(2) PLAN OF ACQUISITION/MERGER--PLAN OF MERGER
PLAN AND AGREEMENT OF MERGER AND EXCHANGE OF STOCK
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THIS PLAN AND AGREEMENT OF MERGER AND EXCHANGE OF STOCK ("Agreement") is
made and entered into as of the 17th day of December, 1999, by and among
NET/TECH INTERNATIONAL, INC., a corporation organized and existing under the
laws of the State of Delaware ("Net/Tech"), whose address is ▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, NET/TECH ACQUISITION CORPORATION, a
corporation organized and existing under the laws of the State of Georgia and
wholly-owned subsidiary of Net/Tech (the "Subsidiary"), whose address is ▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, RESULTS ORIENTED INTEGRATION
CORPORATION, a corporation organized and existing under the laws of the State of
Georgia ("ROI"), whose address is Westside Center, ▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, an individual resident of Georgia ("▇. ▇▇▇▇▇▇▇▇▇"),
whose address is ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, an
individual resident of Alabama ("▇. ▇▇▇▇▇▇▇▇▇"), whose address is ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇., an individual resident of
Georgia ("▇▇▇▇▇▇▇"), whose address is ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
(▇. ▇▇▇▇▇▇▇▇▇, ▇. ▇▇▇▇▇▇▇▇▇, and ▇▇▇▇▇▇▇ collectively referred to as the
"Controlling Shareholders" and individually referred to as an "Controlling
Shareholder").
W I T N E S S E T H:
-------------------
WHEREAS, the Controlling Shareholders are the owners of over 80% of the
issued and outstanding shares of the no par value common stock of ROI; and
WHEREAS, the parties hereto desire to merge the Subsidiary with and into
ROI by exchanging all of the issued and outstanding shares of ROI common stock
(the "ROI Common Stock") for a total of 36,713,508 shares (subject to adjustment
based on the Reverse Split as defined herein) of the $.01 par value common stock
of Net/Tech
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as restricted in accordance with securities laws, Net/Tech's bylaws, and the
Escrow Agreement as defined herein (the "Net/Tech Common Stock"), all subject to
the terms, provisions, conditions and limitations set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises, the mutual covenants and
agreements set forth herein, and for other good and valuable consideration, the
receipt, adequacy and sufficiency of which are hereby acknowledged by the
parties hereto, the parties hereto do hereby mutually covenant and agree as
follows:
1. The Merger
(a) THE MERGER. Upon the terms and subject to the conditions set forth in
this Agreement, and in accordance with Section 14-2-1101, et seq. of the Georgia
Business Corporation Code (the "GBCC"), the Subsidiary shall be merged with and
into ROI at the Effective Time (as defined in Section 1(c)). Following the
Effective Time, the separate corporate existence of the Subsidiary shall cease,
and ROI shall continue as the surviving corporation (the "Surviving
Corporation") under a name to be determined prior to Closing and shall succeed
to and assume all the rights and obligations of ROI and the Subsidiary in
accordance with the GBCC.
(b) THE CLOSING; Effective Date. The closing of the Merger contemplated by
this Agreement (the "Closing") shall take place at such time and on such date as
is agreed to by the parties (the "Closing Date"), which (subject to satisfaction
or waiver of the conditions set forth in Section 7) shall be no later than the
second business day after satisfaction or waiver of the conditions set forth in
Section 7 at such location as the parties may agree, unless another date is
agreed to in writing by the parties hereto.
(c) EFFECTIVE TIME. Subject to the provisions of this Agreement, the
parties shall file articles of merger (the "Articles of Merger") executed in
accordance with Section 14-2-1105 of the GBCC and shall make all other filings
or records required under the GBCC as soon as practical on or after the Closing
Date. The Merger shall become effective at such time as the Articles of Merger
are accepted for record by the Secretary of State of the State of Georgia or at
such other time as the Subsidiary and ROI shall agree as specified in the
Articles of Merger but not exceeding 30 days after the date the Articles of
Merger are accepted for record by the Secretary of State of the State of Georgia
(the "Effective Time").
(d) EFFECT OF MERGER ON THE CONSTITUENT CORPORATIONS.
(1) GENERAL. The Merger shall have the effect set forth in Section
14-2-1106 of the GBCC. Without limiting the generality of the foregoing,
and subject thereto, at the Effective Time of the Merger, (i) the Surviving
Corporation shall possess all assets and property of every description, and
every interest therein, wherever located, and the rights, privileges,
immunities, powers, franchises and authority, of a public as well as of a
private nature, of each of the Constituent Corporations, (ii) all
obligations belonging to or due each of the Constituent Corporations shall
be vested in, and become the obligations of, the Surviving Corporation
without further act or deed, (iii) title to any real estate or any interest
therein vested in either of the Constituent Corporations shall not revert
or in any way be impaired by reason of the Merger, (iv) all rights of
creditors and all liens upon any property of either of the Constituent
Corporations shall be preserved unimpaired, and (v) the Surviving
Corporation shall be liable for all of the debts and obligations of each of
the Constituent Corporations, and any claim existing, or action or
proceeding pending, by or against either of the Constituent Corporations
may be prosecuted to judgment with right of appeal, as if the Merger had
not taken place.
(2) ARTICLES OF INCORPORATION OF THE SURVIVING CORPORATION. The
Articles of Incorporation of ROI, in effect as of the Effective Time, shall
become the Articles of Incorporation of the Surviving Corporation from and
after the Effective Time and until thereafter amended as provided by law.
(3) BYLAWS OF THE SURVIVING CORPORATION. The Bylaws of ROI shall be
the Bylaws of the Surviving Corporation from and after the Effective Time
and until thereafter altered, amended or repealed in accordance with the
GBCC, the Articles of Incorporation of the Surviving Corporation and said
Bylaws.
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(4) DIRECTORS. The Board of Directors of ROI at the Effective Time
shall, from and after the Effective Time, be the Board of Directors of the
Surviving Corporation until their successors have been duly elected or
appointed and qualified or until their earlier death, resignation or
removal in accordance with the Surviving Corporation's Articles of
Incorporation and applicable law.
(5) OFFICERS. The officers of ROI at the Effective Time shall, from
and after the Effective Time, be the officers of the Surviving Corporation
until their successors have been duly elected or appointed and qualified or
until their earlier death, resignation or removal in accordance with the
Surviving Corporation's Articles of Incorporation and Bylaws.
(6) ASSETS, LIABILITIES. At the Effective Time, the assets,
liabilities, reserves and accounts of each of the Constituent Corporations
shall be taken upon the books of the Surviving Corporation at the amounts
at which they respectively shall be carried on the books of said
corporations immediately prior to the Effective Time, except as otherwise
set forth in this Agreement and subject to such adjustments, or elimination
of intercompany items, as may be appropriate in giving effect to the Merger
in accordance with generally accepted accounting principles.
(7) TAX TREATMENT. The parties hereto acknowledge that for federal
income tax purposes, it is intended that the Merger shall qualify as a
reorganization under the provisions of Sections 368(a)(1)(A) and
368(a)(2)(E) of the Code.
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2. EFFECT OF THE MERGER ON THE STOCK OF THE CONSTITUENT CORPORATIONS;
EXCHANGE OF CERTIFICATES.
(a) EFFECT ON STOCK. As of the Effective Time, by virtue of the Merger and
without any action on the part of any holder of any stock of either of the
Constituent Corporations:
(1) CANCELLATION OF TREASURY STOCK. Each share of Subsidiary Stock
that is owned by the Subsidiary or by any subsidiary of the Subsidiary
shall automatically be canceled and retired and shall cease to exist, and
no Merger Consideration (as hereinafter defined) shall be delivered in
exchange therefor.
(2) CONVERSION OF COMPANY STOCK. All of the issued and outstanding
shares of ROI Common Stock shall at the Effective Time be converted into
36,713,508 shares of Net/Tech Common Stock (the "Merger Consideration").
(It being understood that the Merger Consideration shall represent
approximately 77.5% of the total issued and outstanding shares of Net/Tech
as of the Closing, excluding any shares related to the "Private Placement"
as defined hereinbelow. The number of shares of Net/Tech Common Stock
referred to throughout this Agreement shall be subject to adjustment based
on the Reverse Split and shall be adjusted from time to time to reflect any
other stock splits or stock dividends or reclassification of capital
structure. As of the Effective Time, all such ROI Common Stock shall no
longer be outstanding and shall automatically be canceled and retired and
shall cease to exist, and each holder of a certificate evidencing any ROI
Common Stock shall cease to have any rights with respect thereto, except
the right to receive the Merger Consideration to be issued in consideration
therefor upon surrender of such certificate in accordance with Section 2(b)
hereof.
(3) SUBSIDIARY STOCK. As of the Effective Time, all of the issued and
outstanding shares of Subsidiary common stock shall be converted into 1,000
shares of ROI Common Stock.
(b) EXCHANGE OF CERTIFICATES. Upon the terms, subject to the conditions and
in reliance upon the representations and warranties contained herein and subject
to the Escrow Agreement, upon the proper surrender at Closing to Net/Tech by the
ROI Shareholders of the certificate or certificates which immediately prior to
the Closing represented outstanding shares of ROI Common Stock (the
"Certificates") that are to be exchanged pursuant to Section 2(a) for the Merger
Consideration, the ROI Shareholders shall be entitled to receive in exchange
therefor the Merger Consideration set forth opposite such ROI Shareholder's name
on the ROI Shareholders List (as defined in Section 6(d) hereof). Any fractional
share of Net/Tech Common Stock to which any ROI Shareholder may be entitled as a
result of the Merger shall be rounded up to the nearest whole share of Net/Tech
Common Stock.
3. CLOSING OBLIGATIONS.
(a) CLOSING OBLIGATIONS OF ROI AND THE ROI SHAREHOLDER. At the Closing, ROI
and the ROI Shareholders shall deliver to Net/Tech the following:
(1) certificates representing all of the ROI Common Stock, duly
endorsed (or accompanied by duly executed stock powers) for transfer to
Net/Tech;
(2) an executed Employment Agreement between Net/Tech and ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, the form of which is attached hereto as Schedule A;
(3) a certificate, dated the Closing Date, stating that (i) the
representations and warranties of ROI and the ROI Shareholders contained in
this Agreement or any Schedule are true and correct in all material
respects on and as of the Closing Date, and (ii) ROI and the ROI
Shareholders have performed in all material respects all obligations
required to be performed by them under this Agreement at or prior to the
Closing.
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(4) an executed Escrow Agreement, the form of which is attached hereto
as Schedule B.
(b) Closing Obligations of Net/Tech. At the Closing, Net/Tech shall deliver
to the ROI Shareholders the following:
(1) the Merger Consideration;
(2) an executed Employment Agreement between Net/Tech and ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, the form of which is attached hereto as Schedule A;
(3) a certificate, dated the Closing Date, stating that (i) the
representations and warranties of Net/Tech contained in this Agreement or
any Schedule are true and correct in all material respects on and as of the
Closing Date, (ii) Net/Tech has performed in all material respects all
obligations required to be performed by it under this Agreement at or prior
to the Closing.
(4) an executed Escrow Agreement, the form of which is attached hereto
as Schedule B.
4. APPROVALS.
(a) The Controlling Shareholders and ROI have approved this Agreement and
the transactions contemplated herein. Prior to the Closing ROI and the ROI
Shareholders shall have taken any and all action required for the Merger.
(b) The shareholders and the Board of Directors of Net/Tech must approve
the Merger prior to the Closing. If such approvals are not obtained on or before
April 1, 2000, any party to this Agreement may, at its sole option, terminate
this Agreement by notifying the other parties in writing of such termination.
Upon such termination, each party shall be responsible for its own costs and
expenses related to this Agreement and no party shall have any obligation
hereunder.
5. REPRESENTATIONS AND WARRANTIES OF NET/TECH. Except for the approvals
described in 4(b) hereof, Net/Tech represents and warrants to the ROI
Shareholders that the following representations and warranties are true and
correct in all material respects as of the Closing:
(a) Net/Tech is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has the corporate power and
authority and all licenses, permits, and authorizations necessary to carry on
the businesses in which it is engaged and to own and use the properties owned
and used by it.
(b) Net/Tech has the requisite corporate power and authority to execute and
deliver this Agreement and the Employment Agreement and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of this
Agreement and the Employment Agreement by Net/Tech and the consummation by
Net/Tech of the transactions contemplated herein and therein have been duly
authorized by Net/Tech's Board of Directors and, except for the approval of the
Net/Tech shareholders, no other corporate or other proceedings on the part of
Net/Tech or the Net/Tech shareholders are necessary to authorize this Agreement
and the Employment Agreement or for Net/Tech to consummate the transactions
contemplated hereunder and thereunder. This Agreement has been duly and validly
executed and delivered by Net/Tech and constitutes, and the Employment Agreement
when executed and delivered at Closing will constitute, a valid and binding
agreement of Net/Tech, enforceable against Net/Tech in accordance with their
terms, except as enforceability may be limited by creditors' rights, bankruptcy,
insolvency and general principles of equity.
(c) Schedule C, which is attached hereto and thereby made an integral part
hereof, contains the audited financial statements of Net/Tech for the fiscal
years ended November 30, 1997 and 1998, and the unaudited interim financial
statements for the nine months ended August 31, 1999. All such financial
statements are accurate and complete
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in all material respects. Except as disclosed on Schedule C, there is no
material litigation pending or threatened against Net/Tech.
(d) Neither the execution, delivery or performance of this Agreement or the
Employment Agreement by Net/Tech, nor the consummation by Net/Tech of the
transactions contemplated hereunder or thereunder, will (i) conflict with or
result in any breach of any provisions of the Articles of Incorporation or
Bylaws of Net/Tech, (ii) require a filing with, or a permit, authorization,
consent or approval of, any federal, state, local or foreign court, arbitral
tribunal, administrative agency or commission or other governmental or other
regulatory authority or administrative agency or commission, except for filings
or approvals required under applicable federal or state securities laws and the
filing of the Articles of Merger, (iii) result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a default (or
give rise to any right of termination, cancellation or acceleration) under, or
result in the creation of any mortgage, pledge, security interest, encumbrance,
lien, claim or charge of any kind or right of others of whatever nature, on any
property or asset of Net/Tech pursuant to any of the terms, conditions or
provisions of any contract, agreement, lease, intellectual property license,
note, bond, mortgage, indenture, license, or other instrument or obligation to
which Net/Tech is a party or by which it is bound or (iv) to the best knowledge
of Net/Tech, violate any law, order, writ, injunction, decree, statute, rule or
regulation of any governmental entity applicable to Net/Tech or any of its
properties or assets, except, in the case of clauses (ii), (iii) and (iv), where
failures to make such filing or obtain such authorization, consent or approval
would not have, or where such violations, breaches or defaults or liens would
not have, individually or in the aggregate, a material adverse effect.
(e) Schedule D, which is attached hereto and thereby made an integral part
hereof, is a complete and accurate listing of all outstanding shares and other
securities of Net/Tech of any kind, whether debt or equity, and all outstanding
options and warrants of any kind for the purchase of shares or any other
securities of Net/Tech, whether debt or equity. Said Schedule D contains the
corresponding number of each of the aforementioned items as currently existing
and each such number will be adjusted for the Reverse Split, as defined herein.
(f) Schedule E, which is attached hereto and thereby made an integral part
hereof, is a complete and accurate listing of all existing obligations of
Net/Tech and such Schedule E shall be updated as of the Closing. Those items
designated as continuing obligations (the "Continuing Obligations") shall remain
obligations of Net/Tech after the Closing. Except as noted on Schedule E, the
obligations listed thereon as the "Obligations to be Satisfied" will have been
paid or satisfied prior to the Closing and Net/Tech will have no employees as of
the Closing.
(g) Net/Tech (i) has timely filed all Tax Returns (as hereinafter defined)
required to be filed by it for all periods ending on or prior to the Closing,
and such tax returns are true, correct and complete in all material respects,
(ii) has duly paid in full or made adequate provision for the payment of all
Taxes (as hereinafter defined) for all periods ending at or prior to the Closing
(whether or not shown on any Tax Return), and (iii) has not filed for an
extension to file any Tax Return not yet filed. No claim has been made by any
authority in a jurisdiction where Net/Tech does not file a Tax Return that
Net/Tech is or may be subject to tax in such jurisdiction. No waivers of
statutes of limitation have been given by or requested with respect to any Taxes
of Net/Tech. Net/Tech has not agreed to any extension of time with respect to
any Tax deficiency. The liabilities and reserves for Taxes reflected in the
Net/Tech Financial Statements are adequate to cover all Taxes for all periods
ending on or prior to August 31, 1999, and there are no liens for Taxes upon any
property or asset of Net/Tech, except for liens for Taxes not yet due. Net/Tech
has withheld and paid all Taxes required to have been withheld and paid in
connection with amounts paid or owing to any employee, independent contractor,
creditor, shareholder, or other third party.
For purposes of this Agreement, the term "Taxes" shall mean all taxes, charges,
fees, levies or other assessments, including gross receipts, excise, property,
sales, withholding, social security, occupation, use, service, service use,
license, payroll, franchise, transfer and recording taxes, fees and charges,
imposed by the United States, or any state, local or foreign government or
subdivision or agency thereof whether computed on a separate, consolidated,
unitary, combined or any other basis; and such term shall include any interest,
fines, penalties or additional amounts attributable or imposed or with respect
to any such taxes, charges, fees, levies or other assessments, and the term "Tax
Return" shall mean any return, report or other document or information required
to be supplied to a taxing authority in connection with Taxes.
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(h) To the best of Net/Tech's knowledge, the representations contained in
this subsection (h) are complete and accurate. Any and all securities issued by
Net/Tech have been issued in compliance with Federal and State securities laws.
Net/Tech has filed with the Securities and Exchange Commission all of the
documents ("Net/Tech SEC Documents") that it was required to file through the
date of this Agreement. As of their respective dates, the Net/Tech SEC Documents
did not contain any untrue statements of material facts or omit to state
material facts required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. As of their respective dates, the Net/Tech SEC Documents complied in
all material respects with the applicable requirements of the Securities Act of
1933 and the Securities Exchange Act of 1934 and the rules and regulations
promulgated under such statutes. The financial statements contained in the
Net/Tech SEC Documents, together with the notes thereto, have been prepared in
accordance with generally accepted accounting principles consistently followed
throughout the periods indicated (except as may be indicated in the notes
thereto or, in the case of the unaudited financial statements, as permitted by
Form 10-Q), reflect all known liabilities of Net/Tech required to be stated
therein, including all known contingent liabilities as of the end of each period
reflected therein, and present fairly the financial condition of Net/Tech at
said date and the results of operations and cash flows of Net/Tech for the
periods then ended.
6. REPRESENTATIONS AND WARRANTIES OF THE CONTROLLING SHAREHOLDERS. Each of
the Controlling Shareholders respectively (and not jointly) represents and
warrants to Net/Tech that the following representations and warranties
pertaining to such individual Controlling Shareholder are true and correct in
all material respects as of the Closing:
(a) ROI is a corporation duly organized, validly existing and in good
standing under the laws of the State of Georgia and has the corporate power and
authority and all licenses, permits, and authorizations necessary to carry on
the businesses in which it is engaged and to own and use the properties owned
and used by it.
(b) The Controlling Shareholders have the requisite power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this Agreement
and the Employment Agreement and the consummation of the transactions
contemplated herein and therein have been duly authorized by ROI's Board of
Directors and no other corporate or other proceedings on the part of ROI or the
ROI shareholders are necessary to authorize this Agreement and the Employment
Agreement or to consummate the transactions contemplated hereunder and
thereunder. This Agreement has been duly and validly executed and delivered by
Controlling Shareholders and constitutes a valid and binding agreement of the
Controlling Shareholders, enforceable against the Controlling Shareholders in
accordance with its terms, except as enforceability may be limited by creditors'
rights, bankruptcy, insolvency and general principles of equity.
(c) Neither the execution, delivery or performance of this Agreement or the
Employment Agreement, nor the consummation of the transactions contemplated
hereunder or thereunder, will (i) conflict with or result in any breach of any
provisions of the Articles of Incorporation or Bylaws of ROI, (ii) require a
filing with, or a permit, authorization, consent or approval of, any federal,
state, local or foreign court, arbitral tribunal, administrative agency or
commission or other governmental or other regulatory authority or administrative
agency or commission, except for filings or approvals required under applicable
federal or state securities laws and the filing of the Articles of Merger, (iii)
result in a violation or breach of, or constitute (with or without due notice or
lapse of time or both) a default (or give rise to any right of termination,
cancellation or acceleration) under, or result in the creation of any mortgage,
pledge, security interest, encumbrance, lien, claim or charge of any kind or
right of others of whatever nature, on any property or asset of ROI pursuant to
any of the terms, conditions or provisions of any contract, agreement, lease,
intellectual property license, note, bond, mortgage, indenture, license, or
other instrument or obligation to which ROI is a party or by which it is bound
or (iv) to the best knowledge of ROI, violate any law, order, writ, injunction,
decree, statute, rule or regulation of any governmental entity applicable to
Net/Tech or any of its properties or assets, except, in the case of clauses
(ii), (iii) and (iv), where failures to make such filing or obtain such
authorization, consent or approval would not have, or where such violations,
breaches or defaults or liens would not have, individually or in the aggregate,
a material adverse effect.
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(d) At least ten (10) prior to Closing, a list will be delivered to
Net/Tech containing the name and the corresponding number of each of the items
listed in this subsection (d) (the "ROI Shareholder List"). The ROI Shareholder
List shall contain a complete and accurate listing of all outstanding shares and
other securities of ROI of any kind, whether debt or equity, and all outstanding
options and warrants of any kind for the purchase of shares or any other
securities of ROI, whether debt or equity.
(e) The ROI Shareholders have the requisite authority and capacity to
perform the Merger.
(f) The ROI Shareholders are the owners of record of the ROI Common Stock
and are entitled to transfer any or all of such ROI Common Stock in accordance
herewith.
(g) By virtue of acquiring the ROI Common Stock hereunder, Net/Tech shall
be entitled to any and all rights and privileges to which the ROI Shareholders
are entitled by virtue of owning the ROI Common Stock.
(h) Other than the ROI Common Stock as shown on the ROI Shareholder List,
each of the ROI Shareholders owns no other shares of common stock of ROI and has
not transferred or caused ROI to issue any shares of common stock of ROI to
anyone else.
(i) There is no material litigation pending or threatened against or
relating to the ROI Shareholders, or any of them, that would affect the ROI
Common Stock or the transaction contemplated by this Agreement.
(j) There is no effective order, decree or judgment of any court to which
the ROI Shareholders, or any of them, are a party that would affect the ROI
Common Stock or the transaction contemplated by this Agreement.
(k) The ROI Shareholders have good title to the ROI Common Stock to be
transferred pursuant to this Agreement; such ROI Common Stock are validly issued
and outstanding, and are paid for in full; and each of the ROI Shareholders has
full legal right, power and authority to sell, assign and transfer the ROI
Common Stock to Net/Tech pursuant to this Agreement.
(l) Schedule F, which is attached hereto and thereby made an integral part
hereof, contains the audited financial statements of ROI for the fiscal years
ended June 30, 1998 and 1999, and the unaudited financial statements for the
three months ended September 30, 1999. All such financial statements are
accurate and complete in all material respects. ROI has invoiced at total of
$1.3 million for the period July 1, 1999, through the date of this Agreement,
and invoiced a total of $1.4 million for the entire fiscal year of July 1, 1998,
through June 30, 1999. Except as disclosed on Schedule F, there is no material
litigation pending or threatened against ROI and there are no delinquent taxes
of any kind. Schedule F-1, which is attached hereto and thereby made an integral
part hereof, contains a list of the ROI software products reflected on the
Balance Sheet. Except as noted on said Schedule F-1, ROI is the owner of all
such software and has granted no rights of any kind related to the software to
any other party except for licenses granted in the ordinary course of business.
(m) ROI (i) has timely filed all Tax Returns (as hereinafter defined)
required to be filed by it for all periods ending on or prior to the Closing,
and such tax returns are true, correct and complete in all material respects,
(ii) has duly paid in full or made adequate provision for the payment of all
Taxes for all periods ending at or prior to the Closing (whether or not shown on
any Tax Return), and (iii) has not filed for an extension to file any Tax Return
not yet filed. No claim has been made by any authority in a jurisdiction where
ROI does not file a Tax Return that ROI is or may be subject to tax in such
jurisdiction. No waivers of statutes of limitation have been given by or
requested with respect to any Taxes of ROI. ROI has not agreed to any extension
of time with respect to any Tax deficiency. The liabilities and reserves for
Taxes reflected in the ROI Financial Statements are adequate to cover all Taxes
for all periods ending on or prior to September 30, 1999, and there are no liens
for Taxes upon any property or asset of ROI, except for liens for Taxes not yet
due. ROI has withheld and paid all Taxes required to have been withheld and paid
in connection with amounts paid or owing to any employee, independent
contractor, creditor, shareholder, or other third party.
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(n) Any and all securities issued by ROI have been issued in compliance
with Federal and State securities laws. Any and all filings required any
governmental authority have been filed by ROI on a timely basis and such filings
are true and correct in all material respects.
7. CONDITIONS PRECEDENT TO CLOSING. The parties covenant and agree that the
Closing of the Merger shall be subject to the fulfillment of each of the
following covenants and agreements, each of which constitutes a condition
precedent to the obligations of the parties hereunder:
(a) The shareholders and the Board of Directors of Net/Tech shall have
approved the Merger.
(b) Net/Tech shall obtain a commitment to raise capital through a private
placement of securities made pursuant to Regulation D promulgated under the
Securities Act of 1933, as amended, in the minimum amount of Four Million and
No/100 Dollars ($4,000,000.00) on terms and conditions agreed to in writing by
the parties hereto (the "Private Placement"), with such commitment contingent
only upon the Closing of the Merger. Any such shares of Net/Tech sold in the
Private Placement shall be issued after the Merger is complete and dilution
shall be shared prorata by all Net/Tech shareholders including the parties to
this Agreement.
(c) Net/Tech shall complete a reverse stock split of the Net/Tech Common
Stock (the "Reverse Split") at the Closing on terms agreed to in writing by the
parties hereto.
(d) Net/Tech shall have paid or satisfied all of the Obligations to be
Satisfied and shall have no employees.
(e) At the Closing, ▇▇▇▇▇ ▇. ▇▇▇▇▇, President of Net/Tech, shall resign as
an employee and officer of Net/Tech, but shall continue as a member of the Board
of Directors and shall enter into a Services Agreement with Net/Tech, in the
form of Schedule G, which is attached hereto and thereby made an integral part
hereof. All other members of the Board of Directors shall resign prior to or at
the Closing.
(f) At the Closing, ▇▇▇▇▇▇▇ shall enter into the Employment Agreement with
Net/Tech.
(g) At the Closing, the Controlling Shareholders and Net/Tech shall enter
into a Share Escrow Agreement.
8. Legend on Shares; Piggyback Registration. Each certificate for shares of
Net/Tech Common Stock issued hereunder, unless at the time of exercise such
shares are registered under the Act, shall bear the following legend (and any
additional legend required by the any national securities exchanges upon which
such shares may, at the time of such exercise, be listed or under applicable
securities laws):
The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the "Act"), or the
securities laws of any state. They may not be sold, transferred, assigned,
pledged, hypothecated, encumbered, or otherwise disposed of in the absence
of registration under said Act and all other applicable securities laws,
unless an exemption from registration is available.
The ROI Shareholders agree to hold the shares of Net/Tech Common Stock for a
minimum of one (1) year after the Closing or, if the Private Placement terms
require, for a minimum of two (2) years after the Closing. Except for the
foregoing minimum holding period, the ROI Shareholders shall have unlimited
piggyback registration rights for any shares of Net/Tech Common Stock issued
hereunder. If Net/Tech at any time proposes for any reason to register any of
its securities under the Securities Act of 1933, as amended (the "Act"), it
shall each such time promptly give written notice to the ROI Shareholders of its
intention to do so, and upon the written request, given within thirty (30) days
after receipt of any such notice, of any of the ROI Shareholders to register any
shares of Net/Tech Common Stock held by any of them, Net/Tech shall cause all
such shares to be registered under the Act, all to the extent requisite to
permit the sale or other disposition by any of the ROI Shareholders of the
shares respectively held by them so registered. Net/Tech, at its sole expense,
shall take all actions required and prepare and file any and all documents
required under the Act or any
37
other securities or "blue sky" laws of any jurisdictions reasonably requested by
the ROI Shareholders or by the Securities and Exchange Commission or any other
regulatory agency.
9. ASSIGNMENT. Except as permitted herein, none of the parties to this
Agreement may assign its respective rights and obligations hereunder without the
prior written consent of the other parties hereto.
10. TERMINOLOGY AND SECTION HEADINGS. All personal pronouns in this
Agreement, whether used in the masculine, feminine or neuter gender shall
include all other genders; the singular shall include the plural and the plural
shall include the singular. Titles of Paragraphs are for convenience only, and
neither limit nor amplify the provisions of this Agreement.
11. BINDING EFFECT. Subject to the restrictions on assignments set forth in
this Agreement, this Agreement and the rights of the parties hereunder shall
inure to the benefit of and be binding upon the parties and their respective
legal representatives, successors and assigns. Whenever in this Agreement a
reference is made to one of the parties, such reference shall be deemed to
include a reference to the legal representatives, successors and assigns of such
party.
12. SEVERABILITY. This Agreement shall be governed by and construed in
accordance with, and only to the extent permitted by, all applicable laws,
ordinances, rules and regulations. If any provision of this Agreement, or the
application thereof to any person or circumstance, shall, for any reason and to
any extent, be invalid or unenforceable, the remainder of this Agreement and the
application of such provision to other persons or circumstances shall not be
affected thereby, but rather shall be enforced to the greatest extent permitted
by law.
13. INTERPRETATION. In construing the terms and provisions of this
Agreement, it is understood and agreed that no court or other interpretive body
shall apply a presumption that the terms of this Agreement shall be more
strictly or particularly construed against one party hereto by reason of the
fact that said party, either directly or through its agents, prepared this
Agreement, it being understood and agreed that all parties, either directly or
through their agents, have fully participated in the preparation hereof.
14. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Georgia. Any litigation to enforce or
interpret this Agreement shall take place in the state or federal courts located
in the State of Delaware. Such courts shall apply the law of the State of
Georgia as to both substantive and procedural questions.
15. ENTIRE AGREEMENT. Except as specifically provided in this Agreement to
the contrary, this Agreement constitutes the entire agreement between the
parties hereto regarding the subject matter hereof, and no modification hereof
shall be effective unless made a supplemental agreement in writing executed by
all of the parties hereto.
38
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed in multiple counterparts, each of which shall be deemed an original,
with their respective seals affixed thereto all as of the date and year first
above written.
NET/TECH INTERNATIONAL, INC.
Attest: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
-------------------------- -------------------------
Its: Asst. Sec Its: President
----------------------------- ------------------------
[CORPORATE SEAL]
NET/TECH ACQUISITION CORPORATION
Attest: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
-------------------------- -------------------------
Its: Asst. Sec Its: President
----------------------------- ------------------------
[CORPORATE SEAL]
RESULTS ORIENTED INTEGRATION CORPORATION
Attest: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇.
-------------------------- -------------------------
Its: Asst. Sec Its: President
----------------------------- ------------------------
[CORPORATE SEAL]
CONTROLLING SHAREHOLDERS:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ (SEAL)
-------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ (SEAL)
-------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇. (SEAL)
-------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
SCHEDULE A
----------
TO PLAN AND AGREEMENT OF MERGER AND EXCHANGE OF STOCK
-----------------------------------------------------
EMPLOYMENT AGREEMENT
--------------------
THIS EMPLOYMENT AGREEMENT ("AGREEMENT") is made and entered into as of the
10th day of August, 2000, by and between NET/TECH INTERNATIONAL, INC., a
Delaware corporation ("CORPORATION"), and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇., an individual
resident of Georgia ("EMPLOYEE").
▇▇
▇ ▇ ▇ ▇ ▇ ▇ ▇ ▇ ▇ ▇:
--------------------
WHEREAS, the Corporation desires to secure the benefits of the background,
experience, ability and expertise of Employee and Employee desires to be
employed by the Corporation on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth in this Agreement, the parties hereto agree as follows:
1. DEFINITIONS.
A. AFFILIATE means any company, corporation, or business entity which
directly (or indirectly through one or more intermediaries) controls, is
controlled by, or is under common control with the Corporation.
B. BOARD OF DIRECTORS means the board of directors of the Corporation
unless otherwise specified.
C. BUSINESS shall mean the enterprise operated by Corporation which
develops, implements, and markets software programs that facilitate the
processing of electronic payments and the connection of real-time devices, data
equipment, and computer systems.
D. COMPETE shall mean, with respect to the Corporation, without
limitation: (i) calling on, taking away or accepting as a client or customer, or
attempting any of the foregoing, any individual, partnership, corporation,
association or other business entity, which was a client or customer of
Corporation during the three (3) year period immediately preceding the date
hereof; (ii) entering into or attempting to enter into any business
substantially similar to or competing in any way with the Business of the
Corporation, either alone or in conjunction with any other individual,
partnership, corporation or association.
E. COMPETING BUSINESS shall mean, any person (including Employee),
concern or entity which is engaged in or conducts a business, in the United
States or any other country in which Corporation has done business with, that is
involved in the development and/or marketing of the Products and also any
services which are the same as or similar to those offered by Corporation or
under development by Corporation at the time of the execution of this Agreement.
Notwithstanding the foregoing, Employee may own up to two (2%) percent of any
publicly traded company that would otherwise be considered a Competing Business.
F. CORPORATION'S POLICIES AND PROCEDURES means the written policies
and procedures of the corporation as adopted and amended from time to time.
G. DIRECTLY OR INDIRECTLY shall mean, in modification of the word
"compete," to (i) act as an agent, representative, consultant, officer,
director, independent contractor or employee of any entity or enterprise that
may compete with the Business of Corporation; (ii) participate in any such
competing entity or enterprise as an owner, partner, limited partner, joint
venturer, creditor or stockholder (but only if such stockholder owns five
percent (5%) or more of the stock of such entity or enterprise); and (iii)
communicate to any such competing entity or enterprise Trade Secret information,
as defined below.
H. DUTIES means the Duties shown on Schedule A, which is attached to
this Agreement and thereby made an integral part hereof.
I. EFFECTIVE DATE means the Effective Date shown on Schedule A.
J. PRODUCTS shall mean the software described on Schedule B attached
to this Agreement, including any derivative products, component parts and source
codes used in the development of the software.
40
K. SOLICIT shall mean hiring, soliciting, taking away or attempting
any of the foregoing with respect to any employee of Corporation, whether on its
own behalf or on behalf of any other person or entity, or engaging in or
participating in the solicitation of any customer of the Corporation, or any
prospect solicited by Corporation, for the sale of the Products or services in
competition with the Business conducted by Corporation.
L. TERM means the period of time commencing with the Effective Date
and continuing for a period of five (5) years, unless earlier terminated or
extended as provided herein.
M. TERMINATION WITH CAUSE means the termination of this Agreement and
the employment relationship of Employee with the Corporation for good cause,
which means only the following: (i) willful dishonesty by Employee towards or
deliberate injury or deliberate attempted injury by Employee to the Corporation,
(ii) commission of a felony or other act involving moral turpitude which
adversely and materially affects the Corporation, (iii) willful failure or
refusal to perform the Duties or implement a directive from the Board of
Directors remaining uncured for a period of two (2) weeks after receipt of
written notice specifying such failure, (iv) disclosure of Trade Secrets in
violation of the terms of this Agreement (v) a disability of Employee,
including, but not limited to, drug or alcohol abuse, which prevents Employee
from performing the Duties for an uninterrupted period of three (3) consecutive
months, or (iv) death of Employee.
N. TRADE SECRETS shall mean items of confidential information about
the Business or the Products, which includes, but is not limited to, the
following categories of information relating to the design, development and
production of the Products, all of which Seller agrees constitute Trade Secrets
of the Business within the ambit of the Georgia Trade Secrets Act of 1990
(collectively, the "TRADE SECRETS"):
(i) Customer information, such as any compilation of past,
existing or prospective customers, any proposals or agreements, the status of
customers' accounts or credit, or related information about actual or
prospective customers. Proposals for, bids for, or contracts with clients, joint
venturers, customers, suppliers, designated agents, designated independent
contractors, designated consultants, employees, or other persons or entities
with whom Academia conducts any business;
(ii) Financial information, such as earnings or projected
earnings, assets, debts, prices, pricing structure, volumes of purchases or
sales or other financial data, whether relating to the Business generally, or to
particular projects, products, services, geographic areas, or time periods;
(iii) Supply and service information, such as goods and services,
suppliers' names or addresses, terms of supply or service contracts, or of
particular transactions, or related information about potential suppliers, to
the extent that such information is not generally known to the public, and to
the extent that the combination of suppliers or use of a particular supplier,
though generally known or available, yields advantages, the details of which are
not generally known;
(iv) Marketing information, such as details about ongoing or
proposed marketing programs or agreements, customer lists, addresses, telephone
numbers and personnel contacts; sales forecasts, results of marketing efforts,
and information about impending transactions;
(v) Personnel information, such as employees' personal or medical
histories, compensation or other terms of employment, actual or proposed
promotions, hiring, resignations, disciplinary actions, terminations or reasons
therefore, training methods, performance, or other employee information;
(vi) Research and development information, including any and all
information related to the Products, such as inventions, innovations and other
proprietary information related to the manufacture of technologies facilitating
the connection of real-time devices, data equipment and other computer systems,
whether or not these technologies have been patented, copyrighted or
trademarked, technological and computer information, including discs, files,
data base files, tapes or programs, scientific research, memoranda, plans,
notes, records, surveys, reports, computations, calculations, renderings,
prototypes, models, tests or lab data, sketches, plans, drawings, designs, and
other confidential research and development information;
41
(vii) Technological processes, applications and innovations
utilized in the design and construction of the Products and their component
parts, whether or not these processes have been patented, copyrighted or
trademarked, including, but not limited to the configuration, production or
design of software, computer source codes, computer discs, files, data base
files, tapes or programs, and the fabrication of the software medium, including
installation or assembly processes, manufacturing procedures or techniques,
material and process specifications, mechanical processes, field processes and
equipment utilization; and
(viii) Product Design specifications including software
configuration or design, computer programs, database files, drawings, models,
prototypes, reports, descriptions of functional specifications, computations,
calculations, working papers, documents, instruments, or any other materials
related to the design, development or improvement of the Product, including
alternative designs not utilized in the Products.
O. Voluntary Termination means unilateral termination by Employee of
his employment with the Corporation prior to the end of the Term and in the
absence of a material breach by the Corporation of the terms of this Agreement.
2. EMPLOYMENT. During the Term, and any renewal thereof, the Corporation
agrees to employ Employee as a full-time employee of the Corporation to perform
the Duties. Employee agrees to diligently and faithfully perform the Duties and
shall: (i) devote all of his time, energy and skill during regular business
hours to the performance of the Duties (reasonable vacations, up to four (4)
weeks annually, and reasonable absences due to illness excepted), and faithfully
and industriously perform the Duties; (ii) diligently follow and implement all
management policies and decisions communicated to him; and (iii) timely prepare
and forward all reports and accountings as may be requested of Employee. The
Corporation, at its sole option and expense, may purchase life insurance on
Employee with the Corporation as beneficiary, while Employee is employed by the
Corporation.
3. COMPENSATION AND BENEFITS. The corporation shall compensate Employee and
provide the benefits as shown on Schedule A.
4. NONCOMPETITION. Employee covenants and agrees that during Employee's
employment and for a period of one (1) year after any termination of employment
for any reason, provided that the Corporation is not in material breach of the
terms of this Agreement, Employee shall not directly or indirectly, actively or
passively, individually or as an employee of any firm, association, partnership
or corporation:
(i) Engage in the business of operating as a developer, consultant or
supplier of software programs that compete with the Products or provide any
other products or services to Competing Businesses, which are substantially
similar to the Business of the Corporation or services provided by the Employee
to or on behalf of the Corporation, and which are competitive with the Business
of the Corporation, within the geographic territory in which the Corporation
does business;
(ii) Solicit or attempt to divert or appropriate to a competing
Business, any customers of the Corporation with respect to whom the Employee had
contact concerning Business matters of the Corporation while employed by the
Corporation; or
(iii) Solicit or attempt to divert or appropriate to a competing
Business, any customers of the Corporation or potential customers with whom the
Corporation had direct and substantive contact concerning Business matters of
the Corporation while the Employee was employed by the Corporation.
5. NONSOLICITATION OF EMPLOYEES AND CUSTOMERS. Employee covenants and
agrees that during employee's employment and for a period of one (1) year after
any termination of employment for any reason, and regardless of Employee's
capacity (whether as employee, partner, officer, director or stockholder or
otherwise) with respect to any person, firm, association, partnership or
corporation, provided that the Corporation is not in material breach of the
terms of this Agreement, Employee agrees not to hire, employ, recruit, attempt
to employ or hire, or assist others in recruiting or hiring, any person who is
or was an employee of Corporation during
42
the time Employee was an employee of the Corporation, in an attempt to have such
person work in any other firm, association, partnership, corporation or business
engaged in any business similar to the business of the Corporation. It is the
intention of the parties that this restriction against solicitation relate only
to those geographic areas where the Corporation conducted its Business. The
parties further acknowledge and agree that the Corporation has conducted its
Business throughout the United States. Thus, it is the intention of the parties
that the territorial restriction in this nonsolicitation provision relate to the
United States.
6. TRADE SECRETS.
A. Employee acknowledges that he or she has had the opportunity to
inspect, gain knowledge of and learn about certain Trade Secrets, both tangible
and intangible, of the Business, which Trade Secrets may include, without
limitation, patents, copyrights, marks, unpatented research and development,
customer and supplier information, financial information, marketing information,
books of account, contract forms, computer discs, files and programs, and
similar assets. Employee acknowledges that during his or her association with
the Business, he or she has acquired Trade Secrets, including research and
development, design and manufacturing processes related to software which
facilitates electronic payment processing and the connection of real-time
devices, data equipment and computer systems. Employee acknowledges and agrees
that he or she has no right or proprietary interest in such property or in the
Products, which are specifically defined herein.
B. Employee acknowledges and agrees that these Trade Secrets are an
essential part of the Business; are regarded by the Corporation as secret,
confidential, proprietary, unique, and valuable; were acquired or developed to
be used in the Corporation at great cost and over a long period of time; derive
economic value, actual or potential, for not being generally known to, and not
being readily ascertainable by proper means by, other persons who can obtain
economic value from disclosure or use of such items, and that the disclosure of
any of these Trade Secrets to anyone other than the Corporation's designated
managers, designated agents, designated independent contractors, designated
consultants, licensees, or authorized employees will cause the Corporation
irreparable financial injury and harm. Similarly, Employee's use of any Trade
Secrets in the design or manufacture of similar products, including but not
limited to products utilizing software facilitating electronic payment
processing and the connection of real-time devices, data equipment and computer
systems, will cause the Corporation irreparable financial injury and harm.
C. Employee shall hold the Trade Secrets in strict confidence and
shall not use, reveal, disclose, or divulge the Trade Secrets set forth in
Section 1(N), directly or indirectly, to any person, firm, company, partnership,
agency, corporation, limited liability company, or other entity (including a
parent, subsidiary or affiliate of any other such entity), a joint venturer,
officer, director, employee, agent, consultant, independent contractor or other
representative thereof, or any other individual or entity whatsoever, whether
governmental or private, or whether provided prior to or subsequent to the
execution of the Contract and this Agreement. Employee's obligation to protect
the confidentiality of the Trade Secrets and all other components of the
Products as set forth in Section 1(N), and Employee's obligation to refrain from
using the Trade Secrets and all other components of the Products shall survive
the termination of the Agreement. In the event of a breach or threatened breach
by Seller of any provision of this Agreement, then the Business shall be
entitled to the remedies set out in Section 10 of this Agreement.
D. Corporation and Employee consider their relationship to be one of
utmost confidence with respect to all Trade Secrets. Therefore, upon the
execution of this Agreement, Employee shall not publish, divulge or use in any
way, commercially or otherwise, directly or indirectly, any information relating
to the Trade Secrets of that belong to Corporation, its agents or affiliates, or
Trade Secrets or any confidential information conveyed to Employee prior to his
or her termination. Except as provided herein, Employee shall hold the Trade
Secrets in confidence and shall not use, reveal, disclose, or divulge, directly
or indirectly, to any person, firm, company, partnership, agency, corporation,
limited liability company, or other entity, whether governmental or private, the
Trade Secrets, whether provided prior to or subsequent to the execution of this
Agreement. Employee's obligation to protect the confidentiality of the Trade
Secrets received hereunder shall survive the termination of this Agreement and
any subsequent contract or agreement between the parties, unless Employee is
specifically released therefrom by Corporation in writing.
43
Notwithstanding anything to the contrary contained herein, the Employee shall
have no obligation to preserve the confidentiality of any information which (1)
was previously known to the Employee free of any obligation to keep it
confidential; (2) is disclosed to the Employee by the Corporation without
restriction; or (3) is or becomes publicly available or known in the public
domain by means of authorized disclosures by the Corporation or by independent
development or disclosure by other parties.
E. The parties acknowledge and agree that the Products and all Trade
Secrets are the sole and exclusive property of Corporation. The fact that
Employee may have been provided access to certain Trade Secrets, technological
processes, designs or innovations, shall give Employee no ownership interest
therein whatsoever.
F. It is the intention of the parties that the restrictions against
the misappropriation, use or disclosure of the Trade Secrets set out in this
Agreement shall be of unlimited duration. In the event that a Georgia court of
competent jurisdiction finds that the restrictions set out in this Agreement are
unreasonable because they are of unlimited duration, then the parties shall
agree that there will be a fifteen (15) year limitation on the restrictions
against misappropriation, use or disclosure of the Trade Secrets disclosed and
conveyed to Employee.
7. RENEWAL AND TERMINATION. This Agreement may be renewed for additional
one (1) year terms on the fifth anniversary of the Effective Date and on each
anniversary thereafter, by Employee and the Corporation. Prior to the end of the
Term, the Corporation may terminate this Agreement only if such termination is a
Termination With Cause, and such termination shall be effective only upon
receipt by Employee of written notice from the Board of Directors of the
Corporation. The Corporation may not terminate this Agreement other than
pursuant to a Termination With Cause. Provided that the Corporation is not in
material breach of the terms of this Agreement, Employee may not terminate this
Agreement during the first year of the Term. Thereafter, Employee may terminate
this Agreement upon the occurrence of: (i) Voluntary Termination, provided
Employee shall give the Corporation ninety (90) days prior written notice
thereof; or (ii) a material breach by the Corporation of the terms of this
Agreement. Upon any termination of this Agreement, the parties agree that the
Corporation shall immediately pay Employee any and all compensation, and
benefits due Employee. Except as provided herein, upon the termination of
Employee's employment hereunder, the Corporation shall have no further
obligation to Employee with respect to this Agreement.
8. NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been given and
received immediately upon personal delivery or delivery by courier, or if mailed
by United States Certified or Registered Mail, postage prepaid on the date of
its signed report by the recipient;
If to Employee: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
If to Corporation: Net/Tech International, Inc.
Westside Center, ▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
or at such address as may be furnished in writing from time to time by any party
hereto to the other party.
9. ARBITRATION; GOVERNING LAW. All disputes, controversies, claims or
differences which may arise among the parties hereto out of or in relation to or
in connection with this Agreement or the breach thereof (other than any
disputes, controversies, claims or differences under Section 4, 5, or 6 hereof)
shall be finally settled by arbitration conducted in accordance with the
Commercial Arbitration Rules (the "RULES") and Supplementary Procedures for
International Commercial Arbitration (the "SUPPLEMENTARY PROCEDURES") of the
American Arbitration Association, in effect in 1987. Whenever any dispute,
controversy, claim or difference which may be submitted to arbitration under
this Section 9 arises among the parties hereto, any party hereby may give to the
other
44
parties hereto notice, in accordance with Section 8 hereof, of its intention to
submit such dispute, controversy, claim or difference to arbitration. Such
arbitration shall take place in Atlanta, Georgia, United States of America,
before a single arbitrator agreed upon by the parties to the arbitration. In the
event the parties to the arbitration cannot agree upon an arbitrator within
twenty (20) days after the effective date, as provided in Section 8 hereof, of
any party's notice to arbitrate, such arbitration shall take place in Atlanta,
Georgia, United States of America, before a single arbitrator appointed by the
American Arbitration Association in accordance with the Rules and Supplementary
Procedures.
The parties hereto agree that each party to the arbitration is to pay an
equal part of the deposit fixed by the American Arbitration Association or the
arbitrator. The parties hereto further agree that unless the arbitrator
determines otherwise (i) all costs associated with the arbitration shall be
borne equally by each party to the arbitration, and (ii) each party to the
arbitration shall be responsible for its own attorneys' fees incurred in
connection with the arbitration. So as to provide a more thorough and
expeditious presentation of the issues among the parties to the arbitration, the
parties hereto agree that, to the extent not inconsistent with the Rules, the
Federal Rules of Civil Procedure, 28 U.S.C.A., shall apply to and be utilized in
connection with such proceedings. The determinations of such arbitrator will be
final and binding upon the parties to the arbitration, and judgment upon the
award rendered by the arbitrator may be entered in any court having
jurisdiction, or application may be made to such court for a judicial acceptance
of the award and an order of enforcement, as the case may be. The arbitrator
shall set forth the grounds for his decision in the award.
The arbitrator shall apply the law of the State of Georgia, United States
of America, as to both substantive and procedural questions, but excepting any
State of Georgia rule which would result in judicial failure to enforce this
arbitration provision or any portion thereof.
The parties hereto stipulate that submission of disputes to arbitration as
provided in this Section 9 and arbitration pursuant thereto shall be a condition
precedent to any suit, action or proceeding instituted in any court or before
any administrative tribunal with respect to this Agreement or disputes arising
out of or regarding this Agreement. The arbitration provisions hereof shall,
with respect to any controversy or dispute arising out of this Agreement,
survive the termination or expiration of this Agreement.
This Agreement shall be governed and construed as to both substantive and
procedural matters in accordance with the laws of the State of Georgia, United
States of America, including any applicable treaties or conventions to which the
United States of America is a party, but excepting (i) any State of Georgia or
United States of America rule which would result in judicial failure to enforce
this arbitration provision contained in this Section 9, or any portion thereof,
and (ii) in the State of Georgia or any state in the United States of America
any rule which would result in the application of the law of a jurisdiction
other than the State of Georgia, United States of America; provided, however,
that disputes under this Agreement are expressly submitted to arbitration as
described in this Section 9, in reliance on 9 U.S.C.A. SS1-14, and in reliance
on enforcement of any resulting arbitral award pursuant to the Convention on the
Recognition and Enforcement of Foreign Arbitral Awards of June 10, 1958, as
codified at 9 U.S.C.A.
In the event the parties fail to arbitrate any dispute, controversy, claim
of difference, as provided in this Section 9, then each of the parties hereto
hereby irrevocably consents to the exclusive jurisdiction of, and the laying of
venue exclusively in, the United States District Court for the Northern District
of Georgia, Atlanta Division, in any dispute, action or suit arising out of this
Agreement and hereby unconditionally agrees that service of process mailed to
any party in accordance with Section 8 hereof shall be effective and sufficient
service of process upon such party to establish jurisdiction and venue in such
court in any such dispute, action or suit. In any such dispute, action or suit
relating to this Agreement, the prevailing party will be entitled to
reimbursement by the other party of its reasonable attorneys' fees and related
expenses.
10. CERTAIN COVENANTS. Employee acknowledges that a breach by him of any of
the covenants provided in Sections 4, 5, or 6 hereof will result in irreparable
and continuing damage to the Corporation and any breach or threatened breach of
any of the covenants provided in Sections 4, 5, or 6 hereof shall be subject to
specific performance by temporary as well as permanent injunction or any other
equitable remedies of any court of
45
competent jurisdiction. In the event a court of competent jurisdiction
determines that Employee has breached any of the foregoing covenants contained
in Sections 4, 5, or 6 hereof, Employee shall pay all costs of enforcement of
the foregoing covenants including, but not limited to, court costs and
reasonable attorney's fees. The parties agree that: (i) the covenants and
agreements of Employee contained in Sections 4, 5, and 6 hereof are reasonable
necessary to protect the interests of the Corporation in whose favor said
covenants and agreements are imposed in light of the nature of the Corporation's
business and the professional involvement of Employee in such business, (ii) the
restrictions imposed by Sections 4, 5, and 6 hereof are not greater than are
necessary for the protection of the Corporation in light of the substantial harm
that the Corporation will suffer should Employee breach any of the provisions of
said covenants or agreements, (iii) the covenants and agreements of Employee
contained in Sections 4, 5, and 6 hereof are material inducements for the
Corporation to hire Employee, (iv) the period of restriction and geographical
area of restriction contained in Sections 4 and 5 hereof are fair and reasonable
in that they are reasonably required for the protection of the Corporation, and
(v) the nature, kind and character of the activities Employee is prohibited to
engage in are reasonable and necessary to protect the Corporation in that the
Corporation will introduce Employee to its customers, referral sources, supplier
relationships and other important aspects of its business. The covenants and
agreements on the part of Employee contained in Sections 4, 5, and 6 hereof
shall be construed as agreements independent of any other agreement between
Employee and the Corporation. The existence of any claim or cause of action of
Employee against the Corporation, whether predicated on this Agreement or
otherwise, shall not constitute a defense to the enforcement by the Corporation
of each of such covenants and agreements or otherwise affect the remedies to
which the Corporation is entitled hereunder. The provisions of Sections 4, 5,
and 6 hereof shall survive the expiration or sooner termination of this
Agreement for any reason.
11. SEVERABILITY. The invalidity or unenforceability of any provision of
this Agreement shall not affect the other provisions hereof and the Agreement
shall be construed in all respects as if such invalid or unenforceable
provisions were omitted. Furthermore, if the fulfillment of any provision hereof
at the time performance of such provision shall be due, shall presently involve
transcending the limit of validity prescribed by any applicable law, then ipso
facto, the obligation to be fulfilled shall be reduced to the limit of such
validity and if any clause or provision herein contained operates or would
prospectively operate to invalidate this Agreement, in whole or in part, then
such clause or provision only shall be held for naught, as though not herein
contained, and the remainder of this Agreement shall remain operative and in
full force and effect.
12. MODIFICATION. No change, amendment, or modification of this Agreement
shall be valid unless made in writing and signed by all of the parties hereto.
13. SUCCESSORS AND ASSIGNS. This Agreement shall be binding on and inure to
the benefit of the parties and their respective heirs, legal representatives,
administrators, successors and assigns.
14. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties with respect to this subject matter and supersedes all prior
understandings, agreements, and correspondence, whether oral or written, related
to this subject matter.
46
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be
executed by its duly authorized representatives and Employee has executed this
Agreement as set forth below.
NET/TECH INTERNATIONAL, INC.
By: _______________________
Its: _____________________
EMPLOYEE: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
_______________________________ [SEAL]
47
AMENDMENT TO PLAN AND AGREEMENT
-------------------------------
OF MERGER AND EXCHANGE OF STOCK
-------------------------------
THIS AMENDMENT TO PLAN AND AGREEMENT OF MERGER AND EXCHANGE OF STOCK
("Amendment") is made and entered into as of the 8th day of June, 2000, by and
among NET/TECH INTERNATIONAL,, INC. ("Net/Tech"), NET/TECH ACQUISITION
CORPORATION, (the "Subsidiary"), RESULTS ORIENTED INTEGRATION CORPORATION,
("ROI"), ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇ ("▇. ▇▇▇▇▇▇▇▇▇"), ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ("▇.
▇▇▇▇▇▇▇▇▇"), and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇. ("▇▇▇▇▇▇▇"), (▇. ▇▇▇▇▇▇▇▇▇, ▇. ▇▇▇▇▇▇▇▇▇,
and ▇▇▇▇▇▇▇ collectively referred to as the "Controlling Shareholders" and
individually referred to as a "Controlling Shareholder").
WITNESSETH
WHEREAS, the parties have entered into that certain Plan and Agreement of
Merger and Exchange of Stock dated December 17, 1999 (the "Merger Agreement"),
and
WHEREAS, the parties desire to change certain terms and conditions of the
Merger Agreement;
NOW, THEREFORE, the parties do hereby mutually covenant and agree as
follows:
1. The following shall replace in its entirety Section 2a(2) of the Merger
Agreement:
(2) Conversion of Company Stock. A11 of the issued and outstanding shares
of ROI Common Stock shall at the Effective Time be converted into 6,118,918
shams of Net/Tech Common Stock (the "Merger Consideration"). (It being
understood that the Merger Consideration shall represent approximately
92.6% of the total issued and outstanding shares of Net/Tech as of the
Closing, excluding any shares related to the "Private Placement" as defined
hereinbelow. The number of shares of Net/Tech Common Stock for the Merger
Consideration and the Private Placement referred to throughout this
Agreement shall not be subject to adjustment based on the Reverse Split or
any other stock splits or stock dividends or reclassification of capital
structure prior to the Closing. As of the Effective Time, all such ROI
Common Stock shall no longer be outstanding and shall automatically be
canceled and retired and shall cease to exist, and each holder of a
certificate evidencing any ROI Common Stock shall cease to have any rights
with respect thereto, except the right to receive the Merger Consideration
to be issued in consideration therefore upon surrender of such certificate
in accordance with Section 2(b) hereof.
48
2. The following shall replace in their entirety Sections 7(b) and 7(c) of the
Merger Agreement:
(b) Net/Tech shall complete the private placement of securities through
First Montauk Securities pursuant to that certain Private Placement
Memorandum dated May 2, 2000 (the "Private Placement"). A minimum of two
million and a maximum of three million post Reverse Split shares will be
sold at a gross price of $2.50 each. At the minimum offering of the total
issued and outstanding shares of Net/Tech as of the Closing, the Merger
Consideration shall represent approximately 70.8% and the Private Placement
shall represent approximately 23.1%.. At the maximum offering of the total
issued and outstanding shares of Net/Tech as of the Closing, the Merger
Consideration shall represent approximately 63.5% and the Private Placement
shall represent approximately 31.1%.. If the minimum offering is not closed
by July 31, 2000, this Agreement, at ROI's sole discretion, may be
terminated immediately upon written notice by ROI to the other parties.
(c) Net/Tech shall complete a 1-for-20 reverse stock split of the Net/Tech
Common Stock (the "Reverse Split") prior to or simultaneously with the
Closing.
3. Exhibit B to Schedule G to the Merger Agreement is replaced in its entirety
by the following:
Contractor will provide the following Services and Company will pay
Contractor as follows:
Commencing ______________, ______ [Note: This will be the Effective Date of
the Merger of Results Oriented Integration Corporation with Company],
Contractor will provide consulting to the Company and perform other duties
as mutually agreed to from time to time. Unrelated to this Agreement,
Contractor may also serve as a member of the Board of Directors of Company.
Starting with the second month after commencement of this Agreement and
continuing for a total of thirty-six (36) months, on the fifteenth (15th)
day of each calendar month, Company will pay Contractor a consulting fee of
Two Thousand and No/100 Dollars ($2,000 00).
4. In the first WHEREAS paragraph in Schedule B to the Merger Agreement the
phrase "a total of 36, 713,508 shares (subject to adjustment based on the
"Reverse Split" as defined therein)" shall be replaced by the following:
a total of 6,118,918 shares (not subject to adjustment based on the
"Reverse Split" as defined therein)
49
5. The following shall replace the first two sentences of Section 1 of
Schedule B to the Merger Agreement:
The number of shares of Net/Tech Common Stock referred to throughout this
Agreement shall not be subject to adjustment based on the Reverse Split,
but shall be adjusted from time to time to reflect any other stock splits
or stock dividends or reclassification of capital structure that occur
after the Closing. Of the total of 6,118, 918 shares of Net/Tech Common
Stork issued to the ROl Shareholders 2,352,988 shares were delivered to the
ROI Shareholders at the Closing (as defined in the Merger Agreement), and
3,765,930 shares owned by the Shareholders as follows: 1,553,485 shares by
▇. ▇▇▇▇▇▇▇▇▇, 941,412 shares by ▇. ▇▇▇▇▇▇▇▇▇, and 1,2711,033 shares by
▇▇▇▇▇▇▇ (collectively the "Escrowed Shares") shall be held in escrow by
Escrow Agent to be released according to the terms of Section 2 of this
Agreement.
6. The following shall replace the first sentence of Section 2 of Schedule 8
to the Merger Agreement:
Within 30 days after the issuance of Net/Tech's audited financial
statements for each fiscal year for the fiscal years ending in 2000, 2001,
2002, 2003, 2004, and 2005 for each $2.40 of Net Income Before Income Taxes
("NIBIT") as shown on the Income Statement for that fiscal year, one (1)
share shall be released by the Escrow Agent (subject to adjustment to
reflect any stock splits or stock dividends or reclassification of capital
structure that occurs after the Closing).
7. The following shall replace in their entirety Sections 4 and 5 of Schedule
8 to the Merger Agreement:
4. Employee Incentive Stock Options. In addition to all issued and
outstanding shares of Net/Tech Common Stock (including the Escrowed
Shares), a total of 1,000,000 shares of Net/Tech Common Stock (not subject
to adjustment based on the "Reverse Split" as defined in the Merger
Agreement, but adjusted from time to tame to reflect any other stock splits
or stock dividends or reclassification of capital structure that occur
after the Closing) will be set aside for a Stock Option Plan for employees
officers, and directors.
5. Issuance of Shares in Lieu of Payment. In addition to all issued and
outstanding shares of Net/Tech Common Stock (including the Escrowed
Shares), a total of 150,000 shares of Net/Tech Common Stock (not subject to
adjustment based on the "Reverse Split" as defined in the Merger Agreement,
but adjusted from time to time to reflect any other stock splits or stock
dividends or reclassification of capital structure that occur after the
Closing) will be set aside to be issued from time to time to certain
creditors in lieu of payment upon unanimous approval of the Hoard of
Directors.
8. All other terms and conditions of the Merger Agreement shall remain in full
force and effect.
50
IN witness WHEREOF, the parties hereto have caused this instrument to be
executed in multiple counterparts, each of which shall be deemed an original,
with their respective seals affixed thereto all as of the data and year first
above written.
NET/TECH INTERNATIONAL, INC.
Attest By
------------------------------ ------------------------------
Its Its
--------------------------------- -----------------------------
[CORPORATE SEAL]
NET/TECH ACQUISITION CORPORATION
Attest By
------------------------------ ------------------------------
Its Its
--------------------------------- -----------------------------
[CORPORATE SEAL]
RESULTS ORIENTED INTEGRATION CORPORATION
Attest By
------------------------------ ------------------------------
Its Its
--------------------------------- -----------------------------
[CORPORATE SEAL]
CONTROLLING SHAREHOLDERS:
--------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇
51
SCHEDULE A
1. DUTIES mean the general management and direction of the operations of
the Corporation and its subsidiaries and the performance of such additional
duties and responsibilities as may be designated by the Board of Directors in
conjunction with the performance of services by Employee as President and Chief
Executive Officer of the Corporation, and such other capacities with the
Corporation as may be designated by the Board of Directors. Employee shall also
serve as a member of the Board of Directors of the Corporation.
2. EFFECTIVE DATE shall mean August 10, 2000.
3. COMPENSATION. The Corporation shall pay, and Employee agrees to accept,
as compensation for performance of the Duties hereunder during the Term, the
following:
A. BASE SALARY. From the Effective Date through December 31, 2000,
Employee shall be paid a Base Salary of at least Six Thousand Two Hundred Fifty
and No/100 ($6,250.00) Dollars per month, to be paid in equal semi-monthly
installments. [Note: It is the intention of the parties that Employee's salary
will be the same as the salary paid to Employee by Results Oriented Integration
Corporation prior to its merger with the Corporation. Since said salary is
subject to an increase as of January 1, 2000, the Base Salary herein shall be
adjusted to reflect any such increase.] Thereafter during the Term, Employee
shall receive, on the first day of each calendar year, an increase in Base
Salary as such increases are (i) determined by a majority vote of the Board of
Directors, except that in any such vote of the Board of Directors, Employee may
not vote as a member of the Board of Directors, and (ii) approved by Consent of
the Corporation.
B. INCENTIVE COMPENSATION. Employee shall receive (i) monthly
incentive compensation equal to Three (3%) Percent of the total net revenue of
the Corporation and its subsidiaries, and (ii) Employee will receive an
additional 2% (for a total of 5%) of that portion of total net revenue for each
fiscal year which is in excess of the total net sales for the prior fiscal year,
paid monthly, and (iii) quarterly incentive compensation which shall be targeted
at Seven Thousand Five Hundred and No/100 ($7,500.00) Dollars for each fiscal
quarter, with each such quarter's incentive compensation being equal to, less,
or more than said target based on Employee's performance and accomplishment of
goals as determined by the Board of Directors of the Corporation except that in
any such vote of the Board of Directors, Employee may not vote as a member of
the Board of Directors; and (iv) annual incentive compensation which shall be
targeted at Thirty Thousand and No/100 ($30,000.00) Dollars for each fiscal
year, with each such year's incentive compensation being equal to, less, or more
than said target based on Employee's performance and accomplishment of goals as
determined by the Board of Directors of the Corporation except that in any such
vote of the Board of Directors, Employee may not vote as a member of the Board
of Directors. All incentive compensation shall be paid in accordance with the
Corporation's Policies and Procedures.
C. BONUSES. Employee shall receive bonuses if (i) determined by a
majority vote of the Board of Directors, except that in any such vote of the
Board of Directors, Employee may not vote as a member of the Board of Directors.
Such bonuses shall be paid in accordance with the Corporation's Policies and
Procedures.
D. DEDUCTIONS. The Corporation may deduct from Employee's compensation
all amounts required to be deducted and withheld in accordance with applicable
federal and state income, FICA and other withholding tax requirements.
52
4. BENEFITS. In addition to the compensation received by Employee as
specified above, Employee shall receive company paid health and dental insurance
and all benefits generally available to officers, directors, and employees of
the Corporation.
5. EXPENSE REIMBURSEMENT. Employee shall be reimbursed in accordance
with the Corporation's Policies and Procedures for all reasonable and necessary
expenses incurred by him in connection with the performance of his duties of
employment hereunder; provided Employee shall, as a condition of reimbursement,
submit verification of the nature and amount of such expenses in accordance with
said reimbursement policies. If Employee is required to purchase life insurance
on any other employees, shareholders, or directors of the Corporation, the
Corporation will reimburse Employee or pay the premiums for such life insurance,
and, to the extent that such premiums are taxable income to Employee, the
Corporation shall reimburse the Employee for such taxes.
53
SCHEDULE B
PRODUCTS
54
[LOGO] END USER PRICES AND TERMS
FOR MORE INFORMATION CALL ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇.▇▇▇▇▇.▇▇
E-TRANSACTION MIDDLEWARE(SM)
AS/400 CREDIT CARD (ROI CARD & POS-PORT) - FOR ROI JAVACARDTM SEE APPLICABLE
PRICE LIST
------------------------------------------------------------------------------------------------
SERIES-ITEM DESCRIPTION LICENSE
FEE
------------------------------------------------------------------------------------------------
200-003 ROI CARD(TM) software license - single AS/400 system - 1 dial-up $15,990
port - includes 1 Merchant ID and 1 authorization network (choose
1 from list of supported networks)
------------------------------------------------------------------------------------------------
200-004 ROI ULTRACARD(TM) software license - includes ROI Card and the $25,990
processing of financial transactions through ROI Sockets for up
to 8 concurrent users (expandable at additional cost)
------------------------------------------------------------------------------------------------
200-008 8 ADDITIONAL CONNECTIONS software license - adds up to 8 $995 per
additional concurrent users through ROI Sockets for ROI UltraCard 8 connections
financial transactions on same AS/400
------------------------------------------------------------------------------------------------
300-001 AS/400 SUPPORT FOR POS-PORT(TM) software license for VisaNet $5,995
authorization network ONLY - 1 dial-up port - includes 1 Merchant
ID - NO upgrade or trade in permitted
------------------------------------------------------------------------------------------------
300-002 AS/400 SUPPORT FOR POS-PORT(TM) software license for VisaNet $8,995
authorization network - upgradable version - 1 dial-up port -
includes 1 Merchant ID - continuous ASUS allows trade in
------------------------------------------------------------------------------------------------
300-004 POS-PORT AMEX MODULE software license - 1 dial-up port - requires $2,495
300-001 or 300-002 - Adds ability to handle American Express
Corporate Cards and settle directly with Amex
------------------------------------------------------------------------------------------------
AS/400 CONNECTIVITY (ROI SESSIONS PLUS, ROI SOCKETS, AND ROI TCP/REMOTE)
------------------------------------------------------------------------------------------------
SERIES-ITEM DESCRIPTION LICENSE
FEE
------------------------------------------------------------------------------------------------
100-001 ROI SESSIONS PLUS(TM) software license for serial connectivity to $7,995
material handling, distribution, manufacturing, and data
collection systems and devices - first port on AS/400 system
------------------------------------------------------------------------------------------------
100-014 POLAR SYSTEM(TM) software license - adds to 100-001 the ability quoted on
to poll remote sites on a user-defined schedule request plus
100-001
------------------------------------------------------------------------------------------------
100-020 PROTOCOL SUPPORT software license - adds to 100-001 the ability $2,595 plus
to interface with certain devices (check with ROI for appropriate 100-001
protocol level and license fee) - first port on AS/400 system
------------------------------------------------------------------------------------------------
200-002 ROI SOCKETS(TM)software license for TCP/IP sockets connectivity $7,995
without complex programming - first connection on AS/400 system
------------------------------------------------------------------------------------------------
200-005 ROI TCP/REMOTE(TM) software license for TCP/IP sockets $7,995
connectivity between systems (AS/400 to AS/400 or to non-AS/400)
without complex programming - first AS/400
------------------------------------------------------------------------------------------------
SUPPORT & SERVICES FOR SERIES 100, 200, AND 300 SOFTWARE
------------------------------------------------------------------------------------------------
SERIES-ITEM DESCRIPTION PRICE
------------------------------------------------------------------------------------------------
200-MID ADDITIONAL MERCHANT ID - adds another merchant ID to ROI Card $250 each
(quantity discounts available)
------------------------------------------------------------------------------------------------
800-000 90 DAY WARRANTY includes phone support and implementation included in
assistance, 24 hours/day, 7 days/week license fee
------------------------------------------------------------------------------------------------
800-001 ANNUAL SUPPORT & UPDATE SERVICE (ASUS) includes phone support 24 15% of total
hours/day, 365 days/year; see ROI Software License Agreement for license fees
benefits of continuous ASUS
------------------------------------------------------------------------------------------------
800-002 ANNUAL LIMITED LICENSE for non-production AS/400 for equals
backup/development only (includes ASUS) - license expires production
annually on production system ASUS expiration date system ASUS
------------------------------------------------------------------------------------------------
900-002 PROGRAMMING SERVICES (at ROI offices) - hourly rate $150
per hour
------------------------------------------------------------------------------------------------
900-003 DESIGN SERVICES (at ROI offices) - hourly rate $250
per hour
------------------------------------------------------------------------------------------------
900-005 ON-SITE SERVICES (at location other than ROI offices) - rate per $1,500
day or portion (plus travel & living) per day
------------------------------------------------------------------------------------------------
900-010 ON-SITE EXPENSES - travel & living expenses actual
------------------------------------------------------------------------------------------------
Prices are effective January 1, 2000, are in U.S. dollars, apply only to the
United States and Canada, and supersede all previously published prices. Refer
to product documentation for specifications, prerequisites, and hardware and
software
55
requirements. Fees and specifications are subject to change without notice.
Trademarks are the property of their respective owners. All software is licensed
by ROI Corporation subject to the terms and conditions of the applicable license
agreement provided with each item. License fees include one set of media and
documentation and a 90 day limited warranty with telephone support and
implementation assistance. Fees do not include shipping and handling charges or
applicable taxes. Each License Fee shown is for the first port on a single CPU
unless otherwise noted. The fee for each additional port or connection is
discounted if purchased during the initial warranty period or if ROI Annual
Support & Update Service has been paid for and in effect without any lapse in
coverage.
------------------------------------------------------------------------------------------------
SERIES-ITEM DESCRIPTION LICENSE
FEE
------------------------------------------------------------------------------------------------
400-001 ROI JAVACARD VISANET1 POS-port Replacement software license for $5,995
VisaNet authorization network ONLY - 1 dial-up port - includes 1
Merchant ID - NO upgrade or trade in permitted
------------------------------------------------------------------------------------------------
400-002 ROI JAVACARD VISANET2 POS-port Replacement software license for $8,995
VisaNet authorization network - upgradable version - 1 dial-up
port - includes 1 Merchant ID - continuous ASUS allows trade in
------------------------------------------------------------------------------------------------
400-004 ROI JAVACARD AMEX POS-port Replacement authorization network $2,495
software license - 1 dial-up port - requires 400-001 or 400-002
POS-port Replacement license
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
SERIES-ITEM DESCRIPTION LICENSE
FEE
------------------------------------------------------------------------------------------------
400-100 ROI JAVACARD MANAGER software license - single AS/400 system - $7,995
prerequisite for authorization network licenses (one or more must
be added)
------------------------------------------------------------------------------------------------
400-2XX ROI JAVACARD host authorization network software license - 1 $7,995
dial-up connection - includes 1 Merchant ID - requires 400-100
ROI JavaCard Manager (choose 1 from list of supported networks)
------------------------------------------------------------------------------------------------
400-3XX ROI JAVACARD terminal authorization network software license - 1 $7,995
dial-up connection - includes 1 Merchant ID - requires 400-100
ROI JavaCard Manager (choose 1 from list of supported networks)
------------------------------------------------------------------------------------------------
400-4XX ROI JAVACARD leased line authorization network software license - $9,995
1 connection - includes 1 Merchant ID - requires 400-100 ROI
JavaCard Manager (choose 1 from list of supported networks)
------------------------------------------------------------------------------------------------
400-600 ROI JAVACARD ULTRA MANAGER software license - single AS/400 - $10,000
includes 8 incoming connections - requires 400-100 ROI JavaCard
Manager & authorization network license(s)
------------------------------------------------------------------------------------------------
400-608 ROI JAVACARD ULTRA software license for up to 8 additional $995
concurrent incoming connections to same AS/400 - requires 400-600
ROI JavaCard Ultra Manager and its prerequisites
------------------------------------------------------------------------------------------------
400-701 ROI JAVACARD INTERLEAVING software license - single AS/400 - $5,995
requires 400-100 ROI JavaCard Manager & authorization network
license(s) allowing interleaving
------------------------------------------------------------------------------------------------
400-710 ROI JAVACARD SIGNATURE CAPTURE software license - single AS/400 - $7,995
requires 400-100 ROI JavaCard Manager & authorization network
license(s)
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
SERIES-ITEM DESCRIPTION PRICE
------------------------------------------------------------------------------------------------
400-900 90 DAY WARRANTY includes phone support and implementation included in
assistance, 24 hours/day, 7 days/week license fee
------------------------------------------------------------------------------------------------
400-901 ANNUAL SUPPORT & UPDATE SERVICE (ASUS) includes phone support 24 15% of total
hours/day, 365 days/year; see ROI Software License Agreement for license fee
benefits of continuous ASUS
------------------------------------------------------------------------------------------------
400-902 ANNUAL LIMITED LICENSE for non-production AS/400 for equals
backup/development only (includes ASUS) - license expires production
annually on production system ASUS expiration date system ASUS
------------------------------------------------------------------------------------------------
400-903 PROGRAMMING SERVICES (at ROI offices) - for Series 400 ROI $150
JavaCard software - hourly rate per hour
------------------------------------------------------------------------------------------------
400-904 DESIGN SERVICES (at ROI offices) - for Series 400 ROI JavaCard $250
software - hourly rate per hour
------------------------------------------------------------------------------------------------
400-905 ON-SITE SERVICES (at location other than ROI offices) - for $1,500
Series 400 ROI JavaCard software - rate per day or portion (plus per day
travel & living)
------------------------------------------------------------------------------------------------
400-910 ON-SITE EXPENSES - travel & living expenses actual
------------------------------------------------------------------------------------------------
400-950 ROI JAVACARD ADDITIONAL MERCHANT ID - adds 1 merchant ID to any $150
ROI JavaCard system - one-time charge for processing and setup each
------------------------------------------------------------------------------------------------
56
Prices are effective October 1, 1999, are in U.S. dollars, apply only to the
United States and Canada, and supersede all previously published prices. Refer
to product documentation for specifications, prerequisites, and hardware and
software requirements. Fees and specifications are subject to change without
notice. Trademarks are the property of their respective owners. All software is
licensed by ROI Corporation subject to the terms and conditions of the
applicable license agreement provided with each item. License fees include one
set of media and documentation and a 90 day limited warranty with telephone
support and implementation assistance. Fees do not include shipping and handling
charges or applicable taxes.
[LOGO]
E-TRANSACTION MIDDLEWARE(SM)
▇▇▇-▇▇▇-▇▇▇▇ o ▇▇▇.▇▇▇▇▇.▇▇
EXHIBIT B ESCROW AGREEMENT
ESCROW AGREEMENT
THIS ESCROW AGREEMENT ("Agreement") is made and entered into as of the ____
day of August, 2000, by and among RETURN ON INVESTMENT CORPORATION d/b/a ROI
CORPORATION (formerly NET/TECH INTERNATIONAL, INC.), a corporation organized and
existing under the laws of the State of Delaware ("ROI"), whose address is ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, SUNTRUST BANK, a
Georgia banking corporation ("Escrow Agent"), whose address is ▇▇ ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, an individual
resident of Georgia ("▇. ▇▇▇▇▇▇▇▇▇"), whose address is ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, an individual resident of Alabama ("▇.
▇▇▇▇▇▇▇▇▇"), whose address is ▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, and
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇., an individual resident of Georgia ("▇▇▇▇▇▇▇"), whose
address is ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, (▇. ▇▇▇▇▇▇▇▇▇, ▇.
▇▇▇▇▇▇▇▇▇, and ▇▇▇▇▇▇▇ collectively referred to as the "Shareholders" and
individually referred to as a "Shareholder").
W I T N E S S E T H:
-------------------
WHEREAS, ROI and the Shareholders have entered into that certain Plan And
Agreement of Merger and Exchange of Stock dated December 17, 1999, as amended
June 8, 2000 (the "Merger Agreement") under the terms of which the ROI
Shareholders (as defined therein) received a total of 6,118,918 shares of the
$.01 par value common stock (not subject to adjustment based on the "Reverse
Split" as defined therein) of ROI as restricted in accordance with securities
laws, ROI's bylaws, and the Escrow Agreement as set forth herein (the "ROI
Common Stock"); and
WHEREAS, the parties agree that a portion of the ROI Common Stock shall be
held in escrow and released to the Shareholders in accordance with the terms,
provisions, conditions and limitations set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises, the mutual covenants and
agreements set forth herein, and for other good and valuable consideration, the
receipt,
57
adequacy and sufficiency of which are hereby acknowledged by the parties hereto,
the parties hereto do hereby mutually covenant and agree as follows:
1. ESCROW. Of the total of 6,118,918 shares of ROI Common Stock issued to
the ROI Shareholders, 2,352,988 shares were delivered to the ROI Shareholders at
the Closing, and ROI agrees to deliver 3,765,930 shares to be distributed to the
Shareholders as follows: 1,553,485 shares to ▇. ▇▇▇▇▇▇▇▇▇, 941,412 shares to ▇.
▇▇▇▇▇▇▇▇▇, and 1,271,033 shares to ▇▇▇▇▇▇▇ (collectively the "Escrowed Shares")
but which shall be held in escrow by Escrow Agent to be released according to
the terms of Section 2 of this Agreement. Escrow Agent agrees to hold the same
and to perform the duties of Escrow Agent hereunder. ROI agrees to pay and
Escrow Agent agrees to accept as payment for Escrow Agent's services hereunder
the fees shown on Schedule 1, which is attached hereto and thereby made an
integral part hereof. This Agreement shall become effective upon Escrow Agent's
receipt of the Escrowed Shares and payment of the first year's fee.
2. RELEASE OF SHARES. At such time as Escrow Agent receives written notice
from ROI (meaning a notice signed by not less than all of the members of the ROI
Board of Directors, referred to herein as the "ROI Board") and all of the
Shareholders setting forth the number of Escrowed Shares and the Shareholders to
whom Escrowed Shares are to be delivered, Escrow Agent shall deliver such
Escrowed Shares as directed in the written notice. However, if such notice is
given by either the ROI Board or one or more of the Shareholders but not by all,
Escrow Agent shall (i) promptly notify those who have not given such notice that
Escrow Agent has received a request for delivery and (ii) withhold delivery for
a period of thirty (30) calendar days after so notifying the other parties. If
Escrow Agent receives a written notice by the ROI Board or one or more of the
Shareholders within said thirty (30) day period objecting to the earlier notice
of delivery then Escrow Agent shall withhold such delivery until the ROI Board
and all of the Shareholders agree upon a delivery of the Escrowed Shares. The
ROI Board and all of the Shareholders agree to send to the other parties a
duplicate copy of any written notice sent to the Escrow Agent requesting
delivery or objecting to a request for disbursement.
3. RIGHTS AND PRIVILEGES. The Shareholders shall enjoy all of the rights
and privileges related to the Escrowed Shares unless and until any of the
Escrowed Shares are returned to the Treasury as described in Section 2 hereof,
including, but not limited to, any and all voting rights and dividends,
provided, however, that any Escrowed Shares that have not yet been released to
the Shareholders and any rights or privileges associated therewith may not be
sold, transferred, or pledged.
4. INDEMNITY. So long as Escrow Agent has met its standard of care provided
for in Section 10 hereof, ROI and the Shareholders agree to indemnify and hold
harmless Escrow Agent from any loss, damage, liability or claim to which Escrow
Agent may become subject as a result of performing its duties as Escrow Agent
under this Agreement
58
5. PERMITTED RELIANCE. Escrow Agent may rely and shall be fully protected
in acting or refraining from acting upon any notice, advice, schedule, report,
certificate, direction or other document believed by Escrow Agent in good faith
to be genuine and to have been signed or presented by the proper party or
parties in accordance with the provisions hereof. Escrow Agent may consult with
counsel, and the written advice or opinion of counsel shall be full and complete
authorization and protection in respect of any action taken or omitted by it
hereunder in good faith and in accordance with such advice or opinion of
counsel.
6. STANDARD OF CARE. Escrow Agent shall not be liable for any mistake of
fact or of law or any error of judgment, or for any act or omission, except as a
result of Escrow Agent's proven willful misconduct or gross negligence.
7. DUTIES. Escrow Agent shall have no duties or responsibilities except
those expressly set forth herein. Escrow Agent shall not be bound by any waiver,
modification, amendment, termination, cancellation or revision of this
Agreement, unless in writing and signed by the other parties hereto, and, if
Escrow Agent's duties as Escrow Agent hereunder are affected, unless Escrow
Agent shall have given its prior written consent thereto. Escrow Agent shall not
be bound by any assignment by the parties hereto of their rights hereunder
unless Escrow Agent shall have received written notice thereof from the
assignor. Escrow Agent shall perform any acts ordered by a court of competent
jurisdiction.
8. DIRECTION TO ESCROW AGENT. If Escrow Agent shall be uncertain as to its
duties or rights hereunder, shall receive any notice, advice, schedule, report,
certificate, direction or other document from any other party to this Agreement
with respect to the Escrowed Shares that, in Escrow Agent's opinion, is in
conflict with any of the provisions of this Agreement, or shall be advised that
a dispute has arisen with respect to the Escrowed Shares, Escrow Agent shall be
entitled, without liability to anyone, to refrain from taking any action other
than to use Escrow Agent's best efforts to keep safely the Escrowed Shares until
Escrow Agent shall be directed otherwise in writing by an order, decree or
judgment of a court of competent jurisdiction that has been finally affirmed on
appeal or that by lapse of time or otherwise is no longer subject to appeal or
by mutual agreement of ROI and the Shareholders evidenced in writing to Escrow
Agent with direction; but Escrow Agent shall be under no duty to institute or
defend any proceeding.
9. RESIGNATION OF ESCROW AGENT. Should, at anytime, any attempt be made to
modify this Agreement in a manner that would increase the duties and
responsibilities of Escrow Agent, or to modify this Agreement in any manner in
which Escrow Agent deems undesirable, Escrow Agent may resign by notifying ROI
and the Shareholders. In the event that Escrow Agent so elects to resign, until
(i) a successor escrow agent is appointed and has agreed to act as escrow agent
hereunder, or (ii) thirty (30) days following notice from Escrow Agent that is
has elected to resign, whichever occurs earlier, Escrow Agent's only remaining
obligations will be to perform its duties hereunder in accordance with the terms
of this Agreement.
59
10. SUCCESSOR ESCROW AGENT. If Escrow Agent shall be unable to act or shall
resign as Escrow Agent hereunder, ROI and the Shareholders shall appoint a
successor escrow agent (the "Successor"). If the Successor is for any reason
unable or unwilling to become successor escrow agent and to accept the Escrowed
Shares, the parties hereto shall promptly appoint another successor escrow
agent. If no successor escrow agent has been appointed and has accepted the
Escrowed Shares within thirty (30) days after the Escrow Agent has notified ROI
and the Shareholders that it has elected to resign, Escrow Agent may petition
any court of competent jurisdiction for the appointment of a successor escrow
agent. Such court may thereupon appoint a successor escrow agent after Escrow
Agent deposits the Escrowed Shares into court and after such notice, if any, to
the other parties hereto as the court may deem proper and prescribe. This
Agreement shall not otherwise be assignable by Escrow Agent without the prior
written consent of the other parties hereto.
11. INTERPLEADER. The parties to this Agreement authorize Escrow Agent to
interplead all interested parties in any court of competent jurisdiction and to
deposit the Escrowed Shares with the clerk of that court.
12. TERMINATION OF DUTIES. Escrow Agent's responsibilities and liabilities
hereunder, except as a result of Escrow Agent's own willful misconduct or gross
negligence, will terminate upon the disbursement and delivery of the Escrowed
Shares as provided in this Agreement, or until Escrow Agent deposits the
Escrowed Shares in the registry of the court, resigns or otherwise ceases to act
as Escrow Agent, whichever occurs earlier.
13. FURTHER ACTION. At any time and from time to time the parties to this
Agreement agree, at their expense, to take such actions and to execute and
deliver such documents as may be reasonably necessary to effectuate the purposes
of this Agreement.
14. NOTICES. Any notice, request or other communication required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given if sent by registered or certified mail, return receipt requested, postage
prepaid, to the parties at their respective addresses set forth above, or to
such other addresses as may be furnished in writing from time to time by any
party hereto to the other parties.
15. ASSIGNMENT. Except as permitted herein, none of the parties to this
Agreement may assign its respective rights and obligations hereunder without the
prior written consent of the other parties hereto.
16. TERMINOLOGY AND SECTION HEADINGS. All personal pronouns in this
Agreement, whether used in the masculine, feminine or neuter gender shall
include all other genders; the singular shall include the plural and the plural
shall include the singular. Titles of Paragraphs are for convenience only, and
neither limit nor amplify the provisions of this Agreement.
60
17. BINDING EFFECT. Subject to the restrictions on assignments set forth in
this Agreement, this Agreement and the rights of the parties hereunder shall
inure to the benefit of and be binding upon the parties and their respective
legal representatives, successors and assigns. Whenever in this Agreement a
reference is made to one of the parties, such reference shall be deemed to
include a reference to the legal representatives, heirs, successors and assigns
of such party.
18. SEVERABILITY. This Agreement shall be governed by and construed in
accordance with, and only to the extent permitted by, all applicable laws,
ordinances, rules and regulations. If any provision of this Agreement, or the
application thereof to any person or circumstance, shall, for any reason and to
any extent, be invalid or unenforceable, the remainder of this Agreement and the
application of such provision to other persons or circumstances shall not be
affected thereby, but rather shall be enforced to the greatest extent permitted
by law.
19. INTERPRETATION. In construing the terms and provisions of this
Agreement, it is understood and agreed that no court or other interpretive body
shall apply a presumption that the terms of this Agreement shall be more
strictly or particularly construed against one party hereto by reason of the
fact that said party, either directly or through its agents, prepared this
Agreement, it being understood and agreed that all parties, either directly or
through their agents, have fully participated in the preparation hereof.
20. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Georgia.
21. ENTIRE AGREEMENT. Except as specifically provided in this Agreement to
the contrary, this Agreement constitutes the entire agreement between the
parties hereto regarding the subject matter hereof, and no modification hereof
shall be effective unless made a supplemental agreement in writing executed by
all of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed in multiple counterparts, each of which shall be deemed an original,
with their respective seals affixed thereto all as of the date and year first
above written.
RETURN ON INVESTMENT CORPORATION
d/b/a ROI CORPORATION
By:
-------------------------------------
Its:
------------------------------------
[CORPORATE SEAL]
61
SUNTRUST BANK
By:
-------------------------------------
Its:
------------------------------------
[CORPORATE SEAL]
SHAREHOLDERS:
(SEAL)
----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
(SEAL)
----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
(SEAL)
----------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
62
SCHEDULE C
NET/TECH FINANCIAL STATEMENTS
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of
Net/Tech International, Inc.
We have audited the accompanying consolidated balance sheet of Net/Tech
International, Inc. and subsidiary as of November 30, 1998 and the related
consolidated statements of loss, stockholders' equity and cash flows for the
year then ended. These consolidated financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Net/Tech International, Inc. and subsidiary as of November 30, 1998 and the
consolidated results of their operations, cash flows and statements of
stockholders' equity for the year then ended in conformity with generally
accepted accounting principles.
▇▇▇▇▇▇, ▇▇▇▇▇ & ASSOCIATES, P.A.
Fort ▇▇▇, New Jersey
March 5, 1999
Except for Note 3 which is
March 15, 1999
63
SCHEDULE D
NET/TECH SHARES, OPTIONS, WARRANTS
SHARES OUTSTANDING:
EXISTING SHARES
---------------
BEFORE REVERSE SPLIT
--------------------
9,757,967 shares
Note: does not include the conversion into 750,000 shares of ▇▇▇▇▇ ▇. ▇▇▇▇▇'▇
option to purchase 1,000,000 shares.
OPTIONS AND WARRANTS OUTSTANDING:
▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
100,000 options @ $0.50 1,000,000 options @ $2.50
100,000 options @ $1.25 expires June 2002
100,000 options @ $1.21
1,000,000 options @ $0.15 ▇▇▇▇▇▇ ▇▇▇▇▇
expires 2003 150,000 options @ $0.25
total 1,300,000 expires December 20, 2004
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
450,000 shares @ $1.25 100,000 shares @ $1.25
expires August 20, 2001 expires May 8, 2003
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
50,000 options @ $5.00 50,000 options @ $2.50
expires May 4, 2001 expires July 7, 2001
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
25,000 options at $1.25 20,000 options at $1.25
expires February 18, 2000 expires May 7, 2003
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. Orleans
15,000 options @ $0.25 18,750 options at $5.00
expires December 20, 2004 expires June 8, 2001
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇
12,500 options at $5.00 12,500 options at $5.00
expires June 3, 2001 expires June 8, 2001
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
10,000 options at $2.50 9,375 options at $5.00
expires March 31, 2001 expires June 3, 2001
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
9,375 options at $5.00 2,500 options at $5.00
expires June 3, 2001 expires May 4, 2001
▇▇▇▇ ▇▇▇▇▇▇ Knud Gutterup
2,500 options at $1.25 20,000 options @ $1.25
expires May 2, 2003 expires May 1, 2003
25,000 options @ $0.50
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ expires November 12, 2003
15,000 options @ $0.50 48,000 options @ $0.25
expires November 12, 2003 expires December 20, 2004
12,000 options @ $0.25
expires December 20, 2004
64
SCHEDULE E
OBLIGATIONS TO BE SATISFIED:
Obligations to be Satisfied, if any, will be determined prior to Closing.
CONTINUING OBLIGATIONS:
1. Enbros Company (landlord)
Lease expires February 28, 2001
A total of 22 months remaining
May 1999 to December 1999 $5,262.52 per month
January 1999 to February 28, 2001 $5407.00 per month
Net/Tech International, Inc.
8 months at $1,462.52 per month = $ 11,700.16
22 months at $1,510.68 per month = 33,234.96
TOTAL liability Net/Tech $ 44,935.12
Federal Mortgage Company
8 months at $3,00.00 per month = $ 24,000.00
22 months at $3,048.16 per month = 67,059.52
TOTAL liability Federal Mortgage $ 91,059.52
L & B Design
8 months at $800.00 per month = $ 6,400.00
22 months at $848.16 per month = 18,659.52
TOTAL liability L & B Design $ 25,059.52
Total lease liability including all tenants = $ 161,054.16
2. GE Capital (copier lease) $159.42 per month
lease expires March 24, 2000 which is a $1.00 buy-out
3. Continental Stock Transfer & Trust Company
approximately $400.00 to $700.00 per month
handles all shareholder requests (including lost certificates, legend
removal, etc.)
65
4. Directors & Officers Insurance
$1,775.00 per month with $9,000.00 down / $36,000.00 annually last
payment was made in December - policy expires March 9, 2000
5. Liability/Business Insurance $386.00 annually
paid for the year - policy expires May 8, 2000
6. Compliance Control Inc. lawsuit pending
7. American Express - upon closing of the merger, this account will be closed
8. ▇▇▇▇ Atlantic - local phone service
9. United Telecom - long distance and 800 service
10. ▇▇▇▇ Atlantic Mobil - signed a one year agreement which expires on Jan.
2000
Disputed Bills
Coastline Group $ 391.14
▇▇▇ ▇▇▇▇ 411.70
Infrared of New Jersey 10,000.00
Prepchek 3,056.00
Florida Restaurateur 1,786.00
Prepack 470.73
Bio-Informatics Inc. 1,105.00
▇▇▇▇▇▇ Central Express 1,210.60
Land Star Express 1,371.26
▇▇▇▇▇▇▇ & ▇▇▇ 34,256.00
$54,058.43
66
SCHEDULE F
ROI FINANCIAL STATEMENTS
Net/Tech International, Inc.
Balance Sheets
November 30, November 30,
1999 1998
Assets
Current Assets
Cash $18,589 $160,334
Accounts receivable 24,000 9,437
Inventory
Prepaid expenses 3,168 12,419
-----------------------------
Total Current Assets 45,757 182,190
-----------------------------
Fixed Assets
Leasehold improvements - 10,126
Furniture and fixtures - 44,024
Machinery and equipment - 18,898
-----------------------------
- 73,048
Less Accumulated Depreciation - 26,474
-----------------------------
- 46,574
-----------------------------
Intangible Assets
Patent application costs (net of accumulated
amortization of $5,000 and $21,144 20,000 52,633
respectively)
Other Assets
Security deposits 10,850 10,850
-----------------------------
Total Assets $76,607 $292,247
=============================
Liabilities and Stockholdrs' Equity
Current Liabilities
Accounts payable and accrued expenses and $173,745 $148,483
interest
Obligations under capital lease, current portion - 1,759
-----------------------------
Total Liabilities 173,745 150,242
-----------------------------
Stockholders' Equity (Deficit)
Common Stock, $.01 par value: 20,000,000
authorized;
9,758,671 and 9,324,637 shares issued and
outstanding, respectively 97,587 93,246
Additional paid-in capital 5,980,800 5,920,140
Deficit (6,175,525) (5,871,382)
-----------------------------
Total Stockholders' Equity (97,138) 142,004
-----------------------------
Total liabilities and stockholders' equity $76,607 $292,246
=============================
See accompanying notes to consolidated financial
statements are an integral part of
these financial statements
67
Net/Tech International, Inc.
Statement of Losses
For the Year For the For the
Year Year
Ended Ended Ended
November 30, November 30, November 30,
1999 1998 1997
-------------------------------------------
Revenue $158,381 $36,022 $-
Costs and Expenses:
Cost of Sales 12,535 14,674 -
Marketing, general & administrative expenses 295,211 1,298,821 814,604
Research, development and related expenses 25,298 419,013 391,939
Litigation Settlement 80,904
Depreciation and amortization 20,419 20,266 18,974
-------------------------------------------
Operating Loss (275,986) (1,716,752) (1,225,517)
Other (income) and expense
Interest Income (2,602) (16,366)
Interest Expense 276 409 627
Loss on abandonment of assets 30,483 371,082
-------------------------------------------
Net Income (Loss) $(304,143) $(2,071,877) $(1,226,144)
===========================================
Net Income (loss) per share (0.03) (0.29) (0.20)
Number of Shares Used In Computation 9,680,894 7,085,086 6,024,262
See accompanying notes to consolidated financial
statements are an integral part of
these financial statements
68
Net/Tech International, Inc.
Statement of Losses
For the Year For the For the
Year Year
Ended Ended Ended
November 30, November 30, November 30,
1999 1998 1997
-------------------------------------------
Revenue $158,381 $36,022 $-
Costs and Expenses:
Cost of Sales 12,535 14,674 -
Marketing, general & administrative expenses 295,211 1,298,821 814,604
Research, development and related expenses 25,298 419,013 391,939
Litigation Settlement 80,904
Depreciation and amortization 20,419 20,266 18,974
-------------------------------------------
Operating Loss (275,986) (1,716,752) (1,225,517)
Other (income) and expense
Interest Income (2,602) (16,366)
Interest Expense 276 409 627
Loss on abandonment of assets 30,483 371,082
-------------------------------------------
Net Income (Loss) $(304,143) $(2,071,877) $(1,226,144)
===========================================
Net Income (loss) per share (0.03) (0.29) (0.20)
Number of Shares Used In Computation 9,680,894 7,085,086 6,024,262
See accompanying notes to consolidated financial
statements are an integral part of
these financial statements
69
SCHEDULE G
----------
TO PLAN AND AGREEMENT OF MERGER AND EXCHANGE OF STOCK
-----------------------------------------------------
SERVICES AGREEMENT
------------------
THIS SERVICES AGREEMENT ("Agreement") is made as of the _____ day of
____________, ____, between Net/Tech International, Inc., a Delaware
corporation, ("Company"), whose address is Westside Center, ▇▇▇ ▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, and ▇▇▇▇▇ ▇. ▇▇▇▇▇, an individual resident of New
Jersey ("Contractor"), whose address is ___________________________.
WHEREAS, Contractor was formerly an employee of Company and has terminated such
employment in accordance with the "Termination Agreement" attached hereto as
Exhibit A; and
WHEREAS, Contractor desires to assist Company by providing certain services (the
"Services") as described on Exhibit B, which is attached to this Agreement and
by this reference made an integral part hereof, and Company desires Contractor
to provide the Services, all on the terms and conditions herein set forth.
NOW, THEREFORE, for and in consideration of the representations and agreements
contained herein and other good and valuable consideration, the receipt,
adequacy and sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. Company hereby retains Contractor subject to the terms and conditions
provided in this Agreement to provide the Services to Company. Any and all
Services or other work performed by Contractor hereunder will be considered
"work for hire" and shall be the property of Company. Contractor will use the
best of its abilities in every respect and make every effort to provide the
Services. In consideration for the Services performed by Contractor under this
Agreement, Company agrees to pay and Contractor agrees to accept the amounts
shown on Exhibit B.
2. For purposes of this Agreement:
A. CONFIDENTIAL INFORMATION means any and all data and information relating to
Company, its affiliates, and their respective business activities (whether
constituting a Trade Secret, as hereinafter defined, or not), (i) which is or
has been disclosed to Contractor, or of which Contractor becomes aware as a
consequence of or through Contractor's relationship with Company; and (ii) which
has value to Company and is not generally known by its competitors or the
public. Confidential Information shall not include any data or information (i)
that has been voluntarily disclosed to the public by Company or has become
generally known to the public (except where such public disclosure has been made
by or through Contractor or by a third person or entity with the knowledge of
Contractor without the written consent of Company); (ii) that has been
independently developed and disclosed by parties other than Contractor or
Company to Contractor
70
or to the public generally without a breach of any obligation of confidentiality
by any such person running directly or indirectly to Company; or (iii) that
otherwise enters the public domain through lawful means. Confidential
Information may include, but is not limited to, information relating to the
financial affairs, products, processes, services, customers, research,
development, inventions, manufacturing, purchasing, accounting, engineering,
computer programs, sales plans, expansion plans, distribution systems and
marketing of Company.
B. TRADE SECRETS means information including, but not limited to, technical or
nontechnical data, a formula, a pattern, a compilation, a program, a device, a
method, a technique, a drawing, a process, financial data, financial plans,
product plans, or a list of actual or potential customers or suppliers which (i)
derives economic value, actual or potential, from not being generally known to,
and not being readily ascertainable by proper means by, other persons who can
obtain economic value from its disclosure or use, and (ii) is the subject of
efforts that are reasonable under the circumstances to maintain its secrecy.
Trade Secrets shall not include any data or information (i) that has been
voluntarily disclosed to the public by Company (except where such public
disclosure has been made by or through Contractor or by a third person or entity
with the knowledge of Contractor without the written consent of Company); (ii)
that has been independently developed and disclosed by parties other than
Contractor or Company to Contractor or to the public generally without a breach
of any obligation of confidentiality by any such person running directly or
indirectly to Company; or (iii) that otherwise enters the public domain through
lawful means.
3. All information given to Contractor by Company, all Services or other work
performed by Contractor hereunder, and any updates thereto shall be deemed
"Confidential Information" for purposes of this Agreement. Contractor agrees
that any and all information and data originated by Contractor and work created
by Contractor during its, his or her engagement by Company and, where
applicable, by other employees or associates under Contractor's direction or
supervision in connection with or as a result of any work or service performed
under the terms of Contractor's engagement, shall be promptly disclosed to
Company, shall become Company's property, and shall be kept confidential by
Contractor. Any and all such information and data and work created, reduced to
written, graphic, or other tangible form and any and all copies and
reproductions thereof shall be furnished to Company upon request and in any case
shall be returned to Company upon termination of any engagement for any reason.
Ownership of all copyrights, including all renewals and extensions, in any such
information and data and work created shall vest in Company, and Company shall
have unlimited rights to use, disclose, reproduce, modify and distribute such
information and data and work created in any manner and for any purpose.
Contractor agrees that it, he or she will promptly disclose to Company all
inventions or discoveries made, conceived, or for the first time reduced to
practice in connection with or as a result of the work and/or services performed
under the terms of Contractor's engagement, either solely or jointly with
others. Contractor agrees that it, he or she will assign the entire right, title
and interest in such invention or inventions to Company, and will assign to
Company any patents that may be granted thereon in any country in the world.
Contractor further agree that it, he or she will, without expense to Company,
execute all documents and do all acts which may be necessary, desirable, or
convenient to enable Company, at this expense, to file and prosecute
applications for patents on such inventions, and to maintain patents granted
thereon. Contractor shall not use or disclose any of the Confidential
Information without Company's prior written permission. Contractor will not,
without the prior written permission of Company, use the Confidential
Information for any purpose other than that required for the discussions
hereunder. Contractor represents that it has no obligations or commitments
inconsistent with this Agreement. During the term of this Agreement and for a
period of one (1) year thereafter, Contractor shall not directly or indirectly,
actively or passively, individually or as an employee of any firm, association,
partnership or corporation, solicit the Company's customers or provide services
to any of them (the "Non-Competition Covenant"). Contractor agrees that the
foregoing Non-Competition Covenant is reasonable.
4. Upon termination of Contractor's relationship with Company, Contractor shall
promptly return to Company all materials containing Confidential Information,
including any and all extracts and copies thereof.
5. Contractor agrees that the remedy at law of Company would be inadequate as to
any unauthorized use or disclosure of Confidential Information by Contractor and
Contractor agrees that Company shall be
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entitled to preliminary and permanent injunctions in any court of competent
jurisdiction to prevent such unauthorized use or disclosure by Contractor.
6. Contractor is an independent contractor and is not an employee, a partner or
joint venture of Company. Unless specified on Exhibit B or otherwise agreed to
in advance in writing by Company, Contractor shall be responsible for all of its
own expenses related to activities hereunder. Contractor shall not, orally or in
writing, accept, approve or execute any letter, document, order or agreement on
behalf of, or in the name of Company, nor shall Contractor represent itself to
be an employee or agent of Company. Contractor shall be solely responsible for
any and all employment taxes or any other taxes related to Contractor's income
and shall indemnify Company against any claims related to such taxes.
7. The term of this Agreement shall commence as of the date shown on Exhibit B
and shall continue in effect for three (3) years thereafter. This Agreement may
be extended by mutual written agreement. Upon termination of this Agreement,
Contractor shall promptly return to Company all written material of any type
belonging to Company and its suppliers and all copies thereof. Contractor's
obligations related to the Non-Competition Covenant and Company's Trade Secrets
and Confidential Information shall survive termination of this Agreement.
8. Limitation of Liability. Each party's liability hereunder will be limited to
the specific performance of its obligations as specified herein. NEITHER PARTY
OR ITS RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS WILL BE LIABLE TO
ANY OTHER PARTY FOR ANY SPECIAL, INCIDENTAL, INDIRECT, GENERAL OR CONSEQUENTIAL
DAMAGES, INCLUDING, BUT NOT LIMITED TO, DAMAGES OR COSTS INCURRED AS A RESULT OF
LOSS OF TIME, LOSS OF SAVINGS, LOSS OF PROPERTY, LOSS OF DATA OR LOSS OF
PROFITS, WHICH MAY ARISE IN CONNECTION WITH THIS AGREEMENT AND REGARDLESS OF
WHETHER SUCH PARTY HAS BEEN APPRISED OF THE POSSIBILITY OR LIKELIHOOD OF SUCH
DAMAGES OCCURRING OR WHETHER CLAIMS ARE BASED OR REMEDIES ARE SOUGHT IN
CONTRACT, NEGLIGENCE, STRICT LIABILITY, TORT, PRODUCTS LIABILITY OR OTHERWISE.
9. This Agreement constitutes the entire understanding of the parties hereto
with respect to the subject matter hereof and supersedes all prior agreements,
oral or written, and any other communication between the parties relating to the
subject matter of this Agreement. No additional terms, consent, waiver or
alteration or modification of any provision of this Agreement shall be binding
unless in writing and signed by an authorized representative of each party.
Neither this Agreement nor any of Contractor's obligations hereunder may be
assigned by Contractor, in whole or in part, or by operation of law or
otherwise, without the prior written consent of Company. If any provision of
this Agreement is determined to be void or unenforceable by a court of competent
jurisdiction, the remaining provisions shall be enforced as if this Agreement
was originally written without the invalid provision. Contractor agrees that the
remedy at law of Company would be inadequate as to any unauthorized use or
disclosure of the Trade Secrets or Confidential Information by Contractor and
agrees that Company shall be entitled to preliminary and permanent injunctions
in any court of competent jurisdiction to prevent such unauthorized use or
disclosure. This Agreement shall be governed, construed and interpreted in
accordance with the laws of the State of Georgia. Any litigation to enforce or
interpret this Agreement shall be filed and heard only in the state or federal
courts for ▇▇▇▇▇▇ County, Georgia.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives.
Company: Net/Tech International, Inc.
By:____________________________________
Its: _________________________________
Contractor: ▇▇▇▇▇ ▇. ▇▇▇▇▇
_________________________________[SEAL]
Social Security Number ___________________
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EXHIBIT A
See attached Termination Agreement.
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EXHIBIT B
Contractor will provide the following Services and Company will pay Contractor
as follows:
Commencing _________, ____ [Note: This will be the Effective Date of the Merger
of Results Oriented Integration Corporation with Company], Contractor will
manage Company's relationship with GOJO Industries, Inc. ("GOJO"), and act as a
liaison between Company's management and GOJO. In addition, Contractor will
perform other duties as mutually agreed to from time to time. Unrelated to this
Agreement, Contractor may also serve as a member of the Board of Directors of
Company.
Starting with the second month after commencement of this Agreement and
continuing for a total of thirty-six (36) months, on the fifteenth (15th) day of
each calendar month, Company will pay Contractor a consulting fee of Five
Thousand and No/100 Dollars ($5,000.00). In addition, starting with the second
month after commencement of this Agreement and continuing for a total of
ninety-six (96) months, on the fifteenth (15th) day of each calendar month,
Company will pay Contractor a commission equal to five percent (5%) of the Net
Sales Payments, as described in Section 3.1 (c) and (d) of that certain Asset
Purchase Agreement dated March 15, 1999, between GOJO and Company, received by
Company from GOJO in the previous calendar month for each month during the term
of this Agreement.
TERMINATION AGREEMENT
THIS TERMINATION AGREEMENT is made and entered into as of the ___ day of ______,
____, by and between Net/Tech International, Inc. ("Company"), and ▇▇▇▇▇ ▇.
▇▇▇▇▇ ("Employee").
WHEREAS, Company and Employee entered into that certain Employment Agreement
dated October 25, 1998 (the "Employment Agreement"); and
WHEREAS, Company and Employee desire to terminate the Employment Agreement on
the terms and conditions contained herein;
NOW, THEREFORE, for and in consideration of good and valuable consideration, the
receipt, adequacy, and sufficiency of which are hereby acknowledged, the parties
agree as follows:
1. The stock options granted under paragraph 7 of the Employment Agreement to
purchase up to 1,000,000 shares of Company's Common Stock are hereby
converted into a stock grant of 750,000 shares (subject to adjustment based
on the Reverse Split contemplated in the Merger Agreement and subject to
adjustment from time to time to reflect any other stock splits or stock
dividends or reclassification of capital structure). Such shares shall have
unlimited piggyback registration rights.
2. The Employment Agreement is hereby terminated effective immediately.
Employee acknowledges and agrees that Employee accepts the payments made by
Company to date, if any, as payment in full of Company's obligations and
that no amounts of any kind or description are due from Company to Employee
under the Employment Agreement. Company and Employee each acknowledge and
agree that the other party has no further obligations of any kind or
description under the Employment Agreement.
3. Employee does hereby release, acquit, and forever discharge, and does for
himself, and his agents and assigns, release acquit and forever discharge
Company, and its officers, directors, shareholders, employees, agents, and
assigns, of and from any and all liability, loss, cost, claim, or demand,
and any and all manner of actions, causes of action, suits, debts, sums of
money, accounts, covenants, agreements, promises and damages (whether
grounded in tort, contract, quasi contract or equity, or on any local,
state, or federal statute, rule, or regulation or otherwise), known or
unknown, of whatever kind or nature, from the beginning of the world to the
date hereof, which Employee has heretofore had, now has, or may in the
future have whatsoever, in law or in equity or otherwise against Company
related, directly or indirectly, to the Employment Agreement.
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IN WITNESS WHEREOF, each party hereto has executed or caused this Termination
Agreement to be executed on its behalf, all on the day and year first above
written.
Company: NET/TECH INTERNATIONAL, INC. Employee: ▇▇▇▇▇ ▇. ▇▇▇▇▇
By:____________________________________ ___________________________
Its: _________________________________
(4) INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS
