Exhibit 7.5
BUSINESS SEPARATION AND SETTLEMENT AGREEMENT
--------------------------------------------
This Business Separation and Settlement Agreement (this "Agreement") is
made and entered into as of November 1, 2001, by and among X-Xxxx.xxx, Inc.
D/B/A HomeMark, a Texas corporation ("HomeMark"), Homeseekers Management, Inc.,
a Texas corporation (together with HomeMark, the "Companies"), and, for the
limited purposes of the releases and representations set forth in Sections 4 and
5 below, the current directors of HomeMark and Homeseekers Management, Inc. (the
"Companies' Directors"), and Xxxxxxxxxxx.xxx Incorporated, a Nevada corporation
("Homeseekers"), and, for the limited purposes of the releases and
representations set forth in Sections 4 and 5 below, the current and former
directors of Homeseekers whose signatures appear below (collectively, the
"Homeseekers' Directors").
W I T N E S E T H:
- - - - - - - - -
WHEREAS, the Companies, on the one hand, and the Homeseekers, on the
other hand, desire to terminate their business relationship on the terms set
forth herein;
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
1. Termination of Agreements. On the date hereof, the parties hereby
-------------------------
terminate, and release any and all obligations under, any and all agreements
whatsoever, express or implied, between the parties in existence on the date
hereof, including, but not limited to, that certain Loan Agreement, Security
Agreement and Financing Statement (the "June Loan Agreements") and the
Securities Purchase Agreement (the "Purchase Agreement"), each of which is dated
as of June 6, 2001; the Security Agreement and Financing Statement dated as of
June 19, 2001 (the "June Security Agreement"); the Intercorporate Services
Agreement dated as of July 1, 2001 (the "Services Agreement"); the Loan
Agreement, Security Agreement and Financing Statement (the "July Loan
Agreements"), each of which is dated as of July 17, 2001; and terminate, cancel
and void all promissory notes between them, including, without limitation, those
issued in connection with the June Loan Agreements and the June Security
Agreement (Promissory Notes dated June 6, 2001 and June 19, 2001) and the July
Loan Agreements (Promissory Note dated July 17, 2001) (collectively, the
"Notes").
2. Settlement Obligations. The parties agree that at the Closing:
----------------------
(a) Homeseekers shall pay to HomeMark $1,875,000, in immediately
available f unds, by wire transfer to an account designated by HomeMark;
(b) Homeseekers shall assign to HomeMark that certain Loan Agreement
and the Security Agreement and Financing Agreement, each dated as of July 16,
2001, between EntrePort Corporation, a Florida corporation ("EntrePort"), and
Homeseekers (collectively, the "EntrePort Loan Agreements"), all promissory
notes issued by EntrePort under the EntrePort Loan Agreements
(the "EntrePort Notes," and together with the EntrePort Loan Agreements, the
"EntrePort Agreements") and all financing statements filed with any jurisdiction
which perfect or evidence Homeseekers' security interest under the EntrePort
Agreements, such assignment in the form of Exhibit A attached hereto;
---------
(c) Homeseekers shall have obtained the release of HomeMark as
guarantor from any and all of Homeseekers merchant account agreements and all
amounts payable thereunder;
(d) The Companies shall return to Homeseekers the originals of all
Notes and release any and all liens and security and other interests in any
Homeseekers' securities and other tangible and intangible property, including,
without limitation, any UCC statements and filings;
(e) Homeseekers and HomeMark shall jointly release a press release
describing the transactions set forth in this Agreement, in the form of Exhibit
-------
B attached hereto;
-
(f) HomeMark shall, subject to the receipt of the consideration set
forth in Section 2(a) terminate that certain Consulting Agreement dated July
___, 2001 between HomeMark and Xxxxxxx Xxxxxxx, a copy of which is set forth in
Exhibit C attached hereto, and any and all agreements, express or implied, with
---------
Xxxxxx Xxxxx, Xx., and will indemnify Homeseekers from any and all liability
arising out of or relating to such agreements or the termination of such
agreements;
(g) The Companies shall terminate any and all agreements entered
into with third parties by the Companies as manager of Homeseekers on behalf of
Homeseekers and indemnify Homeseeekers for any liability arising out of or
relating to such agreements or arising out of or relating to such terminations.
3. Closing. The closing of the transactions contemplated herein (the
-------
"Closing") shall take place at 11:00 a.m. (Dallas time) on the date hereof, at
the offices of Xxxxxxx Xxxxxx, L.L.P., 000 Xxxx Xxxxxx, Xxxxx 0000, Xxxxxx,
Xxxxx 00000, or such other time, date and place as the parties shall agree.
4. Releases.
--------
(a) Release by the Homeseekers and Homeseekers Directors.
----------------------------------------------------
Homeseekers, on its own behalf and on behalf of its directors, partners,
officers, agents, successors, heirs, legal representatives and assigns of each
of the foregoing (collectively, the "Homeseekers Releasors"), and each of the
Homeseekers' Directors on their own behalf and on behalf of their respective
heirs, legal representatives and the respective successors, heirs, legal
representatives and assigns of each of the foregoing (collectively, the
"Homeseekers Director Releasors") each agrees to release and do hereby release,
acquit and forever discharge the Companies and their respective directors,
officers, employees, and heirs, legal representatives, agents and attorneys, and
each of their respective successors and assigns (collectively, the "HomeMark
Releasees") from, and extinguishes, any and all claims, demands, debts, damages,
costs, losses, expenses, commissions, actions, causes of action, rights,
liabilities, obligations and choses in action of whatever nature or type,
whether known or unknown, which any of the Homeseekers Releasors and the
Homeseekers Director Releasors have, ever had or may have, or which have been,
or could have been, or in the future otherwise might have been asserted in
connection with acts of HomeMark Releasees or any of them occurring on or prior
to the date hereof (the "Homeseekers Claims"), including, but not limited to,
those arising under that
2
the June Loan Agreements, the Purchase Agreement, the June Security Agreement,
the Services Agreement, the July Loan Agreements, and the Notes. Notwithstanding
the foregoing, in no event shall this paragraph operate to release any of
HomeMark Releasees from any claims or liability resulting from a breach of the
representations, warranties, covenants and agreements of the Companies contained
in this Agreement. Further, in no event shall this paragraph operate to release
Xx. Xxxxxx Xxxxx, Xx., from any claims or liability, other than for any claims
or liabilities arising out of or related to the acts of Xx. Xxxxxx Xxxxx, Xx.
(a) while he was acting within his capacity as an officer or director of the
Companies, or (b) that may otherwise rise to an obligation of the Companies to
indemnify him as an officer or director of the Companies.
(b) Release by the Companies. Each of the Companies, on its own
------------------------
behalf and on behalf of its respective directors, officers, agents, successors,
heirs, legal representatives and assigns of each of the foregoing (collectively,
the "Companies Releasors") and each of the Companies' Directors on their own
behalf and on behalf of their respective heirs, legal representatives and the
respective successors, heirs, legal representatives and assigns of each of the
foregoing (collectively, the "Companies Director Releasors") each agrees to
release and does hereby release, acquit and forever discharge Homeseekers and
their respective directors, officers, employees, and heirs, legal
representatives, agents and attorneys, and each of their respective successors
and assigns (collectively, the "Homeseekers Releasees") from, and extinguishes,
any and all claims, demands, debts, damages, costs, losses, expenses,
commissions, actions, causes of action, rights, liabilities, obligations and
choses in action of whatever nature or type, whether known or unknown, which any
of the Companies Releasors and the Companies Directors Releasors have, ever had
or may have, or which have been, or could have been, or in the future otherwise
might have been asserted in connection with acts of the Homeseekers Releasees or
any of them occurring on or prior to the date hereof (the "HomeMark Claims"),
including, but not limited to, those arising under that the June Loan
Agreements, the Purchase Agreement, the June Security Agreement, the Services
Agreement, the July Loan Agreements, and the Notes except that in no event shall
this paragraph operate to release any of the Homeseekers Releasees from any
claims or liability resulting from a breach of the representations, warranties,
covenants and agreements of the Homeseekers contained in this Agreement.
5. Representations and Warranties.
------------------------------
(a) Representations and Warranties of the Companies. Each of the
-----------------------------------------------
Companies, and the Companies' Directors (the "Companies Representing Party") as
to itself or himself hereby represents and warrants that the following are true
and correct as of the date hereof: (i) if the Companies Representing Party is an
entity, such Representing Party is validly existing and in good standing under
the laws of the State of organization; (ii) such Companies Representing Party
has the power and authority to execute, deliver and perform its obligations
under this Agreement, and this Agreement constitutes such Companies Representing
Party's valid and binding obligation, enforceable against such Companies
Representing Party in accordance with the terms hereof; (iii) such Companies
Representing Party has not assigned, sold, conveyed or otherwise transferred all
or any portion of the Homeseekers Claims, including, without limitation, any
interest in or rights relating to the June Loan Agreements, the Purchase
Agreement, the June Security Agreement, the Services Agreement, the July Loan
Agreements, and the Notes; and (v) if such Companies Representing Party is an
individual, such Companies Representing Party has consulted or has had
sufficient opportunity to discuss with any person, including an attorney of his
choice, all provisions
3
of this Agreement, that such Companies Representing Party has carefully read
and fully understands all the provisions of this Agreement, that such Companies
Representing Party is competent to execute this Agreement, and that such
Companies Representing Party is voluntarily entering into this Agreement of his
own free will and accord, without reliance upon any statement or representation
of any person or parties released, or their representatives, concerning the
nature and extent of the damages and/or legal liability therefore
(b) Representations and Warranties of the Homeseekers. Each of
-------------------------------------------------
Homeseekers and the Homeseekers Directors (the "Homeseekers Representing
Party"), as to itself or himself hereby represents and warrants that the
following are true and correct as of the date hereof: (i) if the Homeseekers
Representing Party is an entity, such Homeseekers Representing Party is validly
existing and in good standing under the laws of the State of organization; (ii)
such Homeseekers Representing Party has the power and authority to execute,
deliver and perform its obligations under this Agreement, and this Agreement
constitutes such Homesekers Representing Party's valid and binding obligation,
enforceable against such Homeseekers Representing Party in accordance with the
terms hereof; (iii) such Homeseekers Representing Party has not assigned, sold,
conveyed or otherwise transferred all or any portion of the Homeseekers Claims,
including, without limitation, any interest in or rights relating to the June
Loan Agreements, the Purchase Agreement, the June Security Agreement, the
Services Agreement, the July Loan Agreements, and the Notes; and (v) if such
Homeseekers Representing Party is an individual, such Homeseekers Representing
Party has consulted or has had sufficient opportunity to discuss with any
person, including an attorney of his choice, all provisions of this Agreement,
that such Homeseekers Representing Party has carefully read and fully
understands all the provisions of this Agreement, that such Homeseekers
Representing Party is competent to execute this Agreement, and that such
Homeseekers Representing Party is voluntarily entering into this Agreement of
his own free will and accord, without reliance upon any statement or
representation of any person or parties released, or their representatives,
concerning the nature and extent of the damages and/or legal liability
therefore.
(c) Only Truthful Remarks. After the Closing: (i) each Homeseekers
-----------------------
Representing Party agrees not to make any statements or remarks, written or
verbal, public or private, regarding Companies or any of HomeMark Releasees at
any time, unless such statement or remark is truthful; and (ii) each Companies
Representing Party agrees not to make any statements or remarks, written or
verbal, public or private, regarding any Representing Party or any of the
Homeseekers Releasees at any time, unless such statement or remark is truthful.
6. Disclaimer of Liability. This Release shall not in any way be
-----------------------
construed as an admission by any of the of the parties hereto of any wrongful or
illegal act against any of the other parties hereto or any other person, and
that each party hereto expressly disclaims any liability of any nature
whatsoever arising from or related to the subject of the releases set forth in
this Agreement.
7. Other Agreements.
----------------
(a) At the Closing, the Companies shall promptly turn over to
Homeseekers all corporate records, minutes, ledgers, stock books, financial
books and records, (including without limitation any and all records of banking
transactions), contracts, agreements, files, documents, business records, lists
of customers and potential customers, promotional materials, internal operating
reports, employee and potential employee names and addresses, customer strategy
4
information, employment and payroll records, marketing information, manuals,
billing reports, pricing information and strategies, management methods and
systems, contracts with customers, subcontractors and others, correspondence,
resumes of existing and potential employees, customer bids and proposals, books
and records, and any other records in any form or format whatsoever, including
electronic or digital, and any and all documents, writings of any kind
whatsoever, and all assets of any kind whatsoever that belong to Homeseekers.
Further, the Companies shall not copy or record in any manner whatsoever, or
retain any copies in any form of, the information contained in the foregoing
materials; and the Companies shall turn over to Homeseekers any copies or
recordings of any kind whatsoever containing information derived directly or
indirectly from such materials and to the extent any records, communications or
other information relating to Homeseekers exists in electronic or digital form
on computers or computer systems, the Companies shall cause such information to
be transferred to one or more compact discs and protected by password and shall
deliver all such discs, together with the protecting passwords, to Homeseekers.
Homeseekers acknowledges and agrees that the equipment set forth in Exhibit D
---------
constitutes all of Homeseekers' equipment in HomeMark's possession.
(b) Each of the Companies agrees not to trade or deal in, acquire,
sell, convey, or transfer, directly or indirectly, the securities or any
interests or contingent interest in, any the securities or derivatives of
Homeseekers for a period of four (4) years, beginning on the date of the
Closing.
(c) Within sixty days of the date of the Closing, Homeseekers and
HomeMark shall make best faith efforts to enter into a web site linking
agreement the terms of which shall be mutually agreed upon between such parties;
containing in substantial form, the terms set forth in Exhibit E attached
---------
hereto. Notwithstanding the foregoing, the obligations of the parties to enter
into such agreement shall be binding only to the extent such agreement does not
conflict with agreements existing on the date hereof between Homeseekers or
HomeMark and third parties (the "Third Party Agreements"); provided that each
party shall use its best efforts to obtain any necessary consents or waivers
under the Third Party Agreements to enable each to enter into such agreement.
(d) Homeseekers shall make every effort to keep its existing
policies of directors' and officers' liability insurance current and in full
force and effect.
8. Amendment and Assignment. This Agreement may be amended, modified or
------------------------
supplemented only by an instrument in writing executed by all the parties
hereto. This Agreement shall extend to and be binding upon, and inure of the
benefit of the Homeseekers Releasees, HomeMark Releasees and each of the parties
hereto and their respective heirs, successors, assigns, legal representatives
and any corporation or other entity into or with which any party hereto may
merge or consolidate. Notwithstanding the above, neither this Agreement nor any
right created hereby shall be assignable to any party hereto without the prior
written consent of the other parties hereto, which consent shall not be
unreasonably withheld.
9. Notice. Any notice or communication must be in writing and given by
------
depositing the same in the United States mail, addressed to the party to be
notified, postage prepaid and registered or certified with return receipt
requested, or by delivering the same in person or by facsimile. Any such notice
or communication shall be deemed received, if not earlier received, on the third
business
5
day following the date on which it is mailed, or on the day on which it is hand
delivered or delivered by facsimile, as the case may be.
10. Entire Agreement. This Agreement contains the entire agreement of
-----------------
the parties hereto with respect to the subject matter
hereof, and supersedes all prior agreements and understandings, oral or written,
relating to the subject matter hereof.
11. Severability. If any provision of this Agreement is held to be
------------
illegal, invalid or unenforceable by a court of competent jurisdiction, such
provisions shall be deemed severable and this Agreement shall be construed and
enforced as if such illegal, invalid or unenforceable provisions did not
comprise a part hereof unless the loss of such provision causes this Agreement
to fail of its essential purpose; and the remaining provisions hereof shall
remain in full force and effect and shall not be affected by the illegal,
invalid or unenforceable provision or by its severance herefrom except as
aforesaid. Furthermore, in lieu of such illegal, invalid or unenforceable
provision, the parties agree to meet to determine in good faith, or will ask the
court to determine, a provision as similar in its terms to such illegal, invalid
or unenforceable provision as may be possible and be legal, valid and
enforceable and such provision so determined shall then be added as part of this
Agreement.
12. Governing Law. This Agreement and the rights and obligations of
-------------
the parties hereto, shall be governed, construed and enforced in accordance with
the laws of the State of Texas.
13. Counterparts. This Agreement may be executed in multiple
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute a single instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
X-XXXX.XXX, INC.
D/B/A HOMEMARK
By: _________________________
Xxxxxx Xxxxxx, President
HOMESEEKERS MANAGEMENT, INC.
By: _________________________
Xxxxx Xxxxx, President
XXXXXXXXXXX.XXX INCORPORATED
By: _________________________
Xxxxxxx Xxxxxx, President
6
COMPANIES'DIRECTORS:
__________________________________
__________________________________
HOMESEEKERS'DIRECTORS:
__________________________________
__________________________________
__________________________________
7
EXHIBIT A
FORM OF ENTREPORT AGREEMENTS ASSIGNMENT
8
EXHIBIT B
FORM OF PRESS RELEASE
9
EXHIBIT C
CONSULTING AGREEMENT
10
EXHIBIT D
HOMESEEKERS' EQUIPMENT
11
EXHIBIT E
PROPOSED LINKING AGREEMENT PROVISIONS
HomeSeekers would establish and maintain at least one link, either
in hypertext, text, banner, logo and contextual links ("Graphical Image") form
which permit a user to go from one party's web site to another by clicking on
the Graphical Image (a "Link") from the HomeSeekers web sites' home pages to the
HomeMark web site home Page. HomeSeekers agrees that the Link provided on the
HomeSeekers web site home page would be in the form of a banner which comprises
between ten percent (10%) and fifteen percent (15%) of the area displayed on the
Homeseekers web site home page, or, at HomeMark's option, in such other form and
displayed such in other location as is reasonably acceptable to HomeMark.
Further, HomeSeekers would establish one or more Links from the HomeSeekers web
sites to the HomeMark Web Site as HomeSeekers deems appropriate.
HomeMark would establish and maintain at least one Link from the HomeMark web
site to the HomeSeekers web sites' home pages. HomeMark agrees that the Link
provided on the HomeMark web site home page shall be prominently displayed in a
location reasonably acceptable to HomeSeekers. Further, HomeMark would establish
one or more Links from the HomeMark web site to the HomeSeekers web sites as
Homemark deems appropriate.
12
