1
Exhibit 10(b)
AGREEMENT
---------
THIS AGREEMENT, dated as of the 3rd day of June, 1997 by and between
The Statesman Group, Inc. (the "Group") and Regency Affiliates, Inc. (the
"Company").
W I T N E S S E T H:
--------------------
WHEREAS, the Company wishes to obtain the future services of Xxxxxxx X.
Xxxxxxxx, Xx. ("Xxxxxxxx"), for the Company; and
WHEREAS, Xxxxxxxx is willing, upon the terms and conditions herein set
forth, to provide such services;
WHEREAS, Xxxxxxxx has contracted to exclusively provide services and
labor for the Group, and,
WHEREAS, the Group is willing to forbear from competing with the
Company, NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, and intending to be legally bound hereby, the parties hereto
agree as follows:
1. RELEASE
-------
The Group hereby releases Xxxxxxxx from all of his employment
obligations with the Group.
2. EMPLOYMENT OF XXXXXXXX.
-----------------------
Simultaneously with the execution of this Agreement, the Company
proposes to enter into an Employment Agreement with Xxxxxxxx on terms acceptable
to the Company and Xxxxxxxx. The execution of this Agreement by the Company is
2
conditioned upon the execution of such Employment Agreement by both the Company
and Xxxxxxxx.
3. COMPENSATION.
-------------
As an inducement for the Group to enter into this Agreement, and
release Xxxxxxxx from his conflicting obligations to the Group, the Company
shall issue 466,667 shares of its common stock to the Group upon execution of
this Agreement.
4. STOCK OPTIONS.
--------------
(a) The Group will be granted options to purchase Six Million
One Hundred Thousand (6,100,000) common shares of the Company at the greater of
the Fair Market Value of the Company's common stock or the par value of the
common stock at date of execution of this Agreement. The Company agrees to
reserve sufficient shares to meet the requirements of this paragraph. The
options shall become exercisable immediately and shall remain exercisable until
April 15, 2007. At the option of the Group, payment may be made by the Group for
exercise of the option to purchase shares of the Company granted hereunder, in
whole or in part, in the form of a promissory note executed by the Group,
secured only by a pledge of the shares purchased, which promissory note will
accrue interest for any quarter at the prime rate in effect on the last day of
the quarter at Chase Manhattan Bank, with interest and principal payable in a
balloon payment five years after the date of execution of the note.
(b) With regard to any shares purchased by the Group as a
result of the foregoing options (such shares referred to in this subparagraph as
the "Stock"), Statesman acknowledges that the Stock is acquired for the purposes
of investment and
- 2 -
3
not for distribution and will not, at the time of issuance, be registered with
the Securities and Exchange Commission (the "SEC"). Statesman acknowledges that
the shares received by it may not be resold or distributed except in a
registered offering or pursuant to an exemption under the federal securities
laws. If Regency determines to file a registration statement to register for
public offering any of its securities, it shall so notify Statesman. At the
request of Statesman, Regency shall include, to the extent then permissible
under the Securities Act of 1933, as amended (the "Act") and the rules and
regulations of the SEC, the Stock in the registration. Prior to the effective
date of each registration statement relating to any of the shares of the Stock,
Regency and Statesman shall enter into an agreement providing for reciprocal
indemnification against any losses, claims, damages, or liabilities to which
Statesman or Regency may become subject under the Act or otherwise. The form of
the reciprocal indemnification provisions shall be the form customarily
appearing in underwriting agreements used by reputable investment bankers.
5. AGREEMENT NOT TO COMPETE.
-------------------------
(a) SCOPE. For so long as Xxxxxxxx shall be employed by the
Company, the Group agrees that it will not engage in any business or activity in
competition with the Company within the United States of America, either
directly or indirectly, whether for itself or a third party, without the express
written permission of the Company.
The Group promises that for a period of two (2) years
following the termination of Xxxxxxxx employment with the Company, it will not,
either directly or indirectly, whether for itself or a third party, without the
express written permission of the
- 3 -
4
Company, pursue any business opportunity that was actively pursued by the
Company during Xxxxxxx Xxxxxxxx'x tenure of employment and not abandoned by the
Company.
(B) REMEDIES. The parties agree that the violation or
threatened violation by the Group of its non-compete obligation hereunder, will
cause the Company irreparable harm for which damages will be inadequate or
unascertainable. Accordingly, in such case the Company shall be entitled to
appropriate temporary and permanent injunctive relief.
6. NOTICES.
--------
Any notice, request, demand or other communication required or
permitted to be given under this Agreement shall be given in writing and if
delivered personally, or sent by certified or registered mail, return receipt
requested, as follows (or to such other addressee or address as shall be set
forth in a notice given in the same manner):
If to the Group: Statesman Group, Inc.
X.X. Xxx XX00000
Xxxxxx X.X. Bahamas
If to the Company: Regency Affiliates, Inc.
00000 Xxx Xxxx Xxxx, Xxxxx #0
Xxxxx, Xxxxxxxx 00000
Any such notices shall be deemed to be given on the date personally
delivered or such return receipt is issued.
7. ARBITRATION.
------------
It is agreed that in the event that any disagreement, dispute,
controversy or claim arises out of or in relation to or in connection with this
Agreement or breach thereof, the parties shall seek to solve the matter amicably
through discussions between parties.
- 4 -
5
Each party agree to consider in good faith any reasonable request by the other
party to engage in mediation or any other means of alternative dispute
resolution short of arbitration. Only if the parties fails to resolve such
disagreement, dispute, controversy, claim or breach by amicable agreement and
compromise within 60 days, may the aggrieved party seek arbitration as set forth
herein. Any disagreement, dispute, controversy or claim with respect to the
validity of this Agreement or arising out of or in relation to the construction
or interpretation of this Agreement or arising out of or in relation to the
construction or interpretation of this Agreement, or breach hereof, shall be
finally settled by binding arbitration. The arbitration shall take place in Fort
Lauderdale, Florida in accordance with the rules of the American Arbitration
Association or as the parties shall otherwise agree. The arbitration shall be
brought before three (3) arbitrators, one (1) each appointed by the respective
parties and one (1) additional arbitrator selected by the two (2) appointed
arbitrators. Judgment upon the award rendered by the arbitrator may be entered
in any court having jurisdiction thereof. The arbitrators shall have the power,
in addition to the power of determining the merits of the arbitration, to
determine the scope and limits of discovery and to enforce the rights, remedies,
including specific performance, if requested, procedures, duties, liabilities,
and obligations of discovery by the imposition of the same terms, conditions,
consequences, liabilities, sanctions, and penalties as can be or may be imposed
on the like circumstances in a civil action by a State Court of the State of
Florida under the provisions of Florida Rules of Civil Procedure, except the
power to order the arrest or imprisonment of a person. Each party shall absorb
its own costs of arbitration, including attorney's fees, and the parties shall
split equally any arbitrators' fees.
- 5 -
6
Notwithstanding the section above, the parties shall have recourse to
the courts of Florida for the purpose of obtaining any injunctive relief remedy
as permitted by the laws of the State of Florida.
8. SEVERABILITY.
-------------
Whenever possible, each provision of this Agreement will be interpreted
in such manner so effective and valid under applicable law, but if any provision
of this Agreement is held to be invalid, illegal or unenforceable in any respect
under any applicable law or rule in any jurisdiction, such invalidity,
illegality or unenforceability will not affect any other provision or any other
jurisdiction, but this Agreement will be reformed, construed and enforced in
such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.
9. WAIVER OF BREACH.
-----------------
The waiver by the Company or the Group of a breach of any provision of
this Agreement by the other party shall not operate, or be construed, as a
waiver of any other breach of such other party. Each of the parties to this
Agreement will be entitled to enforce its rights under this Agreement
specifically, to recover damages by reason of any breach of any provision of
this Agreement and to exercise all other rights existing in its favor.
10. AMENDMENT; ENTIRE AGREEMENT.
----------------------------
This Agreement may not be changed orally but only by an agreement in
writing agreed to by the party against whom enforcement of any waiver, change,
modification, extension or discharge is sought. This Agreement embodies the
entire agreement and understanding of the parties hereto in respect of the
subject matter of this Agreement, and supersedes and replaces all prior
Agreements, understandings and commitments
- 6 -
7
with respect to such subject matter.
11. GOVERNING LAW.
--------------
This Agreement shall be governed by, construed, applied and enforced in
accordance with the Laws of the State of Florida, and no doctrine of choice of
law shall be used to apply to any law other than that of Florida, and no
defense, counterclaim or right of set-off given or allowed by the laws of any
other state or jurisdiction, or arising out of the enactment, modification or
repeal of any law, regulation, or ordinance or decree of any foreign
jurisdiction, shall be interposed in any action hereon.
IN WITNESS WHEREOF, the parties hereto have set their hands as of the
day and year first above written.
STATESMAN GROUP, INC. REGENCY AFFILIATES, INC.
BY: /s/ Xxxxxx Xxxxxxx BY: /s/ Xxxxxx X. Xxxxxx
------------------------ -----------------------------
ITS: President ITS: Secretary
----------------------- ----------------------------
- 7 -