EXHIBIT 10.1
October 12, 2005
Total Professional Restoration, Inc.
0000 Xxxxxx Xxxx Xxxxx
Xxxxx X
Xxxxxxx, Xxxxx 00000
RE: Memorandum of Understanding for the Acquisition of Total Professional
Restoration, Inc., and Offer of Employment for Xxxxx Xxxxx
Attention: Xxxxx Xxxxx
RG America, Inc., together with the Board of Directors, Restoration Group
America, Inc., Restoration Group America 2003, Inc. and all divisions thereof,
deem it advisable and in the best interests of both Total Professional
Restoration, Inc. ("Company") and Restoration Group America 2003, Inc.
("Buyer"), and all respective shareholders thereof, that Restoration Group
America 2003 acquire Total Professional Restoration in order to advance the
long-term business interests of both the Buyer and the Company.
The acquisition of the Company shall be effected through the following terms and
conditions:
I. TIME OF EFFECT
A. Closing. The closing of the sale by Company and purchase by Buyer
shall be held on or before October 15, 2005, or at the date agreed
upon by Buyer and Company ("Closing Date").
B. Effect.
i. At the Closing Date, and upon the terms and conditions below,
Company will (or cause to be) sell, transfer, assign, convey,
and deliver to Buyer all the issued and outstanding shares of
Total Professional Restoration, Inc (the Company). Buyer
shall in turn remit to Company the purchase price (as defined
below) in the manner and upon the terms set out in this
Memorandum.
ii. Effective Time. The acquisition shall be deemed effective at
such time as all shares of the Company inclusive of it's
right, title, and assets, including registered and
unregistered Intellectual Property of Company have been
delivered to Buyer, the purchase price has been satisfied by
Buyer and received by Company, and all appropriate filings
(as described below) are completed by Buyer ("Effective
Time").
II. PAYMENT TERMS
A. Purchase Price. The purchase price of the Company shall be the sum
of SEVEN HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS ($750,000) plus
the balance of Buyer's (or its parent, sisters, subsidiaries, or
other divisions), outstanding debt to Company, which shall be paid
at the Closing Date, pursuant to the terms and conditions below.
B. Terms and Conditions. Buyer shall acquire Company in full
satisfaction of the Purchase Price in exchange for RG America, Inc.
stock, which shall be issued to Company at:
i. FORTY CENTS ($0.40) per share, not to exceed the sum of SEVEN
HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS ($750,000); and at
ii. Company shall have, for 90 days at Company's sole option, the
right to convert debt owed to Company by Buyer at THIRTY
CENTS ($0.30) per share, not to exceed the sum of Buyer's
outstanding debt to Company;
Such stock shall be held in escrow for a period of five (5) years,
and disbursed at TWENTY PERCENT (20%) per year, subject to Xxxxx
Xxxxx' acceptance of the terms of the Acquisition and the Offer of
Employment (as described in Section V of this Memorandum), and
subject to Xxxxx Xxxxx' successful employment per year under the
terms of Section V and any applicable Employee policies.
C. Offer of Employment. In furtherance of the acquisition of Company by
Xxxxx, Buyer hereby extends an offer of employment to Company's
existing owner, Xxxxx Xxxxx, under the terms of this Memorandum,
particularly the terms which are described in Section V. of this
Memorandum.
III. REPRESENTATIONS OF BUYER
A. Good Standing. Buyer hereby represents and warrants to Company that
Buyer is a corporation, duly organized, validly existing, and in
good standing with the laws of the state of incorporation.
B. Authority/No Conflict. The execution and delivery of this Memorandum
and the consummation of the transactions contemplated have been duly
authorized by all necessary corporate action on the part of the
Buyer. The execution and delivery of this Memorandum and the
consummation of the transactions contemplated herein will not
conflict with, or result in any violation of or default or loss of a
material benefit under, any provision of the articles or bylaws of
any permit, concession, grant, franchise, license, judgment, order,
decree, statute, law, or ordinance, rule or regulation applicable to
Buyer.
C. No Broker or Finder. Buyer is not a party to or obligated under any
agreement with any broker or finder relating to the transactions
contemplated by this Memorandum, and neither the execution of this
Memorandum nor the transactions provided herein will result in any
liability to any broker or finder.
D. SEC Filings. Buyer is a reporting issuer under the Securities Act
and other applicable Securities Laws and is not in default in the
performance of the requirements of the Securities Act or any other
applicable Securities Laws.
IV. REPRESENTATIONS OF COMPANY
A. Authority/No Conflict. Company hereby represents and warrants that
it, together with its owner, Xxxxx Xxxxx, has all requisite
corporate power and authority to execute this Memorandum, enter into
an agreement with Buyer regarding the transactions contemplated
under this Memorandum, and perform all obligations herein.
B. No Encumbrances. Company represents and warrants that Xxxxx Xxxxx
wholly owns and has good and marketable title to the Company, and
that the Company is free and clear of all liens, encumbrances,
pledges or charges of any kind or nature. Company represents and
warrants that it is not in any default with respect to any
contracts, agreements, or leases constituting or related to any of
its assets, which are part of this contemplated transaction between
Company and Buyer.
C. No Broker or Finder. Company further represents and warrants that
neither it, nor its owner, Xxxxx Xxxxx, is a party to or obligated
under any agreement with any broker or finder relating to the
transactions contemplated by this Memorandum, and neither the
execution of' this Memorandum nor the consummation of any
transactions provided for herein will result in any liability to any
broker or finder.
D. Employees. Company represents and warrants that there are no
employment agreements in effect, offered, or promised to any
employees of the Company, and that no employee of Company will have
any basis for any claim or suit against the Company.
E. No Further Ownership of Company. Upon the Effective Time, Xxxxx
Xxxxx shall cease to own or have any claim of right or title in the
Company and/or all assets thereof, including any registered and
unregistered Intellectual Property, in whole or in part, and Buyer
will thereafter be the sole, rightful, and perpetual owner of
Company.
If the terms of this Memorandum are agreeable to both Buyer and Company,
indicated by authorized signatures below, upon the Closing Date, Buyer shall
extend to Company's current owner, Xxxxx Xxxxx, an offer of employment with
Buyer's sister company, Restoration Group America, Inc. ("Employer"), on the
terms outlined below. In addition to the terms below, employment will be subject
to the rules and regulations outlined in the Employee Handbook, which shall be
distributed upon acceptance of this offer.
V. OFFER OF EMPLOYMENT
Employee: Xxxxx Xxxxx
Date of Hire: October 15, 2005
Term: The term employment shall be for a period of TEN (10) YEARS,
the period commencing on the Date of Hire and ending, or
being subject for renewal, on the tenth (10th) anniversary
thereof, unless terminated earlier pursuant to the terms
hereunder, and/or those terms outlined in the Employee
Handbook.
Title: Director of Operations, Remediation Division (The Restoration
Group), and President of Total Professional Restoration.
Status: Employee shall be considered a full-time, exempt employee as
defined in the Federal Fair Labor Standards Act (29 U.S.C.
213) and applicable State laws.
Accountability &
Obligations: During the term of employment, Employee shall devote his full
business efforts and time to the Employer. Employee agrees
not to actively engage in any other employment, occupation,
or consulting activity for any direct or indirect
remuneration without the prior written approval of the
Employer, provided, however, he may, without the approval of
the Employer, serve in any capacity with any civic,
educational, or charitable organization.
Employee will report directly to RG America, Inc.'s Chief
Operating Officer, Xxxxx Xxx. Employee's general duties will
be such duties and responsibilities as are commensurate with
the Director's position and any additional responsibilities
and authority as may be from time to time assigned to the
Director by the Employer, particularly in the remediation
services of and for RG America, Inc. and its divisions. The
Employee is expected to guard the Employer's resources, and
to support the Employer's decision making. As President of
Total Professional Restoration, Employee will carefully
oversee the operations and relations of the company, and will
have/perform those responsibilities and duties which may from
time to time be assigned by the Board of Directors so as to
maximize the interests of Employer.
No Conflict: Employee represents and warrants to Employer that he is under
no obligations or commitments, whether contractual or
otherwise, that are inconsistent with the obligations
described in this Memorandum. Employee further represents and
warrants to Employer that his employment as contemplated by
this Memorandum will not infringe or violate the rights of
any other person or entity, and that Employee has returned
all property and confidential information belonging to prior
employers or owners.
Confidential
Information: Employee acknowledges that during the course of employment he
will come in contact with Employer's Confidential
Information, and Employee agrees that except as otherwise
required by Employee's duties for the Employer, Employee
shall maintain in strict confidence and shall not directly,
indirectly or otherwise, use, publish, disclose or
disseminate, or use for Employee's benefit or the benefit of
any person, firm, corporation or entity, any Confidential
Information of or relating to the Employer or its affiliates
(or which the Employer or its affiliates has a right to use).
Termination: AT WILL
The Employee's employment shall be "at will" and either the
Employer or the Employee may terminate the Employee's
employment at any time, for any reason (or for no reason),
with or without Cause. Any contrary representations that may
have been made to Employee are hereby superseded by the terms
of this Memorandum. This Memorandum shall constitute the full
and complete agreement between the Employee and the Employer
on the "at will" nature of the Employee's employment, which
may only be changed in an express written agreement signed by
the Employee and a duly authorized officer of the Employer.
1. By Employer
Employer may terminate the Employee's employment by giving
the Employee written notice. Employee's employment shall
terminate immediately or in the manner stated in the written
notice if different.
2. By Employee
Employee may terminate his/her employment by giving the
Company at least fourteen (14) days advance written notice.
Employee's employment shall terminate at the expiration of
the 14 day period, or as determined by the Company if
different.
FOR CAUSE
For the purposes of this Agreement, "Cause" shall include,
but not exclusively, the following:
Significant reduction in the Employee's position, authority,
or responsibilities;
1. Unauthorized use or disclosure of Confidential
Information or trade secrets of the Employer;
2. Any breach of this Agreement or a violation of the
guidelines in the Employee Handbook (which shall be
given to Employee upon his acceptance of this
employment offer);
3. Conviction, plea of "guilty," or plea of "no contest"
to a felony under the laws of the United States of
any state thereof;
4. Misappropriation of Employer assets or any act of
fraud or embezzlement, or any act of dishonesty by
Employee in connection with the performance of
his/her duties that adversely affects the business or
affairs of the Employer;
5. Intentional misconduct or the Employee's failure to
satisfactorily perform his/her duties after having
received written notice of such failure and after
having at least 30 days to cure such failure;
6. Any other act or omission the Employer may consider
grounds for the termination of employment.
AUTOMATIC
The Employee's employment shall terminate automatically in
the event of death or permanent disability. For the purposes
of this Memorandum, Permanent Disability shall mean the
Employee has become so physically or mentally disabled (as
determined by an independent physician) as to be incapable of
satisfactorily performing the duties under this Memorandum,
or any subsequent agreement, for a period of one hundred
eighty (180) consecutive days.
Compensation: BASE SALARY
ONE HUNDRED TWENTY THOUSAND AND NO/100 DOLLARS ($120,000)
annually, to be paid out bi-weekly.
COMMISSION
As additional performance-based remuneration, Employer agrees
to pay Employee a commission equal to three percent (3%) of
the revenues resulting from Employee's remediation
deliverables, up to TEN MILLION AND NO/100 DOLLARS
($10,000,000), and said commission shall increase by ONE
TENTH of a Percent (1/10th %) for each million dollars over
the TEN MILLION ($10,000,000) base. A deliverable shall be
defined as a signed contract between Employer (or its parent,
subsidiary, or sister company), and a new or repeat Customer
of Employer, in which Employer performs remediation services,
and for which Employer receives payment from Customer.
Employer shall pay to Employee commission amounts due and
owing within thirty (30) business days of the Employer's
receipt of such revenues from Customer.
STOCK OPTIONS
250,000 RG America, Inc. stock options issued at an exercise
price equal to one hundred five percent (105%) of the five
(5) day average trading price prior to the Closing of the
acquisition of Total Professional Restorations, Inc. The
options will vest according to the schedule below:
o 20% of the total options equally over 60 months of
successful employment at Restoration Group America,
Inc.;
o 40% of the total options upon RG America, Inc.
attaining TWELVE CENTS ($0.12) per share in annual
earnings; and
o 40% of the total options upon RG America, Inc.
attaining TWENTY FOUR CENTS ($0.24) per share in
annual earnings.
CAR ALLOWANCE
Employer agrees to pay to Employee FIVE HUNDRED AND NO/100
DOLLARS ($500) per month as a car allowance, payable
bi-weekly and subject to employment taxes and withdrawals.
HEALTH CARE
Employer will reimburse Employee of costs up to FIVE HUNDRED
AND NO/100 DOLLARS ($500) per month for health care
insurance, payable upon receipt of a written expense report,
and accompanied by receipts for Employee's health care
premiums, which Employee shall deliver to Employer on the
first day of each month.
EXPENSES
Subject to Employer's prior written approval, Employer will
reimburse Employee for expenses incurred by Employee in the
performance of his duties and obligations, provided that
Employee shall account for such expenses by the return to
Employer of a written expense report accompanied by written
vendor receipts for such expenses. Such expense reimbursement
shall cumulate and be paid upon Employer's written approval,
which shall not be unreasonably withheld, but not more often
than monthly.
Xxxxx, we are all committed to your long term success. We look forward to not
only working with you but sharing ideas for the business and ways in which to
implement them. We welcome discussion and debate, but must always remember that
ultimately we all work for the stockholders.
RG America, Inc. and all its divisions observe the highest moral and ethical
standards. Each and every member of management is expected to be tireless in the
observation of these standards.
We have all invested a great deal toward the success of what we all believe is
and will be an excellent business. The scope of activities that each of us is
called upon to handle is broad and exciting. This leads to the opportunity for
each of us to grow, strengthen and expand our personal skill sets. It demands
flexibility and teamwork, and we believe you will do well in such an
environment.
By signing below you agree to the acquisition terms outlined in this Memorandum,
and you accept this offer of employment and challenges and opportunities that go
with it.
RG AMERICA, INC. For TOTAL PROFESSIONAL
RESTORATION, INC.,
and individually
/s/ /s/
------------------------------- -----------------------------
Xxxxx X. Xxx Xxxxx Xxxxx
Chief Operating Officer
0000 Xxxxxxx Xxxxxx 0000 Xxxxxx Xxxx Xxxxx
Xxxxx 00x Xxxxx X
Xxxxx, Xxxxx 00000 Xxxxxxx, Xxxxx 00000
DATE: DATE:
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