ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT made this 7th day of June, 1999;
Between: Cadapult Graphic Systems, Inc., a Delaware corporation
with offices located at 000 Xxxxxxxx Xxxxx, Xxxxxxxxx,
Xxx Xxxxxx 00000, hereinafter referred to alternatively as
"Cadapult" or "Purchaser";
And: WEB Associates, Inc., a Pennsylvania corporation with
offices located at 0000 Xxxxxxxx Xxxx, Xxxxxxxxxx,
Xxxxxxxxxxxx 00000, hereinafter referred to alternatively
as "WEB" or "Seller".
Whereas, both Purchaser and Seller are engaged in the sale and servicing of
computer graphics and imaging equipment and supplies; and,
Whereas, Purchaser is desirous of purchasing the Assets of Seller, as defined
hereinafter, and Seller is desirous of selling said Assets, for the
consideration and upon the terms and conditions set forth hereinafter.
Now Therefore, in consideration of the mutual covenants, promises and conditions
set forth herein, the parties hereto do hereby agree as follows:
1. Purchase and Sale.
1.01 Seller agrees to sell to Purchaser and Purchaser agrees to purchase
from Seller all of the Assets owned and used by Seller in the operation of its
business, including but not limited to the following:
A. Accounts Receivable, less allowances;
B. Inventory at lower of cost or fair market value;
C. Property and Equipment as listed on Exhibit A annexed to and
made a part hereof;
D. Use of the name "WEB Associates";
E. Customer lists and all files relating thereto;
F. Sales, service and vendor contracts and security deposits;
G. Existing telephone numbers (000) 000-0000, (000) 000-0000,
(000) 000-0000, (000) 000-0000;
H. Databases;
I. Other prepaid commitments as listed on Exhibit J for which
there shall be an adjustment at Closing.
The Assets which are the subject of the within sale, including those set forth
hereinabove, shall hereinafter be collectively referred to as "Assets".
1.02 In conjunction with purchase by Cadapult of the Assets, as defined
herein, Cadapult has agreed to assume the following Liabilities of Seller:
A. Trade payables as of the date of Closing;
B. Customer deposits payable as of the date of Closing;
Cadapult has not agreed to assume any other liabilities other than those set
forth hereinabove. Liabilities specifically EXCLUDED from assumption by
Cadapult include the following: (a) any monies due any governmental agency,
including any federal, state and/or local taxes; (b) any contingent
liabilities resulting from any claim or threatened claim against Seller which
may not, as of this date or date of Closing, have matured into a debt; (c)
any obligations arising out of any claim by Seller's personnel, including any
unpaid salaries, commissions, pension or other benefits, accrued vacation or
sick pay arising prior to the date of Closing, and, (d) any other undisclosed
liabilities.
2. Purchase Price and Terms of Sale.
2.01 Cadapult does hereby agree to assume the Liabilities referenced
in Subparagraphs A and B of Paragraph 1.02 hereinabove (hereinafter referred
to as "Liabilities") and to purchase the Assets referenced in Subparagraphs A
though J of Paragraph 1.01 hereinabove. It is anticipated that the dollar
value of the Assets purchased will exceed the Liabilities assumed, as
determined by generally accepted accounting principles (hereinafter referred
to as "Net Asset Value"), by Three Hundred, Ninety Thousand ($390,000.00)
Dollars. In such event, Cadapult shall then be obligated to tender to Seller
$300,000 in cash at Closing plus, in accordance with Paragraph 9L, that
number of Cadapult unregistered and restricted common shares equal to
$500,000 divided by the average Stock Price of Cadapult common stock for the
thirty (30) days prior to Closing, where the Stock Price is the average of
the high 'bid' and low 'ask' at the close of the trading day. The sum of
such $300,000 in cash plus such Cadapult common shares (subject to adjustment
as set forth in 2.01A and 2.01B below) shall be hereinafter referred to as
the "Initial Purchase Price."
A. In the event the Net Asset Value, as defined hereinabove, is
greater than $390,000, at Closing, Cadapult shall tender additional shares of
Cadapult unregistered and restricted common stock, the number of additional
shares being determined by dividing the Net Asset Value, less $390,000, by
the average aforesaid Stock Price of Cadapult common stock for the thirty
(30) days prior to Closing.
B. In the alternative, in the event the Net Asset Value is less
than $390,000, but greater than $90,000, then the difference between $390,000
and the Net Asset Value will reduce the cash tendered to the Seller by such
amount. In the event the Net Asset Value is less than $90,000, then no cash
will be tendered to the Seller and the number of shares of Cadapult common
stock will be reduced by the difference between the Net Asset Value and
$90,000, divided by the average aforesaid Stock Price of Cadapult common
stock for the thirty (30) days prior to Closing.
3. Escrow and Post Closing Adjustments. At Closing, fifty (50%) percent of
the common stock of Cadapult due Seller thereat, (hereinafter "Escrowed
Shares"), shall be endorsed in blank and delivered to the Joint Escrow Agents
designated herein, after which the Escrowed Shares shall be held in escrow
pending attainment of specified Gross Profit objectives in the first 12 and
second 12 months from the date of Closing. For the purposes of this
Paragraph 3, Gross Profit shall be defined in the manner set forth in Exhibit
C annexed to and made a part hereof.
If Seller attains, or exceeds, certain Gross Profit Targets, as defined
hereafter, during the first twelve (12) months following the Closing, 50% of
the Escrowed Shares will be released to Seller from the Escrow plus
additional unregistered and restricted shares as shall be issued to Seller by
Cadapult pursuant to the schedule of Gross Profit Targets annexed to and made
a part hereof as Exhibit D. (Such additional shares shall hereinafter be
referred to as "Additional Purchase Price.") In the alternative, failure to
attain Gross Profit Targets resulting in less than 50% of the Escrowed Shares
being issued to Seller at the end of the first twelve month period shall
result in those shares being returned to Cadapult and Seller forfeiting any
rights thereto.
The same process shall be repeated in the second twelve month period from the
date of the Closing.
The aforesaid shall be set forth in a separate Escrow Agreement to be
executed at Closing. The Joint Escrow Agents shall be one attorney
designated by Seller and another attorney designated by Purchaser. The Joint
Escrow Agents shall receive an agreed upon fee, as set forth in the Escrow
Agreement, for services rendered by them as Joint Escrow Agents.
4. Deposit. Simultaneously upon the execution of this Agreement,
Purchaser shall forward a check to Seller's attorney in the sum of
$50,000.00. This check shall be deposited into the attorney's trust account
of Seller's attorney, who shall be an attorney admitted to the Bar of the
State of Pennsylvania, and shall be held in escrow thereby pursuant to the
provisions of Paragraph 12 hereinunder. In the event a Closing does not
occur as a consequence of the failure of any conditions precedent to this
Agreement or Seller's breach, the within xxxxxxx money Deposit shall be
refunded to the Purchaser without any deduction or set off whatsoever within
forty-eight (48) hours of demand therefore.
5. Allocation of Purchase Price. The Purchase Price shall be allocated
amongst the various Assets in the manner set forth in Exhibit E annexed to
and made a part hereof. The Purchase Price shall equal the sum of the
Initial Purchase Price plus the Additional Purchase Price.
6. Employment Agreements. A condition precedent to Cadapult's obligation
to Close shall be : (1) Seller's shareholders, Xxxxx X. Xxxxxxx and Xxxxxxx
X'Xxxxx executing Employment Agreements in the form annexed to and made a
part hereof as Exhibit F, for a term of not less than two (2) and one (1)
years from Closing respectively; and (2) Seller obtaining from another
shareholder, Xxxxxxxxx Xxxxxxx, a written undertaking on the part of
Xxxxxxxxx Xxxxxxx that she shall be restricted from competing with, or
contacting or soliciting, any of Seller's customers for a period of not less
than three years from the date of Closing, said Restrictive covenant to be in
the form annexed hereto and made a part hereof as Exhibit I.
7. Closing. The Closing shall occur on or before July 1, 1999 at Seller's
offices or the offices of Seller's attorneys provided same are located within
15 miles of Philadelphia, Pennsylvania (hereinbefore referred to as "Closing
Date"). All monies due and payable at Closing shall be paid in the form of a
bank, certified or attorneys trust account check.
8. Conditions Precedent.
A. Purchaser agrees to accept an assignment of Seller's lease for its
current location. A true copy of said Lease is annexed hereto and made a
part hereof as Exhibit G. On or before the Closing, Seller shall obtain its
Landlord's consent to an assignment of said Lease to Cadapult.
B. Purchaser's satisfactory review of aspects of Seller's business,
including but not limited to, financial statements, Statements of Profits and
Losses and Balance Sheets for all of 1998 and at least the first 3 months of
1999. Management prepared financial statements for the three months of 1999
will be accepted for the purposes of Purchaser's review. Said review shall
be completed within 30 days of the date hereof at which time Purchaser shall
notify Seller in writing that it either (i) is willing to proceed to closing
based upon its review of the Seller's business or (ii) is unwilling to
proceed to closing based upon such review. Purchaser shall have the right to
make either of the aforesaid elections at its sole and absolute discretion.
In the absence of such notice, Purchaser shall be deemed to have elected not
to proceed.
C. Execution at Closing of the Employment Agreements referenced in
Paragraph 6 hereinabove.
9. Seller's Representations. Seller represents and warrants to Purchaser
as follows:
A. Title to Assets. Seller shall, as of the date of Closing, have
good and marketable title to the Assets, free and clear of restrictions on or
conditions to transfer or assignment as well as any and all liens, pledges,
charges, or encumbrances, except those specifically referred to 1.02
hereinabove. At Closing, Seller shall convey all such Assets.
B. Indemnification. Seller, and Seller's shareholders, do hereby
jointly and severally agree to protect, indemnify, and hold the Purchaser
harmless from and against any loss, damage or expense, as well as reasonable
counsel fees and costs, if incurred, resulting from any breach of the
warranties set forth in Subparagraph A of this Paragraph 9. Specifically,
the within Indemnification shall include any claim made against Purchaser for
any unpaid liability of Seller. Should any claim for indemnification arise
during the pendency of the Escrow as referenced in Paragraph 3 hereinabove,
the Purchaser shall have the right to request that any funds being held on
behalf of the Seller continue to be held pending resolution of such claim
and, further to pay the amount of such claim upon adjudication thereof from
said Escrowed Funds, should same remain unsatisfied. The allocation of any
liability among the Shareholders arising pursuant to the provisions of this
Paragraph shall be in proportion to the equity owned by each in WEB
Associates, Inc., and, except in the case of fraud, shall not exceed the
amount received by each Shareholder as his or her share of the consideration
paid pursuant to this Agreement.
C. Transfer Not Subject to Encumbrances or Third-Party Approval. The
execution and delivery of this Agreement by Seller, and the consummation of
the within contemplated transaction, will not result in the creation or
imposition of any valid lien, charge, or encumbrance on any of the Assets,
and will not require the authorization, consent, or approval of any third
party, including any lender or governmental or regulatory agency.
D. Corporate Existence. Seller is now, and on the Closing Date will
be, a corporation duly organized and validly existing and in good standing
under the laws of the State of Pennsylvania. At Closing, Seller shall
provide a copy of a Certificate of Good Standing issued by the State of
Pennsylvania and the Pennsylvania Department of Revenue. In addition, Seller
shall comply with all applicable governmental and legal requirements in
relation to the bulk sales of its Assets.
E. Authorization. The execution, delivery, and performance of this
Agreement has been duly authorized and approved by the Board of Directors and
shareholders of Seller having a majority of the issued and outstanding Common
Stock thereof, and this Agreement constitutes a valid and binding Agreement
of Seller in accordance with its terms.
F. Noncancelable Contracts. At the time of Closing, there will be no
leases (other than the Paragraph 8A lease), employment contracts, contracts
for services or maintenance, or other similar material contracts existing or
relating to or connected with the operation of Seller's business not
cancelable at Closing or within 30 days thereof.
G. Continued Operations. Seller will continue to conduct its business
up to the date of Closing in essentially the same manner as it has been
conducted in the past, and in accordance with all applicable laws and
regulations. Until Closing, Seller shall maintain all of its Assets in their
present condition. Seller shall use its best efforts to preserve, for
Purchaser, the goodwill of vendors, suppliers, customers and others having
business relations with it. Prior to Closing, Seller will not sell or
transfer any of the Assets which are the subject of this Agreement. Seller
has no knowledge of a business termination of a material customer, vendor or
supplier.
H. Withholding Taxes. Seller has paid in full, or will arrange for
the payment in full, in a timely manner, of all federal and State of
Pennsylvania taxes incurred by Seller, including, but not limited to income,
withholding, social security, unemployment insurance, and sales taxes due
through the Date of Closing, and shall hold Purchaser harmless therefrom.
I. Financial Records. Financial records and other documents delivered
by Seller to Purchaser in connection with the within transaction, including
profit and loss statements and balance sheets, contracts, and other books and
records, accurately reflect the financial condition of Seller. To the best
of Seller's knowledge, Seller is in compliance with all laws and regulations
affecting its business.
J. Employee Benefits. Except for its SEP retirement plan, health and
dental insurance plan, life insurance plan and disability plan, Seller does
not maintain any retirement or deferred compensation plan, savings,
incentive, stock option or stock purchase plan, unemployment compensation
plan, vacation pay, severance pay, bonus or benefit arrangement, insurance or
hospitalization program or any other fringe benefit arrangement for any
employee, consultant or agent of the Seller, whether pursuant to contract,
arrangement, custom or informal understanding, which constitute an "Employee
Benefit Plan" (as defined in Section 3(3) of ERISA. The Seller does not
maintain, nor has it ever contributed to, any Multi-employer Plan as defined
by Section 3(37) of ERISA. The Seller does not currently maintain any
Employee Pension Benefit Plan subject to Title IV of ERISA. There have been
no "prohibited transactions" (as described in Section 406 of ERISA or Section
4975 of the Code) with respect to an Employee Pension Benefit Plan or
Employee Welfare Benefit party. Seller has no written contracts with
employees. Seller shall be responsible for paying, prior to Closing, all
accrued vacation or sick pay entitlements. Seller and seller shareholders
shall indemnify and hold purchaser harmless from any liability or obligation
arising in relation to any employee benefit including, but not limited to any
of the employee benefit plans referred to in this Sub-Paragraph J. The
allocation of any liability among the Shareholders arising pursuant to the
provisions of this Paragraph shall be in proportion to the equity owned by
each in WEB Associates, Inc., and, except in the case of fraud, shall not
exceed the amount received by each Shareholder as his or her share of the
consideration paid pursuant to this Agreement.
K. Accuracy of Representations and Warranties. None of the
representations or warranties of Seller contain or will contain any untrue
statement of a material fact or omit or will omit or misstate a material fact
necessary in order to make statements in this Agreement not misleading.
Seller knows of no fact or circumstance that has resulted, or that in the
reasonable judgment of Seller will result, in a material change in the
business, operations, or assets of Seller that has not been previously
disclosed or set forth in this Agreement.
L. Seller's Agreement to Restriction on Sale of Seller's Stock
Conveyed Pursuant to the Within Agreement. The Sellers agree that any sale
or other disposition of the Securities after the one year anniversary of the
Closing Date shall be a bona fide transaction in accordance with Rule 144, as
promulgated under the Securities Act of 1933 as amended, conducted through a
major brokerage firm or such other firm as is mutually agreed by the parties
in writing, and shall be sold in a manner not to cause any materially adverse
effect on the market for the Corporation's common stock. These
representations by the Sellers are material to the Purchaser's decision to
enter into this Agreement and, Seller's agree that any violation hereof would
entitle the Purchaser to injunctive relief to preclude Securities sales
activity by the Sellers in contravention of these representations. Any
legend that would appear on the stock certificates is set forth on Exhibit K
attached hereto.
10. Purchaser's Representations. Purchaser represents and warrants to
Seller as follows:
A. Corporate Existance. Buyer is a DELAWARE corporation, duly
organized, validly existing and in good standing under the laws of the state
of Delaware and has the power and authority to carry on its business, as now
conducted, to own and operate its properties and assets, to execute the
Agreement and other agreements and instruments referred to therein and
delivering and carrying out the transactions contemplated.
B. Authorization. Execution and delivery of the Agreement and other
Agreements and instruments referred to have been duly authorized by the board
of directors and shareholders of Cadapult Graphic Systems, Inc. and
constitute legal, valid, binding and enforceable agreements and instruments.
Neither the execution, delivery or performance of the Agreement or any other
agreement or instrument executed and delivered by or on behalf of Cadapult
Graphic Systems, Inc., nor the consummation of the transactions nor
compliance with the terms and provisions of the Agreement contravenes the
Certificate of Incorporation, Articles of Incorporation, or bylaws or any
provision of law, statute, rule, regulation or order of any court or
governmental authority to which Cadapult Graphic Systems, Inc., is subject,
or any judgment, decree, franchise, order or permit applicable to it, or
conflicts or inconsistent with, or will result in any breach of or constitute
a default under, any contract, commitment, agreement, understanding,
arrangement or instrument, or result in the creation of or imposition of, or
the obligation to create or impose any lien, encumbrance or liability upon,
any of the property or assets of it, or will increase any such lien,
encumbrance, or liability.
C. Indemnification. Purchaser shall indemnify Seller against any and
all loss, liability, deficiency, or damage suffered or incurred by WEB, or
its shareholders, resulting from any untrue representation, breach of
warranty or non-fulfillment of any covenant or agreement by Cadapult Graphic
System, Inc. contained in the Agreement or in any certificate, document, or
instrument delivered to WEB in connection with the within transaction.
11. Mutual Indemnification. Purchaser and Seller agree to protect,
indemnify, and hold the other harmless against, and with respect to, any
loss, damage or expense occasioned by any breach or alleged breach, falsity,
or failure of any of the representations, covenants, warranties or agreements
of any such party contained herein or contained in any document exchanged
between Purchaser and Seller in connection with this transaction. This
Indemnification shall survive the Closing.
12. Default. In the event of a material breach, the non-breaching party
shall have the right, in addition to seeking damages, to choose to compel the
breaching party to perform under the terms of this Agreement (specific
performance). Irrespective of the aforesaid, and in addition thereto, in the
event of a material breach by Purchaser, Seller shall have the right to
retain the Deposit irrespective of whether Seller is able to establish
damages, seeks to compel specific performance, or ultimately obtains a
judgment for damages in excess of the Deposit provided however that in the
event of the latter, the amount of the Deposit shall be deducted from any
damage award.
13. Miscellaneous.
A. Amendment and Modification. Subject to applicable law, this
Agreement may be amended, modified, or supplemented only by a written
agreement signed by all of the parties hereto.
B. Notices. All notices, requests, consents, approvals or other
communications under this Agreement shall be in writing and mailed by
certified mail, return receipt requested, postage prepaid, or delivered by a
nationally recognized overnight courier service which obtains delivery
receipts (e.g., Federal Express), addressed:
Seller:
Xxxxx and Xxxxxxxxx Xxxxxxx
00 Xxxxxx Xxxx
Xxxxx Xxxxx, XX 00000
Xxxxxxx X'Xxxxx
000 Xxxxx Xxxx
Xxxxxxxxxxx, XX 00000
Xxxxxxx X. Xxxxxxx, Esq.
Obermayer, Rebmann, Xxxxxxx & Hippel, LLP
19th Floor
0000 Xxxx X. Xxxxxxx Xxxx.
Xxxxxxxxxxxx, XX 00000-0000
Purchaser:
Cadapult Graphic Systems, Inc.
000 Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Xxxxx X. Xxxxxx, Esq.
000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Either party may, by notice given as aforesaid, change its address for all
subsequent notices. All notices hereunder shall be effective upon receipt of
same.
C. Legal Fees in the Event of Dispute. In the event a dispute arises
between the parties in relation to the interpretation and/or implementation
of the within Agreement resulting in the filing of a legal proceeding in a
court of competent jurisdiction, the non-prevailing party shall reimburse the
prevailing party to the extent of reasonable counsel fees and costs incurred
by the latter.
D. No Broker. The Seller and Purchaser represent and warrant, each to
the other, that neither has engaged or in any way dealt with a broker,
finder, agent, or anyone in a similar capacity, in relation to the
transaction contemplated by the within Agreement. To this extent, Seller and
Purchaser do each hereby agree to indemnify, defend and hold the other
harmless from and against any and all loss, expense, including but not
limited to reasonable counsel fees and costs, damage or liability resulting
from any claim or claims arising from an alleged rendering of any services to
the indemnifying party in breach of the within warranty.
E. 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 affect the interpretation of this Agreement. All pronouns and
any variation thereof shall be deemed to refer to the masculine, feminine,
neuter, singular or plural as the identity of the person or persons may
require.
F. Entire Agreement. This Agreement contains the entire understanding
between and among the parties and supersedes any prior understanding and
agreements among them respecting the subject matter of this Agreement. Any
amendments to this Agreement must be in writing and signed by the party
against whom enforcement of that amendment is sought.
G. Presumption. This Agreement, or any Section thereof, shall not be
construed against any part due to the fact that said Agreement or any Section
thereof was drafted by said party.
H. 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 purpose of the Agreement.
I. Counterparts. This Agreement may be executed in several
counterparts and all so executed shall constitute one Agreement, binding on
all the parties hereto even though all the parties are not signatories to the
original or the same counterpart.
J. 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.
K. Governing Law. The parties agree that the terms of this Agreement,
as well as any dispute arising as a consequence thereof, shall be interpreted
in accordance with and governed by the laws of the State of Delaware.
L. Assignment. Seller shall have the right to assign its post-Closing
rights under this Agreement to its shareholders in connection with the
liquidation of Seller.
Executed as of the dates set forth below, in several counterparts, each of
which shall be deemed an original, but all constituting only one agreement.
Purchaser:
Cadapult Graphic Systems, Inc.
Date: June 7, 1999 By: /s/ Xxxxxxx Xxxxx
----------------------------
Xxxxxxx Xxxxx, President
Seller:
WEB Associates, Inc.
Date: June 7, 1999 By: /s/ Xxxxx Xxxxxxx
---------------------------
Xxxxx Xxxxxxx, Pres.
Solely as to the provisions of Paragraphs
6, 9B and 9J as same pertains to the
undersigned and as to no other provision
contained herein.
/s/ Xxxxxxxxx Xxxxxxx
------------------------------
Xxxxxxxxx Xxxxxxx
/s/ Xxxxxxx X'Xxxxx
------------------------------
Xxxxxxx X'Xxxxx
/s/ Xxxxx Xxxxxxx
------------------------------
Xxxxx Xxxxxxx
EXHIBIT LIST
Exhibit A Property and Equipment
Exhibit B NOT USED
Exhibit C Gross Profit Definition
Exhibit D Incentive Gross Profit Schedule
Exhibit E Allocation of Purchase Price
Exhibit F Form of Employment Agreement
Exhibit G Lease
Exhibit H NOT USED
Exhibit I Restrictive Covenant
Exhibit J Adjustments
Exhibit K Restrictive Legend
Exhibit C: Gross Profit Definition
- Definitions
- WEB Customer - A past or current client of WEB Associates that
is not at the time of closing a current Cadapult client.
- WEB Team - A sales team including Xxxxx, Xxxxxxx and Xxxx or
their direct replacement
- Internal Costs - Those costs defined by the Technical Services
department as compensation for their work including
installations, integrations and field and depot service.
The definition of Gross Profit (GP) must be broken down into two pieces. The
first is the calculation of the GP itself, and the second is the
determination of on what sales the GP is to be calculated.
Starting with the latter, the following sales should be included in the
calculation of GP:
- Service
- Renewal of all service contracts now held by WEB Associates.
- Renewal of all service contracts of printers originally sold by
WEB and not currently covered by Cadapult.
- Future sales of service contracts relating to new printer sales
closed by the WEB Team.
- Supplies
- Sales of all supplies to a WEB Customer.
- Future sales of supplies relating to new printer sales closed
by the WEB Team.
- System and other product sales
- Sales of all systems and other products to a WEB Customer.
- Future sales of systems and other product s closed by the WEB
Team with a WEB Customer or anybody else.
As to calculation of Gross Profit itself:
- Service
- The GP on Tektronix service contracts will be calculated to be
75% of the selling price.
- The GP on all other service contracts is to be calculated by
the selling cost less invoice costs to us of those items
required to fulfill a contract, less Internal Costs.
- Supplies
- The GP on sales of supplies to be calculated by the selling
price, less the invoice cost of those supplies including
shipping, less any unreimbursed shipping costs to the customer.
- Systems and other products
- The GP on sales of systems and other products to be calculated
by the selling price, less the invoice cost of all components
including shipping costs, less Internal Costs, less any
unreimbursed shipping costs to the customer.
- In addition to the above, for determining the GP associated
with the sales of Tektronix printers, the Tektronix performance
rebate (now 4% on business products and 6% on specialty
products) will be included as long as Cadapult is receiving
this rebate. Growth rebates from Tektronix are not to be
included.
Exhibit D - Stock Release Schedule
The stock placed in Escrow is to be released on each of the first and second
anniversaries of the closing against the following schedule of Gross Profit
achievement of the acquired business for the previous 12 months.
- $817,500 and above - 75% of the amount of the initially escrowed shares
- $681,250 to $817,499 - 62.5% of the amount of the initially escrowed shares
- $545,000 to $681,249 - 50% of the amount of the initially escrowed shares
- $408,750 to $544,999 - 37.5% of the amount of the initially escrowed shares
- $272,500 to $408,749 - 25% of the amount of the initially escrowed shares
- $136,250 to $272,499 - 12.5% of the amount of the initially escrowed shares
- $0 to $136,249 - 0 shares
Exhibit E - Allocation of Purchase Price
Inventory Tax basis at start of Closing Date
Accounts receivable (less bad
Debt allowances ) Tax basis at start of Closing Date
Property and equipment Depreciated tax basis at start of
Closing Date
Prepaid commitments and
Customer deposits Face amount at start of Closing
Date
Covenants not to compete Zero
Xxxxxxxxx Xxxxxxx Restrictive Covenant $1000
Goodwill and other intangible assets Entire remainder of purchase price.
[Any post-closing adjustments to purchase price will increase or decrease the
allocation to goodwill and other intangible assets.]
Exhibit F - Form of Employment Agreement
EMPLOYMENT AGREEMENT
AGREEMENT, dated June , 1999 between CADAPULT GRAPHIC SYSTEMS INC.,
a Delaware corporation with offices at 000 Xxxxxxxx Xxxxx, Xxxxxxxxx, Xxx
Xxxxxx 00000 ("Employer"), and Xxxxx X. Xxxxxxx ("Employee") residing at 00
Xxxxxx Xxxx, Xxxxx Xxxxx, XX 00000.
W I T N E S S E T H:
WHEREAS, Employer desires to retain the services of Employee and
Employee desires to be employed by Employer upon the terms and conditions
hereinafter set forth;
NOW THEREFORE, in consideration of the agreements herein contained,
the parties hereto agree as follows:
1. EMPLOYMENT. The Employer hereby employs Employee, and Employee
hereby agrees to serve, as Account Manager of Employer, or such other
position and with such title as Employer may reasonably designate, for the
Term of Employment (as defined in Section 2). Employee agrees to perform
such services as are customary for such office or to such other offices as
shall from time to time be assigned to Employee by Employer's Board of
Directors or its designee, and, in the absence of such assignment, such
services customary to such offices as are necessary to the operations of
Employer. Employee further agrees to use Employee's best efforts to promote
the interest of Employer and to devote Employee's full business time and
energies during normal business hours to the business and affairs of Employer
during the Term of Employment.
2. TERM OF EMPLOYMENT. The employment hereunder which shall
commence on the date of the execution of this Agreement and shall continue
for a term of two (2) years (the "Term of Employment"), unless earlier
terminated: (a) upon death of Employee; (b) at the option of Employer upon
30 days' prior written notice to Employee, in the event Employee, by reason
of physical injury or illness, is unable to materially perform his duties
hereunder for a period of 60 days and has no proof of expectation of
returning to work within a reasonable time thereafter; or (c) upon the
discharge of Employee by the Board of Directors of Employer for "cause" (as
defined in Section 8 hereof).
3. COMPENSATION.
A. Base Salary and Commission.
(1) As compensation for the services to be
provided hereunder and in consideration of Employee's agreement not to
compete as set forth in Section 4, during the Term of Employment, Employer
shall pay Employee salary of $42,500 per annum plus Commission, or such
greater amount as may be established by Employer's Board of Directors, which
shall be payable in appropriate installments to conform with the regular
payroll dates for salaried personnel of Employer.
(2) For purpose of Section 3.A, the term
"Commission" is defined as twenty percent (20%) of the Employee's Gross
Profit.
(3) For purpose of Section 3.A, the term
"Gross Profit" is defined as selling price less invoice costs of products,
plus applicable rebates to Cadapult, with the exclusion of the Tektronix
growth rebate, and less internal costs of service and does not include profit
on sales not contracted for by Employee. Furthermore, Employee shall not
share in any profits realized on purchase orders or verbal orders received
after the termination of his employment.
B. Other Benefits. Employee shall be entitled to the
following fringe benefits, perquisites, and other benefits of employment
during the Term of Employment to the extent that the Board of Directors
determines such benefits are to be made available to Employer's employees in
general: (i) medical and dental insurance under such group medical and dental
insurance policies as Employer may provide to its employees; (ii) sick days
in accordance with Employer's policy regarding employees; (iii) four (4)
weeks vacation in accordance with Employer's policy, and it is not to be
deemed to have any cash value; (iv) participation in Employer's 401(k) plan
or such other plan as Employer may adopt; and (v) participation in Employer's
employee stock option plan.
C. Payment Upon Early Termination. In the event of early
termination of employment for any reason specified in Section 8 hereof,
Employer shall no longer be obligated to make any payments of compensation to
Employee or Employee's estate under this Agreement. However, any salary or
bonus earned and/or vested for prior periods, but not yet paid, shall be paid
by Employer to Employee or Employee's estate.
4. COVENANT NOT TO COMPETE; INTELLECTUAL PROPERTY; CONFIDENTIALITY.
A. Covenant Not to Compete and Solicit. During the Term of
Employment and for a period of two (2) years after termination of Employee's
employment with Employer, Employee will not, within any jurisdiction in which
Employer or any affiliate conducts its business operations, directly or
indirectly, own, manage, operate, control, be employed by or participate in
the ownership, management, operation or control of, or be connected in any
manner with, any business of the type or character engaged in or competitive
with that conducted by Employer. The decision of Employer's Board of
Directors as to what constitutes a competing business shall be final and
binding upon Employee, and such decision shall be made in good faith and with
specific consideration for the type of business conducted or being
contemplated by Employer at the time of said termination. For these
purposes, ownership by Employee or any affiliate of Employee of securities of
a public company not in excess of 1% of any class of such securities shall
not be considered to be competition with Employer.
For a period of three (3) years after termination of
Employee's employment with Employer, Employee further agrees to refrain from
interfering with the employment relationship between Employer and its other
employees by soliciting any of such individuals to participate in any way in
any other business ventures and agrees to refrain from soliciting competitive
business from any client or prospective client (as disclosed in a list,
compiled in good faith, to be provided to Employee by Employer at the time he
ceases to be employed, which list shall be binding upon Employee) of
Employer's for Employee's benefit or for any other entity.
It is the desire and intent of the parties that if any
provisions of this Section 4(A) shall be adjudicated to be invalid or
unenforceable, this Section 4(A) shall be deemed amended to delete therefrom
such provisions or portion adjudicated to be invalid or unenforceable, such
amendment to apply only with respect to the operation of this paragraph in
the particular jurisdiction in which such adjudication is made.
B. Intellectual Property. During the Term of Employment,
Employee will disclose to Employer all ideas, inventions and business plans
developed by Employee during such period which relates directly or indirectly
to the business of Employer or affiliates, including without limitation any
process, operation, product or improvement which may be patentable or
copyrightable. Employee agrees that such will be the property of Employer
and that Employee will, at Employer's request and cost, do whatever is
necessary to secure the rights thereto by patent, copyright or otherwise to
Employer.
C. Confidentiality. Employee agrees to not divulge to
anyone (other than Employer or any other persons employed or designated by
Employer) any knowledge or information of any type whatsoever of a
confidential nature relating to the business of Employer or any of its
subsidiaries or affiliates, including without limitation all types of trade
secrets (unless readily ascertainable from public or published information or
trade sources). Employee further agrees not to disclose, publish or make use
of any such knowledge or information of a confidential nature without prior
written consent of Employer.
5. REIMBURSEMENT OF EXPENSES. Employee shall be entitled to be
reimbursed for reasonable travel and other reasonable expenses incurred in
connection with Employee's services to Employer pursuant to and during the
Term of Employment upon a basis consistent with the policies established or
announced by Employer.
6. BREACH BY EMPLOYEE. Both parties recognize that the services to
be rendered under this Agreement by Employee are special, unique and
extraordinary in character, and that in the event of a breach by Employee of
the terms and conditions of this Agreement to be performed by Employee, or in
the event Employee performs services during the Term of Employment for any
person, firm, corporation or other entity engaged in a competing line of
business with Employer, or otherwise breaches this Agreement, Employer shall
be entitled, if it so elects, to take all actions, either in law or in
equity, that it deems necessary to protect its rights and interests. In the
event that the Employee breaches this Agreement or advances an action, either
in law or equity, that is adjudicated or results in a judgement in favor of
the Employer, Employee shall reimburse Employer for reasonable costs and
expenses, including reasonable attorneys fees.
7. BREACH BY EMPLOYER. In the event that the Employer breaches this
Agreement or advances an action, either in law or equity, that is adjudicated
or results in a judgement in favor of the Employee, Employer shall reimburse
Employee for reasonable costs and expenses, including reasonable attorneys
fees.
8. TERMINATION FOR CAUSE. Employer may terminate Employee for cause
upon ten days' prior written notice to Employee. For purposes of this
Agreement, an event or occurrence constituting "cause" shall mean:
A. Employee's willful failure or refusal after notice
thereof, to perform specific directives of Employer's Board of Directors,
when such directives are consistent with the scope and nature of Employee's
duties and responsibilities as set forth in Section 1 and elsewhere herein;
B. Dishonesty of Employee affecting Employer;
C. Employee's conviction of a felony or of any crime
involving moral turpitude, fraud or misrepresentation;
D. Any gross or wilful conduct of Employee resulting in
substantial loss to Employer, substantial damage to Employer's reputation or
theft from Employer;
E. Other than physical injury or illness, Employee's
material failure to perform the duties and responsibilities under this
Agreement; or
F. Any material breach (not covered by any of the clauses
(A) through (E)) of any of the provisions of this Agreement, causing material
damage to Employer, if such breach is not cured within ten days after written
notice thereof to Employee by Employer.
9. ASSIGNMENT. This Agreement is a personal contract and, except as
specifically set forth herein, the rights and interests of Employee herein
may not be sold, transferred, assigned, pledged or hypothecated by Employee.
The rights and obligations of Employer hereunder shall be binding upon and
run in favor of the successors and assigns of Employer. In the event of any
attempted assignment or transfer of rights hereunder contrary to the
provisions hereof, Employer shall have no further liability for payments
hereunder. Employee specifically consents to assignment of this Agreement by
Employer pursuant to any reorganization or business combination that Employer
may effect hereafter.
10. GOVERNING LAW; CAPTIONS. This Agreement contains the entire
agreement between the parties and shall be governed by the laws of the State
of Delaware. It may not be changed orally, but only by agreement in writing
signed by the party against whom enforcement of any waiver, change,
modification or discharge is sought, and consented to in writing by the
President of Employer. Section headings are for convenience or reference
only and shall not be considered a part of this Agreement.
11. PRIOR AGREEMENTS. This Agreement supersedes and terminates all
prior agreements between Employer and Employee relating to the subject matter
herein addressed.
12. ARBITRATION. Any dispute or claim hereunder may be referred to
arbitration. The notice shall be filed with the Employer or Employee, in no
event, later than thirty (30) days after written notice of the dispute is
mailed via certified mail to the non-grieving party.
It is agreed that during the term of this Agreement the
arbitrator to whom the grievance shall be referred for a decision shall be
selected by the Employer and the Employee. If the parties fail to select an
arbitrator, the grievance shall be presented to the American Arbitration
Association. The voluntary labor arbitration rules of the American
Arbitration Association shall apply to the proceeding and the choice of
arbitrator.
The decision of the arbitrator shall be supported by substantial
evidence on the record as a whole, and shall be final and conclusive and
binding upon the Employee and the Employer. The arbitrator shall have no
power to add to or subtract from or modify in any way the terms of this
Agreement.
The arbitrator shall be requested to issue his written decision
not later than thirty (30) days from the date of the close of the hearing or,
if oral hearings have been waived, then from the date of transmitting the
final statements and proofs to the arbitrator. The decision of the
arbitrator will be accepted as final by the parties to the disputes, and both
will abide by it.
All expenses for the arbitrators services and the proceedings
shall be borne equally by the Employer and the Employee. However, each party
shall be responsible for compensating its own representatives and witnesses.
13. NOTICES. Any notice or other communication required or
permitted hereunder shall be sufficiently given if delivered in person to
Employer by delivery to its Chairman of the Board of Directors or sent by
telex, telecopy or by registered or certified mail, postage prepaid,
addressed as follows:
If to Employee, to:
Xxxxx X. Xxxxxxx
00 Xxxxxx Xxxx
Xxxxx Xxxxx, XX 00000
If to Employer, to:
Cadapult Graphic Systems Inc.
Attn: Xxxxxxx Xxxxx, President
000 Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
fax: 000-000-0000
IN WITNESS WHEREOF, Employer has by its appropriate officer signed
this Agreement and Employee has signed this Agreement, on and as of the date
and year first above written.
CADAPULT GRAPHIC SYSTEMS INC.
By:
-----------------------------
Xxxxxxx X. Xxxxx, President
EMPLOYEE
--------------------------------
Xxxxx X. Xxxxxxx
EMPLOYMENT AGREEMENT
AGREEMENT, dated June , 1999 between CADAPULT GRAPHIC SYSTEMS INC., a
Delaware corporation with offices at 000 Xxxxxxxx Xxxxx, Xxxxxxxxx, Xxx
Xxxxxx 00000 ("Employer"), and Xxxxxxx X'Xxxxx ("Employee") residing at 000
Xxxxx Xxxx, Xxxxxxxxxxx, XX 00000.
W I T N E S S E T H:
WHEREAS, Employer desires to retain the services of Employee and
Employee desires to be employed by Employer upon the terms and conditions
hereinafter set forth;
NOW THEREFORE, in consideration of the agreements herein contained, the
parties hereto agree as follows:
1. EMPLOYMENT. The Employer hereby employs Employee, and Employee
hereby agrees to serve, as Account Manager of Employer, or such other
position and with such title as Employer may reasonably designate, for the
Term of Employment (as defined in Section 2). Employee agrees to perform
such services as are customary for such office or to such other offices as
shall from time to time be assigned to Employee by Employer's Board of
Directors or its designee, and, in the absence of such assignment, such
services customary to such offices as are necessary to the operations of
Employer. Employee further agrees to use Employee's best efforts to promote
the interest of Employer and to devote Employee's full business time and
energies during normal business hours to the business and affairs of Employer
during the Term of Employment.
2. TERM OF EMPLOYMENT. The employment hereunder which shall commence
on the date of the execution of this Agreement and shall continue for a term
of one (1) year (the "Term of Employment"), unless earlier terminated: (a)
upon death of Employee; (b) at the option of Employer upon 30 days' prior
written notice to Employee, in the event Employee, by reason of physical
injury or illness, is unable to materially perform her duties hereunder for a
period of 60 days and has no proof of expectation of returning to work within a
reasonable time thereafter; or (c) upon the discharge of Employee by the
Board of Directors of Employer for "cause" (as defined in Section 8 hereof).
3. COMPENSATION.
A. Base Salary and Commission.
(1) As compensation for the services to be provided
hereunder and in consideration of Employee's agreement not to compete as set
forth in Section 4, during the Term of Employment, Employer shall pay
Employee salary of $40,000 per annum plus Commission, or such greater amount
as may be established by Employer's Board of Directors, which shall be
payable in appropriate installments to conform with the regular payroll dates
for salaried personnel of Employer.
(2) For purpose of Section 3.A, the term "Commission"
is defined as twenty percent (20%) of the Employee's Gross Profit.
(3) For purpose of Section 3.A, the term "Gross
Profit" is defined as selling price less invoice costs of products, plus
applicable rebates to Cadapult, with the exclusion of the Tektronix growth
rebate, and less internal costs of service and does not include profit on
sales not contracted for by Employee. Furthermore, Employee shall not share
in any profits realized on purchase orders or verbal orders received after
the termination of her employment.
B. Other Benefits. Employee shall be entitled to the following
fringe benefits, perquisites, and other benefits of employment during the
Term of Employment to the extent that the Board of Directors determines such
benefits are to be made available to Employer's employees in general: (i)
medical and dental insurance under such group medical and dental insurance
policies as Employer may provide to its employees; (ii) sick days in
accordance with Employer's policy regarding employees; (iii) four (4) weeks
vacation in accordance with Employer's policy, and it is not to be deemed to
have any cash value; (iv) participation in Employer's 401(k) plan or such
other plan as Employer may adopt; and (v) participation in Employer's
employee stock option plan.
C. Payment Upon Early Termination. In the event of early
termination of employment for any reason specified in Section 8 hereof,
Employer shall no longer be obligated to make any payments of compensation to
Employee or Employee's estate under this Agreement. However, any salary or
bonus earned and/or vested for prior periods, but not yet paid, shall be paid
by Employer to Employee or Employee's estate.
4. COVENANT NOT TO COMPETE; INTELLECTUAL PROPERTY; CONFIDENTIALITY.
A. Covenant Not to Compete and Solicit. During the Term of
Employment and for a period of two (2) years after termination of Employee's
employment with Employer, Employee will not, within any jurisdiction in which
Employer or any affiliate conducts its business operations, directly or
indirectly, own, manage, operate, control, be employed by or participate in
the ownership, management, operation or control of, or be connected in any
manner with, any business of the type or character engaged in or competitive
with that conducted by Employer. The decision of Employer's Board of
Directors as to what constitutes a competing business shall be final and
binding upon Employee, and such decision shall be made in good faith and with
specific consideration for the type of business conducted or being
contemplated by Employer at the time of said termination. For these
purposes, ownership by Employee or any affiliate of Employee of securities of
a public company not in excess of 1% of any class of such securities shall
not be considered to be competition with Employer.
For a period of three (3) years after termination of Employee's
employment with Employer, Employee further agrees to refrain from
interfering with the employment relationship between Employer and its other
employees by soliciting any of such individuals to participate in any way in
any other business ventures and agrees to refrain from soliciting competitive
business from any client or prospective client (as disclosed in a list,
compiled in good faith, to be provided to Employee by Employer at the time he
ceases to be employed, which list shall be binding upon Employee) of
Employer's for Employee's benefit or for any other entity.
It is the desire and intent of the parties that if any provisions
of this Section 4(A) shall be adjudicated to be invalid or unenforceable,
this Section 4(A) shall be deemed amended to delete therefrom such provisions
or portion adjudicated to be invalid or unenforceable, such amendment to
apply only with respect to the operation of this paragraph in the particular
jurisdiction in which such adjudication is made.
B. Intellectual Property. During the Term of Employment,
Employee will disclose to Employer all ideas, inventions and business plans
developed by Employee during such period which relates directly or indirectly
to the business of Employer or affiliates, including without limitation any
process, operation, product or improvement which may be patentable or
copyrightable. Employee agrees that such will be the property of Employer
and that Employee will, at Employer's request and cost, do whatever is
necessary to secure the rights thereto by patent, copyright or otherwise to
Employer.
C. Confidentiality. Employee agrees to not divulge to anyone
(other than Employer or any other persons employed or designated by Employer)
any knowledge or information of any type whatsoever of a confidential nature
relating to the business of Employer or any of its subsidiaries or
affiliates, including without limitation all types of trade secrets (unless
readily ascertainable from public or published information or trade sources).
Employee further agrees not to disclose, publish or make use of any such
knowledge or information of a confidential nature without prior written
consent of Employer.
5. REIMBURSEMENT OF EXPENSES. Employee shall be entitled to be
reimbursed for reasonable travel and other reasonable expenses incurred in
connection with Employee's services to Employer pursuant to and during the
Term of Employment upon a basis consistent with the policies established or
announced by Employer.
6. BREACH BY EMPLOYEE. Both parties recognize that the services to be
rendered under this Agreement by Employee are special, unique and
extraordinary in character, and that in the event of a breach by Employee of
the terms and conditions of this Agreement to be performed by Employee, or in
the event Employee performs services during the Term of Employment for any
person, firm, corporation or other entity engaged in a competing line of
business with Employer, or otherwise breaches this Agreement, Employer shall
be entitled, if it so elects, to take all actions, either in law or in
equity, that it deems necessary to protect its rights and interests. In the
event that the Employee breaches this Agreement or advances an action, either
in law or equity, that is adjudicated or results in a judgement in favor of
the Employer, Employee shall reimburse Employer for reasonable costs and
expenses, including reasonable attorneys fees.
7. BREACH BY EMPLOYER. In the event that the Employer breaches this
Agreement or advances an action, either in law or equity, that is adjudicated
or results in a judgement in favor of the Employee, Employer shall reimburse
Employee for reasonable costs and expenses, including reasonable attorneys
fees.
8. TERMINATION FOR CAUSE. Employer may terminate Employee for cause
upon ten days' prior written notice to Employee. For purposes of this
Agreement, an event or occurrence constituting "cause" shall mean:
A. Employee's willful failure or refusal after notice thereof,
to perform specific directives of Employer's Board of Directors, when such
directives are consistent with the scope and nature of Employee's duties and
responsibilities as set forth in Section 1 and elsewhere herein;
B. Dishonesty of Employee affecting Employer;
C. Employee's conviction of a felony or of any crime involving
moral turpitude, fraud or misrepresentation;
D. Any gross or wilful conduct of Employee resulting in
substantial loss to Employer, substantial damage to Employer's reputation or
theft from Employer;
E. Other than physical injury or illness, Employee's material
failure to perform the duties and responsibilities under this Agreement; or
F. Any material breach (not covered by any of the clauses (A)
through (E)) of any of the provisions of this Agreement, causing material
damage to Employer, if such breach is not cured within ten days after written
notice thereof to Employee by Employer.
9. ASSIGNMENT. This Agreement is a personal contract and, except as
specifically set forth herein, the rights and interests of Employee herein
may not be sold, transferred, assigned, pledged or hypothecated by Employee.
The rights and obligations of Employer hereunder shall be binding upon and
run in favor of the successors and assigns of Employer. In the event of any
attempted assignment or transfer of rights hereunder contrary to the
provisions hereof, Employer shall have no further liability for payments
hereunder. Employee specifically consents to assignment of this Agreement by
Employer pursuant to any reorganization or business combination that Employer
may effect hereafter.
10. GOVERNING LAW; CAPTIONS. This Agreement contains the entire
agreement between the parties and shall be governed by the laws of the State
of New Jersey. It may not be changed orally, but only by agreement in
writing signed by the party against whom enforcement of any waiver, change,
modification or discharge is sought, and consented to in writing by the
President of Employer. Section headings are for convenience or reference
only and shall not be considered a part of this Agreement.
11. PRIOR AGREEMENTS. This Agreement supersedes and terminates all
prior agreements between Employer and Employee relating to the subject matter
herein addressed.
12. ARBITRATION. Any dispute or claim hereunder may be referred to
arbitration. The notice shall be filed with the Employer or Employee, in no
event, later than thirty (30) days after written notice of the dispute is
mailed via certified mail to the non-grieving party.
It is agreed that during the term of this Agreement the arbitrator
to whom the grievance shall be referred for a decision shall be selected by
the Employer and the Employee. If the parties fail to select an arbitrator,
the grievance shall be presented to the American Arbitration Association.
The voluntary labor arbitration rules of the American Arbitration Association
shall apply to the proceeding and the choice of arbitrator.
The decision of the arbitrator shall be supported by substantial
evidence on the record as a whole, and shall be final and conclusive and
binding upon the Employee and the Employer. The arbitrator shall have no
power to add to or subtract from or modify in any way the terms of this
Agreement.
The arbitrator shall be requested to issue his written decision
not later than thirty (30) days from the date of the close of the hearing or,
if oral hearings have been waived, then from the date of transmitting the
final statements and proofs to the arbitrator. The decision of the
arbitrator will be accepted as final by the parties to the disputes, and both
will abide by it.
All expenses for the arbitrators services and the proceedings shall
be borne equally by the Employer and the Employee. However, each party shall be
responsible for compensating its own representatives and witnesses.
13. NOTICES. Any notice or other communication required or permitted
hereunder shall be sufficiently given if delivered in person to Employer by
delivery to its Chairman of the Board of Directors or sent by telex, telecopy or
by registered or certified mail, postage prepaid, addressed as follows:
If to Employee, to:
Xxxxxxx X'Xxxxx
000 Xxxxx Xxxx
Xxxxxxxxxxx, XX 00000
If to Employer, to:
Cadapult Graphic Systems Inc.
Attn: Xxxxxxx Xxxxx, President
000 Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
fax: 000-000-0000
IN WITNESS WHEREOF, Employer has by its appropriate officer signed this
Agreement and Employee has signed this Agreement, on and as of the date and year
first above written.
CADAPULT GRAPHIC SYSTEMS INC.
By:
-----------------------------
Xxxxxxx X. Xxxxx, President
EMPLOYEE
--------------------------------
Xxxxxxx X'Xxxxx
Exhibit I - Restrictive Covenant
Restrictive Covenant
AGREEMENT, dated June , 1999 between CADAPULT GRAPHIC SYSTEMS INC.,
a Delaware corporation with offices at 000 Xxxxxxxx Xxxxx, Xxxxxxxxx, Xxx
Xxxxxx 00000 ("Purchaser"), and Xxxxxxxxx Xxxxxxx ("Shareholder") residing at
00 Xxxxxx Xxxx, Xxxxx Xxxxx, XX 00000.
W I T N E S S E T H:
WHEREAS, Shareholder is the owner of Common Stock of WEB Associates,
Inc., the assets of which have this date, and simultaneous herewith, been
acquired by the Purchaser; and,
WHEREAS, in conjunction with, and as a consequence of, the
acquisition of the assets of WEB Associates, Inc. by Purchaser, Shareholder
has received and will receive substantial consideration in proportion to her
stock/equity ownership interest in WEB Associates, Inc.; and,
WHEREAS, a material inducement for Purchaser acquiring the assets of
WEB Associates, Inc. was the execution by Shareholder of the within Agreement
protecting Purchaser for a reasonable period of time from post purchase
competition to the extent set forth hereinafter; and,
WHEREAS, the parties hereto do hereby acknowledge that such
protection is reasonable under the circumstances;
NOW THEREFORE, in consideration of the agreements herein contained,
the parties hereto agree as follows:
1. COVENANT NOT TO COMPETE; INTELLECTUAL PROPERTY; CONFIDENTIALITY.
A. Covenant Not to Compete and Solicit. From the date of
conveyance of the Assets to the Purchaser and for a period of three (3)
years, Shareholder will not, within any jurisdiction in which Purchaser or
any affiliate conducts its business operations, directly or indirectly, own,
manage, operate, control, be employed by or participate in the ownership,
management, operation or control of, or be connected in any manner with, any
business of the type or character engaged in or competitive with that
conducted by Purchaser. The decision of Purchaser's Board of Directors as to
what constitutes a competing business shall be final and binding upon
Shareholder, and such decision shall be made in good faith and with specific
consideration for the type of business conducted or being contemplated by
Purchaser at the time of said termination. For these purposes, ownership by
Shareholder or any affiliate of Shareholder of securities of a public company
not in excess of 1% of any class of such securities shall not be considered
to be competition with Purchaser.
From the date of conveyance of the Assets to the Purchaser
for a period of three (3) years, Shareholder further agrees to refrain from
interfering with the employment relationship between Purchaser and its other
employees by soliciting any of such individuals to participate in any way in
any other business ventures and agrees to refrain from soliciting competitive
business from any client or prospective client of Purchaser's for
Shareholder's benefit or for any other entity.
It is the desire and intent of the parties that if any
provisions of this Section 1(A) shall be adjudicated to be invalid or
unenforceable, this Section 1(A) shall be deemed amended to delete therefrom
such provisions or portion adjudicated to be invalid or unenforceable, such
amendment to apply only with respect to the operation of this paragraph in
the particular jurisdiction in which such adjudication is made.
B. Confidentiality. Shareholder agrees to not divulge to
anyone (other than Purchaser or any other persons employed or designated by
Purchaser) any knowledge or information of any type whatsoever of a
confidential nature relating to the business of Purchaser or any of its
subsidiaries or affiliates, including without limitation all types of trade
secrets (unless readily ascertainable from public or published information or
trade sources). Shareholder further agrees not to disclose, publish or make
use of any such knowledge or information of a confidential nature without prior
written consent of Purchaser.
2. BREACH BY SHAREHOLDER. Both parties recognize that the
circumstances under this Agreement special, unique and extraordinary in
character, and that in the event of a breach by Shareholder of the terms and
conditions of this Agreement to be performed by Shareholder, or in the event
Shareholder performs services during the restricted period, as set forth
herein above, for any person, firm, corporation or other entity engaged in a
competing line of business with Purchaser, or otherwise breaches this
Agreement, Purchaser shall be entitled, if it so elects, to take all actions,
either in law or in equity, that it deems necessary to protect its rights and
interests. In the event that the Shareholder breaches this Agreement or
advances an action, either in law or equity, that is adjudicated or results
in a judgement in favor of the Purchaser, Shareholder shall reimburse
Purchaser for reasonable costs and expenses, including reasonable attorneys
fees.
3. ASSIGNMENT. This Agreement is a personal contract and, except as
specifically set forth herein, the rights and interests of Shareholder herein
may not be sold, transferred, assigned, pledged or hypothecated by
Shareholder. The rights and obligations of Purchaser hereunder shall be
binding upon and run in favor of the successors and assigns of Purchaser. In
the event of any attempted assignment or transfer of rights hereunder
contrary to the provisions hereof, Purchaser shall have no further liability
for payments hereunder. Shareholder specifically consents to assignment of
this Agreement by Purchaser pursuant to any reorganization or business
combination that Purchaser may effect hereafter.
4. GOVERNING LAW; CAPTIONS. This Agreement contains the entire
agreement between the parties and shall be governed by the laws of the State
of Delaware. It may not be changed orally, but only by agreement in writing
signed by the party against whom enforcement of any waiver, change,
modification or discharge is sought, and consented to in writing by the
President of Purchaser. Section headings are for convenience or reference
only and shall not be considered a part of this Agreement.
5. PRIOR AGREEMENTS. This Agreement supersedes and terminates all
prior agreements between Purchaser and Shareholder relating to the subject
matter herein addressed.
6. ARBITRATION. Any dispute or claim hereunder may be referred to
arbitration. The notice shall be filed with the Purchaser or Shareholder, in
no event, later than thirty (30) days after written notice of the dispute is
mailed via certified mail to the non-grieving party.
It is agreed that during the term of this Agreement the
arbitrator to whom the grievance shall be referred for a decision shall be
selected by the Purchaser and the Shareholder. If the parties fail to select
an arbitrator, the grievance shall be presented to the American Arbitration
Association. The voluntary labor arbitration rules of the American
Arbitration Association shall apply to the proceeding and the choice of
arbitrator.
The decision of the arbitrator shall be supported by substantial
evidence on the record as a whole, and shall be final and conclusive and
binding upon the Shareholder and the Purchaser. The arbitrator shall have no
power to add to or subtract from or modify in any way the terms of this
Agreement.
The arbitrator shall be requested to issue his written decision
not later than thirty (30) days from the date of the close of the hearing or,
if oral hearings have been waived, then from the date of transmitting the
final statements and proofs to the arbitrator. The decision of the
arbitrator will be accepted as final by the parties to the disputes, and both
will abide by it.
All expenses for the arbitrators services and the proceedings
shall be borne equally by the Purchaser and the Shareholder. However, each
party shall be responsible for compensating its own representatives and
witnesses.
7. NOTICES. Any notice or other communication required or permitted
hereunder shall be sufficiently given if delivered in person to Purchaser by
delivery to its Chairman of the Board of Directors or sent by telex, telecopy
or by registered or certified mail, postage prepaid, addressed as follows:
If to Shareholder, to:
Xxxxxxxxx Xxxxxxx
00 Xxxxxx Xxxx
Xxxxx Xxxxx, XX 00000
If to Purchaser, to:
Cadapult Graphic Systems Inc.
Attn: Xxxxxxx Xxxxx, President
000 Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
fax: 000-000-0000
IN WITNESS WHEREOF, Purchaser has by its appropriate officer signed
this Agreement and Shareholder has signed this Agreement, on and as of the
date and year first above written.
CADAPULT GRAPHIC SYSTEMS INC.
By:
-----------------------------
Xxxxxxx X. Xxxxx, President
SHAREHOLDER
--------------------------------
Xxxxxxxxx Xxxxxxx
Exhibit K - Restrictive Legend
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933. THE SHARES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933 OR AN OPINION OF THE COMPANY'S COUNSEL THAT REGISTRATION IS NOT
REQUIRED UNDER SAID ACT.
