Exhibit 10.2
PURCHASE AGREEMENT-2
This Agreement made this 3rd day of January, 2000 (the "Agreement") by and among
Spectrum Information Technologies, Inc. doing business as Xxxx-Xxxxx.xxx
("SITI"), and Xxxxxxxx Xxxxxx ("Xxx") and his partner Xxxxxx Xxxxxxxxx ("Xxxxx")
is intended to provide for the purchase of an e-news/magazine business and
website owned and operated by Xxx and Xxxxx as partners, known as New Media
Xxxxx.xxx, the further purchase of a conference/ exposition business described
below, devoted to music on the internet, separately owned and operated by Xxxxx,
and the respective employment of Xxx and Xxxxx thereafter as executives of SITI,
on the terms and conditions hereinafter set forth.
Now Therefore, in consideration of the mutual covenants and understandings set
forth herein, the parties do hereby agree as follows:
1. Purchase of Business and Website. Xxx and Xxxxx hereby sell, assign and
transfer the e-news/magazine business and website of New Media Xxxxx.xxx
("Newmedia") to SITI, including, without limitation, all of their assets,
properties, archives, contracts, client lists, artist and sponsor
contracts and contact lists, articles and releases in process,
inventories, service contracts, receivables, proprietary information,
website and related software, servers, computer equipment, records and
other properties and assets in any form, subject to all existing
liabilities, for future operation by SITI. A current balance sheet for
such business and website has been furnished to SITI and has been approved
for this transaction, annexed as exhibit A. Among other assets, Newmedia
is represented and warranted to be currently attracting approximately
20,000 unique internet "hits" per month to its website.
2. Payment in Shares of SITI. Xxx and Xxxxx shall each be entitled to receive
in payment 15,000 shares of SITI common stock on January 15, 2000, and
after transfer and ongoing operations of the website are secure and in
working operation by SITI (expected by February of 2000 ), Xxx and Xxxxx
shall each receive an additional 15,000 shares of such common stock, for a
total of 60,000 shares in the transaction.
3. Services. SITI shall hereafter continue to employ Xxx as its
Vice-President/Technical Director to manage the Xxxxxxxx.xxx website, and
SITI's other websites, supervising the day to day operation thereof under
the direction and control of SITI's management, with his existing
compensation plan in a related contract with SITI covering all Newmedia
and other services.
Xxxxx shall hereafter be employed by SITI as its Vice-President/Business
Development, supervising all editorial and news content of Newmedia, and
also managing the New York Music & Internet Expo 2000 and all of its
continuing events hereafter across the country, described below. Xxxxx
shall be employed at a salary of $65,000 annually the first year, with
increases contemplated based on his performance, along with bonuses and
stock option or stock grants similarly based, all reviewable by SITI's
management each six months. The performance of Newmedia under Xxx and
Steve's continuing management shall be evaluated separately from their
services in other SITI ventures, with compensation directly related
thereto, as a part of their overall compensation as SITI executives, all
to be based on a bonus plan with annual goals agreed upon by each of them
with SITI's management, listing several corporate objectives, with each
goal weighted in the bonus computation.
Xxxxx shall also be included in SITI's insured medical/dental plan for
employees and their families, and Ted's benefits date thereunder is
provided for in his related contract with SITI. Xxx and Xxxxx manage other
web-related ventures, but each has represented he will be a full-time
executive, and will devote all necessary time and attention to SITI's
business during his employment hereunder, to maximize results at its
several websites and other ventures.
4. Music & Internet Expos. Xxxxx independently owns and operates a separate
business promoting Music and Internet conferences and expositions, in New
York, San Francisco and in other cities contemplated in discussions with
SITI (collectively, the "Expos"). In consideration of this Agreement, he
(by causing his Subchapter S corporation to assign its assets) is hereby
selling, assigning and transferring the Expos as an
ongoing business to SITI, including, without limitation, all of their
assets, properties, contracts, client, artist and sponsor lists, archives,
inventories, banners, equipment, databases, website and related software,
records and other properties and assets in any form, subject to
liabilities shown on Exhibit A-1, for future operation by SITI. A current
balance sheet and preliminary expansion plan for such business has been
furnished to SITI and has been approved for this transaction, annexed as
exhibit B.
5. March 2000 Expo. The parties agree that Xxxxx has financed and completed
three-fourths of the work necessary for the March 2000 Expo in New York
City, and that he shall be entitled to retain three-fourths of its net
earnings at the completion thereof, subject to SITI being repaid any cash
or other advances it is required to make for its completion, with interest
at 9% per annum until repaid, duly charged as overhead, and SITI shall be
entitled to receive the remaining one-fourth of any net earnings.
6. Future Expos Compensation to Xxxxx. SITI and Xxxxx have agreed that he has
sold the Expos business to SITI hereunder without additional compensation,
because continuation, and expansion thereof to other cities, will require
capital from SITI, and his employment under paragraph 3 preceding gives
him the regular income and office facilities necessary to build the Expos,
with incentive compensation for doing so on SITI's behalf.
Expos shall be operated as a separate division of SITI, with incentive
compensation to Xxxxx directly related thereto, as a part of his overall
future compensation; provided, however, that for a three year period
commencing after the March 2000 Expo, Xxxxx shall be entitled to receive
at least 15% of the operating income of Expos (revenues less operating
expenses, before interest and taxes, determined by generally accepted
accounting principles). Steve's interest in future Expos earnings for said
three years shall continue for such period, unless he voluntarily resigns
or is discharged for material and serious "just cause"; provided however,
that a"forced resignation" by other executives unreasonable behavior
towards him shall not be deemed a voluntary resignation by Xxxxx, and
shall not deprive him of his interest in Expos earnings for the stated
period.
7. Confidentiality Covenant. Xxx and Xxxxx agree that while employed by SITI,
each of them will not engage in any other business activity which, after
their respective full disclosure thereof, conflicts with their respective
obligations to build SITI as executives thereof. Any potentially
competitive activities to SITI's operations shall be reviewed with its
management. Furthermore, Xxx and Xxxxx shall each keep confidential, and
not use for his own account, all of the trade secrets, know-how, software,
and other proprietary information and materials of SITI and its subsidiary
and affiliated operations, including artists, promotions, customer or
contact lists and other data which comes into their respective purview as
a result of their activities on behalf of SITI. Xxx and Xxxxx acknowledge
that the covenants set forth above are necessary for SITI's protection and
that the nature and scope thereof are reasonable.
8. Representations and Warranties. Xxx and Xxxxx each makes the
representations and warranties to SITI set forth herein and in exhibit C
annexed hereto, which also contains representations and warranties by SITI
to Xxx and Xxxxx as to its common stock and other matters.
9. Piggy-Back Registration Rights. The shares being issued to Xxx and Xxxxx
hereunder are not registered under the Securities Act of 1933, and will
bear a legend restricting their marketability as set forth in exhibit D.
SITI will xxxxx Xxx and Xxxxx customary registration rights, on a pro-rata
basis, along with other executives on all future SITI registered share
offerings, subject to any underwriters' restrictions or conditions imposed
thereon.
10. Good Faith and Fair Dealings. The parties acknowledge that SITI's several
websites and business plans are all start-ups with high risks and growth
potential, and anticipate changes in focus or strategy. The parties
foresee a continuing requirement of good faith, fairness and full
disclosure in their dealings with each other , and each party agrees that
such standards shall apply to all of such dealings.
11. Miscellaneous. This Agreement and the exhibits annexed thereto contain the
entire understanding of the the parties with respect to the subject matter
hereof. No amendment or modification of this Agreement shall be valid or
binding unless in writing and executed by the parties. This Agreement
shall be governed by,
construed and enforced in accordance with the laws of New York. Xxx and
Xxxxx each agrees not to assign any of their respective rights or
obligations hereunder without the written consent of SITI.
In Witness Whereof, the parties have executed and delivered this Agreement as of
the day and year first above written.
Spectrum Information Technologies, Inc. Xxxxxxxx Xxxxxx
d/b/a Siti-Sites. com
By /s/ Xxxxxxxx X. Xxxxxx /s/ Xxxxxxxx Xxxxxx
----------------------------------------- -----------------------------------
Xxxxxxxx X. Xxxxxx, Chairman/CEO 00 Xxxxxxxx Xxxxxx
000 Xxxxxxxx, Xxxxx 0000, X.X., X.X.00000 Xxxxxx Xxxxxx, N.Y. 10308
Xxxxxx Xxxxxxxxx
/s/ Xxxxxx Xxxxxxxxx
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000 Xxxxxxxxxx Xxxxxx, Xxxxx 0X
Xxxxxxxx, X.X. 00000
