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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
Date of Report (Date of earliest event reported): June 1, 1998
SHOPPING.COM
(Exact name of registrant as specified in its charter)
CALIFORNIA 333-36215 33-0733679
(State or other (Commission (I.R.S. Employer
jurisdiction File Number) Identification No.)
of incorporation)
2101 E. COAST HIGHWAY, GARDEN LEVEL
CORONA DEL MAR, CALIFORNIA 92625
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (714) 640-4393
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(Former name or former address, if changed since last report.)
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ITEM 5 OTHER EVENTS.
On June 1, 1998, the Board of Directors accepted the resignation of
Robert J. McNulty from his positions as President and Chief Executive Officer
and as a board member of Shopping.com (the "Company") for personal reasons.
(Resignation letter is attached as Exhibit 20.2). The Company has appointed John
Markley as Chief Executive Officer and President to replace Mr. McNulty and
assume such responsibilities effective immediately. (Employment Agreement dated
June 1, 1998 is attached as 10.20).
Mr. Markley has also been appointed to the board of directors to fill the
vacancy created by Mr. McNulty's resignation. Mr. Markley is currently the
founder of Allwoods Management Group providing management consulting to
businesses primarily in the areas of retailing and real estate. From 1989 until
present, Mr. Markley has served as the Chairman of the Board and Chief Executive
Officer of Pay N' Pak Home Centers, a regional chain of 102 Home Improvement
Centers with annual sales in excess of $498 million who filed for protection
under the Federal Bankruptcy Code (11USC) in 1991. Mr. Markley also held the
position of President and Chief Executive Officer of the W. R. Grace Western
Region Home Center Division, building and managing a regional chain of 94 Home
Improvement Centers operating in six Western States with annual sales in excess
of $450 million. Mr. Markley has over twenty five years experience in the retail
industry. From 1985-1989, Mr. Markley was the founder and managing broker for
six offices of Re/Max Realtors in Southern California with sales of $200 million
in residential and commercial real estate. Prior to this, Mr. Markley was
Executive Vice President & General Manager of Cashways Building Materials, a
chain of 12 Home Improvement stores with annual sales in excess of $100 million.
(Press Release dated June 5, 1998 is attached as 99.1).
Effective June 1, 1998, the Company entered into a Termination and
Buy-Out Agreement with Mr. McNulty terminating his Employment Agreement dated
May 1, 1997 whereby he will receive cash consideration, which is to be paid over
the next two years and options to purchase shares of the Company's common stock.
(Termination Agreement dated June 1, 1998 is attached as 10-21).
Effective June 1, 1998, the Company entered into a three year consulting
agreement with Cyber Depot, Inc., a California corporation whereby Cyber Depot's
principal, Mr. Robert McNulty, will act as a consultant to the Company providing
general services relating to the operation, promotion, strategic planning
marketing, geographic expansion and financing of the Company's business.
(Consulting Agreement dated June 1, 1998 is attached as 10.21).
Also effective June 1, 1998, Mr. McNulty granted irrevocable proxies,
expiring on the earlier of (i) June 1, 2000 or (ii) any time after June 1, 1999
if it is determined by the Board of Directors of the Company that the Agreement
is no longer in the best interest of the Company, to Douglas Hay a director and
Executive Vice President of the Company for 204,750 shares, Paul J. Hill, a
director of the Company, for 204,750 shares, Edward F. Bradley, a director of
the Company, for 204,750 shares and John Markley for 204,750 shares. Cyber
Depot, Inc., in which Mr. McNulty is a principal, has granted an irrevocable
proxy to Frank Denny the Chairman of the Board, for 250,000 shares expiring on
the earlier of (i) June 1, 2000 or (ii) any time after June 1, 1999 if it is
determined by the Board of Directors of the Corporation that the Agreement is no
longer in the best interest of the Company. The five proxies totaling 1,069,000
shares of common stock represent all of the issued and outstanding shares of
common stock in the Company owned and controlled by Mr. McNulty.
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ITEM 7 EXHIBITS.
The following exhibits are filed as part of this report in accordance
with the provisions of Item 601 of Regulation S-B:
Exhibit Name of Exhibit
- ------- ---------------
7.1 Irrevocable Proxy dated June 1, 1998 from Cyber Depot, Inc. to Frank
W. Denny
7.2 Irrevocable Proxy dated June 1, 1998 from Robert J. McNulty to Doug
Hay
7.3 Irrevocable Proxy dated June 1, 1998 from Robert J. McNulty to Paul J.
Hill
7.4 Irrevocable Proxy dated June 1, 1998 from Robert J. McNulty to Edward
F. Bradley
7.5 Irrevocable Proxy dated June 1, 1998 from Robert J. McNulty to John
Markley
10.20 Employment Agreement between the Company, Shopping.com and John H.
Markley Dated June 1, 1998
10.21 Termination and Buy-Out Agreement between the Company, Shopping.com
and Robert J. McNulty Dated June 1, 1998.
10.22 Consulting Agreement between the Company, Shopping.com and Cyber
Depot, Inc. Dated June 1, 1998
10.23 Consulting Agreement between the Company, Shopping.com and Stilden
Co., Inc. Dated April 1, 1998
20.2 Letter of Resignation dated June 1, 1998 from Robert J. McNulty
99.3 Press Release Dated June 5, 1998
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SIGNATURE
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 hereunto duly authorized.
SHOPPING.COM
Date: June 9, 1998 By: /s/ Kristine E. Webster
--------------------------------
Kristine E. Webster
Chief Financial Officer and Treasurer
(Principal Accounting Officer)
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EXHIBIT INDEX
Exhibit Name of Exhibit
- ------- ---------------
7.1 Irrevocable Proxy dated June 1, 1998 from Cyber Depot, Inc. to Frank
W. Denny
7.2 Irrevocable Proxy dated June 1, 1998 from Robert J. McNulty to Doug
Hay
7.3 Irrevocable Proxy dated June 1, 1998 from Robert J. McNulty to Paul J.
Hill
7.4 Irrevocable Proxy dated June 1, 1998 from Robert J. McNulty to Edward
F. Bradley
7.5 Irrevocable Proxy dated June 1, 1998 from Robert J. McNulty to John
Markley
10.20 Employment Agreement between the Company, Shopping.com and John H.
Markley Dated June 1, 1998
10.21 Termination and Buy-Out Agreement between the Company, Shopping.com
and Robert J. McNulty Dated June 1, 1998.
10.22 Consulting Agreement between the Company, Shopping.com and Cyber
Depot, Inc. Dated June 1, 1998
10.23 Consulting Agreement between the Company, Shopping.com and Stilden
Co., Inc. Dated April 1, 1998
20.2 Letter of Resignation dated June 1, 1998 from Robert J. McNulty
99.1 Press Release dated June 5, 1998
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EXHIBIT 7.1
IRREVOCABLE PROXY FROM ROBERT J. MCNULTY
TO FRAN W. DENNY
JUNE 1, 1998
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IRREVOCABLE PROXY
The undersigned Robert J. McNulty ("McNulty"), Principal of Cyber
Depot, Inc., hereby constitutes and appoints Frank W. Denny ("Denny") his lawful
attorney-in fact and proxy, pursuant to the provisions of the California
Corporations Code, to vote at all meeting of the stockholders and any
adjournments thereof, to execute and deliver written consents, and in all other
ways act in McNulty's place and stead, with respect to Two Hundred Fifty
Thousand (250,000) shares only of the common stock (the "Stock") of Shopping.com
(the "Corporation") now owned by McNulty and/or his Successors (as defined
below) as fully, to the same extent and with the same effect as McNulty might or
could do under any applicable laws or regulations governing the rights and
powers of the stockholders of a California corporation with respect to any and
all business and other matters (including, but not limited to, the election of
directors) which are presented to the stockholders of the Corporation.
McNulty hereby ratifies and confirms all that Denny may do or cause to
be done by virtue of this Irrevocable Proxy. McNulty further understands and
agrees that this Irrevocable Proxy may be exercised by Denny for the period
beginning the date hereof and ending on the earlier of (i) June 1, 2000 or (ii)
any time after June 1, 1999 if it is determined by the Board of Directors of the
Corporation that the Agreement is no longer in the best interest of the Company.
This Irrevocable Proxy encompasses Two Hundred Fifty Thousand (250,000)
shares only of the Common Stock owned by McNulty on this date and not the full
holdings of McNulty.
This Irrevocable Proxy is coupled with an interest and shall remain in
full force and effect and, shall be enforceable against any donees, devisees,
transferees, or assignees of the undersigned. This Irrevocable Proxy shall be
binding upon and be enforceable against McNulty and his heirs, legal and
personal representatives, successors, and assigns.
In the event that Denny is unable to exercise the rights granted by this
Irrevocable Proxy because of death or disability, McNulty hereby appoints Doug
Jennings as the successor proxy holder to Denny, entitled to exercise all of the
rights of Denny under the premises.
IN WITNESS WHEREOF, the undersigned has executed this Irrevocable Proxy
this 1st day of June, 1998.
Cyber Depot, Inc.
By: /s/ Robert J. McNulty
-----------------------------
Robert J. McNulty, President
Agreed and Accepted
this 1st day of June, 1998
/s/ Frank W. Denny
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Frank Denny
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EXHIBIT 7.2
IRREVOCABLE PROXY FROM ROBERT J. MCNULTY
TO DOUG HAY
JUNE 1, 1998
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IRREVOCABLE PROXY
The undersigned Robert J. McNulty ("McNulty") hereby constitutes and
appoints Doug Hay ("Hay") his lawful attorney-in fact and proxy, pursuant to the
provisions of the California Corporations Code, to vote at all meeting of the
stockholders and any adjournments thereof, to execute and deliver written
consents, and in all other ways act in McNulty's place and stead, with respect
to Two Hundred Four Thousand Seven Hundred Fifty (204,750) shares only of the
common stock (the "Stock") of Shopping.com (the "Corporation") now owned by
McNulty and/or his Successors (as defined below) as fully, to the same extent
and with the same effect as McNulty might or could do under any applicable laws
or regulations governing the rights and powers of the stockholders of a
California corporation with respect to any and all business and other matters
(including, but not limited to, the election of directors) which are presented
to the stockholders of the Corporation.
McNulty hereby ratifies and confirms all that Hay may do or cause to be
done by virtue of this Irrevocable Proxy. McNulty further understands and agrees
that this Irrevocable Proxy may be exercised by Hay for the period beginning the
date hereof and ending on the earlier of (i) June 1, 2000 or (ii) any time after
June 1, 1999 if it is determined by the Board of Directors of the Corporation
that the Agreement is no longer in the best interest of the Company.
This Irrevocable Proxy encompasses Two Hundred Four Thousand Seven
Hundred Fifty (204,750) shares only of the Common Stock owned by McNulty on this
date and not the full holdings of McNulty.
This Irrevocable Proxy is coupled with an interest and shall remain in
full force and effect and, shall be enforceable against any donees, devisees,
transferees, or assignees of the undersigned. This Irrevocable Proxy shall be
binding upon and be enforceable against McNulty and his heirs, legal and
personal representatives, successors, and assigns.
In the event that Hay is unable to exercise the rights granted by this
Irrevocable Proxy because of death or disability, McNulty hereby appoints Doug
Jennings as the successor proxy holder to Hay, entitled to exercise all of the
rights of Hay under the premises.
IN WITNESS WHEREOF, the undersigned has executed this Irrevocable Proxy
this 1st day of June, 1998.
/s/ Robert J. McNulty
-----------------------------
Robert J. McNulty
Agreed and Accepted
this 1st day of June, 1998
/s/ Doug Hay
- ------------------------
Doug Hay
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EXHIBIT 7.3
IRREVOCABLE PROXY FROM ROBERT J. MCNULTY
TO PAUL J. HILL
JUNE 1, 1998
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IRREVOCABLE PROXY
The undersigned Robert J. McNulty ("McNulty") hereby constitutes and
appoints Paul J. Hill ("Hill") his lawful attorney-in fact and proxy, pursuant
to the provisions of the California Corporations Code, to vote at all meeting of
the stockholders and any adjournments thereof, to execute and deliver written
consents, and in all other ways act in McNulty's place and stead, with respect
to Two Hundred Four Thousand Seven Hundred Fifty (204,750) shares only of the
common stock (the "Stock") of Shopping.com (the "Corporation") now owned by
McNulty and/or his Successors (as defined below) as fully, to the same extent
and with the same effect as McNulty might or could do under any applicable laws
or regulations governing the rights and powers of the stockholders of a
California corporation with respect to any and all business and other matters
(including, but not limited to, the election of directors) which are presented
to the stockholders of the Corporation.
McNulty hereby ratifies and confirms all that Hill may do or cause to be
done by virtue of this Irrevocable Proxy. McNulty further understands and agrees
that this Irrevocable Proxy may be exercised by Hill for the period beginning
the date hereof and ending on the earlier of (i) June 1, 2000 or (ii) any time
after June 1, 1999 if it is determined by the Board of Directors of the
Corporation that the Agreement is no longer in the best interest of the Company.
This Irrevocable Proxy encompasses Two Hundred Four Thousand Seven
Hundred Fifty (204,750) shares only of the Common Stock owned by McNulty on this
date and not the full holdings of McNulty.
This Irrevocable Proxy is coupled with an interest and shall remain in
full force and effect and, shall be enforceable against any donees, devisees,
transferees, or assignees of the undersigned. This Irrevocable Proxy shall be
binding upon and be enforceable against McNulty and his heirs, legal and
personal representatives, successors, and assigns.
In the event that Hill is unable to exercise the rights granted by this
Irrevocable Proxy because of death or disability, McNulty hereby appoints Doug
Jennings as the successor proxy holder to Hill, entitled to exercise all of the
rights of Hill under the premises.
IN WITNESS WHEREOF, the undersigned has executed this Irrevocable Proxy
this 1st day of June, 1998.
/s/ Robert J. McNulty
-----------------------------
Robert J. McNulty
Agreed and Accepted
this 1st day of June, 1998
/s/ Paul J. Hill
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Paul J.Hill
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EXHIBIT 7.4
IRREVOCABLE PROXY FROM ROBERT J. MCNULTY
TO EDWARD F. BRADLEY
JUNE 1, 1998
<PAGE> 2
IRREVOCABLE PROXY
The undersigned Robert J. McNulty ("McNulty") hereby constitutes and
appoints Edward F. Bradley ("Bradley") his lawful attorney-in fact and proxy,
pursuant to the provisions of the California Corporations Code, to vote at all
meeting of the stockholders and any adjournments thereof, to execute and deliver
written consents, and in all other ways act in McNulty's place and stead, with
respect to Two Hundred Four Thousand Seven Hundred Fifty (204,750) shares only
of the common stock (the "Stock") of Shopping.com (the "Corporation") now owned
by McNulty and/or his Successors (as defined below) as fully, to the same extent
and with the same effect as McNulty might or could do under any applicable laws
or regulations governing the rights and powers of the stockholders of a
California corporation with respect to any and all business and other matters
(including, but not limited to, the election of directors) which are presented
to the stockholders of the Corporation.
McNulty hereby ratifies and confirms all that Bradley may do or cause to
be done by virtue of this Irrevocable Proxy. McNulty further understands and
agrees that this Irrevocable Proxy may be exercised by Bradley for the period
beginning the date hereof and ending on the earlier of (i) June 1, 2000 or (ii)
any time after June 1, 1999 if it is determined by the Board of Directors of the
Corporation that the Agreement is no longer in the best interest of the Company.
This Irrevocable Proxy encompasses Two Hundred Four Thousand Seven
Hundred Fifty (204,750) shares only of the Common Stock owned by McNulty on this
date and not the full holdings of McNulty.
This Irrevocable Proxy is coupled with an interest and shall remain in
full force and effect and, shall be enforceable against any donees, devisees,
transferees, or assignees of the undersigned. This Irrevocable Proxy shall be
binding upon and be enforceable against McNulty and his heirs, legal and
personal representatives, successors, and assigns.
In the event that Bradley is unable to exercise the rights granted by
this Irrevocable Proxy because of death or disability, McNulty hereby appoints
Doug Jennings as the successor proxy holder to Bradley, entitled to exercise all
of the rights of Bradley under the premises.
IN WITNESS WHEREOF, the undersigned has executed this Irrevocable Proxy
this 1st day of June, 1998.
/s/ Robert J. McNulty
-----------------------------
Robert J. McNulty
Agreed and Accepted
this 1st day of June, 1998
/s/ Edward F. Bradley
- ---------------------------
Edward F. Bradley
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EXHIBIT 7.5
IRREVOCABLE PROXY FROM ROBERT J. MCNULTY
TO JOHN MARKLEY
JUNE 1, 1998
<PAGE> 2
IRREVOCABLE PROXY
The undersigned Robert J. McNulty ("McNulty") hereby constitutes and
appoints John Markley ("Markley") his lawful attorney-in fact and proxy,
pursuant to the provisions of the California Corporations Code, to vote at all
meeting of the stockholders and any adjournments thereof, to execute and deliver
written consents, and in all other ways act in McNulty's place and stead, with
respect to Two Hundred Four Thousand Seven Hundred Fifty (204,750) shares only
of the common stock (the "Stock") of Shopping.com (the "Corporation") now owned
by McNulty and/or his Successors (as defined below) as fully, to the same extent
and with the same effect as McNulty might or could do under any applicable laws
or regulations governing the rights and powers of the stockholders of a
California corporation with respect to any and all business and other matters
(including, but not limited to, the election of directors) which are presented
to the stockholders of the Corporation.
McNulty hereby ratifies and confirms all that Markley may do or cause to
be done by virtue of this Irrevocable Proxy. McNulty further understands and
agrees that this Irrevocable Proxy may be exercised by Markley for the period
beginning the date hereof and ending on the earlier of (i) June 1, 2000 or (ii)
any time after June 1, 1999 if it is determined by the Board of Directors of the
Corporation that the Agreement is no longer in the best interest of the Company.
This Irrevocable Proxy encompasses Two Hundred Four Thousand Seven
Hundred Fifty (204,750) shares only of the Common Stock owned by McNulty on this
date and not the full holdings of McNulty.
This Irrevocable Proxy is coupled with an interest and shall remain in
full force and effect and, shall be enforceable against any donees, devisees,
transferees, or assignees of the undersigned. This Irrevocable Proxy shall be
binding upon and be enforceable against McNulty and his heirs, legal and
personal representatives, successors, and assigns.
In the event that Markley is unable to exercise the rights granted by
this Irrevocable Proxy because of death or disability, McNulty hereby appoints
Doug Jennings as the successor proxy holder to Markley, entitled to exercise all
of the rights of Markley under the premises.
IN WITNESS WHEREOF, the undersigned has executed this Irrevocable Proxy
this 1st day of June, 1998.
/s/ Robert J. McNulty
-----------------------------
Robert J. McNulty
Agreed and Accepted
this 1st day of June, 1998
/s/ John Markley
- --------------------------
John Markley
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EXHIBIT 10.20
EMPLOYMENT AGREEMENT BETWEEN SHOPPING.COM
AND JOHN MARKLEY
JUNE 1, 1998
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AGREEMENT
This agreement is made on June 1, 1998 between John H. Markley. (JHM), an
individual residing in California, and SHOPPING.COM (S.C.) a California
Corporation. John H. Markley has accepted the position of President and Chief
Executive Officer of Shopping.com and Shopping.com wishes to employ the services
of JHM. NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties hereto agree as follows:
ARTICLE I
TERM
1. The term of this agreement shall be for a period of three years
commencing June 1, 1998 and ending on March 31,2001. The contract will
automatically be renewed in one-year increments unless either party
terminates via giving written notice by January 31st each year starting
with January 31, 2001. Employer may terminate this Agreement at any time
for "Cause" with or without notice. For purposes of the Agreement, the
term "Cause" shall mean any of the following:
(i) Employee's willful breach or habitual neglect of the duties and
obligations required of him, either expressly or impliedly by the
terms of the Agreement;
(ii) Employee's failure to perform his duties in a manner consistent
with good business judgment, or in the best interests of
Employer;
(iii) The event of Employee being charged by any federal, state, or
local authority with act of dishonesty, any act involving public
ridicule or moral
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turpitude, or an act constituting a felony, and Employee either
being convicted or entering a plea of guilty or nolo contendere;
or
(iv) Employee's commission of a fraud, embezzlement, or
misappropriation, whether or not a criminal or civil charge is
filed in connection therewith.
ARTICLE II
SERVICES
JHM shall provide executive management for the promotion, strategic planning,
marketing, geographic expansion, financing, and general management of S.C's
business. JHM will devote substantially all of his business time to the
operation of S.C. JHM shall report directly to the Board of Directors. JHM
agrees to obtain, at S.C's expense, key man life insurance of $1.0 million with
the company as the beneficiary.
ARTICLE III
COMPENSATION
JHM shall receive a bi-weekly base compensation of $6,735 during the period
commencing June 1, 1998 and ending May 31, 1999. For the period commencing June
1, 1999 through May 31, 2000 the bi-weekly base compensation shall be $9,615.
For period commencing June 1, 2000 through May 31, 2001 the bi-weekly base
compensation shall be $11,540. Actual business expenses will be 100% reimbursed
by S.C. JHM will document all expenses on an approved expense form. S.C has
authorized a $1000 per month auto allowance and a twelve month housing allowance
of $1500 per month. S.C agrees to provide health and life insurance at the
company's expense. In
<PAGE> 4
addition to the above, JHM will participate in a formula bonus which will
provide for the opportunity to receive an amount equal 100% of JHM base
compensation for exceeding the Shopping.com annual business plan net profit. The
incentive plan shall be approved annually by the Board of Directors.
ARTICLE IV
NON-DISCLOSURE AND SECRECY
1. JHM agrees that, during the term of this Agreement, and at all times
thereafter, it will keep and cause all S.C. information in strictest
confidence and will not either directly or indirectly use or allow to
be used for personal benefit, or the benefit of others, disseminate or
disclose any Confidential Information or Trade Secrets (as such terms
are defined below) used and/or obtained in providing the Services
hereunder, except to parties to this Agreement, regardless of whether
the Confidential information of Trade Secrets have been conceived or
developed, in whole or in part by JHM. JHM acknowledges and agrees
that the terms "Confidential Information" and "Trade Secrets" as used
in this Agreement include without limitation, the whole or any portion
or phase of any design, process, service, procedure, formula,
improvement, customer list, information with respect to customer
requirements and practices, marketing research and development
information, statistical data, sources of merchandise, technical
information, computer models, and all other information concerning the
industry and business in which the S.C. concept operates and which is
of value in the operation of S.C. business, or is otherwise understood
to be, of a confidential character and which has not been published or
otherwise understood to be, of a confidential character and which has
not been published or otherwise become a matter of general public
knowledge, under circumstances involving no breach of this Agreement.
JHM agrees that all Trade Secrets and Confidential Information are and
shall be the
<PAGE> 5
property of S.C. regardless of whether conceived or developed by JHM
pursuant to the Services. To that end, JHM hereby assigns to S.C. all
rights and all Trade Secrets and proprietary information developed by
JHM in providing the Services.
2. Upon termination or earlier expiration of this Agreement JHM shall
surrender to S.C. at any time of such expiration or termination of
this Agreement or upon demand by S.C. at any time all material of a
confidential and secret nature, including without limitation, the
Confidential Information and Trade Secrets, and any other documents of
a proprietary nature as may then be in JHM (s) possession or control.
ARTICLE V
MISCELLANEOUS
1. INJUNCTIVE RELIEF JHM acknowledges and agrees that any breach of
obligations to be performed by and pursuant to Article IV is likely to
result in irreparable harm to S.C and JHM therefore consents and agrees
that if it violates any such obligations, S.C shall be entitled, among
and in addition to any other rights and remedies available under this
Agreement or otherwise, to temporary and permanent injunctive relief to
prevent JHM from committing or continuing a breach of such obligations.
2. ENTIRE AGREEMENT This agreement constitutes the whole Agreement
between the parties hereto and there are no other terms other than those
contained herein. This Agreement supersedes any prior contract or
understanding related to retaining JHM.
3. AMENDMENT No variation of this Agreement shall be deemed valid unless
in writing and signed by the parties hereto.
<PAGE> 6
4. GOVERNING LAW This agreement shall be construed and enforced in
accordance with the laws of California.
5. SEVERABILITY Each provision of this Agreement is intended to be
severable from the other so that if any provision or term hereof is
illegal or invalid for any reason whatsoever, such illegality or
invalidity shall not effect the validity of the remaining provisions and
terms hereof.
6. INDEMNITY AND HOLD HARMLESS S.C agrees to indemnify and does hold
harmless JHM from and against any and all liabilities, claims, demands,
damages, costs and expenses (including attorney's fees) resulting from,
arising out of, or occasioned by any S.C business related activity.
7. ASSIGNMENT This Agreement may not be assigned by JHM to any other
person or party without S.C's prior written consent which may be
withheld in S.C's sole discretion. Notwithstanding the forgoing, S.C may
assign this Agreement to any successor corporation, affiliated company
of subsidiary. In the case of assignment by S.C, Assignee shall assume,
in writing, S.C obligations.
8. REPRESENTATION AND WARRANTY JHM hereby agrees that any documents
produced with respect to the business of S.C shall be marked
"Confidential" and "Property of Shopping.com" whether those documents
are produced by JHM or by a vendor or party chosen by JHM.
9. CAPTIONS Captions used in this Agreement are used for convenience
only and are not intended to, nor are they to be construed to, have any
substantive meaning or control in the construction of the Agreement.
10. NOTICES Any Notice given by one party to any other party hereunder
shall be delivered to the party at the address indicated below that
party's signature
<PAGE> 7
to this Agreement. Such notice shall be given to U.S. Mail, certified,
and shall be deemed delivered on the date of actual receipt or the date
of first refusal to accept delivery.
11. REPRESENTATION BY COUNSEL Each party agrees and acknowledges that it
has had the opportunity to consult with independent legal, tax and
financial counsel of each party's choice in order to be advised with
respect to the effect of this Agreement.
12. CONSTRUCTION Any issues with respect to construction or
interpretation of this Agreement are to be resolved without resort to
the presumption that any ambiguities in this Agreement should be
contrued against the drafter.
Agreed to:
Date: May 29, 1998 /s/ JOHN H. MARKLEY
--------------------------------
John H. Markley
/s/ ED BRADLEY /s/ FRANK W. DENNY
------------------------------ --------------------------------
Shopping.com Shopping.com
By: Ed Bradley By: Frank W. Denny
/s/ KRISTINE E. WEBSTER
-----------------------------
Shopping.com
By: Kristine E. Webster
<PAGE> 1
TERMINATION AND BUY-OUT AGREEMENT
---------------------------------
THIS TERMINATION AND BUY-OUT AGREEMENT ("Agreement") is entered into
effective as of the 1st day of June, 1998, by and between SHOPPING.COM, INC., a
California corporation (formerly known as the Shopper's Source, Inc.) (the
"Company") and ROBERT J. MC NULTY (an "Individual").
WHEREAS, the parties entered into the Employment Agreement effective as
of May 1, 1997, a copy of which is attached hereto as Exhibit "A", and
incorporated herein by this reference ("Original Agreement"), under which
Executive was employed as the Chief Executive Officer and President of the
Company;
WHEREAS, the Company and Executive now desire to terminate the Original
Agreement under the terms and conditions as hereinafter set forth.
NOW, THEREFORE, the parties hereto agree as follows:
1. Termination. The parties hereby agree that the Original Agreement is
terminated effective as of June 1, 1998 ("Effective Date").
2. Payment of Wages. Executive represents and agrees that he has
received all sums owed to him by the Company, including but not limited to
wages, earned but unused vacation pay, and any other payments and/or benefits to
which he is entitled under the Original Agreement through the Effective Date,
and otherwise under Company policy, and/or California law.
3. Cash Consideration. In consideration for agreeing to terminate the
original agreement under the terms hereof, Executive shall receive a total of
Five Hundred Thousand Dollars ($500,000) in cash ("Cash Consideration"), payable
under the following schedule: $100,000 on or before July 31, 1998; and $50,000
on or before the last day of each succeeding fiscal quarter of the Company,
beginning October 31, 1998, until the Cash Consideration is fully paid.
Notwithstanding the foregoing, in the event the number of members of the Board
of Directors of the Company equal to a majority of the Board as of the Effective
Date hereof are replaced by other members, Executive shall have the option of
accelerating any remaining payments of Cash Consideration due under this Section
3, to be paid in a lump sum, upon thirty (30) days written notice to the
Company.
On the Effective Date, Executive shall cease to be an employee of
Company for all purposes, including but not limited to California employment and
labor laws, and California and Federal tax purposes. All Cash Consideration paid
under this Agreement is agreed to be paid under the terms of this Contract, and
is not paid to Executive as an employee of the Company. Therefore, Company shall
not be obligated to, and shall not, withhold any amounts from the Cash
Consideration for payment of employment or withholding taxes, and Executive is
solely responsible for all taxes which may be due as a result of payment of the
Cash Consideration.
<PAGE> 2
4. Stock Options. As additional consideration under this Agreement,
Executive shall be granted the option to purchase One Hundred Fifty Thousand
(150,000) shares of the common stock of the Company, commencing on the effective
date of this Agreement, and ending five (5) years thereafter, for a purchase
price of $16 per share, and otherwise pursuant to the terms of the Stock Option
Agreement, a copy of which is attached hereto as Exhibit "B", and incorporated
herein by this reference.
5. Continuing Indemnification of Executive by Company. It is further
understood and agreed to between the parties that Executive shall continue to be
indemnified for his actions or omissions during the period he was a duly-elected
director and officer of the Company, to the fullest extent permitted under
California law and as more specifically set forth in Article V of the Company's
Articles of Incorporation; and in particular, the Company shall indemnify
McNulty as a duly-elected director and officer of the Company with respect to
any and all pending lawsuits against him involving his acts or omissions in such
capacity or capacities and against any such future lawsuits that may be filed.
6. Release of Company by Executive. Executive hereby releases and
forever discharges Company, its successors, representatives, assigns, agents,
transferees, managers, members, principals, employees, servants, and attorneys,
and each of them, of and from any and all claims, debts, liabilities, demands,
obligations, costs, expenses, damages, actions and causes of action of
whatsoever kind or nature, whether known or unknown, anticipated or
unanticipated, based on, arising out of or in connection with anything
whatsoever done, omitted or suffered to be done at any time prior to the date of
this Agreement, including but not limited to any and all claims, debts,
liabilities, demands, obligations, costs, expenses, damages, actions and causes
of action of whatsoever kind or nature, whether known or unknown, anticipated or
unanticipated, based on, arising out of or in connection with any of the
payments due, or matters or facts alleged or set forth in the Original
Agreement, the Recitals above, or in any way relating to Executive's employment
with the Company.
7. Release of Executive by Company. Company hereby releases and forever
discharges Executive, its heirs, successors, representatives, assigns, agents,
transferees, principals, shareholders, employees, servants, and attorneys, and
each of them, of and from any and all claims, debts, liabilities, demands,
obligations, costs, expenses, damages, actions and causes of action of
whatsoever kind or nature, whether known or unknown, anticipated or
unanticipated, based on arising out of or in connection with anything whatsoever
done, omitted or suffered to be done at any time prior to the date of this
Agreement, including but not limited to any and all claims, debts, liabilities,
demands, obligations, costs, expenses, damages, actions and causes of action of
whatsoever kind or nature, whether known or unknown, anticipated or
unanticipated, based on, arising out of or in connection with any of the matters
or facts alleged or set forth in the Original Agreement, the Recitals above, or
in any way relating to Executive's employment with the Company.
2
<PAGE> 3
8. Full and Final Release. Each party understands that Section 1542 of
the Civil Code of California reads as follows:
"1542. (Certain claims not affected by general release.) A general
release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release,
which if known by him must have materially affected his settlement with
the debtor."
Each party hereby expressly waives Section 1542 of the California Civil Code. It
is further understood and agreed that this full and final release is intended to
cover and does cover all and any future damages described or arising out of the
facts alleged in the lawsuit referenced in the Recitals of this Agreement not
known, or which may later develop, or be discovered, including the effects or
consequences thereof and including all causes of action therefor.
9. Ownership of Claims. The parties to this Agreement warrant and
represent that they are the only persons or entities which have any interest in
any of the matters herein compromised or released, and that none of such claims,
causes of action, costs or demands, or any part thereof, have been assigned,
granted or transferred in any way to any other person.
10. Definitions. Unless otherwise defined herein, certain definitions
used in this Agreement have the same meaning set forth for such terms in the
Original Agreement.
11. Governing Law. It is understood and agreed that the construction and
interpretation of this Agreement shall at all times and in all respects be
governed by the laws of the State of California, without giving effect to
principles of conflict of laws. The parties hereto agree that the California
courts shall have jurisdiction over matters arising relating to this Agreement,
and that the venue for any such actions shall be Orange County, California.
12. Severability. The provisions of this Agreement shall be deemed
severable, and the invalidity or enforceability of any one or more of the
provisions hereof shall not affect the validity and enforceability of the other
provisions hereof.
13. Entire Agreement. This Agreement contains the entire agreement and
understanding by and among the parties hereto with respect to the subject matter
hereof, and no representations, promises, agreements, or understandings, written
or oral, not herein contained shall be of any force or effect.
14. Waivers and Amendments. This Agreement may be amended, modified,
superseded, canceled, renewed or extended, and the terms and conditions hereof
may be waived, only by a written instrument signed by the parties or, in the
case of a waiver, by the party waiving compliance. No delay on the part of any
party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any waiver on the part of any party of any right,
power or privilege
3
<PAGE> 4
hereunder preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder.
15. Captions. The captions appearing in this Agreement are inserted only
as a matter of convenience and as a reference and in no way define, limit or
describe the scope or intent of this Agreement or any of the provisions hereof.
16. Further Instruments and Actions. The parties agree to execute such
further instruments and to take such further action as may reasonably be
necessary to carry out the intent of this Agreement.
17. Notices. All notices, demands or other communications hereunder
shall be in writing and shall be deemed to have been duly given if delivered in
person, or by United States mail, certified or registered, return receipt
requested, or otherwise actually delivered to the addresses set forth on the
signature page hereof or at such address as may have been furnished by such
person in writing to the other parties. Any such notice, demand or other
communication shall be deemed to have been given on the date delivered or as of
the date mailed, as the case may be.
18. Attorneys' Fees. If legal action is instituted by any party to
enforce the terms of this Agreement, the prevailing party in such action or
proceedings shall be entitled to reasonable attorneys' fees and costs of such
action in addition to any other award, including any such costs of appeal.
19. Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
20. Representation by Counsel. Each party hereby agrees and acknowledges
that (i) he and it has had the opportunity to consult with independent legal,
tax and financial counsel of each party's choice, in order to be advised with
respect to the effect of this Agreement.
21. Construction. Any issues with respect to construction or
interpretation of this Agreement are to be resolved without resort to the
presumption that any ambiguities in this Agreement should be construed against
the drafter.
4
<PAGE> 5
IN WITNESS WHEREOF, the Company and Executive have executed this
Agreement, effective as of the day and first above written.
<TABLE>
<CAPTION>
ADDRESSES: COMPANY:
- ---------- --------
<S> <C>
21014 E. Coast Highway SHOPPING.COM
Garden Level a California Corporation
Corona Del Mar, CA 92625
Dated: 6-1-98 By: /s/ Frank W. Denny
---------------- ------------------------------
Frank W. Denny, Chairman of the Board
and Compensation Committee Member
Dated: 6-1-98 By: /s/ Edward Bradley
---------------- ------------------------------
Edward Bradley, Compensation
Committee Member and Director
Dated: 6-1-98 By: /s/ Kristine E. Webster
---------------- ------------------------------
Kristine E. Webster, Secretary
2401 Bayshore Drive EXECUTIVE:
Newport Beach, California 92663 ---------
Dated: 5-29-98 /s/ Robert J. McNulty
----------------- ---------------------------------
Robert J. McNulty, an individual
</TABLE>
5
<PAGE> 1
EXHIBIT 10.22
CONSULTING AGREEMENT BETWEEN SHOPPING.COM
AND CYBER DEPOT, INC.
JUNE 1, 1998
<PAGE> 2
CONSULTING AGREEMENT
--------------------
This consulting agreement is made on June 1, 1998 between CYBER DEPOT, INC.
(CD), a California Corporation, and SHOPPING.COM (S.C.) a California
Corporation. Cyber Depot, Inc. is in the consulting business and Shopping.com
wishes to employ the consulting services of CD. NOW, THEREFORE, in consideration
of the mutual covenants contained herein, the parties hereto agree as follows:
ARTICLE I
TERM
The term of this agreement shall be for a period of three years commencing June
1, 1998 and ending on March 31,2001. The contract will automatically be renewed
in one-year increments unless either party terminates via giving written notice
by January 31st each year starting with January 31, 2001.
ARTICLE II
SERVICES
CD shall assign its principal, Robert J. McNulty, to provide general services
relating to the operation, promotion, strategic planning marketing, geographic
expansion and financing of S.C's business. In addition, Mr. McNulty will provide
recommendations concerning S.C's business consulting operations and management,
attend meetings as directed by the Board of Directors, attend trade and
technology shows and complete specific assignments as directed by the Board of
Directors. Mr. McNulty will spend a
<PAGE> 3
minimum of 75% of his business time, which will equate to a minimum of 130 hours
per month, specifically working on S.C's business.
ARTICLE III
FEES
CD shall receive $21,500 monthly fee, which will be invoiced to S.C. on the
first of each succeeding month. S.C. agrees to pay CD invoices by the 10th of
each succeeding month. Actual business expenses will be 100% reimbursed by S.C.
CD will document all expenses on an approved expense form.
As a further consideration for executing this Agreement the company has granted
to CD or its designee stock options as follows:
STOCK OPTIONS
CD or its designee shall be granted the option to purchase One Hundred Thousand
(100,000) shares of the common stock of SC, exercisable during the period
beginning with the effective date of the Agreement, and ending five (5) years
therefrom, during which period all or a portion of such options shall be
exercisable by Robert J. McNulty or its designee. The option price shall be the
closing market sale price of the common shares of SC on the effective date of
this Agreement. The terms of this option are more specifically set forth in the
Stock Option Agreement, a copy of which is attached hereto as Exhibit A and
incorporated herein by this reference.
<PAGE> 4
ARTICLE IV
NON-DISCLOSURE AND SECRECY
CD agrees that, during the term of this Agreement, and at all times thereafter,
it will keep and cause all of its officers, directors, employees, agents and
representatives to keep all S.C. information in strictest confidence and will
not itself either directly or indirectly use or allow to be used for its
benefit, or the benefit of others, disseminate or disclose any Confidential
Information or Trade Secrets (as such terms are defined below) used and/or
obtained in providing the Services hereunder, except to parties to this
Agreement, regardless of whether the Confidential information of Trade Secrets
have been conceived or developed, in whole or in part by CD. CD acknowledges and
agrees that the terms "Confidential Information" and "Trade Secrets" as used in
this Agreement include without limitation, the whole or any portion or phase of
any design, process, service, procedure, formula, improvement, customer list,
information with respect to customer requirements and practices, marketing
research and development information, statistical data, sources of merchandise,
technical information, computer models, and all other information concerning the
industry and business in which the S.C. concept operates and which is of value
in the operation of S.C. business, or is otherwise understood to be, of a
confidential character and which has not been published or otherwise understood
to be, of a confidential character and which has not been published or otherwise
become a matter of general public knowledge. CD agrees that all Trade Secrets
and Confidential Information are and shall be the property of S.C. regardless of
whether conceived or developed by CD pursuant to the Services.
CD acknowledges and agrees that any and all Trade Secrets, Confidential
Information, computer programs, documentation and other copyrightable or
trademark materials that CD is asked to prepare or work on as part of CD's
consulting services hereunder shall be the property of S.C to that end, CD
hereby irrevocably assigns, transfers, sets over and conveys to S.C all of CD's
right, title and interest in and to all such information,
<PAGE> 5
including, without limitation, CD's copyrights or rights of trademark. CD's
irrevocable assignment hereunder shall be deemed to have been coupled with an
interest.
Upon termination or earlier expiration of this Agreement CD shall surrender to
S.C. at any time of such expiration or termination of this Agreement or upon
demand by S.C. at any time all material of a confidential and secret nature,
including without limitation, the Confidential Information and Trade Secrets,
and any other documents of a proprietary nature as may then be in CD (s)
possession or control.
ARTICLE V
INDEPENDENT CONTRACTOR STATUS
CD shall perform the consulting services required hereunder as an independent
contractor and an employee of SC for all purposes, including but not limited to
California Employment and Labor Laws, and California and Federal tax purposes.
SC is interested only in the results obtained by CD, who shall solely control
and determine the method, details, and means of performing the consulting
services required hereunder, except as otherwise stated in this Agreement. CD
shall not use S.C's name in any manner which would submit it to state of federal
taxes, contributions or any employment tax or benefit or related expense of any
kind. CD shall not represent or consider itself or any of its representatives as
an officer, partner or joint venturer of the Company. Nothing herein shall be
deemed or construed as creating a joint venture, partnership or unincorporated
association between S.c and CD. S.C shall not be obligated to, and shall not,
withhold any amounts from CD's compensation for payments of taxes. CD is solely
responsible for all taxes which may be due as a result of the payment of CD's
compensation.
<PAGE> 6
ARTICLE VI
MISCELLANEOUS
1. INJUNCTIVE RELIEF CD acknowledges and agrees that any breach of obligations
to be performed by and pursuant to Article IV is likely to result in irreparable
harm to S.C and CD therefore consents and agrees that if it violates any such
obligations, S.C shall be entitled, among and in addition to any other rights
and remedies available under this Agreement or otherwise, to temporary and
permanent injunctive relief to prevent CD from committing or continuing a breach
of such obligations.
2. ENTIRE AGREEMENT This agreement constitutes the whole Agreement between the
parties hereto and there are no other terms other than those contained herein.
This Agreement supersedes any prior contract or understanding related to
retaining CD.
3. AMENDMENT No variation of this Agreement shall be deemed valid unless in
writing and signed by the parties hereto.
4. GOVERNING LAW This agreement shall be construed and enforced in accordance
with the laws of California.
5. SEVERABILITY Each provision of this Agreement is intended to be severable
from the other so that if any provision or term hereof is illegal or invalid for
any reason whatsoever, such illegality or invalidity shall not effect the
validity of the remaining provisions and terms hereof.
<PAGE> 7
6. INDEMNITY AND HOLD HARMLESS S.C agrees to indemnify and does hold harmless
CD and its subsidiaries, affiliated companies, shareholders, officers,
directors, agents, employees, successors and assigns from and against any and
all liabilities, claims, demands, damages, costs and expenses (including
attorney's fees) resulting from, arising out of, or occasioned by any S.C
business related activity or the services provided by CD hereunder.
7. ASSIGNMENT This Agreement may not be assigned by CD to any other person or
party without S.C's prior written consent which may be withheld in S.C's sole
discretion. Notwithstanding the forgoing, S.C may assign this Agreement to any
successor corporation, affiliated company of subsidiary. In the case of
assignment by S.C, Assignee shall assume, in writing, S.C obligations.
8. REPRESENTATION AND WARRANTY Each Consultant hereby agrees that any documents
produced with respect to the Services and/or the Concept shall be marked
"Confidential" and "Property of Shopping.com" whether those documents are
produced by CD or by a vendor chosen by CD.
9. CAPTIONS Captions used in this Agreement are used for convenience only and
are not intended to, nor are they to be construed to, have any substantive
meaning or control in the construction of the Agreement.
10. NOTICES Any Notice given by one party to any other party hereunder shall be
delivered to the party at the address indicated below that party's signature to
this Agreement. Such notice shall be given to U.S. Mail, certified, and shall be
deemed delivered on the date of actual receipt or the date of first refusal to
accept delivery.
11. CHANGE OF CONTROL In the event the number of members of the Board of
Directors of the Company equal to a majority of the Board as of the Effective
Date hereof are replaced by other members, CD shall have the option of
<PAGE> 8
accelerating any remaining payments of fees due to be paid under Article III in
a lump sum, upon thirty (30) days written notice to the Company.
12. REPRESENTATION BY COUNSEL Each party agrees and acknowledges that it has had
the opportunity to consult with independent legal, tax and financial counsel of
each party's choice in order to be advised with respect to the effect of the
Agreement.
13. CONSTRUCTION Any issues with respect to construction or interpretation of
this Agreement are to be resolved without resort to the presumption that any
ambiguities in this Agreement should be construed against the drafter.
/s/ Robert J. McNulty /s/ Ed Bradley
---------------------------- ---------------------------
Cyber Depot, Inc. Shopping.com
By: Robert J. McNulty By: Ed Bradley
/s/ Frank W. Denny /s/ Kristine E. Webster
---------------------------- ---------------------------
Shopping.com Shopping.com
By: Frank W. Denny By: Kristine E. Webster
<PAGE> 1
EXHIBIT 10.23
CONSULTING AGREEMENT BETWEEN SHOPPING.COM
AND STILDEN & CO., INC.
APRIL 1, 1998
<PAGE> 2
AGREEMENT
This agreement is made on April 1, 1998 between STILDEN CO., INC. (SCI), a Texas
Corporation, and SHOPPING.COM (S.C.) a California Corporation. Stilden Co. Inc.
is in the consulting business and Shopping.com wishes to employ the consulting
services of SCI. NOW, THEREFORE, in consideration of the mutual covenants
contained herein, the parties hereto agree as follows:
ARTICLE I
TERM
1. The term of this agreement shall be for a period of two years commencing
April 1, 1998 and ending on March 31,2000. The contract will
automatically be renewed in one-year increments unless either party
terminates via giving written notice by January 31, 1998 each year
starting with January 31, 2000.
ARTICLE II
SERVICES
SCI shall provide general services relating to the operation, promotion and
financing of S.C's business. SCI shall also provide specific consulting service
on special projects as assigned by the Board of Directors and /of the Chief
Executive Officer of the company SCI shall work a minimum of 80 hours per month
on matters directly related to S.C's business.
<PAGE> 3
ARTICLE III
FEES
SCI shall receive $7000 monthly fee, which will be invoiced to S.C. on the first
of each succeeding month. S.C. agrees to pay SCI invoices by the 10th of each
succeeding month. Actual business expenses will be 100% reimbursed by S.C. SCI
will document all expenses on an approved expense form. SCI will invoice
expenses monthly and S.C. shall reimburse remitted expenses by the 10th day of
each succeeding month. S.C. has authorized a $1600 per month housing allowance
for twelve months, which will be detailed on the monthly invoice.
ARTICLE IV
NON-DISCLOSURE AND SECRECY
1. SCI agrees that, during the term of this Agreement, and at all times
thereafter, it will keep and cause all group consultants to keep all S.C.
information in strictest confidence and will not itself either directly or
indirectly use of allow to be used for its benefit, or the benefit of others,
disseminate or disclose any Confidential Information or Trade Secrets (as such
terms are defined below) used and/or obtained in providing the Services
hereunder, except to parties to this Agreement, regardless of whether the
Confidential information of Trade Secrets have been conceived or developed, in
whole or in part by SCI. SCI acknowledges and agrees that the terms
"Confidential Information" and "Trade Secrets" as used in this Agreement include
without limitation, the whole or any portion or phase of any design, process,
service, procedure, formula, improvement, customer list, information with
respect to customer requirements and practices, marketing research and
development information, statistical data, sources of merchandise, technical
information, computer models, and all other information concerning the industry
and business in which the S.C. concept operates and which is of value in the
operation of S.C. business, or is otherwise understood to be, of a confidential
character and which has not been published or otherwise understood to be, of a
confidential character and which has not been published or otherwise become a
matter of general public knowledge, under circumstances involving no breach of
this Agreement. SCI agrees that all Trade Secrets
<PAGE> 4
and Confidential Information are and shall be the property of S.C. regardless of
whether conceived or developed by SCI pursuant to the Services. To that end, SCI
hereby assigns to S.C. all rights and all Trade Secrets and proprietary
information developed by SCI in providing the Services.
2. Upon termination or earlier expiration of this Agreement SCI shall surrender
to S.C. at any time of such expiration or termination of this Agreement or upon
demand by S.C. at any time all material of a confidential and secret nature,
including without limitation, the Confidential Information and Trade Secrets,
and any other documents of a proprietary nature as may then be in SCI (s)
possession or control.
ARTICLE V
COVENANT NOT TO COMPETE
1. SCI hereby agrees that during the term of this Agreement and for a period
of three (3) years following the expiration of this Agreement, it will not be
directly or indirectly engaged in any business in any form or fashion including
partner, consultant, controlling stockholder, joint venture, or employee of any
business which may compete, directly or indirectly, with the business as
contemplated by the Concept of S.C. within the state of California without prior
written agreement from S.C. It is the desire and intent of the parties to this
Agreement that the terms and provisions for this Article be enforced to the
fullest extent permissible under the law and public policy. If any element of
this Article is adjudicated to be invalid or unenforceable, such deletion or
reformation is to apply only with respect to the operation of this Article in
the particular jurisdiction in which such adjudication is made. SCI specifically
acknowledges and agrees that the limitations as to time, geographical area and
scope of activity as set forth in this Article V are reasonable and do not
impose a greater restraint than is necessary in SCI's sole opinion to protect
the good will and other business interest of S.C given the terms and conditions
of this Agreement with respect to the Services and Concept.
<PAGE> 5
ARTICLE VI
MISCELLANEOUS
1. INJUNCTIVE RELIEF SCI acknowledges and agrees that any breach of obligations
to be performed by and pursuant to Articles IV and V is likely to result in
irreparable harm to S.C and SCI therefore consents and agrees that if it
violates any such obligations, S.C shall be entitled, among and in addition to
any other rights and remedies available under this Agreement or otherwise, to
temporary and permanent injunctive relief to prevent SCI from committing or
continuing a breach of such obligations.
2. ENTIRE AGREEMENT This agreement constitutes the whole Agreement between the
parties hereto and there are no other terms other than those contained herein.
This Agreement supersedes any prior contract or understanding related to
retaining SCI.
3. AMENDMENT No variation of this Agreement shall be deemed valid unless in
writing and signed by the parties hereto.
4. GOVERNING LAW This agreement shall be construed and enforced in accordance
with the laws of Argentina.
5. SEVERABILITY Each provision of this Agreement is intended to be severable
from the other so that if any provision or term hereof is illegal or invalid for
any reason whatsoever, such illegality or invalidity shall not effect the
validity of the remaining provisions and terms hereof.
6. INDEPENDENT CONTRACTORS SCI hereby acknowledges and agrees that it is an
independent Contractor with respect to the Services to be rendered and performed
pursuant to this Agreement and that no terms or provisions of this Agreement
shall be implied to create an employer/employee relationship between S.C and
SCI.
7. INDEMNITY AND HOLD HARMLESS SCI agrees to indemnify and does hold harmless
S.C and its subsidiaries, affiliated companies, shareholders, officers,
directors, agents, employees, successors and assigns from and against any and
all liabilities, claims, demands, damages, costs and expenses (including
attorney's fees) resulting from, arising out of, or occasioned by breach of the
nondisclosure, secrecy and/or covenant not to compete terms and provisions made
part of the Agreement.
<PAGE> 6
8. ASSIGNMENT This Agreement may not be assigned by SCI to any other person or
party without S.C's prior written consent which may be withheld in S.C's sole
discretion. Notwithstanding the forgoing, S.C may assign this Agreement to any
successor corporation, affiliated company of subsidiary. In the case of
assignment by S.C, Assignee shall assume, in writing, S.C obligations.
9. REPRESENTATION AND WARRANTY Each Consultant hereby agrees that any documents
produced with respect to the Services and/or the Concept shall be marked
"Confidential" and "Property of Shopping.com" whether those documents are
produced by SCI or by a vendor chosen by SCI.
10. CAPTIONS Captions used in this Agreement are used for convenience only and
are not intended to, nor are they to be construed to, have any substantive
meaning or control in the construction of the Agreement.
11. NOTICES Any Notice given by one party to any other party hereunder shall be
delivered to the party at the address indicated below that party's signature to
this Agreement. Such notice shall be given to U.S. Mail, certified, and shall be
deemed delivered on the date of actual receipt or the date of first refusal to
accept delivery.
<PAGE> 7
Signed by each party as indicated below, to be effective April 1, 1998.
SHOPPING.COM: STILDEN CO. INC.:
/s/ ROBERT MCNULTY /s/ FRANK W. DENNY
- ---------------------------- ----------------------------
Robert McNulty Frank W. Denny
President President
7514 Reindeer Trail
San Antonio, Texas 78238
<PAGE> 1
EXHIBIT 20.2
RESIGNATION LETTER OF ROBERT J. MCNULTY
DATED JUNE 1, 1998
<PAGE> 2
[LETTERHEAD OF SHOPPING.COM]
June 1, 1998
To: The Board of Directors of Shopping.com, Inc.
From: Robert J. McNulty
It is with deep regret that I find myself writing this letter. Although
I continue to enjoy your full support and appreciate that the action I have
decided to take was neither requested nor recommended by any of you, I must
tender my resignation as President and Chief Executive Officer as well as member
of the Board of Directors of the Company effective June 1, 1998.
After three years of hard work in conceiving and developing
Shopping.com, it is most gratifying to see that the company has become the
internet retailer. No doubt, the company has faced a number of challenges in its
path of success. In addition to being an ongoing topic of yellow journalism, the
company has been subject to an orchestrated attack by short sellers who
evidently got caught in a squeeze. It appears that there is absolutely no limit
to the abuses the short sellers will employ in order to exploit and damage our
company. From the filing of lawsuits containing false allegations to the
manipulation of the offices of a United States Senator to pressure the
Securities and Exchange Commission to suspend the trading of the company's
stock, the short sellers conduct matches the reprehensible business they are
in--destroying companies rather than building them as I have done.
Although the courts have summarily thrown out the short sellers'
frivolous actions, it appears that the Securities and Exchange Commission has
yet to investigate the true market manipulators. Rather than deflecting
attention from profiteers whose sole agenda is avarice, the Securities and
Exchange Commission should return to the course chartered by Congress,
protecting shareholders and prosecuting the short sellers who have violated the
law. I firmly believe that the vast majority of Shopping.com's shareholders are
pleased with the value that has been created, the putative class actions'
allegations to the contrary notwithstanding.
In order for the company to continue on its path of success, it will
need to raise additional capital from institutional investors and eventually
become a company that is listed on NASDAQ. So as to expedite accomplishing these
goals, I have decided to resign. I trust that my stewardship has laid the
foundation for further growth which inures to the benefit of our shareholders.
It has been a pleasure to work with talented and loyal staff at
Shopping.com. I wish everyone the best of success.
Very truly yours,
/s/ Robert J. McNulty
-----------------------------
Robert J. McNulty
<PAGE> 1
EXHIBIT 99.1
PRESS RELEASE
DATED JUNE 5, 1998
<PAGE> 2
SHOPPING.COM NAMES
JOHN H. MARKLEY
PRESIDENT & CHIEF EXECUTIVE OFFICER
June 5, 1998 6:00 AM
Corona del Mar, CA., June 5, 1998/ -- Following the resignation of founder and
President Chief Executive Officer Robert J. McNulty as the companies President,
Chief Executive Officer and member of the Board of Directors, Shopping.com
(OTC, IBUY), today announced the addition of Mr. John H. Markley in the
position of President and Chief Executive Officer and Director.
"The Company is well positioned for the future with a strong management team
and Board of Directors" stated Robert J. McNulty. "With John Markley as
President and Chief Executive Officer the company will have the opportunity to
reach its full potential in the burgeoning Internet marketplace."
"The Board of Directors of Shopping.com believe that John Markley is a strong
leader able to take the company to the next plateau." Stated Frank Denny,
Chairman of the Board of Shopping.com. "We are pleased to have John join this
team of professionals."
Mr. Markley has over 25 years experience in the retail industry and has
demonstrated expertise in directing corporate activities of public corporations
as well as positioning start up companies for growth and expansion. Mr. Markley
is the former Chairman of the Board and Chief Executive Officer of Pay N' Pak
Home Centers a regional chain of 102 Home Improvement Centers in six Western
states with annual sales in excess of $498 million. Mr. Markley also held the
position of President and Chief Executive Officer of the W.R. Grace Western
Region Home Center Division, building and managing a regional chain of 94 Home
Improvement Centers operating in six Western states with annual sales in excess
of $450 million. Prior to this, Mr. Markley was Executive Vice President &
General Manager of Cashways Building Centers, a chain of 12 Home Improvement
stores operating in three Western states with annual sales in excess of $100
million.
ABOUT SHOPPING.COM
Shopping.com, headquartered in Corona del Mar, CA, is an online retailer
offering over a million-item selection of top brand name consumer products
organized by category. Targeting both the consumer and commercial markets, and
utilizing state-of-the-art proprietary systems technology, Shopping.com offers
Internet shopper's products, ranging from computers, books and office products
to CDs, with low prices and fast delivery using direct vendor shipping, secure
on-line payment protection and customer friendly check-out services to provide
a user-friendly web shopping experience.
Visit Shopping.com's Superstore website at www.shopping.com or for further
information contact: Dr. Ogden Forbes, Chief of Knowledge and Research,
(714) 640-4393, oforbes"shopping.com
