THE MINI-CAP SECTOR PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("Agreement") is entered into this 10th
day of December, 2002, by and between Maximum Dynamics Inc., a Colorado
corporation (hereinafter referred to as "Buyer"), XXXXX XXXX, an individual
resident of the State of Colorado ("Xxxx"), XXXXX XXXXXX, an individual resident
of the State of Colorado ("Sprout"), XXXXX XXXXXXXX, an individual resident of
the State of Colorado ("Thornton"), EQUITY RESEARCH, INC., a Colorado company
("Equity") and XXXX XXXXXX, an individual resident of the State of Colorado
("Xxxxxx")(Xxxx, Sprout, Thornton, Equity and Xxxxxx are referred to herein
collectively as "Sellers" and individually as "Seller"), and the Mini-Cap
Sector, a Colorado entity (hereafter referred to as the "Asset").
WITNESSETH:
WHEREAS, Sellers own of record and beneficially all rights (the
"Rights") of the Asset; and
WHEREAS, Sellers desire to sell the Rights to Buyer, and Buyer desires
to purchase the Rights from Sellers, upon the terms and conditions set forth
herein;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, and for other good and valuable consideration, the receipt,
adequacy and sufficiency of which are hereby acknowledged, and subject to the
accuracy of the representations and warranties of the parties, the parties
hereto agree as follows:
ARTICLE I.
SALE AND PURCHASE OF THE RIGHTS
1.1 SALE AND PURCHASE. Subject to the terms and conditions hereof,
Sellers hereby sell, assign, transfer, convey and deliver to Buyer, and Buyer
hereby purchases from Sellers, the Rights. The transaction contemplated by this
Agreement is sometimes referred to as the "Transaction".
1.2 PURCHASE CONSIDERATION. The purchase consideration for the Rights
(the "Purchase Consideration") shall be (a) cash in the amount of One Hundred
Thousand Dollars ($100,000.00) by wire transfer to an account or accounts
designated by Sellers in writing or by delivery to Sellers of one or more
cashier's or certified checks made payable to Sellers, (b) the issuance of
5,450,000 shares of the unregistered common stock of MXDY, (c) 125,000 shares of
registered common stock of MXDY, and a note payable for $255,000 that shall be
paid out of the revenues generated by the Assets being acquired. . The Purchase
Consideration shall be payable by Buyer to Sellers as provided in Article III
hereof by delivery of cash.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES
2.1 REPRESENTATIONS AND WARRANTIES OF SELLERS AND THE COMPANY.
Subject to the matters disclosed in Schedule A attached hereto and incorporated
herein by this reference, each Seller, severally and not jointly, represents and
warrants to Buyer as follows:
(a) TITLE TO THE RIGHTS; POWER TO SELL. Such Sellers own of
record and beneficially all of the Rights set forth
opposite such Seller's name on Schedule A hereto, free
and clear of all liens, encumbrances, pledges, claims,
options, charges and assessments of any nature
whatsoever, with full right and lawful authority to
transfer such Rights to Buyer. The Rights constitute all
of the Rights of the control of the Asset. No person has
any preemptive rights or rights of first refusal with
respect to any of the Rights. There exists no voting
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agreement, voting trust, or outstanding proxy with
respect to any of the Rights. There are no outstanding
rights, options, warrants, calls, commitments, or and
other agreements of any character, whether oral or
written, with respect to the Rights. Such Seller has the
power and authority to sell all of the Rights owned by
such Seller to Buyer as provided herein and to execute,
deliver and otherwise perform this Agreement and the
agreements, instruments and documents to be executed and
delivered by such Seller pursuant to this Agreement.
(b) TITLE TO RIGHTS OF THE MINI-CAP SECTOR. Sellers own of
record and beneficially all of the Rights of The
Mini-Cap Sector ("Mini-Cap"), free and clear of all
liens, encumbrances, pledges, claims, options, charges
and assessments of any nature whatsoever. No person has
any preemptive rights or rights of first refusal with
respect to any of the Rights of Mini-Cap. There exists
no voting agreement, voting trust, or outstanding proxy
with respect to any of the Rights of capital stock of
Mini-Cap. There are no outstanding rights, options,
warrants, calls, commitments, or any other agreements of
any character, whether oral or written, with respect to
any of the Rights of capital stock of Mini-Cap.
(c) ORGANIZATION. The Asset is validly existing and in good
standing under the laws of the State of Colorado. The
Asset has all requisite power and authority to own,
lease and operate its properties and to carry on its
business.
(d) AUTHORIZED CAPITALIZATION. The Rights have been duly
authorized, validly issued, are fully paid and
nonassessable with no personal liability attaching to
the ownership thereof and were offered, issued, sold and
delivered by Sellers in compliance with all applicable
state and federal laws. Sellers do not have any
outstanding rights, options, warrants, calls,
commitments, conversion or any other agreements of any
character, whether oral or written, obligating it to
issue any Rights of its capital stock, whether
authorized or not. Sellers are not a party to and is not
bound by any agreement, contract, arrangement or
understanding, whether oral or written, giving any
person or entity any interest in, or any right to share,
participate in or receive any portion of, the Seller's
income, profits or assets, or obligating Sellers to
distribute any portion of its income, profits or assets.
(e) AUTHORITY. Such Sellers have full power and lawful
authority to execute and deliver this Agreement and to
consummate and perform the Transaction contemplated
hereby. This Agreement constitutes a valid and legally
binding obligation of such Sellers, enforceable in
accordance with its terms. Neither the execution and
delivery of this Agreement by such Sellers, nor the
consummation and performance of the Transaction
contemplated thereby, will conflict with, requires the
consent, waiver or approval of, results in a breach of
or default under, or gives to others any interest or
right of termination, cancellation or acceleration in or
with respect to, any agreement by which such Sellers or
the Asset is a party or by which such Sellers or the
Asset or any of their respective properties or assets
are bound or affected.
(f) NO UNDISCLOSED LIABILITIES. Neither such Sellers nor the
Asset is aware of any liabilities for which the Asset
currently is liable or will become liable in the future.
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(g) TAXES. The Asset has made payments of taxes sufficient
to avoid penalties for late payments or underpayment of
taxes; all taxes and other amounts that the Asset is or
was required by applicable law to withhold or collect
have been duly withheld and collected and have been paid
over to the proper government authorities in accordance
with applicable law; there are no liens for taxes on any
of the assets with respect to state and local taxes on
property; no audit of the returns of the taxes is
currently being conducted; the Asset has not received
from any governmental authority with jurisdiction or
other authority as to taxes either a notice that it
intends to conduct any other audit of returns of taxes
or any request for information with respect to taxes;
there are no outstanding agreements or waivers extending
the statutory period of limitation applicable to any
return of taxes for any period; and there are no
outstanding requests by the Asset for rulings from any
governmental authority.
(h) COMPLIANCE WITH AGREEMENTS. The Asset is in compliance
with each agreement and lease to which it is a party or
subject.
(i) COMPLIANCE WITH LAWS; PERMITS. The Asset is not in
material violation of any federal, state, local or other
law, ordinance, rule or regulation applicable to its
business, and has not received any actual or threatened
complaint, citation or notice of violation or
investigation from any governmental authority. The Asset
(i) has all permits required to operate the business of
the Asset as currently being conducted and (ii) is (and
has been) in material compliance with each such permit;
provided, however, that the foregoing will not require
disclosure of state and local business or similar
licenses required of businesses generally.
(j) NO LITIGATION. There are no actions, suits, claims,
complaints or proceedings pending or, to the best
knowledge of such Sellers, threatened against the Asset,
at law or in equity, or before or by any governmental
department, commission, court, board, bureau, agency or
instrumentality; and there are no facts known to such
Sellers which would provide a valid basis for any such
action, suit or proceeding. There are no orders,
judgments or decrees of any governmental authority
outstanding which specifically apply to the Asset or any
of its assets.
(k) DISCLOSURE. All statements of such Sellers contained in
this Agreement and the exhibits and schedules hereto and
in any other written documents delivered by or on behalf
of the Asset or such Sellers to Buyer are true and
correct in all material respects and do not omit any
material fact necessary to make the statements contained
therein not misleading in light of the circumstances
under which they were made. There are no facts known to
such Sellers which could have a materially adverse
affect upon the business, financial condition, results
of operations, assets, liabilities, or prospects of the
Asset, which have not been disclosed to Buyer in this
Agreement.
2.2 REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and
warrants to Sellers as follows:
(a) ORGANIZATION. Buyer is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of
Colorado. Buyer has all requisite corporate power and authority to
own, lease and operate its properties and to carry on its business.
Buyer is duly qualified and in good standing as a corporation in each
jurisdiction where its ownership of property or operation of its
business requires qualification.
(b) AUTHORITY. Buyer has full power and lawful authority to execute
and deliver this Agreement and to consummate and perform the
Transaction contemplated hereby. This Agreement constitutes the valid
and legally binding obligation of Buyer, enforceable in accordance
with its terms. Neither the execution and delivery of this Agreement
by Buyer, nor the consummation and performance of the Transaction
contemplated hereby, conflicts with, requires the consent, waiver or
approval of, results in a breach of or default under, or gives to
others any interest or right of termination, cancellation or
acceleration in or with respect to, any agreement by which Buyer is a
party or by which Buyer or any of its properties or assets are bound
or affected.
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(c) NO UNDISCLOSED LIABILITIES. Except as set forth in the Buyer
Financial statements or the Buyer SEC Reports, Buyer is not aware of
any material liabilities for which Buyer is liable or will become
liable in the future.
(d) INVESTMENT INTENT. Buyer is acquiring the Rights for its own
account, for investment purposes only, and not with a view to the
sale or distribution of any part thereof, and Buyer has no present
intention of selling, granting participation in, or otherwise
distributing the same. Buyer understands the specific risks related
to an investment in the Rights.
ARTICLE III.
CLOSING DELIVERIES
3.1 PAYMENTS BY BUYER. Contemporaneous with the execution and delivery
hereof, Sellers shall receive from Buyer a compensation agreement to be issued
by Buyer pursuant to this Agreement and all of the cash required to be paid by
Buyer in accordance with Section 1.2 hereof. Each Seller shall receive such
Seller's pro-rata interest (based on the total number of Rights owned by such
Seller as of the date hereof and the total number of Rights issued and
outstanding as of the date hereof) in the aggregate Purchase Consideration.
3.2 DOCUMENTS TO BE DELIVERED BY BUYER. Contemporaneous with the
execution and delivery hereof, Buyer shall deliver the following documents to
Sellers:
(a) a Non-Competition and Non-Disclosure Agreement, substantially in
the form of Exhibit A attached hereto and incorporated herein by this
reference, with Equity (the "Non-Compete Agreement"), executed by
Buyer;
(b) an Employment Agreement with Xxxx, substantially in the form of
Exhibit B attached hereto and incorporated herein by this reference
(collectively, the "Employment Agreement"), executed by Buyer;
(c) a Purchase Consideration Transaction Agreement, substantially in
the form of Exhibit C attached hereto and incorporated herein by
this reference, with each of Xxxx, Sprout, Thornton, Equity and
Xxxxxx (the "Registration Rights Agreements"), executed by Buyer;
and
(d) such other documents or certificates as shall be reasonably
required by Sellers or their counsel in order to close and
consummate the Transaction.
3.3 DOCUMENTS TO BE DELIVERED BY SELLERS AND THE COMPANY.
Contemporaneous with the execution and delivery hereof, Sellers and the Asset
shall deliver the following documents to Buyer:
(a) certificates representing all of the Rights, duly endorsed to
Buyer and in blank or accompanied by duly executed stock powers;
(b) the Non-Compete Agreement, duly executed by Xxxx;
(c) the Employment Agreement, duly executed by each of Xxxx;
(d) such other documents or certificates as shall be reasonably
required by Buyer or its counsel in order to close and consummate
the Transaction and this Agreement.
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ARTICLE IV.
SURVIVAL; INDEMNIFICATION
4.1 REPRESENTATIONS AND WARRANTIES TO SURVIVE. Unless otherwise
provided, all of the representations and warranties contained in this Agreement
and in any certificate, exhibit or other document delivered pursuant to this
Agreement shall survive the date of this Agreement for a period of two (2)
years. No investigation made by any party hereto or its representatives shall
constitute a waiver of any representation or warranty.
4.2 INDEMNIFICATION. Sellers (severally and not jointly) and Buyer each
agree to indemnify, defend and hold the other harmless for any Loss (as defined
below) incurred or suffered by the other party or parties as a result of or in
connection with or involving a breach of a representation, warranty, covenant or
agreement set forth in this Agreement. "Loss" means any liability, loss, cost,
damage or expense, including, without limitation, reasonable attorneys' fees and
any taxes of the recipient on indemnification payments made to it, but net of
(i) tax benefits, (ii) other recoveries and benefits, including insurance
recoveries, and (iii) the expenses of obtaining such recoveries and benefits
from others.
4.3 CERTAIN LIMITATIONS. Notwithstanding the foregoing:
(a) Neither Sellers nor Buyer will be required to indemnify the
other party or parties hereto, as the case may be, pursuant to this
Article IV unless and until the aggregate amount of such
indemnification claim or claims against Buyer, on the one hand, or
any or all of the Sellers, on the other hand, exceeds $35,000, in
which event the indemnifying party will be required to indemnify the
indemnified party or parties hereto for the entire amount (i.e.,
from the first dollar).
(b) Neither Sellers nor Buyer will be obligated to make
indemnification payments pursuant to this Agreement which in the
aggregate exceed:
(i) the aggregate amount of the Purchase Consideration with
respect to an inaccuracy, untruth or incompleteness of
the representations or warranties of each Seller
contained in Section 2.1(a) hereof (it being
acknowledged that only the particular Seller or Sellers
in breach of Section 2.1(a) shall have any liability
whatsoever in respect of a breach of that Section); and
(ii) in all other cases, 20% of the aggregate amount of the
Purchase Consideration.
In no event shall the aggregate liability of any individual Seller
(other than with respect to a breach of such Seller's representations
and warranties contained in Section 2.1(a) of this Agreement) exceed
that fraction of the total liability of all Sellers under this Section
of which (A) the numerator is the number of Rights owned by such Seller
as of the date hereof, and (B) the denominator is the total number of
Rights owned by all Sellers as of the date hereof.
ARTICLE V.
MISCELLANEOUS
5.1 KEY MAN INSURANCE. At any time after the date hereof, Buyer, Equity
or Asset may, in its sole discretion and at its sole cost and expense, purchase
and maintain one or more policies of key man insurance on Xxxx, which policies
of insurance shall designate Buyer, Equity or Asset, as the case may be, as the
beneficiary thereunder. Xxxx agrees to cooperate fully with Buyer, Equity or
Asset after the date hereof in obtaining such policies of insurance and to make
available all records and information that are required to obtain such policies
of insurance in a prompt and timely manner.
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5.2 BINDING EFFECT. This Agreement and the certificates and other
instruments delivered by or on behalf of the parties pursuant hereto constitute
the entire agreement between the parties. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
heirs, legal representatives, successor and assigns of the parties hereto, as
the case may be. Nothing in this Agreement, expressed or implied, confers any
rights or remedies upon any party other than the parties hereto and their
respective heirs, legal representatives and assigns.
5.3 APPLICABLE LAW. This Agreement is made pursuant to, and will be
governed by, and construed and enforced in accordance with, the laws of the
State of Colorado.
5.4 NOTICES. All notices and other communications under this Agreement
shall be in writing and may be given by any of the following methods: (a)
personal delivery; (b) facsimile transmission; (c) registered or certified mail,
postage prepaid, return receipt requested; or (d) overnight delivery service
requiring acknowledgment of receipt. Any such notice or communication shall be
sent to the appropriate party at its address or facsimile number given below (or
at such other address or facsimile number for such party as shall be specified
by notice given hereunder):
If to Sellers, to:
Xxxxx Xxxx
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxxxx, Xxxxxxxx 00000
Fax. No.: (000) 000-0000
Xxxxx Xxxxxx
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxxxx, Xxxxxxxx 00000
Fax. No.: (000) 000-0000
Xxxxx Xxxxxxxx
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxxxx, Xxxxxxxx 00000
Fax. No.: (000) 000-0000
Equity Research, Inc.
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxxxx, Xxxxxxxx 00000
Fax. No.: (000) 000-0000
Xxxx Xxxxxx
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxxxx, Xxxxxxxx 00000
Fax. No.: (000) 000-0000
If to Buyer, to:
Maximum Dynamics, Inc.
0 Xxxxx Xxxxxxx, Xxxxx 0000
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Fax No.: (000)000-0000
Attn: Xxxx Xxxxxx, Chairman and Chief Executive Officer
All such notices and communications shall be deemed received upon (a) actual
receipt thereof by the addressee; (b) actual delivery thereof to the appropriate
address as evidenced by an acknowledged receipt; or (c) in the case of a
facsimile transmission, upon transmission thereof by the sender and confirmation
of receipt. In the case of notices or communications sent by facsimile
transmission, the sender shall contemporaneously mail a copy of the notice or
communication to the addressee at the address provided for above; provided,
however, that such mailing shall in no way alter the time at which the facsimile
notice or communication is deemed received.
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5.5 HEADINGS. The headings contained in this Agreement are for
reference only and will not affect in any way the meaning or interpretation of
this Agreement.
5.6 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which will be deemed an original and all of which together will constitute
one instrument. Executed counterparts may be delivered via facsimile
transmission.
5.7 SEVERABILITY. If any one or more of the provisions of this
Agreement shall, for any reason, be held to be invalid, illegal or unenforceable
under applicable law, this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained HEREIN. The
remaining provisions of this Agreement shall be given effect to the maximum
extent then permitted by law.
5.8 FORBEARANCE; WAIVER. Failure to pursue any legal or equitable
remedy or right available to a party shall not constitute a waiver of such
right, nor shall any such forbearance, failure to pursue or actual waiver imply
or constitute a forbearance or waiver of any subsequent default or breach.
5.9 ATTORNEYS' FEES AND EXPENSES. The prevailing party in any legal
proceeding based upon this Agreement shall be entitled to reasonable attorneys'
fees and expenses and court costs.
5.10 EXPENSES. Each party shall pay all fees and expenses incurred by
it incident to this Agreement and in connection with the consummation of all
transactions contemplated by this Agreement.
5.11 INTEGRATION. This Agreement and all schedules, exhibits, documents
and instruments executed pursuant hereto merge and integrate all prior
agreements and representations respecting the transaction, whether written or
oral, and constitute the sole agreement of the parties in connection therewith.
This Agreement has been negotiated by and submitted to the scrutiny of Sellers
and Buyer and their respective counsel and shall be given a fair and reasonable
interpretation in accordance with the terms hereof, without consideration or
weight being given to its having been drafted by any party hereto or its
counsel.
IN WITNESS WHEREOF, the undersigned parties hereto have duly executed
and delivered this Agreement or caused this Agreement to be duly executed and
delivered by its duly authorized officer, all as of the date first written
above.
MAXIMUM DYNAMICS, INC.
By: /s/: Xxxx Xxxxxx
---------------------------------------------------
Xxxx Xxxxxx, Chairman and Chief Executive Officer
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THE MINI-CAP SECTOR
/s/ Xxxxx Xxxx
----------------------------------------------------
Xxxxx Xxxx, principle
/s/ Xxxxx Xxxxxx
----------------------------------------------------
Xxxxx Xxxxxx, principle
/s/ Xxxxx Xxxxxxxx
----------------------------------------------------
Xxxxx Xxxxxxxx, principle
/s/ Equity Research, Inc.
----------------------------------------------------
Xxxxx Xxxx, On Behalf Of Equity Research, Inc., principle
/s/ Xxxx Xxxxxx
----------------------------------------------------
Xxxx Xxxxxx, principle
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EXHIBIT A
NON-COMPETITION AND NON-DISCLOSURE AGREEMENT
THIS NON-COMPETITION AND NON-DISCLOSURE AGREEMENT (the "Agreement") is
made and entered into as of the 27th day of November, 2002 by and between
Maximum Dynamics, a Colorado corporation ("Buyer"), and Xxxxx Xxxx, an
individual resident of the State of Colorado ("Seller").
WITNESSETH:
WHEREAS, pursuant to the terms of that certain The Mini-Cap Sector
Purchase Agreement (the "Purchase Agreement") of even date herewith among Buyer,
Seller and The Mini-Cap Sector (the "Asset"), among others, Buyer is purchasing
(hereinafter referred to as the "Purchase") all of the outstanding rights of the
Asset;
WHEREAS, prior to the Purchase, all business development and tangible
and intangible assets of The Mini-Cap Sector (which shall be included in the
definition of the "Asset" for purposes of this Agreement) was, and after the
Purchase the Asset will continue to be, in the business of offering securities
brokerage, investment advisory and investment banking services, including,
without limitation, the execution of orders, the processing of transactions and
the receipt, identification, custody and delivery of customer funds and
securities, to banks, institutional investors, investment advisers and
individual investor clients;
WHEREAS, Seller is currently a principle of the Asset, has heretofore
been involved in and had knowledge of the operation of the Asset, and has
knowledge of the trade secrets, customer information and other confidential and
proprietary information of the Asset and Buyer;
WHEREAS, the execution of this Agreement is contemplated by the
Purchase Agreement to which this Agreement is attached as Exhibit "A";
WHEREAS, in order to protect the goodwill of the Asset and the other
value to be acquired by Buyer pursuant to the Purchase Agreement for which Buyer
is paying substantial consideration, Buyer and Seller have agreed that Buyer's
obligation to consummate the transactions contemplated by the Purchase Agreement
are subject to the condition, among others, that Seller shall have entered into
this Agreement;
WHEREAS, Buyer has separately bargained and paid additional
consideration for the covenants contained herein;
WHEREAS, Seller acknowledges that the provisions of this Agreement are
reasonable and necessary to protect the legitimate interest of Buyer and the
Asset and goodwill acquired by it pursuant to the Purchase Agreement; and
WHEREAS, in order to induce Buyer to consummate the transactions
contemplated by the Purchase Agreement, Seller is willing to enter into this
Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants set forth herein, the parties agree as follows:
1. DEFINITIONS. As used in this Agreement, terms defined in the
preamble and recitals of this Agreement shall have the meanings set forth
therein and the following terms shall have the meanings set forth below:
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(a) "Competitive Business" shall mean any Person engaged in
the business of offering securities brokerage, investment banking or investment
advisory services to clients or customers.
(b) "Confidential Information" shall mean the Asset's client
and vendor lists, marketing arrangements, business plans, projections, financial
information, training manuals, pricing manuals, product development plans,
market strategies, internal performance statistics and other competitively
sensitive information concerning the Asset and its subsidiaries which is
material to the Asset and not generally known by the public, other than Trade
Secrets, whether or not in written or tangible form.
(c) "Control" shall mean, with respect to any Person the power
to direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise.
(d) "Buyer Market" shall mean the geographic limits of
Colorado Springs, Colorado.
(e) "Key Employee" shall mean any Person who is employed in a
management, executive, supervisory, training, marketing or sales capacity for
another Person.
(f) "Permitted Activities" shall mean (i) owning not more than
70% of the outstanding shares of publicly-held corporations engaged in a
Competitive Business which have shares listed for trading on a securities
exchange registered with the Securities and Exchange Commission or through the
automatic quotation system of a registered securities association, (ii) serving
as an officer, director or employee of Buyer, or (iii) owning the outstanding
shares or serving as an officer, director or employee of a bank, as such term is
defined in Section 1813(a) of the Federal Deposit Insurance Act (12 U.S.C.
ss.1813(a)), so long as Seller does not personally provide securities brokerage,
investment banking or investment advisory services to such bank's or such bank's
subsidiaries' clients or customers.
(g) "Person" shall mean any individual, corporation, firm,
unincorporated organization, association, partnership, limited liability
company, trust (inter vivos or testamentary), estate of a deceased, insane or
incompetent individual, business trust, joint stock company, joint venture or
other organization, entity or business, whether acting in an individual,
fiduciary or other capacity.
(h) "Restricted Period" shall mean the period from the date
hereof through the second (2nd) anniversary of the date hereof, unless Seller
shall remain an employee of the Asset or Buyer, in which case Restricted Period
shall mean the period from the date hereof through the second (2nd) anniversary
of the first day on which Seller shall no longer be employed by Buyer or the
Asset or any of their respective subsidiaries.
(i) "Trade Secrets" shall mean the whole or any portion or
phase of any technical information, designs, processes, procedures, formulas or
improvements that are valuable and not generally known to the competitors of the
Asset, whether or not in written or tangible form.
2. NO COMPETING BUSINESS. Seller hereby agrees that for a period of one
(1) year after the date hereof, except as permitted by Section 5 of this
Agreement, Seller will not directly or indirectly own, manage, operate, control,
invest or acquire an interest in, or otherwise engage or participate in (whether
as a proprietor, partner, stockholder, director, officer, Key Employee, joint
venturer, investor or other participant in) any Competitive Business in the
Buyer Market, without regard to (a) whether the Competitive Business has its
office or other business facilities within the Buyer Market; (b) whether any
activity of Seller referred to above itself occurs or is performed within the
Buyer Market; or (c) whether Seller resides or reports to an office within the
Buyer Market.
3. NO INTERFERENCE WITH THE BUSINESS.
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3.1 Seller hereby agrees that during the Restricted Period, except as
permitted by Section 5 of this Agreement, Seller will not directly or indirectly
solicit, induce or influence any customer, lender, lessor or any other Person
which has a business relationship with the Asset or any of its subsidiaries in
the Buyer Market, or which had on the date of this Agreement a business
relationship with the Asset or any of its subsidiaries in the Buyer Market, to
discontinue or reduce the extent of such relationship with the Asset or its
subsidiaries in the Buyer Market.
3.2 Seller hereby agrees that during the Restricted Period, except as
permitted by Section 5 of this Agreement, Seller will not (a) directly or
indirectly recruit, solicit or otherwise induce or influence any Key Employee of
the Asset or any of its subsidiaries to discontinue such employment or agency
relationship with the Asset or its subsidiaries, or (b) employ or seek to
employ, or cause or permit any Competitive Business to employ or seek to employ
as a Key Employee for any Competitive Business, any Person who is then (or was
at any time within six (6) months prior to the date Seller or the Competitive
Business employs or seeks to employ such Person) employed by the Asset or any of
its subsidiaries as a Key Employee.
4. NO DISCLOSURE OF PROPRIETARY INFORMATION.
4.1 Seller hereby agrees that he will not directly or indirectly
disclose to anyone, or use or otherwise exploit for his own benefit or for the
benefit of anyone other than Buyer and the Asset and their respective
subsidiaries, any Trade Secrets for as long as they remain Trade Secrets, except
as permitted by Section 5 of this Agreement.
4.2 Seller hereby agrees that, during the Restricted Period, Seller
will not directly or indirectly disclose to anyone, or use or otherwise exploit
for Seller's own benefit or for the benefit of anyone other than Buyer and the
Asset and their respective subsidiaries, any Confidential Information, except as
permitted by Section 5 of this Agreement.
5. PERMITTED ACTIVITIES. The restrictions set forth in Sections 2, 3
and 4 of this Agreement shall not apply to Permitted Activities or to actions
taken by Seller during the xxxx Xxxxxx is employed by Buyer or the Company or
any of their respective subsidiaries to the extent, but only to the extent, that
such actions are expressly approved by the Board of Directors of Buyer.
6. REPRESENTATIONS AND WARRANTIES. Seller represents and warrants that
this Agreement constitutes the legal, valid and binding obligation of Seller,
enforceable against Seller in accordance with its terms. Seller represents and
warrants that Seller has no right, title, interest or claim in, to or under any
Trade Secrets or Confidential Information.
7. WAIVERS. Buyer will not be deemed as a consequence of any act,
delay, failure, omission, forbearance or other indulgences granted from time to
time by Buyer or for any other reason (a) to have waived, or to be estopped from
exercising, any of its rights or remedies under this Agreement, or (b) to have
modified, changed, amended, terminated, rescind, or superseded any of the terms
of this Agreement.
8. INJUNCTIVE RELIEF. Seller acknowledges (a) that any violation of
this Agreement will result in irreparable injury to Buyer; (b) that damages at
law would not be reasonable or adequate compensation to Buyer for violation of
this Agreement; and (c) that Buyer shall be entitled to have the provisions of
this Agreement specifically enforced by preliminary and permanent injunctive
relief without the necessity of proving actual damages and without posting bond
or other security, as well as to an equitable accounting of all earnings,
profits and other benefits arising out of any such violation.
9. NOTICES. All notices and other communications under this Agreement
shall be in writing and may be given by any of the following methods: (a)
personal delivery; (b) facsimile transmission; (c) registered or certified mail,
postage prepaid, return receipt requested; or (d) overnight delivery service
requiring acknowledgment of receipt. Any such notice or communication shall be
sent to the appropriate party at its address or facsimile number given below (or
at such other address or facsimile number for such party as shall be specified
by notice given hereunder):
11
To Buyer:
Maximum Dynamics, Inc.
0 Xxxxx Xxxxxxx, Xxxxx 0000
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Fax No.: (000)000-0000
Attn: Xxxx Xxxxxx, Chairman and Chief Executive Officer
To Seller:
Xx. Xxxxx Xxxx
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxxxx, Xxxxxxxx 00000
Fax No.: (000) 000-0000
All such notices and communications shall be deemed received upon (a) actual
receipt thereof by the addressee; (b) actual delivery thereof to the appropriate
address as evidenced by an acknowledged receipt; or (c) in the case of a
facsimile transmission, upon transmission thereof by the sender and confirmation
of receipt. In the case of notices or communications sent by facsimile
transmission, the sender shall contemporaneously mail a copy of the notice or
communication to the addressee at the address provided for above; provided,
however, that such mailing shall in no way alter the time at which the facsimile
notice or communication is deemed received.
10. SUCCESSORS IN INTEREST. This Agreement shall be binding upon, and
shall inure to the benefit of and be enforceable by, the parties hereto and
their respective heirs, legal representatives, successors and assigns, as the
case may be, and any reference to a party hereto shall also be a reference to
any such heir, legal representative, successor or assign.
11. NUMBER; GENDER. Whenever the context so requires, the singular
number shall include the plural and the plural shall include the singular, and
the gender of any pronoun shall include the other genders.
12. CAPTIONS. The titles and captions contained in this Agreement are
inserted herein only as a matter of convenience and for reference and in no way
define, limit, extend or describe the scope of this Agreement or the intent of
any provision hereof. Unless otherwise specified to the contrary, all references
to Sections are references to Sections of this Agreement.
13. CONTROLLING LAW; INTEGRATION; AMENDMENT. This Agreement shall be
governed by, and construed and enforced in accordance with, the internal laws of
the State of Colorado without reference to its choice of law rules. This
Agreement and the documents executed pursuant hereto or in connection herewith
supersede all negotiations, agreements and understandings between the parties
with respect to the subject matter hereof and constitutes the entire agreement
between the parties hereto. This Agreement may not be amended, modified or
supplemented except by written agreement of the parties hereto.
14. SEVERABILITY. Any provision hereof which is prohibited or
unenforceable in any jurisdiction will, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction will not invalidate or render unenforceable such provision in any
other jurisdiction. To the extent permitted by law, the parties hereto waive any
provision of law which renders any such provision prohibited or unenforceable in
any respect. In the event that any provision of this Agreement should ever be
deemed to exceed the time, geographic, product or service or any other
limitations permitted by applicable law, then such provision shall be deemed
reformed to the maximum extent permitted by applicable law.
12
15. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and it shall not be
necessary in making proof of this Agreement or the terms hereof to produce or
account for more than one of such counterparts. Executed counterparts may be
delivered via facsimile transmission.
16. ENFORCEMENT OF CERTAIN RIGHTS. Nothing expressed or implied in this
Agreement is intended, or shall be construed, to confer upon or give any person
other than the parties hereto, and their respective heirs, legal
representatives, successors or assigns, as the case may be, any rights,
remedies, obligations or liabilities under or by reason of this Agreement, or
result in such person being deemed a third party beneficiary of this Agreement.
IN WITNESS WHEREOF, Seller has duly executed and delivered this
Agreement, and Buyer has caused this Agreement to be duly executed and delivered
on its behalf by an officer thereunto duly authorized, all as of the date first
above written.
/s/ Xxxxx X. Xxxx
-------------------------------------------
Xxxxx X. Xxxx
THE MINI-CAP SECTOR
By: /s/ Xxxxx X. Xxxx
---------------------------------------
Its: Xxxxx X. Xxxx, President, Signing On
Behalf Of The Mini-Cap Sector Only
------------------------------------
13
EXHIBIT B
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT
Employment Agreement, between Maximum Dynamics Corporation (the "Company")
and Xxxxx Xxxx (the "Employee").
1. For good consideration, the Company employs the Employee on the
following terms and conditions.
2. Term of Employment. Subject to the provisions for termination set forth
below this agreement will begin on December 16, 2002 and end on
December 16, 2004.
3. Salary. The Company shall pay Employee a salary of $96,000 per year,
for the services of the Employee, payable in increments of $4,000 on
the 15th and last day of the month. Salary compensation shall commence
whenever the first of any of the following occurs: Xxxx Xxxxxx or
Xxxxxx Xxxxxxx begins receiving salary compensation OR when the Company
receives at least $1 million in financing OR when the Company receives
revenue generated from the Financial Consulting Division. In addition,
to this salary, Employee will receive any bonuses, incentives stock
options, or other compensated items based upon performance. The initial
base salary may be increased every 3 months at the discretion of the
principles of the Company.
4. Duties and Position. The Company hires the Employee in the capacity of
Director of Financial Services.
5. Employee to Devote Full Time to Company. The Employee will devote full
time, attention, and energies to the business of the Company, and,
during this employment, will not engage in any other business activity
except for consulting with Equity Research, Inc., regardless of whether
such activity is pursued for profit, gain, or other pecuniary
advantage. Employee is not prohibited from making personal investments
in any other businesses provided those investments do not require
active involvement in the operation of said companies.
6. Confidentiality or Proprietary Information. Employee agrees, during or
after the term of this employment, not to reveal confidential
information, or trade secrets to any person, firm, corporation, or
entity. Should Employee reveal or threaten to reveal this information,
the Company shall be entitled to an injunction restraining the Employee
from disclosing same, or from rendering any services to any entity to
whom said information has been or is threatened to be disclosed.
7. Reimbursement of Expenses. The Employee may incur reasonable expenses
for furthering the Company's business, including expenses for
entertainment, travel, and similar items. The Company shall reimburse
Employee for all business expenses after the Employee presents an
itemized account of expenditures, pursuant to Company policy.
14
8. Vacation. The Employee shall be entitled to a yearly vacation of 3
weeks at full pay.
9. Disability. In Employee cannot perform the duties because of illness or
incapacity for a period of more than 2 weeks, the compensation
otherwise due during said illness or incapacity will be reduced by 20
percent. The Employee's full compensation will be reinstated upon
return to work. However, if the Employee is absent from work for any
reason for a continuous period of over 6 months, the Company may
terminate the Employee's employment, and the Company's obligations
under this agreement will cease on that date.
10. Termination of Agreement. Without cause, the Company may not terminate
this agreement at any time with the Employee. Notwithstanding anything
to the contrary contained in this agreement, the Company may terminate
the Employee's employment upon 120 days' notice to the Employee should
any of the following events occur:
a) The sale of substantially all of the Company's assets to a single
purchaser or group of associated purchasers; or
b) The sale, exchange, or other disposition, in one transaction of the
majority of the Company's outstanding corporate shares; or
c) The Company's decision to terminate its business and liquidate its
assets; or
d) The merger or consolidation of the Company with another company; or
e) Bankruptcy or chapter 11 reorganization.
11. Death Benefit. Should Employee die during the term of employment, the
Company shall pay to Employee's estate any compensation due for 3
months at the end of the month in which death occurred.
12. Restriction on Post Employment Compensation. For a period of twelve
months after the end of employment, the Employee shall not control,
consult to or be employed by any business similar to that conducted by
the company, either by soliciting any of its accounts or by operating
within Employer's general trading area.
13. Assistance in Litigation. Employee shall upon reasonable notice,
furnish such information and proper assistance to the Company as it may
reasonably require in connection with any litigation in which it is, or
may become, a party either during or after employment.
14. Effect or Prior Agreements. This Agreement supersedes any prior
agreement between the Company or any predecessor of the Company and the
Employee, except that this agreement shall not affect or operate to
reduce any benefit or compensation inuring to the Employee of a kind
elsewhere provided and not expressly provided in this agreement.
15. Settlement by Arbitration. Any claim or controversy that arises out of
or relates to this agreement, or the breach of it, shall be settled by
arbitration in accordance with the rules of the American Arbitration
Association. Judgment upon the award rendered may be entered in any
court with jurisdiction.
16. Limited Effect of Waiver by Company. Should Company waive breach of any
provision of this agreement by the Employee, that waiver will not
operate or be construed as a waiver of further breach by the Employee.
17. Severability. If, for any reason, any provision of this agreement is
held invalid, all other provisions of this agreement shall remain in
effect. If this agreement is held invalid or cannot be enforced, then
to the full extent permitted by law any prior agreement between the
Company (or any predecessor thereof) and the Employee shall be deemed
reinstated as if this agreement had not been executed.
18. Assumption of Agreement by Company's Successors and Assignees. the
Company's rights and obligations under this agreement will inure to the
benefit and be binding upon the Company's successors and assignees.
19. Oral Modifications Not Binding. This instrument is the entire agreement
of the Company and the Employee. Oral changes have no effect. It may be
altered only by a written agreement signed by the party against whom
enforcement of any waiver, change, modification, extension, or
discharge is sought.
This Agreement is signed this 12th day of December 2002.
/s/ Xxxx Xxxxxx /s/ Xxxxx Xxxx
------------------------------ --------------------------
Maximum Dynamics, Inc. Employee
Authorized signer: Xxxx Xxxxxx
Title: President
15
EXHIBIT C
PURCHASE CONSIDERATIONTRANSACTION AGREEMENT
The following list details the compensation summary per Seller per
Article III Section 3.1 of the Share Purchase Agreement.
Name: Xxxxx Xxxx
Address: 000 Xxxxxx Xxxxxx, Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Cash amount: $70,000
^
Restricted Shares: 3,815,000
Name: Xxxxx Xxxxxx
Address: 000 Xxxxxx Xxxxxx, Xxxxx 000, Xxxx Xxxxxxx, Xxxxxxxx 00000
Cash amount: $0
^
Restricted Shares: 545,000
Name: Xxxxx Xxxxxxxx
Address: 000 Xxxxxx Xxxxxx, Xxxxx 000, Xxxx Xxxxxxx, Xxxxxxxx 00000
Cash amount: $0
^
Restricted Shares: 545,000
Name: Equity Research, Inc.
Address: 000 Xxxxxx Xxxxxx, Xxxxx 000, Xxxx Xxxxxxx, Xxxxxxxx 00000
Cash amount: $30,000 and $255,000 note
^
Restricted Shares: 272,500
Name: Xxxx Xxxxxx
Address: 000 Xxxxxx Xxxxxx, Xxxxx 000, Xxxx Xxxxxxx, Xxxxxxxx 00000
Cash amount: 0
^
Restricted Shares: 272,500
