ASSET PURCHASE AGREEMENT
This Agreement is effective May 4, 2000, by and between, Xxxxxxxxxx.xxx. Inc., a
Nevada Corporation ("Buyer") which is a wholly owned subsidiary of Xxxxxxxx.xxx,
a Nevada Corporation and Xxxxxxxxxx.xxx. Inc., a Delaware Corporation
("Seller").
WHEREAS, the Buyer is in the business of providing branding eCommerce and
financial products and programs to the mass market.
WHEREAS, the Seller is in the business of providing direct response marketing of
special interest informational products, particularly videos and books and other
related products and programs,
WHEREAS, the parties desire to set forth herein the terms pursuant to which the
Seller will transfer, sell, assign and convey and the Buyer will acquire,
certain of the assets related to the Business.
NOW, THEREFORE, In consideration of the foregoing premises and of the mutual
covenants contained hereinafter, and for other good and valuable consideration,
the receipt and sufficiency that are hereby acknowledged, intending to be
legally bound hereby, the parties agree as follows:
TERMS
1. TRANSFER AND SALE OF PURCHASED ASSETS, PURCHASE PRICE.
(a) TRANSFER AND SALE OF PURCHASED ASSETS. Subject to all terms and
conditions hereof, Seller agrees hereby to transfer, sell, assign,
convey and deliver to Buyer (as hereinafter defined), all of the
Seller's right, title and interest in and to the following described
assets, including, without limitation, all goodwill associated
therewith (collectively, the "Purchased Assets"). The parties expressly
agree that none of the Sellers" liabilities are being assumed by Buyer
except as otherwise expressly set forth herein.
(i) The assets and operations changeover date will be
assumed as of April 30, 2000 including but not
limited to the assets used in the operation, bank
checking account, inventory, merchant account reserve
deposit, other prepaid expense, as described in
Exhibit "A," attached hereto;
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(ii) All right, title and interest of Seller in and to
customer lists and mailing lists owned by Seller and
relating to the Business;
(iii) All files, business records and information,
addresses, and related account information with
respect to the customers of the Business;
(iv) All trade names, fictitious names, trademarks,
service marks, slogans and logos used by and
belonging to Seller, including but not limited to the
trade nameand Internet domain name of "Videos Now,"
"Books Now," and "Xxxxxxxxxx.xxx" and others listed
on Exhibit "A".
(v) The "800" telephone numbers operated by Seller in
connection with the Business.
(b) CERTAIN ASSETS AND LIABILITIES OF SELLER NOT SUBJECT TO THIS
AGREEMENT. The parties acknowledge that the accounts receivable as of
April 30, 2000 will not be conveyed to Buyer under the terms of this
Agreement. Buyer shall not be responsible for any obligations of
Seller, which were incurred prior to Closing.
(c) CONSIDERATION. The Buyer agrees that within 90 days from the
affixed date to transfer and convey to Seller in consideration of the
transfer, sale, conveyance, assignment and delivery of the Purchased
Assets:
(i) Three hundred thousand shares (300,000) of the Common
Stock, par value $.0001 of Buyer (the"Shares") with
legend. Upon delivery by Buyer to Seller hereunder,
the Shares will be fully paid and non-assessable. If
Xxxxxxxx.xxx proposes to register under the
Securities Act of 1933, as amended, any of its
securities for sale (other than pursuant to a
registration in connection with an employee benefit
plan), Xxxxxxxx.xxx will give prompt written notice
to the Buyer of its intention to effect such a
registration. Xxxxxxxx.xxx will include in such
registration all of the Shares which the Buyer
requests Xxxxxxxx.xxx to include in such registration
by written notice given to Xxxxxxxx.xxx within 15
days following receipt of Xxxxxxxx.xxx's notice;
provided, however, that Buyer's rights to inclusion
in such registration will be subject to the approval
of the managing underwriter.
(ii) $ 195,792.22 Cash. It is understood that these funds
will be first used to pay off all vendor payables,
commission due, payroll and other expenses per
Schedule A-1. These funds will be wire transferred to
the Seller's bank account within 60 days from the
affixed date using information contained in Exhibit
"B".
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2. CLOSING
(a) CLOSING DATE. The closing of the transactions contemplated by this
Agreement (the "Closing") shall effect on May 4, 2000.
(b) OBLIGATIONS OF SELLER. The Seller shall execute and deliver to
Buyer such xxxx of sale, assignments, agreements and other instruments,
and shall take such other action as shall be necessary to accomplish
the transfer, sale, assignment, conveyance and deliver of the Purchased
Assets, including but not limited to the following:
(i) A xxxx of sale in the form attached hereto as Exhibit
"C" (The "Xxxx of Sale") conveying all of Seller's
right, title and interest in and to certain of the
Purchased Assets.
(ii) One or more assignments in the form attached hereto
as Exhibit "D" (the "Assignment of Intellectual
Property Rights") conveying all of Seller's right,
title and interest in and to any and all registered
trade names and trade marks, patents and patents
pending, copyrights and registrations and
applications therefore.
(C) OBLIGATIONS OF BUYER . The Buyer shall execute and deliver to
Seller such certificates, assumption agreements and other instruments
and shall take such other actions as shall be necessary to complete the
transactions described in this Agreement, including but not limited to
the following:
(i) An Executive Management Agreement with Xxxxx
Xxxxxxxxx attached hereto as Exhibit "E" (the
"Employment Contract").
(i) A one-year consulting agreement with Xxxxx Xxxxxxxxx
attached hereto as Exhibit "F" (the "Consulting
Agreement").
3. REPRESENTATIONS AND WARRANTIES OF SELLER.
Seller represents and warrants to Buyer as of the date hereof and as of
the Closing Date, as material inducement to Buyer to enter into and perform its
obligations under this Agreement as follows:
(a) ORGANIZATION. Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
Seller has all requisite power and authority to conduct its business in
the manner and in the jurisdictions where they are now conducted.
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(b) AUTHORITY. Seller has the right, power, legal capacity and
authority to enter into, deliver and perform this agreement and any
other agreements and instruments contemplated hereby, and this
Agreement and all such other agreements are, or upon the execution
thereof will be, valid and binding upon and enforceable against Seller
in accordance with their respective terms.
(c) OTHER AGREEMENTS. The execution and delivery of this Agreement and
the consummation of the transactions herein contemplated will not
conflict with, or with notice of the passage of time, or both, result
in a breach of any of the terms or provisions of, or constitute a
default under, any agreement or other instrument to which the Purchased
Assets may be subject.
(d) FINANCIAL STATEMENTS. The results of operations and other financial
disclosures, which Seller has provided to Buyer with respect to the
operation of the Business are true and accurate representations of the
subject matter thereof.
(e) TITLE TO AND CONDITION OF PURCHASED ASSETS. Seller has and at
Closing shall convey to Buyer good and marketable title to all of the
Purchased Assets, free and clear of any pledges, collateral
assignments, security interest, liens, charges or encumbrances
whatsoever.
(f) LITIGATION. There are not actions, suits, proceedings or
investigations pending or, to the knowledge of Seller, threatened in
any court or before any governmental agency or instrumentality against
or materially affecting Seller or the Purchased Assets, or which would
prevent the carrying out of this Agreement or any of the transactions
contemplated hereby or declare the same unlawful or cause the
rescission thereof, Seller has not be charged with, or to the knowledge
of Seller, is threatened with or under any investigation with respect
to, any charge concerning any violation of any provision of any
federal, state or local law, regulation, ordinance, order or
administrative ruling, and Seller is not in default with respect to any
order, writ or decree of any court, agency or instrumentality with
respect to the Business.
(g) TAXES. Seller has timely filed all Federal, state and local income,
payroll, withholding, excise, sales, use, personal property, stock or
franchise, use and occupancy, real estate, business and other tax
returns which are required to be filed by it with respect to the
Business, and has paid all such taxes, interest and penalties which are
shown to have become due pursuant to such returns, as well as all other
interest, penalties, assessments and impositions.
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(h) DISCLOSURE. No representation or warranty of Seller, and no
certificate furnished or to be furnished by Seller to Buyer hereunder,
contains or will contain any untrue statement of material fact or omits
to state a material fact necessary in order to make the statements
made, in light of the circumstances under which they were made, not
misleading.
(i) EMPLOYEE BENEFIT PLANS. Buyer will have no obligation with respect
to any employee obligations which includes but is not limited any
benefit plans of Seller or governmental, both Federal and state
liabilities.
(j) MATERIAL CONTRACTS. Attached hereto as Exhibit "G" is a complete
list of all material contracts to which Seller is a party in connection
with its operation of the Business.
4. REPRESENTATIONS AND WARRANTIES OF BUYER.
Buyer represents and warrants to Seller as of the date hereof and as of
the Closing Date, as a material inducement to Buyer to enter into and perform
its obligations under this Agreement, as follows:
(a) ORGANIZATION. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Nevada.
Buyer has all requisite power and authority to conduct its business in
the manner and in the jurisdictions where they are now conducted.
(b) AUTHORITY. Buyer has the right, power, legal capacity and authority
to enter into, deliver and perform this Agreement and any other
agreements and instruments contemplated hereby, and this Agreement and
all such other agreements are, or upon the execution thereof will be,
valid and binding upon and enforceable against Buyer in accordance with
their receptive terms.
(c) OTHER AGREEMENTS. The execution and delivery of this Agreement and
the consummation of the transactions herein contemplated will not
conflict with, or with notice or the passage of time, or both, result
in a breach of any of the terms or provisions of, or constitute a
default under, any agreement or other instrument to which Buyer is a
party or by which Buyer or Buyer's property is bound.
(d) DISCLOSURE. No representation or warranty of Buyer, and no
certificate furnished or to be furnished by Buyer to Seller hereunder,
contains or will contain any untrue statement of material fact or omits
to state a material fact necessary in order to make the statements
made, in light of the circumstances in which they were made, not
misleading.
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(e) LITIGATION. There are not actions, suits, proceedings or
investigations pending or, to the knowledge of Buyer, threatened in any
court or before any governmental agency or instrumentality against or
materially affecting Buyer, or which would prevent the carrying out of
this Agreement or any of the transactions contemplated hereby or
declare the same unlawful or cause the rescission thereof. Buyer has
not been charged with, or to the knowledge of Buyer, is threatened with
or under an investigation with respect xxx, any charge concerning any
violation of any provision of any federal, state or local law,
legislation, ordinance, order or administrative ruling, and Seller is
not in default with respect to any order, writ or decree of any court,
agency or instrumentality.
(f) ISSUANCE OF SHARES. Upon the issuance of the Share to Seller, such
Shares shall have been duly authorized, validly issued and fully paid
and nonassessable. Except that said shares will be legend to reflect a
holding period of one year pursuant to Section 144.
5. COVENANT
Buyer and Seller shall give such notice of the proposed sale and
purchase of the Purchased Assets to the applicable taxing authorities as
required by law.
6. CONDUCT PENDING CLOSING.
(a) INSURANCE. Seller shall keep in force and effect all existing
insurance affecting the Purchased Assets, including but not limited to
product liability, until the date of Closing.
(b) CONDUCT OF BUSINESS. Until the date of Closing, Seller shall not
enter into any agreement affecting the Purchased Assets or otherwise
dispose of any of the Purchased Assets, other than in the ordinary
course of business, without the prior written consent of Buyer.
7. REGARDING THE REPRESENTATIONS AND WARRANTIES.
Seller, on the one hand, and Buyer, on the other hand, shall have the
right to rely fully upon the representations and warranties of each other
contained in this agreement, and on the accuracy of any document, certificate,
Schedule or Exhibit given or delivered by each such party pursuant to the terms
of this Agreement, notwithstanding any right of any such party hereto to
investigate the business or affairs or any such party hereto and notwithstanding
any knowledge of facts determined or determinable by such party. Each of the
representations and warranties of the Buyer and Seller contained in this
Agreement shall be true in all material respects on the Closing Date, as though
such representations and warranties were made on and as of the Closing Date, and
shall survive for a period of 12 months following Closing.
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8. CONDUCT FOLLOWING CLOSING.
Seller will cooperate in effecting a smooth transition of the business
to Buyer. Specifically, for the ninety day period following the effective date
of this agreement. Seller will provide Buyer with reasonable access to Seller's
offices during regular business hours for the purpose of obtaining information
with respect to certain of seller's procedures, including methods of taking
order from customers and placing orders to suppliers, and customer service
practices.
9. MISCELLANEOUS.
(a) FURTHER ASSURANCES. Each of the parties agrees that it will at any
time and from time to time after Closing, upon the request of the
other, do all such further things as the other may reasonably request
in connection with the performance of their respective covenants and
obligations hereunder.
(b) BROKERS.
(i) Buyer represents and warrants that there are and will
be no claims for brokerage commissions, finders fees
or investment banking fee in connection with the
transactions contemplated by this agreement resulting
from any action taken by Buyer, its officers,
director or agents.
(ii) Seller represents and warrants that there are and
will be no claims for brokerage commissions, finders'
fees or investment banking fees in connection with
the transactions contemplated by this Agreement
resulting from any action taken by Sellers, its
officers, directors or agents.
(c) NON-COMPETE PROVISION. Seller and Seller's officers, and directors
agree that they will not compete in the same or similar business,
directly or indirectly, for a period of three years from the effective
date of this agreement.
(d) ENTIRE AGREEMENT. This Agreement, including the Exhibits and
Schedules hereto, each of which is incorporated herein by this
reference, (i) contains the entire understanding of the parties hereto
with respect to the subject matter contained herein, superseding all
prior or contemporaneous agreements and understandings; and (ii) may
not be amended or modified or any term or provision hereof waived or
discharged except in writing by the party against whom such amendment,
modification, waiver or discharge is sought to be enforced.
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(e) BINDING TERMS. This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective heirs,
executors, administrators, personal representative, successors in
interest and assigns. Nothing in this Agreement expressed or implied,
is intended to confer on any person other than the parties hereto
and/or their respective successors, and assigns, any rights, remedies,
obligations or liabilities.
(f) COUNTERPARTS. This Agreement may be executed in any number of
counterparts; each of which shall be deemed to be an original and all
of which together shall be deemed to be one and the same instrument.
(g) APPLICABLE LAW. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of California.
(h) NOTICES. Any notices or other communication required or permitted
under this Agreement shall be in writing and shall be deemed
sufficiently delivered (i) when delivered in person or by facsimile,
(ii) as of the day after it is deposited with a nationally recognized
overnight courier for overnight deliver, and (iii) as of the third
(3rd) day after it is deposited with the United Sates Postal Service,
certified or registered mail, postage pre-paid, with return receipt
requested, and addressed to the applicable party as its address set
forth below or at such other address as such party shall provide by
notice given pursuant hereto:
If to Buyer:
Xxxxxxxx.xxx
% Xxxxxxxxxx.xxx Inc. (a Nevada Corporation)
00000 Xxxx Xxxxx Xx.
Xxx Xxxxx, Xxxxxxxxxx 00000
Tel. 000 000 0000
If to Seller:
ClickSmart. Com, Inc. (a Delaware Corporation)
000 Xxxxxx Xxxxxx
Xxxx Xxxxxx, Xxx Xxxxxx 00000
Tel. 000 000 0000
Addresses may be changed by notice in writing singed by the party changing its
address and such notice shall be effective only upon receipt by the other party.
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IN WITNESS WHEREOF, this Agreement has been duly executed by each of the parties
hereto on the date first above written.
XXXXXXXXXX.XXX, INC. (A DELAWARE CORPORATION) (SELLER)
By: _________________________
Name:
Title:
XXXXXXXXXX.XXX, INC. (A NEVADA CORPORATION) (BUYER)
By: __________________________
Name:
Title:
EXHIBIT A
ASSETS
EQUIPMENT:
----------
1) A 11 station (monitors, keyboards and PC mini towers)
telemarketing/order entry computer system with 2 dedicated, redundant
Novell servers with 4 HP laser printers, wide carriage dot matrix
printer and dot matrix report printer, HP color printer/copier, 4
universal power supplies, redundant tape drives).
2) A dedicated fulfillment station computer system (mini tower, keyboard,
monitor, weight scale and large warehouse continuous invoice printer,
laser printer).
3) An 8 user license for the M.O.M. WINDOWS order processing and
fulfillment software with List Management Module, and Import/Export
Module.
4) A 64 line expandable Prostar phone system with 18 hand sets.
5) A 100 line expandable Toshiba phone system with 18 hand sets and VBS
voice mail computer
6) 4 fax machines.
7) 2 copy machines.
8) 2 MacIntosh graphics computer systems. #1 G3 production system (with
17" monitor, scanner, PowerMac computer, keyboard, Zip drives,
universal power supply, color printer, assorted graphics software
packages), #2 backup PowerMac tower.
9) 2 mail meters.
10) Color Scanner and various software packages
11) Accounting computer and software
12) 6 Air conditioners
13) Real Networks Video Server
14) Net Perceptions software
15) Alarm System
16) Windows NT BooksNow webserver
17) Compaq Windows NT Internet webserver with SiteLink software to build
Websites directly from M.O.M. using ASP technology.
FURNITURE:
----------
18 desks and chairs, 2 credenzas, 16 vertical filing cabinets, 1
conference table with 4 chairs, 4 extra large shipping tables, hand
pallet xxxx, 63 -7' tall 7 shelf warehouse metal shelving units, 12,000
plus separate cardboard product bins
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MISC.
-----
1) Recent list of customers (past 6 months) : 29,000
2) Proprietary product database: Current number of titles represented
online at xxxxxxxxxxxxxx.xxx with content descriptions: 9,440. Video
cover scans currently online at xxxxxxxxxxxxxx.xxx: 4,000 plus.
3) Catalog database maintenance software template. Allows for
instantaneous updating of our catalog databases.
4) Automatic affiliate website building, linking, and banner placement
software template. Allows for building and linking of an affiliate
storefront within 1 minute.
5) Fund Raiser Pages linked to xxxxxxxxxxxxxx.xxx: 530
6) Affiliate Online Business Center at
xxxx://xxx.xxxxxxxxxxxxxx.xxx/xxx.xxx . Consists of online manual and
downloadable marketing materials, online newsletters, banner graphics
and more.
7) Total affiliate and prospect list: over 100,000 names.
8) Promotional Affiliate Banners Artwork: hundreds of targeted banners and
buttons.
9) Existing Archive of Welcome/doorway Pages by subject category, issue,
and celebrities: 500 plus
10) Company-owned registered domain names for use in future targeted
marketing efforts:
DOMAIN NAME EXP
----------- ---
XxxxxxxXxxx.xxx 8/12/00
XxxxxxXxxx.xxx 1/20/01
XxxxXxxx.xxx 1/20/01
XxxxxxxXxxx.xxx 1/20/01
XxxXxxxxXxxx.xxx 9/26/00
XxxxxXxxxx.xxx 2/25/01
XxxxxXxxxxx.xxx 2/25/01
XxxxxXxx.xxx 12/22/00
XxxxxxXxx.xxx 2/3/01
XxxXxxxxXxxxxx.xxx 5/5/01
XxxxxXxxx.xxx 1/1/01
XxxxxXxxxx.xxx 5/5/01
XxxxxxXxxxx.xxx 5/8/01
XxxxxxxXxxxx.xxx 1/1/01
XxxxxxXxxxx.xxx 1/1/01
Xxxxxxxxxxx.xxx 2/3/01
Xxx0Xxxxx.xxx 9/20/00
XxxXxxXxxx.xxx 5/5/01
XxxXxxxxXxxx.xxx 1/20/01
XxxxxxxxXxxx.xxx 1/20/01
XxxXxxxxXxxx.xxx 1/20/01
XXxxxx.xxx 3/18/01
XxxxxXxxxxxXxxx.xxx 2/7/01
XxxxxXxxxxxxxx.xxx 10/14/00
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EXHIBIT B
WIRE TRANSFER INSTRUCTIONS
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EXHIBIT C
XXXX OF SALE
THIS XXXX OF SALE is executed and delivered as of the 4th day of May,
2000, by and between Xxxxxxxxxx.xxx, Inc., a Delaware corporation, ("Seller"),
and Xxxxxxxxxx.xxx, Inc, a Nevada corporation ("Purchaser").
W I T N E S E T H
WHEREAS, contemporaneously with the execution and delivery of this Xxxx
of Sale, Seller has sold and conveyed to Purchaser the assets (the "Assets")
described on Exhibit "A" attached hereto and incorporated herein by reference.
NOW, THEREFORE, for and in consideration of the sum of Ten and No/100
Dollars ($10.00) in hand paid at or before the execution, sealing and delivery
hereof, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged by Seller, Seller hereby agrees as follows:
1. SALE AND CONVEYANCE. Seller hereby sells, transfers and conveys unto
Purchaser, its successors and assigns, without warranties, express or
implied, all right, title and interest of Seller in and to the Assets,
including any third party warranties relating thereto. Seller warrants
that the Assets are being conveyed free and clear of all liens, charges
and encumbrances and has not been conveyed to any other party.
2. GOVERNING LAW. This Xxxx of Sale shall be construed and enforced in
accordance with and governed by the laws of the State of California.
3. BINDING EFFECT. This Xxxx of Sale shall bind and inure to the benefit
of the parties hereto and their respective heirs, executors, personal
representatives, successors and assigns.
IN WITNESS WHEREOF, Seller and Purchaser have caused this instrument to be
executed and sealed as of the day and year first above written.
SELLER:
Xxxxxxxxxx.xxx, a Delaware corporation
By: ____________________________
Name:
Title:
BUYER:
Xxxxxxxxxx.xxx, a Nevada corporation
By: _____________________________
Name:
Title:
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EXHIBIT D
ASSIGNMENT OF INTELLECTUAL PROPERTY RIGHTS
FOR VALUE RECEIVED, and intending to be legally bound, Xxxxxxxxxx.xxx,
Inc., a Delaware corporation ("Assignor") hereby conveys, transfers, assigns,
and sets over to Xxxxxxxxxx.Xxx, Inc., a Nevada corporation ("Assignee"), all of
Assignor's right, title and interest in and to the following (collectively, the
"Assigned Interests"):
All trade names, fictitious names, trademarks, service marks slogans
and logos used in connection with the business and belonging to Assignor,
including, without limitation, the trade names and Internet domain names
"Clicksmart", "Books Now" and "VideosNow".
The Assignment is made, executed and delivered pursuant to a certain
Asset Purchase Agreement, dated as of the date hereof, between Assignor and
Assignee (the "Asset Purchase Agreement"). All capitalized terms, if any, used
herein without separate definition, will have the same meanings therefor as
defined in the Asset Purchase Agreement.
Assignor hereby represents and warrants that, to the best of their
knowledge, (i) all of the assigned Interests are valid, subsisting and
enforceable, (ii) no party is engaging in any activity which in any way
infringes upon any Assigned Interests, and (iii) Assignor is the sole and
exclusive owner of the entire and unencumbered right, title and interest in and
to each of the Assigned Interests, free and clear of any liens, charges and
encumbrances.
Assignor hereby agrees to indemnify and hold Assignee harmless from and
against all claims, demands, losses, damages, expenses and costs including, but
not limited to, reasonable attorney's fees and expenses actually incurred,
arising out of or in connection with Assignor's failure, prior to the date
hereof, to observe, perform and discharge each and every one of the covenants,
obligations and liabilities of the Assignor under the Assigned Interest to be
observed, performed or discharged with respect to the period prior to the date
of this Assignment. Assignee hereby agrees to indemnify and hold Assignor
harmless from and against all claims, demands, losses, damages, expenses and
costs including, but not limited to, reasonable attorney's fees and expenses
actually incurred, arising out of or in connection with Assignee's failure, from
and after the delivery of this Assignment to observe, perform and discharge each
and every one of the covenants, obligations and liabilities under the Assigned
Interests to be observed, performed or discharged with respect to the period on
and after, but not before, the date of this Assignment.
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IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment
this 4th day of May, 2000.
ASSIGNOR:
XXXXXXXXXX.XXX, INC.,
a Delaware corporation
By: ____________________
Name:
Title:
ASSIGNEE:
XXXXXXXXXX.XXX, INC.,
a Nevada corporation
By: ________________________
Name:
Title:
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EXHIBIT E
EMPLOYMENT AGREEMENT
This Agreement is entered into as of the 4th day of May, 2000 between
XxxxxXxxxx.xxx, Inc., a Nevada corporation (hereinafter the "Company" and
"Purchaser") and wholly owned subsidiary of Xxxxxxxx.xxx, and Xxxxx Xxxxxxxxx
(hereinafter "Executive") under the following terms and conditions:
RECITALS:
WHEREAS, it is in the best interest of the Company to employ the
services of the Executive as President of the Company upon the terms and
conditions hereinafter set forth; and
WHEREAS, in connection with the employment of Executive by the
Company, the Company and Purchaser desire to restrict Executive's rights to
compete with the business of the Company and its subsidiaries and affiliates;
NOW, THEREFORE, in consideration of the mutual promises, covenants
and agreements hereinafter set forth, the parties hereto agree as follows:
1. TERM
1.1 It is the intention of the Company and the Executive to rapidly
grow and expand the profitability of Clicksmart business model. The initial term
of this Agreement shall be for a period of three years, commencing on the
effective date of this Agreement subject however, to prior termination as
provided hereinbelow, in Paragraph 5 and 6. At which time, it is intended that
the Executive will continue under the same terms and conditions as other
executives operating subsidiaries which are under the direction of the parent
holding company and the Board of Directors.
2. COMPENSATION
2.1 The Company will pay to the Executive during the term hereof a
salary at the rate of ninty-five thousand dollars ($95,000) per year, which
compensation shall be paid to Executive in equal semi-monthly installments. If
after two years, the company becomes unprofitable then the Board of Directors
will make the determination of compensation.
2.2 Executive shall be entitled to periodic cash bonuses, stock options
or other forms of compensation, at the discretion of the Company's Board of
Directors, dependent upon Executive's performance.
2.3 All compensation shall be subject to customary withholding tax and
other employment taxes as are required with respect to compensation paid by a
corporation to an Executive.
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3. CONFIDENTIALITY AND COVENANT NOT TO COMPETE
The Executive covenants and agrees that he will not at any time during
and after the end of the Term, directly or indirectly, use for his own account,
or disclose to any person, firm or corporations, other than authorized officers,
directors and employees of the Company or its subsidiaries, Confidential
Information of the Company. During the term of this Agreement and for a period
of twelve months after the termination of this agreement, Executive shall not,
without the express written consent of the Company, engage in any activity
competitive with and/or adverse to the Company's business or practice (whether
alone, as a partner, or as an officer, director, Executive or shareholder of any
other corporation, or a trustee or fiduciary or any other representative of any
other entity).
4. SERVICES
4.1 Executive agrees to devote his full time (subject to the
limitations set forth in this Paragraph 4) to the business of the Company and
agrees to serve as President of the Company and any of its Subsidiaries and
Affiliates. Executive agrees to perform those duties customarily incident to
such office and such other services, acts or things necessary or advisable as
directed by the Company, as provided in the Bylaws of the Company and the
Company's Policies and Procedures Manual and as set forth in the job description
entitled Management Responsibilities, a copy of which is attached hereto and
incorporated by reference herein as Exhibit "A." Executive shall report and
shall be responsible to the Chairman and the Board of Directors of the Company.
Expenditures of time for personal, business, charitable and other activities
shall not be deemed a breach of this Agreement, provided that such activities do
not interfere with the services required to be rendered to the Company hereunder
or compete with the business of the Company. Executive agrees that he will serve
the Company faithfully, diligently, competently and to the best of his ability
until the termination of his employment hereunder.
4.2 The parties agree that the services to be rendered by Executive
pursuant to this Agreement are contemplated to be performed primarily at the
offices of the Company.
5. EFFECTIVE DATE.
The effective date of this Agreement shall be May 4, 2000.
6. TERMINATION
6.1 Company may terminate the Executive's employment hereunder for
Cause. For purposes of this Agreement, "Cause" shall mean (i) the willful
failure or refusal by the Executive to perform his duties hereunder (other than
any such failure resulting from the Executive's incapacity due to physical or
mental illness), which has not ceased within ten(10) days after a written demand
for substantial performance is delivered to the Executive by the Company, which
demand identifies the manner in which the Company believes that the Executive
has not performed such duties, (ii) the willful engaging by the Executive in
misconduct which is materially injurious to the Company, monetarily or
otherwise, (iii) the conviction of the Executive of, or the entering of a plea
of nolo contendere by the Executive with respect to, a felony. Upon the
disability of the Executive due to physical disability or other incapacity
including but not limited to substance abuse, which renders the Executive
unable, to perform the duties required of him upon ninety (90) calendar days
written notice. Upon Executive's breach of any of the terms of this Agreement,
Executive shall receive written notice of the breach which notice shall set
forth the term(s) of this Agreement which was (were) breached and
recommendations from the Board of Directors to cure the breach. In the event the
breach is not cured by Executive within thirty days (30) days from the date of
notice, then at the Company's option, this Agreement shall be terminated on the
day immediately following the period in which Executive was to cure the breach.
6.2 Upon termination for any of the foregoing causes, the Executive
shall be entitled to receive one hundred percent (100%) of only the compensation
which Executive would otherwise be entitled to as of the date of the termination
less such amounts as are required to be withheld and deducted.
16
7. EXPENSES
7.1 Executive shall be entitled to reimbursement of all reasonable
expenses actually incurred in the course of his employment. Executive shall
submit to the Company a standardized expense report form, provided by the
Company, and shall attach thereto receipts for all expenditures. Automobile
expenses shall be reimbursed at the maximum mileage rate allowed by the Internal
Revenue Service.
8. THE COMPANY'S AUTHORITY
Executive agrees to observe and comply with the reasonable rules and
regulations of the Company as adopted by the Company's Board of Directors either
orally or in writing respecting performance of his duties and to carry out and
perform orders, directions and policies stated by the Board of Directors, to him
from time to time, either orally or in writing.
9. INSURANCE
Executive shall be allowed to participate in the Company's medical
health plans.
10. PAID VACATION
Executive shall be entitled to a paid vacation each year equal to two
weeks per year per company policy and procedures handbook.
11. NON-TRANSFERABILITY
This Agreement shall not be transferable or assignable by Executive,
nor shall Executive's interest herein be transferred or assigned by operation of
law, and any assignment or attempted assignment, transfer, mortgage,
hypothecation, or pledge of this Agreement or his interest herein by Executive,
shall be null and void.
12. PARTICIPATION IN STOCK AND OPTION EXECUTIVE COMPENSATION PLAN
Executive shall be granted options to purchase 300,000 shares of Common
Stock of the Company (the "OPTIONS"), The Options, which will be evidenced by
Stock Option Agreements in the forms attached hereto as EXHIBIT "A," at an
exercise price equal to the closing price of the Company's Common Stock on the
American Stock Exchange as calculated on the 1st reporting day of June. These
Options vest ratably over a three-year period on each anniversary of this
Agreement, and shall be exercisable for a period of five years from each
applicable vesting period during employment. Should a termination occur between
the parties, then the Executive will have a three-month period to exercise any
stock that has vested.
17
13. NOTICES
All notices, requests, demands and other communications provided for by
this Agreement shall be in writing and (unless otherwise specifically provided
herein) shall be deemed to have been given at the time when mailed in any
general or branch United States Post Office, enclosed in a registered or
certified postpaid envelope, addressed to the parties stated below or to such
changed address as such party may have fixed by notice:
TO THE COMPANY: XxxxxXxxxx.xxx, Inc.
C/O Xxxxxxxx.xxx
00000 Xxxx Xxxxx Xx. Xxxxx 000
Xxx Xxxxx, XX 00000
EXECUTIVE: Xxxxx Xxxxxxxxx
0 Xxxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
14. ENTIRE AGREEMENT
This Agreement supercedes any and all Agreements, whether oral or
written, between the parties hereto, with respect to the employment of Executive
by the Company and contains all of the covenants and Agreements between the
parties with respect to the rendering of such services in any manner whatsoever.
Each party to this Agreement acknowledges that no representations, inducements,
promises or agreements, orally or otherwise, have been made by any party, or
anyone acting on behalf of any party, which are not embodied herein, and that no
other agreement, statement or promise with respect to such employment not
contained in this Agreement shall be valid or binding. Any modification of this
Agreement will be effective only if it is in writing and signed by all the
parties hereto.
15. PARTIAL INVALIDITY
If any provision in this Agreement is held by a court of competent
jurisdiction to be invalid, void, or unenforceable the remaining provisions
shall nevertheless continue in full force and effect without being impaired or
invalidated in any way.
16. ATTORNEYS' FEES
If any action in law or equity, including an action for declaratory
relief, is brought to enforce or interpret the provisions of this Agreement, the
prevailing party shall be entitled to reasonable attorney's fees and costs,
which may be set by the court in the same action or in a separate action brought
for that purpose, in addition to any other relief to which that party may be
entitled.
17. GOVERNING LAW
This Agreement will be governed by and construed in accordance with the
laws of the State of California.
18. BINDING NATURE
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective representatives, heirs, successors and
assigns.
19. WAIVER
No waiver of any of the provision of this Agreement shall be deemed, or
shall constitute a waiver of any other provision, whether or not similar, nor
shall any waiver constitute a continuing waiver. No waiver shall be binding
unless executed in writing by the party making the waiver.
18
20. CORPORATE APPROVALS
The Company represents and warrant that the execution of this Agreement
by their respective corporate officers named below have been duly authorized by
the Board of Director of the Company, is not in conflict with any Bylaw or other
agreement and will be a binding obligation of the Company enforceable in
accordance with its terms.
21. TIME IS OF THE ESSENCE.
Time is of the essence with respect to all matters provided in this
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date above written.
"THE COMPANY"
XxxxxXxxxx.xxx, Inc., a Nevada Corporation
By: ___________________________
"EXECUTIVE"
/S/ Xxxxx Xxxxxxxxx
-------------------------------
Xxxxx Xxxxxxxxx
19
EXHIBIT A
Stock Option Agreements are attached. The stock incentive plan will be issued
according to the following schedule:
1. 40,000 option shares will be issued under the Xxxxxxxx.xxx
employee stock option plan with vesting in one year from June
1, 2000 at market price.
2. 60,000 share options will be issued with vesting in one year
which will not be covered under the Xxxxxxxx.xxx employee
stock option plan from June 1, 2000 at market price.
3. 100,000 share options will be issued with vesting in two years
which will not be covered under the Xxxxxxxx.xxx stock option
plan from June 1, 2000 at market price.
4. 100,000 option shares will be issued upon the adoption of the
new Xxxxxxxx.xxx employee stock option plan by the
shareholders which is being presented at the next shareholders
meeting which share will be priced at market at that time with
vesting in three years from June 1, 2000.
20
EXHIBIT F
CONSULTING AGREEMENT
This Agreement is entered into as of the 1st day of May, 2000 between
XxxxxXxxxx.xxx, Inc., a Nevada corporation (hereinafter the "Company" and
"Purchaser") and wholly owned subsidiary of Xxxxxxxx.xxx, and Xxxxx Xxxxxxxxx
(hereinafter "Executive") under the following terms and conditions:
RECITALS:
WHEREAS, it is in the best interest of the Company to employ the
consulting services of the Executive upon the terms and conditions hereinafter
set forth; and
WHEREAS, in connection with the consulting services of Executive
by the Company, the Company desire to restrict Executive's rights to compete
with the business of the Company and its subsidiaries and affiliates;
NOW, THEREFORE, in consideration of the mutual promises, covenants
and agreements hereinafter set forth, the parties hereto agree as follows:
1. TERM
1.2 The initial term of this Agreement shall be for a period of one (1)
year, commencing on the effective date of this Agreement.
2. COMPENSATION
2.1 The Company will pay to the Executive during the term hereof a
consulting fee of Twelve thousand ($12,000) per year, which compensation shall
be paid to Executive in equal monthly installments.
3. CONFIDENTIALITY AND COVENANT NOT TO COMPETE
The Executive covenants and agrees that he will not at any time during
and after the end of the Term, directly or indirectly, use for his own account,
or disclose to any person, firm or corporations, other than authorized officers,
directors and employees of the Company or its subsidiaries, Confidential
Information of the Company. During the term of this Agreement and for a period
of eighteen months after the termination of this agreement, Executive shall not,
without the express written consent of the Company, engage in any activity
competitive with and/or adverse to the Company's business or practice (whether
alone, as a partner, or as an officer, director, Executive or shareholder of any
other corporation, or a trustee or fiduciary or any other representative of any
other entity).
4. SERVICES
4.1 Executive agrees to consult with the Company on a limited basis
when requested.
4.2 The parties agree that the services to be rendered by Executive
pursuant to this Agreement are not necessarily contemplated to be performed at
the offices of the Company.
21
5. EFFECTIVE DATE.
The effective date of this Agreement shall be May 15, 2000.
6. TERMINATION
Upon Executive's breach of any of the terms of this Agreement,
Executive shall receive written notice of the breach which notice shall set
forth the term(s) of this Agreement which was (were) breached and
recommendations from the Board of Directors to cure the breach
7. NON-TRANSFERABILITY
This Agreement shall not be transferable or assignable by Executive,
nor shall Executive's interest herein be transferred or assigned by operation of
law, and any assignment or attempted assignment, transfer, mortgage,
hypothecation, or pledge of this Agreement or his interest herein by Executive,
shall be null and void.
8. ENTIRE AGREEMENT
This Agreement supercedes any and all Agreements, whether oral or
written, between the parties hereto, with respect to the employment of Executive
by the Company and contains all of the covenants and Agreements between the
parties with respect to the rendering of such services in any manner whatsoever.
Each party to this Agreement acknowledges that no representations, inducements,
promises or agreements, orally or otherwise, have been made by any party, or
anyone acting on behalf of any party, which are not embodied herein, and that no
other agreement, statement or promise with respect to such employment not
contained in this Agreement shall be valid or binding. Any modification of this
Agreement will be effective only if it is in writing and signed by all the
parties hereto.
9. PARTIAL INVALIDITY
If any provision in this Agreement is held by a court of competent
jurisdiction to be invalid, void, or unenforceable the remaining provisions
shall nevertheless continue in full force and effect without being impaired or
invalidated in any way.
10. ATTORNEYS' FEES
If any action in law or equity, including an action for declaratory
relief, is brought to enforce or interpret the provisions of this Agreement, the
prevailing party shall be entitled to reasonable attorney's fees and costs,
which may be set by the court in the same action or in a separate action brought
for that purpose, in addition to any other relief to which that party may be
entitled.
11. GOVERNING LAW
This Agreement will be governed by and construed in accordance with the
laws of the State of California.
12. BINDING NATURE
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective representatives, heirs, successors and
assigns.
22
13. WAIVER
No waiver of any of the provision of this Agreement shall be deemed, or
shall constitute a waiver of any other provision, whether or not similar, nor
shall any waiver constitute a continuing waiver. No waiver shall be binding
unless executed in writing by the party making the waiver.
14. CORPORATE APPROVALS
The Company represents and warrant that the execution of this Agreement
by their respective corporate officers named below have been duly authorized by
the Board of Director of the Company, is not in conflict with any Bylaw or other
agreement and will be a binding obligation of the Company enforceable in
accordance with its terms.
15. TIME IS OF THE ESSENCE.
Time is of the essence with respect to all matters provided in this
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date above written.
"THE COMPANY"
XxxxxXxxxx.xxx, Inc., a Nevada Corporation
By: ___________________________
"EXECUTIVE"
/S/ Xxxxx Xxxxxxxxx
-------------------------------
Xxxxx Xxxxxxxxx
23
EXHIBIT A
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