereinbelow. At the closing of the sale of the Call Center Assets, the
proceeds of the sale shall be paid in certified funds by the purchaser directly
to Xxxxxxx, CCC, ForcedMatrix and ITS to the extent necessary to pay in full (i)
all amounts due under the Original Notes as of the date of said closing, as such
amounts due, including accrued interest through the date of such closing and all
late payment fees, are set forth on Exhibit "A" attached hereto and incorporated
herein by reference, and (ii) all amounts due under the Rent Note (hereinafter
defined), the Property Note, and the Compensation Note (hereinafter defined).
Upon receipt of such certified funds, Xxxxxxx, CCC, ForcedMatrix and ITS shall
contemporaneously execute and deliver to BusinessMall and TheYPD UCC-3's in the
form and content set forth in Exhibit "H" attached hereto and incorporated
herein by reference, to be filed by BusinessMall and TheYPD in the appropriate
state and/or county offices within the State of Florida.
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6. Financing. BusinessMall is actively seeking debt and/or equity
financing. BusinessMall agrees that in the event the Original Notes, the
Compensation Note, the Property Note, and/or the Rent Note remain unpaid at the
time of closing of such debt and/or equity financing, the proceeds of such
financing shall be used to pay in full the amounts owed pursuant to the Original
Notes, the Rent Note, the Property Note, and the Compensation Note. Subject to
the receipt of the full and timely payment provided for in the following
sentence, Xxxxxxx, CCC, ForcedMatrix, and ITS shall deliver to BusinessMall and
TheYPD UCC-3 Termination Statements releasing all security interests they have
with respect to all of BusinessMall's and TheYPD's assets, including but not
limited to a release of the security interest contemplated in Section 8
hereinbelow. At the closing of the debt and/or equity financing, the proceeds of
such financing (except the first One Hundred Fifty Thousand Dollars
($150,000.00) of proceeds, which may be used by BusinessMall to pay expenses in
its discretion) shall be paid in certified funds directly to Xxxxxxx, CCC,
ForcedMatrix and ITS to the extent necessary to pay in full (i) all amounts due
under the Original Notes as of the date of said closing, as such amounts due,
including accrued interest through the date of closing and all late fees, are
set forth on Exhibit "A" attached hereto and incorporated herein by reference,
and (ii) all amounts due under the Rent Note, the Property Note, and the
Compensation Note. Upon receipt of such certified funds, Xxxxxxx, CCC,
ForcedMatrix and ITS shall contemporaneously execute and deliver to BusinessMall
and TheYPD UCC-3 Termination Statements in the form and content set forth in
Exhibit "H", to be filed by BusinessMall and TheYPD in the appropriate state
and/or county offices within the State of Florida.
7. Non-Sale of Call Center Assets. If the Original Notes, the Rent
Note, the Property Note, and/or the Compensation Note have not been paid in full
by March 15, 2001, or upon the acceleration of the Original Notes, the Rent
Note, the Property Note, and /or the Compensation Note, BusinessMall shall not
in any way impede, hinder and/or delay Freeman, CCC, ForcedMatrix, and ITS
(collectively referred to in this Section as the "Secured Creditors") and/or
their agents, in obtaining access to the Call Center and such other premises, if
any, where assets of BusinessMall may be found, to remove all assets subject to
the liens held by the Secured Creditors (the "Collateral"). By this Agreement,
BusinessMall authorizes the Secured Creditors to enter upon the Call Center and
such other premises at any time after March 15, 2001, and/or after any such
acceleration, for the purpose of removing the Collateral. BusinessMall further
authorizes the Secured Creditors to engage the services of a locksmith for the
purpose of obtaining access to the Call Center and such other premises.
BusinessMall agrees not to impede the Secured Creditors in any way from
obtaining access to and possession of the Collateral.
BusinessMall further is aware that it has the right and opportunity to
be heard on any show cause order that will be served upon it concerning the
right of the Secured Creditors to obtain a writ of replevin authorizing the
appropriate officer of the court to take the Collateral from BusinessMall's
and/or TheYPD's possession prior to final judgment against it. BusinessMall
hereby states that it does not want to be heard on this matter and that it
expressly waives its right to be heard. BusinessMall understands that the effect
of its signing this Agreement probably will be a court order authorizing the
issuance of a writ of replevin directing an officer of the court to take
possession of the Collateral prior to final judgment against it with respect to
the claim under which the property is taken. BusinessMall further agrees to
execute such other documents as Secured Creditors may reasonably request to
evidence and perfect their rights pursuant to this Agreement. BusinessMall
further agrees that if any bond is required of the Secured Creditors by any
court as a condition precedent to the obtaining of any order authorizing the
issuance of a writ of replevin, that a bond in the amount of $2500 is
sufficient. BusinessMall further agrees that any action against it pertaining to
the Collateral shall be brought only in a court of competent jurisdiction
located in Orange County, Florida.
8. Claims Against BusinessMall and TheYPD.
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a. Claim Regarding Property. BusinessMall and TheYPD acknowledge that
BusinessMall previously agreed (through an offer verbally made by its officers
and subsequently affirmed and ratified by its board of directors) to pay ITS
Four Hundred Thousand Dollars ($400,000.00) for the Property listed in Exhibit
"E ", and certain other assets of which BusinessMall nor longer has possession.
This payment was not made. The Parties acknowledge that this Property is of a
type which depreciates speedily in value, and has in fact greatly depreciated in
value. BusinessMall now disputes the obligation to make the Four Hundred
Thousand Dollar ($400,000.00) payment to ITS. In settlement and satisfaction of
this disputed claim, however, BusinessMall and TheYPD agree (i) to return the
Property to ITS simultaneously with the execution of this Agreement, as set
forth in Section 2 above, (ii) to deliver to ITS simultaneously with the
execution of this Agreement the Shares, as defined in Section 10 of this
Agreement, (iii) to transfer, assign and deliver the Assets described in Exhibit
"E-2" attached hereto and incorporated herein by reference simultaneously with
the execution of this Agreement, (iv) to execute and deliver, simultaneously
with the execution of this Agreement, the Two Hundred Seventy-Five Thousand
Dollar ($275,000.00) Promissory Note attached hereto as Exhibit "I", and
incorporated herein by reference, and (v) to execute and deliver, simultaneously
with the execution of this Agreement, the Seventy Thousand Dollar ($70,000.00)
Promissory Note attached hereto as Exhibit "I-2" and incorporated herein by
reference (hereinafter, the "Property Note"). TheYPD acknowledges that it will
obtain a direct financial benefit from the settlement of this claim against its
parent corporation, BusinessMall, and acknowledges the adequacy of the
consideration received by TheYPD in exchange for the execution of the said
$275,000.00 Promissory Note and the said Property Note.
b. Claim Regarding Stock Purchase Agreement. ForcedMatrix has asserted
claims relating to the Stock Purchase Agreement, which claims include
allegations of material misrepresentations of the assets of CCC which had a
material adverse effect on the owner of CCC, ForcedMatrix. In satisfaction of
such claims, BusinessMall and TheYPD have agreed to execute and deliver to
ForcedMatrix simultaneously with the execution of this Agreement, the Twenty
Thousand Dollar ($20,000.00) Promissory Note attached hereto as Exhibit "J" and
incorporated herein by reference.
c. Claim Regarding Health Insurance. BusinessMall and TheYPD have not
satisfied the obligation to provide health insurance benefits for up to four (4)
employees of CCC, as required by Section 6(a) of the Stock Purchase Agreement.
BusinessMall and TheYPD agree to execute and deliver simultaneously with the
execution of this Agreement, the Five Thousand Dollar ($5,000.00) Promissory
Note attached hereto as Exhibit "K-1", and incorporated herein by reference in
satisfaction of this obligation.
d. Claim Regarding Attorney Fees. StormTel has agreed to pay the
attorney fees incurred in connection with the negotiation and drafting of this
Agreement, and BusinessMall and TheYPD have agreed to contribute Fifteen
Thousand Dollars ($15,000.00) to StormTel towards the payment of such fees. In
full satisfaction of this obligation, BusinessMall and TheYPD agree to execute
and deliver simultaneously with the execution of this Agreement, the unsecured
promissory note in the principal sum of Fifteen Thousand Dollars ($15,000.00)
attached hereto as Exhibit "K-2" and incorporated herein by reference.
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The $275,000.00 Promissory Note, the $20,000.00 Promissory Note, the $5,000.00
Promissory Note, and the $15,000.00 Promissory Note referenced in Section 8a,
8b, 8c and 8d hereinabove are hereinafter referred to as the "Settlement Notes."
The Property Note is not included in the definition of "Settlement Notes".
Except for the Fifteen Thousand Dollar ($15,000.00) unsecured Settlement Note
payable to StormTel, each of the Settlement Notes is secured by a lien on all of
the assets of BusinessMall and TheYPD. BusinessMall and TheYPD have previously
executed Security Agreements in favor of CCC and ForcedMatrix, which secure all
existing and future indebtedness, including the indebtedness evidenced by the
Settlement Notes in favor of CCC and ForcedMatrix. Simultaneously with the
execution of this Agreement, BusinessMall and TheYPD shall execute and deliver
to ITS Security Agreements attached hereto as Exhibit "L"and Exhibit "M" and
incorporated herein by reference, securing the Settlement Note executed in favor
of ITS and any other indebtedness of BusinessMall and TheYPD to ITS.
Simultaneously with the execution of this Agreement, BusinessMall and TheYPD
shall execute and deliver to ITS UCC-1 Financing Statements in favor of ITS, in
the form and content set forth in Exhibit "N" and Exhibit "O," attached hereto
and incorporated herein by reference. If the Original Notes, the Compensation
Note, the Rent Note and the Property Note are paid in full on or before March
15, 2001 then the Settlement Notes will be forgiven and canceled and UCC-3's
releasing these security interests will be signed and delivered to BusinessMall
and TheYPD for filing. If the Original Notes, the Compensation Note, the Rent
Note and the Property Note are not paid in full by March 15, 2001, then the
Settlement Notes shall not be forgiven and shall be due and payable in
accordance with the terms of such Settlement Notes.
9. Domain Names. By the execution of this Agreement, BusinessMall
quitclaims and releases, and does hereby transfer, the ownership of the domain
name "XxxXxxxxxx.xxx" to Xxxxxxx or his designee. In connection with the
foregoing, BusinessMall agrees to execute such documents as presented to
BusinessMall by Xxxxxxx, as necessary to effectuate any such transfer, quitclaim
and release. Xxxxxxx and Xxxxxxx hereby quitclaims and releases any right,
title, and interest which Xxxxxxx and Xxxxxxx may have, if any, in the domain
names "XxxXxxxxxXxxxXxxxxxxxx.xxx" and "XxxXXX.xxx" to BusinessMall. In
connection with the foregoing, Xxxxxxx and Xxxxxxx agree to execute such
documents as presented to Xxxxxxx and Xxxxxxx by BusinessMall, as necessary to
effectuate any such quitclaim and release. The Parties understand and agree that
the quitclaim and release in favor of BusinessMall relates to the domain name
"The XXX.xxx" and does not relate to the domain name "XXX.xxx."
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10. Stock Issuance. Simultaneously with the execution of this
Agreement, BusinessMall shall issue to ITS an aggregate of 1,275,000 shares of
its common stock (hereinafter, "Settlement Shares"). BusinessMall will deliver
two (2) stock certificates representing the Settlement Shares: one in the amount
of 900,000 shares and the other in the amount of 375,000 shares, along with the
registration rights agreement attached hereto as Exhibit "P" (hereinafter, the
"Registration Rights Agreement"). The share certificate for 375,000 of the
Settlement Shares in the name of ITS shall be held in escrow by ITS's attorney,
Xxxxx X. Xxxxxx (hereinafter, the "Escrow Agent"), along with a duly executed
stock power from ITS, pursuant to the terms of this Agreement. In the event
BusinessMall defaults under the terms of the Registration Rights Agreement, ITS
shall be entitled to the delivery of the share certificate for 375,000 of the
Settlement Shares and Xxxxx X. Xxxxxx is directed to deliver such Settlement
Shares to ITS. In the event BusinessMall timely and fully complies with the
terms of the Registration Rights Agreement, the share certificate for 375,000 of
the Settlement Shares will be returned to BusinessMall as a discount/ payment
from ITS to BusinessMall along with the duly executed stock power as an
inducement to fully comply with the Registration Rights Agreement. The
Settlement Shares will be subject to the lock-up agreement attached hereto as
Exhibit "Q" (hereinafter, the "Lock-Up Agreement"), and incorporated herein by
reference, whereby ITS will be restricted during the term of the Lock-Up
Agreement from selling (i) more than 90,000 of the Settlement Shares during any
thirty day period so long as the share certificate for 375,000 of the Settlement
Shares is held in escrow or if such share certificate is returned to
BusinessMall, and (ii) more than 127,500 of the Settlement Shares during any
thirty day period if the share certificate for 375,000 of the Settlement Shares
has been released to ITS from escrow. Any Settlement Shares which would be
permitted to be sold during any thirty (30) day period but which were not sold
during such thirty (30) day period, may be sold by ITS in any subsequent thirty
(30) day period, in addition to the number of Settlement Shares which could
otherwise be sold during such thirty (30) day period. BusinessMall agrees that
it will not register any of its common stock issued in the name of any other
person or entity without first, or simultaneously, registering the Settlement
Shares issued to ITS.
11. Change of Control. BusinessMall hereby represents that there are
currently Fifteen Million Seven Hundred Thirteen Thousand Three Hundred
Eighty-one (15,713,381) shares of common stock in BusinessMall issued and
outstanding. Simultaneously with the execution of this Agreement, BusinessMall
shall issue to ITS, in addition to the Settlement Shares issued pursuant to
Section 10 hereinabove, an additional Sixteen Million Three Hundred Fifty-five
Thousand (16,355,000) shares of common stock of BusinessMall, so that said
additional Sixteen Million Three Hundred Fifty-five Million (16,355,000) shares
represent approximately fifty-one percent (51%) of the issued and outstanding
shares of common stock in BusinessMall (hereinafter the "Controlling Shares").
The share certificate representing the Controlling Shares in the name of ITS
shall be held in escrow by the Escrow Agent, along with the duly executed stock
power from ITS, pursuant to the terms of this Agreement. Simultaneously with the
execution of this Agreement, the Board of Directors of BusinessMall shall each
execute and deliver to the Escrow Agent, the resignation of each member of the
Board of Directors, in the form and content set forth in Exhibit "DD" attached
hereto and incorporated herein by reference (hereinafter, "Resignations"), and
the resolutions of the Board of Directors of BusinessMall, in the form and
content set forth in Exhibit "FF" attached hereto and incorporated herein by
reference (hereinafter, the "Corporate Resolutions"). If the Original Notes, the
Rent Note, the Property Note, and the Compensation Note are not paid in full on
or before March 15, 2001, then, in such event, the Escrow Agent shall deliver to
ITS Controlling Shares, the Corporate Resolutions, and the Resignations.
BusinessMall further agrees that it will not take any action which would cause
the percentage ownership in BusinessMall represented by the Controlling Shares,
to be less than fifty-one percent (51%). If BusinessMall desires to issue
additional shares to any other person or entity, BusinessMall may do so only on
the condition that simultaneously therewith, BusinessMall issues and delivers to
ITS certificates representing a sufficient number of shares of common stock in
BusinessMall to prevent a dilution in the fifty-one (51%) percent ownership in
BusinessMall represented by the Controlling Shares owned by ITS. BusinessMall
represents and warrants that Xxxx X. Xxxxxxx, Xxxxxx Xxxxxx, Xxxx Xxx, Xxxxxxx
Xxxxx and Xxxxx X. Xxxxxx, are all of the members of the Board of Directors of
BusinessMall. Simultaneously with the execution of this Agreement, each of the
members of the Board of Directors of BusinessMall shall execute and deliver to
Xxxxxxx, CCC, ForcedMatrix, and ITS, the Springing Guaranties set forth in
Exhibit "EE-1," "EE-2", "EE-3", "EE-4", and "EE-5", attached hereto and
incorporated herein by reference. Upon the occurrence of the failure of
BusinessMall to pay in full the Original Notes, the Rent Note, the Property
Note, and the Compensation Note on or before March 15, 2001, all of the
Springing Guaranties shall become effective and shall be the binding obligation
of each of the individuals signing any of such Springing Guaranties, if any of
the following events (hereinafter, "Springing Guaranty Events"), have previously
occurred or occur simultaneously with or following such failure to pay:
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a. Upon the occurrence of any act or omission which causes the
Controlling Shares to represent less than fifty-one percent (51%) of the issued
and outstanding shares of common stock in BusinessMall; or
b. In the event any member of the Board of Directors attempts to
withdraw or rescind or otherwise cause to be ineffective any of the Resignations
held in escrow pursuant to this Agreement, or in the event there are any members
of the Board of Directors of BusinessMall other than as represented hereinabove;
or
c. In the event of any act or omission attempting to delay, hinder, or
block the delivery of the Controlling Shares and/or the Resignations and/or the
Corporate Resolutions to ITS; or
d. In the event of the election of a new member to the Board of
Directors, unless such new member of the Board of Directors shall execute and
deliver to the Escrow Agent, prior to the effective date of his election to the
Board of Directors, the resignation of such new member of the Board of
Directors, in the form and content set forth in Exhibit "DD" and a Springing
Guaranty in the form of Exhibit "EE-6"; or
e. In the event of any attempt to withdraw, revoke, supercede, rescind
or otherwise cause to be ineffective the Corporate Resolutions held in escrow
pursuant to this Agreement; or
f. In the event any statement contained in any affidavit signed by an
officer or director of BusinessMall in connection with this transaction is
determined to be false.
12. Delivery of Settlement Shares by Escrow Agent. Escrow Agent is
directed by this Agreement to deliver the share certificate for 375,000 of the
Settlement Shares to ITS upon receipt of a sworn affidavit from ITS in the form
and content set forth in Exhibit "R-1" attached hereto and incorporated herein
by reference. Escrow Agent is directed by this Agreement to deliver the share
certificate for 375,000 of the Settlement Shares to BusinessMall only (i) upon
receipt of both (and not less than both) of the sworn affidavits set forth in
Exhibits "R-2" and "R-3" attached hereto and incorporated herein by reference;
and (ii) upon confirmation by the Escrow Agent that the registration required by
the Registration Rights Agreement has occurred, which confirmation shall be
conducted through the online SEC reporter service known as "Xxxxx". The parties
hereby irrevocably instruct Escrow Agent to reject and ignore, as if never
received, any affidavit(s) that are not word for word the same as, and without
alteration of any kind whatsoever from Exhibits "R-1" and/or "R-2" and "R-3".
a. Termination of Escrow. The escrow created pursuant to this Agreement
shall terminate at the time that the share certificate has been delivered in
accordance herewith.
b. Duties of Escrow Agent. The duties of the Escrow Agent shall be
subject to the terms set forth in Exhibit "CC" attached hereto and incorporated
herein by reference.
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13. Dismissal of Involuntary Bankruptcy Proceeding. Immediately upon
the execution of this Agreement, CCC, ForcedMatrix and ITS will execute and
deliver to BusinessMall a joint motion in the form and content attached hereto
as Exhibit "S" and incorporated herein by reference, for the dismissal of the
Chapter 11 Petition. BusinessMall will sign and file the joint motion with the
Bankruptcy Court and cause the same to be served as required by the Bankruptcy
Code and Bankruptcy Rules. In the event CCC, ForcedMatrix and ITS fail to take
the necessary actions contemplated by this Section within five (5) days from the
time BusinessMall permits the Property to be removed from the Call Center by
ITS, all Settlement Shares and Controlling Shares shall be forfeited and
immediately returned to BusinessMall.
14. No Future Bankruptcy Filing. Xxxxxxx and Xxxxxxx agree that except
as provided in Section 15 below, that they will not directly or indirectly
refile and/or file a new involuntary petition or join in the filing of any new
involuntary petition under Chapter 11 of the United States Bankruptcy Code
against BusinessMall or any of its affiliates or subsidiaries.
15. Default Under Lease or Notes. In the event (i) Xxxxxxx'x counsel,
Xxxxx X. Xxxxxx, receives written notice of default under BusinessMall's lease
with respect to its 00000 X.X. Xxxxxxx 00 X., Xxxxxxxxxx, XX 00000 location, and
BusinessMall fails to cure such default at least two (2) business days prior to
the prescribed cure period as set forth in the lease, or, if less, as set forth
in any demand or notice of default letter, or (ii) if BusinessMall's landlord
fails or refuses to send notice to Xxxxx X. Xxxxxx of any such default, but
Xxxxxxx nonetheless becomes aware that BusinessMall's landlord is attempting to
terminate the lease, evict BusinessMall, or otherwise exercise eviction or
termination of lease remedies under the lease, or, (iii) if BusinessMall does
not make all payments under the Original Notes, the Rent Note, the Property
Note, the Compensation Note, and/or the Settlement Notes when due, then, in any
of such events, but in no other event, Xxxxxxx, CCC, ForcedMatrix, and/or ITS
may refile the involuntary petition under Chapter 11. Simultaneously with the
execution of this Agreement, BusinessMall shall execute and deliver to Xxxxxxx,
for forwarding by Xxxxxxx to BusinessMall's landlord, the Notice set forth in
Exhibit "T" attached hereto and incorporated herein by reference, authorizing
and directing the landlord that all notices under the lease agreement must
include a copy to Xxxxxxx'x counsel, Xxxxx X. Xxxxxx, as set forth in the notice
provision below.
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16. Settlement of Employment Issues. Simultaneously with the execution
of this Agreement, BusinessMall and TheYPD shall issue to Xxxxxxx the secured
promissory note in the principal amount of Thirty-four Thousand Dollars
($34,000.00), attached hereto as Exhibit "U", and incorporated herein by
reference (the "Compensation Note"), which shall represent payments due under
his employment agreement. Simultaneously with the execution of this Agreement,
BusinessMall and TheYPD shall each execute the Security Agreements in favor of
Xxxxxxx attached hereto as Exhibit "W" and "X", and incorporated herein by
reference to secure the Compensation Note, and UCC-1 Financing Statements, in
the form and content set forth in Exhibit "Y" and "Z"" attached hereto and
incorporated herein by reference. The Parties hereto hereby agree that the
Employment Agreement made and entered into as of the 9th day of November, 1999,
as amended, between Progressive Telecommunications Corporation, Inc., a
predecessor in interest of BusinessMall, and Xxxxxxx is hereby canceled in its
entirety and neither BusinessMall nor Xxxxxxx shall have any further rights or
obligations under said Employment Agreement or any amendments thereto, including
but not limited to any non-disclosure, non-competition, and/or non-solicitation
obligations, or any other obligations or rights whatsoever. The Parties hereto
hereby agree that the Employment Agreement made and entered into as of the 7th
day of February, 2000, as amended, between Progressive Telecommunications
Corporation, Inc., a predecessor in interest of BusinessMall, TheYPD, and
Xxxxxxx is hereby canceled in its entirety and neither BusinessMall, TheYPD, nor
Xxxxxxx shall have any further rights or obligations under said Employment
Agreement or any amendments thereto, including but not limited to any
non-disclosure, non-competition, and/or non-solicitation obligations, or any
other obligations or rights whatsoever.
17. Settlement of Rent Issues. BusinessMall and TheYPD have not
satisfied the obligation to provide office space to CCC as required by Section 7
(b) of the Stock Purchase Agreement. In satisfaction of this obligation,
BusinessMall and TheYPD agree to execute and deliver simultaneously with the
execution of this Agreement, the Twenty-five Thousand Dollars ($25,000)
Promissory Note attached hereto as Exhibit "V", and incorporated herein by
reference (the "Rent Note"). BusinessMall and TheYPD may, at their sole option,
pay the Rent Note by assigning to CCC by written instrument, no later than
November 30, 2000, with the landlord's written consent, the lease agreement with
respect to BusinessMall's office space located at 000 Xxxxxxxxx Xxxxxx, Xxxxx
000, Xxxxxxxxxx, Xxxxxxx 00000, and by paying when due all rent with respect to
such office space through March 30, 2001.
18. Control Issues. Freeman, Maguire, CCC, ForcedMatrix and ITS each
jointly and severally agree that they will not directly or indirectly engage in
any activity or cooperate with any person or entity in attempting to gain
control of BusinessMall, so long as BusinessMall and TheYPD are in full
compliance with their obligations under (i) this Agreement, (ii) the Original
Notes, (iii) the Rent Note, (iv) the Compensation Note, (v) the Property Note,
and (vi) the Settlement Notes. In addition, except in the case of a default
under (i) this Agreement, (ii) the Original Notes, (iii) the Rent Note, (iv) the
Compensation Note, (v) the Property Note, or (vi) the Settlement Notes, Freeman,
Maguire, CCC, ForcedMatrix, StormTel, and ITS shall not commence any adversarial
proceedings against BusinessMall, its affiliates and subsidiaries. Nothing
contained herein shall be construed as preventing any of the Parties hereto from
voting their shares of stock in BusinessMall with respect to any matter brought
before the shareholders for a vote.
19. Reaffirmation of Debt Instruments. BusinessMall and TheYPD
acknowledge and agree that all terms, conditions and provisions of the Original
Notes and the Security Agreements securing the Original Notes, and the UCC-1
Financing Statements filed in connection therewith, (the "Debt Instruments")
continue in full force and effect and remain unaffected and unchanged except as
expressly and specifically modified by this Agreement. This Agreement is not
intended to and shall not be construed to create or constitute a release or
relinquishment of, and, except as herein specifically provided to the contrary,
shall not affect, the liens, security interests and rights, which are hereby
ratified, confirmed, renewed and extended in all respects. BusinessMall and
TheYPD reaffirm each of the representations, warranties, covenants and
agreements of BusinessMall and TheYPD set forth in the Debt Instruments with the
same force and effect if each were separately stated herein and made as of the
date hereof.
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20. No Bona Fide Disputes. BusinessMall and TheYPD hereby acknowledge
that the debts evidenced by the Original Notes, the Settlement Notes, the
Compensation Note, the Property Note, and the Rent Note (hereinafter
collectively, the "Notes") are bona fide debts of BusinessMall and TheYPD and
are not disputed debts, and there is no defense to the payment of any of such
Notes in accordance with their terms, as expressly modified by this Agreement.
If BusinessMall and/or TheYPD later dispute any such indebtedness or if they
assert that any of the Parties hereto are not proper petitioners in any
bankruptcy proceeding filed in accordance with this Agreement, BusinessMall and
TheYPD acknowledge that the only reason for such a dispute and/or such an
assertion would be solely for the purpose of hindering and/or delaying creditors
in bad faith.
21. Acknowledgment of Indebtedness and Collateral; Modification of Debt
Instruments. BusinessMall and TheYPD hereby acknowledge that the aggregate
amount owed by BusinessMall and TheYPD pursuant to Original Notes is as set
forth in Exhibit "A" attached hereto. BusinessMall and TheYPD acknowledge that
all of the Collateral identified in the respective Debt Instruments secures and
shall continue to secure the Original Notes, as well as any and all obligations
created hereunder or in connection herewith, including but not limited to the
Rent Note, the Compensation Note, the Property Note, and the Settlement Notes.
The Security Agreements included in the Debt Instruments, and the Stock Purchase
Agreement, are hereby amended to the extent that any of the provisions thereof
could be construed as precluding the obligations under the Rent Note, the
Compensation Note, the Property Note, and the Settlement Notes, from being
secured by the Security Agreements. Because the due dates for the Original Notes
are already in default and past any cure period, the Parties agree that the Debt
Instruments are also hereby amended and modified by the deletion of any grace
periods or opportunities to cure in the event of the non-payment of any amounts
when now due on March 15, 2001. There has been no interruption, cessation, or
other lapse of the aforesaid security interests in the Collateral created by the
Security Agreements. BusinessMall and TheYPD shall execute and deliver
simultaneously with the execution of the Agreement, the gap affidavits attached
hereto as Exhibit "AA-1" and Exhibit "AA-2" and incorporated herein by
reference.
22. No Defenses or Claims. BusinessMall and TheYPD, jointly and
severally, hereby acknowledge and agree that neither of them have any defense,
counterclaim, offset, cross-complaint, claim or demand of any kind or nature
whatsoever, including without limitation any usury or lender liability claim or
defense, arising out of the Debt Instruments, any past relationship between or
among them and the other Parties hereto, any actions of the other Parties in
seeking to enforce the Debt Instruments, or otherwise, that can be asserted by
either of them either to reduce or eliminate all or any part of their liability
for the amounts owed or to seek affirmative relief or damages of any kind or
nature from the other Parties hereto. BusinessMall and TheYPD, jointly and
severally, further acknowledge that to the extent that any such claim should, in
fact, exist, including without limitation any usury or lender liability claim,
it is hereby fully, finally, and irrevocably released, as contemplated by
Section 23 hereinbelow.
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23. Release of Claims. BusinessMall and TheYPD hereby acknowledge and
agree that certain defaults exist pursuant to the terms of the Debt Instruments
and that the other Parties have no obligation whatsoever to restructure the Debt
Instruments. In consideration of the terms and conditions of this Agreement,
made at the request of BusinessMall and TheYPD, BusinessMall and TheYPD, jointly
and severally, on behalf of themselves and their respective heirs, successors
and assigns hereby fully, finally and irrevocably release the other Parties
hereto, and their officers, directors, affiliates, subsidiaries, parents,
representatives, agents, shareholders, attorneys, employees, predecessors,
successors and assigns (collectively, the "Released Parties") from any and all
defenses, counterclaims, offsets, cross-claims, claims and demands of any kind
or nature existing as of the date of this Agreement, including without
limitation any usury or lender liability claims or defenses, whether known or
unknown and whenever and howsoever arising, relating to the Debt Instruments or
to any past relationship between BusinessMall and TheYPD and the other Parties,
or to any actions of the other Parties in seeking to enforce the Debt
Instruments. In addition, BusinessMall and TheYPD hereby agree not to commence,
join in, prosecute, participate or assist any other person or entity in any way
whatsoever in any suit or other proceeding in a position adverse to that of any
of the Released Parties arising, directly or indirectly, from any of the
foregoing matters. In addition, BusinessMall and TheYPD, jointly and severally,
hereby assign and convey unequivocally to CCC, ITS, and ForcedMatrix, any and
all defenses, counterclaims, offsets, cross-claims, claims and demands of any
kind or nature existing as of the date of this Agreement, including without
limitation any usury or lender liability claims or defenses, whether known or
unknown and whenever and howsoever arising, relating to the Debt Instruments, or
any prior conduct of the Released Parties in seeking to enforce any of the Debt
Instruments, or any past relationship between BusinessMall and TheYPD and the
Released Parties.
24. Releases.
a. Release of BusinessMall and TheYPD. Xxxxxxx, CCC, StormTel,
ForcedMatrix, ITS, and Xxxxxxx, each hereby jointly and severally fully forever,
release, waive and BusinessMall and TheYPD from and against each and every
claim, demand, cause of action, obligation, damage, complaint, expense or action
of any kind, description or nature whatsoever, known or unknown, suspected or
unsuspected, that Xxxxxxx, CCC, StormTel, ForcedMatrix, ITS, and/or Xxxxxxx has
or may have, against BusinessMall and/or TheYPD and their officers and
directors, arising from any act or omission of BusinessMall and/or TheYPD
occurring on or prior to the date hereof, including but not limited to any claim
arising out of the Xxxxxxx Lawsuit and the Xxxxxxx Arbitration. .However,
nothing contained herein shall be construed as releasing BusinessMall and/or
TheYPD from the continuing rights and obligations of BusinessMall and TheYPD
under this Agreement, the Debt Instruments, the Original Notes, the Rent Note,
the Compensation Note, the Property Note, the Settlement Notes, and the
Registration Rights Agreement, which rights and obligations remain in full force
and effect..
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b. Release of Xxxxxxx, CCC, StormTel, ForcedMatrix, ITS, and Xxxxxxx.
BusinessMall and TheYPD, each hereby jointly and severally fully forever,
release, waive Xxxxxxx, CCC, StormTel, ForcedMatrix, ITS, and Xxxxxxx from and
against each and every claim, demand, cause of action, obligation, damage,
complaint, expense or action of any kind, description or nature whatsoever,
known or unknown, suspected or unsuspected, that BusinessMall and/or TheYPD has
or may have, against Xxxxxxx, CCC, StormTel, ForcedMatrix, ITS, and/or Xxxxxxx,
arising from any act or omission of Xxxxxxx, CCC, StormTel, ForcedMatrix, ITS,
and/or Xxxxxxx occurring on or prior to the date hereof, including but not
limited to any claim arising out of the Xxxxxxx Lawsuit and the Xxxxxxx
Arbitration. However, nothing contained herein shall be construed as releasing
Xxxxxxx, CCC, StormTel, ForcedMatrix, ITS, and/or Xxxxxxx from their respective
continuing rights and obligations under this Agreement, the Debt Instruments,
the Original Notes, the Rent Note, the Compensation Note, the Property Note, the
Settlement Notes, and the Registration Rights Agreement. BusinessMall expressly
fully and forever releases Xxxxxxx, CCC, StormTel, ForcedMatrix, ITS, and
Xxxxxxx from any claim, liability, expense, or obligation related in any manner
to the filing and/or prosecution of the Chapter 11 Petition.
c. Individuals and Entities not Released. Notwithstanding anything to
the contrary contained herein, nothing in this Agreement and any documents
executed in connection with this Agreement, shall in any way act as a release
of, effect or prejudice any claims of Xxxxxxx, CCC, StormTel, ForcedMatrix, ITS,
and/or Xxxxxxx against any person or entity not a Party hereto. In the event of
any conflict between this provision of this Agreement and any other provision
hereof, this provision shall govern and control. The Parties expressly
acknowledge and agree that this Agreement does not in any way release Xxxxxxx of
any debts or obligations he has to Xxxxxxx, CCC, StormTel, ForcedMatrix, and/or
ITS.
25. Continuing Obligations of BusinessMall and TheYPD. Notwithstanding
the release contained hereinabove, BusinessMall and TheYPD hereby agree that
they shall continue to have the following obligations to CCC, ForcedMatrix,
StormTel and/or ITS, as applicable.
a. Delivery of Minority Shares. There are Three Million Five Hundred
Fifty-two Thousand Five Hundred (3,552,500) shares of CCC common stock
(hereinafter the "Minority Shares"), which have not been transferred to
ForcedMatrix. BusinessMall shall utilize its reasonable best efforts to obtain
good title to the Minority Shares and transfer title to said Minority Shares to
ForcedMatrix, by February 15, 2001. For the purposes of this provision,
reasonable best efforts shall include the offer to the holders of the Minority
Shares of up to Six Hundred Forty-three Thousand Six Hundred Seventy-nine
(643,679) shares of the common stock of BusinessMall, pursuant to an effective
registration statement under the Securities Act of 1933, as amended.
b. Delivery of Warrants. At the time of execution of this Agreement,
BusinessMall shall issue and deliver to ITS, as full and final payment for
consulting services to BusinessMall which have been fully performed by ITS,
Fifty thousand (50,000) common stock purchase warrants (hereinafter,
"Warrant(s)") to purchase fifty thousand (50,000) shares of common stock of
BusinessMall. Each Warrant will have an exercise price of Fifty-six and
Two-Tenths Cents (56.2(cent)) per share and shall expire on December 31, 2002.
BusinessMall shall make an S-8 filing and take such other actions as are
necessary to cause the shares of common stock issued pursuant to the Warrant(s)
to be immediately registered and immediately free trading and able to be sold on
the NASDAQ OTC BB.
c. Non-Solicitation. BusinessMall and TheYPD acknowledge that due to
prior dealings with CCC and StormTel, that BusinessMall and TheYPD and their
employees, officers, directors, shareholders, and agents are familiar with
various aspects of CCC's and StormTel's long distance telephone and
communication business, and that protection of CCC's and StormTel's customer
base (the "Customer Base") is essential to CCC's and StormTel's continuing
operations.
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(i) BusinessMall and TheYPD hereby agree that neither
BusinessMall, TheYPD nor any officer, director, shareholder,
employee, or agent of BusinessMall or TheYPD shall, for a
period of four (4) years from and after the date of this
Agreement, directly or indirectly, whether as an individual or
sole proprietor, or as an owner, partner, officer, director,
manager, agent, consultant, employee, or independent
contractor, formal or informal adviser, or by or through the
lending of any form of assistance, to, for, or on behalf of
any organization or business:
(1) Solicit, take away or endeavor to take away, any
customer included in the Customer Base.
(ii) The Parties expressly acknowledge and agree that BusinessMall
and TheYPD may otherwise engage in a business in competition
with CCC. It will not be considered to be a violation of the
non-solicitation provision set forth above, if a customer
included in the Customer Base signs up for long distance
telephone service through a web site offering of BusinessMall
or TheYPD, provided that such customer was not targeted and/or
solicited by BusinessMall and/or TheYPD, other than the
general solicitation set forth in said web site. If
BusinessMall and/or TheYPD inadvertently breaches the
non-solicitation provisions of this Agreement, BusinessMall
and TheYPD shall have an opportunity for a period of thirty
(30) days to cure such breach, by causing the inadvertently
solicited customer to be moved back to CCC and/or StormTel, as
applicable. Notwithstanding the foregoing, BusinessMall and
TheYPD shall have no opportunity to cure a breach in the event
of an intentional solicitation in violation of the
non-solicitation provisions set forth in this Agreement, and
CCC and StormTel may immediately exercise all rights and
remedies available to it.
(iii) The BusinessMall and TheYPD agree and acknowledge that:
(1) The terms contained in this Agreement are necessary
for the reasonable and proper protection of CCC's and
StormTel's interests and the success of its business
and that CCC and StormTel would not enter into this
Agreement unless, by the execution of this Agreement,
BusinessMall and TheYPD acknowledged their acceptance
of these terms.
(2) Each and every covenant and restriction of this
Agreement is reasonable, including but not limited to
those regarding subject matter, length of time, and
specific customers, given the nature of CCC's and
StormTel's operations, and the provisions of this
Section and all other terms of this Agreement are
fully enforceable in any state in the United States.
(iv) BusinessMall and TheYPD further agree that the four (4) year
period of this non-solicitation provision shall be extended by
the period of time there is a violation of any portion of this
non-solicitation provision.
15
di Confidential Information; Nondisclosure. BusinessMall and TheYPD
acknowledge that BusinessMall and TheYPD and/or their shareholders, officers,
directors, employees, or agents, have had access to certain information,
including but not limited to trade secret information, and other proprietary
information, with respect to StormTel and/or CCC and their customers, which is
of independent economic value, both actual and potential, because it is neither
generally known to those other than StormTel and/or CCC or their customers, nor
is such information readily ascertainable by proper means by those other than
StormTel and/or CCC or their customers ("Confidential Information"). This
Confidential Information includes, but is not limited to the following:
information relating to customer lists, Agent Contracts, StormTel and/or CCC
agent lists, and StormTel and/or CCC agent dealings.
Upon execution hereof, and at any time thereafter, BusinessMall and
TheYPD agree that neither BusinessMall, TheYPD, nor any shareholder, director,
officer, employee, or agent of BusinessMall and/or TheYPD, will disclose any
Confidential Information, in whole or in part, to any person or entity for any
reason or purpose whatsoever. BusinessMall and TheYPD agree that neither
BusinessMall, TheYPD, nor any shareholder, director, officer, employee, or agent
of BusinessMall and/or TheYPD, will duplicate, remove, download, disclose, or
transfer any Confidential Information in any manner whatsoever and shall at all
times keep such Confidential Information secure and confidential. Upon request
by CCC, all records of Confidential Information including all correspondence,
magnetic discs and any other information storage media, drawings, blueprints,
manuals, letters, notes, notebooks, reports, flow-charts, programs, proposals,
documents concerning StormTel's and/or CCC's customers/clients, lists of
potential or actual customers, documents concerning products or processes used
by StormTel and/or CCC, and all other documents, writings, and materials
utilized by StormTel and/or CCC, together with any copies or other reproductions
thereof shall be promptly delivered by BusinessMall and TheYPD to CCC.
BusinessMall and TheYPD agree that all data bases, including, without
limitation, computer files, letters, copies of contracts, telephone logs,
diaries, expense reports or any form of record or memorandum of customers names,
addresses, telephone numbers, contacts and/or service records containing
Confidential Information, is the exclusive property of CCC.
26a Representations of BusinessMall and TheYPD. BusinessMall and TheYPD
each jointly and severally represent, warrant, and agree as follows:
16
ai Authority to Execute and Perform Agreement; No Breach. BusinessMall
and TheYPD each have the full legal right and power and all authority and
approval required to enter into, execute and deliver this Agreement and to
perform fully its obligations hereunder. This Agreement has been duly executed
and delivered by BusinessMall and TheYPD constitutes the valid and binding
obligation of BusinessMall and TheYPD, enforceable in accordance with its terms.
No approval or consent of, or filing with, any governmental or regulatory body,
and no approval or consent of, or filing with, any other person is required to
be obtained by BusinessMall and/or TheYPD or in connection with the execution
and delivery by BusinessMall and/or TheYPD of this Agreement and consummation
and performance by them of the transactions contemplated hereby. The execution,
delivery and performance of this Agreement by BusinessMall and TheYPD and the
consummation of the transactions contemplated hereby in accordance with the
terms and conditions hereof by BusinessMall and TheYPD will not:
i0 knowingly violate, conflict with or result in the breach of
any of the material terms of, or constitute (or with notice or
lapse of time or both would constitute) a material default
under, any contract, lease, agreement or other instrument or
obligation to which BusinessMall and/or TheYPD is a party or
by or to which any of the properties and assets of
BusinessMall and/or TheYPD may be bound or subject;
ii0 violate any order, judgment, injunction, award or decree of
any court, arbitrator, governmental or regulatory body, by
which either BusinessMall, TheYPD, or the securities, assets,
properties or business of BusinessMall or TheYPD is bound; or
iii0 knowingly violate any statute, law or regulation.
bi Compliance with Law and Government Regulations. BusinessMall and
TheYPD are in compliance with all applicable statutes, regulations, decrees,
orders, restrictions, guidelines and standards, whether mandatory or voluntary,
imposed by the United States of America, any state, county, municipality or
agency of any thereof, and any foreign country or government to which
BusinessMall and/or TheYPD is subject. Without limiting the generality of the
foregoing, BusinessMall has filed all reports and statements required to be
filed pursuant to the Securities Act of 1933 (hereinafter, the "1933 Act") and
Securities Exchange Act of 1934 (hereinafter, the "1934 Act") including all
periodic reports required under the Section 13 or 15 of the Exchange Act. Each
of such reports was complete, did not contain any material misstatement of or
omit to state any material fact.
ci Shares. The Settlement Shares and the Controlling Shares to be
issued and delivered to ITS shall be fully paid, non-assessable and free and
clear of any lien, claim, charge of encumbrance.
17
27a Press Release; Nondisparagement. The Parties hereto agree to issue
the press release set forth in Exhibit "BB" attached hereto and incorporated
herein by reference. Each of the Parties agree that they will not make any oral
or written statement which is inconsistent with such press release. Further,
BusinessMall and TheYPD agree that they will not make any oral or written
statements concerning any of the other Parties which will, or would tend to,
cast such other Party in an unfavorable light, or which would constitute a
disparaging comment, whether such comment is true or untrue. BusinessMall and
TheYPD acknowledge that a violation of the agreement contained in this Section
by BusinessMall and/or TheYPD would cause substantial damage to the business
reputation of the Party disparaged, and the precise measurement of the damages
to such Party as a result of such violation would be difficult to determine.
Therefore, taking into consideration the reliance of the Parties upon the
covenants and agreements of BusinessMall and TheYPD, the nature of the business
of the Parties, and the harm flowing to the Parties should BusinessMall and/or
TheYPD violate the provisions hereof, BusinessMall and TheYPD jointly and
severally agree that, if BusinessMall and/or TheYPD breaches any of the
provisions of this Section, BusinessMall and TheYPD jointly and severally, shall
immediately pay to the disparaged Party a sum equal to Three Hundred Thousand
Dollars ($300,000.00) for each occurrence, together with attorney fees and costs
incurred in pursuing said damages. This sum represents the Parties' good faith
estimate of the harm that would be caused to the disparaged Party by
BusinessMall's and/or TheYPD's violation of the terms of this Section, and is
not to be construed to be a penalty. However, in the event of a violation of
this Section, the disparaged Party shall provide written notice to BusinessMall
and TheYPD of the occurrence of such event, and shall notify BusinessMall and
TheYPD that said liquidated damages shall be due and payable unless, within five
(5) business days of receipt of said notice, BusinessMall and TheYPD
communicate, in the same manner and to the same individuals to which the
disparaging comment was communicated, stating that (i) the disparaging comment
is retracted in full, and (ii) BusinessMall and TheYPD apologize for such
comment. Such retraction and apology must be communicated in a manner so as to
be communicated as broadly as the disparaging comment itself (for example, by
issuing a news business wire which shall be posted along with BusinessMall's
stock quotes ). If such retraction is made within said 5 business day period,
then the liquidated damages for such occurrence shall not be due.
28a Representations of Xxxxxxx, CCC, ForcedMatrix, ITS, StormTel and
Xxxxxxx. Xxxxxxx, CCC, ForcedMatrix, ITS, StormTel and Xxxxxxx each individually
represent, warrant and agree as follows:
ai Authorization. Xxxxxxx, CCC, ForcedMatrix, ITS, StormTel and Xxxxxxx
each have the full power, legal capacity and authority to enter into this
Agreement, to execute all attendant documents and instruments necessary to
consummate the transaction herein contemplated. This Agreement and all other
agreements, documents and instruments to be executed in connection herewith have
been effectively authorized by all necessary action, corporate or otherwise, on
the part of Xxxxxxx, CCC, ForcedMatrix, ITS, StormTel and Xxxxxxx, which
authorizations remain in full force and effect, have been duly executed and
delivered by Xxxxxxx, CCC, ForcedMatrix, ITS, StormTel and Xxxxxxx, and no other
corporate proceedings on the part of Xxxxxxx, CCC, ForcedMatrix, ITS, StormTel
and Xxxxxxx are required to authorize this Agreement and the transactions
contemplated hereby, except as specifically set forth herein. This Agreement
constitutes the legal, valid and binding obligation of Xxxxxxx, CCC,
ForcedMatrix, ITS, StormTel and Xxxxxxx and is enforceable with respect to
Xxxxxxx, CCC, ForcedMatrix, ITS, StormTel and Xxxxxxx in accordance with its
terms.
bi Securities Acknowledgments. ITS hereby acknowledges that:
i0 The Settlement Shares and the Controlling Shares have
not been registered under the Securities Act of 1933,
as amended (hereinafter, the "Securities Act"), or
any state securities act in reliance on exemptions
therefrom.
ii0 In connection with the issuance of the Settlement
Shares and the Controlling Shares, that no
representation has been made by representatives of
BusinessMall regarding its business, assets or
prospects other than that set forth herein and as set
forth in the filings made by BusinessMall pursuant to
Section 13 of the Securities Exchange Act of 1934, as
amended and such other representations and warranties
as set forth in this Agreement.
18
iii0 The certificate or certificates representing the
Shares will be inscribed with the following legend:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933. The securities have been acquired
for investment and may not be sold, transferred assigned in the absence of an
effective registration statement for these securities under the Securities Act
of 1933 or an opinion of Xxxxxxx'x counsel, in form and substance reasonably
acceptable to BusinessMall's counsel, that registration is not required under
said Act."
ci Securities Representations. ITS hereby represents, warrants
and agrees as follows:
i0 The Settlement Shares and the Controlling Shares are
being acquired solely for ITS's own account, for
investment and are not being acquired with a view to
or for the resale or distribution thereof, except as
contemplated by the Registration Rights Agreement.
ITS understands that the Settlement Shares and the
Controlling Shares may only be resold pursuant to a
registration statement under the Securities Act, or
pursuant to some other available exemption;
ii0 ITS is an "accredited investor" as that term is
defined in Regulation D of the Securities Act and has
sufficient knowledge and experience in financial and
business matters to be capable of evaluating the
merits and the risks of its investment in the
Settlement Shares and the Controlling Shares and is
able to bear the economic risk of its investment in
the Settlement Shares and the Controlling Shares;
29a No Admission. The Parties agree that the execution of this
Agreement is not an admission by any of them of liability with respect to
damages, except as set forth in this Agreement.
30a Remedies. BusinessMall and TheYPD acknowledge that the injury to
BusinessMall, ForcedMatrix, Freeman, Maguire, ITS, and/or StormTel which would
be occasioned by the failure of any of BusinessMall and/or TheYPD to abide by
the terms of this Agreement shall not be adequately compensated by monetary
damages. BusinessMall and TheYPD agree that as the remedy at law would be
inadequate, BusinessMall, ForcedMatrix, Freeman, Maguire, ITS, and/or StormTel
shall be entitled to seek and obtain specific performance and immediate and
permanent injunctive and other equitable relief including but not limited to
temporary restraining orders and/or preliminary or permanent injunctions to
restrain or enjoin any such violation, without the necessity of posting a bond
or other security. These remedies of BusinessMall, ForcedMatrix, Freeman,
Maguire, ITS, and/or StormTel are in addition to all other relief set forth in
this Agreement, available at law, or available in equity, together with the
right to receive attorney's fees and costs of pursuing available remedies and
enforcing the terms of this Agreement. BusinessMall and TheYPD hereby waive,
with respect to any future dispute related to this Agreement, any defense based
on the argument that BusinessMall, ForcedMatrix, Freeman, Maguire, ITS, and/or
StormTel will not be irreparably harmed or that they have available an adequate
remedy at law.
19
31a Miscellaneous Provisions.
ai Severability. In the event that any provision of this Agreement is
found to be illegal or unenforceable by any court or tribunal of competent
jurisdiction, then to the extent that such provision may be made enforceable by
amendment to or modification thereof, the Parties agree to make such amendment
or modification so that the same shall be made valid and enforceable to the
fullest extent permissible under existing law and public policies in the
jurisdiction where enforcement is sought, and in the event that the Parties
cannot so agree, such provision shall be modified by such court or tribunal to
conform, to the fullest extent permissible under applicable law, to the intent
of the Parties in a valid and enforceable manner, if possible and if not
possible, then be stricken entirely from the Agreement by such court or tribunal
and the remainder of this Agreement shall remain binding on the Parties hereto.
bi Amendment. No amendment or modification of the terms or conditions
of this Agreement shall be valid unless in writing and signed by the Party or
Parties to be bound thereby.
ci Governing Law. This Agreement shall be interpreted, construed,
governed and enforced according to the internal laws of the State of Florida
without regard to conflict or choice of law principles of Florida or any other
jurisdiction. This Agreement shall be executed in Florida and is intended to be
performed in Florida. In the event of litigation arising out of this Agreement,
the Parties hereto consent to the personal jurisdiction of the State of Florida,
and agree to exclusively litigate said actions, in a federal or state court of
competent jurisdiction located in Orange County, Florida.
di Good Faith; Further Assurances. The Parties to this Agreement shall
in good faith undertake to perform their obligations under this Agreement, to
satisfy all conditions and to cause the transactions contemplated by this
Agreement to be carried out promptly in accordance with the terms of this
Agreement. Upon the execution of this Agreement and thereafter, each Party shall
do such things as may be reasonably requested by the other Party hereto in order
to more effectively consummate or document the transactions contemplated by this
Agreement.
ei Survival of Representations, Warranties and Covenants. All of the
representations, warranties, and covenants contained herein shall survive the
execution of this Agreement and the consummation of the transaction contemplated
herein. Such execution and consummation shall not be considered to be a waiver
of any misrepresentation or breach of warranty or covenant, and each Party may
exercise any and all rights and remedies as provided for herein.
20
fi Waivers. No waiver by any Party of, or consent by such Party to, a
variation from, or breach of, or default under any provision of this Agreement
shall be effective unless made in a written instrument duly executed on behalf
of such Party by its duly authorized officer or such individual (as the case may
be), and any such waiver or consent shall be limited solely to those rights or
conditions expressly so waived or consented to. No failure or delay on the part
of any Party in exercising any power, right or privilege under this Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power preclude any other or further exercise thereof, or the
exercise of any other right or power under this Agreement. No other actions
taken by any Party, including, without limitation, any investigation by or on
behalf of such Party, and no failure to take action, shall be deemed to
constitute a waiver or an extension by such Party of compliance with any
representation , warranty, condition, agreement or indemnification set forth in
this Agreement.
gi Counterparts. This Agreement and all Exhibits, attachments,
appendices, and schedules attached hereto, and any other document executed in
connection herewith, may be executed in two or more counterparts, each of which
shall be deemed an original and all of which shall constitute one and the same
document. Facsimile transmissions and/or photocopies of a signed counterpart of
this Agreement, or any such document shall be considered for all purposes to
constitute the delivery of a properly executed original of this Agreement or any
such document.
hi Binding Agreement. This Agreement shall be binding upon and shall
inure to the benefit of the Parties hereto, and upon their respective heirs,
successors, assigns and legal representatives.
ii Counsel. Each of the Parties hereto represents that it, she or he
has consulted legal counsel in connection with this Agreement, or has been given
full opportunity to review this Agreement with counsel of his, her or its choice
prior to execution thereof and has elected not to seek such counsel. The Parties
hereto waive all claims that they were not adequately represented in connection
with the negotiation, drafting and execution of this Agreement.
ji Notices. All notices and demands permitted, required or provided for
by this Agreement shall be made in writing, and shall be deemed adequately
delivered if delivered by hand or by mailing the same via the United States
Mail, prepaid certified or registered mail, return receipt requested, or by
priority overnight courier for next business day delivery by a nationally
recognized overnight courier service that regularly maintains records of its
pick-ups and deliveries and has daily deliveries to the area to which the notice
is sent, addressed to the Parties at their respective addresses as shown below:
Name Address
To BusinessMall: XxxxxxxxXxxx.Xxx, Inc.
00000 X.X. Xxxxxxx 00 X.
Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
With a Copy To: Xxxxxx & Xxxxxxxxx LLP
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx Xxxx, XX 00000
Facsimile: (000) 000-0000
To Xxxxxxx: Xxxxxx X. Xxxxxxx
0000 Xxxx Xxxxx Xxxxxxx Xxxxxx
21
Apt. 727
Xxxxxxxxxx, XX 00000
Facsimile: 000-000-0000
With a Copy To: Xxxxx X. Xxxxxx, Esq.
Akerman, Senterfitt
X.X. Xxx 000
Xxxxxxx, Xx. 00000-0000
Facsimile: (000) 000-0000
To CCC: CCC Communications Corporation
c/o Xxxxxx X. Xxxxxxx
0000 Xxxx Xxxxx Xxxxxxx Xxxxxx
Xxx. 000
Xxxxxxxxxx, XX 00000
Facsimile: 000-000-0000
With a Copy To: Xxxxx X. Xxxxxx, Esq.
Akerman, Senterfitt
X.X. Xxx 000
Xxxxxxx, Xx. 00000-0000
Facsimile: (000) 000-0000
To StormTel: StormTel, Inc.
c/o Xxxxxx X. Xxxxxxx
0000 Xxxx Xxxxx Xxxxxxx Xxxxxx
Xxx. 000
Xxxxxxxxxx, XX 00000
Facsimile: 000-000-0000
With a Copy To: Xxxxx X. Xxxxxx, Esq.
Akerman, Senterfitt
X.X. Xxx 000
Xxxxxxx, Xx. 00000-0000
Facsimile: (000) 000-0000
To ForcedMatrix: XxxxxxXxxxxx.xxx, Inc.
c/o Xxxxxx X. Xxxxxxx
0000 Xxxx Xxxxx Xxxxxxx Xxxxxx
Xxx. 000
Xxxxxxxxxx, XX 00000
Facsimile: 000-000-0000
With a Copy To: Xxxxx X. Xxxxxx, Esq.
22
Akerman, Senterfitt
X.X. Xxx 000
Xxxxxxx, Xx. 00000-0000
Facsimile: (000) 000-0000
To ITS: ITS Billing, Inc.
c/o Xxxxxx X. Xxxxxxx
0000 Xxxx Xxxxx Xxxxxxx Xxxxxx
Xxx. 000
Xxxxxxxxxx, XX 00000
Facsimile: 000-000-0000
With a Copy To: Xxxxx X. Xxxxxx, Esq.
Akerman, Senterfitt
X.X. Xxx 000
Xxxxxxx, Xx. 00000-0000
Facsimile: (000) 000-0000
To Xxxxxxx: Xxxxx Xxxxxxx
0000 Xxxxxxxxx Xxxxx
Xxxx Xxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
To Escrow Agent: Xxxxx X. Xxxxxx, Esq.
Akerman, Senterfitt
X.X. Xxx 000
Xxxxxxx, Xx. 00000-0000
Facsimile: (000) 000-0000
Notices delivered personally shall be deemed communicated as of the
date of actual receipt. Notices mailed as set forth above shall be deemed
communicated as of the date three (3) business days after mailing, and notices
sent by overnight courier shall be deemed communicated as of the date one (1)
business day after sending.
ki Entire Agreement. This Agreement and the Exhibits hereto
set forth the entire agreement and understanding of the Parties hereto in
respect of the subject matter contained herein, and supersedes all prior
agreements, promises, understandings, letters of intent, covenants,
arrangements, communications, representations or warranties, whether oral or
written, by any Party hereto or by any related or unrelated third party. All
exhibits attached hereto, and all certificates, documents and other instruments
delivered or to be delivered pursuant to the terms hereof are hereby expressly
made a part of this Agreement, and all references herein to the terms "this
Agreement", "hereunder", "herein", "hereby" or "hereto" shall be deemed to refer
to this Agreement and to all such writings.
23
li Interpretation. The language in all parts of this Agreement shall in
all cases to construed as a whole according to its fair meaning, strictly
neither for nor against any Party, and without implying a presumption that the
terms hereof shall be more strictly construed against one (1) Party by reason of
any rule of construction to the effect that a document is to be construed more
strictly against the Party who personally or through such Party's agent prepared
the same.
mi Successors and Assigns. As used herein the term "the Parties" shall
include their respective successors in interest, licensees or assigns.
ni Execution. Each person who signs this Agreement on behalf of a
corporate entity represents and warrants that he has full and complete authority
to execute this Agreement on behalf of such entity. Each Party shall bear the
fees and expenses of its counsel and its own out-of-pocket costs in connection
with the Action and this Agreement.
oi Captions. The captions appearing in this Agreement are for
convenience only, and shall have no effect on the construction or interpretation
of this Agreement.
pi Corporate Authority. Each individual signing below represents that
he or she has all necessary corporate power and authority to enter into, execute
and perform this Agreement for and on behalf of the Party for which such person
is signing. Attached hereto as Exhibit "CC-1" and "CC-2", and incorporated
herein by reference, are Board of Director Resolutions for BusinessMall and
TheYPD. BusinessMall and TheYPD each represent and warrant that said corporate
resolutions were duly enacted and remain in full force and effect, and that no
further approvals or other corporate action is required, and this Agreement and
the obligations contained herein, are the binding obligations of the
BusinessMall and TheYPD, enforceable in accordance with their terms.
Executed by the Parties on the day and date first hereinabove written.
XxxxxxxxXxxx.Xxx Inc. XxxxxxXxxxxx.xxx, Inc.
By: By:
----------------------------- -----------------------------
Name: Name:
Title: Title:
XxxXxxxxxXxxxXxxxxxxxx.Xxx Corp. ITS Billing, Inc.
By: By:
----------------------------- -----------------------------
Name: Name:
Title: Title:
CCC Communications Corporation
---------------------------------
Xxxxxx Xxxxxxx, Individually
By:
-----------------------------
Name: ---------------------------------
Title: Xxxxx Xxxxxxx, Individually
24
StormTel, Inc.
By:
------------------------------
Name: Xxxxx X. Xxxxxx
Title: "Escrow Agent"
25
