SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
WATCHOUT! INC.
(Exact name of registrant as specified in its charter)
WHITE CLOUD EXPLORATION, INC.
(Former Name of Registrant)
Utah 84-0959153
State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
20283 State Road 7, Suite 400 Boca Raton, Florida 33496
(Address of Principal Executive Offices including zip code)
Consulting Services Plans
Compensation Plan Agreement
(Full title of the plan)
Farber and Klein
23123 State Road 7, Suite 350B
Boca Raton, Florida 33428
(Name and address of agent for service)
(561) 470-9010
(Telephone number, including area code, of agent for service)
<TABLE>
<CAPTION>
Title of Class of Securities Amount to be Proposed Maximum Offering Amount of
to be Registered Registered Price Per Share (1) Fee
- ---------------- ---------- ------------------- ---
<S> <C> <C> <C>
Common Stock, $.001 1,530,000 $1.75 $ 707.00
par value
</TABLE>
1) Computed pursuant to Rule 457(c) of the Securities Act of 1933, as amended,
solely for the purpose of calculating the registration fee and not as a
representation as to any actual proposed price. The offering price per share,
maximum aggregate offering price and registration fee is based upon the average
of the high and the low price in the market for the common stock on April 10,
2000.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Pursuant to Rule 428(b)(1), the information required by Part 1 is included in
documents sent or given to each employee of Watchout! Inc., a Utah corporation
("Company").
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents are incorporated by reference into this Registration
Statement and made a part hereof:
(a) The registrant's Form 10-K for the year ended December 31, 1999 filed on
March 30, 2000 under Section 13(a) or 15(d) of Securities Exchange Act of 1934,
as amended (the "Exchange Act").
(b) All other reports which may be filed by the Registrant pursuant to Section
13(a) or 15(d) of the Exchange Act since the end of the fiscal year covered by
the registrant document referred to in (a) immediately above.
(c) Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposed of this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Registration
Statement.
Item 4. Description of Securities.
The class of securities to be offered hereby has been registered under Section
12 of the Exchange Act by the registrant, and incorporated by reference.
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<PAGE>
Item 5. Interests of Named Experts and Counsel.
The validity of the securities offered will be passed upon for the Company by
the law firm of Farber and Klein of Boca Raton, Florida..
The Law Offices of Jeffrey Klein, P.A., and Andrew Farber P.A. have each
rendered legal services for and on behalf of the Registrant. Both firms are
located at 23123 State Road 7, Suite 350B, Boca Raton, Florida 33428
Michael Johnson & Company, LLC consent to the incorporation by reference of
their report on the audited financial statements contained in the Form 10-KSB
filed on March 30, 2000.
Item 6. Indemnification of Directors and Officers.
We shall indemnify to the fullest extent permitted by, and in the manner
permissible under the laws of the State of Utah, any person made, or threatened
to be made, a party to an action or proceeding, whether criminal, civil,
administrative or investigative, by reason of the fact that he is or was a
director or officer, or served any other enterprise as director, officer or
employee at our request. The Board of Directors, in its discretion, shall have
the power on our behalf to indemnify any person, other than a director or
officer, made a party to any action, suit or proceeding by reason of the fact
that he/she is or was an employee.
Utah Code Section 16-10a-902 provides that Utah corporations may indemnify an
individual made a party to a proceeding because he is or was a director, against
liability incurred in the proceeding if the person's conduct was in good faith,
was not opposed to the best interests of the corporation and in the case of any
criminal proceeding, the person had no reasonable cause to believe his conduct
was unlawful. The termination of a proceeding by judgment, order, settlement,
conviction, or a plea of nolo contendere or its equivalent is not, of itself,
determinative that the director did not meet the required standard of conduct.
Indemnification is not available in a proceeding by the corporation in which the
director is adjudged liable or, in connection with any other proceeding where
the director derived an improper personal gain.
Further, in an action brought by us or in our right, if the person, after
exhaustion of all appeals, is found to be liable to us, or if the person makes
payment to us in settlement of the action, indemnification is available only to
the extent a court of competent jurisdiction determines the person is fairly and
reasonably entitled to indemnification. Such discretionary indemnification is
available only as authorized on a case-by-case basis by: (1)
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<PAGE>
the stockholders; (2) a majority of a quorum of the Board of Directors
consisting of members of the Board who were not parties to the action, suit or
proceeding; (3) if a majority of a quorum of the Board of Directors consisting
of members of the board who were not parties to the action, suit or proceeding
so orders, by independent legal counsel in a written opinion; or (4) if a quorum
of the Board of Directors consisting of members of the Board who were not
parties to the action cannot be obtained, by independent legal counsel in a
written opinion.
To the extent that our director or officer is successful in defending against an
action, suit or proceeding brought against that person as a result of their
current or former status as an officer or director, we must indemnify the person
against all expenses actually and reasonably incurred by the person in
connection with their defense. Utah law also allows Utah corporations to advance
expenses of officers and directors incurred in defending a civil or criminal
action as they are incurred, upon receipt of an undertaking by or on behalf of
the director or officer to repay such expenses if it is ultimately determined by
a court of competent jurisdiction that such officer or director is not entitled
to be indemnified by the corporation because such officer or director did not
act in good faith and in a manner reasonably believed to be in or not opposed to
the best interests of the corporation.
Our By-laws provide for the indemnification of its directors and officers to the
maximum extent provided by law. It is the position of the SEC and certain state
securities administrators that any attempt to limit the liability of persons
controlling an issuer under the federal securities laws or state securities laws
is contrary to public policy and therefore unenforceable.
Item 7. Exemption from Registration Claimed.
Not Applicable.
Item 8. Consultants and Advisors
The following consultants will be issued securities pursuant to this
Registration statement:
<TABLE>
<CAPTION>
Name Number Type of Services Provided
- ---- ------ -------------------------
<S> <C> <C>
Jeffrey Klein 15,000 Legal Services
Andrew Farber 15,000 Legal Services
Richard Epstein 750,000 Consulting Services
Mark Johnson 750,000 Consulting Services
</TABLE>
Item 9. Exhibits.
See Exhibit Index and Exhibits attached hereto.
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<PAGE>
Item 10. Undertakings.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which it offers or sells securities, a post
effective amendment to this Registration Statement to:
(i) Include any prospectus required by section 10(a)(3) of the
Securities Act;
(ii) Reflect in the prospectus any facts or events which, individually
or together, represent a fundamental change in the information in the
registration statement; and notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any deviation
from the low or high of the estimated maximum offering range may be reflected in
the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in the volume and price represent no more than twenty
percent (20%) change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration statement.
(iii) Include any additional or changed material information on the
plan of distribution.
(2) For determining liability under the Securities Act, treat each post
effective amendment as a new registration statement of the securities offered,
and the offering of the securities at that time to be the initial bona fide
offering.
(3) For determining any liability under the Securities Act, treat the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the small business issuer under Rule 424(b)(1), or (4) or
497(h) under the Securities Act as part of this registration statement as of the
time Commission declared it effective.
(4) For determining any liability under the Securities Act, treat each post
effective amendment as a new registration statement for the securities offered,
and the offering of the securities at that time to be the initial bona fide
offering. Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended (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 in 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
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<PAGE>
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 Securities
Act and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement on Form S-8 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Boca Raton, State of Florida, on April 11, 2000.
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities and on the
date indicated:
Watchout! Inc.
Kevin Waltzer
- --------------------------
/s/ Kevin Waltzer
By: Kevin Waltzer, President and Chief Executive Officer
20283 State Road 7, Suite 400
Boca Raton, Florida 33431
Telephone: (561)482-9421
Facsimile: (954) 752-9171
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<PAGE>
EXHIBIT INDEX
Exhibit #
Exhibit Item
3.1 Articles of Incorporation (Incorporated by Reference, Form 10-SB)
3.2 Bylaws (Incorporated by Reference, Form 10-SB)
5 Opinion Re: Legality and Consent
10.1 Consulting Agreement between the Company and Jeffrey Klein and Andrew
Farber
10.2 Consulting Agreement between the Company and Richard Epstein
10.3 Compensation Plan Agreement between the Company and Mark Johnson
23 Consent of Experts
7
EXHIBIT 5
CONSENTS OF EXPERTS AND COUNSEL
FARBER AND KLEIN
23123 STATE ROAD 7
Suite 350B
Boca Raton, FL 33428
Phone: 561-470-9010
Facsimile: 561-470-9078
April 11, 2000
WATCHOUT! INC.
Attn: Kevin Waltzer, President
20283 State Rd. 7, Suite 400
Boca Raton, FL 33496
RE: SEC Registration Statement on Form S-8
Dear Sir/Madam:
This firm (the "Firm") has been engaged as counsel for WatchOut! Inc., a Utah
corporation (the "Company"), in connection with its proposed offering under the
Securities Act of 1933, as amended (the "Act"), of 1,530,000 shares of its
common stock which are to be issued under a plan for consulting services by the
Company, by a filing of a Registration Statement under Form S-8 to which this
opinion is a part, to be filed with the Securities and Exchange Commission (the
"Commission"). In connection with rendering the opinion as set forth below, the
Firm has reviewed and examined originals or copies of the following:
1. Articles of Incorporation of the Company, and any amendments, as filed with
the Secretary of State of Utah;
2. By Laws of the Company
3. Written Consent or Minutes of a Meeting of the Board of Directors on or about
April 10, 2000 , authorizing the Consultant Agreement Plan (the "Plan") with the
consultant and certain other matters;
4 The Company's Registration Statement on Form S-8 and exhibits thereto as filed
with the Commission.
<PAGE>
In our examination, we have assumed the genuineness of all signatures, the legal
capacity of all persons, the authenticity of all documents submitted to the Firm
as originals, the conformity with the original documents of all documents
submitted to the Firm as certified or photostatic copies, and the authenticity
of the originals of such copies and the truth of all information supplied us.
We have further assumed, among other things, that the recipient of the Shares
will have completed the required services, and/or provided considerations
required acceptable to the Board of Directors and in compliance with Form S-8
and that any Shares to be issued will have been registered in accordance with
the Act, absent the application of an exemption from registration, prior to the
issuance of such Shares. We have not independently investigated or verified any
matter, assumption, or representation.
Based upon the foregoing and in reliance thereof, it is our opinion that,
subject to the limitations set forth herein, the Shares to be issued will be
duly and validly authorized, legally issued, fully paid and non-assessable. This
opinion is expressly limited in scope to the Shares enumerated herein which are
to be expressly covered by the referenced Registration Statement and does not
cover subsequent issuances of shares, pertaining to services to be performed in
the future (such transactions are required to be included in either a new
registration Statement or a Post Effective Amendment to the Registration
Statement including updated opinions).
This opinion is limited. We consent to you filing this opinion with the
Commission as an exhibit to the Registration Statement on Form S-8. This opinion
is not to be used, circulated, quoted or otherwise referred to for any other
purpose without our prior written consent. This opinion is based upon our
assumptions as to application of the law and facts as of the date hereof. We
assume no duty to communicate with you with respect to any matters, which may
come to our attention hereafter.
Sincerely yours,
/S/ JEFFREY G KLEIN
- -----------------------------
JEFFREY G KLEIN
CONSULTING AGREEMENT
This Consulting Agreement (the "Agreement") is entered into this ___
day of April, 2000 by and between WatchOut! Inc., a Utah corporation (the
"Company") and Andrew Farber, Esquire and Jeffrey Klein, Esquire, doing business
as Farber & Klein, a partnership of professional associations (the
"Consultant").
WHEREAS, Consultant is skilled in providing legal services, and has
provided legal services to Company in the past;
WHEREAS, the Company desires to continue to engage Consultant to
provide legal services; and
NOW THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration receipt whereof is hereby
acknowledged it is agreed.
1. The Company hereby engages the Consultant and the Consultant
hereby accepts this engagement on a non-exclusive basis
pursuant to the terms and conditions of this Consulting
Agreement.
2. Consultant shall assist the Company with the preparation of
its Registration Statement on Form S-8. Consultant will also
assist the Company in connection with general securities law
matters for a period of 60 calendar days from the date hereof.
Any additional work will be dealt with on a case by case
basis.
3. In order to assist Consultant with his duties, the Company
will provide Consultant with such information, as may be
required by Consultant. Company will make available to
Consultant copies of all material agreements, notice of
pending or threatened litigation and notice of all proposed
press releases.
<PAGE>
4. In consideration of the services to be provided, Consultant
shall receive a fee equal to 30,000 shares of the Company's
common stock.
5. The Company will register these shares pursuant to a
registration statement on Form S-8.
6. During the term of this Agreement, each party may have access
to trade secrets, know how, formulae, customer and price lists
all of which are valuable, special, proprietary and unique
assets of each. The parties agree that all knowledge and
information which each other shall acquire during the term of
this Agreement shall be held in trust and in a fiduciary
capacity for the sole benefit of the other party, its
successors and assigns, and each agrees not to publish or
divulge either during the term of this Agreement or subsequent
thereto, knowledge of any technical or confidential
information acquired during their term of this Agreement. At
the termination of this Agreement, or at any other time either
party may request the other party to deliver to the other,
without retaining any copies, notes or excerpts thereof, all
memoranda, diaries, notes, records, plans, specifications,
formulae or other documents relating to, directly or
indirectly, to any confidential information made or compiled
by, or delivered or made available to or otherwise obtained by
the respective parties. However, the foregoing provision shall
not prohibit Consultant from engaging in any work at any time
following his termination of this Agreement which does not
conflict with the terms of this Agreement.
7. Except as otherwise provided herein, any notice or other
communication to any party pursuant to or relating to this
Agreement and the transactions provided for
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<PAGE>
herein shall be deemed to have been given or delivered when
deposited in the United States Mail, registered or certified,
and with proper postage and registration or certification fees
prepaid, addressed at their principal place of business or to
such other address as may be designated by either party in
writing.
8. This Agreement shall be governed by and interpreted pursuant
to the laws of the state of Florida. By entering into this
Agreement, the parties agree to the jurisdiction of the
Florida courts with venue in Palm Beach, County Florida. In
the event of any breach of this Agreement, the prevailing
party shall be entitled to recover all costs including
reasonable attorney's fees and those that may be incurred on
appeal.
9. This Agreement may be executed in any number of counterparts,
each of which when so executed an delivered shall be deemed an
original, and it shall not be necessary, in making proof of
this Agreement to produce or account for more than one
counterpart.
IN WITNESS WHEREOF, the parties hereto have subscribed their hands an
seals the day and year first above written.
CONSULTANT: COMPANY:
WATCHOUT! INC.
/s/ Jeffrey Klein
- ---------------------- By: /s/ Kevin Waltzer
Jeffrey Klein --------------------------
Kevin Waltzer, President
/s/ Andrew Farber
- ------------------------
Andrew Farber
3
CONSULTING AGREEMENT
This Consulting Agreement (the "Agreement") is entered into this 6th
day of April, 2000 by and between WatchOut! Inc., a Utah corporation (the
"Company") and Richard Epstein of 12147 Northwest 9th Drive, Coral Springs, Fl.
33071 (the "Consultant").
WHEREAS, Consultant is skilled in providing strategic business
planning, and has provided these services to Company in the past;
WHEREAS, the Company desires to continue to engage Consultant to
provide consulting services; and NOW THEREFORE, in consideration of the mutual
covenants contained herein and other good and valuable consideration receipt
whereof is hereby acknowledged it is agreed.
1. The Company hereby engages the Consultant and the Consultant
hereby accepts this engagement on a non-exclusive basis
pursuant to the terms and conditions of this Consulting
Agreement.
2. Consultant shall assist the Company with public mergers and
acquisitions. Consultant will also assist the Company in
connection with general business strategy and marketing.
3. In order to assist Consultant with his duties, the Company
will provide Consultant with such information, as may be
required by Consultant. Company will make available to
Consultant copies of all material agreements, notice of
pending or threatened litigation and notice of all proposed
press releases.
<PAGE>
4. Consultant agrees that he/she has not been retained for any of
the following activities and/or purposes:
1. for capital raising or for promotional activities regarding
the Company's securities.
2. to directly or indirectly promote or maintain a market for the
Company's securities.
3. to act as a conduit to distribute S-8 Securities to the
general public.
4. to render investor relations services or shareholder
communications services to the Company.
5. to render advice to the Company regarding the arrangement or
effecting of mergers involving the Company that have the
effect of taking a private company public.
6. In consideration of the services to be provided, Consultant
shall receive a fee equal to 750,000 shares of the Company's
common stock.
7. The Company will register these shares pursuant to a
registration statement on Form S-8.
8. During the term of this Agreement, each party may have access
to trade secrets, know how, formulae, customer and price lists
all of which are valuable, special, proprietary and unique
assets of each. The parties agree that all knowledge and
information which each other shall acquire during the term of
this Agreement shall be held in trust and in a fiduciary
capacity for the sole benefit of the other party, its
successors and assigns, and each agrees not to publish or
divulge either during the term of this Agreement or subsequent
thereto, knowledge of any technical or confidential
information acquired during their term of this Agreement. At
the termination of this Agreement, or at any other time either
party may request the other party to deliver to the other,
without retaining any copies, notes or excerpts thereof, all
memoranda, diaries, notes, records, plans, specifications,
formulae or other documents relating to, directly or
indirectly, to any confidential information made or compiled
by, or delivered or made available to or otherwise obtained by
the respective parties. However, the foregoing provision shall
not prohibit Consultant from engaging in any work at any time
following his termination of this Agreement which does not
conflict with the terms of this Agreement.
2
<PAGE>
9. Except as otherwise provided herein, any notice or other
communication to any party pursuant to or relating to this
Agreement and the transactions provided for herein shall be
deemed to have been given or delivered when deposited in the
United States Mail, registered or certified, and with proper
postage and registration or certification fees prepaid,
addressed at their principal place of business or to such
other address as may be designated by either party in writing.
10. This Agreement shall be governed by and interpreted pursuant
to the laws of the state of Florida. By entering into this
Agreement, the parties agree to the jurisdiction of the
Florida courts with venue in Palm Beach, County Florida. In
the event of any breach of this Agreement, the prevailing
party shall be entitled to recover all costs including
reasonable attorney's fees and those that may be incurred on
appeal.
11. This Agreement may be executed in any number of counterparts,
each of which when so executed an delivered shall be deemed an
original, and it shall not be necessary, in making proof of
this Agreement to produce or account for more than one
counterpart.
IN WITNESS WHEREOF, the parties hereto have subscribed their hands and
seals the day and year first above written.
COMPANY:
WATCHOUT! INC.
CONSULTANT:
By: /s/ Kevin Waltzer
--------------------------------
/s/ Richard Epstein Kevin Waltzer,President
- ------------------------
Richard Epstein
3
COMPENSATION PLAN AGREEMENT
THIS Agreement is made effective as of this ____ day of April, 2000 by
and between Watch Out!, Inc., whose address is 20283 State Road 7, Suite 400,
Boca Raton, Florida 33498 referred to as the "Company", and Mark Johnson, whose
address is 2912 McGee Way, Olney, Md. 20832 , referred to as the "Employee:
1. Employment: The Company hereby employs the Employee as a Sales and
Business Development Manager and the Employee hereby accepts such employment in
accordance with the terms and conditions of this Contract.
2. Duties of Employee:
a. The duties of the Employee are generally described as follows: to
oversee telecommunications and computer sales and product and business
development for WATCHOUT, INC. and any of its subsidiaries
b. The Company's Rules and Regulations. The Employee shall strictly
adhere to all the rules and regulations of the Company which are presently in
force or which may be established hereafter with respect to the conduct of
Employees. The Employee shall also strictly follow the directions of the Company
with respect to the methods to be used in performing his or her duties. The
Employee is responsible to continue and maintain the Company's standards of
uniformity, purity and quality with respect to all services performed by the
Company.
c. Employee agrees that he/she has not been employed for any of the
following activities and/or purposes:
1. for capital raising or for promotional activities regarding
the Company's securities.
2. to directly or indirectly promote or maintain a market for the
Company's securities.
3. to act as a conduit to distribute S-8 Securities to the
general public.
4. to render investor relations services or shareholder
communications services to the Company.
<PAGE>
5. to render advice to the Company regarding the arrangement or
effecting of mergers involving the Company that have the
effect of taking a private company public.
3. Power of Employee to Bind Company: The Employee may not enter into
any contract or otherwise bind the Company in any way without authority from the
Company. Any contracts which the Employee enters into without the authorization
will not be binding upon the company.
4. Other Employment: It is the Company's intention that the Employee
devote at least 20 hours per week of the Employee's work effort towards the
fulfillment of the Employee's obligation under this contract. However during
the Employment period and any subsequent period during which he is employed
hereunder; it is understood that ownership of less than 10% of the issued and
outstanding capital stock of a corporation, the securities of which are listed
on a national securities exchange or regularly included in the national list of
over-the-counter securities as it may from time to time be published in a
newspaper of general circulation, shall not be deemed to constitute such a
business activity as contemplated hereunder.
5. Compensation of Employee:
During the Employment Period:
(a) As compensation for his services hereunder Company shall pay
Employee, 750,000 shares of free trading S8 stock.
(b) In addition to his salary, Employee shall be entitled to all
perquisites which Company makes available to employees of similar class and
station, and be included, to the extent eligible, under any and all present
plans of Company providing benefits for its employees including, but not limited
to, retirement benefits, thrift plan, group life insurance, hospitalization,
medical, accidental death and dismemberment, and any and all other similar or
comparable benefits made available to employees of similar class and station;
provided, however, that in no event shall employee have perquisites or benefits
less favorable than the comparable perquisites or benefits he is presently
receiving from Company.
2
<PAGE>
6. Employee Expenses: Employee shall be authorized, to incur reasonable
and necessary expenses (such as travel and telephone). Company will reimburse
Employee for all such expenses authorized by Company upon the presentation by
Employee to Company. Employee is required to submit an itemized request for
reimbursement of such expenditures supported by sufficient documentation of the
expenditures and explanation of their purpose.
7. Term: The term of this Agreement shall commence on the date hereof
and shall continue for one (1) year.
8. Termination of Employment: Either party may terminate this contract
in the employment hereunder, without cause and at any time, upon thirty days
notice by Certified or Registered Mail, or facsimile to the other party at the
addresses set forth above.
9. Remedies for Breach of Contract:
a. In the event the breach or threatened breach of any provision of the
contract of the Employee, the Company shall be entitled to injunctions, both
preliminary and final, and join in or understanding such breach or threatened
breach. Such remedies shall be in addition to all other remedies available at
law or in equity including the Company's right to recover from the Employee any
damages that may be sustained as a result of the Employee's breach of contract.
b. In addition to any other remedies the Company may have available to
it under the terms of this contract, the Company shall be entitled to stop
Employee, by means of injunction, from violating any part of this Agreement, and
to recover by means of an accounting, any profits the Employee may have obtained
in violation of this contract. The Company shall be entitled to recover its
attorneys fees and expenses in any successful action by the Company to enforce
this Agreement.
10. Affiliates. The term "affiliate" as used herein shall mean any
corporation controlling, controlled by or under common control with Company. The
term "control" shall mean the ownership, directly or indirectly, of a sufficient
number of shares of voting stock of any corporation to elect a majority of the
Board of Directors of that corporation.
3
<PAGE>
11. Complete Agreement: This Contract supersedes all prior contracts
and understandings between the Employee and the Company may not be modified,
changed or altered by any promise or statement by whomever made; nor shall any
modification of it be binding upon the Company until such written modification
shall have been approved in writing by an officer of the Company.
12. Waiver of Breach: The waiver by the Company of any breach of any
provision of this Contract by the Employee shall not operate or be construed as
a waiver of any subsequent breach by the Employee.
IN WITNESS WHEREOF, the undersigned has executed this Agreement the day
and year first above written.
WITNESSES:
WATCHOUT!, INC.
By: /s/ Kevin Waltzer
----------------------------
Kevin Waltzer, President
/s/ Mark Johnson
----------------------------
Mark Johnson
4
LETTER OF CONSENT
RE: AUDITED FINANCIAL INFORMATION
We hereby consent to the incorporation by reference of our report as of
December 31, 1999 relating to the audited financial statements of WatchOut! Inc.
that are included in the Form 10-KSB for the year ended December 31, 1999, in
the April 11, 2000 filing of WatchOut! Inc. on Form S-8.
Michael Johnson & Company, LLC
/s/ Michael Johnson, CPA
- ----------------------
By: Michael Johnson, CPA
9175 East Kenyon Avenue, Suite 100
Denver, CO 80237
Telephone: (303) 796-0099
Facsimile: (303) 796-0137
