ACQUISITION AGREEMENT
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This Agreement is made on December 29, 2000 between XXXXXX X. XXXXXXXX
("Xxxxxxxx") the "Seller", NEW WAVE NETWORKS, LLC, a Nevada limited liability
company (the "Company"), and PRIME COMPANIES, INC., a Delaware Corporation (the
"Purchaser"). The Company is a party to this Agreement so that it may enter into
certain contracts as provided herein, but shall have no rights or obligations
under this Agreement except as expressly provided herein.
Xx. Xxxxxxxx'x mailing address is: 000 Xxxxx Xxxxxx, Xxx 0000, Xxxxxxxxx,
Xxxxxx, 00000. New Wave Networks, LLC's ("NWN") Resident Agent's address is: 000
Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxx 00000.
Prime Companies, Inc.'s ("Prime") address is: 000 Xxxxxx Xxxxxx, Xxxx Xxxx,
Xxxxxxxxxx, 00000.
RECITALS:
A. Seller owns 112,658 Class A and 112,658 class B Units of the Company, said
Units constituting one hundred percent (100%) of all its issued and outstanding
Units. Xxxxxxxx is the President, Resident Agent, Manager and/or Member of the
Company.
B. Seller wishes to sell, and Purchaser wishes to purchase, all of the
outstanding Units of the Company on the terms and conditions contained in this
Agreement. As of the Closing, Seller shall exchange Units of NWN and Purchaser
shall exchange Shares of Common Stock of Prime, relying on (amongst other
things) the representations, warranties and undertakings to be structured under
a Unit-for-Share non-taxable merger transaction that will be necessarily
considered non-taxable under United States Internal Revenue Service Rules,
Regulations and Code.
C. Seller warrants that NWN will be debt free upon the Closing of this
Transaction.
D. Prime Companies, Inc. wishes to employ Xxxxxxxx, and Xxxxxxxx wishes to be
employed by Prime Companies, Inc. on the terms and conditions of the Employment
Contract included as Article VIII, Sections 8.1 to 8.8 of this Agreement.
E. Xx. Xxx Xxxxxxxxxx is only a creditor in this proposed transaction and is not
a principal of NWN. Xx. Xxx Xxxxxxxxxx does not waive any of his rights under
his loan agreement with NWN.
AGREEMENTS:
On the terms and subject to the conditions described herein, the parties agree
as follows:
I. THE SALE OF UNITS
1.1 Commitments. The Seller agrees to (1) sell to Purchaser, and Purchaser
agrees to purchase from Seller, 112,658 Class A and 112,658 class B Units of the
Company, said Units comprising one hundred percent (100%) of the issued and
outstanding Units of the Company and (2) the elimination of Xx. Xxx Xxxxxxxxxx'x
outstanding debt for the purchase price provided in Section 1.2.
1.2 Purchase Price. The purchase price for all the Units of NWN and the
elimination of Xx. Xxx Xxxxxxxxxx'x outstanding debt as described in Section 1.1
shall be (1) Five hundred fifty thousand dollars ($550,000.00) payable directly
to Xx. Xxx Xxxxxxxxxx in cash at the Closing (plus$175.00 per day in additional
interest if not paid by December 31, 2000 which is deductible from the
$50,000.00 in cash to be paid to Seller by Prime.). These funds shall, at
Closing, be transferred to an account(s) designated solely by Xx. Xxx
Xxxxxxxxxx. (2) Fifty thousand dollars ($50,000.00) in cash and 1,500,000 Shares
of Common Stock of Prime Companies, Inc. to be paid directly to Seller. The
shares and the cash to be issued to the Seller may be designated to multiple
parties as provided in this Agreement as Exhibit 1.2.
This exchange ratio is based upon Prime's Common Stock shares being valued
at $1.00 per Common Stock share and values NWN's gross 1990 POPs of 577,043 at
$3.63 per POP or a total transaction value of $2,100,000.00 (made up of
$550,000.00 in debt elimination, $50,000.00 in cash and 1,500,000 shares of
Prime Common Stock).
This valuation arbitrarily allocates $4.00 per POP for the "A" band license
(386,507 POPs) or $1,546,028.00 and $2.90 per POP for the "B" band license
(190,536 POPs) or $553,972.00.
1.3 Registration of Shares. These Common Stock shares to be granted to Seller
from Prime must be registered under the Securities Exchange Act of 1933 ("the
Act") utilizing a registration statement. The registration statement must be
filed with the SEC within 120 days of the execution of this Agreement.
Mutual Release. As part of the Closing of this Transaction, Xx. Xxx Xxxxxxxxxx,
Xx. Xxxxxx X. Xxxxxxxx and NWN agree to enter into a mutual release between and
among the Parties.
1.5 The Closing. The closing ("Closing") of this Agreement will be held at the
offices of Prime Companies, Inc., 000 Xxxxxx Xxxxxx, Xxxx Xxxx, XX 00000, on
February 13, 2001 (the "Closing Date") or at such other time and place as the
parties may agree in writing. The obligation of each party to close is subject
to its respective conditions as stated in Article VII.
1.6 Good Faith Deposit. A sum of $10,000.00 was paid by Prime to NWN as
referenced in Section 2.2 of the Binding Letter of Intent dated October 27, 2000
between NWN and Prime as a good faith deposit. In the event that this Agreement
is not executed, this deposit will be retained by NWN as a break-up fee.
In the event that NWN terminates the Agreement, NWN must refund the deposit
to Prime.
In the event that this Agreement is executed, then the good faith deposit
of $10,000.00 will be included as part of the $50,000.00 cash component to be
paid to the Seller.
1.7 Exclusion. NWN will not engage in business combination discussions with any
company or organization other than Prime from October 27, 2000 to December 31,
2000.
1.8 Financing. Following the execution of this Agreement, Prime agrees to review
the NWN Business Plan and determine the capital needs of NWN. Prime agrees to
arrange for debt and equity financing as required in the Business Plan.
1.9 Timetable. (1) This Agreement will be executed no later than December 31,
2000. (2) Prime and NWN will submit all necessary applications and forms to the
FCC and all assignments and transfers will be posted for public notice no later
than February 20, 2000. (3) The Parties will conclude the Transaction within
five business days after the receipt of the FCC approval and no later than April
20, 2001, however, FCC approval of the transfer of the five licenses is a
necessary pre-condition of the closing.
II. REPRESENTATIONS AND WARRANTIES
2.1 The Seller represents and warrants to the Purchaser as follows:
(a) Corporate Status. The Company is a Company duly organized and existing in
good standing under the laws of the State of Nevada and is qualified to do
business with full power, corporate and otherwise, to carry on its business and
own its properties. Accurate and complete copies of the Certificate of Limited
Liability Company and the By-Laws of the Company, including all amendments, are
attached as Exhibits 2.1(a) and 2.1(a)2. The Company is qualified to do business
and is in good standing in all jurisdictions where the nature of its activities
or ownership of properties requires such qualification and has duly filed all
franchise and other tax returns required to be filed by the laws of such states
and jurisdictions and has paid all taxes shown to be due and payable in such
returns.
(b) Capitalization. The present equity capitalization of the NWN is accurately
and completely set forth in Exhibit 2.1(b). All outstanding membership interests
of NWN are validly issued, fully paid and non-assessable. Except as set forth in
Exhibit 2.1(b)1, the Company does not have any authorized, issued or outstanding
securities convertible into or exchangeable for membership interests, nor does
any person hold any option or right to purchase or otherwise acquire any
interests or any securities convertible into or exchangeable for such interests.
NWN has not declared, and has no outstanding commitment, to pay any dividend or
to make any distribution or transfer of assets to its members or persons
affiliated with them. The Company has not adopted or committed to any change in
its equity capitalization.
(c) Title to Units. The Seller owns all 112,658 Class A and 112,658 class B
Units of the Company hereunder free and clear of all pledges, liens,
encumbrances, security interest, mortgages, deeds of trust and claims whatsoever
and of all restrictions on his right to sell them to Purchaser hereunder.
Without limitation, neither the Seller nor the Company is party to any existing
agreement restricting the sale or transfer of the units or granting any person a
right to buy them.
(d) Subsidiaries. The Company has no subsidiaries except those listed in
Exhibit 2.1(d). Except as set forth in Exhibit 2.1(d), the Company owns all of
the authorized and outstanding stock of each of its subsidiaries free and clear
of all pledges, liens, encumbrances, security interests, mortgages, deeds of
trust, claims, or restrictions on the change of control contemplated herein.
(e) Membership Authorization. Execution, delivery and performance of this
Agreement has been duly authorized by all requisite action on the part of the
members of NWN. NWN has all necessary power and authority to enter into and
perform this Agreement which will not conflict with any law, regulation,
restriction, or agreement to which it is subject.
(f) Financial Statements. The financial statements of the Company for its fiscal
years ended December 31, 1998 and 1999, and the nine month period ended
September 30, 2000, will be audited by KPMG, and attached as Exhibit 2.1(f) ,
and will reflect fairly the financial condition of the Company at such dates and
its results of operations, retained earnings and changes in financial position
for the fiscal years then ended in accordance with generally accepted accounting
principles consistently applied. All material liabilities and obligations,
existing and contingent, of the Company at September 30, 2000 are fairly
reflected or disclosed and described in its financial statements and the notes
thereto. Since September 30, 2000, the Company has conducted its activities only
in the ordinary course and no material change in its financial condition,
results of operations or retained earnings occurred during such period.
(g) Taxes. Seller has delivered to Purchaser complete and correct
copies of the federal, state and local tax returns of the Company for each of
the three years ended December 31, 1997, 1998 and 1999. Such returns and the
information contained therein have been properly and accurately compiled and
completed and reflect the tax liabilities of the Company for the periods in
question. Purchaser may withhold and deduct from Xx. Xxxxxxxx'x cash
disbursement any amounts due to any Federal or state agency for unpaid taxes.
Prior to closing Seller will deliver to Purchaser all such returns which must be
filed prior to close. The Company has not filed any federal, state and local tax
returns which may required to be filed and has not paid or made adequate
provision for the payment of all taxes which have become or may become due in
respect o f operations during the periods to which such returns relate. The
Company has not delivered to Purchaser complete and correct copies of the
reports of any audit of the income tax returns of the Company and of any
deficiency letter and/or proposed assessment issued at the end of any such audit
and all subsequent correspondence and documents relating thereto.
(h) Litigation, Proceedings or Claims. Except as described in Exhibit 2.1(h),
there is no litigation, governmental proceeding or investigation, or claim
pending or threatened against the Company or the Seller or the Company's
properties or business which might materially and adversely affect its financial
condition, business or operations, or against or relating to the transactions
contemplated by this Agreement.
(i) Description of Properties, Contracts and Material Information. Exhibit
2.1(i) is an accurate and complete list as of the date of this Agreement of (i)
all real property and all major items of equipment presently owned or leased by
the Company with a brief description of each property and its use, copies of
title instruments and leases, and details relating to any liens, encumbrances or
claims thereto and any direct or indirect interest therein of any of the
Company's directors or officers; (ii) all patents, trademarks, trade names,
copyrights, including all registration thereof and applications therefor
presently owned in whole or in party by the Company, and all patent, trademark
or copyright licenses to which the Company is a party; (iii) all bonds,
debentures, notes, stock or other securities other than stock of subsidiaries
already listed in Exhibit 2.1(d), and all accounts receivable other than trade
accounts receivable which are not more than 90 days old, held or owned by the
Company; (iv) all policies of insurance in force covering or owned by the
Company; (v) all loan agreements or bank credit agreements in effect, setting
forth the amount of the original loan, the unpaid balance, the interest rate and
payments, the maturity date, any prepayment penalties and the name of the
lender; (vi) all agreements to which the Company is a party.; (vii) all
employment contracts with any officers or employees of the Company and the names
and current salary rates of all such officers and employees, together with a
description of all incentive, compensation, bonus, profit sharing retirement,
pension or other similar plans or arrangements for any of such officers or
employees and (viii) all agents, consultants and independent contractors
retained by the Company, with a brief description of the arrangement for
compensation, and all persons, if any, holding a power of attorney, to act on
its behalf (ix) all agreements and transactions entered into and in force with
any officer, director or member of the Company or any person related to any of
them. Complete and correct copies of all agreements, instruments or other
documents relating to the items referred to above are attached hereto as
Exhibit(s) 2.1(i). The Company is not in material default on any obligation to
be performed by it under any loan, plan or agreement referred to in Exhibit
2.1(i), or in material violation of any law, ordinance, regulation, order or
decree applicable to it.
(j) Legal Compliance. The Company is in compliance with all laws, regulations,
permits and orders applicable to its business and assets. Seller has not, and is
not, infringing any patent, trademark or copyright or using or disclosing
without authorization any trade secret of third parties.
(k) Employee Relations. Since January 1, 1998, the Company has not experienced
any strike, work interruption, organization campaign or other concerted action
by its employees and has not received any complaint of failure to comply with
equal employment opportunity laws.
(l) Employee Benefit Plans. All employee benefit plans, as defined in the
Employee Retirement Income Security Act, covering present and former employees
of the Company are listed in Exhibit 2.1(l) attached hereto and have been fully
disclosed to the Purchaser including, without limitation, all commitments to
provide employee benefits. Any plans intended to be qualified plans and trusts
intended to be exempt organizations under the Internal Revenue Code are
qualified and exempt and the Company has determination letters evidencing such
status. There has been, and is, no reportable event, accumulated funding
deficiency, termination liability, withdrawal liability or prohibited
transaction in connection with such plans. The Company has no obligation to
provide post-retirement health, medical, death or other welfare benefits. All
group health plans have been maintained in compliance with the Internal Revenue
Code. All vacation, severance and similar plans or policies of the Company have
been fully and accurately disclosed to the Purchaser, and are listed in Exhibit
2.1(l) attached hereto.. (m) Environmental, Safety and Product Liability.
Without limitation of other representations and warranties herein, the Company
and its business and assets are in compliance with, and are not subject to, any
liability under federal, state and local environmental laws. The Company is not
aware of any reason why it will not continue to be able to comply with all its
permits or to renew any permit expiring within one year after the date of this
Agreement without imposition of standards materially stricter than those now in
effect. The Company is not subject to any liability with respect to a release or
disposal of hazardous waste, hazardous substances or constituents or pollutants.
The Company is not subject to any liability with respect to defective products
regardless of whether such liability results from breach of express or implied
warranties or strict liability imposed by reason of misdesign, mismanufacture or
failure to warn.
2.2 Representations and Warranties of Purchaser. The Purchaser represents and
warrants to the Seller and the Company as follows:
(a) Purchaser is a Corporation duly authorized and existing in good standing
under the laws of Delaware with full corporate power and authority to carry out
the transactions contemplated by this Agreement.
(b) The execution, delivery and
performance by Purchaser of this Agreement and all other agreements and
transactions contemplated herein have been authorized on the part of Purchaser
by all requisite corporate action and will not violate or conflict with its
Certificate of Incorporation or By-laws or with any law, regulation, judgment,
order, restriction or agreement to which Purchaser is a party or to which it is
subject.
(c) The Units of NWN are being acquired by Purchaser for investment and without
any view to, or for resale in connection with, any distribution of such Units
within the meaning of the Securities Act of 1933.
(d) No consent, approval, permit, registration, filing or notice to or with any
governmental agency or third party is required on the part of Purchaser for the
execution, delivery and performance of this Agreement except as expressly
provided herein.
(e) This is no litigation or governmental proceeding pending or, to the
best of Purchaser's knowledge, threatened against Purchaser that questions the
validity or challenges the performance of this Agreement or any action to be
taken by Purchaser pursuant to this Agreement.
III. COVENANTS
3.1 Conduct of Business Until Closing. Pending the Closing, Seller shall cause
NWN, and NWN agrees, to conduct its business only in the ordinary course.
Without limitation of the foregoing, NWN shall (A) use its best efforts to
preserve intact its business and its assets; (B) maintain its assets in good
repair and operating condition except for fire, flood or other Acts of God; (C)
continue in full all existing insurance coverage, (D) not enter into any
material contract or other transaction without prior written approval of
Purchaser; (E) use its best efforts to retain employees, customers and
suppliers; (F) refrain from any increase in the compensation or benefits of
employees or any commitment for an increase; (G) not engage in any inter-company
transaction with any of its affiliates except for continuation of transactions
in the normal course of business fully disclosed in exhibits to this Agreement;
(H) refrain from any sale or transfer or commitment to sell or-transfer any of
its assets except for sales of products in the ordinary course of business or
any action or omission which will subject its assets to any lien, encumbrance,
or security interest; (I) refrain, without Purchaser's consent, from any
material modification of any of its assets or commitment for any capital
expenditure.
3.2. Access to the Business and Assets. Until the Closing, Seller shall consult
with Purchaser on the operation of its business and shall afford access to
Purchaser and its representatives during normal business hours to all records of
its business and Assets and to its employees, accountants, customers and
suppliers. However, no investigation by Purchaser shall limit responsibility of
Seller for the representations, warranties and agreements herein. Seller shall
maintain its assets in good order and repair, but no material alterations or
improvements shall be made except with the written approval of Purchaser.
3.3. Transfers of Certain Properties. At or prior to the Closing, Seller shall
transfer to the Company its assets currently owned by either or both of them but
used wholly or partially in its business and listed in Exhibit 3.3. At or prior
to the Closing, Prime shall transfer to Seller certain assets listed in Exhibit
3.3.
3.4. (This section intentionally omitted)
3.5. Cooperation After the Closing. After the Closing, Seller and Purchaser
shall cooperate in transition of ownership of the Company from Seller to
Purchaser. Without limitation, if Seller shall receive any assets of the Company
after the Closing, he shall promptly deliver such assets to the Company. If
either party or the Company shall need any information for the preparation of
tax returns, the other party shall furnish such information in reasonable prior
notice.
3.6. Confidential Information. All technical and business information
furnished by either party to the other party in connection with the transactions
contemplated by this Agreement shall be maintained in confidence and shall not
be disclosed to third parties or used except for the purposes of this Agreement.
The foregoing obligations shall not apply to information which the recipient can
show that (a) the information was previously known to it at the time of receipt,
(b) was in the public domain at the time of receipt or thereafter entered the
public domain without fault of the recipient, (c) corresponds to information
which was furnished to the recipient by a third party lawfully entitled to do
so, (d) was developed independently by personnel of the recipient who had no
access to the information or (e) is required to be disclosed in legal
proceedings. If this Agreement shall not be closed, Purchaser shall return to
Seller all documents concerning its business or Assets obtained by Purchaser
from Seller.
3. 7. Noncompetition. Seller agrees not to compete, directly or indirectly, with
Purchaser in any markets in which Purchaser is conducting wireless business in
the United States for a period of two years after the Closing Date, or a period
of one year after termination of employment, whichever is longer. Such
competition shall include, without limitation, any employment or consultation
with persons engaged or planning to engage in competition with Purchaser's
business and any investment in any such person.
3.8. Seller represents to Purchaser that neither he nor the Company has, and
Purchaser represents to Seller that Purchaser has , not retained any finder,
broker, or agent, or agreed to pay a fee or commission to any such person. Each
party agrees to defend and indemnify the other parties against all loss,
liability, cost and expense (including reasonable attorneys fees) in connection
with any claim or claims which may be made against the other parties by reason
of alleged agreements, understandings or arrangements for such a fee or
commission by it.
IV. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE PARTIES
4.1 Conditions to the Obligations of Purchaser. The obligation of Purchaser to
close this Agreement is, at its option, subject to the following conditions:
(a) Representations and Warranties. The representations and warranties of Seller
shall continue to be accurate in all respects on the Closing Date, subject to
changes occurring in the ordinary course of business and not materially adverse
in nature, and they shall have performed all covenants and other obligations
under this Agreement required to be performed by them at or before the Closing
Date.
(b) No Material Adverse Change. There shall have been no material adverse change
in its business, assets, financial condition, or results of operations of the
NWN.
(c) Delivery of Certain Documents. Seller and the Company shall have delivered
at the Closing all of the documents described in Article V.
4.2 Conditions to the Obligations of the Seller and the Company. The obligations
of Seller to close this Agreement are at the option of each of them, subject to
the following conditions:
(a) Representations and Warranties. The representations and warranties of
Purchaser shall continue to be materially accurate in all respects on the
Closing Date and the Purchaser shall have performed all covenants and other
agreements herein required to be performed by it on or before the Closing Date.
(b) Delivery of Certain Documents. The Purchaser shall have delivered at the
Closing the payments and documents described in Article V.
4.3 Failure of Fulfillment of Conditions; Remedies. The parties each agree to
make all reasonable efforts to fulfill their respective conditions and to
cooperate with the other party in fulfillment of its conditions. If any party
fails or refuses to perform this Agreement, the other party or parties shall be
entitled to specific performance of this Agreement or such other remedies as may
be granted in equity or law by a court of competent jurisdiction, in a court of
competent jurisdiction in the Sacramento district of Northern California.
V. DOCUMENTS TO BE DELIVERED AT THE CLOSING
5.1 Documents Delivered by the Seller and the Company. At the Closing, the
Seller and the Company shall deliver to the Purchaser the following documents:
(a) Such evidence of limited liability company existence, qualification, good
standing, incumbency of officers adoption of resolutions and evidence of other
limited liability company procedures and authority as may reasonably be
requested by counsel for the Purchaser.
(b) Evidence that the property transfers described in Section 3.3 have been
made.
(c) A certificate signed by the Seller updating and reaffirming the
representations and warranties set forth in Section 2.1 and confirming
performance of all the covenants set forth in Article III to the extent they are
to be performed by them on or before the Closing Date.
(d) A "comfort letter" from Seller's counsel, dated the Closing Date.
(e) A written opinion of Seller's counsel, dated the Closing Date.
(f) A release signed by Seller.
(g) Certificates representing all Units of NWN.
(h) Employment Contract in the form attached as Exhibit V5.1(h) signed by Prime
and Xxxxxxxx as described in Article VIII, Sections 8.1 to 8.8 of this
Agreement.
5.2 Documents to be Delivered by Purchaser. At the Closing and upon fulfillment
of the conditions described at Section 5.1 by the Seller and the Company, the
Purchaser shall deliver documents and make payments as follows:
(a) Such evidence of corporate existence, qualification, good standing,
incumbency of officers, adoption of resolutions and evidence of other corporate
procedures and authority as may reasonably be requested by counsel for the
Seller.
(b) A certificate signed by an officer of the Purchaser updating and reaffirming
its representations and warranties set forth in Section 2.2 and confirming
performance of all the covenants set forth in Article III to the extent they are
to be performed by the Purchaser on or before the Closing date.
(c) A written opinion of Purchaser's counsel, dated the Closing Date.
(d) A certified bank check for $550,000.00 payable to Xx. Xxx Xxxxxxxxxx.
(e) A certified bank check for $5,000 payable to Xxxxxxx X. XxxXxxxxx.
(f) A certified bank check for $35,000 (or remaining balance after XxxXxxxxx'x
check) payable to Xxxxxxxx.Xxxxxx Trust
(g) Stock certificate for 875,000 shares of Common Stock of Prime in the name of
Xxxxxxxx Family Trust.
(h) Stock certificate for 40,000 shares of Common Stock of Prime in the name of
Xxxxxxx Xxxxxxxx..
(i) Stock certificate for 40,000 shares of Common Stock of Prime in the name of
Competitive Consulting Group.
(j) Stock certificate for 20,000 shares of Common Stock of Prime in the name of
Blooston, Mordofsky, Xxxxxxx, and Xxxxxxx.
(k) Stock certificate for 150,000 shares of Common Stock of Prime in the name of
Xxxxxxx X. XxxXxxxxx.
(l) Stock certificate for 30,000 shares of Common Stock of Prime in the name of
Xxxxx Xxxxxxx.
(m) Stock certificate for 50,000 shares of Common Stock of Prime in the name of
Xxxxx Xxxxxx.
(n) Stock certificate for 90,000 shares of Common Stock of Prime in the name of
Xxx Xxxxx.
(o) Stock certificate for 90,000 shares of Common Stock of Prime in the name of
Xxxxxxx Xxxxx.
(p) Stock certificate for 15,000 shares of Common Stock of Prime in the name of
Xxxx Xxxxx.
(q) Stock certificate for 10,000 shares of Common Stock of Prime in the name of
Xxx Xxxxxx.
(r) Stock certificate for 90,000 shares of Common Stock of Prime in the name of
Xxxxx Xxxxx.
5.3 Simultaneous Delivery. All documents delivered at the Closing shall be
deemed to have been delivered simultaneously.
VI. GENERAL PROVISIONS
6.1 Survival; Indemnities. All representations, warranties and agreements of the
parties shrill survive the Closing, notwithstanding investigations made by the
parties. Seller shall jointly and severally indemnify the Purchaser, and
Purchaser shall indemnify Seller against all loss, liability, damage and expense
resulting from untruth, inaccuracy or incompleteness of the information
contained in their respective representations and warranties or any failure to
perform their respective agreements.
6.2 Further Actions. The parties agree to execute and deliver from time to time
hereafter any and all such further documents and to take such further actions as
shall be reasonably necessary to carry out the transactions contemplated by this
Agreement.
6.3 Nonassignability. Neither this Agreement nor any rights thereunder may be
assigned or otherwise transferred directly or indirectly by any party without
the prior written consent of the other parties and any attempt to do so shall be
null and void, provided that this Agreement and the rights and obligations
herein shall inure to the benefit of, and be binding upon, the executors,
administrators, heirs and successors of Xxxxxxxx in the event of his death.
6.4 Entire Agreement. In entering into and closing this Agreement, no party has
relied or shall rely upon any promises, representations and warranties not
expressed herein, and this Agreement expresses their entire agreement on the
subject matter.
6.5 Amendment and Waiver. Neither this Agreement nor any provision or provisions
herein may be amended or waived except by a written amendment or new agreement
executed by the parties.
6.6 Governing Law. The validity, interpretation, performance and enforcement of
this Agreement shall be governed by the laws of California. Each of the parties
consents to the jurisdiction of the federal and state courts in California in
all matters relating to this Agreement.
6.7 Notices. All notices or other communications hereunder shall be given in
writing and shall be deemed to be duly given if delivered or mailed, first class
postage prepaid, to the following addresses:
In the case of NWN: ATTN: Xx. Xxxxxx X. Xxxxxxxx, President
X.X. Xxx 0000
000 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
In the case of Prime: ATTN: Xx. Xxxxxxx X. Xxxx, President
000 Xxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Copies to:
ATTN:Mr. Xxxxxxx Xxxxxxx, CFO Xxxxxxx & Xxxxxxxx, PC.
0000 Xxxxx Xxxxxxxxx, Xxxxx X-0 XXXX: Xx. Xxxxxx Xxxxxxx, Esq
Xxxxxxx, XX 00000 000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Telephone: 000-000-0000 Xxx Xxxxxxxxx, XX 00000
Facsimile: 000-000-0000 Telephone: 000-000-0000
Facsimile: 000-000-0000
Xxxx XxxXxxxxx
The XxxXxxxxx Group, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxx Xxx Xxx, XX 00000
Telephone 000-000-0000
Fax 000-000-0000
6.8 Expenses. The Seller shall pay all costs and expenses incurred by him
(including, without limitation, the payment of all fees and expenses of its
counsel) and any tax on the sale or transfer of their shares and the Purchaser
shall pay all costs and expenses incurred by it (including, without limitation,
all fees and expenses of its counsel) in carrying out its respective obligations
under this Agreement and the transactions contemplated herein. All expenses
related to discussion, negotiations and other activities between the Company,
Xxxxxxxx and Prime are the sole responsibility of the party that incurs them.
6.9 Announcements. Pending completion of this Agreement, the Parties shall,
subject to the requirements of law or any regulatory body or the rules and
regulations of any recognized stock exchange, consult together as to the terms
of, the timetable for and manner of publication of, any formal announcement or
circular to the shareholders, employees, customers, suppliers, distributors, and
sub-contractors and to any recognized stock exchange or other authorities or to
the media or otherwise which any party may desire or be obliged to make
regarding this Agreement. Any other communication which the Parties may make
concerning the foregoing matters shall, subject to the requirements of law or
any regulatory body or the rules and regulations of any recognized stock
exchange, be consistent with any such formal announcements or circular.
6.10 Counterparts. This Agreement may be executed in any number of counterparts
each of which shall be deemed to be an original, but all the counterparts shall
constitute one and the same instrument.
6.11 Presumption. As designated in the Binding Letter of Intent between NWN and
Prime dated October 27, 2000, this Agreement has been drafted by Prime's legal
counsel. Any FCC approval applications are to be drafted by Prime's
communications legal counsel. This Agreement, the FCC approval applications, or
any section thereof shall not be construed against any party due to the fact
that said Agreement or any section thereof was drafted by said party.
6.12 Arbitration. If at any time during the term of this Agreement any dispute,
difference, or disagreement shall arise upon or in respect of the Agreement, and
the meaning and construction hereof, every such dispute, difference, and
disagreement shall be referred to a single arbiter agreed upon by the parties,
or if no single arbiter can be agreed upon, an arbiter or arbiters shall be
selected in accordance with the rules of the American Arbitration Association
and such dispute, difference, or disagreement shall be settled by arbitration in
accordance with the then prevailing commercial rules of the American Arbitration
Association, and judgment upon the award rendered by the arbiter may be entered
in any court having jurisdiction thereof.
6.13 Amendment and Modification. Subject to applicable law, this
Agreement may be amended, modified, or supplemented only by a written agreement
signed by Purchaser and Seller.
6.14 Waiver of Compliance; Consents. Any failure of any party to comply
with any obligation, covenant, agreement, or condition herein may be waived by
the party entitled to the performance of such obligation, covenant, or agreement
or who has the benefit of such conditions, but such waiver or failure to insist
upon strict compliance with such obligation, covenant, agreement, or condition
will not operate as a waiver of, or estoppel with respect to, any subsequent or
other failure.
6.15 Titles and Captions. All section titles or captions contained in
this Agreement are for convenience only and shall not be deemed part of the
context nor effect the interpretation of this Agreement.
6.16 Entire Agreement. This Agreement contains the entire understanding between
and among the parties and supersedes any prior understandings and agreements
among them respecting the subject matter of this Agreement.
6.17 Agreement Binding. This Agreement shall be binding upon the
heirs, executors, administrators, successors and assigns of the parties hereto.
6.18 Attorney Fees. In the event of an arbitration, suit or action
brought by any party under this Agreement to enforce any of its terms, or in any
appeal therefrom, it is agreed that the prevailing party shall be entitled to
reasonable attorney fees to be fixed by the arbitrator, trial court, and/or
appellate court.
6.19 Pronouns and Plurals. All pronouns and any variations thereof
shall be deemed to refer to the masculine, feminine, neuter, singular, or plural
as the identity of the person or persons may require.
6.20 Further Action. The parties hereto shall execute and deliver all documents,
provide all information and take or forebear from all such action as may be
necessary or appropriate to achieve the purposes of the Agreement.
6.21 Parties in Interest - No Third Party Beneficiaries . Nothing herein shall
be construed to be to the benefit of any third party, nor is it intended that
any provision shall be for the benefit of any third party.
6.22 Savings Clause. If any provision of this Agreement, or the application of
such provision to any person or circumstance, shall be held invalid, the
remainder of this Agreement, or the application of such provision to persons or
circumstances other than those as to which it is held invalid, shall not be
affected thereby.
VII. CONDITIONS
Completion of this Agreement is anticipated to be conditional upon
satisfaction of the following conditions:
7.1 Due Diligence. Prime being satisfied on or before the later of (1)
December 31, 2000 or (2) 15 days after the audited financial statements referred
to in Section 2.1(f) above and Section 7.6 below are delivered to Prime, in its
sole and absolute discretion with a detailed and wide ranging due diligence
exercise to be carried out by it and its professional advisors on its behalf and
in relation to the direct interests being acquired by virtue of Prime's purchase
or acquisition of Units.
7.2 Access to Credit Line. This proposed transaction is necessarily
based upon Prime having access to an anticipated equity credit line that would
allow Prime to meet the cash components of the transaction,. In the event that
Prime is unable to access this capital pool by February 13, 2000, the
transaction may be terminated by either party or extended upon the mutual
consent of all Parties.
7.3 Consent. Obtaining all necessary consents and approvals from
Prime's and NWN's respective Board of Directors, and if necessary, their
respective stakeholders.
7.4 SEC Registration. The Parties to any submission for the approvals
of issuance and or registration of the Shares of Prime, to be received by Seller
in respect of the exchange of the Shares to the Securities and Exchange
Commission shall be prepared by, made in the name and at the expense of Prime,
subject to the input of NWN and that all requests and inquiries from any
government, governmental, or regulatory body shall be dealt with by Prime and/or
NWN in consultation with each other and each shall promptly co-operate with and
provide all necessary information and assistance reasonably required by such
government, or agency upon being requested to do so.
7.5 Debt Conversion. In the event that NWN's debt holder (Xx. Xxx
Xxxxxxxxxx) converts his outstanding debt to Units in NWN, or he does not accept
the $550,000.00 plus any additional interest if any accrued after December 31,
2000, as payment in full for his debt owed to him by NWN, then Prime has the
right to immediately terminate this Agreement. In the event that this Agreement
is terminated by Prime due to the above, NWN will return the $10,000 good faith
deposit money.
7.6 Audit. NWN will commence a two year and nine month audit of its
business.. The costs associated with the audit will be initially underwritten by
Prime. In the event that the audit cannot be completed by NWN, then NWN will
reimburse Prime for any audit related costs paid by Prime, and the $10,000 good
faith deposit money.
VIII. EMPLOYMENT AGREEMENT
8.1 Xx. Xxxxxx X. Xxxxxxxx will be provided by Prime with a one year
renewable employment agreement on the following terms:
Xx. Xxxxxxxx'x base salary will be $78,000.00.
Xx. Xxxxxxxx will receive a bonus plan of $40,000.00, to be paid half in
cash and half in Common Stock of Prime calculated at the market value on the
date of grant of any bonus if Xx. Xxxxxxxx introduces to and assists Prime in
the acquisition of a group of BTA's consisting of 1 million POPs. Xx. Xxxxxxxx
will be paid an additional $40,000.00 bonus under the same terms for each
additional 1 million POPs acquired by Prime. Any prospective acquisition
candidates under contract with or represented by Xxxxxxx & Associates are
specifically excluded from this bonus plan.
Xx. Xxxxxxxx will receive at the execution of this Agreement, a total of
50,000 three year common stock options that will vest 1/12 each month over the
period of the Employment Agreement. The options will be priced at the closing
price of Prime's common stock on the date of the Closing and Primeherein
provides piggyback registration rights to any shares issued through the exercise
of these options.
Xx. Xxxxxxxx will receive health care coverage provided through Prime
equivalent to that of other senior executives at Prime.
Xx. Xxxxxxxx'x title shall be Head of Acquisitions. He will also be invited
to attend any regular sessions of Prime's Board of Directors meetings as a
Senior Advisor on Acquisitions to the Board of Directors during the period of
his Employment Agreement.
In the event that Xx. Xxxxxxxx is terminated without cause during the period of
his Employment Agreement, all options will immediately vest and he will receive
a severance payment in a lump sum of $50,000.00.
Prime agrees to interview, and if found appropriate, hire Xx. Xxx Xxxxx as an
employee to assist Prime and Xx. Xxxxxxxx in general business and acquisition
analysis at a starting salary of $2,000.00 per month.
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of
the 29th day of December, 2000.
New Wave Networks, LLC
By
President_____________________
Xxxxxx X. Xxxxxxxx
PRIME COMPANIES, INC.
By
President_______________________
Xxxxxxx X. Xxxx
Exhibit 1.2
DATE: December 27, 2000
RE: New Wave Acquisition
enclosed are the contents for inclusion in the unnumbered Exhibit of 1.2 of the
draft contract:
Share Allocation of 1,500,000 Shares:
1. Xxxxxxxx Family Trust
X.X. Xxx 00000
Xxxxxx Xxxx, Xxxxxx 00000
Phone: 000-000-0000
875,000 Shares
2. Competitive Consulting Group
0000 Xxxxxxxxxx Xxx., Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Phone: 000-00000000
40,000 Shares
3. Blooston, Mordkofsky, Xxxxxxx and Dickens
0000 X. Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Phone: 000-000-0000
20,000 Shares
4. Xx. Xxxxxxx X. XxxXxxxxx
0000 Xxxxxxx Xxxxxx
Xxxxx xxx Xxx, XX 00000
Phone: 000-000-0000
150,000 Shares
5. Xx. Xxxx Xxxxxxxx
Address and phone to be provided
40,000 Shares
6. Mr. Xxxxx Xxxxxxx
Address and phone to be provided
30,000 Shares
7. Xx. Xxxxx Xxxxxx
0000 Xxxxx Xxxx Xxxx
Xxxxxxxxx, Xx. Xxxx XX 00000
Phone to be provided
50,000 Shares
8. Mr. Xxx Xxxxx
Address and phone to be provided
90,000 Shares
9. Mr. Xxxxxxx Xxxxx
Address and phone to be provided
90,000 Shares
10. Mr. Xxxx Xxxxx
X.X. Xxx 000000
Xxxxx Xxxx Xxxxx, XX 00000
Phone to be provided
15,000 Shares
11. Xxx Xxxxxx
Address to be provided
10,000 shares
12. Xxxxx Xxxxx
Address to be provided
90,000 shares
Cash Allocation of US$40,000.00: Xx. Xxxxxxx X. XxxXxxxxx - US$5,000
--------------------------------
0000 Xxxxxxx Xxxxxx
Xxxxx xxx Xxx, XX 00000
Phone: 000-000-0000
Xxxxxxxx Family Trust - US$35,000.00 or the remaining balance after Xx.
XxxXxxxxx receives US$5,000.00
X.X. Xxx 00000
Xxxxxx Xxxx, Xxxxxx 00000
Phone: 000-000-0000
Exhibit 2.1(a)1
Certificate of Limited Liability Company
Attached to original document but not available in electronic format.
Exhibit 2.1(a)2
By-Laws of New Wave Networks LLC.
14 page Operating Agreement of New Wave Networks LLC dated December 31, 1997
attached to original document but not available in electronic format
Exhibit 2.1(b)
Equity Capitalization of New Wave Networks LLC.
Exhibit 2.1(b)1
None
Exhibit 2.1 (d)
None
Not Applicable
Exhibit 2.1 (f)
Audit to be conducted by KPMG
Exhibit 2.1 (h)
none
Exhibit 2.1 (i)
none
Exhibit 2.1 (L)
none
Exhibit 3.3
FCC license call sign WPOK205
FCC license call sign WPOK206
FCC license call sign WPOK207
FCC license call sign WPOK208
FCC license call sign WPOK209
Exhibit 5.1 (h)
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement"), made and entered into this ____day of
__________ of 2001 effective _______________ (the "Effective Date"), by and
between Prime Companies, Inc., a Delaware corporation (the "Company"), and
_______________, a resident of Nevada ("Executive").
WITNESSETH:
WHEREAS, the Company is a corporation engaged in business in the State of
Delaware and throughout the United States; and WHEREAS, the Company desires to
employ Executive in the capacity of Head of Acquisitions upon the terms and
conditions hereinafter set forth; and WHEREAS, Executive is willing to enter
into this Agreement with respect to his employment and services upon the terms
and conditions hereinafter set forth; NOW, THEREFORE, in consideration of the
mutual covenants and obligations contained herein, Company hereby employs
Executive and Executive hereby accepts such employment upon the terms and
conditions set forth below.
1. Term of Employment. The term of employment under this Agreement shall be for
a period of one (1) year, commencing on the Effective Date and terminating onone
year from that date unless such employment is terminated or extended prior to
the expiration of said period as hereinafter provided. Effective as of the
expiration of such initial one-year term and as of each anniversary date
thereof, the term of this Agreement shall be extended for an additional one-year
period unless, not later than one (1) months prior to each such respective date,
either party hereto shall have given notice to the other that the term shall not
be so extended. In the event of non-renewal, and the terminating party shall
give notice of this decision not later than five and a half months before the
anniversary date. Notwithstanding the foregoing, Executive's employment
hereunder may be earlier terminated as provided in ss.8 hereof.
2. Duties of Executive. Positions and Reporting. The Company hereby employs the
Executive for the Employment Period as its President and Chief Operating Officer
on the terms and conditions set forth in this Agreement. During the Employment
Period, Executive shall report directly to the Chairman on an ongoing basis and
directly to the Board of Directors of the Company (the "Board") with full access
to the Board except during executive sessions. Complete Commitment. Executive
agrees that during the term of this Agreement, he will devote his professional
and business-related time, skills, and best efforts to the businesses of the
Company in the capacity of Head of Acquisitions or in such other capacities as
the Company may request of Executive hereafter in writing. Authority and Duties.
Executive shall exercise such authority, perform such executive duties and
functions, and discharge such responsibilities as are reasonably associated with
the Executive's positions, commensurate with the authority vested in the
Executive pursuant to this Agreement, and consistent with the By-Laws of the
Company as may be modified from time to time by the Board. The Executive shall
attend all Board meetings, and the Executive agrees to serve as a director if
invited by the Board. During the Employment Period, the Executive shall devote
full business time, skill, and efforts to the business of the Company.
Notwithstanding the foregoing, the Executive may make and manage personal
business investments of his choice and, after first seeking and obtaining Board
approval, have a second job or serve in any capacity with any civic,
educational, or charitable organization, or any trade association. If there are
major changes in the duties or responsibilities of Executive from those listed
above that are not mutually agreed upon, Executive may give notice of
non-acceptance specifying the details of his counter-proposal and request to
negotiate a mutually acceptable compromise. If the Parties are unable within
thirty (30) days of the date of Executive's notice of non-acceptance, Executive
may give notice of his intention to terminate his employment which shall become
effective sixty (60) days thereafter absent a mutual agreement otherwise and
absent the Company's withdrawal of the request for changed duties, thereby
re-establishing the status quo ante. Executive agrees to continue to fulfill his
employment obligations throughout the entire period of employment and to train
conscientiously a replacement if so requested, notwithstanding any pending
notice of termination. (d) Other Positions. The Company acknowledges and agrees
that, during the term of this Agreement, Executive will devote some of his
professional and business-related time, skills, and best efforts to Prime
Companies, Inc. and subsidiaries of Employer including LMDS Communications,
Inc., and that Employee will not receive compensation from such subsidiaries for
his services.
3. Compensation. The Company shall pay Executive an annual base salary of One
Hundred Thousand ($78,000.00) per annum (or fraction for portions of a year) to
be paid semi-monthly on or about the second and 16th of each month. Such base
salary will be adjusted from time to time in accordance with then current
standard salary administration guidelines of the Company. Executive's salary
shall be subject to all appropriate federal and state withholding taxes and
shall be payable in accordance with the normal payroll procedures of the
Company.
4. Fringe Benefits. The terms of this Agreement shall not foreclose Executive
from participating with other employees of the Company in such fringe benefit or
incentive compensation plans as may be authorized and adopted from time to time
by the Company; provided, however, that Executive must meet any and all
eligibility provisions required under said fringe benefit or incentive
compensation plans. Executive may be granted such other fringe benefits or
perquisites as Executive and the Company may from time to time agree upon. In
addition, Human Resources may devise a job specific incentive plan and present
it to Board and, if approved, to Executive.
5. Vacations. Executive shall be entitled to the number of paid vacation days in
each calendar year as shall be determined by the Board from time to time. In no
event, however, shall Executive be entitled to less than two weeks paid vacation
during each calendar year.
6. Reimbursement of Expenses. The Company recognizes that Executive will incur
legitimate business expenses in the course of rendering services to the Company
hereunder. Accordingly, the Company shall reimburse Executive, upon presentation
of receipts or other adequate documentation, for all necessary and reasonable
business expenses incurred by Executive in the course of rendering services to
the Company under this Agreement.
7. Working Facilities. Executive shall be furnished an office, and such other
facilities and services suitable to his position and adequate for the
performance of his duties, which shall be consistent with the policies of the
Company.
8. Termination. The employment relationship between Executive and the Company
created hereunder shall terminate before the expiration of the stated term of
this Agreement upon the occurrence of any one of the following events:
(a) Executive's Death or Permanent Disability. For the purpose of this
Agreement, the "permanent disability" of Executive shall mean Executive's
inability, because of his injury, illness, or other incapacity (physical or
mental), to perform the essential functions of the position contemplated herein,
with or without reasonable accommodation to Executive with respect to such
injury, illness, or other incapacity, for a continuous period of sixty (60) days
or for ninety (90) days out of a continuous period of 360 days. Such permanent
disability shall be deemed to have occurred on the sixtieth (60th) consecutive
day or on the ninetieth (90th) day within the specified period, whichever is
applicable.
(b) Termination for Cause. The following events, which for purposes of this
Agreement shall constitute "cause" for termination with the majority vote of the
Board: The willful breach by Executive of any provision of Sections 11, 12, or
13 hereof or any act of fraud, misappropriation, or embezzlement by Executive
with respect to any aspect of the Company's business or under circumstances that
reflect adversely on the Company in the public eye, in each case in the Board's
sole and exclusive determination, shall be cause for immediate termination with
immediate curtailment of all compensation, benefits within statutory
limitations, and stock option rights. The willful breach by Executive of Section
2 hereof (including but not limited to a refusal to follow lawful directives of
the Board) after notice to Executive of the details thereof and a period of 10
days thereafter within which to cure such breach and the failure of Executive to
cure such breach to the Board's satisfaction within such 10 day period; The use
of illegal drugs by Executive during the term of this Agreement that, in the
sole and exclusive determination of Board, interferes with Executive's
performance of his duties hereunder or under circumstances that reflect
adversely on the Company in the public eye; The filing of a petition in
bankruptcy court for bankruptcy, reorganization, or rearrangement or an
adjudication that Executive is bankrupt; The commencement of involuntary
proceedings against Executive for bankruptcy or appointment of a receiver
because of insolvency; If the Company determines that employee has engaged in
any dishonest conduct in the course of his management duties including by way of
example and not by limitation the knowing receipt of kickbacks from suppliers,
misappropriation of corporate assets or opportunities, etc. If the circumstances
of Employee's personal life, whether or not in the course of management duties,
reflects adversely on the Company such that it would be in the Company's best
interests, in its sole discretion, to terminate its business relations with
Employee. The dissolution of the Company's corporate status; Executive is
convicted of or pleads guilty or nolo contendere to a felony or misdemeanor
involving financial misconduct, moral turpitude, controlled substances, or
personal injuries caused by driving under the influence; Failure of performance
by Executive that is repeated or continued after 30 day written notice to
Executive of such failure and that is determined by the Board to be injurious to
the business or interests of the Company and which failure is not cured by
Executive within such 30 day period in the Board's sole determination. Any
notice of discharge shall describe with reasonable specificity the cause or
causes for the termination of Executive's employment, as well as the effective
date of the termination (which effective date may be the date of such notice).
If the Company terminates Executive's employment for any of the reasons set
forth above, the Company shall have no further obligations hereunder from and
after the effective date of termination (other than as set forth below).
(c) Termination by Executive with Notice. Executive may terminate this Agreement
without liability to the Company arising from the resignation of Executive upon
a three (3) month written notice to the Company. the Company retains the right
after proper notice of Executive's voluntary termination to require Executive to
cease employment immediately. During such notice period, Executive shall provide
such consulting services to the Company as the Company may reasonably request
and shall assist the Company in training his successor and generally managing an
orderly transition. (d) Termination by the Company with Notice. The Company may
terminate this Agreement at any time, with or without cause, upon three (3)
month written notice to Executive; provided, however, upon such notice Executive
shall not be required to perform any services for the Company other than during
the period of one (1) month immediately following the receipt of such notice of
termination in which Executive shall assist the Company in training his
successor and generally preparing for an orderly transition.
9. Compensation Upon Termination.
(a) General. Upon the termination of Executive's employment under this Agreement
before the expiration of the stated term hereof for any reason, Executive shall
be entitled to (i) the salary earned by him before the effective date of
termination, as provided in Section 3(a) hereof, prorated on the basis of the
number of full days of service rendered by Executive during the year to the
effective date of termination, (ii) any accrued, but unpaid, vacation benefits,
and (iii) any authorized but unreimbursed business expenses. However on
termination, Executive automatically forfeits any unvested fringe benefits,
dividends, bonuses, and stock options, and any vesting schedule shall be
adjusted on a pro rata basis parallel to ss.9(a)(i) above. In the event that Xx.
Xxxxxxxx is terminated without cause during the period of his Employment
Agreement, all options will immediately vest and he will receive a severance
payment in a lump sum of $50,000.00.
(b) Death or Disability. In the event of termination of employment hereunder on
account of Executive's death or disability, Executive, Executive's heirs,
estate, or personal representatives under law, as applicable, shall be entitled
to the payment of Executive's Base Salary as in effect immediately prior to
death or disability for a period of not less than two calendar months and not
more than the earlier of six calendar months or the payment of benefits pursuant
to a life or disability insurance policy, if any, purchased by the Company for
Executive. Executive, beneficiary, or estate shall not be required to remit to
the Company any payments received pursuant to any such insurance policy
purchased by the Company. Executive is encouraged to purchase life and/or
disability insurance to cover financial needs resulting from death or
disability.
(c) Termination For Cause. If the employment relationship hereunder is
terminated by the Company for cause (as defined in Section 8(b) hereof),
Executive shall not be entitled to any severance compensation, except as
provided in Section 9(a) above, subject to offset and deductions for reasonably
demonstrable damages.
(d) Termination by Executive with Notice. If the employment relationship is
terminated by Executive pursuant to ss.8(c) above, the Company shall remain
obligated to pay Executive his salary during the three (3) month notice period
or the remaining term of this Agreement, whichever is less.
(e) Termination by the Company with Notice. If the employment relationship is
terminated by the Company pursuant to the provisions of ss.8(d) hereof, the
Company shall remain obligated to pay Executive his salary during a nine (9)
month severance period, again subject to offset and deductions for reasonably
demonstrable damages. Survival. The provisions of Sections 9, 11, 12, 13, 14,
and 20 hereof shall survive the termination of the employment relationship,
irrespective of the manner of termination absent a specific writing providing
otherwise which is signed by Executive and Board. The Parties agree that
Executive's breach, violation, or threat of breach or violation of such sections
will result in immediate and irreparable injury and harm to the Company, and
that the Company shall have, in addition to any and all remedies of law and
other consequences under this Agreement, the right to an injunction, specific
performance, or other equitable relief to prevent the breach or violation of the
obligations hereunder. Excise Tax Limit. Notwithstanding anything in this
Agreement to the contrary, in the event it shall be determined that any payment
or distribution by the Company or any other person or entity to or for the
benefit of Executive is a "parachute payment" (within the meaning of ss.280G of
the Internal Revenue Code, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise (a "Payment")
in connection with, or arising out of, his employment with the Company or a
change in ownership or effective control of the Company (within the meaning of
ss.280G of the Code, and would be subject to the excise tax imposed by ss.4999
of the Code) (the "Excise Tax"), the Payments shall be reduced to the extent
necessary so that such remaining Payment would not be subject to the excise tax
imposed by ss.4999 of the Code.
10. Other Agreements. This Agreement shall be primary with regard to other
agreements between the Parties which are inconsistent in any way and shall be
deemed to alter the terms of any executive compensation agreements, deferred
compensation agreements, bonus agreements, general employment benefits plans,
stock option plans, and any other plans or agreements entered into between
Executive and the Company pursuant to which Executive has been granted specific
rights, benefits, or options.
11. Non-competition. Executive agrees that, during his employment with the
Company and for a period of two (2) years from the date of termination of his
employment with the Company, he will not, without the approval of the Board,
directly or indirectly, alone or as partner, joint venturer, officer, director,
Executive, consultant, agent, independent contractor, or stockholder (other than
as provided below) of any company or business, engage in any "Competitive
Business" within any State of the United States or Province of Canada where the
Company has staff, equipment, or facilities. For purposes of the foregoing, the
term "Competitive Business" shall mean any business directly involved in those
business activities performed by the Company during Executive's employment
period. Notwithstanding the foregoing, Executive shall not be prohibited during
the non-competition period applicable above from acting as a passive investor
where he owns not more than five percent (5%) of the issued and outstanding
capital stock of any publicly-held company.
12. Confidential Data. Executive agrees that he will not at any time during the
Employment Period or at any time thereafter for any reason, in any fashion,
form, or manner, either directly or indirectly, divulge, disclose, or
communicate to any person, firm, corporation, or other business entity, in any
manner whatsoever, any confidential information or trade secrets concerning the
business of the Company including, without limiting the generality of the
foregoing, the techniques, methods, or systems of its operation or management,
any information regarding its financial matters, or any other material
information concerning the Company's business, its manner of operation, its
plans or other material data including without limitation the confidential
information listed in Exhibit A. The provisions of this Section shall not apply
to (i) information disclosed in the performance of Executive's duties to the
Company based on his good faith belief that such a disclosure is in the best
interests of Company; (ii) information that is, at the time of the disclosure,
public knowledge; (iii) information disseminated by the Company to third parties
in the ordinary course of business; (iv) information lawfully received by
Executive from a third party who, based upon inquiry by Executive, is not bound
by a confidential relationship to the Company; or (v) information disclosed
under a requirement of law or as directed by applicable legal authority having
jurisdiction over the Executive.
13. Non-solicitation of Customers/Employees. Executive covenants that, during
his employment with the Company and for a period of two (2) years from the date
of termination of his employment with the Company, he will not (i) directly or
indirectly induce or attempt to induce any customer or Executive of the Company
to terminate his or her business relations with the Company or (ii) without
prior written consent of the Company, offer business relations either on behalf
of himself or on behalf of any other individual or entity to any customer or
employee of the Company or to any former customer or employee of the Company.
14. Property of The Company. Executive acknowledges that from time to time in
the course of providing services pursuant to this Agreement, he shall have the
opportunity to inspect, create, or use certain property, both tangible and
intangible, of the Company and Executive hereby agrees that such property shall
remain the exclusive property of the Company, and Executive shall have no right
or proprietary interest in such property, whether tangible or intangible,
including, without limitation, Executive's confidential information listed on
Exhibit A. In addition, Executive is retained in a capacity such that his
responsibilities may include the making of technical and managerial
contributions of value to the Company. Executive hereby assigns to the Company
all rights, title, and interest in such contributions and inventions made or
conceived by Executive alone or jointly with others during the Employment Period
which relate to the Business. This assignment shall include (a) the right to
file and prosecute patent applications on such inventions in any and all
countries, (b) the patent applications filed and patents issuing thereon, and
(c) the right to obtain copyright, trademark, or trade name protection for any
such work product. Executive shall promptly and fully disclose all such
contributions and inventions to the Company and assist the Company in obtaining
and protecting the rights therein (including patents thereon), in any and all
countries; provided, however, that said contributions and inventions will be the
property of Company, whether or not patented or registered for copyright,
trademark, or trade name protection, as the case may be. Inventions conceived by
the Executive which are not related to the Company's business or business
activities, shall remain the property of the Executive. Executive agrees to
return to the Company all Company property, confidential/proprietary
information, and all copies of the same within five (5) days of employment
termination.
15. Equitable Relief. Executive acknowledges that the services to be rendered by
him are of a special, unique, unusual, extraordinary, and intellectual
character, which gives them a peculiar value, and the loss of which cannot
reasonably or adequately be compensated in damages in an action at law, and that
a breach by him of any of the provisions contained in this Agreement will cause
the Company irreparable injury and damage. By reason thereof, Executive agrees
that the Company shall be entitled, in addition to any other remedies it may
have under this Agreement or otherwise, to injunctive and other equitable relief
to prevent or curtail any breach of this Agreement by him. Executive hereby
acknowledges and agrees that prohibitions set forth in ss.ss.11, 12, 13, and 14
are in addition to, and not in lieu of, any rights or remedies that the Company
may have available pursuant to the laws of any jurisdiction or at common law to
prevent such violations, and the enforcement by the Company of its rights and
remedies pursuant to this Agreement shall not be construed as a waiver of any
other rights or available remedies that it may possess in law or equity absent
this Agreement.
16. "Change of Control." The terms of this Agreement shall remain in effect in
the event that (i) the Company becomes a subsidiary of another corporation or
entity or is merged or consolidated into another corporation or entity or
substantially all of the assets of the Company are sold to another corporation
or entity; or (ii) any person, corporation, partnership, or other entity, either
alone or in conjunction with its "affiliates," as that term is defined in Rule
405 of the General Rules and Regulations under the Securities Act of 1933, as
amended, or other group of persons, corporations, partnerships, or other
entities who are not "affiliates" but who are acting in concert, becomes the
owner of record or beneficially of securities of the Company that represent
thirty-three and one-third percent (33 1/3%) or more of the combined voting
power of the Company's then outstanding securities entitled to elect Directors.
MISCELLANEOUS PROVISIONS
17. Non-Assignment; Successors. Neither party hereto may assign his or its
rights or delegate his or its duties under this Agreement without the prior
written consent of the other party; provided, however, that: (i) this Agreement
shall inure to the benefit of and be binding upon the successors and assigns of
the Company upon any sale of all or substantially all of the Company's assets,
or upon any merger, consolidation, or reorganization of the Company with or into
any other corporation, all as though such successors and assigns of the Company
and their respective successors and assigns were the Company; and (ii) this
Agreement shall inure to the benefit of and be binding upon the heirs, assigns,
or designees of Executive to the extent of any payments due to them hereunder.
As used in this Agreement, the term "Company" shall be deemed to refer to any
such successor or assign of the Company referred to in the preceding sentence.
18. Severability and Reformation. The parties hereto intend all provisions of
this Agreement to be enforced to the fullest extent permitted by law. If,
however, any provision of this Agreement is held to be illegal, invalid, or
unenforceable under present or future law, such provision shall be reformed to
effect the fullest possible extent of the provision that is legal, valid, and
enforceable. In the event that even this is not possible, such provision shall
be fully severable, and this Agreement shall be construed and enforced as if
such illegal, invalid, or unenforceable provision were never a part hereof, and
the remaining provisions shall remain in full force and effect and shall not be
affected by the illegal, invalid, or unenforceable provision or by its
severance.
19. Construction with Articles and Bylaws. Except as explicitly modified by this
Agreement, the provisions of the Articles and Bylaws shall remain in full force
and effect. Notwithstanding the foregoing, the provisions of this Agreement
shall be subject to the provisions of the Articles and shall supersede the
Bylaws only to the extent inconsistent herewith, and the Articles and Bylaws
shall be construed in a manner that gives effect to the purposes of this
Agreement and the intent of the parties hereto.
20. Mandatory Mediation/Arbitration. Given the economies of time and money as
well as enhanced prospects of swiftly restoring amicable business relations, in
the event of a breach, default, and/or dispute between the Parties in connection
with, arising out of, or related to this Agreement and any aspect of relations
between the Parties including without limitation whether an issue is arbitrable,
each Party agrees exclusively to the following terms and conditions for dispute
resolution and claims for relief including injunctive or other equitable relief.
The Parties agree to take the following actions in the following order:
Mediation. The Parties shall agree upon a neutral mediator who is mutually
acceptable and may be selected from those mediators offered by the Judicial
Arbitration Mediation Services-Endispute ("JAMS") in Sacramento or San
Francisco, but there are advantages to finding a conveniently available mediator
close at hand who can readily address and help resolve problematic matters at
the earliest possible stages. If a mediator is not appointed and approved ten
(10) days after the date on which one or the other Party first seeks to retain a
mediator, the mediator shall be appointed by JAMS. The mediator shall have ten
(10) business days to resolve the matter; and
Arbitration. If mediation proves unsuccessful and the matter has not been
resolved after ten (10) business days, any Party (the "Complaining Party") may
seek arbitration, to which each Party hereby agrees to submit to personal
jurisdiction, as follows:
Notice of Request. The Complaining Party shall notify in writing each party
involved in the matter that it is seeking arbitration in accordance with this
Section. There shall be a period of thirty (30) days after the date of such
notice during which the Parties involved in the matter shall hold with the
mediator at least (2) mediation meetings. If, after such thirty (30) day period
as expired, such two (2) additional mediation meetings have taken place and the
matter is not resolved, the Complaining Party may proceed with a formal
arbitration.
Mutual Designation of the Arbitrator. The Complaining Party shall notify the
other Party that it elects to have the dispute heard and determined by a former
judge of the California Superior or Appellate Courts retained by JAMS under JAMS
rules and procedures, and request that a hearing be held to resolve the
controversy within thirty (30) days after the filing of the application or as
soon thereafter as possible. The arbitration hearing shall be held in a place
agreed upon between the Parties and if no such agreement is possible within ten
(10) days of discussion, the JAMS aribtrator shall designate the arbitration
site. The arbitrator shall be required to grant a remedy specifically requested
by a party to the arbitration, and he/she shall have no authority to fashion a
remedy that has not been so specifically requested.
Expediting Resolution. Each Party agrees actively to expedite the resolution of
the dispute with all reasonable efforts to secure a hearing within thirty (30)
days after the filing of the Arbitration Petition, or as soon thereafter as
possible. In more complicated cases upon the Arbitrator's consent, each Party
may serve a single request for admissions, interrogatories, and request for
production of documents in compliance with the California Rules of Civil
Procedure, and the arbitrator shall have sole and complete discretion to
determine any discovery disputes.
Equitable Relief. In the event of an application for a temporary restraining
order or other equitable relief, each party agrees to any and all measures
necessary to secure a hearing within ten (10) business days of the Notice which
may proceed even without the responding Party's presence, subject to proof
satisfactory to the JAMS arbitrator that notice was effected.
Arbitrator's Decision and Confidentiality. The arbitrator shall deliver a
written opinion setting forth factual findings and the decision rationale which
may be reduced to a judgment and filed in any court having jurisdiction. At the
expense of the moving party, the arbitrator shall reconsider the decision once
upon a written motion submitted and served within ten (10) business days of the
decision. The Confidentiality provisions of this Agreement shall apply to the
arbitration proceeding, all evidence taken, and the opinion.
The Losing Party. The arbitrator's award or opinion shall identify by name the
party or parties who shall not have prevailed in the arbitration (the "Losing
Party"). In rendering the decision with respect to any state law claims, the
arbitrator shall apply the laws of the State of California without regard to the
application of principles of conflicts of law. The arbitrator shall assess all
expenses of arbitration and mediation, including but not specifically limited to
all forms of mediator's fees, arbitration fees, costs, and attorneys' fees in
accordance with Paragraph 20(a) of this Agreement.
Attorneys' Fees and Costs. The costs and expenses incurred in connection with
any attempt at mediation described above, including JAMS' and the mediator fees,
shall be shared equally among all the Parties involved in such mediation, with
each party responsible for its own attorneys' fees, if the mediation
successfully resolves the matter, or if the matter is otherwise resolved without
arbitration. However, if the matter is arbitrated, the Losing Party in the
arbitration shall pay all the mediation costs including but not specifically
limited to the mediator's fees and disbursements and attorneys' fees of the
parties who are not the Losing Party as well as all costs and expenses of
arbitration including but not specifically limited to JAMS' fees, attorneys'
fees of parties who are not the Losing Party and costs, plus attorneys' fees
incurred to enforce any award or opinion entered in any court having
jurisdiction thereof. If more than one party constitutes the Losing Party, as
determined by the arbitrator, all such parties shall be jointly and severally
liable for all costs and expenses of mediation and/or arbitration.
Full Assessment as Incentive for Resolution by Mediation. For purposes of this
Section, the phrase "costs and expenses" shall include, in addition to those
items enumerated above, discovery costs, air and ground transportation, lodging,
meals, and related items advanced or incurred by necessary parties to the
arbitration and by witnesses, investigators, accountants, and attorneys
participating in the who reside outside Northern California. For purposes of
this Section, the term "attorney's fees" shall mean the full and actual cost of
any legal services actually performed in connection with the matter for which
such fees are sought, calculated on the basis of the usual fees charged by the
attorneys performing such services, and such fees shall not be limited to
"reasonable attorney's fees" as that term may be defined by statutory or
decisional authority. Judgment on such award may be entered in any court having
jurisdiction over the subject matter of the controversy and shall thereafter be
deemed an enforceable judgment.
Enforceability. This Agreement will be enforceable, the arbitration order/award
will be final, and judgment thereon may be entered in any court of competent
jurisdiction. Any complaint, adversarial claim, or action related to this
Agreement prosecuted in any jurisdiction or forum other than as provided herein
shall be null and void.
Survivability. This provision shall survive the termination of this Agreement.
This agreement to arbitrate shall be specifically enforceable, each Party
waiving rights to jury trial and appeal in the interests of maximizing economy,
privacy, and swift resolution while minimizing expense, hostilities, and delay.
-------- --------
Employer Employee
21. Notices. All notices and other communications required or permitted to be
given hereunder shall be in writing and shall be deemed to have been duly given
if delivered personally, mailed by certified mail (return receipt requested) or
sent by overnight delivery service, cable, telegram, facsimile transmission or
telex to the parties at the following addresses or at such other addresses as
shall be specified by the parties by like notice:
(a) If to Employer: Prime Companies, Inc.
000 Xxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
(000) 000-0000
Facsimile: (000) 000-0000
e-mail: xxxxxxxx@xxxxxxxxxxxxxx.xxx
(b) If to Executive: _________________
(c) and in all cases to:
Xx. Xxxxxx Xxxxxxx, Esq.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
(000) 000-0000
Facsimile: (000) 000-0000
e-mail: xxxxxxxxxx@xxx.xxx
or to such other respective addresses as the Parties hereto shall designate to
the other by like notice, provided that notice of a change of address shall be
effective only upon receipt thereof. Notice so given shall, in the case of
notice so given by mail, be deemed to be given and received on the fourth
calendar day after posting, in the case of notice so given by overnight delivery
service, on the date of actual delivery and, in the case of notice so given by
cable, telegram, facsimile transmission, telex, or personal delivery, on the
date of actual transmission or, as the case may be, personal delivery, in each
case followed by posting with the U. S. Postal Service by certified mail. The
Parties further consent and agree that notice given pursuant to this section
shall be effective in securing personal jurisdiction for dispute resolution with
JAMS.
22. Further Actions. Whether or not specifically required under the terms of
this Agreement, each Party hereto shall execute and deliver such documents and
take such further actions as shall be necessary in order for such party to
perform all of his or its obligations specified herein or reasonably implied
from the terms hereof.
Waiver of Breach. Any waiver of any breach of this Agreement shall not be
construed to be a continuing waiver or consent to any subsequent breach on the
part either of the Executive or Company.
Governing Law. This agreement shall be governed by and construed in accordance
with the internal law, and not the law of conflicts, of the State of California.
25. Assignment. This Agreement is personal to Executive and may not be assigned
in any way by Executive without the prior written consent of the Company. This
Agreement shall not be assignable or delegable by the Company, other than to an
affiliate of the Company, except if there is a Change of Control as defined in
Section 16, the Company may assign its rights and obligations hereunder to the
person, corporation, partnership or other entity that has gained such control.
26. Interpretation. Neither this Agreement nor any amendment hereto nor any
uncertainty or ambiguity herein shall be construed or resolved against the
Company or Employee, whether under any rule of construction or otherwise. On the
contrary, this Agreement and any amendment has been reviewed by all parties and
shall be construed and interpreted according to the ordinary meaning of the
words used so as to fairly accomplish the purposes and intentions of the parties
hereto. The normal rule of construction to the effect that any ambiguities are
to be resolved against the drafting party shall not be used in the construction
or the interpretation of this Agreement or any amendments hereto.
27. Entire Agreement & Modification: This Agreement merges and supersedes all
prior agreements, negotiations, warranties, and representations by or between
the Parties on the subjects addressed herein, whether oral, written, or both,
and constitutes the entire understanding with respect to this subject matter.
Any inconsistencies or ambiguities shall not be interpreted for or against
either Party. This Agreement may be modified only with a writing signed by both
Parties and approved by the Board, may be signed in counterparts, and may be
deemed an original including signature pages even in facsimile copy. No promise,
warranty, representation, or amendment shall be binding unless in writing and
signed by the Party to be charged.
28. Good Faith. The Parties intend and agree that their respective rights,
duties, powers, liabilities, obligations, and discretionary acts shall be
performed, carried out, discharged, and exercised reasonably in good faith and
in fair dealing with the other Party, shareholders, directors, officers,
employees, customers, and suppliers of the Company.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement.
PRIME COMPANIES, INC.
By: ________________ By: _________________________
Name: Xxxxxxx X. Xxxx Name: Xxxxxx Xxxxxxxx
Title: Chief Executive Officer Title: Head of Acquisitions
EXECUTIVE: APPROVED BY THE BOARD:
By:__ ___________ By:____ By:__ ___________ By:____
EXHIBIT A - CONFIDENTIAL/PROPRIETARY INFORMATION
Generally, the Company's confidential and propriety information
includes all property, tangible and intangible, regardless of how stored in
writing, magnetically encoded, photographic, laser imprinted, or computerized,
etc. Upon termination of employment, Executive shall be entitled only to remove
his personal belongings. More specifically but without limitation,
Confidential/Proprietary Information includes the following:
All Company trade secrets and all business plans including strategic plans,
product plans, marketing plans, financial plans, operating plans, resource
plans, all research and development plans including all records, data,
illustrations, computer files, and any other documentation produced by or
related to such efforts;
All Company business records including customer, supplier, and personnel lists
and information, all internally prepared documents, all sales, accounting, and
business activity records and files;
All documents, software, records, files, internal policies, procedures, methods,
and approaches which have been developed or adopted by to Prime Companies, Inc.
and are not public.
Any information relating to the marketing, pricing, contracts, discounting,
employment, job responsibility, performance, salaries, and personnel
compensation of any other employee with the Company.
Any information, knowledge, or data that Executive receives in confidence or
acquires from the Company or its staff or customers or that Executive may
develop during the course of his employment and which relates to or is a trade
secret of the company or its customers as contained in formulas, patterns,
toolings, devices, processes, methods, machines, compositions, discoveries,
inventions, designs, compilations of information, records, specifications,
customer/employee/supplier lists, or otherwise.
