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EXHIBIT 10.24
[XXXXXXXXXX.XXX LETTERHEAD]
August 1, 2000
Mr. Xxxxxx Xxxxx
Executive Director
Patient Support International
0000 Xxxxxxx Xxxx
Xxxxxxxx, Xx X0X 0X0 XXXXXX
Dear Xxxxxx:
Thank your for speaking with Xxxxxx and Xxxxx. Pursuant to their
recommendation, and my own belief in the Tobacco School, we are pleased to
submit our proposal to you for the acquisition of the business of Tobacco
School by XxxxXxxxxx.xxx. The following letter agreement ("Letter Agreement")
outlines our proposal to you:
1) XxxxXxxxxx.xxx will incorporate a new Limited Liability Corporation in the
United States to be named Tobacco School LLC. ("Tobacco School LLC"), to
be owned 51% (fifty-one percent) by XxxxXxxxxx.xxx and 49% (forty-nine
percent) by Xxxxxx Xxxxx ("Xxxxx") or his assignees.
2) XxxxXxxxxx.xxx will capitalize Tobacco School LLC with a $200,000 ($US)
line of credit ("Credit") to be drawn upon by Tobacco School LLC based
upon a mutually agreed upon development schedule for the completion of
Tobacco School LLC's web-site. Our current understanding is that
approximately $50,000 ($US) will be needed to be paid to outside vendors
to complete the website over the next 60 days.
3) Xxxxx will transfer 100% of his ownership in the assets of Patient Support
International ("PSI") to Tobacco School LLC in consideration of the
following: a) 200,000 common shares of XxxxXxxxxx.xxx's common shares and a
further 100,000 common shares of XxxxXxxxxx.xxx for distribution by Xxxxx
at his discretion; b) $75,000 ($US) annual stipend to be paid monthly to
Xxxxx, payable three months in advance; c) appointment as an advisor, with
customary stock benefits, for Xxxxx to XxxxXxxxxx.xxx's Board of Advisors;
and d) a cash distribution or payment of the remaining portion of the
Credit to Xxxxx or his assignees at the time the website is launched by
Tobacco School LLC.
4) Upon the full payment of the Credit by XxxxXxxxxx.xxx to Tobacco School
LLC, the evidence of the Credit will be forgiven by XxxxXxxxxx.xxx and
will be considered equity of Tobacco School LLC.
5) Tobacco School LLC will pay quarterly a 10% (ten-percent) of operating
income (defined as total revenues less total expenses) to Xxxxx to provide
for his contribution of new content and editorial support to the business
of Tobacco School LLC. Xxxxx shall have the right to accept this payment
in cash or in an equivalent number of common shares of XxxxXxxxxx.xxx. In
the event common shares of XxxxXxxxxx.xxx are to be accepted as payment,
the number of shares issued to you will be based upon the prior five-day
average trading price of XxxxXxxxxx.xxx, sufficient to equal 115% (one
hundred fifteen percent) of the payment.
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Mr. Xxxxxx Xxxxx
August 1, 2000
Page 2
6) From the closing date forward, all commercial activity, worldwide, related
to the Tobacco School will be conducted through Tobacco School LLC. We
understand the assets of PSI to be transferred to Tobacco School LLC
include all website development work concerning Tobacco School, all print
material concerning Tobacco School, copyrighted or otherwise, by Xxxxx, all
trademarks and domain names concerning Tobacco School, etc. We further
understand that PSI is essentially a personal holding company of Xxxxx and
has no debts, contractual or otherwise, and has complete and unencumbered
rights to market or sell products of the Tobacco School.
7) Xxxxx will devote substantially all of his time, which may involve travel
away from home, to assisting Tobacco School develop and market its
business. Xxxxx further agrees not to compete with Tobacco School LLC in
any area related to the use of tobacco or any activity, which promotes,
stopping the use of tobacco.
8) Tobacco School LLC will pay an annual distribution of any net profits,
including the cost of advertising which may be provided by XxxxXxxxxx.xxx,
to the shareholders of Tobacco School LLC as a dividend. Xxxxx shall have
the right to accept dividends in cash or in an equivalent number of common
shares of XxxxXxxxxx.xxx. In the event common shares of XxxxXxxxxx.xxx are
to be accepted as payment, the number of shares issued to you will be based
upon the prior five-day average trading price of XxxxXxxxxx.xxx, sufficient
to equal 115% (one hundred fifteen percent) of the amount of the dividend.
I believe the above proposal reflects the understanding of the parties to
date. Please indicate your acceptance of these terms, subject to final
documentation and return to me a signed copy of this Letter Agreement.
Sincerely,
/s/ XXXXX XXXXX-XXXXXXX/SR
Xxxxx Xxxxx-Xxxxxxx
President & CEO
Agreed to and accepted:
/s/ XXXXXX XXXXX
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Xxxxxx Xxxxx
Date: Aug. 3/2000
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