EXHIBIT 2
AGREEMENT BETWEEN XXXXXX XXX AND ADATOM DATED DECEMBER 21, 2000
DEFINITIVE AGREEMENT
DECEMBER 21, 2000
This agreement is entered into on this date between current Officers and
Directors of Xxxxxx.xxx, Inc., (hereinafter "Adatom"), and Xxxxxx Xxx, an
individual. Each party shall be defined as to include its duly appointed
representatives, officers, directors, employees and/or attorneys.
Whereas, Xxxxxx Xxx desires to put forth an operating plan to reduce Adatom's
debt and enhance shareholder value;
Whereas, Adatom's current Officers and Directors have determined the company is
insolvent and have not been successful in their attempts procure additional
working capital to sustain Adatom's daily operations;
Whereas, all parties acknowledge the current Board of Directors of Adatom have
found the company to be insolvent and recommended the company file for
bankruptcy;
Whereas, all parties desire to preserve the company's value for the benefit of
the creditors and shareholders;
Whereas, Adatom's Officers and Directors have been provided with and partially
relied on information provided by Xxxxxx Xxx to assist in their due diligence;
PURPOSE
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Now, therefore Adatom and Xxxxxx Xxx enter into this definitive agreement for
the purpose of transferring the daily operations and responsibility of the
company to Xxxxxx Xxx and his representatives.
BOARD OF DIRECTORS AND OFFICER TRANSITION
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1. The Board of Directors agrees to appoint Xx. Xxxxxx Xxx, to the Board
of Adatom on December 22, 2000.
2. Mr. Xxxxxxx Xxxxxx, Chairman of the Board, President and Chief
Executive Officer of Adatom, agrees to resign as such on December 22,
2000.
3. The Board of Directors agrees to accept the resignation of Xx. Xxxxxx
and agrees to appoint Xxxxxx Xxx as the new Chairman of the Board,
President and Chief Executive Officer.
4. The current Board of Directors, excluding Xx. Xxxxxx Xxx, agrees to
resign effective December 22, 2000.
5. Prior to resignation, the Board of Directors will amend Article II
section 2 of the By Laws to remove "(not less than three)" and will
adjust the number of seats on the Board from nine to only one seat in
accordance with Delaware law and Article II section 2 of the By Laws,
as of December 22, 2000.
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XXXXXX XXX'X DUTIES
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6. Xxxxxx Xxx and his representatives agree to use their best efforts to
resolve Adatom's obligations to its creditors.
7. Xxxxxx Xxx and his representatives will use their best efforts to
enhance the value of existing and future shareholders of Adatom.
ADATOM'S DUTIES
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8. Adatom's current officers and directors agree to cooperate fully with
Xxxxxx Xxx and his representatives to facilitate a smooth transition of
the daily operations of the company.
9. Adatom's current Officers and Directors agree to reasonably assist
Xxxxxx Xxx in his efforts to resolve Adatom's obligations to creditors.
PROHIBITION AGAINST SHAREHOLDER DILUTION
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10. Xxxxxx Xxx and his representatives will use their best efforts in
preventing the dilution of the current ownership interests of Adatom
shareholders.
INDEMNIFICATION AND INSURANCE
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11. Xxxxxx Xxx and his representatives will make no changes to existing
Adatom documents which will have the effect of reducing indemnification
obligations of Adatom to its current or past directors, officers and
employees.
12. Xxxxxx Xxx and his representatives will maintain directors and officers
liability insurance coverage providing uninterrupted D&O liability
insurance coverage for current and future Adatom Directors and Officers
for as long as the company is publicly traded on any market.
13. Xxxxxx Xxx and his representatives agree to indemnify and hold harmless
all Adatom employees, officers, directors and agents from and against
all claims and liabilities arising henceforth from the transferal to
Xxxxxx Xxx'x management and operation of Adatom.
GENERAL RELEASE
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14. Whether known or unknown Xxxxxx Xxx and his representatives hereby
release all Adatom Employees, Officers and Directors from any past,
present or future claims or liabilities duly related to their
respective Adatom duties and/or employment, based upon the warranties
from Adatom that it has fully disclosed all important business matters
and affairs.
MUTUAL NON-DISPARAGEMENT
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15. All parties agree neither they nor their representatives will make any
public statement professionally or personally critical of or, which in
any way maligns another party or another party's respective
representatives or their reputations.
LITIGATION COOPERATION
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16. All parties agree to cooperate fully with one another and their
respective counsel in any litigation, which arises out of, or is
related to the party's service with the company or in which the party
is named as a party. The cooperation includes one party making itself
available for reasonable periods of time for consultation with the
other party's counsel in any such litigation. Upon their reasonable
request, all parties and their legal representatives will continue to
have unhindered access to the files of the company for informational as
well as for legal purposes.
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MISCELLANEOUS
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17. This agreement shall be subject to the jurisdiction of the State of
California including its conflicts of laws principles. In the event of
a dispute, all parties agree to abide by binding arbitration before the
American Arbitration Association ("AAA").
18. This agreement may be executed by and between all parties via facsimile
transmission, each counterpart of which shall be deemed an original in
nature and legally binding on all parties.
XXXXXX.XXX, INC. XXXXXX XXX
By: /s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxxx Xxx
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Xxxxxxx X. Xxxxxx Xxxxxx Xxx
By: /s/ Xxxxx Xxxxxxx
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Xxxxx Xxxxxxx
By: /s/ Xxxxxx X. Xxx
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Xxxxxx X. Xxx
By: /s/ Xxxxx X. Xxxx
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Xxxxx X. Xxxx
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