<PAGE> 1
FORM 10-KSB/A
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999.
[ ] TRANSITION REPORT UNDER SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _________ TO ____________.
COMMISSION FILE NUMBER 0-27418
KINETIKS.COM, INC.
----------------------------------------------
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
DELAWARE 76-0478045
- --------------------------------- ---------------------
(STATE OR OTHER JURISDICTION IRS EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER
10055 WESTMOOR DRIVE, WESTMINSTER, CO 80021
- ---------------------------------------- ----------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
ISSUER'S TELEPHONE NUMBER, INCLUDING AREA CODE: (303) 534-1408
----------------
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
NAME OF EACH EXCHANGE ON
TITLE OF EACH CLASS WHICH REGISTERED
------------------- ------------------------
NONE NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
TITLE OF EACH CLASS
----------------------------
$.001 PAR VALUE COMMON STOCK
Check whether the issuer: (1) filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
shorter period that the issuer was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes [X] No [ ]
Check if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-KSB or any amendment to this form 10-KSB. [X]
State the issuer's revenues for its most recent year end: $761,300.
<PAGE> 2
As of April 14, 2000, the market value of the Registrant's $0.001 par
value common stock, excluding shares held by affiliates, was $7,950,000 based
on a closing bid price of $1.56 per share on the OTC Bulletin Board. There were
17,500,000 shares of common stock and 250,000 shares of preferred stock
convertible into 12,500,000 shares of common stock outstanding as of December
31, 1999.
FORWARD-LOOKING STATEMENTS
In addition to historical information, this Report contains
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995, and is thus prospective. The forward-looking
statements contained herein are subject to certain risks and uncertainties that
could cause actual results to differ materially from those reflected in the
forward-looking statements. Factors that might cause such a difference include,
but are not limited to, competitive pressures, changing economic conditions,
those discussed in the Section entitled "Management's Discussion and Analysis
of Financial Condition and Results of Operations," and other factors, some of
which will be outside the control of Kinetiks.com, Inc. (the "Company").
Readers are cautioned not to place undue reliance on these forward-looking
statements, which reflect management's analysis only as of the date hereof. The
Company undertakes no obligation to publicly revise these forward-looking
statements to reflect events or circumstances that arise after the date hereof.
Readers should refer to and carefully review the information in future
documents the Company files with the Securities and Exchange Commission.
<PAGE> 3
ITEM 9: DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The following table sets forth the names and ages of the Directors and
executive officers of Kinetiks.com, Inc. ("the Company") and the positions they
hold with the Company. Directors hold their positions until the next annual
meeting of stockholders and until their respective successors are elected and
qualified or until their earlier resignation, removal from office or death.
Executive officers serve at the pleasure of the Board of Directors.
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Jon V. Ludwig...............28 Chairman of the Board, President and Chief Executive Officer
M. Jay Vickers..............31 Chief Operating Officer
Paul Thomas.................30 Chief Financial Officer
Paul Piciocchi..............30 Executive Vice President of Mergers and Acquisitions and
Director
William J. Daughton.........55 Director
David C. Hardwicke..........62 Director
</TABLE>
- ---------------
JON V. LUDWIG, CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE
OFFICER. Mr. Ludwig has served as President and Chief Executive Officer of the
Company since November 1, 1999 and as Chairman of the Board since December,
1999. He founded Imagenuity, Inc. in October 1997 and served as its President
and Chief Executive Officer from its inception until completion of the merger in
December, 1999. From November, 1996 to October, 1997, he was employed by CGI
Systems, Inc., a national computer software application training company, as a
Certified Lotus Instructor and Special Project Manager. From 1994 to November,
1996, he was employed by Productivity Point International, a national computer
software application training company, as a Certified Lotus Instructor and
Technical Sales Specialist.
JAY VICKERS, CHIEF OPERATING OFFICER. Mr. Vickers has served as Chief
Operating Officer of the Company since January 3, 2000. From 1992 to 1997, he
co-owned and operated the Florida franchise group of Productivity Point
International. Following the sale of Productivity Point International's Florida
franchise group to Knowledge Universe in 1997, and through 1999, Mr. Vickers
served as Regional Vice President of Productivity Point International.
PAUL THOMAS, CHIEF FINANCIAL OFFICER. Mr. Thomas has served as Chief
Financial Officer of the Company since March, 2000. From June, 1997 to
February, 2000, Mr. Thomas was employed by Fannie Mae in Washington, D.C.,
where he was Director of Credit Portfolio Transactions. From 1996 to 1997, Mr.
Thomas was an Asset and Liability Manager at GE Capital Mortgage Services.
Prior to 1996, Mr. Thomas was an Assistant Vice President at Chase Manhattan
Mortgage. Mr. Thomas is a Chartered Financial Analyst (CFA), and a member of
both the Association for Investment Management and Research and the Washington
Society of Investment Analysts.
PAUL PICIOCCHI, EXECUTIVE VICE PRESIDENT OF MERGERS AND ACQUISITIONS
AND DIRECTOR. Mr. Piciocchi has served as Executive Vice President of Mergers
and Acquisitions and Director of the Company since December, 1999. He currently
also serves as the CEO of TechTrainUSA, a technology training company he
founded in 1999, and Piciocchi Investments, a real estate holding management
company. From 1992 to 1997, he co-owned and operated the Florida franchise
group of Productivity Point International. Following the sale of Productivity
Point International's Florida franchise group to Knowledge Universe in 1997,
and through 1999, Mr. Piciocchi served as Regional General Manager-Conversion
Specialist of Productivity Point International.
WILLIAM J. DAUGHTON, DIRECTOR. Mr. Daughton has served as Director of
the Company since December, 1999. Since 1994, Mr. Daughton has served as the
Director of the Lockheed-Martin Program of Engineering Management at the
University of Colorado. Prior to 1994, he was employed by Texas Instruments as
a senior scientist. Mr. Daughton received a Ph.D. in Applied Physics from the
University of Missouri in 1973.
DAVID C. HARDWICKE, DIRECTOR. Mr. Hardwicke has served as Director of
the Company since January 11, 2000. For the last six years, Mr. Hardwicke has
served as Global Account Manager for StorageTek, a preeminent provider of
network computing storage.
1
<PAGE> 4
FAMILY RELATIONSHIPS
Mr. Vickers is the brother in law of Mr. Ludwig.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors, officers and stockholders of more than 10% of the
Company's Common Stock to file with the Securities and Exchange Commission
initial reports of ownership and reports of changes in ownership of Common
Stock and any other equity securities of the Company. To the Company's
knowledge, based solely upon representations made by its directors, officers
and stockholders of more than 10% of the Company's Common Stock and a review of
forms, reports and certificates furnished to the Company by such persons, all
such reports were filed on a timely basis during 1999.
ITEM 10: EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION TABLE
The following table sets forth the annual compensation for services to
the Company, for the years ended December 31, 1999, 1998 and 1997, provided by
(i) Mr. Ludwig, the current Chief Executive Officer of the Company and (ii) Mr.
Gregory S. Carr, the Chief Executive Officer of the Company prior to the
Imagenuity merger in December, 1999. No executive officer of the Company
received compensation exceeding $100,000 during 1999.
SUMMARY COMPENSATION TABLE
Annual
Compensation
Name and ------------
Principal Position Year Salary
------------------ ---- ------
Jon V. Ludwig, Chairman of the Board, President and 1997 NA
Chief Executive Officer (1) 1998 NA
1999 $12,500
Gregory S. Carr, Chief Executive Officer (2) 1997 $0
1998 $0
1999 $0
- ---------------
(1) Mr. Ludwig was appointed as President and Chief Executive Officer of the
Company on November 1, 1999. He was not an employee of the Company, and
received no compensation from the Company, prior to that date.
(2) Mr. Carr resigned as Chief Executive Officer when Mr. Ludwig was retained.
Mr. Carr received no compensation for his service as Chief Executive
Officer during 1997, 1998 and 1999.
EMPLOYMENT AGREEMENTS
Mr. Ludwig has entered into an employment agreement with the Company
(the "Employment Agreement"), effective as of November 1, 1999, pursuant to
which he has agreed to serve as the Company's Chief Executive Officer and
President. The Employment Agreement provides that, during the first year of
employment, Mr. Ludwig shall be paid an annual salary of $75,000. Mr. Ludwig's
compensation in subsequent years shall be established by the board of directors
from time to time. The employment agreement is terminable at will upon 90-day's
written notice by either party and is subject to automatic one-year renewals,
unless either party provides the other party with written notice of
termination.
2
<PAGE> 5
COMPENSATION TO OUTSIDE DIRECTORS
The members of the Company's Board of Directors did not receive any
cash compensation for their services as directors although they were reimbursed
for out-of-pocket expenses in attending Board of Directors' meetings.
ITEM 11: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of March 31, 2000, information as
to the beneficial ownership of the Company's voting securities by (i) each
person known to the Company as having beneficial ownership of more than 5% of
the Company's voting securities, (ii) each person serving the Company as a
Director on such date, (iii) each person serving the Company as an executive
officer on such date who qualifies as a "named executive officer" as defined in
Item 402(a)(2) of Regulation S-B under the Securities Exchange Act of 1934, and
(iv) all of the Directors and executive officers of the Company as a group.
<TABLE>
<CAPTION>
Percentage
Number of Shares Percentage Number of Shares of of Preferred
of Common Stock of Common Stock Preferred Stock Stock
Name and Address(1) Beneficially Owned Outstanding(2) Beneficially Owned Outstanding(3)
- ------------------------------------------ -------------------- ---------------- --------------------- ---------------
<S> <C> <C> <C> <C>
SECURITY OWNERSHIP OF OFFICERS AND
DIRECTORS:
Jon V. Ludwig.............................. 10,000,000 57% 250,000 100%
Paul Piciocchi............................. 750,000 4% 0 0%
William J. Daughton........................ 0 0 0 0%
David C. Hardwicke(4)...................... 18,500 * 0 0%
Gregory S. Carr(5)......................... 284,000 2% 0 0%
Officers and Directors as a Group
(7 persons)................................ 11,030,000 63% 250,000 100%
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS:
The Rockies Fund, Inc.(6) ................. 1,845,323 11% 0 0%
</TABLE>
- ---------------
* Less than one percent
(1) Unless otherwise indicated, the address of each of the beneficial owners
identified is 10055 Westmoor Drive, Westminister, CO 80021.
(2) Unless otherwise noted, each person has voting and investment power with
respect to all such shares. The share data is based on 17,450,000 shares
of Common Stock outstanding. Pursuant to the rules of the Securities and
Exchange Commission, certain shares of Common Stock which a person has the
right to acquire within 60 days of the date hereof pursuant to the
exercise of stock options are deemed to be outstanding for the purpose of
computing the percentage ownership of such person but are not deemed
outstanding for the purpose of computing the percentage ownership of any
other person.
(3) Based on 250,000 shares of Series A Preferred Stock outstanding. The
shares of Series A Preferred Stock are immediately convertible into
12,500,000 shares of the Common Stock of the Company.
(4) Does not include 6,500 shares owned beneficially by Jean Hardwicke, Mr.
Hardwicke's wife, as to which shares Mr. Hardwicke disclaims beneficial
ownership.
(5) The address of Mr. Carr is 4906 Pine Garden, Kingwood, TX 77345.
(6) To the Company's knowledge, the shares listed as owned by The Rockies Fund,
Inc. are owned either directly or indirectly through subsidiaries and
affiliates of The Rockies Fund, Inc. including without limitation Marco
Foods, WebQuest, Inc. and R.V. Holiday.com, Inc. The address for The
Rockies Fund is 5373 North Union Boulevard, Suite 100, Colorado Springs,
Colorado 80198.
3
<PAGE> 6
ITEM 12: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On January 26, 1998, Mr. and Ms. Carr entered into an agreement with
The Rockies Fund ("the Fund"), a stockholder of the Company, whereby the Carrs
agreed to sell up to 2,900,000 shares of their stock to the Fund at the rate of
$0.05 per share. As of May 5, 1999, the Fund, Mr. Calandrella, the president of
the Fund, certain of his family members, and other entities that are controlled
by the Fund, own a total of 1,845,323 shares of the Company's Common Stock. The
shares owned represent approximately 11% of the outstanding shares of Common
Stock of the Company.
In February 1997 and during 1998, the Company borrowed $25,000 and
$61,476, respectively, from the Fund, a shareholder which is a "business
development company" under the Investment Company Act of 1940. The $25,000 note
bears interest at 10% (default rate 18%) and was due March 21, 1997. Pursuant
to the note agreement, the Company issued warrants to purchase 50,000 shares of
its Common Stock at $.25 per share to the Fund. Additionally, the note
agreement requires the Company to issue to the Fund 50,000 warrants monthly for
every month that the note is in default. As of May 5, 1999, the Company had
granted 1,350,000 warrants to the Fund. The $61,476 note bears interest at 8%
and has no specific repayment terms. No warrants were issued pursuant to the
$61,476 note payable. Subsequent to December 31, 1998, the Company also
borrowed approximately $29,000 from the Fund. The note issued in connection
with this borrowing bears interest at 8%, has no stated repayments terms and is
without collateral.
Mr. Carr advanced funds to the Company to fund its operating and
start-up expenses. In connection with this loan, the Company issued a note to
Mr. Carr which bore interest at 9% per annum and matured in January 1997. In
January 1997, when the Company was unable to pay this note, Mr. Carr accepted
as partial payment the Company's automobile. The net book value of the
automobile approximated $21,000, which Mr. Carr and the Company believed to be
the automobile's estimated fair market value. During the year ended December
31, 1997, the Company reduced the principal amount owed to the shareholder
officer by $18,756, which represented personal charges made by Mr. Carr on the
Company's credit card. In addition to the remaining unpaid principal and
interest pursuant to the note payable to Mr. Carr, the Company owed Mr. Carr
and his wife, who was previously an officer and director of the Company,
accrued wages and unreimbursed expenses in the amount of $64,960 and $4,061,
respectively. In April 1998, the Company and Mr. Carr and his wife entered into
a settlement agreement, pursuant to which the Carrs agreed to accept a cash
payment in the amount of $6,700 to settle all outstanding claims and to
contribute the remaining balances, in the amount of $250,245, as additional
paid in capital to the Company.
ITEM 13: EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
(2) Agreement and Plan of Merger, dated October 11, 1999, between the
Company, Elinear Corporation and Imagenuity, Inc. -- incorporated herein by
reference from the Company's Current Report on Form 8-K filed with the
Commission on October 25, 1999
(3)(i) Articles of Incorporation of Kinetiks.com, Inc. -- incorporated
herein by reference from the Company's Form 10-KSB for the period ending
December 31, 1995
(3)(ii) By-laws of Kinetiks.com Inc. -- incorporated herein by
reference from the Company's Form 10-KSB for the period ending December 31,
1995
(10) Employment Agreement between the Company and Jon Ludwig dated
December, 1999
(21) Subsidiaries of the Company
(27) Financial Data Schedule (previously filed with the Company's
Form 10-KSB on April 14, 2000)
(b) Reports on Form 8-K
The Company filed a Form 8-K with the Commission on October 25, 1999
in which it reported under Item 2 that it had entered into an Agreement and
Plan of Merger, dated October 11, 1999, pursuant to which Imagenuity, Inc., a
Florida corporation, would be merged with and into the Company's wholly-owned
subsidiary, Elinear Corporation.
4
<PAGE> 7
The Company filed an amendment to its prior Form 8-K on December 21,
1999 in which it reported that the conditions to the Imagenuity merger had been
satisfied.
The Company filed a Form 8-K with the Commission on February 7, 2000
in which it filed, in connection with the Imagenuity merger: (a) the Report of
Independent Certified Public Accountants; the audited Balance Sheets as of
December 31, 1998, 1997; the audited Statements of Operations for the period
October 20, 1997 (inception) through December 31, 1997 and for the year ended
December 31,1998; the audited statements of Stockholder's Equity for the period
October 20, 1997 (inception) through December 31, 1997 and for the year ended
December 31, 1998; and the audited Statements of Cash Flows for the period
October 20, 1997 (inception) through December 31, 1998 and for the year ended
December 31, 1998, of Imagenuity, Inc. d/b/a eLinear, together with the notes
thereto; and (b) the unaudited Proforma Combined Condensed Financial
Information of Kinetiks.com, Inc. and subsidiary and Imagenuity, Inc. d/b/a
eLinear, consisting of the unaudited proforma combined, condensed Balance
Sheet for Kinetiks.com, Inc. and subsidiary and Imagenuity, Inc. d/b/a eLinear
as of October 31, 1999; unaudited proforma combined, condensed Statements of
Operations for Kinetiks.com, Inc. and subsidiary and Imagenuity, Inc. d/b/a
eLinear, for the year ended December 31, 1998 and the ten-month period ended
October 31, 1999 with adjustments.
5
<PAGE> 8
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this Report to be signed on its behalf
by the undersigned, thereunto duly authorized.
KINETIKS.COM, INC.
By: /s/ Jon V. Ludwig
-----------------------------
Jon V. Ludwig, President and
Chief Executive Officer
Dated: 4/30/00
6
<PAGE> 9
EXHIBIT INDEX
(2) Agreement and Plan of Merger, dated October 11, 1999, between
the Company, Elinear Corporation and Imagenuity, Inc. -- incorporated herein by
reference from the Company's Current Report on Form 8-K filed with the
Commission on October 25, 1999
(3)(i) Articles of Incorporation of Kinetiks.com, Inc. --
incorporated herein by reference from the Company Form 10-KSB for the period
ending December 31, 1995
(3)(ii) By-laws of Kinetiks.com Inc. -- incorporated herein by
reference from the Company Form 10-KSB for the period ending December 31, 1995
(10) Employment Agreement between the Company and Jon Ludwig dated
December, 1999
(21) Subsidiaries of the Company
(27) Financial Data Schedule (previously filed with the Company's
Form 10-KSB on April 14, 2000)
7
<PAGE> 1
EXHIBIT 10
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into as of October 12, 1999, to be
effective on the 1st day of November, 1999, between Kinetiks.com, Inc. a
Delaware corporation ("Kinetiks"), and Jon V. Ludwig ("Ludwig").
RECITALS
Kinetiks, Elinear Corporation, a Colorado corporation ("Elinear") and
Imagenuity, Inc., a Florida corporation ("Imagenuity") have entered into an
Agreement and Plan of Merger, dated as of October 11, 1999, ("the "Plan") under
which Imagenuity will merge with Elinear (the "Merger") and under which shares
of Kinetiks Common Stock and Series A Preferred Convertible Stock, which,
following the Merger, will vest in Ludwig approximately 75 percent of the
control of Kinetiks, will be distributed to Ludwig.
Under Subsection 7.01(k) of the Plan, Kinetiks may terminate and
abandon the Plan if Ludwig fails to enter into this Agreement.
THEREFORE, in consideration of the premises and of the mutual covenants
set forth in this Agreement, Kinetiks and Ludwig agree as follows:
1. ENGAGEMENT. Kinetiks hereby appoints and employs Jon Ludwig as
president of Kinetiks and Elinear and Ludwig accepts such appointment and
employment, subject to the terms and conditions set forth in this Agreement.
2. DUTIES.
(a) Ludwig shall (i) perform the duties of president and
chief executive officer of Kinetiks and Elinear, (ii) provide all services
necessary and reasonable to develop and promote the businesses of Kinetiks and
Elinear and (iii) provide such other services as the board of directors of
Kinetiks and Elinear shall request from time to time.
(b) Ludwig shall diligently and conscientiously devote
his attention and his best efforts on a full-time basis to the discharge of his
duties, subject only to the directives of the board of directors of Kinetiks.
3. COMPENSATION.
For the year commencing on November 1, 1999, Kinetiks shall pay Ludwig
an annual salary of $75,000, payable in 12 equal monthly installments. Ludwig's
compensation in subsequent years shall be established by the board of directors
from time to time.
4. COVENANT OF NONDISCLOSURE; COMPETITION.
(a) Ludwig acknowledges that in connection with, and as a
result of his employment by Kinetiks (i) Ludwig will develop, has use of, will
acquire, and will be provided information that Ludwig believes is, or Kinetiks
has designated as, confidential information or a trade secret, and (ii) Ludwig
will have access to financial and accounting information, programs, designs,
systems, proprietary and other computer software, business plans, procedures,
estimates, manuals, and reports, all of which are referred to generally as the
"Proprietary Information." Ludwig acknowledges that the Proprietary Information
is a valuable asset of Kinetiks and is subject to the terms of this Agreement
notwithstanding how such information is delivered or disclosed to or discovered
by Ludwig during the term of this Agreement.
1
<PAGE> 2
(b) Ludwig shall upon the termination of this Agreement,
promptly deliver to Kinetiks all Proprietary Information. Ludwig shall not,
without the prior written consent of Kinetiks, copy or remove from Kinetiks a
copy of Proprietary Information upon termination of his employment under this
Agreement.
(c) Ludwig shall not, at any time directly or indirectly,
use for any purpose whatsoever other than for the benefit of Kinetiks (including
any corporation or entity that controls, is controlled by, or is under common
control with Kinetiks) any Proprietary Information (the "Covenant of
Nondisclosure").
(d) During the Term of this Agreement, and for a period
of one year following the termination of this Agreement, Ludwig shall not
directly or indirectly engage in any business similar to the business of
Kinetiks or have any interest directly or indirectly in any such business (the
"Covenant Not to Compete"). This covenant is necessary to protect Kinetiks'
interests in the Proprietary Information.
(e) In the event Ludwig breaches the Covenant of
Nondisclosure or the Covenant Not to Compete, Kinetiks, in addition to and not
in limitation of any other rights, remedies, or damages available to it at law
or in equity, shall be entitled to the following relief: (i) a permanent
injunction or order to prevent or restrain any breach of the Covenant of
Nondisclosure or the Covenant Not to Compete by Ludwig or any person directly or
indirectly acting for or with Ludwig and (ii) and accounting and repayment of
all compensation that Ludwig directly or indirectly shall have realized and may
realize as a result of, growing out of, or in connection with, this Agreement.
5. TERM. This Agreement shall be terminable at will upon 90 days
prior written notice by either party. It shall automatically renew as of
November 1, 2000, and each year after that unless written notice of termination
is delivered by Kinetiks to Ludwig or Ludwig shall deliver a written notice of
his resignation to Kinetiks. The date of such termination or resignation shall
for purposes of this Agreement be the earlier of the date described in the
notice or the date such notice is sent or received by Ludwig.
6. TRANSFER FEE. Notwithstanding any restriction or limitation to
the contrary in paragraph 4 related to the Nondisclosure Covenant or the
Covenant Not to Compete, for a period of one year following the termination of
this Agreement, Ludwig shall pay and turn over to Kinetiks an amount (the
"Transfer Fee") equal to 100 percent of any profit, fees or commissions received
by Ludwig from any individual or entity that was a customer or client of
Kinetiks as of the date of the termination (the "Existing Clients"). The
obligation to pay Ludwig the Transfer Fee shall commence effective as of
Ludwig's date of termination and shall be due 15 days after Ludwig shall receive
any payment from Existing Clients.
7. GENERAL PROVISIONS.
(a) Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given when delivered
personally or on the third succeeding business day after being mailed, postage
prepaid, as follows:
If to Kinetiks.com, Inc. at:
Kinetiks.com, Inc.
Attn.: Jon Ludwig
10055 Westmoor Drive, Suite 230
Westminster, Colorado 80021
If to Jon Ludwig at:
Jon Ludwig
10055 Westmoor Drive, Suite 230
Westminster, Colorado 80021
2
<PAGE> 3
(b) Assignment. This Agreement shall not be assignable by
either party. Nothing in this Agreement, express or implied, is intended to
confer upon any persons, other than the parties and their successors and
assigns, any rights or remedies under or by reason of this Agreement.
(c) Entire Agreement; Amendments. This Agreement
represents the entire agreement of the parties with respect to the subject
matter hereof, superseding all prior agreements, understandings, discussions,
negotiations and commitments of any kind. This Agreement may not be amended or
supplemented, nor may any rights hereunder be waived, except in writing signed
by Kinetiks and Ludwig.
(d) Invalidity. If any provision of this Agreement is
invalid, illegal, or unenforceable, the balance of this Agreement shall remain
in effect, and if any provision is inapplicable to any person or circumstances,
it shall nevertheless remain applicable to all other persons and circumstances.
(e) Waiver. Any waiver of a breach of any provision of
this Agreement shall not operate as or be construed to be a waiver of any other
breach of that provision or of any breach of any other provision of this
Agreement. The failure of a party to insist upon strict adherence to any term of
this Agreement on one or more occasions shall not be considered a waiver or
deprive that party of the right after such time to insist upon strict adherence
to that term or any other term of this Agreement. No waiver shall be effective
unless it is written and signed by the waiving party, and, in the case of a
corporation, authorized by a resolution of the board of directors or by an
officer of such corporation.
(f) Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of Colorado, without giving effect to
conflict of laws. Any action, suit or proceeding arising out of, based on, or in
connection with this Agreement, may be brought only in the District Court for
the City and County of Denver and each party covenants and agrees not to assert,
by way of motion, as a defense, or otherwise, in any such action, suit, or
proceeding, any claim that it is not subject personally to the jurisdiction of
such court, that its property is exempt or immune from attachment or execution,
that the action, suit, or proceeding is brought in an inconvenient forum, that
the venue of the action, suit, or proceeding is improper, or that this Agreement
or its subject matter may not be enforced in or by such court.
The parties have executed this Agreement on the day and date first
above written.
Kinetiks.com, Inc.
By: /s/ Bradley Smith
----------------------------------
Bradley Smith, assistant secretary
/s/ Jon V. Ludwig
--------------------------------------
Jon V. Ludwig, individually
3
<PAGE> 1
EXHIBIT 21
Subsidiaries of the Company as of March 31, 2000:
Elinear Corporation, a Colorado corporation
