Securities and Exchange Commission
Washington, D.C. 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 29, 1999.
Internet Media Corporation
(Exact name of registrant as specified in its charter)
NEVADA 333-26385 72-1346591
(State or other jurisdiction (Commission File No.) (I.R.S. Employer
of incorporation) Identification No.)
8748 Quarters Lake Road, Baton Rouge, Louisiana 70809
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (504) 922-7744
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Form 8-K
Internet Media Corporation
Item 2. Acquisition or Disposition of Assets.
On January 29,1999, Internet Media Corporation, a Nevada corporation (the
"Company"), acquired, pursuant to an Agreement and Plan of Reorganization
(the "Reorganization Agreement"), all of the outstanding capital stock of
CyberHighway, Inc., an Idaho corporation ("CyberHighway"), a full-service
Internet Service Provider (ISP) based in Boise, Idaho. The shares of
capital stock of CyberHighway were acquired in exchange for 2,000,000
shares of the Company's $.0001 par value Common Stock, as follows: (1)
1,394,000 shares were issued to Julius W. Basham II; (2) 303,000 shares
were issued to Wm. Kim Stimpson; and (3) 303,000 shares to David W. Brown.
The shares of Company Common Stock issued to the CyberHighway shareholders
were valued at $7.50 per share, the closing bid price, as reported by the
OTC Electronic Bulletin Board, of the Company's Common Stock, pursuant to
the terms of the Reorganization Agreement. The valuation of the shares of
Company Common Stock was determined through negotiations with the
shareholders of CyberHighway. No cash was used in the acquisition of
CyberHighway.
Pursuant to the terms of the Reorganization Agreement, Julius W. Basham,
II, was elected as a director and Chief Operating Officer of the Company.
In connection with the Reorganization Agreement, Mr. Basham executed an
Employment Agreement with the Company.
Pursuant to the terms of the Reorganization Agreement, Wm. Kim Stimpson
executed an Employment Agreement with CyberHighway and will continue to
serve as an officer and a director of CyberHighway.
Pursuant to the terms of the Reorganization Agreement, David W. Brown
executed an Employment Agreement with CyberHighway and will continue to
serve as an officer and a director of CyberHighway.
Following the consummation of the Reorganization Agreement, Julius W.
Basham, II, Wm. Kim Stimpson, David W. Brown, David M. Loflin, President
and a director of the Company, and Waddell D. Loflin, Vice President and a
director of the Company, entered into a Voting Agreement with respect to
all of their respective shares of Company Common Stock. For the seven-year
term of the Voting Agreement, each of such persons have agreed to vote, in
an election of directors of the Company, all of their respective shares of
Company Common Stock for election of Julius W. Basham, II, David M. Loflin
and Waddell D. Loflin as directors of the Company.
Item 7. Financial Statements and Exhibits.
The financial statements required by this Item 7 are not filed at this
time. The required financial statements shall be filed by amendment to
this Current Report on Form 8-K not later than 75 days from date of the
event to which this Current Report on Form 8-K relates.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Dated: February 12, 1999.
INTERNET MEDIA CORPORATION
By: /s/ David M. Loflin
David M. Loflin
President
<PAGE>
INDEX OF EXHIBITS
Exhibit # Description of Document
2.1 Agreement and Plan of Reorganization, dated as of January 21, 1999,
among Internet Media Corporation, a Nevada corporation, Julius W. Basham,
II, Wm. Kim Stimpson and David W. Brown.
10.1 Employment Agreement, dated as of January 29, 1999, between Internet
Media Corporation, a Nevada corporation, and Julius W. Basham, II.
10.2 Employment Agreement, dated as of January 29, 1999, between
CyberHighway, Inc., an Idaho corporation, and Wm. Kim Stimpson.
10.3 Employment Agreement, dated as of January 29, 1999, between
CyberHighway, Inc., an Idaho corporation, and David W. Brown.
10.4 Confidentiality Agreement, dated as of January 29, 1999, between
Internet Media Corporation, a Nevada corporation, and Julius W. Basham, II.
10.5 Confidentiality Agreement, dated as of January 29, 1999, between
CyberHighway, Inc., an Idaho corporation, and Wm. Kim Stimpson.
10.6 Confidentiality Agreement, dated as of January 29, 1999, between
CyberHighway, Inc., an Idaho corporation, and David W. Brown.
10.7 Agreement Not to Compete, dated as of January 29, 1999, between
Internet Media Corporation, a Nevada corporation, and Julius W. Basham, II.
10.8 Agreement Not to Compete, dated as of January 29, 1999, between
CyberHighway, Inc., an Idaho corporation, and Wm. Kim Stimpson.
10.9 Agreement Not to Compete, dated as of January 29, 1999, between
CyberHighway, Inc., an Idaho corporation, and David W. Brown.
10.10 Voting Agreement, dated as of January 29, 1999, among Julius W.
Basham, II, Wm. Kim Stimpson, David W. Brown, David M. Loflin and Waddell
D. Brown.
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EXHIBIT 2.1
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PLAN AND AGREEMENT OF REORGANIZATION
This Plan and Agreement of Reorganization is entered this 21st day of
January, 1999, among Internet Media Corporation, a Nevada corporation,
sometimes referred to in this Agreement as the "Purchaser," and Julius W.
Basham, II, Wm. Kim Stimpson and David W. Brown, who are individually
called the "Shareholder" and collectively called the "Shareholders." The
Shareholders are owners of all of the outstanding shares of capital stock
of CyberHighway, Inc., an Idaho corporation, sometimes referred to in this
Agreement as the "Acquired Corporation."
This Plan specifies a reorganization within the meaning of Section
368(a)(1)(B) of the Internal Revenue Code of 1986, as amended. The
Purchaser will acquire from the Shareholders all of the issued and
outstanding shares of capital stock of the Acquired Corporation, in
exchange solely for shares of voting stock of the Purchaser. Under this
Plan, the Acquired Corporation will become a subsidiary of the Purchaser.
In order to consummate the Plan of Reorganization, the Purchaser and
Shareholders, in consideration of the mutual covenants and on the basis of
the representations and warranties set forth, agree as follows:
ARTICLE 1
EXCHANGE OF CAPITAL STOCK
Transfer of Acquired Corporation's Capital Stock
1.01. Subject to the terms and conditions of this Agreement, each
Shareholder will transfer and deliver to Purchaser, on the Closing Date,
certificates for shares of capital stock of the Acquired Corporation, duly
endorsed in blank with signatures bearing a Medallion Signature Guaranty,
as follows:
Name and Address No. of Shares of Capital
of Shareholder Stock of Acquired Corporation
Julius W. Basham, II 1,725
6176 Laurelwood Drive
Reno, Nevada 89509
Wm. Kim Stimpson 375
3350 Americana Terrace
Suite 350
Boise, Idaho 83706
David W. Brown 375
3350 Americana Terrace
Suite 350
Boise, Idaho 83706
Consideration for Transfer
1.02. In exchange for the number of shares transferred by each Shareholder
pursuant to Paragraph 1.01, Purchaser will issue and cause to be delivered
to each Shareholder, on the Closing Date, in proportion to the number of
shares of capital stock of CyberHighway, Inc., owned by each, an aggregate
of 2,000,000 shares of Purchaser's Common Stock, as follows:
Name and Address No. of Shares of Common
of Shareholder Stock of Purchaser
Julius W. Basham, II 1,394,000
Wm. Kim Stimpson 303,000
David W. Brown 303,000
The Closing - Closing Date
1.03. Subject to the conditions precedent set forth in this Agreement, and
the other obligations of the parties set forth in this Agreement, the Plan
of Reorganization shall be consummated at the offices of CyberHighway,
Inc., 3350 Americana Terrace, Suite 350, Boise, Idaho 83706, on January 29,
1999, at the hour of 2:00 p.m., or at any other place and date as the
parties fix by mutual consent. Consummation shall include the delivery by
the Shareholders of their respective shares of capital stock of the
Acquired Corporation, as provided in Paragraph 1.01 of this Agreement, and
the delivery by the Purchaser of its shares of Common Stock, as provided in
Paragraph 1.02 of this Agreement. The date of the consummation of this
Agreement is referred to as the "Closing Date."
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF
SHAREHOLDERS OF ACQUIRED CORPORATION
Organization and Standing of Acquired Corporation
2.01. CyberHighway, Inc., is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Idaho, with
corporate power to own property and carry on its business as it is now
being conducted. Copies of the Articles of Incorporation of CyberHighway,
Inc., that have been certified by the Secretary of State of Idaho and
delivered to Purchaser, are complete and accurate as of the date of this
Agreement. CyberHighway, Inc., is qualified to transact business as a
foreign corporation and is in good standing in all jurisdictions in which
it carries on business or in which any of its principal properties are
located.
Subsidiaries
2.02. CyberHighway, Inc., has no subsidiaries nor any interest in any
other corporation, firm, partnership or other juridical entity.
Capitalization
2.03. CyberHighway, Inc., has an authorized capitalization of 10,000
shares, all of one class of No Par Value Per Share Common Stock, and, as of
the Closing Date, 2,475 shares are issued and outstanding, fully paid and
non-assessable. There are no outstanding subscriptions, options,
contracts, commitments or demands relating to the authorized but unissued
stock of CyberHighway, Inc., or other agreements of any character under
which CyberHighway, Inc., would be obligated to issue or purchase shares of
its capital stock. Shareholders have waived, and do hereby waive, any
preemptive or prescriptive right to purchase shares of CyberHighway, Inc.,
that they have or may have had in the past.
Ownership of Acquired Corporation's Capital Stock
2.04. Each Shareholder is, on the date of this Agreement, and on the
Closing Date will be, the lawful owner of the shares of capital stock of
CyberHighway, Inc., that is set opposite the Shareholder's name in
Paragraph 1.01 of this Agreement. Each Shareholder has the legal right and
power to sell, assign and transfer the shares of the Shareholder in the
capital stock of CyberHighway, Inc. The delivery of the described shares
to the Purchaser pursuant to the provisions of this Agreement will transfer
valid title to the shares free and clear of all liens, encumbrances, claims
and other restrictions of any kind.
Financial Statements
2.05. (a) Shareholders have delivered to Purchaser the balance sheets of
CyberHighway, Inc., for the years ended January 31, 1996 and 1997, and as
of the eleven months ended December 31, 1998, and the related statements of
income and retained earnings for each of such periods. All the financial
statements described in this Paragraph have been prepared in conformity
with generally accepted accounting principles, applied on a consistent
basis, and present fairly the financial position of CyberHighway, Inc., as
of their respective dates, and as of December 31, 1998, subject to normal
changes resulting from the year-end adjustments to the financial statements
as of January 31, 1999.
(b) Other than changes in the usual and ordinary conduct of the business
since December 31, 1998, there have been, and at the Closing Date there
will be, no materially adverse changes in such financial condition of
CyberHighway, Inc. For purposes of this Agreement, the term "material"
shall mean a change in an amount equal to or exceeding $40,000.
(c) Subject to any changes as a result of the ordinary and usual course
of business, the assets of CyberHighway, Inc., at the Closing Date, will be
substantially those owned by it and shown on its financial statements as of
December 31, 1998.
Operations Since Balance Sheet Date
2.06. Since December 31, 1998, CyberHighway, Inc., has not, and prior to
the Closing Date will not have, without written notice to Purchaser:
(a) Issued or sold any stock, bond or other corporate securities.
(b) Except for current liabilities incurred and obligations entered into
in the ordinary course of business, incurred any absolute or contingent
obligation, including long-term debt.
(c) Except for current liabilities shown on the balance sheet and current
liabilities incurred since that date in the ordinary course of business,
discharged or satisfied any lien or encumbrance, or paid any obligation or
liability.
(d) Mortgaged, pledged or subjected to lien any of its assets.
(e) Except in the ordinary course of business, sold or transferred any of
its tangible assets, or canceled any debts or claims, or waived any rights
of substantial value, exclusive of any claim arising under any unpaid stock
subscriptions agreements.
(f) Sold, assigned or transferred any patents, formulas, trademarks,
trade names, copyrights, licenses, or other intangible assets.
(g) Incurred any materially adverse losses or damage, or become involved
in any strikes or other labor disputes.
(h) Entered into any transaction other than in the ordinary course of
business, except for the transaction that is the subject matter of this
Agreement.
Title to Assets
2.07. The Corporation has good and marketable title to all its assets
specified in the schedule described in Paragraph 2.08, and reflected in the
balance sheet dated December 31, 1998. None of such is subject to any
mortgage, pledge, lien, charge, security interest, encumbrance or
restriction, except those that:
(a) Are disclosed on the balance sheet as securing specified liabilities;
(b) Are disclosed in the Schedule of Assets pursuant to paragraph 2.08; or
(c) Do not materially adversely affect the use of the asset. The
buildings and equipment of CyberHighway, Inc., are in good condition and
repair, except for reasonable wear and tear.
Schedule of Assets
2.08. Prior to the Closing Date, or within forty-five (45) days
thereafter, the Shareholders will have delivered to the Purchaser a
separate Schedule of Assets, specifically referring to this paragraph,
containing a true and complete:
(a) Legal description of all real property owned by CyberHighway, Inc.,
and any real property in which CyberHighway, Inc., has a leasehold interest;
(b) Aged list of accounts receivable as of the Closing Date;
(c) List of all capitalized machinery, tools, equipment and rolling stock
owned by CyberHighway, Inc., that sets forth any liens, claims,
encumbrances, charges, restrictions, covenants and conditions concerning
the listed items;
(d) Description of all machinery, tools, equipment and rolling stock in
which CyberHighway, Inc., has a leasehold interest, with a description of
each interest;
(e) A true and complete list of all patents, patent licenses, trademarks,
trademark registrations, trade names, copyrights, and copyright
registrations owned by CyberHighway, Inc.; and
(f) List of all fire and other casualty and liability policies of
CyberHighway, Inc., in effect at the time of delivery of such schedule.
Indebtedness
2.09. (a) Except as set forth in the balance sheet of CyberHighway, Inc.,
dated December 31, 1998, described in Paragraph 2.05, CyberHighway,
Inc., presently has no outstanding indebtedness other than liabilities
incurred in the ordinary course of business or in connection with this
transaction. CyberHighway, Inc., is not in default with respect to any
terms or conditions of any indebtedness.
(b) CyberHighway, Inc., has not made any assignment for the benefit of
creditors, nor has any involuntary or voluntary petition in bankruptcy been
filed by or against CyberHighway, Inc..
Litigation
2.10. (a) CyberHighway, Inc., is not party to, nor has it been threatened
with, any litigation or governmental proceeding that, if decided adversely
to it, would have a materially adverse affect on the transaction
contemplated by this Agreement, or on the financial condition, net worth,
prospects or business of CyberHighway, Inc. To the best of the
Shareholders' knowledge, they are not aware of any facts that might result
in any action, suit or other proceeding that would result in any material
adverse change in the business or financial condition of CyberHighway,
Inc., except that CyberHighway, Inc., is engaged in a dispute with
networkMCI, Inc., involving a claim against CyberHighway, Inc., of
approximately $60,000.
(b) To the best knowledge of all Shareholders, CyberHighway, Inc., is not
infringing on, or otherwise acting adversely to, any copyrights, trademark
rights, patent rights or licenses owned by any other person, and there is
no pending claim or threatened action with respect to such rights.
CyberHighway, Inc., is not obligated to make any payments in the form of
royalties, fees, or otherwise to any owner or licensor of any patent,
trademark, trade name or copyright.
Compliance With Law and Other Instruments
2.11. To the best knowledge of Shareholders, the business operation of
CyberHighway, Inc., has been, and currently is being, conducted in
accordance with all applicable laws, rules and regulations of all
authorities, including, without limitation, state franchise registration
and/or business opportunity laws and regulations, or laws similar thereto.
CyberHighway, Inc., is not, to the best knowledge of Shareholders, in
violation of, or in default under, any term or provision of its Articles of
Incorporation, its Bylaws or of any lien, mortgage, lease, agreement,
instrument, order, judgment or decree, or any other type of restriction
that would prevent consummation of the exchange of securities contemplated
by this Agreement.
Contractual Obligations
2.12. CyberHighway, Inc., is not a party to, or bound by, any written or
oral:
(a) Contract not disclosed on the December 31, 1998, balance sheet or
made in the ordinary course of business;
(b) Employment or consultant contract that is not terminable at will
without cost or other liability to CyberHighway, Inc., or any successor;
(c) Contract with any labor union;
(d) Other than as disclosed in the Acquired Corporation's 1998 Employee
Manual, bonus, pension, profit-sharing, retirement, stock option,
hospitalization, group insurance or similar plan providing employee benefits;
(e) Any real or personal property lease as lessor;
(f) Other than as contained in CyberHighway's License Agreements and
other than the potential contract with Steele Stolz and Associates to
provide marketing and advertising services to CyberHighway's Boise office,
advertising contract or contract for public relations services;
(g) Other than as disclosed on the enclosed Exhibit "D", deed of trust,
mortgage, conditional sales contract, security agreement, pledge agreement,
trust receipt or any other agreement subjecting any of the assets or
properties of CyberHighway, Inc., to a lien, encumbrance or other restriction;
(h) Contract that contains a redetermination of price or similar type of
provision.
CyberHighway, Inc., has performed all obligations required to be performed
by it to date and is not in material default under any of the contracts,
leases or other arrangements by which it is bound. To the best knowledge
of CyberHighway, Inc., none of the parties with whom CyberHighway, Inc.,
has contractual arrangements are in default of their obligations.
Changes in Compensation
2.13 Since the balance sheet date of December 31, 1998, CyberHighway,
Inc., has not granted any general pay increase to employees or changed the
rate of compensation, commission or bonus payable to any officer, employee,
director, agent or stockholder.
Inventories
2.14 Since the balance sheet date of December 31, 1998, CyberHighway,
Inc., has continued to replenish its inventories in its normal and
customary fashion and will continue to do so until the Closing Date.
Records
2.15. All of the account books, minute books, stock certificate books and
stock transfer ledgers of CyberHighway, Inc., are complete and accurate.
No Brokers or Finders
2.16. All negotiations on the part of the Shareholders related to this
Agreement have been accomplished solely by the Shareholders without the
assistance of any person employed as a broker or finder. The Shareholders
have done nothing to give rise to any valid claims against Purchaser or
CyberHighway, Inc., for a brokerage commission, finder's fee or any similar
charge.
Taxes
2.17. (a) CyberHighway, Inc., has filed all federal income tax returns
and, in each state where qualified or incorporated, all state income tax
and franchise tax returns that are required to be filed. CyberHighway,
Inc., has paid all taxes as shown on the returns as have become due, and
has paid all assessments received that have become due.
(b) Shareholders will indemnify Purchaser for any and all material
deficiencies in prior years' taxes determined against CyberHighway, Inc.
Full Disclosure
2.18. As of the Closing Date, the Shareholders will have disclosed all
events, conditions and facts materially affecting the business and
prospects of CyberHighway, Inc. The Shareholders have not withheld
knowledge of any events, conditions and facts that they have reasonable
ground to know may materially affect the business and prospects of
CyberHighway, Inc. None of the representations and warranties made by the
Shareholders in this Agreement, or set forth in any other instrument
furnished to Purchaser, contain any untrue statement of a material fact,
fail to state material facts or fail to state facts necessary to make the
statements of fact made not misleading.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Organization and Standing of Purchaser
3.01. Purchaser is a corporation duly organized, validly existing and in
good standing under the laws of the State of Nevada, with corporate power
to own property and carry on its business as it is now being conducted.
Copies of the articles of incorporation of Purchaser, that have been
certified by the Secretary of State of Nevada and delivered to the
Shareholders, are complete and accurate as of the date of this Agreement.
Purchaser is not required to be qualified as a foreign corporation to
transact business in any other jurisdiction.
Subsidiaries
3.02. Purchaser owns all of the issued and outstanding capital stock of
(1) Winter Entertainment, Inc., a Delaware corporation, (2) Missouri Cable
TV Corp., a Louisiana corporation and (3) Santa Fe Wireless Internet, Inc.,
a New Mexico corporation, each being duly organized, existing and in good
standing under the laws of their respective states of incorporation, with
corporate power to own property and to carry on business as now conducted.
Capitalization
3.03. Purchaser has an authorized capitalization of 100,000,000 shares of
common stock of the par value of $.0001 per share, of which 8,422,259
shares are issued, outstanding, fully paid and non-assessable as of the
date of this Agreement. Except for 2,550,000 shares of authorized but
unissued stock that are reserved for stock options, issuance upon
conversion of Purchaser securities or issuable as payment for employment,
consulting fees and finder's fees, there are no outstanding options,
contracts, calls, commitments or demands relating to the authorized but
unissued stock of Purchaser.
Financial Statements
3.04. Purchaser has delivered to the Shareholders:
(a) The audited financial statements of Purchaser for the fiscal years
ended December 31, 1996 and 1997. These statements have been audited by
Weaver & Tidwell, LLP, independent certified public accountants.
(b) An unaudited interim balance sheet of the Purchaser and its
subsidiaries as of September 30, 1998, and their related statements of
income and cash flows for the nine months ended September 30, 1998. These
statements are subject to year end audit.
All of the financial statements listed in this paragraph present fairly
the financial condition of Purchaser at the specfied dates and the results
of its operations for the periods specified. The statements were prepared
in accordance with generally accepted accounting principles applied in a
manner consistent with prior accounting periods.
Financial Condition Since Balance Sheet Date
3.05. Since the balance sheet date of September 30, 1998, no change, event
or condition has occurred that materially and adversely affects the
financial condition, assets, business or prospects of Purchaser, to the
knowledge of any of its officers.
Status of Receivables
3.06. None of the accounts receivable or contracts receivable indicated in
the financial statements specified in Paragraph 3.04 that Purchaser has
delivered to the Shareholders is subject to any counterclaim or setoff, and
all such accounts receivable and contracts receivable are current and
collectible at the aggregate recorded amount.
Title to Assets
3.07. All book assets of Purchaser are in existence in its possession, are
in good condition and repair and conform to all applicable laws,
regulations and ordinances. Purchaser has good and marketable title to all
of its assets and, except as shown on its financial statements as of
September 30, 1998, holds such assets subject to no mortgage, lien or
encumbrance.
Status of Transferred Shares
3.08. The shares of Purchaser Common Stock that are to be issued and
delivered to the Shareholders pursuant to the terms of this Agreement will
be validly authorized and issued, and will be fully paid and non-assessable
and will be free and clear of all liens, claims and encumbrances of any
kind or nature. No shareholder of Purchaser will have any preemptive right
of subscription or purchase with respect to the shares to be issued and
delivered. In addition, Purchaser's issuance of the shares of the
Purchaser Common Stock to the Shareholders shall be in compliance with all
securities laws, rules and regulations enacted or otherwise promulgated by
all appropriate federal or state governmental bodies or agencies and shall
be in compliance with any applicable rules and regulations of the National
Association of Securities Dealers, Inc.
Indebtedness
3.09. Except as set forth in the consolidated balance sheet of Purchaser
and its subsidiaries as of September 30, 1998, there is no outstanding
indebtedness, other than liabilities incurred in the ordinary course of
business or in connection with this transaction.
Purchaser and its subsidiaries are not in default with respect to any
terms or conditions of any indebtedness.
Litigation
3.10. (a) Purchaser and its subsidiaries are not a party to, nor have any
of them been threatened with any litigation or governmental proceeding that
could have a materially adverse affect on the transaction contemplated by
this Agreement or on the financial condition of Purchaser or its subsidiaries.
(b) To the best knowledge of Purchaser, Purchaser is not infringing on,
or otherwise acting adversely to, any copyrights, trademark rights, patent
rights or licenses owned by any other person, and there is no pending claim
or threatened action with respect to such rights. Purchaser is not
obligated to make any payments in the form of royalties, fees, or otherwise
to any owner or licensor of any patent, trademark, trade name or copyright.
Compliance With Law and Other Instruments
3.11. To the best knowledge of Purchaser, the business operation of
Purchaser has been, and currently is being, conducted in accordance with
all applicable laws, rules and regulations of all authorities, including,
without limitation, state franchise registration and/or business
opportunity laws and regulations, or laws similar thereto. Purchaser is
not, to the best knowledge of Purchaser, in violation of, or in default
under, any term or provision of its Articles of Incorporation, its Bylaws
or of any lien, mortgage, lease, agreement, instrument, order, judgment or
decree, or any other type of restriction that would prevent consummation of
the exchange of securities contemplated by this Agreement.
Purchaser's Authority
3.12. The execution and performance of this Agreement have been duly
authorized by all requisite corporate action. This Agreement constitutes a
valid and binding obligation of Purchaser, in accordance with its terms.
No provision of the Purchaser's Articles of Incorporation, Bylaws, minutes,
share certificates or contracts prevents Purchaser from delivering good
title to its shares of such Common Stock in the manner contemplated by this
Agreement.
Brokers and Finders
3.13. Purchaser has utilized the services of a finder in connection with
the transaction contemplated by this Agreement. Purchaser will discharge
any claim of such finder for compensation relating to this transaction and
will hold the Shareholders harmless from any such claim.
Taxes
3.14. Purchaser and its subsidiaries have filed all federal income tax
returns and, in each state where qualified or incorporated, all state
income tax or franchise tax returns that are required to be filed, and
have paid all taxes as shown on the returns as they have become due.
Full Disclosure
3.15. As of the Closing Date, Purchaser will have disclosed to the
Shareholders all events, conditions and facts materially affecting the
business and prospects of Purchaser.
Purchaser has not withheld knowledge of any events, conditions or facts it
has reasonable ground to know may materially affect the business and
prospects of Purchaser. None of the representations and warranties made by
the Purchaser in this Agreement or set forth in any other instrument
furnished to the Shareholders contain any untrue statement of a material
fact, fail to state material facts or fail to state facts necessary to make
the statements of fact made not misleading.
Securities and Exchange Commission Reports
3.16 Purchased has delivered to Shareholders true copies of each periodic
report filed with the Securities and Exchange Commission by Purchaser.
ARTICLE 4
CONDUCT OF BUSINESS OF ACQUIRED
CORPORATION PENDING CLOSING DATE
Conduct of Business in Its Ordinary Course
4.01. The Shareholders will cause CyberHighway, Inc., to carry on its
business in substantially the same manner as previous to the date of
execution of this Agreement, and to:
(a) Continue in full force the amount and scope of insurance coverage
carried prior to that date;
(b) Use their best efforts to cause CyberHighway, Inc., to maintain its
business organization and keep it intact, to retain its present employees
and to maintain its goodwill with suppliers, customers and others having
business relationships with it;
(c) Exercise due diligence in safeguarding and maintaining confidential
reports and data used in its business; and
(d) Maintain its assets and properties in good condition and repair, and
not sell or otherwise dispose of any of its assets or properties, except
sales of inventory in the ordinary course of business.
Satisfy Conditions Precedent
4.02. The Shareholders will use their best efforts to cause CyberHighway,
Inc., to satisfy all conditions precedent contained in this Agreement.
Access to Information and Documents
4.03. (a) The Shareholders will cause CyberHighway, Inc., to afford the
officers and representatives of Purchaser, from the date of this Agreement
until consummation of the Plan of Reorganization, full access during normal
business hours to all properties, books, accounts, contracts, commitments
and any other records of any kind of CyberHighway, Inc. Sufficient access
shall be allowed to provide Purchaser with full opportunity to make any
investigation it desires to make of CyberHighway, Inc., and to keep itself
fully informed of the affairs of CyberHighway, Inc.
(b) In addition, the Shareholders will cause CyberHighway, Inc., to
permit Purchaser to make extracts or copies of all such books, accounts,
contracts, commitments and records, and to furnish to Purchaser, on demand,
any further financial and operating data of CyberHighway, Inc., as
Purchaser reasonably requests.
(c) Purchaser will use any information obtained under this paragraph only
for its own purposes in connection with the consummation of the transaction
contemplated by this Agreement, and will not divulge the information to any
other person. In the event the transaction contemplated by this Agreement
is not consummated within thirty (30) days of the date of mutual execution,
all documents or information gathered by Purchaser hereunder will be
returned to CyberHighway, Inc., forthwith.
Negative Covenants
4.04. Except with the prior written consent of Purchaser, the Shareholders
agree that CyberHighway, Inc., will not:
(a) Incur any liabilities, other than current liabilities incurred in the
ordinary course of business;
(b) Incur any mortgage, lien, pledge, hypothecation, charge, encumbrance
or restriction of any kind;
(c) Become a party to any contract, or renew, extend or modify any
existing contract, except in the ordinary course of business;
(d) Make any capital expenditures, except for ordinary repairs,
maintenance and replacement;
(e) Declare or pay any dividend, or make any other distribution, to
shareholders;
(f) Purchase, retire or redeem any shares of its capital stock;
(g) Issue or sell additional shares of its capital stock, whether or not
such shares have been previously authorized or issued;
(h) Issue or sell any warrants, rights or options to acquire any shares
of its capital stock:;
(i) Amend its Articles of Incorporation or Bylaws;
(j) Pay or agree to pay any bonus, increase in compensation, pension or
severance pay to any director, shareholder, officer, consultant, agent or
employee;
(k) Discharge or satisfy any lien or encumbrance, nor pay any obligation
or liability, except current liabilities shown on the balance sheet dated
December 31, 1998, or incurred in the ordinary course of business since
that date;
(l) Merge or consolidate with any other entity;
(m) Enter into any transactions or take any acts that would constitute a
breach of the representations, and warranties contained in this Agreement; and
(n) Institute, settle, or agree to settle any action or proceeding before
any court or governmental body.
Consultation
4.05. CyberHighway, Inc., and each of the Shareholders will consult with
Purchaser at all times until the Closing Date with respect to the operation
and conduct of CyberHighway's business.
ARTICLE 5
CONDUCT OF BUSINESS OF PURCHASER PENDING CLOSING DATE
Conduct of Business in Its Ordinary Course
5.01. Purchaser will carry on its business in substantially the same
manner as before the date of execution of this Agreement.
Satisfy Conditions Precedent
5.02. Purchaser will use its best efforts to satisfy all conditions
precedent contained in this Agreement.
Access to Information and Documents
5.03. (a) Purchaser will provide the Shareholders, from the date of this
Agreement until the consummation of the Plan of Reorganization, full access
during normal business hours to all properties, books, accounts, contracts,
commitments and records of Purchaser. Sufficient access shall be allowed
to provide the Shareholders with full opportunity to make any investigation
they desire to make of Purcvhaser and to keep themselves fully informed of
the affairs of Purchaser.
(b) Purchaser will permit the Shareholders to make extracts or copies of
all books, accounts, contracts, commitments and records. Additionally,
Purchaser will furnish to the Shareholders, within two (2) days after
demand, any further financial and operating data and other information
concerning its business and assets that the Shareholders reasonably request.
(c) The Shareholders may use any information secured pursuant to this
paragraph only for their own purposes in connection with the consummation
of the transaction contemplated by this Agreement and may not divulge the
information to any other persons. Further, the Shareholders acknowledge
that information obtained pursuant to this paragraph may constitute "inside
information" as that term is used in the securities laws of the United
States, and the Shareholders agree that they will neither purchase nor sell
any of the Common Stock of Purchaser on the public markets during the
period of this Agreement, plus three days after the Closing Date.
Negative Covenants
5.04. Except with the prior written consent of the Shareholders, Purchaser
may not declare or pay any dividend or make any other distribution to its
shareholders other than those relating to dividend distributions of the
capital stock of New Wave Media Corp., Argo Petroleum Corporation and
Woodcomm, Inc., heretofore declared and announced.
ARTICLE 6
CONDITIONS PRECEDENT TO OBLIGATIONS OF SHAREHOLDERS
Conditions Precedent to Closing
6.01. The obligations of the Shareholders to consummate the Plan of
Reorganization in this Agreement shall be subject to the conditions
precedent specified in this Article 6.
Truth of Representations and Warranties
and Compliance With Covenants
6.02. The representations and warranties of Purchaser contained in this
Agreement shall be true as of the Closing Date with the same effect as
though made on the Closing Date. Purchaser shall have performed all
obligations and complied with all covenants required by this Agreement to
be performed or complied with by it prior to the Closing Date. Purchaser
shall deliver to the Shareholders a certificate dated as of the Closing
Date and signed by the President or a Vice President and the Secretary or
an Assistant Secretary of Purchaser, certifying the truth of the
representations and warranties.
Employment Agreements
6.03. Each of Julius W. Basham, II, Wm. Kim Stimpson and David W. Brown
shall be employed by the Purchaser or by CyberHighway, Inc., and Purchaser
or CyberHighway, Inc., shall execute, at or prior to the Closing, an
Employment Agreement in the forms attached hereto as Exhibits "A-1", "A-2"
and "A-3", respectively, which agreements are incorporated herein by this
reference the same as if fully copied and set forth at length.
Confidentiality Agreements
6.04. Purchaser and CyberHighway, Inc., shall execute, at or prior to the
Closing, a Confidentiality Agreement in the forms attached hereto as
Exhibits "B-1", "B-2" and "B-3", respectively, which agreements are
incorporated herein by this reference the same as if fully copied and set
forth at length.
Non-Competition Agreements
6.05. Purchaser and CyberHighway, Inc., shall execute, at or prior to the
Closing, an Agreement Not to Compete in the forms attached hereto as
Exhibits "C-1", "C-2" and "C-3", respectively, which agreements are
incorporated herein by this reference the same as if fully copied and set
forth at length.
Election of Julius W. Basham, II, as Director
6.06 The Board of Directors of Purchaser shall have elected Julius W.
Basham, II, as a director of Purchaser, effective immediately upon the
consummation of this Agreement.
Opinion of Counsel for Purchaser
6.07. On the Closing Date, Purchaser shall furnish to the Shareholders an
opinion of counsel for Purchaser, dated the Closing Date, to the effect
that Purchaser is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Nevada and that the shares of
common stock of Purchaser delivered to the Shareholders on the Closing Date
have been duly authorized, issued and delivered and are validly issued and
outstanding, fully paid and non-assessable shares of common stock of
Purchaser.
No Restrictions
6.08. No action or proceeding by any governmental body or agency shall
have been threatened, asserted or instituted to prohibit the consummation
of the transactions contemplated by this Agreement.
ARTICLE 7
CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER
Conditions Precedent to Closing
7.01. The obligations of Purchaser to consummate the Plan of
Reorganization in this Agreement shall be subject to the conditions
precedent specified in this Article 7.
Truth of Representations and Warranties
and Compliance With Covenants
7.02. The representations and warranties of the Shareholders contained in
this Agreement shall be true as of the Closing Date, with the same effect
as though made on the Closing Date. The Shareholders shall have performed
all obligations and complied with all covenants required by this Agreement
to be performed or complied with by them prior to the Closing Date. The
Shareholders shall deliver to Purchaser a certificate dated the Closing
Date and signed by each of the Shareholders, certifying the truth of the
representations and warranties.
Acceptability of Papers and Proceedings
7.03. To the extent requested by Purchaser, the form and substance of all
papers and proceedings under this Agreement shall be acceptable to counsel
for Purchaser.
Opinion of Counsel for Shareholders
7.04. The Shareholders shall deliver to the Purchaser an opinion of
counsel for the Shareholders, referred to as "Counsel", dated the Closing
Date, to the effect that:
(a) CyberHighway, Inc., is a corporation duly organized, validly existing
and in good standing under the laws of the State of Idaho with full
corporate power to carry on the business in which it is engaged;
(b)(i) The shares of capital stock of CyberHighway, Inc., which are the
subject of this Agreement, have been duly authorized and validly issued,
and are fully paid and non-assessable.
(ii) The issuance of shares of Purchaser's Common Stock to the
Shareholders hereunder by Purchaser is exempt from the permit or
registration requirements of the Idaho Securities Act; and
(iii) The shares of capital stock of CyberHighway, Inc., exchanged in
this transaction constitute 100% percent of all of the issued and
outstanding shares of capital stock of CyberHighway, Inc.
(c) The Articles of Incorporation, the Bylaws, the minutes, share
certificates to which CyberHighway, Inc., or any Shareholder is a party do
not prevent any Shareholder from delivering good title to the shares of
such capital stock in the manner specified in this Agreement.
(d) This Agreement is the valid and binding obligation of each
Shareholder in accordance with its terms, except as limited by bankruptcy,
insolvency or other laws affecting the enforcement of creditor's rights;
(e) Counsel has no knowledge of any facts that might adversely affect the
title of the Purchaser to the shares of capital stock of CyberHighway,
Inc., being transferred under this Agreement. Counsel has no knowledge of
any defects or limitations on the title of CyberHighway, Inc., to any of
its assets or properties; and
(f) Counsel has no knowledge of any litigation, or governmental
investigation or labor dispute pending or threatened against CyberHighway,
Inc., its business or properties or the capital stock of CyberHighway,
Inc., transferred under this Agreement. In rendering the opinion specified
in this paragraph, Counsel may rely on certificates of public officials,
cerfificates of officers of CyberHighway, Inc., and the Shareholders, and
any other evidence that is appropriate.
Certified Financial Statements
7.05. Shareholders are not aware of any facts that would prevent an
independent auditor from performing an audit of the financial statements of
CyberHighway, Inc.
Retention of Officers and Directors
7.06. The present officers and directors of CyberHighway, Inc., shall
remain in office subsequent to the Closing and until their earlier
resignation or removal.
Employment Agreements
7.07. Each of Julius W. Basham, II, Wm. Kim Stimpson and David W. Brown
shall be employed by the Purchaser or by CyberHighway, Inc., and shall
execute at, or prior to the Closing, an Employment Agreement in the forms
attached hereto as Exhibits "A-1", "A-2" and "A-3", respectively, which
agreements are incorporated herein by this reference the same as if fully
copied and set forth at length.
Confidentiality Agreements
7.08. Each of Julius W. Basham, II, Wm. Kim Stimpson and David W. Brown
shall execute, at or prior to the Closing, a Confidentiality Agreement in
the forms attached hereto as Exhibits "B-1", "B-2" and "B-3", respectively,
which agreements are incorporated herein by this reference the same as if
fully copied and set forth at length.
Non-Competition Agreements
7.09. Each of Julius W. Basham, II, Wm. Kim Stimpson and David W. Brown
shall execute, at or prior to the Closing, an Agreement Not to Compete in
the forms attached hereto as Exhibits "C-1", "C-2" and "C-3", respectively,
which agreements are incorporated herein by this reference the same as if
fully copied and set forth at length.
Investment Letters
7.10. Each Shareholder shall deliver to the Purchaser an executed written
statement or investment letter as specified in Paragraph 9.01 of this
Agreement and in form and substance acceptable to counsel for the Purchaser.
No Restrictions
7.11. No action or proceeding by any governmental body or agency shall be
threatened, asserted or instituted that prohibits the consummation of the
transactions contemplated by this Agreement.
No Contracts Terminated
7.12. Other than existing Non-Compete Agreements (which include employment
provisions), CyberHighway, Inc., shall not have terminated any contracts
prior to the Closing Date that, in the aggregate would materially and
adversely affect its business.
No Damage to Assets
7.13. At the Closing Date, the machinery, equipment, inventory or other
tangible property of CyberHighway, Inc., shall not be damaged by fire,
flood, accident, labor strife, act of war or any other cause beyond the
reasonable power and control of the CyberHighway, Inc., or the Shareholders
to an extent that substantially affects the value of the property and
assets. Loss or damage shall be considered to affect substantially the
value of the properties and assets within the meaning of this paragraph, if
the book value of the properties and assets lost or damaged exceeds ten
percent (10%) of the total book value of all assets of CyberHighway, Inc..
ARTICLE 8
SURVIVAL OF WARRANTIES AND INDEMNIFICATION
Nature and Survival of Representations and Warranties
8.01. All statements of fact contained in this Agreement, or in any
memorandum, certificate, letter, document or other instrument delivered by
or on behalf of CyberHighway, Inc., Purchaser or the Shareholders pursuant
to this Agreement shall be deemed representations and warranties made by
any such party, respectively, to each other party under this Agreement. The
covenants, representations and warranties of Purchaser and Shareholders
shall survive the Closing Date, and all inspections, examinations, or
audits on behalf of the parties and the Shareholders for a period of one
year following the Closing Date.
Indemnification
8.02. Shareholders agree to indemnify, jointly and severally, and hold the
Purchaser and Acquired Corporation harmless after the date of this
Agreement in respect to any damages as defined in Paragraph 7.02. Damages,
as used in this paragraph, shall include any claim, action, demand, loss,
cost, expense, liability, penalty and other damage, including, but not
limited to, attorney's fees and other costs and expenses incurred
attempting to avoid damages or in enforcing this indemnity, resulting to
the Purchaser or Acquired Corporation from:
(a) Any inaccurate representation made by or on behalf of the
Shareholders in or pursuant to this Agreement;
(b) Breach of any of the warranties by the Shareholders in or pursuant to
this Agreement; or
(c) Breach or default of any of the obligations to be performed by the
Shareholders under this Agreement.
Shareholders shall reimburse Purchaser for any payment made or loss
suffered by Purchaser or Acquired Corporation, at any time after the
Closing Date, based on the judgment of any arbitrator or any court of
competent jurisdiction or pursuant to a bona fide compromise or settlement
of claims, demands or actions with respect to any damages described in this
paragraph.
8.03. Purchaser agrees to indemnify and hold the Shareholders, and each of
them, harmless after the date of this Agreement in respect to any damages
as defined in Paragraph 6.02. Damages, as used in this paragraph, shall
include any claim, action, demand, loss, cost, expense, liability, penalty
and other damage, including, but not limited to, attorney's fees and other
costs and expenses incurred attempting to avoid damages or in enforcing
this indemnity, resulting to the Shareholders, or any of them, from:
(a) Any inaccurate representation made by or on behalf of the Purchaser
in or pursuant to this Agreement;
(b) Breach of any of the warranties by the Purchaser in or pursuant to
this Agreement; or
(c) Breach or default of any of the obligations to be performed by the
Purchaser under this Agreement.
Purchaser shall reimburse Shareholders for any payment made or loss
suffered by Shareholders, or any of them, at any time after the Closing
Date, based on the judgment of any arbitrator or any court of competent
jurisdiction or pursuant to a bona fide compromise or settlement of claims,
demands or actions with respect to any damages described in this paragraph.
Expenses
8.04. Shareholders shall pay all of their own expenses incurred by them
arising out of this Agreement and the transactions contemplated in this
Agreement, including, but not limited to, all fees and expenses of their
counsel and accountants. Whether or not this Agreement is terminated, each
of the parties shall bear all expenses incurred by it or him in connection
with this Agreement and in the consummation of the transactions
contemplated by, and in preparation for, this Agreement.
ARTICLE 9
COMPLIANCE WITH SECURITIES LAWS
Unregistered Stock Under Federal Securities Act
9.01. (a) Each Shareholder acknowledges that the shares of the
Purchaser's Common Stock to be delivered to the Shareholder pursuant to
this Agreement have not been registered under the Securities Act of 1933,
as amended, referred to in this Agreement as the "1933 Act", and that,
therefore, the Purchaser Common Stock is not freely transferable, except as
permitted under various exemptions contained in the 1933 Act and the rules
of the Securities and Exchange Commission under the 1933 Act. The
provisions contained in this paragraph 9.01 are intended to ensure
compliance with the 1933 Act.
(b) Purchaser acknowledges that the shares of the Acquired Corporation's
Common Stock to be delivered by the Shareholders pursuant to this Agreement
have not been registered under the Securities Act of 1933, as amended,
referred to in this Agreement as the "1933 Act", and that, therefore, the
Acquired Corporation's Common Stock is not freely transferable, except as
permitted under various exemptions contained in the 1933 Act and the rules
of the Securities and Exchange Commission under the 1933 Act. The
provisions contained in this paragraph 9.01 are intended to ensure
compliance with the 1933 Act.
No Distribution of Stock to Public
(c) Each Shareholder represents and warrants to the Purchaser that the
Shareholder is acquiring the shares of the Purchaser's Common Stock under
this Agreement for the Shareholder's own account for investment, and not
for the purpose of resale or any other distribution of the shares. Each
Shareholder also represents and warrants that the Shareholder has no
present intention of disposing of all or any part of such shares at any
particular time, for any particular price or on the happening of any
particular circumstances. Each Shareholder acknowledges that the Purchaser
is relying on the truth and accuracy of the warranties and representations
set forth in this paragraph in issuing the shares, without first
registering the shares under the 1933 Act.
(d) Purchaser represents and warrants to the Shareholders that the
Purchaser is acquiring the shares of the Acquired Corporation's Common
Stock under this Agreement for the Purchaser's own account for investment,
and not for the purpose of resale or any other distribution of the shares.
Purchaser also represents and warrants that the Purchaser has no present
intention of disposing of all or any part of such shares at any particular
time, for any particular price or on the happening of any particular
circumstances. Purchaser acknowledges that the Shareholders are relying on
the truth and accuracy of the warranties and representations set forth in
this paragraph in issuing the shares, without first registering the shares
under the 1933 Act.
No Transfers in Violation of the 1933 Act
(e) Each Shareholder covenants and represents that none of the shares of
Purchaser's Common Stock that will be issued to the Shareholder pursuant to
this Agreement will be offered, sold, assigned, pledged, transferred or
otherwise disposed of, except after full compliance with all of the
applicable provisions of the 1933 Act and the rules and regulations of the
Securities and Exchange Commission under the 1933 Act. Therefore, each
Shareholder agrees not to sell or otherwise dispose of any of the shares of
the Purchaser's Common Stock received pursuant to this Agreement, unless
the Shareholder:
(i) Has delivered to the Purchaser a written legal opinion in form and
substance satisfactory to counsel for the Purchaser, to the effect that the
disposition is permissible under the terms of the 1933 Act and regulations
under the 1933 Act;
(ii) Has complied with the registration and prospectus requirements of
the 1933 Act relating to such a disposition; or
(iii) Has presented the Purchaser satisfactory evidence that such a
disposition is exempt from registration under the 1933 Act.
Purchaser shall place a stop transfer order against transfer of shares,
until one of the conditions set forth in this paragraph has been met.
(f) Purchaser covenants and represents that none of the shares of the
Acquired Corporation's Common Stock that will be delivered to the Purchaser
pursuant to this Agreement will be offered, sold, assigned, pledged,
transferred or otherwise disposed of, except after full compliance with all
of the applicable provisions of the 1933 Act and the rules and regulations
of the Securities and Exchange Commission under the 1933 Act.
Investment Legend on Certificates
(g) Each Shareholder agrees that the certificates evidencing the shares
the Shareholder will receive under this Agreement will contain the
following, or substantially similar, legend:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 AND HAVE BEEN TAKEN FOR INVESTMENT. THE
SECURITIES MAY NOT BE SOLD OR OFFERED FOR SALE UNLESS A REGISTRATION
STATEMENT UNDER THE FEDERAL SECURITIES ACT OF 1933, AS AMENDED, IS IN
EFFECT AS TO THE SECURITIES, OR AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF SUCH ACT IS IN FACT APPLICABLE TO SUCH OFFER OR SALE.
(h) Purchaser agrees that the certificates evidencing the shares the
Purchaser will receive under this Agreement will contain the following, or
substantially similar, legend:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 AND HAVE BEEN TAKEN FOR INVESTMENT. THE
SECURITIES MAY NOT BE SOLD OR OFFERED FOR SALE UNLESS A REGISTRATION
STATEMENT UNDER THE FEDERAL SECURITIES ACT OF 1933, AS AMENDED, IS IN
EFFECT AS TO THE SECURITIES, OR AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF SUCH ACT IS IN FACT APPLICABLE TO SUCH OFFER OR SALE.
Indemnification
(i) If, at any time in the future, any of the Shareholders sell or
otherwise dispose of any of such shares of Common Stock received from the
Purchaser without registration under the 1933 Act or any similar federal
statute that may then be in effect, such Shareholder agrees to indemnify
and hold harmless the Purchaser against any claims, liabilities, penalties,
costs and expenses that may be asserted against or suffered by the
Purchaser as a result of such disposition.
(j) If, at any time in the future, Purchaser sells or otherwise disposes
of any of such shares of Common Stock received from the Shareholders
without registration under the 1933 Act or any similar federal statute that
may then be in effect, Purchaser agrees to indemnify and hold harmless the
Shareholders, and each of them, against any claims, liabilities, penalties,
costs and expenses that may be asserted against or suffered by the
Shareholders, or any of them, as a result of such disposition.
ARTICLE 10
TERMINATION
Default
10.01. Purchaser or the Shareholders may, on or at any time prior to the
Closing Date, terminate this Agreement by notice to the other party in the
event:
(a) One party has determined that any material representation of the
other party is untrue;
(b) The other party has defaulted under the Agreement by failing to
perform any of its covenants and agreements contained in this Agreement; and
(c) Each default has not been fully cured within three (3) days after
receipt of the notice specifying particularly the nature of the default.
Delay
10.02. If consummation of the transaction specified in this Agreement has
not occurred by 11:59 p.m., Idaho time, on February 1, 1999, any party that
is not in default in the timely performance of any of its covenants and
conditions may terminate this Agreement subsequent to that time by giving
written notice of termination to the other party. The written notice of
termination shall be effective upon the delivery of the notice in person to
an officer of the party or, if served by mail, upon the receipt of the
notice by such party.
Damage or Loss
10.03. Purchaser may, at its option, terminate this Agreement prior to the
Closing Date, if CyberHighway, Inc., has suffered any damage, destruction
or loss (whether or not covered by insurance) that materially and adversely
affects the property, business or financial condition of CyberHighway, Inc.
Damage, destruction or loss shall be considered materially and adversely
to affect the properties, business or financial condition of CyberHighway,
Inc., if the book or market value (whichever is lower) of the assets
damaged, destroyed or lost exceeds ten percent (10%) in book or market
value (whichever is lower) of all assets of CyberHighway, Inc.
10.04. Shareholders, jointly and not severally, may, at their option,
terminate this Agreement prior to the Closing Date, if Purchaser has
suffered any damage, destruction or loss (whether or not covered by
insurance) that materially and adversely affects the property, business or
financial condition of Purchaser. Damage, destruction or loss shall be
considered materially and adversely to affect the properties, business or
financial condition of Purchaser if the book or market value (whichever is
lower) of the assets damaged, destroyed or lost exceeds ten percent (10%)
in book or market value (whichever is lower) of all assets of Purchaser.
ARTICLE 11
MISCELLANEOUS
Public Announcements
11.01. Purchaser shall have the exclusive right to issue a press release
or otherwise make any public statements with respect to the existence of
this Agreement or the transactions contemplated by this Agreement.
Amendments
11.02. This Agreement may be amended or modified at any time and in any
manner only by an instrument in writing executed by the President of
Purchaser and the Shareholders.
Waiver
11.03. Either Purchaser or any Shareholder may, in writing:
Extension of Time
(a) Extend the time for the performance of any of the obligations of any
other party to the Agreement, including Purchaser, CyberHighway, Inc., or
the Shareholders.
Waiving Inaccuracies
(b) Waive any inaccuracies and misrepresentations contained in this
Agreement or any document delivered pursuant to this Agreement made by any
other party to this Agreement, including Purchaser, CyberHighway, Inc., or
the Shareholders.
Waiving Compliance With Covenants
(c) Waive compliance with any of the covenants or performance of any
obligations contained in this Agreement by any other party to this
Agreement, including Purchaser, CyberHighway, Inc., or the Shareholders.
Waiving Satisfaction of Condition Precedent
(d) Waive the fulfillment of any condition precedent to the performance
by any other party to the Agreement, including Purchaser, CyberHighway,
Inc., or the Shareholders.
Arbitration
11.04. All parties agree that any dispute arising between or among them
related to this Agreement or the performance hereof shall be submitted for
resolution to the American Arbitration Association for arbitration in the
Dallas, Texas, office of the Association under the then-current rules of
arbitration. The Arbitrator or Arbitrators shall have the authority to
award to the prevailing party its reasonable costs and attorneys fees. Any
award of the Arbitrators may be entered as a judgment in any court
competent jurisdiction.
Assignment
11.05. (a) Neither this entire Agreement nor any right created by the
Agreement shall be assignable by either the Shareholders or Purchaser,
without the prior written consent of the other, except by the laws of
succession.
(b) Except as limited by the provisions of paragraph (a), this Agreement
shall be binding on, and inure to the benefit of, the respective successors
and assigns of the parties, as well as the parties.
(c) Nothing in this Agreement, expressed or implied, is intended to
confer upon any person, other than the parties and their successors, any
rights or remedies under this Agreement.
Notices
11.06. Any notice or other communication required or permitted by this
Agreement must be in writing and shall be deemed to be properly given when
delivered in person to each Shareholder or an officer of Purchaser, when
deposited in the United States mails for transmittal by certified or
registered mail, postage prepaid, or when deposited with a public telegraph
company for transmittal, charges prepaid, provided that the communication
is addressed:
(a) In the case of Purchaser, to:
Internet Media Corporation
8748 Quarters Lake Road
Baton Rouge, Louisiana 70809
with a copy to:
Newlan & Newlan, Attorneys at Law
819 Office Park Circle
Lewisville, Texas 75057
(b) In the case of the Shareholders, to:
Julius W. Basham, II
6176 Laurelwood Drive
Reno, Nevada 89509
Wm. Kim Stimpson
Suite 350
3350 Americana Terrace
Boise, Idaho 83706
David W. Brown
Suite 350
3350 Americana Terrace
Boise, Idaho 83706
with a copy to:
Steven R. Weeks, Esquire
Givens Pursley LLP
Suite 200
277 North 6th Street
Boise, Idaho 83702
Paragraph Headings
11.07. Paragraph and other headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
Entire Agreement
11.08. This instrument and the exhibits to this instrument contain the
entire Agreement between the parties with respect to the transaction
contemplated by the Agreement. It may be executed in any number of
counterparts, but the aggregate of the counterparts together constitute
only one and the same instrument.
Effect of Partial Invalidity
11.09. In the event that any one or more of the provisions contained in
this Agreement shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Agreement,
but this Agreement shall be constructed as if it never contained any such
invalid, illegal or unenforceable provisions.
Controlling Law
11.10. The validity, interpretation and performance of this agreement
shall be controlled by and construed under the laws of the State of Idaho,
the State in which this Agreement is being performed.
Specific Performance
11.11. The parties declare that it is impossible to measure in money the
damages that will accrue to a party or its successors as a result of the
other parties' failure to perform any of the obligations under this
Agreement. Therefore, if a party or its successor institutes any action or
proceeding to enforce the provisions of this Agreement, any party opposing
such action or proceeding agrees that specific performance may be sought
and obtained for any breach of this Agreement.
Executed as of the date first above written, at Boise, Idaho, and Baton
Rouge, Louisiana.
INTERNET MEDIA CORPORATION
/s/ Julius W. Basham, II
Julius W. Basham, II
By: /s/ David M. Loflin
David M. Loflin
President /s/ Wm. Kim Stimpson
Wm. Kim Stimpson
/s/ David W. Brown
David W. Brown
<PAGE>
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EXHIBIT 10.1
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EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made by and between Internet
Media Corporation, a duly organized Nevada corporation ("Employer"), and
Julius W. Basham, II, a resident of the State of Nevada ("Employee").
W I T N E S S E T H:
WHEREAS, Employer is in need of persons with expertise in business, in
general, and Internet operations, in particular; and
WHEREAS, Employee has a substantial amount of expertise in Internet
operations, including operations of an Internet Service Provider; and
WHEREAS, Employee is willing to be employed by Employer, and Employer is
willing to employ Employee, on the terms, covenants and conditions
hereinafter set forth; and
WHEREAS, Employer has accumulated valuable and confidential information
including, without limitation, trade secrets and know-how relating to
technology, equipment, marketing plans, acquisition plans, sources of
supply, business strategies and other business records; and
WHEREAS, the giving of the covenants contained herein is a condition
precedent to the employment of Employee by Employer and Employee
acknowledges that the execution of this Agreement and the entering into of
these covenants is an express condition of his employment by Employer and
that said covenants are given in consideration for such employment and the
other benefits conferred upon him by this Agreement; and
NOW, THEREFORE, in consideration of such employment and other valuable
consideration, the receipt and adequacy of which is hereby acknowledged,
Employer and Employee hereby agree as follows:
SECTION I. EMPLOYMENT OF EMPLOYEE
Employer hereby employs, engages and hires Employee as Chief Operating
Officer of Employer, and Employee hereby accepts and agrees to such hiring,
engagement and employment, subject to the general supervision and pursuant
to the orders, advice and direction of the Board of Directors of Employer.
Employee shall perform duties as are customarily performed by one holding
such position in other, same or similar businesses or enterprises as that
engaged in by Employer, and shall also additionally render such other and
unrelated services and duties as may be assigned to him from time to time
by Employer.
Employee shall devote his full-time efforts to the performance of his
duties as Chief Operating Officer of Employer.
SECTION II. EMPLOYEE'S PERFORMANCE
Employee hereby agrees that he will, at all times, faithfully,
industriously and to the best of his ability, experience and talents,
perform all of the duties that may be required of and from him pursuant to
the express and implicit terms hereof, to the reasonable satisfaction of
Employer.
SECTION III. COMPENSATION OF EMPLOYEE
Employer shall pay Employee, and Employee shall accept from Employer, in
full payment for Employee's services hereunder, compensation as follows:
A. Salary. Employee shall be paid as and for a salary the sum of
$81,600.00 per year, which salary shall be payable in equal installments on
the 1st and 15th days of each calendar month, in arrears, subject to
deduction of all lawful and required withholding.
B. Insurance and Other Benefits. As further consideration for the
covenants contained herein, Employer will provide Employee with such
insurance, welfare, sick leave and other benefits as may be established by
Employer from time to time with respect to its employees in accordance with
Employer's established procedures. Employee shall be entitled to
Directors' and Officers' indemnification insurance coverage to the same
extent as is provided to other persons employed as officers of Employer.
C. Other Compensation Plans. Employee shall be entitled to participate,
to the same extent as is provided to other persons employed by Employer, in
any future stock bonus plan, stock option plan or employee stock ownership
plan of Employer.
D. Expenses. It is acknowledged that, during the term of employment,
Employee will be required to incur ordinary and necessary business expenses
on behalf of Employer in connection with the performance of his duties
hereunder. Employer shall reimburse Employee promptly the amount of all
such expenses upon presentation of itemized vouchers or other evidence of
those expenditures. Any single expense item in excess of $1,000.00 shall
be approved by Employer prior to the incurrence of such expense.
E. Vacations. Employee shall be entitled to three (3) weeks paid vacation
each year for the term of this Agreement. Such vacations shall be taken at
such times as Employer designates as to time-of-year. Vacation time can be
accumulated year-to-year up to three years maximum.
SECTION IV. COMPANY POLICIES
Employee agrees to abide by the policies, rules, regulations or usages
applicable to Employee as established by Employer from time to time and
provided to Employee in writing.
SECTION V. CONFIDENTIALITY AGREEMENT; NON-COMPETITION AGREEMENT
A. In consideration of Employer's executing this Agreement, Employee shall
have executed, prior to the execution of this Agreement, a Confidentiality
Agreement (the "Confidentiality Agreement"), in the form attached hereto as
Exhibit "A".
B. In consideration of Employer's executing this Agreement, Employee
agrees, effective as of the date hereof, to sign and be bound by the
obligations of an Agreement Not to Compete (the "Non-Competition
Agreement"), in the form attached hereto as Exhibit "B".
C. The obligations under the Confidentiality Agreement and the
Non-Competition Agreement shall survive the termination of this Agreement.
SECTION VI. RELEASE
In the event Employee becomes entitled to payment pursuant to Section
VII(B) hereof, Employee shall, as a condition to such payments being made,
execute and deliver to Employer a general release in such form as is
reasonably satisfactory to Employer.
SECTION VII. TERM AND TERMINATION
A. Term. The term of this Agreement shall be a period of seven years,
commencing on the Effective Time of the acquisition contemplated by that
certain Plan and Agreement of Reorganization among Employer, Employee, Wm.
Kim Stimpson and David W. Brown, to which a form of this Agreement is
attached as an exhibit, subject, however, to prior termination as
hereinafter provided.
B. Termination. Employer agrees not to terminate this Agreement except
for "just cause", and agrees to give Employee written notice of its belief
that acts or events constituting "just cause" exist. Employee has the
right to cure, within thirty (30) days of Employer's giving of such notice,
the acts, events or conditions which led to Employer's notice. For
purposes of this Agreement, "just cause" shall mean (1) the willful failure
or refusal of Employee to implement or follow the written policies or
directions of Employer's Board of Directors, provided that Employee's
failure or refusal is not based upon Employee's belief in good faith, as
expressed to Employer in writing, that the implementation thereof would be
unlawful; (2) conduct which is inconsistent with Employee's position with
Employer and which results in a material adverse effect (financial or
otherwise) or misappropriation of assets of Employer; (3) conduct which
violates the provisions contained in the Confidentiality Agreement or the
Non-Competition Agreement; (4) the intentional causing of material damage
to Employer's physical property; and (5) any act involving personal
dishonesty or criminal conduct against Employer.
Although Employer retains the right to terminate Employee for any reason
not specified above, Employer agrees that if it discharges Employee for any
reason other than just cause, as is solely defined above, Employee will be
entitled to full compensation, including participation in all benefit
programs, for six (6) months or the remainder of the current term, original
or renewal, as the case may be, of employment, whichever is more.
If Employee should cease his employment hereunder voluntarily for any
reason, or is terminated for just cause, all compensation and benefits
payable to Employee shall thereupon, without any further writing or act,
cease, lapse and be terminated. However, all defined compensation,
benefits and reimbursements which accrued prior to Employee's ceasing
employment or termination, will become immediately due and payable.
Should Employee voluntarily cease his employment, Employee retains the
right to participate for the period of this Agreement in Employee's medical
insurance plan and will be responsible for 100% of the cost of participation.
SECTION VIII. COMPLETE AGREEMENT
This Agreement contains the complete agreement concerning the employment
arrangement between the parties hereto and shall, as of the effective date
hereof, supersede all other agreements between the parties. The parties
hereto stipulate that neither of them has made any representation with
respect to the subject matter of this Agreement or any representations
including the execution and delivery hereof, except such representations as
are specifically set forth herein and each of the parties hereto
acknowledges that he or it has relied on his or its own judgment in
entering into this Agreement. The parties hereto further acknowledge that
any payments or representations that may have heretofore been made by
either of them to the other are of no effect and that neither of them has
relied thereon in connection with his or its dealings with the other.
SECTION IX. WAIVER; MODIFICATION
The waiver by either party of a breach or violation of any provision of
this Agreement shall not operate as, or be construed to be, a waiver of any
subsequent breach hereof. No waiver or modification of this Agreement or
of any covenant, condition or limitation herein contained shall be valid
unless in writing and duly executed by the party to be charged therewith
and no evidence of any waiver or modification shall be offered or received
in evidence of any proceeding or litigation between the parties hereto
arising out of, or affecting, this Agreement, or the rights or obligations
of the parties hereunder, unless such waiver or modification is in writing,
duly executed as aforesaid, and the parties further agree that the
provisions of this Section IX may not be waived except as herein set forth.
SECTION X. SEVERABILITY
All agreements and covenants contained herein are severable, and in the
event any one of them, with the exception of those contained in Sections I,
III, IV and V hereof, shall be held to be invalid in any proceeding or
litigation between the parties, this Agreement shall be interpreted as if
such invalid agreements or covenants were not contained herein.
SECTION XI. NOTICES
Any and all notices will be sufficient if furnished in writing, sent by
registered mail to his last known residence, in case of Employee, or, in
case of Employer, to its principal office address.
SECTION XII. CORPORATE AUTHORITY OF EMPLOYER
The provisions of this Agreement required to be approved by the Board of
Directors of Employer have been so approved and authorized.
SECTION XIII. NO LEGAL DISABILITY OF EMPLOYEE
Employee is under no legal disability with respect to his entering into
this Agreement.
SECTION XIV. COUNTERPARTS
This Agreement may be executed in duplicate counterparts, each of which
shall be deemed an original and, together, shall constitute one and the
same agreement, with one counterpart being delivered to each party hereto.
SECTION XV. BENEFIT
The provisions of this Agreement shall extend to the successors, surviving
corporations and assigns of Employer and to any purchaser of substantially
all of the assets and business of Employer. The term "Employer" shall be
deemed to include any joint venture, partnership, limited liability
company, corporation or other juridical entity, in which Employer shall
have an interest, financial or otherwise.
SECTION XVI. ARBITRATION
The parties agree that any dispute arising between them related to this
Agreement or the performance hereof shall be submitted for resolution to
the American Arbitration Association for arbitration in the Dallas, Texas,
office of the Association under the then-current rules of arbitration. The
Arbitrator or Arbitrators shall have the authority to award to the
prevailing party its reasonable costs and attorneys fees. Any award of the
Arbitrators may be entered as a judgment in any court competent jurisdiction.
Notwithstanding the provisions contained in the foregoing paragraph, the
parties hereto agree that Employer may, at its election and without
delivering the notice to Employee required in Section VII(B) hereof, seek
injunctive or other equitable relief from a court of competent jurisdiction
for a violation or violations by Employee of the Confidentiality Agreement
or the Non-Competition Agreement.
SECTION XVII. GOVERNING LAW
It is the intention of the parties hereto that this Agreement and the
performance hereunder and all suits and special proceedings hereunder be
construed in accordance with and under and pursuant to the laws of the
State of Idaho, and that, in any action, special proceeding or other
proceeding that may be brought arising out of, in connection with or by
reason of this Agreement, the laws of the State of Idaho shall be
applicable and shall govern to the exclusion of the law of any other forum,
without regard to the jurisdiction in which any such action or special
proceeding may be instituted.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
29th day of January, 1999.
"EMPLOYER": "EMPLOYEE":
INTERNET MEDIA CORPORATION
/s/ Julius W. Basham, II
Julius W. Basham, II,
individually
By: /s/ David M. Loflin
David M. Loflin
President
<PAGE>
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EXHIBIT 10.2
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EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made by and between
CyberHighway, Inc., a duly organized Idaho corporation ("Employer"), and
Wm. Kim Stimpson, a resident of the State of Idaho ("Employee").
W I T N E S S E T H:
WHEREAS, Employer is in need of persons with expertise in sales and
Internet operations; and
WHEREAS, Employee has a substantial amount of expertise in sales and
Internet operations, including operations of an Internet Service Provider; and
WHEREAS, Employee is willing to be employed by Employer, and Employer is
willing to employ Employee, on the terms, covenants and conditions
hereinafter set forth; and
WHEREAS, Employer has accumulated valuable and confidential information
including, without limitation, trade secrets and know-how relating to
technology, equipment, marketing plans, acquisition plans, sources of
supply, business strategies and other business records; and
WHEREAS, the giving of the covenants contained herein is a condition
precedent to the employment of Employee by Employer and Employee
acknowledges that the execution of this Agreement and the entering into of
these covenants is an express condition of his employment by Employer and
that said covenants are given in consideration for such employment and the
other benefits conferred upon him by this Agreement; and
NOW, THEREFORE, in consideration of such employment and other valuable
consideration, the receipt and adequacy of which is hereby acknowledged,
Employer and Employee hereby agree as follows:
SECTION I. EMPLOYMENT OF EMPLOYEE
Employer hereby employs, engages and hires Employee as Affiliate Sales
Manager of Employer, and Employee hereby accepts and agrees to such hiring,
engagement and employment, subject to the general supervision and pursuant
to the orders, advice and direction of the Board of Directors of Employer.
Employee shall perform duties as are customarily performed by one holding
such position in other, same or similar businesses or enterprises as that
engaged in by Employer, and shall also additionally render such other and
unrelated services and duties as may be assigned to him from time to time
by Employer.
Employee shall devote his full-time efforts to the performance of his
duties as Affiliate Sales Manager of Employer.
SECTION II. EMPLOYEE'S PERFORMANCE
Employee hereby agrees that he will, at all times, faithfully,
industriously and to the best of his ability, experience and talents,
perform all of the duties that may be required of and from him pursuant to
the express and implicit terms hereof, to the reasonable satisfaction of
Employer.
SECTION III. COMPENSATION OF EMPLOYEE
Employer shall pay Employee, and Employee shall accept from Employer, in
full payment for Employee's services hereunder, compensation as follows:
A. Salary. Employee shall be paid as and for a salary the sum of
$67,800.00 per year, which salary shall be payable in equal installments on
the 1st and 15th days of each calendar month, in arrears, subject to
deduction of all lawful and required withholding.
B. Insurance and Other Benefits. As further consideration for the
covenants contained herein, Employer will provide Employee with such
insurance, welfare, sick leave and other benefits as may be established by
Employer from time to time with respect to its employees in accordance with
Employer's established procedures. Employee shall be entitled to
Directors' and Officers' indemnification insurance coverage to the same
extent as is provided to other persons employed as officers of Employer.
C. Other Compensation Plans. Employee shall be entitled to participate,
to the same extent as is provided to other persons employed by Employer, in
any future stock bonus plan, stock option plan or employee stock ownership
plan of Employer.
D. Expenses. It is acknowledged that, during the term of employment,
Employee will be required to incur ordinary and necessary business expenses
on behalf of Employer in connection with the performance of his duties
hereunder. Employer shall reimburse Employee promptly the amount of all
such expenses upon presentation of itemized vouchers or other evidence of
those expenditures. Any single expense item in excess of $1,000.00 shall
be approved by Employer prior to the incurrence of such expense.
E. Vacations. Employee shall be entitled to three (3) weeks paid vacation
each year for the term of this Agreement. Such vacations shall be taken at
such times as Employer designates as to time-of-year. Vacation time can be
accumulated year-to-year up to three years maximum.
SECTION IV. COMPANY POLICIES
Employee agrees to abide by the policies, rules, regulations or usages
applicable to Employee as established by Employer from time to time and
provided to Employee in writing.
SECTION V. CONFIDENTIALITY AGREEMENT; NON-COMPETITION AGREEMENT
A. In consideration of Employer's executing this Agreement, Employee shall
have executed, prior to the execution of this Agreement, a Confidentiality
Agreement (the "Confidentiality Agreement"), in the form attached hereto as
Exhibit "A".
B. In consideration of Employer's executing this Agreement, Employee
agrees, effective as of the date hereof, to sign and be bound by the
obligations of an Agreement Not to Compete (the "Non-Competition
Agreement"), in the form attached hereto as Exhibit "B".
C. The obligations under the Confidentiality Agreement and the
Non-Competition Agreement shall survive the termination of this Agreement.
SECTION VI. RELEASE
In the event Employee becomes entitled to payment pursuant to Section
VII(B) hereof, Employee shall, as a condition to such payments being made,
execute and deliver to Employer a general release in such form as is
reasonably satisfactory to Employer.
SECTION VII. TERM AND TERMINATION
A. Term. The term of this Agreement shall be a period of three years,
commencing on the Effective Time of the acquisition contemplated by that
certain Plan and Agreement of Reorganization among Internet Media
Corporation, Employee, Julius W. Basham, II and David W. Brown, to which a
form of this Agreement is attached as an exhibit, subject, however, to
prior termination as hereinafter provided. At the expiration date, this
Agreement shall be renewed for additional one-year periods, provided
neither party hereto submits a written notice of termination within sixty
(60) days prior to the termination of either the initial term hereof or any
renewal term.
B. Termination. Employer agrees not to terminate this Agreement except
for "just cause", and agrees to give Employee written notice of its belief
that acts or events constituting "just cause" exist. Employee has the
right to cure, within thirty (30) days of Employer's giving of such notice,
the acts, events or conditions which led to Employer's notice. For
purposes of this Agreement, "just cause" shall mean (1) the willful failure
or refusal of Employee to implement or follow the written policies or
directions of Employer's Board of Directors, provided that Employee's
failure or refusal is not based upon Employee's belief in good faith, as
expressed to Employer in writing, that the implementation thereof would be
unlawful; (2) conduct which is inconsistent with Employee's position with
Employer and which results in a material adverse effect (financial or
otherwise) or misappropriation of assets of Employer; (3) conduct which
violates the provisions contained in the Confidentiality Agreement or the
Non-Competition Agreement; (4) the intentional causing of material damage
to Employer's physical property; and (5) any act involving personal
dishonesty or criminal conduct against Employer.
Although Employer retains the right to terminate Employee for any reason
not specified above, Employer agrees that if it discharges Employee for any
reason other than just cause, as is solely defined above, Employee will be
entitled to full compensation, including participation in all benefit
programs, for six (6) months or the remainder of the current term, original
or renewal, as the case may be, of employment, whichever is more.
If Employee should cease his employment hereunder voluntarily for any
reason, or is terminated for just cause, all compensation and benefits
payable to Employee shall thereupon, without any further writing or act,
cease, lapse and be terminated. However, all defined compensation,
benefits and reimbursements which accrued prior to Employee's ceasing
employment or termination, will become immediately due and payable.
Should Employee voluntarily cease his employment, Employee retains the
right to participate for the period of this Agreement in Employee's medical
insurance plan and will be responsible for 100% of the cost of participation.
SECTION VIII. COMPLETE AGREEMENT
This Agreement contains the complete agreement concerning the employment
arrangement between the parties hereto and shall, as of the effective date
hereof, supersede all other agreements between the parties. The parties
hereto stipulate that neither of them has made any representation with
respect to the subject matter of this Agreement or any representations
including the execution and delivery hereof, except such representations as
are specifically set forth herein and each of the parties hereto
acknowledges that he or it has relied on his or its own judgment in
entering into this Agreement. The parties hereto further acknowledge that
any payments or representations that may have heretofore been made by
either of them to the other are of no effect and that neither of them has
relied thereon in connection with his or its dealings with the other.
SECTION IX. WAIVER; MODIFICATION
The waiver by either party of a breach or violation of any provision of
this Agreement shall not operate as, or be construed to be, a waiver of any
subsequent breach hereof. No waiver or modification of this Agreement or
of any covenant, condition or limitation herein contained shall be valid
unless in writing and duly executed by the party to be charged therewith
and no evidence of any waiver or modification shall be offered or received
in evidence of any proceeding or litigation between the parties hereto
arising out of, or affecting, this Agreement, or the rights or obligations
of the parties hereunder, unless such waiver or modification is in writing,
duly executed as aforesaid, and the parties further agree that the
provisions of this Section IX may not be waived except as herein set forth.
SECTION X. SEVERABILITY
All agreements and covenants contained herein are severable, and in the
event any one of them, with the exception of those contained in Sections I,
III, IV and V hereof, shall be held to be invalid in any proceeding or
litigation between the parties, this Agreement shall be interpreted as if
such invalid agreements or covenants were not contained herein.
SECTION XI. NOTICES
Any and all notices will be sufficient if furnished in writing, sent by
registered mail to his last known residence, in case of Employee, or, in
case of Employer, to its principal office address.
SECTION XII. CORPORATE AUTHORITY OF EMPLOYER
The provisions of this Agreement required to be approved by the Board of
Directors of Employer have been so approved and authorized.
SECTION XIII. NO LEGAL DISABILITY OF EMPLOYEE
Employee is under no legal disability with respect to his entering into
this Agreement.
SECTION XIV. COUNTERPARTS
This Agreement may be executed in duplicate counterparts, each of which
shall be deemed an original and, together, shall constitute one and the
same agreement, with one counterpart being delivered to each party hereto.
SECTION XV. BENEFIT
The provisions of this Agreement shall extend to the successors, surviving
corporations and assigns of Employer and to any purchaser of substantially
all of the assets and business of Employer. The term "Employer" shall be
deemed to include Internet Media Corporation, the parent of Employer, any
joint venture, partnership, limited liability company, corporation or other
juridical entity, in which Employer shall have an interest, financial or
otherwise.
SECTION XVI. ARBITRATION
The parties agree that any dispute arising between them related to this
Agreement or the performance hereof shall be submitted for resolution to
the American Arbitration Association for arbitration in the Dallas, Texas,
office of the Association under the then-current rules of arbitration. The
Arbitrator or Arbitrators shall have the authority to award to the
prevailing party its reasonable costs and attorneys fees. Any award of the
Arbitrators may be entered as a judgment in any court competent jurisdiction.
Notwithstanding the provisions contained in the foregoing paragraph, the
parties hereto agree that Employer may, at its election and without
delivering the notice to Employee required in Section VII(B) hereof, seek
injunctive or other equitable relief from a court of competent jurisdiction
for a violation or violations by Employee of the Confidentiality Agreement
or the Non-Competition Agreement.
SECTION XVII. GOVERNING LAW
It is the intention of the parties hereto that this Agreement and the
performance hereunder and all suits and special proceedings hereunder be
construed in accordance with and under and pursuant to the laws of the
State of Idaho, and that, in any action, special proceeding or other
proceeding that may be brought arising out of, in connection with or by
reason of this Agreement, the laws of the State of Idaho shall be
applicable and shall govern to the exclusion of the law of any other forum,
without regard to the jurisdiction in which any such action or special
proceeding may be instituted.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
29th day of January, 1999.
"EMPLOYER": "EMPLOYEE":
CYBERHIGHWAY, INC.
/s/ Wm. Kim Stimpson
Wm. Kim Stimpson, individually
By: /s/ Julius W. Basham, II
Julius W. Basham, II
President
<PAGE>
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EXHIBIT 10.3
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EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made by and between
CyberHighway, Inc., a duly organized Idaho corporation ("Employer"), and
David W. Brown, a resident of the State of Idaho ("Employee").
W I T N E S S E T H:
WHEREAS, Employer is in need of persons with expertise in computer
networks and Internet operations; and
WHEREAS, Employee has a substantial amount of expertise in computer
networks and Internet operations, including operations of an Internet
Service Provider; and
WHEREAS, Employee is willing to be employed by Employer, and Employer is
willing to employ Employee, on the terms, covenants and conditions
hereinafter set forth; and
WHEREAS, Employer has accumulated valuable and confidential information
including, without limitation, trade secrets and know-how relating to
technology, equipment, marketing plans, acquisition plans, sources of
supply, business strategies and other business records; and
WHEREAS, the giving of the covenants contained herein is a condition
precedent to the employment of Employee by Employer and Employee
acknowledges that the execution of this Agreement and the entering into of
these covenants is an express condition of his employment by Employer and
that said covenants are given in consideration for such employment and the
other benefits conferred upon him by this Agreement; and
NOW, THEREFORE, in consideration of such employment and other valuable
consideration, the receipt and adequacy of which is hereby acknowledged,
Employer and Employee hereby agree as follows:
SECTION I. EMPLOYMENT OF EMPLOYEE
Employer hereby employs, engages and hires Employee as Network Manager of
Employer, and Employee hereby accepts and agrees to such hiring, engagement
and employment, subject to the general supervision and pursuant to the
orders, advice and direction of the Board of Directors of Employer.
Employee shall perform duties as are customarily performed by one holding
such position in other, same or similar businesses or enterprises as that
engaged in by Employer, and shall also additionally render such other and
unrelated services and duties as may be assigned to him from time to time
by Employer.
Employee shall devote his full-time efforts to the performance of his
duties as Network Manager of Employer.
SECTION II. EMPLOYEE'S PERFORMANCE
Employee hereby agrees that he will, at all times, faithfully,
industriously and to the best of his ability, experience and talents,
perform all of the duties that may be required of and from him pursuant to
the express and implicit terms hereof, to the reasonable satisfaction of
Employer.
SECTION III. COMPENSATION OF EMPLOYEE
Employer shall pay Employee, and Employee shall accept from Employer, in
full payment for Employee's services hereunder, compensation as follows:
A. Salary. Employee shall be paid as and for a salary the sum of $69,900
per year, which salary shall be payable in equal installments on the 1st
and 15th days of each calendar month, in arrears, subject to deduction of
all lawful and required withholding.
B. Insurance and Other Benefits. As further consideration for the
covenants contained herein, Employer will provide Employee with such
insurance, welfare, sick leave and other benefits as may be established by
Employer from time to time with respect to its employees in accordance with
Employer's established procedures. Employee shall be entitled to
Directors' and Officers' indemnification insurance coverage to the same
extent as is provided to other persons employed as officers of Employer.
C. Other Compensation Plans. Employee shall be entitled to participate,
to the same extent as is provided to other persons employed by Employer, in
any future stock bonus plan, stock option plan or employee stock ownership
plan of Employer.
D. Expenses. It is acknowledged that, during the term of employment,
Employee will be required to incur ordinary and necessary business expenses
on behalf of Employer in connection with the performance of his duties
hereunder. Employer shall reimburse Employee promptly the amount of all
such expenses upon presentation of itemized vouchers or other evidence of
those expenditures. Any single expense item in excess of $1,000.00 shall
be approved by Employer prior to the incurrence of such expense.
E. Vacations. Employee shall be entitled to three (3) weeks paid vacation
each year for the term of this Agreement. Such vacations shall be taken at
such times as Employer designates as to time-of-year. Vacation time can be
accumulated year-to-year up to three years maximum.
SECTION IV. COMPANY POLICIES
Employee agrees to abide by the policies, rules, regulations or usages
applicable to Employee as established by Employer from time to time and
provided to Employee in writing.
SECTION V. CONFIDENTIALITY AGREEMENT; NON-COMPETITION AGREEMENT
A. In consideration of Employer's executing this Agreement, Employee shall
have executed, prior to the execution of this Agreement, a Confidentiality
Agreement (the "Confidentiality Agreement"), in the form attached hereto as
Exhibit "A".
B. In consideration of Employer's executing this Agreement, Employee
agrees, effective as of the date hereof, to sign and be bound by the
obligations of an Agreement Not to Compete (the "Non-Competition
Agreement"), in the form attached hereto as Exhibit "B".
C. The obligations under the Confidentiality Agreement and the
Non-Competition Agreement shall survive the termination of this Agreement.
SECTION VI. RELEASE
In the event Employee becomes entitled to payment pursuant to Section
VII(B) hereof, Employee shall, as a condition to such payments being made,
execute and deliver to Employer a general release in such form as is
reasonably satisfactory to Employer.
SECTION VII. TERM AND TERMINATION
A. Term. The term of this Agreement shall be a period of three years,
commencing on the Effective Time of the acquisition contemplated by that
certain Plan and Agreement of Reorganization among Internet Media
Corporation, Employee, Julius W. Basham, II and Wm. Kim Stimpson, to which
a form of this Agreement is attached as an exhibit, subject, however, to
prior termination as hereinafter provided. At the expiration date, this
Agreement shall be renewed for additional one-year periods, provided
neither party hereto submits a written notice of termination within sixty
(60) days prior to the termination of either the initial term hereof or any
renewal term.
B. Termination. Employer agrees not to terminate this Agreement except
for "just cause", and agrees to give Employee written notice of its belief
that acts or events constituting "just cause" exist. Employee has the
right to cure, within thirty (30) days of Employer's giving of such notice,
the acts, events or conditions which led to Employer's notice. For
purposes of this Agreement, "just cause" shall mean (1) the willful failure
or refusal of Employee to implement or follow the written policies or
directions of Employer's Board of Directors, provided that Employee's
failure or refusal is not based upon Employee's belief in good faith, as
expressed to Employer in writing, that the implementation thereof would be
unlawful; (2) conduct which is inconsistent with Employee's position with
Employer and which results in a material adverse effect (financial or
otherwise) or misappropriation of assets of Employer; (3) conduct which
violates the provisions contained in the Confidentiality Agreement or the
Non-Competition Agreement; (4) the intentional causing of material damage
to Employer's physical property; and (5) any act involving personal
dishonesty or criminal conduct against Employer.
Although Employer retains the right to terminate Employee for any reason
not specified above, Employer agrees that if it discharges Employee for any
reason other than just cause, as is solely defined above, Employee will be
entitled to full compensation, including participation in all benefit
programs, for six (6) months or the remainder of the current term, original
or renewal, as the case may be, of employment, whichever is more.
If Employee should cease his employment hereunder voluntarily for any
reason, or is terminated for just cause, all compensation and benefits
payable to Employee shall thereupon, without any further writing or act,
cease, lapse and be terminated. However, all defined compensation,
benefits and reimbursements which accrued prior to Employee's ceasing
employment or termination, will become immediately due and payable.
Should Employee voluntarily cease his employment, Employee retains the
right to participate for the period of this Agreement in Employee's medical
insurance plan and will be responsible for 100% of the cost of participation.
SECTION VIII. COMPLETE AGREEMENT
This Agreement contains the complete agreement concerning the employment
arrangement between the parties hereto and shall, as of the effective date
hereof, supersede all other agreements between the parties. The parties
hereto stipulate that neither of them has made any representation with
respect to the subject matter of this Agreement or any representations
including the execution and delivery hereof, except such representations as
are specifically set forth herein and each of the parties hereto
acknowledges that he or it has relied on his or its own judgment in
entering into this Agreement. The parties hereto further acknowledge that
any payments or representations that may have heretofore been made by
either of them to the other are of no effect and that neither of them has
relied thereon in connection with his or its dealings with the other.
SECTION IX. WAIVER; MODIFICATION
The waiver by either party of a breach or violation of any provision of
this Agreement shall not operate as, or be construed to be, a waiver of any
subsequent breach hereof. No waiver or modification of this Agreement or
of any covenant, condition or limitation herein contained shall be valid
unless in writing and duly executed by the party to be charged therewith
and no evidence of any waiver or modification shall be offered or received
in evidence of any proceeding or litigation between the parties hereto
arising out of, or affecting, this Agreement, or the rights or obligations
of the parties hereunder, unless such waiver or modification is in writing,
duly executed as aforesaid, and the parties further agree that the
provisions of this Section IX may not be waived except as herein set forth.
SECTION X. SEVERABILITY
All agreements and covenants contained herein are severable, and in the
event any one of them, with the exception of those contained in Sections I,
III, IV and V hereof, shall be held to be invalid in any proceeding or
litigation between the parties, this Agreement shall be interpreted as if
such invalid agreements or covenants were not contained herein.
SECTION XI. NOTICES
Any and all notices will be sufficient if furnished in writing, sent by
registered mail to his last known residence, in case of Employee, or, in
case of Employer, to its principal office address.
SECTION XII. CORPORATE AUTHORITY OF EMPLOYER
The provisions of this Agreement required to be approved by the Board of
Directors of Employer have been so approved and authorized.
SECTION XIII. NO LEGAL DISABILITY OF EMPLOYEE
Employee is under no legal disability with respect to his entering into
this Agreement.
SECTION XIV. COUNTERPARTS
This Agreement may be executed in duplicate counterparts, each of which
shall be deemed an original and, together, shall constitute one and the
same agreement, with one counterpart being delivered to each party hereto.
SECTION XV. BENEFIT
The provisions of this Agreement shall extend to the successors, surviving
corporations and assigns of Employer and to any purchaser of substantially
all of the assets and business of Employer. The term "Employer" shall be
deemed to include Internet Media Corporation, the parent of Employer, any
joint venture, partnership, limited liability company, corporation or other
juridical entity, in which Employer shall have an interest, financial or
otherwise.
SECTION XVI. ARBITRATION
The parties agree that any dispute arising between them related to this
Agreement or the performance hereof shall be submitted for resolution to
the American Arbitration Association for arbitration in the Dallas, Texas,
office of the Association under the then-current rules of arbitration. The
Arbitrator or Arbitrators shall have the authority to award to the
prevailing party its reasonable costs and attorneys fees. Any award of the
Arbitrators may be entered as a judgment in any court competent jurisdiction.
Notwithstanding the provisions contained in the foregoing paragraph, the
parties hereto agree that Employer may, at its election and without
delivering the notice to Employee required in Section VII(B) hereof, seek
injunctive or other equitable relief from a court of competent jurisdiction
for a violation or violations by Employee of the Confidentiality Agreement
or the Non-Competition Agreement.
SECTION XVII. GOVERNING LAW
It is the intention of the parties hereto that this Agreement and the
performance hereunder and all suits and special proceedings hereunder be
construed in accordance with and under and pursuant to the laws of the
State of Idaho, and that, in any action, special proceeding or other
proceeding that may be brought arising out of, in connection with or by
reason of this Agreement, the laws of the State of Idaho shall be
applicable and shall govern to the exclusion of the law of any other forum,
without regard to the jurisdiction in which any such action or special
proceeding may be instituted.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
29th day of January, 1999.
"EMPLOYER": "EMPLOYEE":
CYBERHIGHWAY, INC.
/s/ David W. Brown
David W. Brown, individually
By: /s/ Julius W. Basham, II
Julius W. Basham, II
President
<PAGE>
- -------------------
EXHIBIT 10.4
- -------------------
January 29, 1999
Internet Media Corporation
8748 Quarters Lake Road
Baton Rouge, Louisiana 70809
Re: Confidentiality Agreement
Gentlemen:
In connection with the execution of an employment agreement (the
"Employment Agreement") between the undersigned and Internet Media
Corporation (together with affiliates, including CyberHighway, Inc., the
"Company"), the Company will furnish each to the undersigned certain
information concerning its business, financial position, operations,
business contacts, assets and liabilities, as well as certain items of
equipment useful in the Wireless Internet access business. As a condition
to such information's being furnished to the undersigned and as a condition
to the undersigned's entering into an employment agreement with the
Company, the undersigned agrees to treat any information concerning the
Company (whether prepared by the Company, its advisors, or otherwise, and
irrespective of the form of communication) which is furnished to the
undersigned now or in the future by or on behalf of the Company (together
with the material described below, herein collectively referred to as the
"Confidential Material") in accordance with the provisions of this letter
agreement, and to take or abstain from taking certain other actions
hereinafter set forth.
The undersigned understands that the term "Confidential Material" also
includes all notes, analysis, compilations, studies, interpretations or
other documents prepared by the Company or its representatives which
contain, reflect or are based upon, in whole or in part, the information
furnished to the undersigned. The term "Confidential Material" does not
include information which (A) is or becomes generally available to the
public other than as a result of a disclosure by the undersigned, or (B)
was lawfully within the undersigned's possession prior to its being
furnished to the undersigned by or on behalf of the Company, provided that
the source of such information was not known by the undersigned to be bound
by a confidentiality agreement with, or other contractual, legal or
fiduciary obligation of confidentiality to, the Company or any other party
with respect to such information, or (C) is disclosed to the undersigned by
a third party, provided that such third party was not known by the
undersigned to be bound by a confidentiality agreement with, or other
contractual, legal or fiduciary obligation of confidentiality to, the
Company or any other party with respect to such information.
The undersigned hereby agrees that he will use the Confidential Material
solely in connection with the undersigned's performance of his duties under
the employment agreement, that the Confidential Material will be kept
confidential and that the undersigned will not disclose any of the
Confidential Material in any manner whatsoever.
The undersigned hereby agrees that he shall not reverse engineer, reverse
assemble or otherwise attempt to recreate or duplicate any model or working
model capable of performing the functions of any portion or all of the
Company's Wireless Internet access system included in the Confidential
Material.
In addition, the undersigned agrees that, without the prior written
consent of the Company, the undersigned will not disclose to any other
person the fact that the Confidential Material has been made available to
the undersigned, that discussions or negotiations are taking place
concerning a possible transaction involving the Company, or any of the
terms, conditions or other facts with respect thereto (including the status
thereof), unless, in the opinion of the undersigned's counsel, such
disclosure must be made by the undersigned in order that the undersigned
not commit a violation of law. The term "person" as used in this letter
agreement shall be broadly interpreted to include the media and any
corporation, partnership, group, individual or other entity, but shall not
include the Securities and Exchange Commission or the Federal Trade
Commission as to any required filing with either such agency.
In the event that the undersigned is requested or required (by oral
questions, interrogatories, requests for information or documents in legal
proceedings, subpoena, civil investigative demand or other similar process)
to disclose any of the Confidential Material, the undersigned will provide
the Company with prompt written notice of any such request or requirement
so that the Company may seek a protective order or other appropriate remedy
and/or waive compliance with the provisions of this letter agreement. If,
in the absence of a protective order or other remedy or the receipt of a
waiver by the Company, the undersigned is, nonetheless, in the opinion of
counsel, legally compelled to disclose Confidential Material, the
undersigned may, without liability hereunder, disclose only that portion of
the Confidential Material specifically required by an order of Court.
Additionally, the undersigned shall make every reasonable effort and take
every reasonable action, including, without limitation, by cooperating with
the Company, to obtain an appropriate protective order or other reliable
assurance that confidential treatment will be accorded the Confidential
Material.
Upon termination of the Employment Agreement or at any time upon the
request of the Company, the undersigned will promptly deliver to the
Company or certify destruction of, at the Company's direction, all
Confidential Material (and all copies thereof) furnished to the undersigned
by or on behalf of the Company pursuant hereto. All oral Confidential
Material provided to the undersigned shall continue to be held confidential
hereunder. Notwithstanding the return or destruction of the Confidential
Material, the undersigned will continue to be bound by obligations of
confidentiality hereunder.
The undersigned agrees that the Company, without prejudice to any rights
to judicial relief he may otherwise have, shall be entitled to equitable
relief, including injunctive relief and specific performance, in the event
of any breach of the provisions of this letter agreement and that the
undersigned will not oppose the granting of such relief. The undersigned
also agrees that he will not seek and agrees to waive any requirement for
the securing and posting of a bond in connection with the Company's seeking
or obtaining such relief. In the event of litigation relating to this
letter agreement, if a court of competent jurisdiction determines that the
undersigned has breached this letter agreement, then the undersigned will
be liable to pay to the Company the reasonable legal fees incurred in
connection with such litigation, including any appeal therefrom. Also, in
the event a court of competent jurisdiction determines that the undersigned
has not breached this letter agreement, then the Company will be liable to
pay to the undersigned the reasonable legal fees incurred in connection
with such litigation, including any appeal therefrom.
This letter agreement is for the benefit of the Company, and shall be
construed (both as to validity and performance) and enforced in accordance
with, and governed by, the laws of the State of Idaho applicable to
agreements made and to be performed wholly within such jurisdiction. This
letter agreement shall remain in full force and effect until terminated by
the Company.
Please confirm your agreement with the foregoing by signing and returning
one copy of this letter to the undersigned whereupon this letter agreement
shall become a binding agreement.
Very truly yours,
/s/ Julius W. Basham, II
Julius W. Basham, II
AGREED AND ACCEPTED as
of the date first written above:
INTERNET MEDIA CORPORATION
By: /s/ David M. Loflin
David M. Loflin
President
<PAGE>
- --------------------
EXHIBIT 10.5
- --------------------
January 29, 1999
CyberHighway, Inc.
3350 Americana Terrace
Suite 350
Boise, Idaho 83706
Re: Confidentiality Agreement
Gentlemen:
In connection with the execution of an employment agreement (the
"Employment Agreement") between the undersigned and CyberHighway, Inc.
(together with affiliates, including Internet Media Corporation, the
"Company"), the Company will furnish each to the undersigned certain
information concerning its business, financial position, operations,
business contacts, assets and liabilities, as well as certain items of
equipment useful in the Wireless Internet access business. As a condition
to such information's being furnished to the undersigned and as a condition
to the undersigned's entering into an employment agreement with the
Company, the undersigned agrees to treat any information concerning the
Company (whether prepared by the Company, its advisors, or otherwise, and
irrespective of the form of communication) which is furnished to the
undersigned now or in the future by or on behalf of the Company (together
with the material described below, herein collectively referred to as the
"Confidential Material") in accordance with the provisions of this letter
agreement, and to take or abstain from taking certain other actions
hereinafter set forth.
The undersigned understands that the term "Confidential Material" also
includes all notes, analysis, compilations, studies, interpretations or
other documents prepared by the Company or its representatives which
contain, reflect or are based upon, in whole or in part, the information
furnished to the undersigned. The term "Confidential Material" does not
include information which (A) is or becomes generally available to the
public other than as a result of a disclosure by the undersigned, or (B)
was lawfully within the undersigned's possession prior to its being
furnished to the undersigned by or on behalf of the Company, provided that
the source of such information was not known by the undersigned to be bound
by a confidentiality agreement with, or other contractual, legal or
fiduciary obligation of confidentiality to, the Company or any other party
with respect to such information, or (C) is disclosed to the undersigned by
a third party, provided that such third party was not known by the
undersigned to be bound by a confidentiality agreement with, or other
contractual, legal or fiduciary obligation of confidentiality to, the
Company or any other party with respect to such information.
The undersigned hereby agrees that he will use the Confidential Material
solely in connection with the undersigned's performance of his duties under
the employment agreement, that the Confidential Material will be kept
confidential and that the undersigned will not disclose any of the
Confidential Material in any manner whatsoever.
The undersigned hereby agrees that he shall not reverse engineer, reverse
assemble or otherwise attempt to recreate or duplicate any model or working
model capable of performing the functions of any portion or all of the
Company's Wireless Internet access system included in the Confidential
Material.
In addition, the undersigned agrees that, without the prior written
consent of the Company, the undersigned will not disclose to any other
person the fact that the Confidential Material has been made available to
the undersigned, that discussions or negotiations are taking place
concerning a possible transaction involving the Company, or any of the
terms, conditions or other facts with respect thereto (including the status
thereof), unless, in the opinion of the undersigned's counsel, such
disclosure must be made by the undersigned in order that the undersigned
not commit a violation of law. The term "person" as used in this letter
agreement shall be broadly interpreted to include the media and any
corporation, partnership, group, individual or other entity, but shall not
include the Securities and Exchange Commission or the Federal Trade
Commission as to any required filing with either such agency.
In the event that the undersigned is requested or required (by oral
questions, interrogatories, requests for information or documents in legal
proceedings, subpoena, civil investigative demand or other similar process)
to disclose any of the Confidential Material, the undersigned will provide
the Company with prompt written notice of any such request or requirement
so that the Company may seek a protective order or other appropriate remedy
and/or waive compliance with the provisions of this letter agreement. If,
in the absence of a protective order or other remedy or the receipt of a
waiver by the Company, the undersigned is, nonetheless, in the opinion of
counsel, legally compelled to disclose Confidential Material, the
undersigned may, without liability hereunder, disclose only that portion of
the Confidential Material specifically required by an order of Court.
Additionally, the undersigned shall make every reasonable effort and take
every reasonable action, including, without limitation, by cooperating with
the Company, to obtain an appropriate protective order or other reliable
assurance that confidential treatment will be accorded the Confidential
Material.
Upon termination of the Employment Agreement or at any time upon the
request of the Company, the undersigned will promptly deliver to the
Company or certify destruction of, at the Company's direction, all
Confidential Material (and all copies thereof) furnished to the undersigned
by or on behalf of the Company pursuant hereto. All oral Confidential
Material provided to the undersigned shall continue to be held confidential
hereunder. Notwithstanding the return or destruction of the Confidential
Material, the undersigned will continue to be bound by obligations of
confidentiality hereunder.
The undersigned agrees that the Company, without prejudice to any rights
to judicial relief he may otherwise have, shall be entitled to equitable
relief, including injunctive relief and specific performance, in the event
of any breach of the provisions of this letter agreement and that the
undersigned will not oppose the granting of such relief. The undersigned
also agrees that he will not seek and agrees to waive any requirement for
the securing and posting of a bond in connection with the Company's seeking
or obtaining such relief. In the event of litigation relating to this
letter agreement, if a court of competent jurisdiction determines that the
undersigned has breached this letter agreement, then the undersigned will
be liable to pay to the Company the reasonable legal fees incurred in
connection with such litigation, including any appeal therefrom. Also, in
the event a court of competent jurisdiction determines that the undersigned
has not breached this letter agreement, then the Company will be liable to
pay to the undersigned the reasonable legal fees incurred in connection
with such litigation, including any appeal therefrom.
This letter agreement is for the benefit of the Company, and shall be
construed (both as to validity and performance) and enforced in accordance
with, and governed by, the laws of the State of Idaho applicable to
agreements made and to be performed wholly within such jurisdiction. This
letter agreement shall remain in full force and effect until terminated by
the Company.
Please confirm your agreement with the foregoing by signing and returning
one copy of this letter to the undersigned whereupon this letter agreement
shall become a binding agreement.
Very truly yours,
/s/ Wm. Kim Stimpson
Wm. Kim Stimpson
AGREED AND ACCEPTED as
of the date first written above:
CYBERHIGHWAY, INC.
By: /s/ Julius W. Basham, II
Julius W. Basham, II
President
<PAGE>
- --------------------
EXHIBIT 10.6
- --------------------
January 29, 1999
CyberHighway, Inc.
3350 Americana Terrace
Suite 350
Boise, Idaho 83706
Re: Confidentiality Agreement
Gentlemen:
In connection with the execution of an employment agreement (the
"Employment Agreement") between the undersigned and CyberHighway, Inc.
(together with affiliates, including Internet Media Corporation, the
"Company"), the Company will furnish each to the undersigned certain
information concerning its business, financial position, operations,
business contacts, assets and liabilities, as well as certain items of
equipment useful in the Wireless Internet access business. As a condition
to such information's being furnished to the undersigned and as a condition
to the undersigned's entering into an employment agreement with the
Company, the undersigned agrees to treat any information concerning the
Company (whether prepared by the Company, its advisors, or otherwise, and
irrespective of the form of communication) which is furnished to the
undersigned now or in the future by or on behalf of the Company (together
with the material described below, herein collectively referred to as the
"Confidential Material") in accordance with the provisions of this letter
agreement, and to take or abstain from taking certain other actions
hereinafter set forth.
The undersigned understands that the term "Confidential Material" also
includes all notes, analysis, compilations, studies, interpretations or
other documents prepared by the Company or its representatives which
contain, reflect or are based upon, in whole or in part, the information
furnished to the undersigned. The term "Confidential Material" does not
include information which (A) is or becomes generally available to the
public other than as a result of a disclosure by the undersigned, or (B)
was lawfully within the undersigned's possession prior to its being
furnished to the undersigned by or on behalf of the Company, provided that
the source of such information was not known by the undersigned to be bound
by a confidentiality agreement with, or other contractual, legal or
fiduciary obligation of confidentiality to, the Company or any other party
with respect to such information, or (C) is disclosed to the undersigned by
a third party, provided that such third party was not known by the
undersigned to be bound by a confidentiality agreement with, or other
contractual, legal or fiduciary obligation of confidentiality to, the
Company or any other party with respect to such information.
The undersigned hereby agrees that he will use the Confidential Material
solely in connection with the undersigned's performance of his duties under
the employment agreement, that the Confidential Material will be kept
confidential and that the undersigned will not disclose any of the
Confidential Material in any manner whatsoever.
The undersigned hereby agrees that he shall not reverse engineer, reverse
assemble or otherwise attempt to recreate or duplicate any model or working
model capable of performing the functions of any portion or all of the
Company's Wireless Internet access system included in the Confidential
Material.
In addition, the undersigned agrees that, without the prior written
consent of the Company, the undersigned will not disclose to any other
person the fact that the Confidential Material has been made available to
the undersigned, that discussions or negotiations are taking place
concerning a possible transaction involving the Company, or any of the
terms, conditions or other facts with respect thereto (including the status
thereof), unless, in the opinion of the undersigned's counsel, such
disclosure must be made by the undersigned in order that the undersigned
not commit a violation of law. The term "person" as used in this letter
agreement shall be broadly interpreted to include the media and any
corporation, partnership, group, individual or other entity, but shall not
include the Securities and Exchange Commission or the Federal Trade
Commission as to any required filing with either such agency.
In the event that the undersigned is requested or required (by oral
questions, interrogatories, requests for information or documents in legal
proceedings, subpoena, civil investigative demand or other similar process)
to disclose any of the Confidential Material, the undersigned will provide
the Company with prompt written notice of any such request or requirement
so that the Company may seek a protective order or other appropriate remedy
and/or waive compliance with the provisions of this letter agreement. If,
in the absence of a protective order or other remedy or the receipt of a
waiver by the Company, the undersigned is, nonetheless, in the opinion of
counsel, legally compelled to disclose Confidential Material, the
undersigned may, without liability hereunder, disclose only that portion of
the Confidential Material specifically required by an order of Court.
Additionally, the undersigned shall make every reasonable effort and take
every reasonable action, including, without limitation, by cooperating with
the Company, to obtain an appropriate protective order or other reliable
assurance that confidential treatment will be accorded the Confidential
Material.
Upon termination of the Employment Agreement or at any time upon the
request of the Company, the undersigned will promptly deliver to the
Company or certify destruction of, at the Company's direction, all
Confidential Material (and all copies thereof) furnished to the undersigned
by or on behalf of the Company pursuant hereto. All oral Confidential
Material provided to the undersigned shall continue to be held confidential
hereunder. Notwithstanding the return or destruction of the Confidential
Material, the undersigned will continue to be bound by obligations of
confidentiality hereunder.
The undersigned agrees that the Company, without prejudice to any rights
to judicial relief he may otherwise have, shall be entitled to equitable
relief, including injunctive relief and specific performance, in the event
of any breach of the provisions of this letter agreement and that the
undersigned will not oppose the granting of such relief. The undersigned
also agrees that he will not seek and agrees to waive any requirement for
the securing and posting of a bond in connection with the Company's seeking
or obtaining such relief. In the event of litigation relating to this
letter agreement, if a court of competent jurisdiction determines that the
undersigned has breached this letter agreement, then the undersigned will
be liable to pay to the Company the reasonable legal fees incurred in
connection with such litigation, including any appeal therefrom. Also, in
the event a court of competent jurisdiction determines that the undersigned
has not breached this letter agreement, then the Company will be liable to
pay to the undersigned the reasonable legal fees incurred in connection
with such litigation, including any appeal therefrom.
This letter agreement is for the benefit of the Company, and shall be
construed (both as to validity and performance) and enforced in accordance
with, and governed by, the laws of the State of Idaho applicable to
agreements made and to be performed wholly within such jurisdiction. This
letter agreement shall remain in full force and effect until terminated by
the Company.
Please confirm your agreement with the foregoing by signing and returning
one copy of this letter to the undersigned whereupon this letter agreement
shall become a binding agreement.
Very truly yours,
/s/ David W. Brown
David W. Brown
AGREED AND ACCEPTED as
of the date first written above:
CYBERHIGHWAY, INC.
By: /s/ Julius W. Basham, II
Julius W. Basham, II
President
<PAGE>
- --------------------
EXHIBIT 10.7
- --------------------
AGREEMENT NOT TO COMPETE
THIS AGREEMENT NOT TO COMPETE is entered into by and between Internet
Media Corporation, a Nevada corporation ("Employer"), and Julius W. Basham,
II ("Employee").
WHEREAS, Employee is employed by Employer as Chief Operating Officer,
pursuant to an employment agreement (the "Employment Agreement"); and
WHEREAS, as a condition to such Employment Agreement, Employee has agreed
to sign and be bound by this Agreement Not to Compete; and
NOW, THEREFORE, the parties agree as follows:
Section 1. Covenant Not to Compete. Employee acknowledges that, as a key
management employee of Employer, Employee will be involved, on a high
level, in the development, implementation and management of the national
and international business strategies and plans of Employer, which shall
consist of Employer and such other business, units, divisions, subsidiaries
or other entities of Employer, as Employer shall determine in its sole
discretion from time to time. By virtue of Employee's unique and sensitive
position and special background, employment of Employee by a competitor of
Employer represents a serious competitive danger to Employer, and the use
of Employee's talent and knowledge and information about Employer's
business, strategies and plans can and would constitute a valuable
competitive advantage over Employer. In view of the foregoing, Employee
covenants and agrees that, if Employee's employment with Employer is
terminated for any reason at any time, for a period of one year after the
date of such termination, Employee will not, except as set forth in Section
1A below, engage or be engaged, in any capacity, directly or indirectly,
including, but not limited to, as employee, agent, consultant, manager,
executive, owner or stockholder (except as a passive investor holding less
than 1% equity interest in any enterprise the securities of which are
publicly traded) in any business entity engaged in competition with any
business conducted by Employer on the date of termination. This Agreement
Not to Compete shall survive the termination or expiration of the
Employment Agreement. If any court determines that this Agreement Not to
Compete, or any part hereof, is unenforceable because the duration or
geographic scope of such provision, such court shall have the power to
reduce the duration or scope of such provision, as the case may be, and, in
its reduced form, such provision shall then be enforceable.
Section 1A. Exceptions. There are excepted from the prohibited
activities set forth in Section 1 above, the engagement by Employee in
business activities related to his interests in Family Online Network,
Inc., and Akers & Waterman and Associates. Additionally, any other
business ventures of Employee, participation in which is approved in
writing by Employer, is excepted from the prohibitions of Section 1 above.
Section 2. Continuing Obligations. Employee agrees that, for one year
following his termination of employment with Employer, Employee shall keep
Employer informed of the identification of Employee's employer and the
nature of such employment or of Employee's self-employment. Employer
agrees that, within fifteen days after receiving notice pursuant to this
Section 2 of the identification of the prospective employer, the nature of
the employment or self-employment or any change therein, Employer will
advise Employee as to whether such employment constitutes a violation of
Section 1 hereof.
Section 3. Injunctive Relief. Employee acknowledges that the violation
of the covenants contained in this Agreement would be detrimental and cause
irreparable injury to Employer and its affiliates which could not be
compensated by money damages. Employee agrees that an injunction from a
court of competent jurisdiction is the appropriate remedy for these
provisions, and consents to the entry of an appropriate judgment enjoining
Employee from violating these provisions in the event there is a find of
their breach.
Section 4. Severability of Covenants. Each of the covenants contained in
this Agreement are independent covenants, which may be available to or
relied upon by Employer and its affiliates in any court of competent
jurisdiction. If any one of the separate and independent covenants shall
be deemed to be unenforceable under the laws of any state of competent
jurisdiction, each of the remaining covenants shall not be affected
thereby. Notwithstanding the provisions of this Section 4, it is
understood that every benefit received by Employee by virtue of this
Agreement is consideration for each separate covenant contained herein.
Section 5. Governing Law. This Agreement shall be governed by the laws
of the State of Idaho.
Section 6. Other Remedies. The undertakings herein shall not be
construed as any limitation upon the remedies Employer might, in the
absence of this Agreement, have at law or in equity.
INTENDING to be legally bound hereby, Employer and Employee hereby duly
execute this Agreement Not to Compete on the date indicated below.
EMPLOYER:
INTERNET MEDIA CORPORATION
Date: January 29, 1999 By: /s/ David M. Loflin
David M. Loflin, President
EMPLOYEE:
Date: January 29, 1999 /s/ Julius W. Basham, II
Julius W. Basham, II,
individually
<PAGE>
- -------------------
EXHIBIT 10.8
- -------------------
AGREEMENT NOT TO COMPETE
THIS AGREEMENT NOT TO COMPETE is entered into by and between CyberHighway,
Inc., an Idaho corporation ("Employer"), and Wm. Kim Stimpson ("Employee").
WHEREAS, Employee is employed by Employer as Affiliate Sales Manager,
pursuant to an employment agreement (the "Employment Agreement"); and
WHEREAS, as a condition to such Employment Agreement, Employee has agreed
to sign and be bound by this Agreement Not to Compete; and
NOW, THEREFORE, the parties agree as follows:
Section 1. Covenant Not to Compete. Employee acknowledges that, as a key
management employee of Employer, Employee will be involved, on a high
level, in the development, implementation and management of the national
and international business strategies and plans of Employer, which shall
consist of Employer, the parent of Employer, Internet Media Corporation,
and such other business, units, divisions, subsidiaries or other entities
of Employer and the parent of Employer, as Employer shall determine in its
sole discretion from time to time. By virtue of Employee's unique and
sensitive position and special background, employment of Employee by a
competitor of Employer represents a serious competitive danger to Employer,
and the use of Employee's talent and knowledge and information about
Employer's business, strategies and plans can and would constitute a
valuable competitive advantage over Employer. In view of the foregoing,
Employee covenants and agrees that, if Employee's employment with Employer
is terminated for any reason at any time, for a period of one year after
the date of such termination, Employee will not engage or be engaged, in
any capacity, directly or indirectly, including, but not limited to, as
employee, agent, consultant, manager, executive, owner or stockholder
(except as a passive investor holding less than 1% equity interest in any
enterprise the securities of which are publicly traded) in any business
entity engaged in competition with any business conducted by Employer on
the date of termination. This Agreement Not to Compete shall survive the
termination or expiration of the Employment Agreement. If any court
determines that this Agreement Not to Compete, or any part hereof, is
unenforceable because the duration or geographic scope of such provision,
such court shall have the power to reduce the duration or scope of such
provision, as the case may be, and, in its reduced form, such provision
shall then be enforceable.
Section 2. Continuing Obligations. Employee agrees that, for one year
following his termination of employment with Employer, Employee shall keep
Employer informed of the identification of Employee's employer and the
nature of such employment or of Employee's self-employment. Employer
agrees that, within fifteen days after receiving notice pursuant to this
Section 2 of the identification of the prospective employer, the nature of
the employment or self-employment or any change therein, Employer will
advise Employee as to whether such employment constitutes a violation of
Section 1 hereof.
Section 3. Injunctive Relief. Employee acknowledges that the violation
of the covenants contained in this Agreement would be detrimental and cause
irreparable injury to Employer and its affiliates which could not be
compensated by money damages. Employee agrees that an injunction from a
court of competent jurisdiction is the appropriate remedy for these
provisions, and consents to the entry of an appropriate judgment enjoining
Employee from violating these provisions in the event there is a find of
their breach.
Section 4. Severability of Covenants. Each of the covenants contained in
this Agreement are independent covenants, which may be available to or
relied upon by Employer and its affiliates in any court of competent
jurisdiction. If any one of the separate and independent covenants shall
be deemed to be unenforceable under the laws of any state of competent
jurisdiction, each of the remaining covenants shall not be affected
thereby. Notwithstanding the provisions of this Section 4, it is
understood that every benefit received by Employee by virtue of this
Agreement is consideration for each separate covenant contained herein.
Section 5. Governing Law. This Agreement shall be governed by the laws
of the State of Idaho.
Section 6. Other Remedies. The undertakings herein shall not be
construed as any limitation upon the remedies Employer might, in the
absence of this Agreement, have at law or in equity.
INTENDING to be legally bound hereby, Employer and Employee hereby duly
execute this Agreement Not to Compete on the date indicated below.
EMPLOYER:
CYBERHIGHWAY, INC.
Date: January 29, 1999 By: /s/ Julius W. Basham
Julius W. Basham, II
President
EMPLOYEE:
Date: January 29, 1999 /s/ Wm. Kim Stimpson
Wm. Kim Stimpson, individually
<PAGE>
- -------------------
EXHIBIT 10.9
- -------------------
AGREEMENT NOT TO COMPETE
THIS AGREEMENT NOT TO COMPETE is entered into by and between CyberHighway,
Inc., an Idaho corporation ("Employer"), and David W. Brown ("Employee").
WHEREAS, Employee is employed by Employer as Network Manager, pursuant to
an employment agreement (the "Employment Agreement"); and
WHEREAS, as a condition to such Employment Agreement, Employee has agreed
to sign and be bound by this Agreement Not to Compete; and
NOW, THEREFORE, the parties agree as follows:
Section 1. Covenant Not to Compete. Employee acknowledges that, as a key
management employee of Employer, Employee will be involved, on a high
level, in the development, implementation and management of the national
and international business strategies and plans of Employer, which shall
consist of Employer, the parent of Employer, Internet Media Corporation,
and such other business, units, divisions, subsidiaries or other entities
of Employer and the parent of Employer, as Employer shall determine in its
sole discretion from time to time. By virtue of Employee's unique and
sensitive position and special background, employment of Employee by a
competitor of Employer represents a serious competitive danger to Employer,
and the use of Employee's talent and knowledge and information about
Employer's business, strategies and plans can and would constitute a
valuable competitive advantage over Employer. In view of the foregoing,
Employee covenants and agrees that, if Employee's employment with Employer
is terminated for any reason at any time, for a period of one year after
the date of such termination, Employee will not, except as set forth in
Section 1A below, engage or be engaged, in any capacity, directly or
indirectly, including, but not limited to, as employee, agent, consultant,
manager, executive, owner or stockholder (except as a passive investor
holding less than 1% equity interest in any enterprise the securities of
which are publicly traded) in any business entity engaged in competition
with any business conducted by Employer on the date of termination. This
Agreement Not to Compete shall survive the termination or expiration of the
Employment Agreement. If any court determines that this Agreement Not to
Compete, or any part hereof, is unenforceable because the duration or
geographic scope of such provision, such court shall have the power to
reduce the duration or scope of such provision, as the case may be, and, in
its reduced form, such provision shall then be enforceable.
Section 1A. Exceptions. There are excepted from the prohibited
activities set forth in Section 1 above, the engagement by Employee in his
development and implementation of certain custom horse management software
and an on-line horse data base (horse.com).
Section 2. Continuing Obligations. Employee agrees that, for one year
following his termination of employment with Employer, Employee shall keep
Employer informed of the identification of Employee's employer and the
nature of such employment or of Employee's self-employment. Employer
agrees that, within fifteen days after receiving notice pursuant to this
Section 2 of the identification of the prospective employer, the nature of
the employment or self-employment or any change therein, Employer will
advise Employee as to whether such employment constitutes a violation of
Section 1 hereof.
Section 3. Injunctive Relief. Employee acknowledges that the violation
of the covenants contained in this Agreement would be detrimental and cause
irreparable injury to Employer and its affiliates which could not be
compensated by money damages. Employee agrees that an injunction from a
court of competent jurisdiction is the appropriate remedy for these
provisions, and consents to the entry of an appropriate judgment enjoining
Employee from violating these provisions in the event there is a find of
their breach.
Section 4. Severability of Covenants. Each of the covenants contained in
this Agreement are independent covenants, which may be available to or
relied upon by Employer and its affiliates in any court of competent
jurisdiction. If any one of the separate and independent covenants shall
be deemed to be unenforceable under the laws of any state of competent
jurisdiction, each of the remaining covenants shall not be affected
thereby. Notwithstanding the provisions of this Section 4, it is
understood that every benefit received by Employee by virtue of this
Agreement is consideration for each separate covenant contained herein.
Section 5. Governing Law. This Agreement shall be governed by the laws
of the State of Idaho.
Section 6. Other Remedies. The undertakings herein shall not be
construed as any limitation upon the remedies Employer might, in the
absence of this Agreement, have at law or in equity.
INTENDING to be legally bound hereby, Employer and Employee hereby duly
execute this Agreement Not to Compete on the date indicated below.
EMPLOYER:
CYBERHIGHWAY, INC.
Date: January 29, 1999 By: /s/ Julius W. Basham
Julius W.
Basham, II,
President
EMPLOYEE:
Date: January 29, 1999 /s/ David W. Brown
David W. Brown,
individually<PAGE>
- ---------------------
EXHIBIT 10.10
- ---------------------
VOTING AGREEMENT
This Agreement is made this 29th day of January,1999, by and among David
M. Loflin, an individual resident of the State of Louisiana ("D. Loflin"),
Waddell D. Loflin, an individual resident of the State of Louisiana ("W.
Loflin"), Julius W. Basham, II, an individual resident of the State of
Nevada ("Basham"), Wm. Kim Stimpson, an individual resident of the State of
Idaho ("Stimpson"), and David W. Brown, an individual resident of the State
of Idaho ("Brown"), in light of the following facts:
1. D. Loflin is the largest shareholder of Internet Media Corporation, a
Nevada corporation ("IMC"), and has voting control of IMC, and is an
officer and director of IMC;
2. W. Loflin is a shareholder of IMC and is an officer and director of IMC;
3. Basham is the largest shareholder of CyberHighway, Inc., an Idaho
corporation ("CyberHighway"), and has voting control of CyberHighway;
4. Stimpson is a shareholder of CyberHighway;
5. Brown is a shareholder of CyberHighway;
6. IMC is acquiring, by exchange of stock, all of the outstanding common
stock of CyberHighway in a transaction described in Section 368(a)(1)(B) of
the Internal Revenue Code of 1986, as amended, the result of which will be
the ownership by Basham, Stimpson and Brown of a significant block of the
Common Stock of IMC and the installation of Basham as an officer and
director of IMC;
7. Each of the parties desires to maintain the continuity of the makeup of
the Board of Directors of IMC subsequent to the aforedescribed acquisition;
and
8. Each of the parties desires to agree to vote the Common Stock of IMC
owned by them to assure that D. Loflin, W. Loflin and Basham each will be
elected to the Board of Directors of IMC in the foreseeable future.
WITNESSETH, THEREFORE, the agreement of the parties, the promises of each
being consideration for the promises of the others:
I. VOTING
Each of the parties agrees to vote his respective shares of Common Stock
of IMC, at any election of Directors of IMC, for D. Loflin, W. Loflin and
Basham.
II. CONDITION PRECEDENT
This Agreement is conditioned on the consummation of the contemplated
acquisition by IMC of all of the outstanding common stock of CyberHighway
on or before February 1, 1999. Upon consummation of the contemplated
acquisition, this Agreement will become irrevocable.
III. TERM
This Agreement shall be in force for a period of seven years from the date
of mutual execution.
IN WITNESS WHEREOF, the parties have set their hands the day and year
first above written.
/s/ David M. Loflin /s/ Waddell D. Loflin
David M. Loflin Waddell D. Loflin
/s/ Julius W. Basham II /s/ Wm. Kim Stimpson
Julius W. Basham, II Wm. Kim Stimpson
/s/ David W. Brown
David W. Brown
