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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS ISSUERS
UNDER SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
iBIZ TECHNOLOGY CORP.
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(Exact name of registrant as specified in its charter)
Florida 86-0933890
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1919 West Lone Cactus, Phoenix, Arizona 85021
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (623) 492-9200
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Securities to be registered under Section 12(b) of the Act:
None
Securities to be registered under Section 12(g) of the Act:
Common stock, $.001 par value per share
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PART I
DESCRIPTION OF BUSINESS
iBIZ HISTORY
iBIZ Technology Corp. (the "Company") was originally
incorporated under the laws of the State of Florida in 1994. From its
incorporation through December 31, 1998, the Company operated as a development
stage company with no operations or revenues while it sought to identify a
strategic business combination with a private operating company. Effective
January 1, 1999, the Company entered into a Plan of Reorganization and Stock
Exchange Agreement with INVNSYS Technology Corporation ("INVNSYS") and various
shareholders of INVNSYS (the "Reorganization"). As a result of the
Reorganization, INVNSYS became a wholly-owned subsidiary of the Company. On
February 1, 1999, INVNSYS Technology Corporation changed its name to iBIZ
Technology Corp.
INVNSYS (formerly known as SouthWest Financial Systems, Inc.)
was founded in 1979. Under the direction of INVNSYS' founder, Kenneth Schilling,
the Company initially focused on distributing front-end bank branch automation
computer systems for networking applications. The Company acted as a regional
distributor for SHARP Electronics ("SHARP"), a privately held Japanese
manufacturer of computers and electronic devices. In addition, the Company also
distributed the products of Billcon Company, Ltd., and Glory, manufacturers of
bank automation and money processing systems.
In 1985, INVNSYS became a master distributor of SHARP products
and acquired the exclusive rights to distribute SHARP products to financial
institutions in the western United States. Between 1987 and 1990, INVNSYS won
various awards from SHARP for outstanding sales performance. Also during this
time, the Company began to participate in the design of computer systems for
financial institutions. In cooperation with Wells Fargo Bank and SHARP, the
Company produced the first plain paper facsimile machine in 1990.
In 1992, INVNSYS began to design and build its own computer
systems, focusing on integrated systems for the banking industry. In 1993, the
Company terminated its relationship with SHARP and focused on developing its own
products. In 1994, INVNSYS began working in conjunction with Epson America, a
leading manufacturer of point-of-sale computer products, in the development of
products for the banking industry. For example, INVNSYS designed a software
program which enabled Epson transactional printers to produce cashier's checks,
an industry innovation. In addition, in cooperation with Epson, INVNSYS designed
and marketed a stackable computer system for financial institutions. In 1996,
INVNSYS produced its first entry into the market for complete computer systems
with its Vision 2000 Multimedia Notestation, an Intel Pentium-based
computer/printer combination. In October 1998, INVNSYS began to market its
current line of business transaction computers, the iT series.
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The Company's principal offices are located at 1919 West Lone
Cactus, Phoenix, Arizona 85021. The Company maintains a website at
www.ibizcorp.com. The information on the website should not be considered part
of this Form 10-SB.
PRODUCTS
Through its operating subsidiary, INVNSYS, the Company engages
in the business of designing, manufacturing and distributing small-footprint
desktop computers, transaction printers, general purpose financial application
keyboards, numeric keypads, cathode ray tube ("CRT") and liquid crystal display
("LCD") monitors and related products. The Company also markets a line of
original equipment manufacturer ("OEM") notebook computers and distributes a
line of Epson transactional printers.
The Company's continued success is dependant upon the
introduction of new products and the enhancement of existing products. The
Company is actively engaged in the design and development of additional
computers and peripherals to augment its present product line. Currently, the
Company designs many of its products in-house. The Company employs a four-person
product design and development staff which is managed directly by Kenneth
Schilling. During 1998, the Company spent approximately Two Hundred Thousand
Dollars ($200,000.00) on research and development and expects to spend
approximately Five Hundred Thousand Dollars ($500,000.00) on these activities in
fiscal 1999.
Because of the rapid pace of technological advances in the
personal computer industry, the Company must be prepared to design, develop,
manufacture and market new and more powerful hardware products in a relatively
short time span. While the Company believes that it has been successful to date
in accomplishing that goal, there can be no assurance that it will continue to
do so in the future.
Business Application Small Footprint Computers
The Company believes its iT-8000 has the smallest footprint of
any desktop personal computer in the industry. (A "footprint" is the amount of
desk space the computer terminal covers.) The iT-8000 provides the convenience
of a small footprint and the power of a traditional desktop unit. The iT-8000's
compact dimensions allow it to be installed in areas where the physical space
available to install a computer is limited. These applications include corporate
workstations, branch bank teller platforms, supermarkets and other retail
point-of-sale ("POS") machines. The iT-8000 is also suited to other
space-conscious settings such as a hospital patient bedside.
Standard features include extra serial ports for attaching
peripheral devices such as magnetic card readers or check readers and a built-in
LAN connection. Currently, the iT-8000 may be configured with Intel Pentium
processors with MMX Technology (75Mhz through 233Mhz), from 2 to 256 megabyte
("MB") random access memory
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("RAM"), a standard 2.5" hard drive, providing current industry capacity of up
to 13 gigabyte ("GB"), and 10.4", 12.0" or 13.3" color LCD panels.
Personal Computers
Capitalizing on its knowledge and success in designing
computer systems for the financial institution industry, the Company has
expanded its product line to include personal home computers.
Sahara. The Sahara Databook is a small footprint desktop
computer which integrates optional Intel Pentium II/III processor power,
simplified networking and sophisticated manageability features into a compact
form. The Company believes its flexible design allows original equipment
manufacturers ("OEMS") to deliver a range of uses, from a fully-featured
corporate workstation to a stripped-down network personal computer. The Sahara
is sold in four basic configurations, each allowing customers to pick the
options most suitable for their purposes.
Safari. The Safari is a small footprint computer with a full
array of local area network ("LAN"), P.O.S., entertainment and internet
applications. The Safari is offered with a range of processors including Intel
Pentium, Cyrix, IBM, and AMD may provide up to 256 MB RAM, and can be equipped
with an optional LCD panel, 20X Slim Size CD-ROM drive and a 3D full duplex
sound module.
Keyboards
Historically, the Company has designed and marketed a range of
keyboards and numeric keypads for financial institutions. Such products
currently include the Geno 628 data pad, the Serial data numeric-only key pad,
the ACK-540GP keyboard, and the TV-3682, a space-efficient keyboard designed for
bank branch teller applications. The TV-3682 is encoded with a proprietary
software which allows the keyboard to be used with any computer without the need
to install a driver. To aid numeric input, the numeric pad is given prominence
over the alpha pad. The TV-3682 also incorporates a touchpad mouse with no
moving parts, which saves space and improves reliability.
Capitalizing on the expanding market for powerful, handheld
organizers, the Company recently introduced its KeySync Keyboard ("KeySync").
The KeySync directly connects to all Palm devices, including the Palm5,
PalmPilot and PalmIII produced by 3COM, and allows users to more easily input
data into their organizers. The KeySync is integrated with the Palm products
through KeyLink software, exclusively designed for and licensed to the Company.
The KeySync's dimensions are 10" x 4-1/2" x 1-1/4" (LxWxH),
and offers a sixty-two (62) key keyboard, six (6) programmable function keys and
uses three (3) "AAA" batteries to minimize draining the Palm's battery. In
addition to Palm products, future
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KeySync releases may also be used as an input device to function with the Casio
Cassiopeia, Everex Freestyle, and Philips Nino Palm PC handheld organizer
product lines.
Palm Pilot Accessories
The Company recently began selling a foldable cradle to hold
the various Palm Pilot products. Management believes this cradle is easier to
use than the products offered by competitors. The Company also began selling a
12-volt power adapter to enable recharging the batteries used in the Palm Pilot
in a vehicle's cigarette lighter.
Displays and Monitors
The Company also offers a line of space-saving, zero-emission
LCD flat panel displays under the name "iView." The Company believes these LCD
monitors provide superior viewing angles, graphic display and brightness over
conventional monitors while consuming less energy. Moreover, LCD panels do not
flicker like conventional CRT monitors, thus reducing eye strain and user
fatigue. The Company's LCD panels take up less than one-tenth of the space
needed for an equivalent cathode ray tube ("CRT") monitor and are some of the
thinnest available on the market. The Company believes that the flat LCD panel
gives the monitor a competitive edge over conventional CRT products by providing
equivalent screen sizes in less space.
The computer industry is currently experiencing a shortage of
LCD panels. To date, the Company has been able to obtain adequate supplies of
LCD panels and has not experienced any significant production delays as a result
of the shortage. However, if the shortage continues and the Company's demand
increases, the Company may experience difficulties in meeting customer demand.
The Company also offers a range of conventional CRT monitors
in sizes 14 to 21 inches with digital controls.
Planned Product Introductions
Thin-client Terminals. Presently, the Company is developing a
line of "thin-client" computers. Thin-client computers are scaled down devices
with limited memory and no local storage capability designed to be integrated
with a centralized server. In a thin-client environment, network software
applications remain on the server, while the terminal functions as the gateway
to the system. The Company believes thin-client systems offer increased
manageability and better security as all applications run on the server and not
the terminal.
The Company's thin-client computer, the iTerm-8000 (a
derivative of the iT-8000), will support up to a 233 Mhz processor, 128 MB RAM,
optional floppy and hard drives, and offers an attached LCD monitor. The iTerm
8000 will come with Citrix Systems,
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Inc. ("Citrix") Independent Computing Architecture ("ICA") as the server
application which will be compatible with Citrix MetaFrame and WinFrame
software.
iT-9000. The Company is currently developing a new small
footprint Pentium II/III computer with attachable LCD monitor, currently called
the iT-9000. The iT-9000 combines numerous technologies into less than one
square-foot of desktop space. As a highly flexible, open-architecture platform,
the iT-9000 can be configured for multiple computing roles. The iT-9000 will
provide functions for visual Internet access, in-home video monitoring, family
message center, home security, home control and high-resolution television
reception. The Company believes that by eliminating the necessity to assemble
numerous electronic components, the iT-9000 will present an all-in-one solution
to office desktop overcrowding. With its optional under-cabinet mounting, the
Company believes the iT-9000 will provide a solution to extremely limited home
and office work areas.
The iT-9000 will offer a flip-down LCD panel, and will utilize
the latest Pentium III processor technology. The iT-9000 is undergoing final
product evaluation and has an anticipated consumer delivery slated for the
fourth quarter of 1999 or the first quarter of 2000.
Lapboard. The Company is also in the final stages of
development of a wireless keyboard to be marketed under the name "Lapboard."
This keyboard incorporates RF wireless technology and is suitable for a variety
of applications including general computing, Web TV and Dish Technology. The
Lapboard is ergonomically designed and features an elevated palm rest allowing
the hands to be in a more natural position above the alpha keys, thus
alleviating stress on the wrist. In addition, the Lapboard will offer a "bottom
case" contoured for the user's lap. The Company has incorporated several
flexible design elements into the Lapboard, such as an interchangeable pointing
device for users who prefer a trackball instead of the standard mouse touchpad.
A joystick module and a sixteen (16) key programmable keypad have also been
designed as interchangeable elements. The Company currently anticipates full
production of the keyboard for a November 1999 delivery.
OEM Notebook Computers
In addition to designing its own products, the Company also
offers a complete line of competitively priced, build-to-order notebook
computers manufactured by Twinhead Corporation and marketed under the name
"iBook." Currently, the Company offers three (3) notebook models, the Apache,
Phoenix and RoadRunner.
RoadRunner. The Company believes the RoadRunner offers
powerful computing power in a lightweight design. At only 1" high and 3.7
pounds, the RoadRunner is half the weight of most competing notebooks.
The RoadRunner offers Intel Pentium processors with MMX
Technology up to 366Mhz, as well as Pentium III processors, a built in 56k
fax/modem, external FDD/24X
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CD-ROM module or DVD drive, a full size keyboard and a full 12.1" TFT screen
offering resolution as high as 800 x 600 pixels. The RoadRunner offers 32 MB of
memory, which can be upgraded to 160 MB. Utilizing a patented (pending) battery
auto calibration system and the notebook's Advanced Configuration and Power
Interface ("ACPI") power management standard, which automatically monitors and
optimizes battery use, the RoadRunner provides up to 2.5 hours of full battery
usage.
Apache. The Apache offers high performance in an ultra-slim
(1.54 mm high), compact unit. Models have a range of central processing units
("CPU's") from the Celeron MMC1 366Mhz to the fastest of mobile processors, the
Dixon Pentium II MMC1 400Mhz. The Apache has a 16-bit stereo sound system with
built-in stereo speakers and microphone supporting full-duplex sound, a 3D
graphics system with 2 MB of video RAM operating over a 64-bit memory bus and a
built-in 24X CD-ROM, which is interchangeable with a 2X DVD-ROM drive. The
Apache offers resolution as high as 1024 x 768 pixels with its 13.3" (XGA) or
12.1" (SVGA) built-in TFT screen.
The Apache can be installed with up to 256 MB of memory using
industry-standard Synchronous Dual in-line Memory Modules ("SO DIMM"). To
improve slow input/output, the Apache also features a fast hard disk drive, an
optional built-in 56 Kbps modem and a 32-bit CardBus PC card drive. The Apache
also offers an infrared port which allows wireless file transfer and printing to
other infrared-enabled systems.
The Company believes power saving is a major concern for
notebook users. To address this issue, the Apache offers a processor which
consumes up to forty percent (40%) less energy than a comparable desktop
processor. In addition, the Apache has numerous user-controlled power management
routines including suspend to RAM and suspend to disk. The Apache comes with a
patented (pending) battery auto calibration system, which monitors and optimizes
battery use automatically. Using ACPI in tandem with battery auto calibration,
battery life can be extended to more than three (3) hours on one charge. The
battery will automatically recharge in approximately four (4) hours when the AC
adapter is plugged in and the notebook is in suspend mode.
The Company believes the Apache is designed to be user
friendly. It offers OSD (On-Screen Display), which allows the user to see volume
and brightness changes as made. Screen brightness can be changed with special
hot keys. The modular 9.5 mm hard disk drive may be removed, thus allowing users
to switch hard disk drives quickly and keep data secure.
Phoenix. The Company believes the Phoenix is a desktop
computer replacement, providing the user with accelerated graphics in a portable
package. This notebook is designed to provide all the functions of a powerful
desktop multimedia system in a compact, lightweight notebook format. The Phoenix
weighs 6.8 pounds and measures 12.2" x 9.8" x 1.6 (LxWxH). The Company believes
it is slimmer and lighter than most other notebooks while providing superior
performance and convenience.
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The Phoenix utilizes the latest Intel Pentium II 300 to 400
MHz processors. The notebook features a 10 GB hard disk drive, an optional
built-in 56 Kbps modem, two (2) PC Card slots with integrated CardBus and Zoomed
Video, an infrared port and a built-in 24X CD-ROM, which is interchangeable with
a 2X DVD-ROM drive.
The Phoenix incorporates the latest 2X AGP-bus interface,
which is four (4) times faster than the fastest PCI-bus. In addition, the
Phoenix offers 4 MB of video RAM operating over a 64-bit memory bus, a VGA chip,
and a hardware DVD accelerator with MPEG II support which allows users to watch
full-screen video without dropping frames.
The Phoenix may be configured with a 1024 x 768 pixel built-in
13.3" or 14.1"(XGA) FTF screen and may be connected to an external monitor or
television via built-in ports.
For sound applications, the Phoenix offers the ESS Maestro-2M
PCI, which is the latest industry standard, is compatible with the 16-bit Sound
Blaster Pro, and supported by Microsoft DirectAudio and Direct 3D for use in
Windows NT 5.0 or Windows 98 systems. It features integrated 3D audio effects as
well as dual channel full duplex operation.
The Phoenix comes with an Intel MMC2 CPU module, which allows
for easy upgrades. In addition, the notebook's modular design allows for several
configurations. The notebook may be configured with anywhere from 32 to 256 MB
of RAM. The modular hard disk drive may be removed and replaced with an
alternate drive. Users also have the choice of 24X CD-ROM or 2X DVD-ROM,
depending on their needs. Also available in the Phoenix is an LS-120 drive,
which reads and writes to 120MB Superdisks as well as standard 3.5" floppy
disks. An additional expandability option for the Phoenix is the proprietary
port replicator, which duplicates all of the connectors that are available on
the rear side of the notebook and adds one extra PS/2 port, one stereo line-out
connector and a Game/MIDI port.
For communications, the Phoenix offers an optional 56 Kbps
fax/modem which facilitates dial-up networking, a full duplex sound system and
built-in microphone and stereo speakers which allow the Phoenix to be installed
with voicemail and speakerphone functions. Network connections are possible
through a 32-bit CardBus slot. In addition, the Phoenix offers an infrared port
which allows wireless file transfer and printing to other infrared-enabled
systems.
The Phoenix supports all the new functions provided with the
Windows 98 operating system. Power management is optimized with an advanced
power management system. Whenever the notebook's processor is not operational
for a short time, the processor becomes idle so that it consumes less power.
When the processor resumes working, it returns to full speed almost
instantaneously with no loss of performance. The Phoenix also supports the
patented (pending) battery auto calibration system, which monitors and optimizes
battery use at the touch of a key, ensuring longer battery life.
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Epson Computers and Peripherals
The Company is an authorized distributor of Epson computers
and peripherals. The Company distributes the Epson TM-U325, a low cost, high
speed transaction printer. In addition, the Company distributes the Epson
TM-U375, a high speed transaction printer which has the ability to prepare and
print cashier's checks and money orders, including signatures. Management
believes this feature is not available in competing products and the inclusion
of this product increases the Company's ability to offer proprietary products in
the marketplace.
Currently, the Company distributes refurbished models of
Epson's iT-U375, a combination computer/printer. This hybrid offers a computer
in the base of a transaction printer, thereby reducing the space required for
operation. Originally manufactured for the retail POS market, the Company
currently utilizes this product in financial institution applications.
The Company intends to offer an internet service provider
offering a reduced monthly rate for customers who purchase the Company's
hardware or peripherals. Many of the Company's competitors presently offer
similar services. Management believes this Internet service will expand its
ability to market and sell its hardware products without suffering any
significant decrease in margins. However, there is no assurance that
competition's aggressive price reductions through implementation of a similar
strategy won't negatively impact the overall profitability of the Company or
that the Internet service will be effectively implemented.
SERVICES
The Company recently started a new line of business through
hiring a Chief Technology Officer who has network integration service accounts
with American Express and Motorola. The Company plans to expand its network
integration servicing business as the market permits.
MARKETING, SALES AND DISTRIBUTION
The Company markets and distributes products directly to end
users through a direct sales force, regional re-sellers, value-add providers in
the banking and POS market and Internet commerce sites. The Company has a direct
sales force of six (6) employees, directed by Mr. Schilling, who market the
Company's products to financial institutions.
In addition to direct sales, the Company also sells its full
range of products directly to retail customers through its website at
www.ibizcorp.com. The website is linked to an Online Consumer site on Yahoo!
Recently, the Company entered into an agreement with Cyberian Outpost, Inc. to
market the Company's products on its website
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www.outpost.com. Management believes that direct sales to end users allows the
Company to more efficiently and effectively meet customer needs by providing
products which are tailored for the customer's individual requirements at a more
economical price.
The Company distributes a line of Epson computers and
transactional printers. The Company participates in Epson's MasterVar program
which provides the Company a non-exclusive right to sell, support and service
Epson computer peripherals in the United States and Canada. In addition, the
Company may sell Epson personal computers in conjunction with sales of Epson
peripherals or the Company's products.
The Company also distributes its products to regional
resellers and, to a lesser extent, national distributors. For example, the
Company has entered into a vendor agreement for KeySync with MicroAge, Inc., one
of the largest hardware distributors in North America. The Company believes this
agreement will provide a major distribution channel for the Company's products.
In February 1999, the Company entered into a marketing
agreement with Global Telephone Communication, Inc. ("Global"), whereby Global
will market the Company's products in the Pacific Rim. Management believes that
Global, through a joint venture with Pacific Assets International, will provide
access to numerous banks throughout Asia, including Mainland China, Hong Kong,
Taiwan, South Korea, Malaysia, Indonesia, and Japan. There is no assurance,
however, that the Company will make any sales to such banks.
MANUFACTURING
The Company's products are engineered and manufactured by
various entities in Taiwan. Currently, the Company has an agreement with
DataComp, a private Taiwanese company, to manufacture the Company's keyboards
and keypads. The Company's iT-8000 computers are currently manufactured by
Puritron, a Taiwanese company. The Company's LCD's are manufactured by Sampo
Technology, a Taiwanese manufacturer, and receive varying customization ranging
from cosmetic items to enhancing components such as stereo speakers and touchpad
screens from Acana Peripherals Corporation, a Taiwanese company. The Company's
Sahara and Safari desktop computers are currently manufactured by First
International Computer in Taiwan.
These manufacturers build the Company's products to the
Company's specifications with non-proprietary components. Therefore, the vast
majority of parts used in the Company's products are available to the Company's
competitors. Although the Company has not experienced difficulties in the past
relating to engineering and manufacturing, the failure of the Company's
manufacturers to produce products of sufficient quantity and quality could
adversely affect the Company's abilities to sell the products its customers
demand.
The Company engages in final assembly, functional testing and
quality control of its products in its Phoenix, Arizona facility. The Company's
completion of the final stages
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of manufacturing allows the Company to ensure quality control for its products
manufactured overseas.
The Company has entered into an agreement with Twinhead
Corporation, a Taiwanese manufacturer of notebook computers ("Twinhead") to
produce build-to-order notebook computers and a 15" LCD flat panel display. The
design, engineering and manufacturing of the Company's notebook computers is
done entirely by Twinhead. Management believes this relationship allows the
Company to offer a broader range of products to its customers without the cost
of research and development and manufacturing.
The Company has experienced no product delays or cancellation
of orders as a result of the recent earthquake in Taiwan. Management believes
that certain costs of components may face a temporary increase as a result of
the earthquake, however, the Company believes most of the increase in costs will
be recouped through increased prices paid by customers.
LICENSES
Citrix Systems, Inc. On December 30, 1998, the Company entered
a licensing agreement with Citrix Systems, Inc. ("Citrix") for the use of Citrix
Independent Computing Architecture ("ICA"), an emerging industry standard for
server based computing (the "ICA Agreement"). Under the ICA Agreement, the
Company is granted a non-exclusive, non-transferable right to incorporate ICA
into Citrix-approved iBIZ products. The license is for a term of two (2) years
and automatically renews for successive one (1) year periods unless either party
gives notice of an intent to allow the agreement to expire at the end of the
then current term.
In addition, the Company and Citrix have entered into a Citrix
Business Alliance Membership Agreement dated February 22, 1999 (the "CBA
Agreement"). For a membership fee, CBA membership entitles the Company to
engineering, sales, and marketing support by Citrix, as well as access to beta
releases of new Citrix products and discounted current software products.
Microsoft, Inc. In June 1999, the Company entered into an
agreement with Microsoft, Inc. to become a OEM system builder. Participation in
this program will allow the Company to install genuine Microsoft operating
systems in selected applications with full support from Microsoft. In addition,
this agreement entitles the Company to pre-production versions of Microsoft
products and enables the Company to provide input into development and design of
new products.
KeyLink Software License. The Company has an exclusive,
perpetual license to use, distribute and offer for sale with associated
hardware, the software which facilitates the connection between the KeySync
keyboard and the 3COM Palm devices.
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PATENTS AND TRADEMARKS
The Company holds no United States or foreign patents for its
products. However, the Company is currently assessing potential patent
applications for keyboard products under development. In general, the Company
believes that its continued success will depend primarily upon the technical
expertise, creative skills, and management abilities of its officers, directors,
and key employees rather than on patent ownership.
The Company has filed an application with the United States
Patent and Trademark Office for the use of the names "iBIZ" and "KeySync" and is
currently investigating various other product trademarks.
YEAR 2000 ISSUES
Management believes that all of the Company's current products
are Year 2000 compliant. The Company is in the process of converting its
internal systems for Year 2000 compliance and Management believes such
conversion will be completed prior to December 31, 1999. The Company has not
conducted an assessment of the impact of third-party's systems on the Company
and the Company can give no assurance that failure of third-party systems will
not have a material effect on the Company's operations. To date, the Company
incurred no expenses related to Year 2000 issues.
SERVICE AND SUPPORT
The Company provides its customers with a comprehensive
service and support program. The Company provides technical support to its
customers via a toll-free telephone number as well as through its website. The
number is available Monday through Friday 8:00 a.m. to 5:00 p.m., Arizona time.
The Company maintains a staff of approximately ten (10) technical and customer
support representatives who respond to telephone inquiries.
Also available on the Company's website are links to files for
software patches and drivers used for software updates.
The Company's products have either a one year (1) or three
year (3) limited warranty covering parts and service. In addition, the Company
offers extended service agreements, which may extend warranty coverage for up to
two (2) additional years. Under the Virtual Spare program, the Company provides
replacement units by next-day shipment in the event a customer's unit fails.
Under this program, customers have, at no additional expense, the option to have
their existing hard-drive configuration installed on the replacement unit. The
customer's units are then returned to the Company's Phoenix facility for
service. Under the Company's On-Site program, customers have the ability to have
a Company-owned spare on-site for immediate availability in the event of a
failure. Failed units are then returned to the Company's facility for service
and returned to replace the spare
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for future needs. The Company believes its Virtual Spare and On-Site programs
eliminate the need for on-site technical support for the replacement units and
reduce set-up time at customer facilities.
COMPETITION
The personal computer industry is highly competitive. The
Company competes at the product level with various other personal computer
manufacturers and at the distribution level primarily with computer retailers,
on-line marketers and the direct sales forces of large personal computer
manufacturers.
At the product level, the personal computer industry is
characterized by rapid technological advances in both hardware and software
development and by the frequent introduction of new and innovative products.
There are approximately 100 manufacturers of personal computers, the majority of
which have greater financial marketing and technological resources than the
Company. Competitors at this level include IBM, Compaq, Dell, and Gateway 2000.
Gateway 2000 and NEC, among other competitors, have recently introduced smaller
desk top computers than have been manufactured in the past. However, those
computers are targeted for the consumer and not for the corporate customer and
are more expensive than the computers offered by the Company. The Company's main
competitors for its planned product line of thin-client computer systems include
specialty manufacturers such as WYSE Technology.
Competitive factors include product quality and reliability,
price to performance characteristics, marketing capability, and corporate
reputation. In addition, a segment of the industry competes primarily for
customers on the basis of price. Although the companies are price competitive,
the Company does not attempt to compete solely on the basis of price.
Management believes that it can compete effectively by
providing computers and peripherals utilizing unique designs and space-saving
qualities, such as small footprints. Although Management believes it has been
successful to date, there can be no assurance that the Company will be able to
compete successfully in the future.
CUSTOMERS
Throughout its history, the Company's ability to deliver
innovative product designs and quality customer service has enabled it to
provide products to major financial institutions including Wells Fargo, Bank of
America, Security Pacific, Northrim Bank, and First Interstate Banks. Currently,
no single customer accounts for more than ten percent (10%) of the Company's
revenues.
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EMPLOYEES; LABOR RELATIONS
As of August 15, 1999, the Company had approximately
twenty-two (22) full-time employees. No employee of the Company is represented
by a labor union or is subject to a collective bargaining agreement. The Company
has never experienced a work-stoppage due to labor difficulties and believes
that its employee relations are good.
FCC REGULATIONS
The Federal Communications Commission (the "FCC") has adopted
regulations setting radio frequency emission standards for computing equipment.
Management believes all of the Company's current products meet applicable FCC
and foreign requirements.
The Company is in the process of exploring foreign operations.
Many foreign jurisdictions require governmental approval prior to the sale or
shipment of personal computing equipment and in certain jurisdictions such
requirements are more stringent than in the United States. Any delays or
failures in obtaining necessary approvals from foreign jurisdictions may impede
or preclude the Company's efforts to penetrate such markets.
LITIGATION
The Company is not a party to any material pending litigation.
USE OF TRADEMARKS AND TRADENAMES
All trademarks and tradenames used in this Form 10-SB are the
property of their respective owners.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Through its operating subsidiary, INVNSYS, the Company
designs, manufactures, and distributes small footprint desktop computers,
transaction printers, general purpose financial application keyboards, numeric
keypads, CRT's, LCD monitors and related products. The Company also markets a
line of OEM notebook computers and distributes a line of Epson transactional
printers.
14
<PAGE> 15
SELECTED FINANCIAL INFORMATION.
<TABLE>
<CAPTION>
Year Ended
10/31/97 10/31/98
Statement of Operations Data
<S> <C> <C>
Net sales $ 2,350,459 $ 3,402,681
Gross profit $ 771,019 $ 1,182,885
Operating income (loss) $ (478,036) $ 37,600
Net earnings (loss) after tax $ (321,109) $ 7,863
Net earnings (loss) per share $ (32.11) $ 0.79
</TABLE>
<TABLE>
<CAPTION>
10/31/97 10/31/98
Balance Sheet Data
<S> <C> <C>
Total assets $ 318,606 $ 503,210
Total liabilities $ 1,821,151 $ 1,999,231
Stockholders' equity (deficit) $ (511,197) $ (345,233)
</TABLE>
<TABLE>
<CAPTION>
8 Months Ended
6/30/98 6/30/99
Statement of Operations Data
<S> <C> <C>
Net sales $ 1,963,354 $ 1,509,777
Gross profit $ 826,863 $ 384,234
Operating income (loss) $ 223,258 $ (579,345)
Net earnings (loss) after tax $ 270,878 $ (276,015)
Balance Sheet Data
Total assets $ 1,687,669 $ 1,263,869
Total liabilities $ 1,839,237 $ 1,232,345
Stockholders' equity (deficit) $ (151,568) $ 31,524
</TABLE>
15
<PAGE> 16
RESULTS OF OPERATIONS.
Fiscal year ended October 31, 1998 compared to fiscal year ended October 31,
1997.
Revenues. Sales increased by approximately 45% from $2,350,459
for the fiscal year ended October 1997 to $3,402,681 for the fiscal year ended
October 1998. The increase was mainly as a result of greater demand for the
Company's iT business application products and new product introductions and
shipments for its keyboards.
Cost of Sales. The cost of sales increased by approximately
41% from $1,579,440 in the fiscal year ended October 1997 to $2,219,796 in the
fiscal year ended October 1998. The increase in cost of sales is attributable to
a similar percentage increase in sales and reflects hardware costs which
remained fairly stable over the two-year period.
Gross Profit. Gross profit increased from approximately
$771,019.00 in October 1997 to $1,182,885.00 in October 1998. The increase
resulted primarily from the increase in revenues coupled with a slight decline
in the costs of products components.
Selling, General and Administrative Expenses. Selling, general
and administrative expenses decreased approximately 9% in the fiscal year ended
October 1997 to the fiscal year ended October 1998. The decrease was primarily
due to lower cost of components, parts and CPU's.
Interest Expense. Interest expense of $75,282 for the fiscal
year ended October 1998 and of $74,147 for the fiscal year ended October 1997
was accrued on notes payable to Community First National Bank (primarily
extended for working capital purposes).
Income Taxes. Because the Company incurred a loss of
approximately $471,130 for the fiscal year ended October 1997, the Company
obtained a refund of $150,021. For the fiscal year ended October 1998, the
Company incurred taxes of $75,372 even though income before taxes was only
$83,235. The significant tax on nominal income resulted from certain
non-deductible expenses.
Net Earnings. A loss in fiscal year October 1997 of $150,021
increased to a profit of $75,372 for fiscal year ended October 1998.
Profitability resulted primarily from a dramatic increase in sales and a
decrease in selling, general and administrative expenses.
Eight months ended June 30, 1999 compared to eight months ended June 30, 1998.
Revenues. Sales decreased by approximately 23% from $1,963,354
in the eight month period ended June 1998 to $1,509,777 in the eight month
period ended June 1999. The decrease was mainly as a result of the focus by
management on raising financing for the Company and a transition to a new line
of products.
16
<PAGE> 17
Cost of Sales. The cost of sales of $1,136,492 in the eight
month period June 1998 to $1,125,543 in the eight month period ended June 1999
remained almost constant.
Gross Profit. Gross profit decreased by approximately 54% from
$826,863 in the eight month period June 1998 to $384,234 in the eight month
period ended June 1999. The decrease resulted primarily from the decrease in
revenues coupled with a slight increase in the cost of sales.
Selling, General and Administrative Expenses. Selling, general
and administrative expenses increased approximately 60% from $628,575 in the
eight month period ended June 1998 to $963,579 for the eight month period ended
June 1999. The increase was primarily due to costs of consulting paid in
connection with the merger, legal and accounting fees associated with the merger
and an increase in the salaries of the Company's key employees.
Interest Expense. Interest expense of $29,242 for the eight
month period ended June 1999 and of $24,970 for the eight month period June 1998
was accrued on notes payable to Community First National Bank primarily extended
for working capital purposes.
Net Earnings. Net earnings decreased from $270,878 for the
eight month period ended June 1998 to a loss of $276,015 for the eight month
period ended June 1999. The loss resulted from a dramatic increase in the
selling, general and administrative expenses and a substantial decrease in
revenues for the eight month period ended June 1999.
Liquidity and Capital Resources
For the year ended October 1997, the Company supplemented cash
flow with proceeds from notes payable of approximately $138,000. At year end,
the Company had an overdraft of $14,133. For the year ending October 1998, the
Company received an advance from iBiz Technology Corp. (prior to the merger) for
approximately $158,101. The Company also repaid notes of approximately $211,631.
For the fiscal year ended October 1998, the Company had an overdraft of $13,500.
Historically, the Company has had significant problems with
liquidity. It has been unable to generate sufficient internal cash flow to fund
all of its obligations. Outside sources of financing consisting of bank loans
have been insufficient. While the Company pays most of its suppliers in full
prior to delivery of product by its manufacturers of hardware in Taiwan, its
banking customers are not obligated to make payments until 30 days after
delivery of products.
During 1999, the Company repaid $225,000 on an outstanding
loan from Community First National Bank in the amount of $350,000 and delinquent
payroll taxes, penalties and interest of approximately $260,000. The Company is
in an industry subject to
17
<PAGE> 18
rapid obsolescence and change. It will continue to need to raise additional
substantial funds for research and development and production of new products.
Beginning in November 1, 1998 and continuing through September
1, 1999, the Company raised approximately $842,911 though sales of its common
stock. If at any time the Company is unable to raise financing through
additional sales of common stock it may be forced into insolvency. There is no
assurance that it can continue to raise funding through sales of equity.
DESCRIPTION OF PROPERTY
On July 1, 1999, the Company began leasing an approximately
15,000 square foot custom-built office building located at 1919 West Lone
Cactus, Phoenix, Arizona. The facility is used for administration, design,
engineering and assembly of products. The Company's lease ("Lease") is for a
term of twenty-six and one-half years (26.5), with monthly rental payments of
$12,800.00, subject to annual increases, plus taxes and operating costs.
The facility is leased from Lone Cactus Capital Group, L.L.C.,
a limited liability company in which Kenneth Schilling is a member. The Lease is
personally guaranteed by Mr. Schilling and his wife, Diane. Management believes
this new facility will provide adequate space to accommodate the Company's
current plan of growth and expansion.
18
<PAGE> 19
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding
the beneficial ownership of the Company's common stock as of June 30, 1999, by:
- - all directors
- - each person who is known by the Company to be the beneficial owner of
more than five percent (5%) of the outstanding common stock
- - each executive officer named in the Summary Compensation Table below
- - all directors and executive officers as a group
The number of shares beneficially owned by each director or
executive officer is determined under rules of the SEC, and the information is
not necessarily indicative of beneficial ownership for any other purpose. Under
the SEC rules, beneficial ownership includes any shares as to which the
individual has the sole or shared voting power or investment power. In addition,
beneficial ownership includes any shares which the individual has the right to
acquire within sixty (60) days of June 30, 1999, through the exercise of any
stock option or other right. Unless otherwise indicated, each person listed
below has sole investment and voting power (or shares such powers with his or
her spouse). In certain instances, the number of shares listed includes (in
addition to shares owned directly), shares held by the spouse or children of the
person, or by a trust or estate of which the person is a trustee or an executor
or in which the person may have a beneficial interest.
<TABLE>
<CAPTION>
Number of Shares of
Common Stock Beneficially Owned
- --------------------------------------------------------------------------------------------------------------------
Name and Address of Vested
Beneficial Owner Shares Options (1) Total (1) Percent (1)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Kenneth W. Schilling(2) -------- 200,000 200,000 0.7%
8512 W. Via Montoya, Peoria, AZ 85382
Moorea Trust(2) 12,120,000 --------- 12,120,000 46.6%
8512 W. Via Montoya, Peoria, AZ 85382
Terry S. Ratliff 1,771,200 300,000 2,071,200 7.9%
5312 W. Westwind Drive, Glendale, AZ
85310
Mark H. Perkins 1,771,200 300,000 2,071,200 7.9%
16410 N. 9th Place, Phoenix, AZ 85022
All directors and officers as group 15,662,400 800,000 16,462,400 61.5%
(3 persons)
</TABLE>
(1) Includes options vested on June 30, 1999 and options which will become
vested on or before August 29, 1999.
(2) Kenneth and Diane Schilling are husband and wife and hold the shares as
trustees under the Moorea Trust dated December 18, 1991.
iBIZ Technology Corp. Stock Option Plan
The iBIZ Technology Corp. Stock Option Plan (the "Plan")
provides for the grant of stock options to purchase common stock to eligible
directors, officers, key
19
<PAGE> 20
employees, and service providers of the Company. The Plan covers an aggregate
maximum of five million (5,000,000) shares of common stock and provides for the
granting of both incentive stock options (as defined in Section 422 of the
Internal Revenue Code of 1986, as amended) and non-qualified stock options
(options which do not meet the requirements of Section 422). Under the Plan, the
exercise price may not be less than the fair market value of the common stock on
the date of the grant of the option. As of June 30, 1999, three million six
hundred thirty-five thousand (3,635,000) options had been granted under the plan
at an exercise price of $0.75 to $1.00.
The Board of Directors (the "Board") administers and
interprets the Plan and is authorized to grant options thereunder to all
eligible persons. In the event the Board has at least two members who are not
either employees or officers of the Company or of any parent or subsidiary of
the Company, the Plan will be administered by a committee of not less than two
(2) persons who are such independent directors. The Board designates the
optionees, the number of shares subject to the options and the terms and
conditions of each option. Certain changes in control of the Company, as defined
in the Plan, will cause the options to vest immediately. Each option granted
under the Plan must be exercised, if at all, during a period established in the
grant which may not exceed ten (10) years from the date of grant. An optionee
may not transfer or assign any option granted and may not exercise any options
after a specified period subsequent to the termination of the optionee's
employment with the Company. The Board may make such amendments to the Plan from
time to time it deems proper and in the best interests of the Company provided
it may not take any action which disqualifies any option granted under the Plan
as an incentive stock option or which adversely effects or impairs the rights of
the holder of any option under the Plan.
DIRECTORS AND EXECUTIVE OFFICERS
NAME AGE POSITION
Kenneth W. Schilling 47 President, Chief Executive Officer,
Director
Terry S. Ratliff 41 Vice President, Controller, Director
Mark H. Perkins 35 Vice President of Operations, Director
Kenneth W. Schilling, founded the Company's predecessor,
SouthWest Financial Systems, in 1979, and has been Chief Executive Officer,
President and a Director since the founding of the Company's predecessor. Mr.
Schilling studied for a B. S. in electrical engineering at the University of
Pittsburgh from 1970 to 1972 but left for military service prior to receiving
his degree.
Terry S. Ratliff, joined the Company in 1989 as controller and
currently serves as Vice President, and Controller. Ms. Ratliff was appointed to
Company's Board of Directors on March 5, 1999. Ms. Ratliff graduated from
Nicholls State University in
20
<PAGE> 21
Thibodaux, Louisiana where she received a B.A. in accounting.
Mark H. Perkins, joined the Company in 1994 and currently
serves as Vice President of Operations. Mr. Perkins was appointed to the
Company's Board of Directors on March 5, 1999. Prior to his joining the Company,
Mr. Perkins was employed at American Express as a project manager for major
systems implementation, a position he held for eight years. Mr. Perkins earned a
degree in business management from California State University-Sonoma.
EXECUTIVE COMPENSATION
Prior to entering the Reorganization with INVNSYS, the Company
operated as a development-stage company with no business operations. During this
time, the Company's officers and directors were not compensated for their
services. Mr. Eric P. Littman served as President and sole Director from January
1, 1995 through July 9, 1998. Thereafter, Mr. John Xinos served as President,
Secretary, and Treasurer from July 10, 1998 through December 31, 1998. As
Messrs. Littman and Xinos were not compensated for their services, the Company
has not included them in the compensation table below.
The following table sets forth certain compensation paid or
accrued by the Company to Mr. Schilling, the Company's current chief executive
officer during fiscal years ended 1998 and 1999.
<TABLE>
<CAPTION>
OTHER RESTRICTED
ANNUAL STOCK LTIP ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION AWARD(S) OPTIONS(1) PAYOUT COMPENSATION
($) ($) ($) ($) (#) ($) ($)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Kenneth W. Schilling, 1998 $200,000 ----
President, Chief Executive
Officer 1999 $200,000 250,000
</TABLE>
(1) Includes 50,000 options granted for service as a director of the Company.
21
<PAGE> 22
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
NUMBER OF
SECURITIES
UNDERLYING PERCENT OF TOTAL
OPTIONS/ OPTIONS/SARS
SARS GRANTED TO EMPLOYEES EXERCISE OF
GRANTED IN FISCAL BASE PRICE EXPIRATION
NAME (1) YEAR ($/SH) DATE
(a) (b) (c) (d) (e)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Kenneth W. Schilling 250,000 10.7% $0.75 4/21/09
</TABLE>
(1) Includes 50,000 options granted for service as a director of the Company.
200,00 options vested upon granting on April 22, 1999, and 25,000 will vest
on April 22, 2000 and April 22, 2001 respectively.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
<TABLE>
<CAPTION>
NUMBER OF
UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS
SHARES ACQUIRED ON VALUE FISCAL YEAR END AT FISCAL QUARTER ENDED
EXERCISE (#) REALIZED EXERCISABLE/ JUNE 30, 1999
NAME ($) UNEXERCISABLE EXERCISABLE/
UNEXERCISABLE (1)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Kenneth W. Schilling -0- -0- 200,000/50,000 $318,000/$179,500
</TABLE>
(1) Based on closing price of the common stock on June 30, 1999 at $1.59.
Compensation of Directors
Pursuant to the terms of their employment agreements,
effective April 22, 1999, Messrs. Schilling, Perkins and Ms. Ratliff each
received fifty thousand (50,000) options to purchase fifty thousand (50,000)
shares of common stock in consideration for their services as a director of the
Company. Each director holds office until the next annual meeting of
shareholders or until their successors are elected and qualified.
Employment Agreement for Kenneth W. Schilling
Effective March 5, 1999, Kenneth W. Schilling and the Company
entered into an Employment Agreement (the "Agreement"), as amended as of
September 8, 1999.
Under the Agreement, Mr. Schilling has been retained to act as
President and Chief Executive Officer of the Company. The Agreement is for a
term of two (2) years
22
<PAGE> 23
ending March 4, 2001. Under the Agreement, Mr. Schilling shall receive an annual
base salary of $200,000.00. In addition, effective April 22, 1999, Mr. Schilling
shall receive two hundred fifty thousand (250,000) options to purchase two
hundred fifty thousand (250,000) shares of common stock of the Company at an
exercise price of $0.75 per share. Two hundred thousand (200,000) options shall
be issued in consideration of Mr. Schilling's services as an officer of the
Company and fifty thousand (50,000) options shall be issued in consideration for
services as a director. Two hundred thousand (200,000) options vested upon
granting on April 22, 1999, and twenty-five thousand (25,000) options will vest
on April 22, 2000 and April 22, 2001, respectively.
The Agreement provides that upon total and permanent
disability, as defined in the Agreement, the Company shall pay Mr. Schilling
such benefits as may be provided to officers of the Company under any Company
provided disability insurance or similar policy or under any Company adopted
disability plan. In the absence of such policy or plan, the Company shall
continue to pay Mr. Schilling for a period of not less than six (6) months the
compensation then in effect as of the effective date of his termination.
Mr. Schilling may terminate the Agreement upon written notice,
within thirty (30) days following the occurrence of an event constituting "Good
Reason," as defined below. Upon the termination by Mr. Schilling for Good
Reason, Mr. Shilling will be entitled to receive a payment equal to the lesser
of: (1) an amount equal to one-half of his annual base salary in effect at the
time of termination; or (2) the remaining compensation due to Mr. Schilling
under the terms of the Agreement. If Mr. Schilling fails to exercise his rights
to terminate the Agreement for Good Reason within thirty (30) days following an
event constituting Good Reason, such rights shall expire and be of no further
force or effect.
"Good Reason" is defined to mean the occurrence of any of the
following events without Mr. Schilling's consent: (1) assignment of Mr.
Schilling to any duty substantially inconsistent with his position or duties
contemplated by the Agreement or a substantial reduction of his duties
contemplated by the Agreement; (2) the removal of any titles bestowed under the
Agreement; (3) any material breach or failure of the Company to carry out the
provisions of the Agreement after notice and an opportunity to cure; and (4) the
relocation of Mr. Schilling, his corporate office facilities, or personnel
outside the Phoenix metropolitan area.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Prior to the Reorganization, INVNSYS operated as a
closely-held private corporation. While a private company, INVNSYS made loans
totaling $992,037 to Kenneth Schilling. These loans are payable on demand and
accrued interest at eight percent (8%) during 1997 and six percent (6%) during
1998 and 1999. As of June 30, 1999, the balance of the loans payable by Mr.
Schilling to INVNSYS totaled $366,787.00.
23
<PAGE> 24
The Company leases its facility from Lone Cactus Capital
Group, L.L.C., a limited liability company in which Kenneth Schilling is a
member. The Company believes the terms of the lease are at an arms-length fair
market rate.
DESCRIPTION OF SECURITIES
General. The Company's Articles of Incorporation authorize the
issuance of 100,000,000 shares of common stock, $.001 par value. As of June 30,
1999, there were 25,933,418 shares of common stock outstanding.
Common Stock. Holders of shares of common stock are entitled
to one vote for each share of common stock held of record on all matters
submitted to a vote of the shareholders. Each share of common stock is entitled
to receive dividends as may be declared by the Company's Board of Directors out
of funds legally available. Management, however, does not presently intend to
pay any dividends. In the event of liquidation, dissolution or winding up of the
Company, the holders of common stock are entitled to share ratably in all assets
remaining after payment in full of all creditors of the Company and the
liquidation preferences of any outstanding shares of preferred stock, if any.
There are no redemption or sinking fund provisions applicable to the common
stock.
Debentures. The Company has issued Two Hundred Thousand
Dollars ($200,000.00) of convertible debentures (the "Debentures"). The
Debentures are due on June 21, 2000, bear interest at eight percent (8%) per
annum, and are unsecured. Under the terms of the Debentures, the Company is
obligated to use its best efforts to include the shares issuable upon conversion
of the Debentures in a registration statement filed with the Securities and
Exchange Commission ("SEC") under the Securities Act ("Registration Statement")
by June 21, 2000. Upon the effectiveness of the Registration Statement, the
Debentures shall automatically convert to 300,000 fully paid and nonassessable
shares of common stock, $.001 par value.
24
<PAGE> 25
PART II
MARKET PRICE OF DIVIDENDS ON THE COMPANY'S AND RELATED
SHAREHOLDER MATTERS
The Company's common stock is currently traded on the OTC
Bulletin Board. The common stock was initially listed under the symbol "EVCV" on
June 3, 1998 and trading began on July 16, 1998. On October 26, 1998, the
Company changed its trading symbol to "IBIZ." The following charts indicate the
high and low sales price for the Company's common stock for each fiscal quarter
between September 30, 1998 and June 30, 1999.
[Bar Graph]
Fiscal 1998 Common Stock Prices EVCV - iBIZ
<TABLE>
<CAPTION>
Quarter Ended
Stock Price Sep - 98 Dec - 98
<S> <C> <C>
High $3.06 $2.69
Low 2.25 1.88
</TABLE>
[Bar Graph]
Fiscal 1999 Common Stock Prices iBIZ
<TABLE>
<CAPTION>
Quarter Ended
Stock Price Mar - 99 Jun - 99
<S> <C> <C>
High $2.06 $2.44
Low 0.94 0.56
</TABLE>
25
<PAGE> 26
As of June 30, 1999, Management believes there to be 55
holders of record of the Company's common stock. To date, the Company has not
paid any dividends on its common stock. The Company does not currently intend to
pay dividends in the future.
LEGAL PROCEEDINGS
The Company is not currently a party to any lawsuit or
proceeding. However, the Company is subject to lawsuits occurring in the regular
course of business. Most such lawsuits involve claims for money damages. The
Company carries insurance to protect itself against such claims, subject to any
applicable deductibles. The Company can give no assurances that future lawsuits
will not have a material adverse effect on the Company's financial condition or
results of operations.
RECENT SALES OF UNREGISTERED SECURITIES
On July 10, 1998 the Company issued 3,000,000 shares of common
stock, $.001 par value, at a sales price of $.05 per share totaling $150,000.
The Company relied upon Regulation D, Rule 504 promulgated under the Securities
Act with respect to these sales.
Between November 13, 1998 and January 13, 1999 the Company
issued 540,318 shares of common stock, $.001 par value, at a sales price of $.35
per share totaling $189,111.30. The Company relied upon Regulation D, Rule 506
promulgated under the Securities Act with respect to these sales.
iBIZ Technology Corp.
Effective January 1, 1999, the Company entered into a Plan of
Reorganization and Share Exchange Agreement with INVNSYS and the below
referenced individuals. Pursuant to the Reorganization, the Company issued
16,000,000 shares of common stock, $.001 par value, in exchange for one hundred
percent (100%) of the outstanding shares of INVNSYS. The shares were allocated
as follows:
<TABLE>
<CAPTION>
NO. OF SHARES
-------------
<S> <C>
Moorea Trust dated December 18, 1991 12,120,000
Terry Ratliff 1,771,200
Mark Perkins 1,771,200
Paul Russo 46,400
Frank Ligammari 33,600
Richard Bielfelt 28,800
Terry Neild 228,800
</TABLE>
The shares issued by the Company were issued pursuant to the
exemption
26
<PAGE> 27
provided by Section 4(2) of the Securities Act of 1933, as amended (the
"Securities Act").
On March 19, 1999, the Company issued 1,293,000 shares of
common stock, $.001 par value, at a sales price of $.50 per share and 100,000
shares of common stock, $.001 par value, at a sales price of $.35 totaling an
aggregate of $681,500. The Company relied upon Regulation D, Rule 506
promulgated under the Securities Act with respect to these sales.
From April 22, 1999 through May 13, 1999 the Company issued
options to purchase 3,635,000 shares of common stock, $.001 par value to
employees and various consultants. The exercise price of the options is the fair
market value on the date of grant which ranged from $0.75 to $1.00 per share.
The Company relied upon either Rule 701 or Section 4(2) with respect to the
granting of the options.
On June 21, 1999 the Company issued Two Hundred Thousand
Dollars ($200,000.00) of convertible debentures (the "Debentures"). The
Debentures are due on June 21, 2000, bear interest at eight percent (8%) per
annum, and are unsecured. Under the terms of the Debentures, the Company is
obligated to use its best efforts to include the shares issuable upon conversion
of the Debentures in a registration statement filed with the SEC under the
Securities Act ("Registration Statement") by June 21, 2000. Upon the
effectiveness of the Registration Statement, the Debentures shall automatically
convert to 300,000 fully paid and nonassessable shares of common stock, $.001
par value.
In June 1999, the Company issued a warrant entitling the
holder to acquire 400,000 shares of common stock, $.001 par value, at an
exercise price of $0.75 per share for the first 300,000 shares and $1.00 per
share for the remaining 100,000 shares.
INVNSYS Technology Corporation
Effective November 1, 1997, INVNSYS issued the following
shares of common stock, One Dollar ($1.00) par value:
<TABLE>
<CAPTION>
NO. OF SHARES
-------------
<S> <C>
Moorea Trust dated December 18, 1991 605
Terry Ratliff 1,550
Mark Perkins 1,550
Paul Russo 40
Frank Ligammari 30
Richard Bielfelt 25
Terry Neild 200
</TABLE>
INVNSYS relied on either Rule 701 promulgated under the
Securities Act or Section 4(2) of the Securities Act with respect to all sales
and offers referenced above.
27
<PAGE> 28
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Limitation of Liability and Indemnification Matters. The
Company's Articles of Incorporation, as amended, provide to the fullest extent
permitted by Florida law, a director or officer of the Company shall not be
personally liable to the Company or its shareholders for damages for breach of
such director's or officer's fiduciary duty. The effect of this provision of the
Company's Articles of Incorporation, as amended, is to eliminate the right of
the Company and its shareholders (through shareholders' derivative suits on
behalf of the Company) to recover damages against a director or officer for
breach of the fiduciary duty of care as a director or officer (including
breaches resulting from negligent or grossly negligent behavior), except under
certain situations defined by statute. The Company believes that the
indemnification provisions in its Articles of Incorporation, as amended, are
necessary to attract and retain qualified persons as directors and officers.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
PART F/S
FINANCIAL STATEMENTS
1. INVNSYS Technology Corporation formerly known as Southwest
Financial Systems, Inc. Financial Statements October 31, 1998 and 1997.
2. Financial statements for the eight month period ended June 30,
1999 (iBIZ Technology Corp.) and June 30, 1998 (Southwest Financial Systems,
Inc.).
28
<PAGE> 29
INVNSYS TECHNOLOGY CORPORATION
FORMERLY KNOWN AS
SOUTHWEST FINANCIAL SYSTEMS, INC.
FINANCIAL STATEMENTS
OCTOBER 31, 1998 AND 1997
F-1
<PAGE> 30
TABLE OF CONTENTS
PAGE NO.
--------
INDEPENDENT AUDITORS' REPORT ...................................... 1
FINANCIAL STATEMENTS
Balance Sheets.............................................. 2
Statements of Income........................................ 3
Statement of Changes in Stockholders' Equity................ 4
Statements of Cash Flows.................................... 5-6
Notes to Financial Statements............................... 7-15
F-2
<PAGE> 31
INDEPENDENT AUDITORS' REPORT
To The Board of Directors and Stockholders
Invnsys Technology Corporation
Formerly known as Southwest Financial Systems, Inc.
Phoenix, Arizona
We have audited the accompanying balance sheets of Invnsys Technology
Corporation formerly known as Southwest Financial Systems, Inc., as of October
31, 1998 and 1997, and the related statements of income, changes in
stockholders' equity, and cash flows for the years then ended. These financial
statements are the responsibility of the company's management. Our
responsibility is to express an opinion on the financial statements based on our
audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion the financial statements referred to above present fairly, in all
material respects, the financial position of Invnsys Technology Corporation as
of October 31, 1998 and 1997, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
MOFFITT & COMPANY, P. C.
June 14, 1999
F-3
<PAGE> 32
INVNSYS TECHNOLOGY CORPORATION
FORMERLY KNOWN AS
SOUTHWEST FINANCIAL SYSTEMS, INC.
BALANCE SHEETS
OCTOBER 31, 1998 AND 1997
ASSETS
<TABLE>
<CAPTION>
1998 1997
---------- ----------
<S> <C> <C>
CURRENT ASSETS
Cash $ 200 $ 412
Accounts receivable, trade 153,536 91,073
Other receivables 1,500 1,000
Corporation income tax refund current 0 19,919
Inventories 323,397 202,320
Prepaid expenses, current 24,577 3,882
---------- ----------
TOTAL CURRENT ASSETS 503,210 318,606
---------- ----------
PROPERTY AND EQUIPMENT 76,536 97,069
---------- ----------
OTHER ASSETS
Note receivable, related party 906,620 666,103
Deposits 20,155 17,765
Prepaid expenses, long-term 2,423 5,655
Deferred tax assets 145,054 204,756
---------- ----------
TOTAL OTHER ASSETS 1,074,252 894,279
---------- ----------
TOTAL ASSETS $1,653,998 $1,309,954
========== ==========
</TABLE>
F-4
<PAGE> 33
LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)
<TABLE>
<CAPTION>
1998 1997
----------- -----------
<S> <C> <C>
CURRENT LIABILITIES
Bank overdraft $ 13,700 $ 14,545
Accounts payable, trade 780,815 691,944
Customer deposits 395,264 267,630
Notes payable, current 28,378 215,976
Accrued liabilities 63,243 30,713
Sales and payroll taxes payable 255,410 61,840
Corporation income taxes payable,
Current 17,841 13,741
Deferred income 71,031 110,797
----------- -----------
TOTAL CURRENT LIABILITIES 1,625,682 1,407,186
----------- -----------
LONG - TERM LIABILITIES
Notes payable 365,325 389,358
Deferred income taxes payable 8,224 24,607
----------- -----------
TOTAL LONG - TERM LIABILITIES 373,549 413,965
----------- -----------
STOCKHOLDER'S EQUITY
Common stock, $1.00 par value,
100,000 shares authorized,
10,000 shares issued and outstanding 10,000 10,000
Advance from IBIZ Technology Corp. 158,101 0
Retained earnings (deficit) (513,334) (521,197)
----------- -----------
TOTAL STOCKHOLDER'S EQUITY
(DEFICIT) (345,233) (511,197)
----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDER'S EQUITY (DEFICIT) $ 1,653,998 $ 1,309,954
=========== ===========
</TABLE>
F-5
<PAGE> 34
INVNSYS TECHNOLOGY CORPORATION
FORMERLY KNOWN AS
SOUTHWEST FINANCIAL SYSTEMS, INC.
STATEMENTS OF INCOME
FOR THE YEARS ENDED OCTOBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
1998 1997
----------- -----------
<S> <C> <C>
SALES $ 3,402,681 $ 2,350,459
COST OF SALES 2,219,796 1,579,440
----------- -----------
GROSS PROFIT 1,182,885 771,019
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES 1,145,285 1,249,055
----------- -----------
INCOME (LOSS) FROM OPERATIONS 37,600 (478,036)
----------- -----------
OTHER INCOME (EXPENSES)
Interest income 40,320 27,848
Miscellaneous income 3,815 10,835
Gain/loss on disposition of assets 1,500 (6,177)
Loss on Investment property 0 (25,600)
----------- -----------
TOTAL OTHER INCOME (EXPENSE) 45,635 6,906
----------- -----------
INCOME (LOSS) BEFORE INCOME TAXES
(REFUND) 83,235 (471,130)
INCOME TAXES (REFUND) 75,372 (150,021)
----------- -----------
NET INCOME (LOSS) $ 7,863 $ (321,109)
=========== ===========
NET INCOME (LOSS) PER COMMON SHARE
Basic and Diluted $ 0.79 $ (32.11)
=========== ===========
AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING 10,000 10,000
=========== ===========
</TABLE>
F-6
<PAGE> 35
INVNSYS TECHNOLOGY CORPORATION
FORMERLY KNOWN AS
SOUTHWEST FINANCIAL SYSTEMS, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED OCTOBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
ADVANCE
COMMON STOCK FROM IBIZ
----------------------- TECHNOLOGY RETAINED
SHARES AMOUNT CORP. EARNINGS
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
BALANCE, NOVEMBER 1, 1996 10,000 $ 10,000 $ 0 $(200,088)
NET (LOSS) FOR THE YEAR
ENDED OCTOBER 31, 1997 0 0 0 (321,109)
--------- --------- --------- ---------
BALANCE, OCTOBER 31, 1997 10,000 10,000 0 (521,197)
ADVANCE FROM IBIZ
TECHNOLOGY CORP 0 0 158,101 0
NET INCOME FOR THE YEAR
ENDED OCTOBER 31, 1998 0 0 0 7,863
--------- --------- --------- ---------
BALANCE, OCTOBER 31, 1998 10,000 $ 10,000 $ 158,101 $(513,334)
========= ========= ========= =========
</TABLE>
F-7
<PAGE> 36
INVNSYS TECHNOLOGY CORPORATION
FORMERLY KNOWN AS
SOUTHWEST FINANCIAL SYSTEMS, INC.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED OCTOBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
1998 1997
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 7,863 $(321,109)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities
Depreciation 38,604 92,407
Gain/loss on disposition of equipment (1,500) 31,777
Adjustment of October 31, 1996 retained earnings 0 (248,281)
Increase (decrease) in
Accounts receivable, trade (62,463) 277,523
Other receivables (500) 3,000
Income tax refunds 19,919 56,146
Inventories (121,077) 98,263
Prepaid expenses (17,463) 8,794
Deferred tax asset 59,702 (204,756)
Deposits (2,390) 73
Accounts payable 88,871 (32,201)
Customer deposits 127,634 267,630
Accrued liabilities and taxes 226,100 (32,104)
Corporation income taxes payable (12,283) 12,469
Deferred income (39,766) 30,136
--------- ---------
NET CASH FLOWS PROVIDED
BY OPERATING ACTIVITIES 311,251 39,767
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property and equipment (18,071) (97,923)
Loans to related party (240,517) (35,000)
Proceeds from sale of property and equipment 1,500 0
--------- ---------
NET CASH FLOWS (USED) BY
INVESTING ACTIVITIES (257,088) (132,923)
--------- ---------
</TABLE>
F-8
<PAGE> 37
INVNSYS TECHNOLOGY CORPORATION
FORMERLY KNOWN AS
SOUTHWEST FINANCIAL SYSTEMS, INC.
STATEMENTS OF CASH FLOWS (CONTINUED)
FOR THE YEARS ENDED OCTOBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
1998 1997
--------- ---------
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES
Advance from IBIZ Technology Corp. $ 158,101 $ 0
Proceeds from notes payable 0 138,000
Repayments of notes payable (211,631) (32,364)
--------- ---------
NET CASH FLOWS PROVIDED (USED)
BY FINANCING ACTIVITIES (53,530) 105,636
--------- ---------
NET INCREASE IN CASH 633 12,480
CASH BALANCE (OVERDRAFT), BEGINNING
OF YEAR (14,133) (26,613)
--------- ---------
CASH BALANCE (OVERDRAFT), END
OF YEAR $ (13,500) $ (14,133)
========= =========
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION
Cash paid during year:
Interest $ 61,117 $ 74,108
========= =========
Taxes $ 850 $ 50,913
========= =========
</TABLE>
F-9
<PAGE> 38
INVNSYS TECHNOLOGY CORPORATION
FORMERLY KNOWN AS
SOUTHWEST FINANCIAL SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1998 AND 1997
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF BUSINESS
Invnsys Technology Corporation, formerly known as Southwest Financial
Systems, Inc., was incorporated in the State of Arizona on July 30,
1980 and is in the business of selling retail and wholesale
financial, computing and communication equipment. They also provide
repair services and sell maintenance contracts. The corporation
currently operates a service center in Phoenix, Arizona.
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS
Uncollectible accounts receivable are written off at the time
management specifically determines them to be uncollectible. In
addition, the allowance for doubtful accounts is provided at an
amount determined by management.
A summary of accounts receivable and the allowance for doubtful
accounts is as follows:
<TABLE>
<CAPTION>
1998 1997
-------- --------
<S> <C> <C>
Accounts receivable $156,036 $ 98,073
Allowance for doubtful accounts 2,500 7,000
-------- --------
Net accounts receivable $153,536 $ 91,073
======== ========
</TABLE>
INVENTORIES
Inventories are stated at the lower of cost (determined
principally by the first-in, first-out method) or market.
PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. Major renewals and
improvements are charged to the asset accounts while replacement,
maintenance and repairs, which do not improve or extend the lives of
the respective assets, are expensed. At the time property and
equipment are retired or otherwise disposed of, the asset and related
accumulated depreciation accounts are relieved of the applicable
amounts. Gains or losses from retirements or sales are credited or
charged to income.
The company depreciates its property and equipment for financial
reporting purposes using the straight-line method based upon the
following useful lives of the assets:
F-10
<PAGE> 39
INVNSYS TECHNOLOGY CORPORATION
FORMERLY KNOWN AS
SOUTHWEST FINANCIAL SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 1998 AND 1997
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
PROPERTY AND EQUIPMENT (CONTINUED)
<TABLE>
<S> <C>
Tooling 3 Years
Machinery and equipment 5-10 Years
Office furniture and equipment 5-10 Years
Vehicles 5 Years
Leasehold improvements 5 Years
</TABLE>
ACCOUNTING ESTIMATES
Management uses estimates and assumptions in preparing financial
statements in accordance with generally accepted accounting
principles. Those estimates and assumptions affect the reported
amounts of assets and liabilities, the disclosure of contingent
assets and liabilities, and the reported revenues and expenses.
Actual results could vary from the estimates that were used.
REVENUE RECOGNITION
The company recognizes revenue from product sales when the goods
are shipped and title passes to customers.
SALES OF MAINTENANCE AGREEMENTS
The revenue received for the maintenance agreements is being
reported evenly over the life of the contracts. Such unearned portion
is recorded as "deferred income".
INCOME TAXES
Provisions for income taxes are based on taxes payable or
refundable for the current year and deferred taxes on temporary
differences between the amount of taxable income and pretax financial
income and between the tax bases of assets and liabilities and their
reported amounts in the financial statements. Deferred tax assets and
liabilities are included in the financial statements at currently
enacted income tax rates applicable to the period in which the
deferred tax assets and liabilities are expected to be realized or
settled as prescribed in FASB Statement No., 109, Accounting for
Income Taxes. As changes in tax laws or rates are enacted, deferred
tax assets and liabilities are adjusted through the provision for
income taxes.
F-11
<PAGE> 40
INVNSYS TECHNOLOGY CORPORATION
FORMERLY KNOWN AS
SOUTHWEST FINANCIAL SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 1998 AND 1997
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
NET EARNINGS PER SHARE
The company adopted Statement of Financial Accounting Standards
No. 128 that requires the reporting of both basic and diluted
earnings per share. Basic earnings per share is computed by dividing
net income available to common shareowners by the weighted average
number of common shares outstanding for the period. Diluted earnings
per share reflects the potential dilution that could occur if
securities or other contracts to issue common stock were exercised or
converted into common stock.
RISKS AND UNCERTAINTIES
The company is in the computer and computer technology industry. The
company's products are subject to rapid obsolescence and management
must authorize substantial funds for research and development costs
in order to stay competitive.
NOTE 2 DISCLOSURE ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS
The company has financial instruments, none of which are held for
trading purposes. The company estimates that the fair value of all
financial instruments at October 31, 1998 and 1997, as defined in
FASB 107, does not differ materially from the aggregate carrying
values of its financial instruments recorded in the accompanying
balance sheet. The estimated fair value amounts have been determined
by the company using available market information and appropriate
valuation methodologies. Considerable judgement is required in
interpreting market data to develop the estimates of fair value, and
accordingly, the estimates are not necessarily indicative of the
amounts that the company could realize in a current market exchange.
NOTE 3 INVENTORIES
At October 31, 1998 and 1997, inventories were comprised of:
<TABLE>
<CAPTION>
1998 1997
-------- --------
<S> <C> <C>
Computer equipment $208,725 $161,212
Office equipment 25,693 25,689
Depot 9,343 9,343
Demo units 77,576 4,016
Parts 2,060 2,060
-------- --------
Totals $323,397 $202,320
======== ========
</TABLE>
F-12
<PAGE> 41
INVNSYS TECHNOLOGY CORPORATION
FORMERLY KNOWN AS
SOUTHWEST FINANCIAL SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 1998 AND 1997
NOTE 4 PROPERTY AND EQUIPMENT
At October 31, 1998 and 1997, property and equipment and
accumulated depreciation consisted of:
<TABLE>
<CAPTION>
1998 1997
-------- --------
<S> <C> <C>
Tooling $ 68,100 $ 68,100
Machinery and equipment 30,656 75,104
Office furniture and equipment 60,406 45,476
Vehicles 39,141 59,596
Leasehold improvements 18,044 18,044
-------- --------
216,347 266,320
Less accumulated depreciation 139,811 169,251
-------- --------
Total property and equipment $ 76,536 $ 97,069
======== ========
</TABLE>
The depreciation expenses for the years ended October 31, 1998
and 1997 were $38,604 and $92,407, respectively.
NOTE 5 NOTE RECEIVABLE, RELATED PARTY
<TABLE>
<CAPTION>
1998 1997
-------- --------
<S> <C> <C>
The related note is unsecured, payable on demand and
accrues interest at 6% for 1998 and 8% for 1997. At October
31, 1998 and 1997, management believed the notes would not be
collected within the current operating cycle and classified
the asset as a long-term asset. $615,250 of the loan was
repaid in 1999.
Total $906,620 $666,103
======== ========
</TABLE>
F-13
<PAGE> 42
INVNSYS TECHNOLOGY CORPORATION
FORMERLY KNOWN AS
SOUTHWEST FINANCIAL SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 1998 AND 1997
NOTE 6 DEFERRED INCOME TAXES
Deferred income taxes (benefits) are provided for certain income
and expenses which are recognized in different periods for tax and
financial reporting purposes. Sources of temporary differences and
the resulting tax assets and liabilities are as follows:
<TABLE>
<CAPTION>
1998 1997
-------- --------
<S> <C> <C>
Deferred tax assets
Net operating loss carryforwards $116,382 $176,591
Tax credits 20,175 20,175
Other 8,497 7,980
-------- --------
Total 145,054 204,746
Less valuation allowance 0 0
-------- --------
Net deferred tax assets $145,054 $204,746
======== ========
Deferred tax liability
Property related $ 8,224 $ 24,607
======== ========
</TABLE>
NOTE 7 TAX CARRYFORWARD
The company has the following tax carryforwards at October 31,
1998:
<TABLE>
<CAPTION>
EXPIRATION
YEAR AMOUNT DATE
------------------ -------- ----------------
<S> <C> <C>
Net operating loss
October 31, 1997 $342,302 October 31, 2012
Capital loss
October 31, 1997 25,600 October 31, 2002
Contribution
October 31, 1995 1,536 October 31, 2000
October 31, 1996 2,068 October 31, 2001
</TABLE>
NOTE 8 PAYROLL TAXES PAYABLE
At October 31, 1998, the company was delinquent in the payment
and filing of payroll tax returns in the amount of $236,923. The
payroll taxes were paid in 1999.
F-14
<PAGE> 43
INVNSYS TECHNOLOGY CORPORATION
FORMERLY KNOWN AS
SOUTHWEST FINANCIAL SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 1998 AND 1997
NOTE 9 NOTES PAYABLE
<TABLE>
<CAPTION>
1998 1997
-------- --------
<S> <C> <C>
Note payable to Community First National Bank due in monthly
payments of interest of approximately $3,100. Interest is
computed at national prime as stated in the Wall Street Journal
plus 3 percent. The principal amount is due July 31, 2000. This
note is secured by accounts receivable, general intangibles and
all equipment and leasehold improvements. The shareholder has
personally guaranteed the loan and the bank is the beneficiary
of an insurance policy on the life of the shareholder. $340,613 $334,890
Note payable to Community First National Bank due in monthly
installments of principal and interest of $3,754 until May 7,
1999. Interest is computed at national prime as stated in the
Wall Street Journal plus 3 percent. This note is secured by
accounts receivable, general intangibles and all equipment and
leasehold improvements. The shareholder has personally
guaranteed the loan and the bank is the beneficiary of an
insurance policy on the life of the shareholder
The loan was paid off in 1999. 23,737 64,798
Note payable to Community First National Bank due in monthly
payments of principal and interest of $545 with interest at 7
percent until March 7, 2004. The note is secured by
an automobile. 29,353 33,646
</TABLE>
F-15
<PAGE> 44
INVNSYS TECHNOLOGY CORPORATION
FORMERLY KNOWN AS
SOUTHWEST FINANCIAL SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 1998 AND 1997
NOTE 9 NOTES PAYABLE (CONTINUED)
<TABLE>
<CAPTION>
1998 1997
-------- --------
<S> <C> <C>
Note payable to an individual payable in one payment of $50,000
on February 1, 1998 and a final balance and accrued interest on
May 21, 1998. The note is secured by a houseboat
owned by a stockholder of the company. $ 0 $100,000
Unsecured note payable from an individual
with interest computed at 14%. Principal
and accrued interest is due December 5, 1997. 0 72,000
-------- --------
393,703 605,334
Less: current portion of long-term debt 28,378 215,976
-------- --------
Net long-term debt $365,325 $389,358
======== ========
</TABLE>
Maturities of long-term debt are as follows:
<TABLE>
<CAPTION>
1998 1997
-------- --------
<S> <C> <C>
Year ended October 31,
1998 $ 0 215,976
1999 28,378 29,790
2000 345,588 339,865
2001 5,336 5,336
2002 5,721 5,721
2003 & thereafter 8,680 8,646
-------- --------
$393,703 $605,334
======== ========
</TABLE>
F-16
<PAGE> 45
INVNSYS TECHNOLOGY CORPORATION
FORMERLY KNOWN AS
SOUTHWEST FINANCIAL SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 1998 AND 1997
NOTE 10 OPERATING LEASE - REAL ESTATE
The company leases office space under a non-cancelable operating
lease agreement expiring on July 15, 1999. The lease provides for
annual rentals of approximately $40,000 plus increases due to changes
in the consumer price index and building operating costs. The lease
is guaranteed by the major stockholders of the company.
Future minimum lease payments, excluding taxes and expenses, are as
follows for the years ending October 31:
<TABLE>
<CAPTION>
1998 1997
------- -------
<S> <C> <C>
1998 $ 0 $47,320
1999 35,128 35,128
------- -------
$35,128 $82,448
======= =======
</TABLE>
NOTE 11 ADVERTISING
The company expenses all advertising as incurred. For the years ended
October 31, 1998 and 1997, the company charged to operations $89,656
and $24,721, respectively, in advertising costs.
NOTE 12 INTEREST
The company incurred interest expenses for the years ended October
31, 1998 and 1997 of $75,282 and $74,147, respectively.
NOTE 13 WARRANTY RESERVE
In 1998, the company established a warranty reserve to cover any
potential warranty costs on computer equipment that are not covered
by the computer manufacturer's warranty.
NOTE 14 ECONOMIC DEPENDENCY
The company purchases the majority of its computer equipment from
three suppliers.
NOTE 15 PLAN OF REORGANIZATION AND STOCK EXCHANGE AGREEMENT
On January 1, 1999, the company entered into a plan of reorganization
with IBIZ Technology Corp., a Florida corporation.
Under the plan, IBIZ Technology Corp. issued 16,000,000 shares of
newly issued unregistered common stock for 100% of the issued and
outstanding stock of Invnsys Technology Corporation.
F-17
<PAGE> 46
INVNSYS TECHNOLOGY CORPORATION
FORMERLY KNOWN AS
SOUTHWEST FINANCIAL SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 1998 AND 1997
NOTE 16 OFFICERS' COMPENSATION
On March 5, 1999, the company entered into three employment
agreements with the following officers:
<TABLE>
<CAPTION>
PRESIDENT VICE
AND CHIEF VICE PRESIDENT
EXECUTIVE PRESIDENT/ OF
OFFICER COMPTROLLER OPERATIONS
<S> <C> <C> <C>
Annual compensation $ 200,000 $ 88,000 $ 88,000
Options for IBIZ Technology
Corp. stock 250,000 350,000 350,000
shares shares shares
Exercise price per share $ 0.75 $ 0.75 $ 0.75
</TABLE>
NOTE 17 INCOME TAXES FOR YEAR ENDED OCTOBER 31, 1998
The net income before taxes was $83,235 and the corporation
income taxes was $75,372. The large tax was due to the fact
that a number of expenses the company incurred are not
deductible for income tax purposes.
F-18
<PAGE> 47
iBIZ TECHNOLOGY CORPORATION AND CONSOLIDATED SUBSIDIARY
(INTERNALLY PREPARED-UNREVIEWED & UNAUDITED)
FOR NOVEMBER 1998 THRU JUNE 1999 AND
INVNSYS TECHNOLOGY CORPORATION FOR
NOVEMBER 1997 THRU JUNE 1998
<TABLE>
<CAPTION>
INTERNALLY INTERNALLY
PREPARED PREPARED
----------------- --------------------
iBIZ
INVNSYS CONSOLIDATED
11/97-06/98 11/98-06/99
----------------- --------------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash 200 83,653
Accounts receivable, trade 423,625 131,190
Other receivables 1,000 553
Corporation income tax refund current 0 0
Inventories 332,954 256,548
Prepaid expenses, current 6,733 26,455
----------------- --------------------
TOTAL CURRENT ASSETS 764,512 498,399
PROPERTY AND EQUIPMENT 87,579 73,979
OTHER ASSETS
Investments 303,995
Note receivable, related party 476,892 366,787
Deposits 32,220 19,650
Prepaid expenses, long-term 0 0
Deferred tax assets 0 305,054
----------------- --------------------
TOTAL OTHER ASSETS 813,107 691,491
----------------- --------------------
TOTAL ASSETS 1,665,198 1,263,869
================= ====================
</TABLE>
F-19
<PAGE> 48
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)
<S> <C> <C>
CURRENT LIABILITIES
Bank overdraft 91,053 0
Accounts payable, trade 367,439 536,513
Customer deposits 754,104 160,018
Notes payable, current 392,362 73,861
Accrued liabilities 53,528 49,771
Sales and payroll taxes payable 116,319 86,761
Corporate income taxes payable, current 13,791 18,666
Deferred income 110,750 77,159
Deferred income taxes payable (136,830)
Convertible debentures, payable 200,000
------------- -----------------------
TOTAL CURRENT LIABILITIES 1,762,516 1,202,749
LONG-TERM LIABILITIES
Accounts payable, long term 143,000
Notes payable 0 21,372
Deferred income taxes payable 8,224
------------- -----------------------
TOTAL LONG-TERM LIABILITIES 143,000 29,596
STOCKHOLDER'S EQUITY
Common stock, $1.00 par value,
100,000 shares authorized,
10,000 shares issued and outstanding 10,000 0
Common stock
Authorized - 100,000,000 shares, par
value $.001 per shares
Issued and outstanding - 25,985,918 shares 25,986
Paid in capital in excess of par value of stock 964,207
Advance from iBIZ Technology Corp.
Advances on stock subscriptions
Retained earnings (deficit) (250,319) (958,669)
------------- -----------------------
TOTAL STOCKHOLDER'S EQUITY
(DEFICIT) (240,319) 31,524
------------- -----------------------
TOTAL LIABILITIES AND
STOCKHOLDER'S EQUITY (DEFICIT) 1,665,198 1,263,869
============== ========================
</TABLE>
STATEMENT OF INCOME
F-20
<PAGE> 49
<TABLE>
<S> <C> <C>
SALES 1,963,354 1,509,777
COST OF SALES (1,136,492) 1,125,543
------------- -----------------------
GROSS PROFIT 826,863 384,234
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES (628,575) 963,579
------------- -----------------------
PROFIT (LOSS) BEFORE OTHER INCOME 198,288 (579,345)
OTHER INCOME
Cancellation of debt 148,033
Other income 147,962 20,147
------------- -----------------------
TOTAL OTHER INCOME 147,962 168,180
PROFIT (LOSS) BEFORE INCOME TAX REFUND 346,250 (411,165)
PROVISION FOR INCOME TAXES (REFUND) 75,372 (135,150)
------------- -----------------------
NET (LOSS) 270,878 (276,015)
============= =======================
</TABLE>
CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net (Loss) 270,878 (276,015)
Adjustment to reconcile net (loss) to
net cash (used) by operating activities
Depreciation 9,490 27,670
Cancellation of debt (148,033)
Increase (decrease) in
Accounts receivable, trade (332,552) 22,346
Other receivables 947
Inventories (130,634) 147,570
Prepaid expenses 2,804 545
Deferred tax asset 204,756 (160,000)
Deposits (14,455) 505
</TABLE>
F-21
<PAGE> 50
<TABLE>
<S> <C> <C>
Accounts payable (181,505) (259,398)
Customer deposits 486,474 (235,246)
Accrued liabilities (84,093) (193,777)
Corporate Income Tax Refund 19,919
Deferred income (47) 6,128
------------- -----------------------
NET CASH FLOWS (USED)
BY OPERATING ACTIVITIES 251,036 (1,066,758)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment (25,113)
Repayment of related party loans (114,784) 539,833
------------- -----------------------
NET CASH FLOWS PROVIDED BY
INVESTING ACTIVITIES (114,784) 514,720
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from issuance of common stock 747,661
Proceeds from issuance of convertible debentures 200,000
Decrease in notes payable (212,972) (298,470)
------------- -----------------------
NET CASH FLOW PROVIDED
BY FINANCING ACTIVITIES (212,972) 649,191
------------- -----------------------
NET INCREASE IN CASH (76,720) 97,153
CASH BALANCE (OVERDRAFT), OCTOBER 31, 1997 (1998) (14,133) (13,500)
------------- ------------------------
CASH BALANCE (OVERDRAFT), JUNE 30, 1998 (1999) (90,853) 83,653
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION
Cash paid during year:
Interest 24,970 26,490
Taxes 0 0
NON CASH INVESTING AND FINANCING
ACTIVITIES
Issuance of company stock for investment in
INVNSYS Technology Corporation 6,000
Cancellation of debt 148,033
</TABLE>
F-22
<PAGE> 51
PART III
INDEX TO EXHIBIT
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE NO.
----------- ----------- --------
<S> <C> <C>
2.01 Plan of Reorganization and Stock Exchange Agreement dated January 1, 1999
3.01 Articles of Incorporation, as amended
3.02 Bylaws
10.1 Citrix Business Alliance Membership Agreement dated February 10, 1999, between
INVNSYS and Citrix Systems, Inc.
10.2 Client Software License Agreement dated December 30, 1998, between INVNSYS
Citrix Systems, Inc.
10.3 iBIZ Technology Corporation Distributed Software License Agreement dated June 2,
1999, between the Company and Jeremy Radlow
10.4 3Com Designed for Palm Computing Platform Logo License Agreement, between the
Company and Palm Computing, Inc.
10.5 iBIZ Technology Corp. Stock Option Plan dated January 31, 1999
10.6 Form of Stock Option
10.7 Lease Agreement dated June 1, 1999, between the Company and Lone Cactus Capital
Group, L.L.C.
10.8 Strategic Teaming and Marketing Agreement dated February 18, 1999, between the
Company and Global Telephone Communication, Inc.
10.9 Form of iBIZ Technology Corp. Common Stock Purchase Warrant
10.10 Form of iBIZ Technology Corp. Convertible Debenture
10.11 Employment Agreement dated March 5, 1999, as amended, between the Company,
INVNSYS and Kenneth Schilling
10.12 Employment Agreement dated March 5, 1999, as amended, between the Company,
INVNSYS and Terry Ratliff
10.13 Employment Agreement dated March 5, 1999, as amended,
between the Company, INVNSYS and Mark Perkins
11. Statement re: Computation of Earnings per share
21. Subsidiaries of Registrant
27. Financial Data Schedule
</TABLE>
<PAGE> 52
Pursuant to the requirements of Section 12 of the Securities
Act of 1934, the registrant has duly caused this registration statement to be
signed on its behalf by the undersigned thereunto duly authorized.
Dated this _____________ day of __________________ , 1999
iBIZ TECHNOLOGY CORP., A FLORIDA
CORPORATION
By:_______________________________________________________
Kenneth W. Schilling, President, Director
By:_______________________________________________________
Terry S. Ratliff, Vice President,
Comptroller, Director
By:_______________________________________________________
Mark H. Perkins, Vice President of Operations,
Director
<PAGE> 53
INDEX TO EXHIBIT
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE NO.
----------- ----------- --------
<S> <C> <C>
2.01 Plan of Reorganization and Stock Exchange Agreement dated January 1, 1999
3.01 Articles of Incorporation, as amended
3.02 Bylaws
10.1 Citrix Business Alliance Membership Agreement dated February 10, 1999, between
INVNSYS and Citrix Systems, Inc.
10.2 Client Software License Agreement dated December 30, 1998, between INVNSYS
Citrix Systems, Inc.
10.3 iBIZ Technology Corporation Distributed Software License Agreement dated June 2,
1999, between the Company and Jeremy Radlow
10.4 3Com Designed for Palm Computing Platform Logo License Agreement, between the
Company and Palm Computing, Inc.
10.5 iBIZ Technology Corp. Stock Option Plan dated January 31, 1999
10.6 Form of Stock Option
10.7 Lease Agreement dated June 1, 1999, between the Company and Lone Cactus Capital
Group, L.L.C.
10.8 Strategic Teaming and Marketing Agreement dated February 18, 1999, between the
Company and Global Telephone Communication, Inc.
10.9 Form of iBIZ Technology Corp. Common Stock Purchase Warrant
10.10 Form of iBIZ Technology Corp. Convertible Debenture
10.11 Employment Agreement dated March 5, 1999, as amended, between the Company,
INVNSYS and Kenneth Schilling
10.12 Employment Agreement dated March 5, 1999, as amended, between the Company,
INVNSYS and Terry Ratliff
10.13 Employment Agreement dated March 5, 1999, as amended, between the Company,
INVNSYS and Mark Perkins
21. Subsidiaries of Registrant
27. Financial Data Schedule
</TABLE>
<PAGE> 1
Exhibit 2.01
PLAN OF REORGANIZATION
AND
STOCK EXCHANGE AGREEMENT
THIS PLAN OF REORGANIZATION AND STOCK EXCHANGE AGREEMENT ("this
Agreement") is entered into effective as of the 1st day of January, 1999, by and
among (i) iBIZ TECHNOLOGY CORP., a Florida corporation formerly known as Invnsys
Holding Corporation ("Buyer"); (ii) INVNSYS TECHNOLOGY CORPORATION, an Arizona
corporation formerly known as Southwest Financial Systems, Inc. (the "Company");
and (iii) KENNETH SCHILLING and DIANE SCHILLING, husband and wife and trustees
under the Moorea Trust dated December 18, 1991 (sometimes collectively referred
to herein as the "Schillings"); (iv) TERRY RATLIFF, an individual ("Ratliff");
(v) MARK PERKINS, an individual ("Perkins"); (vi) PAUL RUSSO, an individual
("Russo"); (vii) FRANK LIGAMMARI, an individual ("Ligammari"); (viii) RICHARD
BIELFELT, an individual ("Bielfelt"); and (ix) TERRY NEILD, an individual
("Neild"). The foregoing individuals are all Shareholders of the Company, and
are sometimes referred to herein individually as a "Stockholder" or a "Seller"
and collectively as "the Stockholders" or "the Sellers". The foregoing persons
are sometimes referred to herein individually as a "party" and collectively as
the "parties".
RECITALS:
A. The Company is engaged in the business of designing,
manufacturing and distributing small-footprint desktop computers, transaction
printers, general purpose and financial application keyboards, numeric keypads,
cathode ray tube and liquid crystal display monitors and related products.
B. The Schillings have been officers and directors of the Company
and are the trustees under the Moorea Trust dated December 18, 1991, which holds
a majority of the stock in the Company.
C. The Shareholders desire to sell, and Buyer desires to buy, all of
the issued and outstanding shares of common stock of the Company in exchange for
newly issued voting stock in Buyer representing not less than sixty-five percent
(65%) of the outstanding stock in Buyer. It is intended that this transaction
will qualify as a tax-free reorganization pursuant to the U.S. Internal Revenue
Code.
THEREFORE, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants herein contained, the parties agree as follows:
1. DEFINITIONS. The following terms shall have the following
meaning as used in this Agreement:
Page 1
<PAGE> 2
"Affiliate" has the meaning set forth in Rule 12b-2 of the
regulations promulgated under the Securities Exchange Act of 1934, as amended.
"Code" means the Internal Revenue Code of 1986, as amended.
"Income Taxes" means any federal, state, local, or foreign income
taxes, including any interest, penalty, or addition thereto, whether disputed or
not.
"Income Tax Return" means any return, declaration, report, claim for
refund, or information return or statement relating to Income Taxes, including
any schedule or attachment thereto, and including any amendment thereof.
"Knowledge" means actual knowledge without independent
investigation.
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"Person" means an individual, a partnership, a limited liability
company, a corporation, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization, or a governmental entity (or any
department, agency, or political subdivision thereof) or other entity or
association.
"Security Interest" means any mortgage, pledge, lien, encumbrance,
charge, or other security interest.
"Stockholders" means the Schillings as trustees under the Moorea
Trust dated December 18, 1991 (10,605 shares, i.e., 75.75%), Terry Ratliff
(1,550 shares, i.e., 11.07%), Mark Perkins (1,550 shares, i.e., 11.07%), Paul
Russo (40 shares, i.e., 0.29%), Frank Ligammari (30 shares, i.e., 0.21%),
Richard Bielfelt (25 shares, i.e., 0.18%) and Terry Neild (200 shares, i.e.,
1.43%).
"Subsidiary" means any corporation with respect to which a specified
Person (or a Subsidiary thereof) owns a majority of the common stock or has the
power to vote or direct the voting of sufficient securities to elect a majority
of the directors.
2. BASIC TRANSACTION.
(a) Purchase and Sale of Stock. Subject to the terms and conditions
of this Agreement, Buyer agrees to purchase from Sellers, and Sellers agrees to
sell, transfer, convey, and deliver to Buyer, 14,000 shares of the common stock
of the Company (the "Shares") which will at Closing represent 100% of the issued
and outstanding shares of the common stock of the Company. The transfer of the
Shares will be effective as of January 1, 1999.
Page 2
<PAGE> 3
(b) Purchase Price. The Buyer agrees to pay and deliver to Sellers
at the Closing 16,000,000 shares of newly issued unregistered Common Stock, .001
par value, of Buyer ("Buyer Securities") (collectively the "Purchase Price"),
with the certificates for the Buyer Securities to be delivered at the Closing.
The Buyer Securities shall be allocated as follows: The Schillings as trustees
under the Moorea Trust dated December 18, 1991 (12,120,000 shares); Terry
Ratliff (1,771,200 shares); Mark Perkins (1,771,200 shares); Paul Russo (46,400
shares); Frank Ligammari (33,600 shares); Richard Bielfelt (28,800 shares);
Terry Neild (228,800 shares)). The Buyer Securities shall be titled in the name
of the foregoing individuals as indicated. The Purchase Price shall be allocated
to the Shares and the Covenant Not to Compete set forth in Section 7(f) in any
reasonable manner agreed on by the Sellers and Buyer.
(c) The Closing. The closing of the transactions contemplated by
this Agreement (the "Closing") shall take place at the offices of the Company
located at 2331 W. Royal Palm Road, Suite 105, Phoenix, Arizona commencing at
2:00 p.m. on the second business day following the satisfaction or waiver of all
conditions to the obligations of the parties as set forth in Section 6 to
consummate the transactions contemplated hereby (other than conditions with
respect to actions the respective parties will take at the Closing itself) or
such other date as the parties may mutually determine but in no event later than
March 5, 1999 ("Closing Date").
(d) Deliveries at the Closing. At the Closing, (i) Sellers will
deliver to Buyer the various certificates, instruments, and documents referred
to in Section 5(a) below; (ii) Buyer will deliver to Sellers the various
certificates, instruments, and documents referred to in Section 5(b) below;
(iii) Buyer will deliver to Sellers the Buyer Securities specified in Section
2(b) above; and (iv) Sellers will transfer the Shares to Buyer pursuant to
Section 2(b) above.
3. REPRESENTATIONS AND WARRANTIES OF SELLERS AND THE SCHILLINGS.
(a) Each Seller individually represents and warrants to Buyer that
the statements contained in this Section 3(a) are correct and complete as of the
date of this Agreement and will be correct and complete as of the Closing Date
(as though made then and as though the Closing Date were substituted for the
date of this Agreement throughout this Section 3(a)), except as set forth in the
disclosure schedule attached to this Agreement ("Disclosure Schedule"). The
Disclosure Schedule will be arranged in paragraphs corresponding to the lettered
and numbered paragraphs contained in this Section 3(a).
(i) Authorization of Transaction. Sellers have full power and
authority to execute and deliver this Agreement and to perform his, her,
or its obligations hereunder. This Agreement constitutes the valid and
legally binding obligation of the Sellers, enforceable in accordance with
its terms and conditions. The Sellers need not give any notice to, make
any filing with, or obtain any authorization, consent, or approval of any
government or governmental agency in order to consummate the transactions
contemplated by this Agreement.
Page 3
<PAGE> 4
(ii) Noncontravention. Except as set forth on Section 3(a)(ii)
of the Disclosure Schedule, neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby
will (i) to the individual Knowledge of the respective Sellers, violate
any constitution, statute, regulation, rule, injunction, judgment, order,
decree, ruling, charge, or other restriction of any government,
governmental agency or court, to which such Seller is subject or any
provision or (ii) conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the
right to accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license, instrument, or other
arrangement to which such Seller is a party or by which it is bound or to
which any of the Shares is subject (or result in the imposition of any
Security Interest upon any of the Shares), except where the violation,
conflict, breach, default, acceleration, termination, modification,
cancellation, failure to give notice, or Security Interest would not have
a material adverse effect on the ability of the parties to consummate the
transactions contemplated by this Agreement. To the individual Knowledge
of the respective Sellers, there is no need to give any notice to, make
any filing with, or obtain any authorization, consent, or approval of any
government or governmental agency in order for the parties to consummate
the transactions contemplated by this Agreement, except where the failure
to give notice, to file, or to obtain any authorization, consent, or
approval would not have a material adverse effect on the business,
financial condition, operations, results of operations, or future
prospects of the Company or on the ability of the parties to consummate
the transactions contemplated by this Agreement.
(iii) Brokers' Fees. Sellers have no liability or obligation
to pay any fees or commissions to any broker, finder, or agent with
respect to the transactions contemplated by this Agreement for which the
Buyer could become liable or obligated.
(iv) Investment. Each Seller (i) understands that the Buyer
Securities have not been, and may not be, registered under any federal,
state or other securities laws, and are being issued in reliance upon
federal and state exemptions for transactions not involving any public
offering, (ii) is acquiring Buyer Securities solely for its own account
for investment purposes, and not with a view to the distribution thereof,
(iii) is a sophisticated investor with knowledge and experience in
business and financial matters, (iv) has received certain information
concerning Buyer and has had the opportunity to obtain additional
information as desired in order to evaluate the merits and the risks
inherent in holding Buyer Securities, (v) is able to bear the economic
risk and lack of liquidity inherent in holding Buyer Securities. The
Schillings represent and warrant they qualify as an "Accredited Investor"
as defined in Rule 502 of Regulation D promulgated under the Securities
Act of 1933, as amended. The Buyer Securities shall contain a restrictive
legend. Before transferring any Buyer Securities, Sellers shall furnish
Buyer with (i) a written opinion reasonably satisfactory to
Page 4
<PAGE> 5
Buyer in form and substance from counsel reasonably satisfactory to Buyer
by reason of experience to the effect that the holder may transfer Buyer
Securities as desired without registration and (ii) a written undertaking
executed by the desired transferee reasonably satisfactory to Buyer in
form and substance agreeing to be bound by the restrictions on transfer
contained herein.
(v) Ownership of Shares. Each Seller holds of record and owns
beneficially the number of Shares set forth next to his or its name in
Section 1 of this Agreement, free and clear of any restrictions on
transfer (other than restrictions under the Securities Act and state
securities laws), taxes, Security Interests, options, warrants, purchase
rights, contracts, commitments, equities, claims, and demands. None of the
Sellers is a party to any option, warrant, purchase right, or other
contract or commitment that could require such Seller to sell, transfer,
or otherwise dispose of any capital stock of the Company (other than this
Agreement). The Sellers is not a party to any voting trust, proxy, or
other agreement or understanding with respect to the voting of any capital
stock of the Company.
(vi) Disclosure. To the individual Knowledge of each of the
Sellers, the representations and warranties contained in this Section 3(a)
do not contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements and
information contained in this Section 3(a) not misleading.
(b) The Schillings and the Company represent and warrant to Buyer
that the statements contained in this Section 3(b) are correct and complete as
of the date of this Agreement and will be correct and complete as of the Closing
Date (as though made then and as though the Closing Date were substituted for
the date of this Agreement throughout this Section 3), except as set forth in
the disclosure schedule attached to this Agreement ("Disclosure Schedule"). The
Disclosure Schedule will be arranged in paragraphs corresponding to the lettered
and numbered paragraphs contained in this Section 3(b).
(i) Organization of the Company. The Company is a corporation
duly organized, validly existing, and in good standing under the laws of
the jurisdiction of its incorporation. The Company has provided current
Articles, Bylaws and stock records, along with any amendments, to Buyer.
(ii) Noncontravention. Except as set forth on Section 3(b)(ii)
of the Disclosure Schedule, neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby
will (i) to the Knowledge of the Schillings, violate any constitution,
statute, regulation, rule, injunction, judgment, order, decree, ruling,
charge, or other restriction of any government, governmental agency or
court, to which the Company is subject or any provision of the charter or
bylaws of the Company or (ii) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any
party the right to accelerate, terminate, modify, or cancel, or require
any notice under any agreement, contract, lease, license, instrument, or
other arrangement to the Company is a party or by which it is bound or to
which any of its assets is subject (or result in the imposition of any
Page 5
<PAGE> 6
Security Interest upon any of its assets), except where the violation,
conflict, breach, default, acceleration, termination, modification,
cancellation, failure to give notice, or Security Interest would not have
a material adverse effect on the business, financial condition,
operations, results of operations, or future prospects of the Company or
on the ability of the parties to consummate the transactions contemplated
by this Agreement. To the Knowledge of the Schillings, the Company does
not need to give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any government or governmental
agency in order for the parties to consummate the transactions
contemplated by this Agreement, except where the failure to give notice,
to file, or to obtain any authorization, consent, or approval would not
have a material adverse effect on the business, financial condition,
operations, results of operations, or future prospects of the Company or
on the ability of the parties to consummate the transactions contemplated
by this Agreement.
(iii) Brokers' Fees. The Company has no liability or
obligation to pay any fees or commissions to any broker, finder, or agent
with respect to the transactions contemplated by this Agreement for which
Buyer could become liable or obligated.
(iv) Title to Assets. The Company has good and marketable
title to all of its tangible assets, and owns all of its assets free and
clear of any Security Interest except those set forth on Section 3(b)(iv)
of the Disclosure Schedule.
(v) Subsidiaries. The Company has no Subsidiaries or Affiliate
entities except TellerVision, Inc., which is an Arizona corporation, all
of the stock of which is held by the Schillings as trustees of the Moorea
Trust dated December 18, 1991 which is not included in the transactions
contemplated by this Agreement. The Schillings covenant to change the name
of TellerVision, Inc. if requested by Buyer.
(vi) Financial Statements. Attached hereto as Section 3(b)(vi)
of Disclosure Schedule are the following financial statements for the
Company: unaudited financial statements for the fiscal years ended October
31, 1995, October 31, 1996, and October 31, 1997. The October 31, 1997
Financial Statements are sometimes referred to herein as the "Company's
Most Recent Financial Statements". Except as may otherwise be indicated,
the Company's Most Recent Financial Statements have been prepared in
accordance with GAAP applied on a consistent basis throughout the periods
covered thereby, present fairly the financial condition of the Company as
of such dates and the results of operations of the Company for such
periods. "GAAP" means United States generally accepted accounting
principles as modified from time to time.
(vii) Events Subsequent to the Company's Most Recent Financial
Statements. Since the Sellers' Most Recent Financial Statements, there has
not been any material adverse change in the financial condition of the
Company taken as a
Page 6
<PAGE> 7
whole except as may otherwise be set forth on Section 3(b)(vi) of the
Disclosure Schedule.
(viii) Undisclosed Liabilities. To the Knowledge of the
Schillings, the Company has no material liability (whether known or
unknown, whether asserted or unasserted, whether absolute or contingent,
whether accrued or unaccrued, whether liquidated or unliquidated, and
whether due or to become due, including any liability for taxes), except
for (i) liabilities set forth on the Company's Most Recent Financial
Statements; and (ii) liabilities which have arisen after the Company's
Most Recent Financial Statements in the Ordinary Course of Business; and
those that are specifically disclosed in Section 3(b)(vii) of the
Disclosure Schedule.
(ix) Legal Compliance. To the Knowledge of the Schillings, the
Company has complied with all applicable laws (including rules,
regulations, codes, plans, injunctions, judgments, orders, decrees,
rulings, and charges thereunder) of federal, state, local, and foreign
governments (and all agencies thereof), and no action, suit, proceeding,
hearing, investigation, charge, complaint, claim, demand, or notice has
been filed or commenced against any of them alleging any failure so to
comply, except where the failure to comply would not have a material
adverse effect on the business, financial condition, operations, results
of operations, or future prospects of the Company.
(x) Tax Matters.
(1) Other than the tax return for the period ended
October 31, 1998, the Company has filed all Income Tax Returns that
it was required to file. All such Income Tax Returns were correct
and complete in all material respects. Except as otherwise set forth
in Section 3(b)(x) of the Disclosure Schedule, all Income Taxes owed
by the Company (whether or not shown on any Income Tax Return) have
been paid. The Company currently is not the beneficiary of any
extension of time within which to file any Income Tax Return other
than the extension filed on January 15, 1999 for the period ended
October 31, 1998.
(2) There is no material dispute or claim concerning any
Income Tax liability of the Company either claimed or raised by any
authority in writing or as to which the Schillings have Knowledge
based upon personal contact with any agent of such authority.
(3) The Company is not currently the subject of an
audit. The Company has not waived any statute of limitations in
respect of Income Taxes or agreed to any extension of time with
respect to an Income Tax assessment or deficiency.
Page 7
<PAGE> 8
(4) The Company has not been a member of an Affiliated
Group (as defined herein) filing a consolidated federal Income Tax
Return and has no liability for the taxes of any other Person under
Reg. Section 1.1502-6 (or any similar provision of state, local, or
foreign law), as a transferee or successor, by contract, or
otherwise. "Affiliated Group" means any affiliated group within the
meaning of Code Section 1504(a) or any similar group defined under a
similar provision of state, local, or foreign law.
(5) The unpaid Income Taxes of the Company did not, as
of the Company's Most Recent Financial Statements, exceed by any
material amount the reserve for Income Tax liability (rather than
any reserve for deferred taxes established to reflect timing
differences between book and tax income) set forth on the Company's
Most Recent Financial Statements and will not exceed by any material
amount that reserve as adjusted for operations and transactions
through the Closing Date in accordance with the past custom and
practice of the Company in filing Income Tax Returns.
(6) The foregoing notwithstanding, the Company has those
liabilities for unpaid taxes as may be set forth in the Company's
Most Recent Financial Statements and those that may be set forth in
Section 3(b)(x) of the Disclosure Schedule.
(xi) Real Property. Section 3(b)(xi) of the Disclosure
Schedule lists all real property that the Company owns, and all real
property leased or subleased to the Company.
(xii) Intellectual Property. Section 3(b)(xii) of the
Disclosure Schedule identifies each pending or issued trademark, copyright
or other intellectual property application, registration or patent owned
by the Company, and identifies each license, agreement, or other
permission that the Company has granted to any third party with respect to
any of its intellectual property. To the Knowledge of the Schillings, the
Company owns or has the right to use any trademarks, know-how, patents,
copyrights, software and other intellectual properties necessary, or
actually used by the Company, for the operation of its business. To the
Knowledge of the Schillings, the Company has not interfered with,
infringed upon, misappropriated, or otherwise come into conflict with any
intellectual property rights of third parties.
(xiii) Tangible Assets. The buildings, machinery, equipment,
and other tangible assets that the Company owns and leases are free from
material defects (patent and latent), have been maintained in accordance
with normal industry practice, and are in good operating condition and
repair (subject to normal wear and tear).
(xiv) Inventory. The inventory of the Company is merchantable
and fit for the purpose for which it was procured or manufactured, and
none of which is
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<PAGE> 9
slow-moving, obsolete, damaged, or defective, subject only to the reserve
for inventory writedown set forth on the Most Recent Financial Statement
as adjusted for operations and transactions through the Closing Date in
accordance with the past custom and practice of the Company.
(xv) Contracts. Section 3(b)(xv) of the Disclosure Schedule
lists all written contracts and other written or oral agreements to which
the Company is a party the performance of which by the Company will
involve consideration in excess of $1,000 paid by the Company or incurred
or received by the Company in connection with services yet to be
performed. The Company has delivered to the Buyer a correct and complete
copy of each contract or other agreement listed in Section 3(b)(xv) of the
Disclosure Schedule (as amended to date).
(xvi) Notes and Accounts Receivable. All notes and accounts
receivable of the Company are reflected properly on their books and
records, are valid receivables subject to no setoffs or counterclaims, are
current and collectible, and will be collected in accordance with their
terms at their recorded amounts, subject only to the reserve for bad debts
set forth on the Company's Most Recent Financial Statements as adjusted
for operations and transactions through the Closing Date in accordance
with the past custom and practice of the Company.
(xvii) Powers of Attorney. There are no material outstanding
powers of attorney executed on behalf of the Company.
(xviii) Insurance. Section 3(b)(xviii) of the Disclosure
Schedule lists all material insurance policies of the Company and
summarizes the coverages thereunder.
(xix) Litigation. Section 3(b)(xix) of the Disclosure Schedule
sets forth each instance in which the Company (i) is subject to any
outstanding injunction, judgment, order, decree, ruling, or charge or (ii)
is a party or, to the Knowledge of the Schillings, is threatened to be
made a party to any action, suit, proceeding, hearing, or investigation
of, in, or before any court or quasi-judicial or administrative agency of
any federal, state, local, or foreign jurisdiction or before any
arbitrator.
(xx) Product Warranty. Substantially all of the products
manufactured, sold, leased, and delivered by the Company have conformed in
all material respects with all applicable contractual commitments and all
express and implied warranties, and the Company has no material liability
(whether known or unknown, whether asserted or unasserted, whether
absolute or contingent, whether accrued or unaccrued, whether liquidated
or unliquidated, and whether due or to become due) for replacement or
repair thereof or other damages in connection therewith, subject only to
the reserve for product warranty claims set forth on the Company's Most
Recent Financial Statements as adjusted for operations and transactions
through the Closing Date in accordance with the past custom and practice
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of the Company. Substantially all of the products manufactured, sold,
leased, and delivered by the Company are subject to the Company's standard
terms and conditions of sale or lease.
(xxi) Product Liability. To the Knowledge of the Schillings,
the Company has no material liability (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to
become due) arising out of any injury to individuals or property as a
result of the ownership, possession, or use of any product manufactured,
sold, leased, or delivered by the Company.
(xxii) Employees. To the Knowledge of the Schillings, no
executive, key employee, or significant group of employees currently plans
to terminate employment with the Company. The Company is not a party to or
bound by any collective bargaining agreement, nor has the Company
experienced any strike or material grievance, claim of unfair labor
practices, or other collective bargaining dispute within the past three
years. The Schillings do not have any Knowledge of any organizational
effort presently being made or threatened by or on behalf of any labor
union with respect to employees of any of the Company.
(xxiii) Employee Benefits. The Company has not maintained any
plans or other arrangements that may qualify as Employee Benefit Plans
other than those that may be disclosed on Section 3(b)(xxiii) of the
Disclosure Schedule, and with respect to any such plans the Company has
complied with all applicable laws. "Employee Benefit Plan" means any (a)
nonqualified deferred compensation or retirement plan or arrangement, (b)
qualified defined contribution retirement plan or arrangement which is an
Employee Pension Benefit Plan, (c) qualified defined benefit retirement
plan or arrangement which is an Employee Pension Benefit Plan (including
any Multiemployer Plan), or (d) Employee Welfare Benefit Plan or material
fringe benefit or other retirement, bonus, or incentive plan or program.
The foregoing terms have the meanings established under the Employee
Retirement Income Security Act of 1974, as amended ("ERISA").
(xxiv) Guaranties. The Company is not a guarantor or otherwise
is responsible for any liability or obligation (including indebtedness) of
any other Person.
(xxv) Environmental, Health, and Safety Matters.
(a) To the Knowledge of the Schillings, the Company is
in compliance with Environmental, Health, and Safety Requirements
(as defined below), except for such noncompliance which would not
have a material adverse effect on the financial condition of the
Company taken as a whole.
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(b) To the Knowledge of the Schillings, the Company has
not received any written notice, report or other information
regarding any actual or alleged material violation of Environmental,
Health, and Safety Requirements, or any material liabilities or
potential material liabilities (whether accrued, absolute,
contingent, unliquidated or otherwise), including any investigatory,
remedial or corrective obligations, relating to the Company or its
facilities arising under Environmental, Health, and Safety
Requirements, the subject of which would have a material adverse
effect on the financial condition of the Company.
(c) As used herein, "Environmental, Health, and Safety
Requirements" means all federal, state, local and foreign statutes,
regulations, ordinances and similar provisions having the force or
effect of law, all judicial and administrative orders and
determinations, and all common law concerning public health and
safety, worker health and safety, and pollution or protection of the
environment, including without limitation all those relating to the
presence, use, production, generation, handling, transportation,
treatment, storage, disposal, distribution, labeling, testing,
processing, discharge, release, threatened release, control, or
cleanup of any hazardous materials, substances or wastes, chemical
substances or mixtures, pesticides, pollutants, contaminants, toxic
chemicals, petroleum products or byproducts, asbestos,
polychlorinated biphenyls, noise or radiation.
(xxvi) Certain Business Relationships With the Company. Except
as may be disclosed in Section 3(b)(xxvi) of the Disclosure Statement,
neither the Schillings nor their Affiliates have been involved in any
material business arrangement or relationship with the Company within the
past 12 months, and neither the Schillings nor their Affiliates own any
material asset, tangible or intangible, which is used in the business of
the Company.
(xxvii) Disclosure. To the Knowledge of the Schillings, the
representations and warranties contained in this Section 3(b) do not
contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements and information
contained in this Section 3(b) not misleading.
(c) The Company represents and warrants to Buyer that the statements
contained in this Section 3(c) are correct and complete as of the date of this
Agreement and will be correct and complete as of the Closing Date (as though
made then and as though the Closing Date were substituted for the date of this
Agreement throughout this Section 3), except as set forth in the disclosure
schedule attached to this Agreement ("Disclosure Schedule"). The Disclosure
Schedule will be arranged in paragraphs corresponding to the lettered and
numbered paragraphs contained in this Section 3(c).
(i) Organization of the Company. The Company is a corporation
duly organized, validly existing, and in good standing under the laws of
the
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jurisdiction of its incorporation. The Company has obtained authority to
do business in those jurisdictions in which the Company is required to
obtain authority to do business. Attached as Exhibit 3(c)(i) are the
resolutions or other instruments authorizing the Company to enter into
this Agreement and perform its obligations hereunder.
(ii) Authorization of Transaction. The Company has full power
and authority to execute and deliver this Agreement and to perform its
obligations hereunder. The Company has obtained the approval of its
Shareholders to consummate this Agreement and perform the obligations
hereunder. This Agreement constitutes the valid and legally binding
obligation of the Company, enforceable in accordance with its terms and
conditions.
(iii) The Shares. The Shares to be delivered to Buyer at
Closing pursuant to Section 2 have been duly authorized and are validly
issued, fully paid, and non-assessable. The Company only has one class of
stock which is not divided into series, and the Shares represent one
hundred percent (100%) of the Company's common stock and one hundred
percent (100%) of the Company's total outstanding securities, whether
voting or non-voting. Except as may be disclosed in Section 3(c)(iii) of
the Disclosure Schedule, there are no outstanding or authorized options,
warrants, purchase rights, subscription rights, conversion rights,
exchange rights or contracts or commitments that could require the Company
to issue, sell, or otherwise cause to become outstanding any of its
capital stock, and there are no outstanding authorized stock appreciation,
phantom stock, profit participation, or similar rights with respect to the
Company.
(d) Disclaimer of other Representations and Warranties. Except as
expressly set forth in this Section 3, Sellers and the Company make no
representation or warranty, express or implied, at law or in equity, in respect
to any of the Company's assets, liabilities or operations, including, without
limitation, merchantability or fitness for any particular purpose of any of the
Company's assets; and any such other representations or warranties are hereby
expressly disclaimed. Buyer hereby acknowledges and agrees that, except to the
extent specifically set forth in this Section 3, the Buyer is purchasing the
Company on an "AS-IS, WHERE-IS" basis. Buyer acknowledges that some of the
Company's hardware and software may not be year 2000 compliant.
4. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and
warrants to Sellers that the statements contained in this Section 4 are correct
and complete as of the date of this Agreement and will be correct and complete
as of the Closing Date (as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this Section 4), except as
set forth in the Disclosure Schedule. The Disclosure Schedule will be arranged
in paragraphs corresponding to the lettered and numbered paragraphs contained in
this Section 4.
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(a) Organization of Buyer. Buyer is a corporation duly organized,
validly existing, and in good standing under the laws of the jurisdiction of its
incorporation. Buyer has obtained authority to do business in those
jurisdictions in which Buyer is required to obtain authority to do business.
Attached as Exhibit 4(a) are the resolutions or other instruments duly
authorizing Buyer to enter into this Agreement and perform its obligations
hereunder, which shall include a resolution of Buyer's Board of Directors (and
shareholders if required) authorizing this Agreement and issuance of the Buyer
Securities in exchange for the Shares and a determination by the Board of the
adequacy of the consideration for the Buyer Securities.
(b) Authorization of Transaction. Buyer has full power and authority
to execute and deliver this Agreement and to perform its obligations hereunder.
Buyer does not need to obtain the approval of its Shareholders to authorize this
Agreement and perform the obligations hereunder. This Agreement constitutes the
valid and legally binding obligation of Buyer, enforceable in accordance with
its terms and conditions.
(c) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby will (i)
to the Knowledge of Buyer, violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other restriction of any
government, governmental agency or court, to which Buyer is subject or any
provision of its charter or bylaws or (ii) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license, instrument, or other arrangement
to which Buyer is a party or by which it is bound or to which any of its assets
is subject. To the Knowledge of Buyer, Buyer does not need to give any notice
to, make any filing with, or obtain any authorization, consent, or approval of
any government or governmental agency in order for the parties to consummate the
transactions contemplated by this Agreement.
(d) Brokers' Fees. Buyer has no liability or obligation to pay any
fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which Sellers could become
liable or obligated.
(e) Buyer Securities. The Buyer Securities to be delivered to
Sellers at Closing pursuant to Section 2 have been duly authorized and are
validly issued, fully paid, and non-assessable, Buyer only has one class of
stock which is not divided into series, and Buyer Securities represent not less
than sixty-five percent (65%) of Buyer's common stock and not less than
sixty-five percent (65%) of Buyer's total outstanding securities, whether voting
or non-voting. Sellers acknowledge that Buyer may issue an additional 440,600
shares of common stock on or before Closing, which would decrease the foregoing
percentage to sixty-four percent (64%). Except as may be disclosed in Section
4(e) of the Disclosure Schedule, there are no outstanding or authorized options,
warrants, purchase rights, subscription rights, conversion rights, exchange
rights or contracts or commitments that could require Buyer to issue, sell, or
otherwise cause to become outstanding any of its capital stock, and there are no
outstanding authorized stock appreciation, phantom stock,
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profit participation, or similar rights with respect to Buyer. Excluding the
Buyer Securities to be issued to Sellers, one hundred percent (100%) of Seller's
outstanding common stock is publicly traded with no stop transfer orders present
or pending under the symbol "iBIZ".
(f) Price Stabilization. Neither Buyer nor, to its Knowledge, any of
its directors or Affiliates has taken, directly or indirectly, any action
designed to cause or result in, or which has constituted, the stabilization or
manipulation of the price of the outstanding common stock or any other
outstanding securities of Buyer.
(g) NASD Compliance. Buyer has complied with the reporting
requirements of the National Association of Securities Dealers ("NASD") to have
its common stock quoted on the Over-the-Counter Bulletin Board ("Bulletin
Board"), and Buyer's common stock is now quoted on the Bulletin Board under the
symbol "iBIZ". Buyer is currently in compliance with the reporting requirements
of the NASD.
(h) Actions Affecting Securities Compliance. Buyer has not taken any
action (including, but not limited to, the offering or sale of securities which
may be integrated with the issuance and sale governed by this Agreement) which
adversely affects the availability of the exemption from registration under the
Securities Act of 1933 provided by Section 4(2) thereof or the applicable rules
and regulations thereunder or any provisions of the securities or blue sky laws
of any applicable jurisdiction. Without limiting the foregoing, Sellers
acknowledge that Buyer has recently issued securities under Regulation D and has
fully complied with said Regulation.
(i) No Injunctions Against Principals. To the best of Buyer's
Knowledge, neither Buyer, nor any of its officers or directors have, during the
past five (5) years, been the subject of any injunction, cease and desist order,
assurance of discontinuance, suspension or restraining order, revocation or
suspension of a license to practice a trade, occupation or profession, denial of
an application to obtain or renew same, any stipulation or consent to desist
from any act or practice, any disciplinary action by any court or administrative
agency, nor has Buyer or any of its officers or directors knowingly violated any
state or federal laws regulating the offering and sale of securities.
(j) Subsidiaries. Buyer has no Subsidiaries or Affiliate entities.
(k) Financial Statements. Attached hereto as Section 4(k) of Buyer's
Disclosure Schedule are the following financial statements for Buyer: audited
financial statements for the fiscal years ended December 31, 1996, December 31,
1997 and for January 1998 through May 28, 1998, and unaudited financial
statements for the fiscal year ended December 31, 1998. The December 31, 1998
Financial Statements are sometimes referred to herein as the "Buyer's Most
Recent Financial Statements". Except as may otherwise be indicated, the Buyer's
Most Recent Financial Statements have been prepared in accordance with GAAP
applied on a consistent basis throughout the periods covered thereby, present
fairly the financial condition of Buyer as of such dates and the results of
operations
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of Buyer for such periods. "GAAP" means United States generally accepted
accounting principles as modified from time to time.
(l) Events Subsequent to Buyer's Most Recent Financial Statements.
Since the Buyer's Most Recent Financial Statements, there has not been any
material adverse change in the financial condition of Buyer taken as a whole
except as may otherwise be set forth on Section 4(l) of the Buyer's Disclosure
Schedule. Without limiting the generality of the foregoing, since the Buyer's
Most Recent Financial Statements Buyer has not declared or made any dividend or
other distribution, and has not taken any action or entered into any transaction
outside the Ordinary Course of Business.
(m) Undisclosed Liabilities. To the Knowledge of Buyer, Buyer has no
material liability (whether known or unknown, whether asserted or unasserted,
whether absolute or contingent, whether accrued or unaccrued, whether liquidated
or unliquidated, and whether due or to become due, including any liability for
taxes), except for (i) liabilities set forth on the Buyer's Most Recent
Financial Statements; and (ii) those that are specifically described in Section
4(m) of the Buyer's Disclosure Schedule.
(n) Legal Compliance. To the knowledge of Buyer, Buyer has complied
with all applicable laws (including rules, regulations, codes, plans,
injunctions, judgments, orders, decrees, rulings, and charges thereunder) of
federal, state, local, and foreign governments (and all agencies thereof), and
no action, suit, proceeding, hearing, investigation, charge, complaint, claim,
demand, or notice has been filed or commenced against any of them alleging any
failure so to comply, except where the failure to comply would not have a
material adverse effect on the business, financial condition, operations,
results of operations, or future prospects of Buyer.
(o) Litigation. Section 4(o) of the Buyer's Disclosure Schedule sets
forth each instance in which Buyer (i) is subject to any outstanding injunction,
judgment, order, decree, ruling, or charge or (ii) is a party or, to the
Knowledge of Buyer, is threatened to be made a party to any action, suit,
proceeding, hearing, or investigation of, in, or before any court or
quasi-judicial or administrative agency of any federal, state, local, or foreign
jurisdiction or before any arbitrator.
(p) Disclosure. To the Knowledge of Buyer, the representations and
warranties contained in this Section 4 do not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements and information contained in this Section 4 not misleading.
5. PRE-CLOSING COVENANTS AND CLOSING OBLIGATIONS.
(a) Closing Obligations of Sellers. On or before the Closing,
Sellers shall do the following:
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(i) Sellers shall deliver to Buyer certificates in the form
attached hereto collectively as Exhibit 5(a-1) to the effect that each of
the representations and warranties specified above in Section 3 are
correct and complete as of the Closing Date;
(ii) Sellers shall tender the Employment Agreements executed
by Ken Schilling, Terry Ratliff and Mark Perkins in the form attached
hereto as Exhibit 5(a-2), 5(a-3), and 5(a-4);
(iii) Sellers shall tender executed Assignments of Stock
Separate From Certificate for the Shares.
(b) Closing Obligations of Buyer. On or before the Closing, Buyer
shall do the following:
(i) Buyer shall deliver to Sellers a certificate of Buyer in
the form attached hereto as Exhibit 5(b-1) to the effect that each of the
representations and warranties specified above in Section 4 are correct
and complete as of the Closing Date;
(ii) Buyer shall execute the Employment Agreements for Ken
Schilling, Terry Ratliff and Mark Perkins in the form attached hereto as
Exhibit 5(a-2), 5(a-3), and 5(a-4);
(iii) Buyer shall deliver executed stock certificates for the
Buyer Securities pursuant to Section 2(b).
(c) Pre-Closing Confidentiality. Prior to the Closing, Buyer shall
maintain all confidential information of Sellers in confidence, shall not use or
disclose such information except in furtherance of the transactions contemplated
by this Agreement, and shall return such information upon demand by Sellers in
the event of a failure to close. Sellers acknowledge that Buyer has issued
certain press releases and Sellers consent to such releases as they have been
disclosed to Sellers prior to execution hereof. Sellers and Buyer shall
coordinate all future publicity and no party shall issue any press release
publicity statement, or other public notice relating to this Agreement and the
transactions contemplated hereby without the approval of the other party,
subject only to Section 9(b).
6. CONDITIONS TO OBLIGATION TO CLOSE; TERMINATION.
(a) Conditions to Obligation of the Buyer. The obligation of the
Buyer to consummate the transactions to be performed by it in connection with
the Closing is subject to satisfaction of the following conditions:
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(i) the representations and warranties set forth in Section 3
above shall be true and correct in all material respects at and as of the
Closing Date;
(ii) the Sellers shall have performed and complied with all of
their covenants hereunder in all material respects through the Closing;
(iii) there shall not be any injunction, judgment, order,
decree, ruling, or charge in effect preventing consummation of any of the
transactions contemplated by this Agreement;
(iv) Sellers and Buyer shall have received all authorizations,
consents, and approvals required to consummate the transactions
contemplated by this Agreement, including approval of Community First
National Bank to the extent required.
(v) the Buyer shall have received from counsel to the Sellers
an opinion letter in form and substance reasonably acceptable to Buyer,
addressed to the Buyer, and dated as of the Closing Date, giving those
opinions reasonably requested by the Buyer, which shall include without
limitation the following opinions: (a) that the Company is a corporation
duly organized, validly existing, and in good standing under the laws of
the State of Arizona; and (b) the Company has the requisite power and
authority to carry out the terms and conditions applicable to them under
this Agreement;
(vi) all advances made by Buyer to the Company shall be
evidenced by a promissory note bearing interest at six percent (6%) per
annum, in a form acceptable to Buyer in its commercially reasonable
discretion;
(vii) any changes in the Disclosure Schedules and Exhibits
Attached hereto shall be acceptable to Buyer in its discretion.
The Buyer may waive any condition specified in this Section 6(a) if it executes
a writing so stating at or prior to the Closing.
(b) Conditions to Obligation of the Sellers. The obligation of the
Sellers to consummate the transactions to be performed by it in connection with
the Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in Section 4
above shall be true and correct in all material respects at and as of the
Closing Date;
(ii) the Buyer shall have performed and complied with all of
its covenants hereunder in all material respects through the Closing;
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(iii) there shall not be any injunction, judgment, order,
decree, ruling, or charge in effect preventing consummation of any of the
transactions contemplated by this Agreement;
(iv) Sellers and Buyer shall have received all authorizations,
consents, and approvals required to consummate the transactions
contemplated by this Agreement;
(v) the Sellers shall have received from counsel to the Buyer
an opinion letter in form and substance reasonably acceptable to Sellers,
addressed to the Sellers, and dated as of the Closing Date, giving those
opinions reasonably requested by the Sellers, which shall include without
limitation the following opinions: (a) that the Buyer is a corporation
duly organized, validly existing, and in good standing under the laws of
the State of Florida; (b) that the Buyer's authorized capital consists of
100,000,000 common shares, par value $.001 per share, of which not more
than 24,980,918 shares are issued and outstanding as of the Closing Date
after issuance of the Buyer Securities to Sellers, and that Buyer only has
one class of stock which is not divided into series, and the Buyer
Securities represent not less than sixty-four percent (64%) of Buyer's
common stock and not less than sixty-four percent (64%) of Buyer's total
outstanding securities, whether voting or non-voting; (c) the Buyer
Securities to be issued to Sellers under this Agreement have been duly
authorized and are validly issued, fully paid, and nonassessable, and are
entitled to all applicable economic and voting rights; (d) the Buyer has
the requisite corporate power and authority to carry out the terms and
conditions applicable to it under this Agreement; (e) the execution,
delivery, and performance of this Agreement by the Buyer has been duly
authorized by all requisite corporate action on the part of the Buyer; (f)
the execution and delivery of this Agreement and consummation of the
transactions contemplated by this Agreement by the Buyer will not conflict
with or result in a violation of the Buyer's Articles of Incorporation or
bylaws, and such transactions shall not give rise to any right of
redemption or otherwise limit Sellers' rights in the Buyer Securities
under Florida's control share statutes or otherwise.
(vi) the Company shall have received a loan of $250,000 from
Buyer which is in addition to and over and above the advances made by
Buyer to the Company as of the execution of this Agreement;
(vii) the shares exchanged pursuant to this Agreement shall
constitute a tax free exchange for the Sellers.
The Sellers may waive any condition specified in this Section 6(b) if the
execute a writing so stating at or prior to the Closing.
(c) Termination of Agreement. The parties may terminate this
Agreement as provided below:
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(i) the Buyer and the Sellers may terminate this Agreement by
mutual written consent at any time prior to the Closing;
(ii) the Buyer may terminate this Agreement by giving written
notice to the Sellers in the event of a failure to close that is not the
fault of Buyer, or if the Closing shall not have occurred on or before
February 28, 1999, by reason of the failure of any condition precedent
under Section 6(a) hereof (unless the failure results from the Buyer
itself breaching any representation, warranty, or covenant contained in
this Agreement); and
(iii) the Sellers may terminate this Agreement by giving
written notice to the Buyer in the event of a failure to close that is not
the fault of the Sellers, or if the Closing shall not have occurred on or
before February 28, 1999, by reason of the failure of any condition
precedent under Section 6(b) hereof (unless the failure results from the
Sellers themselves breaching any representation, warranty, or covenant
contained in this Agreement).
If any party terminates this Agreement pursuant to this Section, all
rights and obligations of the parties hereunder shall terminate without any
liability of any party to any other party (except for any liability of any party
then in breach); provided, however, that the confidentiality provisions
contained in Section 5(c) shall survive termination.
7. POST-CLOSING COVENANTS. The parties agree as follows with respect
to the period following the Closing.
(a) General; Payment of Tax Liabilities. In case at any time after
the Closing any further action is necessary to carry out the purposes of this
Agreement, each of the parties will take such further action (including the
execution and delivery of such further instruments and documents) as any other
party reasonably may request, all at the sole cost and expense of the requesting
party (unless the requesting party is entitled to indemnification therefor under
Section 8 below). Immediately after the Closing, Buyer shall cause the Company
to pay off all outstanding tax liabilities for overdue taxes, including
outstanding tax liabilities for overdue payroll and sales taxes and any
penalties. Buyer shall permit the Sellers to review and comment on any documents
necessary to carry out the foregoing and shall make such revisions as are
reasonably requested by the Sellers.
(b) Litigation Support. In the event and for so long as any party
actively is contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand in connection with
(i) any transaction contemplated under this Agreement or (ii) any fact,
situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction on or prior
to the Closing Date involving Sellers, each of the other parties will cooperate
with the contesting or defending party and its counsel in the contest or
defense, make available its personnel, and provide such testimony and access to
its books and records as shall be necessary in connection with the contest or
defense, all at the sole cost and expense of the contesting or
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defending party (unless the contesting or defending party is entitled to
indemnification therefor under Section 8 below).
(c) Transition. Sellers will not take any action that is designed or
intended to have the effect of discouraging any lessor, licensor, customer,
supplier, or other business associate of Sellers from maintaining the same
business relationships with Buyer after the Closing as it maintained with
Sellers prior to the Closing.
(d) Confidentiality. Sellers will treat and hold as confidential all
information concerning the business and affairs of Sellers that is not already
generally available to the public ("Confidential Information"), refrain from
using any Confidential Information except in connection with this Agreement, and
deliver promptly to Buyer or destroy, at the request and option of Buyer, all
tangible embodiments (and all copies) of Confidential Information in its
possession. In the event that Sellers is requested or required (by oral question
or request for information or documents in any legal proceeding, interrogatory,
subpoena, civil investigative demand, or similar process) to disclose any
Confidential Information, Sellers will notify Buyer promptly of the request or
requirement so that Buyer may seek an appropriate protective order or waive
compliance with the provisions of this Section 7(d). If, in the absence of a
protective order or the receipt of a waiver hereunder, Sellers are, on the
advice of counsel, compelled to disclose any Confidential Information to any
tribunal or else stand liable for contempt, that Sellers may disclose
Confidential Information to the tribunal; provided, however, that each Seller
shall use its reasonable best efforts to obtain, at the reasonable request of
Buyer, an order or other assurance that confidential treatment will be accorded
to such portion of Confidential Information required to be disclosed as Buyer
shall designate.
(e) Transfer of Employees. Sellers will cooperate with Buyer to
transfer employment of the Company's employees to Buyer after Closing to the
extent requested by Buyer. A list of Sellers' employees and a summary of
compensation and benefits is attached hereto as Exhibit 7(e).
(f) Covenant Not to Compete. For a period of five (5) years from and
after the Closing Date, Sellers will not engage directly or indirectly in any
business that the Company was conducting as of the Closing Date in any
geographic area in which the Company was conducting that business as of the
Closing Date or in any geographic area in which Buyer conducts business.
(g) Internal Controls. Buyer shall maintain a system of internal
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary in order to permit
preparation of financial statements in accordance with generally accepted
accounting principles and to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; (iv) and the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
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(h) Transfer Agreement. Buyer has appointed Interwest Transfer
Company, Inc., located at 1891 East Murray Holladay Road, Suite 100, Salt Lake
City, Utah 84117 as Buyer's transfer agent. Buyer will continue to retain a
transfer agent reasonably satisfactory to Sellers for a period of three (3)
years following the Closing Date.
(i) Independent Board. For a period of five (5) years from the
Closing Date, Buyer agrees to appoint and nominate for election as iBIZ
directors by the shareholders Alan Smith and Ken Schilling. Buyer's audit and
compensation committee shall consist of a majority of outside independent
directors as long as Sellers or the Schillings hold any common stock or other
voting securities of Buyer.
(j) Insurance. Effective as soon as possible but no later than sixty
(60) days after the Closing Date, Buyer shall have acquired and shall continue
to maintain an errors and omissions insurance policy in an amount reasonably
acceptable to the Board of Directors of Buyer to cover the errors and omissions
of the directors and officers of Buyer.
(k) Prohibition of Cheap Stock. Any and all issuances by Buyer of
preferred or common stock or warrants, options or other securities convertible
into common stock to Affiliates at a price or conversion price, as applicable,
of less than the Fair Market Value (as defined below) at the time of issuance
shall require prior approval of Sellers. "Fair Market Value" shall mean:
(i) if Buyer's Stock ("the Shares") are listed or admitted to
trading on any securities exchange, the fair market value shall be the
average sales price on such day on the New York Stock Exchange, or if the
Shares have not been listed or admitted to trading on the New York Stock
Exchange, on such other securities exchange on which such stock is then
listed or admitted to trading, or if no sale takes place on such day on
any such exchange, the average of the closing bid and asked price on such
day as officially quoted on any such exchange;
(ii) if the Shares are not then listed or admitted to trading
on any securities exchange, the fair market value shall be the average
sales price on such day, or if no sales takes place on such day, the
average of the reported closing bid and asked price on such date, in the
over-the-counter market as furnished by the National Association of
Securities Dealers Automated Quotation ("NASDAQ"), or if NASDAQ at the
time is not engaged in the business of reporting such prices, as furnished
by any similar firm then engaged in such business and selected by the
Buyer's Board; or
(iii) if the Shares are not then listed or admitted to trading
in the over-the-counter market, the fair market value shall be the amount
determined by the Buyer's Board in a manner consistent with Treasury
Regulation Section 20-2031-2 promulgated under the Code or in such other
manner prescribed by the U.S. Secretary of the Treasury or the Internal
Revenue Service.
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(l) Repayment of Schilling Note. The promissory note evidencing Ken
Schilling's debt to the Company shall be repaid in full in either cash or
securities.
(m) Capital Raise. Buyer hereby agrees to raise funds through the
sale of equity in accordance with the schedule set forth on Exhibit 7(m)
attached hereto.
8. REMEDIES FOR BREACHES OF THIS AGREEMENT.
(a) Survival of Representations and Warranties. All of the
representations and warranties contained in this Agreement shall survive the
Closing and continue in full force and effect for a period of two years
thereafter.
(b) Indemnification Provisions for Benefit of Buyer. In the event
Sellers breach any of their respective representations, warranties, or covenants
contained in this Agreement, and Buyer makes a written claim for indemnification
against Sellers within the survival period set forth in Section 8(a), then
Sellers shall indemnify Buyer from and against the entirety of any Adverse
Consequences, as defined below, that Buyer may suffer through and after the date
of the claim for indemnification (including any Adverse Consequences that Buyer
may suffer after the end of any applicable survival period) resulting from,
arising out of, relating to, or caused by the breach.
(c) Indemnification Provisions for Benefit of Sellers. In the event
Buyer breaches any of its representations, warranties, or covenants contained in
this Agreement, and Sellers or the Schillings make a written claim for
indemnification against Buyer within the survival period set forth in Section
8(a), then Buyer shall indemnify Sellers or the Schillings as applicable from
and against the entirety of any Adverse Consequences that Sellers or the
Schillings may suffer through and after the date of the claim for
indemnification (including any Adverse Consequences that Sellers or the
Schillings may suffer after the end of any applicable survival period) resulting
from, arising out of, relating to, or caused by the breach.
(d) Matters Involving Third Parties.
(i) If any third party shall notify any party ("Indemnified
Party") with respect to any matter ("Third Party Claim") that may give
rise to a claim for indemnification against any other party ("Indemnifying
Party") under this Section 8, then the Indemnified Party shall promptly
notify the Indemnifying Party thereof in writing.
(ii) Any Indemnifying Party will have the right to assume the
defense of the Third Party Claim with counsel of his or its choice
reasonably satisfactory to the Indemnified Party at any time within 15
days after the Indemnified Party has given notice of the Third party
Claim; provided, however, that the Indemnifying party must conduct the
defense of the Third Party Claim actively and diligently thereafter in
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order to preserve its rights in this regard; and provided further that the
Indemnified Party may retain separate co-counsel at its sole cost and
expense and participate in the defense of the Third Party Claim.
(iii) So long as the Indemnifying Party has assumed and is
conducting the defense of the Third Party Claim in accordance with Section
8(d)(ii) above, (A) the Indemnifying Party will not consent to the entry
of any judgment or enter into any settlement with respect to the Third
Party Claim without the prior written consent of the Indemnified Party
(not to be withheld unreasonably) unless the judgment or proposed
settlement involves only the payment of money damages by one or more of
the Indemnifying Parties and does not impose an injunction or other
equitable relief upon the Indemnified Party and (B) the Indemnified Party
will not consent to the entry of any judgment or enter into any settlement
with respect to the Third Party Claim without the prior written consent of
the Indemnifying Party (not to be withheld unreasonably).
(iv) In the event none of the Indemnifying Parties assume and
conduct the defense of the Third Party Claim in accordance with Section
8(d)(ii) above, (A) the Indemnified Party may defend against, and consent
to the entry of any judgment or enter into any settlement with respect to,
the Third Party Claim in any manner it reasonably may deem appropriate
(and the Indemnified Party need not consult with, or obtain any consent
from, any Indemnifying Party in connection therewith) and (B) the
Indemnifying Party will remain responsible for any Adverse Consequences
the Indemnified Party may suffer resulting from, arising out of, relating
to, or caused by the Third Party Claim to the fullest extent provided in
this Section 8.
(e) Definition of Adverse Consequences. As used herein "Adverse
Consequences" means all actions, suits, proceedings, hearings, investigations,
charges, complaints, claims, demands, injunctions, judgments, orders, decrees,
rulings, damages, dues, penalties, fines, costs, reasonable amounts paid in
settlement, liabilities, obligations, taxes, liens, losses, expenses, and fees,
including court costs and reasonable attorneys' fees and expenses.
(f) Exclusive Remedy. The parties acknowledge and agree that the
foregoing indemnification provisions shall be the exclusive remedy under this
Agreement, and the parties hereby waive any statutory, equitable, or common law
rights or remedies.
9. MISCELLANEOUS.
(a) Survival of Representations and Warranties. The representations
and warranties of the parties contained in this Agreement shall survive the
Closing hereunder as and to the extent provided herein in Section 8.
(b) Press Releases and Public Announcements. No party shall issue
any press release or make any public announcement relating to the subject matter
of this
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Agreement without the prior written approval of the other party; provided,
however, that any party may make any public disclosure it believes in good faith
is required by applicable law or any listing or trading agreement concerning its
publicly-traded securities (in which case the disclosing party will use its best
efforts to advise the other party prior to making the disclosure).
(c) No Third-Party Beneficiaries. This Agreement shall not confer
any rights or remedies upon any Person other than the parties and their
respective successors and permitted assigns.
(d) Entire Agreement. This Agreement (including the documents
referred to herein) constitutes the entire agreement between the parties with
respect to the subject matter hereof and supersedes any prior understandings,
agreements, or representations by or between the parties, written or oral, to
the extent they relate in any way to the subject matter hereof.
(e) Succession and Assignment. This Agreement shall be binding upon
and inure to the benefit of the parties named herein and their respective
successors and permitted assigns. No party may assign either this Agreement or
any of its rights, interests, or obligations hereunder without the prior written
approval of the other party; provided, however, Buyer may assign any or all of
its rights and interests hereunder to one or more of its Affiliates and
designate one or more of its Affiliates to perform its obligations hereunder or
may assign its rights and obligations hereunder to a successor of substantially
all of the Acquired Assets (in any of which cases Buyer nonetheless shall remain
responsible for the performance of all of its obligations hereunder).
(f) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(g) Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(h) Notices. All notices, requests, demands, claims, and other
communications hereunder shall be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given if (and then
two business days after) it is sent by U.S. registered or certified mail, return
receipt requested, postage prepaid, and addressed to the intended recipient as
follows: If to a Seller, the notice may be addressed using the most recent
address for the Seller reflected in the Buyer's shareholder records. If to the
Buyer:
iBIZ Technology Corp.
c/o Alan M. Smith & Associates, LTD.
999 West Hastings Street, Suite 1750
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Vancouver, B.C. Canada V6C2W2
Attn: Alan Smith
Any party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. Any
party may change the address to which notices, requests, demands, claims, and
other communications hereunder are to be delivered by giving the other party
notice in the manner herein set forth.
(i) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Arizona without giving effect to any
choice or conflict of law provision or rule (whether of the State of Arizona or
any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Arizona.
(j) Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by Buyer
and Sellers. No waiver by any party of any default, misrepresentation, or breach
of warranty or covenant hereunder, whether intentional or not, shall be deemed
to extend to any prior or subsequent default, misrepresentation, or breach of
warranty or covenant hereunder or affect in any way any rights arising by virtue
of any prior or subsequent such occurrence.
(k) Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(l) Expenses. Buyer and Sellers will bear their or its own costs and
expenses (including legal fees and expenses) incurred in connection with this
Agreement and the transactions contemplated hereby except to the extent that
Buyer assumes Sellers' obligations hereunder.
(m) Construction. The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation.
(n) Incorporation of Exhibits and Schedules. The Exhibits and
Schedules identified in this Agreement are incorporated herein by reference and
made a part hereof.
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(o) Bulk Transfer Laws. The Buyer acknowledges that Sellers will not
comply with the provisions of any bulk transfer laws of any jurisdiction in
connection with the transactions contemplated by this Agreement.
(p) Representation. The parties hereto acknowledge that Gammage &
Burnham, P.L.C., has represented the Company in connection with this Agreement
and has not represented the individual Shareholders of the Company.
*****
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IN WITNESS WHEREOF, the parties hereto have executed this Plan Of
Reorganization and Stock Exchange Agreement effective as of the date first above
written.
iBIZ TECHNOLOGY CORP., a Florida corporation
By:_________________________________________
Name:_______________________________________
Title:______________________________________
INVNSYS TECHNOLOGY CORPORATION, an
Arizona corporation
By:_________________________________________
Name:_______________________________________
Title:______________________________________
KENNETH SCHILLING, individually and as trustee
of the Moorea Trust dated December 18, 1991
____________________________________________
DIANE SCHILLING, individually and as trustee
of the Moorea Trust dated December 18, 1991
____________________________________________
TERRY RATLIFF
____________________________________________
MARK PERKINS
____________________________________________
PAUL RUSSO
____________________________________________
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FRANK LIGAMMARI
____________________________________________
RICHARD BIELFELT
____________________________________________
TERRY NEILD
____________________________________________
Page 28
<PAGE> 1
Exhibit 3.01
ARTICLES OF INCORPORATION
OF
EXOTIC VIDEO CITY, INC.
The undersigned subscriber to these Articles of Incorporation,
a natural person competent to contract, hereby forms a corporation under the
laws of the State of Florida.
ARTICLE I
NAME
The name of this corporation is Exotic Video City, Inc.
ARTICLE II
NATURE OF THE BUSINESS
This corporation shall have the power to transact or engage in
any business permitted under the laws of the United States and of the State of
Florida.
ARTICLE III
AUTHORIZED SHARES
The capital stock of this corporation shall consist of 1,000
shares of common stock having a par value of $.01 per share.
ARTICLE IV
INITIAL CAPITAL
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<PAGE> 2
The amount of capital with which this corporation shall
commence business shall be not less than One Hundred ($100.00) Dollars.
ARTICLE V
TERM OF EXISTENCE
This corporation shall have perpetual existence.
ARTICLE VI
INITIAL ADDRESS
The initial address of the principal place of business of this
corporation in the State of Florida shall be 1428 Brickell Avenue, Suite 202,
Miami, Florida 33131. The Board of Directors may at any time and from time to
time move the principal office of this corporation to any location within or
without the State of Florida.
ARTICLE VII
DIRECTORS
The business of this corporation shall be managed by its Board
of Directors. The number of such directors shall be not less than one (1) and,
subject to such minimum may be increased or decreased from time to time in the
manner provided in the By-Laws. The number of persons constituting the initial
Board of Directors shall be 1.
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ARTICLE VIII
INITIAL DIRECTORS
The names and addresses of the initial Board of Directors and
officers are as follows:
Julio A. Padilla Director/President
1428 Brickell Avenue
Suite 202
Miami, Florida 33131
ARTICLE IX
SUBSCRIBER
The name and address of the person signing these Articles of
Incorporation as subscriber is:
Eric P. Littman
Suite 202
1428 Brickell Avenue
Miami, Florida 33131
ARTICLE X
The Board of Directors shall be elected by the Stockholders of
the corporation at such time and in such manner as provided in the By-Laws.
ARTICLE XI
CONTRACTS
No contract or other transaction between this corporation and
any person, firm or corporation shall be affected by the fact that any officer
or director of this corporation is such other party or is, or at some time in
the future becomes, an
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<PAGE> 4
officer, director or partner of such other contracting party, or has now or
hereafter a direct or indirect interest in such contract.
ARTICLE XII
INDEMNIFICATION OF OFFICERS AND DIRECTORS
This corporation shall have the power, in its By-Laws or in
any resolution of its stockholders or directors, to undertake to indemnify the
officers and directors of this corporation against any contingency or peril as
may be determined to be in the best interests of this corporation, and in
conjunction therewith, to procure, at this corporation's expense, policies of
insurance.
ARTICLE XIII
RESIDENT AGENT
The name and address of the initial resident agent of this
corporation is:
Berlit Corporate Services, Inc.
1428 Brickell Avenue
Suite 202
Miami, Florida 33131
IN WITNESS WHEREOF, I have hereunto subscribed to and executed these
Articles of Incorporation this on March 31, 1994.
________________________________
Eric P. Littman, Subscriber
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<PAGE> 5
Subscribed and Sworn to before me on
March 31, 1994
______________________________
Isabel Canters, Notary Public
My Commission Expires:
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CERTIFICATE DESIGNATING PLACE OF BUSINESS OR
DOMICILE FOR SERVICE OF PROCESS WITHIN THIS STATE
NAMING THE AGENT UPON WHOM PROCESS MAY BE SERVED
Having been named to accept service of process for Exotic
Video City, Inc. at the place designated in the Articles of Incorporation, the
undersigned is familiar with and accepts the obligations of that position
pursuant to F.S. 607.0501(3).
BERLIT CORPORATE SERVICES, INC.
By:_______________________________
Eric P. Littman, Secretary
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ARTICLES OF AMENDMENT TO
EXOTIC VIDEO CITY, INC.
THE UNDERSIGNED, being the sole director and president of
Exotic Video City, Inc., does hereby amend its Articles of Incorporation as
follows:
ARTICLE I
CORPORATE NAME
The name of the Corporation shall be EVC Ventures, Inc.
ARTICLE II
PURPOSE
The Corporation shall be organized for any and all purposes
authorized under laws of the state of Florida.
ARTICLE III
PERIOD OF EXISTENCE
The period during which the Corporation shall continue is
perpetual.
ARTICLE IV
SHARES
The capital stock of this corporation shall consist of
50,000,000 shares of stock, $.001 par value.
ARTICLE V
PLACE OF BUSINESS
The address of the principal place of business of this
corporation in the State of Florida shall be 7695 S.W. 104th Street, Suite 210,
Miami, FL 33156. The Board of Directors may at any time and from time to time
move the principal office of this corporation.
ARTICLE VI
DIRECTORS AND OFFICERS
The business of this corporation shall be managed by the Board
of Directors. The number of such directors shall be not be less than one (1)
and, subject to such minimum may be increased or decreased from time to time in
the manner provided in the By-Laws.
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<PAGE> 8
ARTICLE VII
DENIAL OF PREEMPTIVE RIGHTS
No shareholder shall have any right to acquire shares or other
securities of the Corporation except to the extent such right may be granted by
an amendment to these Articles of Incorporation or by a resolution of the Board
of Directors.
ARTICLE VIII
AMENDMENT OF BYLAWS
Anything in these Articles of Incorporation, the Bylaws, or
the Florida Corporation Act notwithstanding, bylaws shall not be adopted,
modified, amended or repealed by the shareholders of the Corporation except upon
the affirmative vote of a simple majority vote of the holders of all the issued
and outstanding shares of the corporation entitled to vote thereon.
ARTICLE IX
SHAREHOLDERS
9.1 Inspection of Books. The board of directors shall make
reasonable rules to determine at what times and places and under what conditions
the books of the Corporation shall be open to inspection by shareholders or a
duly appointed representative of a shareholder.
9.2. Control Share Acquisition. The provisions relating to any
control share acquisition as contained in Florida Statutes now, or hereinafter
amended, and any successor provision shall not apply to the Corporation.
9.3. Quorum. The holders of shares entitled to one-third of
the votes at a meeting of shareholders shall constitute a quorum.
9.4. Required Vote. Acts of shareholders shall require the
approval of holders of 50.01% of the outstanding votes of shareholders.
ARTICLE X
LIABILITY AND INDEMNIFICATION
OF DIRECTORS AND OFFICERS
To the fullest extent permitted by law, no director or officer
of the Corporation shall be personally liable to the Corporation or its
shareholders for damages for breach of any duty owed to the Corporation or its
shareholders. In addition, the Corporation shall have the power, in its By-Laws
or in any resolution of its stockholders or directors, to undertake to indemnify
the officers and directors of this corporation against any contingency or peril
as may be determined to be in the
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best interests of this corporation, and in conjunction therewith, to procure, at
this corporation's expense, policies of insurance.
ARTICLE XI
CONTRACTS
No contract or other transaction between this corporation and
any person, firm or corporation shall be affected by the fact that any officer
or director of this corporation is such other party or is, or at some time in
the future becomes, an officer, director or partner of such other contracting
party, or has now or hereafter a direct or indirect interest in such contract.
I hereby certify that the following was adopted by a majority
vote of the shareholders and directors of the corporation on May 27, 1998 and
that the number of votes cast was sufficient for approval.
IN WITNESS WHEREOF, I have hereunto subscribed to and executed
this Amendment to Articles of Incorporation this on May 27, 1998.
______________________________
Eric P. Littman, Sole Director
The foregoing instrument was acknowledged before me on May 27,
1998, by Eric P. Littman, who is personally known to me.
________________________________
Notary Public
My commission expires:
________________________
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ARTICLES OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
EVC VENTURES, INC.
Pursuant to the provisions of section 607.1006, Florida Statutes, this
Florida profit corporation adopts the following articles of amendment to its
articles of incorporation:
FIRST: Amendment adopted:
Article I is hereby amended to read as follows:
The name of this corporation is INVNSYS HOLDING CORPORATION.
SECOND: There is no change to the capital of the corporation.
THIRD: This amendment was adopted on October 10, 1998.
FOURTH: The amendment was approved by the shareholders. The number of votes cast
for the amendment was sufficient for approval.
Signed this 22nd day of October, 1998.
___________________________
Alan Smith, President
Prepared by: Thomas Braun, Legal Assistant
Venture Law Corporation
#618 - 688 W. Hastings Street
Vancouver, BC V6L 3E3
Tel: (604) 659-9188
Fax: (604) 659-9178
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ARTICLES OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
INVNSYS HOLDING CORPORATION
Pursuant to the provisions of section 607.1006, Florida Statutes, this
Florida profit corporation adopts the following articles of amendment to its
articles of incorporation:
FIRST: Amendment adopted:
Article I is hereby amended to read as follows:
The name of this corporation is iBIZ TECHNOLOGY CORP.
SECOND: There is no change to the capital of the corporation.
THIRD: This amendment was adopted on January 21, 1999.
FOURTH: The amendment was approved by the shareholders. The number of votes cast
for the amendment was sufficient for approval.
Signed this 21st day of January, 1999.
_______________________________
Alan Smith, President
Prepared by: Thomas Braun, Legal Assistant
Venture Law Corporation
#618 - 688 W. Hastings Street
Vancouver, BC V6L 3E3
Tel: (604) 659-9188
Fax: (604) 659-9178
Page 11
<PAGE> 1
Exhibit 3.02
BYLAWS
OF
EVC VENTURES CORP.
(A FLORIDA CORPORATION)
Page 1
<PAGE> 2
INDEX
<TABLE>
<CAPTION>
PAGE NUMBER
<S> <C>
ARTICLE ONE - OFFICES
SECTION 1. PRINCIPAL OFFICE............................... 1
SECTION 2. OTHER OFFICES.................................. 1
ARTICLE TWO - MEETINGS OF SHAREHOLDERS
SECTION 1. PLACE.......................................... 1
SECTION 2. TIME OF ANNUAL MEETING......................... 1
SECTION 3. CALL OF SPECIAL MEETINGS....................... 1
SECTION 4. CONDUCT OF MEETINGS............................ 1
SECTION 5. NOTICE AND WAIVER OF NOTICE.................... 2
SECTION 6. BUSINESS AND NOMINATIONS FOR ANNUAL AND
SPECIAL MEETINGS............................... 2
SECTION 7. QUORUM......................................... 2
SECTION 8. VOTING RIGHTS PER SHARE........................ 3
SECTION 9. VOTING OF SHARES............................... 3
SECTION 10. PROXIES........................................ 3
SECTION 11. SHAREHOLDER LIST............................... 4
SECTION 12. ACTION WITHOUT MEETING......................... 4
SECTION 13. FIXING RECORD DATE............................. 5
SECTION 14. INSPECTORS AND JUDGES.......................... 5
SECTION 15. VOTING FOR DIRECTORS........................... 5
ARTICLE THREE - DIRECTORS
SECTION 1. NUMBER. TERM; ELECTION; QUALIFICATION.......... 5
SECTION 2. RESIGNATION; VACANCIES; REMOVAL................ 6
SECTION 3. POWERS......................................... 6
SECTION 4. PLACE OF MEETINGS.............................. 6
SECTION 5. ANNUAL MEETINGS................................ 6
SECTION 6. REGULAR MEETINGS............................... 6
SECTION 7. SPECIAL MEETINGS AND NOTICE.................... 6
SECTION 8. QUORUM AND REQUIRED VOTE....................... 7
SECTION 9. ACTION WITHOUT MEETING......................... 7
SECTION 10. CONFERENCE TELEPHONE OR SIMILAR COMMUNICATIONS
EQUIPMENT MEETINGS............................. 7
SECTION 11. COMMITTEES..................................... 7
SECTION 12. COMPENSATION OF DIRECTORS...................... 8
ARTICLE FOUR - OFFICERS
SECTION 1. POSITIONS...................................... 8
SECTION 2. ELECTION OF SPECIFIED OFFICERS BY BOARD........ 8
SECTION 3. ELECTION OR APPOINTMENT OF
OTHER OFFICERS................................. 8
</TABLE>
PAGE 2
<PAGE> 3
<TABLE>
<S> <C>
SECTION 4. COMPENSATION................................... 8
SECTION 5. TERM; RESIGNATION; REMOVAL; VACANCIES.......... 9
SECTION 6. CHAIRMAN OF THE BOARD.......................... 9
SECTION 7. CHIEF EXECUTIVE OFFICER........................ 9
SECTION 8. PRESIDENT...................................... 9
SECTION 9. VICE PRESIDENTS................................ 9
SECTION 10. SECRETARY...................................... 10
SECTION 11. CHIEF FINANCIAL OFFICER........................ 10
SECTION 12. TREASURER...................................... 10
SECTION 13. OTHER OFFICERS; EMPLOYEES AND AGENTS........... 10
ARTICLE FIVE - CERTIFICATES FOR SHARES
SECTION 1. ISSUE OF CERTIFICATES.......................... 10
SECTION 2. LEGENDS FOR PREFERENCES AND RESTRICTIONS
ON TRANSFER.................................... 11
SECTION 3. FACSIMILE SIGNATURES........................... 11
SECTION 4. LOST CERTIFICATES.............................. 11
SECTION 5. TRANSFER OF SHARES............................. 12
SECTION 6. REGISTERED SHAREHOLDERS........................ 12
SECTION 7. REDEMPTION OF CONTROL SHARES................... 12
ARTICLE SIX - GENERAL PROVISIONS
SECTION 1. DIVIDENDS...................................... 12
SECTION 2. RESERVES....................................... 12
SECTION 3. CHECKS......................................... 12
SECTION 4. FISCAL YEAR.................................... 13
SECTION 5. SEAL........................................... 13
SECTION 6. GENDER......................................... 13
ARTICLE SEVEN - AMENDMENT OF BYLAWS.................................... 13
</TABLE>
PAGE 3
<PAGE> 4
BYLAWS
OF
EVC VENTURES CORP.
ARTICLE ONE
OFFICES
Section 1. Principal Office. The principal office of EVC
Ventures Corp., a Florida corporation (the "Corporation"), shall be located at
such place determined by the Board of Directors of the Corporation (the "Board
of Directors") in accordance with applicable law.
Section 2. Other Offices. The Corporation may also have
offices at such other places either within or without the State of Florida, as
the Board of Directors may from time to time determine or as the business of the
Corporation may require.
ARTICLE TWO
MEETINGS OF SHAREHOLDERS
Section 1. Place. All annual meetings of shareholders shall be
held at such place, within or without the State of Florida, as may be designated
by the Board of Directors and stated in the notice of the meeting or in a duly
executed waiver of notice thereof. Special meetings of shareholders may be held
at such place, within or without the State of Florida, and at such time as shall
be stated in the notice of the meeting or in a duly executed waiver of notice
thereof.
Section 2. Time of Annual Meeting. Annual meetings of
shareholders shall be held on such date and at such time fixed, from time to
time, by the Board of Directors, provided, that there shall be an annual meeting
held every calendar year at which the shareholders shall elect a board of
directors and transact such other business as may properly be brought before the
meeting.
Section 3. Call of Special Meetings. Special meetings of the
shareholders shall be held if called in accordance with the procedures set forth
in the Corporation's Articles of Incorporation (the "Articles of Incorporation")
for the call of a special meeting of shareholders.
Section 4. Conduct of Meetings. The Chairman of the Board of
Directors (or in his absence, the President, or in his absence, such other
designee of
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the Chairman of the Board of Directors) shall preside at the annual and special
meetings of shareholders and shall be given full discretion in establishing the
rules and procedures to be followed in conducting the meetings, except as
otherwise provided by law or in these Bylaws.
Section 5. Notice and Waiver of Notice. Except as otherwise
provided by law, written or printed notice stating the place, date and time of
the meeting and, in the case of a special meeting, the purpose or purposes for
which the meeting is called, shall be delivered not less than ten (10) nor more
than sixty (60) days before the date of the meeting, either personally or by
first-class mail or other legally sufficient means, by or at the direction of
the Chairman of the Board, President, or the persons calling the meeting, to
each shareholder of record entitled to vote at such meeting. If the notice is
mailed at least thirty (30) days before the date of the meeting, it may be done
by a class of United States mail other than first class. If mailed, such notice
shall be deemed to be delivered when deposited in the United States mail
addressed to the shareholder at the address appearing on the stock transfer
books of the Corporation, with postage thereon prepaid. If a meeting is
adjourned to another time and/or place, and if an announcement of the adjourned
time and/or place is made at the meeting, it shall not be necessary to give
notice of the adjourned meeting unless the Board of Directors, after
adjournment, fixes a new record date for the adjourned meeting. Whenever any
notice is required to be given to any shareholder, a waiver thereof in writing
signed by the person or persons entitled to such notice, whether signed before,
during or after the time of the meeting stated therein, and delivered to the
Corporation for inclusion in the minutes or filing with the corporate records,
shall constitute an effective waiver of such notice. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the
shareholders need be specified in any written waiver of notice. Attendance of a
person at a meeting shall constitute a waiver of (a) lack of or defective notice
of such meeting, unless the person objects at the beginning to the holding of
the meeting or the transacting of any business at the meeting, or (b) lack of or
defective notice of a particular matter at a meeting that is not within the
purpose or purposes described in the meeting notice, unless the person objects
to considering such matter when it is presented.
Section 6. Business and Nominations for Annual and Special
Meetings. Business transacted at any special meeting shall be confined to the
purposes stated in the notice thereof. At any annual meeting of shareholders,
only such business shall be conducted as shall have been property brought before
the meeting in accordance with the requirements and procedures set forth in the
Articles of Incorporation. Only such persons who are nominated for election as
directors of the Corporation in accordance with the requirements and procedures
set forth in the Articles of Incorporation shall be eligible for election as
directors of the Corporation.
Section 7. Quorum. Shares entitled to vote as a separate
voting group may take action on a matter at a meeting only if a quorum of those
shares exists
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with respect to that matter. Except as otherwise provided in the Articles of
Incorporation or applicable law, shares representing a majority of the votes
pertaining to outstanding shares which are entitled to be cast on the matter by
the voting group constitute a quorum of that voting group for action on that
matter. If less than a quorum of shares are represented at a meeting, the
holders of a majority of the shares so represented may adjourn the meeting from
time to time. After a quorum has been established at any shareholders' meeting,
the subsequent withdrawal of shareholders, so as to reduce the number of shares
entitled to vote at the meeting below the number required for a quorum, shall
not affect the validity of any action taken at the meeting or any adjournment
thereof. Once a share is represented for any purpose at a meeting, it is deemed
present for quorum purposes for the remainder of the meeting and for any
adjournment of that meeting unless a new record date is or must be set for that
adjourned meeting.
Section 8. Voting Rights Per Share. Each outstanding share,
regardless of class, shall be entitled to vote on each matter submitted to a
vote at a meeting of shareholders, except to the extent that the voting rights
of the shares of any class are limited or denied by or pursuant to the Articles
of Incorporation or the Florida Business Corporation Act.
Section 9. Voting of Shares. A shareholder may vote at any
meeting of shareholders of the Corporation, either in person or by proxy. Shares
standing in the name of another corporation, domestic or foreign, may be voted
by the officer, agent or proxy designated by the bylaws of such corporate
shareholder or, in the absence of any applicable bylaw, by such person or
persons as the board of directors of the corporate shareholder may designate. In
the absence of any such designation, or, in case of conflicting designation by
the corporate shareholder, the chairman of the board, the president, any vice
president, the secretary and the treasurer of the corporate shareholder, in that
order, shall be presumed to be fully authorized to vote such shares. Shares held
by an administrator, executor, guardian, personal representative, or conservator
may be voted by such person, either in person or by proxy, without a transfer of
such shares into his name. Shares standing in the name of a trustee may be voted
by such person, either in person or by proxy, but no trustee shall be entitled
to vote shares held by such person without a transfer of such shares into his
name or the name of his nominee. Shares held by or under the control of a
receiver, a trustee in bankruptcy proceedings, or an assignee for the benefit of
creditors may be voted by such person without the transfer thereof into his
name. If shares stand of record in the names of two or more persons, whether
fiduciaries, members of a partnership, joint tenants, tenants in common, tenants
by the entirety or otherwise, or if two or more persons have the same fiduciary
relationship respecting the same shares, unless the Secretary of the Corporation
is given notice to the contrary and is furnished with a copy of the instrument
or order appointing them or creating the relationship wherein it is so provided,
then acts with respect to voting shall have the following effect: (a) if only
one votes, in person or by proxy, his act binds all; (b) if more than one vote,
in person or by proxy, the act of the majority so
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voting binds all; (c) if more than one vote, in person or by proxy, but the vote
is evenly split on any particular matter, each faction is entitled to vote the
share or shares in question proportionally; or (d) if the instrument or order so
filed shows that any such tenancy is held in unequal interest, a majority or a
vote evenly split for purposes hereof shall be a majority or a vote evenly split
in interest. The principles of this paragraph shall apply, insofar as possible,
to execution of proxies, waivers, consents, or objections and for the purpose of
ascertaining the presence of a quorum.
Section 10. Proxies. Any shareholder of the Corporation, other
person entitled to vote on behalf of a shareholder pursuant to law, or
attorney-in-fact for such persons may vote the shareholder's shares in person or
by proxy. Any shareholder of the Corporation may appoint a proxy to vote or
otherwise act for such person by signing an appointment form, either personally
or by his attorney-in-fact. An executed telegram or cablegram appearing to have
been transmitted by such person, or a photographic, photostatic, or equivalent
reproduction of an appointment form, shall be deemed a sufficient appointment
form. An appointment of a proxy is effective when received by the Secretary of
the Corporation (the "Secretary") or such other officer or agent which is
authorized to tabulate votes, and shall be valid for up to 11 months, unless a
longer period is expressly provided in the appointment form. The death or
incapacity of the shareholder appointing a proxy does not affect the right of
the Corporation to accept the proxy's authority unless notice of the death or
incapacity is received by the Secretary or other officer or agent authorized to
tabulate votes before the proxy authority under the appointment is exercised. An
appointment of a proxy is revocable by the shareholder unless the appointment
form conspicuously states that it is irrevocable and the appointment is coupled
with an interest.
Section 11. Shareholder List. After fixing a record date for a
meeting of shareholders, the Corporation shall prepare an alphabetical list of
the names of all its shareholders who are entitled to notice of the meeting,
arranged by voting group with the address of, and the number and class and
series, if any, of shares held by each. The shareholders' list must be available
for inspection by any shareholder for a period of ten (10) days prior to the
meeting or such shorter time as exists between the record date and the meeting
and continuing through the meeting at the Corporation's principal office, at a
place identified in the meeting notice in the city where the meeting will be
held, or at the office of the Corporation's transfer agent or registrar. Any
shareholder of the Corporation or such person's agent or attorney is entitled on
written demand to inspect the shareholders' list (subject to the requirements of
law), during regular business hours and at his expense, during the period it is
available for inspection. The Corporation shall make the shareholders' list
available at the meeting of shareholders, and any shareholder or agent or
attorney of such shareholder is entitled to inspect the list at any time during
the meeting or any adjournment. The shareholders' list is prima facie evidence
of the identity of shareholders entitled to examine the shareholders' list or to
vote at a meeting of shareholders.
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Section 12. Action Without Meeting. Any action required or
permitted by law to be taken at a meeting of shareholders may be taken without a
meeting or notice if a consent, or consents, in writing, setting forth the
action so taken, shall be dated and signed by the holders of outstanding stock
having not less than the minimum number of votes that would be necessary to
authorize or take such action at a meeting at which all voting groups and shares
entitled to vote thereon were present and voted with respect to the subject
matter thereof, and such consent shall be delivered to the Corporation, within
the period required by Section 607.0704 of the Florida Business Corporation Act,
by delivery to its principal office in the State of Florida, its principal place
of business, the Secretary or another officer or agent of the Corporation having
custody of the book in which proceedings of meetings of shareholders are
recorded. Within ten (10) days after obtaining such authorization by written
consent, notice must be given to those shareholders who have not consented in
writing or who are not entitled to vote on the action, in accordance with the
requirements of Section 607.0704 of the Florida Business Corporation Act.
Section 13. Fixing Record Date. For the purpose of determining
shareholders entitled to notice of or to vote at any meeting of shareholders or
any adjournment thereof, or entitled to receive payment of any dividend, or in
order to make a determination of shareholders for any other proper purposes, the
Board of Directors may fix in advance a date as the record date for any such
determination of shareholders, such date in any case to be not more than seventy
(70) days, and, in case of a meeting of shareholders, not less than ten (10)
days, before the meeting or action requiring such determination of shareholders.
If no record date is fixed for the determination of shareholders entitled to
notice of or to vote at a meeting of shareholders or the determination of
shareholders entitled to receive payment of a dividend, the date before the day
on which the first notice of the meeting is mailed or the date on which the
resolutions of the Board of Directors declaring such dividend is adopted, as the
case may be, shall be the record date for such determination of shareholders.
When a determination of shareholders entitled to vote at any meeting of
shareholders has been made as provided in this Section, such determination shall
apply to any adjournment thereof, except where the Board of Directors fixes a
new record date for the adjourned meeting,
Section 14. Inspectors and Judges. The Board of Directors in
advance of any meeting may, but need not, appoint one or more inspectors of
election or judges of the vote, as the case may be, to act at the meeting or any
adjournment thereof. If any inspector or inspectors, or judge or judges, are not
appointed, the person presiding at the meeting may, but need not, appoint one or
more inspectors or judges, In case any person who may be appointed as an
inspector or judge fails to appear or act, the vacancy may be filled by the
Board of Directors in advance of the meeting, or at the meeting by the person
presiding thereat. The inspectors or judges, if any, shall determine the number
of shares of stock outstanding and the voting power of each, the shares of stock
represented at the meeting, the existence of a quorum, the validity and effect
of proxies, and shall receive votes, ballots and
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consents, hear and determine all challenges and questions arising in connection
with the right to vote, count and tabulate votes, ballots and consents,
determine the result, and do such acts as are proper to conduct the election or
vote with fairness to all shareholders. On request of the person presiding at
the meeting, the inspector or inspectors or judge or judges, if any, shall make
a report in writing of any challenge, question or matter determined by him or
them, and execute a certificate of any fact found by him or them.
Section 15. Voting for Directors. Unless otherwise provided in
the Articles of Incorporation, directors shall be elected by a plurality of the
votes cast by the shares entitled to vote in the election at a meeting at which
a quorum is present.
ARTICLE THREE
DIRECTORS
Section 1. Number; Term; Election; Qualification. The number
of directors of the Corporation shall be fixed from time to time, within the
limits specified by the Articles of Incorporation, by resolution of the Board of
Directors. Directors shall be elected in the manner and hold office for the term
as prescribed in the Articles of Incorporation. Directors must be natural
persons who are 18 years of age or older but need not be residents of the State
of Florida, shareholders of the Corporation or citizens of the United States,
Section 2. Resignation; Vacancies; Removal. A director may
resign at any time by giving written notice to the Board of Directors or the
Chairman of the Board. Such resignation shall take effect at the date of receipt
of such notice or at any later time specified therein; and, unless otherwise
specified therein, the acceptance of such resignation shall not be necessary to
make it effective. In the event the notice of resignation specifies a later
effective date, the Board of Directors may fill the pending vacancy (subject to
the provisions of the Articles of Incorporation) before the effective date if
they provide that the successor does not take office until the effective date.
Director vacancies shall be filled, and directors may be removed, in the manner
prescribed in the Corporation's Articles of Incorporation.
Section 3. Powers. The business and affairs of the Corporation
shall be managed by the Board of Directors, which may exercise all such powers
of the Corporation and do all such lawful acts and things as are not by statute
or by the Articles of Incorporation or by these Bylaws directed or required to
be exercised and done by the shareholders.
Section 4. Place of Meetings. Meetings of the Board of
Directors, regular or special, may be held either within or without the State of
Florida.
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Section 5. Annual Meetings. Unless scheduled for another time
by the Board of Directors, the first meeting of each newly elected Board of
Directors shall be held, without call or notice, immediately following each
annual meeting of shareholders.
Section 6. Regular Meetings. Regular meetings of the Board of
Directors may also be held without notice at such time and at such place as
shall from time to time be determined by the Board of Directors.
Section 7. Special Meetings and Notice. Special meetings of
the Board of Directors may be called by the President or Chairman of the Board
and shall be called by the Secretary on the written request of any two
directors. At least forty-eight (48) hours' prior written notice of the date,
time and place of special meetings of the Board of Directors shall be given to
each director. Except as required by law, neither the business to be transacted
at, nor the purpose of, any regular or special meeting of the Board of Directors
need be specified in the notice or waiver of notice of such meeting. Notices to
directors shall be in writing and delivered to the directors at their addresses
appearing on the books of the Corporation by personal delivery, mail or other
legally sufficient means. Subject to the provisions of the preceding sentence,
notice to directors may also be given by telegram, teletype or other form of
electronic communication. Notice by mail shall be deemed to be given at the time
when the same shall be received. Whenever any notice is required to be given to
any director, a waiver thereof in writing signed by the person or persons
entitled to such notice, whether before, during or after the meeting, shall
constitute an effective waiver of such notice. Attendance of a director at a
meeting shall constitute a waiver of notice of such meeting and a waiver of any
and all objections to the place of the meeting, the time of the meeting and the
manner in which it has been called or convened, except when a director states,
at the beginning of the meeting or promptly upon arrival at the meeting, any
objection to the transaction of business because the meeting is not lawfully
called or convened.
Section 8. Quorum and Required Vote. A majority of the
prescribed number of directors determined as provided in the Articles of
Incorporation shall constitute a quorum for the transaction of business and the
act of the majority of the directors present at a meeting at which a quorum is
present shall be the act of the Board of Directors, unless a greater number is
required by the Articles of Incorporation. Whenever, for any reason, a vacancy
occurs in the Board of Directors, a quorum shall consist of a majority of the
remaining directors until the vacancy has been filled. If a quorum shall not be
present at any meeting of the Board of Directors, a majority of the directors
present thereat may adjourn the meeting to another time and place, without
notice other than announcement at the time of adjournment. At such adjourned
meeting at which a quorum shall be present, any business may be transacted that
might have been transacted at the meeting as originally notified and called.
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Section 9. Action Without Meeting. Any action required or
permitted to be taken at a meeting of the Board of Directors or committee
thereof may be taken without a meeting if a consent in writing, setting forth
the action taken, is signed by all of the members of the Board of Directors or
the committee, as the case may be, and such consent shall have the same force
and effect as a unanimous vote at a meeting. Action taken under this Section 9
is effective when the last director signs the consent, unless the consent
specifies a different effective date. A consent signed under this Section 9
shall have the effect of a meeting vote and may be described as such in any
document.
Section 10. Conference Telephone or Similar Communications
Equipment Meetings. Directors and committee members may participate in and hold
a meeting by means of conference telephone or similar communications equipment
by means of which all persons participating in the meeting can hear each other.
Participation in such a meeting shall constitute presence in person at the
meeting, except where a person participates in the meeting for the express
purpose of objecting to the transaction of any business on the ground the
meeting is not lawfully called or convened.
Section 11. Committees. The Board of Directors, by resolution
adopted by a majority of the whole Board of Directors, may designate from among
its members an executive committee and one or more other committees, each of
which, to the extent provided in such resolution, shall have and may exercise
all of the authority of the Board of Directors in the business and affairs of
the Corporation except where the action of the full Board of Directors is
required by applicable law. Each committee must have two or more members who
serve at the pleasure of the Board of Directors. The Board of Directors, by
resolution adopted in accordance with this Article Three, may designate one or
more directors as alternate members of any committee, who may act in the place
and stead of any absent member or members at any meeting of such committee.
Vacancies in the membership of a committee may be filled only by the Board of
Directors at a regular or special meeting of the Board of Directors. The
executive committee shall keep regular minutes of its proceedings and report the
same to the Board of Directors when required. The designation of any such
committee and the delegation thereto of authority shall not operate to relieve
the Board of Directors, or any member thereof, of any responsibility imposed
upon it or such member by law.
Section 12. Compensation of Directors. The directors may be
paid their expenses, if any, of attendance at each meeting of the Board of
Directors and may be paid a fixed sum for attendance at each meeting of the
Board of Directors or a stated salary as director. No such payment shall
preclude any director from serving the Corporation in any other capacity and
receiving compensation therefor. Similarly, members of special or standing
committees may be allowed compensation for attendance at committee meetings or a
stated salary as a committee member and
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payment of expenses for attending committee meetings. Directors may receive such
other compensation as may be approved by the Board of Directors.
ARTICLE FOUR
OFFICERS
Section 1. Positions. The officers of the Corporation may
consist of a Chairman of the Board, a Chief Executive Officer, a President, one
or more Vice Presidents (any one or more of whom may be given the additional
designation of rank of Executive Vice President or Senior Vice President), a
Secretary, a Chief Financial Officer and a Treasurer. Any two or more offices
may be held by the same person. Officers other than the Chairman of the Board
need not be members of the Board of Directors. The Chairman of the Board must be
a member of the Board of Directors.
Section 2. Election of Specified Officers by Board. The Board
of Directors at its first meeting after each annual meeting of shareholders
shall elect a Chairman of the Board, a Chief Executive Officer, a President, one
or more Vice Presidents (including any Senior or Executive Vice Presidents), a
Secretary, a Chief Financial Officer and a Treasurer.
Section 3. Election or Appointment of Other Officers. Such
other officers and assistant officers and agents as may be deemed necessary nay
be elected or appointed by the Board of Directors, or, unless otherwise
specified herein, appointed by the Chairman of the Board. The Board of Directors
shall be advised of appointments by the Chairman of the Board at or before the
next scheduled Board of Directors meeting.
Section 4. Compensation. The salaries, bonuses and other
compensation of the Chairman of the Board and all officers of the Corporation to
be elected by the Board of Directors pursuant to Section 2 of this Article Four
shall be fixed from time to time by the Board of Directors or pursuant to its
direction. The salaries of all other elected or appointed officers of the
Corporation shall be fixed from time to time by the Chairman of the Board or
pursuant to his direction.
Section 5. Term; Resignation; Removal; Vacancies. The officers
of the Corporation shall hold office until their successors are chosen and
qualified. Any officer or agent elected or appointed by the Board of Directors
or the Chairman of the Board may be removed, with or without cause, by the Board
of Directors, but such removal shall be without prejudice to the contract
rights, if any, of the person so removed. Any officer or agent appointed by the
Chairman of the Board pursuant to Section 3 of this Article Four may also be
removed from such office or position by the Board of Directors or the Chairman
of the Board, with or without cause. Any vacancy occurring in any office of the
Corporation by death, resignation, removal or
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otherwise shall be filled by the Board of Directors, or, in the case of an
officer appointed by the Chairman of the Board, by the Chairman of the Board or
the Board of Directors. Any officer of the Corporation may resign from his
respective office or position by delivering notice to the Corporation, and such
resignation shall be effective without acceptance. Such resignation shall be
effective when delivered unless the notice specifies a later effective date. If
a resignation is made effective at a later date and the Corporation accepts the
future effective date, the Board of Directors may fill the pending vacancy
before the effective date if the Board provides that the successor does not take
office until such effective date.
Section 6. Chairman of the Board. The Chairman of the Board
shall preside at all meetings of the shareholders and the Board of Directors.
The Chairman of the Board shall also serve as the chairman of any executive
committee.
Section 7. Chief Executive Officer. Subject to the control of
the Board of Directors, the Chief Executive Officer, in conjunction with the
President, shall have general and active management of the business of the
Corporation, shall see that all orders and resolutions of the Board of Directors
are carried into effect and shall have such powers and perform such duties as
may be prescribed by the Board of Directors. In the absence of the Chairman of
the Board or in the event the Board of Directors shall not have designated a
Chairman of the Board, the Chief Executive Officer shall preside at meetings of
the shareholders and the Board of Directors. The Chief Executive Officer shall
also serve as the vice-chairman of any executive committee.
Section 8. President. Subject to the control of the Board of
Directors, the President in conjunction with the Chief Executive Officer, shall
have general and active management of the business of the Corporation and shall
have such powers and perform such duties as may be prescribed by the Board of
Directors. In the absence of the Chairman of the Board and the Chief Executive
Officer or in the event the Board of Directors shall not have designated a
Chairman of the Board and a Chief Executive officer shall not have been elected,
the President shall preside at meetings of the shareholders and the Board of
Directors. The President shall also serve as the vice-chairman of any executive
committee.
Section 9. Vice Presidents. The Vice Presidents, in the order
of their seniority, unless otherwise determined by the Board of Directors,
shall, in the absence or disability of the President and the Chief Executive
Officer, perform the duties and exercise the powers of the President. They shall
perform such other duties and have such other powers as the Board of Directors,
the Chairman of the Board or the Chief Executive Officer shall prescribe or as
the President may from time to time delegate. Executive Vice Presidents shall be
senior to Senior Vice Presidents, and Senior Vice Presidents shall be senior to
all other Vice Presidents.
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Section 10. Secretary. The Secretary shall attend all meetings
of the shareholders and all meetings of the Board of Directors and record all
the proceedings of the meetings of the shareholders and of the Board of
Directors in a book to be kept for that purpose and shall perform like duties
for the standing committees when required. The Secretary shall give, or cause to
be given, notice of all meetings of the shareholders and special meetings of the
Board of Directors and shall keep in safe custody the seal of the Corporation
and, when authorized by the Board of Directors, affix the same to any instrument
requiring it. The Secretary shall perform such other duties as may be prescribed
by the Board of Directors, the Chairman of the Board, the Chief Executive
Officer or the President. the Chairman of the Board, the Chief Executive Officer
or the President.
Section 11. Chief Financial Officer. The Chief Financial
Officer shall be responsible for maintaining the financial integrity of the
Corporation, shall prepare the financial plans for the Corporation and shall
monitor the financial performance of the Corporation and its subsidiaries, as
well as performing such other duties as may be prescribed by the Board of
Directors, the Chairman of the Board, the Chief Executive Officer or the
President.
Section 12. Treasurer. The Treasurer shall have the custody of
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the Corporation in such depositories as may be designated by the Board of
Directors. The Treasurer shall disburse the funds of the Corporation as may be
ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the Chairman of the Board and the Board of
Directors at its regular meetings or when the Board of Directors so requires an
account of all his transactions as Treasurer and of the financial condition of
the Corporation. The Treasurer shall perform such other duties as may be
prescribed by the Board of Directors, the Chairman of the Board, the Chief
Executive Officer or the President.
Section 13. Other Officers; Employees and Agents. Each and
every other officer, employee and agent of the Corporation shall possess, and
may exercise, such power and authority, and shall perform such duties, as may
from time to time be assigned to such person by the Board of Directors, the
officer so appointing such person or such officer or officers who may from time
to time be designated by the Board of Directors to exercise such supervisory
authority.
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ARTICLE FIVE
CERTIFICATES FOR SHARES
Section 1. Issue of Certificates. The shares of the
Corporation shall be represented by certificates, provided that the Board of
Directors of the Corporation may provide by resolution or resolutions that some
or all of any or all classes or series of its stock shall be uncertificated
shares. Any such resolution shall not apply to shares represented by a
certificate until such certificate is surrendered to the Corporation.
Notwithstanding the adoption of such a resolution by the Board of Directors,
every holder of stock represented by certificates (and upon request every holder
of uncertificated shares) shall be entitled to have a certificate signed by or
in the name of the Corporation by the Chairman of the Board or a Vice Chairman
of the Board, or the Chief Executive Officer, President or Vice President, and
by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant
Secretary of the Corporation, representing the number of shares registered in
certificate form.
Section 2. Legends for Preferences and Restrictions on
Transfer. The designations, relative rights, preferences and limitations
applicable to each class of shares and the variations in rights, preferences and
limitations determined for each series within a class (and the authority of the
Board of Directors to determine variations for future series) shall be
summarized on the front or back of each certificate. Alternatively, each
certificate may state conspicuously on its front or back that the Corporation
will furnish the shareholder a full statement of this information on request and
without charge. Every certificate representing shares that are restricted as to
the sale, disposition, or transfer of such shares shall also indicate that such
shares are restricted as to transfer, and there shall be set forth or fairly
summarized upon the certificate, or the certificate shall indicate that the
Corporation will furnish to any shareholder upon request and without charge, a
full statement of such restrictions. If the Corporation issues any shares that
are not registered under the Securities Act of 1933, as amended, or not
registered or qualified under the applicable state securities laws, the transfer
of any such shares shall be restricted substantially in accordance with the
following legend:
"THESE SHARES HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 OR UNDER ANY
APPLICABLE STATE LAW. THEY MAY NOT BE
OFFERED FOR SALE, SOLD, TRANSFERRED OR
PLEDGED WITHOUT (1) REGISTRATION UNDER THE
SECURITIES ACT OF 1933 AND ANY APPLICABLE
STATE LAW, OR (2) AT HOLDER'S EXPENSE, AN
OPINION (SATISFACTORY TO THE CORPORATION) OF
COUNSEL (SATISFACTORY TO THE
CORPORATION)THAT REGISTRATION IS NOT
REQUIRED."
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Section 3. Facsimile Signatures. Any and all signatures on the
certificate may be a facsimile. In case any officer, transfer agent or registrar
who has signed or whose facsimile signature has been placed upon such
certificate shall have ceased to be such officer, transfer agent or registrar
before such certificate is issued, it may be issued by the Corporation with the
same effect as if he were such officer, transfer agent or registrar at the date
of issue.
Section 4. Lost Certificates. The Board of Directors may
direct a new certificate or certificates to be issued in place of any
certificate or certificates theretofore issued by the Corporation alleged to
have been lost or destroyed, upon the making of an affidavit of that fact by the
person claiming the certificate of stock to be lost or destroyed. When
authorizing such issue of a new certificate or certificates, the Corporation
may, in its discretion and as a condition precedent to the issuance thereof,
require the owner of such lost or destroyed certificate or certificates, or his
legal representative, to advertise the same in such manner as it shall require
and/or to give the Corporation a bond in such sum as it may direct as indemnity
against any claim that may be made against the Corporation with respect to the
certificate alleged to have been lost or destroyed.
Section 5. Transfer of Shares. Upon surrender to the
Corporation or the transfer agent of the Corporation of a certificate for shares
duly endorsed or accompanied by proper evidence of succession, assignment or
authority to transfer, it shall be the duty of the Corporation to issue a new
certificate to the person entitled thereto, cancel the old certificate and
record the transaction upon its books.
Section 6. Registered Shareholders. The Corporation shall be
entitled to recognize the exclusive rights of a person registered on its books
as the owner of shares to receive dividends, and to vote as such owner, and
shall not be bound to recognize any equitable or other claim to or interest in
such share or shares on the part of any other person, whether or not it shall
have express or other notice thereof, except as otherwise provided by the laws
of the State of Florida.
Section 7. Redemption of Control Shares. As provided by the
Florida Business Corporation Act, if a person acquiring control shares of the
Corporation does not file an acquiring person statement with the Corporation,
the Corporation may, at the discretion of the Board of Directors, redeem the
control shares at the fair value thereof at any time during the 60-day period
after the last acquisition of such control shares. If a person acquiring control
shares of the Corporation files an acquiring person statement with the
Corporation, the control shares may be redeemed by the Corporation, at the
discretion of the Board of Directors, only if such shares are not accorded full
voting rights by the shareholders as provided by law.
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ARTICLE SIX
GENERAL PROVISIONS
Section 1. Dividends. The Board of Directors may from time to
time declare, and the Corporation may pay, dividends on its outstanding shares
in cash, property, stock (including its own shares) or otherwise pursuant to law
and subject to the provisions of the Articles of Incorporation.
Section 2. Reserves. The Board of Directors may by resolution
create a reserve or reserves out of earned surplus for any proper purpose or
purposes, and may abolish any such reserve in the same manner.
Section 3. Checks. All checks or demands for money and notes
of the Corporation shall be signed by such officer or officers or such other
person or persons as the Board of Directors may from time to time designate.
Section 4. Fiscal Year. The fiscal year of the Corporation
shall end on December 31 of each year, unless otherwise fixed by resolution of
the Board of Directors.
Section 5. Seal. The Board of Directors may adopt a corporate
seal by resolution. The corporate seal, if adopted, shall have inscribed thereon
the name and state of incorporation of the Corporation. The seal may be used by
causing it or a facsimile thereof to be impressed or affixed or in any other
manner reproduced.
Section 6. Gender. All words used in these Bylaws in the
masculine gender shall extend to and shall include the feminine and neutral
genders.
ARTICLE SEVEN
AMENDMENT OF BYLAWS
Except as otherwise set forth herein, these Bylaws may be
altered, amended or repealed or new Bylaws may be adopted at any meeting of the
Board of Directors at which a quorum is present, by the affirmative vote of a
majority of the directors present at such meeting.
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PRESIDENT'S CERTIFICATE OF ADOPTION OF
THE BYLAWS OF EVC VENTURES CORP.
I hereby certify:
That I am the duly elected President of EVC Ventures Corp., a
Florida corporation;
That the foregoing Bylaws comprising thirteen (13) pages,
constitute the Bylaws of said corporation as duly adopted by the Board of
Directors of the Corporation on July 10th, 1998.
IN WITNESS WHEREOF, I have hereunder signed my name this 10th
day of July, 1998.
______________________________
John Xinos, President
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Exhibit 10.1
CITRIX BUSINESS ALLIANCE MEMBERSHIP AGREEMENT
This Agreement ("Agreement") is between:
CITRIX SYSTEMS, INC. ("Citrix"), a Delaware corporation, located at 6400 NW 6th
Way, Fort Lauderdale, Florida 33309, and Invnsys Technology Corporation, a
Phoenix, AZ, corporation, located at: 2331 W. Royal Palm #105, Phoenix, Arizona
85021 (the Citrix Business Alliance Member or "CBA Member").
Whereas, CBA Member desires to enter into an alliance marketing relationship and
to recommend computer solutions to its customers in accordance with this
Membership Agreement; and
Whereas, Citrix desires to supply Citrix software and provide marketing services
and technical support on Citrix products to assist CBA Member in recommending
solutions to its customers, resellers and channel partners;
Now, therefore, in consideration of the mutual promises contained herein, the
parties agree as follows:
1. CBA MEMBER OBLIGATIONS. Pursuant to this Agreement, Member makes the
following promises and undertakes the following obligations to Citrix:
The Annual fee is waived through December 31, 1999 and will be invoiced on
January 1, 2000 and each September 1st thereafter, if renewed by Member. Initial
term Fee will be prorated based on effective date of agreement.
The CBA Member shall pay the annual fee set forth in the applicable Program
Track for the products and services provided by Citrix pursuant to this
Agreement which shall be submitted to Citrix with CBA Member's signed copy of
this Agreement. In addition, CBA Member agrees to Program Track requirements in
effect upon the Effective Date of this Agreement.
2. CITRIX OBLIGATIONS. During the term and pursuant to the terms of this
Agreement, Citrix undertakes the obligations to CBA Member set forth in the
Program Track applicable to this Agreement.
3. TRADEMARKS.
3.1 During the term of this Agreement, CBA Member shall have the right to
identify itself as a CBA Member. Citrix may also identify CBA Member as an
Alliance Member.
3.2 During the term of this Agreement, CBA Member may refer to Citrix products
using the Citrix product trademarks if the reference is not misleading and does
not indicate or imply Citrix's endorsement, testing, or approval of any other
product or of any service offered by CBA Member. The appropriate trademark
symbol (either "(TM)" [standard trademark] or (R) [registered trademark] in
superscript following the product name) shall be used whenever a Citrix product
name is mentioned in any advertisement, brochure, or material circulated or
published in any form whatsoever by CBA Member. The appropriate trademark symbol
must be used in conjunction with, at least, the first reference to each Citrix
product in all CBA Member's publications.
3.3 CBA Member may also have the right to use certain other Citrix trademarks in
order to inform the public that CBA Member's products contain, or are compatible
with, Citrix technology or products. CBA Members' rights and obligations with
respect to such mark(s) shall be governed by an appropriate Trademark License
Agreement to be included as an attachment to this Agreement.
4 Confidentiality.
4.1 Each party expressly undertakes to retain in confidence the terms and
conditions of this Agreement and all information transmitted to the other that
the disclosing party has identified in writing as confidential.
4.2 Either party may disclose confidential information as required by
governmental or judicial order, provided such party gives the other party prompt
written notice prior to such disclosure and complies with any protective order
(or equivalent) imposed on such disclosure.
4.3 Neither party shall have an obligation to maintain the confidentiality of
information that
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(i) it received rightfully from a third party prior to its receipt to the
disclosing party; (ii) the disclosing party has disclosed to a third party
without any obligation to maintain to such information in confidence; or (iii)
is independently developed by the obligated party. Each party's obligation under
this Section shall survive the expiration or earlier termination of this
Agreement and shall extend to the earlier of such time as the information
protected hereby falls into the public domain through no fault of the obligated
party or five (5) years following termination or expiration of this Agreement.
5. TERM AND TERMINATION.
5.1 This Agreement shall take effect on the date of its execution by Citrix
("Effective Date"), and unless terminated earlier as provided herein, shall
continue for a period of two (2) years from the Effective Date. Thereafter, this
Agreement shall automatically renew for additional one (1) year terms. Program
benefits are provided in accordance with the Program Track policies and
procedures in effect when a specific benefit is requested. CBA Member
understands that, at any time within Citrix's sole discretion, Citrix may add to
or cancel any CBA Program Track benefits.
5.2 Either party shall have the right to terminate this Agreement at any time,
without cause and without the intervention of the courts, on the giving of
thirty (30) days' prior written notice. Neither party shall be responsible to
the other for any costs or damages resulting from the termination of this
Agreement.
5.3 Upon expiration or termination of this Agreement, CBA Member shall
immediately cease use of any Citrix trademarks licensed hereunder, and shall
cease to represent itself as a CBA Member.
6. NEW PRODUCTS.
6.1 Notwithstanding any other provisions of this Agreement, Citrix may elect at
any time during the term of this Agreement to announce new Citrix products to
which the terms and conditions of this Agreement may not apply. New versions
(upgrades), minor product revisions (updates), and maintenance releases of
existing titles are not considered new Citrix products.
7. WARRANTIES/LIMITED WARRANTIES.
7.1 Citrix warrants Citrix products on the terms set out in the license
agreement accompanying each such product. THESE LIMITED WARRANTIES ARE IN LIEU
OF ALL OTHER WARRANTIES AND CONDITIONS, EXPRESSED, IMPLIED, OR STATUTORY,
INCLUDING ALL IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, AND AGAINST INFRINGEMENT AND OF ALL OTHER OBLIGATIONS, CONDITIONS, OR
LIABILITIES ON CITRIX'S PART EXCEPT AS OTHERWISE PROVIDED BY APPLICABLE LAW.
8. INDEMNITY.
8.1 CBA Member shall defend, indemnify, and hold harmless Citrix from and
against all liabilities, claims, costs, fines, and damages of any type
(including attorneys' fees) arising out of or in any way related to CBA Member's
delivery of services and/or representations made by CBA Member to its customers.
8.2 CBA Member agrees that Citrix has the right but not the obligation to
defend, or at Citrix's option, to settle any claim, suit or proceeding brought
against CBA Member based on a claim that any products or materials supplied to
CBA Member under this Agreement infringe upon any United States patent or
copyright or violate the trade secret rights of any United States party
(hereinafter "Infringement Claims") provided that CBA Member notifies Citrix in
writing within seven (7) days of notification or discovery of an Infringement
Claim. CBA Member agrees that Citrix will have sole control over the defense or
settlement of any Infringement Claim, and CBA Member will provide reasonable
assistance in the defense of the same (Citrix will reimburse CBA Member for
reasonable expenses incurred in providing such assistance). Any favorable
monetary award, judgment, or settlement will belong exclusively and entirely to
Citrix.
9. LIMITATION OF LIABILITY.
9.1 EXCEPT FOR CLAIMS UNDER SECTION 8 OR CLAIMS FOR INFRINGEMENT OF INTELLECTUAL
PROPERTY RIGHTS, AND SUBJECT TO APPLICABLE LAW, NEITHER PARTY OR
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ITS SUPPLIERS OR ITS LICENSORS SHALL BE LIABLE TO THE OTHER FOR ANY DIRECT,
INDIRECT, CONSEQUENTIAL OR INCIDENTAL DAMAGES (INCLUDING DAMAGES FOR LOSS OF
BUSINESS PROFITS, BUSINESS INTERRUPTION, LOSS OF BUSINESS INFORMATION, AND THE
LIKE) ARISING OUT OF ITS PERFORMANCE OR FAILURE TO PERFORM UNDER THIS AGREEMENT,
EVEN IF THE OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
BECAUSE SOME JURISDICTIONS DO NOT ALLOW THE EXCLUSION OR LIMITATION OF
CONSEQUENTIAL OR INCIDENTAL DAMAGES, THE ABOVE LIMITATION MAY NOT APPLY. IN ANY
EVENT, EXCEPT AS OTHERWISE PROVIDED BY LAW, THE LIABILITY OF CITRIX OR ITS
SUPPLIERS, WHETHER FOR NEGLIGENCE, BREACH OF CONTRACT, BREACH OF WARRANTY, OR
OTHERWISE, SHALL, IN THE AGGREGATE, NOT EXCEED THE AMOUNT PAID TO CITRIX BY CBA
MEMBER HEREUNDER.
10. GENERAL.
10.1 Except as expressly granted herein, no license regarding the use of
Citrix's copyrights, patents, trademarks or trade names is granted or will be
implied.
10.2 If a particular provision of the Agreement is terminated or held by a court
of competent jurisdiction to be invalid, illegal, or unenforceable, this
Agreement shall remain in full force and effect as to the remaining provisions.
10.3 No waiver of any breach of any provisions of this Agreement shall
constitute a waiver of any prior, concurrent, or subsequent breach of the same
or any other provisions hereof, and no waiver shall be effective unless made in
writing and signed by an authorized representative of the waiving party.
10.4 Neither this Agreement, nor any terms and conditions contained herein,
shall be construed as creating a partnership, joint venture, franchise or agency
relationship between Citrix and CBA Member.
10.5 CBA Member is an independent business and agrees that it shall not make any
representation that might indicate to any third party that CBA Member has
authority to act on Citrix's behalf or to bind Citrix to any representation or
warranty. CBA Member shall not hold itself out as an agent of Citrix, or attempt
to bind Citrix to any third-party agreement.
10.6 This Agreement, and any rights or obligations hereunder, shall not be
assigned or sublicensed by CBA Member, without prior written consent from
Citrix.
10.7 This Agreement shall be governed by the laws of the State of Florida and
CBA Member consents to jurisdiction and venue in the state and federal courts
sitting in the State of Florida. If either Citrix or CBA Member employs
attorneys to enforce any rights arising out of or relating to this Agreement,
the prevailing party shall be entitled to recover costs and attorneys' fees.
10.8 The making, execution and delivery of this Agreement have been induced by
no representations, statements, warranties or agreements other than those herein
expressed.
10.9 No term or provision of this Agreement may be changed, waived, discharged
or terminated except by a writing singed by duly authorized officers of the
parties hereof. The terms of any other documents or electronic communications
exchanged (including the terms set forth on any purchase order) shall be of no
force or effect unless incorporated herein as a modification or addition to the
terms of this Agreement.
10.10 This Agreement constitutes the entire agreement between the parties with
respect to the subject matter hereof and supersedes all prior and
contemporaneous communications including all prior and current Citrix Authorized
Reseller and Citrix Authorized Premier Reseller Agreements. It shall not be
modified except by a written agreement dated subsequent to the Effective Date of
the Agreement and signed on behalf of CBA Member and Citrix by their respective
duly authorized representations.
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ACCEPTED BY CBA MEMBER
Company Name:
Invnsys Technology Corporation
- ------------------------------
Authorized Signature:
- ------------------------------
Name (printed):
Mark Perkins
- ------------------------------
Title:
Vice President - Operations
- ------------------------------
Date:
2-10-99
- ------------------------------
ACCEPTED BY CITRIX SYSTEMS, INC.
Authorized Signature:
- ------------------------------
Name (printed):
Marc-Andre Boisseau
- ------------------------------
Title:
Controller
- ------------------------------
Date:
2/22/99
- ------------------------------
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Exhibit 10.2
CLIENT SOFTWARE LICENSE AGREEMENT
This Client Software License Agreement ("Agreement") is between Citrix
Systems, Inc., a Delaware corporation, with primary offices at 6400 NW 6th Way,
Fort Lauderdale, FL 33309, ("Citrix"), and INVNSYS TECH. CORPORATION, a
_____________ corporation, with primary offices __________________ ("Licensee").
The effective date of this Agreement is 12-30-98 ("Effective Date").
RECITALS
Citrix designs, manufactures, markets, and distributes certain computer
system software products. Licensee designs, manufactures, markets, and
distributes Licensee's ______________ products which are complementary to the
Citrix products.
Citrix and Licensee wish to cooperate such that Licensee may offer
Citrix products to its customers in combination with Licensee's existing or
planned products or technology.
These recitals are intended only to summarize the intent of this
Agreement. The actual terms and conditions of the Agreement are stated below.
AGREEMENT
1. DEFINITIONS
1.1. "Citrix Product(s)" means the products specified in Exhibit A,
as such products may be adapted by Licensee for use in Licensee
Products pursuant to subsection 2.1 below, and includes all
Product Releases, Version Releases, and Update Releases provided
by Citrix to Licensee in connection with this Agreement.
1.2. "Non-Volatile Memory" means a storage unit which is dedicated to
storage of the Licensee Product and which retains the Licensee
Product when power is turned off, e.g., ROM or other silicon,
and not including diskettes, CD-ROM, hard disks or other general
purpose peripherals.
1.3. "Licensee Product(s)" means the terminal products specified in
Exhibit B, which shall include the Citrix Product(s) in
Non-Volatile Memory, and which shall be marketed and distributed
by Licensee as approved by Citrix.
1.4. "FCS" of a Licensee Product means the first customer ship of
that Licensee Product for revenue by Licensee.
1.5. "Product Release" means a release of a Citrix Product which is
designated by Citrix in its sole discretion as a change in the
digit(s) to the left of the decimal point in the Citrix Product
version number, ({x}.xx).
1.6 "Version Release" means a release of a Citrix Product which is
designated by Citrix in its sole discretion as a change in the
tenths digit in the Citrix Product version number, (x. {x} x).
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1.7 "Update Release" means a release of a Citrix Product which is
designated by Citrix in its sole discretion as a change in the
hundredths digit in the Citrix Product version number
(x.{x}x).
1.8 "Documentation" means the standard user guidelines developed
and released by Citrix for use with the Citrix Products.
1.9 "Documentation Media" means the diskettes, CDs, or other media
containing the machine-readable data files developed by Citrix
which contain the source for the Documentation.
1.10 "Master Software Media" means the standard microcomputer
diskettes, CDs, or other media containing the object code
version of the Citrix Product(s).
1.11 "Period" means those periods of time identified in Exhibit C.
1.12 "Level I Support" means receipt and management of all customer
support calls, and provision of fixes for known problems.
1.13 "Level 2 Support" means reproducing and isolating problems,
and jointly developing, workarounds for problems and testing
software fixes with the other party.
1.14 "Level 3 Support" means providing software fixes for
correction of isolated problems, and jointly developing
workarounds for, problems and testing software fixes with the
other party.
1.15 "ICA" means the Citrix architecture and proprietary protocols
which define communications between server computers and
workstations or terminals such that the intelligence and
memory resident in the workstation or terminal is efficiently
exploited. ICA protocols relate to functions including, but
not limited to the following: distributed Windows graphical
user interface, full screen text, virtual channels, data
packet framing, compression, and encryption.
1.16 "Reseller" shall mean distributors and subdistributors within
Licensee's distribution channel which market and deliver
Licensee Products in the form in which the products are
received from Licensee.
1.17 "Technical Manager" means the individual designated by
Licensee on Exhibit B hereto to receive, maintain and, when
required, return the Citrix Deliverables. Licensee may assign
a new Technical Manager only upon thirty (30) days written
notice to Citrix.
2. LICENSE GRANT
2.1. License to adapt software. Each Citrix Product as delivered by
Citrix may include certain software in source code form
("Source Code Fragments"), as specified in Citrix grants to
Licensee a nonexclusive and nontransferable license to modify,
delete, or replace these Source Code Fragments within each
Citrix Product or, if applicable, to use the ICA 3.0 materials
solely in order to adapt that Citrix Product for use in
Licensee Products. No other rights to any Citrix Product
source code are granted.
2.2. License to copy software. Subject to the terms and conditions
contained in this Agreement, Citrix -rants to Licensee a
nontransferable and nonexclusive license to copy
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the Citrix Products from the Master Software Media to
Non-Volatile Memory for incorporation into Licensee Products.
2.3 License to copy documentation. Subject to the terms and
conditions contained in this Agreement, Citrix grants to
Licensee a nontransferable and nonexclusive right to copy the
Documentation Media solely for the purpose of distributing
printed copies of the Documentation with Licensee Products to
which the Documentation refers, pursuant to subsection 2.5
below. Licensee may reproduce the Documentation as exact copies
or, subject to subsection 8.6 below, Licensee may produce
derivative works of the Documentation. In either case, the
quality of produced documentation by Licensee must be equal to
or better than the quality of Documentation produced by Citrix.
Prior to distribution Licensee will deliver to Citrix a copy of
each document it produces based on the Citrix Documentation, for
review and approval by Citrix, which approval shall not be
unreasonably withheld.
2.4. Restriction on license. Licensee agrees that, except as
specified in subsection 2.1 above, it will not make
modifications to, decompile, reverse engineer or otherwise
decode or alter the software delivered on the Master Software
Media. Licensee further agrees that it shall not modify or
remove functions in Citrix Products, nor shall Licensee offer
such functions to its customers in stock keeping units ("SKUs")
which divide the Citrix Product functions in a manner different
from the function packaging of the standard Citrix SKUS, except
as may be authorized by this Agreement or as may be authorized
by Citrix in writing.
2.5. License to distribute. During the term of, and subject to the
terms and conditions of, this Agreement, Citrix grants to
Licensee, and Licensee accepts, the nonexclusive,
nontransferable right to incorporate the Citrix Product(s) in
NonVolatile Memory, in the Licensee Product(s), as specified in
subsection 2.2 above, only in the manner provided in Exhibit B,
and to distribute such Citrix Product(s) so incorporated in
Licensee Products subject to the restrictions of subsection 11.3
below.
2.6. Terms of Distribution. Licensee agrees that it will distribute
the [Licensee/Citrix] Products pursuant to such license
agreements as Licensee customarily uses to distribute other
similar software. Except as permitted in this Agreement,
Licensee shall contractually prohibit, and shall require its
distributors and other resellers to contractually prohibit, end
users and all entities in the chain of distribution from: (i)
using, copying (except as necessary for back-up or archival
purposes or to the extent expressly permitted by applicable law
and to the extent that Citrix is not permitted by that
applicable law to exclude or limit such rights), modifying, or
transferring the software or any copy in whole or in part, or
granting any rights in the software or accompanying
documentation; (ii) translating, reverse engineering,
decompiling, disassembling, or creating derivative works based
on the software or the accompanying documentation; (iii) renting
or leasing the software; or (iv) removing any proprietary
notices, labels, or marks on the software and accompanying
documentation.
3. TERMS OF PAYMENT
3.1. Price and payment. Licensee agrees to pay Citrix the amount(s)
and within the times stated in this Section 3 and in Exhibit C.
Licensee's obligation to pay such amounts is unconditional
except as is otherwise expressly stated to the contrary herein.
The royalties due to Citrix for each Period will be paid within
fifteen (15) business days after the end
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of each Period. A finance charge of one percent per month, or,
if less, the maximum percentage allowed by applicable law,
will be assessed on all amounts that are past due.
3.2. Reports. Within fifteen (15) business days of the end of each
Period, Licensee will deliver to Citrix a certified report in
a form reasonably acceptable to Citrix that details for each
Citrix Product and each Licensee Product (1) the number of
copies distributed by Licensee during the Period, by customer
zip code in a format reasonably acceptable to Citrix, (ii) the
number of such distributed copies which are exempt from
royalties per subsection 3.4 below, and (iii) the license fee
due Citrix on copies distributed during that Period.
3.3. Taxes. Prices stated are exclusive of any federal, state,
withholding, municipal or other governmental taxes, duties,
licenses, fees, excises or tariffs now or hereafter imposed on
Licensee's production, storage, licensing, sale,
transportation, import, export or use of Citrix Products or
Licensee Product(s). Such charges shall be paid by Licensee,
or in lieu thereof, Licensee shall provide an exemption
certificate acceptable to Citrix and the applicable authority.
Citrix, however, shall be responsible for all taxes based upon
its net income.
3.4. Copies exempt from royalties. No royalty shall accrue to
Citrix for copies of Citrix Product(s) (i) used solely for
development, testing, and/or technical support purposes; (ii)
shipped as replacement copies for copies found to be defective
in materials, manufacture, or reproduction; (iii) which are
Update Releases provided to Licensee by Citrix pursuant to
subsection 7.2 below and are shipped by Licensee as an update
of a Citrix Product copy for which Licensee has paid to Citrix
the applicable royalty; (iv) used exclusively for
demonstration or promotional purposes, such copies not to
exceed two hundred (200) copies for each Version Release; or
(v) provided to Citrix; so long as, in all cases above, such
copies are provided by Licensee for free or for Licensee's
reasonable cost of goods plus shipping and handling.
4. DELIVERY
4.1. Citrix Deliverables. For each Citrix Product specified in
Exhibit A, at mutually agreed upon delivery dates, Citrix will
deliver to Licensee two (2) copies of the Master Software
Media and two (2) copies of the Documentation Media to use for
the purposes and under the restrictions described herein.
5. ACCEPTANCE AND WARRANTY
5.1. Acceptance. Within thirty (30) days after Citrix' delivery to
Licensee of any Product Release, Version Release, or Upgrade
Release of a Citrix Product licensed hereunder, Licensee shall
either accept such Citrix Product or report material
deviations from specifications in writing. Material
conformance to specifications shall solely determine
acceptability. If Licensee does not report material deviations
from product specifications within the thirty (30) day period,
or if Licensee ships a Licensee Product to a customer for
revenue, Licensee shall be deemed to have accepted the Citrix
Product.
5.2. Deviations. If Licensee reports any material deviations from
Citrix Product specifications prior to acceptance then Citrix
shall have sixty (60) days to correct such deviations. Upon
delivery of a corrected release of the Citrix Product to
Licensee, Licensee shall have thirty (30) days in which to
re-evaluate the corrected release for material conformance to
specifications as provided in subsection 5.1 above. If any
material deviations from
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specifications reported before acceptance are not eliminated
in the sixty (60) day correction period, then, as Licensee's
sole remedy (i) the Citrix Product may be retained at an
equitable adjustment in price as may be agreed by the parties,
(ii) the correction period may be extended as may be agreed by
the parties, or (iii) failing any agreement, Licensee may
reject the Citrix Product. If Licensee rejects any Citrix
Product Release or Version Release, the parties shall
renegotiate in good faith Licensee's payment obligations
therefor pursuant to Exhibit C.
5.3. Disclaimer of warranty. Apart from Citrix' obligations to
provide error corrections and support the Citrix Product(s)
pursuant to subsections 5.2 and 7.2, CITRIX DISCLAIMS ANY AND
ALL OTHER WARRANTIES AND CONDITIONS OF ANY KIND WHATSOEVER,
EXPRESS, IMPLIED, STATUTORY, OR OTHERWISE, INCLUDING THOSE FOR
MERCHANTABILITY, SATISFACTORY QUALITY, AND/OR FITNESS FOR A
PARTICULAR PURPOSE, WHICH ARE EXPRESSLY EXCLUDED.
5.4. Unreleased product. Licensee shall not distribute for revenue
any release of a Citrix Product in any form until Citrix
olives its written approval of such Citrix Product for such
distribution by its OEM customers generally or until Licensee
receives the final form of the Master Software Media for such
Citrix Product as declared in writing by Citrix.
6. TRAINING
6.1. Technical training. Citrix shall provide to Licensee one and
one half (1 1/2) days of "Train the Trainer" sales training;
and two (2) days of "Train the Trainer" technical support. All
training shall be conducted at Citrix' facility at Citrix
standard rates. Citrix shall also provide to Licensee up two
(2) weeks of "on the phone" support training to at least one
Licensee Level 2 support engineer at Citrix' facility, at
Citrix standard rates.
7. SUPPORT
7.1. Licensee. Licensee shall be responsible for Level I and Level
2 support for the Citrix Product(s). For a period of three
months following the first shipment of Licensee Product(s) by
Licensee, Citrix shall provide appropriate consulting support
as required to Licensee for these efforts. Citrix shall have
no responsibility to deal directly with Licensee's customers.
Licensee shall keep its Citrix Product(s) support capabilities
current by attending Citrix training classes, as appropriate,
at Citrix' regular class rate.
7.2. Citrix. Citrix shall be responsible for the joint development
of workarounds and for Level 3 support for unmodified portions
of Citrix Product(s) relative to deviations from product
specifications, such support to be provided without charge to
Licensee. If Licensee reports any deviations from
specifications in a Citrix Product following acceptance and
during the term of this Agreement, then, as Licensee's sole
remedy, Citrix agrees to use reasonable efforts to correct
such deviations. Notice to Citrix of any deviations from
product specifications shall be made in writing using Citrix'
standard problem reporting mechanisms as they may be updated
from time to time, or using the notice provisions of
subsection 15.5 below. Citrix' obligations under this
subsection as to a particular release of a Citrix Product
shall cease ninety (90) days after delivery to Licensee of an
Update Release, Version Release, or Product Release with a
higher version number which has been accepted pursuant to
Section 5 above. Any free Update Releases provided by Citrix
to its customers generally shall be provided to Licensee
without charge within thirty (30) days of the general
availability of such Update Releases.
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8. ADDITIONAL OBLIGATIONS OF LICENSEE
8.1. Licensee Products for Citrix use. As soon as possible, and at
least thirty (30) days prior to FCS of each Licensee Product,
Licensee shall deliver to Citrix, for Citrix' internal use,
six (6) Licensee Products. From time to time Licensee shall
promptly upgrade or replace, as appropriate, these Licensee
Products to ensure that they are representations of the
current version of each Licensee Product.
8.2. Quality control. Licensee agrees to exercise the highest level
of quality assurance, with regard to media, replication, and
testing procedures, generally in use in the computer software
industry in connection with Licensee's exercise of the rights
granted in Section 2 above.
8.3. Copyright and patent notices. Licensee agrees not to alter or
remove any copyright and/or patent notices in the Citrix
Products. Licensee agrees to comply with the copyright and
patent notice requirements as set forth in Exhibit D.
8.4. Terminal Client Identifier. Licensee agrees not to modify or
delete Citrix' standard licensing technology that identifies
the Licensee client as an embedded ICA client. This will allow
for connections to WinFrame for Terminals and MetaFrame for
Terminals.
8.5. Citrix attribution. Licensee agrees to cause a screen
providing attribution to Citrix, in accordance with the
requirements specified in Exhibit D, to appear on each
Licensee Product upon initiation of use of the Licensee
Product.
8.6. Product and Version release numbers. Licensee shall market
each release of each Licensee Product with reference to the
ICA version/release number assigned by Citrix to the Citrix
Product, contained in the Licensee Product. As a result of
this, resellers and/or end users must be easily able to
determine correspondence between Licensee Product releases and
ICA version/release levels.
8.7. Licensee Product translation. Licensee agrees that it may
translate neither the Documentation nor the Citrix Products to
languages other than U.S. English without the prior written
consent of Citrix.
9. TERM AND TERMINATION
9.1. Initial and renewal terms. The initial term of this Agreement
("Initial Term") shall run for two (2) years from the
Effective Date. This Agreement shall renew automatically each
year for a one year term, unless either party gives sixty (60)
days written notice of its intent to allow this Agreement to
expire at the end of the then current term.
9.2. Termination for cause. If either party defaults in the
performance of any material provision of this Agreement, then
the non-defaulting party may give written notice to the
defaulting party that, if the default is not cured within
sixty (60) days the Agreement will be terminated. If the
non-defaulting party gives such notice, and the default is not
cured during the sixty (60) day period, then the Agreement
will terminate immediately upon notice by the non-defaulting
party.
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9.3. Termination for insolvency. This Agreement may be terminated
by either party upon notice, in the event that any of the
following occur(s): (i) voluntary institution by the other
party of insolvency, receivership, bankruptcy, or any other
proceedings for the settlement of the other party's debt; (ii)
involuntary institution of insolvency, receivership,
bankruptcy, or any other proceedings for the settlement of the
other party's debt; which proceedings are not resolved within
sixty (60) days, (iii) the making of a general assignment by
the other party for the benefit of creditors; or (iv) the
dissolution of the other party.
9.4. Return of materials. In addition to the Master Software Media
and the Documentation Media, all of Citrix' trademarks, marks,
trade names, patents, copyrights, designs, drawings, formulas
or other data, photographs, samples, literature, and sales
aids of every kind will remain the property of Citrix. Within
thirty (30) days after the termination or expiration of this
Agreement, Licensee will prepare all such items in its
possession, and will collect such materials in Reseller's
possession, for shipment as Citrix may direct, at Citrix'
expense. Licensee will not make or retain any copies of any
confidential items or information which may have been
entrusted to it. Effective upon the termination or expiration
of this Agreement, Licensee will cease to use all trademarks
and trade names of Citrix.
9.5. Destruction of inventory. Upon expiration or earlier
termination of this Agreement, Licensee shall destroy or erase
(as applicable), and shall certify to Citrix the destruction
or erasure of, (i) all copies of the Citrix Product(s) and
Licensee Product(s) in any form in the possession of Licensee
or any Reseller, including all Master Software Media,
Documentation, and Documentation Media, and (ii) all other
materials related to the Citrix Product(s) or Documentation in
Licensee's possession or control not otherwise dealt with
under subsection 9.4 above.
9.6. Survival of certain terms. The provisions of Sections 3 (as to
payment for distribution and copying prior to termination or
expiration), 5.3, 9.4, 9.5, 1 0, I 1, 13, 14, and 15, as well
as end user licenses properly granted by Licensee, will
survive the termination or expiration of this Agreement for
any reason. All other rights and obligations of the parties
will cease upon termination or expiration of this Agreement.
10. AUDITS
10.1. Record keeping. Licensee agrees to maintain and to ensure that
any Reseller maintains, until two (2) years after the
termination of this Agreement, complete books, records and
accounts regarding all copying and distribution activities
pursuant to Section 2 above and the payments due to Citrix
thereon.
10.2. Audit rights. Licensee agrees to allow Citrix the right to
audit and examine such books, records and accounts during
Licensee's or Reseller's (as applicable) normal business hours
to verify the accuracy of the reports made to Citrix under
subsection 3.2 above. In the event such examination leads to a
determination that Licensee has made more than the authorized
number of copies and/or has not paid for all of the copies of
Citrix Products made, Licensee agrees to pay, in addition to
any damages (including direct, indirect and consequential) to
which Citrix might be entitled, all unpaid royalties which
should have been paid, plus interest thereon from the date the
royalty payment should have been made, at the rate of one
percent per month (or, if less, the maximum allowed by
applicable law); provided, however, that if the audit reveals
underpayment of five percent (5%) or more of the amount that
should have been paid for the period audited,
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<PAGE> 8
then, in addition to the above payments, Licensee shall pay
Citrix' auditing expense for such examination. Citrix will
credit to Licensee any overpayments discovered in the audit.
11. PROPERTY RIGHTS AND CONFIDENTIALITY
11.1. Property rights. Licensee agrees that Citrix owns all right,
title, and interest in the Citrix Product(s), including,
without limitation, the Master Software Media and
Documentation Media, now or hereafter subject to this
Agreement, and in all of Citrix' patents, trademarks, trade
names, inventions, copyrights, know-how, and trade secrets
relating to the design, manufacture, operation or service of
the Citrix Product(s)[.][, provided that Licensee][Citrix]
shall own the adaptations [it/Licensee] makes pursuant to
subsection 2.1 above.
11.2. Confidentiality. Licensee acknowledges that by reason of its
relationship to Citrix hereunder it will have access to
certain information and materials concerning Citrix' business,
plans, customers, technology, and Citrix Products that are
confidential and of substantial value to Citrix, which value
would be impaired if such information were disclosed to third
parties. Licensee agrees that it will not use the confidential
information for any purpose other than the development and
support of the Licensee Product in accordance with the terms
of this Agreement and shall not use the confidential
information in any other way for its own account or the
account of any third party, nor disclose to any third party,
any such confidential information revealed to it by Citrix
(including, but not limited to, the Source Code, the Source
Code Fragments and the ICA 3.0 Protocol specifications).
Licensee shall take every reasonable precaution to protect the
confidentiality of such information. Upon request by Licensee,
Citrix shall advise whether or not it considers any particular
information or materials to be confidential. Licensee shall
not publish any technical description of the Product beyond
the description published by Citrix. In the event of
termination of this Agreement, there shall be no use or
disclosure by Licensee of any confidential information of
Citrix, and Licensee shall not manufacture or have
manufactured any Products utilizing any of Citrix'
confidential information. The provisions of this Section shall
not apply to information: which is (or becomes) available to
the public other than by breach of this Agreement or of any
other duty; which is already in Licensee's possession prior to
disclosure by Citrix or is independently obtained by Licensee
in circumstances under which Licensee is free to disclose it;
or which is trivial or obvious.
11.3. International distribution. Licensee shall not distribute
Products outside of the geographical boundaries of the
following countries without Citrix' prior written consent:
United States, Canada, Australia, Japan, the European Union,
Sweden, Norway and Finland. In the event Licensee desires to
distribute Products outside of the geographical boundaries set
forth above, Citrix and Licensee shall negotiate in good faith
regarding the expansion of the list to include additional
countries that provide adequate protection for Citrix' and its
suppliers' proprietary rights through copyright, trade secret,
patent or other laws.
12. TRADEMARKS AND TRADE NAMES
12.1. Use of trademarks and trade names. Licensee is obligated to
use the applicable Citrix trademarks and trade names with
respect to the Licensee Product(s) in accordance with the
requirements and guidelines specified in Exhibit E. In
accordance with Exhibit E,
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Licensee shall submit to Citrix for prior approval any
advertising, packaging, promotional, or other materials
prepared by or for Licensee which include any Citrix
trademarks or trade names. Citrix shall have the night to make
reasonable updates to the requirements and guidelines in
Exhibit E from time to time. Notwithstanding the foregoing,
Citrix shall not attempt to cause Licensee to adopt any
particular advertising, promotional or marketing plan.
12.2. ICA certification process. In the event that Citrix implements
an ICA certification process, all subsequent Licensee Products
will be developed so as to meet the certification requirements
and will be labeled in accordance with the programs
specifications. Certification shall be performed at no charge
to Licensee.
12.3. Attribution. Licensee agrees to make explicit mention of the
Citrix company name and the ICA and WinFrame trademarks in all
press releases and product announcements related to the
licensed products. Licensee also agrees to make its best
reasonable effort to ensure that the Citrix company name and
the ICA and WinFrame trademarks are mentioned in all press
articles related to the licensed products.
13. INDEMNIFICATION
13.1. Defense or settlement of infringement claims. Licensee agrees
that Citrix has the right to defend, or at its option to
settle, and Citrix agrees, at its own expense to indemnify or
at its option to settle, any claim, suit or proceeding brought
against Licensee or its customer based on a claim that a
Citrix Product infringes upon any United States patent or
copyright or violates the trade secret rights of any United
States party, (hereinafter "Infringement Claims"); provided
Citrix is notified promptly in writing of an Infringement
Claim and has sole control over its defense or settlement, and
Licensee and/or its customer provides reasonable assistance in
the defense of the same.
13.2. Infringement cures. Following notice of an Infringement Claim,
or if Citrix believes such a claim is likely, Citrix may at
its sole expense and option, (1) procure for Licensee the
right to continue to market, use and have others use, the
alleged infringing Citrix Product(s), (ii) replace or modify
the appropriate Citrix Product(s) to make them non-infringing,
or (iii) accept return of the Citrix Product(s) and refund as
appropriate payments made therefor by Licensee.
13.3. Limitation. Citrix shall have no liability for any
infringement claim based on Licensee's (i) use or distribution
of any product after Citrix' notice that Licensee should cease
use or distribution of such product due to an infringement
claim, or (ii) modification of the Citrix Product other than
by Citrix, or combination of a Citrix Product with non-Citrix
programs, data, hardware, or other materials, if such
infringement claim would have been avoided by the exclusive
use of the unmodified Citrix Product alone. For all
infringement claims to which this subsection is applicable,
Licensee agrees to indemnify and defend Citrix, provided
Licensee is notified promptly in writing of an infringement
claim and has sole control over its defense or settlement, and
Citrix and/or its customer provides reasonable assistance in
the defense of the same.
13.4. Entire liability. THE FOREGOING PROVISIONS OF THIS SECTION 13
STATE THE ENTIRE LIABILITY AND OBLIGATIONS OF CITRIX, AND THE
EXCLUSIVE REMEDY OF LICENSEE AND ITS CUSTOMERS, WITH RESPECT
TO ANY ALLEGED INTELLECTUAL PROPERTY INFRINGEMENT BY THE
CITRIX PRODUCT(S), OR ANY PART THEREOF.
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13.5. Other third party claims. Except for Infringement Claims which
Citrix is obliged to settle or defend under this Section 13,
Licensee agrees to indemnify and hold Citrix harmless against
any cost, loss, liability, or expense (including attorneys'
fees) arising out of third party claims against Citrix as a
result of Licensee's or Reseller's copying, use or
distribution of the Licensee Product(s) and Licensee's
exercise of the license rights granted under this Agreement.
14. LIMITATION OF LIABILITY
CITRIX' TOTAL LIABILITY ARISING OUT OF THIS AGREEMENT, THE TERMINATION
THEREOF, AND/OR LICENSE OF THE PRODUCTS AND DOCUMENTATION HEREUNDER,
SHALL BE LIMITED TO THE AMOUNT HAVING THEN ACTUALLY BEEN PAID BY
LICENSEE TO CITRIX UNDER THIS AGREEMENT. IN NO EVENT SHALL CITRIX BE
LIABLE FOR COSTS OF SUBSTITUTE PRODUCTS OR SERVICES. IN NO EVENT SHALL
CITRIX BE LIABLE TO LICENSEE OR ANY OTHER ENTITY FOR ANY SPECIAL,
CONSEQUENTIAL, INCIDENTAL OR OTHER DAMAGES, HOWEVER CAUSED .AND ON ANY
THEORY OF LIABILITY, AND WHETHER OR NOT FOR BREACH OF CONTRACT,
NEGLIGENCE OR OTHERWISE, AND WHETHER OR NOT CITRIX HAS BEEN ADVISED OF
THE POSSIBILITY OF SUCH DAMAGE. THESE LIMITATIONS WILL APPLY
NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY
PROVIDED HEREIN. CITRIX' LIMITATION OF LIABILITY IS CUMULATIVE, WITH ALL
CITRIX' EXPENDITURES BEING AGGREGATED TO DETERMINE SATISFACTION OF THE
LIMIT. THE EXISTENCE OF CLAIMS OR SUITS AGAINST MORE THAN ONE CITRIX
PRODUCT LICENSED UNDER THIS AGREEMENT WILL NOT ENLARGE OR EXTEND THE
LIMIT. IN NO EVENT SHALL ANY LICENSORS OR SUPPLIERS OF CITRIX BE LIABLE
FOR ANY DIRECT, INDIRECT, CONSEQUENTIAL OR OTHER DAMAGES ARISING OUT OF
THIS AGREEMENT.
15. GENERAL PROVISIONS
15.1. Entire agreement; modifications. This Agreement, including the
attached Exhibits, sets forth the entire agreement and
understanding of the parties relating to the subject matter
herein and merges all prior discussion between them. No
modification or amendment to this Agreement shall be effective
unless in writing and signed by both parties. The terms and
conditions on any Licensee purchase orders or similar documents
shall not apply. Any restrictive endorsement on any check or any
instrument of payment to Citrix which purports to alter this
Agreement or any of the parties' rights shall be of no force and
effect, and the payee party shall be free to negotiate such
checks notwithstanding such void endorsement.
15.2. Confidentiality of agreement. The parties agree that the terms
and conditions of this Agreement shall be treated as
confidential information, provided, however, that each party may
disclose the terms and conditions of this Agreement: (i) as
required by any court or other governmental body; (ii) as
otherwise required by law; (iii) to legal counsel of the
parties; (iv) in confidence, to accountants, banks, investors
and other financing sources and their advisors; (v) in
confidence, in connection with the enforcement of this Agreement
or rights under this Agreement; or (vi) in confidence, in
connection with an actual or proposed merger, acquisition, or
similar transaction.
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15.3. Independent contractors. The relationship between Citrix and
Licensee established by this Agreement is that of independent
contractors, and nothing contained in this Agreement shall be
construed as creating a partnership, joint venture or agency
relationship, or as granting a franchise.
15.4. Governing law and jurisdiction. This Agreement shall be
governed by and construed under the laws of the State of
Florida without regard to conflict of law principles, and
Licensee consents to personal and exclusive jurisdiction and
venue in the state and federal courts sitting in Broward and
Dade counties, Florida. Process may be served on either party
by using the notice provisions of subsection 15.5 below.
15.5. Notices. Any notice required or permitted by this Agreement
will be in writing and will be sent by prepaid registered or
certified mail, return receipt requested, or by overnight
courier, charges prepaid, with a confirming fax; to the
appropriate address set forth at the beginning of this
Agreement, or to such other address for which the relevant
party gives appropriate notice. Notice shall be deemed to have
been given when delivered or, if delivery is not accomplished
by some fault of the addressee, when tendered.
15.6. Force majeure. Nonperformance of either party "will be excused
to the extent that performance is rendered impossible by
strike, fire, flood, governmental acts or orders or
restrictions, failure of suppliers, or any other reason where
failure to perform is beyond the control of, and not caused by
the negligence of, the non performing party.
15.7. Successors and assigns. Neither this Agreement nor any of the
rights or obligations of Licensee arising under this Agreement
may be assigned or transferred, by operation of law or
otherwise, without Citrix' prior written consent. Any
attempted such assignment or transfer shall be void and shall
result in the immediate and automatic termination of this
Agreement. Subject to this restriction, this Agreement will be
binding upon and inure to the benefit of the parties hereto,
their successors and assigns.
15.8. Severability; waiver. If any provision of this Agreement is
held to be invalid by a court of competent jurisdiction, the
remaining provisions will nevertheless remain in full force
and effect. Citrix and Licensee agree to replace any invalid
provision with a valid provision which most closely
approximates the intent and economic effect of the invalid
provision. The waiver by either party of a breach of any
provision of this Agreement by the other will not operate or
be interpreted as a waiver of any other or subsequent breach.
All waivers must be in writing.
15.9. Government End-Users. Citrix Products and Documentation are
"commercial items" as that term is defined in 49 C.F.R. 2-101
(October 1995) consisting of "commercial computer software"
and "commercial computer software documentation" as such terms
are used in 49 C.F.-P,. 12-212 (September 1995). Consistent
with 48 C.F.R. 12.212 and 48 C.F.R. 227.7202-1 through
227.7202-4 (June 1995), if the Citrix Products which Licensee
licenses or acquires hereunder are for or on behalf of the
U.S. Government or any agency or department thereof, the
soft-ware and the documentation are licensed hereunder (i)
only as a commercial item, and (ii) with only those rights as
are granted to all other end users pursuant to the terms and
conditions of this Agreement.
15.10. Export controls. Licensee agrees to comply with all United
States export regulations and restrictions in connection with
this Agreement.
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15.11. Headings. The headings used in this Agreement and the attached
Exhibits are intended for convenience only and shall not be
deemed to supersede or modify any provisions.
15.12. Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original and all
of which together will constitute one instrument.
IN WITNESS WHEREOF, this Agreement is executed as of the Effective Date
set forth above.
CITRIX SYSTEMS. INC.
6400 NW 6th Way
Fort Lauderdale, FL 33309
By: By:
Name: Name:
Title: Title:
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EXHIBIT A
CITRIX PRODUCTS
CITRIX PRODUCTS SHALL BE THE CITRIX DOS OR WINDOWS CLIENT ("CLIENT") SOFTWARE
IN BINARY FORMAT FOR ICA 3.0 PROTOCOL SUPPORT DEEMED BY CITRIX TO BE
NECESSARY OR APPROPRIATE FOR THE DEVELOPMENT OF THE LICENSEE PRODUCTS.
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EXHIBIT B
LICENSEE PRODUCTS
[ADD DESCRIPTION LICENSEE'S PRODUCTS]
Licensee Products must not implement any modifications or extensions to the ICA
Protocol. They must connect to and communicate with Citrix and Citrix based
application server technology in accordance with the appropriate ICA product and
Version Release number specifications as defined in the ICA 3.0 Protocol
specifications.
The operating environment which may ran on the Licensee Products concurrently
with the ICA Protocol is the MS-DOS compatible environment ("Authorized
Environment"). In the event that Licensee desires to add additional operating
environments to the Authorized Environment, the parties agree to negotiate in
good faith to expand the definition of the Authorized Environments.
Citrix reserves the right to require Licensee to go through a reasonable
certification to ensure quality and complete ICA compatibility for Licensee
Products.
Licensee's Technical Manager shall be:
Name:
Title:
Address:
Telephone:
Fax:
E-Mail:
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EXHIBIT C
PAYMENT SCHEDULE
A. Nonrefundable Initial Design Consultation, Training, and Ongoing
Support Fees (for the services described in Sections 6 and 7 of the
Agreement)
$10,000 payable upon execution of the Agreement.
B. Period
Each three (3) month period after FCS shall be a "Period."
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EXHIBIT D
CITRIX ATTRIBUTION, NOTICES, TRADEMARKS
FOR CITRIX CLIENT PRODUCTS
The Citrix OEM Client Splash Screen Logo: "Citrix(R) ICA(R)"
Attribution
The "Citrix(R) ICA(R)" logo must be displayed on the client's initial
load screen as a graphic image.
The "Citrix(R) ICA(R)" logo must be a minimum of 32 x 32 pixels on the
initial load screen.
Copyright and Patent Notices
Copyright and/or patent notices must be incorporated into Licensee's
product packaging as follows:
On initial load screen:
Citrix copyright notice.
Logo Artwork
The "Citrix(R) ICA(R)" logo must never be altered and must be reproduced from
the supplied Citrix reproduction sheet or from diskette using the supplied EPS
file. Citrix will provide authorized OEMs with camera-ready artwork of the
"Citrix(R) ICA(R)" Splash Screen. Licensee may not alter this artwork in any
way. The words "Citrix(R) ICA(R)" as they appear in the logo are the only
words and the only typeface approved for use and may not be modified. The S
must appear immediately following the words Citrix and ICA.
Color Scheme
The following Splash Screen colors are to be used:
ICA text 100% PMS Reflex Blue
Distributed Windows text 100% Black
Citrix Logo Text 80% Black
Citrix Logo Dots 100% Warm Red
Wirfdow 100% Warm Red
Globe 70% PMS Reflex Blue
Laptop 100% Black with White outline and White
monitor screen
Border 100% Black
The logo must always be self-contained within a white background.
Spacing
The "Citrix(R) ICA(R)" logo must stand alone. A minimum amount of space, 1/4
inch, must be left between the logo and any other object such as type,
borders, edges, etc.
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EXHIBIT E
TRADEMARK GUIDELINES
1. TRADEMARK AND LOGO GUIDELINES
All references to Citrix products or to the ICA protocol shall include the
appropriate Citrix trademarks and shall be in accordance with these guidelines.
All marketing materials and other publications or press releases referencing the
Citrix products or the ICA protocol shall be submitted to Citrix for its prior
approval. Approved marketing materials may be reused without Citrix' prior
approval if the use of the Citrix trademarks is exactly as previously approved
and if the context and contents of the new materials are substantially similar
to the approved materials.
The Citrix and WinFrame names, logos and trademarks can only be used by
authorized OEMs and Resellers in connection with the sales and marketing of
Citrix Products.
The Citrix name and Citrix logos may not be used to promote other Resellers'
products. Nor may the Citrix name and logo be used for general dealer promotions
not specifically related to Citrix Products.
If any of the Trademarks are to be used in conjunction with another trademark on
or in relation to the Citrix Product, then Citrix' mark shall be presented
equally legibly, equally prominently, and of equal size to the other, but
nevertheless separated from the other so that each appears to be a mark in its
own right, distinct from the other mark.
2. TRADEMARK AND LOGO USAGE
Advertisements, collateral materials, direct mail materials, and other printed
materials (with exception of Licensee signage) should include the credit line:
Citrix WinView and ICA are registered trademarks of and WinFrame is a trademark
of Citrix Systems, Inc.
3. DESIGN STANDARDS
The following is a general outline of design rules governing the use of the
company name, Citrix Product's names and logos:
In text usage, the first time the company name is used it should be
"Citrix Systems, Inc.", thereafter "Citrix" is acceptable.
Citrix Systems, Citrix WinView and other Citrix Products should have
"Citrix" in upper and lower case, with "WinView" spelled as one word
with the "W" and "V" capitalized and WinFrame spelled as one word with
the "W" and "F" capitalized. Additional proper names will be covered at
the time of their use.
ARTWORK FOR THE CITRIX CORPORATE LOGO AND PRODUCT LOGOS IS AVAILABLE AND WILL BE
SUPPLIED TO LICENSEE. THE CORPORATE LOGO MUST BE OF THE SAME DESIGN, COLOR AND
OTHER DETAILS OR SHOULD BE EXACT COPIES OF THOSE USED BY CITRIX. THE CORPORATE
LOGO SHOULD APPEAR AS ONE COLOR (PREFERABLY BLACK) ON TWO-COLOR MATERIALS, OR ON
FULL COLOR ARTWORK AS PMS 403 FOR THE BODY OF THE LOGO, AND PMS WARM RED FOR THE
DOTS. COLOR SAMPLES
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ARE AVAILABLE FROM CITRIX. CITRIX PRODUCT LOGOS SHOULD BE ONE COLOR, IN BLACK OR
IN THE TEXT COLOR OF DOCUMENT.
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<PAGE> 1
Exhibit 10.3
IBIZ TECHNOLOGY CORPORATION
DISTRIBUTED SOFTWARE LICENSE AGREEMENT
<TABLE>
<S> <C>
LICENSOR:
JEREMY RADLOW Agreement # 99-017
DBA: LNKVERSE Attachments (if any)
None
33 MILL STREET #5 ORONO, ME 04473 Effective: June 2, 1999
Licensor Contact Delivery: June 4, 1999
JEREMY RADLOW
INSTALLATION SITE: Non-expiring, perpetual license
Multi-use license: for use distribution And sale Warranty Period
with associated hardware
Support for 1 year from effective date
</TABLE>
<TABLE>
PRODUCTS: KEYLINK SOFTWARE License Fee
Quantity Description Total Cost
- -------- ----------- ----------
<S> <C> <C>
Exclusive license to use, distribute and Upon delivery of KeyLink, iBIZ
offer for sale with associated hardware, Technology Corp. will transfer to
the software program named by author as: Licensor, within (1) business day, the
"KeyLink". The purpose of said software is following:
to allow connection of the keyboard product
manufactured by iBIZ Technology Corp. to 20,000 shares of iBIZ Technology
connect to "Palm Computing Devices" Common stock (NASDAQ BB: IBIZ)
produced by 3COM Corp. The "KeyLink" - market value approximately $26000
software package has been adapted from a US Dollars as of June 1, 1999
trial version named "KeyZ", previously
tested by iBIZ Technology. Modifications $3,000.00 US Dollars
have been, or will be made to the tested
software prior to final delivery, to meet Delivered within (3) business days,
required specifications from iBIZ the following:
Technology.
As a final "distribution" version of the (1) New laptop computer
software has not been received or tested Current production
by iBIZ Technology, Licensor agrees to model, P2, w/
reasonably modify and support the RAM, floppy & CD drives, HD, TFT
software for a period of (1) year from LCD screen, Battery, Charger
the execution agreement. "IBIZ Phoenix"
(Manufactured by Twinhead, as their date of this
Slimnote VX model)
Support shall be to make all reasonable
efforts to adapt, modify or otherwise
change the software to allow
compatibility with current and future
versions of Palm Computing Devices.
This shall include compatibility with
other software products "approved" by
3COM and Palm Computing, but excludes
non-approved software products.
</TABLE>
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<PAGE> 2
This Agreement is entered into as of the Effective Date specified above between
iBIZ Technology Corporation ("iBIZ") and the Licensor specified above.
1. PROVISION OF PROGRAMS. Under the provisions of this Agreement, Licensor
agrees to grant iBIZ licenses to use Licensor's proprietary computer programs
and associated materials ("Products") specified above.
2. SCOPE OF LICENSE. Licensor hereby grants to iBIZ a perpetual, exclusive
license to use the software on the terms and conditions set forth herein
(together with all modifications and accompanying documentation referred to
herein as the "Software"). This license is for the use of the Software by iBIZ
and any assigned user, purchasing or receiving said Software. iBIZ is entitled
to copy the Software into any machine-readable or printed form for back-up or
modification purposes and duplication for sale or distribution by iBIZ.
3. INSTALLATION/ACCEPTANCE. Unless otherwise specified herein iBIZ shall install
or provide for sale or distribution the Product in accordance with instructions
provided by Licensor. iBIZ reserves the right to conduct acceptance testing
within sixty (60) days of its receipt thereof, to demonstrate the Products
conform to their respective Specifications. If a Product does not pass the
acceptance test, iBIZ shall notify Licensor, specifying in reasonable detail in
what respects the Product has failed to perform. Licensor shall promptly correct
said deficiencies or accept the return of the Products for full refund of all
fees paid therefore.
4. DOCUMENTATION AND TRAINING. Upon delivery of each Product, Licensor shall
deliver to iBIZ one (1) copy of all generally available documentation for such
Product sufficient to enable iBIZ personnel to use and to reasonably understand
the use and operations of the Product ("Documentation"). iBIZ may copy the
Documentation in order to satisfy its own internal requirements or may duplicate
additional copies for any reasonable use.
5.0 (a) LICENSE GRANT. Licensor grants to iBIZ a perpetual, exclusive license to
use each Product, commencing upon its delivery to iBIZ and continuing thereafter
from the date of iBIZ's acceptance of the Product, for the License Term
specified on the Schedule, unless terminated earlier in accordance with this
Agreement.
(b) INVOICE AND PAYMENT. Licensor may invoice iBIZ for the License Fee
set forth above, on or after acceptance by iBIZ of the Product involved. Each
invoice properly rendered in accordance with this Agreement, shall be payable
within thirty (30) days after its receipt, unless otherwise specified herein.
5.1 DISASTER RECOVERY. Each License includes the right to use Products on
temporary substitute or back-up equipment. iBIZ shall also be entitled to make
and keep copies of each Product and its Documentation for archival/back-up
purposes. iBIZ may from time to time permanently transfer the license to use a
Product from one computer to another compatible with the Product (irrespective
of model, type or size) or from one Installation Site to another, from one
country or region to another, without payment of any additional fee or charge.
5.2 TITLE AND MODIFICATIONS. Licensor retains title to the Products provided
hereunder, but does convey exclusive rights and other interest therein to iBIZ,
with the licenses granted hereunder. Licensor agrees that iBIZ shall have the
right to enhance, modify and/or adapt any of the Products and/or materials
provided to iBIZ hereunder, may create and use derivative works and may use said
enhanced, modified, adapted Products and/or materials in accordance with this
Agreement. iBIZ may also combine Products with other programs and/or materials.
iBIZ shall have the exclusive ownership right to use any enhancements,
modifications, adaptations and derivative works made by or for iBIZ or by
Licensor specifically at iBIZ's request and expense. Nothing contained in this
Section, by itself, shall give iBIZ any right to receive the Product source
code.
6.0 MAINTENANCE. Licensor warrants that for a period of ninety (90) days after
iBIZ has notified Licensor of its acceptance of the Product pursuant to Article
3 ("Installation/Acceptance"), it shall correct and repair any malfunction,
defect or nonconformity which prevents such Product from performing in
accordance with the provisions of this Agreement at no additional charge to
iBIZ.
7.0 (a) CORRECTION OF NONCONFORMITIES AND TECHNICAL SUPPORT. Licensor shall
promptly correct or repair any Product failure, malfunction, defect or
nonconformity, which prevents it from performing in
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accordance with the Documentation and Specifications for a period of (1) year
from the effective date of this agreement. Licensor shall respond by telephone
(or other confirmed means) to any request for service made during normal
business hours within one (1) day of iBiZ's initial request for service.
Licensor shall provide reasonable remote technical assistance and consultation
to iBIZ at any time during normal working hours.
(b) UPDATES AND REVISIONS. Licensor shall provide iBIZ with all
revisions, updates, improvements, modifications and enhancements to each Product
and to the documentation described in Article 4 ("Documentation And Training"),
hereof, which are produced and generally made available by Licensor ("Update"),
including any revised Documentation. iBIZ may refuse to accept same, and in such
event, Licensor shall maintain the Product in the form in effect immediately
prior to Licensor's request that iBIZ accept such Update. For purposes of this
Agreement, an Update once incorporated into any Product or Documentation shall
be considered a part thereof for all purposes hereunder. Licensor shall use all
commercially reasonable efforts to produce and make available to iBIZ any and
all modifications to the Products to enable same to operate in conjunction with
any new releases of the applicable equipment's operating system.
8.0 GENERAL WARRANTIES. Licensor warrants to iBIZ that: (i) Licensor has the
right to furnish the Products, Documentation, Specifications and other materials
and perform the services as specified in this Agreement ("Product Materials and
Services") covered hereunder free of all liens, claims, encumbrances and other
restrictions; (ii) the Product Materials and Services furnished by Licensor
and/or iBIZ's use of the same hereunder do not violate or infringe the rights of
any third party or the laws or regulations of any governmental or judicial
authority; (iii) iBIZ shall be entitled to use and enjoy the benefit of the
Product Materials and Services, subject to and in accordance with this
Agreement; and (iv) iBIZ's use and possession of the Product Materials and
Services hereunder, shall not be adversely affected, interrupted or disturbed by
Licensor or any entity assenting a claim under or through Licensor.
8.1 YEAR 2000 WARRANTIES. Licensor warrants that: the Products have been tested
and are fully capable of providing accurate results using data having date
ranges spanning the twentieth (20th) and twenty first (21st) centuries (e.g.,
years 1980-2100). Without limiting the generality of the foregoing, Licensor
warrants that all software licensed from Licensor shall (a) manage and
manipulate data involving all dates from the 20th and 21st centuries without
functional or data abnormality related to such dates; (b) manage and manipulate
data involving all dates from the 20th and 21st centuries without inaccurate
results related to such dates; (c) have user interfaces and data fields
formatted to distinguish between dates from the 20th and 21st centuries; and (d)
represent all data related to include indications of the millennium, century,
and decade as well as the actual year.
8.2 PRODUCT WARRANTIES. Licensor warrants that: (i) for the period of one (1)
year from date of acceptance all tangible portions of the Product Materials and
Services shall be free from any defects in materials and workmanship and the
Products shall conform to and operate in accordance with the Specifications for
such Products, the Documentation provided to iBIZ as are attached, described
and/or provided under this Agreement; and (ii) the Specifications and
Documentation and other materials provided by Licensor hereunder shall
faithfully and accurately reflect the Products provided to iBIZ hereunder.
Licensor further warrants that for the Warranty Period specified herein it shall
correct and repair any malfunction, defect or nonconformity which prevents such
Product from performing in accordance with the provisions of this Agreement at
no additional charge to iBIZ. Licensor warrants that, upon the expiration of the
Warranty Period, it shall perform the maintenance and support services as
specified in this Agreement.
8.3 WARRANTY DISCLAIMER. EXCEPT AS SPECIFICALLY PROVIDED IN THIS AGREEMENT,
THERE ARE NO OTHER WARRANTIES, EXPRESSED OR IMPLIED, INCLUDING, BUT NOT LIMITED
TO, ANY IMPLIED WARRANTY OF MERCHANT-ABILITY OR FITNESS FOR A PARTICULAR
PURPOSE.
9.0 INTELLECTUAL PROPERTY INFRINGEMENT. Licensor agrees to defend and/or handle
at its own expense, any claim or action against any iBIZ Entity, defined as
iBIZ, Invnsys, subsidiaries. and affiliated companies, for actual or alleged
infringement of any intellectual or industrial property right, including,
without limitation, trademarks, service marks, patents, copyrights,
misappropriation of trade secrets or any similar proprietary rights, based upon
the Product Materials and Services furnished hereunder by Licensor or based on
iBIZ's use thereof, excluding modifications by iBIZ that result in alleged
infringement. Licensor further agrees to indemnify and hold iBIZ harmless from
and against any and all liabilities, losses, costs, damages and expenses
(including reasonable attorneys' fees) associated with any such claim or action.
Licensor shall have the sole right to conduct the defense of
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any such claim or action and all negotiations for its settlement or compromise,
unless otherwise mutually agreed to in writing.
9.1 INTELLECTUAL PROPERTY INFRINGEMENT REMEDIES. If any Product Materials and/or
Services become, or in Licensor's opinion are likely to become, the subject of
any such claim or action, then, Licensor, at its expense may either: (i) procure
for iBIZ the right to continue using same as contemplated hereunder; (ii) modify
same to render same non-infringing (provided such modification does not
adversely affect iBIZ's use as contemplated hereunder); or (iii) replace same
with equally suitable, functionally equivalent, compatible, non-infringing
products, materials and/or services. If none of the foregoing are commercially
practicable, Licensor having used all reasonable efforts, then iBIZ shall have
the right to terminate the Schedule(s) involved and shall be entitled to a
pro-rata refund of all payments made in respect of such Product (calculated on a
straightline five (5) year basis unless a shorter License Term applies).
10.0 iBIZ CONFIDENTIAL INFORMATION. Licensor agrees to regard and preserve as
confidential all information related to the business and activities of iBIZ and
the iBIZ Entities, their customers, clients, suppliers and other entities with
whom iBIZ and the iBIZ Entities do business, that may be obtained by Licensor
from any source or may be developed as a result of this Agreement. Licensor
agrees to hold such information in trust and confidence for iBIZ and not to
disclose such information to any person, firm or enterprise, or use (directly or
indirectly) any such information for its own benefit or the benefit of any other
party, unless authorized by iBIZ in writing, and even then, to limit access to
and disclosure of such confidential information to Licensor's employees on a
"need to know" basis only.
10.1 LICENSOR CONFIDENTIAL INFORMATION. iBIZ acknowledges that Licensor
considers the Products and any materials labeled "Confidential" at the time of
their delivery to iBIZ, to be confidential and/or trade secrets of Licensor and
iBIZ agrees that iBIZ has obtained Licensor's written consent to release and
distribute the Products. Further, iBIZ will utilize the Products for purposes
specifically related to additional iBIZ products.
10.2 CONFIDENTIALITY EXCEPTIONS. Information shall not be considered
confidential to the extent, but only to the extent, that such information is:
(i) already known to the receiving party free of any restriction at the time it
is obtained from the other party; (ii) subsequently learned from an independent
third party free of any restriction and without breach of this Agreement; (iii)
is or becomes publicly available through no wrongful act of either party; (iv)
is independently developed by one party without reference to any Confidential
Information of the other; or (v) required to be disclosed pursuant to a
requirement of a government agency or law so long as the parties provide each
other with timely written prior notice of such requirements.
11.0 TAXES. iBIZ agrees to pay all taxes levied against or upon the Products and
any services or their use hereunder, exclusive, however, of taxes based on
Licensor's income, which taxes shall be paid by Licensor. If any tax for which
iBIZ is responsible hereunder is paid by Licensor, iBIZ will reimburse Licensor
upon iBIZ's receipt of proof of payment.
12.0 LIABILITY. In no event shall either party be liable, one to the other, for
any indirect, special or consequential damages arising out of or in connection
with this Agreement.
13.0 EXCUSABLE DELAYS. In no event shall either party be liable to the other for
any delay or failure to perform due to causes beyond the control and without the
fault or negligence of the party claiming excusable delay.
14.0 MATERIAL BREACH. In the event of any material breach of this Agreement by
one party, the other party may (reserving cumulatively all other remedies and
rights under this Agreement and in law and in equity) terminate the License
involved, in whole, by giving thirty (30) days' written notice thereof;
provided, however, that any such termination shall not be effective if the party
in breach has cured the breach of which it has been notified prior to the
expiration of said thirty (30) days.
15.0 ADVERTISING OR PUBLICITY. Neither party shall use the name or marks, refer
to or identify the other party in advertising or publicity releases, promotional
or marketing correspondence to others without first securing the consent of such
other party.
16.0 ASSIGNMENT. Neither party may assign this Agreement, any Schedule and/or
any rights and/or obligations hereunder without the written consent of the other
party and any such attempted assignment shall be void; provided, however, that
iBIZ may assign this Agreement, any Schedule and/or any of its rights and/or
obligations hereunder to any iBIZ Entity upon written notice to Licensor without
the consent of Licensor.
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17.0 GOVERNING LAW. In all respects this Agreement shall be governed by the
substantive laws of the State of Arizona without regard to conflict of law
principles.
18.0 MODIFICATION, AMENDMENT, SUPPLEMENT AND WAIVER. No modification, course of
conduct, amendment, supplement to or waiver of this Agreement, any Schedule. or
any provisions hereof shall be binding upon the parties unless made in writing
and duly signed by both parties. At no time shall any failure or delay by either
party in enforcing any provisions, exercising any option, or requiring
performance of any provisions, be construed to be a waiver of same.
19.0 SEVERABILITY. If any of the provisions of this Agreement are held invalid,
illegal or unenforceable, the remaining provisions shall be unimpaired.
20.0 HEADINGS. Headings are for reference and shall not affect the meaning of
any of the provisions of this Agreement.
21.0 ENTIRE AGREEMENT. The attachments (if applicable), to this Agreement are
incorporated by this reference and shall constitute part of this Agreement. This
Agreement constitutes the entire agreement between the parties pertaining to the
subject matter hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized representatives.
INKVERSE, LLC iBIZ TECHNOLOGY CORPORATION
(iBIZ)
By:____________________________________ By:______________________________
Name/Title:____________________________ Name/Title:______________________
(Print, Stamp or Type) (Print, Stamp or Type)
Date:__________________________________ Date:____________________________
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Exhibit 10.4
3COM DESIGNED FOR PALM COMPUTING PLATFORM LOGO LICENSE
AGREEMENT YOU SHOULD CAREFULLY READ THE FOLLOWING TERMS AND CONDITIONS BEFORE
USING THIS SOFTWARE, THE USE OF WHICH IS LICENSED BY PALM COMPUTING, INC., A
SUBSIDIARY OF 3COM CORPORATION (COLLECTIVELY, "3COM"), TO ITS CUSTOMERS FOR
THEIR USE ONLY AS SET FORTH BELOW. IF YOU DO NOT AGREE TO THE TERMS AND
CONDITIONS OF THIS AGREEMENT, DO NOT USE THE SOFTWARE. USING ANY PART OF THE
SOFTWARE INDICATES THAT YOU ACCEPT THESE TERMS.
RECITALS
WHEREAS, Palm owns good and valuable trademarks and logos; and
WHEREAS, You wish to license use of the Logo in accordance
with Palms terms and conditions described below, NOW THEREFORE: The parties
hereby agree as follows:
1. DEFINITIONS
For purposes of this Logo Agreement the following terms shall
have the following meanings:
(a) Logo shall mean the Designed for Palm Computing
platform logo depicted in the attached Exhibit A or
such additional or replacement Logos as Palm may
provide from time to time under this Logo Agreement.
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(b) Integer Release shall mean any product with a Version
Number of the form N.0, where N is any integer.
(c) Point Release shall mean any product with a Version
Number of the form N.XXX, where N is any integer, and
XXX is any combination of integers.
(d) Product shall mean your product or products described
in the attached Exhibit B which meet the applicable
Designed for Palm Computing platform compatibility
criteria set forth in Exhibit B. Product shall
automatically include any Point Releases of products
whose Integer Releases are described in Exhibit B.
2. LICENSE GRANT
(a) Subject to and expressly conditioned upon compliance
with the terms and conditions of this Logo Agreement,
Palm hereby grants to you a worldwide (except as
provided in Section 2(b)), nonexclusive,
nontransferable, royalty-free, right to use the Logo
solely in conjunction with Product in the manner
described in the guidelines set forth in the attached
Exhibit C and as may be prescribed by Palm from time
to time.
(b) The license right set forth in Section 2(a) shall not
extend to the Republic of China (Taiwan), South Korea
(Korea), or the Peoples Republic of China (PRC),
unless and until you provide Palm with
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written notice of your intent to distribute Product
in these countries. You agree not to use the Logo in
such countries and shall not be licensed pursuant to
this Logo Agreement to do so until you have provided
Palm with such written notice.
(c) You may not use or reproduce the Logo in any manner
whatsoever other than as expressly described in
Exhibit C.
(d) You agree and acknowledges that Palm retains all
right, title and interest in and to the Logo. Except
as expressly granted in this Logo Agreement, you
shall have no rights in the Logo. Under no
circumstances will any term, event or condition in
this Logo Agreement be construed as granting, by
implication, estoppel or otherwise, a license to any
Palm technology or proprietary right other than the
permitted use of the Logo pursuant to Section2(a).
(e) You represent and warrant that you will use the Logo
solely as provided in this Logo Agreement and will
not use the Logo for promotional goods or for
products which, in Palms reasonable judgment, will
diminish or otherwise damage Palms goodwill in the
Logo, including but not limited to uses which could
be deemed to be obscene, pornographic, scandalous,
violent or otherwise in poor taste or unlawful, or
which purpose or objective is to encourage unlawful
activities.
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3. NO FURTHER CONVEYANCES
The license grant in Section 2(a) is personal to you, and you
shall not assign, transfer or sublicense this Logo Agreement (or any right
granted herein) in any manner without the prior written consent of Palm.
4. QUALITY, INSPECTION, AND APPROVAL
(a) You agree to maintain the quality of Product used in
conjunction with the Logo at a level that meets or
exceeds industry standards and at least commensurate
with the quality of Product previously distributed by
you.
(b) You shall supply Palm with suitable specimens of
Product and your use of the Logo in connection with
Product at the times and in the manner described in
Exhibit C, or at any time upon reasonable notice from
Palm. You shall cooperate fully with Palm to
facilitate periodic review of your use of the Logo
and of your compliance with the quality standards
described in this Logo Agreement.
(c) You shall fully correct and remedy any deficiencies
in your use of the Logo, conformance to the Designed
for Palm Computing platform compatibility criteria,
and/or the quality of Product used in conjunction
with the Logo, upon reasonable notice from Palm.
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(d) You represent and warrant that each Product release
meets the applicable Designed for Palm Computing
platform compatibility criteria set forth in Exhibit
B. You shall provide Palm with copies or summaries of
the results of applicable compatibility tests
following the completion of such tests, for each
product release.
(e) You warrant and represent that you will comply with
all applicable laws, rules, and regulations and will
not violate or infringe any right of any third party.
(f) You agrees to indemnify, hold Palm harmless, and
defend Palm, at Palms request, from and against any
and all claims, damages, costs, and expenses
(including reasonable attorneys fees) arising out of
or related to the Product in any manner, including
user claims regarding Products incompatibility with
the Palm Computing platform; provided you are
notified promptly in writing of any claim, you have
sole control over your defense or settlement, and
Palm provides reasonable assistance in the defense of
the same.
5. IDENTIFICATION AND USE
(a) You shall mark every use of the Logo with the
trademark designation set forth in Exhibit A and as
described in Exhibit C and shall comply with Palms
trademark use guidelines as amended from time to
time.
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(b) You acknowledge Palms ownership of the Logo and the
Designed for Palm Computing platform logo trademark.
You shall employ your best efforts to use the Logo in
a manner that does not derogate from Palms rights in
the Logo and will take no action that will interfere
with or diminish Palms rights in the Logo, either
during the term of this Logo Agreement or afterwards.
You agree not to adopt, use or register any corporate
name, trade name, trademark, service mark or
certification mark, or other designation similar to,
or containing in whole or in part, the Logo. You
agree that all use of the Logo by you will inure to
the benefit of Palm. You may not use the Logo in any
way as an endorsement or sponsorship of Product by
Palm.
6. DEFENSE OF INFRINGEMENT CLAIM
(a) Subject to Section 7, Palm agrees to defend you
against, and pay the amount of any adverse final
judgment (or settlement to which Palm consents)
resulting from, third party claim(s) (hereinafter
Indemnified Claims) that the Logo infringes any
registered trademark rights enforceable in the United
States, Canada, Australia, Japan, Switzerland, the
European Union; provided Palm is notified promptly in
writing of the Indemnified Claim and has
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sole control over its defense or settlement, and you
provide reasonable assistance in the defense of the
same.
(b) In the event Palm receives information concerning an
intellectual property infringement claim (including
an Indemnified Claim) related to the Logo, Palm may
at its expense, without obligation to do so, either
(i)procure for you the right to continue to
distribute the alleged infringing Logo, or
(ii)replace or modify the Logo to make it
non-infringing, and in which case, you shall
thereupon cease distribution of the alleged
infringing Logo.
(c) Palm shall have no liability for any intellectual
property infringement claim (including an Indemnified
Claim) based on your (i)manufacture, distribution, or
use of the Logo after Palms notice that you should
cease use of such Logo due to such a claim. For all
claims described in this Section 6(c), you agree to
indemnify and defend Palm from and against all
damages, costs and expenses, including reasonable
attorneys fees.
(d) Palm shall have no obligation to you for any
Indemnified Claims which arise outside the
geographical boundaries of the United States, Canada,
Australia, Japan, Switzerland, the European Union
(Included Jurisdictions).
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(e) PALM MAKES NO WARRANTIES. THE DEFENSE PURSUANT TO
SECTION 6(a) IS EXCLUSIVE AND IS IN LIEU OF ALL
WARRANTIES, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE
WITH RESPECT TO THE LOGO, INCLUDING ANY WARRANTY OF
NON-INFRINGEMENT, IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
7. CONSEQUENTIAL ET AL. DAMAGES
IN NO EVENT SHALL PALM BE LIABLE FOR ANY CONSEQUENTIAL,
INCIDENTAL, INDIRECT, PUNITIVE OR SPECIAL DAMAGES (INCLUDING LOSS OF BUSINESS
PROFITS) ARISING FROM OR RELATED TO YOUR MARKETING, DISTRIBUTION OR ANY USE OF
THE LOGO, REGARDLESS OF WHETHER SUCH LIABILITY IS BASED ON BREACH OF CONTRACT,
TORT, STRICT LIABILITY, BREACH OF WARRANTIES, INFRINGEMENT OF INTELLECTUAL
PROPERTY, FAILURE OF ESSENTIAL PURPOSE OR OTHERWISE, EVEN IF ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES. IN NO EVENT SHALL PALM BE LIABLE FOR ANY DAMAGES
FOR YOUR USE OF THE LOGO IN VIOLATION OF THE TERMS AND CONDITIONS OF THIS LOGO
AGREEMENT.
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8. INFRINGEMENT
You shall promptly notify Palm of any suspected infringement
of or challenge to the Logo or any of its constituent elements.
9. TERM OF LOGO AGREEMENT
(a) This Logo Agreement shall terminate at the earliest
of the following dates: (a) Two (2) years from the
Effective Date; or (b) 90 days after the date of
release of a new version of the Palm Operating
System; provided however, that Palm shall have the
right to terminate this Logo Agreement with or
without cause upon thirty (30) days prior written
notice.
(b) From and after termination or expiration of this Logo
Agreement, you shall cease and desist from all use of
the Logo. However, unless the Logo Agreement is
terminated for breach, you may distribute
then-existing units of Product and advertising
materials containing the Logo for a period of ninety
(90) days from the termination date provided use of
the Logo in connection with such inventory is in
compliance with the terms and conditions of this Logo
Agreement.
10. NOTICES
All notices and other communications under this Logo Agreement
shall be in writing and shall be deemed given if delivered personally, mailed by
registered
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or certified mail, return receipt requested, or sent by telecopy with a receipt
confirmed by telephone, to the parties at the following addresses or to such
other addresses as a party may from time to time notify the other parties.
11. ENTIRE LOGO AGREEMENT; AMENDMENT
Palms providing this Logo Agreement to you does not constitute
an offer by Palm. Upon execution by both Palm and you, this Logo Agreement,
including all Exhibits, contains the entire agreement of the parties with
respect to the subject matter hereof, and shall supersede and merge all prior
and contemporaneous communications. It shall not be amended except by a written
agreement signed on behalf of the parties by their respective authorized
representatives.
12. GOVERNING LAW; ATTORNEYS FEES; EQUITABLE RELIEF
(a) This Logo Agreement shall be governed by and
construed in accordance with the laws of the State of
California. You hereby consent to jurisdiction and
venue in the state and federal courts sitting in the
State of California. The parties agree to accept
service of process by U.S. certified or registered
mail, return receipt requested, or by any other
method authorized by California law.
(b) If either party employs attorneys to enforce any
rights arising out of or related to this Logo
Agreement, the prevailing party shall be entitled to
recover its reasonable attorneys fees, costs, and
other expenses.
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(c) You acknowledge that a breach by you of this Logo
Agreement may cause Palm irreparable damage which
cannot be remedied in monetary damages in an action
at law, and may also constitute infringement of the
Logo. In event of any breach that could cause
irreparable harm to Palm, or cause some impairment or
dilution of its reputation or Logo, Palm shall be
entitled to an immediate injunction, in addition to
any other legal or equitable remedies.
13. HEADINGS
Section headings are used in this Logo Agreement for
convenience of reference only and shall not affect the meaning of any provision
of this Logo Agreement.
14. NO WAIVER
No waiver of any breach of any provision of this Logo
Agreement shall constitute a waiver of any prior, concurrent or subsequent
breach of the same or any other provision hereof, and no waiver shall be
effective unless made in writing and signed by an authorized representative of
the waiving party.
15. SEVERABILITY
If any provision of this Logo Agreement (or any other
agreements incorporated herein) shall be held by a court of competent
jurisdiction to be illegal, invalid or unenforceable, the remaining provisions
shall remain in full force and effect.
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16. RELATIONSHIP
Neither this Logo Agreement, nor any terms and conditions
contained herein, shall be construed as creating a partnership, joint venture or
agency relationship or as granting a franchise.
17. SURVIVAL
The provisions of Sections 2(d), 4(e), 5(b), and 7 shall
survive expiration or termination of this Logo Agreement.
18. EXHIBITS
This Logo Agreement includes Exhibits A, B and C which are
hereby incorporated by reference.
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EXHIBIT A
DESIGNED FOR PALM COMPUTING PLATFORM LOGO
Do not reproduce this example. You will be able to download
appropriate artwork after agreeing to this license.
EXHIBIT B
YOUR PRODUCT(S) AND DESIGNED FOR PALM COMPUTING LATFORM LOGO
CRITERIA
KeySync Keyboard version 1.1
KeyLink Software version .94
Designed for Palm Computing platform Compatibility Criteria
Application(s) uphold the following criteria:
- Only makes use of PalmOS and Licensee publicly documented APIs and
structures
- Has successfully run 500,000 gremlin events using the latest released
version of the Palm OS Emulator with no failures on both Debug and
non-Debug ROMs
- Notwithstanding the 500,000 events above, the application has also
tested out of memory conditions by running 100,000 gremlin events in
the latest version of the Palm OS Emulator after the out of memory
dialog has appeared in after adding data in any area of the
application that can accept and create new data.
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- Has the back-up bit set
- Does not crash during installation
- Does not crash during a synchronization that occurs after data has
been changed
- Does not crash during a System Find. The find must be initiated when
the application is closed.
- All of the databases have the same creator ID as the application
- Has been tested in all presently shipping Palm Computing platform
devices, or if it is designed for set of devices it should be tested
on those devices and the product literature should indicate this.
EXHIBIT C
GUIDELINES FOR USING THE DESIGNED FOR PALM COMPUTING PLATFORM
LOGO
Palm Computing has established the following set of Guidelines
to assist you in proper use of the logo:
1. The following attribution footnote should accompany each use
of the logo. Palm Computing is a registered trademark and the
Palm Computing platform Platinum logo is a trademark of Palm
Computing, Inc., 3Com or its subsidiaries. If other 3Com
trademarks are referenced in the context of the document, they
should also be included in the attribution footnote.
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2. You may only use the logo as a symbol that your product is
designed for the Palm Computing platform and those products
based upon it. You may not imply that Palm Computing in any
way endorses your product.
3. The Designed for Palm Computing platform logo program is not
intended to be a certification program, i.e., the logo does
not represent that Palm Computing certifies your product in
any way.
4. Usage of the Designed for Palm Computing platform logo
requires that the product pass Compatibility Testing set forth
in Exhibit B. Other than maintenance or bug-fix releases, new
releases of the product must be re-tested for compatibility.
5. You must sign and return the Palm Computing Platform Logo
License Agreement before artwork will be provided.
6. You may not display the logo on any materials including, but
not limited to, packaging, collateral and documentation, in a
manner which suggests that the Product is a Palm Computing
product or in a manner which suggests that Palm Computing is a
part of your products name.
7. You may not alter or animate the logo in any way.
Sizing, Placement and Color Requirements:
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1. Palm Computing will provide camera-ready artwork of the logo
in electronic format.
2. You may not display the logo on packaging, documentation,
collateral, or advertising in a manner which suggests that
your Product is a Palm Computing product or in a manner which
suggests that the mark, Palm Computing, is a part of your
product name.
3. The logo cannot be larger than or more prominent than your
Product name, trademark, logo, or trade name.
4. You may not combine the logo with any other feature including,
but not limited to, other logos, words, graphics, photos,
slogans, headlines, numbers, design features, or symbols.
5. The Designed for Palm Computing platform logo must stand
alone. A minimum amount of empty space has been established
around the logo to ensure that it appears in a clear visual
field. No other object such as type, photography, borders,
edges, etc. may appear in the empty space. The preferred
distance between the logo border and any other type, images or
graphic elements, on any side is equal to the height of the
logo block. The minimum required border (margin) of empty
space around the logo must be x, where x equals the width of
the logo block.
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6. The minimum size requirements for the Designed for Palm
Computing platform logo is 15 mm in height and the maximum is
37 mm in height. For odd-sized materials, the maximum size
logo height should not exceed 5% of largest dimension.
7. The right to use this logo is at the discretion of Palm
Computing and Palm Computing reserves the right to revoke that
right or change its program at any time.
8. You may use the Designed for Palm Computing platform logo in
the about box of your application as long as you obey all the
above sizing, placement and color requirements.
9. Quality Control
Palm reserves the right to review your use of the Logo. Upon
signing the logo license agreement, you are required to provide Palm with any
Products, documentation or marketing materials bearing the Logo, so that Palm
can review usage to determine whether the Usage Guidelines have been followed.
Send these items to:
Palm Computing, Inc.
a subsidiary of 3Com Corporation
1565 Charleston Road
Mountain View, CA 94043-9450
Attention: Development Programs Department
OR TO
[email protected]
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Palm reserves the right to conduct spot checks on all
Products, product packaging, marketing materials, and documentation and may
periodically send out requests for samples. Palm may also conduct spot checks in
retail outlets and other product sources to monitor your compliance with the
License Logo Agreement and the Logo Use Guidelines. Refusal to submit samples,
or non-compliance with your License Logo Agreement and with these Guidelines,
could result in revocation of the license to use the Logo.
You must correct any deficiencies in your use of the Logo
and/or in the quality of the Product used in conjunction with the Logo upon
reasonable notice from Palm. Refusal to correct such deficiencies could result
in revocation of your license to use the Logo.
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Exhibit 10.5
iBIZ TECHNOLOGY CORP.
STOCK OPTION PLAN
1. PURPOSE OF PLAN.
(a) General Purpose. The purpose of iBIZ TECHNOLOGY CORP. STOCK OPTION
PLAN ("Plan") is to further the interests of iBIZ TECHNOLOGY CORP., a Florida
corporation (the "Corporation"), and its stockholders by providing an incentive
based form of compensation to the directors, officers, key employees and service
providers of the Corporation and by encouraging such persons to invest in shares
of the Corporation's Common Stock, thereby acquiring a proprietary interest in
its business and an increased personal interest in its continued success and
progress and ongoing inducement to remain in the Corporation's employ, service
or as a director.
(b) Incentive Stock Options. Some one or more of the options granted
under the Plan may be intended to qualify as an "incentive stock option" as
defined in Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"), and any grant of such an option shall clearly specify that such option
is intended to so qualify. If no such specification is made, an option granted
hereunder shall not be intended to qualify as an "incentive stock option." The
employees eligible to be considered for the grant of incentive stock options
hereunder are any persons regularly employed by the Corporation in a managerial,
professional or technical capacity on a full-time, salaried basis.
2. STOCK AND MAXIMUM NUMBER OF SHARES SUBJECT TO PLAN.
(a) Description of Stock and Maximum Shares Allocated. The stock
subject to the provisions of the Plan and issuable upon exercise of options
granted under the Plan are shares of the Corporation's Common Stock, $.001 par
value, which may be either unissued or treasury shares, as the Corporation's
Board of Directors (the "Board") may from time to time determine. Subject to
adjustment as provided in Section 7, the aggregate number of shares of Common
Stock covered by the Plan and issuable upon exercise of all options granted
hereunder shall be 5,000,000 shares, which shares shall be reserved for use upon
the exercise of options to be granted from time to time.
(b) Restoration of Unpurchased Shares. If an option expires or
terminates for any reason prior to its exercise in full and before the term of
the Plan expires, the shares subject to, but not issued under such option shall
again be available for other options thereafter granted.
3. ADMINISTRATION; AMENDMENTS.
(a) Administration by Committee. The Plan shall be administered by the
Board of Directors or whenever the Board has at least two members who are not
either employees or officers of the Corporation or of any parent or subsidiary
of the Corporation ("Independent Directors") by a committee of not less than two
persons who are Independent Directors (the "Compensation Committee"), with full
power to administer the Plan, to interpret the Plan and to establish and amend
rules and regulations for its administration. (The term "Compensation Committee"
as used
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throughout this Plan shall refer to the Board of Directors or a committee of two
Independent Directors, whichever is administering the Plan at the time).
(b) Exercise Price. Upon the grant of any option, the Compensation
Committee shall specify the exercise price for the shares issuable upon exercise
of options granted. In no event may an option exercise price per share be less
than 100% of the Fair Market Value (as defined below) per share of the
Corporation's Common Stock on the date such option is granted.
(c) Fair Market Value. The Fair Market Value of a share on any
particular day shall be determined as follows:
(1) If the shares are listed or admitted to trading on any
securities exchange, the fair market value shall be the average sales
price on such day on the New York Stock Exchange, or if the shares have
not been listed or admitted to trading on the New York Stock Exchange,
on such other securities exchange on which such stock is then listed or
admitted to trading, or if no sale takes place on such day on any such
exchange, the average of the closing bid and asked price on such day as
officially quoted on any such exchange;
(2) If the shares are not then listed or admitted to trading
on any securities exchange, the fair market value shall be the average
sales price on such day or, if no sale takes place on such day, the
average of the reported closing bid and asked price on such date, in
the over-the-counter market as furnished by the National Association of
Securities Dealers Automated Quotation ("NASDAQ"), or if NASDAQ at the
time is not engaged in the business of reporting such prices, as
furnished by any similar firm then engaged in such business and
selected by the Board; or
(3) If the shares are not then listed or admitted to trading
in the over-the-counter market, the fair market value shall be the
amount determined by the Board in a manner consistent with Treasury
Regulation Section 20-2031-2 promulgated under the Code or in such
other manner prescribed by the Secretary of the Treasury or the
Internal Revenue Service.
(c) Interpretation. The interpretation and construction by the
Compensation Committee of the terms and provisions of this Plan and of the
agreements governing options and rights granted under the Plan shall be final
and conclusive. No member of the Compensation Committee shall be liable for any
action taken or determination made in good faith.
(d) Amendments to Plan. The Compensation Committee may, without action
on the part of the stockholders of the Corporation, make such amendments to,
changes in and additions to the Plan as it may, from time to time, deem proper
and in the best interests of the Corporation; provided that the Compensation
Committee may not, without consent of the holder, take any action which
disqualifies any option granted under the Plan as an incentive stock option for
treatment as such or which adversely affects or impairs the rights of the holder
of any option outstanding under the Plan.
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4. PARTICIPANTS; DURATION OF PLAN.
(a) Eligibility and Participation. Options may be granted in the total
amount for the period as allocated by the Board as provided in Section 4(b)
below only to persons who at the time of grant are directors, key employees of,
or service providers to the Corporation, whether or not such persons are also
members of the Board; provided, however, that no incentive stock option may be
granted to a director of the Corporation unless such person is also an executive
employee of the Corporation.
(b) Allotment. The Board shall determine the aggregate number of shares
of Common Stock which may be optioned from time to time but the Compensation
Committee shall have sole authority to determine the number of shares and the
recipient thereof to be optioned at any time. The Compensation Committee shall
not be required to grant all options allocated by the Board for any given period
if it determines, in its sole and exclusive judgment, that such grant is not in
the best interests of the Corporation. The grant of an option to any person
shall neither entitle such individual to, nor disqualify such individual from,
participation in any other grant of options under the Plan.
(c) Duration of Plan. The term of the Plan, unless previously
terminated by the Board, is ten years or January 31, 2009. No option shall be
granted under the Plan unless granted within ten years after the adoption of the
Plan by the Board, but options outstanding on that date shall not be terminated
or otherwise affected by virtue of the Plan's expiration.
(d) Approval of Stockholders. If the Board issues any incentive stock
options, solely for the purposes of compliance with the Code provisions
pertaining to incentive stock options, the Plan shall be submitted to the
stockholders of the Corporation for their approval at a regular meeting to be
held within twelve months after adoption of the Plan by the Board. Stockholder
approval shall be evidenced by the affirmative vote of the holders of a majority
of the shares of Common Stock present in person or by proxy and voting at the
meeting. If the stockholders decline to approve the Plan at such meeting or if
the Plan is not approved by the stockholders within twelve months after its
adoption by the Board, no incentive stock options may be issued under the Plan
but all options granted under the Plan shall remain in full force and effect
regardless of Shareholder approval and the Plan may be used for future
nonincentive stock option issuances. If shareholders fail to approve the Plan,
all previously issued incentive stock options shall be automatically converted
to nonincentive stock options.
5. TERMS AND CONDITIONS OF OPTIONS AND RIGHTS.
(a) Individual Agreements. Options granted under the Plan shall be
evidenced by agreements in such form as the Board from time to time approves,
which agreements shall substantially comply with and be subject to the terms of
the Plan, including the terms and conditions of this Section 5.
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(b) Required Provisions. Each agreement shall state (i) the total
number of shares to which it pertains, (ii) the exercise price for the shares
covered by the option, (iii) the time at which the option becomes exercisable,
(iv) the scheduled expiration date of the option, (v) the vesting period(s) for
such options, and (vi) the timing and conditions of issuance of any stock option
exercise.
(c) Period. No option granted under the Plan shall be exercisable for a
period in excess of ten years from the date of its grant. All options granted
shall be subject to earlier termination in the event of termination of
employment, retirement or death of the holder as provided in Section 6 or as
otherwise set forth in the agreement granting the option. An option may be
exercised in full or in part at any time or from time to time during the term
thereof, or provide for its exercise in stated installments at stated times
during such term.
(d) No Fractional Shares. Options shall be granted and exercisable only
for whole shares; no fractional shares will be issuable upon exercise of any
option granted under the Plan.
(e) Method of Exercising Option. Options shall be exercised by written
notice to the Corporation, addressed to the Corporation at its principal place
of business. Such notice shall state the election to exercise the option and the
number of shares with respect to which it is being exercised, and shall be
signed by the person exercising the option. Such notice shall be accompanied (i)
by the certificate described in Section 8(b) and (ii) by payment in full of the
exercise price for the number of shares being purchased. Payment may be made in
cash or by bank cashier's check, except that, if and to the extent the
instrument evidencing the option so provides and if the Company is not then
prohibited from purchasing or acquiring shares of such stock. In lieu of cash,
such payment may be made in whole or in part with shares of the same class of
stock as are then subject to the option, delivered in lieu of cash concurrently
with such exercise, the shares so delivered to be valued on the basis of the
fair market value of the stock (determined in a manner specified in the
instrument evidencing the option) on the day preceding the date of exercise.
Alternatively, the Grantee may, in lieu of using previously outstanding shares
therefore, use some of the shares as to which the option is then being
exercised. The Corporation shall deliver a certificate or certificates
representing the option shares to the purchaser as soon as practicable after
payment for those shares has been received. If an option is exercised by any
person other than the optionholder, such notice shall be accompanied by
appropriate proof of the right of such person to exercise the option. All shares
that are purchased and paid for in full upon the exercise of an option shall be
fully paid and non-assessable.
(f) No Rights of a Stockholder. An optionholder shall have no rights as
a stockholder with respect to shares covered by an option. No adjustment will be
made for dividends with respect to an option for which the record date is prior
to the date a stock certificate is issued upon exercise of an option. Upon
exercise of an option, the holder of the shares of Common Stock so received
shall have all rights of a stockholder of the Corporation as of the date of
issuance.
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(g) Compliance with Law. No shares of Corporation Common Stock shall be
issued or transferred upon the exercise of any option unless and until all legal
requirements applicable to the issuance or transfer of such shares have been
completed.
(h) Other Provisions. The option agreements may contain such other
provisions as the Board deems necessary to effectuate the sense and purpose of
the Plan, including covenants on the holder's part not to compete and remedies
to the Corporation in the event of the breach of any such covenant.
6. TERMINATION OF EMPLOYMENT; ASSIGNABILITY; DEATH.
(a) Termination of Employment. If any optionholder ceases to be a
director or employee of the Corporation, or ceases to render services pursuant
to a consulting, management or other agreement, other than for death, disability
or discharge for cause, such holder (or successors or transferees) may, within
six months after the date of termination (three months in the case of incentive
stock options), but in no event after the stated expiration date, purchase some
or all of the shares with respect to which such optionholder was entitled to
exercise such option, on the date such employment, directorship, or consulting
relationship terminated and the option shall thereafter be void for all
purposes. Any termination of an agreement pursuant to which services are
rendered to the Corporation by any party who is an optionholder, without a
renewal of that agreement or entry into a similar successor agreement, may be
treated as a termination of the employment of the third party.
(b) Assignability. Options granted under the Plan and the privileges
conferred thereby shall not be assignable or transferable, unless the
Compensation Committee provides otherwise. Options shall be exercisable by such
transferee as set forth in this Section 6.
(c) Disability. If the employment or directorship of the optionholder
is terminated due to disability, the optionholder (or transferee of the
optionholder) may exercise the options, in whole or in part, to the extent they
were exercisable on the date when the optionholder's employment or directorship
terminated, at any time prior to the expiration date of the options or within
one year of the date of termination of employment or directorship, whichever is
earlier.
(d) Discharge for Cause. If the employment or directorship of the
optionholder with the Corporation is terminated due to discharge for cause, the
options shall terminate upon receipt by the optionholder of notice of such
termination or the effective date of the termination, whichever is earlier.
Discharge for cause shall include discharge for personal dishonesty, willful
misconduct in performance of duties, failure, impairment or inability to perform
required duties, inefficiencies or omissions in performing required duties,
breach of fiduciary duty or conviction of any felony or crime of moral
turpitude. The Compensation Committee shall have the sole and exclusive right to
determine whether the optionholder has been discharged for cause for purposes of
the Plan and the date of such discharge.
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(e) Death of Holder. If optionholder dies while in the Corporation's
employ or while rendering consulting services to the Corporation, an option
shall be exercisable until the stated expiration date thereof by the person or
persons ("successors") to whom the holder's rights pass under will or by the
laws of descent and distribution or by transferees of the optionholders, as the
case may be, but only to the extent that the holder was entitled to exercise the
option at the date of death. An option may be exercised (and payment of the
option price made in full) by the successors or transferees only after written
notice to the Corporation, specifying the number of shares to be purchased or
rights to be exercised. Such notice shall comply with the provisions of Section
5(e), and shall be accompanied by the certificate required by Section 8(b).
7. CERTAIN ADJUSTMENTS.
(a) Capital Adjustments. Except as limited by Section 422 of the Code,
the aggregate number of shares of Common Stock subject to the Plan, the number
of shares covered by outstanding options, and the price per share stated in such
options shall be proportionately adjusted for any increase or decrease in the
number of outstanding shares of Common Stock of the Corporation resulting from a
subdivision or consolidation of shares or any other capital adjustment or the
payment of a stock dividend or any other increase or decrease in the number of
such shares effected without receipt by the Corporation of consideration
therefor in money, services or property.
(b) Corporate Reorganizations. Upon the dissolution or liquidation of
the Corporation, or upon a reorganization, merger or consolidation of the
Corporation as a result of which the outstanding securities of the class then
subject to options hereunder are changed into or exchanged for cash or property
or securities not of the Corporation's issue, or any combination thereof, or
upon a sale of substantially all of the property of the Corporation to, or the
acquisition of stock representing more than eighty percent (80%) of the voting
power of the stock of the Corporation then outstanding by another corporation or
by a group of persons who are required to file a Form 13D under the Securities
Exchange Act of 1934 ("34 Act"), the Plan shall terminate, and all options
theretofore granted hereunder shall terminate, unless provision be made in
writing in connection with such transaction for the continuance of the Plan or
for the assumption of options covering the stock of a successor employer
corporation, or a parent or a subsidiary thereof, with appropriate adjustments
as to the number and kind of shares and prices, in which event the Plan and
options theretofore granted shall continue in the manner and under the terms so
provided. If the Plan and unexercised options shall terminate pursuant to the
foregoing sentence, all persons entitled to exercise any unexercised portions of
options then outstanding shall have the right, at such time prior to the
consummation of the transaction causing such termination as the Corporation
shall designate, to exercise the unexercised portions of their options,
including the portions thereof which would, but for this paragraph entitled
"Corporate Reorganizations," not yet be exercisable.
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8. DELIVERY OF STOCK; LEGENDS, REPRESENTATIONS.
(a) Legend on Certificates. All certificates representing shares of
Common Stock issued upon exercise of options granted under the Plan shall be
endorsed with a legend reading as follows:
The shares of Common Stock evidenced by this
certificate have been issued to the registered owner in
reliance upon written representations that these shares have
been purchased solely for investment. These shares may not be
sold, transferred or assigned unless in the opinion of the
Corporation and its legal counsel such sale, transfer or
assignment will not be in violation of the Securities Act of
1933, as amended, and the Rules and Regulations thereunder.
(b) Private Offering for Investment Only. The options are and shall be
made available only to a limited number of present and future key executives,
directors, services providers and key employees who have knowledge of the
Corporation's financial condition, management and its affairs. The Plan is not
intended to provide additional capital for the Corporation, but to encourage
stock ownership among the Corporation's key personnel. By the act of accepting
an option, each optionholder agrees (i) that, if he, his successors, or his
transferees exercise his option, he his successors, or his transferees will
purchase the subject shares solely for investment and not with any intention at
such time to resell or redistribute those shares, and (ii) that he, his
successors, or his transferees will confirm such intention by an appropriate
certificate at the time the option is exercised. However, the neglect or failure
to execute such a certificate shall not limit or negate the foregoing agreement.
9. COMPLIANCE WITH LEGAL REQUIREMENTS.
(a) For Investment Only. If, at the time of exercise of this option,
there is not in effect as to the Option Shares being purchased a registration
statement under the Securities Act of 1933, as amended (or any successor
statute) (collectively the 1933 Act"), then the exercise of this option shall be
effective only upon receipt by the Corporation from the key employee or service
provider (or his legal representatives or heirs) of a written representation
that the option shares are being purchased for investment and not for
distribution.
(b) Registration Statement Preparation. The key employee or service
provider hereby agrees to supply the Corporation with such information and to
cooperate with the Corporation, as the Corporation may reasonably request, in
connection with the preparation and filing of the registration statements and
amendments thereto under the Securities Act of 1933 and applicable state
statutes and regulations applicable to the option shares. The Corporation shall
not be liable for failure to issue any such option shares where such opinion of
counsel cannot be obtained within the period specified for the exercise of the
option, or where such registration is required in the opinion of counsel. If
shares of Common Stock of the Corporation are, at the time of the exercise of
this option, listed upon a securities exchange, the exercise of this option
shall be contingent upon
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completion of the necessary steps to list the option shares being purchased upon
such securities exchange.
(c) Additional Restrictions on Option Exercise. Officers or any other
employee or service providers who are privy to material confidential information
of the Company as determined by the Committee may only exercise options during
the period commencing three days following the release for publication of
quarterly or annual financial information regarding the Corporation and ending
two weeks prior to the end of the then current fiscal quarter of the Corporation
(the "Release Period").
A "release for publication" shall be deemed to be satisfied if the
specified financial data appears:
(1) On a wire service;
(2) A financial news service;
(3) In a newspaper of general circulation; or
(4) Is otherwise made publicly available.
Notwithstanding any provision to the contrary contained herein, a key
employee or service provider may exercise options only so long as such exercise
does not violate the law or any rule or regulation adopted by the appropriate
governmental authority.
10. APPLICATION OF FUNDS.
The proceeds received by the Corporation from the sale of Common Stock
pursuant to the exercise of options will be used for general corporate purposes.
11. WITHHOLDING OF TAXES.
The Corporation shall have the right to deduct from any other
compensation of the option holder any federal, state or locate income taxes
(including FICA) required by law to be withheld with respect to the granting or
exercise of any options.
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DATED as of the 31st day of January, 1999.
iBIZ TECHNOLOGY CORP.
a Florida corporation
By ___________________________________________
Kenneth Schilling, President and
Chief Executive Officer
ATTESTED BY:
Name:___________________________________
Title: Secretary
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Exhibit 10.6
NON-QUALIFIED STOCK OPTION
ISSUED UNDER iBIZ TECHNOLOGY CORP.
1999 STOCK OPTION PLAN
1. GRANT OF OPTION. iBIZ TECHNOLOGY CORP., a Florida
corporation and its subsidiaries (the "Company"), subject to the terms and
conditions of this instrument and to the terms and conditions of the iBIZ
TECHNOLOGY CORP. Stock Option Plan dated as of January 31, 1999 (the "Plan"), a
copy of which the Grantee hereby acknowledges receiving, grants to ((Recipient))
(the "Grantee") an option to purchase from the Company an aggregate of
((Options)) shares of the Company's common stock, $.001 par value per share (the
"Option Shares"), at a price of $((ExercisePrice)). This Option is not to be
treated as an incentive stock option under Section 422 of the Internal Revenue
Code of 1986.
2. APPROVAL BY BOARD. The terms and conditions of this Stock
Option have been specifically approved by the Board of Directors of the Company
and any substantive and material changes to this Stock Option shall require the
approval of the Board of Directors.
3. EXPIRATION OF OPTION. This Option is granted on
((Date_of_Issuance)) (the "Grant Date"). Unless exercised or terminated earlier
in accordance with the provisions hereof, this option will expire at 5:00 p.m.
local time on the day preceding the tenth anniversary of the Grant Date.
4. WHEN OPTION EXERCISABLE. This Option shall vest and become
exercisable according to the following schedule (the "Vesting Dates"):
(a) One-half of the Option Shares on April 22,
2000; and
(b) The remaining one-half of the Option Shares
on April 22, 2001.
Grantee may exercise this Option at any time on or after the
Vesting Dates set forth above but prior to the expiration pursuant to Section 3
or termination pursuant to Section 7 of this Option.
5. CONTINUOUS SERVICE A REQUISITE. Except as otherwise
specifically provided in this section, this Option may not be exercised unless
the Grantee is a director of the Company continuously from the Grant Date to the
date of exercise. If the Grantee is removed or resigns from the directorship of
the Company other than for death,
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disability, or discharge for cause, the Grantee may exercise this Option, in
whole or in part, to the extent it was exercisable on the date when the Grantee
terminated his directorship with the Company, at any time prior to the
expiration date of the Option or within six (6) months of the date of
termination of his directorship with the Company, whichever is earlier.
(a) If the directorship of the Grantee is terminated
due to disability, as determined by the Company, the Grantee may
exercise this Option, in whole or in part, to the extent it was
exercisable on the date when the Grantee's directorship terminated, at
any time prior to the expiration date of the Option or within one (1)
year of the date of termination of directorship, whichever is earlier.
(b) If the Grantee is removed from the directorship
of the Company due to discharge for cause, as determined by the
Company, this Option shall terminate upon receipt by the Grantee of
notice of such removal or the effective date of the removal, whichever
is earlier.
(c) If the directorship of Grantee is terminated by
reason of death of the Grantee, the person or persons to whom the
Grantee's rights under the option pass by will or by applicable laws of
descent and distribution may exercise the option, in whole or in part,
to the extent it was exercisable on the date when the Grantee's
directorship terminated, at any time prior to the expiration of the
Option or within one (1) year after the date of the death of the
Grantee, whichever is earlier. The person or persons to whom the
Grantee's rights under the Option pass shall be considered the Grantee.
6. OPTION NOT ASSIGNABLE. This Option shall only be
transferable by will or the laws of descent and distribution, or pursuant to a
qualified domestic relations order as defined by the Internal Revenue Code of
1986, as amended, or Title I of the Employee Retirement Income Security Act or
the rules thereunder. It may be exercised, during the life of the Grantee, only
by the Grantee, and may not be pledged or hypothecated in any way. Additionally,
it shall not be subject to execution, attachment or similar process.
7. TERMINATION OF OPTION. This Option shall terminate and all
rights of the Grantee shall cease at the earliest of the following:
(a) 5:00 p.m., local time, of the day before the end
of the six (6) month period following the termination of Grantee's
directorship with the Company for any reason other than death,
disability, or discharge for cause;
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(b) 5:00 p.m., local time, on the day before the end of
the one (1) year period following the termination of the Grantee's
directorship with the Company due to disability;
(c) The earlier of 5:00 p.m., local time, of the
effective date of the Grantee's termination of directorship with the
Company for cause or receipt by the Grantee of notice of termination
for cause;
(d) 5:00 p.m., local time, on the day before the end of
the one (1) year period following the Grantee's death if the Grantee's
directorship with the Company is terminated by reason of death; and
(e) Expiration of this Option as provided in Section 3.
8. EXERCISE OF OPTION. This Option may be exercised by
presenting a written notice to the Company that the Option is being exercised.
Such notice shall identify this Option, state the number of Option Shares
exercised, and shall be signed by the Grantee. Payment in full for the Option
Shares to be purchased shall accompany the notice of exercise. Such payment
shall be by bank cashier's check or certified check. If the Company is required
to withhold on account of any present or future tax imposed as a result of such
exercise, the notice of exercise shall be accompanied by a check to the order of
the Company in payment of the amount of such withholding. Any representation
required by Section 11 shall also accompany the notice of exercise.
The fair market value of a share of the Company on any
particular date shall mean fair market value as determined under Section 3(d)(2)
of the Plan. If the Grantee is deceased, or if the Grantee is disabled, the
notice of exercise may be signed by the Grantee's legal representatives or
heirs, and shall be accompanied by evidence satisfactory to the Company of the
right of such person or persons to exercise this Option. The Grantee shall have
none of the rights of a shareholder with respect to any of the Option Shares
until the Option Shares are actually issued.
9. ADJUSTMENTS AND CORPORATE REORGANIZATIONS. This Option
shall not affect in any way the right or power of the Company or its
shareholders to make or authorize any merger, consolidation, recapitalization,
reorganization or dissolution of the Company or any other corporate act or
proceeding whether of a similar character or otherwise. In the event of any
change in the Option Shares through reorganization, recapitalization, stock
split, stock dividend, continuation of shares, merger, consolidation, rights
offering, or any other change in the corporate structure, appropriate
adjustments shall be made by the Board in the number and kind of shares and the
price per share subject to this Option. The determination of the Board on
whether any adjustment is required and the extent and nature of any such
adjustment shall be final and binding upon all persons. Upon a determination by
the Board of any adjustment in the number of Option
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Shares or of the option price, this Option shall be amended in accordance with
the action of the Board. Upon the dissolution or liquidation of the Company, or
upon a reorganization, merger or consolidation of the Company as a result of
which the outstanding securities of the class then subject to this Option are
changed into or exchanged for cash or property or securities not of the
Company's issue, or any combination thereof, or upon a sale of substantially all
the property of the Company to, or the acquisition of stock representing more
than eighty percent (80%) of the voting power of the stock of the Company then
outstanding by, another corporation or person, this Option shall terminate,
unless provision be made in writing in connection with such transaction for the
assumption of options theretofore granted under the Stock Option Plan under
which this Option was granted, or the substitution of such options of any
options covering the stock of a successor employer corporation, or a parent or
subsidiary thereof, with appropriate adjustments as to the number and kind of
shares and prices, in which event this Option shall continue in the manner and
under the terms so provided. If this Option shall terminate pursuant to the
foregoing sentence, the Grantee shall have the right, at such time prior to the
consummation of the transaction causing such termination as the Company shall
designate, to exercise the unexercised portions of this Option, including the
portions thereof which would, but for this Section entitled "Adjustments and
Corporate Reorganizations," not yet be exercisable.
10. SERVICE MAY BE TERMINATED. The granting of this Option
shall not confer upon the Grantee any right to continue as a director of the
Company and shall not interfere in any way with the right of the Company to
terminate the directorship of Grantee.
11. COMPLIANCE WITH LEGAL REQUIREMENTS. If, at the time of
exercise of this Option, there is not in effect as to the Option Shares being
purchased a registration statement under the Securities Act of 1933, as amended
(or any successor statute) (collectively the "1933 Act"), then the exercise of
this Option shall be effective only upon receipt by the Company from the Grantee
(or his legal representatives or heirs) of a written representation that the
Option Shares are being purchased for investment and not for distribution.
The Company may request an opinion of its counsel as to
whether registration of the Option Shares being purchased is required under the
1933 Act or under applicable state statutes or regulations. If counsel is of the
opinion that such registration is not required, the Company shall issue the
Option Shares. If counsel is of the opinion that such registration is required,
the Company shall not be required to issue the Option Shares until they have
been so registered, but the Company shall be under no obligation to register the
Option Shares.
The Grantee hereby agrees to supply the Company with such
information and to cooperate with the Company, as the Company may reasonably
request, in connection with the preparation and filing of the registration
statements and amendments thereto under the
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1933 Act and applicable state statutes and regulations applicable to the Option
Shares. The Company shall not be liable for failure to issue any such Option
Shares where such opinion of counsel cannot be obtained within the period
specified for the exercise of the Option, or where such registration is required
in the opinion of counsel. If shares of Common Stock of the Company are, at the
time of the exercise of this Option, listed upon a securities exchange, the
exercise of this Option shall be contingent upon completion of the necessary
steps to list the Option Shares being purchased upon such securities exchange.
Furthermore, this Option may only be exercised during the
period beginning three (3) days following the release for publication of
quarterly or annual financial information regarding the Company and ending two
(2) weeks prior to the end of the then current fiscal quarter of the Company.
12. ADDITIONAL POWERS OF THE BOARD. The Board may construe
this Option and correct any defect, supply any omission or reconcile any
inconsistency in this instrument or in the Plan as the Board may deem
appropriate. The Board shall determine any dispute that may arise under this
Option. All decisions of the Board under this or any other provision of this
Option and under the Plan shall be binding and conclusive on the Grantee, his or
her spouse, legal representatives and heirs.
13. GOVERNING LAW. This instrument shall be governed by the
laws of the State of Arizona as applied to residents of Arizona.
IN WITNESS WHEREOF, the Company has caused this Option to be
executed by a duly authorized officer as of .
-------------------
iBIZ TECHNOLOGY CORP.
By:
------------------------------------
Its:
------------------------------
ATTEST:
- -----------------------------
I hereby acknowledge that I have received a copy of iBIZ
TECHNOLOGY CORP. Stock Option Plan dated as of January 31, 1999.
- -----------------------------
Grantee
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Exhibit 10.7
GENERAL LEASE PROVISIONS
1. THE LEASED PREMISES
In consideration of the rent and the covenants and agreements
hereinafter made on the part of the Tenant to be paid, observed, and performed,
the Landlord has demised and leased and by these presents does demise and lease
to the Tenant, the Leased Premises described on the Facing Page attached hereto
and outlined in the Typical Plan Schedule attached hereto and forming a part
hereof. but excluding therefrom any part of the exterior face of the Building,
together with the right of the Tenant, in common with the Landlord, its other
tenants, subtenants, and invitees thereof. to the nonexclusive use of the
Building grounds and parking area.
2. DEFINITIONS
In this Lease the following terms or words shall have the
following meanings:
(a) The terms appearing on the Facing Page attached
hereto shall have the meanings stated thereupon.
(b) "Herein", "hereof", "hereunder", "hereto",
"hereinafter", and similar expressions refer to this Lease and not to
any particular paragraph, section, or other portion thereof unless the
context otherwise specifies.
(c) "Business Day" means any of the days from Monday
to Friday of each week inclusive unless such day is a holiday.
(d) "Commencement Date" means the date so designated
on the Facing Page attached hereto, or the date identified by the
Landlord when the Landlord notifies the Tenant that the Leased Premises
are ready for occupancy, whichever last occurs; however, if the
Commencement Date has not occurred within six (6) months from the date
of this Lease, then this Lease shall be null and void and Landlord and
Tenant shall be released from all further obligations under this Lease.
If the Commencement Date is different than the date designated on the
Facing Page then Landlord and Tenant shall execute a written
acknowledgment on the date of Commencement and shall attach it to this
Lease as RIDER (2).
(e) "Normal Business Hours" means the hours from
10:00 a.m. to 6:00 p.m. on Business Days.
(f) "Term" means the time in the Lease Period set
forth on the Facing Page attached hereto, to be computed from 12:00
o'clock noon on the
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Commencement Date and expiring at 12:00 o'clock noon on the last day of
such Lease Period.
(g) "Rent" as the term is used throughout this Lease
shall denote the "Base Rent", as is hereinafter defined, and all other
financial obligations of the Tenant hereunder which are herein
described as "Additional Rental" or "Additional Rent."
(h) "Real Property" as the term 'Ls used throughout
this Lease shall designate the total parcel of real property owned by
the Landlord upon which the Building and the Leased Premises are
located.
3. TERM OF LEASE
Tenant shall have the right to have and hold the Leased
Premises for and during the Term subject to the payment of the Base Rent and the
Additional Rent and the full and timely performance by Tenant of the covenants
and conditions hereinafter set forth.
TENANT COVENANTS
Tenant covenants and agrees with the Landlord as follows:
4. BASE RENT
Tenant covenants and agrees to timely pay without notice,
deduction. offset or abatement to the Landlord at the Building, or such other
address as Landlord may notify Tenant of in writing, yearly and every year
during the Term hereof, the Rent in lawful money of the United States. Base Rent
is payable in the monthly installments set forth on the Facing Page attached
hereto; Additional Rent is payable pursuant to the terms of Paragraph 7 hereof.
Rent is due and shall be paid in advance on or before the first (1st) day of
each month during the term hereof. Rent is considered late and Tenant shall be
in default if rent is received after 5:00 o'clock p.m on the fifth (5th) day of
the month. A penalty of fifty dollars ($50.00) per day will be assessed on any
suits due under the lease which are received after the fifth (5th) day of the
month. In the event that Landlord is required to post a 3-day notice for
non-payment of rent or for any other breach of the Lease, Tenant shall pay to
Landlord an administrative fee of $250.00 and attorneys fees of $250.00 (total
of $500.00) together with any other sums due as an essential part of the cure of
default. If the Term hereof commences on any day other than the first day or
expires on any day other than the last day of the month, Rent for the fraction
of a month at the commencement and at the end of the Term shall be adjusted pro
rata or a per diem basis, arid all succeeding installments of Base Rent shall be
paid on the first (1st) day of each month during the term hereof. Should Tenant
be in default, Landlord may collect $50.00 per day penalty under this provision
or 18% interest under Paragraph 36, whichever is greater. Any rent check
returned for insufficient funds shall
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constitute an event of default, and Tenant must cover said check with certified
funds plus the penalty contained herein. Landlord may also seek additional
relief as provided by law.
5. COMMENCEMENT AND CONDUCT OF BUSINESS
Tenant shall commence it business in the Leased Premises on
the Commencement Date and hereafter shall operate its business in the entire
Leased Premises in accordance with Paragraph 14 in a reputable manner and in
compliance with the provisions of this Lease and the requirements of all
applicable governmental laws and during Business Days during the Term hereof,
provided that nothing in this Section shall require the Tenant to carry on
business during any period prohibited by any law or ordinance regulating or
limiting the hours during which such business may be carried on.
6. BUSINESS TAXES, ETC.
6.1 Tenant shall fully and timely pay all business and other
taxes, separately metered utility charges, other charges, rates, duties,
assessments and license fees levied, imposed, charged, or assessed against or in
respect of the Tenant's occupancy of the Leased Premises or in respect of the
personal property, trade fixtures, furniture and facilities of the Tenant or the
business or income of the Tenant on and from the Leased Premises, if any, as and
when the same become due, and shall indemnify and hold Landlord harmless from
and against all payment of such taxes, charges, rates, duties, assessments, and
license fees and against all loss, costs, charges, and expenses occasioned by or
arising from any and all such taxes, rates, duties, assessments, and license
fees.
6.2 Tenant shall promptly deliver to Landlord for inspection
at Landlord's option upon written request of Landlord, receipts for payment of
an taxes, charges, rates, duties, assessments, and licenses in respect to all
improvements, equipment, and facilities of the Tenant on or in the Leased
Premises which were due and payable up to one (1) year prior to such request and
in any event to furnish to the Landlord it requested by the Landlord, evidence
satisfactory to the Landlord of any such payments. Landlord shall have no
obligation hereunder or otherwise to make or monitor the making of such
payments.
7. ADDITIONAL RENT
7.1 Real Estate Taxes, and Operating Costs:
(a) Tenant shall pay to the Landlord as Additional
Rent both a pro rata portion of the "Real Estate Taxes", as said term
is hereinafter defined, and a portion of the Operating Costs as said
term is hereinafter defined. In determining the Tenant's share of any
such Additional Rent, such amount shall be a fraction, the numerator of
which shall be the area of the Leased Premises and the denominator of
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which shall be the total rentable space in the Building. For
purposes of this Lease, and unless and until there is physical
change in the size of the Leased Premises and/or the rentable
space in the Building, the Tenant's proportional share shall
be deemed to be JL1is_0/6 ("Tenants Proportional Share").
Tenant accepts the figures used by the Landlord for the area
of the Leased Premises, the total rentable space in the
Building, and Tenant's proportional share, and waives any
right to dispute these figures in the future.
(b) Real Estate Taxes
(i) "Real Estate Taxes" shall mean and
include all general and special taxes, assessments, dues,
duties, and levies charged and levied upon or assessed against
the Building, the land upon which it is located, any
improvements situated on the Real Property, any leasehold
improvements, fixtures, installations, additions, and
equipment used in the maintenance or operation of the Building
whether owned by Landlord or Tenant, not paid directly by the
Tenant. Further, if at any time during the Term of this Lease
the method of taxation of real estate prevailing at the time
of execution hereof shall be or has been altered so as to
Cause the whole or any part of the taxes now or hereafter
levied, assessed, or imposed upon real estate to be levied,
assessed, or imposed upon Landlord wholly or partially as a
capital levy or otherwise, or on or measured by the rents
therefrom, then such new or altered taxes attributable to the
Leased Premises shall be deemed to be included within the term
"Real Estate Taxes" for purposes of this Section, save and
except that such shall not be deemed to include any increase
in said tax not attributable to the Building.
(ii) The amount of Real Estate Taxes
attributed to the Leased Premises for any year or portion of
year shall be the amount of such taxes multiplied by Tenant's
Proportional Share.
(c) Operating Costs
(i) The term "Operating Costs" means the
total amounts paid or payable whether by the Landlord or
others on behalf of the Landlord in connection with the
ownership, maintenance, repair and operation of the Building,
including without limiting the generality of the foregoing,
the purchase of steam or other energy for heating or other
purposes, the amount paid or payable for all electricity
furnished by the Landlord to the Building, the amount paid or
payable for replacement of electric light bulbs, tubes and
ballasts; the amount paid or payable for all hot and cold
water (other than that paid by Tenants), the amount paid or
payable for all labor and/or wages and
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other payments including costs to Landlord or workman's
compensation and disability insurance, payroll taxes, welfare
and fringe benefits made to janitors, caretakers, and other
employees, contractors and subcontractors of the Landlord
(including but not limited to salary or wages of the building
manager) involved in the operation, maintenance, and repair of
the Building, managerial and administrative expenses related
to the Building, the total charges of any independent
contractors employed in the repair, care, operation,
maintenance, and cleaning of the Building, the amount paid or
payable for all supplies including all supplies and
necessities which are occasioned by everyday wear and tear,
the costs of climate control, window and exterior wall
cleaning, telephone and utility costs, the cost of accounting
services necessary to compute the rents and charges payable by
tenants of the Building, fees for management, legal,
accounting, inspection and consulting services, the cost of
guards and other protection services, the cost of locks, keys,
alarms and related security equipment, payments for general
maintenance and repairs to the plant and equipment supplying,
the amount paid for premiums for all insurance and all amounts
payable in accordance with ground leases, easements, or right
of way appurtenant to the Building. Operating Costs shall not,
however, include interest on debt, capital improvements.
capital retirement of debt, depreciation, costs properly
chargeable to capital account, and costs directly charged by
the Landlord to any tenant or tenants. The reference to
"Building" in this subparagraph (c)(i) shall include all
related facilities including interior Lease Premises,
sidewalks, grounds, elevators, and other public areas
contained in and around the Building as well as landscaping,
parking areas, and exterior walkways and areas. By setting
forth the above items which may or could be included within
Operating Costs, it is not meant to indicate or imply that all
of such activities or services will be provided by the
Landlord.
(ii) The amount of Operating Costs
attributed to the Leased Premises for any year or portion of
year shall be the amount of such Operating Costs multiplied by
Tenant's Proportional Share.
(d) If only part of the first or final calendar year
is included within the Term, the amount of Real Estate and
operating Costs payable by the Tenant for such period shall be
estimated by the Landlord acting reasonably and adjusted
proportionately on a per diem basis and shall be payable upon
demand as soon as such amount has been ascertained by the
Landlord.
7.2 Payment of Additional Rent
Any Additional Rent payable by the Tenant under Section 7.1
hereof shall be paid as follows, unless otherwise provided:
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(a) During the Term, the Tenant shall pay to the
Landlord at the same time as the payment of the Base Rent, one twelfth
(1/12th) of the amount of such Additional Rentals as estimated by the
Landlord in advance acting reasonably to be due from the Tenant for a
twelve month period of time. Such estimate may be adjusted from time to
time by the Landlord as actual Real Estate Taxes and Operating Costs
become known, and the Tenant shall pay installments of Additional
Rentals according to such estimate as periodically adjusted.
(b) If the aggregate amount of such estimated
Additional Rental payments made by the Tenant in any year of the Term
should be less than the Additional Rentals due for such year of the
Term, then the Tenant shall pay to the Landlord as Additional Rental
upon demand, the amount of such deficiency. Similarly, if the aggregate
amount of such estimated Additional Rental payments made by the Tenant
in any year of the Term should be more than the Additional Rentals due
for such year of the Term, then such surplus shall be credited to
future Additional Rent due and owing in the next subsequent year.
(c) Notwithstanding the foregoing, if the Landlord is
required to pay an amount which it is entitled to collect from the
tenants of the Building more frequently than monthly, or if the
Landlord is required to prepay any such amount, the Tenant shall pay to
the Landlord its proportionate share of such amount calculated in
accordance with this Lease within ten (10) days from receipt of written
demand.
(d) The Landlord shall, within ninety (90) days after
the end of each calendar year (or as soon thereafter as possible
reasonable), provide the Tenant a statement of the actual Real Estate
Taxes and Operating Costs incurred for the previous calendar year,
certified by the Landlord as to its accuracy. If the Tenant wishes to
dispute the Landlord's determination or calculation of such expenses
for any calendar year, the Tenant shall give the Landlord written
notice of such dispute within thirty (30) days after receipt of notice
from the Landlord of the matter giving rise to the dispute. If the
Tenant does not give the Landlord such notice within such time, the
Tenant shall have waived its right to dispute such determination or
calculation. In the event the Tenant disputes any such determination or
Calculation, the Tenant shall have the right to inspect the Landlord's
accounting records at the Landlord's accounting office and if, after
such inspection, the Tenant still disputes such determination or
calculation, a certification as to the proper amount made by an
independent certified public accountant selected by the Landlord shall
be final and conclusive. The Tenant agrees to pay the costs of such
certification. If such certification reveals that the amount previously
determined and calculated by the Landlord was incorrect and improper, a
correction shall be made and either the Landlord shall promptly return
to the Tenant any overpayment or the Tenant shall promptly pay to the
Landlord any underpayment that was based on such incorrect amount.
Notwithstanding the pendency of any dispute hereunder, the
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Tenant shall make payments based upon the Landlord's determination and
calculation until such determination and calculation has been established
hereunder to be incorrect.
8. BULBS, TUBES, BALLASTS
Tenant shall make any replacement of electric light bulbs,
tubes, and ballasts in the Leased Premises throughout the term and any renewal
thereof. The Landlord, in its sole discretion may adopt a system of revamping
and reballasting periodically on a group basis in accordance with good
practice.
9. METERS
Tenant shall pay as Additional Rental, on demand, the cost of
any metering which may be required by the Landlord to measure any excess usage
of electricity, water, or other utility or energy.
10. USE OF ELECTRICITY
10.1 Tenant's use of electricity in the Leased Premises shall
be separately metered and paid by Tenant to the supplying utility of the
Landlord's discretion.
10.2 If, for any reason, electricity is not separately metered
to Tenant, Landlord shall reasonably apportion Tenant's share of electrical
usage and Tenant shall pay the cost thereof as Additional Rent on the dates for
payment of Base Rent not occurring after billing of Tenant therefore by
Landlord.
11. TENANT REPAIR
11.1 If the Building, boilers, engines, pipes, or other
apparatus, or members or elements of the Building (or any of them) used for the
purpose of climate control of the Building, or if the water pipes, drainage
pipes electrical lighting, or other equipment of the Building or the roof or
outside walls of the Building or Real Property of Landlord become damaged or are
destroyed through any act or omission of the Tenant, its servants, agents,
employees, or its invitees, then the cost of the necessary repairs,
replacements, or alterations, shall be borne by the Tenant who shall pay such
cost to Landlord within ten (10) days from receipt of written demand thereof,
except to the extent such costs are reimbursed by insurance.
11.2 Tenant shall keep the Leased Premises in as good order,
condition, and repair as when they were entered upon. Tenant shall be
responsible for the cost of any repair, replacement or alteration of ceiling
tile, water pipes, sinks, toilets, plumbing, drainage pipes, electrical wiring,
electrical outlets, lighting, climate control, doors, locks (interior and
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exterior), door hardware, interior walls and flooring, roof if penetrated by
tenant as set forth in Section 30 or other portions of the Building or Real
Property of Landlord. If Tenant fails to keep the Leased Premises in such good
order, condition, and repair as required hereunder to the satisfaction of
Landlord, Landlord may restore the Leased Premises to such good order and
condition and make such repairs without liability to Tenant for any loss or
damage that may accrue to Tenant's property or business by reason thereof, and
upon completion thereof. Tenant shall pay to Landlord the costs of restoring the
Leased Premises to such good order and condition and of the making of such
repairs, within ten (10) days from receipt of written demand thereof.
11.3 Tenant shall deliver at the expiration of the Term hereof
or sooner upon termination of the Term, the Leased Premises in the same
condition as received except for reasonable wear and tear, and cause to be
removed at Tenant's expense furniture and equipment belonging to Tenant, signs,
notices, displays, and the like from the Leased Premises and repair any damage
caused by such removal.
11.4 In the event Landlord is responsible for cleaning service
under this Lease, Tenant shall leave the Leased Premises at the end of each
Business Day in a reasonably tidy condition for the purpose of allowing the
cleaning service to perform adequately.
11.5 Landlord reserves the right to enter into contracts for
preventive maintenance for all climate control and Tenant shall be responsible
for said costs.
12. ASSIGNMENT AND SUBLETTING
12.1 Tenant shall not permit any part of the Leased Premises
to be used or occupied by any persons other than the Tenant, any subtenants
permitted under Section 12.2, and the employees of the Tenant and any such
permitted subtenant. or permit any part of the Leased Premises to be used or
occupied by any licensee or concessionaire, or permit any persons to be upon the
Leased Premises other than the Tenant, such permitted subtenants, and their
respective employees, customers, and others having the lawful business with
them.
12.2 Tenant shall not assign or sublet or part with the
possession of all or part of the Leased Premises without the prior written
consent of Landlord, which consent shall not be unreasonably withheld; provided,
however, that the use of the Premises by the sublessee or assignee shall be
substantially the same as the use permitted by the Tenant, and provided that the
Tenant shall: submit in writing to Landlord (a) the name and legal composition
of the proposed subtenant or assignee; (b) the nature of the business proposed
to be carried on in the Leased Premises; (c) the terms and provisions of the
proposed sublease; (d) such reasonable financial and other information as the
Landlord may request concerning the proposed subtenant or assignee; (e)
assurances, adequate to the Landlord, of the future
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performance by the proposed subtenant or assignee under the Lease; (f) a payment
of $500.00 to the Landlord to defray expense of Landlord in reviewing the
aforementioned material, (g) payment of all Landlord's legal fees and related
expenses incurred as a result of the assignment or subletting. Any such consent
to any assignment or subletting shall not relieve the Tenant from its
obligations for the payment of all rental due hereunder and for the full and
faithful observance and performance of the covenants, terms and conditions
herein contained. No term of assignment or subletting shall extend beyond the
primary term of the lease, and any option periods under this Lease shall
terminate with respect to any the Tenant and any assignee or sublessee. Consent
of the Landlord to an assignment or subletting shall not in any way be construed
to relieve the Tenant from obtaining the consent of the Landlord to any further
assignment or subletting, and shall not bind Landlord to provide any services or
benefits to subtenant that Tenant had provided or committed to provide in
writing or otherwise. Any violation of this subsection shall be a non-curable
default, which allows the Landlord the right to possession of the Premises and
other rights of default against Tenant or anyone else occupying the Premises as
set forth in Section 35, despite efforts by Tenant to cure. Any rent collected
by Tenant from a sublessee in excess of the rate of rent under the Lease shall
be the property of the Landlord. Landlord shall have the option, in its sole
discretion, to demand that a sublessee pay rent directly to the Landlord. Any
sublease shall be on a sublease form provided by the Landlord.
12.3 If the Tenant is an entity other than an individual, the
transfer of an interest in more than fifty percent (50%) of such entity in
more than fifty percent (50%) of any type of equity security of such entity;
i.e., preferred stock, any class of common stock) shall constitute an assignment
for purposes of this Section which assignment shall require the same approval
and be subject to the same limitations pursuant to Section 12.2 as any other
assignment. The rights and obligations described in this Section 12.3 shall be
applicable regardless of whether the change in control occurs at one time or as
a cumulative result of several changes in ownership. The Tenant shall, upon
request of the Landlord, make available to the Landlord for inspection or
copying or both, all books and records of the Tenant which alone or with other
data show the applicability or inapplicability of this Section 12.3.
12.4 The proposed subtenant or assignee shall have at least
three (3) years of experience in the management and/or operation of the business
contemplated in the sublease or assignment of the Premises. Tenant shall provide
satisfactory evidence of this experience to the Landlord. Or, in lieu of such
actual experience, the proposed subtenant or assignee shall provide satisfactory
evidence to Landlord that the proposed subtenant or assignee will hire as
employees or independent contractor personnel competent to operate the business
contemplated in the sublease or assignment of the Premises.
12.5 If any interest holder of the Tenant shall fail or refuse
to furnish to the Landlord information or data requested by Landlord, verified
by the affidavit of such interest
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holder or other credible person, which data alone or with other data show the
applicability of Section 12.3, then such failure shall constitute an event of
default under this Lease.
13. MASTER DECLARATION OF PROTECTIVE COVENANTS
Tenant and employees and all persons visiting or doing
business with the Tenant in the Leased Premises shall be bound by and shall
observe the Master Declaration of Protective Covenants.
14. USE OF LEASED PREMISES
14.1 Except as expressly permitted by prior written consent of
the Landlord, the Leased Premises shall not be used other than as set forth on
Facing Page of this Lease, which use shall be non-exclusive. Landlord makes no
representation or warranty to the Tenant regarding the occupancy or use of any
lease space owned by the Landlord or leased to any other Tenant. All use of the
Leased Premises shall comply with the terms of this Lease and all applicable
laws, ordinances, regulations. or other governmental ordinances from time to
time in existence. Tenant shall not have more than one (1) person per two
hundred and fifty (250) square feet of useable space occupying the premises.
14.2 Tenant agrees that it will not keep, use, sell or offer
for sale in or upon the Leased Premises any articles, which may be prohibited by
any insurance policy in force time to time covering the Building. In the event
the Tenant's occupancy or conduct of business in or on the Leased Premises,
whether or not the Landlord has consented to the same, results in any increase
in premiums for the insurance carried from time to time by the Landlord with
respect to the Building, the Tenant shall pay any such increase in premiums as
Additional Rental within ten (10) days after bills for such additional premiums
shall be rendered by the Landlord in determining whether increased premiums are
a result of the Tenant's use or occupancy of the Leased Premises. A schedule
issued by the organization computing the insurance rate shall be conclusive
evidence of the several items and charges which make up such rate. The Tenant
shall comply with all reasonable requirements of the insurance authority or of
any insurer now or hereafter in effect relating to the Leased Premises.
15. TENANT'S INSURANCE
15.1 Landlord shall maintain fire and extended coverage
insurance on the Building and the Leased Premises in such amounts as Landlord
shall deem reasonable. Such insurance shall be maintained at the expense of
Landlord (but assessed to Tenant as a part of the Operational Costs), and
payments for losses thereunder shall be made solely to Landlord or the
mortgagees of Landlord as their interest shall appear. Tenant shall maintain at
its expense, in an amount equal to full replacement costs, fire and extended
coverage insurance
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on all of its personal property, including removable trade fixtures, located in
the Leased Premises. Tenant shall maintain insurance coverage for business
interruption, including relocation costs in the event of partial or total
destruction of the Premises. All Tenant's insurance must be in place and proof
of insurance provided to Landlord prior to Tenant's possession of the Premises.
Should Tenant's use cause the Landlord's insurance premiums to increase. Tenant
shall be solely responsible for the increase in the premium.
15.2 Tenant shall, at its sole Cost and expense, procure and
maintain through the term of this Lease, comprehensive general liability
insurance against claims for bodily injury or death and property damage
occurring in or upon or resulting from the Leased Premises, in standard form and
with such insurance company or companies as may be acceptable to Landlord, such
insurance to afford immediate protection, to the limit of not less than
$1,000,000.00 in respect of any one accident or occurrence, and to the limit of
not less than $100.000.00 for property damage, with not more than $5,000.00
deductible. Such comprehensive general liability Insurance shall name the
Landlord as an additional insured and shall contain blanket contractual
liability coverage which insures contractual liability under the indemnification
of Landlord by Tenant set forth in this Lease (but such coverage or the amount
thereof shall in no way limit such indemnification). Tenant shall maintain with
respect to each policy or agreement evidencing such comprehensive general
liability insurance and each policy or agreement evidencing the insurance
required pursuant to Section 15(l) above, such endorsements as may be required
by Landlord and shall at all times deliver to and maintain with Landlord a
certificate with respect to such insurance in form satisfactory to Landlord and
the mortgagees of Landlord. Tenant shall obtain a written obligation on the part
of each insurance company to notify Landlord at least ten days prior to
cancellation or modification of such insurance. Such policies or duly executed
certificates of insurance relating thereto shall be promptly delivered to
Landlord and renewals thereof as required shall be delivered to Landlord at
least thirty (30) days prior to the expiration of the respective policy terms.
If Tenant fails to comply with the foregoing requirements relating to insurance,
Landlord may obtain such insurance and Tenant shall pay to Landlord on demand
the premium cost thereof, together with interest thereon from the date of
payment by Landlord until repaid by Tenant at the rate of eighteen percent (18%)
per annum. Failure to comply with any provision of Paragraph 15 by the Tenant
shall constitute an event of substantial default justifying eviction of the
Tenant.
16. CANCELLATION OF INSURANCE
It any insurance policy upon the Building or any part thereof
shall be canceled or cancellation shall be threatened or the coverage thereunder
reduced or threatened to be reduced in any way by reason of the use or
occupation of the Leased Premises or any part thereof by the Tenant or by any
assignee or subtenant of the Tenant or by anyone permitted by the Tenant to be
upon the Leased Premises, and if the Tenant fails to remedy the condition giving
rise to Cancellation, threatened cancellation, or reduction of coverage within
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twenty-four (24) hours after notice, the Landlord may, at its option, enter upon
the Leased Premises and attempt to remedy such condition and the Tenant shall
pay the cost thereof to Landlord within ten (10) days from receipt of written
demand therefor, Landlord shall not be deemed to be liable for any damage or
injury caused to any property of the Tenant or of others located on the Leased
Premises as a result of such entry. After such ten (10) day period, interest on
such cost shall accrue at the rate of eighteen percent (18%) per annum. In the
event that the Landlord shall be unable to remedy such condition, then Landlord
shall have all of the remedies provided for in the Lease in the event of a
default by Tenant. Notwithstanding the foregoing provisions of this Section 16,
if Tenant fails to remedy as aforesaid, Tenant shall be in default of its
obligation hereunder and Landlord shall have no obligation to attempt to remedy.
17. OBSERVANCE OF LAW
Tenant shall comply with all provisions of law in effect
during the Term and any renewal terms, or while otherwise in possession of the
Premises, including without limitation, federal, state, county and city laws.
zoning requirements, licensing requirements, any other ordinances, and
regulations and any other governmental, quasi-governmental or municipal
regulations which relate to the partitioning, equipment operation, alteration,
occupancy and use of the Leased Premises, and to the making of any repairs,
replacements, alterations, additions, changes, substitutions, or improvements of
or to the Leased Premises including signage of any kind, whether located on or
off the Premises. Moreover, the Tenant shall comply with all police, fire, and
sanitary regulations imposed by any federal, State, county or municipal
authorities, or made by insurance underwriters, and to observe and obey all
governmental and municipal regulations and other requirements governing the
conduct of any business conducted in the Leased Premises during the Term and any
renewal terms.
18. WASTE AND NUISANCE
Tenant shall not commit, suffer, or permit any waste or damage
or disfiguration or injury to the Leased Premises or the Real Property of
Landlord or common areas in the Building or the fixtures and equipment located
therein or thereon, or permit or suffer any overloading of the electrical
systems or telephone systems Or 14VAC systems, or overloading of the floors
thereof and shall not place therein any safe, heavy business machinery,
computers, data processing machines, or other heaving things without first
obtaining the consent in writing of the Landlord and, if requested, by
Landlord's superintending architect, and not use or permit to be used any part
of the Leased Premises for any dangerous, noxious or offensive trade or
business, and shall not cause or permit any nuisance, noise, or action in, at or
on the Leased Premises. Landlord, in its sole discretion, shall determine what
constitutes waste or nuisance under this Section. Landlord shall not be liable
to Tenant for waste or nuisance committed by any other tenant on the Real
Property. If
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this should occur, Tenant's sole remedy is against the other tenant committing
waste or nuisance.
19. ENTRY BY LANDLORD
Tenant agrees to and shall permit the Landlord, its servants
or agents to enter upon the Leased Premises at any time and from time to time
for the purpose of inspecting and of making repairs, alterations, or
improvements to the Leased Premises or to the Building, or for the purpose of
having access to the under-floor ducts, or to the access panels to mechanical
shafts (which the Tenant agrees not to obstruct), and the Tenant shall not be
entitled to compensation for any inconvenience, nuisance or discomfort
occasioned thereby. The Landlord shall also have the right of entry to remedy
any condition which Landlord, in its reasonable discretion, believes may cause
cancellation or reduction of any insurance maintained by Landlord on the
Building. The Landlord shall have the right to enter the Leased Premises in
order to check, calibrate, adjust and balance controls and other parts of the
heating, ventilating, and climate control system at any time. The Landlord shall
attempt to proceed hereunder after reasonable notice has been given to Tenant,
if possible, and in such manner as to minimize interference with the Tenant's
use and enjoyment of the Leased Premises. For the purpose of this Section and
for all other purposes set forth in this Lease, Landlord shall have and retain a
key with which to unlock all doors in, upon and about the Leased Premises and
Landlord shall have the right to use any and all means which Landlord may deem
proper to open said doors in an emergency, in order to obtain entry to the
Leased Premises. Tenant shall not change exterior or interior door locks without
prior written permission of Landlord. Tenant shall provide Landlord with keys to
any new locks.
20. EXISTING PREMISES
Tenant shall permit the Landlord or its agents to exhibit and
show the Leased Premises to prospective tenants during normal Business Hours of
the last six (6) months of the Term or any renewal thereof, or if Tenant is in
default of any term of the Lease. Tenant shall not hold the Landlord liable for
any damages resulting from such entry, absent gross negligence on the part of
the Landlord.
21. ALTERATIONS
21.1 In the event Tenant desires to make any alterations to
any portion of the Building, Real Property or the Leased Premises, including
alterations to accommodate Tenant's for needs for extra services in addition to
those provided by the Landlord under Section 29, unless the Tenant has supplied
the Landlord with a list of additional services necessary to meet Tenant's
requirements, and said list is attached and incorporated into this lease at the
date of execution by Landlord, Tenant is deemed to have accepted the existing
services to the Leased Premises as sufficient. Any additional services required
by the Tenant
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shall be deemed an Alteration to be paid by the Tenant under Section 21 of the
Lease. Tenant shall give written notice of the proposed alterations to Landlord
and shall not proceed with work on the alterations without Landlord's prior
written consent (which consent in the sole and absolute discretion of Landlord
may be withheld). For purposes of this Paragraph 21 "material alterations" shall
mean any alterations that affect the exterior, structure, or mechanical
components of the Building, or modify the basic utility and function of the
Building. Any material alterations shall at once become the property of the
Landlord and shall be surrendered to the Landlord upon termination of the Lease.
Any breach of the terms of this section shall be a non-curable event of default.
21.2 No alterations shall be commenced until the Tenant shall
have procured and paid for, so far as the same may be required from time to
time, all permits and authorizations of all municipal departments and
governmental subdivisions having jurisdiction. Landlord shall in its sole and
absolute discretion have the right to require, prior to commencement of such
alterations, a letter of credit, bond or other satisfactory financial instrument
assuring faithful performance and lien free completion of such alterations.
21.3 Any alterations shall be made within a reasonable time
and in a good and workmanlike manner and in compliance with all applicable
permits and authorizations and building and zoning laws and with all other laws,
ordinances, orders, rules, regulations and requirements of all federal, state
and municipal governments, departments, commissions, boards and officers.
21.4 In no event shall Tenant, by reason of such alterations,
be entitled to any abatement, allowance, reduction or suspension of the Rent and
other charges herein reserved of required to be paid hereunder, nor shall
Tenant, by reason thereof, be released of or from any other obligations imposed
upon Tenant under this Lease.
21.5 Landlord shall have no responsibility to Tenant or to any
contractor, subcontractor, supplier, materialman, workman, or other person,
firm, or corporation who shall engage or participate in any alterations, and
Landlord shall be entitled to post notices of nonliability on the Leased
Premises. If any lens for labor and materials supplied or claimed to have been
supplied to the Leased Premises shall be filed, Tenant shall within fifteen (15)
days of the filing of such lien discharge such lien or furnish a bond, a letter
of credit or title insurance protection to Landlord which in the sole and
absolute discretion of Landlord affords its sufficient protection during
Tenant's timely and good faith contesting of such liens. Tenant shall indemnify
and hold Landlord harmless against any liability, loss, damage, cost or expense,
including attorneys fees, on account of such liens.
21.6 The Tenant may remove from the Leased Premises any
fixtures installed by the Tenant, as well as those of its office supplies and
movable office furniture and equipment which are not attached to the Building,
provided: (i) such removal is made prior to
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the termination of the Term of this Lease; (ii) the Tenant is not in default of
any obligation or covenant under this Lease at the time of such removal; and
(iii) the Tenant promptly repairs all damage caused by such removal so that the
Leased Premises (where such items shall have been located) shall be placed in
the condition of such Leased Premises at the Inception of this Lease, subject to
reasonable deterioration and wear and tear. Additionally, if the Landlord so
requests in writing, the Tenant will, prior to the termination of this Lease,
remove any and all alterations, additions, fixtures, equipment and property
placed or installed by it in the Leased Premises and will repair any damage
caused by such removal to the condition at the inception of this Lease.
reasonable deterioration and wear and tear excepted. If the Tenant does not
elect or is not required to remove such alterations, additions fixtures and
equipment, such property shall become the property of the Landlord and shall
remain upon and be surrendered with the Leased Premises as a part thereof at the
termination of this Lease, the Tenant hereby waiving all rights to any payment
or compensation therefore.
22. GLASS
Tenant shall pay on demand the cost of replacement with as
good quality and size of any glass broken on the Leased Premises including
outside windows and doors of the perimeter of the Leased Premises (including
perimeter windows in the exterior walls) during the continuance of this Lease,
unless the glass shall be broken by the Landlord, its servants, employees or
agents acting on its behalf.
23. SIGNS, DRAPES, SHUTTERS AND BANNERS
23.1 Tenant shall not place or permit to be placed in or upon
the Leased Premises where visible from the outside of the Building, or outside
the Leased Premises, any signs, notices, drapes, shutters, blinds or displays of
any type without the prior written consent of Landlord, which consent shall not
be unreasonably withheld.
23.2 Landlord reserves the right in Landlord's sole discretion
to place and locate on any roof or exterior of the Building such signs, notices,
displays, and, similar items as Landlord deems appropriate in the proper
operation of the Building.
24. NAME OF BUILDING
Tenant shall not refer to the Building by any name other than
that designated from time to time by the Landlord. nor use such name for any
purpose other than that of the business address of the Building assigned to it
by the Landlord.
25. SUBORDINATION AND ATTORNMENT
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25.1 At Landlord's option, this Lease shall be subject to and
subordinate to all mortgage (including any deed of trust and mortgage
securing bonds and all indentures supplemental thereto) and to all underlying,
superior, ground or land leases which may now or hereafter encumber the Real
Property of which the Leased Premises are a part, and all renewals,
modifications, consolidations, replacements and extensions thereof of such
mortgages and leases which may now or hereafter affect the Leased Premises or
any part thereof. The Tenant hereby constitutes and appoints the Landlord its
agent and attorney, which power of attorney is coupled with an interest, for the
purpose of executing any subordination, acknowledgment, or agreement required
by a mortgagee, lender or lessor of Landlord.
25.2 The Tenant agrees that in the event that any holder of
any mortgage, indenture, deed of trust, or other encumbrance encumbering any
part of the Real Property becomes mortgagee in possession of the Leased
Premises, the Tenant will pay to such mortgagee all Rent subsequently payable
hereunder. Further, the Tenant agrees that in the event of the enforcement by
the trustee or the beneficiary under or holder or owner of any such mortgage,
deed of trust, land or ground lease of the remedies provided for by law or by
such mortgage, deed of trust, land or ground lease, the Tenant will, upon
request of any person or party succeeding to the interest of the Landlord as a
result of such enforcement, automatically become the tenant of and attorns to
such successor-in-interest without changing the terms or provisions of this
Lease. Upon request by such successor-in-interest and without cost to the
Landlord or such successor-in-interest, the Tenant shall execute, acknowledge
and deliver an instrument or instruments confirming the attornment herein
provided for.
26. ACCEPTANCE OF PREMISES
26.1 Taking possession of the Leased Premises by Tenant shall
be conclusive evidence as against Tenant that the Leased Premises were in good
and satisfactory condition when possession was taken and acknowledgment of
completion in full accordance with the terms of this Lease.
26.2 Tenant agrees that there is no promise, representation,
or undertaking by or binding upon the Landlord with respect to any alteration,
remodeling, or redecorating of or installation of equipment or fixtures in the
Leased Premises, except such, if any, as were expressly set forth in this Lease
or the Typical Plan Schedule attached hereto.
26.3 Landlord reserves the right to relocate the Tenant from
the existing premises to a substitute premises within the property (Landlord's
building, shopping center or complex as the case may be) selected by the
Landlord. The aforesaid right to relocate shall be exercisable at any time
during the term or option period by delivering written notice of LANDLORD'S
intention not less than ninety (90) days In advance. Tenant shall notify
Landlord via certified mail within thirty (30) days of notice of its intent of
acceptance or
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rejection. Should Tenant notify Landlord of rejection of premises selected by
Landlord, Tenant may terminate this Lease Agreement and vacate prior to the end
of the ninety (90) day notice period provided by Landlord. Tenant's right of
termination in this section is not applicable in situations of fire or other
cause set forth in Section 31.
27. ESTOPPEL CERTIFICATES
Tenant agrees that it shall at any time and from time to time
upon not less than five (5) days' prior notice execute and deliver to the
Landlord a statement in writing certifying that this Lease is unmodified and in
full force and effect (or, if modified, stating the modifications and that the
same is in full force and effect as modified), the amount of the annual rental
then being paid hereunder, the dates to which the rent, by installment or
otherwise, and other charges hereunder have been paid. and whether or not there
is any existing default on the part of the Landlord of which the Tenant has
knowledge and such other Information reasonably required by Landlord or its
mortgagees or any other party with whom Landlord is dealing. Any such statement
may be relied upon conclusively by any such party. Tenant's failure to deliver
such statements within such time shall be conclusive upon the Tenant that this
Lease is in full force and effect, except as and to the extent any modification
has been represented by Landlord, and that there are no uncured defaults in
Landlord's performance, and that not more than one (1) month's rent has been
paid in advance.
LANDLORD'S COVENANTS
Landlord covenants and agrees with the Tenant as follows:
28. QUIET ENJOYMENT
Landlord covenants and agrees with Tenant that upon Tenant
paying rent and other monetary sums due under the lease, performing its
covenants and conditions under the Lease, Tenant shall and may peaceably and
quietly have, hold and enjoy the Leased Premises for the term, subject, however,
to the terms and limitations of the Lease and of any of the ground leases,
mortgages, or deeds of trust referred to in Section 25, and the limitations of
Landlord's liability for acts of other tenants and third parties contained in
Sections 18 and 33.
29. SERVICES
29.1 Landlord agrees to provide, at its cost, utility services
such as electrical, gas, water and sewer), HVAC services (such as heating,
ventilation and cooling), and telephone connections into the Building in such
capacity as shall be sufficient to meet building design requirements. Tenant
shall be responsible for assessing its needs and arranging for procurement of
additional services to meet its needs prior to occupancy. In this
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regard, Tenant represents that it has no requirements in excess of those
provided in the building design for utility services and telephone capacity
relating to the operations that Tenant intends to conduct in the Leased Premises
as permitted in accordance with the terms of this Lease. Unless otherwise
treated as part of the Tenant Finish items to be installed as part of this
Lease, all connection charges and all outlets, risers, wiring, piping, duct work
or other means of distribution of such services within the Leased Premises
unless shown on the Exhibits hereto shall be supplied by Tenant at Tenant's sole
expense. Tenant covenants and agrees that at all times its use of any such
services shall never exceed the capacity of the mains, feeders, ducts, and
conduits bringing the utility services to the Building; provided, however, that
Tenant may increase the capacity of the mains, feeders, ducts and conduits
aforementioned if Tenant pays for and performs all necessary work therefore
subject to Landlord's prior written approval, which approval shall not be
unreasonably withheld. Tenant shall be solely responsible for procuring of
telephone equipment and services. Tenant shall pay all charges incurred by it
for any utility services used on the Leased Premises and any maintenance charges
for utilities and shall furnish all electric light bulbs and tubes. Landlord
shall not be liable for any interruption or failure of utility services on the
Leased Premises, unless due to the affirmative or negligent acts of Landlord.
29.2 Provided that the Tenant has no special or extraordinary
requirements, the Landlord shall contract to provide air conditioning and
heating for the occupied portion of the Leased Premises during the Term, at such
temperatures and in such amounts as may be reasonably required, in the
Landlord's sole judgment, for comfortable use and occupancy under normal office
conditions, from 7:00 a.m. to 6:00 p.m. on Monday through Friday, and 7:00 a.m.
to 12:00 noon on Saturday, but not on Sundays or Holidays observed by the
Building. Tenant shall pay for the costs of said climate control services under
Paragraph 7.1.c. or Paragraph 11 as may be applicable. In the event the Tenant
has special requirements for air conditioning and heating, Tenant shall pay for
the cost to provide air conditioning and heating at such temperatures and in
such amounts as may be reasonably required as an alteration under Section 21 of
the Lease. Alternatively, at Landlord's sole discretion, the Landlord may treat
said costs as Operating Costs under Section 7.1(c) of the Lease.
29.3 No slowdown, interruption. stoppage, or malfunction of
any services identified in Section 29 shall constitute an eviction or
disturbance of the Tenant's use and possession of the Leased Premises or the
Building or a breach by the Landlord of any of its obligations under this Lease,
nor tender the Landlord liable for damages or entitle the Tenant to be relieved
from any of its obligations under this Lease (including the obligation to pay
Rent), nor grant the Tenant any right of setoff or recoupment. In no event shall
the Landlord be liable for damages to persons or property, or be in default
under this Lease, as a result of such slowdown, interruption, stoppage, or
malfunction. In the event of any such interruption, however, the Landlord shall
use reasonable diligence to restore such service. The Tenant agrees that if any
payment of Rent shall remain unpaid for more than ten (10) days after it shall
become due, the Landlord may, without notice to the Tenant, discontinue
furnishing any
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or all of such services until all arrearages of Rent have been paid in full, and
the Landlord shall not be liable for damages to persons or property for any such
discontinuance or consequential damages resulting therefrom, nor shall such
discontinuance in any way be construed as an eviction or constructive eviction
of the Tenant or cause an abatement of Rent or operate to release the Tenant
from any of the Tenant's obligations under this Lease.
30. REPAIR AND MAINTENANCE BY LANDLORD
Subject to the other provisions of this Lease imposing
obligations therefor upon the Tenant, Including but not limited to Tenant Repair
in Section 11, the Landlord shall as necessary or when required by governmental
authority, repair, replace and maintain the external and structural parts of the
Building, to include the roof provided that the roof has not been penetrated by
Tenant, and grounds which do not comprise a part of the Leased Premises and are
not leased to others and shall perform such repairs, replacements and
maintenance with reasonable dispatch, in a good and workmanlike manner. The
Landlord shall not be liable for any damages direct or indirect or consequential
or for damages for personal discomfort, illness, or inconvenience of the Tenant
or the Tenant's servants, clerks, employees, invitees, or other persons by
reason of failure to repair such equipment facilities or systems or reasonable
delays in the performance of such repairs, replacements, and maintenance, unless
caused by the deliberate act or omissions or the negligence of the Landlord, its
servants, agents or employees.
31. FIRES, ETC.
If the Building shall be partially damaged by fire or other
cause not resulting from the act or omission of Tenant, Tenant's employees,
agents, contractors, customers, licensees or invitees, the damages shall be
repaired by and at the expense of Landlord, and the Rent due hereunder shall be
apportioned according to the part of the Leased Premises which is usable by
Tenant until such repairs are made. If such partial damage is due to the action
or omission of Tenant or Tenant's employees, agents, contractors, licensees, or
Tenant's customers or invitees who Tenant negligently leaves in a position to
cause such partial damage, there shall be no apportionment or abatement of Rent
due hereunder by Tenant, and the debris, if any, shall be removed by and at the
expense of Tenant. No penalty shall accrue for reasonable delay which may arise
by reason of adjustment of fire insurance on the part of Landlord or Tenant, for
reasonable delay on account of shortages of labor or materials, acts of God, or
any other cause beyond Landlord's control, Landlord shall not be obligated to
restore fixtures, improvements, or other property of Tenant.
Total Destruction. If the Building should be totally destroyed
by fire, tornado, or other casualty, or if it should be so damaged that
rebuilding or repairs to the Leased Premises cannot be completed or commenced
within one hundred eighty (180) days after the date upon which Tenant is
notified by Landlord of such damage (or within one hundred
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eighty (180) days after the date on which Landlord otherwise becomes aware of
such damage), this Lease shall terminate and the rent shall be abated during the
unexpired portion of this Lease, effective upon the date of the occurrence of
such damage. Notwithstanding the above termination provisions, the one hundred
eighty day period for completion of repairs or rebuilding may be extended by the
Landlord in its sole discretion in the event that the processing of insurance
claim or claims prevents the completion of rebuilding or repairs within one
hundred eighty days.
32. CONDEMNATION
If all or any part of or interest in the Leased Premises shall
be taken as a result of the exercise of the power of, eminent domain or purchase
in lieu thereof, this Lease shall terminate as to the part so taken as of the
date of taking. If a part of or interest in the Leased Premises, or if a
substantial portion of the Building is so taken, either Landlord or Tenant shall
have the right to terminate this Lease as to the balance of the Leased Premises
by written notice to the other within thirty (30) days after the date of taking;
provided, however, that a condition to the exercise by Tenant of such right to
terminate shall be that the portion of the Leased Premises or Building taken
shall be of such extent and nature as to substantially handicap, impede, or
impair Tenant's use of the Leased Premises, or the balance of the Leased
Premises remaining, for the purposes for which they were leased, in the event of
any taking, Landlord shall be entitled to any and all compensation, damages,
income, rent and awards with respect thereto except for an award, if any,
specified by the condemning authority for the fixtures and other property that
Tenant has the right to remove upon termination of this Lease and the value of
the unexpired Lease term if any. Tenant shall have no claim against Landlord for
the value of any unexpired term. In the event of a partial taking of the Leased
Premises which does not result in a termination of this Lease, the Rent
thereafter to be paid shall be equitably reduced. Termination as provided herein
with respect to a total or partial taking shall be without prejudice to the
rights of either Landlord or Tenant to recover compensation and damages caused
by condemnation from the condemner as hereinafter provided. The rights and
obligations by Landlord and Tenant with respect to a taking or partial taking
shall be provided herein (any statute, principle of law or rule of equity to the
contrary notwithstanding), and each of the parties agree to cooperate with the
other and to do everything necessary to effect the results herein described.
Landlord and Tenant shall each have the right to claim separate awards
consistent with the terms of this Lease or to litigate the matter of the taking
and damages or awards. In the event of a taking or partial taking during the
term of the Lease, all sums awarded as compensation for the loss or damage to
the property or the Building, fixtures and permanently attached equipment.
except as set forth above, shall be awarded to Landlord; and all sums awarded as
compensation for loss or damage to Tenant's equipment and other personal
property and as compensation for loss of or detriment to the business of Tenant
upon the Leased Premises and for loss of anticipated profits of such business
shall be awarded to Tenant. If, under the laws, rules or procedures regulating
any such taking or partial taking, it shall not be possible for the parties to
obtain in
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such proceedings segregation of awards as herein above prescribed, then the
entire award or the aggregate of the awards as may be adjudged shall be paid to
Landlord. The foregoing provisions of this paragraph are subject to the terms of
any deed of trust conveying the Leased Premises, the Building, or Real Property
now or hereafter in existence, and to which Landlord is a party.
33. LOSS AND DAMAGE
Landlord shall not be liable to Tenant or Tenant's employees,
agents, patrons or visitors, or to any other person whomsoever, for any injury
to person or damage to property in or about the Leased Premises caused by the
negligence or affirmative acts of Tenant, or any other tenant or third party on
the Real Property, its agents, servants, or employees, or of any other person
entering upon the Leased Premises under express or implied invitation of Tenant,
or caused by the Building or any obligation of Tenant to maintain the Building,
or caused by leakage of gas, oil, water or steam, or by electricity emanating
from the Building, and Tenant agrees to indemnify Landlord and hold it harmless
from any and all loss, expense, or claims, including attorneys' fees, arising
out of such damage or injury.
34. DELAYS
Whenever and to the extent that the Landlord shall be unable
to fulfill or shall be delayed or restricted in the fulfillment of any
obligation hereunder in respect to the supply or provision Of any service or
utility or the doing of any work, or the making of any repairs by reason of
being unable to obtain the material goods, equipment, service, utility,
insurance proceeds or labor required to enable it to fulfill such obligation or
by reason of any statute, law, or any regulation or order passed or made
pursuant thereto or by reason of the order passed or made pursuant thereto or by
reason of the order of direction of any administrator, controller, or board or
any governmental department or officer or other authority, or by reason of not
being able to obtain any permission or authority required thereby or by reason
of any other cause beyond its control whether of the foregoing character or not,
including any delay caused by the processing of insurance claims, the Landlord
shall be entitled to extend the time for fulfillment of such obligation by a
time equal to the duration of such delay or restriction, and the Tenant shall
not be entitled to compensation for any inconvenience, nuisance or discomfort
thereby occasioned.
35. DEFAULT
35.1 The following events shall be deemed to be events of
default by Tenant under this Lease:
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(a) The failure of Tenant to timely and fully pay any
installment of Rent or other charge or money obligation herein required
to be paid by Tenant. Rent is due and shall be paid in advance on the
first (1st) day of each month during the Term hereof, and Tenant shall
be in default as set forth in Section 4.
(b) The failure of Tenant to perform, or if not
immediately curable, to commence performance of (and diligently pursue
performance thereafter), any one or more of its other covenants under
this Lease within three (3) days after written notice to Tenant
specifying the covenant or covenants Tenant has not performed.
(c) Tenant becomes insolvent, or makes a transfer in
fraud of creditors, or makes an assignment for the benefit of
creditors, or admits in writing its inability to pay its debts as they
become due.
(d) The attachment, seizure, levy upon or taking of
possession by any creditor, receiver, or custodian of any portion of
the property of Tenant.
(e) The instituting of proceedings in a court of
competent jurisdiction for the involuntary bankruptcy arrangement,
reorganization, liquidation, or dissolution of Tenant under the U.S.
Bankruptcy Code (as now or hereafter in effect) or any state bankruptcy
or insolvency act or for its adjudication as a bankrupt or insolvent or
for the appointment of a receiver of the property of Tenant, and said
proceedings are not dismissed or any receiver, trustee, or liquidator
appointed herein is not discharged within sixty (60) days after the
institution of said proceedings of Tenant and said proceedings are not
dismissed.
(f) Any change occurs in the financial condition of
Tenant or any guarantor, which Landlord considers materially or
significantly adverse.
(g) The instituting of proceedings for the voluntary
bankruptcy arrangement, reorganization, liquidation, or dissolution of
Tenant under the U.S. Bankruptcy Code (as now or hereafter in effect)
or any state bankruptcy or insolvency act, or if Tenant shall otherwise
take advantage of any state or federal bankruptcy or insolvency act as
a bankrupt or insolvent.
(h) Tenant shall cease to conduct its normal business
operations in the Leased Premises or shall vacate or abandon same for a
period of at least ten (10) days.
(i) Tenant shall repeatedly default in the timely
payment of Rent or any other charges required to be paid, or shall
repeatedly default in keeping, observing or performing any other
covenant, agreement, condition or provisions of this Lease,
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whether or not Tenant shall timely cure any such payment or other
default. For the purposes of this subsection, the occurrence of any
such defaults three (3) times during any twelve (12) month period shall
constitute a repeated default, regardless of cure by the Tenant. The
Parties agree that repeated default shall constitute a basis for
eviction, regardless of partial or total cure of the individual events
of default by Tenant.
35.2 No condoning, excusing, or overlooking by the Landlord of
any default, breach or non-observance by the Tenant at any time or times in
respect of any covenants, provisions, or conditions herein contained shall
operate as a waiver of the Landlord's right hereunder in respect of any
continuing or subsequent default, breach, or non-observance, or so as to defeat
or affect such continuing or subsequent default or breach, and no waiver shall
be inferred or implied by anything done or omitted by the Landlord save only
express waiver in writing. All rights and remedies of the Landlord in this Lease
contained shall be cumulative and not alternative.
36. REMEDIES OF LANDLORD
36.1 If an event of default set forth in Section 35.1 occurs,
including repeated default under Section 35. 1 (i), the Landlord shall have the
following rights and remedies, in addition to all other remedies at law or
equity, and none of the following whether or not exercised by the Landlord shall
preclude the exercise of any other right or remedy whether herein set forth or
existing at law or equity, and all such remedies shall be cumulative:
(a) Landlord shall have the right to terminate this
Lease by giving the Tenant notice in writing at any time. No act by or
on behalf of the Landlord, such as entry of the Leased Premises by the
Landlord to perform maintenance and repairs and efforts to relet the
Leased Premises, other than giving the Tenant written notice of
termination, shall terminate this Lease. If the Landlord gives such
notice, this Lease and the Term hereof as well as the right, title and
interest of the Tenant under this Lease shall wholly cease and expire
in the same manner and with the same force and effect (except as to the
Tenant's liability) on the date specified in such notice as if such
date were the expiration date of the Term of this Lease without the
necessity of re-entry or any other act on the Landlord's part. Upon any
termination of this Lease, the Tenant shall quit and surrender to the
Landlord the Leased Premises as set forth in Section 37.1. If this
Lease is terminated, the Tenant shall be and remain liable to the
Landlord for damages as hereinafter provided and the Landlord shall be
entitled to recover forthwith from the Tenant as damages an amount
equal to the total of:
(i) the cost, including reasonable
attorneys' fees, of enforcing any provision of this Lease,
defending counterclaims, crossclaims or third party actions,
and of recovering the Leased Premises:
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(ii) all Rent accrued and unpaid at the time
of termination of the Lease, plus interest thereon at the rate
provided in Section 36.1 (g); and
(iii) any other money and damages owed by
the Tenant to the Landlord.
In addition, the Landlord shall also be entitled to
recover from the Tenant as damages the amounts determined, at the
Landlord's election, under (iv) or (v) below:
(iv) the amount of Rent that would have been
payable hereunder if the Lease had not been terminated, less
the net proceeds, if any, received by the Landlord from any
reletting of the Leased Premises, after deducting all costs
incurred by the Landlord in finding a new tenant and reletting
the space, including costs of remodeling and refinishing space
for a new tenant, reasonable tenant inducements, reasonable
brokerage commissions or agents' commissions in connection
therewith, redecorating costs, attorneys' fees and other costs
and expenses incident to the reletting of the Leased Premises
(collectively referred to herein as "Reletting Costs");
provided, however, that the Landlord shall have no obligation
to relet or attempt to relet the Leased Premises. The Tenant
shall pay such damages to the Landlord on the days on which
the Rent would have been payable if the Lease had not
terminated; or
(v) the present value (discounted at the
rate of eight percent (8%) per annum) an the balance of the
Rent for the remainder of the stated Term of this Lease after
the termination date plus anticipated Reletting Costs, less
the present value (discounted at the same rate) of the fair
market rental value of the Leased Premises for such period. No
provision of this Lease shall limit or prejudice the right of
the Landlord to prove and obtain as damages by reason of any
termination of this Lease, an amount equal to the maximum
allowed by any statute or rule of law in effect at the time
when, and governing the proceedings in which, such damages are
to be proved, whether or not such amount be greater, equal to
or less than the amounts referred to above.
(b) The Landlord may, without demand or notice of any
kind to the Tenant, terminate the Tenant's right of possession (but not
the Lease) and re-enter and take possession of the Leased Premises or
any part thereof, and repossess the same as of the Landlord's former
estate and expel the Tenant and those claiming through or under the
Tenant, and remove the effects of any and all such persons (forcibly,
if necessary) and change the locks on the Leased Premises without
being deemed guilty
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of any manner of trespass, without prejudice to any remedies for
arrears of Rent of preceding breach of covenants and without
terminating this Lease or otherwise relieving the Tenant of any
obligation hereunder. Should the Landlord elect to re-enter as provided
in this Section 36.1(b), or should the Landlord take possession
pursuant to legal proceedings or pursuant to any notice provided for by
law, the Landlord may, from time to time, without terminating this
Lease, relet the Leased Premises or any part thereof for such term or
terms and at such rental or rentals, and upon such other conditions as
the Landlord may in its absolute discretion deem advisable, with the
right to make alterations and repairs to the Leased Premises. No such
re-entry, repossession or reletting of the Leased Premises by the
Landlord shall be construed as an election on the Landlord's part to
terminate this Lease unless a written notice of termination is given to
the Tenant by the Landlord. No such re-entry, repossession or reletting
of the Leased Premises shall relieve the Tenant of its liability and
obligation under this Lease, all of which shall survive such re-entry,
repossession or reletting. Upon the occurrence of such re-entry or
repossession, the Landlord shall be entitled to the amount of the
monthly Rent which would be payable hereunder if such re-entry or
repossession had not occurred, less the net proceeds, if any, of any
reletting of the Leased Premises after deducting all Reletting Costs
and all attorneys' fees, other costs and expenses incurred in the
re-entry, repossession and reletting procedures. The Tenant shall pay
such amount to the Landlord on the days on which the Rent or any other
sums due hereunder would have been payable hereunder if possession had
not been retaken. In no event shall the Tenant be entitled to receive
the excess, if any, of net Rent collected by the Landlord as a result
of such reletting over the sums payable by the Tenant to the Landlord
hereunder. If this Lease is terminated by operation of law as a result
of the Landlord's actions under this Section, then the Landlord shall
be entitled to recover damages from the Tenant as provided in Section
36.1 (a). The Landlord shall have the right to collect from the Tenant
amounts equal to such deficiencies and damages provided for above by
suits or proceedings brought from time to time on one or more occasions
without the Landlord being obligated to wait until the expiration of
the term of this Lease.
(c) In the event Landlord gives Tenant notice of
default or delivers to Tenant a Notice of Demand for Payment or
Possession pursuant to the applicable statute, any such notice will not
constitute an election to terminate the Lease unless Landlord expressly
states in any such notice that it is exercising its rights to terminate
the Lease.
(d) If the Tenant shall default in making any payment
required to be made by the Tenant (other than payments of Rent) or
shall default in performing any other obligations of the Tenant under
this Lease, the Landlord may, but shall not be obligated to, make such
payment or, on behalf of the Tenant, expend such sum as may be
necessary to perform such obligation. All sums so expended by the
Landlord with
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interest thereon at the rate provided in Section 36.1(g) shall be
repaid by the Tenant to the Landlord on demand. No such payment or
expenditure by the Landlord shall be deemed a waiver of the Tenant's
default nor shall it affect any other remedy of the Landlord by reason
of such default.
(e) If the Tenant shall default in making payment of
any Rent due under this Lease, the Landlord may charge and the Tenant
shall pay, upon demand, interest thereon at the rate provided in
Section 36.1(g), but the payment of such interest shall not excuse or
cure any default by the Tenant under this Lease. In addition to such
interest, the Tenant shall be responsible for the late charges set
forth in Section 36.3. Such interest and late payment penalties are
separate and cumulative and are in addition to and shall not diminish
or represent a substitute for any or all of the Landlord's rights or
remedies under any other provisions of this Lease.
(f) In any action of unlawful detainer commenced by
the Landlord against the Tenant by reason of any default hereunder, the
reasonable rental value of the Leased Premises for the period of the
unlawful detainer shall be deemed to be the amount of Rent reserved in
this Lease for such period.
(g) Whenever the Tenant shall be required to make
payment to the Landlord of any sum with interest, interest on such sum
shall be computed from the date such sum is due until paid, at an
interest rate equal to eighteen percent (18%) per annum or, if such
amount violates any then applicable law with respect to interest rates,
at the highest interest rate otherwise allowable under then applicable
law. Should Tenant be in default, Landlord may collect 18% interest
under this provision or $50.00 per day penalty under Paragraph 4,
whichever is greater.
(h) In addition to any damages described as being
collectable herein, damages will also include, in all cases, the
unamortized portion of any costs, expenses, or inducements provided by
the Landlord to the Tenant in connection with this Lease. Such expenses
include, without limitation, any tenant inducements paid directly to
the Tenant, expenses incurred in providing tenant improvements or other
similar improvements to the Leased Premises, and free rent periods or
reduced rent periods granted to the Tenant. All such expenses will be
amortized over the Term (or initial term, if applicable) of the Lease
and will be prorated in proportion to the total amount of time of the
Term of the Lease as compared to the time during which the Tenant
performed under the Lease without default.
(i) As used in this Lease, the terms "re-entry",
"take possession", "repossess" and "repossession" are not restricted to
their technical legal meaning.
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(j) Tenant hereby expressly waives, to the full extent
waivable, any and all right of redemption granted by or under any
present or future laws in the event of Tenant being evicted or
dispossessed for any cause, or in the event of Landlord obtaining
possession of the Leased Premises, by reason of the violation by Tenant
of any of the covenants or conditions of this Lease, or otherwise.
36.2 As additional security for the Tenant's performance of its
obligations under this Lease, the Tenant hereby grants to the Landlord a
security interest in and to all of the personal property of Tenant situated on
the Leased Premises, subject to a perfected purchase money security interest and
prior existing security interests, as security for the payment of all Rent and
other sums due, or to become due, under this Lease. Tenant shall execute such
documents as the Landlord may reasonably require to evidence the Landlord's
security interest in such personal property. If the Tenant is in default under
this Lease, such personal property shall not be removed from the Leased Premises
(except to the extent such property is replaced with an item of equal or greater
value) without the prior written consent of the Landlord. It is intended by the
parties hereto that the instrument shall have the effect of a security agreement
covering such personal property, and the Landlord may upon the occurrence of an
event of default set forth in Section 35.1 exercise any rights of a secured
party under the Uniform Commercial Code of the State of Arizona including the
right to take possession of such personal property and (after ten (10) days
notice to those parties required by statute to be notified) to sell the same for
the best price that can be obtained at public or private sale and out of the
money derived therefrom, pay the amount due the Landlord, and all costs arising
out of the execution of the provisions of this Section, paying the surplus, if
any, to the Tenant. It such personal property or any portion thereof shall be
offered at a public sale, the Landlord may become the purchaser thereof.
36.3 As part of the consideration for the Landlord's executing this
Lease, Tenant hereby waives a trial by jury and the right to interpose any
counterclaim or offset of any nature or description in any litigation between
the Tenant and Landlord with respect to this Lease, the Leased Premises and the
repossession hereof.
36.4 Tenant hereby acknowledges that late payment by Tenant to Landlord
of Rent and other sums due hereunder will cause Landlord to incur costs not
contemplated by this Lease, the exact amount of which will be extremely
difficult to ascertain. Such costs include, but are not limited to, processing
and accounting charges and late charges which may be imposed on Landlord by the
terms of any mortgage or trust deed covering the Real Property. Accordingly, if
any installment of Rent or any other sum due from Tenant shall not be received
by Landlord or Landlord's designee within five (5) days after such amount shall
be due, Tenant shall pay to the Landlord a late charge equal to ten percent
(10%) of such overdue amount. The parties hereby agree that such late charge
represents a fair and reasonable estimate of the costs Landlord will incur by
reason of late payment by Tenant. Acceptance of such late charge by Landlord
shall in no event constitute a waiver of Tenant's
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default with respect to such overdue amount, nor prevent Landlord from
exercising any of the rights and remedies granted hereunder.
37. END OF TERM
37.1 Upon the expiration or other termination of this Lease, the Tenant
shall vacate and surrender to the Landlord the Leased Premises, broom clean
condition, carpets professionally cleaned, dry wall repaired and in good order.
The Tenant shall remove all property of the Tenant, as directed by the Landlord.
Any property left on the Leased Premises at the expiration or other termination
of this Lease, or after the occurrence of any default as set forth in Section 35
may at the option of the Landlord either be deemed abandoned or be placed in
storage at a public warehouse in the name of and for the account of and at the
expense and risk of the Tenant. If such property is not claimed by the Tenant
within ten (10) days after such expiration, termination or the happening of an
event of default, it may be sold or otherwise disposed of by the Landlord. The
Tenant expressly releases the Landlord from any and all claims and liability for
damage to or loss of property left by the Tenant upon the Leased Premises at the
expiration or other termination of this Lease, and the Tenant hereby indemnifies
the Landlord against any and all claims and liability with respect thereto.
37.2 If the Tenant shall continue to occupy and continue to pay rent
for the Leased Premises after the expiration of this Lease with or without the
consent of the Landlord, and without any further written agreement, the Tenant
shall be a tenant from month to month at a monthly Base Rent equal to the last
full monthly Base Rent payment due hereunder times 1.5, and subject to all of
the additional rentals, terms, and conditions herein set out except as to
expiration of the Lease Term.
38. TRANSFER BY LANDLORD
In the event of a sale or other transfer by the Landlord of the
Building or a portion thereof containing the Leased Premises (including a
foreclosure or deed in lieu of foreclosure), the Landlord shall without further
written agreement be freed, released and relieved of all liability or
obligations under this Lease. The rights of Landlord under this Lease shall not
be affected by any such sale, lease or other transfer.
39. NOTICE
39.1 Any notice, request, statement, or other writing pursuant to this
Lease shall be deemed to have been given if sent by registered or certified
mail, postage prepaid, return receipt requested, to the party at the address
stated on the Facing Page of this Lease.
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39.2 Notice shall also be sufficiently given if and when the same shall
be delivered, in the case of notice to Landlord, to an executive officer of the
Landlord, or the managing agent, and in the case of notice to the Tenant or the
Guarantor of the Tenant, to the Leased Premises. Such notice, if delivered,
shall be conclusively deemed to have been given and received at the time of such
delivery. If in this Lease two or more persons are named as Tenant, such notice
shall also be sufficiently given if and when the same shall be delivered
personally to any one of such persons.
39.3 Any party may, by notice to the other, from time to time designate
another address in the United States or Canada to which notice mailed more then
ten (10) days thereafter shall be addressed.
40. GOVERNING LAW, VENUE AND COMMENCEMENT OF ACTION
40.1 This Lease shall be deemed to have been made in and shall be
construed in accordance with the laws of Maricopa County in the State of
Arizona. Venue shall be in Maricopa County in the State of Arizona.
40.2 Any claim, demand, right, or defense by Tenant that arises out of
this Lease or the negotiations that preceded this Lease shall be barred unless
Tenant commences an action thereon, or interposes a defense by reason thereof,
within six (6) months after the date of the inaction, omission, event, or action
that gave rise to such claim, demand, right, or defense.
40.3 Tenant acknowledges and understands, after having consulted with
its legal counsel, that the purpose of Paragraph 40.2 above is to shorten the
period within which Tenant would otherwise have to raise such claims, demands,
rights, or defenses under applicable laws.
41. PAYMENT IN UNITED STATES CURRENCY/CERTIFIED FUNDS
The rentals reserved herein and all other amounts required to be paid
or payable under the provisions of this Lease shall be paid in lawful money of
the United States. Landlord shall have the right in its sole and absolute
discretion to require that Rental and all other sums due by Tenant be paid in
certified funds.
42. LEASE ENTIRE AGREEMENT
The Tenant acknowledges that there are no covenants, representations,
warranties, agreements, or conditions expressed or implied, collateral or
otherwise forming part of or in any way affecting or relating to this Lease save
expressly set out in this Lease,
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the Facing Page, Exhibits, Riders, and Schedules attached hereto and that this
Lease, the Facing Page, Exhibits, Riders, and Schedules attached hereto and the
Rules and Regulations promulgated by Landlord in accordance with Section 13
hereof constitute the entire agreement between the Landlord and the Tenant and
may not be amended or modified except as explicitly provided or except by
subsequent agreement in writing of equal formality hereto executed by the party
to be charged therewith. The Tenant acknowledges that Tenant has provided review
of and input to this Lease, and therefore agrees that this Lease has been
jointly drafted by Landlord and Tenant.
43. BINDING EFFECT
Except as expressly provided herein, this indenture shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns, and all covenants and agreements herein
contained to be observed and performed by the Tenant shall be joint and several.
44. SECURITY DEPOSIT
The Tenant shall keep on deposit with the Landlord at all times during
the term of this Lease the Lease Deposit specified on the Lease Facing Page
hereof as security for the payment by the Tenant of the Rent and any other sums
due under this Lease and for the faithful performance of all the terms,
conditions, and covenants of this Lease, it being expressly understood that the
Lease Deposit shall not be considered advance payment of Rent or a measure of
Landlord's damages in the case of default by Tenant. Security deposit is due in
full prior to Tenant's possession of the Premises. If an event of a default set
forth in Section 35.1 occurs, the Landlord may (but shall not be required to)
use any such deposit, or so much thereof as necessary in payment of any Rent or
any other sums due under this Lease in default, in reimbursement of any expense
incurred by the Landlord, and to repair any damage or to clean, paint, carpet
and fruitage the Leased Premises after termination of possession by Tenant. In
such event the Tenant shall on written demand of the Landlord forthwith remit
to the Landlord a sufficient amount in cash to restore such deposit to its
original amount. If such deposit has not been utilized as aforesaid, such
deposit, or as much thereof as has not been utilized for such purposes, shall be
refunded to the Tenant upon full performance of this Lease by the Tenant.
Landlord shall have the right to commingle such deposit with other funds of the
Landlord, and such deposit need not be kept in an escrow or other segregated
account. Landlord shall deliver the funds deposited herein by the Tenant to any
purchaser of the Landlord's interest in the Leased Premises in the event such
interest be sold, and thereupon, the Landlord shall be discharged from further
liability with respect to such deposit.
45. INTERPRETATION
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Unless the context otherwise requires, the word "Landlord" wherever it
is used herein shall be construed to include and shall mean the Landlord, its
successors, and/or assigns, and the word "Tenant" shall be construed to include
and shall mean the Tenant, and the executors, administrators, successors and/or
assigns of the Tenant and when there are two or more tenants, or two or more
persons bound by the Tenant's covenants herein contained their obligation
hereunder shall be joint and several. The word "Tenant" and the personal
pronouns "his" or "it" relating thereto and used therewith shall be read and
construed as Tenants and "his," "its," or "their" respectively as the number and
gender of the party or parties referred to each require and the tense of the
verb agreeing therewith, shall be construed and agree with the said word or
pronoun so substituted. Time shall be of the essence in all respects hereunder.
46. SEVERABILITY
Should any provision or provisions of this Lease be illegal or not
enforceable, it or they shall be considered separate and severable from this
Lease and its remaining provisions shall remain in force and be binding upon the
parties hereto as though the said provision or provisions had never been
included.
47. CAPTIONS
The captions appearing within the body of this Lease have been inserted
as a matter of convenience and for reference only and in no way define, limit,
or enlarge the scope or meaning of this Lease or of any provision hereof.
48. RECORDING - SHORT FORM MEMO
This Lease shall not be recorded in its entirety. If recorded by
Tenant, this Lease may be terminated at Landlord's option as of the date of
recording and Landlord shall then have all rights and remedies provided in the
case of default by Tenant hereunder. If requested by Landlord, Tenant shall
execute in recordable form, a short form memorandum of Lease which may, at
Landlord's option, be placed of record.
49. NON-WAIVER OF DEFAULTS/LANDLORD'S DEFAULT
49.1 No waiver of any provision of this Lease shall be implied by any
failure of Landlord to enforce any remedy on account of the Violation of such
provision, even if such Violation be continued or repeated subsequently, and no
express waiver shall affect any provision other than the one specified in such
waiver and in that event only for the time and in the manner specifically
stated. No receipt of monies by Landlord from Tenant after the termination of
this Lease will in any way alter the length of the Term or Tenant's right of
possession hereunder or, after the giving of any notice, shall reinstate,
continue or
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extend the Term or affect any notice given Tenant prior to the receipt of such
monies, it being agreed that after the service of notice or the commencement of
a suit or after final judgment for possession of the Leased Premises, Landlord
may receive and collect any Rent due, and the payment of Rent shall not waive or
affect said notice, suit or judgment, nor shall any such payment be deemed to be
other than on account of the amount due, nor shall the acceptance of Rent be
deemed a waiver of any breach by Tenant of any term, covenant or condition of
this Lease. No endorsement or statement on any check or any letter accompanying
any check or payment of Rent shall be deemed an accord and satisfaction.
Landlord may accept any such check or payment without prejudice to Landlord's
right to recover the balance due of any installment or payment of Rent or pursue
any other remedies available to Landlord with respect to any existing Defaults.
None of the terms, covenants or conditions of this Lease can be waived by either
Landlord or Tenant except by appropriate written instrument.
49.2 If any act or omission by the Landlord shall occur which would
give the Tenant the right to damages from the Landlord or the right to terminate
this Lease by reason of a constructive or actual eviction from all or part of
the Lease Premises or otherwise, the Tenant shall not sue for such damages or
exercise any such right to terminate until (i) it shall have given written
notice of such act or omission to the Landlord and to the holder(s) of the
indebtedness or other obligations secured by any mortgage or deed of trust
affecting the Leased Premises or the Real Property, if the name and address of
such holder(s) shall previously have, been furnished to the Tenant, and (i) a
reasonable period of time for remedying such act or omission shall have elapsed
following the giving of such notice, during which time the Landlord and such
holder(s), or either of them, their agents or employees, shall be entitled to
enter upon the Leased Premises and do therein whatever may be necessary to
remedy such act or omission. Claims against insurance policies which cause delay
shall not be deemed an act or omission of the Landlord which shall give the
Tenant right to damages from the Landlord.
50. CERTAIN IMPOSITIONS
The Tenant shall pay, as Additional Rent, and shall indemnify the
Landlord against, and reimburse the Landlord on demand for, all future duties,
taxes, levies, imposts, charges and impositions, whatsoever, imposed, assessed,
levied or collected by or for the benefit of any federal, State or local
government or any political subdivision or taxing authority thereof, together
with any interest thereon and penalties with respect thereto on or in respect of
the Leased Premises, the Lease or by reason of the tenancy.
51. ENVIRONMENTAL MATTERS
51.1 The Tenant shall not cause or permit any Hazardous Substances (as
hereafter defined) to be generated, produced, brought upon, used, stored,
treated or disposed
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of in, on, under or about the Leased Premises, except that the Tenant shall be
entitled to store Hazardous Substances in the Leased Premises, in the ordinary
course of its business, but only with the prior written consent of the Landlord.
The Tenant agrees to indemnify, defend and hold the Landlord and its officers,
shareholders, directors, partners, employees, and agents harmless from any
claims, judgments, damages, penalties, fines, costs, liabilities (including sums
paid in settlement of claims), losses or expenses, including without limitation,
reasonable attorney's fees, reasonable consultant fees, and reasonable expert
fees, which are incurred or arise during or after the term of this Lease from or
in any way connected with the presence or suspected presence of Hazardous
Substances in, on, under or about the soil, groundwater, surface water, air or
soil vapor in, on under or about the Leased Premises arising out of the use of
the Leased Premises by the Tenant, its officers, employees, agents, invitees, or
contractors. Without limiting the generality of the foregoing, the
indemnification provided by this Section specifically shall cover costs incurred
in connection with any investigation of site conditions existing prior to, at or
after the date of execution of this Lease or any remediation, including, without
limitation, studies or reports as needed or required, remedial, removal, or
restoration work required by any federal, state, or local governmental agency or
political subdivision because of the presence or suspected presence of Hazardous
Substances in, on under or about the soil, groundwater, surface water, air or
soil vapor on, under or about the Leased Premises, arising out of the use of the
Leased Premises by the Tenant, its officers, employees, agents, invitees, or
contractors.
51.2 For purposes of this section, "Hazardous Substances" shall mean
any hazardous, toxic, radioactive, infectious, or carcinogenic substance
material, gas, or waste which is or becomes listed or regulated by any federal,
state, or local law or governmental authority or agency, including, without
limitation, petroleum and petroleum products in underground tanks, PCSs,
asbestos, lead, cyanide, DDT, and all substances defined as hazardous materials,
hazardous wastes, hazardous substances, or extremely hazardous waste under any
present or future federal, state, or local law or regulation, as amended from
time to time.
51.3 Those claims, judgments, damages, penalties, fines, costs,
liabilities, losses, and expenses for which each party and its officers,
shareholders, directors, partners, employees, and agents are indemnified
hereunder shall be reimbursable as incurred without any requirement of waiting
for the ultimate outcome of any litigation, claim or other proceeding, and the
indemnifying party shall pay such claims, judgments, damages, penalties, fines.
costs, liabilities, losses, and expenses as incurred by the indemnified party
within fifteen (15) days after notice itemizing the amounts incurred to the date
of such notice. Any defense of any claim against an indemnified party shall be
made by counsel satisfactory to the indemnified party.
51.4 The foregoing provisions of this Section shall survive the
termination of this Lease.
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52. DISABILITIES LAWS
52.1 Disabilities Laws as used herein shall include the Americans with
Disabilities Act and any state, county or local laws, statutes, or ordinances
applicable to the Leased Premises, the Tenant's business or the activities of
the Tenant in or about the Leased Premises. Disabilities Laws shall also include
any amendments thereto, regulations or court decisions interpreting such laws.
52.2 Tenant shall comply with all Disability Laws relating to the use
and occupancy of and access to the Leased Premises. Tenant shall be responsible
to perform its own assessment of the compliance of the Leased Premises with such
laws by surveying the facility, determining what barrier removal is readily
achievable and shall comply with alternative and new construction requirements
of Disability Laws. Tenant shall bear the sole cost and expense of determining
compliance. To the extent Tenant determines that compliance may require
alteration or future construction on the Leased Premises, Tenant shall notify
Landlord and shall obtain Landlord's consent to such alteration in advance.
Landlord shall not unreasonably withhold consent to reasonable alterations to be
made by Tenant in order to comply with the provisions of such Disabilities Laws.
In addition to any other reasonable requirements of Landlord for granting such
consent, Landlord's consent may be conditioned upon Tenant providing adequate
assurances of the proper completion of such alterations and payment therefor,
and that the alterations be in conformity to the aesthetic style and future
expansion plans for the Building.
Should Landlord incur any additional costs as a result of Tenant's
occupancy of the Leased Premises and obligations under Disability Laws, Tenant
shall reimburse Landlord for such costs.
52.3 Any costs incurred by Landlord in complying with Disabilities Laws
shall be considered a Common Area Maintenance charge, and Tenant shall pay his
pro-rata share of such charge pursuant to the provisions of Paragraph 51 of this
Lease.
53. SECURITY
Tenant shall be responsible for locking and keeping the Leased Premises
secure, as well as locking any outside door to the building in which the Leased
Premises are located upon entering or leaving the building.
52.4 Tenant hereby indemnifies Landlord and agrees to defend and hold
Landlord harmless from and against any and all losses, liabilities, damages,
injuries, costs (including, without limitation, court costs and reasonable
attorneys' fees), expenses and claims of any and every kind whatsoever caused by
Tenant or any of its subtenants,
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permittees, agents or representatives, which at any time or from time to time
may be paid, incurred or suffered by, or asserted against, Landlord for, with
respect to or as a direct or indirect result of, Tenant's failure to comply with
the requirements of paragraph 35(b) above including, without limitation, any
losses resulting from a diminution in the value of the Building and any losses,
liabilities, damages, injuries, costs, expenses or claims asserted or arising
under any Disabilities Laws.
52.5 Tenant covenants and agrees that: (i) Tenant will comply with any
reasonable requirements of Landlord and any mortgagee from time to time to
implement or facilitate the administration or enforcement of any or all of the
provisions of this Section; (ii) Tenant will certify annually, it so requested
by Landlord that it is in compliance with all Disabilities Laws; and (iii)
Tenant will cause every sublease and concession agreement to contain provisions
substantially the same as those in the preceding clauses (i) and (ii) and
expressly state that they are for the benefit of and may be enforced by Landlord
and any mortgagee (in addition to any other person Tenant may desire to name
therein).
52.6 Tenant's liability for the undertakings and indemnification's set
out in this Section shall survive the Termination or expiration of this Lease.
The provisions of this Section shall govern and control over any inconsistent
provisions of this Lease or any other agreement between Landlord (or any of its
affiliates) and Tenant.
52.7 THE UNDERSIGNED hereby grants the Landlord the right, from time to
time for the duration of the Lease term, to obtain a credit report from a credit
reporting agency on the undersigned and any spouse of the undersigned at the
owner's sole expense.
IN WITNESS WHEREOF, the parties hereto have executed these Lease
provisions as of the Lease Date on the Facing Page attached hereto.
LANDLORD:
LONE CACTUS CAPITAL GROUP, L.L.C.
By:
-----------------------------------------
Its:
--------------------------------------
TENANT:
IBIZ TECHNOLOGY CORP.
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<PAGE> 36
By:
-----------------------------------------
Its:
--------------------------------------
ATTEST:
By:
-----------------------------------------
Its:
--------------------------------------
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<PAGE> 37
LEASE GUARANTY
RIDER (1)
LANDLORD:
NAME: Lone Cactus Capital Group, L.L.C.
ADDRESS: P.O. Box 5061
Carefree, AZ 85377
TENANT:
NAME: iBIZ Technology Corp. for 1919 Lone Cactus
ADDRESS: 2331 W. Royal Palm, Suite 105
Phoenix, AZ 85021
LEASE:
LEASE DATE: June 1, 1999
GUARANTY DATE: Full Term
LEASE TERM:
LEASE PERIOD: 25 YEARS PLUS 6 MONTHS
COMMENCEMENT DATE: July 1, 1999
BASE RENT: $153,600 Per annum, payable in
installments of $12,800
per month, 5% Annual escalators.
GUARANTOR:
NAME: Kenneth W. Schilling and
Diane Schilling
ADDRESS: 8512 W. Via Montoya
Peoria, AZ 85382
THIS LEASE GUARANTY is attached to and made a part of the Lease
referenced above, and is in effect as of the date it is signed. To induce the
Landlord to enter into, to waive a default under, or to extend or renew the term
of the Lease, the Guarantor agrees as follows:
1. The Guarantor hereby covenants and agrees with the Landlord,
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a. to make due and punctual payment of all rent, monies, and
charges payable under the Lease during the Term thereof and all
renewals thereof:
b. to effect prompt and complete performance of all and each
of the terms, covenants, conditions and provisions in the Lease
required on the part of the Tenant to be kept, observed and performed
during the period of the Term and any renewals thereof; and
c. to indemnify and save harmless the Landlord from any loss,
attorney's fees, costs or damages arising out of any failure to pay the
aforesaid rent, monies, and charges or the failure to perform any of
the terms, covenants, conditions and provisions of the Lease.
2. In the event of a default under the Lease, the Guarantor waives any
right to require the Landlord to:
a. proceed against the Tenant or pursue any rights or remedies
with respect to the Lease;
b. proceed against or exhaust any security of the Tenant held
by the Landlord; or
c. pursue any other remedy whatsoever in the Landlord's power.
The Landlord shall have the right to enforce this Guaranty regardless
of the acceptance of additional security from the Tenant and regardless of the
release or discharge of the Tenant or any other Guarantor of the Lease by the
Landlord or by others, or by operation of any law or the amendment or
modification of any terms of the Lease, to which the Guarantor gives the Tenant
the express authority to consent on behalf of the Guarantor.
3. The Guarantor hereby expressly waives notice of the acceptance of
this Guaranty and all notice of nonperformance, non-payment or non-observance on
the part of the Tenant of the terms, covenants of conditions and provisions of
the Lease.
4. Without limiting the generality of the foregoing, the liability of
the Guarantor under this Guaranty shall not be deemed to have been waived,
released, discharged, impaired or affected by reason of the release or discharge
of the Tenant in any receivership, bankruptcy, winding-up or other creditor
proceedings or the rejection, disaffirmance or disclaimer of the Lease by any
party, and shall continue with respect to the periods prior thereto and
thereafter, for and with respect to the Term originally contemplated and
expressed in the Lease. The liability of the Guarantor shall not be affected by
any repossession of the Leased Premises by the Landlord, the extension by
Landlord of time for
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the payment by Tenant of any sums owing or payable under the Lease, the
assignment or subletting of the Leased Premises or the waiver, failure, omission
or delay of Landlord to enforce, assert or exercise any right, power or remedy.
5. Guarantor shall pay all costs, charges and expenses, including
reasonable attorney fees and court costs, incurred by Landlord in enforcing
Guarantor's obligations under this Guaranty.
6. This Guaranty shall be one of payment and performance and not of
collection. Notwithstanding the use of the word "indemnity" or "guaranty", each
guarantor or indemnitor shall be jointly and severally liable under this and any
other guaranty of the Lease.
7. The Guarantor shall, without limiting the generality of the
foregoing, be bound by this Guaranty in the same manner as though the Guarantor
were the Tenant named in the Lease.
8. All of the terms, agreements and conditions of this Guaranty shall
extend to and be binding upon the Guarantor, his heirs, executors,
administrators, successors and assigns, and shall inure to the benefit of and
may be enforced by the Landlord, its successors and assigns, and the holder of
any mortgage to which the Lease may be subject.
IN WITNESS WHEREOF, the undersigned has caused this Guaranty to be duly
executed as of the Guaranty Date first above written.
----------------------------- ---------------------------------
Diane Schilling Kenneth W. Schilling, Guarantor
###-##-####
Social Security Number
Home Address:
8512 W. Via Montoya
Peoria, AZ 85382
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ADDITIONAL PROVISIONS
RIDER (2)
A. The Lease shall commence on July 1, 1999 or the date that
the tenant takes possession of the premises, whichever occurs first, and
terminates on December 31, 2024.
B. Base Rent shall be paid in the following manner plus any
rental taxes, and additional rent as outlined herein.
<TABLE>
<CAPTION>
YEAR ANNUAL RENT MONTHLY RENT
---- ----------- ------------
<S> <C> <C>
Year l $153,600 $12,800
Year 2 $161,280 $13,440
Year 3 $169,344 $14,112
Year 4 $177,816 $14,818
Year 5 $186,708 $15,559
Year 6-26 5% above previous year
</TABLE>
PLUS ADDITIONAL RENT AS OUTLINED HEREIN
C. Tenant agrees to accept the premises in an "as is"
condition.
D. This lease is a triple net lease. Tenant is responsible for
payment of all expenses of the building. Tenant agrees to sign up and pay for
its own utilities, taxes, insurance and maintenance of interior and exterior of
building and its grounds.
E. All other terms and conditions of this Lease shall remain
in effect.
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RULES & REGULATIONS
RIDER (4)
1. Tenant shall not block or obstruct any of the entries,
passages, doors, hallways, or stairways of Building or garage, or place, empty,
or throw any rubbish, litter, trash, or material of any nature into such areas,
or permit such areas to be used at any time, except for ingress or egress of
Tenant, its officers, agents, servants, employees, patrons, licenses, customers,
visitors, or invitees.
2. Landlord will not be responsible for lost or stolen
personal property, equipment, money, or any article taken from Leased Premises,
regardless of how or when loss occurs.
3. Tenant shall not install or operate any refrigerating,
heating, or air conditioning apparatus or carry on any mechanical operation on
the Leased Premises without written permission of Landlord.
4. Tenant shall not use Leased Premises for housing, lodging,
or sleeping purposes or for the cooking or preparation of food without written
permission of Landlord.
5. Tenant shall not bring into the Leased Premises or keep on
Leased Premises any fish, fowl, reptile, insect or animal or any bicycle or
other vehicle without the prior written consent of Landlord; wheelchairs,
however, will be permitted.
6. No additional locks shall be placed on any door in the
Building without the prior written consent of Landlord. Landlord may at all
times keep a pass key to the Leased Premises. All of Tenant's keys shall be
returned to Landlord promptly upon termination of this Lease.
7. Tenant shall do no painting or decorating in Leased
Premises; or mark, paint or cut into, drive nails or screw into, nor in any way
deface any part of Leased Premises or Building without the prior written consent
of Landlord. If Tenant desires signal, communication, alarm, or other utility or
service connection installed or changed, such work shall be done at expense of
Tenant with the approval and under the direction of Landlord.
8. Tenant shall not permit the operation of any musical or
sound-producing instruments or device which may be heard outside Leased
Premises, or which may emanate electrical waves or x-rays or other emissions
which will impair radio or television broadcasting or reception from or in the
Building, or be hazardous to health, well-being, or condition of persons or
property.
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9. Tenant shall, before leaving Leased Premises unattended,
close and lock all doors and shut off all utilities. Damage resulting from
failure to do so shall be paid by Tenant. Each Tenant, before closing for the
day and leaving the Leased Premises, shall see that all doors are locked.
10. Tenant shall give Landlord prompt notice of all accidents
to or defects in air conditioning equipment, plumbing, electrical facilities, or
any part or appurtenance of the Leased Premises.
11. The plumbing facilities shall not be used for any other
purpose than that for which they are constructed, and no foreign substance of
any kind shall be thrown therein, and the expense of any breakage, stoppage, or
damage resulting from a violation of this provision shall be borne directly by
the Tenant, who shall, or whose officers, employees, agents, servants, patrons,
customers, licensees, visitors, or invitees shall have caused it. Landlord shall
not be responsible for any damage due to stoppage, backup, or overflow of the
drains or other plumbing fixtures.
12. All contractors and/or technicians performing work for
Tenant within the Leased Premises, the Building, or garage facilities shall be
referred to Landlord for approval before performing such work. This shall apply
to all work including, but not limited to, installation of telephones, telegraph
equipment, electrical devices and attachments, and all installations affecting
floors, walls, windows, doors, ceilings, equipment, or any other physical
feature of the Building, Leased Premises, or garage facilities. None of this
work shall be done by Tenant without Landlord's prior written approval.
13. Neither Tenant nor any officer, agent, employee, servant,
patron, customer, visitor, licensee, or invitee of any Tenant shall go upon the
roof of the Building without the written consent of the Landlord.
14. In the event Tenant must dispose of crates, boxes, etc.
which will not fit into wastepaper baskets, it will be the responsibility of
Tenant to dispose of same properly.
15. If the Leased Premises shall become infested with vermin,
roaches, or other undesirable creatures, Tenant, at its sole cost and expense,
shall cause the Leased Premises to be professionally treated from time to time
to the satisfaction of Landlord and shall employ such exterminators for this
purpose as shall be approved by Landlord.
16. Tenant shall not install any antenna or aerial wires,
radio or television equipment, or any other type of equipment inside or outside
of the Building without Landlord's prior approval in writing and upon such
terms and conditions as may be specified by Landlord in each and every instance.
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17. Tenant shall not make or permit any use of Leased
Premises, the Building, or garage facilities which, directly or indirectly, is
forbidden by law, ordinance, or governmental or municipal regulation, code, or
order or which may be disreputable or dangerous to life, limb, or property.
18. Tenant shall not advertise the business, profession, or
activities of Tenant in any manner which violates the letter or spirit of any
code of ethics adopted by any recognized association or organization pertaining
thereto, use the name of the Building for any purpose other than that of the
business address of Tenant or use any picture or likeness of the Building or the
Building name in any picture or likeness of the Building or the Building name in
any letterheads, envelopes, circulars, notices, advertisements, containers, or
wrapping material without Landlord's express consent in writing.
19. Tenant shall neither conduct its business nor control its
officers, agents, employees, servants, patrons, customers, licensees, and
visitors in such a manner as to create any nuisance or interfere with, annoy, or
disturb any other tenant or Landlord in its operation of the Building, or commit
waste, or suffer or permit waste to be committed in Leased Premises.
20. The Tenant shall not install in the Leased Premise any
equipment which uses a substantial amount of electricity without the advance
written consent of Landlord. The Tenant shall ascertain from the Landlord the
maximum amount of electrical current which can safely be used in the Leased
Premises, taking into account the capacity of the electric wiring in the
Building and the Leased Premises and the need of other tenants in the Building
and shall not use more than such safe capacity. The Landlord's consent to the
installation of electric equipment shall not relieve the Tenant from the
obligation not to use more electricity that such safe capacity.
21. The Tenant, without the written consent of Landlord, shall
not lay linoleum or other similar floor covering.
22. No outside storage of any material, including disabled
vehicles will be permitted.
23. Tenant shall place chair pads beneath each desk chair to
protect the carpet in the Leased Premises.
24. Landlord may waive any one or more of these Rules &
Regulations for the benefit of Tenant or any other tenant, but no such waiver by
Landlord shall be construed as a waiver of these Rules & Regulations in favor of
Tenant or any other tenant, nor prevent Landlord from thereafter enforcing any
such Rules & Regulations against any or all of the tenants of the Building.
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25. Landlord reserves the right to make any such other
reasonable Rules & Regulations as, in its judgment, may from time to time be
needed for safety and security, for care and cleanliness of the Building and for
the preservation of good order therein or in response to governmental regulation
of any kind. Tenant agrees to abide by all such Rules & Regulations herein above
stated and any additional Rules and Regulations which are adopted within five
(5) days after receiving a copy of such additional Rules and Regulations.
26. Tenant shall be responsible for the observance of all of
the foregoing Rules and Regulations by Tenant's officers, employees, agents,
servants, clients, customers, patrons, invitees, licensees, visitors and guests.
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<PAGE> 1
Exhibit 10.8
STRATEGIC TEAMING AND MARKETING AGREEMENT
THIS AGREEMENT, made as of this 18th day of February 1999 by and between iBiz
Technology Corp. A Florida corporation with a place of business at 2331 W.
Royal Palm Rd, Suite E 105 Phoenix, AZ 85021, hereinafter referred to as iBiz
and Global Telephone Communication Inc. a Nevada corporation with a place of
business at 3838 Camino Del Rio North Suite 333, San Diego California 92108
herein after referred to as GTCI, and collectively referred to as the Parties.
WITNESSETH:
WHEREAS, the Parties have identified certain business opportunities;
WHEREAS, the Parties have unique capabilities which they believe
complementary and not independently available within either of their respective
companies; and
WHEREAS, the Parties wish to enter into this Agreement in order to
develop the best management and technical approach for said business
opportunities;
WHEREAS, iBiz is a corporation specializing in "small footprint,"
computer technology solutions for the financial services industry and other
space-conscience computing environments; and
WHEREAS GTCI is a telecommunications corporation providing
communication products and services in China and the Pacific Rim; and
NOW, THEREFORE, the Parties hereby agree as follows:
1. iBiz agrees to give non-exclusive marketing rights of its products to
GTCI for a period of five (5) years to the Asian territories defined
as: Mainland China/Hong Kong, Taiwan, South Korea, North Korea,
Thailand, Vietnam, Cambodia, Myanmar (Burma), Laos, Malaysia, the
Philippines, Indonesia and Japan. See Schedule A
2. GTCI agrees to use every effort and resource to market iBiz products in
the Asian territories (defined in paragraph 1) for period of five (5)
years.
PROPRIETARY INFORMATION
The party receiving the proprietary information shall be hereinafter
referred to as the receiving Party and the Party furnishing the information the
transmitting Party. The receiving Party agrees to keep in confidence and prevent
the unauthorized disclosure to any person or persons outside its organization,
and agrees further not to use for a purpose other
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<PAGE> 2
than for which furnished (and then only with appropriate restrictions governing
its use) any and all data and information including all data and information
previously furnished by the transmitting party relating to the subject areas of
expertise of the transmitting Party. This includes all data and information
which is designated in writing, or by appropriate stamp or legend, by the
transmitting Party to be of a proprietary nature. The receiving Party shall not
be liable for unauthorized disclosure of any such data or information if the
same:
(a) is in the public domain at the time it was disclosed;
or
(b) is disclosed inadvertently despite the exercise of
the same degree of care as the receiving Party takes
to preserve and safeguard its own proprietary
information, provided also that any person having
access to such information shall be advised of the
contents of this Agreement; or
(C) is disclosed with a written approval of the
transmitting Party; or
(D) was independently developed by the receiving Party;
or
(E) becomes known to the receiving Party from a source
other than the transmitting Party who is legally
entitled to such information without breach of this
Agreement; or
(F) was not identified in writing, or by application of
the appropriate identifying stamp or legend, as
proprietary information subject to this Agreement; or
Each Party shall designate in writing the individual or
individuals authorized to receive proprietary information
under this Agreement and either Party may change its
designation by written notice to the other.
CLASSIFIED INFORMATION
To the extent the obligations of the Parties hereunder require
providing a customer or potential customer, confidential or sensitive
information, the Parties agree that the customer shall execute such appropriate
Non-Disclosure Agreement to protect such information, the form of which shall be
agreed upon by both Parties.
TERMINATION
This Agreement and all rights and duties hereunder, except those under
paragraph 3, above, which shall survive termination of this Agreement, may be
terminated by either Party, on thirty (30) days' prior written notice to the
other.
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<PAGE> 3
THIRD-PARTY TRADEMARKS
During the performance of this Agreement, the following shall apply
with respect to trademarks:
It is understood that each Party will use its best effort to convey information
to the other Party which is clear of third-party rights; however, none of the
information which may be submitted or exchanged by the Parties shall constitute
any representation, warranty, assurance, guarantee or inducement by either Party
to the other with respect to the unknown or unasserted infringement of
trademark, patents, copyrights or any right to privacy, or other rights of third
persons.
EXPENSES
Except as otherwise set forth herein, or as may be mutually agreed by
the Parties, and except for the compensation which may be paid to the Parties in
accordance with any such contracts and subcontracts, each Party shall bear all
of its own expenses incurred in connection with the business opportunities
referred to herein.
PUBLICITY
No publicity or advertising regarding any proposal or contract relating
to this Agreement shall be released without prior approval of both Parties, with
exception that this Agreement may be made known to the customer, and certain
information made public as required by the Securities Exchange Commission (SEC)
or other regulatory agencies.
ASSIGNMENTS
Neither Party may assign or transfer its interest herein without the
prior written consent of the other. This approval requirement shall not apply to
the assignment to any successor corporation in the event of a merger or
consolidation. Any consent required shall not be unreasonably withheld.
COMPLIANCE WITH LAW
The Parties shall comply with all applicable federal, state and local
laws and regulations.
LIMITATION OF LIABILITY
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<PAGE> 4
Neither Party shall be liable to the other for any indirect,
incidental, special or consequential damages, however caused, whether as a
consequence of the negligence of the one Party or otherwise.
SEVERABILITY
If any provision of this Agreement or part of such provision is or
becomes invalid or unenforceable, then the remaining provisions hereof shall
continue to be effective.
WAIVERS
No waiver by a party of any its rights or remedies shall be construed
as a waiver by such party of any other rights or remedies that such party may
have under this Agreement.
ENTIRE AGREEMENT
This Agreement contains the entire Agreement between the Parties and
supercedes any previous understanding, commitments, or agreement, oral or
written. This Agreement shall not be amended nor shall any waiver of any right
hereunder be effective, unless set forth in a document executed by duly
authorized representatives of both Parties. The validity, construction, scope
and performance of this Agreement shall be governed by the laws of the State of
California.
IN WITNESS WHEREOF, the Parties hereby have caused this Agreement to be duly
executed on the day and year first above written.
Global Telephone Communication Inc. iBiz Technology Corp.
By:__________________________ By:_________________________
Name: Terry Wong Name: Ken Schilling
Title: President Title: President
DATE:_______________________ DATE:______________________
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SCHEDULE A
i-Key 2000 - Ergonomic Wireless Keyboard with Glidepoint and Palm Rest
TV3682 - Financial Application Keyboard with Integrated Glidepoint
TV3681 - Financial Application Keyboard
Page 5
<PAGE> 1
Exhibit 10.9
NEITHER THIS WARRANT NOR THE STOCK FOR WHICH IT MAY BE EXERCISED HAS BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED ("SECURITIES ACT"), OR
ANY OTHER FEDERAL OR STATE SECURITIES LAW, AND MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF EXCEPT AS EXPRESSLY PROVIDED HEREIN. WITHOUT LIMITING THE
FOREGOING, NEITHER THIS WARRANT NOR THE STOCK FOR WHICH IT MAY BE EXERCISED MAY
BE TRANSFERRED FOR A PERIOD OF TWELVE (12) MONTHS AFTER THE DATE OF ISSUANCE OF
THIS WARRANT OR THE EXERCISE OF THE STOCK PURCHASE RIGHTS HEREUNDER UNLESS
PERMITTED BY THE TERMS OF THIS WARRANT AND APPLICABLE LAW.
iBIZ TECHNOLOGY CORP.
COMMON STOCK PURCHASE WARRANT
This certifies that, for value received, _______________, an individual
("Holder") is entitled to subscribe for, and purchase from iBIZ TECHNOLOGY
CORP., a Florida corporation ("Company"), 400,000 shares, subject to adjustment
as set forth in Article II below, ("Warrant Shares") of Common Stock of the
Company, par value $.001 per share ("Common Stock"), at the exercise price of
$0.75 per share for the first 300,000 shares and $1.00 per share for the
remaining 100,000 shares, which prices are subject to adjustment as set forth in
Article II below, ("Exercise Price"), at any time and from time to time
beginning on the date of this Warrant as set forth below ("Exercise Date"), and
ending on the date that is three (3) years after the date of this Warrant or, if
earlier, thirty (30) days from notice of the effectiveness of the Registration
Statement described below in Section 3.03 ("Expiration Date"), upon written
notice from the Holder to the Company ("Notice") and subject to the terms
provided herein.
This Warrant is subject to the following provisions, terms and
conditions:
ARTICLE I.
EXERCISE; RESERVATION OF SHARES
Section 1.01 Warrant Exercise. The rights represented by this Warrant
may be exercised by the Holder at any time and from time to time prior to the
expiration of this Warrant, upon Notice, by the surrender at the principal
office of the Company of this Warrant together with a duly executed subscription
in the form annexed hereto ("Subscription Form") and accompanied by payment, in
certified or immediately available funds, of the Exercise Price for the number
of Warrant Shares specified in the Subscription Form. The shares so purchased
shall be deemed to be issued to the Holder as the record owner of such shares as
of the close of business on the date on which this Warrant shall be exercised as
hereinabove provided. No fractional shares or scrip representing fractional
shares shall be issued upon exercise of this Warrant and the number of shares
that shall be issued upon such exercise shall be rounded to the nearest whole
share without the payment or receipt of any additional consideration.
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Section 1.02 Certificates. Certificates for the shares purchased
pursuant to Section 1.01 shall be delivered to the Holder within a reasonable
time after the rights represented by this Warrant shall have been so exercised,
and a new Warrant in the name of the Holder representing the rights, if any,
that shall not have been exercised prior to the Expiration Date with respect to
this Warrant shall also be delivered to such Holder within such time, with such
new Warrant to be identical in all other respects to this Warrant. The term
"Warrant," as used herein, includes any Warrants into which this Warrant may be
divided or combined and any subsequent Warrants issued upon the transfer or
exchange or reissuance upon loss hereof.
Section 1.03 Reservation of Shares. The Company represents, warrants,
covenants and agrees:
(a) That all shares of Common Stock that may be issued upon
exercise of this Warrant will, upon issuance, be validly issued, fully
paid and nonassessable and free from all taxes, liens and charges with
respect to the issue thereof;
(b) That during the period the rights represented by this
Warrant may be exercised, the Company will at all times have
authorized, and reserved for the purpose of issue and delivery upon
exercise of the rights evidenced by this Warrant, a sufficient number
of shares of Common Stock to provide for the exercise of the rights
represented by this Warrant; and
(c) If the Common Stock is listed on any national
securities exchange or similar trading market, the shares of Common
Stock that may be issued upon exercise of this Warrant will, prior to
or on the date that a Registration Statement covering the Warrant
Shares is effective, also be listed on such exchange subject to notice
of issuance.
ARTICLE II.
ADJUSTMENTS
Section 2.01 Reorganization, Reclassification, Consolidation, Merger or
Sale.
(a) Capital Events. If any reorganization or
reclassification of the capital stock of the Company, or any
consolidation or merger of the Company with another corporation, or the
sale of all or substantially all of its assets to another corporation
(in any instance, a "Capital Event") shall be effected in such a way
that holders of Common Stock shall be entitled to receive stock,
securities or assets (including cash) with respect to or in exchange
for their Common Stock, then, as a condition of such Capital Event,
lawful and adequate provisions shall be made whereby the Holder hereof
shall thereafter have the right to purchase and receive upon the basis
and upon the terms and conditions specified in this Warrant and in lieu
of the shares of the Common Stock of the Company immediately
theretofore purchasable and receivable upon the exercise of the rights
represented hereby, an amount of such shares of stock, securities or
assets (including cash) as may have been issued or payable with respect
to or in exchange for a number of
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outstanding shares of such Common Stock equal to the number of shares
of such stock immediately theretofore purchasable and receivable upon
the exercise of the rights represented hereby had such Capital Event
not taken place.
(b) Preservation of Value. In the case of any Capital
Event, appropriate provision shall be made with respect to the rights
and interests of the Holder of this Warrant to the end that the
provisions hereof (including, without limitation, provisions for
adjustment of the number of shares that may be issued upon exercise of
this Warrant and the Exercise Price hereof) shall thereafter be
applicable, as nearly as may be, in relation to any shares of stock,
securities or assets (including cash) thereafter deliverable upon the
exercise of the rights represented hereby.
(c) Obligation Expressly Assumed. The Company shall not
effect any consolidation, merger or sale of all or substantially all of
its assets, unless prior to the consummation thereof the successor
corporation (if other than the Company) resulting from such
consolidation or merger, or the corporation into or for the securities
of which the previously outstanding stock of the Company shall be
changed in connection with such consolidation or merger, or the
corporation purchasing such assets, as the case may be, shall assume by
written instrument executed and mailed or delivered to the registered
Holder at the last address of such Holder appearing on the books of the
Company, the obligation to deliver to such Holder, upon exercise of
this Warrant, such shares of stock, securities or assets (including
cash) as, in accordance with the foregoing provisions, such Holder may
be entitled to purchase.
Section 2.02 Subdivision or Combination of Stock. In the event that the
Company shall at any time subdivide or split its outstanding shares of Common
Stock into a greater number of shares, the number of Warrant Shares subject to
issuance upon exercise of this Warrant at the opening of business on the day
upon which such subdivision becomes effective shall be proportionately
increased. In the event that the outstanding shares of Common Stock of the
Company shall be combined into a smaller number of shares, the number of shares
subject to issuance upon exercise of this Warrant at the opening of business on
the day upon which such subdivision becomes effective shall be proportionately
decreased. Any such increase or decrease, as the case may be, shall become
effective immediately after the opening of business on the day following the day
upon which such subdivision or combination, as the case may be, becomes
effective.
Section 2.03 Stock Dividends. In the event that the Company shall at
any time declare any dividend or distribution upon its Common Stock payable in
stock, the number of Warrant Shares subject to issuance upon exercise of this
Warrant shall be increased by the number (and the kind) of shares which would
have been issued to the holder of this Warrant if this Warrant were exercised
immediately prior to such dividend. Such increase shall become effective
immediately after the opening of business on the day following the record date
for such dividend or distribution.
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Section 2.04 Equitable Adjustment. In the event the Company shall
participate in any extraordinary corporate event or transaction not otherwise
provided for herein, including a so-called issuer self-tender, there shall be
made an equitable and proportionate adjustment in the number of shares issuable
upon exercise of this Warrant and the Exercise Price consistent with the
principles of other such adjustments provided for in this Article II.
Section 2.05 Treasury Shares. The number of shares of Common Stock
outstanding at any given time shall not include shares of the Company owned or
held by or for the account of the Company.
Section 2.06 Minimum Adjustment. No adjustment in the number of shares
that may be issued upon exercise of this Warrant as provided in this Article II
shall be required unless such adjustment would require an increase or decrease
in such number of shares of at least one percent (1%) of the then adjusted
number of shares of Common Stock that may be issued upon exercise of this
Warrant; provided, however, that any such adjustments that by reason of the
foregoing are not required to be made shall be carried forward and taken into
account and included in determining the amount of any subsequent adjustment; and
provided further, that if the Company shall at any time subdivide or combine the
outstanding shares of Common Stock or issue additional shares of Common Stock as
a dividend, said percentage shall forthwith be proportionately adjusted so as to
appropriately reflect the same.
Section 2.7 Adjustment of Exercise Price. Whenever the number of shares
of Common Stock that may be issued upon exercise of this Warrant is adjusted and
effective at the time such adjustment is effective, as provided in Sections
2.01, 2.02 and 2.03 of this Article II, the Exercise Price shall be adjusted (to
the nearest whole cent) by multiplying each such Exercise Price immediately
prior to such adjustment by a fraction (x) the numerator of which shall be the
number of shares of Common Stock which may be issued upon the exercise of each
such Warrant immediately prior to such adjustment, and (y) the denominator of
which shall be the number of shares of Common Stock so purchasable immediately
thereafter. The Company may retain a firm of independent certified public
accountants (which may not be the regular accountants employed by the Company)
to make any required computation, and a certificate signed by such firm shall be
conclusive evidence of the correctness of such adjustment.
Section 2.8 Record Date. In the event that the Company shall not take a
record of the holders of its Common Stock for the purpose of entitling them to
receive a dividend payable in Common Stock, then such record date shall be
deemed for the purposes of this Article II to be the date of the issue or sale
of the shares of Common Stock deemed to have been issued or sold upon the
declaration of such dividend.
Section 2.9 Officer's Certificate. Whenever the Exercise Price shall be
adjusted as provided in this Article II, the Company shall forthwith file with
its Secretary and retain in the permanent records of the Company, an officer's
certificate showing the adjusted Exercise Price determined as provided in this
Article II, setting forth in reasonable detail the facts requiring such
adjustment, including a statement of the number of additional or fewer shares of
Common Stock, and such other facts as may be reasonably necessary to show the
reason for and the method of
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computing such adjustment. Each such officer's certificate shall be made
available at all reasonable times for inspection by the Holder.
Section 2.10 Notice of Adjustment. Upon any adjustment of the number of
shares that may be issued upon exercise of this Warrant or the Exercise Price,
the Company shall give notice thereof to the Holder, which notice shall state
the increase or decrease, if any, in the number of shares that may be issued
upon the exercise of this Warrant and the Exercise Price, setting forth in
reasonable detail the method of calculation and the facts upon which such
calculation is based.
Section 2.11 Definition of "Common Stock". As used in this Article II,
the term "Common Stock" shall mean and include all of the Company's authorized
Common Stock of any class as constituted on the date of this Warrant as set
forth below, and shall also include any capital stock of any class of the
Company thereafter authorized that shall not be limited to a fixed sum or stated
value in respect of the rights of the holders thereof to participate in
dividends or the distribution of assets upon the voluntary or involuntary
liquidation, dissolution or winding up of the Company.
Section 2.12 Exclusion of Certain Stock. Notwithstanding anything in
this Article II, no adjustment of the Exercise Price or the number of shares to
be issued upon exercise of this Warrant shall be made upon, (i) the grant of
options under any stock option plan of the Company now existing or hereafter
adopted by the Company (as any such plan may be amended from time to time) or
(ii) the issuance of shares of Common Stock upon the exercise of options granted
under any such plan or (iii) other events where adjustment is not specifically
required by this Warrant.
ARTICLE III.
TRANSFER RESTRICTIONS; REGISTRATION RIGHTS
Section 3.01 Securities Law Transfer Restrictions. By taking and
holding this Warrant, the Holder (i) acknowledges that neither this Warrant nor
any shares of Common Stock that may be issued upon exercise of this Warrant have
been registered under the Securities Act or any applicable state securities or
blue sky law (collectively, "Securities Laws"); (ii) agrees not to sell,
transfer or otherwise dispose of this Warrant, and agrees not to sell, transfer
or otherwise dispose of any such shares of Common Stock without registration
unless the sale, transfer or disposition of such shares can be effected without
registration and in compliance with the Securities Laws; and (iii) agrees not to
sell, transfer or otherwise dispose of this Warrant or any portion thereof or
interest therein except as otherwise expressly permitted herein. No part of this
Warrant or any portion thereof or interest therein may be transferred, whether
voluntarily, involuntarily or by operation of law, except to a Permitted
Transferee as hereinafter defined. "Permitted Transferee" shall mean a successor
by inheritance or intestate succession to any interest in this Warrant or any
portion thereof and who accepts by written instrument reasonably acceptable to
the Company each of the terms and conditions that govern this Warrant. Without
limiting the foregoing, no rights in this Warrant or the stock for which it may
be exercised may
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be transferred for twelve (12) months after the date of issuance of this Warrant
or the exercise of the stock purchase rights hereunder. Any certificate for
shares of Common Stock issued upon exercise of this Warrant shall bear an
appropriate legend describing the foregoing restrictions, unless such shares of
Common Stock have been effectively registered under the applicable Securities
Laws.
Section 3.02 Provision of Information by Holder. The Holder shall make
available to the Company such written information, presented in form and content
satisfactory to the Company, as the Company may reasonably request, from time to
time, in order to make the determination provided for in Section 3.01.
Section 3.03 Registration Rights. The following provisions shall apply
irrespective of whether the Holder holds this Warrant or has exercised this
Warrant and holds Warrant Shares, and shall apply during the period beginning on
the date of this Warrant as set forth below ("Issue Date") and continuing until
the Expiration Date:
(a) The Company shall use reasonable best efforts to,
within one year from the Issue Date, include the Warrant Shares in a
registration statement ("Registration Statement") filed with the
Securities and Exchange Commission under the Securities Act, and have
such Registration Statement declared effective no later than the first
anniversary after the Exercise Date so that upon issuance the Warrant
Shares will be freely tradeable, provided that the Holder shall furnish
to the Company all appropriate information in connection therewith as
the Company may reasonably request. The Company shall use its
reasonable best efforts to ensure that such Registration Statement
shall remain continuously effective for ninety (90) days after its
effectiveness.
(b) The Company shall (i) bear the costs, expenses and fees
incurred in connection with any such registration, excluding any broker
fees, selling commissions, and out-of-pocket costs and expenses of the
Holder; (ii) use its reasonable best efforts to keep any such
registration statement effective through the Expiration Date, as
amended from time to time, as necessary; (iii) supply prospectuses and
other documents as the Holder may reasonably request; (iv) use its
reasonable best efforts to register and qualify the Warrant Shares for
sale in such states as the Holder designates; (v) do any and all other
acts and things that may be necessary or desirable to enable Holder to
consummate the public sale or other disposition of the Warrant Shares;
and (vi) enter into cross-indemnification arrangements with the Holder
with respect to matters arising from such Registration Statement and
public offering.
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ARTICLE IV.
MISCELLANEOUS
Section 4.01 Transfer of Warrants. No right or interest in this Warrant
shall be transferable except as provided in Article III.
Section 4.02 Notices. Any notice or communication to be given pursuant
to this Warrant shall be in writing and shall be delivered in person or by
certified mail, return receipt requested, in the United States mail, postage
prepaid. Notices to the Company shall be addressed to the Company's principal
office. Notices to the Holder shall be addressed to the Holder's address as
reflected in the records of the Company. Notices shall be effective upon
delivery in person, or, if mailed, at midnight on the fifth business day after
mailing.
Section 4.03 Issue Tax. The issuance of certificates for shares of
Common Stock upon the exercise of this Warrant shall be made without charge to
the Holder for any issuance tax in respect thereof, provided that the Company
shall not be required to pay any tax that may be payable in respect of any
transfer involved in the issuance and delivery of any certificate in a name
other than that of the Holder of the Warrant exercised.
Section 4.04 No Shareholder Rights. This Warrant shall not entitle the
Holder to any voting rights or other rights as a shareholder of the Company.
Section 4.05 Current Information. The Company shall cause copies of all
financial statements and reports, proxy statements and other documents that are
provided to its shareholders to be sent by first class mail, postage prepaid, on
the date of mailing to such shareholders, to the Holder at the address reflected
in the records of the Company.
Section 4.06 Governing Law. This Warrant shall be governed by and
construed in accordance with the laws of the State of Arizona.
Section 4.07 Headings; Interpretation. The section headings used herein
are for convenience of reference only and are not intended to define, limit or
describe the scope or intent of any provision of this Warrant. When used in this
Warrant, the term "including" shall mean "including, without limitation."
Section 4.08 Successors. The covenants, agreements and provisions of
this Warrant shall bind the parties hereto and their respective successors and
permitted assigns.
Section 4.09 Integrated Agreement; Modification. This Warrant is a
complete statement of the agreement of the parties with respect to the subject
matter hereof and may be modified only by written instrument executed by the
parties.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be issued as
of the ____________ day of ____________, 1999.
ATTEST: iBIZ TECHNOLOGY CORP.
By: By:
--------------------------------- ------------------------------
Secretary Ken Schilling, President
------------------,
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SUBSCRIPTION FORM
(To be Executed only upon Exercise of Warrant)
The undersigned registered owner of this Warrant irrevocably exercises
this Warrant and purchases _______ shares of Common Stock of iBIZ TECHNOLOGY
CORP., a Florida corporation, that may be issued under this Warrant and herewith
delivers the sum of $__________ in full payment of the Exercise Price for such
shares, all on the terms and conditions specified in this Warrant. Such shares
are to be delivered to such holder at the address reflected in the records of
the Company unless contrary instructions are herein given.
Deliver certificates to:
- --------------------------------------------------------------------------------
Dated:
------------------------------- ------------------------------------
(Signature of Registered Owner)
------------------------------------
(Street Address)
------------------------------------
(City) (State) (Zip Code)
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UNANIMOUS CONSENT OF THE DIRECTORS
IN LIEU OF SPECIAL MEETING OF
THE BOARD OF DIRECTORS OF
IBIZ TECHNOLOGY CORP.
The undersigned, being all of the directors of iBIZ TECHNOLOGY
CORP., a Florida corporation, hereby consent to the following action taken
without a meeting:
RESOLVED, that the Warrant attached hereto is hereby
approved by the Board, the undersigned having determined that
the consideration for the Warrant and the stock obtainable
thereunder is adequate, and the President is hereby authorized
to issue such Warrant to Scott Waldman.
This consent, and all executed counterparts hereof, shall be
deemed effective as of the ___ day of __________, 1999, and shall be filed with
the minutes of the proceedings of the Board.
DIRECTORS:
---------------------------------------------
Kenneth Schilling
---------------------------------------------
Alan M. Smith
---------------------------------------------
Terry Ratliff
---------------------------------------------
Mark Perkins
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Exhibit 10.10
NEITHER THIS DEBENTURE NOR THE SECURITIES ISSUABLE HEREUNDER HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY OTHER
FEDERAL OR STATE SECURITIES LAWS, AND THEY MAY NOT BE SOLD OR
OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED
EXCEPT AS EXPRESSLY PROVIDED FOR HEREIN. WITHOUT LIMITING THE
FOREGOING, NEITHER THIS DEBENTURE NOR THE STOCK ISSUABLE HEREUNDER
MAY BE TRANSFERRED FOR A PERIOD OF TWELVE (12) MONTHS AFTER THE DATE
OF THIS DEBENTURE OR THE ISSUANCE OF STOCK HEREUNDER UNLESS
PERMITTED BY THE TERMS OF THIS DEBENTURE AND APPLICABLE LAW.
iBIZ TECHNOLOGY CORP.
CONVERTIBLE DEBENTURE DUE JUNE 21, 2000
June 21, 1999 US $120,000
FOR VALUE RECEIVED, iBIZ Technology Corp., a Florida corporation
(the "Company") promises to pay to the order of __________, an individual (the
"Holder") on June 21, 2000 (the "Maturity Date"), the principal sum of One
Hundred Twenty Thousand Dollars ($120,000), plus interest accruing from and
after the date hereof, as hereinafter provided.
1. PAYMENT AND INTEREST. The indebtedness outstanding under this
Debenture shall bear interest of eight percent (8%) per annum. Unless the
conversion rights provided under Section 5 are exercised pursuant to this
Debenture, the principal and accrued interest shall be due on the Maturity Date.
Payment is to be made at the office of the Holder as reflected in the records of
the Company or at such other place as the Holder of this Debenture shall have
notified the Company in writing. Nothing herein contained, nor any transaction
relating thereto, shall be construed or so operate as to require the Company to
pay interest at a greater rate than the maximum allowed by the applicable law
relating to this Debenture. Should any interest or other charges, charged, paid
or payable by the Company in connection with this Debenture, or any other
compensation, payment or earning of interest, be in excess of the maximum
allowed by the applicable law as aforesaid, then any and all such excess shall
be, and the same hereby is, waived by the Holder, and any and all such excess
paid shall be automatically credited against and in reduction of the principal
due under this Debenture.
2. LIQUIDATION RIGHTS. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Company, this Debenture shall be
entitled to a claim in liquidation before participation by the holders of any
debt subordinate hereto or of any capital stock of the
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Company. The amount of the claim in liquidation shall equal the amount to which
the Holder of this Debenture would be entitled in the case of payment, whether
or not this Debenture is eligible for payment at the time of liquidation. A
liquidation, dissolution, or winding up of the Company, for purposes of this
Section 2, shall not include any consolidation, reorganization, or merger of the
Company with or into any other association or corporation, or any acquisition of
all or substantially all of the assets and liabilities of the Company by any
other association or corporation, whether or not of a different form or subject
to the laws or a different jurisdiction, provided the same are not in violation
of any of the terms of this Debenture or the agreements contemplated therein.
3. EVENTS OF DEFAULT; ACCELERATION. If any of the following
conditions or events ("Events of Default") shall occur:
(a) if the Company shall default in the payment of any
principal of this Debenture when the same becomes due and payable and such
default is not remedied within sixty (60) days after written notice
thereof; or
(b) if the Company shall default in the payment of any
interest on this Debenture after the same becomes due and payable and such
default is not remedied within sixty (60) days after written notice
thereof
then the Holder may at any time, at the option of the Holder, by
written notice or notices given to the Company, declare this Debenture to be,
and this Debenture shall thereupon become, forthwith due and payable and the
Company forthwith will pay to the Holder the entire principal of and interest
accrued on this Debenture.
4. LEGAL TENDER. All payments of principal and interest hereunder
shall be in coin or currency of the United States or America which on the
respective dates of payment thereof constitutes legal tender for the payment of
public and private debt.
5. CONVERSION OF DEBENTURE.
(a) Conversion Following Registration. Upon the effectiveness
of the Registration Statement described below in Section 9, this Debenture
shall be automatically converted into 180,000 fully paid and nonassessable
shares of common stock of the Company.
(b) Mechanics of Conversion. Upon conversion, all obligations
of the Company to pay principal and interest hereunder shall be
extinguished. Upon conversion, the Holder of this Debenture shall
surrender the Debenture during regular business hours at the office of the
Company. As promptly as practicable after the surrender of the Debenture
as aforesaid, the Company shall deliver or cause to be delivered to the
Holder a certificate or certificates for the number of fully paid and
nonassessable shares of common stock issuable upon conversion of this
Debenture. Such conversion shall be deemed to have been effected
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immediately prior to the close of business on the effective date of the
Registration Statement, subject to surrender of the Debenture, (the "Date
Of Conversion"), and at such time the rights of the Holder shall cease and
the Holder shall be deemed to have become the holder of record of the
shares issuable hereunder.
(c) Adjustments. If the Company shall effect any capital
reorganization or any reclassification of the capital stock of the Company
or in case of the consolidation or merger or exchange of the company with
or into another corporation or the conveyance of all or substantially all
of the assets of the Company to another corporation, the Holder of this
Debenture shall be entitled to receive upon the conversion of the
Debenture, that type and number of securities to which a holder of the
number of shares of common stock into which this Debenture is convertible
immediately prior to such event would have been entitled upon such
reorganization, reclassification, consolidation, merger or conveyance;
and, in any such case, appropriate adjustment, as determined by the Board
of Directors, shall be made in the application of the provisions herein
set forth with respect to the rights and interests thereafter of the
holder of this Debenture, to the end that the provisions set forth herein
shall thereafter be applicable, as nearly as reasonably may be, in
relation to any shares of stock or other property thereafter deliverable
upon the conversion of the Debenture. If the Company shall at any time
subdivide its outstanding shares of Common Stock into a greater number of
shares or pay a dividend in shares of common stock to the outstanding
common stock, or combine the outstanding share of common stock into a
smaller number of shares, the conversion rate for this Debenture in effect
immediately prior to such subdivision, dividend or combination shall be
adjusted proportionately simultaneously with such event.
6. RESERVATION OF SHARES. The Company covenants and agrees that,
during the period within which conversion rights represented by this Debenture
may be exercised, the Company will at all times have authorized and reserved,
solely for the purpose of such possible conversion, free from preemptive rights,
out of its authorized but unissued shares, a sufficient number of shares of its
common stock to provide for the exercise in full of the conversion rights
represented by this Debenture. In accordance with and subject to applicable laws
and regulations, the Company shall from time to time increase its number of
authorized shares of common stock so as to maintain a number of such shares
sufficient to permit the conversion of common stock if necessary to ensure such
conversion.
7. REGISTRATION AND TRANSFER OF THIS DEBENTURE. No right or interest
in this Debenture may be transferred except to a successor by inheritance or
intestate succession, and such successor shall, as a condition of succession,
accept by written instrument reasonably acceptable to the Company each of the
terms and conditions that govern this Debenture. Without limiting the foregoing,
neither this Debenture nor the stock issuable hereunder may be transferred for a
period of twelve (12) months after the date of this Debenture or the issuance of
stock hereunder unless permitted by the terms of this Debenture and applicable
law.
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8. LOST DOCUMENTS. Upon receipt by the Company of evidence
satisfactory to it of the loss, theft, destruction or mutilation of this
Debenture or any Debentures exchanged for it, and (in case of loss, theft or
destruction) of indemnity satisfactory to it, and upon reimbursement to the
Company of all reasonable expenses incidental thereto, and upon surrender and
cancellation of such Debenture, if mutilated, the Company will make and deliver
in lieu of such Debenture a new Debenture of the same series and of like tenor
and unpaid principal amount.
9. REGISTRATION RIGHTS.
(a) The Company shall use reasonable best efforts to, within
one (1) year from the date hereof, include the shares of common stock
issuable upon conversion of this Debenture in a registration statement
("Registration Statement") filed with the Securities and Exchange
Commission under the Securities Act, and have such Registration Statement
declare effective no later than the first anniversary from the date hereof
so that upon issuance the shares issuable hereunder will be freely
tradeable, provided that the Holder shall furnish to the Company all
appropriate information in connection therewith as the Company may
reasonably request.
(b) The Company shall (i) bear the costs, expenses and fees
incurred in connection with any such registration, excluding any broker
fees, selling commissions and out of pocket costs and expenses of the
Holder; (ii) supply prospectuses and other documents as the Holder may
reasonably request; (iii) use its reasonable best efforts to register and
qualify the shares issuable hereunder for sale in such states as the
Holder designates; (iv) do any and all other acts and things that may be
necessary or desirable to enable Holder to consummate the public sale or
other disposition of the shares issuable hereunder; and (v) enter into
cross-indemnification arrangements with the Holder with respect to matters
arising from such Registration Statement and public offering.
10. DEFINITIONS. The term Holder means the Holder and each
subsequent holder of this Debenture; and any consent, waiver or agreement in
writing by the then Holder with respect to any matter or thing in connection
with this Debenture, whether altering any provision hereof or otherwise, shall
bind all subsequent holders of this Debenture.
11. MISCELLANEOUS.
(a) Transfer of Warrants. No right or interest in this
Debenture is transferable except as provided in Section 7. Upon automatic
conversion, the shares issued upon cancellation of the Debenture will be
fully tradeable.
(b) Notices. Any notice or communication to be given pursuant
to this Debenture shall be in writing and shall be delivered in person or
by certified mail, return receipt requested, in the United States mail,
postage prepaid. Notices to the Company shall be addressed to the
Company's principal office. Notices to the Holder shall be addressed to
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the Holder's address as reflected in the records of the Company. Notices
shall be effective upon delivery in person, or, if mailed, at midnight on
the fifth business day after mailing.
(c) Issue Tax. The issuance of certificates for shares of
common stock upon the exercise of this Debenture shall be made without
charge to the Holder for any issuance tax in respect thereof, provided
that the Company shall not be required to pay any tax that may be payable
in respect of any transfer involved in the issuance and delivery of any
certificate in a name other than that of the Holder of the Debenture
exercised.
(d) No Shareholder Rights. This Debenture shall not entitle
the Holder to any voting rights or other rights as a shareholder of the
Company.
(e) Current Information. The Company shall cause copies of all
financial statements and reports, proxy statements and other documents
that are provided to its shareholders to be sent by first class mail,
postage prepaid, on the date of mailing to such shareholders, to the
Holder at the address reflected in the records of the Company.
(f) Governing Law. This Debenture shall be governed by and
construed in accordance with the laws of the State of Arizona.
(g) Headings; Interpretation. The section headings used herein
are for convenience of reference only and are not intended to define,
limit or describe the scope or intent of any provision of this Debenture.
When used in this Debenture, the term "including" shall mean "including,
without limitation."
(h) Successors. The covenants, agreements and provisions of
this Debenture shall bind the parties hereto and their respective
successors and permitted assigns.
(i) Integrated Agreement; Modification. This Debenture is a
complete statement of the agreement of the parties with respect to the
subject matter hereof and may be modified only by written instrument
executed by the parties.
IN WITNESS WHEREOF, the Company has executed this Debenture as of
the ____________ day of ____________, 1999.
ATTEST: iBIZ TECHNOLOGY CORP.
By:________________________________ By:___________________________________
_____________, Secretary Ken Schilling, President
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Exhibit 10.11
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT effective as of _________________, 1999,
is by and between iBIZ TECHNOLOGY CORP., a Florida corporation, INVNSYS
TECHNOLOGY CORPORATION, an Arizona corporation (collectively the "Company"), and
KENNETH SCHILLING, an individual residing in Peoria, Arizona ("Employee").
RECITALS:
A. Employee has agreed to serve as the President and Chief Executive
Officer of the Company;
B. The Board of Directors of the Company considers sound and vital
management to be essential and desires to have the benefit of Employee's
knowledge, experience and service; and
C. Employee desires to be employed by the Company and the Company
desires to retain Employee as its President and Chief Executive Officer on the
terms and conditions set forth herein.
AGREEMENTS:
The parties hereto, in consideration of the covenants and agreements
set forth herein and other good and valuable consideration, agree as follows:
1. DEFINITIONS. For purposes of this Agreement, the following terms
shall have the meaning indicated thereof:
1.1 Board means the Board of Directors of the Company or any
successor.
1.2 Company means iBIZ TECHNOLOGY CORP. or any successor
entity.
1.3 Compensation means the total amount included in Employee's
gross income for federal income tax purposes in connection with his
employment hereunder for payments or benefits received under the
provisions of Sections 2.3.1 and 2.3.2 hereof.
1.4 Effective Date means ______________________, 1999.
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1.5 Termination For Cause means the termination of employment
of Employee by the Board because of Employee's personal dishonesty,
willful misconduct, breach of fiduciary duty involving personal profit,
intentional failure to perform stated duties, willful violation of any
material law, rule or regulation resulting in the Company's detriment or
reflecting upon the Company's integrity (other than traffic infractions or
similar minor offenses) or a material breach by the Employee of the terms
of this Agreement and failure to cure such breach within thirty (30) days
after receipt of written notice from the Company specifying the nature of
such breach or to pay compensation to the Company deemed reasonable by the
Company if the breach cannot be cured. For purposes of this Agreement,
Employee's termination of employment shall not be considered to be a
Termination for Cause unless and until there shall have been delivered to
the Employee a copy of a resolution, duly adopted by the affirmative vote
of not less than sixty-six percent (66%) of the entire membership of the
Board at a meeting called and held for that purpose after reasonable
notice to Employee and an opportunity for him, together with his counsel,
to be heard, finding that, in the good faith opinion of the Board,
Employee is guilty of misconduct of the type described in this Section
1.5, and specifying the particulars thereof in detail which determination
shall be subject to a complete and de novo review as to reasonableness and
good faith.
1.6 Termination by Employee For Good Reason means the
termination of this Agreement by Employee upon the occurrence of any of
the following events without Employee's consent: (i) assignment of
Employee to any duties substantially inconsistent with his position or
duties contemplated by this Agreement or a substantial reduction of his
duties contemplated by this Agreement; (ii) the removal of any titles of
Employee specified in Section 2.2 of this Agreement; (iii) any material
breach of the Company's obligation under this Agreement or any failure by
the Company to carry out any of its material obligations hereunder, and
the failure to cure such breach or failure within thirty (30) days after
written notice of such breach or failure has been delivered to the Company
by Employee; and (iv) the relocation of Employee or his corporate office,
facilities, or personnel outside the Phoenix metropolitan area.
1.7 Total and Permanent Disability means an injury or illness
of the Employee that prevents the performance of customary duties and
which is expected to be of long continued and indefinite duration and that
has caused Employee's absence from service for at least one hundred eighty
(180) days.
2. EMPLOYMENT. The Company hereby retains and employs Employee to
serve in the capacity of President and Chief Executive Officer. Employee accepts
such employment on the terms and conditions set forth herein.
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2.1 Term. The term of this Agreement shall commence on the
Effective Date and shall end, unless previously terminated in accordance
with the provisions of Section 3 hereof, at the close of business on the
day before the second anniversary of the Effective Date hereof.
2.2 Duties and Responsibilities. Employee's position shall be
President and Chief Executive Officer of the Company. The President and
Chief Executive Officer of the Company, subject to the control of the
directors, shall in general supervise and control all business and affairs
of the Company. He shall bear ultimate responsibility for the success or
failure of the business of the Company and the operating profits or
losses. Employee shall serve in such other executive capacities and have
such additional titles and authorities with respect to the Company and its
subsidiaries as the Board may from time to time reasonably prescribe.
During the term of this Agreement, Employee shall devote substantially his
entire work time, attention, and energies to the business of the Company
and its subsidiaries. Subject to the provisions of Section 4 hereof,
Employee may serve as a director or member of any other corporation or
entity so long as any such service does not cause any conflict of interest
with the Company. During the term of this Agreement, the Company shall use
its good-faith efforts to cause the Board to include Employee as a nominee
and cause his election to the Board.
2.3. Compensation.
2.3.1 Base Salary. Subject to the further provisions of
this Agreement, the Company agrees to pay to Employee an annual base
salary of $200,000, payable no less frequently than in accordance
with the regular payroll practices of the Company, with such
increases as shall be made from time to time in accordance with the
Company's regular salary administrative practices as applied to
Company officers. The base salary of Employee shall not be decreased
at any time during the term of this Agreement from the amount in
effect from time to time. Employee shall be entitled and eligible
for bonuses that may be declared from time to time in the sole
discretion of the Board.
2.3.2 Fringe Benefits. Employee shall be entitled to
participate in any fringe benefits which are now or may hereafter
become applicable to the Company's executives, and any other
benefits which are commensurate with the duties and responsibilities
to be performed by the Employee under this Agreement; including, but
not limited to, reimbursement for reasonable business expenses
accounted for in accordance with applicable governmental
regulations; life, long-term disability and accident insurance
plans; employee saving and
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investment plans; and medical, dental and hospitalization insurance
plans; without any material reduction in such fringe benefits as in
effect on the Effective Date hereof. Employee shall receive 5 weeks
paid vacation and 6 personal days paid vacation per year that this
Agreement is in effect. Effective upon execution of this Agreement,
Employee shall receive _____ options to purchase _____ shares of
Common Stock of the Company at an exercise price of _____ per share
subject to the vesting schedule and other terms and conditions
contained in the stock option attached hereto as Exhibit "2.3.2"
issued pursuant to the Employee Stock Option Plan (the "Option
Plan") attached hereto as Exhibit "2.3.2(a)."
2.3.3 Participation in Retirement and Benefit Plans. The
Employee shall be entitled to participate in any retirement,
pension, thrift or other retirement or employee plan that the
Company has adopted or may adopt for the benefit of its senior
executives.
3. TERMINATION. Employee's employment under this Agreement shall
terminate upon the occurrence of any one of the following events:
3.1 Total and Permanent Disability. In the event Employee
suffers Total and Permanent Disability, the Company may terminate
Employee's employment. Upon termination by reason of Total and Permanent
Disability, the Company shall pay to Employee such benefits as may be
provided to officers of the Company under any Company provided disability
insurance or similar policy or under any Company adopted disability plan
and in the absence of any such policy or plan shall continue to pay to
Employee for a period of not less than six (6) months the Compensation
then in effect as of the effective date of Employee's termination.
Employee agrees, in the event of any dispute under this Section as to the
existence of Total and Permanent Disability, to submit to a physical
examination by a licensed physician selected by the Company, the cost of
such examination to be paid by the Company, and the decision as to
Employee's disability shall be conclusive and binding upon the Company and
Employee. Nothing contained herein shall be construed to affect Employee's
rights under any disability insurance or similar policy, whether
maintained by the Company, Employee or another party.
3.2 Death. In the event of the death of Employee this
Agreement shall terminate and all obligations of the Company hereunder
shall be extinguished as of the date of Employee's death. Nothing
contained herein shall be construed to affect any rights of Employee's
estate under any life insurance or similar policy, whether owned by the
Company, the Employee or any third party.
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3.3 Termination For Cause. The Company may effect a
Termination For Cause of Employee. The Company shall have no further
obligation to pay Compensation hereunder after the date of Termination For
Cause.
3.4 Voluntary. Should Employee voluntarily terminate his
employment prior to the termination of this Agreement, the Company shall
have no further obligation to pay compensation.
3.5 Termination By Employee For Good Reason. Employee shall be
entitled to terminate his employment hereunder upon the occurrence of an
event constituting Good Reason, as defined in Section 1.6. If an event
constituting Good Reason occurs, Employee shall have the right,
exercisable for a period of thirty (30) days, to immediately terminate
this Agreement by delivering a written statement to that effect to the
Company. Upon such a termination, Employee shall be entitled to receive a
payment equal to the lesser of (i) an amount equal to one-half of the
Employee's annual base salary in effect at the time of termination, or
(ii) the remaining compensation due Employee under the terms of this
Agreement. If Employee fails to exercise his rights under this Section 3.5
within thirty (30) days following an event constituting Good Reason, such
rights shall expire and be of no further force or effect.
4. CONFIDENTIALITY.
4.1 Confidential Information. Employee acknowledges that he
has and will have access to trade secrets and confidential business
information of the Company and its affiliates and subsidiaries throughout
the term of this Agreement and that any such trade secret or confidential
information, regardless of whether Employee alone or with others developed
any such trade secret or confidential information, shall be and shall
remain the property of the Company or its affiliates or subsidiaries.
During the term of this Agreement and after termination of employment,
Employee shall not, either voluntarily or involuntarily, on either his own
account, as a member of a firm, or on behalf of another employer or
otherwise, directly or indirectly use or reveal to any person,
partnership, corporation or association any trade secret or confidential
information of the Company or any of its subsidiaries or affiliates. Such
trade secrets shall include, but shall not be limited to, business plans,
marketing plans or programs, any non-public financial information,
including but not limited to, financial information, forecasts and
statistics relating to markets, contracts, customer lists, compensation
arrangements and business opportunities. The term "trade secrets" shall
not include information generally available to the public or a
governmental agency. Employee will not make available to any person,
partnership, corporation or association, or retain after termination of
employment, any Employer policy manuals, printed
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materials or computer disc containing information related to the Company
or to any affiliate of the Company.
4.2 Injunctive Relief. Employee acknowledges that the
restrictions contained in this Section 4 are a reasonable and necessary
protection of the immediate interests of the Company and its affiliates
and subsidiaries and that any violation of these restrictions would cause
substantial injury to the Company. In the event of a breach or threatened
breach by Employee of these restrictions, the Company shall be entitled to
apply to any court of competent jurisdiction for an injunction restraining
Employee from such breach or threatened breach; provided, however, that
the right to apply for an injunction shall not be construed as prohibiting
the Company from pursuing any other available remedies for such breach or
threatened breach.
5. BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding upon
and inure to the benefit of the Employee, the Company and their respective
heirs, executors, administrators, successors and assigns; provided, however,
that Employee may not assign his rights hereunder without the prior written
consent of the Company and may not assign his obligations hereunder. The Company
may assign either its rights or obligations hereunder to any of its subsidiaries
or affiliated corporation or to any successor to substantially all of the assets
or business of the Company.
6. MODIFICATION, WAIVER OR AMENDMENT. The provisions of this
Agreement may not be modified, amended or waived except by a written instrument
executed by the Company and Employee. The waiver of any provision of this
Agreement by either party shall not constitute a waiver of any subsequent
occurrences or transactions unless the waiver, by its terms, constitutes a
continuing waiver.
7. ARBITRATION. Any disputes related to or arising out of this
Agreement or otherwise relating to Employee's employment with the Company shall
be subject to mandatory binding arbitration before a single arbitrator in
accordance with the rules of the American Arbitration Association ("AAA"),
except that the Company may, in place of or in addition to arbitration, elect to
pursue court remedies for any breach of Section 4 of this Agreement. The
arbitrator shall be selected in accordance with the AAA's rules for selecting a
single arbitrator provided that, if AAA rules call for selecting an arbitrator
by making strikes against a list of candidates, in the event that there is an
odd number of candidates Employee shall have the first strike and in the event
that there is an even number of candidates the Company shall have the first
strike. Except to the extent contrary to this Agreement or the Company's written
policies regarding arbitration with Employee, the procedural rules that shall
govern the arbitration shall be the rules of the AAA, or in the event that a
particular procedural issue is not governed by the foregoing, the Arizona Rules
of Civil Procedure shall apply except that discovery may be conducted only upon
agreement of the parties or order of the arbitrator upon good cause shown,
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and in issuing discovery orders, the arbitrator shall consider that the parties
have chosen arbitration to provide for the efficient and inexpensive resolution
of disputes. The forum for the arbitration shall be Phoenix, Arizona. The
applicable substantive law shall be the law chosen to apply to disputes provided
by this Agreement. A party may initiate arbitration under this Section by making
a demand for arbitration and shall serve with that demand a detailed statement
setting forth with particularity the factual and legal basis for each claim
asserted. In the event that the party initiating arbitration fails to serve on
the opposing party the detailed statement of claims required by this Section,
the opposing party shall be entitled to move to dismiss the arbitration, and
upon such motion, such claims shall be dismissed. Upon the issuance of a
decision, the arbitrator shall issue written findings of fact and conclusions of
law. The decision of the arbitrator shall be in accordance with the express
terms and conditions of this Agreement. Each party shall pay its own attorneys'
fees and costs and shall share the arbitration fees provided that the
nonprevailing party shall reimburse the prevailing party for all reasonable
attorneys' fees and costs, including the arbitration fees, incurred in
connection with the arbitration. Arbitration proceedings and any information
related thereto shall be kept confidential. THE PARTIES ACKNOWLEDGE THAT THEIR
AGREEMENT TO ARBITRATE UNDER THIS SECTION MEANS THAT TRIAL BY JURY OR APPEAL
WILL NOT BE AVAILABLE FOR ANY DISPUTES RELATED TO OR ARISING OUT OF THIS
AGREEMENT OR OTHERWISE RELATING TO EMPLOYEE'S EMPLOYMENT WITH THE COMPANY
INCLUDING WITHOUT LIMITATION DISPUTES INVOLVING ALLEGED EMPLOYMENT
DISCRIMINATION, HARASSMENT, WRONGFUL TERMINATION, AND ANY OTHER CLAIMS ARISING
OUT OF FEDERAL OR STATE STATUTES, COMMON LAW OR PUBLIC POLICY, EXCEPT THAT THIS
SECTION DOES NOT RESTRICT THE RIGHT TO PURSUE COURT REMEDIES FOR ANY BREACH OF
SECTION 4 OF THIS AGREEMENT.
8. NO MITIGATION. Any compensation earned by Employee from another
employer or from employment not in violation of the provisions of Section 2.2 or
Section 4 hereof shall not reduce any payment to which Employee is entitled
under the terms of this Agreement.
9. MISCELLANEOUS.
9.1 Entire Agreement. This Agreement rescinds and
supersedes any other agreement and contains the entire understanding
between the parties relative to the employment of Employee, there
being no terms, conditions, warranties, or representations other
than those contained or referred to herein, and no amendment hereto
shall be valid unless made in writing and signed by both of the
parties hereto.
9.2 Governing Law. This Agreement shall be interpreted
and construed in accordance with the laws of the State of Arizona
without regard to conflicts of law principles as applied to
residents of Arizona.
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9.3 Severability. In the event that any provisions
herein shall be legally unenforceable, the remaining provisions
nevertheless shall be carried into effect.
9.4 Attorneys' Fees. In the event of any litigation
between the parties hereto arising out of the terms, conditions and
obligations expressed in this Agreement, the prevailing party in
such litigation shall be entitled to recover reasonable attorneys'
fees incurred in connection therewith.
9.5 Notices. All notices required or permitted to be
given hereunder shall be deemed given if in writing and delivered
personally or sent by telex, telegram, telecopy, or forwarded by
prepaid registered or certified mail (return receipt requested) to
the party or parties at the following addresses (or at such other
addresses as shall be specified by like notices), and any notice,
however given, shall be effective when received:
To Employee: Kenneth Schilling
8512 W. Via Montoya
Peoria, Arizona 85382
To the Company: iBIZ TECHNOLOGY CORP.
Suite 618-688 West Hastings Street
Vancouver, British Columbia,
Canada V6B 1P1
9.6 Waiver. The waiver by any party of a breach of any
provision of this Agreement by the other shall not operate or be construed
as a waiver of any subsequent breach of the same provision or any other
provision of this Agreement.
9.7. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
9.8 Headings. The subject headings to the sections in this
Agreement are included for purposes of convenience only and shall not
affect the construction or interpretation of any of its provisions.
9.9 Survivorship. The provisions of Sections 3.1, 4.1, 4.2, 7
and 8 shall continue and shall survive the termination of the Agreement.
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9.10 Integration. This Agreement reflects the entire agreement
of the parties related to the subject matter hereof, and any prior
understandings, agreements or representations relating to such subject
matter are hereby superseded.
In witness whereof, the parties have executed this Agreement on
___________________, 1999, and effective as of the date first hereinabove
written.
iBIZ TECHNOLOGY CORP.,
a Florida corporation
By:___________________________________
Its:__________________________________
Employee
___________________________________
KENNETH SCHILLING
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EXHIBIT "2.3.2"
EMPLOYEE STOCK OPTION
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EXHIBIT "2.3.2(a)"
EMPLOYEE STOCK OPTION PLAN
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ADDENDUM TO EMPLOYMENT AGREEMENT
THIS ADDENDUM TO EMPLOYMENT AGREEMENT ("this Addendum") is entered
into effective as of the ____ day of ______________, 1999, by and between iBIZ
TECHNOLOGY CORP., a Florida corporation ("iBIZ"), INVNSYS TECHNOLOGY
CORPORATION, ("INVNSYS") (iBIZ and INVNSYS are referred to collectively as the
"Company") and KENNETH SCHILLING, an individual ("Employee"). iBIZ and the
Employee entered into that certain Employment Agreement dated March 5, 1999
("Employment Agreement"), which, among other things, provided for the issuance
of certain options to purchase shares of common stock of iBIZ. iBIZ and Employee
desire to amend the provisions relating to the options under such Employment
Agreement.
THEREFORE, in consideration of the covenants and agreements set
forth in the Employment Agreement and this Addendum and other good and valuable
consideration, the parties agree as follows:
1. OPTIONS. In lieu of the options that were to be issued to
Employee under the Employment Agreement, the Company and Employee hereby agree
that iBIZ shall issue to Employee 250,000 options to purchase 250,000 shares of
common stock of iBIZ at an exercise price of $0.75 per share. Such options shall
be subject to the vesting schedule and other terms and conditions contained in
the stock option attached to the Employment Agreement issued pursuant to the
Employee Stock Option Plan attached to the Employment Agreement. A total of
200,000 options shall be issued to Employee in consideration of Employee's
services as an officer of iBIZ and 50,000 options shall be issued to Employee in
consideration of Employee's services as a director of iBIZ. The effective date
of the issuance of the foregoing options shall be April 22, 1999.
2. EFFECT OF ADDENDUM. Except as amended by this Addendum, the terms
and conditions of the Employment Agreement shall remain unchanged. This Addendum
is hereby incorporated into the Employment Agreement as though originally a part
thereof.
IN WITNESS WHEREOF, the parties have executed this Addendum as of
the effective date set forth above.
iBIZ TECHNOLOGY CORP.
By: _______________________________
Ken Schilling, President
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KEN SCHILLING
___________________________________
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Exhibit 10.12
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT effective as of ___________________, 1999,
is by and between iBIZ TECHNOLOGY CORP., a Florida corporation, INVNSYS
TECHNOLOGY CORPORATION, an Arizona corporation (collectively the "Company"), and
TERRY RATLIFF, an individual residing in Glendale, Arizona ("Employee").
RECITALS:
A. Employee has agreed to serve as the Vice President/Comptroller of
the Company;
B. The Board of Directors of the Company considers sound and vital
management to be essential and desires to have the benefit of Employee's
knowledge, experience and service; and
C. Employee desires to be employed by the Company and the Company
desires to retain Employee as its Vice President/Comptroller on the terms and
conditions set forth herein.
AGREEMENTS:
The parties hereto, in consideration of the covenants and agreements
set forth herein and other good and valuable consideration, agree as follows:
1. DEFINITIONS. For purposes of this Agreement, the following terms
shall have the meaning indicated thereof:
1.1 Board means the Board of Directors of the Company or any
successor.
1.2 Company means iBIZ TECHNOLOGY CORP. or any successor
entity.
1.3 Compensation means the total amount included in Employee's
gross income for federal income tax purposes in connection with her
employment hereunder for payments or benefits received under the
provisions of Sections 2.3.1 and 2.3.2 hereof.
1.4 Effective Date means ____________________, 1999.
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1.5 Termination For Cause means the termination of employment
of Employee by the Board because of Employee's personal dishonesty,
willful misconduct, breach of fiduciary duty involving personal profit,
intentional failure to perform stated duties, willful violation of any
material law, rule or regulation resulting in the Company's detriment or
reflecting upon the Company's integrity (other than traffic infractions or
similar minor offenses) or a material breach by the Employee of the terms
of this Agreement and failure to cure such breach within thirty (30) days
after receipt of written notice from the Company specifying the nature of
such breach or to pay compensation to the Company deemed reasonable by the
Company if the breach cannot be cured. For purposes of this Agreement,
Employee's termination of employment shall not be considered to be a
Termination for Cause unless and until there shall have been delivered to
the Employee a copy of a resolution, duly adopted by the affirmative vote
of not less than sixty-six percent (66%) of the entire membership of the
Board at a meeting called and held for that purpose after reasonable
notice to Employee and an opportunity for her, together with her counsel,
to be heard, finding that, in the good faith opinion of the Board,
Employee is guilty of misconduct of the type described in this Section
1.5, and specifying the particulars thereof in detail which determination
shall be subject to a complete and de novo review as to reasonableness and
good faith.
1.6 Termination by Employee For Good Reason means the
termination of this Agreement by Employee upon the occurrence of any of
the following events without Employee's consent: (i) assignment of
Employee to any duties substantially inconsistent with her position or
duties contemplated by this Agreement or a substantial reduction of her
duties contemplated by this Agreement; (ii) the removal of any titles of
Employee specified in Section 2.2 of this Agreement; (iii) any material
breach of the Company's obligation under this Agreement or any failure by
the Company to carry out any of its material obligations hereunder, and
the failure to cure such breach or failure within thirty (30) days after
written notice of such breach or failure has been delivered to the Company
by Employee; and (iv) the relocation of Employee or her corporate office,
facilities, or personnel outside the Phoenix metropolitan area.
1.7 Total and Permanent Disability means an injury or illness
of the Employee that prevents the performance of customary duties and
which is expected to be of long continued and indefinite duration and that
has caused Employee's absence from service for at least one hundred eighty
(180) days.
2. EMPLOYMENT. The Company hereby retains and employs Employee to
serve in the capacity of Vice President/Comptroller. Employee accepts such
employment on the terms and conditions set forth herein.
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2.1 Term. The term of this Agreement shall commence on the
Effective Date and shall end, unless previously terminated in accordance
with the provisions of Section 3 hereof, at the close of business on the
day before the second anniversary of the Effective Date hereof.
2.2 Duties and Responsibilities. Employee's position shall be
Vice President/Comptroller of the Company. The Vice President/Comptroller
of the Company shall, among other duties, keep full and accurate accounts
of receipts and disbursements in the books of the Company; and shall
ASSIST the Board in preparing all records, reports, statements and other
documents required by law to be maintained or filed by the Company.
Employee shall serve in such other executive capacities and have such
additional titles and authorities with respect to the Company and its
subsidiaries as the Board may from time to time reasonably prescribe.
During the term of this Agreement, Employee shall devote substantially her
entire work time, attention and energies to the business of the Company
and its subsidiaries. Subject to the provisions of Section 4 hereof,
Employee may serve as director or member of any other corporation or
entity so long as such service does not cause any conflict of interest
with the Company.
2.3. Compensation.
2.3.1 Base Salary. Subject to the further provisions of
this Agreement, the Company agrees to pay to Employee an annual base
salary of $88,000, payable no less frequently than in accordance
with the regular payroll practices of the Company, with such
increases as shall be made from time to time in accordance with the
Company's regular salary administrative practices as applied to
Company officers. The base salary of Employee shall not be decreased
at any time during the term of this Agreement from the amount in
effect from time to time. Employee shall be entitled and eligible
for bonuses that may be declared from time to time in the sole
discretion of the Board.
2.3.2 Fringe Benefits. Employee shall be entitled to
participate in any fringe benefits which are now or may hereafter
become applicable to the Company's executives, and any other
benefits which are commensurate with the duties and responsibilities
to be performed by the Employee under this Agreement; including, but
not limited to, reimbursement for reasonable business expenses
accounted for in accordance with applicable governmental
regulations; life, long-term disability and accident insurance
plans; employee saving and investment plans; and medical, dental and
hospitalization insurance plans; without any material reduction in
such fringe benefits as in effect on the Effective Date hereof.
Employee shall receive 4 weeks paid
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vacation and 5 personal days paid vacation per year that this
Agreement is in effect. Effective upon execution of this Agreement,
Employee shall receive _____ options to purchase _____ shares of
Common Stock of the Company at an exercise price of _____ per share
subject to the vesting schedule and other terms and conditions
contained in the stock option attached hereto as Exhibit "2.3.2"
issued pursuant to the Employee Stock Option Plan (the "Option
Plan") attached hereto as Exhibit "2.3.2(a)."
2.3.3 Participation in Retirement and Benefit Plans. The
Employee shall be entitled to participate in any retirement,
pension, thrift or other retirement or employee plan that the
Company has adopted or may adopt for the benefit of its senior
executives.
3. TERMINATION. Employee's employment under this Agreement shall
terminate upon the occurrence of any one of the following events:
3.1 Total and Permanent Disability. In the event Employee
suffers Total and Permanent Disability, the Company may terminate
Employee's employment. Upon termination by reason of Total and Permanent
Disability, the Company shall pay to Employee such benefits as may be
provided to officers of the Company under any Company provided disability
insurance or similar policy or under any Company adopted disability plan
and in the absence of any such policy or plan shall continue to pay to
Employee for a period of not less than six (6) months the Compensation
then in effect as of the effective date of Employee's termination.
Employee agrees, in the event of any dispute under this Section as to the
existence of Total and Permanent Disability, to submit to a physical
examination by a licensed physician selected by the Company, the cost of
such examination to be paid by the Company, and the decision as to
Employee's disability shall be conclusive and binding upon the Company and
Employee. Nothing contained herein shall be construed to affect Employee's
rights under any disability insurance or similar policy, whether
maintained by the Company, Employee or another party.
3.2 Death. In the event of the death of Employee this
Agreement shall terminate and all obligations of the Company hereunder
shall be extinguished as of the date of Employee's death. Nothing
contained herein shall be construed to affect any rights of Employee's
estate under any life insurance or similar policy, whether owned by the
Company, the Employee or any third party.
3.3 Termination For Cause. The Company may effect a
Termination For Cause of Employee. The Company shall have no further
obligation to pay Compensation hereunder after the date of Termination For
Cause.
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3.4 Voluntary. Should Employee voluntarily terminate her
employment prior to the termination of this Agreement, the Company shall
have no further obligation to pay compensation.
3.5 Termination By Employee For Good Reason. Employee shall be
entitled to terminate her employment hereunder upon the occurrence of an
event constituting Good Reason, as defined in Section 1.6. If an event
constituting Good Reason occurs, Employee shall have the right,
exercisable for a period of thirty (30) days, to immediately terminate
this Agreement by delivering a written statement to that effect to the
Company. Upon such a termination, Employee shall be entitled to receive a
payment equal to the lesser of (i) an amount equal to one-half of the
Employee's annual base salary in effect at the time of termination, or
(ii) the remaining compensation due Employee under the terms of this
Agreement. If Employee fails to exercise her rights under this Section 3.5
within thirty (30) days following an event constituting Good Reason, such
rights shall expire and be of no further force or effect.
4. CONFIDENTIALITY.
4.1 Confidential Information. Employee acknowledges that she
has and will have access to trade secrets and confidential business
information of the Company and its affiliates and subsidiaries throughout
the term of this Agreement and that any such trade secret or confidential
information, regardless of whether Employee alone or with others developed
any such trade secret or confidential information, shall be and shall
remain the property of the Company or its affiliates or subsidiaries.
During the term of this Agreement and after termination of employment,
Employee shall not, either voluntarily or involuntarily, on either her own
account, as a member of a firm, or on behalf of another employer or
otherwise, directly or indirectly use or reveal to any person,
partnership, corporation or association any trade secret or confidential
information of the Company or any of its subsidiaries or affiliates. Such
trade secrets shall include, but shall not be limited to, business plans,
marketing plans or programs, any non-public financial information,
including but not limited to, financial information, forecasts and
statistics relating to markets, contracts, customer lists, compensation
arrangements and business opportunities. The term "trade secrets" shall
not include information generally available to the public or a
governmental agency. Employee will not make available to any person,
partnership, corporation or association, or retain after termination of
employment, any Employer policy manuals, printed materials or computer
disc containing information related to the Company or to any affiliate of
the Company.
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4.2 Injunctive Relief. Employee acknowledges that the
restrictions contained in this Section 4 are a reasonable and necessary
protection of the immediate interests of the Company and its affiliates
and subsidiaries and that any violation of these restrictions would cause
substantial injury to the Company. In the event of a breach or threatened
breach by Employee of these restrictions, the Company shall be entitled to
apply to any court of competent jurisdiction for an injunction restraining
Employee from such breach or threatened breach; provided, however, that
the right to apply for an injunction shall not be construed as prohibiting
the Company from pursuing any other available remedies for such breach or
threatened breach.
5. BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding upon
and inure to the benefit of the Employee, the Company and their respective
heirs, executors, administrators, successors and assigns; provided, however,
that Employee may not assign her rights hereunder without the prior written
consent of the Company and may not assign her obligations hereunder. The Company
may assign either its rights or obligations hereunder to any of its subsidiaries
or affiliated corporation or to any successor to substantially all of the assets
or business of the Company.
6. MODIFICATION, WAIVER OR AMENDMENT. The provisions of this
Agreement may not be modified, amended or waived except by a written instrument
executed by the Company and Employee. The waiver of any provision of this
Agreement by either party shall not constitute a waiver of any subsequent
occurrences or transactions unless the waiver, by its terms, constitutes a
continuing waiver.
7. ARBITRATION. Any disputes related to or arising out of this
Agreement or otherwise relating to Employee's employment with the Company shall
be subject to mandatory binding arbitration before a single arbitrator in
accordance with the rules of the American Arbitration Association ("AAA"),
except that the Company may, in place of or in addition to arbitration, elect to
pursue court remedies for any breach of Section 4 of this Agreement. The
arbitrator shall be selected in accordance with the AAA's rules for selecting a
single arbitrator provided that, if AAA rules call for selecting an arbitrator
by making strikes against a list of candidates, in the event that there is an
odd number of candidates Employee shall have the first strike and in the event
that there is an even number of candidates the Company shall have the first
strike. Except to the extent contrary to this Agreement or the Company's written
policies regarding arbitration with Employee, the procedural rules that shall
govern the arbitration shall be the rules of the AAA, or in the event that a
particular procedural issue is not governed by the foregoing, the Arizona Rules
of Civil Procedure shall apply except that discovery may be conducted only upon
agreement of the parties or order of the arbitrator upon good cause shown, and
in issuing discovery orders, the arbitrator shall consider that the parties have
chosen arbitration to provide for the efficient and inexpensive resolution of
disputes. The forum for the arbitration shall be Phoenix, Arizona. The
applicable substantive
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law shall be the law chosen to apply to disputes provided by this Agreement. A
party may initiate arbitration under this Section by making a demand for
arbitration and shall serve with that demand a detailed statement setting forth
with particularity the factual and legal basis for each claim asserted. In the
event that the party initiating arbitration fails to serve on the opposing party
the detailed statement of claims required by this Section, the opposing party
shall be entitled to move to dismiss the arbitration, and upon such motion, such
claims shall be dismissed. Upon the issuance of a decision, the arbitrator shall
issue written findings of fact and conclusions of law. The decision of the
arbitrator shall be in accordance with the express terms and conditions of this
Agreement. Each party shall pay its own attorneys' fees and costs and shall
share the arbitration fees provided that the nonprevailing party shall reimburse
the prevailing party for all reasonable attorneys' fees and costs, including the
arbitration fees, incurred in connection with the arbitration. Arbitration
proceedings and any information related thereto shall be kept confidential. THE
PARTIES ACKNOWLEDGE THAT THEIR AGREEMENT TO ARBITRATE UNDER THIS SECTION MEANS
THAT TRIAL BY JURY OR APPEAL WILL NOT BE AVAILABLE FOR ANY DISPUTES RELATED TO
OR ARISING OUT OF THIS AGREEMENT OR OTHERWISE RELATING TO EMPLOYEE'S EMPLOYMENT
WITH THE COMPANY INCLUDING WITHOUT LIMITATION DISPUTES INVOLVING ALLEGED
EMPLOYMENT DISCRIMINATION, HARASSMENT, WRONGFUL TERMINATION, AND ANY OTHER
CLAIMS ARISING OUT OF FEDERAL OR STATE STATUTES, COMMON LAW OR PUBLIC POLICY,
EXCEPT THAT THIS SECTION DOES NOT RESTRICT THE RIGHT TO PURSUE COURT REMEDIES
FOR ANY BREACH OF SECTION 4 OF THIS AGREEMENT.
8. NO MITIGATION. Any compensation earned by Employee from another
employer or from employment not in violation of the provisions of Section 2.2 or
Section 4 hereof shall not reduce any payment to which Employee is entitled
under the terms of this Agreement.
9. MISCELLANEOUS.
9.1 Entire Agreement. This Agreement rescinds and
supersedes any other agreement and contains the entire understanding
between the parties relative to the employment of Employee, there
being no terms, conditions, warranties, or representations other
than those contained or referred to herein, and no amendment hereto
shall be valid unless made in writing and signed by both of the
parties hereto.
9.2 Governing Law. This Agreement shall be interpreted
and construed in accordance with the laws of the State of Arizona
without regard to conflicts of law principles as applied to
residents of Arizona.
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9.3 Severability. In the event that any provisions
herein shall be legally unenforceable, the remaining provisions
nevertheless shall be carried into effect.
9.4 Attorneys' Fees. In the event of any litigation
between the parties hereto arising out of the terms, conditions and
obligations expressed in this Agreement, the prevailing party in
such litigation shall be entitled to recover reasonable attorneys'
fees incurred in connection therewith.
9.5 Notices. All notices required or permitted to be
given hereunder shall be deemed given if in writing and delivered
personally or sent by telex, telegram, telecopy, or forwarded by
prepaid registered or certified mail (return receipt requested) to
the party or parties at the following addresses (or at such other
addresses as shall be specified by like notices), and any notice,
however given, shall be effective when received:
To Employee: Terry Ratliff
5312 W. Westwind Drive
Glendale, Arizona 85310
To the Company: iBIZ TECHNOLOGY CORP.
Suite 618-688 West Hastings Street
Vancouver, British Columbia,
Canada V6B 1P1
9.6 Waiver. The waiver by any party of a breach of any
provision of this Agreement by the other shall not operate or be construed
as a waiver of any subsequent breach of the same provision or any other
provision of this Agreement.
9.7. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
9.8 Headings. The subject headings to the sections in this
Agreement are included for purposes of convenience only and shall not
affect the construction or interpretation of any of its provisions.
9.9 Survivorship. The provisions of Sections 3.1, 4.1, 4.2, 7
and 8 shall continue and shall survive the termination of the Agreement.
9.10 Integration. This Agreement reflects the entire agreement
of the parties related to the subject matter hereof, and any prior
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understandings, agreements or representations relating to such subject
matter are hereby superseded, and Employee hereby expressly acknowledges
that this Agreement supersedes and replaces Employee's Employment
Agreement with INVNSYS Technology Corporation and Employee hereby waives
and releases INVNSYS Technology Corporation from all claims for
compensation and other benefits as of the effective date of Employee's
employment with the Company.
In witness whereof, the parties have executed this Agreement on
___________________, 1999, and effective as of the date first hereinabove
written.
iBIZ TECHNOLOGY CORP.,
a Florida corporation
By:_________________________________________
Its:________________________________________
EMPLOYEE
____________________________________________
TERRY RATLIFF
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EXHIBIT "2.3.2"
EMPLOYEE STOCK OPTION
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EXHIBIT "2.3.2(a)"
EMPLOYEE STOCK OPTION PLAN
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ADDENDUM TO EMPLOYMENT AGREEMENT
THIS ADDENDUM TO EMPLOYMENT AGREEMENT ("this Addendum") is entered
into effective as of the ____ day of ______________, 1999, by and between iBIZ
TECHNOLOGY CORP., a Florida corporation ("iBIZ"), INVNSYS TECHNOLOGY
CORPORATION, ("INVNSYS") (iBIZ and INVNSYS are referred to collectively as the
"Company") and TERRY RATLIFF, an individual ("Employee"). iBIZ and the Employee
entered into that certain Employment Agreement dated March 5, 1999 ("Employment
Agreement"), which, among other things, provided for the issuance of certain
options to purchase shares of common stock of iBIZ. iBIZ and Employee desire to
amend the provisions relating to the options under such Employment Agreement.
THEREFORE, in consideration of the covenants and agreements set
forth in the Employment Agreement and this Addendum and other good and valuable
consideration, the parties agree as follows:
3. OPTIONS. In lieu of the options that were to be issued to
Employee under the Employment Agreement, the Company and Employee hereby agree
that iBIZ shall issue to Employee 350,000 options to purchase 350,000 shares of
common stock of iBIZ at an exercise price of $0.75 per share. Such options shall
be subject to the vesting schedule and other terms and conditions contained in
the stock option attached to the Employment Agreement issued pursuant to the
Employee Stock Option Plan attached to the Employment Agreement. A total of
300,000 options shall be issued to Employee in consideration of Employee's
services as an officer of iBIZ and 50,000 options shall be issued to Employee in
consideration of Employee's services as a director of iBIZ. The effective date
of the issuance of the foregoing options shall be April 22, 1999.
4. EFFECT OF ADDENDUM. Except as amended by this Addendum, the terms
and conditions of the Employment Agreement shall remain unchanged. This Addendum
is hereby incorporated into the Employment Agreement as though originally a part
thereof.
IN WITNESS WHEREOF, the parties have executed this Addendum as of
the effective date set forth above.
iBIZ TECHNOLOGY CORP.
By:_________________________________________
Ken Schilling, President
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TERRY RATLIFF
____________________________________________
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Exhibit 10.13
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT effective as of _______________,
1999, is by and between iBIZ TECHNOLOGY CORP., a Florida corporation, and
INVNSYS TECHNOLOGY CORPORATION, an Arizona corporation, (collectively the
"Company"), and MARK PERKINS, an individual residing in Phoenix, Arizona
("Employee").
RECITALS:
A. Employee has agreed to serve as Vice-President of
Operations of the Company;
B. The Board of Directors of the Company considers sound and
vital management to be essential and desires to have the benefit of Employee's
knowledge, experience and service; and
C. Employee desires to be employed by the Company and the
Company desires to retain Employee as its Vice-President of Operations on the
terms and conditions set forth herein.
AGREEMENTS:
The parties hereto, in consideration of the covenants and
agreements set forth herein and other good and valuable consideration, agree as
follows:
1. DEFINITIONS. For purposes of this Agreement, the following
terms shall have the meaning indicated thereof:
1.1 Board means the Board of Directors of the Company
or any successor.
1.2 Company means iBIZ TECHNOLOGY CORP. or any
successor entity.
1.3 Compensation means the total amount included in
Employee's gross income for federal income tax purposes in connection
with his employment hereunder for payments or benefits received under
the provisions of Sections 2.3.1 and 2.3.2 hereof.
1.4 Effective Date means __________________, 1999.
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1.5 Termination For Cause means the termination of
employment of Employee by the Board because of Employee's personal
dishonesty, willful misconduct, breach of fiduciary duty involving
personal profit, intentional failure to perform stated duties, willful
violation of any material law, rule or regulation resulting in the
Company's detriment or reflecting upon the Company's integrity (other
than traffic infractions or similar minor offenses) or a material
breach by the Employee of the terms of this Agreement and failure to
cure such breach within thirty (30) days after receipt of written
notice from the Company specifying the nature of such breach or to pay
compensation to the Company deemed reasonable by the Company if the
breach cannot be cured. For purposes of this Agreement, Employee's
termination of employment shall not be considered to be a Termination
for Cause unless and until there shall have been delivered to the
Employee a copy of a resolution, duly adopted by the affirmative vote
of not less than sixty-six percent (66%) of the entire membership of
the Board at a meeting called and held for that purpose after
reasonable notice to Employee and an opportunity for him, together with
his counsel, to be heard, finding that, in the good faith opinion of
the Board, Employee is guilty of misconduct of the type described in
this Section 1.5, and specifying the particulars thereof in detail
which determination shall be subject to a complete and de novo review
as to reasonableness and good faith.
1.6 Termination by Employee For Good Reason means the
termination of this Agreement by Employee upon the occurrence of any of
the following events without Employee's consent: (i) assignment of
Employee to any duties substantially inconsistent with his position or
duties contemplated by this Agreement or a substantial reduction of his
duties contemplated by this Agreement; (ii) the removal of any titles
of Employee specified in Section 2.2 of this Agreement; (iii) any
material breach of the Company's obligation under this Agreement or any
failure by the Company to carry out any of its material obligations
hereunder, and the failure to cure such breach or failure within thirty
(30) days after written notice of such breach or failure has been
delivered to the Company by Employee; and (iv) the relocation of
Employee or his corporate office, facilities, or personnel outside the
Phoenix metropolitan area.
1.7 Total and Permanent Disability means an injury or
illness of the Employee that prevents the performance of customary
duties and which is expected to be of long continued and indefinite
duration and that has caused Employee's absence from service for at
least one hundred eighty (180) days.
2. EMPLOYMENT. The Company hereby retains and employs Employee
to serve in the capacity of Vice-President of Operations. Employee accepts such
employment on the terms and conditions set forth herein.
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2.1 Term. The term of this Agreement shall commence
on the Effective Date and shall end, unless previously terminated in
accordance with the provisions of Section 3 hereof, at the close of
business on the day before the second anniversary of the Effective Date
hereof.
2.2 Duties and Responsibilities. Employee's position
shall be Vice-President of Operations. The Vice-President of Operations
of the Company shall have such duties and powers as the Board,
President or Chief Executive Officer may delegate from time to time. At
the request of the President or in the case of absence or disability of
the President, the Vice-President of Operations shall perform the
duties of the President and, when so acting, shall have all powers and
be subject to all obligations of President. Employee shall serve in
such other executive capacities and have such additional titles and
authorities with respect to the Company and its subsidiaries as the
Board may from time to time reasonably prescribe. During the term of
this Agreement, Employee shall devote substantially his entire work
time, attention, and energies to the business of the Company and its
subsidiaries. Subject to the provisions of Section 4 hereof, Employee
may serve as a director or member of any other corporation or entity so
long as any such service does not cause any conflict of interest with
the Company.
2.3. Compensation.
2.3.1 Base Salary. Subject to the further
provisions of this Agreement, the Company agrees to pay to
Employee an annual base salary of $88,000, payable no less
frequently than in accordance with the regular payroll
practices of the Company, with such increases as shall be made
from time to time in accordance with the Company's regular
salary administrative practices as applied to Company
officers. The base salary of Employee shall not be decreased
at any time during the term of this Agreement from the amount
in effect from time to time. Employee shall be entitled and
eligible for bonuses that may be declared from time to time in
the sole discretion of the Board.
2.3.2 Fringe Benefits. Employee shall be
entitled to participate in any fringe benefits which are now
or may hereafter become applicable to the Company's
executives, and any other benefits which are commensurate with
the duties and responsibilities to be performed by the
Employee under this Agreement; including, but not limited to,
reimbursement for reasonable business expenses accounted for
in accordance with applicable governmental regulations; life,
long-term disability and accident insurance plans; employee
saving and investment plans; and medical, dental and
hospitalization insurance plans; without any material
reduction in such fringe benefits as in effect
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on the Effective Date hereof. Employee shall receive 4 weeks
paid vacation and 4 personal days paid vacation per year that
this Agreement is in effect. Effective upon execution of this
Agreement, Employee shall receive _____ options to purchase
_____ shares of Common Stock of the Company at an exercise
price of _____ per share subject to the vesting schedule and
other terms and conditions contained in the stock option
attached hereto as Exhibit "2.3.2" issued pursuant to the
Employee Stock Option Plan (the "Option Plan") attached hereto
as Exhibit "2.3.2(a)."
2.3.3 Participation in Retirement and
Benefit Plans. The Employee shall be entitled to participate
in any retirement, pension, thrift or other retirement or
employee plan that the Company has adopted or may adopt for
the benefit of its senior executives.
3. TERMINATION. Employee's employment under this Agreement
shall terminate upon the occurrence of any one of the following events:
3.1 Total and Permanent Disability. In the event
Employee suffers Total and Permanent Disability, the Company may
terminate Employee's employment. Upon termination by reason of Total
and Permanent Disability, the Company shall pay to Employee such
benefits as may be provided to officers of the Company under any
Company provided disability insurance or similar policy or under any
Company adopted disability plan and in the absence of any such policy
or plan shall continue to pay to Employee for a period of not less than
six (6) months the Compensation then in effect as of the effective date
of Employee's termination. Employee agrees, in the event of any dispute
under this Section as to the existence of Total and Permanent
Disability, to submit to a physical examination by a licensed physician
selected by the Company, the cost of such examination to be paid by the
Company, and the decision as to Employee's disability shall be
conclusive and binding upon the Company and Employee. Nothing contained
herein shall be construed to affect Employee's rights under any
disability insurance or similar policy, whether maintained by the
Company, Employee or another party.
3.2 Death. In the event of the death of Employee this
Agreement shall terminate and all obligations of the Company hereunder
shall be extinguished as of the date of Employee's death. Nothing
contained herein shall be construed to affect any rights of Employee's
estate under any life insurance or similar policy, whether owned by the
Company, the Employee or any third party.
3.3 Termination For Cause. The Company may effect a
Termination For Cause of Employee. The Company shall have no further
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obligation to pay Compensation hereunder after the date of Termination
For Cause.
3.4 Voluntary. Should Employee voluntarily terminate
his employment prior to the termination of this Agreement, the Company
shall have no further obligation to pay compensation.
3.5 Termination By Employee For Good Reason. Employee
shall be entitled to terminate his employment hereunder upon the
occurrence of an event constituting Good Reason, as defined in Section
1.6. If an event constituting Good Reason occurs, Employee shall have
the right, exercisable for a period of thirty (30) days, to immediately
terminate this Agreement by delivering a written statement to that
effect to the Company. Upon such a termination, Employee shall be
entitled to receive a payment equal to the lesser of (i) an amount
equal to one-half of the Employee's annual base salary in effect at the
time of termination, or (ii) the remaining compensation due Employee
under the terms of this Agreement. If Employee fails to exercise his
rights under this Section 3.5 within thirty (30) days following an
event constituting Good Reason, such rights shall expire and be of no
further force or effect.
4. CONFIDENTIALITY.
4.1 Confidential Information. Employee acknowledges
that he has and will have access to trade secrets and confidential
business information of the Company and its affiliates and subsidiaries
throughout the term of this Agreement and that any such trade secret or
confidential information, regardless of whether Employee alone or with
others developed any such trade secret or confidential information,
shall be and shall remain the property of the Company or its affiliates
or subsidiaries. During the term of this Agreement and after
termination of employment, Employee shall not, either voluntarily or
involuntarily, on either his own account, as a member of a firm, or on
behalf of another employer or otherwise, directly or indirectly use or
reveal to any person, partnership, corporation or association any trade
secret or confidential information of the Company or any of its
subsidiaries or affiliates. Such trade secrets shall include, but shall
not be limited to, business plans, marketing plans or programs, any
non-public financial information, including but not limited to,
financial information, forecasts and statistics relating to markets,
contracts, customer lists, compensation arrangements and business
opportunities. The term "trade secrets" shall not include information
generally available to the public or a governmental agency. Employee
will not make available to any person, partnership, corporation or
association, or retain after termination of employment, any Employer
policy manuals, printed materials or computer disc containing
information related to the Company or to any affiliate of the Company.
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4.2 Injunctive Relief. Employee acknowledges that the
restrictions contained in this Section 4 are a reasonable and necessary
protection of the immediate interests of the Company and its affiliates
and subsidiaries and that any violation of these restrictions would
cause substantial injury to the Company. In the event of a breach or
threatened breach by Employee of these restrictions, the Company shall
be entitled to apply to any court of competent jurisdiction for an
injunction restraining Employee from such breach or threatened breach;
provided, however, that the right to apply for an injunction shall not
be construed as prohibiting the Company from pursuing any other
available remedies for such breach or threatened breach.
5. BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding
upon and inure to the benefit of the Employee, the Company and their respective
heirs, executors, administrators, successors and assigns; provided, however,
that Employee may not assign his rights hereunder without the prior written
consent of the Company and may not assign his obligations hereunder. The Company
may assign either its rights or obligations hereunder to any of its subsidiaries
or affiliated corporation or to any successor to substantially all of the assets
or business of the Company.
6. MODIFICATION, WAIVER OR AMENDMENT. The provisions of this
Agreement may not be modified, amended or waived except by a written instrument
executed by the Company and Employee. The waiver of any provision of this
Agreement by either party shall not constitute a waiver of any subsequent
occurrences or transactions unless the waiver, by its terms, constitutes a
continuing waiver.
7. ARBITRATION. Any disputes related to or arising out of this
Agreement or otherwise relating to Employee's employment with the Company shall
be subject to mandatory binding arbitration before a single arbitrator in
accordance with the rules of the American Arbitration Association ("AAA"),
except that the Company may, in place of or in addition to arbitration, elect to
pursue court remedies for any breach of Section 4 of this Agreement. The
arbitrator shall be selected in accordance with the AAA's rules for selecting a
single arbitrator provided that, if AAA rules call for selecting an arbitrator
by making strikes against a list of candidates, in the event that there is an
odd number of candidates Employee shall have the first strike and in the event
that there is an even number of candidates the Company shall have the first
strike. Except to the extent contrary to this Agreement or the Company's written
policies regarding arbitration with Employee, the procedural rules that shall
govern the arbitration shall be the rules of the AAA, or in the event that a
particular procedural issue is not governed by the foregoing, the Arizona Rules
of Civil Procedure shall apply except that discovery may be conducted only upon
agreement of the parties or order of the arbitrator upon good cause shown, and
in issuing discovery orders, the arbitrator shall consider that the parties have
chosen arbitration to provide for the efficient and inexpensive resolution of
disputes.
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The forum for the arbitration shall be Phoenix, Arizona. The applicable
substantive law shall be the law chosen to apply to disputes provided by this
Agreement. A party may initiate arbitration under this Section by making a
demand for arbitration and shall serve with that demand a detailed statement
setting forth with particularity the factual and legal basis for each claim
asserted. In the event that the party initiating arbitration fails to serve on
the opposing party the detailed statement of claims required by this Section,
the opposing party shall be entitled to move to dismiss the arbitration, and
upon such motion, such claims shall be dismissed. Upon the issuance of a
decision, the arbitrator shall issue written findings of fact and conclusions of
law. The decision of the arbitrator shall be in accordance with the express
terms and conditions of this Agreement. Each party shall pay its own attorneys'
fees and costs and shall share the arbitration fees provided that the
nonprevailing party shall reimburse the prevailing party for all reasonable
attorneys' fees and costs, including the arbitration fees, incurred in
connection with the arbitration. Arbitration proceedings and any information
related thereto shall be kept confidential. THE PARTIES ACKNOWLEDGE THAT THEIR
AGREEMENT TO ARBITRATE UNDER THIS SECTION MEANS THAT TRIAL BY JURY OR APPEAL
WILL NOT BE AVAILABLE FOR ANY DISPUTES RELATED TO OR ARISING OUT OF THIS
AGREEMENT OR OTHERWISE RELATING TO EMPLOYEE'S EMPLOYMENT WITH THE COMPANY
INCLUDING WITHOUT LIMITATION DISPUTES INVOLVING ALLEGED EMPLOYMENT
DISCRIMINATION, HARASSMENT, WRONGFUL TERMINATION, AND ANY OTHER CLAIMS ARISING
OUT OF FEDERAL OR STATE STATUTES, COMMON LAW OR PUBLIC POLICY, EXCEPT THAT THIS
SECTION DOES NOT RESTRICT THE RIGHT TO PURSUE COURT REMEDIES FOR ANY BREACH OF
SECTION 4 OF THIS AGREEMENT.
8. NO MITIGATION. Any compensation earned by Employee from
another employer or from employment not in violation of the provisions of
Section 2.2 or Section 4 hereof shall not reduce any payment to which Employee
is entitled under the terms of this Agreement.
9. MISCELLANEOUS.
9.1 Entire Agreement. This Agreement
rescinds and supersedes any other agreement and contains the
entire understanding between the parties relative to the
employment of Employee, there being no terms, conditions,
warranties, or representations other than those contained or
referred to herein, and no amendment hereto shall be valid
unless made in writing and signed by both of the parties
hereto.
9.2 Governing Law. This Agreement shall be
interpreted and construed in accordance with the laws of the
State of Arizona without regard to conflicts of law principles
as applied to residents of Arizona.
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9.3 Severability. In the event that any
provisions herein shall be legally unenforceable, the
remaining provisions nevertheless shall be carried into
effect.
9.4 Attorneys' Fees. In the event of any
litigation between the parties hereto arising out of the
terms, conditions and obligations expressed in this Agreement,
the prevailing party in such litigation shall be entitled to
recover reasonable attorneys' fees incurred in connection
therewith.
9.5 Notices. All notices required or
permitted to be given hereunder shall be deemed given if in
writing and delivered personally or sent by telex, telegram,
telecopy, or forwarded by prepaid registered or certified mail
(return receipt requested) to the party or parties at the
following addresses (or at such other addresses as shall be
specified by like notices), and any notice, however given,
shall be effective when received:
To Employee: Mark Perkins
16410 North 9th Place
Phoenix, Arizona 85022
To the Company: iBIZ TECHNOLOGY CORP.
Suite 618-688 West Hastings Street
Vancouver, British Columbia,
Canada V6B 1P1
9.6 Waiver. The waiver by any party of a breach of
any provision of this Agreement by the other shall not operate or be
construed as a waiver of any subsequent breach of the same provision or
any other provision of this Agreement.
9.7. Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument.
9.8 Headings. The subject headings to the sections in
this Agreement are included for purposes of convenience only and shall
not affect the construction or interpretation of any of its provisions.
9.9 Survivorship. The provisions of Sections 3.1,
4.1, 4.2, 7 and 8 shall continue and shall survive the termination of
the Agreement.
9.10 Integration. This Agreement reflects the entire
agreement of the parties related to the subject matter hereof, and any
prior
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understandings, agreements or representations relating to such subject
matter are hereby superseded, and Employee hereby expressly
acknowledges that this Agreement supersedes and replaces Employee's
Employment Agreement with INVNSYS Technology Corporation and Employee
hereby waives and releases INVNSYS Technology Corporation from all
claims for compensation and other benefits as of the effective date of
Employee's employment with the Company.
In witness whereof, the parties have executed this Agreement
on ___________________, 1999, and effective as of the date first hereinabove
written.
iBIZ TECHNOLOGY CORP.,
a Florida corporation
By:
--------------------------------------
Its:
--------------------------------------
EMPLOYEE
--------------------------------------
MARK PERKINS
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EXHIBIT "2.3.2"
EMPLOYEE STOCK OPTION
Page 10
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EXHIBIT "2.3.2(a)"
EMPLOYEE STOCK OPTION PLAN
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ADDENDUM TO EMPLOYMENT AGREEMENT
THIS ADDENDUM TO EMPLOYMENT AGREEMENT ("this Addendum") is
entered into effective as of the ____ day of ______________, 1999, by and
between iBIZ TECHNOLOGY CORP., a Florida corporation ("iBIZ"), INVNSYS
TECHNOLOGY CORPORATION, ("INVNSYS") (iBIZ and INVNSYS are referred to
collectively as the "Company") and MARK PERKINS, an individual ("Employee").
iBIZ and the Employee entered into that certain Employment Agreement dated March
5, 1999 ("Employment Agreement"), which, among other things, provided for the
issuance of certain options to purchase shares of common stock of iBIZ. iBIZ and
Employee desire to amend the provisions relating to the options under such
Employment Agreement.
THEREFORE, in consideration of the covenants and agreements
set forth in the Employment Agreement and this Addendum and other good and
valuable consideration, the parties agree as follows:
5. OPTIONS. In lieu of the options that were to be issued to
Employee under the Employment Agreement, the Company and Employee hereby agree
that iBIZ shall issue to Employee 350,000 options to purchase 350,000 shares of
common stock of iBIZ at an exercise price of $0.75 per share. Such options shall
be subject to the vesting schedule and other terms and conditions contained in
the stock option attached to the Employment Agreement issued pursuant to the
Employee Stock Option Plan attached to the Employment Agreement. A total of
300,000 options shall be issued to Employee in consideration of Employee's
services as an officer of iBIZ and 50,000 options shall be issued to Employee in
consideration of Employee's services as a director of iBIZ. The effective date
of the issuance of the foregoing options shall be April 22, 1999.
6. EFFECT OF ADDENDUM. Except as amended by this Addendum, the
terms and conditions of the Employment Agreement shall remain unchanged. This
Addendum is hereby incorporated into the Employment Agreement as though
originally a part thereof.
IN WITNESS WHEREOF, the parties have executed this Addendum as
of the effective date set forth above.
iBIZ TECHNOLOGY CORP.
By:
------------------------------------------
Ken Schilling, President
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MARK PERKINS
----------------------------------------------
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Exhibit 21
EXHIBIT NO. 21
SUBSIDIARIES OF REGISTRANT
INVNSYS Technology Corporation, an Arizona corporation, is a
wholly owned subsidiary of iBIZ TECHNOLOGY Corp., a Florida corporation.
Page 1
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
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<ALLOWANCES> (2,500)
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<CURRENT-ASSETS> 717,946
<PP&E> 241,460
<DEPRECIATION> (167,481)
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<CURRENT-LIABILITIES> 1,232,345
<BONDS> 0
0
0
<COMMON> 25,986
<OTHER-SE> 5,538
<TOTAL-LIABILITY-AND-EQUITY> 1,263,869
<SALES> 1,509,777
<TOTAL-REVENUES> 1,509,777
<CGS> 1,125,543
<TOTAL-COSTS> 1,125,543
<OTHER-EXPENSES> 937,089
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<INTEREST-EXPENSE> 26,490
<INCOME-PRETAX> 0
<INCOME-TAX> (135,150)
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<EXTRAORDINARY> (168,180)
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<NET-INCOME> (276,015)
<EPS-BASIC> 0
<EPS-DILUTED> (.011)
</TABLE>
