UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES PURSUANT TO SECTION
12(b) OR 12(g) OF
THE SECURITIES EXCHANGE ACT OF 1934
TMEX USA, Inc.
(Exact name of registrant as specified in its charter)
Nevada 33-0248339
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
5031 Birch Street, Suite G, Newport Beach, California 92660
(Address of principal executive offices) (Zip Code)
949.863.9872
(Registrant's Telephone Number, Including Area Code)
Securities to be registered under Section 12(b) of the Act:
Title of Each Class: Name of Each Exchange on which Registered:
None None
Securities to be registered under Section 12(g) of the Act:
Common Stock, Par Value $.001
(Title of Class)
If this form relates to the registration of a class of securities pursuant to
Section 12(b) of the Exchange Act and is effective pursuant to General
Instruction A.(c), check the following box. [_]
If this form relates to the registration of a class of securities pursuant to
Section 12(g) of the Exchange Act and is effective pursuant to General
Instruction A.(d), check the following box.[x]
Securities Act registration statement file number to which this form relates:
Not applicable.
1
<PAGE>
We have filed our annual report of Form 10-KSB for the year ended December 31,
1999 concurrently with the filing this Registration Statement on Form 8-A.
Item 1. Description of Registrant's Securities to be Registered.
We are authorized to issue 50,000,000 shares of common stock, $.001 par value,
each share of common stock having equal rights and preferences, including voting
privileges. We are not authorized to issue shares of preferred stock. As of
March 31, 2000, 14,679,437 shares of our $.001 par value common stock were
issued and outstanding.
Our shares of $.001 par value common stock constitute equity interests entitling
each shareholder to a pro rata share of cash distributions made to shareholders,
including dividend payments. The holders of our common stock are entitled to one
vote for each share of record on all matters to be voted on by shareholders.
There is no cumulative voting with respect to the election of our directors or
any other matter, with the result that the holders of more than 50% of the
shares voted for the election of those directors can elect all of the Directors.
The holders of our common stock are entitled to receive dividends when, as and
if declared by our Board of Directors from funds legally available therefor;
provided, however, that cash dividends are at the sole discretion of our Board
of Directors. In the event of our liquidation, dissolution or winding up, the
holders of common stock are entitled to share ratably in all assets remaining
available for distribution to them after payment of our liabilities and after
provision has been made for each class of stock, if any, having preference in
relation to our common stock. Holders of the shares of our common stock have no
conversion, preemptive or other subscription rights, and there are no redemption
provisions applicable to our common stock.
Dividend Policy. We have never declared or paid a cash dividend on our capital
stock and do not expect to pay cash dividends on our common stock in the
foreseeable future. We currently intend to retain our earnings, if any, for use
in our business. Any dividends declared in the future will be at the discretion
of the Board of Directors and subject to any restrictions that may be imposed by
our lenders.
Item 2. Exhibits
- ------- --------
3.1 Articles of Incorporation
(Charter Document)
3.2 Certificate of Amendment to Articles of Incorporation
(Charter Document)
3.3 Bylaws
10.1 Employment Agreement with Crofton Cooper
(material contract)
10.2 Employment Agreement with Cooper Lee
(material contract)
10.3 Employment Agreement with Cecil Zeringue
(material contract)
10.4 Employment Agreement with Michael Garone
(material contract)
10.5 Indemnification Agreement with Crofton Cooper
(material contract)
2
<PAGE>
10.6 Indemnification Agreement with Cooper Lee
(material contract)
10.7 Indemnification Agreement with Cecil Zeringue
(material contract)
10.8 Stock Option Plan
3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned in the City of Newport Beach, California, on April 12,
2000.
TMEX USA, Inc.,
a Nevada corporation
By: /s/ COOPER LEE
----------------------------
Cooper Lee
Its: President
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
TMEX USA, Inc.
/s/ CROFTON COOPER April 12, 2000
- ----------------------------------------
Crofton Cooper, Chief Executive
Officer, Secretary, Treasurer, Director
/s/ CECIL ZERINGUE April 12, 2000
- ----------------------------------------
Cecil Zeringue, Vice President, Director
4
[STAMP]
FILED
IN THE OFFICE OF THE
SECRETARY OF STATE OF THE
STATE OF NEVADA
JUL 20 1987
FRANKIE ___ DEL PAPA SECRETARY OF THE STATE
/s/ FRANKIE ___ DEL PAPA
No. 5505-87
ARTICLES OF INCORPORATION
OF
SWISS CELLULAR LABORATORIES, INC.
****
FIRST. The name of the corporation is
SWISS CELLULAR LABORATORIES, INC.
SECOND. Its principal office in the State of Nevada is located at One East
First Street, Reno Washoe County, Reno, Nevada 89501. The name and address of
its resident agent is The Corporation Trust Company of Nevada, One East First
Street, Reno, Nevada 89501.
THIRD. The nature of the business, or objects or purposes proposed to be
transacted, promoted or carried on are:
To engage in any lawful activity and to manufacture, purchase or otherwise
acquire, invest in, own, mortgage, pledge, sell assign and transfer or otherwise
dispose of, trade, deal in and deal with goods, wares and merchandise and
personal property of every class and description.
FOURTH: The amount of the total authorized capital stock of the corporation
is fifty million (50,000,000) shares of common stock of the par value of one
tenth of one cent ($.001) each.
FIFTH. The governing board of this corporation shall be known as directors,
and the number of directors may from time to time be increased or decreased in
such manner as shall be provided by the by-laws of this corporation, provided
that the number of directors shall not be reduced to less than five (5) except
that in cases where all the shares of the corporation are owned bemefocially and
of record by wither one or tow stockholders, the number of directors may be less
than five (5) but not less than the number of stockholders.
The initial number of stockholders shall be one (1).
The name and post-office address of the first Board of Directors, which
shall be three (3), are as follows:
NAME POST-OFFICE ADDRESS
---- -------------------
John D. Davis, Sr. 109 Via Yella
Newport Beach, CA 92663
Rodger W. Garrity 15292 Nantes Cir.
Irvine, CA 92714
Frankie M. Garrity 15292 Nantes Cir.
Irvine, CA 92714
<PAGE>
SIXTH. The capital stock, after the amount of the subscription price, or
par value, has been paid in shall not be subject to assessment to pay the debts
of the corporation.
SEVENTH. The name and post-office address of each of the incorporators
signing the Articles of Incorporation are as follows:
NAME POST-OFFICE ADDRESS
---- -------------------
John D. Davis, Sr. 109 Via Yella
Newport Beach, CA 92663
Rodger W. Garrity 15292 Nantes Cir.
Irvine, CA 92714
Frankie M. Garrity 15292 Nantes Cir.
Irvine, CA 92714
EIGHTH. The corporation is to have perpetual existence.
NINTH. In furtherance and not limitation of the powers conferred by
statute, the board of directors is expressly authorized:
Subject to the by-laws, if any, adopted by the stockholders, to make, alter
or amend the by-laws of the corporation.
To fix the amount to be reserved as working capital over and above its
capital stock paid in, to authorize and cause to be executed mortgages and liens
upon the real and personal property of this corporation.
By resolution passed by a majority of the whole board, to designate one (1)
or more committees, each committee to consist of one (1) or more of the
directors of the corporation, which, to the extent provided in the resolution or
in the by-laws of the corporation, shall have and may exercise the powers of the
board of directors in the management of the business and affairs of the
corporation, and may authorize the seal of the corporation to be affixed to all
papers which may require it. Such committee or committees shall have such name
or names as may be stated in the by-laws of the corporation or as may be
determined from time to time by resolution adopted by the board of directors.
When and as authorized by the affirmative vote of stockholders holding
stock entitling them to exercise at least a majority of the voting power given
at a stockholders' meeting called for that purpose, or when authorized by the
written consent of the holders of at least a majority of the voting stock issued
and outstanding, the board of directors shall have power and authority at any
meeting to sell, lease or exchange all of the property and assets of the
corporation, including its good will and its corporate franchises, upon such
terms and conditions as its board of directors deem expedient and for the best
interests of the corporation.
<PAGE>
TENTH. Meetings of stockholders may be held outside the State of Nevada, if
the by-laws so provide. The books of the corporation may be kept (subject to any
provision contained in the statutes) outside the State of Nevada at such place
or places as may be designated from time to time by the board of directors or in
the by-laws of the corporation.
ELEVENTH. This corporation reserves the right to amend, alter, change or
repeal any provision contained in the articles of incorporation, in the manner
now or hereafter prescribed by statute, or by the articles of incorporation, and
all rights conferred upon stockholders herein are granted subject to this
reservation.
WE, THE UNDERSIGNED, being each of the incorporators hereinbefore named for
the purpose of forming a corporation pursuant to the General Corporation Law of
the State of Nevada, do make and file these articles of incorporation, hereby
declaring and certifying that the facts herein stated are true, and accordingly
have hereunto set our hands this 16th day of July, 1987.
/s/ John D. Davis, Sr.
----------------------
John D. Davis, Sr.
/s/ Rodger W. Garrity
----------------------
Rodger W. Garrity
/s/ Frankie M. Garrity
----------------------
Frankie M. Garrity
<PAGE>
STATE OF CALIFORNIA
COUNTY OF ORANGE
On this 16th day of July, 1987, before me, a Notary Public, personally
appeared John. D. Davis, Sr., Rodger W. Garrity and Frankie M. Garrity, who
severally acknowledged that they executed the above instrument.
/s/ Vicki K. Wessel
----------------------------
Notary Public
- --------------------------------------------------------------------------------
CAT. NO. NN00627
TO 1944 CA (9-84)
[LOGO] TICOR TITLE INSURANCE
(Individual)
STATE OF CALIFORNIA )SS.
COUNTY OF ORANGE )
On July 16, 1987 before me, the undersigned, a Notary Public in and for said
State, personally, appeared John D. Davis, Sr., Rodger W. Garrity and Frankie M.
Garrity, personally known to me or proved to me on the basis of satisfactory
evidence to be the persons whose names are subscribed to the within instrument
and acknowledged that they executed the same.
WITNESS my hand and official deal. [NOTARIAL SEAL]
Vicki K. Wessel
Signature /s/ Vicki K. Wessel NOTARY PUBLIC CALIFORNIA
------------------------ PRINCIPAL OFFICE IN
ORANGE COUNTY
My Commission Expires Feb. 12, 1991
(This areas for official notarial seal)
CERTIFICATE OF AMENDMENT
(After Issuance of Stock) Filed by:
FILED
IN THE OFFICE OF THE
SECRETARY OF STATE OF THE
STATE OF NEVADA
JUN 15 1995
DEAN HELLER SECRETARY OF STATE
/s/ Dean Heller
Swiss Cellular Laboratories, Inc.
- --------------------------------------------------------------------------------
Name of Corporation
We the undersigned Rodger W. Garrity and
-------------------------------------
President or Vice President
Frankie M. Garrity of Swiss Cellular Laboratories, Inc.
- ---------------------------------- -------------------------------------------
Secretary or Assistant Secretary Name of Corporation
do hereby certify:
That the Board of Directors of said corporation at a meeting duly convened,
on the 13th day of June, 1995, adopted a resolution to amend the original
articles as follows:
Article FIRST is hereby amended to read as follows:
The name of the corporation is
TMEX USA, INC.
The number of shares of the corporation outstanding and entitled to vote on
an amendment to the Articles of Incorporation is 300,000; that the said
change(s) and amendment have been consented to and approved by a majority vote
of the stockholders holding at least a majority of each class of stock
outstanding and entitled to vote thereon.
/s/ Rodger Garrity
-----------------------------------
President or Vice President
/s/ Frankie M. Garrity
-----------------------------------
Secretary or Assistant Secretary
--------------------------
[SEAL]
State of California ) A. MESBAH
)SS. Comm. #1056732
County of Orange ) NOTARY PUBLIC - CALIFORNIA
ORANGE COUNTY
Comm. Exp. May 17, 1999
--------------------------
On June 14, 1995, personally appeared before me, a Notary Public,
Rodger Garrity and Frankie Garrity, who acknowledged that they executed the
- ----------------------------------
Names of Persons Appearing and Signing Documents
above instrument.
/s/ [ILLEGIBLE]
-----------------------------------------------
Signature of Notary
--------------------------
(Notary Stamp Or Seal) [SEAL]
A. MESBAH
Comm. #1056732
NOTARY PUBLIC - CALIFORNIA
ORANGE COUNTY
Comm. Exp. May 17, 1999
--------------------------
RECEIVED
JUN 15 1995
11:55 [ILLEGIBLE]
------------------
SECRETARY OF STATE
- 6 -
SWISS CELLULAR LABORATORIES, INC.
(a Nevada corporation)
****
BY-LAWS
****
ARTICLE I
OFFICES
Section 1. The principal office shall be in the City of Reno, County of
Washoe, State of Nevada.
Section 2. The corporation may also have offices at such other places both
within and without the State of Nevada as the Board of Directors may from time
to time determine or the business of the corporation may require.
ARTICLE II
MEETING OF STOCKHOLDERS
Section 1. All annual meetings of the stockholders shall be held in the
City of Irvine, State of California. Special meetings of the stockholder may be
held at such time and place within or without the State of Nevada as shall be
stated in the notice of the meeting, or in a duly executed waiver of notice
thereof.
Section 2. Annual meetings of stockholders, commencing with the year 1988,
shall be held on the 30th day of May, if not a legal holiday, and if a legal
holiday, then on the next regular day following, at 10:00 A.M., at which they
shall elect by a plurality vote a board of directors, and transact such other
business as may properly be brought before the meeting.
Section 3. Special meetings of the stockholders, for any purpose or
purposes, unless otherwise prescribed by statute or by the articles of
incorporation, may be called by the president and shall be called by the
president or secretary at the request in writing of a majority of the board of
directors, or at the request in writing of stockholders owning a majority in
amount of the entire capital stock of the corporation issued and outstanding and
entitled to vote. Such request shall state the purpose or purposes of the
proposed meeting.
<PAGE>
Section 4. Notices of meetings shall be in writing and signed by the
president or a vice president, or the secretary, or an assistant secretary, or
by such other person or persons as the directors shall designate. Such notice
shall state the purpose or purposes for which the meeting is called and the time
when, and the place, which may be within or without this state, where it is to
be held. A copy of such notice shall be either delivered personally to or shall
be mailed, postage prepaid, to each stockholder of record entitled to vote at
such meeting not less than ten nor more than sixty days before such meeting. If
mailed, it shall be directed to a stockholder at his address as it appears upon
the records of the corporation and upon such mailing of any such notice, the
service thereof shall be complete, and the time of the notice shall begin to run
from the date upon which such notice is deposited in the mail for transmission
to such stockholder. Personal delivery of any such notice to any officer of a
corporation or association, or to any member of a partnership shall constitute
delivery of such notice to such corporation, association or partnership. In the
event of the transfer of stock after delivery or mailing of the notice of and
prior to the holding of the meeting, it shall not be necessary to deliver or
mail notice of the meeting to the transferee.
Section 5. Business transacted at any special meeting of stockholders shall
be limited to the purpose stated in the notice.
Section 6. The holders of a majority of the stock issued an outstanding and
entitled to vote thereat, present in person or represented by proxy, shall
constitute a quorum at all meetings of the stockholders for the transaction of
business except as otherwise provided by statute or by the articles of
incorporation. If, however, such quorum shall not be present or represented at
any meeting of the stockholders, the stockholders entitled to vote thereat,
present in person or represented by proxy, shall have power to adjourn the
meeting from time to time, without notice other than announcement at the
meeting, until a quorum shall be present or represented. At such adjourned
meeting at which a quorum shall be present or represented any business may be
transacted which might have been transacted at the meeting as originally
notified.
Section 7. When a quorum is present or represented at any meeting, the vote
of the holders of a majority of the stock haveing voting power present in person
or represented by proxy shall decide any question brought before such meeting,
unless the question is one upon which by express provision of the statutes or of
the articles of incorporation a different vote is required in which case such
express provision shall govern and control the decision of such question.
Section 8. Every stockholder of record of the corporation shall be entitled
at each meeting of stockholders to one vote for each share of stock standing in
his name on the books of the corporation.
<PAGE>
Section 9. At any meeting of the stockholders, any stockholder may be
represented and vote by a proxy or proxies appointed by an instrument in
writing. In the event that any such instrument in writing shall designate two or
more persons to act as proxies, a majority of such persons present at the
meeting, or, if only one shall be present, then that one shall have and may
exercise all of the powers conferred by such written instrument upon all of the
persons so designated unless the instrument shall otherwise provide. No such
proxy shall be valid after the expiration of six months from the date of its
execution, unless coupled with an interest, or unless the person executing it
specifies therein the length of time for which it is to continue in force, which
in no case shall exceed seven years from the date of its execution. Subject to
the above, any proxy duly executed is not revoked and continues in full force
and effect until an instrument revoking it or a duly executed proxy bearing a
later date is filed with the secretary of the corporation.
Section 10. Any action, except election of directors, which may be taken by
the vote of the stockholders at a meeting, may be taken without a meeting if
authorized by the written consent of stockholders holding at least a majority of
the voting power, unless the provisions of the statutes or of the articles of
incorporation require a greater proportion of voting power to authorize such
action in which case such greater proportion of written consents shall be
required.
ARTICLE III
DIRECTORS
Section 1. The number of directors which shall constitute the whole board
shall be five (5). The directors shall be elected at the annual meeting of the
stockholders, and except as provided in Section 2 of this article, each director
elected shall hold office until his successor is elected and qualified.
Directors need not be stockholders.
Section 2. Vacancies, including those caused by an increase in the number
of directors, may be filled by a majority of the remaining directors though less
than a quorum. When one or more directors shall give notice of his or their
resignation to the board, effective at a future date, the board shall have power
to fill such vacancy or vacancies to take effect when such resignation or
resignations shall become effective, each director so appointed to hold office
during the remainder of the term of office of the resigning director or
directors.
Section 3. The business of the corporation shall be managed by its board of
directors which may exercise all such powers of the corporation and do all such
lawful acts and things as are not by statute or by the articles of incorporation
or by these by-laws directed or required to be exercised or done by the
stockholders.
<PAGE>
Section 4. The board of directors of the corporation may hold meetings,
both regular and special, either within or without the State of Nevada.
MEETINGS OF THE BOARD OF DIRECTORS
Section 5. The first meeting of each newly elected board of directors shall
be held at such time and place as shall be fixed by the vote of the stockholders
at the annual meeting and no notice of such meeting shall be necessary to the
newly elected directors in order legally to constitute the meeting, provided a
quorum shall be present. In the event of the failure of the stockholders to fix
the time or place of such first meeting of the newly elected board of directors,
or in the event such meeting is not held at the time and place so fixed by the
stockholders, the meeting may be held at such time and place as shall be
specified in a notice given as hereinafter provided for special meetings of the
board of directors, or as shall be specified in a written waiver signed by all
of the directors.
Section 6. Regular meetings of the board of directors may be held without
notice at such time and place as shall from time to time be determined by the
board.
Section 7. Special meetings of the board of directors may be called by the
president or secretary on the written request of two directors. Written notice
of special meetings of the board of directors shall be given to each director at
least ten (10) days before the date of the meeting.
Section 8. A majority of the board of directors, at a meeting duly
assembled, shall be necessary to constitute a quorum for the transaction of
business and the act of a majority of the directors present at any meeting at
which a quorum is present shall be the act of the board of directors, except as
may be otherwise specifically provided by statute or by the articles of
incorporation. Any action required or permitted to be taken at a meeting of the
directors may be taken without a meeting if a consent in writing, setting forth
the action so taken, shall be signed by all of the directors entitled to vote
with respect to the subject matter thereof.
COMMITTEES OF DIRECTORS
Section 9. The board of directors may, by resolution passed by a majority
of the whole board, designate one or more committees, each committee to consist
of one or more of the directors of the corporation, which, to the extent
provided in the resolution, shall have and may exercise the powers of the board
of directors in the management of the business and affairs of the corporation to
be affixed to all papers which may require it. Such committee or committees
shall have such name or names as may be determined from time to time by
resolution adopted by the board of directors.
Section 10. The committees shall keep regular minutes of their proceedings
and report the same to the board when required.
<PAGE>
COMPENSATION OF DIRECTORS
Section 11. The directors may be paid their expenses, if any, of attendance
at each meeting of the board of directors and may be paid a fixed sum for
attendance at each meeting of the board of directors or a stated salary as
director. No such payment shall preclude any director from serving the
corporation in any other capacity and receiving compensation therefor. Members
of special or standing committees may be allowed like compensation for attending
committee meetings.
ARTICLE IV
NOTICES
Section 1. Notices to directors and stockholders shall be in writing and
delivered personally or mailed to the directors or stockholders at their
addresses appearing on the books of the corporation. Notice by mail shall be
deemed to be given at the time when the same shall be mailed. Notice to
directors may also be given by telegram.
Section 2. Whenever all parties entitled to vote at any meeting, whether of
directors or stockholders, consent, either by a writing on the records of the
meeting or filed with the secretary, or by presence at such meeting and oral
consent entered on the minutes, or by taking part in the deliberations at such
meeting without objection, the doings of such meeting shall be as valid as if
had a meeting regularly called and noticed, and at such meeting any business may
be transacted which is not excepted from the written consent or to the
consideration of which no objection for want of notice or of such consent,
provided a quorum was present at such meeting, the proceedings of said meeting
may be ratified and approved and rendered likewise valid and the irregularity or
defect therein waived by a writing signed by all parties having the right to
vote at such meetings; and such consent or approval of stockholders may be by
proxy or attorney, but all such proxies and powers of attorney must be in
writing.
Section 3. Whenever any notice whatever is required to be given under the
provisions of the statutes, of the articles of incorporation or of these
by-laws, a waiver thereof in writing, signed by the person or persons entitled
to said notice, whether before or after the time stated therein, shall be deemed
equivalent thereto.
ARTICLE V
OFFICERS
Section 1. The officers of the corporation shall be chosen by the board of
directors and shall be a president, a vice president, a secretary and a
treasurer. Any person may hold two or more offices.
<PAGE>
Section 2. The board of directors at its first meeting after each annual
meeting of stockholders shall choose a president, a vice president, a secretary
and a treasurer, none of whom need be a member of the board.
Section 3. The board of directors may appoint additional vice presidents,
and assistant secretaries and assistant treasurers and such other officers and
agents as it shall deem necessary who shall hold their offices for such terms
and shall exercise such powers and perform such duties as shall be determined
from time to time by the board.
Section 4. The salaries of all officers and agents of the corporation shall
be fixed by the board of directors.
Section 5. The officers of the corporation shall hold office until their
successors are chosen and qualify. Any officer elected or appointed by the board
of directors may be removed at any time by the affirmative vote of a majority of
the board of directors. Any vacancy occurring in any office of the corporation
by death, resignation, removal or otherwise shall be filled by the board of
directors.
THE PRESIDENT
Section 6. The president shall be the chief executive officer of the
corporation, shall preside at all meetings of the stockholders and the board of
directors, shall have general and active management of the business of the
corporation, and shall see that all orders and resolutions of the board of
directors are carried into effect.
Section 7. He shall execute bonds, mortgages and other contracts requiring
a seal, under the seal of the corporation, except where required or permitted by
law to be otherwise signed and executed and except where the signing and
execution thereof shall be expressly delegated by the board of directors to some
other officer or agent of the corporation.
THE VICE PRESIDENT
Section 8. The vice president shall, in the absence or disability of the
president, perform the duties and exercise the powers of the president and shall
perform such other duties as the board of directors may form time to time
prescribe.
<PAGE>
THE SECRETARY
Section 9. The secretary shall attend all meetings of the board of
directors and all meetings of the stockholders and record all the proceedings of
the meetings of the corporation and of the board of directors in a book kept for
that purpose and shall perform like duties for the standing committees when
required. He shall give, or cause to be given, notice of all meetings of the
stockholders and special meetings of the board of directors, and shall perform
such other duties as may be prescribed by the board of directors, and shall
perform such other duties as may be prescribed by the board of directors or
president, under whose supervision he shall be. He shall keep in safe custody
the seal of the corporation and, when authorized by the board of directors,
affix the same to any instrument requiring it and, when so affixed, it shall be
attested by his signature or by the signature of the treasurer or an assistant
secretary.
THE TREASURER
Section 10. The treasurer shall have the custody of the corporate funds and
securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the corporation in
such depositories as may be designated by the board of directors.
Section 11. He shall disburse the funds of the corporation as may be
ordered by the board of directors taking proper vouchers for such disbursements,
and shall render to the president and the board of directors, at the regular
meetings of the board, or when the board of directors so requires, an account of
all his transactions as treasurer and of the financial condition of the
corporation.
Section 12. If required by the board of directors, he shall give the
corporation a bond in such sum and with such surety or sureties as shall be
satisfactory to the board of directors for the faithful performance of the
duties of his office and for the restoration to the corporation, in case of his
death, resignation, retirement or removal from office, of all books, papers,
vouchers, money and other property of whatever kind in his possession or under
his control belonging to the corporation.
ARTICLE VI
CERTIFICATES OF STOCK
Section 1. Every stockholder shall be entitled to have a certificate,
signed by the president or a vice president and the treasurer or an assistant
treasurer, or the secretary or an assistant secretary of the corporation,
certifying the number of shares owned by him in the corporation. When the
corporation is authorized to issue shares of more than one class or more than
one series of any class, there shall be set forth upon the face or back of the
certificate, or the certificate shall have a statement that the corporation will
furnish to any stockholders upon request and without charge, a full or summary
statement of the designations, preferences and relative, participating, optional
or other specific rights of the various classes of stock or series thereof and
the qualifications, limitations or restrictions of such rights, and, if the
corporation shall be authorized to issue only
<PAGE>
special stock, such certificate shall set forth in full or summarize the rights
to the holders of such stock.
Section 2. Whenever any certificate is countersigned or otherwise
authenticated by a transfer agent or transfer clerk, and by a registrar, then a
facsimile of the signatures of the officers or agents of the corporation may be
printed or lighographed upon such certificate in lieu of the actual signatures.
In case any officer or officers who shall have signed, or whose facsimile
signature or signatures shall have been used on, any such certificate or
certificates shall cease to be such officer or officers of the corporation,
whether because of death, resignation or otherwise, before such certificate or
certificates shall have been delivered by the corporation, such certificate or
certificates may nevertheless be adopted by the corporation and be issued and
delivered as though the person or persons who signed such certificate or
certificates, or whose facsimile signature or signatures shall have been used
thereon, had not ceased to be the officer or officers of such corporation.
LOST CERTIFICATES
Section 3. The board of directors may direct a new certificate or
certificates to be issued in place of any certificates or certificates to be
issued in place of any certificate or certificates theretofore issued by the
corporation alleged to have been lost or destroyed, upon the making of an
affidavit of that fact by the person claiming the certificate of stock to be
lost or destroyed. When authorizing such issue of a new certificate or
certificates, the board of directors may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of such lost or destroyed
certificate or certificates, or his legal representative, to advertise the same
in such manner as it shall require and/or give the corporation a bond in such
sum as it may direct as indemnity against any claim that may be made against the
corporation with respect to the certificate alleged to have been lost or
destroyed.
TRANSFER OF STOCK
Section 4. Upon surrender to the corporation or the transfer agent of the
corporation of a certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignment or authority to transfer, it shall be the
duty of the corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.
CLOSING OF TRANSFER BOOKS
Section 5. The directors may prescribe a period not exceeding sixty days
prior to any meeting of the stockholders during which no transfer of stock on
the books of the corporation may be made, or may fix a day not more than sixty
days prior to the holding of any such meeting as the day as of which
stockholders entitled to notice of and to vote at such meeting shall be
determined; and only stockholders of record on such day shall be entitled to
notice or to vote at such meeting.
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REGISTERED STOCKHOLDERS
Section 6. The corporation shall be entitled to recognize the exclusive
right of a person registered on its books as the owner of shares to receive
dividends, and to vote as such owner, and to hold liable for calls and
assessments a person registered on its books as the owner of shares, and shall
not be bound to recognize any equitable or other claim to or interest in such
share or shares on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise provided by the laws of
Nevada.
ARTICLE VII
GENERAL PROVISIONS
DIVIDENDS
Section 1. Dividends upon the capital stock of the corporation, subject to
the provisions of the articles of incorporation, if any, may be declared by the
board of directors at any regular or special meeting pursuant to law. Dividends
may be paid in cash, in property, or in shares of the capital stock, subject to
the provisions of the articles of incorporation.
Section 2. Before payment of any dividend, there may be set aside out of
any funds of the corporation available for dividends such sum or sums as the
directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the corporation, or for such other
purpose as the directors shall think conducive to the interest of the
corporation, and the directors may modify or abolish and such reserves in the
manner in which it was created.
CHECKS
Section 3. All checks or demands for money and notes of the corporation
shall be signed by such officer or officers or such other person or persons as
the board of directors may from time to time designate.
FISCAL YEAR
Section 4. The fiscal year of the corporation shall be fixed by resolution
of the board of directors.
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SEAL
Section 5. The corporate seal shall have inscribed thereon the name of the
corporation, the year of its incorporation and the words "Corporate Seal,
Nevada."
ARTICLE VIII
AMENDMENTS
Section 1. These by-laws may be altered or repealed at any regular meeting
of the stockholders or of the board of directors or at any special meeting of
the stockholders or the board of directors if notice of such alteration or
repeal be contained in the notice of such special meeting.
AGREEMENT OF EMPLOYMENT
THIS AGREEMENT OF EMPLOYMENT ("Agreement") is made and entered into in
duplicate this 12th day of April, 2000, by and between TMEX, Inc., a Nevada
corporation ("Employer"), and Crofton Cooper("Executive").
RECITALS
A. Employer is a corporation duly organized and validly existing pursuant
to the laws of the State of Nevada.
B. Employer is in the business of developing and marketing high-speed
communication networks and services.
C. Employer desires to employ Executive, and Executive desires to serve, as
Chief Executive Officer of Employer and to do and perform any and all services,
acts and things specified hereinafter.
AGREEMENT
NOW, THEREFORE, IN CONSIDERATION OF THE RECITALS SPECIFIED ABOVE THAT SHALL
BE DEEMED TO BE A SUBSTANTIVE PART OF THIS AGREEMENT, AND THE MUTUAL COVENANTS,
PROMISES, UNDERTAKINGS, AGREEMENTS, REPRESENTATIONS AND WARRANTIES SPECIFIED IN
THIS AGREEMENT AND OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND
SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, WITH THE INTENT TO BE OBLIGATED
LEGALLY AND EQUITABLY, THE PARTIES DO HEREBY COVENANT, PROMISE, AGREE, REPRESENT
AND WARRANT AS FOLLOWS:
ARTICLE I.
DEFINITIONS
For the purposes of this Agreement, the following terms have the meanings
specified or referred to in this Article I.
Section 1.1 "Basic Compensation"-- Salary and Benefits.
Section 1.2 "Board of Directors" -- the Board of Directors of Employer.
Section 1.3 "Confidential Information" -- information that is used in
Employer's and
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Employer's affiliates' business and (i) any and all trade secrets concerning the
business and affairs of the Employer, product specifications, data, know-how,
formulae, compositions, processes, designs, sketches, photographs, graphs,
drawings, samples, inventions and ideas, past, current and planned research and
development, current and planned manufacturing and distribution methods and
processes, customer lists, current and anticipated customer requirements, price
lists, market studies, business plans, computer software and programs (including
object code and source code), computer software and database technologies,
systems, structures and architectures (and related processes, formulae,
compositions, improvements, devices, know-how, inventions, discoveries,
concepts, ideas, designs, methods and information, of the Employer and any other
information, however documented, of the Employer that is a trade secret within
the meaning of applicable law; (ii) any and all information concerning the
business and affairs of the Employer (which includes historical financial
statements, financial projections and budgets, historical and projected sales,
capital spending budgets and plans, the names and backgrounds of key personnel,
personnel training and techniques and materials), however documented; and (iii)
any and all notes, analysis, compilations, studies, summaries, and other
material prepared by or for the Employer containing or based, in whole or in
part, on any information included in the foregoing.
Confidential Information shall not include (i) information already in
Executive's possession prior to the date of this Agreement and that was not
acquired or obtained from Employer or its affiliates or pursuant to a
confidentiality agreement; (ii) information that is obtained or was previously
obtained by the Executive from a third Person who, insofar as is known to the
Executive after reasonable inquiry, is not prohibited from transmitting the
information to the Executive by contractual, legal or fiduciary obligation to
the Employer or its affiliates; or (iii) information that is, or becomes,
generally available to the public other than as a result of a direct or indirect
disclosure by the Executive.
Section 1.4 "Effective Date" -- the date specified in the preamble of the
Agreement.
Section 1.5 "Employee Inventions" -- all discoveries, inventions,
improvements, designs, innovations and works of authorship (including all data
and records pertaining thereto) that relate to the business of Employer, whether
or not able to be patented, copyrighted or reduced to writing, that Employee may
discover, invent or originate during the term of his employment pursuant to this
Agreement, and for a period of six (6) months following the termination of this
Agreement, either alone or with other persons and whether or not during working
hours or by the use of the facilities of Employer.
Section 1.6 "Fiscal Year" -- Employer's fiscal year, as it exists on the
Effective Date or as changed from time to time.
Section 1.7 "Person" -- any individual, corporation (including any
non-profit corporation), general or limited partnership, limited liability
company, joint venture, estate, trust, association, organization, or
governmental body.
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ARTICLE II.
EMPLOYMENT TERMS AND DUTIES
Section 2.1 Employment. Employer hereby employs Executive, and Executive
hereby accepts employment by Employer, upon the terms and subject to the
conditions set forth in this Agreement.
Section 2.2 Term. Subject to the provisions of Article VI, the term (the
"Term") of Executive's employment pursuant to this Agreement will be one (1)
year, beginning on the Effective Date and ending that date which is exactly one
(1) year after the Effective Date ("the First Term"). The term of this Agreement
shall be renewed automatically for succeeding periods of one (1) year each
unless either party gives to the other party notice, at least sixty (60) days
prior to the expiration of any term, of the noticing party's intention not to
renew the term of this Agreement.
Section 2.3 Duties. Executive will have such duties as are assigned or
delegated to Executive by the Board of Directors, and will initially serve as
Chief Executive Officer of Employer. Executive will (i) devote his entire
business time, attention, skill, and energy exclusively to the business of
Employer, (ii) use his best efforts to promote the success of Employer's
business, and (iii) cooperate fully with the Board of Directors in the
advancement of the best interests of Employer. If Executive is elected as a
member of the Board if Directors, or as a director or officer of any of
Employer's affiliates, Executive will fulfill his duties as such director or
officer without additional compensation.
ARTICLE III.
COMPENSATION AND BENEFITS
Section 3.1 Basic Compensation. During the Term, Executive will receive an
aggregate Basic Compensation of One Hundred Twenty Thousand Dollars
($120,000.00) annually which will be payable in equal periodic installments
according to Employer's customary payroll practices, but no less frequently than
semi-monthly ("Salary"), and benefits resulting from Executive's participation
in such pension, life insurance, hospitalization, major medical, disability and
other employee benefit plans of Employer that may be in effect from time to time
(including any right to an automobile), to the extent Executive is eligible
pursuant to the terms of those plans (collectively, the "Benefits").
Section 3.2 Bonus. In addition to the Salary and the Benefits, Executive
shall be entitled to receive from Employer and Employer shall pay to Executive,
for each of Employer's complete fiscal quarters during the term of this
Agreement, a cash bonus in an amount equal to two percent (2%) of the "net
profits" of Employer for that fiscal quarter. For purposes of this Section 3.2,
the term "net profits" shall be defined as and mean all gross income from the
operations of the Employer (other than capital gains) less all expenses,
deductions and credits of Employer attributable to those operations. In
computing net profits, federal and state income taxes and payments made pursuant
to this Agreement and other bonus and other incentive plans of Employer shall be
deducted. The net profits shall be determined in accordance with generally
accepted accounting principles utilized by the certified public accountants
regularly employed by Employer, and the determination of those accountants shall
obligate and be conclusive on Employer and Executive. Payment of that bonus
shall be made no later than forty-five (45) days after the end of Employer's
fiscal quarter for which such bonus is due and payable.
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Section 3.3 Health Care Benefits. Employer shall include Employee in the
hospital, surgical, medical and dental benefit plan maintained by Employer.
Section 3.4 Illness. During the Term, Executive shall be entitled to ten
(10) days per year as sick leave with full pay. Sick leave shall not be
accumulated.
Section 3.5 Other Benefits. Executive shall receive all other benefits of
employment available generally to other employees of Employer.
ARTICLE IV.
FACILITIES AND EXPENSES
Section 4.1 Office and Staff. Employer will furnish Executive office
facilities, equipment, supplies, and such other facilities and personnel, as
Employer deems necessary or appropriate for the performance of Executive's
duties pursuant to this Agreement.
Section 4.2 Reimbursement of Business Expenses. Employer will pay on behalf
of Executive (or reimburse the Executive for) reasonable business expenses
incurred by Executive at the request of, or on behalf of, Employer in the
performance of the Executive's duties pursuant to this Agreement, and in
accordance with Employer's employment policies. Executive must file expense
reports with respect to such expenses in accordance with Employer's policies.
ARTICLE V.
VACATIONS AND HOLIDAYS
Section 5.1 Annual Vacation. Executive will be entitled to ten (10) days
paid vacation each Fiscal Year in accordance with the vacation policies of
Employer in effect for Employer's executive officers from time to time. Vacation
must be taken by Executive at such time or times as approved by the Chairman of
the Board of Directors or the Board of Directors. In the event that Executive is
unable for any reason to take the total amount of vacation time authorized
herein during any year, Executive may not accrue that time and add that time to
vacation time for any following year. In lieu of vacation leave, Executive may
elect to receive payment for all or any part of the vacation leave to which
Executive is entitled, in which case the vacation leave shall be valued at the
amount of salary earned by Executive during an equivalent period of time during
the fiscal year in which such vacation leave accrued.
Section 5.2 Paid Holidays. Executive shall be entitled to be paid for those
holidays designated by Employer, as specified in Employer's personnel policies.
ARTICLE VI.
TERMINATION
Section 6.1 (a) Disability. Employer may terminate this Agreement for
Disability. "Disability" shall exist if because of ill health, physical or
mental disability, or any other reason
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beyond Executive's control, and notwithstanding reasonable accommodations made
by Employer, Executive shall have been unable, unwilling or shall have failed to
perform Executive's duties pursuant to this Agreement, as determined in good
faith by the Board of Directors, for a period of thirty (30) consecutive days,
or if, in any twelve (12) month period, Executive shall have been unable or
unwilling or shall have failed to perform Executive's duties for a period of
sixty (60) days, irrespective of whether or not such days are consecutive.
Executive hereby consents to examination by a physician designated by Employer,
and Executive hereby waives any physician-patient privilege resulting from any
such examination.
(b) Cause. Employer may terminate Executive's employment for Cause.
Termination for "Cause" shall mean termination because of Executive's (i) gross
incompetence; (ii) willful gross misconduct that causes economic harm to
Employer or its affiliates or that brings discredit to Employer's or Employer's
affiliates' reputation; (iii) failure to follow directions of the Board of
Directors that are consistent with Executive's duties pursuant to this
Agreement; (iv) final, nonappealable conviction of a felony involving moral
turpitude; or (v) material breach of any provision of this Agreement. Those
events specified in clauses (i), (iii) and (v) of this subsection shall not
constitute Cause unless Employer notifies Executive thereof in writing,
specifying in reasonable detail the basis therefor and specifying that any such
event is for Cause, and unless Executive fails to cure such matter within 60
days after such notice is sent or given pursuant to this Agreement. Executive
shall be permitted to respond and to defend himself before the Board of
Directors or any appropriate committee thereof within a reasonable time after
written notification of any proposed termination for Cause pursuant to any event
specified in clauses (i), (ii), (iii) or (v) of this subsection.
(c) Without Good Reason. During the Term, Executive may terminate his
employment Without Good Reason. Termination "Without Good Reason" shall mean
termination of the Executive's employment by the Executive other than
termination for Employer Breach or resulting from the death of Executive.
(d) Explanation of Termination of Employment. Any party terminating this
Agreement shall give prompt written notice ("Notice of Termination") to the
other party hereto advising such other party of the termination of this
Agreement. Within thirty (30) days after notification that this Agreement has
been terminated, the terminating party shall deliver to the other party hereto a
written explanation, which shall specify in reasonable detail the basis for such
termination and shall indicate whether termination is being made for Cause,
Without Cause or for Disability (if Employer has terminated the Agreement) or
for Employer Breach or Without Good Reason (if Executive has terminated the
Agreement).
(e) Date of Termination. "Date of Termination" shall mean the date on which
Notice of Termination is sent or given pursuant to this Agreement.
Section 6.2 Compensation During Disability or Upon Termination.
(a) During Disability. During any period that Executive fails to perform
his duties pursuant to this Agreement because of ill health, physical or mental
disability, or any other reason beyond Executive's control, Executive shall be
entitled to receive the sick pay specified by the provisions of Section 3.4 of
this Agreement.
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(b) Termination for Disability. If Employer shall terminate Executive's
employment for Disability, Employer's obligation to pay Basic Compensation shall
terminate, except that Employer shall pay Executive (i) accrued but unpaid Basic
Compensation through the Date of Termination, and (ii) the benefits set forth in
Section 6.2(d).
(c) Termination for Cause or Without Good Reason. If Employer shall
terminate Executive's employment for Cause or if the Executive shall terminate
his employment Without Good Reason, then Employer's obligation to pay Basic
Compensation shall terminate, except that Employer shall pay Executive his
accrued but unpaid Basic Compensation through the Date of Termination.
(d) Employee Benefits. Upon the termination of Executive's employment with
Employer, the Basic Compensation shall terminate on the Date of Termination.
Section 6.3 Death of Executive. If Executive dies prior to the expiration
of the Term, Executive's employment and other obligations pursuant to this
Agreement shall automatically terminate and all compensation, to which Executive
is or would have been entitled pursuant to (including, without limitation, under
Section 3.1), shall terminate as of the date in which Executive's death occurs.
ARTICLE VII.
NON-DISCLOSURE COVENANT; EMPLOYEE INVENTIONS
Section 7.1 Acknowledgments by the Executive. Executive acknowledges that
(a) during the Term and as a part of his employment, Executive will have access
to Confidential Information; (b) public disclosure of such Confidential
Information could have an adverse effect on the Employer and its business; (c)
because Executive possesses substantial technical expertise and skill with
respect to Employer's business, Employer desires to obtain exclusive ownership
of each Employee Invention, and Employer will be at a substantial competitive
disadvantage if Employer fails to acquire exclusive ownership of each Employee
Invention; and (d) the provisions of this Article VII are reasonable and
necessary to prevent the improper use or disclosure of Confidential Information
and to provide Employer with exclusive ownership of all Employee Inventions.
Section 7.2 Agreements of the Executive. In consideration of the
compensation and benefits to be paid or provided to Executive by Employer
pursuant to this Agreement, Executive covenants as follows:
(a) Confidentiality.
(i) During and following the Term, Executive will hold in confidence the
Confidential Information and will not disclose the Confidential
Information, or any portion thereof, to any Person, except with the
specific prior written consent of Employer or except as otherwise
expressly permitted by the terms of this Agreement.
(ii) Any trade secrets of Employer or its affiliates will be entitled to
all of the protections and benefits pursuant to applicable law. If
any information that Employer or its
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affiliates deems to be a trade secret is determined by a court of
competent jurisdiction not to be a trade secret for purposes of this
Agreement, such information will, nevertheless, be considered
Confidential Information for purposes of this Agreement. Executive
hereby waives any requirement that Employer submit proof of the
economic value of any trade secret or post a bond or other security.
(iii) None of the foregoing obligations and restrictions applies to any
part of the Confidential Information that Executive demonstrates was
or became generally available to the public other than as a result of
a direct or indirect disclosure by Executive.
(iv) The Executive will not remove from the Employer's or Employer's
affiliates' premises (except to the extent such removal is for
purposes of the performance of the Executive's duties at home or
while traveling, or except as otherwise specifically authorized by
Employer) any document, record, notebook, plan, model, component,
device, or computer software or code, whether embodied in a disk or
in any other form (collectively, the "Proprietary Items"). Executive
agrees that, as between Employer and Executive, all of the
Proprietary Items, whether or not developed by Executive, are the
exclusive property of Employer. Upon termination of this Agreement by
either party, or upon the request of Employer during the Term,
Executive will return to Employer all of the Proprietary Items in
Executive's possession or subject to Executive's control, and
Executive shall not retain any copies, abstracts, sketches, or other
physical embodiment of any of the Proprietary Items.
(b) Employee Inventions. Each Employee Invention will belong exclusively to
Employer. Executive covenants that Executive will promptly:
(i) disclose to Employer in writing any Employee Invention;
(ii) assign to Employer or to a party designated by Employer, at
Employer's request and without additional compensation, all of
Executive's right to the Employee Invention for the United States and
all foreign jurisdictions;
(iii) execute and deliver to Employer such applications, assignments, and
other documents as Employer may request in order to apply for and
obtain patents or other registrations with respect to any Employee
Invention in the United States and any foreign jurisdictions;
(iv) sign all other papers necessary to carry out the above obligations;
and
(v) give testimony and render any other assistance in support of
Employer's rights to any Employee Invention.
Section 7.3 Disputes or Controversies. Executive acknowledges that in the
event that a dispute or controversy resulting from or relating to this Agreement
be submitted for adjudication to any court, arbitration panel, or other third
party, the preservation of the secrecy of Confidential
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Information may be jeopardized. All pleadings, documents, testimony and records
relating to any such adjudication will be maintained in secrecy and will be
available for inspection by Employer, Executive, and their respective attorneys
and experts, who will agree, in advance and in writing, to receive and maintain
all such information in secrecy, except as may be limited by them in writing.
ARTICLE VIII.
NON-COMPETITION AND NON-INTERFERENCE
Section 8.1 Acknowledgments by Executive. Executive acknowledges that (a)
the services to be performed by him pursuant to this Agreement are of a special,
unique, unusual, extraordinary, and intellectual character; (b) Employer's
business conducted nationally and Employer's services and products are marketed
throughout the United States; (c) Employer competes with other businesses that
are or could be located in any part of the United States; and (d) the provisions
of this Article VIII are reasonable and necessary to protect the Employer's
business.
Section 8.2 Covenants of Executive. In consideration of the acknowledgments
by Executive, and in consideration of the compensation and benefits to be paid
or provided to Executive by Employer, Executive covenants that Executive will
not, directly or indirectly:
(a) during the Term, except in the course of his employment pursuant to
this Agreement, and during the Post-Agreement Period, directly or indirectly,
engage or invest in, own, manage, operate, finance, control, or participate in
the ownership, management, operation, financing, or control of, be employed by,
associated with, or in any manner connected with, lend the Executive's name or
any similar name to, lend Executive's credit to or render services or advice to,
any business whose products, services or activities compete in whole or in part
with the products, services or activities of the Employer or any affiliate of
Employer anywhere in the United States; provided, however, that the Executive
may purchase or otherwise acquire up to (but not more than) three percent (3%)
of any class of securities of any issuer (but without otherwise participating in
the activities of such issuer), if such securities are listed on any national or
regional securities exchange or have been registered pursuant to Section 12(g)
of the Securities Exchange Act of 1934;
(b) whether for Executive's own account or for the account of any other
Person, at any time during the Term and the Post-Agreement Period, solicit
business of the same or similar type being carried on by the Employer, from any
Person known by Executive to be a customer of Employer, whether or not Executive
had personal contact with such Person during and by reason of Executive's
employment with Employer;
(c) whether for Executive's account or the account of any other Person (i)
at any time during the Term and the Post-Agreement Period, solicit, employ, or
otherwise engage as an employee, independent contractor, or otherwise, any
Person who is or was an employee of Employer at any time during the Term or in
any manner induce or attempt to induce any employee of Employer to terminate his
or her employment relationship with Employer; or (ii) at any time during the
Term and the Post-Agreement Period, interfere with Employer's relationship with
any Person, including any Person who at any time during the Term was an
employee, contractor, supplier, or customer of Employer; or (d) at any time
during or after the Term, disparage Employer or any of Employer's shareholders,
directors, officers, employees, or agents.
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For purposes of this Section 8.2, the term "Post-Agreement Period" means
the period beginning on the date of termination of the Executive's employment
with the Employer, plus five (5) years.
If any covenant in this Section 8.2 is determined by a court of competent
jurisdiction to be unreasonable, arbitrary, or against public policy, such
covenant will be considered to be divisible with respect to scope, time, and
geographic area, and such reduced scope, time, or geographic area, or all of
them, as a court of competent jurisdiction may determine to be reasonable, not
arbitrary, and not against public policy, will be effective, obligatory, and
enforceable against Executive.
The period of time applicable to any covenant in this Section 8.2 will be
extended by the duration of any violation by Executive of such covenant.
Executive will, while the covenant pursuant to this Section 8.2 is in
effect, give notice to Employer, within ten (10) days after accepting any other
employment, of the identity of Executive's employer. Employer may notify such
employer that Executive is obligated by this Agreement and, at Employer's
election, furnish such employer with a copy of this Agreement or relevant
portions thereof.
ARTICLE IX.
GENERAL PROVISIONS
Section 9.1 Injunctive Relief and Additional Remedy. Executive acknowledges
that the damage that would be suffered by Employer as a result of a breach of
the provisions of this Agreement (including any provision of Articles VII and
VIII) would be irreparable and that an award of monetary damages to the Employer
for such a breach would be an inadequate remedy. Consequently, Employer will
have the right, in addition to any other rights Employer may have, to obtain
injunctive relief to restrain any breach or threatened breach or otherwise to
specifically enforce any provision of this Agreement, and Employer will not be
obligated to post bond or other security in seeking such relief.
Section 9.2 Covenants of Articles VII and VIII Are Essential and
Independent Covenants. The covenants by Executive in Articles VII and VIII are
essential provisions of this Agreement, and without Executive's agreement to
comply with such covenants, Employer would not have entered into this Agreement
or employed or continued the employment of Executive. Employer and Executive
have independently consulted their respective counsel and have been advised in
all respects concerning the reasonableness and propriety of such covenants, with
specific regard to the nature of the business conducted by Employer.
Executive's covenants in Articles VII and VIII are independent covenants
and the existence of any claim by Executive against Employer or any of its
affiliates under this Agreement or otherwise will not excuse Executive's breach
of any covenant in Articles VII or VIII.
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If Executive's employment pursuant to this Agreement expires or is
terminated, this Agreement will continue in full force and effect as is
necessary or appropriate to enforce the covenants and agreements of Executive in
Articles VII and VIII.
Section 9.3 Offset. Employer will be entitled to offset against any and all
amounts owing to Executive pursuant to this Agreement the amount of any and all
claims that Employer may have against Executive.
Section 9.4 Representations and Warranties by the Executive. Executive
represents and warrants to Employer that the execution and delivery by Executive
of this Agreement do not, and the performance by Executive of Executive's
obligations pursuant to this Agreement will not, with or without the giving of
notice or the passage of time, or both (a) violate any judgment, writ,
injunction, or order of any court, arbitrator, or governmental agency applicable
to Executive; or (b) conflict with, result in the breach of any provisions of or
the termination of, or constitute a default under, any agreement to which
Executive is a party or by which Executive is or may be obligated.
Section 9.4 Obligations Contingent on Performance. The obligations of
Employer pursuant to this Agreement, including Employer's obligation to pay the
compensation provided for in this Agreement, are contingent upon Executive's
performance of Executive's obligations pursuant to this Agreement.
Section 9.5 Waiver. The rights and remedies of the parties to this
Agreement are cumulative and not alternative. Neither the failure nor any delay
by either party in exercising any right, power, or privilege pursuant to this
Agreement will operate as a waiver of such right, power, or privilege, and no
single or partial exercise of any such right, power, or privilege will preclude
any other or further exercise of such right, power, or privilege or the exercise
of any other right, power, or privilege. To the maximum extent permitted by
applicable law, (a) no claim or right resulting from this Agreement can be
discharged by one party, in whole or in part, by a waiver or renunciation of the
claim or right unless in writing signed by the other party; (b) no waiver that
may be given by a party will be applicable, except in the specific instance for
which it is given; and (c) no notice to or demand on one party will be deemed to
be a waiver of any obligation of such party or of the right of the party giving
such notice or demand to take additional action without notice or demand as
provided in this Agreement.
Section 9.6 Binding Effect; Delegation of Duties Prohibited. This Agreement
shall inure to the benefit of, and shall obligate, the parties hereto and their
respective successors, assigns, heirs, and legal representatives, including any
entity with which the Employer may merge or consolidate or to which all or
substantially all of its assets may be transferred. The duties and covenants of
Executive pursuant to this Agreement are personal and may not be delegated.
Section 9.7 Notices. All notices, requests, demands or other communications
pursuant to this Agreement shall be in writing or by telex or facsimile
transmission and shall be deemed to have been duly given (i) on the date of
service if delivered in person or by telex or facsimile machine transmission
(with the telex or facsimile confirmation of transmission receipt acting as
confirmation of service when sent and provide telexed or telecopied notices are
also mailed by first class, certified
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or registered mail, postage prepaid); or (ii) seventy-two (72) hours after
mailing by first class, registered or certified mail, postage prepaid, and
properly addressed as follows:
If to Executive: Crofton Cooper
5031 Birch Street, Suite G
Newport Beach, CA 92660
If to Employer: TMEX USA, Inc.
5031 Birch Street, Suite G
Newport Beach, CA 92660
With a copy to: STEPP & BEAUCHAMP LLP
1301 Dove Street, Suite 460
Newport Beach, California 92660
949.660.9700
Telecopier: 949.660.9010
or at such other address as the party affected may designate in a written notice
to such other party in compliance with this section.
Section 9.8 Entire Agreement; Amendments. This Agreement specifies the
entire agreement among the parties with respect to the (i) employment
relationship by and among Employer and Executive and (ii) the terms and
conditions of all other relationships by and among Employer, in any capacity,
and Executive, in any capacity and supersede all prior agreements and
understandings, oral or written, among the parties hereto with respect thereto.
This Agreement may not be amended orally, but only by an agreement in writing
signed by the parties hereto.
Section 9.9 Governing Law. This Agreement will be governed by the laws of
the State of California, without regard to conflicts of laws principles.
Section 9.10 Jurisdiction. Any action or proceeding seeking to enforce any
provision of, or based on any right arising out of, this Agreement shall be
brought against either of the parties in the courts of the State of California,
County of Orange, and each of the parties consents to the jurisdiction of such
courts (and of the appropriate appellate courts) in any such action or
proceeding and waives any objection to venue. Process in any action or
proceeding referred to in the preceding sentence may be served on either party
anywhere in the world.
Section 9.11 Section and Article Headings, Construction. The headings of
sections and articles in this Agreement are provided for convenience only and
will not affect its construction or interpretation. All references to "section"
or "sections" and "article" or "articles" refer to the corresponding section or
sections and article or articles of this Agreement unless otherwise specified.
All words used in this Agreement will be construed to be of such gender or
number as the circumstances require. Unless otherwise expressly provided, the
word "including" does not limit the preceding words or terms.
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Section 9.12 Severability. If any provision of this Agreement is held
invalid or unenforceable by any court of competent jurisdiction, the other
provisions of this Agreement will remain in full force and effect. Any provision
of this Agreement determined to be invalid or unenforceable only in part will
remain in full force and effect to the extent not determined to be invalid or
unenforceable.
Section 9.13 Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.
Section 9.14 Indemnification for Negligence or Misconduct.
A. Employer shall save Employee harmless from and against and shall
indemnify Executive for any liability, loss, costs, expenses or damages
howsoever caused by reason of any injury (whether to body, property, or personal
or business character or reputation) sustained by any person or to any person or
to property by reason of any act, neglect, default or omission of Employer, and
Employer shall pay any and all amounts to be paid or discharged in case of an
action for any such damages or injuries. No provision of this section is
intended to, nor shall any provision of this section, relieve Executive from
that Executive's own act, omission or negligence.
B. Executive shall save Employer harmless from and against and shall
indemnify Employer for any liability, loss, costs, expenses or damages howsoever
caused by reason of any injury (whether to body, property, personal or business
character or reputation) sustained by any person or to any person or to property
by reason of any act, neglect, default or omission of Executive, and Executive
shall pay any and all amounts to be paid or discharged in case of an action for
any such damages or injuries. No provision of this section is intended to, nor
shall any provision of this section, relieve Employer from Employer's own act,
omission or negligence.
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IN WITNESS WHEREOF the parties have executed this Agreement of Employment
in duplicate and in multiple counterparts, each of which shall have the force
and effect of an original, on the date specified in the preamble of this
Agreement.
"EMPLOYER" "EXECUTIVE"
TMEX USA, Inc.,
a Nevada corporation
By: /s/ Cooper Lee /s/ Crofton Cooper
---------------------- -----------------------
Cooper Lee Crofton Cooper
Its: President
By: /s/ Cecil Zeringue
----------------------
Cecil Zeringue
Its: Vice President
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AGREEMENT OF EMPLOYMENT
THIS AGREEMENT OF EMPLOYMENT ("Agreement") is made and entered into in
duplicate this 12th day of April, 2000, by and between TMEX, Inc., a Nevada
corporation ("Employer"), and Cooper Lee ("Executive").
RECITALS
A. Employer is a corporation duly organized and validly existing pursuant
to the laws of the State of Nevada.
B. Employer is in the business of developing and marketing high-speed
communication networks and services.
C. Employer desires to employ Executive, and Executive desires to serve, as
President of Employer and to do and perform any and all services, acts and
things specified hereinafter.
AGREEMENT
NOW, THEREFORE, IN CONSIDERATION OF THE RECITALS SPECIFIED ABOVE THAT SHALL
BE DEEMED TO BE A SUBSTANTIVE PART OF THIS AGREEMENT, AND THE MUTUAL COVENANTS,
PROMISES, UNDERTAKINGS, AGREEMENTS, REPRESENTATIONS AND WARRANTIES SPECIFIED IN
THIS AGREEMENT AND OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND
SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, WITH THE INTENT TO BE OBLIGATED
LEGALLY AND EQUITABLY, THE PARTIES DO HEREBY COVENANT, PROMISE, AGREE, REPRESENT
AND WARRANT AS FOLLOWS:
ARTICLE I.
DEFINITIONS
For the purposes of this Agreement, the following terms have the meanings
specified or referred to in this Article I.
Section 1.1 "Basic Compensation"-- Salary and Benefits.
Section 1.2 "Board of Directors" -- the Board of Directors of Employer.
Section 1.3 "Confidential Information" -- information that is used in
Employer's and
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Employer's affiliates' business and (i) any and all trade secrets concerning the
business and affairs of the Employer, product specifications, data, know-how,
formulae, compositions, processes, designs, sketches, photographs, graphs,
drawings, samples, inventions and ideas, past, current and planned research and
development, current and planned manufacturing and distribution methods and
processes, customer lists, current and anticipated customer requirements, price
lists, market studies, business plans, computer software and programs (including
object code and source code), computer software and database technologies,
systems, structures and architectures (and related processes, formulae,
compositions, improvements, devices, know-how, inventions, discoveries,
concepts, ideas, designs, methods and information, of the Employer and any other
information, however documented, of the Employer that is a trade secret within
the meaning of applicable law; (ii) any and all information concerning the
business and affairs of the Employer (which includes historical financial
statements, financial projections and budgets, historical and projected sales,
capital spending budgets and plans, the names and backgrounds of key personnel,
personnel training and techniques and materials), however documented; and (iii)
any and all notes, analysis, compilations, studies, summaries, and other
material prepared by or for the Employer containing or based, in whole or in
part, on any information included in the foregoing.
Confidential Information shall not include (i) information already in
Executive's possession prior to the date of this Agreement and that was not
acquired or obtained from Employer or its affiliates or pursuant to a
confidentiality agreement; (ii) information that is obtained or was previously
obtained by the Executive from a third Person who, insofar as is known to the
Executive after reasonable inquiry, is not prohibited from transmitting the
information to the Executive by contractual, legal or fiduciary obligation to
the Employer or its affiliates; or (iii) information that is, or becomes,
generally available to the public other than as a result of a direct or indirect
disclosure by the Executive.
Section 1.4 "Effective Date" -- the date specified in the preamble of the
Agreement.
Section 1.5 "Employee Inventions" -- all discoveries, inventions,
improvements, designs, innovations and works of authorship (including all data
and records pertaining thereto) that relate to the business of Employer, whether
or not able to be patented, copyrighted or reduced to writing, that Employee may
discover, invent or originate during the term of his employment pursuant to this
Agreement, and for a period of six (6) months following the termination of this
Agreement, either alone or with other persons and whether or not during working
hours or by the use of the facilities of Employer.
Section 1.6 "Fiscal Year" -- Employer's fiscal year, as it exists on the
Effective Date or as changed from time to time.
Section 1.7 "Person" -- any individual, corporation (including any
non-profit corporation), general or limited partnership, limited liability
company, joint venture, estate, trust, association, organization, or
governmental body.
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ARTICLE II.
EMPLOYMENT TERMS AND DUTIES
Section 2.1 Employment. Employer hereby employs Executive, and Executive
hereby accepts employment by Employer, upon the terms and subject to the
conditions set forth in this Agreement.
Section 2.2 Term. Subject to the provisions of Article VI, the term (the
"Term") of Executive's employment pursuant to this Agreement will be one (1)
year, beginning on the Effective Date and ending that date which is exactly one
(1) year after the Effective Date ("the First Term"). The term of this Agreement
shall be renewed automatically for succeeding periods of one (1) year each
unless either party gives to the other party notice, at least sixty (60) days
prior to the expiration of any term, of the noticing party's intention not to
renew the term of this Agreement.
Section 2.3 Duties. Executive will have such duties as are assigned or
delegated to Executive by the Board of Directors, and will initially serve as
President of Employer. Executive will (i) devote his entire business time,
attention, skill, and energy exclusively to the business of Employer, (ii) use
his best efforts to promote the success of Employer's business, and (iii)
cooperate fully with the Board of Directors in the advancement of the best
interests of Employer. If Executive is elected as a member of the Board if
Directors, or as a director or officer of any of Employer's affiliates,
Executive will fulfill his duties as such director or officer without additional
compensation.
ARTICLE III.
COMPENSATION AND BENEFITS
Section 3.1 Basic Compensation. During the Term, Executive will receive an
aggregate Basic Compensation of One Hundred Twenty Thousand Dollars
($120,000.00) annually which will be payable in equal periodic installments
according to Employer's customary payroll practices, but no less frequently than
semi-monthly ("Salary"), and benefits resulting from Executive's participation
in such pension, life insurance, hospitalization, major medical, disability and
other employee benefit plans of Employer that may be in effect from time to time
(including any right to an automobile), to the extent Executive is eligible
pursuant to the terms of those plans (collectively, the "Benefits").
Section 3.2 Bonus. In addition to the Salary and the Benefits, Executive
shall be entitled to receive from Employer and Employer shall pay to Executive,
for each of Employer's complete fiscal quarters during the term of this
Agreement, a cash bonus in an amount equal to two percent (2%) of the "net
profits" of Employer for that fiscal quarter. For purposes of this Section 3.2,
the term "net profits" shall be defined as and mean all gross income from the
operations of the Employer (other than capital gains) less all expenses,
deductions and credits of Employer attributable to those operations. In
computing net profits, federal and state income taxes and payments made pursuant
to this Agreement and other bonus and other incentive plans of Employer shall be
deducted. The net profits shall be determined in accordance with generally
accepted accounting principles utilized by the certified public accountants
regularly employed by Employer, and the determination of those accountants shall
obligate and be conclusive on Employer and Executive. Payment of that bonus
shall be made no later than forty-five (45) days after the end of Employer's
fiscal quarter for which such bonus is due and payable.
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Section 3.3 Health Care Benefits. Employer shall include Employee in the
hospital, surgical, medical and dental benefit plan maintained by Employer.
Section 3.4 Illness. During the Term, Executive shall be entitled to ten
(10) days per year as sick leave with full pay. Sick leave shall not be
accumulated.
Section 3.5 Other Benefits. Executive shall receive all other benefits of
employment available generally to other employees of Employer.
ARTICLE IV.
FACILITIES AND EXPENSES
Section 4.1 Office and Staff. Employer will furnish Executive office
facilities, equipment, supplies, and such other facilities and personnel, as
Employer deems necessary or appropriate for the performance of Executive's
duties pursuant to this Agreement.
Section 4.2 Reimbursement of Business Expenses. Employer will pay on behalf
of Executive (or reimburse the Executive for) reasonable business expenses
incurred by Executive at the request of, or on behalf of, Employer in the
performance of the Executive's duties pursuant to this Agreement, and in
accordance with Employer's employment policies. Executive must file expense
reports with respect to such expenses in accordance with Employer's policies.
ARTICLE V.
VACATIONS AND HOLIDAYS
Section 5.1 Annual Vacation. Executive will be entitled to ten (10) days
paid vacation each Fiscal Year in accordance with the vacation policies of
Employer in effect for Employer's executive officers from time to time. Vacation
must be taken by Executive at such time or times as approved by the Chairman of
the Board of Directors or the Board of Directors. In the event that Executive is
unable for any reason to take the total amount of vacation time authorized
herein during any year, Executive may not accrue that time and add that time to
vacation time for any following year. In lieu of vacation leave, Executive may
elect to receive payment for all or any part of the vacation leave to which
Executive is entitled, in which case the vacation leave shall be valued at the
amount of salary earned by Executive during an equivalent period of time during
the fiscal year in which such vacation leave accrued.
Section 5.2 Paid Holidays. Executive shall be entitled to be paid for those
holidays designated by Employer, as specified in Employer's personnel policies.
ARTICLE VI.
TERMINATION
Section 6.1 (a) Disability. Employer may terminate this Agreement for
Disability. "Disability" shall exist if because of ill health, physical or
mental disability, or any other reason beyond Executive's control, and
notwithstanding reasonable accommodations made by Employer,
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Executive shall have been unable, unwilling or shall have failed to perform
Executive's duties pursuant to this Agreement, as determined in good faith by
the Board of Directors, for a period of thirty (30) consecutive days, or if, in
any twelve (12) month period, Executive shall have been unable or unwilling or
shall have failed to perform Executive's duties for a period of sixty (60) days,
irrespective of whether or not such days are consecutive. Executive hereby
consents to examination by a physician designated by Employer, and Executive
hereby waives any physician-patient privilege resulting from any such
examination.
(b) Cause. Employer may terminate Executive's employment for Cause.
Termination for "Cause" shall mean termination because of Executive's (i) gross
incompetence; (ii) willful gross misconduct that causes economic harm to
Employer or its affiliates or that brings discredit to Employer's or Employer's
affiliates' reputation; (iii) failure to follow directions of the Board of
Directors that are consistent with Executive's duties pursuant to this
Agreement; (iv) final, nonappealable conviction of a felony involving moral
turpitude; or (v) material breach of any provision of this Agreement. Those
events specified in clauses (i), (iii) and (v) of this subsection shall not
constitute Cause unless Employer notifies Executive thereof in writing,
specifying in reasonable detail the basis therefor and specifying that any such
event is for Cause, and unless Executive fails to cure such matter within 60
days after such notice is sent or given pursuant to this Agreement. Executive
shall be permitted to respond and to defend himself before the Board of
Directors or any appropriate committee thereof within a reasonable time after
written notification of any proposed termination for Cause pursuant to any event
specified in clauses (i), (ii), (iii) or (v) of this subsection.
(c) Without Good Reason. During the Term, Executive may terminate his
employment Without Good Reason. Termination "Without Good Reason" shall mean
termination of the Executive's employment by the Executive other than
termination for Employer Breach or resulting from the death of Executive.
(d) Explanation of Termination of Employment. Any party terminating this
Agreement shall give prompt written notice ("Notice of Termination") to the
other party hereto advising such other party of the termination of this
Agreement. Within thirty (30) days after notification that this Agreement has
been terminated, the terminating party shall deliver to the other party hereto a
written explanation, which shall specify in reasonable detail the basis for such
termination and shall indicate whether termination is being made for Cause,
Without Cause or for Disability (if Employer has terminated the Agreement) or
for Employer Breach or Without Good Reason (if Executive has terminated the
Agreement).
(e) Date of Termination. "Date of Termination" shall mean the date on which
Notice of Termination is sent or given pursuant to this Agreement.
Section 6.2 Compensation During Disability or Upon Termination.
(a) During Disability. During any period that Executive fails to perform
his duties pursuant to this Agreement because of ill health, physical or mental
disability, or any other reason beyond Executive's control, Executive shall be
entitled to receive the sick pay specified by the provisions of Section 3.4 of
this Agreement.
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(b) Termination for Disability. If Employer shall terminate Executive's
employment for Disability, Employer's obligation to pay Basic Compensation shall
terminate, except that Employer shall pay Executive (i) accrued but unpaid Basic
Compensation through the Date of Termination, and (ii) the benefits set forth in
Section 6.2(d).
(c) Termination for Cause or Without Good Reason. If Employer shall
terminate Executive's employment for Cause or if the Executive shall terminate
his employment Without Good Reason, then Employer's obligation to pay Basic
Compensation shall terminate, except that Employer shall pay Executive his
accrued but unpaid Basic Compensation through the Date of Termination.
(d) Employee Benefits. Upon the termination of Executive's employment with
Employer, the Basic Compensation shall terminate on the Date of Termination.
Section 6.3 Death of Executive. If Executive dies prior to the expiration
of the Term, Executive's employment and other obligations pursuant to this
Agreement shall automatically terminate and all compensation, to which Executive
is or would have been entitled pursuant to (including, without limitation, under
Section 3.1), shall terminate as of the date in which Executive's death occurs.
ARTICLE VII.
NON-DISCLOSURE COVENANT; EMPLOYEE INVENTIONS
Section 7.1 Acknowledgments by the Executive. Executive acknowledges that
(a) during the Term and as a part of his employment, Executive will have access
to Confidential Information; (b) public disclosure of such Confidential
Information could have an adverse effect on the Employer and its business; (c)
because Executive possesses substantial technical expertise and skill with
respect to Employer's business, Employer desires to obtain exclusive ownership
of each Employee Invention, and Employer will be at a substantial competitive
disadvantage if Employer fails to acquire exclusive ownership of each Employee
Invention; and (d) the provisions of this Article VII are reasonable and
necessary to prevent the improper use or disclosure of Confidential Information
and to provide Employer with exclusive ownership of all Employee Inventions.
Section 7.2 Agreements of the Executive. In consideration of the
compensation and benefits to be paid or provided to Executive by Employer
pursuant to this Agreement, Executive covenants as follows:
(a) Confidentiality.
(i) During and following the Term, Executive will hold in confidence the
Confidential Information and will not disclose the Confidential
Information, or any portion thereof, to any Person, except with the
specific prior written consent of Employer or except as otherwise
expressly permitted by the terms of this Agreement.
(ii) Any trade secrets of Employer or its affiliates will be entitled to
all of the protections and benefits pursuant to applicable law. If any
information that Employer or its affiliates deems to be a trade secret
is determined by a court of competent jurisdiction
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not to be a trade secret for purposes of this Agreement, such
information will, nevertheless, be considered Confidential Information
for purposes of this Agreement. Executive hereby waives any
requirement that Employer submit proof of the economic value of any
trade secret or post a bond or other security.
(iii) None of the foregoing obligations and restrictions applies to any
part of the Confidential Information that Executive demonstrates was
or became generally available to the public other than as a result of
a direct or indirect disclosure by Executive.
(iv) The Executive will not remove from the Employer's or Employer's
affiliates' premises (except to the extent such removal is for
purposes of the performance of the Executive's duties at home or while
traveling, or except as otherwise specifically authorized by Employer)
any document, record, notebook, plan, model, component, device, or
computer software or code, whether embodied in a disk or in any other
form (collectively, the "Proprietary Items"). Executive agrees that,
as between Employer and Executive, all of the Proprietary Items,
whether or not developed by Executive, are the exclusive property of
Employer. Upon termination of this Agreement by either party, or upon
the request of Employer during the Term, Executive will return to
Employer all of the Proprietary Items in Executive's possession or
subject to Executive's control, and Executive shall not retain any
copies, abstracts, sketches, or other physical embodiment of any of
the Proprietary Items.
(b) Employee Inventions. Each Employee Invention will belong exclusively to
Employer. Executive covenants that Executive will promptly:
(i) disclose to Employer in writing any Employee Invention;
(ii) assign to Employer or to a party designated by Employer, at Employer's
request and without additional compensation, all of Executive's right
to the Employee Invention for the United States and all foreign
jurisdictions;
(iii) execute and deliver to Employer such applications, assignments, and
other documents as Employer may request in order to apply for and
obtain patents or other registrations with respect to any Employee
Invention in the United States and any foreign jurisdictions;
(iv) sign all other papers necessary to carry out the above obligations;
and
(v) give testimony and render any other assistance in support of
Employer's rights to any Employee Invention.
Section 7.3 Disputes or Controversies. Executive acknowledges that in the
event that a dispute or controversy resulting from or relating to this Agreement
be submitted for adjudication to any court, arbitration panel, or other third
party, the preservation of the secrecy of Confidential Information may be
jeopardized. All pleadings, documents, testimony and records relating to any
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such adjudication will be maintained in secrecy and will be available for
inspection by Employer, Executive, and their respective attorneys and experts,
who will agree, in advance and in writing, to receive and maintain all such
information in secrecy, except as may be limited by them in writing.
ARTICLE VIII.
NON-COMPETITION AND NON-INTERFERENCE
Section 8.1 Acknowledgments by Executive. Executive acknowledges that (a)
the services to be performed by him pursuant to this Agreement are of a special,
unique, unusual, extraordinary, and intellectual character; (b) Employer's
business conducted nationally and Employer's services and products are marketed
throughout the United States; (c) Employer competes with other businesses that
are or could be located in any part of the United States; and (d) the provisions
of this Article VIII are reasonable and necessary to protect the Employer's
business.
Section 8.2 Covenants of Executive. In consideration of the acknowledgments
by Executive, and in consideration of the compensation and benefits to be paid
or provided to Executive by Employer, Executive covenants that Executive will
not, directly or indirectly:
(a) during the Term, except in the course of his employment pursuant to
this Agreement, and during the Post-Agreement Period, directly or indirectly,
engage or invest in, own, manage, operate, finance, control, or participate in
the ownership, management, operation, financing, or control of, be employed by,
associated with, or in any manner connected with, lend the Executive's name or
any similar name to, lend Executive's credit to or render services or advice to,
any business whose products, services or activities compete in whole or in part
with the products, services or activities of the Employer or any affiliate of
Employer anywhere in the United States; provided, however, that the Executive
may purchase or otherwise acquire up to (but not more than) three percent (3%)
of any class of securities of any issuer (but without otherwise participating in
the activities of such issuer), if such securities are listed on any national or
regional securities exchange or have been registered pursuant to Section 12(g)
of the Securities Exchange Act of 1934;
(b) whether for Executive's own account or for the account of any other
Person, at any time during the Term and the Post-Agreement Period, solicit
business of the same or similar type being carried on by the Employer, from any
Person known by Executive to be a customer of Employer, whether or not Executive
had personal contact with such Person during and by reason of Executive's
employment with Employer;
(c) whether for Executive's account or the account of any other Person (i)
at any time during the Term and the Post-Agreement Period, solicit, employ, or
otherwise engage as an employee, independent contractor, or otherwise, any
Person who is or was an employee of Employer at any time during the Term or in
any manner induce or attempt to induce any employee of Employer to terminate his
or her employment relationship with Employer; or (ii) at any time during the
Term and the Post-Agreement Period, interfere with Employer's relationship with
any Person, including any Person who at any time during the Term was an
employee, contractor, supplier, or customer of Employer; or
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(d) at any time during or after the Term, disparage Employer or any of
Employer's shareholders, directors, officers, employees, or agents.
For purposes of this Section 8.2, the term "Post-Agreement Period" means
the period beginning on the date of termination of the Executive's employment
with the Employer, plus five (5) years.
If any covenant in this Section 8.2 is determined by a court of competent
jurisdiction to be unreasonable, arbitrary, or against public policy, such
covenant will be considered to be divisible with respect to scope, time, and
geographic area, and such reduced scope, time, or geographic area, or all of
them, as a court of competent jurisdiction may determine to be reasonable, not
arbitrary, and not against public policy, will be effective, obligatory, and
enforceable against Executive.
The period of time applicable to any covenant in this Section 8.2 will be
extended by the duration of any violation by Executive of such covenant.
Executive will, while the covenant pursuant to this Section 8.2 is in
effect, give notice to Employer, within ten (10) days after accepting any other
employment, of the identity of Executive's employer. Employer may notify such
employer that Executive is obligated by this Agreement and, at Employer's
election, furnish such employer with a copy of this Agreement or relevant
portions thereof.
ARTICLE IX.
GENERAL PROVISIONS
Section 9.1 Injunctive Relief and Additional Remedy. Executive acknowledges
that the damage that would be suffered by Employer as a result of a breach of
the provisions of this Agreement (including any provision of Articles VII and
VIII) would be irreparable and that an award of monetary damages to the Employer
for such a breach would be an inadequate remedy. Consequently, Employer will
have the right, in addition to any other rights Employer may have, to obtain
injunctive relief to restrain any breach or threatened breach or otherwise to
specifically enforce any provision of this Agreement, and Employer will not be
obligated to post bond or other security in seeking such relief.
Section 9.2 Covenants of Articles VII and VIII Are Essential and
Independent Covenants. The covenants by Executive in Articles VII and VIII are
essential provisions of this Agreement, and without Executive's agreement to
comply with such covenants, Employer would not have entered into this Agreement
or employed or continued the employment of Executive. Employer and Executive
have independently consulted their respective counsel and have been advised in
all respects concerning the reasonableness and propriety of such covenants, with
specific regard to the nature of the business conducted by Employer.
Executive's covenants in Articles VII and VIII are independent covenants
and the existence of any claim by Executive against Employer or any of its
affiliates under this Agreement or otherwise will not excuse Executive's breach
of any covenant in Articles VII or VIII.
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If Executive's employment pursuant to this Agreement expires or is
terminated, this Agreement will continue in full force and effect as is
necessary or appropriate to enforce the covenants and agreements of Executive in
Articles VII and VIII.
Section 9.3 Offset. Employer will be entitled to offset against any and all
amounts owing to Executive pursuant to this Agreement the amount of any and all
claims that Employer may have against Executive.
Section 9.4 Representations and Warranties by the Executive. Executive
represents and warrants to Employer that the execution and delivery by Executive
of this Agreement do not, and the performance by Executive of Executive's
obligations pursuant to this Agreement will not, with or without the giving of
notice or the passage of time, or both (a) violate any judgment, writ,
injunction, or order of any court, arbitrator, or governmental agency applicable
to Executive; or (b) conflict with, result in the breach of any provisions of or
the termination of, or constitute a default under, any agreement to which
Executive is a party or by which Executive is or may be obligated.
Section 9.4 Obligations Contingent on Performance. The obligations of
Employer pursuant to this Agreement, including Employer's obligation to pay the
compensation provided for in this Agreement, are contingent upon Executive's
performance of Executive's obligations pursuant to this Agreement.
Section 9.5 Waiver. The rights and remedies of the parties to this
Agreement are cumulative and not alternative. Neither the failure nor any delay
by either party in exercising any right, power, or privilege pursuant to this
Agreement will operate as a waiver of such right, power, or privilege, and no
single or partial exercise of any such right, power, or privilege will preclude
any other or further exercise of such right, power, or privilege or the exercise
of any other right, power, or privilege. To the maximum extent permitted by
applicable law, (a) no claim or right resulting from this Agreement can be
discharged by one party, in whole or in part, by a waiver or renunciation of the
claim or right unless in writing signed by the other party; (b) no waiver that
may be given by a party will be applicable, except in the specific instance for
which it is given; and (c) no notice to or demand on one party will be deemed to
be a waiver of any obligation of such party or of the right of the party giving
such notice or demand to take additional action without notice or demand as
provided in this Agreement.
Section 9.6 Binding Effect; Delegation of Duties Prohibited. This Agreement
shall inure to the benefit of, and shall obligate, the parties hereto and their
respective successors, assigns, heirs, and legal representatives, including any
entity with which the Employer may merge or consolidate or to which all or
substantially all of its assets may be transferred. The duties and covenants of
Executive pursuant to this Agreement are personal and may not be delegated.
Section 9.7 Notices. All notices, requests, demands or other communications
pursuant to this Agreement shall be in writing or by telex or facsimile
transmission and shall be deemed to have been duly given (i) on the date of
service if delivered in person or by telex or facsimile machine transmission
(with the telex or facsimile confirmation of transmission receipt acting as
confirmation of service when sent and provide telexed or telecopied notices are
also mailed by first class, certified
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or registered mail, postage prepaid); or (ii) seventy-two (72) hours after
mailing by first class, registered or certified mail, postage prepaid, and
properly addressed as follows:
If to Executive: Cooper Lee
5031 Birch Street, Suite G
Newport Beach, CA 92660
If to Employer: TMEX USA, Inc.
5031 Birch Street, Suite G
Newport Beach, CA 92660
With a copy to: STEPP & BEAUCHAMP LLP
1301 Dove Street, Suite 460
Newport Beach, California 92660
949.660.9700
Telecopier: 949.660.9010
or at such other address as the party affected may designate in a written notice
to such other party in compliance with this section.
Section 9.8 Entire Agreement; Amendments. This Agreement specifies the
entire agreement among the parties with respect to the (i) employment
relationship by and among Employer and Executive and (ii) the terms and
conditions of all other relationships by and among Employer, in any capacity,
and Executive, in any capacity and supersede all prior agreements and
understandings, oral or written, among the parties hereto with respect thereto.
This Agreement may not be amended orally, but only by an agreement in writing
signed by the parties hereto.
Section 9.9 Governing Law. This Agreement will be governed by the laws of
the State of California, without regard to conflicts of laws principles.
Section 9.10 Jurisdiction. Any action or proceeding seeking to enforce any
provision of, or based on any right arising out of, this Agreement shall be
brought against either of the parties in the courts of the State of California,
County of Orange, and each of the parties consents to the jurisdiction of such
courts (and of the appropriate appellate courts) in any such action or
proceeding and waives any objection to venue. Process in any action or
proceeding referred to in the preceding sentence may be served on either party
anywhere in the world.
Section 9.11 Section and Article Headings, Construction. The headings of
sections and articles in this Agreement are provided for convenience only and
will not affect its construction or interpretation. All references to "section"
or "sections" and "article" or "articles" refer to the corresponding section or
sections and article or articles of this Agreement unless otherwise specified.
All words used in this Agreement will be construed to be of such gender or
number as the circumstances require. Unless otherwise expressly provided, the
word "including" does not limit the preceding words or terms.
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Section 9.12 Severability. If any provision of this Agreement is held
invalid or unenforceable by any court of competent jurisdiction, the other
provisions of this Agreement will remain in full force and effect. Any provision
of this Agreement determined to be invalid or unenforceable only in part will
remain in full force and effect to the extent not determined to be invalid or
unenforceable.
Section 9.13 Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.
Section 9.14 Indemnification for Negligence or Misconduct.
A. Employer shall save Employee harmless from and against and shall
indemnify Executive for any liability, loss, costs, expenses or damages
howsoever caused by reason of any injury (whether to body, property, or personal
or business character or reputation) sustained by any person or to any person or
to property by reason of any act, neglect, default or omission of Employer, and
Employer shall pay any and all amounts to be paid or discharged in case of an
action for any such damages or injuries. No provision of this section is
intended to, nor shall any provision of this section, relieve Executive from
that Executive's own act, omission or negligence.
B. Executive shall save Employer harmless from and against and shall
indemnify Employer for any liability, loss, costs, expenses or damages howsoever
caused by reason of any injury (whether to body, property, personal or business
character or reputation) sustained by any person or to any person or to property
by reason of any act, neglect, default or omission of Executive, and Executive
shall pay any and all amounts to be paid or discharged in case of an action for
any such damages or injuries. No provision of this section is intended to, nor
shall any provision of this section, relieve Employer from Employer's own act,
omission or negligence.
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IN WITNESS WHEREOF the parties have executed this Agreement of Employment
in duplicate and in multiple counterparts, each of which shall have the force
and effect of an original, on the date specified in the preamble of this
Agreement.
"EMPLOYER" "EXECUTIVE"
TMEX USA, Inc.,
a Nevada corporation
By: /s/ Crofton Cooper /s/ Cooper Lee
---------------------------- ---------------------------
Crofton Cooper Cooper Lee
Its: Chief Executive Officer
By: /s/ Crofton Cooper
----------------------------------
Crofton Cooper
Its: Secretary
AGREEMENT OF EMPLOYMENT
THIS AGREEMENT OF EMPLOYMENT ("Agreement") is made and entered into in
duplicate this 12th day of April, 2000, by and between TMEX, Inc., a Nevada
corporation ("Employer"), and Cecil Zeringue ("Executive").
RECITALS
A. Employer is a corporation duly organized and validly existing pursuant
to the laws of the State of Nevada.
B. Employer is in the business of developing and marketing high-speed
communication networks and services.
C. Employer desires to employ Executive, and Executive desires to serve, as
Vice President of Employer and to do and perform any and all services, acts and
things specified hereinafter.
AGREEMENT
NOW, THEREFORE, IN CONSIDERATION OF THE RECITALS SPECIFIED ABOVE THAT SHALL
BE DEEMED TO BE A SUBSTANTIVE PART OF THIS AGREEMENT, AND THE MUTUAL COVENANTS,
PROMISES, UNDERTAKINGS, AGREEMENTS, REPRESENTATIONS AND WARRANTIES SPECIFIED IN
THIS AGREEMENT AND OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND
SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, WITH THE INTENT TO BE OBLIGATED
LEGALLY AND EQUITABLY, THE PARTIES DO HEREBY COVENANT, PROMISE, AGREE, REPRESENT
AND WARRANT AS FOLLOWS:
ARTICLE I.
DEFINITIONS
For the purposes of this Agreement, the following terms have the meanings
specified or referred to in this Article I.
Section 1.1 "Basic Compensation"-- Salary and Benefits.
Section 1.2 "Board of Directors" -- the Board of Directors of Employer.
Section 1.3 "Confidential Information" -- information that is used in
Employer's and
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Employer's affiliates' business and (i) any and all trade secrets concerning the
business and affairs of the Employer, product specifications, data, know-how,
formulae, compositions, processes, designs, sketches, photographs, graphs,
drawings, samples, inventions and ideas, past, current and planned research and
development, current and planned manufacturing and distribution methods and
processes, customer lists, current and anticipated customer requirements, price
lists, market studies, business plans, computer software and programs (including
object code and source code), computer software and database technologies,
systems, structures and architectures (and related processes, formulae,
compositions, improvements, devices, know-how, inventions, discoveries,
concepts, ideas, designs, methods and information, of the Employer and any other
information, however documented, of the Employer that is a trade secret within
the meaning of applicable law; (ii) any and all information concerning the
business and affairs of the Employer (which includes historical financial
statements, financial projections and budgets, historical and projected sales,
capital spending budgets and plans, the names and backgrounds of key personnel,
personnel training and techniques and materials), however documented; and (iii)
any and all notes, analysis, compilations, studies, summaries, and other
material prepared by or for the Employer containing or based, in whole or in
part, on any information included in the foregoing.
Confidential Information shall not include (i) information already in
Executive's possession prior to the date of this Agreement and that was not
acquired or obtained from Employer or its affiliates or pursuant to a
confidentiality agreement; (ii) information that is obtained or was previously
obtained by the Executive from a third Person who, insofar as is known to the
Executive after reasonable inquiry, is not prohibited from transmitting the
information to the Executive by contractual, legal or fiduciary obligation to
the Employer or its affiliates; or (iii) information that is, or becomes,
generally available to the public other than as a result of a direct or indirect
disclosure by the Executive.
Section 1.4 "Effective Date" -- the date specified in the preamble of the
Agreement.
Section 1.5 "Employee Inventions" -- all discoveries, inventions,
improvements, designs, innovations and works of authorship (including all data
and records pertaining thereto) that relate to the business of Employer, whether
or not able to be patented, copyrighted or reduced to writing, that Employee may
discover, invent or originate during the term of his employment pursuant to this
Agreement, and for a period of six (6) months following the termination of this
Agreement, either alone or with other persons and whether or not during working
hours or by the use of the facilities of Employer.
Section 1.6 "Fiscal Year" -- Employer's fiscal year, as it exists on the
Effective Date or as changed from time to time.
Section 1.7 "Person" -- any individual, corporation (including any
non-profit corporation), general or limited partnership, limited liability
company, joint venture, estate, trust, association, organization, or
governmental body.
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ARTICLE II.
EMPLOYMENT TERMS AND DUTIES
Section 2.1 Employment. Employer hereby employs Executive, and Executive
hereby accepts employment by Employer, upon the terms and subject to the
conditions set forth in this Agreement.
Section 2.2 Term. Subject to the provisions of Article VI, the term (the
"Term") of Executive's employment pursuant to this Agreement will be one (1)
year, beginning on the Effective Date and ending that date which is exactly one
(1) year after the Effective Date ("the First Term"). The term of this Agreement
shall be renewed automatically for succeeding periods of one (1) year each
unless either party gives to the other party notice, at least sixty (60) days
prior to the expiration of any term, of the noticing party's intention not to
renew the term of this Agreement.
Section 2.3 Duties. Executive will have such duties as are assigned or
delegated to Executive by the Board of Directors, and will initially serve as
Vice President of Employer. Executive will (i) devote his entire business time,
attention, skill, and energy exclusively to the business of Employer, (ii) use
his best efforts to promote the success of Employer's business, and (iii)
cooperate fully with the Board of Directors in the advancement of the best
interests of Employer. If Executive is elected as a member of the Board if
Directors, or as a director or officer of any of Employer's affiliates,
Executive will fulfill his duties as such director or officer without additional
compensation.
ARTICLE III.
COMPENSATION AND BENEFITS
Section 3.1 Basic Compensation. During the Term, Executive will receive an
aggregate Basic Compensation of One Hundred Thousand Dollars ($100,000.00)
annually which will be payable in equal periodic installments according to
Employer's customary payroll practices, but no less frequently than semi-monthly
("Salary"), and benefits resulting from Executive's participation in such
pension, life insurance, hospitalization, major medical, disability and other
employee benefit plans of Employer that may be in effect from time to time
(including any right to an automobile), to the extent Executive is eligible
pursuant to the terms of those plans (collectively, the "Benefits").
Section 3.2 Bonus. In addition to the Salary and the Benefits, Executive
shall be entitled to receive from Employer and Employer shall pay to Executive,
for each of Employer's complete fiscal quarters during the term of this
Agreement, a cash bonus in an amount equal to two percent (2%) of the "net
profits" of Employer for that fiscal quarter. For purposes of this Section 3.2,
the term "net profits" shall be defined as and mean all gross income from the
operations of the Employer (other than capital gains) less all expenses,
deductions and credits of Employer attributable to those operations. In
computing net profits, federal and state income taxes and payments made pursuant
to this Agreement and other bonus and other incentive plans of Employer shall be
deducted. The net profits shall be determined in accordance with generally
accepted accounting principles utilized by the certified public accountants
regularly employed by Employer, and the determination of those accountants shall
obligate and be conclusive on Employer and Executive. Payment of that bonus
shall be made no later than forty-five (45) days after the end of Employer's
fiscal quarter for which such bonus is due and payable.
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Section 3.3 Health Care Benefits. Employer shall include Employee in the
hospital, surgical, medical and dental benefit plan maintained by Employer.
Section 3.4 Illness. During the Term, Executive shall be entitled to ten
(10) days per year as sick leave with full pay. Sick leave shall not be
accumulated.
Section 3.5 Other Benefits. Executive shall receive all other benefits of
employment available generally to other employees of Employer.
ARTICLE IV.
FACILITIES AND EXPENSES
Section 4.1 Office and Staff. Employer will furnish Executive office
facilities, equipment, supplies, and such other facilities and personnel, as
Employer deems necessary or appropriate for the performance of Executive's
duties pursuant to this Agreement.
Section 4.2 Reimbursement of Business Expenses. Employer will pay on behalf
of Executive (or reimburse the Executive for) reasonable business expenses
incurred by Executive at the request of, or on behalf of, Employer in the
performance of the Executive's duties pursuant to this Agreement, and in
accordance with Employer's employment policies. Executive must file expense
reports with respect to such expenses in accordance with Employer's policies.
ARTICLE V.
VACATIONS AND HOLIDAYS
Section 5.1 Annual Vacation. Executive will be entitled to ten (10) days
paid vacation each Fiscal Year in accordance with the vacation policies of
Employer in effect for Employer's executive officers from time to time. Vacation
must be taken by Executive at such time or times as approved by the Chairman of
the Board of Directors or the Board of Directors. In the event that Executive is
unable for any reason to take the total amount of vacation time authorized
herein during any year, Executive may not accrue that time and add that time to
vacation time for any following year. In lieu of vacation leave, Executive may
elect to receive payment for all or any part of the vacation leave to which
Executive is entitled, in which case the vacation leave shall be valued at the
amount of salary earned by Executive during an equivalent period of time during
the fiscal year in which such vacation leave accrued.
Section 5.2 Paid Holidays. Executive shall be entitled to be paid for those
holidays designated by Employer, as specified in Employer's personnel policies.
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ARTICLE VI.
TERMINATION
Section 6.1 (a) Disability. Employer may terminate this Agreement for
Disability. "Disability" shall exist if because of ill health, physical or
mental disability, or any other reason beyond Executive's control, and
notwithstanding reasonable accommodations made by Employer, Executive shall have
been unable, unwilling or shall have failed to perform Executive's duties
pursuant to this Agreement, as determined in good faith by the Board of
Directors, for a period of thirty (30) consecutive days, or if, in any twelve
(12) month period, Executive shall have been unable or unwilling or shall have
failed to perform Executive's duties for a period of sixty (60) days,
irrespective of whether or not such days are consecutive. Executive hereby
consents to examination by a physician designated by Employer, and Executive
hereby waives any physician-patient privilege resulting from any such
examination.
(b) Cause. Employer may terminate Executive's employment for Cause.
Termination for "Cause" shall mean termination because of Executive's (i) gross
incompetence; (ii) willful gross misconduct that causes economic harm to
Employer or its affiliates or that brings discredit to Employer's or Employer's
affiliates' reputation; (iii) failure to follow directions of the Board of
Directors that are consistent with Executive's duties pursuant to this
Agreement; (iv) final, nonappealable conviction of a felony involving moral
turpitude; or (v) material breach of any provision of this Agreement. Those
events specified in clauses (i), (iii) and (v) of this subsection shall not
constitute Cause unless Employer notifies Executive thereof in writing,
specifying in reasonable detail the basis therefor and specifying that any such
event is for Cause, and unless Executive fails to cure such matter within 60
days after such notice is sent or given pursuant to this Agreement. Executive
shall be permitted to respond and to defend himself before the Board of
Directors or any appropriate committee thereof within a reasonable time after
written notification of any proposed termination for Cause pursuant to any event
specified in clauses (i), (ii), (iii) or (v) of this subsection.
(c) Without Good Reason. During the Term, Executive may terminate his
employment Without Good Reason. Termination "Without Good Reason" shall mean
termination of the Executive's employment by the Executive other than
termination for Employer Breach or resulting from the death of Executive.
(d) Explanation of Termination of Employment. Any party terminating this
Agreement shall give prompt written notice ("Notice of Termination") to the
other party hereto advising such other party of the termination of this
Agreement. Within thirty (30) days after notification that this Agreement has
been terminated, the terminating party shall deliver to the other party hereto a
written explanation, which shall specify in reasonable detail the basis for such
termination and shall indicate whether termination is being made for Cause,
Without Cause or for Disability (if Employer has terminated the Agreement) or
for Employer Breach or Without Good Reason (if Executive has terminated the
Agreement).
(e) Date of Termination. "Date of Termination" shall mean the date on which
Notice of Termination is sent or given pursuant to this Agreement.
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Section 6.2 Compensation During Disability or Upon Termination.
(a) During Disability. During any period that Executive fails to perform
his duties pursuant to this Agreement because of ill health, physical or mental
disability, or any other reason beyond Executive's control, Executive shall be
entitled to receive the sick pay specified by the provisions of Section 3.4 of
this Agreement.
(b) Termination for Disability. If Employer shall terminate Executive's
employment for Disability, Employer's obligation to pay Basic Compensation shall
terminate, except that Employer shall pay Executive (i) accrued but unpaid Basic
Compensation through the Date of Termination, and (ii) the benefits set forth in
Section 6.2(d).
(c) Termination for Cause or Without Good Reason. If Employer shall
terminate Executive's employment for Cause or if the Executive shall terminate
his employment Without Good Reason, then Employer's obligation to pay Basic
Compensation shall terminate, except that Employer shall pay Executive his
accrued but unpaid Basic Compensation through the Date of Termination.
(d) Employee Benefits. Upon the termination of Executive's employment with
Employer, the Basic Compensation shall terminate on the Date of Termination.
Section 6.3 Death of Executive. If Executive dies prior to the expiration
of the Term, Executive's employment and other obligations pursuant to this
Agreement shall automatically terminate and all compensation, to which Executive
is or would have been entitled pursuant to (including, without limitation, under
Section 3.1), shall terminate as of the date in which Executive's death occurs.
ARTICLE VII.
NON-DISCLOSURE COVENANT; EMPLOYEE INVENTIONS
Section 7.1 Acknowledgments by the Executive. Executive acknowledges that
(a) during the Term and as a part of his employment, Executive will have access
to Confidential Information; (b) public disclosure of such Confidential
Information could have an adverse effect on the Employer and its business; (c)
because Executive possesses substantial technical expertise and skill with
respect to Employer's business, Employer desires to obtain exclusive ownership
of each Employee Invention, and Employer will be at a substantial competitive
disadvantage if Employer fails to acquire exclusive ownership of each Employee
Invention; and (d) the provisions of this Article VII are reasonable and
necessary to prevent the improper use or disclosure of Confidential Information
and to provide Employer with exclusive ownership of all Employee Inventions.
Section 7.2 Agreements of the Executive. In consideration of the
compensation and benefits to be paid or provided to Executive by Employer
pursuant to this Agreement, Executive covenants as follows:
(a) Confidentiality.
(i) During and following the Term, Executive will hold in confidence the
Confidential
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Information and will not disclose the Confidential Information, or any
portion thereof, to any Person, except with the specific prior written
consent of Employer or except as otherwise expressly permitted by the
terms of this Agreement.
(ii) Any trade secrets of Employer or its affiliates will be entitled to
all of the protections and benefits pursuant to applicable law. If any
information that Employer or its affiliates deems to be a trade secret
is determined by a court of competent jurisdiction not to be a trade
secret for purposes of this Agreement, such information will,
nevertheless, be considered Confidential Information for purposes of
this Agreement. Executive hereby waives any requirement that Employer
submit proof of the economic value of any trade secret or post a bond
or other security.
(iii) None of the foregoing obligations and restrictions applies to any
part of the Confidential Information that Executive demonstrates was
or became generally available to the public other than as a result of
a direct or indirect disclosure by Executive.
(iv) The Executive will not remove from the Employer's or Employer's
affiliates' premises (except to the extent such removal is for
purposes of the performance of the Executive's duties at home or while
traveling, or except as otherwise specifically authorized by Employer)
any document, record, notebook, plan, model, component, device, or
computer software or code, whether embodied in a disk or in any other
form (collectively, the "Proprietary Items"). Executive agrees that,
as between Employer and Executive, all of the Proprietary Items,
whether or not developed by Executive, are the exclusive property of
Employer. Upon termination of this Agreement by either party, or upon
the request of Employer during the Term, Executive will return to
Employer all of the Proprietary Items in Executive's possession or
subject to Executive's control, and Executive shall not retain any
copies, abstracts, sketches, or other physical embodiment of any of
the Proprietary Items.
(b) Employee Inventions. Each Employee Invention will belong exclusively to
Employer. Executive covenants that Executive will promptly:
(i) disclose to Employer in writing any Employee Invention;
(ii) assign to Employer or to a party designated by Employer, at Employer's
request and without additional compensation, all of Executive's right
to the Employee Invention for the United States and all foreign
jurisdictions;
(iii) execute and deliver to Employer such applications, assignments, and
other documents as Employer may request in order to apply for and
obtain patents or other registrations with respect to any Employee
Invention in the United States and any foreign jurisdictions;
(iv) sign all other papers necessary to carry out the above obligations;
and
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(v) give testimony and render any other assistance in support of
Employer's rights to any Employee Invention.
Section 7.3 Disputes or Controversies. Executive acknowledges that in the
event that a dispute or controversy resulting from or relating to this Agreement
be submitted for adjudication to any court, arbitration panel, or other third
party, the preservation of the secrecy of Confidential Information may be
jeopardized. All pleadings, documents, testimony and records relating to any
such adjudication will be maintained in secrecy and will be available for
inspection by Employer, Executive, and their respective attorneys and experts,
who will agree, in advance and in writing, to receive and maintain all such
information in secrecy, except as may be limited by them in writing.
ARTICLE VIII.
NON-COMPETITION AND NON-INTERFERENCE
Section 8.1 Acknowledgments by Executive. Executive acknowledges that (a)
the services to be performed by him pursuant to this Agreement are of a special,
unique, unusual, extraordinary, and intellectual character; (b) Employer's
business conducted nationally and Employer's services and products are marketed
throughout the United States; (c) Employer competes with other businesses that
are or could be located in any part of the United States; and (d) the provisions
of this Article VIII are reasonable and necessary to protect the Employer's
business.
Section 8.2 Covenants of Executive. In consideration of the acknowledgments
by Executive, and in consideration of the compensation and benefits to be paid
or provided to Executive by Employer, Executive covenants that Executive will
not, directly or indirectly:
(a) during the Term, except in the course of his employment pursuant to
this Agreement, and during the Post-Agreement Period, directly or indirectly,
engage or invest in, own, manage, operate, finance, control, or participate in
the ownership, management, operation, financing, or control of, be employed by,
associated with, or in any manner connected with, lend the Executive's name or
any similar name to, lend Executive's credit to or render services or advice to,
any business whose products, services or activities compete in whole or in part
with the products, services or activities of the Employer or any affiliate of
Employer anywhere in the United States; provided, however, that the Executive
may purchase or otherwise acquire up to (but not more than) three percent (3%)
of any class of securities of any issuer (but without otherwise participating in
the activities of such issuer), if such securities are listed on any national or
regional securities exchange or have been registered pursuant to Section 12(g)
of the Securities Exchange Act of 1934;
(b) whether for Executive's own account or for the account of any other
Person, at any time during the Term and the Post-Agreement Period, solicit
business of the same or similar type being carried on by the Employer, from any
Person known by Executive to be a customer of Employer, whether or not Executive
had personal contact with such Person during and by reason of Executive's
employment with Employer;
(c) whether for Executive's account or the account of any other Person (i)
at any time during the Term and the Post-Agreement Period, solicit, employ, or
otherwise engage as an employee,
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independent contractor, or otherwise, any Person who is or was an employee of
Employer at any time during the Term or in any manner induce or attempt to
induce any employee of Employer to terminate his or her employment relationship
with Employer; or (ii) at any time during the Term and the Post-Agreement
Period, interfere with Employer's relationship with any Person, including any
Person who at any time during the Term was an employee, contractor, supplier, or
customer of Employer; or
(d) at any time during or after the Term, disparage Employer or any of
Employer's shareholders, directors, officers, employees, or agents.
For purposes of this Section 8.2, the term "Post-Agreement Period" means
the period beginning on the date of termination of the Executive's employment
with the Employer, plus five (5) years.
If any covenant in this Section 8.2 is determined by a court of competent
jurisdiction to be unreasonable, arbitrary, or against public policy, such
covenant will be considered to be divisible with respect to scope, time, and
geographic area, and such reduced scope, time, or geographic area, or all of
them, as a court of competent jurisdiction may determine to be reasonable, not
arbitrary, and not against public policy, will be effective, obligatory, and
enforceable against Executive.
The period of time applicable to any covenant in this Section 8.2 will be
extended by the duration of any violation by Executive of such covenant.
Executive will, while the covenant pursuant to this Section 8.2 is in
effect, give notice to Employer, within ten (10) days after accepting any other
employment, of the identity of Executive's employer. Employer may notify such
employer that Executive is obligated by this Agreement and, at Employer's
election, furnish such employer with a copy of this Agreement or relevant
portions thereof.
ARTICLE IX.
GENERAL PROVISIONS
Section 9.1 Injunctive Relief and Additional Remedy. Executive acknowledges
that the damage that would be suffered by Employer as a result of a breach of
the provisions of this Agreement (including any provision of Articles VII and
VIII) would be irreparable and that an award of monetary damages to the Employer
for such a breach would be an inadequate remedy. Consequently, Employer will
have the right, in addition to any other rights Employer may have, to obtain
injunctive relief to restrain any breach or threatened breach or otherwise to
specifically enforce any provision of this Agreement, and Employer will not be
obligated to post bond or other security in seeking such relief.
Section 9.2 Covenants of Articles VII and VIII Are Essential and
Independent Covenants. The covenants by Executive in Articles VII and VIII are
essential provisions of this Agreement, and without Executive's agreement to
comply with such covenants, Employer would not have entered into this Agreement
or employed or continued the employment of Executive. Employer and Executive
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have independently consulted their respective counsel and have been advised in
all respects concerning the reasonableness and propriety of such covenants, with
specific regard to the nature of the business conducted by Employer.
Executive's covenants in Articles VII and VIII are independent covenants
and the existence of any claim by Executive against Employer or any of its
affiliates under this Agreement or otherwise will not excuse Executive's breach
of any covenant in Articles VII or VIII.
If Executive's employment pursuant to this Agreement expires or is
terminated, this Agreement will continue in full force and effect as is
necessary or appropriate to enforce the covenants and agreements of Executive in
Articles VII and VIII.
Section 9.3 Offset. Employer will be entitled to offset against any and all
amounts owing to Executive pursuant to this Agreement the amount of any and all
claims that Employer may have against Executive.
Section 9.4 Representations and Warranties by the Executive. Executive
represents and warrants to Employer that the execution and delivery by Executive
of this Agreement do not, and the performance by Executive of Executive's
obligations pursuant to this Agreement will not, with or without the giving of
notice or the passage of time, or both (a) violate any judgment, writ,
injunction, or order of any court, arbitrator, or governmental agency applicable
to Executive; or (b) conflict with, result in the breach of any provisions of or
the termination of, or constitute a default under, any agreement to which
Executive is a party or by which Executive is or may be obligated.
Section 9.4 Obligations Contingent on Performance. The obligations of
Employer pursuant to this Agreement, including Employer's obligation to pay the
compensation provided for in this Agreement, are contingent upon Executive's
performance of Executive's obligations pursuant to this Agreement.
Section 9.5 Waiver. The rights and remedies of the parties to this
Agreement are cumulative and not alternative. Neither the failure nor any delay
by either party in exercising any right, power, or privilege pursuant to this
Agreement will operate as a waiver of such right, power, or privilege, and no
single or partial exercise of any such right, power, or privilege will preclude
any other or further exercise of such right, power, or privilege or the exercise
of any other right, power, or privilege. To the maximum extent permitted by
applicable law, (a) no claim or right resulting from this Agreement can be
discharged by one party, in whole or in part, by a waiver or renunciation of the
claim or right unless in writing signed by the other party; (b) no waiver that
may be given by a party will be applicable, except in the specific instance for
which it is given; and (c) no notice to or demand on one party will be deemed to
be a waiver of any obligation of such party or of the right of the party giving
such notice or demand to take additional action without notice or demand as
provided in this Agreement.
Section 9.6 Binding Effect; Delegation of Duties Prohibited. This Agreement
shall inure to the benefit of, and shall obligate, the parties hereto and their
respective successors, assigns, heirs, and legal representatives, including any
entity with which the Employer may merge or consolidate or to
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which all or substantially all of its assets may be transferred. The duties and
covenants of Executive pursuant to this Agreement are personal and may not be
delegated.
Section 9.7 Notices. All notices, requests, demands or other communications
pursuant to this Agreement shall be in writing or by telex or facsimile
transmission and shall be deemed to have been duly given (i) on the date of
service if delivered in person or by telex or facsimile machine transmission
(with the telex or facsimile confirmation of transmission receipt acting as
confirmation of service when sent and provide telexed or telecopied notices are
also mailed by first class, certified or registered mail, postage prepaid); or
(ii) seventy-two (72) hours after mailing by first class, registered or
certified mail, postage prepaid, and properly addressed as follows:
If to Executive: Cecil Zeringue
5031 Birch Street, Suite G
Newport Beach, CA 92660
If to Employer: TMEX USA, Inc.
5031 Birch Street, Suite G
Newport Beach, CA 92660
With a copy to: STEPP & BEAUCHAMP LLP
1301 Dove Street, Suite 460
Newport Beach, California 92660
949.660.9700
Telecopier: 949.660.9010
or at such other address as the party affected may designate in a written notice
to such other party in compliance with this section.
Section 9.8 Entire Agreement; Amendments. This Agreement specifies the
entire agreement among the parties with respect to the (i) employment
relationship by and among Employer and Executive and (ii) the terms and
conditions of all other relationships by and among Employer, in any capacity,
and Executive, in any capacity and supersede all prior agreements and
understandings, oral or written, among the parties hereto with respect thereto.
This Agreement may not be amended orally, but only by an agreement in writing
signed by the parties hereto.
Section 9.9 Governing Law. This Agreement will be governed by the laws of
the State of California, without regard to conflicts of laws principles.
Section 9.10 Jurisdiction. Any action or proceeding seeking to enforce any
provision of, or based on any right arising out of, this Agreement shall be
brought against either of the parties in the courts of the State of California,
County of Orange, and each of the parties consents to the jurisdiction of such
courts (and of the appropriate appellate courts) in any such action or
proceeding and waives any objection to venue. Process in any action or
proceeding referred to in the preceding sentence may be served on either party
anywhere in the world.
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Section 9.11 Section and Article Headings, Construction. The headings of
sections and articles in this Agreement are provided for convenience only and
will not affect its construction or interpretation. All references to "section"
or "sections" and "article" or "articles" refer to the corresponding section or
sections and article or articles of this Agreement unless otherwise specified.
All words used in this Agreement will be construed to be of such gender or
number as the circumstances require. Unless otherwise expressly provided, the
word "including" does not limit the preceding words or terms.
Section 9.12 Severability. If any provision of this Agreement is held
invalid or unenforceable by any court of competent jurisdiction, the other
provisions of this Agreement will remain in full force and effect. Any provision
of this Agreement determined to be invalid or unenforceable only in part will
remain in full force and effect to the extent not determined to be invalid or
unenforceable.
Section 9.13 Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.
Section 9.14 Indemnification for Negligence or Misconduct.
A. Employer shall save Employee harmless from and against and shall
indemnify Executive for any liability, loss, costs, expenses or damages
howsoever caused by reason of any injury (whether to body, property, or personal
or business character or reputation) sustained by any person or to any person or
to property by reason of any act, neglect, default or omission of Employer, and
Employer shall pay any and all amounts to be paid or discharged in case of an
action for any such damages or injuries. No provision of this section is
intended to, nor shall any provision of this section, relieve Executive from
that Executive's own act, omission or negligence.
B. Executive shall save Employer harmless from and against and shall
indemnify Employer for any liability, loss, costs, expenses or damages howsoever
caused by reason of any injury (whether to body, property, personal or business
character or reputation) sustained by any person or to any person or to property
by reason of any act, neglect, default or omission of Executive, and Executive
shall pay any and all amounts to be paid or discharged in case of an action for
any such damages or injuries. No provision of this section is intended to, nor
shall any provision of this section, relieve Employer from Employer's own act,
omission or negligence.
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IN WITNESS WHEREOF the parties have executed this Agreement of Employment
in duplicate and in multiple counterparts, each of which shall have the force
and effect of an original, on the date specified in the preamble of this
Agreement.
"EMPLOYER" "EXECUTIVE"
TMEX USA, Inc.,
a Nevada corporation
By: /s/ Crofton Cooper /s/ Cecil Zeringue
---------------------------- ---------------------------
Crofton Cooper Cecil Zeringue
Its: Chief Executive Officer
By: /s/ Crofton Cooper
----------------------------------
Crofton Cooper
Its: Secretary
EMPLOYMENT AGREEMENT
Agreement made this 1st day of October, 1999 by and between TMEX USA, INC.,
a Nevada corporation also authorized to do business in the state of California
(herein "TMEX") and Michael W. Garone residing at 11625 Vista Forest Drive,
Alpharetta, Georgia (herein "EMPLOYEE" and sometimes referred to as "GARONE").
RECITALS
1. Employee has a successful background of management and sales in the
operation of a telephone debit card business, with an established network
distribution system.
2. TMEX is a telecommunications company headquartered in Newport Beach,
California, with a current US-Mexico Laser Communications network and facilities
available for national and international telephone transmission services.
3. TMEX desires to enter into the telephone debit card business
("Venture"), by and through the employment of GARONE and the opening of a sales
office in Atlanta, Georgia. GARONE desires to be and become an employee of TMEX,
for such purpose.
WITNESSETH
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
promises herein contained, the parties agree as follows:
AGREEMENT
1. Employment. TMEX agrees to employ EMPLOYEE AND EMPLOYEE agrees to serve
TMEX upon the terms and conditions hereinafter set forth.
2. Term of Employment. The employment of EMPLOYEE hereunder shall commence
on October 1, 1999 and shall continue for a period of three years thereafter
with an automatic renewal period of three consecutive years thereafter, unless
sooner terminated pursuant to the provisions of this agreement.
3. Duties of Employee. EMPLOYEE agrees to serve TMEX faithfully in a senior
executive capacity with such title as may be designated by TMEX, to the best of
his ability under direction of the Chief Executive Officer of TMEX or his
successor. It is the intention of the parties that EMPLOYEE shall serve TMEX
specifically in connection with the management and sales operation of a
telephone debit card business by and through a sales office to be established in
Atlanta Georgia, including, but not limited to, such other executive and other
duties, consonant with the management/sales operation of a telephone debit card
business, as TMEX may reasonably require.
<PAGE>
4. Compensation. TMEX agrees to pay, or cause to be paid, to EMPLOYEE and
EMPLOYEE agrees to accept, as compensation for the services to be rendered by
EMPLOYEE hereunder, a minimum salary of $5,000 per month for the first two
months of his employment and $10,000 per month, for the next ten consecutive
months and thereafter increased annually by ten percent, all payable in equal
bimonthly installments on the 1st and 15th day of each successive month. TMEX
shall reimburse EMPLOYEE for all reasonable expenses incurred by EMPLOYEE on
behalf of TMEX, including the expense of any business trips undertaken by
Employee at the request of TMEX.
5. Bonus Compensation. In addition to the base salary and compensation
provided in paragraph 4 above, TMEX shall, as signing bonus compensation, issue
50,000 shares of its common stock to EMPLOYEE upon the signing of this agreement
and thereafter contingent bonus compensation of a total of 960,000 shares of its
common stock, over a period of three years in equal quarterly installments of
80,000 shares, provided that EMPLOYEE meets the minimum profit/revenue
projections set forth on the first year cash flow analysis furnished by
Employees, a copy of which is annexed as Exhibit "A" and, thereafter, set forth
in an annual cash flow analysis for each succeeding year mutually agreed to by
the parties. It is expressly understood that the minimum profit/revenue for each
quarterly period shall be determined on a quarterly roll-over basis.
6. Rule 144 Stock. EMPLOYEE agrees and recognizes that all shares of the
common stock of TMEX issued to him under this agreement have not been registered
under Section 5 of the Securities Act of 1933 and are "restricted securities" as
that term is defined in Rule 144 (a) (3) [17 CFR 230.144(a)(3)] and are subject
to the resale limitations which require a holding period of at least one-year
before resale measured from the date they are acquired. For restricted
securities held between one and two years, other provisions of the rule require
that limited amounts may be resold only in ordinary brokerage transactions with
a notice of the resale to be filed with the Securities Exchange Commission.
After a two-year holding period they may be resoled by a non-affiliate without
any restrictions.
7. Employee Insurance. TMEX warrants and represents that its employees are
covered by a PRO health/hospital insurance plan, under which EMPLOYEE will
likewise be covered, effective upon the signing of this agreement. TMEX also
agrees upon the signing and during the life of this agreement to provide and pay
the premium for a $500,000 15-year level payment term life insurance policy
covering EMPLOYEE, who shall be the owner thereof.
8. Commissions. EMPLOYEE shall be entitled to and shall be paid a
commission equal to one and one-half percent on all debit card sales.
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<PAGE>
9. Restrictive Covenant of EMPLOYEE. In addition to the provisions of
paragraph 3 hereof, EMPLOYEE agrees during the employment period, to devote all
or such part of his time as reasonably necessary to the Venture and that he will
not engage or be otherwise directly or indirectly interested any way in any
business competing with or of a nature similar to the business of TMEX. EMPLOYEE
further agrees that during the employment period and thereafter without limit
that he will not, except to TMEX communicate, or divulge to any person, firm or
corporation, either directly or indirectly, any information (except that which
is generally known to the public) relating to the business, customers and
suppliers or other affairs of TMEX.
10. TMEX Obligations. In addition to payment of salaries, travel expenses,
health and life insurance, and other items provided above, TMEX shall be
obligated for, including but without limitation, the following:
a) To pay for the lease of office space and necessary office equipment in
Atlanta Georgia:
b) Provide and pay for accounting services, switching lease and switches,
licenses and permits, telephone service, and legal fees; and
c) Provide one time capitalization of the Venture as required by Exhibit A
not to exceed $80,000.
11. Merger, Consolidation of TMEX. In the event that TMEX shall at any time
be merged or consolidated with any other corporation or corporations or shall
sell or otherwise transfer a substantial portion of its assets to another entity
or corporation, the provisions of this Agreement shall bed binding upon and
inure to the benefit of the corporation or entity surviving or resulting from
such merger or consolidation or to which the assets shall be sold or
transferred. Except as provided in the preceding sentence, this Agreement shall
not be assignable by the EMPLOYEE or TMEX.
12. Termination Conditions. TMEX, for the reasons set forth below, shall
have the right to terminate this Agreement by sending written notice of
termination together with two-weeks severance pay to the EMPLOYEE, and thereupon
his employment hereunder shall terminate.
a) In the event the EMPLOYEE shall become incapacitated by reason of mental
or physical disability or otherwise during the term of this agreement, so that
he is prevented from performing his principal duties and services hereunder for
a period of four (4) consecutive months, or the equivalent of six (6)
consecutive months during any 12-month period, TMEX shall have the right to
terminate this Agreement.
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<PAGE>
b) In the event the Venture incurs a loss in any month, or months during
the first six months of this Agreement, to the extent that TMEX would of
necessity be required to infuse additional capital into the Venture (new money),
TMEX shall have the right to terminate this Agreement, unless, the additional
capital required does not, in the aggregate, exceed 50% of the profit stemming
from the Venture already realized by TMEX. However, nothing herein contained, is
intended to prevent TMEX from infusing additional capital into the Venture at
anytime, regardless of the source of such capital.
13. Covenant Not To Sue. The parties expressly agree, (1) that the Venture
covered by the terms of this agreement is a development stage venture; (2) that
the success of the Venture is dependent solely upon the ability of EMPLOYEE to
cause the Venture to fully meet the projections set forth in Exhibit A, absence
Acts of God (or similar occurences, ("Force Majure") which temporarily prevents
the facilities of TMEX to accomodate the business generated by the Venture and,
(3) that TMEX has agreed to provide the initial capitalization for the Venture
solely in reliance upon such projections provided by EMPLOYEE and has made no
arrangements and is not willing to provide additional capital for the Venture in
the event it occurs losses or otherwise fails to meet the projections absence
Force Majure. Accordingly, the parties for themselves, their respective heirs,
assigns, legal representatives, assigns and successors covenant with each other
to never collectively or individually institute any suit or action at law or in
equity against the other party arising directly or indirectly out of this
Agreement nor in any way aid in the institution or prosecuting against the other
party of any claim, demand, action or cause of action for damages, arising
directly or indirectly, out of this Agreement.
14. Joint Endeavor. The parties agree that the drafting of this Agreement
was a joint effort on the part of both parties.
15. Notices. All notices, requests, demands and other communications
arising out of this Agreement, if any, shall be delivered personally, by Fax, to
the other party at the address first set forth above. Any party may change such
address by sending written notice of such change by Fax to the other party. All
documents faxed by a party pursuant hereto, including the signature of a party
thereon, if any, shall be deemed an original document for all purposes.
16. Complete Understanding. This Agreement constitutes the complete
understanding between the parties and no statements representation, warranty or
covenant has been made by either party except as expressly set forth herein.
This Agreement shall not be altered, modified, amended or terminated by written
instrument signed by both of the parties hereto.
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<PAGE>
IN WITNESS WHEREOF, the parties have executed this agreement the year and
date set forth along side their respective signatures in the space provided
below. The parties agree that if a signed faxed copy of this Agreement is
delivered by one party to the other, it shall be deemed to be an original signed
document, for all purposes.
TMEX USA, INC. EMPLOYEE
By /s/ [ILLEGIBLE] 9-30-99 By /s/ Michael W. Garone
------------------------ -----------------------
Its Michael W. Garone
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AGREEMENT FOR INDEMNIFICATION
THIS AGREEMENT FOR INDEMNIFICATION ("Agreement") is made and entered into
as of the 12th day of April 2000, by and between TMEX USA, Inc., a Nevada
corporation ("Corporation"), and Crofton Cooper, Chief Executive Officer,
Secretary, Treasurer and a director of the Corporation ("Indemnitee").
RECITALS
A. The Corporation and the Indemnitee understand and agree that
interpretations of statutes, regulations, court opinions, and the Corporation's
Articles of Incorporation and Bylaws, are too uncertain to provide the
Corporation's officers and directors with adequate or reliable advance knowledge
or guidance with respect to the legal risks and potential liabilities to which
they may become exposed personally as a result of performing, in good faith,
their duties as officers and directors of the Corporation.
B. The Corporation and the Indemnitee are aware of the substantial increase
in the number of litigation matters filed against corporate officers and
directors.
C. The Corporation and the Indemnitee are aware that the cost of defending
those litigation matters, whether or not those litigation matters are
meritorious, may be in excess of the financial resources of the officers and
directors of the Corporation or may significantly exceed the limited benefits
derived by persons serving as officers and directors of the Corporation.
D. The Corporation and the Indemnitee are aware that the legal risks and
potential officer and director liabilities, or the very threat thereof, and the
resulting substantial time endured, and fees and expenses incurred, in defending
against such litigation matters have no reasonable logical relationship to the
amount of compensation received by the Corporation's officers and directors.
These factors (i) cause a significant deterrent to, and (ii) induce increased
reluctance on the part of, experienced and capable persons to serve as officers
and directors of the Corporation.
E. The Corporation has investigated the availability and deficiency of
liability insurance to provide its officers and directors with adequate
protection against the foregoing legal risks and potential liabilities. The
Corporation has concluded that such insurance does not provide adequate
protection to the Corporation's officers and directors. Therefore, the
Corporation believes it will be in the best interests of the Corporation and
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its shareholders for the Corporation to agree with the Corporation's officers
and directors, including the Indemnitee, to indemnify those officers and
directors, to the most complete extent permitted by law, against personal
liability for actions taken in the good faith performance in their duties to the
Corporation.
F. Section 78.7502 of the General Corporation Law of Nevada ("Law")
specifies the circumstances regarding the mandatory and permissive
indemnification by a Nevada corporation of the officers, directors, employees
and agents of that corporation, and those provisions (i) require indemnification
in certain circumstances, (ii) permit indemnification in other circumstances,
and (iii) prohibit indemnification in some circumstances.
G. The members of the Board of Directors of the Corporation have
determined, after careful consideration and investigation of the various options
available, that the provisions of this Agreement are reasonable, prudent, and
necessary to promote and ensure the best interests of the Corporation and its
shareholders. The provisions of the Agreement are intended to (i) induce and
encourage significantly experienced and capable persons such as the Indemnitee
to serve as officers and directors of the Corporation; (ii) encourage such
persons to resist what they consider to be unjustifiable litigation matters and
claims made against them regarding the good faith performance of their duties to
the Corporation, secure in the knowledge that certain expenses, costs, and
liabilities incurred by them in their defense of such litigation matters will be
borne and paid by the Corporation and that they will receive the maximum
protection against such risks and liabilities as legally may be made available
to them; and (iii) encourage officers and directors of the Corporation to
exercise their best business judgment regarding matters which will be submitted
to them for consideration, without undue concern for the risk that claims may be
made against them because they are officers or directors of the Corporation.
H. The Corporation desires to cause the Indemnitee to continue to serve as
an officer and director of the Corporation free from concern for unpredictable,
inappropriate, or unreasonable legal risk and personal liabilities by reason of
his acting in good faith in the performance of his duties to the Corporation.
The Indemnitee desires to serve as an officer and director of the Corporation;
provided, however, and on the express condition, that he is furnished with the
indemnification specified by the provisions of this Agreement.
NOW, THEREFORE, IN CONSIDERATION OF THE FOREGOING RECITALS, PREMISES, PROMISES,
COVENANTS, AGREEMENTS, AND UNDERTAKINGS SPECIFIED BY THE PROVISIONS OF THIS
AGREEMENT AND FOR OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND
SUFFICIENCY
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<PAGE>
OF WHICH ARE HEREBY ACKNOWLEDGED, WITH THE INTENT TO BE OBLIGATED LEGALLY AND
EQUITABLY, THE PARTIES TO THIS AGREEMENT AGREE WITH EACH OTHER AS FOLLOWS:
1. Definitions. For the purposes of this Agreement, the following words and
terms shall be defined as follows:
(a) The term "Proceeding" does and shall include any threatened, pending,
or completed action, inquiry, lawsuit, litigation matter, or
proceeding, whether commenced in the name of the Corporation, or
otherwise, and whether civil, criminal, administrative, or
investigative in nature, including, but not limited to, actions,
inquiries, investigations, litigation matters, or proceedings
commenced pursuant to or predicated on the provisions of the
Securities Act of 1933, as amended; the Securities Exchange Act of
1934, as amended; their respective state and provincial counterparts;
and any rule or regulation promulgated pursuant thereto, in which the
Indemnitee may be, or may have been involved as, a party, or otherwise
(other than plaintiff against the Corporation), because of (i) the
fact that the Indemnitee is or was an officer or director of the
Corporation, (ii) any action taken by the Indemnitee, or (iii) any
inaction by the Indemnitee while he is or was functioning as such an
officer or director of the Corporation.
(b) The term "Expenses" includes, but is not limited to, expenses of
investigations, judicial or administrative proceedings or appeals,
court costs, attorneys' fees and disbursements, and any expenses of
establishing a right to indemnification pursuant to applicable law or
the provisions of Paragraph 7 of this Agreement.
(c) References to "other enterprise" does and shall include each entity of
and for which the Corporation is the managing agent and references to
"serving at the request of the Corporation" does and shall include any
service by the Indemnitee as an officer and director of the
Corporation which imposes duties on, or involves services by the
Indemnitee while functioning as such officer and director with respect
to any such entity, its members, partners, or beneficiaries; and if
the Indemnitee acts in good faith and in a manner he reasonably
believes to be in the best interests of the members, partners and
beneficiaries of such entity, the Indemnitee shall be deemed to have
acted in a manner "not opposed to the best interests of the
Corporation," as that
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phrase is contemplated by the provisions of this Agreement.
(d) For the purposes of this Agreement, the Indemnitee shall be deemed to
have been acting as an "Agent" if he was functioning in his capacity
as (i) an officer of the Corporation, (ii) a director of the
Corporation, (iii) a member of a committee of the Board of Directors
of the Corporation, or (iv) a representative or agent of any other
enterprise at the request of the Corporation, whether or not he is
functioning in such capacity at the time any liability or expense is
incurred for which indemnification or reimbursement can be provided
pursuant to the provisions of this Agreement.
(e) The term "Applicable Standard" means that the Indemnitee acted in good
faith and in a manner that the Indemnitee reasonably believed to be in
the best interests of the Corporation; except that in a criminal
proceeding, the Indemnitee must also have had no reasonable cause to
believe that the Indemnitee's conduct was unlawful. The termination of
any Proceeding by judgment, order, settlement, conviction or upon a
plea of nolo contendere or any equivalent procedure shall not, of
itself, create any presumption, or establish, that the Indemnitee did
not satisfy the "Applicable Standard."
(f) "Independent Legal Counsel" shall include any law firm selected by the
regular counsel for the Corporation from a list of law firms which
satisfy reasonable criteria established by the Board of Directors of
the Corporation; provided, however, such law firm has not represented
the Corporation, the Indemnitee, or any person controlled by the
Indemnitee within the preceding 24 calendar months.
(g) The term "Estate" shall include the following terms as those are
understood by applicable law:
(1) The duly appointed and qualified executor, executrix,
administrator, administratrix, administrator with the Will
annexed, or administratrix with the Will annexed, of the estate
of a decedent;
(2) The surviving joint tenant of a decedent, when shares of capital
stock issued by the Corporation are owned by a decedent and a
person who is not active in the business of the Corporation as
joint tenants;
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(3) Any other person who, because of the community property or other
law of any jurisdiction, may acquire, by reason of the death of
such decedent, and without formal probate proceedings, any right,
title, or interest in or to shares of capital stock issued by the
Corporation to such decedent; or
(4) An irrevocable living or grantor's trust for the benefit of a
deceased shareholder of the Corporation.
2. Agreement to Serve. The Indemnitee shall serve or continue to serve as
Chief Executive Officer, Secretary, Treasurer and a member of the Board of
Directors of the Corporation at the will of the Corporation's shareholders, or
pursuant to the provisions of separate agreement, as the case may be, for such
time as he is duly elected or appointed, and until such time as he tenders his
resignation in writing or he is removed.
3. Indemnity in Third Party Proceedings. The Corporation shall indemnify
the Indemnitee, if the Indemnitee is made a party to or threatened to be made a
party to, or otherwise involved in, any Proceeding (other than a Proceeding
which is an action by or in the right of the Corporation to procure a judgment
in its favor), because of the fact that the Indemnitee is or was an Agent of the
Corporation. The indemnification contemplated by the provisions of this
Paragraph 3 shall apply, and be limited, to and against all Expenses, judgments,
fines, penalties, settlements, and other amounts, actually and reasonably
incurred by the Indemnitee in connection with the defense or settlement of any
such Proceeding; provided, however, it is determined pursuant to the provisions
of Paragraph 7 of this Agreement or by the court in which such Proceeding is or
was pending that the Indemnitee satisfied the Applicable Standard.
4. Indemnity in Proceedings By or In the Name of the Corporation. The
Corporation shall indemnify the Indemnitee, if the Indemnitee is made a party
to, or threatened to be made a party to, or otherwise involved in, any
Proceeding which is an action by or in the right of the Corporation to procure a
judgment in the Corporation's favor because the Indemnitee is or was an Agent of
the Corporation. The indemnification contemplated by the provisions of this
Paragraph 4 shall apply, and be limited, to and against all Expenses actually
and reasonably incurred by the Indemnitee in connection with the defense or
settlement of such Proceeding, but only if:
(a) the Indemnitee satisfies the Applicable Standard (except that the
Indemnitee's belief regarding the best interests the Corporation or
other enterprise need
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not have been reasonable);
(b) the Indemnitee acted with such care, including reasonable inquiry, as
an ordinarily prudent person in a similar circumstance would use; and
(c) the Proceeding is settled or otherwise disposed of with approval of
the Corporation.
No indemnification shall be made pursuant to the provisions of this
Paragraph 4 for any claim, issue, or matter as to which the Indemnitee shall
have been adjudged to be liable to the Corporation in the performance of the
Indemnitee's duty to the Corporation, unless, and only to the extent that, the
court in which such Proceeding is or was pending shall determine upon
application that, considering all the circumstances of such Proceeding, the
Indemnitee is fairly and reasonably entitled to indemnification for the
Expenses, which such court shall determine.
5. Expenses of Successful Indemnitee. Notwithstanding any other provision
of this Agreement, to the extent that the Indemnitee has been successful on the
merits in defense of any Proceeding or in defense of any claim, issue, or matter
in such Proceeding, the Indemnitee shall be indemnified by the Corporation from
and against all Expenses actually and reasonably incurred in connection with
such Proceeding.
6. Advances of Expenses. The Expenses incurred by the Indemnitee in any
Proceeding shall be advanced by the Corporation prior to the final disposition
of such Proceeding at the written request of the Indemnitee, but only if the
Indemnitee shall undertake to repay such advances, unless and to the extent that
it is ultimately determined that the Indemnitee is entitled to indemnification.
Any advance required pursuant to the provisions of this Paragraph 6 shall be
deemed to have been approved by the members of the Board of Directors of the
Corporation to the extent the provisions of this Agreement have been approved by
the members of that Board of Directors. In determining whether or not to make an
advance pursuant to the provisions of this Paragraph 6, the ability of the
Indemnitee to repay any such advance shall not be a factor. In a Proceeding
commenced by the Corporation directly, in its own right (as distinguished from a
Proceeding commenced derivatively or by any receiver or trustee), the
Corporation shall have the discretion not to make the advance contemplated by
the provisions of this Paragraph 6, if independent counsel advises the
Corporation in writing that the Corporation has probable cause to believe, and
the Corporation does, in fact, believe, that the Indemnitee did not act in good
faith with regard to the subject matter of such Proceeding or a material portion
of
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such Proceeding.
7. Right of the Indemnitee to Indemnification Upon Application; Procedure
Upon Application. Any indemnification or advance contemplated by the provisions
of this Agreement shall be made no later than 30 calendar days after receipt by
the Corporation of a written request by the Indemnitee for such advance or
indemnification and which request shall be provided in accordance with the
provisions of Paragraph 11 of this Agreement. In all other situations,
indemnification shall be made by the Corporation only if authorized in the
specific situation, upon a determination that indemnification of the Indemnitee
is proper according to the circumstances and the provisions of this Agreement
by:
(a) a majority vote of a quorum of the members of the Board of Directors
of the Corporation (or a duly constituted committee of that Board of
Directors), consisting of officers and directors who are not parties
to the Proceeding at issue;
(b) approval of a majority in interest of the issued and outstanding
voting capital stock of the Corporation, and any shares of the
Corporation's voting capital stock entitled to vote therefor held by
the Indemnitee shall not be entitled to vote regarding such
indemnification;
(c) the court in which the Proceeding at issue is or was pending, upon
application made by the Corporation or made by (i) the Indemnitee or
(ii) any person rendering services in connection with the Indemnitee's
defense, whether or not the Corporation opposes such application; or
(d) to the extent permitted by law and as expressed by independent legal
counsel in a written opinion.
The right to indemnification or advances contemplated by the provisions of
this Agreement shall be enforceable by the Indemnitee in any court of competent
jurisdiction. The burden of proving that such indemnification or advances is
appropriate shall be on the Indemnitee. Neither the failure of the Corporation
(including the members of its Board of Directors or independent legal counsel)
to make a determination prior to the commencement of any action to determine
whether such indemnification or advances is appropriate in the particular
circumstances because the Indemnitee has satisfied the Applicable Standard, nor
a determination by the Corporation (including the members of its Board of
Directors or independent legal counsel) that the Indemnitee has not satisfied
such
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Applicable Standard, shall be a defense to such action or create a presumption
that the Indemnitee has not satisfied the Applicable Standard. The Indemnitee's
Expenses incurred in connection with successfully establishing his right to such
indemnification or advances, in whole or in part, in any Proceeding shall also
be indemnified by the Corporation; provided, however, that if the Indemnitee is
only partially successful, only an equitably allocated portion of such Expenses
shall be indemnified by the Corporation.
If the Indemnitee is entitled to indemnification by the Corporation for
some or a portion of the Expenses, judgments, fines, or penalties actually and
reasonably incurred by the Indemnitee in the investigation, defense, appeal, or
settlement of any Proceeding but not, however, for the total amount of those
Expenses, judgments, fines or penalties the Corporation shall nevertheless
indemnify the Indemnitee for the portion (determined on an equitable basis) of
those Expenses, judgments, fines, or penalties to which the Indemnitee is
entitled.
The Corporation's obligations to advance or indemnify the Indemnitee
pursuant to the provisions of this Agreement shall be deemed satisfied to the
extent of any payments made by an insurer for or on behalf of the Corporation or
the Indemnitee.
8. Indemnification Pursuant to this Agreement Is Not Exclusive. The
indemnification contemplated by the provisions of this Agreement shall not be
deemed exclusive of any other rights to which the Indemnitee may be entitled
pursuant to the provisions of the Certificate of Incorporation or Bylaws of the
Corporation, or any agreement, vote of shareholders, or disinterested officers
and directors, the General Corporation Law of the State of Nevada, or otherwise,
as to action in his official capacities as an officer, director of the
Corporation and any other capacity while serving as an officer or director of
the Corporation. The indemnification contemplated by the provisions of this
Agreement shall continue as to the Indemnitee although he may have ceased to be
an Agent of the Corporation and shall inure to the benefit of the heirs and
personal representatives of the Indemnitee, including the Estate of the
Indemnitee.
9. Limitations. The Corporation shall not be obligated pursuant to the
provisions of this Agreement to make any payment in connection with any claim
made against the Indemnitee:
(a) for which payment is made to the Indemnitee pursuant to the provisions
of a valid and collectible insurance policy, except with respect to
any excess beyond the amount of payments pursuant to the provisions of
such policy;
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(b) for which the Indemnitee is indemnified by the Corporation otherwise
than pursuant to the provisions of this Agreement;
(c) based upon or attributable to the Indemnitee gaining any personal
profit or advantage to which he was not legally entitled;
(d) for an accounting of profits made from the purchase or sale by the
Indemnitee of securities of the Corporation within the meaning of
Section 16(b) of the Securities Exchange Act of 1934 and amendments
thereto or similar provisions of any state statutory law or common
law;
(e) resulting from or contributed to by the active and deliberate
dishonesty of the Indemnitee; provided, however, the Indemnitee shall
be indemnified by the Corporation to the extent otherwise specified by
the provisions of this Agreement as to any claims for which a
litigation action may be commenced against the Indemnitee because of
any alleged dishonesty on his part, unless a judgment or other final
adjudication of such litigation action adverse to the Indemnitee shall
establish that he committed acts of active and deliberate dishonesty
with an actual dishonest purpose and intent, which acts were material
to the litigation action so adjudicated;
(f) for omissions or acts committed in bad faith or which involve
intentional misconduct or a knowing violation of law;
(g) for any omission or act that the Indemnitee believed at the time of
his action to be contrary to, or inconsistent with, the best interests
of both the Corporation and its shareholders, or
(h) for any transaction from which the Indemnitee derived an improper
personal economic benefit in a capacity other than as a shareholder of
the Corporation.
10. Severability. In the event any part of this Agreement, for any reason,
is determined to be invalid, such determination shall not affect the validity of
any remaining portion of this Agreement, which remaining portion shall remain in
complete force and effect as if this Agreement had been executed with the
invalid portion of this Agreement eliminated. It is hereby declared the
intention of the parties that the parties would have
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executed the remaining portion of this Agreement without including any such
part, parts or portion which, for any reason, hereafter may be determined to be
invalid.
11. Notices. The Indemnitee shall, as a condition precedent to his right to
be indemnified pursuant to the provisions of this Agreement, provide to the
Corporation notice in writing within 20 calendar days after he becomes aware of
any claim made against him for which he believes, or should reasonably believe,
indemnification will or could be sought pursuant to the provisions of this
Agreement. All notices, requests, demands, and other communications
(collectively, "notices") contemplated or required by the provisions of this
Agreement shall be in writing (including communications by telephone, telex, or
telecommunication facilities providing facsimile transmission) and mailed
(postage prepaid and return receipt requested), telegraphed, telexed,
transmitted or personally served to each party at the address for such party
specified below such party's signature to this Agreement or at such other
address as such party may designate in a written notice to the other party in
compliance with the provisions of this paragraph. All notices shall be effective
when received; provided, however, receipt shall be deemed to be effective (i) 2
business days of any properly addressed notice having been deposited in the
mail, (ii) 24 hours from the time electronic transmission was made, or (iii)
upon actual receipt of electronic delivery, whichever occurs first.
12. Parties in Interest. No provision of this Agreement is intended to, nor
shall any such provision confer any right or remedies pursuant to or by reason
of the provisions of this Agreement to any persons other than the parties to
this Agreement and their respective successors and assigns, including the Estate
of the Indemnitee, nor is any provision of in this Agreement intended to relieve
or discharge the obligation or liability of any third party to any party to this
Agreement. No provision of this Agreement shall provide any third person any
right of subrogation or action against any party to this Agreement.
13. Successors and Assigns. This Agreement shall inure to the benefit of
and obligate the undersigned parties and their respective successors and
assigns. Whenever, in this Agreement, a reference to any party is made, such
reference shall be deemed to include a reference to the successors and assigns
of such party; provided, however, neither this paragraph nor any other portion
of this Agreement shall be interpreted to constitute a consent to any assignment
or transfer other than pursuant to and in accordance with the other provisions
of this Agreement. Neither party shall assign, transfer or delegate that party's
rights, responsibilities, duties or obligation created by the provisions of this
Agreement to any other person without the prior written consent of the other
party.
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14. Captions and Interpretation. Captions of the paragraphs of this
Agreement are for convenience and reference only, and the words specified in
those captions shall in no way be held to explain, modify, amplify or aid in the
interpretation, construction or meaning of the terms, conditions and provisions
of this Agreement. The language and all parts to this Agreement, in all cases,
shall be construed in accordance with the fair meaning of that language and
those parts and as if that language and those parts were prepared by both
parties and not strictly for or against any party. The rule of construction,
which requires a court to resolve any ambiguities against the drafting party,
shall not apply in interpreting the provisions of this Agreement.
15. Number and Gender. Whenever the singular number is used in this
Agreement, and when required by the context, the same shall include the plural,
and vice versa; the masculine gender shall include the feminine and the neuter
genders, and vice versa; and the word "person" shall include corporation, firm,
trust, estate, joint venture, governmental agency, sole proprietorship,
political subdivision, organization, fraternal order, club, league, joint stock
company, society, municipality, association, partnership or other form of
entity.
16. Execution in Counterparts. This Agreement shall be prepared and
forwarded to the Indemnitee for execution. Counsel for the Corporation shall
cause the executed Agreement to be filed in the principal office of such
counsel.
17. Entire Agreement. This Agreement is the final written expression and
the complete and exclusive statement of all the agreements, conditions,
promises, representations, warranties and covenants between the parties with
respect to the subject matter of this Agreement, and this Agreement supersedes
all prior or contemporaneous agreements, negotiations, representations,
warranties, covenants, understandings and discussions by and between and among
the parties, their respective representatives, and any other person, with
respect to the subject matter specified in this Agreement. This Agreement may be
amended only by an instrument in writing which expressly refers to this
Agreement and specifically states that that instrument is intended to amend this
Agreement and is signed by each of the parties. Nothing specified in any exhibit
attached to this Agreement shall supersede or annul the terms and provisions of
this Agreement, unless the matter specified in such exhibit shall expressly so
provide to the contrary, and in the event of any ambiguity in meaning or
understanding between this Agreement proper and the appended exhibits, the
provisions of this Agreement shall prevail and control. Each of the parties
represents, warrants and covenants that in executing this Agreement that party
has relied solely on the terms, conditions and provisions specified in this
Agreement. Each of
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the parties additionally represents, warrants and covenants that in executing
and delivering this Agreement such party has placed no reliance whatsoever on
any statement, representation, warranty, covenant or promise of the other party,
or any other person, not specified expressly in this Agreement, or upon the
failure of any party or any other person to make any statement, representation,
warranty, covenant or disclosure of any nature whatsoever. The parties have
included this paragraph to preclude (i) any claim that any party was in any
manner whatsoever induced fraudulently to enter into, execute and deliver this
Agreement, and (ii) the introduction of parol evidence to vary, interpret,
supplement or contradict the terms, conditions and provisions of this Agreement.
18. Governing Law. This Agreement shall be deemed to have been entered into
in the State of Nevada, and all questions concerning the validity,
interpretation, or performance of any of the terms, conditions and provisions of
this Agreement or of any of the rights or obligations of the parties shall be
governed by, and resolved in accordance with, the laws of the State of Nevada,
without regard to conflicts of law principles.
19. Government Regulations. The transactions and relationship contemplated
by the provisions of this Agreement are, and shall remain, subject to any and
all present and future orders, rules and regulations of any duly constituted
authority or agency having jurisdiction of those transactions and that
relationship.
20. Further Assurances. The parties shall from time to time sign and
deliver any further instruments and take any further actions as may be necessary
to effectuate the intent and purposes of this Agreement.
21. All Consents in Writing. In any instance in which any party shall be
requested to consent to or approve of any matter with respect to which that
party's consent or approval is required by any of the provisions of this
Agreement, such consent or approval shall be furnished in writing.
22. Attorneys' Fees. In the event any party shall institute any action or
proceeding to enforce any provision of this Agreement to seek relief from any
violation of this Agreement, or to otherwise obtain any judgment or order
relating to or resulting from the subject matter of this Agreement, the
prevailing party shall be entitled to receive from the losing party such
prevailing party's actual attorneys' fees and costs incurred to prosecute or
defend such action or proceeding, including, but not limited to, actual
attorneys' fees and costs incurred preparatory to such prosecution and defense.
Moreover, while a court of competent jurisdiction may assist in determining
whether or not the fees actually
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incurred are reasonable in the circumstances then existing, that court is not be
governed by any judicially or legislatively established fee schedule, and such
fees and costs are to include those as may be incurred on appeal of any issue
and all of which fees and costs shall be included as part of any judgment, by
cost bill or otherwise, and where applicable, any appellate decision rendered in
or resulting from such action or proceeding. For purposes of this Agreement, in
any action or proceeding instituted by a party, the prevailing party shall be
that party in any such action or proceeding (i) in whose favor a judgment is
entered, or (ii) prior to trial, hearing or judgment any other party shall pay
all or any portion of amounts claimed by the party seeking payment, or such
other party shall eliminate the condition, cease the act, or otherwise cure the
act of commission or omission claimed by the party initiating such action or
proceeding.
23. Reservation of Rights. The failure of any party at any time or times
hereafter to require strict performance by any other party of any of the
warranties, representations, covenants, terms, conditions and provisions
specified in this Agreement shall not waive, affect or diminish any right of
such party failing to require strict performance to demand strict compliance and
performance therewith and with respect to any other provisions, warranties,
terms, and conditions specified in this Agreement. Any waiver of any default
shall not waive or affect any other default, whether prior or subsequent
thereto, and whether the same or of a different type. None of the
representations, warranties, covenants, conditions, provisions and terms
specified in this Agreement shall be deemed to have been waived by any act or
knowledge of any party, its agents, trustees, officers, or employees and any
such waiver shall be made only by an instrument in writing, signed by the
waiving party and directed to any non-waiving party specifying such waiver, and
each party reserves such party's rights to insist upon strict compliance
herewith at all times.
24. Purpose of Covenants. All covenants made by each party shall be deemed
made for the purpose of inducing the other party to enter into and execute this
Agreement. The representations, warranties, and covenants specified in this
Agreement shall survive any investigation by either party whether before or
after the execution of this Agreement.
25. Concurrent Remedies. No right or remedy specified in this Agreement
conferred on or reserved to the parties is exclusive of any other right or
remedy specified in this Agreement or by law or equity provided or permitted;
but each such right and remedy shall be cumulative of, and in addition to, every
other right and remedy specified in this Agreement or now or hereafter existing
at law or in equity or by statute or otherwise, and may be enforced concurrently
therewith or from time to time. The termination of this Agreement for any reason
whatsoever shall not prejudice any right or
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remedy which any party may have, either at law, in equity, or pursuant to the
provisions of this Agreement.
26. Force Majeure. If any party is rendered unable, completely or
partially, by the occurrence of an event of "force majeure" (hereinafter
defined) to perform such party's obligations created by the provisions of this
Agreement, such party shall give to the other party prompt written notice of the
event of "force majeure" with reasonably complete particulars concerning such
event; thereupon, the obligations of the party giving such notice, so far as
those obligations are affected by the event of "force majeure," shall be
suspended during, but no longer than, the continuance of the event of "force
majeure." The party affected by such event of "force majeure" shall use all
reasonable diligence to resolve, eliminate and terminate the event of "force
majeure" as quickly as practicable. The term "force majeure," as contemplated by
the provisions of this Paragraph 27 means any act of God, strike, lockout or
other industrial disturbance, act of the public enemy, war blockage, public
riot, lightening, fire, storm, flood explosion, governmental action, earthquake,
governmental delay, restraint or inaction, unavailability or equipment, and any
other cause or event, whether of the kind enumerated specifically herein, or
otherwise, which is not within the control of the party claiming such
suspension.
27. Consent to Agreement. By executing this Agreement, each party, for
itself, represents such party has read or caused to be read this Agreement in
all particulars, and consents to the rights, conditions, duties and
responsibilities imposed upon such party as specified in this Agreement. Each
party represents, warrants and covenants that such party executes and delivers
this Agreement of its own free will and with no threat, undue influence, menace,
coercion or duress, whether economic or physical. Moreover, each party
represents, warrants, and covenants that such party executes this Agreement
acting on such party's own independent judgment and upon the advice of such
party's counsel.
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IN WITNESS WHEREOF the parties have executed this Agreement for
Indemnification on the date specified in the preamble of this Agreement.
TMEX USA, Inc.,
a Nevada corporation
By: /s/ Cooper Lee /s/ Crofton Cooper
---------------------------- --------------------
Cooper Lee Crofton Cooper
Its: President
15
AGREEMENT FOR INDEMNIFICATION
THIS AGREEMENT FOR INDEMNIFICATION ("Agreement") is made and entered into
as of the 12th day of April 2000, by and between TMEX USA, Inc., a Nevada
corporation ("Corporation"), and Cooper Lee, President and a director of the
Corporation ("Indemnitee").
RECITALS
A. The Corporation and the Indemnitee understand and agree that
interpretations of statutes, regulations, court opinions, and the Corporation's
Articles of Incorporation and Bylaws, are too uncertain to provide the
Corporation's officers and directors with adequate or reliable advance knowledge
or guidance with respect to the legal risks and potential liabilities to which
they may become exposed personally as a result of performing, in good faith,
their duties as officers and directors of the Corporation.
B. The Corporation and the Indemnitee are aware of the substantial increase
in the number of litigation matters filed against corporate officers and
directors.
C. The Corporation and the Indemnitee are aware that the cost of defending
those litigation matters, whether or not those litigation matters are
meritorious, may be in excess of the financial resources of the officers and
directors of the Corporation or may significantly exceed the limited benefits
derived by persons serving as officers and directors of the Corporation.
D. The Corporation and the Indemnitee are aware that the legal risks and
potential officer and director liabilities, or the very threat thereof, and the
resulting substantial time endured, and fees and expenses incurred, in defending
against such litigation matters have no reasonable logical relationship to the
amount of compensation received by the Corporation's officers and directors.
These factors (i) cause a significant deterrent to, and (ii) induce increased
reluctance on the part of, experienced and capable persons to serve as officers
and directors of the Corporation.
E. The Corporation has investigated the availability and deficiency of
liability insurance to provide its officers and directors with adequate
protection against the foregoing legal risks and potential liabilities. The
Corporation has concluded that such insurance does not provide adequate
protection to the Corporation's officers and directors. Therefore, the
Corporation believes it will be in the best interests of the Corporation and
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its shareholders for the Corporation to agree with the Corporation's officers
and directors, including the Indemnitee, to indemnify those officers and
directors, to the most complete extent permitted by law, against personal
liability for actions taken in the good faith performance in their duties to the
Corporation.
F. Section 78.7502 of the General Corporation Law of Nevada ("Law")
specifies the circumstances regarding the mandatory and permissive
indemnification by a Nevada corporation of the officers, directors, employees
and agents of that corporation, and those provisions (i) require indemnification
in certain circumstances, (ii) permit indemnification in other circumstances,
and (iii) prohibit indemnification in some circumstances.
G. The members of the Board of Directors of the Corporation have
determined, after careful consideration and investigation of the various options
available, that the provisions of this Agreement are reasonable, prudent, and
necessary to promote and ensure the best interests of the Corporation and its
shareholders. The provisions of the Agreement are intended to (i) induce and
encourage significantly experienced and capable persons such as the Indemnitee
to serve as officers and directors of the Corporation; (ii) encourage such
persons to resist what they consider to be unjustifiable litigation matters and
claims made against them regarding the good faith performance of their duties to
the Corporation, secure in the knowledge that certain expenses, costs, and
liabilities incurred by them in their defense of such litigation matters will be
borne and paid by the Corporation and that they will receive the maximum
protection against such risks and liabilities as legally may be made available
to them; and (iii) encourage officers and directors of the Corporation to
exercise their best business judgment regarding matters which will be submitted
to them for consideration, without undue concern for the risk that claims may be
made against them because they are officers or directors of the Corporation.
H. The Corporation desires to cause the Indemnitee to continue to serve as
an officer and director of the Corporation free from concern for unpredictable,
inappropriate, or unreasonable legal risk and personal liabilities by reason of
his acting in good faith in the performance of his duties to the Corporation.
The Indemnitee desires to serve as an officer and director of the Corporation;
provided, however, and on the express condition, that he is furnished with the
indemnification specified by the provisions of this Agreement.
NOW, THEREFORE, IN CONSIDERATION OF THE FOREGOING RECITALS, PREMISES, PROMISES,
COVENANTS, AGREEMENTS, AND UNDERTAKINGS SPECIFIED BY THE PROVISIONS OF THIS
AGREEMENT AND FOR OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND
SUFFICIENCY
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OF WHICH ARE HEREBY ACKNOWLEDGED, WITH THE INTENT TO BE OBLIGATED LEGALLY AND
EQUITABLY, THE PARTIES TO THIS AGREEMENT AGREE WITH EACH OTHER AS FOLLOWS:
1. Definitions. For the purposes of this Agreement, the following words and
terms shall be defined as follows:
(a) The term "Proceeding" does and shall include any threatened, pending,
or completed action, inquiry, lawsuit, litigation matter, or
proceeding, whether commenced in the name of the Corporation, or
otherwise, and whether civil, criminal, administrative, or
investigative in nature, including, but not limited to, actions,
inquiries, investigations, litigation matters, or proceedings
commenced pursuant to or predicated on the provisions of the
Securities Act of 1933, as amended; the Securities Exchange Act of
1934, as amended; their respective state and provincial counterparts;
and any rule or regulation promulgated pursuant thereto, in which the
Indemnitee may be, or may have been involved as, a party, or otherwise
(other than plaintiff against the Corporation), because of (i) the
fact that the Indemnitee is or was an officer or director of the
Corporation, (ii) any action taken by the Indemnitee, or (iii) any
inaction by the Indemnitee while he is or was functioning as such an
officer or director of the Corporation.
(b) The term "Expenses" includes, but is not limited to, expenses of
investigations, judicial or administrative proceedings or appeals,
court costs, attorneys' fees and disbursements, and any expenses of
establishing a right to indemnification pursuant to applicable law or
the provisions of Paragraph 7 of this Agreement.
(c) References to "other enterprise" does and shall include each entity of
and for which the Corporation is the managing agent and references to
"serving at the request of the Corporation" does and shall include any
service by the Indemnitee as an officer and director of the
Corporation which imposes duties on, or involves services by the
Indemnitee while functioning as such officer and director with respect
to any such entity, its members, partners, or beneficiaries; and if
the Indemnitee acts in good faith and in a manner he reasonably
believes to be in the best interests of the members, partners and
beneficiaries of such entity, the Indemnitee shall be deemed to have
acted in a manner "not opposed to the best interests of the
Corporation," as that
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phrase is contemplated by the provisions of this Agreement.
(d) For the purposes of this Agreement, the Indemnitee shall be deemed to
have been acting as an "Agent" if he was functioning in his capacity
as (i) an officer of the Corporation, (ii) a director of the
Corporation, (iii) a member of a committee of the Board of Directors
of the Corporation, or (iv) a representative or agent of any other
enterprise at the request of the Corporation, whether or not he is
functioning in such capacity at the time any liability or expense is
incurred for which indemnification or reimbursement can be provided
pursuant to the provisions of this Agreement.
(e) The term "Applicable Standard" means that the Indemnitee acted in good
faith and in a manner that the Indemnitee reasonably believed to be in
the best interests of the Corporation; except that in a criminal
proceeding, the Indemnitee must also have had no reasonable cause to
believe that the Indemnitee's conduct was unlawful. The termination of
any Proceeding by judgment, order, settlement, conviction or upon a
plea of nolo contendere or any equivalent procedure shall not, of
itself, create any presumption, or establish, that the Indemnitee did
not satisfy the "Applicable Standard."
(f) "Independent Legal Counsel" shall include any law firm selected by the
regular counsel for the Corporation from a list of law firms which
satisfy reasonable criteria established by the Board of Directors of
the Corporation; provided, however, such law firm has not represented
the Corporation, the Indemnitee, or any person controlled by the
Indemnitee within the preceding 24 calendar months.
(g) The term "Estate" shall include the following terms as those are
understood by applicable law:
(1) The duly appointed and qualified executor, executrix,
administrator, administratrix, administrator with the Will
annexed, or administratrix with the Will annexed, of the estate
of a decedent;
(2) The surviving joint tenant of a decedent, when shares of capital
stock issued by the Corporation are owned by a decedent and a
person who is not active in the business of the Corporation as
joint tenants;
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(3) Any other person who, because of the community property or other
law of any jurisdiction, may acquire, by reason of the death of
such decedent, and without formal probate proceedings, any right,
title, or interest in or to shares of capital stock issued by the
Corporation to such decedent; or
(4) An irrevocable living or grantor's trust for the benefit of a
deceased shareholder of the Corporation.
2. Agreement to Serve. The Indemnitee shall serve or continue to serve as
President and a member of the Board of Directors of the Corporation at the will
of the Corporation's shareholders, or pursuant to the provisions of separate
agreement, as the case may be, for such time as he is duly elected or appointed,
and until such time as he tenders his resignation in writing or he is removed.
3. Indemnity in Third Party Proceedings. The Corporation shall indemnify
the Indemnitee, if the Indemnitee is made a party to or threatened to be made a
party to, or otherwise involved in, any Proceeding (other than a Proceeding
which is an action by or in the right of the Corporation to procure a judgment
in its favor), because of the fact that the Indemnitee is or was an Agent of the
Corporation. The indemnification contemplated by the provisions of this
Paragraph 3 shall apply, and be limited, to and against all Expenses, judgments,
fines, penalties, settlements, and other amounts, actually and reasonably
incurred by the Indemnitee in connection with the defense or settlement of any
such Proceeding; provided, however, it is determined pursuant to the provisions
of Paragraph 7 of this Agreement or by the court in which such Proceeding is or
was pending that the Indemnitee satisfied the Applicable Standard.
4. Indemnity in Proceedings By or In the Name of the Corporation. The
Corporation shall indemnify the Indemnitee, if the Indemnitee is made a party
to, or threatened to be made a party to, or otherwise involved in, any
Proceeding which is an action by or in the right of the Corporation to procure a
judgment in the Corporation's favor because the Indemnitee is or was an Agent of
the Corporation. The indemnification contemplated by the provisions of this
Paragraph 4 shall apply, and be limited, to and against all Expenses actually
and reasonably incurred by the Indemnitee in connection with the defense or
settlement of such Proceeding, but only if:
(a) the Indemnitee satisfies the Applicable Standard (except that the
Indemnitee's belief regarding the best interests the Corporation or
other enterprise need
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not have been reasonable);
(b) the Indemnitee acted with such care, including reasonable inquiry, as
an ordinarily prudent person in a similar circumstance would use; and
(c) the Proceeding is settled or otherwise disposed of with approval of
the Corporation.
No indemnification shall be made pursuant to the provisions of this
Paragraph 4 for any claim, issue, or matter as to which the Indemnitee shall
have been adjudged to be liable to the Corporation in the performance of the
Indemnitee's duty to the Corporation, unless, and only to the extent that, the
court in which such Proceeding is or was pending shall determine upon
application that, considering all the circumstances of such Proceeding, the
Indemnitee is fairly and reasonably entitled to indemnification for the
Expenses, which such court shall determine.
5. Expenses of Successful Indemnitee. Notwithstanding any other provision
of this Agreement, to the extent that the Indemnitee has been successful on the
merits in defense of any Proceeding or in defense of any claim, issue, or matter
in such Proceeding, the Indemnitee shall be indemnified by the Corporation from
and against all Expenses actually and reasonably incurred in connection with
such Proceeding.
6. Advances of Expenses. The Expenses incurred by the Indemnitee in any
Proceeding shall be advanced by the Corporation prior to the final disposition
of such Proceeding at the written request of the Indemnitee, but only if the
Indemnitee shall undertake to repay such advances, unless and to the extent that
it is ultimately determined that the Indemnitee is entitled to indemnification.
Any advance required pursuant to the provisions of this Paragraph 6 shall be
deemed to have been approved by the members of the Board of Directors of the
Corporation to the extent the provisions of this Agreement have been approved by
the members of that Board of Directors. In determining whether or not to make an
advance pursuant to the provisions of this Paragraph 6, the ability of the
Indemnitee to repay any such advance shall not be a factor. In a Proceeding
commenced by the Corporation directly, in its own right (as distinguished from a
Proceeding commenced derivatively or by any receiver or trustee), the
Corporation shall have the discretion not to make the advance contemplated by
the provisions of this Paragraph 6, if independent counsel advises the
Corporation in writing that the Corporation has probable cause to believe, and
the Corporation does, in fact, believe, that the Indemnitee did not act in good
faith with regard to the subject matter of such Proceeding or a material portion
of
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such Proceeding.
7. Right of the Indemnitee to Indemnification Upon Application; Procedure
Upon Application. Any indemnification or advance contemplated by the provisions
of this Agreement shall be made no later than 30 calendar days after receipt by
the Corporation of a written request by the Indemnitee for such advance or
indemnification and which request shall be provided in accordance with the
provisions of Paragraph 11 of this Agreement. In all other situations,
indemnification shall be made by the Corporation only if authorized in the
specific situation, upon a determination that indemnification of the Indemnitee
is proper according to the circumstances and the provisions of this Agreement
by:
(a) a majority vote of a quorum of the members of the Board of Directors
of the Corporation (or a duly constituted committee of that Board of
Directors), consisting of officers and directors who are not parties
to the Proceeding at issue;
(b) approval of a majority in interest of the issued and outstanding
voting capital stock of the Corporation, and any shares of the
Corporation's voting capital stock entitled to vote therefor held by
the Indemnitee shall not be entitled to vote regarding such
indemnification;
(c) the court in which the Proceeding at issue is or was pending, upon
application made by the Corporation or made by (i) the Indemnitee or
(ii) any person rendering services in connection with the Indemnitee's
defense, whether or not the Corporation opposes such application; or
(d) to the extent permitted by law and as expressed by independent legal
counsel in a written opinion.
The right to indemnification or advances contemplated by the provisions of
this Agreement shall be enforceable by the Indemnitee in any court of competent
jurisdiction. The burden of proving that such indemnification or advances is
appropriate shall be on the Indemnitee. Neither the failure of the Corporation
(including the members of its Board of Directors or independent legal counsel)
to make a determination prior to the commencement of any action to determine
whether such indemnification or advances is appropriate in the particular
circumstances because the Indemnitee has satisfied the Applicable Standard, nor
a determination by the Corporation (including the members of its Board of
Directors or independent legal counsel) that the Indemnitee has not satisfied
such
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Applicable Standard, shall be a defense to such action or create a presumption
that the Indemnitee has not satisfied the Applicable Standard. The Indemnitee's
Expenses incurred in connection with successfully establishing his right to such
indemnification or advances, in whole or in part, in any Proceeding shall also
be indemnified by the Corporation; provided, however, that if the Indemnitee is
only partially successful, only an equitably allocated portion of such Expenses
shall be indemnified by the Corporation.
If the Indemnitee is entitled to indemnification by the Corporation for
some or a portion of the Expenses, judgments, fines, or penalties actually and
reasonably incurred by the Indemnitee in the investigation, defense, appeal, or
settlement of any Proceeding but not, however, for the total amount of those
Expenses, judgments, fines or penalties the Corporation shall nevertheless
indemnify the Indemnitee for the portion (determined on an equitable basis) of
those Expenses, judgments, fines, or penalties to which the Indemnitee is
entitled.
The Corporation's obligations to advance or indemnify the Indemnitee
pursuant to the provisions of this Agreement shall be deemed satisfied to the
extent of any payments made by an insurer for or on behalf of the Corporation or
the Indemnitee.
8. Indemnification Pursuant to this Agreement Is Not Exclusive. The
indemnification contemplated by the provisions of this Agreement shall not be
deemed exclusive of any other rights to which the Indemnitee may be entitled
pursuant to the provisions of the Certificate of Incorporation or Bylaws of the
Corporation, or any agreement, vote of shareholders, or disinterested officers
and directors, the General Corporation Law of the State of Nevada, or otherwise,
as to action in his official capacities as an officer, director of the
Corporation and any other capacity while serving as an officer or director of
the Corporation. The indemnification contemplated by the provisions of this
Agreement shall continue as to the Indemnitee although he may have ceased to be
an Agent of the Corporation and shall inure to the benefit of the heirs and
personal representatives of the Indemnitee, including the Estate of the
Indemnitee.
9. Limitations. The Corporation shall not be obligated pursuant to the
provisions of this Agreement to make any payment in connection with any claim
made against the Indemnitee:
(a) for which payment is made to the Indemnitee pursuant to the provisions
of a valid and collectible insurance policy, except with respect to
any excess beyond the amount of payments pursuant to the provisions of
such policy;
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(b) for which the Indemnitee is indemnified by the Corporation otherwise
than pursuant to the provisions of this Agreement;
(c) based upon or attributable to the Indemnitee gaining any personal
profit or advantage to which he was not legally entitled;
(d) for an accounting of profits made from the purchase or sale by the
Indemnitee of securities of the Corporation within the meaning of
Section 16(b) of the Securities Exchange Act of 1934 and amendments
thereto or similar provisions of any state statutory law or common
law;
(e) resulting from or contributed to by the active and deliberate
dishonesty of the Indemnitee; provided, however, the Indemnitee shall
be indemnified by the Corporation to the extent otherwise specified by
the provisions of this Agreement as to any claims for which a
litigation action may be commenced against the Indemnitee because of
any alleged dishonesty on his part, unless a judgment or other final
adjudication of such litigation action adverse to the Indemnitee shall
establish that he committed acts of active and deliberate dishonesty
with an actual dishonest purpose and intent, which acts were material
to the litigation action so adjudicated;
(f) for omissions or acts committed in bad faith or which involve
intentional misconduct or a knowing violation of law;
(g) for any omission or act that the Indemnitee believed at the time of
his action to be contrary to, or inconsistent with, the best interests
of both the Corporation and its shareholders, or
(h) for any transaction from which the Indemnitee derived an improper
personal economic benefit in a capacity other than as a shareholder of
the Corporation.
10. Severability. In the event any part of this Agreement, for any reason,
is determined to be invalid, such determination shall not affect the validity of
any remaining portion of this Agreement, which remaining portion shall remain in
complete force and effect as if this Agreement had been executed with the
invalid portion of this Agreement eliminated. It is hereby declared the
intention of the parties that the parties would have
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executed the remaining portion of this Agreement without including any such
part, parts or portion which, for any reason, hereafter may be determined to be
invalid.
11. Notices. The Indemnitee shall, as a condition precedent to his right to
be indemnified pursuant to the provisions of this Agreement, provide to the
Corporation notice in writing within 20 calendar days after he becomes aware of
any claim made against him for which he believes, or should reasonably believe,
indemnification will or could be sought pursuant to the provisions of this
Agreement. All notices, requests, demands, and other communications
(collectively, "notices") contemplated or required by the provisions of this
Agreement shall be in writing (including communications by telephone, telex, or
telecommunication facilities providing facsimile transmission) and mailed
(postage prepaid and return receipt requested), telegraphed, telexed,
transmitted or personally served to each party at the address for such party
specified below such party's signature to this Agreement or at such other
address as such party may designate in a written notice to the other party in
compliance with the provisions of this paragraph. All notices shall be effective
when received; provided, however, receipt shall be deemed to be effective (i) 2
business days of any properly addressed notice having been deposited in the
mail, (ii) 24 hours from the time electronic transmission was made, or (iii)
upon actual receipt of electronic delivery, whichever occurs first.
12. Parties in Interest. No provision of this Agreement is intended to, nor
shall any such provision confer any right or remedies pursuant to or by reason
of the provisions of this Agreement to any persons other than the parties to
this Agreement and their respective successors and assigns, including the Estate
of the Indemnitee, nor is any provision of in this Agreement intended to relieve
or discharge the obligation or liability of any third party to any party to this
Agreement. No provision of this Agreement shall provide any third person any
right of subrogation or action against any party to this Agreement.
13. Successors and Assigns. This Agreement shall inure to the benefit of
and obligate the undersigned parties and their respective successors and
assigns. Whenever, in this Agreement, a reference to any party is made, such
reference shall be deemed to include a reference to the successors and assigns
of such party; provided, however, neither this paragraph nor any other portion
of this Agreement shall be interpreted to constitute a consent to any assignment
or transfer other than pursuant to and in accordance with the other provisions
of this Agreement. Neither party shall assign, transfer or delegate that party's
rights, responsibilities, duties or obligation created by the provisions of this
Agreement to any other person without the prior written consent of the other
party.
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14. Captions and Interpretation. Captions of the paragraphs of this
Agreement are for convenience and reference only, and the words specified in
those captions shall in no way be held to explain, modify, amplify or aid in the
interpretation, construction or meaning of the terms, conditions and provisions
of this Agreement. The language and all parts to this Agreement, in all cases,
shall be construed in accordance with the fair meaning of that language and
those parts and as if that language and those parts were prepared by both
parties and not strictly for or against any party. The rule of construction,
which requires a court to resolve any ambiguities against the drafting party,
shall not apply in interpreting the provisions of this Agreement.
15. Number and Gender. Whenever the singular number is used in this
Agreement, and when required by the context, the same shall include the plural,
and vice versa; the masculine gender shall include the feminine and the neuter
genders, and vice versa; and the word "person" shall include corporation, firm,
trust, estate, joint venture, governmental agency, sole proprietorship,
political subdivision, organization, fraternal order, club, league, joint stock
company, society, municipality, association, partnership or other form of
entity.
16. Execution in Counterparts. This Agreement shall be prepared and
forwarded to the Indemnitee for execution. Counsel for the Corporation shall
cause the executed Agreement to be filed in the principal office of such
counsel.
17. Entire Agreement. This Agreement is the final written expression and
the complete and exclusive statement of all the agreements, conditions,
promises, representations, warranties and covenants between the parties with
respect to the subject matter of this Agreement, and this Agreement supersedes
all prior or contemporaneous agreements, negotiations, representations,
warranties, covenants, understandings and discussions by and between and among
the parties, their respective representatives, and any other person, with
respect to the subject matter specified in this Agreement. This Agreement may be
amended only by an instrument in writing which expressly refers to this
Agreement and specifically states that that instrument is intended to amend this
Agreement and is signed by each of the parties. Nothing specified in any exhibit
attached to this Agreement shall supersede or annul the terms and provisions of
this Agreement, unless the matter specified in such exhibit shall expressly so
provide to the contrary, and in the event of any ambiguity in meaning or
understanding between this Agreement proper and the appended exhibits, the
provisions of this Agreement shall prevail and control. Each of the parties
represents, warrants and covenants that in executing this Agreement that party
has relied solely on the terms, conditions and provisions specified in this
Agreement. Each of
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the parties additionally represents, warrants and covenants that in executing
and delivering this Agreement such party has placed no reliance whatsoever on
any statement, representation, warranty, covenant or promise of the other party,
or any other person, not specified expressly in this Agreement, or upon the
failure of any party or any other person to make any statement, representation,
warranty, covenant or disclosure of any nature whatsoever. The parties have
included this paragraph to preclude (i) any claim that any party was in any
manner whatsoever induced fraudulently to enter into, execute and deliver this
Agreement, and (ii) the introduction of parol evidence to vary, interpret,
supplement or contradict the terms, conditions and provisions of this Agreement.
18. Governing Law. This Agreement shall be deemed to have been entered into
in the State of Nevada, and all questions concerning the validity,
interpretation, or performance of any of the terms, conditions and provisions of
this Agreement or of any of the rights or obligations of the parties shall be
governed by, and resolved in accordance with, the laws of the State of Nevada,
without regard to conflicts of law principles.
19. Government Regulations. The transactions and relationship contemplated
by the provisions of this Agreement are, and shall remain, subject to any and
all present and future orders, rules and regulations of any duly constituted
authority or agency having jurisdiction of those transactions and that
relationship.
20. Further Assurances. The parties shall from time to time sign and
deliver any further instruments and take any further actions as may be necessary
to effectuate the intent and purposes of this Agreement.
21. All Consents in Writing. In any instance in which any party shall be
requested to consent to or approve of any matter with respect to which that
party's consent or approval is required by any of the provisions of this
Agreement, such consent or approval shall be furnished in writing.
22. Attorneys' Fees. In the event any party shall institute any action or
proceeding to enforce any provision of this Agreement to seek relief from any
violation of this Agreement, or to otherwise obtain any judgment or order
relating to or resulting from the subject matter of this Agreement, the
prevailing party shall be entitled to receive from the losing party such
prevailing party's actual attorneys' fees and costs incurred to prosecute or
defend such action or proceeding, including, but not limited to, actual
attorneys' fees and costs incurred preparatory to such prosecution and defense.
Moreover, while a court of competent jurisdiction may assist in determining
whether or not the fees actually
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incurred are reasonable in the circumstances then existing, that court is not be
governed by any judicially or legislatively established fee schedule, and such
fees and costs are to include those as may be incurred on appeal of any issue
and all of which fees and costs shall be included as part of any judgment, by
cost bill or otherwise, and where applicable, any appellate decision rendered in
or resulting from such action or proceeding. For purposes of this Agreement, in
any action or proceeding instituted by a party, the prevailing party shall be
that party in any such action or proceeding (i) in whose favor a judgment is
entered, or (ii) prior to trial, hearing or judgment any other party shall pay
all or any portion of amounts claimed by the party seeking payment, or such
other party shall eliminate the condition, cease the act, or otherwise cure the
act of commission or omission claimed by the party initiating such action or
proceeding.
23. Reservation of Rights. The failure of any party at any time or times
hereafter to require strict performance by any other party of any of the
warranties, representations, covenants, terms, conditions and provisions
specified in this Agreement shall not waive, affect or diminish any right of
such party failing to require strict performance to demand strict compliance and
performance therewith and with respect to any other provisions, warranties,
terms, and conditions specified in this Agreement. Any waiver of any default
shall not waive or affect any other default, whether prior or subsequent
thereto, and whether the same or of a different type. None of the
representations, warranties, covenants, conditions, provisions and terms
specified in this Agreement shall be deemed to have been waived by any act or
knowledge of any party, its agents, trustees, officers, or employees and any
such waiver shall be made only by an instrument in writing, signed by the
waiving party and directed to any non-waiving party specifying such waiver, and
each party reserves such party's rights to insist upon strict compliance
herewith at all times.
24. Purpose of Covenants. All covenants made by each party shall be deemed
made for the purpose of inducing the other party to enter into and execute this
Agreement. The representations, warranties, and covenants specified in this
Agreement shall survive any investigation by either party whether before or
after the execution of this Agreement.
25. Concurrent Remedies. No right or remedy specified in this Agreement
conferred on or reserved to the parties is exclusive of any other right or
remedy specified in this Agreement or by law or equity provided or permitted;
but each such right and remedy shall be cumulative of, and in addition to, every
other right and remedy specified in this Agreement or now or hereafter existing
at law or in equity or by statute or otherwise, and may be enforced concurrently
therewith or from time to time. The termination of this Agreement for any reason
whatsoever shall not prejudice any right or
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remedy which any party may have, either at law, in equity, or pursuant to the
provisions of this Agreement.
26. Force Majeure. If any party is rendered unable, completely or
partially, by the occurrence of an event of "force majeure" (hereinafter
defined) to perform such party's obligations created by the provisions of this
Agreement, such party shall give to the other party prompt written notice of the
event of "force majeure" with reasonably complete particulars concerning such
event; thereupon, the obligations of the party giving such notice, so far as
those obligations are affected by the event of "force majeure," shall be
suspended during, but no longer than, the continuance of the event of "force
majeure." The party affected by such event of "force majeure" shall use all
reasonable diligence to resolve, eliminate and terminate the event of "force
majeure" as quickly as practicable. The term "force majeure," as contemplated by
the provisions of this Paragraph 27 means any act of God, strike, lockout or
other industrial disturbance, act of the public enemy, war blockage, public
riot, lightening, fire, storm, flood explosion, governmental action, earthquake,
governmental delay, restraint or inaction, unavailability or equipment, and any
other cause or event, whether of the kind enumerated specifically herein, or
otherwise, which is not within the control of the party claiming such
suspension.
27. Consent to Agreement. By executing this Agreement, each party, for
itself, represents such party has read or caused to be read this Agreement in
all particulars, and consents to the rights, conditions, duties and
responsibilities imposed upon such party as specified in this Agreement. Each
party represents, warrants and covenants that such party executes and delivers
this Agreement of its own free will and with no threat, undue influence, menace,
coercion or duress, whether economic or physical. Moreover, each party
represents, warrants, and covenants that such party executes this Agreement
acting on such party's own independent judgment and upon the advice of such
party's counsel.
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IN WITNESS WHEREOF the parties have executed this Agreement for
Indemnification on the date specified in the preamble of this Agreement.
TMEX USA, Inc.,
a Nevada corporation
By: /s/ Crofton Cooper /s/ Cooper Lee
---------------------------- ---------------------------
Crofton Cooper Cooper Lee
Its: Chief Executive Officer
15
AGREEMENT FOR INDEMNIFICATION
THIS AGREEMENT FOR INDEMNIFICATION ("Agreement") is made and entered into
as of the 12th day of April 2000, by and between TMEX USA, Inc., a Nevada
corporation ("Corporation"), and Cecil Zeringue, Vice President and a director
of the Corporation ("Indemnitee").
RECITALS
A. The Corporation and the Indemnitee understand and agree that
interpretations of statutes, regulations, court opinions, and the Corporation's
Articles of Incorporation and Bylaws, are too uncertain to provide the
Corporation's officers and directors with adequate or reliable advance knowledge
or guidance with respect to the legal risks and potential liabilities to which
they may become exposed personally as a result of performing, in good faith,
their duties as officers and directors of the Corporation.
B. The Corporation and the Indemnitee are aware of the substantial increase
in the number of litigation matters filed against corporate officers and
directors.
C. The Corporation and the Indemnitee are aware that the cost of defending
those litigation matters, whether or not those litigation matters are
meritorious, may be in excess of the financial resources of the officers and
directors of the Corporation or may significantly exceed the limited benefits
derived by persons serving as officers and directors of the Corporation.
D. The Corporation and the Indemnitee are aware that the legal risks and
potential officer and director liabilities, or the very threat thereof, and the
resulting substantial time endured, and fees and expenses incurred, in defending
against such litigation matters have no reasonable logical relationship to the
amount of compensation received by the Corporation's officers and directors.
These factors (i) cause a significant deterrent to, and (ii) induce increased
reluctance on the part of, experienced and capable persons to serve as officers
and directors of the Corporation.
E. The Corporation has investigated the availability and deficiency of
liability insurance to provide its officers and directors with adequate
protection against the foregoing legal risks and potential liabilities. The
Corporation has concluded that such insurance does not provide adequate
protection to the Corporation's officers and directors. Therefore, the
Corporation believes it will be in the best interests of the Corporation and
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its shareholders for the Corporation to agree with the Corporation's officers
and directors, including the Indemnitee, to indemnify those officers and
directors, to the most complete extent permitted by law, against personal
liability for actions taken in the good faith performance in their duties to the
Corporation.
F. Section 78.7502 of the General Corporation Law of Nevada ("Law")
specifies the circumstances regarding the mandatory and permissive
indemnification by a Nevada corporation of the officers, directors, employees
and agents of that corporation, and those provisions (i) require indemnification
in certain circumstances, (ii) permit indemnification in other circumstances,
and (iii) prohibit indemnification in some circumstances.
G. The members of the Board of Directors of the Corporation have
determined, after careful consideration and investigation of the various options
available, that the provisions of this Agreement are reasonable, prudent, and
necessary to promote and ensure the best interests of the Corporation and its
shareholders. The provisions of the Agreement are intended to (i) induce and
encourage significantly experienced and capable persons such as the Indemnitee
to serve as officers and directors of the Corporation; (ii) encourage such
persons to resist what they consider to be unjustifiable litigation matters and
claims made against them regarding the good faith performance of their duties to
the Corporation, secure in the knowledge that certain expenses, costs, and
liabilities incurred by them in their defense of such litigation matters will be
borne and paid by the Corporation and that they will receive the maximum
protection against such risks and liabilities as legally may be made available
to them; and (iii) encourage officers and directors of the Corporation to
exercise their best business judgment regarding matters which will be submitted
to them for consideration, without undue concern for the risk that claims may be
made against them because they are officers or directors of the Corporation.
H. The Corporation desires to cause the Indemnitee to continue to serve as
an officer and director of the Corporation free from concern for unpredictable,
inappropriate, or unreasonable legal risk and personal liabilities by reason of
his acting in good faith in the performance of his duties to the Corporation.
The Indemnitee desires to serve as an officer and director of the Corporation;
provided, however, and on the express condition, that he is furnished with the
indemnification specified by the provisions of this Agreement.
NOW, THEREFORE, IN CONSIDERATION OF THE FOREGOING RECITALS, PREMISES, PROMISES,
COVENANTS, AGREEMENTS, AND UNDERTAKINGS SPECIFIED BY THE PROVISIONS OF THIS
AGREEMENT AND FOR OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND
SUFFICIENCY
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OF WHICH ARE HEREBY ACKNOWLEDGED, WITH THE INTENT TO BE OBLIGATED LEGALLY AND
EQUITABLY, THE PARTIES TO THIS AGREEMENT AGREE WITH EACH OTHER AS FOLLOWS:
1. Definitions. For the purposes of this Agreement, the following words and
terms shall be defined as follows:
(a) The term "Proceeding" does and shall include any threatened, pending,
or completed action, inquiry, lawsuit, litigation matter, or
proceeding, whether commenced in the name of the Corporation, or
otherwise, and whether civil, criminal, administrative, or
investigative in nature, including, but not limited to, actions,
inquiries, investigations, litigation matters, or proceedings
commenced pursuant to or predicated on the provisions of the
Securities Act of 1933, as amended; the Securities Exchange Act of
1934, as amended; their respective state and provincial counterparts;
and any rule or regulation promulgated pursuant thereto, in which the
Indemnitee may be, or may have been involved as, a party, or otherwise
(other than plaintiff against the Corporation), because of (i) the
fact that the Indemnitee is or was an officer or director of the
Corporation, (ii) any action taken by the Indemnitee, or (iii) any
inaction by the Indemnitee while he is or was functioning as such an
officer or director of the Corporation.
(b) The term "Expenses" includes, but is not limited to, expenses of
investigations, judicial or administrative proceedings or appeals,
court costs, attorneys' fees and disbursements, and any expenses of
establishing a right to indemnification pursuant to applicable law or
the provisions of Paragraph 7 of this Agreement.
(c) References to "other enterprise" does and shall include each entity of
and for which the Corporation is the managing agent and references to
"serving at the request of the Corporation" does and shall include any
service by the Indemnitee as an officer and director of the
Corporation which imposes duties on, or involves services by the
Indemnitee while functioning as such officer and director with respect
to any such entity, its members, partners, or beneficiaries; and if
the Indemnitee acts in good faith and in a manner he reasonably
believes to be in the best interests of the members, partners and
beneficiaries of such entity, the Indemnitee shall be deemed to have
acted in a manner "not opposed to the best interests of the
Corporation," as that
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phrase is contemplated by the provisions of this Agreement.
(d) For the purposes of this Agreement, the Indemnitee shall be deemed to
have been acting as an "Agent" if he was functioning in his capacity
as (i) an officer of the Corporation, (ii) a director of the
Corporation, (iii) a member of a committee of the Board of Directors
of the Corporation, or (iv) a representative or agent of any other
enterprise at the request of the Corporation, whether or not he is
functioning in such capacity at the time any liability or expense is
incurred for which indemnification or reimbursement can be provided
pursuant to the provisions of this Agreement.
(e) The term "Applicable Standard" means that the Indemnitee acted in good
faith and in a manner that the Indemnitee reasonably believed to be in
the best interests of the Corporation; except that in a criminal
proceeding, the Indemnitee must also have had no reasonable cause to
believe that the Indemnitee's conduct was unlawful. The termination of
any Proceeding by judgment, order, settlement, conviction or upon a
plea of nolo contendere or any equivalent procedure shall not, of
itself, create any presumption, or establish, that the Indemnitee did
not satisfy the "Applicable Standard."
(f) "Independent Legal Counsel" shall include any law firm selected by the
regular counsel for the Corporation from a list of law firms which
satisfy reasonable criteria established by the Board of Directors of
the Corporation; provided, however, such law firm has not represented
the Corporation, the Indemnitee, or any person controlled by the
Indemnitee within the preceding 24 calendar months.
(g) The term "Estate" shall include the following terms as those are
understood by applicable law:
(1) The duly appointed and qualified executor, executrix,
administrator, administratrix, administrator with the Will
annexed, or administratrix with the Will annexed, of the estate
of a decedent;
(2) The surviving joint tenant of a decedent, when shares of capital
stock issued by the Corporation are owned by a decedent and a
person who is not active in the business of the Corporation as
joint tenants;
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(3) Any other person who, because of the community property or other
law of any jurisdiction, may acquire, by reason of the death of
such decedent, and without formal probate proceedings, any right,
title, or interest in or to shares of capital stock issued by the
Corporation to such decedent; or
(4) An irrevocable living or grantor's trust for the benefit of a
deceased shareholder of the Corporation.
2. Agreement to Serve. The Indemnitee shall serve or continue to serve as
Vice President and a member of the Board of Directors of the Corporation at the
will of the Corporation's shareholders, or pursuant to the provisions of
separate agreement, as the case may be, for such time as he is duly elected or
appointed, and until such time as he tenders his resignation in writing or he is
removed.
3. Indemnity in Third Party Proceedings. The Corporation shall indemnify
the Indemnitee, if the Indemnitee is made a party to or threatened to be made a
party to, or otherwise involved in, any Proceeding (other than a Proceeding
which is an action by or in the right of the Corporation to procure a judgment
in its favor), because of the fact that the Indemnitee is or was an Agent of the
Corporation. The indemnification contemplated by the provisions of this
Paragraph 3 shall apply, and be limited, to and against all Expenses, judgments,
fines, penalties, settlements, and other amounts, actually and reasonably
incurred by the Indemnitee in connection with the defense or settlement of any
such Proceeding; provided, however, it is determined pursuant to the provisions
of Paragraph 7 of this Agreement or by the court in which such Proceeding is or
was pending that the Indemnitee satisfied the Applicable Standard.
4. Indemnity in Proceedings By or In the Name of the Corporation. The
Corporation shall indemnify the Indemnitee, if the Indemnitee is made a party
to, or threatened to be made a party to, or otherwise involved in, any
Proceeding which is an action by or in the right of the Corporation to procure a
judgment in the Corporation's favor because the Indemnitee is or was an Agent of
the Corporation. The indemnification contemplated by the provisions of this
Paragraph 4 shall apply, and be limited, to and against all Expenses actually
and reasonably incurred by the Indemnitee in connection with the defense or
settlement of such Proceeding, but only if:
(a) the Indemnitee satisfies the Applicable Standard (except that the
Indemnitee's belief regarding the best interests the Corporation or
other enterprise need
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not have been reasonable);
(b) the Indemnitee acted with such care, including reasonable inquiry, as
an ordinarily prudent person in a similar circumstance would use; and
(c) the Proceeding is settled or otherwise disposed of with approval of
the Corporation.
No indemnification shall be made pursuant to the provisions of this
Paragraph 4 for any claim, issue, or matter as to which the Indemnitee shall
have been adjudged to be liable to the Corporation in the performance of the
Indemnitee's duty to the Corporation, unless, and only to the extent that, the
court in which such Proceeding is or was pending shall determine upon
application that, considering all the circumstances of such Proceeding, the
Indemnitee is fairly and reasonably entitled to indemnification for the
Expenses, which such court shall determine.
5. Expenses of Successful Indemnitee. Notwithstanding any other provision
of this Agreement, to the extent that the Indemnitee has been successful on the
merits in defense of any Proceeding or in defense of any claim, issue, or matter
in such Proceeding, the Indemnitee shall be indemnified by the Corporation from
and against all Expenses actually and reasonably incurred in connection with
such Proceeding.
6. Advances of Expenses. The Expenses incurred by the Indemnitee in any
Proceeding shall be advanced by the Corporation prior to the final disposition
of such Proceeding at the written request of the Indemnitee, but only if the
Indemnitee shall undertake to repay such advances, unless and to the extent that
it is ultimately determined that the Indemnitee is entitled to indemnification.
Any advance required pursuant to the provisions of this Paragraph 6 shall be
deemed to have been approved by the members of the Board of Directors of the
Corporation to the extent the provisions of this Agreement have been approved by
the members of that Board of Directors. In determining whether or not to make an
advance pursuant to the provisions of this Paragraph 6, the ability of the
Indemnitee to repay any such advance shall not be a factor. In a Proceeding
commenced by the Corporation directly, in its own right (as distinguished from a
Proceeding commenced derivatively or by any receiver or trustee), the
Corporation shall have the discretion not to make the advance contemplated by
the provisions of this Paragraph 6, if independent counsel advises the
Corporation in writing that the Corporation has probable cause to believe, and
the Corporation does, in fact, believe, that the Indemnitee did not act in good
faith with regard to the subject matter of such Proceeding or a material portion
of
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such Proceeding.
7. Right of the Indemnitee to Indemnification Upon Application; Procedure
Upon Application. Any indemnification or advance contemplated by the provisions
of this Agreement shall be made no later than 30 calendar days after receipt by
the Corporation of a written request by the Indemnitee for such advance or
indemnification and which request shall be provided in accordance with the
provisions of Paragraph 11 of this Agreement. In all other situations,
indemnification shall be made by the Corporation only if authorized in the
specific situation, upon a determination that indemnification of the Indemnitee
is proper according to the circumstances and the provisions of this Agreement
by:
(a) a majority vote of a quorum of the members of the Board of Directors
of the Corporation (or a duly constituted committee of that Board of
Directors), consisting of officers and directors who are not parties
to the Proceeding at issue;
(b) approval of a majority in interest of the issued and outstanding
voting capital stock of the Corporation, and any shares of the
Corporation's voting capital stock entitled to vote therefor held by
the Indemnitee shall not be entitled to vote regarding such
indemnification;
(c) the court in which the Proceeding at issue is or was pending, upon
application made by the Corporation or made by (i) the Indemnitee or
(ii) any person rendering services in connection with the Indemnitee's
defense, whether or not the Corporation opposes such application; or
(d) to the extent permitted by law and as expressed by independent legal
counsel in a written opinion.
The right to indemnification or advances contemplated by the provisions of
this Agreement shall be enforceable by the Indemnitee in any court of competent
jurisdiction. The burden of proving that such indemnification or advances is
appropriate shall be on the Indemnitee. Neither the failure of the Corporation
(including the members of its Board of Directors or independent legal counsel)
to make a determination prior to the commencement of any action to determine
whether such indemnification or advances is appropriate in the particular
circumstances because the Indemnitee has satisfied the Applicable Standard, nor
a determination by the Corporation (including the members of its Board of
Directors or independent legal counsel) that the Indemnitee has not satisfied
such
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Applicable Standard, shall be a defense to such action or create a presumption
that the Indemnitee has not satisfied the Applicable Standard. The Indemnitee's
Expenses incurred in connection with successfully establishing his right to such
indemnification or advances, in whole or in part, in any Proceeding shall also
be indemnified by the Corporation; provided, however, that if the Indemnitee is
only partially successful, only an equitably allocated portion of such Expenses
shall be indemnified by the Corporation.
If the Indemnitee is entitled to indemnification by the Corporation for
some or a portion of the Expenses, judgments, fines, or penalties actually and
reasonably incurred by the Indemnitee in the investigation, defense, appeal, or
settlement of any Proceeding but not, however, for the total amount of those
Expenses, judgments, fines or penalties the Corporation shall nevertheless
indemnify the Indemnitee for the portion (determined on an equitable basis) of
those Expenses, judgments, fines, or penalties to which the Indemnitee is
entitled.
The Corporation's obligations to advance or indemnify the Indemnitee
pursuant to the provisions of this Agreement shall be deemed satisfied to the
extent of any payments made by an insurer for or on behalf of the Corporation or
the Indemnitee.
8. Indemnification Pursuant to this Agreement Is Not Exclusive. The
indemnification contemplated by the provisions of this Agreement shall not be
deemed exclusive of any other rights to which the Indemnitee may be entitled
pursuant to the provisions of the Certificate of Incorporation or Bylaws of the
Corporation, or any agreement, vote of shareholders, or disinterested officers
and directors, the General Corporation Law of the State of Nevada, or otherwise,
as to action in his official capacities as an officer, director of the
Corporation and any other capacity while serving as an officer or director of
the Corporation. The indemnification contemplated by the provisions of this
Agreement shall continue as to the Indemnitee although he may have ceased to be
an Agent of the Corporation and shall inure to the benefit of the heirs and
personal representatives of the Indemnitee, including the Estate of the
Indemnitee.
9. Limitations. The Corporation shall not be obligated pursuant to the
provisions of this Agreement to make any payment in connection with any claim
made against the Indemnitee:
(a) for which payment is made to the Indemnitee pursuant to the provisions
of a valid and collectible insurance policy, except with respect to
any excess beyond the amount of payments pursuant to the provisions of
such policy;
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(b) for which the Indemnitee is indemnified by the Corporation otherwise
than pursuant to the provisions of this Agreement;
(c) based upon or attributable to the Indemnitee gaining any personal
profit or advantage to which he was not legally entitled;
(d) for an accounting of profits made from the purchase or sale by the
Indemnitee of securities of the Corporation within the meaning of
Section 16(b) of the Securities Exchange Act of 1934 and amendments
thereto or similar provisions of any state statutory law or common
law;
(e) resulting from or contributed to by the active and deliberate
dishonesty of the Indemnitee; provided, however, the Indemnitee shall
be indemnified by the Corporation to the extent otherwise specified by
the provisions of this Agreement as to any claims for which a
litigation action may be commenced against the Indemnitee because of
any alleged dishonesty on his part, unless a judgment or other final
adjudication of such litigation action adverse to the Indemnitee shall
establish that he committed acts of active and deliberate dishonesty
with an actual dishonest purpose and intent, which acts were material
to the litigation action so adjudicated;
(f) for omissions or acts committed in bad faith or which involve
intentional misconduct or a knowing violation of law;
(g) for any omission or act that the Indemnitee believed at the time of
his action to be contrary to, or inconsistent with, the best interests
of both the Corporation and its shareholders, or
(h) for any transaction from which the Indemnitee derived an improper
personal economic benefit in a capacity other than as a shareholder of
the Corporation.
10. Severability. In the event any part of this Agreement, for any reason,
is determined to be invalid, such determination shall not affect the validity of
any remaining portion of this Agreement, which remaining portion shall remain in
complete force and effect as if this Agreement had been executed with the
invalid portion of this Agreement eliminated. It is hereby declared the
intention of the parties that the parties would have
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executed the remaining portion of this Agreement without including any such
part, parts or portion which, for any reason, hereafter may be determined to be
invalid.
11. Notices. The Indemnitee shall, as a condition precedent to his right to
be indemnified pursuant to the provisions of this Agreement, provide to the
Corporation notice in writing within 20 calendar days after he becomes aware of
any claim made against him for which he believes, or should reasonably believe,
indemnification will or could be sought pursuant to the provisions of this
Agreement. All notices, requests, demands, and other communications
(collectively, "notices") contemplated or required by the provisions of this
Agreement shall be in writing (including communications by telephone, telex, or
telecommunication facilities providing facsimile transmission) and mailed
(postage prepaid and return receipt requested), telegraphed, telexed,
transmitted or personally served to each party at the address for such party
specified below such party's signature to this Agreement or at such other
address as such party may designate in a written notice to the other party in
compliance with the provisions of this paragraph. All notices shall be effective
when received; provided, however, receipt shall be deemed to be effective (i) 2
business days of any properly addressed notice having been deposited in the
mail, (ii) 24 hours from the time electronic transmission was made, or (iii)
upon actual receipt of electronic delivery, whichever occurs first.
12. Parties in Interest. No provision of this Agreement is intended to, nor
shall any such provision confer any right or remedies pursuant to or by reason
of the provisions of this Agreement to any persons other than the parties to
this Agreement and their respective successors and assigns, including the Estate
of the Indemnitee, nor is any provision of in this Agreement intended to relieve
or discharge the obligation or liability of any third party to any party to this
Agreement. No provision of this Agreement shall provide any third person any
right of subrogation or action against any party to this Agreement.
13. Successors and Assigns. This Agreement shall inure to the benefit of
and obligate the undersigned parties and their respective successors and
assigns. Whenever, in this Agreement, a reference to any party is made, such
reference shall be deemed to include a reference to the successors and assigns
of such party; provided, however, neither this paragraph nor any other portion
of this Agreement shall be interpreted to constitute a consent to any assignment
or transfer other than pursuant to and in accordance with the other provisions
of this Agreement. Neither party shall assign, transfer or delegate that party's
rights, responsibilities, duties or obligation created by the provisions of this
Agreement to any other person without the prior written consent of the other
party.
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14. Captions and Interpretation. Captions of the paragraphs of this
Agreement are for convenience and reference only, and the words specified in
those captions shall in no way be held to explain, modify, amplify or aid in the
interpretation, construction or meaning of the terms, conditions and provisions
of this Agreement. The language and all parts to this Agreement, in all cases,
shall be construed in accordance with the fair meaning of that language and
those parts and as if that language and those parts were prepared by both
parties and not strictly for or against any party. The rule of construction,
which requires a court to resolve any ambiguities against the drafting party,
shall not apply in interpreting the provisions of this Agreement.
15. Number and Gender. Whenever the singular number is used in this
Agreement, and when required by the context, the same shall include the plural,
and vice versa; the masculine gender shall include the feminine and the neuter
genders, and vice versa; and the word "person" shall include corporation, firm,
trust, estate, joint venture, governmental agency, sole proprietorship,
political subdivision, organization, fraternal order, club, league, joint stock
company, society, municipality, association, partnership or other form of
entity.
16. Execution in Counterparts. This Agreement shall be prepared and
forwarded to the Indemnitee for execution. Counsel for the Corporation shall
cause the executed Agreement to be filed in the principal office of such
counsel.
17. Entire Agreement. This Agreement is the final written expression and
the complete and exclusive statement of all the agreements, conditions,
promises, representations, warranties and covenants between the parties with
respect to the subject matter of this Agreement, and this Agreement supersedes
all prior or contemporaneous agreements, negotiations, representations,
warranties, covenants, understandings and discussions by and between and among
the parties, their respective representatives, and any other person, with
respect to the subject matter specified in this Agreement. This Agreement may be
amended only by an instrument in writing which expressly refers to this
Agreement and specifically states that that instrument is intended to amend this
Agreement and is signed by each of the parties. Nothing specified in any exhibit
attached to this Agreement shall supersede or annul the terms and provisions of
this Agreement, unless the matter specified in such exhibit shall expressly so
provide to the contrary, and in the event of any ambiguity in meaning or
understanding between this Agreement proper and the appended exhibits, the
provisions of this Agreement shall prevail and control. Each of the parties
represents, warrants and covenants that in executing this Agreement that party
has relied solely on the terms, conditions and provisions specified in this
Agreement. Each of
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the parties additionally represents, warrants and covenants that in executing
and delivering this Agreement such party has placed no reliance whatsoever on
any statement, representation, warranty, covenant or promise of the other party,
or any other person, not specified expressly in this Agreement, or upon the
failure of any party or any other person to make any statement, representation,
warranty, covenant or disclosure of any nature whatsoever. The parties have
included this paragraph to preclude (i) any claim that any party was in any
manner whatsoever induced fraudulently to enter into, execute and deliver this
Agreement, and (ii) the introduction of parol evidence to vary, interpret,
supplement or contradict the terms, conditions and provisions of this Agreement.
18. Governing Law. This Agreement shall be deemed to have been entered into
in the State of Nevada, and all questions concerning the validity,
interpretation, or performance of any of the terms, conditions and provisions of
this Agreement or of any of the rights or obligations of the parties shall be
governed by, and resolved in accordance with, the laws of the State of Nevada,
without regard to conflicts of law principles.
19. Government Regulations. The transactions and relationship contemplated
by the provisions of this Agreement are, and shall remain, subject to any and
all present and future orders, rules and regulations of any duly constituted
authority or agency having jurisdiction of those transactions and that
relationship.
20. Further Assurances. The parties shall from time to time sign and
deliver any further instruments and take any further actions as may be necessary
to effectuate the intent and purposes of this Agreement.
21. All Consents in Writing. In any instance in which any party shall be
requested to consent to or approve of any matter with respect to which that
party's consent or approval is required by any of the provisions of this
Agreement, such consent or approval shall be furnished in writing.
22. Attorneys' Fees. In the event any party shall institute any action or
proceeding to enforce any provision of this Agreement to seek relief from any
violation of this Agreement, or to otherwise obtain any judgment or order
relating to or resulting from the subject matter of this Agreement, the
prevailing party shall be entitled to receive from the losing party such
prevailing party's actual attorneys' fees and costs incurred to prosecute or
defend such action or proceeding, including, but not limited to, actual
attorneys' fees and costs incurred preparatory to such prosecution and defense.
Moreover, while a court of competent jurisdiction may assist in determining
whether or not the fees actually
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incurred are reasonable in the circumstances then existing, that court is not be
governed by any judicially or legislatively established fee schedule, and such
fees and costs are to include those as may be incurred on appeal of any issue
and all of which fees and costs shall be included as part of any judgment, by
cost bill or otherwise, and where applicable, any appellate decision rendered in
or resulting from such action or proceeding. For purposes of this Agreement, in
any action or proceeding instituted by a party, the prevailing party shall be
that party in any such action or proceeding (i) in whose favor a judgment is
entered, or (ii) prior to trial, hearing or judgment any other party shall pay
all or any portion of amounts claimed by the party seeking payment, or such
other party shall eliminate the condition, cease the act, or otherwise cure the
act of commission or omission claimed by the party initiating such action or
proceeding.
23. Reservation of Rights. The failure of any party at any time or times
hereafter to require strict performance by any other party of any of the
warranties, representations, covenants, terms, conditions and provisions
specified in this Agreement shall not waive, affect or diminish any right of
such party failing to require strict performance to demand strict compliance and
performance therewith and with respect to any other provisions, warranties,
terms, and conditions specified in this Agreement. Any waiver of any default
shall not waive or affect any other default, whether prior or subsequent
thereto, and whether the same or of a different type. None of the
representations, warranties, covenants, conditions, provisions and terms
specified in this Agreement shall be deemed to have been waived by any act or
knowledge of any party, its agents, trustees, officers, or employees and any
such waiver shall be made only by an instrument in writing, signed by the
waiving party and directed to any non-waiving party specifying such waiver, and
each party reserves such party's rights to insist upon strict compliance
herewith at all times.
24. Purpose of Covenants. All covenants made by each party shall be deemed
made for the purpose of inducing the other party to enter into and execute this
Agreement. The representations, warranties, and covenants specified in this
Agreement shall survive any investigation by either party whether before or
after the execution of this Agreement.
25. Concurrent Remedies. No right or remedy specified in this Agreement
conferred on or reserved to the parties is exclusive of any other right or
remedy specified in this Agreement or by law or equity provided or permitted;
but each such right and remedy shall be cumulative of, and in addition to, every
other right and remedy specified in this Agreement or now or hereafter existing
at law or in equity or by statute or otherwise, and may be enforced concurrently
therewith or from time to time. The termination of this Agreement for any reason
whatsoever shall not prejudice any right or
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remedy which any party may have, either at law, in equity, or pursuant to the
provisions of this Agreement.
26. Force Majeure. If any party is rendered unable, completely or
partially, by the occurrence of an event of "force majeure" (hereinafter
defined) to perform such party's obligations created by the provisions of this
Agreement, such party shall give to the other party prompt written notice of the
event of "force majeure" with reasonably complete particulars concerning such
event; thereupon, the obligations of the party giving such notice, so far as
those obligations are affected by the event of "force majeure," shall be
suspended during, but no longer than, the continuance of the event of "force
majeure." The party affected by such event of "force majeure" shall use all
reasonable diligence to resolve, eliminate and terminate the event of "force
majeure" as quickly as practicable. The term "force majeure," as contemplated by
the provisions of this Paragraph 27 means any act of God, strike, lockout or
other industrial disturbance, act of the public enemy, war blockage, public
riot, lightening, fire, storm, flood explosion, governmental action, earthquake,
governmental delay, restraint or inaction, unavailability or equipment, and any
other cause or event, whether of the kind enumerated specifically herein, or
otherwise, which is not within the control of the party claiming such
suspension.
27. Consent to Agreement. By executing this Agreement, each party, for
itself, represents such party has read or caused to be read this Agreement in
all particulars, and consents to the rights, conditions, duties and
responsibilities imposed upon such party as specified in this Agreement. Each
party represents, warrants and covenants that such party executes and delivers
this Agreement of its own free will and with no threat, undue influence, menace,
coercion or duress, whether economic or physical. Moreover, each party
represents, warrants, and covenants that such party executes this Agreement
acting on such party's own independent judgment and upon the advice of such
party's counsel.
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IN WITNESS WHEREOF the parties have executed this Agreement for
Indemnification on the date specified in the preamble of this Agreement.
TMEX USA, Inc.,
a Nevada corporation
By: /s/ Cooper Lee /s/ Cecil Zeringue
-------------------------- -------------------------
Cooper Lee Cecil Zeringue
Its: President
15
STOCK OPTION PLAN
Article
I. Purposes of the Plan
II. Amount of Stock Subject to Plan
III. Effective Date and Term of the Plan
IV. Administration
V. Eligibility
VI. Limitation on Exercise of Incentive Options
VII. Options: Price and Payment
VIII. Use of Proceeds
IX. Term of Options and Limitations on the Right of Exercise
X. Exercise of Options
XI. Nontransferability of Options and Stock Appreciation Rights
XII. Termination of Directors, Employees and Independent Contractors
XIII. Adjustment of Shares; Effect of Certain Transactions
XIV. Right to Terminate Employees and Independent Contractors
XV. Purchase for Investment
XVI. Issuance of Certificates; Legends; Payment of Expenses
XVII. Withholding Taxes
XVIII. Listing of Shares and Related Matters
XIX. Amendment of the Plan
XX. Termination or Suspension of the Plan
XXI. Governing Law
XXII. Partial Invalidity
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TMEX USA INC. 2000 STOCK OPTION PLAN
I. PURPOSES OF THE PLAN
1.01 TMEX USA, Inc., a Nevada corporation ("Company"), desires to provide
to certain of its directors, employees and independent contractors and the
directors, employees and independent contractors of any subsidiary corporation
or parent corporation of the Company who are responsible for the continued
growth of the Company an opportunity to acquire a proprietary interest in the
Company, and, therefore, to create in such directors, employees and independent
contractors an increased interest in and a greater concern for the welfare of
the Company.
The Company, by means of this TMEX USA, Inc. 2000 Stock Option Plan (the
"Plan"), seeks to retain the services of persons now serving in certain
capacities and to secure the services of persons capable of serving in similar
capacities.
1.02 The stock options ("Options") offered pursuant to the Plan are a
matter of separate inducement and are not in lieu of any salary or other
compensation for the services of any director, employee or independent
contractor.
1.02 The Options granted pursuant to the Plan are intended to be either
incentive stock options ("Incentive Options") within the meaning of Section 422A
of the Internal Revenue Code of 1986, as amended (the "Code"), or options that
do not satisfy the requirements for Incentive Options ("Non-Qualified Options"),
but the Company makes no warranty as to the qualification of any Option as an
Incentive Option.
II. AMOUNT OF STOCK SUBJECT TO THE PLAN
2.01 The total number of shares of common stock of the Company which either
may be purchased pursuant to the exercise of Options shall not exceed, in the
aggregate, five million (5,000,000) shares of the authorized common stock, $.001
par value per share, of the Company (the "Shares").
2.02 Shares which may be acquired pursuant to the Plan may be either
authorized but unissued Shares, Shares of issued stock held in the Company's
treasury, or both, at the discretion of the Company. If and to the extent that
Options expire or terminate without having been exercised, new Options may be
granted with respect to Shares subject to such expired or terminated Options;
provided, however, that the grant and the terms of such new Options shall in all
respects comply with the provisions of the Plan.
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III. EFFECTIVE DATE AND TERM OF THE PLAN
3.01 The Plan is shall become effective on the date (the "Effective Date")
on which it is adopted by the Board of Directors of the Company (the "Board of
Directors"); provided, however, that if the Plan is not approved by a vote of
the shareholders of the Company within twelve (12) months before or after the
Effective Date, the Plan and any Options granted pursuant thereto shall
terminate.
3.02 The Company may, from time to time during the period beginning on the
Effective Date and ending on April 12, 2010 ("Termination Date"), grant Options
to persons eligible to participate in the Plan, pursuant to the terms of the
Plan. Options granted prior to the Termination Date may extend beyond that date,
in accordance with the terms thereof.
3.03 As used in the Plan, the terms "subsidiary corporation" and "parent
corporation" shall have the meanings ascribed to such terms, respectively, in
Sections 425(f) and 425(e) of the Code.
3.04 A director, employee or independent contractor to whom Options are
granted may be referred to herein as a "Participant."
IV. ADMINISTRATION
4.01 The Board of Directors shall designate an option committee (the
"Committee") which shall consist of no fewer than three (3) directors, each of
whom shall be a "disinterested person" within the meaning of Rule 16b-3 (or any
successor rule or regulation) promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), to administer the Plan. A majority of the
members of the Committee shall constitute a quorum, and the act of a majority of
the members of the Committee shall be the act of the Committee. Any member of
the Committee may be removed at any time either with or without cause by
resolution adopted by the Board of Directors, and any vacancy on the Committee
may at any time be filled by resolution adopted by the Board of Directors.
4.02 Any or all powers and functions of the Committee may at any time and
from time to time be exercised by the Board of Directors; provided, however,
that, with respect to the participation in the Plan by members of the Board of
Directors, such powers and functions of the Committee may be exercised by the
Board of Directors only if, at the time of such exercise, a majority of the
members of the Board of Directors, as the case may be, and a majority of the
directors acting in the particular matter, are "disinterested persons" within
the meaning of Rule 16b-3 (or any successor rule or
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regulation) promulgated pursuant to the Exchange Act. Any reference in the Plan
to the Committee shall be deemed also to refer to the Board of Directors, to the
extent that the Board of Directors is exercising any of the powers and functions
of the Committee.
4.03 Subject to the express provisions of the Plan, the Committee shall
have the authority, in its discretion,
(i) to determine the directors, employees and independent contractors to
whom Options shall be granted, the time when such Options shall be
granted, the number of Shares which shall be subject to each Option;
the purchase price or exercise price of each Share which shall be
subject to each Option, the period(s) during which such Options shall
be exercisable (whether in whole or in part), and the other terms and
provisions of the respective Options (which need not be identical);
(ii) to construe the Plan and Options granted pursuant thereto;
(iii) to prescribe, amend and rescind rules and regulations relating to the
Plan; and
(iv) to make all other determinations necessary or advisable for
administering the Plan.
4.04 Without limiting the generality of the foregoing, the Committee also
shall have the authority to require, in its discretion, as a condition of the
granting of any Option, that the Participant agree (i) not to sell or otherwise
dispose of Shares acquired pursuant to the Option for a period of twelve (12)
months following the date of acquisition of such Shares and (ii) that in the
event of termination of directorship, employment, term of any independent
contractor relationship or agreement, or term of any consulting relationship
agreement of such Participant, other than as a result of dismissal without
cause, such Participant will not, for a period to be determined at the time of
the grant of the Option, enter into any employment or participate directly or
indirectly in any business or enterprise which is competitive with the business
of the Company or any subsidiary corporation or parent corporation of the
Company, or enter into any employment or participate directly or indirectly in
any business or enterprise in which such person will be called upon to utilize
special knowledge obtained through directorship, employment, term of any
independent contractor relationship or agreement, or term of any consulting
relationship agreement with the Company or any subsidiary corporation or parent
corporation thereof.
The determination of the Committee on matters referred to in this Article
IV shall
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be conclusive.
4.05 The Committee may employ such legal counsel, consultants and agents as
it may deem desirable for the administration of the Plan and may rely upon any
opinion received from any such counsel or consultant and any computation
received from any such consultant or agent. Expenses incurred by the Committee
in the engagement of such counsel, consultant or agent shall be paid by the
Company. No member or former member of the Committee or of the Board of
Directors shall be liable for any action or determination made in good faith
with respect to the Plan or any Option.
V. ELIGIBILITY
5.01 Non-Qualified Options may be granted only to directors, employees and
independent contractors of the Company, or of any subsidiary corporation or
parent corporation of the Company now existing or hereafter formed or acquired,
except as hereinafter provided. Any person who shall have retired from active
employment by the Company, including such person having entered into an
independent contractor agreement with the Company shall also be eligible to
receive an Option.
VI. LIMITATION ON EXERCISE OF INCENTIVE OPTIONS
6.01 Except as otherwise provided pursuant to the Code, to the extent that
the aggregate fair market value of Shares with respect to which Incentive
Options are exercisable for the first time by an employee or independent
contractor during any calendar year (pursuant to all stock options plans of the
Company and any parent corporation or subsidiary corporation of the Company)
exceeds One Hundred Thousand Dollars ($100,000), such Options shall be treated
as Non-Qualified Options. For purposes of this limitation, (i) the fair market
value of Shares is determined as of the time the Option is granted, and (ii) the
limitation will be applied by taking into account Options in the order in which
they were granted.
VII. OPTIONS: PRICE AND PAYMENT
7.01 The purchase price for each Share purchasable under any Non-Qualified
Option granted pursuant to the Plan shall be such amount as the Committee shall
deem appropriate.
7.02 The purchase price for each Share purchasable pursuant to any
Incentive Option shall be such amount as the Committee shall, in its best
judgment, determine to be not less than one hundred percent (100%) of the fair
market value per Share on the date the option is granted; provided, however,
that in the case of an Incentive Option
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granted to a Participant who, at the time such Incentive option is granted, owns
stock of the Company or any subsidiary corporation or parent corporation of the
Company possessing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or of any subsidiary corporation or
parent corporation of the Company, the purchase price for each Share shall be
such amount as the Committee shall, in its best judgment, determine to be not
less than one hundred ten percent (110%) of the fair market value per Share at
the date such Option is granted.
7.03 If the Shares are listed on a national securities exchange in the
United States on any date on which the fair market value per Share is to be
determined, the fair market value per Share shall be deemed to be the average of
the high and low quotations at which such Shares are sold on such national
securities exchange on such date. If the Shares are listed on a national
securities exchange in the United States of America on such date but the Shares
are not traded on such date, or such national securities exchange is not open
for business on such date, the fair market value per Share shall be determined
as of the closest preceding date on which such exchange shall have been open for
business and the Shares were traded. If the Shares are listed on more than one
national securities exchange in the United States of America on the date any
such Option is granted, the Committee shall determine which national securities
exchange shall be used for the purpose of determining the fair market value per
Share.
7.04 If a public market exists for the Shares on any date on which the fair
market value per Share is to be determined, but the Shares are not listed on a
national securities exchange in the United States of America, the fair market
value per Share shall be deemed to be the mean between the closing bid and asked
quotations in the over-the-counter market for the Shares on such date. If there
are no bid and asked quotations for the Shares on such date, the fair market
value per Share shall be deemed to be the mean between the closing bid and asked
quotations in the over-the-counter market for the Shares on the closest date
preceding such date for which such quotations are available.
7.05 If no public market exists for the Shares on any date on which the
fair market value per Share is to be determined, the Committee shall, in its
sole discretion and best judgment, determine the fair market value of a Share.
For purposes of the Plan, the determination by the Committee of the fair
market value of a Share shall be conclusive.
7.06 Upon the exercise of an Option, the Company shall cause the purchased
Shares to be issued only when it shall have received the full and complete
purchase price for the Shares in cash or by certified check; provided, however,
that in lieu of cash or
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certified check, the Participant may, if and to the extent the terms of the
option so provide and to the extent permitted by applicable law, exercise an
option in whole or in part, by delivering to the Company shares of common stock
of the Company (in proper form for transfer and accompanied by all requisite
stock transfer tax stamps or cash in lieu thereof) owned by such Participant
having a fair market value equal to the purchase price of the Shares as to which
the Option is being exercised. The fair market value of the stock so delivered
shall be determined as of the date immediately preceding the date on which the
Option is exercised, or as may be required in order to comply with or to conform
to the requirements of any applicable laws or regulations.
VIII. USE OF PROCEEDS
8.01 The cash proceeds of the sale of Shares subject to Options are to be
added to the general funds of the Company and used for its general corporate
purposes as the Board of Directors shall determine.
IX. TERM OF OPTIONS AND LIMITATIONS
ON THE RIGHT OF EXERCISE
9.01 Any Option shall be exercisable at such times, in such amounts and
during such period or periods as the Committee shall determine at the date of
the grant of such Option; provided, however, that an Incentive option shall not
be exercisable after the expiration of five (5) years from the date such Option
is granted; and provided, further, that, in the event that an Incentive Option
granted to a Participant who, at the time such Option is granted, owns stock of
the Company or any subsidiary corporation or parent corporation of the Company
possessing more than ten percent (10%) of the total combined voting power of all
classes of stock of the Company or of any subsidiary corporation or parent
corporation of the Company, such Option shall not be exercisable after the
expiration of three (3) years from the date such option is granted.
9.02 Subject to the provisions of Article XX of the Plan, the Committee
shall have the right to accelerate, in whole or in part, from time to time,
conditionally or unconditionally, rights to exercise any option.
9.03 To the extent that an Option is not exercised within the period of
exerciseability specified therein, it shall expire as to the then unexercised
part.
In no event shall an option granted pursuant to the Plan be exercisable for
a fraction of a Share.
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X. EXERCISE OF OPTIONS
10.01 Any Option shall be exercised by the Participant holding such option
as to all or part of the Shares contemplated by such Option by giving written
notice of such exercise to the Secretary of the Company at the principal
business office of the Company, specifying the number of Shares to be purchased
and specifying a business day not more than fifteen (15) days from the date such
notice is given, for the payment of the purchase price against delivery of the
Shares being purchased. Subject to the terms of Articles XV, XVII and XVIII of
the Plan, the Company shall cause certificates for the Shares so purchased to be
delivered to the Participant at the principal business office of the Company, in
exchange for payment of the full and complete purchase price, on the date
specified in the notice of exercise.
XI. NONTRANSFERABILITY OF OPTIONS
AND STOCK APPRECIATION RIGHTS
11.01 No Option shall be transferable, whether by operation of law or
otherwise, other than by will or the laws of descent and distribution, and any
Option shall be exercisable, during the lifetime of the Participant, only by
such Participant.
XII. TERMINATION OF DIRECTORS, EMPLOYEES
AND INDEPENDENT CONTRACTORS
12.01 Upon termination of the directorship, employment, term of any
independent contractor relationship or agreement, or term of any consulting
relationship agreement of any Participant with the Company and all subsidiary
corporations and parent corporations of the Company, unless specified to the
contrary in the respective Stock Option Agreement to which the Company and such
Participant are parties and which relates to such Option, any Option previously
granted to such Participant, shall, to the extent not theretofore exercised,
terminate and become null and void, provided that:
(a) if such Participant shall die while serving as a director, while in
the employ of such corporation, during the term of any independent
contractor relationship or agreement, or during the term of any
consulting relationship agreement or during either the three (3) month
or one (1) year period, whichever is applicable, specified in clause
(b) below and at a time when such Participant was entitled to exercise
an Option as provided in the Plan, the legal representative of such
Participant, or such person who acquired such Option by bequest or
inheritance or by reason of the death of such Participant, may, not
later than one (1) year from the date of
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death, exercise such Option, to the extent not theretofore exercised,
in respect of any or all of such number of Shares as specified by the
Committee in such Option; and
(b) if the directorship, employment, term of any independent contractor
relationship or agreement, or term of any consulting relationship
agreement any Participant to whom such Option shall have been granted
shall terminate by reason of the Participant's retirement (at such age
or upon such conditions as shall be specified by the Committee),
disability (as described in Section 22(e)(3) of the Code) or dismissal
by the Company or any subsidiary corporation or parent corporation of
the Company now existing or hereafter formed or acquired other than
for cause (as defined below), and while such Participant is entitled
to exercise such Option as herein provided, such Participant shall
have the right to exercise such Option, to the extent not theretofore
exercised, in respect of any or all of such number of Shares as
specified by the Committee in such Option, at any time up to and
including (i) three (3) months after the date of such termination of
directorship, employment, term of any independent contractor
relationship or agreement, or term of any consulting relationship
agreement in the case of termination by reason of retirement or
dismissal other than for cause and (ii) one (1) year after the date of
termination of directorship, employment, term of any independent
contractor relationship or agreement, or term of any consulting
relationship agreement in the case of termination by reason of
disability.
In no event, however, shall any person be entitled to exercise any Option
after the expiration of the period of exerciseability of such Option as
specified therein.
12.02 If a Participant voluntarily terminates his directorship, employment,
term of any independent contractor relationship or agreement, or term of any
consulting relationship agreement, or is discharged for cause, unless specified
to the contrary in the respective Stock Option Agreement to which the Company
and such participant are parties, and which relates to such Option, any Option
shall forthwith terminate with respect to any unexercised portion thereof.
12.03 If an Option shall be exercised by the legal representative of a
deceased Participant, or by a person who acquired an Option by bequest or
inheritance or by reason of the death of any Participant, written notice of such
exercise shall be accompanied by a certified copy of letter testamentary or
equivalent proof of the right of such legal representative or other person to
exercise such Option.
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12.04 For the purposes of the Plan, the term "for cause" shall mean (i)
with respect to an employee who is a party to a written agreement with, or,
alternatively, participates in a compensation or benefit plan of the Company or
a subsidiary corporation or parent corporation of the Company, which agreement
or plan contains a definition of "for cause" or "cause" (or words of similar
import) for purposes of termination of employment pursuant thereto by the
Company or such subsidiary corporation or parent corporation of the Company,
"for cause" or "cause" as defined in the most recent of such agreements or
plans, or (ii) a party to any independent contractor relationship or agreement
or any consulting relationship or agreement, whether oral or written, or (iii)
in all other cases, as determined by the Board of Directors, in its sole
discretion, (a) the willful commission by an employee or independent contractor
of a criminal or other act that causes or probably will cause substantial
economic damage to the Company or a subsidiary corporation or parent corporation
of the Company or substantial injury or damage to the business reputation of the
Company or a subsidiary corporation or parent corporation of the Company; (b)
the commission by an employee or independent contractor of an act of fraud in
the performance of such employee's duties on behalf of the Company or a
subsidiary corporation or parent corporation of the Company; (c) the continuing
willful failure of an employee or independent contractor to perform the duties
of such employee or independent contractor to the Company or a subsidiary
corporation or parent corporation of the Company (other than such failure
resulting from the employee's or independent contractor's incapacity due to
physical or mental illness) after written notice thereof (specifying the
particulars thereof in reasonable detail) and a reasonable opportunity to be
heard and cure such failure are given to the employee or independent contractor
by the Board of Directors; or (d) the order of a court of competent jurisdiction
requiring the termination of the employee's employment, or term of any
independent contractor relationship or agreement, or term of any consulting
relationship agreement. For purposes of the Plan, no act, or failure to act, on
the employee's or independent contractor's part shall be considered "willful"
unless done or omitted to be done by the employee or independent contractor not
in good faith and without reasonable belief that the employee's or independent
contractor's action or omission was in the best interest of the Company or a
subsidiary corporation or parent corporation of the Company.
12.05 For the purposes of the Plan, an employment relationship shall be
deemed to exist between a person and a corporation if, at the time of the
determination, the individual was an "employee" of such corporation for purposes
of Section 422A(a) of the Code. If a person is on maternity, military, or sick
leave or other bona fide leave of absence, such person shall be considered an
"employee" for purposes of the exercise of an Option shall be entitled to
exercise such Option during such leave if the period of such leave does not
exceed ninety (90) days, or, if longer, so long as such person's right to
reemployment with his employer is guaranteed either by statute or by contract.
If the
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period of leave exceeds ninety (90) days, the employment relationship shall be
deemed to have terminated on the ninety-first (91) day of such leave, unless
such person's right to reemployment is guaranteed by statute or contract.
12.06 An employee or independent contractor shall not be deemed terminated
by reason of (i) the transfer of a Participant from the Company to a subsidiary
corporation or a parent corporation of the Company or (ii) the transfer of a
Participant from a subsidiary corporation or a parent corporation of the Company
by the Company or by another subsidiary corporation or parent corporation of the
Company.
XIII. ADJUSTMENT OF SHARES; EFFECT OF CERTAIN TRANSACTIONS
13.01 In the event of any change in the outstanding Shares as a result of
merger, consolidation, reorganization, recapitalization, stock dividend, stock
split, split-up, split-off, spin-off, combination or exchange of shares, or
other similar change in capital structure of the Company, an adjustment shall be
made to each outstanding Option such that each such Option shall thereafter be
exercisable for such securities, cash or other property as would have been
received in respect of the Shares subject to such Option had such Option been
exercised in full immediately prior to such change, and such an adjustment shall
be made successively each time any such change shall occur. The term "Shares"
after any such change shall refer to the securities, cash or property then
receivable upon exercise of an Option. In addition, in the event of any such
change, the Committee shall make any additional adjustment as may be appropriate
to the maximum number of Shares subject to the Plan, the maximum number of
Shares, if any, for which Options may be granted to any one employee or
independent contractor, and the number of Shares and price per Share subject to
outstanding Options as shall be appropriate to prevent dilution or enlargement
of rights under such Options, and the determination of the Committee as to these
matters shall be conclusive. Notwithstanding the foregoing, (i) each such
adjustment with respect to an Incentive Option shall comply with the rules of
Section 425(a) of the Code, and (ii) in no event shall any adjustment be made
which would render any Incentive Option other than an "incentive stock option"
for purposes of Section 422A of the Code.
13.02 For purposes of the Plan, a "change in control" of the Company occurs
if: (a) any "person" (defined as such term is used in Sections 13(d) and
14(d)(2) of the Exchange Act, as amended) other than the current owner is or
becomes the beneficial owner, directly or indirectly, of securities of the
Company representing ten percent (10%) or more of the combined voting power of
the Company's outstanding securities then entitled to vote for the election of
directors; or (b) during any period of two consecutive years, persons who at the
beginning of such period constitute the Board of Directors cease for any reason
to constitute at least a majority thereof; or (c) the Board
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of Directors shall approve the sale of all or substantially all of the assets of
the Company or any merger, consolidation, issuance of securities or purchase of
assets, the result of which would be the occurrence of any event described in
clause (a) or (b) above.
13.03 In the event of a change in control of the Company (defined above),
the Committee, in its discretion, may determine that, upon the occurrence of a
transaction described in the preceding paragraph, each Option outstanding
pursuant to the Plan shall terminate within a specified number of days after
notice to the holder, and such holder shall receive, with respect to each Share
subject to such Option, an amount of cash equal to the excess of the fair market
value of such Share immediately prior to the occurrence of such transaction
increases the exercise price per Share of such Option. The provisions specified
in the preceding sentence shall be inapplicable to an Option granted within six
(6) months before the occurrence of a transaction described above if the holder
of such Option is a director or officer of the Company or a beneficial owner of
the Company who is described in Section 16(a) of the Exchange Act, unless such
holder dies or becomes disabled (within the meaning of Section 22(e)(3) of the
Code) prior to the expiration of such six-month period.
Alternatively, the Committee may determine, in its discretion, that all
then outstanding Options shall immediately become exercisable upon a change of
control of the Company.
XIV. RIGHT TO TERMINATE EMPLOYEES
AND INDEPENDENT CONTRACTORS
14.01 The Plan shall not impose any obligation on the Company or on any
subsidiary corporation or parent corporation thereof to continue the retention
of any Participant; and it shall not impose any obligation on the part of any
Participant to remain in the employ of the Company or of any subsidiary
corporation or parent corporation thereof.
XV. PURCHASE FOR INVESTMENT
15.01 Except as provided otherwise in the Plan, a Participant shall, upon
any exercise of an Option, execute and deliver to the Company a written
statement, in form satisfactory to the Company, in which such Participant
represents and warrants that such Participant is purchasing or acquiring the
Shares acquired pursuant thereto for such Participant's own account, for
investment only and not with an intention of the resale or distribution thereof,
and agrees that any subsequent offer for sale or sale or distribution of any of
such Shares shall be made only pursuant to either (a) a Registration Statement
on an appropriate form pursuant to the Securities Act of 1933, as amended (the
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"Securities Act"), which Registration Statement has become effective and is
current with regard to the Shares being offered or sold, or (b) a specific
exemption from the registration requirements of the Securities Act, but in
claiming such exemption the holder shall, if so requested by the Company, prior
to any offer for sale or sale of such Shares, obtain a prior favorable written
opinion, in form and substance satisfactory to the Company, from counsel for or
approved by the Company, as to the applicability of such exemption thereto. The
foregoing restriction shall not apply to (i) issuances by the Company so long as
the Shares being issued are registered pursuant to the Securities Act and a
prospectus in respect thereof is current or (ii) reofferings of Shares by
affiliates of the Company (as defined in Rule 405 or any successor rule or
regulation promulgated pursuant to the Securities Act) if the Shares being
reoffered are registered pursuant to the Securities Act and a prospectus in
respect thereof is current.
XVI. ISSUANCE OF CERTIFICATES; LEGENDS; PAYMENT OF EXPENSES
16.01 Upon any exercise of an Option and, in the case of an Option, payment
of the purchase price, a certificate or certificates for the Shares as to which
such Option has been exercised shall be issued by the Company in the name of the
person exercising such Option and shall be delivered to or upon the order of
such person or persons.
16.02 The Company may endorse such legend or legends upon the certificates
for Shares issued upon exercise of an Option granted pursuant to the Plan and
may issue such "stop transfer" instructions to its transfer agent in respect of
such Shares as, in its discretion, it determines to be necessary or appropriate
to (i) prevent a violation of, or to perfect an exemption from, the registration
requirements of the Securities Act, (ii) implement the provisions of the Plan
and any agreement between the Company and the optionee with respect to such
Shares, or (iii) permit the Company to determine the occurrence of a
disqualifying disposition, within the meaning of Section 421(b) of the Code, of
Shares transferred upon exercise of an Incentive Option.
16.03 The Company shall pay all issue or transfer taxes with respect to the
issuance or transfer of Shares, as well as all fees and expenses incurred by the
Company in connection with such issuance or transfer.
All Shares issued as provided in the Plan shall be fully paid and
non-assessable to the extent permitted by law.
XVII. WITHHOLDING TAXES
17.01 The Company may require an employee or independent contractor
exercising a Non-Qualified Option granted pursuant to the Plan or disposing of
Shares
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acquired pursuant to the exercise of an Incentive Option in a disqualifying
disposition (within the meaning of Section 421(b) of the Code), to reimburse the
corporation that employs such employee for any taxes required by any government
to be withheld or otherwise deducted and paid by such corporation in respect of
the issuance or disposition of such Shares. In lieu thereof, the employer
corporation shall have the right to withhold the amount of such taxes from any
other amounts due or to become due from such corporation to the employee or
independent contractor upon such terms and conditions as the Committee shall
prescribe. The employer corporation may, in its discretion, hold the stock
certificate to which such employee or independent contractor is entitled upon
the exercise of an Option as security for the payment of such withholding tax
liability, until cash sufficient to pay that liability has been accumulated.
XVIII. LISTING OF SHARES AND RELATED MATTERS
18.01 If at any time the Board of Directors shall determine in its
discretion that the listing, registration or qualification of the Shares subject
to the Plan upon any national securities exchange or pursuant to any state or
federal law, or the consent or approval of any governmental regulatory agency,
is necessary or desirable as a condition of, or in connection with, the sale or
purchase of Shares pursuant to the Plan, no Shares shall be issued unless and
until such listing, registration, qualification, consent or approval shall have
been effected or obtained, or otherwise provided for, free of any conditions not
acceptable to the Board of Directors.
XIX. AMENDMENT OF THE PLAN
19.01 The Board of Directors or the Committee may, from time to time, amend
the Plan, provided that, notwithstanding anything to the contrary in the Plan,
no amendment shall be made, without the approval of the shareholders of the
Company, that will (i) increase the total number of Shares reserved for Options
pursuant to the Plan (other than an increase resulting from an adjustment
provided for in Article XII), (ii) reduce the exercise price of any Incentive
Option granted pursuant to the Plan to an amount less than the price required by
Article VI, (iii) modify the provisions of the Plan relating to eligibility, or
(iv) materially increase the benefits accruing to participants pursuant to the
Plan. The Board of Directors or the Committee shall be authorized to amend the
Plan and the Options to permit the Incentive Options to qualify as "incentive
stock options" within the meaning of Section 422A of the Code. The rights and
obligations pursuant to any Option granted before amendment of the Plan or any
unexercised portion of such Option shall not be adversely affected by amendment
of the Plan or the Option without the consent of the holder of the Option.
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XX. TERMINATION OR SUSPENSION OF THE PLAN
20.01 The Board of Directors or the Committee may at any time and for any
or no reason suspend or terminate the Plan. The Plan, unless sooner terminated
pursuant to Article III of the Plan or by action of the Board of Directors,
shall terminate at the close of business on the Termination Date. An Option may
not be granted while the Plan is suspended or after it is terminated. Options
granted while the Plan is in effect shall not be altered or impaired by
suspension or termination of the Plan, except upon the consent of the person to
whom the Option was granted. The power of the Committee pursuant to Article IV
of the Plan to construe and administer any Options granted prior to the
termination or suspension of the Plan shall continue after such termination or
during such suspension.
XXI. GOVERNING LAW
21.01 The Plan and such Options as may be granted pursuant thereto and all
related matters shall be governed by, and construed and enforced in accordance
with, the laws of the State of Nevada, as from time to time amended.
XXII. PARTIAL INVALIDITY
22.01 The invalidity or illegality of any provision of the Plan shall not
be deemed to affect the validity of any other provision of the Plan.
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