Exhibit 10.21
PROFESSIONAL CONSULTING AGREEMENT
This Agreement made as of August 19, 1998, by and between QUEST NET
Corp., a Colorado Corporation, 0000 X Xxxxxxx Xxxx Xxxxxxxxx, Xxxxx 000, Xxxx
Xxxxxxxxxx, Xxxxxxx 00000 ("QUEST NET"), "), Real-Time Phone Services, Inc. a
Florida Corporation, 000 Xxxxx Xxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxxxx Xxxxx
Xxxxxxx 00000 ("REAL TIME") and REAL-TIME's parent company, Secure Transaction
International Corp., a Florida Corporation, 000 Xxxxx Xxxxxxx Xxxxxxx, Xxxxx
000, Xxxxxxxxx Xxxxx Xxxxxxx 00000 ("STIC").
WHEREAS, QUEST NET has substantial experience in computer technology
including data communications and message switching networks and the creating
and marketing of software, especially in the field of encryption; and
WHEREAS, QUEST NET operates data communications and message switching
networks and provides data network and communications services and related
equipment and devices, individually or through affiliates, suppliers and agents;
and
WHEREAS, QUEST NET, through its business operations and contacts is
made aware of new products and market opportunities that could benefit
REAL-TIME; and
WHEREAS, REAL-TIME wishes to enlist QUEST NET as a technology and
marketing consultant to provide assistance to REAL-TIME on an on-going basis
with regard to new product and market opportunities in the areas of computer
technology including data communications and message switching networks and the
creating and marketing of software, especially in the field of encryption; and
WHEREAS, STIC is the parent corporation of REAL-TIME, its wholly owned
subsidiary and,
WHEREAS, STIC intends to become a company whose securities are publicly
traded, and
WHEREAS, STIC's Board of Directors has authorized the conversion of
REAL-TIME preferred stock into the common stock of STIC.
NOW, THEREFORE, for the mutual promises and other consideration
described herein, the parties hereto agree as follows:
1. Services to be Provided by QUEST NET. QUEST NET's duties will
consist of (i) providing technology and marketing advice and analysis of new
product and market opportunities in the areas of computer technology (the
"Opportunities"), including data communications, message switching networks and
encryption and other related software (the "Software"); (ii) evaluating and
presenting to REAL-TIME the Opportunities; (iii) facilitating REAL-TIME's
relationship with the computer technology community and (iv) assisting REAL-TIME
to (a) introduce its encryption software product into various markets throughout
the United States and (b) help expand the
distribution of its encryption software into those markets. QUEST NET will
provide such assistance on an on-going basis. QUEST NET will respond to all
telephone calls from REAL-TIME within a time period of 2 hours from the time the
call was placed.
2. Term. The term of this Agreement shall be for a period of 5 years
from the date hereof.
3 Compensation for Services. In consideration of services to be
rendered hereunder, QUEST NET shall receive a consulting fee of $50,000 per
year, payable in advance by the issuance of 25,000 shares of REAL-TIME's Series
A Preferred Non-Voting Stock, $10.00 per share face value (the "Preferred
Stock"). The Preferred Stock shall be convertible into the common stock of STIC.
The other rights and preferences of the Preferred Stock are more fully described
in Exhibit "A" hereto and incorporated herein. The delivery of the Preferred
certificates will take place within twenty (20) business days from the execution
of this Agreement (the "Delivery Date"). REAL-TIME or STIC shall have the right
to redeem the Preferred Stock not converted, in whole or in part, at any time by
paying the face value thereof.
For each three-month period during the Term of this Agreement, QUEST
NET shall have the right to convert up to 1,250 shares of the Preferred Stock by
providing to REAL-TIME and STIC a notice of conversion. Within fifteen days from
the receipt of the notice, REAL-TIME or STIC shall have the option to redeem
that number of the Preferred Shares noticed for conversion (the "Redeemable
Shares"), at a redemption price of $10.00 per share. If REAL-TIME or STIC do not
redeem the Redeemable Shares within such fifteen day period, QUEST NET shall
have the right to convert the Redeemable Shares into common stock of STIC, at a
conversion rate equal to (i) the average 5 day bid price (as of the date of
conversion) of STIC's common stock, if STIC's common stock is publicly traded,
or at the book value per share of STIC's Common Stock, if such common stock is
not publicly traded.
4. Reimbursement for Expenses. QUEST NET shall bear all of its expenses
and costs without reimbursement from REAL-TIME.
5. Termination. In addition to any other remedy available at law or in
equity, in the event of any breach of this agreement by QUEST NET the number of
shares to be retained by QUEST NET shall be based upon 25,000 times a fraction
whose numerator is the number of days after the date hereof and whose
denominator is 1,825. All remaining shares shall be canceled.
If QUEST NET is unable, for any reason, to perform the duties for
REAL-TIME for 15 consecutive days, it shall be treated as a breach by QUEST NET.
6. Finders Fees. QUEST NET shall not receive any finders' fees,
commissions or other remuneration in connection with any transaction it assists
REAL-TIME with during the term of this Agreement.
7. Representations and Warranties. QUEST NET represents and
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warrants that services to be provided by QUEST NET under this Agreement will be
performed by competent, trained personnel in a workmanlike manner. QUEST NET and
its personnel shall comply with all applicable statues, rules, and regulations
governing all aspects of the services to be performed under this Agreement.
REAL-TIME understands and acknowledges that QUEST NET cannot guarantee that the
services provided hereunder will achieve any particular objective or fulfill any
specified goals.
In order to induce REAL-TIME to issue the Preferred Shares, recognizing
that REAL-TIME will be relying on the information and on the representations set
forth below, QUEST NET hereby represents, warrants, and agrees as follows:
(a) QUEST NET has determined that the purchase of the Preferred shares
and the shares underlying the Preferred Shares of REAL-TIME (the "Shares")
is a suitable investment for QUEST NET and that QUEST NET is able to bear
economic risks including a total loss of an investment in the Shares.
(b) QUEST NET is purchasing the Shares for its own account for
investment, and not with a view to or for sale in connection with the
distribution of the Shares nor with any present intention of selling or
otherwise disposing of all or any part of the Shares. QUEST NET hereby
acknowledges its understanding that the Shares are not being registered
under the Securities Act of 1933 (the "Act"), or any state securities laws
on the ground that the issuance and sale of the Shares to QUEST NET is
exempt under the Act and relevant state securities laws as not involving a
public offering. QUEST NET agrees not to sell the Shares unless they are
subsequently registered or an exemption from such registration is
available. QUEST NET authorizes REAL-TIME to place a legend denoting the
restrictions on the certificates to be issued.
QUEST NET further acknowledges its understanding that REAL-TIME's reliance
on such exemptions are, in part, based upon the foregoing representations,
warranties, and agreements by it and that the statutory basis for such
exemptions would not be present, if notwithstanding such representations,
warranties and agreements, QUEST NET was acquiring the Shares for resale on
the occurrence or non-occurrence of some pre-determined event. In order to
induce REAL-TIME to issue and sell the Shares to QUEST NET, it is agreed
that REAL-TIME will have no obligation to recognize the ownership,
beneficial or otherwise, of such shares by anyone but QUEST NET, except as
set forth herein.
(c) QUEST NET acknowledges and is aware that, except as set forth
herein, the it will not transfer or assign the Shares, or any interest
therein; the assignment and transferability of the Shares will be governed
by this Agreement and all applicable laws.
(d) QUEST NET has acknowledged and is aware that, except for the three
day rescission rights provided under Florida law, it is not entitled to
cancel, terminate or revoke this subscription, and any agreements of QUEST
NET in connection herewith shall survive the termination of this Agreement.
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(e) QUEST NET has had the opportunity to ask questions of, and receive
answers from management of REAL-TIME regarding the terms and conditions of
this Agreement, and the transactions contemplated thereby, as well as the
affairs of REAL-TIME and related matters.
QUEST NET may have access to whatever additional information
concerning REAL-TIME, its financial condition, its business, its prospects,
its management, its capitalization, and other similar matters that it or
its purchaser representative, if any, desires, provided that REAL-TIME can
acquire such information without unreasonable effort or expense. In
addition, as required by Section 517.061(11)(a)(3), Florida Statutes, and
Rule 3E-500.05(a) thereunder, QUEST NET and its purchaser representative
may have, at the offices of REAL-TIME, at any reasonable hour, after
reasonable prior notice, access to the materials set forth in the Rule
which REAL-TIME can obtain without unreasonable effort or expense.
(f) QUEST NET has had the opportunity to obtain additional information
necessary to verify the accuracy of the information referred to in
subparagraph (e) hereof.
QUEST NET hereby agrees to indemnify and hold harmless REAL-TIME its
respective officers, directors, shareholders, employees, agents and attorneys
against any and all losses, claims, demands, liabilities and expenses (including
reasonable attorney fees, expert witness and accounting fees and other
disbursements and costs or other expenses) incurred by each such person in
connection with defending or investigating any such claims or liabilities,
whether or not resulting in any liability to such person) to which any such
indemnified party may become subject under the Act, under any other statute, at
common law or otherwise, insofar as such losses, claims, demands, liabilities
and expenses (a) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in this Agreement, or (b) arise
out of or are based upon any breach of any representation, warranty or agreement
contained herein.
The representations, warranties, and agreements contained herein shall
survive the delivery of and payment for, the Shares.
--------------------------------------------------------------------------------
FLORIDA LAW PROVIDES THAT WHEN SALES ARE MADE TO FIVE OR MORE PERSONS IN
FLORIDA, ANY SALE MADE IN FLORIDA IS VOIDABLE BY THE PURCHASER WITHIN THREE DAYS
AFTER THE FIRST TENDER OF CONSIDERATION IS MADE BY SUCH PURCHASER TO REAL-TIME,
AN AGENT OF REAL-TIME OR AN ESCROW AGENT OR WITHIN THREE DAYS AFTER THE
AVAILABILITY OF THAT PRIVILEGE IS COMMUNICATED TO SUCH PURCHASER, WHICHEVER
OCCURS LATER. PAYMENTS FOR TERMINATED SUBSCRIPTIONS VOIDED BY PURCHASERS AS
PROVIDED FOR IN THIS PARAGRAPH WILL BE PROMPTLY REFUNDED WITHOUT INTEREST.
--------------------------------------------------------------------------------
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8. Governing Law, Venue, and Arbitration. This Agreement shall be deemed to be
executed in the State of Florida and governed by the laws of the State of
Florida. Any controversy or claim arising out of or relating to this Agreement
or to the interpretation, breach or enforcement thereof, except a claim for
injunctive relief, shall be submitted to an arbitrator and settled by
arbitration in Broward County, Florida, in accordance with the rules then
obtaining of the American Arbitration Association. Any award made by the
arbitrator shall be final, binding, and conclusive on all parties hereto for all
purposes, and judgment may be entered thereon in any court having jurisdiction
thereof. Nothing contained herein shall serve to prohibit the parties from
seeking injunctive relief in a court of competent jurisdiction.
9. Severability. In the event any parts of this Agreement are found to
be void, the remaining provisions of this Agreement shall nevertheless be
binding with the same effect as though the void parts were deleted.
10. Successors. Subject to the provisions of this Agreement, this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns.
11. Section and Paragraph Headings. The section and paragraph headings
in this Agreement are for reference purposes only and shall not affect the
meaning or interpretation of this Agreement.
12. Waiver and Amendment. The waiver by any party to this Agreement of
a breach of any provision hereof by any other party shall not be construed as a
waiver of any subsequent breach by any party. No provision of this Agreement may
be terminated, amended, supplemented, waived or modified other than by an
instrument in writing signed by the party against whom the enforcement of the
termination, amendment, supplement, waiver or modification is sought.
13. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. The execution of this
Agreement may be by actual or facsimile signature, provided however that
original signatures must be provided within ten days from the date of signing.
14. Attorney Fees and Costs. In the event any action is commenced, the
prevailing party shall be entitled to reasonable attorney's fees, costs and
expenses.
15. Assignment. This Agreement may be assigned by REAL-TIME to any
other wholly owned subsidiary of STIC. No other assignment will be permitted by
either party without the other party prior written consent, which shall not be
unreasonably withheld.
16. Relationship of Parties. Except as set forth herein, neither party
shall have any right or authority to create any obligation on the part of the
other party or bind the other party to any agreement.
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17. Notices. Any notice required or permitted by this Agreement shall
be in writing and shall be delivered by U.S. Certified Mail, return receipt
requested, or by special messenger service with receipt (such as Federal
Express), by facsimile delivery or by hand, to the parties at the addresses set
forth above or such substitute address of which notice is given in like manner.
The transmission confirmation receipt from the sender's facsimile machine shall
be conclusive evidence of successful facsimile delivery.
Time shall be counted to, or from, as the case may be, the delivery in person or
by mailing.
18. Entire Agreement. This Agreement constitutes the entire agreement
between the parties and supersedes all prior oral or written agreements
regarding the same subject matter.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by its duly authorized officer, or as to an individual
party, has executed this Agreement in his own hand, as of the date first written
above.
In the presence of:
Real-Time Phone Services, Inc.
[Illigible] By: /s/ J. Xxxxxxx Xxxxxx
----------------------- ---------------------------
J. Xxxxxxx Xxxxxx, Chairman
Secure Transaction International
Corporation
[Illigible] By /s/ J. Xxxxxxx Xxxxxx
----------------------- ---------------------------
J. Xxxxxxx Xxxxxx, Chairman
Quest Net, Corp.
BY: /s/ Xxxxxx Xxxxxxx
----------------------- ---------------------------
Xxxxxx Xxxxxxx, President
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EXHIBIT A
Description of Series "A" Preferrgd Stock
The Series A Preferred Stock of REAL-TIME was properly authorized by the
REAL-TIME's Board of Directors and filed with Secretary of State. The shares
initially have a designated face value of ten dollars ($10) per share. One
Hundred million (100,000,000) shares of Preferred Stock have been authorized,
25,000 of which have been designated as Series A and reserved for issuance as
consideration for this Transaction. The Series A Preferred shares are
convertible into the common stock of STIC. The Series A Preferred shares and the
common stock of STIC have never traded in the market and have never been
registered as a part of any registration statement filed by REAL-TIME or STIC
with the Securities and Exchange Commission. The value of the shares was
arbitrarily determined by STIC's and REAL-TIME's Board of Directors after taking
into consideration, among other things, the features of the Series A Preferred
Stock and the prospects for the company's success in connection with projects
acquired with Series A Preferred Stock.
The preferred stock features are:
1. $10.00 face value per share.
2. No voting Rights
3. REAL-TIME has the right to redeem at any time, any and all Preferred Shares
by payment of the face value thereof.
4. The Preferred Shares shall be convertible into the common stock of STIC, at a
conversion rate equal to (i) the average 5 day bid price (as of the date of
conversion) of STIC's common stock, if STIC's common stock is publicly traded,
or at the book value per share of STIC's common stock, if such common stock is
not publicly traded.
THE PREFERRED SHARES AND THE SHARES UNDERLYING THE PREFERRED SHARES ARE NOT
BEING REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR UNDER ANY STATE SECURITIES STATUTE. THE PREFERRED SHARES AND THE
SHARE UNDERLYING THE PREFERRED SHARES ARE BEING ACQUIRED BY QUEST NET FOR ITS
OWN ACCOUNT, FOR INVESTMENT PURPOSES ONLY, AND NOT WITH A VIEW TO ANY
DISTRIBUTION THEREOF. QUEST NET AGREES THAT NO TRANSFER OR OTHER DISPOSITION OF
THE PREFERRED SHARES OR THE SHARES UNDERLYING THE PREFERRED SHARES OR ANY
INTEREST THEREIN WILL BE MADE IN VIOLATION OF THE SECURITIES ACT
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OR ANY STATE SECURITIES STATUTE. QUEST NET WILL EXECUTE AN INVESTMENT LETTER
TO THIS EFFECT.
FLORIDA LAW PROVIDES THAT WHEN SALES ARE MADE TO FIVE OR MORE PERSONS IN
FLORIDA, ANY SALE MADE IN FLORIDA IS VOIDABLE BY THE PURCHASER WITHIN THREE DAYS
AFTER THE FIRST TENDER OF CONSIDERATION IS MADE BY SUCH PURCHASER TO THE
COMPANY, AN AGENT OF THE COMPANY OR AN ESCROW AGENT OR WITHIN THREE DAYS AFTER
THE AVAILABILITY OF THAT PRIVILEGE IS COMMUNICATED TO SUCH PURCHASER, WHICHEVER
OCCURS LATER. SUCH WITHDRAWAL WILL BE WITHOUT ANY FURTHER LIABILITY TO ANY
PERSON. TO ACCOMPLISH SUCH WITHDRAWAL, YOU NEED ONLY SEND A LETTER OR TELEGRAM
TO THE COMPANY AT THE ADDRESS SHOWN HEREIN INDICATING YOUR INTENTION TO
WITHDRAW. SUCH LETTER OR TELEGRAM MUST BE SENT AND POSTMARKED PRIOR TO THE END
OF THE AFOREMENTIONED THIRD BUSINESS DAY. IF SENDING A LETTER, AN INVESTOR
SHOULD SEND IT BY CERTIFIED MAIL. RETURN RECEIPT REQUESTED, TO ENSURE THAT IT IS
RECEIVED AND TO EVIDENCE THE TIME WHEN IT IS MAILED. ANY ORAL REQUESTS FOR
RESCISSION SHOULD BE ACCOMPANIED BY A REQUEST FOR WRITTEN CONFIRMATION THE ORAL
REQUEST WAS RECEIVED ON A TIMELY BASIS.
AS REQUIRED BY SECTION 517.061(11)(A)3 FLORIDA STATUTES, AND RULE
3E-500.05(5)(A) PROMULGATED THEREUNDER, YOU OR YOUR REPRESENTATIVES MAY HAVE, AT
THE OFFICES OF THE COMPANY AT ANY REASONABLE HOUR, AFTER REASONABLE PRIOR
NOTICE, ACCESS TO THE MATERIALS SET FORTH IN THE RULE WHICH THE COMPANY CAN
OBTAIN WITHOUT UNREASONABLE EFFORT OR EXPENSE.
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PROFESSIONAL CONSULTING AGREEMENT
This Agreement made as of August 19, 1998, by and between QUEST NET
Corp., a Colorado Corporation, 0000 X Xxxxxxx Xxxx Xxxxxxxxx, Xxxxx 000, Xxxx
Xxxxxxxxxx, Xxxxxxx 00000 ("QUEST NET"), "), Real-Time Cash, Inc. a Florida
Corporation, 000 Xxxxx Xxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxxxx Xxxxx Xxxxxxx 00000
("REAL TIME") and REAL-TIME's parent company, Secure Transaction International
Corp., a Florida Corporation, 000 Xxxxx Xxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxxxx
Xxxxx Xxxxxxx 00000 ("STIC").
WHEREAS, QUEST NET has substantial experience in computer technology
including data communications and message switching networks and the creating
and marketing of software, especially in the field of encryption; and
WHEREAS, QUEST NET operates data communications and message switching
networks and provides data network and communications services and related
equipment and devices, individually or through affiliates, suppliers and agents;
and
WHEREAS, QUEST NET, through its business operations and contacts is
made aware of new products and market opportunities that could benefit
REAL-TIME; and
WHEREAS, REAL-TIME wishes to enlist QUEST NET as a technology and
marketing consultant to provide assistance to REAL-TIME on an on-going basis
with regard to new product and market opportunities in the areas of computer
technology including data communications and message switching networks and the
creating and marketing of software, especially in the field of encryption; and
WHEREAS, STIC is the parent corporation of REAL-TIME, its wholly owned
subsidiary and,
WHEREAS, STIC intends to become a company whose securities are publicly
traded, and
WHEREAS, STIC's Board of Directors has authorized the conversion of
REAL-TIME preferred stock into the common stock of STIC.
NOW, THEREFORE, for the mutual promises and other consideration
described herein, the parties hereto agree as follows:
1. Services to be Provided by QUEST NET. QUEST NET's duties will
consist of (i) providing technology and marketing advice and analysis of new
product and market opportunities in the areas of computer technology (the
"Opportunities"), including data communications, message switching networks and
encryption and other related software (the "Software"); (ii) evaluating and
presenting to REAL-TIME the Opportunities; (iii) facilitating REAL-TIME's
relationship with the computer technology community and (iv) assisting REAL-TIME
to (a) introduce its encryption software product into various markets throughout
the United States and (b) help expand the
distribution of its encryption software into those markets. QUEST NET will
provide such assistance on an on-going basis. QUEST NET will respond to all
telephone calls from REAL-TIME within a time period of 2 hours from the time the
call was placed.
2. Term. The term of this Agreement shall be for a period of 5 years
from the date hereof.
3 Compensation for Services. In consideration of services to be
rendered hereunder, QUEST NET shall receive a consulting fee of $50,000 per
year, payable in advance by the issuance of 25,000 shares of REAL-TIME's Series
A Preferred Non-Voting Stock, $10.00 per share face value (the "Preferred
Stock"). The Preferred Stock shall be convertible into the common stock of STIC.
The other rights and preferences of the Preferred Stock are more fully described
in Exhibit "A" hereto and incorporated herein. The delivery of the Preferred
certificates will take place within twenty (20) business days from the execution
of this Agreement (the "Delivery Date"). REAL-TIME or STIC shall have the right
to redeem the Preferred Stock not converted, in whole or in part, at any time by
paying the face value thereof.
For each three-month period during the Term of this Agreement, QUEST
NET shall have the right to convert up to 1,250 shares of the Preferred Stock by
providing to REAL-TIME and STIC a notice of conversion. Within fifteen days from
the receipt of the notice, REAL-TIME or STIC shall have the option to redeem
that number of the Preferred Shares noticed for conversion (the "Redeemable
Shares"), at a redemption price of $10.00 per share. If REAL-TIME or STIC do not
redeem the Redeemable Shares within such fifteen day period, QUEST NET shall
have the right to convert the Redeemable Shares into common stock of STIC, at a
conversion rate equal to (i) the average 5 day bid price (as of the date of
conversion) of STIC's common stock, if STIC's common stock is publicly traded,
or at the book value per share of STIC's Common Stock, if such common stock is
not publicly traded.
4. Reimbursement for Expenses. QUEST NET shall bear all of its expenses
and costs without reimbursement from REAL-TIME.
5. Termination. In addition to any other remedy available at law or in
equity, in the event of any breach of this agreement by QUEST NET the number of
shares to be retained by QUEST NET shall be based upon 25,000 times a fraction
whose numerator is the number of days after the date hereof and whose
denominator is 1,825. All remaining shares shall be canceled.
If QUEST NET is unable, for any reason, to perform the duties for
REAL-TIME for 15 consecutive days, it shall be treated as a breach by QUEST NET.
6. Finders Fees. QUEST NET shall not receive any finders' fees,
commissions or other remuneration in connection with any transaction it assists
REAL-TIME with during the term of this Agreement.
7. Representations and Warranties. QUEST NET represents and
2
warrants that services to be provided by QUEST NET under this Agreement will be
performed by competent, trained personnel in a workmanlike manner. QUEST NET and
its personnel shall comply with all applicable statues, rules, and regulations
governing all aspects of the services to be performed under this Agreement.
REAL-TIME understands and acknowledges that QUEST NET cannot guarantee that the
services provided hereunder will achieve any particular objective or fulfill any
specified goals.
In order to induce REAL-TIME to issue the Preferred Shares, recognizing
that REAL-TIME will be relying on the information and on the representations set
forth below, QUEST NET hereby represents, warrants, and agrees as follows:
(a) QUEST NET has determined that the purchase of the Preferred shares
and the shares underlying the Preferred Shares of REAL-TIME (the "Shares")
is a suitable investment for QUEST NET and that QUEST NET is able to bear
economic risks including a total loss of an investment in the Shares.
(b) QUEST NET is purchasing the Shares for its own account for
investment, and not with a view to or for sale in connection with the
distribution of the Shares nor with any present intention of selling or
otherwise disposing of all or any part of the Shares. QUEST NET hereby
acknowledges its understanding that the Shares are not being registered
under the Securities Act of 1933 (the "Act"), or any state securities laws
on the ground that the issuance and sale of the Shares to QUEST NET is
exempt under the Act and relevant state securities laws as not involving a
public offering. QUEST NET agrees not to sell the Shares unless they are
subsequently registered or an exemption from such registration is
available. QUEST NET authorizes REAL-TIME to place a legend denoting the
restrictions on the certificates to be issued.
QUEST NET further acknowledges its understanding that REAL-TIME's reliance
on such exemptions are, in part, based upon the foregoing representations,
warranties, and agreements by it and that the statutory basis for such
exemptions would not be present, if notwithstanding such representations,
warranties and agreements, QUEST NET was acquiring the Shares for resale on
the occurrence or non-occurrence of some pre-determined event. In order to
induce REAL-TIME to issue and sell the Shares to QUEST NET, it is agreed
that REAL-TIME will have no obligation to recognize the ownership,
beneficial or otherwise, of such shares by anyone but QUEST NET, except as
set forth herein.
(c) QUEST NET acknowledges and is aware that, except as set forth
herein, the it will not transfer or assign the Shares, or any interest
therein; the assignment and transferability of the Shares will be governed
by this Agreement and all applicable laws.
(d) QUEST NET has acknowledged and is aware that, except for the three
day rescission rights provided under Florida law, it is not entitled to
cancel, terminate or revoke this subscription, and any agreements of QUEST
NET in connection herewith shall survive the termination of this Agreement.
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(e) QUEST NET has had the opportunity to ask questions of, and receive
answers from management of REAL-TIME regarding the terms and conditions of
this Agreement, and the transactions contemplated thereby, as well as the
affairs of REAL-TIME and related matters.
QUEST NET may have access to whatever additional information
concerning REAL-TIME, its financial condition, its business, its prospects,
its management, its capitalization, and other similar matters that it or
its purchaser representative, if any, desires, provided that REAL-TIME can
acquire such information without unreasonable effort or expense. In
addition, as required by Section 517.061(11)(a)(3), Florida Statutes, and
Rule 3E-500.05(a) thereunder, QUEST NET and its purchaser representative
may have, at the offices of REAL-TIME, at any reasonable hour, after
reasonable prior notice, access to the materials set forth in the Rule
which REAL-TIME can obtain without unreasonable effort or expense.
(f) QUEST NET has had the opportunity to obtain additional information
necessary to verify the accuracy of the information referred to in
subparagraph (e) hereof.
QUEST NET hereby agrees to indemnify and hold harmless REAL-TIME its
respective officers, directors, shareholders, employees, agents and attorneys
against any and all losses, claims, demands, liabilities and expenses (including
reasonable attorney fees, expert witness and accounting fees and other
disbursements and costs or other expenses) incurred by each such person in
connection with defending or investigating any such claims or liabilities,
whether or not resulting in any liability to such person) to which any such
indemnified party may become subject under the Act, under any other statute, at
common law or otherwise, insofar as such losses, claims, demands, liabilities
and expenses (a) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in this Agreement, or (b) arise
out of or are based upon any breach of any representation, warranty or agreement
contained herein.
The representations, warranties, and agreements contained herein shall
survive the delivery of and payment for, the Shares.
--------------------------------------------------------------------------------
FLORIDA LAW PROVIDES THAT WHEN SALES ARE MADE TO FIVE OR MORE PERSONS IN
FLORIDA, ANY SALE MADE IN FLORIDA IS VOIDABLE BY THE PURCHASER WITHIN THREE DAYS
AFTER THE FIRST TENDER OF CONSIDERATION IS MADE BY SUCH PURCHASER TO REAL-TIME,
AN AGENT OF REAL-TIME OR AN ESCROW AGENT OR WITHIN THREE DAYS AFTER THE
AVAILABILITY OF THAT PRIVILEGE IS COMMUNICATED TO SUCH PURCHASER, WHICHEVER
OCCURS LATER. PAYMENTS FOR TERMINATED SUBSCRIPTIONS VOIDED BY PURCHASERS AS
PROVIDED FOR IN THIS PARAGRAPH WILL BE PROMPTLY REFUNDED WITHOUT INTEREST.
--------------------------------------------------------------------------------
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8. Governing Law, Venue, and Arbitration. This Agreement shall be deemed to be
executed in the State of Florida and governed by the laws of the State of
Florida. Any controversy or claim arising out of or relating to this Agreement
or to the interpretation, breach or enforcement thereof, except a claim for
injunctive relief, shall be submitted to an arbitrator and settled by
arbitration in Broward County, Florida, in accordance with the rules then
obtaining of the American Arbitration Association. Any award made by the
arbitrator shall be final, binding, and conclusive on all parties hereto for all
purposes, and judgment may be entered thereon in any court having jurisdiction
thereof. Nothing contained herein shall serve to prohibit the parties from
seeking injunctive relief in a court of competent jurisdiction.
9. Severability. In the event any parts of this Agreement are found to
be void, the remaining provisions of this Agreement shall nevertheless be
binding with the same effect as though the void parts were deleted.
10. Successors. Subject to the provisions of this Agreement, this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns.
11. Section and Paragraph Headings. The section and paragraph headings
in this Agreement are for reference purposes only and shall not affect the
meaning or interpretation of this Agreement.
12. Waiver and Amendment. The waiver by any party to this Agreement of
a breach of any provision hereof by any other party shall not be construed as a
waiver of any subsequent breach by any party. No provision of this Agreement may
be terminated, amended, supplemented, waived or modified other than by an
instrument in writing signed by the party against whom the enforcement of the
termination, amendment, supplement, waiver or modification is sought.
13. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. The execution of this
Agreement may be by actual or facsimile signature, provided however that
original signatures must be provided within ten days from the date of signing.
14. Attorney Fees and Costs. In the event any action is commenced, the
prevailing party shall be entitled to reasonable attorney's fees, costs and
expenses.
15. Assignment. This Agreement may be assigned by REAL-TIME to any
other wholly owned subsidiary of STIC. No other assignment will be permitted by
either party without the other party prior written consent, which shall not be
unreasonably withheld.
16. Relationship of Parties. Except as set forth herein, neither party
shall have any right or authority to create any obligation on the part of the
other party or bind the other party to any agreement.
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17. Notices. Any notice required or permitted by this Agreement shall
be in writing and shall be delivered by U.S. Certified Mail, return receipt
requested, or by special messenger service with receipt (such as Federal
Express), by facsimile delivery or by hand, to the parties at the addresses set
forth above or such substitute address of which notice is given in like manner.
The transmission confirmation receipt from the sender's facsimile machine shall
be conclusive evidence of successful facsimile delivery.
Time shall be counted to, or from, as the case may be, the delivery in person or
by mailing.
18. Entire Agreement. This Agreement constitutes the entire agreement
between the parties and supersedes all prior oral or written agreements
regarding the same subject matter.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by its duly authorized officer, or as to an individual
party, has executed this Agreement in his own hand, as of the date first written
above.
Dated: August 19, 1998
In the presence of:
Real-Time Cash, Inc.
BY: /s/ J. Xxxxxxx Xxxxxx
---------------------------
J. Xxxxxxx Xxxxxx, Chairman
Secure Transaction International
Corporation
[Illigible] BY /s/ J. Xxxxxxx Xxxxxx
------------------------ ---------------------------
J. Xxxxxxx Xxxxxx, Chairman
Quest Net, Corp.
BY: /s/ Xxxxxx Xxxxxxx
------------------------ ---------------------------
Xxxxxx Xxxxxxx, President
6
EXHIBIT A
Description of Series "A" Preferred Stock
The Series A Preferred Stock of REAL-TIME was properly authorized by the
REAL-TIME's Board of Directors and filed with Secretary of State. The shares
initially have a designated face value of ten dollars ($10) per share. One
Hundred million (100,000,000) shares of Preferred Stock have been authorized,
525,000 of which have been designated as Series A and 25,000 of which were
reserved for issuance as consideration for this Transaction. The Series A
Preferred shares are convertible into the common stock of STIC. The Series A
Preferred shares and the common stock of STIC have never traded in the market
and have never been registered as a part of any registration statement filed by
REAL-TIME or STIC with the Securities and Exchange Commission. The value of the
shares was arbitrarily determined by REAL-TIME's Board of Directors after taking
into consideration, among other things, the features of the Series A Preferred
Stock and the prospects for the company's success in connection with projects
acquired with Series A Preferred Stock.
The preferred stock features are:
1. $10.00 face value per share.
2. No voting Rights
3. REAL-TIME has the right to redeem at any time, any and all Preferred Shares
by payment of the face value thereof.
4. The Preferred Shares shall be convertible into the common stock of STIC, at a
conversion rate equal to (i) the average 5 day bid price (as of the date of
conversion) of STIC's common stock, if STIC's common stock is publicly traded,
or at the book value per share of STIC's common stock, if such common stock is
not publicly traded.
THE PREFERRED SHARES AND THE SHARES UNDERLYING THE PREFERRED SHARES ARE NOT
BEING REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR UNDER ANY STATE SECURITIES STATUTE. THE PREFERRED SHARES AND THE
SHARE UNDERLYING THE PREFERRED SHARES ARE BEING ACQUIRED BY QUEST NET FOR ITS
OWN ACCOUNT, FOR INVESTMENT PURPOSES ONLY, AND NOT WITH A VIEW TO ANY
DISTRIBUTION THEREOF. QUEST NET AGREES THAT NO TRANSFER OR OTHER DISPOSITION OF
THE PREFERRED SHARES OR THE SHARES UNDERLYING THE PREFERRED SHARES OR ANY
INTEREST THEREIN WILL BE MADE IN VIOLATION OF THE SECURITIES ACT
7
OR ANY STATE SECURITIES STATUTE. QUEST NET WILL EXECUTE AN INVESTMENT LETTER
TO THIS EFFECT.
FLORIDA LAW PROVIDES THAT WHEN SALES ARE MADE TO FIVE OR MORE PERSONS IN
FLORIDA, ANY SALE MADE IN FLORIDA IS VOIDABLE BY THE PURCHASER WITHIN THREE DAYS
AFTER THE FIRST TENDER OF CONSIDERATION IS MADE BY SUCH PURCHASER TO THE
COMPANY, AN AGENT OF THE COMPANY OR AN ESCROW AGENT OR WITHIN THREE DAYS AFTER
THE AVAILABILITY OF THAT PRIVILEGE IS COMMUNICATED TO SUCH PURCHASER, WHICHEVER
OCCURS LATER. SUCH WITHDRAWAL WILL BE WITHOUT ANY FURTHER LIABILITY TO ANY
PERSON. TO ACCOMPLISH SUCH WITHDRAWAL, YOU NEED ONLY SEND A LETTER OR TELEGRAM
TO THE COMPANY AT THE ADDRESS SHOWN HEREIN INDICATING YOUR INTENTION TO
WITHDRAW. SUCH LETTER OR TELEGRAM MUST BE SENT AND POSTMARKED PRIOR TO THE END
OF THE AFOREMENTIONED THIRD BUSINESS DAY. IF SENDING A LETTER, AN INVESTOR
SHOULD SEND IT BY CERTIFIED MAIL. RETURN RECEIPT REQUESTED, TO ENSURE THAT IT IS
RECEIVED AND TO EVIDENCE THE TIME WHEN IT IS MAILED. ANY ORAL REQUESTS FOR
RESCISSION SHOULD BE ACCOMPANIED BY A REQUEST FOR WRITTEN CONFIRMATION THE ORAL
REQUEST WAS RECEIVED ON A TIMELY BASIS.
AS REQUIRED BY SECTION 517.061(11)(A)3 FLORIDA STATUTES, AND RULE
3E-500.05(5)(A) PROMULGATED THEREUNDER, YOU OR YOUR REPRESENTATIVES MAY HAVE, AT
THE OFFICES OF THE COMPANY AT ANY REASONABLE HOUR, AFTER REASONABLE PRIOR
NOTICE, ACCESS TO THE MATERIALS SET FORTH IN THE RULE WHICH THE COMPANY CAN
OBTAIN WITHOUT UNREASONABLE EFFORT OR EXPENSE.
