SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-KSB
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934, AS AMENDED (THE "EXCHANGE ACT")
For the Fiscal Year Ended December 31, 1999
[] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the period from January 1, 1999 to December 31, 1999
Commission file number: 33-15097-D
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AFFILIATED RESOURCES CORPORATION
(Name of small business issuer in its charter)
Colorado 84-1045715
- -------------------------------- -----------------------
(State or other jurisdiction of (IRS Employer I.D. No.)
incorporation or organization)
3050 Post Oak Boulevard, Suite 1080 Houston, Texas 77056
- -------------------------------------------------- ---------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (713) 355-8940
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
None
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.
Yes __ No X
Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-KSB/A or any amendment to this Form 10-KSB/A. [X]
State issuer's revenues for its most recent fiscal year $519,374.00.
The aggregate market value of the voting common equity held by
non-affiliates of the registrant as of May 1, 2000 was $6,692,226 based on
15,296,517 shares outstanding at a price of $0.4375.
State the number of shares outstanding of $.003 par value Common Stock
of the registrant at: May 1,2000: 18,742,858.
DOCUMENTS INCORPORATED BY REFERENCE
None.
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PART I
FORWARD LOOKING STATEMENTS
This Report includes forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 (the "Securities Act") and Section 21E
of the Securities Exchange Act of 1934 (the "Exchange Act"). Words such as
"expects," intends", "plans," "projects," "believes," "estimates" and similar
expressions typically identify such forward looking statements. These statements
also include all statements with respect to Company operations and the ability
for the Company to raise funds in the future or make future acquisitions or
obtain sufficient funds from Company operations to fund its operations or make
acquisitions.
Even though we believe our expectations regarding future events are
based on reasonable assumptions, forward-looking statements are not guarantees
of future performance. There are many reasons why actual results could, and
probably will, differ from those contemplated in our forward- looking
statements. These include, among others, (i) changes in Company operations or
management, (ii) enforceability of contracts and the Company's ability to meet
its obligations under such contracts, (iii) the ability of the Company to obtain
funds, (iv) civil, criminal, regulatory or administrative actions, claims or
proceeding and regulations dealing with protection of the environment or other
areas, (v) economic conditions and trends and (vi) other unpredictable or
unknown factors not discussed.
ITEM 1. BUSINESS
General
Affiliated Resources Corporation, formerly known as Synaptix Systems
Corporation (the "Company"), was incorporated in the State of Colorado in
December 1986 and became a public company in August 1987. By 1995, the Company's
operations were focused on software development, however, as a result of a
management change in March 1998, the undeveloped software operations were
discontinued and sold. The Company was repositioned to focus on the acquisition
of industry related companies whose products or services are technically
innovative and market proven, but whose market penetration can be significantly
expanded through enhanced marketing or additional capitalization.
Management plans to expand the Company by introducing new products and
by developing strategic marketing alliances to promote its existing products in
the national market. In addition, expansion will also be achieved through
selected, related industry, acquisitions using leverage, stock of the Company,
or a combination of both. Management is confident that current discussions with
investors will yield additional capital to pursue acquisitions and provide
sufficient working capital for future operations.
ChemWay Systems, Inc. On December 30, 1998 the Company acquired all the
issued and outstanding stock of ChemWay Systems, Inc. (ChemWay), from Evans
Systems, Inc., a Texas corporation ("Evans"), and Way Energy, Inc., a Delaware
corporation, in exchange for 1,500,000 shares of the Company's common stock.
ChemWay produces and distributes aftermarket automotive fluids, including
automotive care and performance products, refrigerants, lubricants and solvents.
Currently, ChemWay is fully operational and, subject to the constraints of
operating capital, capable of providing customers with a full line of its
products.
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The Purchase Agreement for the acquisition, as amended through the date
of this filing, requires the Company to fulfill certain covenants including, but
not limited to, (i) receiving at least $1,500,000 in additional proceeds from
the sale of Common Stock in a private placement, and (ii) paying the mortgage
indebtedness on ChemWay's commercial industrial facility described below (which
amounted to $232,500 plus principal and interest at December 31, 1999. As of
March 31, 2000 the Company had fulfilled covenant (ii) and believes that it will
be able to fulfill the remaining covenant. The Company's obligation under the
Purchase Agreement is secured by a pledge of substantially all of the assets of
ChemWay.
Seneca Energy Partners, LP. On December 27, 1999, the Corporation
acquired an 85% limited partnership interest in Seneca Energy Partners, L.P. for
800,000 shares of common stock of the Corporation and a stock option to purchase
up to 425,000 additional shares at an exercise price of $.10 per share. The
purpose of the acquisition is to provide the organization and management core of
an energy division. By focusing on the acquisition of working interests in
producing oil and gas wells and by selective offset drilling in established
fields, Seneca's strategy is to significantly add to its reserves, generate
consistent revenues, and thus build the overall book value of the company. The
value of Seneca's unaudited and undiscounted reserves at acquisition equaled
$121,853 and thus the Company's 85% interest in the reserves at acquisition
totaled $103,575.
At the time of the acquisition, Michael R. Bradle was a Limited Partner
in Seneca Energy Partners. L.P. and President of Lone Star Investment
Management, L.L.C., its General Partner. On December 30,1999, Mr. Bradle
resigned from his position at Lonestar. On January 3, 2000 Mr. Bradle assumed
the duties of President and Chief Operating Officer of the Company and became a
member of the Company's Board of Directors.
Patents, Trademarks, Licenses
In March 1998, as a result of the change in Management, the Company
sold undeveloped Software Assets to Mobilelink Communications, Inc.("Mobile")
The Company retained a five percent interest in Mobile's gross sales of the
Software Assets, beginning with the fiscal quarter ending June 30, 1998. If
gross sales did not exceed $200,000 within 24 months from the closing date of
the transaction, then the Software Assets will be returned to the Company. As of
March 31, 2000, the Software Assets remain in a development stage, and,
therefore, the Company has not received any revenue to date as a result of its
retained interest in the Software Assets and is entitled to the return of the
Software Assets. Although the Company is not confident that the Software Assets
can ever be developed, it is currently taking steps to evaluate the Software
Assets to determine any residual value that may remain.
Discontinued Operations
During 1998, the Company acquired CobolTexas, Inc., in exchange solely
for 641,026 shares of the Company's common stock. CobolTexas, Inc. had developed
a software product that uses on- line technology to solve Year 2000 compliance
problems for COBOL software users. Due to internal operating problems with the
program, which were investigated and confirmed by an independent consultant
hired by the Company, no sales of the product could be completed. Because some
of the former shareholders of CobolTexas, Inc. may have been aware of the
problem and because minimum gross revenues as specified in the original contract
have not been met, the Board of Directors determined to attempt to rescind the
transaction and recover the shares issued to former COBOL shareholders. To date,
one former shareholder has complied with this request and a certificate
representing 240,385 shares has been returned to the Company.
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Employees
The Company employed six full-time employees as of March 31, 2000. Of
these, five are employed in management, and one is employed as an administrative
assistant. At March 31, 2000, ChemWay employed an additional twelve employees.
The Company's success may depend on its ability to attract and retain other
qualified technical and management personnel. The Company competes for such
persons with other companies, academic institutions, government entities, and
other organizations, most of which have substantially greater capital resources
and facilities than the Company. There can be no assurance that the Company will
be successful in recruiting or retaining personnel of the requisite caliber or
in adequate numbers to enable it to conduct its business as proposed.
Furthermore, the Company's possible future expansion into activities requiring
additional expertise in marketing will place increased demands on the Company's
resources and management skills. The Company's lack of working capital increases
the risk that key employees will be attracted to other business opportunities.
ITEM 2. DESCRIPTION OF PROPERTY
As of December 31, 1999, the Company owned commercial industrial
property which consisted of 2,400 square feet of administrative offices; 53,000
square feet of warehouse; and 16,539 square feet of manufacturing and warehouse
facilities in Bay City, Texas, which were acquired in the ChemWay acquisition.
Of the real property acquired, 16,539 square feet is located on a 13 acre tract
that is leased from the Port of Bay City, Texas. In that acquisition the Company
also assumed a sublease of 14,528 square feet of manufacturing and warehouse
space that is also located on the 13 acre tract. The Company leases
approximately 1,600 square feet of administrative office space in Houston,
Texas, and leases approximately 800 square feet of executive offices in
Brecksville, Ohio.
ITEM 3. LEGAL PROCEEDINGS
From time to time, the Company is involved in various legal proceedings
arising in the ordinary course of business. To management's knowledge, the
Company is not currently involved in any legal proceedings and is not aware of
any legal proceeding threatened against it. During the year, the Company settled
two claims that resulted in voluntary monetary judgements against the Company.
The Company believes that the payment of these judgements will not have a
materially adverse effect upon the financial condition of the Company.
At the time of the acquisition of ChemWay, a number of vendor claims
had been incurred in the normal course of business. Since the acquisition of
ChemWay, several of the items have been paid and the Company believes that the
final disposition of the items will not have a materially adverse effect upon
the financial statements of the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of the Company's stockholders
during the last quarter of the year ended December 31, 1999.
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
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Market Information
The Company's common stock is traded on the NASDAQ OTC Electronic
Bulletin Board under the symbol "ARCX". As of March 31, 2000 there were
approximately 306 beneficial owners of the Company's common stock. The following
table sets forth, for the quarterly periods indicated, the range of high and low
closing prices for the Company's common stock, as reported by the NASDAQ OTC
Electronic Bulletin Board.
High Low
1998
March 31 $ 3.1250 $ 1.0000
June 30 1.9375 0.8750
September 30 4.2500 1.7500
December 31 6.0000 4.0625
1999
March 31 6.5000 4.5000
June 30 5.6300 0.3750
September 30 0.8125 0.1875
December 31 0.3500 0.1600
2000
March 31 1.0000 0.2400
The closing price of the Company's common stock on March 31, 2000 was
$0.3438.
Dividend Policy
The Company has never declared or paid a cash dividend on the Common
Stock. The payment of dividends in the future will depend on the Company's
earnings, if any, capital requirements, operating and financial position and
general business conditions. The Company intends to retain any future earnings
for reinvestment in its business and does not intend to pay cash dividends in
the foreseeable future. The Company has not entered into any agreement which
restricts its ability to pay dividends on its Common Stock in the future. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the audited
financial statements included elsewhere herein. Except for the historical
information contained herein, the matters discussed in this Annual Report are
forward-looking statements that involve a number of risks and uncertainties.
There are certain important factors and risks, including the rapid change in
hardware and software technology, market conditions, the anticipation of growth
of certain market segments, the positioning of the Company's products and
services in those segments, the timing of the product announcements, the release
of new or enhanced products, the introduction of competitive products and
services by existing or new competitors and the significant risks associated
with the acquisition of new products, product rights, technologies, businesses,
the management of growth, the Company's ability to attract and retain highly
skilled technical, managerial and sales and marketing
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personnel, and the other risks detailed from time to time in the Company's SEC
reports, including reports on Form 10-KSB and Form 10-QSB, that could cause
results to differ materially from those anticipated by the statements made
herein.
Introduction
On December 30, 1998 the Company acquired all the outstanding stock of
ChemWay Systems, Inc., a corporation that blends and packages chemicals for the
automotive aftermarket. The Company commenced operations of ChemWay on January
7, 1999, and during the first quarter of 1999, ChemWay's facilities became
operationally capable of providing customers with a full line of its products.
Additionally, ChemWay is aggressively pursuing new product lines and marketing
alliances to expand to a national market. While this process has been severely
hampered by a lack of adequate working capital, ChemWay has begun to generate
sales and is shipping product. The Company raised approximately $1,005,000 in
private placements during the fiscal year ended December 31, 1998, $754,385 of
which was used to pay ChemWay debt and other costs assumed pursuant to the
Purchase Agreement. In March of 2000, ChemWay secured a mortgage in the amount
of $510,000 on its Cottonwood property in order to retire the first mortgage on
the property and thereby fulfill a covenant of its Purchase Agreement.
During the course of the year, at the suggestion of one of its then
Directors, the Company pursued a possible venture in the field of E-commerce.
While this opportunity was evaluated, funding, also arranged by the same
Director, was withheld pending the finalization of a definitive corporate
structure to accommodate the new venture. In late May of 1999 a proposal was
submitted to the Company which suggested among other things a reverse split of
the Company's stock as well as the divestiture of ChemWay. The proposal was
submitted on a best effort basis with regard to funding and the completion of
the necessary acquisitions for the new business. Upon review, the Board
determined that the new venture would not be in the best interest of the
shareholders. This was based primarily on the fact that the Company would lose
its principal asset with no guarantee of a suitable replacement. As a result of
this, ChemWay operations, as well as the preparation of the Company's Form10KSB
for 1998, were delayed.
In June of 1999, the Board determined to refocus the Company's efforts
to grow the ChemWay operation as well as seek additional opportunities to
provide immediate revenue and asset enhancement. By December of 1999, the
Company had finalized negotiations with Michael R. Bradle to acquire an interest
in Seneca Energy Partners, LP, and for Mr. Bradle to serve as the President,
Chief Operating Officer and a director of the Company. In order to create a
comprehensive business plan and facilitate planned expansion, in February of
2000 the Company hired Mr. Barry Goverman as Senior Vice President and Chief
Communications Officer and Ms. Catherine A. Tamme as Vice President and Chief
Financial Officer. With the additional management in place, the Company believes
it will be able to more aggressively pursue acquisition candidates that it
believes will be suited to management's business plan to generate sufficient
revenues and provide an asset base for continued growth. When evaluating
acquisitions, the ability to use leverage in order to reduce the issuance of
stock, will be a significant factor, especially in the near term. Management's
business strategy is to focus on the acquisition of those companies whose
product or service is technically innovative or market proven, and compatible
with current operations, and whose market penetration can be significantly
expanded through enhanced marketing or additional capitalization.
Results of Operations
Discussion of Twelve Months Ended December 31, 1999 , Six Months Ended
December 31, 1998 and Twelve Months Ended June 30, 1998
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During the past 24 months the Company has been restructured with
respect to its primary business and management structure. Previously, the
Company was involved in software development. When this endeavor proved to be
unsuccessful, the Board of Directors was reconfigured and new management hired.
During the latter half of 1998 and the first half of 1999 a number of strategies
were evaluated before adopting the current strategic plan. As previously
discussed, this plan focuses on the development of the Company's ChemWay
division as well as a related energy products division. Although year to year
comparison as an analytical tool is inappropriate given the disparate nature of
the previous and current business, it is appropriate to review the components of
the financial statement as follows:
Revenues
As a result of the re-start of ChemWay operations, revenues of $519,374 were
generated in 1999. No revenues were generated during the previous year.
Loss from Operations
The Company had an operating loss of $108,353 for the twelve months
ended December 31, 1999. This loss resulted primarily from sales discounts given
to begin to re-establish ChemWay's presence in the marketplace.
Selling, General and Administrative Expenses
Selling, general and administrative expenses were $2,415,735 for the
twelve months ended December 31, 1999. Depreciation and amortization of goodwill
accounted for $481,259 of this total. In addition, the salaries of the Chairman
and the Executive Vice President totaling $215,000 were deferred. ChemWay's
portion of these expenses totaled $816,157.
Net Loss
The Company had a net loss of $2,401,396 for the twelve months ended
December 31, 1999. This was primarily due to two factors: limited Revenues, and
the increase in Selling, General, and Administrative expense as a result of the
acquisition and re-start of ChemWay operations. Revenues were negatively
impacted during the first half of the year as management evaluated other
business opportunities and during the second half by limited working capital.
Income Taxes
The Company had no income tax expense. As of December 31, 1999, the
Company had net operating loss carryforwards available to offset future taxable
income of approximately $8,300,000, $5,900,000 and $5,332,000, respectively.
These amounts expire during the years 2012 through 2018.
The Company most likely will not be able to utilize the carryover incurred
prior to fiscal 1997 due to change of ownership and the requirement for the
continuation of the same type of business.
Financing, Liquidity and Capital Resources
During the twelve months ended December 31, 1999, an aggregate of
1,396,000 shares of the Company's Common Stock was issued. Of these, 596,000
shares were sold for cash in a private offering resulting in gross proceeds of
$328,000 used primarily to pay certain obligations of ChemWay and to provide
working capital for operations, and 100,000 shares were issued for
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services rendered. The balance of 800,000 shares was sold in exchange for an 85%
interest in Seneca Energy Partners, LP.
Between January 1, 2000 and March 31, 2000, 757,000 shares of the
Company's Common Stock were issued. The shares were sold for cash in a private
offering resulting in gross proceeds of $175,000 used to provide working capital
primarily for ChemWay operations. No underwriter was involved in the sales of
stock. These shares of Common Stock were sold in transactions exempt from
registration under Section 4(2) of the Securities Act of 1933, as amended,
because of the private nature of the sales.
On March 27, 2000 the Company fulfilled a covenant of its agreement
with Evans Systems through the refinancing of the ChemWay office-warehouse
located at 1605 Cottonwood, Bay City, Texas. The mortgage is in the amount of
$510,000 and provides amortization of 15 years with a 5 year term. Proceeds from
the mortgage were used to retire existing ChemWay debt.
At December 31, 1999, stockholders' equity in the company was
$4,607,491. The Company had a retained earnings deficit of $10,031,466 based on
historic losses, and a negative working capital balance of $1,972,625.
Management plans to address this issue by obtaining interim financing against
existing assets as well as a private placement of preferred stock it intends to
conduct at a later date. Management is confident, although there can be no
assurance of success, that with this financing, both ChemWay and the Seneca oil
and gas venture will generate sufficient cash flow to provide for ongoing
operations and expansion.
ITEM 7. FINANCIAL STATEMENTS
The reports of the Company's Independent Public Accountants, Financial
Statements and Notes to Financial Statements appear herein as noted below:
INDEX TO FINANCIAL STATEMENTS
Page
Independent Auditors' Report 10
Consolidated Balance Sheets 11
Consolidated Statements of Operations 13
Consolidated Statements of Stockholders' Equity (Deficit) 14
Consolidated Statements of Cash Flows 15
Notes to Consolidated Financial Statements 17
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Independent Auditors' Report
Board of Directors and Stockholders
Affiliated Resources Corporation
Houston, Texas
We have audited the accompanying Consolidated Balance Sheets of Affiliated
Resources Corporation as of December 31, 1999 and 1998, and the related
Statements of Operations, Stockholders' Equity (Deficit) and Cash Flows for the
year ended December 31, 1999, the six months ended December 31, 1998 and the
year ended June 30, 1998. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits 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 audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Affiliated Resources
Corporation as of December 31, 1999 and 1998, and the results of their
operations and their cash flows for the year ended December 31, 1999, the six
months ended December 31, 1998 and the year ended June 30, 1998, in conformity
with generally accepted accounting principles.
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has suffered accumulated losses from
operations of $10,031,466 and has a working capital deficiency of $1,769,064.
These conditions raise substantial doubt about its ability to continue as a
going concern. Management's plans regarding those matters also are described in
Note 2. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
WEINSTEIN SPIRA & COMPANY, P.C.
Houston, Texas
April 4, 2000
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AFFILIATED RESOURCES CORPORATION
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31,
1999 1998
-------------------- ---------------------
ASSETS
Current Assets
<S> <C> <C>
Cash and cash equivalents $ 8,490 $ 144,123
Accounts receivable 6,900
Inventory 606,100 966,584
Prepaid expenses 7,823 18,699
-------------------- ---------------------
Total Current Assets 629,313 1,129,406
-------------------- ---------------------
Property and Equipment
Land 41,000 41,000
Buildings 744,000 1,064,000
Warehouse equipment 2,423,348 2,450,000
Office equipment and furniture 76,344 76,552
Vehicles 39,784 39,784
Leasehold improvements 334,125 7,277
Oil and gas properties 51,000
-------------------- ---------------------
3,709,601 3,678,613
Less: Accumulated depreciation 257,232 5,300
-------------------- ---------------------
3,452,369 3,673,313
-------------------- ---------------------
Other Assets
Goodwill, net of accumulated amortization of
$228,127 at December 31, 1999 3,264,546 3,421,923
Deposits 3,201 3,201
-------------------- ---------------------
3,267,747 3,425,124
-------------------- ---------------------
$ 7,349,429 $ 8,227,843
==================== =====================
</TABLE>
See accompanying notes to consolidated financial
statements.
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<TABLE>
<CAPTION>
December 31,
1999 1998
-------------------- ---------------------
LIABILITIES
Current Liabilities
<S> <C> <C>
Notes payable $ 395,000
Current maturities of long-term debt 9,300 $ 236,624
Accounts payable:
Trade 1,220,953 1,427,669
Related Parties 106,888 2,388
Accrued expenses 626,236 352,330
Advances payable 40,000 23,000
-------------------- ---------------------
Total Current Liabilities 2,398,377 2,042,011
Long-Term Debt 343,561 141,846
-------------------- ---------------------
2,741,938 2,183,857
-------------------- ---------------------
STOCKHOLDERS' EQUITY
Common Stock, $.003 par value, 25,000,000
shares authorized, 17,947,743 and
16,451,743
shares issued and outstanding at 53,843 49,355
December 31, 1999 and 1998, respectively
Additional Paid-In Capital 16,957,480 15,320,480
Accumulated Deficit (10,031,466) (7,630,070)
Unamortized Stock Compensation (2,366,366) (1,695,779)
Treasury Stock, 641,026 shares, at cost (6,000)
-------------------- ---------------------
4,607,491 6,043,986
-------------------- ---------------------
$ 7,349,429 $ 8,227,843
==================== =====================
</TABLE>
See accompanying notes to consolidated financial
statements.
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AFFILIATED RESOURCES CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the For the Six For the
Year Ended Months Ended Year Ended
December 31, December 31, June 30,
1999 1998 1998
--------------------- --------------------- ---------------------
<S> <C> <C> <C>
Revenues $ 519,374
Cost of Revenues 627,727
-------------------- -------------------- --------------------
Gross Profit (Loss) (108,353)
Selling, General and Administrative 2,415,735 $ 526,843 $ 2,074,494
-------------------- -------------------- --------------------
Expenses
Loss from Operations (2,524,088) (526,843) (2,074,494)
Other Income (Expense)
Interest expense (71,967)
Settlement of litigation (116,652) (86,000)
Debt forgiveness 311,311 297,007
Loss on disposal of property and
equipment (64,593)
-------------------- -------------------- --------------------
122,692 146,414
-------------------- -------------------- --------------------
Net Loss $ (2,401,396) $ (526,843) $ (1,928,080)
==================== ==================== ====================
Net Loss Per Share $ (.14) $ (.04) $ (0.14)
==================== ==================== ====================
Weighted Average Shares Outstanding 16,729,110 14,553,194 13,602,778
==================== ==================== ====================
</TABLE>
See accompanying notes to consolidated financial
statements.
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AFFILIATED RESOURCES CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
Forthe Years Ended December 31, 1999
and June 30, 1998 and the
Six-Month period Ended December
31, 1998
<TABLE>
<CAPTION>
Additional Unamortized
Common stock Paid-in Accumulated Stock Treasury Stock
Shares Amount $ Capital $ Deficit $ Compensation $ Shares Amount $ Total $
----------- ---------- ------------ ------------ -------------- --------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance - June 30, 1997 15,473,700 46,421 5,337,647 (5,175,147) 208,921
Sale of common stock
for cash 20,000 60 15,940 16,000
Issuance of common stock
for services 248,792 746 312,441 313,187
Cancellation of stock
subscription (2,000,000) (6,000) (194,000) (200,000)
Issuance of common stock
options for services 2,834,600 (1,902,280) 932,320
Net Loss (1,928,080) (1,928,080)
----------- ---------- ------------ ------------ --------------- --------- ---------- -----------
Balance - June 30, 1998 13,742,492 41,227 8,306,628 (7,103,227) (1,902,280) (657,652)
Sale of common stock
for cash 562,225 1,687 1,003,313 1,005,000
Issuance of common stock
for services 6,000 18 9,762 9,780
Issuance of common stock
for acquisition of
ChemWay 1,500,000 4,500 5,995,500 6,000,000
Issuance of common stock
for acquisition of
CobolTexas 641,026 1,923 5,277 7,200
Amortization of stock
compensation 206,501 206,501
Net Loss (526,843) (526,843)
----------- ---------- ------------ ------------ --------------- --------- ---------- -----------
Balance - December 31,1998 16,451,743 49,355 15,320,480 (7,630,070) (1,695,779) 6,043,986
Sale of common stock for
cash 596,000 1,788 326,212 328,000
Issuance of common stock
for services 100,000 300 27,820 28,120
Issuance of common stock
for acquisition of
investment 800,000 2,400 61,600 64,000
Issuance of common stock
options for acquisition
of investment 12,750 12,750
Issuance of common stock
options for services 1,190,618 (1,083,587) 107,031
Issuance of common stock
options for debt
financing 18,000 18,000
Amortization of stock
compensation 413,000 413,000
Acquisition of Treasury
Stock (641,026) (6,000) (6,000)
Net loss (2,401,396) (2,401,396)
----------- ---------- ------------ ------------ --------------- --------- ---------- -----------
Balance - December 31, 1999 17,947,743 53,843 16,957,480 (10,031,466) (2,366,366) (641,026) (6,000) 4,607,491
=========== ========== ============ ============ =============== ========= ========== ===========
</TABLE>
See accompanying notes to consolidated financial
statements.
13
<PAGE>
AFFILIATED RESOURCES CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the For the Six For the
Year Ended Months Ended Year Ended
December 31, December 31, June 30,
1999 1998 1998
--------------------- ---------------------- -------------------
Cash Flows From Operating Activities:
<S> <C> <C> <C>
Net loss $ (2,401,396) $ (526,843) $ (1,928,080)
Adjustments to reconcile net loss to net cash used
in operating activities:
Depreciation and amortization expense 481,259 3,866 20,662
Loss on disposal of assets 64,593
Stock issued for services 28,120 313,187
Stock options issued for services 107,031
Stock options issued for debt financing 18,000
Non-cash compensation expense 413,000 206,501 932,320
Debt forgiveness (311,311) (297,007)
Changes in assets and liabilities:
Accounts receivable (6,900)
Inventory 360,484
Prepaid expenses 10,876 (3,682) 72,770
Deposits (3,201)
Accounts payable and accrued liabilities 438,001 (537,378) 375,966
-------------------- --------------------- -------------------
Net Cash Used in Operating Activities (862,836) (860,737) (445,589)
-------------------- --------------------- -------------------
Cash Flows From Investing Activities:
Purchase of equipment (32,111) (23,595) (7,952)
Proceeds from sale of property and equipment 44,923
-------------------- --------------------- -------------------
Net Cash Provided by (Used in) Investing
Activities 12,812 (23,595) (7,952)
-------------------- --------------------- -------------------
Cash Flows From Financing Activities:
Net advances from related parties 17,000 23,000
Proceeds from debt 395,000 437,007
Payments made on debt (25,609)
Sale of common stock 328,000 1,005,000 16,000
-------------------- --------------------- -------------------
Net Cash Provided by Financing Activities 714,391 1,028,000 453,007
-------------------- --------------------- -------------------
Net Increase (Decrease) in Cash Equivalents (135,633) 143,668 (534)
Cash and Cash Equivalents at Beginning of Period 144,123 455 989
-------------------- --------------------- -------------------
Cash and Cash Equivalents at End of Period $ 8,490 $ 144,123 $ 455
==================== ===================== ===================
Supplemental Disclosure of Cash Flow
Information
Cash paid for interest $ 40,152
====================
</TABLE>
Supplemental Operating Activities:
For the six months ended December 31, 1998, 6,000 shares of stock were
issued for accounts payable of $9,780.
Supplemental Investing Activities:
See accompanying notes to consolidated financial
statements.
14
<PAGE>
Effective July 8, 1998, the Company issued 641,026 shares of common
stock for the stock of CobolTexas, Inc., which had office equipment of $7,200.
During 1999, the Company cancelled the acquisition of CobolTexas, Inc. and
acquired the aforementioned 641,026 shares of Treasury stock with a net book
value of $6,000.
Effective December 29, 1998, the Company acquired the following assets
and liabilities of ChemWay Systems, Inc. for stock valued at $6,000,000:
Inventory $ 966,584
Prepaid expenses 15,017
Property and equipment 3,622,814
Goodwill 3,421,923
Accounts payable (1,716,605)
Accrued expenses (71,263)
Long-term debt (238,470)
--------------------
$ 6,000,000
====================
Effective December 27, 1999, the Company acquired an investment in a
limited partnership with oil and gas properties and goodwill for stock valued at
$64,000, stock options valued at $12,750, and accounts payable of $45,000.
See accompanying notes to consolidated financial
statements.
15
<PAGE>
AFFILIATED RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999 and 1998 and June 30, 1998
Note 1 - Organization and Summary of Significant Accounting Policies
The Company issues financial statements on the accrual method of
accounting in accordance with generally accepted accounting principles.
Accounting principles followed by the Company and the methods of applying those
principles which materially affect the determination of financial position,
results of operations and cash flows are summarized below:
Organization
Synaptix Systems Corporation was incorporated in Colorado on December
31, 1986. In May 1998, an Assumed Name Certificate was filed with the State of
Texas to enable the Company to conduct business under the name Affiliated
Resources Corporation. On January 13, 1999, the name was changed to Affiliated
Resources Corporation (the Company). During the six months ended December 31,
1998, the Company changed its fiscal year end from June 30 to December 31.
The Company intends to focus on the acquisition of those companies
whose product or service is technically innovative and market-proven, but whose
market penetration can be significantly expanded through enhanced marketing or
additional capitalization.
Principles of Consolidation
The consolidated financial statements include the accounts of
Affiliated Resources Corporation and its wholly-owned subsidiary, ChemWay
Systems, Inc. All material intercompany accounts and transactions have been
eliminated. ChemWay Systems, Inc. produces, packages and markets automotive
after-market chemical products.
Revenue Recognition
Sales are recognized at the date of product shipment, and amounts
receivable are recorded at that time. Earnings are charged with a provision for
doubtful accounts based on collection experience and a current review of the
collectibility of accounts. Accounts deemed uncollectible are applied against
the allowance for doubtful accounts.
Cash and Cash Equivalents
The Company considers all investments purchased with an original
maturity of three months or less to be cash equivalents.
16
<PAGE>
AFFILIATED RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 1999 and 1998 and June 30, 1998
Inventory
Inventory, consisting of raw materials, packaging and packaged
automotive chemical products, is valued at the lower of cost, as determined by
the first-in, first-out (FIFO) method, or market.
Property and Equipment
Property and equipment are carried at cost. Depreciation is computed at
rates considered sufficient to amortize the cost of the assets over their
estimated useful lives using the straight-line method. Repairs and maintenance
costs are charged against income and betterments are capitalized as additions to
the related assets. Depreciation is based upon the following estimated useful
lives:
Building 15 - 25 years
Warehouse equipment 15 years
Office equipment and furniture 5 - 7 years
Vehicles 5 years
Leasehold improvements 5 - 15 years
Oil and gas properties 15 years
Oil and Gas Accounting
The Company's oil and natural gas properties are accounted for using
the "Successful Efforts" basis of accounting.
Costs to acquire mineral interests in oil and natural gas properties,
to drill and equip exploratory wells that find proved reserves, and to drill and
equip development wells are capitalized. Costs to drill exploratory wells that
do not find proved reserves, geological and geophysical costs, and costs of
carrying and retaining unproved properties are expensed.
Unproved oil and natural gas properties that are individually
significant are periodically assessed for impairment of value, and a loss is
recognized at the time of impairment by providing an impairment allowance. Other
unproved properties are amortized based on the Company's experience of
successful drilling and average holding period. Capitalized costs of producing
oil and natural gas properties, after considering estimated dismantlement and
abandonment costs and estimated salvage values, are depreciated and depleted by
the unit-of-production method. Support equipment and other property and
equipment are depreciated over their estimated useful lives.
On the sale or retirement of a complete unit of a proved property, the
cost and related accumulated depreciation, depletion, and amortization are
eliminated from the property accounts, and the resultant gain or loss is
recognized. On the retirement or sale of a partial unit of proved property, the
cost is charged to accumulated depreciation, depletion and amortization with a
resulting gain or loss recognized in income.
17
<PAGE>
AFFILIATED RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 1999 and 1998 and June 30, 1998
Unamortized Stock Compensation
The Company accounts for stock-based compensation under APB Opinion 25.
Total compensation cost recognized for stock options granted to employees is the
difference between the quoted market price of the stock at the grant date less
the amount the employee is required to pay. The cost is charged to expense over
the periods in which the employee performs the related services. Costs related
to future periods are recorded as unamortized stock compensation and deducted
from stockholders' equity (deficit).
Goodwill
Goodwill arises from the acquisition of assets at an amount in excess
of their fair market value. Amortization is computed by the straight-line method
over 15 years.
Loss Per Share
The computation of loss per share is based on the weighted average
number of shares outstanding during the period.
Income Taxes
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes".
Under this method, deferred income taxes are recorded to reflect the tax
consequences in future years of temporary differences between the tax basis of
the assets and liabilities and their financial amounts at year end. The Company
provides a valuation allowance to reduce deferred tax assets to their estimated
net realizable value.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Note 2 - Going Concern
The accompanying consolidated financial statements have been prepared
assuming the Company will continue as a going concern. The Company had a working
capital deficit of $1,769,064 at December 31, 1999, and has accumulated
operating losses of $10,031,466 as of December 31, 1999.
18
<PAGE>
AFFILIATED RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 1999 and 1998 and June 30, 1998
The Company plans to grow its continuing operations by expansion
through acquisitions. These acquisitions will be financed primarily through the
issuance of common stock, and it is management's belief that these acquisitions
will generate sufficient revenues and provide an asset base for continued
growth. Management is confident that current discussions with investors will
yield additional capital to complete the proposed acquisitions and provide
sufficient working capital for future operations. However, there is no assurance
that the Company will be successful in raising equity and continuing as a going
concern.
Note 3 - Acquisitions and Dispositions
Effective December 29, 1998, the Company acquired from Evans Systems,
Inc., all of the outstanding stock of ChemWay Systems, Inc. (ChemWay), which is
engaged in the business of producing, packaging and marketing automotive
after-market chemical products. The purchase price of $6,000,000 consisted of
1,500,000 shares of common stock valued at $4 per share. The acquisition has
been accounted for as a purchase, and the operations are included in the
accompanying consolidated financial statements from the date of acquisition.
The Purchase Agreement requires the Company to fulfill certain
obligations, including funding of $1,500,000 to satisfy creditors of ChemWay and
providing working capital for current operations and repayment of a $232,500
note payable to Chase Bank. The Company has pledged all of the assets of ChemWay
to secure the obligations. On March 27, 2000, ChemWay repaid the note payable to
Chase Bank. The entire $1,500,000 has not been funded.
The following unaudited pro forma consolidated results of operations
are presented as if the acquisition of ChemWay had taken place at the beginning
of the June 30, 1998 period. ChemWay's operations are included for their fiscal
year ended September 30, 1998.
Revenues $ 2,641,000
Net loss 4,100,000
Basic loss per common share (.27)
Effective July 8, 1998, the Company acquired all of the outstanding
stock of CobolTexas, Inc. in exchange for 641,026 shares of common stock. The
acquisition was accounted for as a pooling of interests and recorded at the net
book value of CobolTexas, Inc. There were no operations of CobolTexas, Inc.
prior to the acquisition. CobolTexas, Inc. is engaged in the remediation of
computer systems involving the year 2000 problems.
During 1999, the 641,026 shares previously issued were reacquired by
the Company as Treasury stock due to the failure of CobolTexas, Inc. to meet
certain requirements of the purchase agreement.
19
<PAGE>
AFFILIATED RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 1999 and 1998 and June 30, 1998
In March 1998, the Company sold the software assets and other property
and equipment to Titan Wireless for a five percent interest in Titan's gross
sales of the software assets. A loss of $64,593 was recorded in the June 30,
1998 Consolidated Statement of Operations for the transaction.
On December 27, 1999, the Company acquired an 85% limited partnership
interest in Seneca Energy Partners, L.P., a Texas limited liability company
engaged in the operation of 16 oil and gas wells in West Virginia. The purchase
price of $121,750, consisting of 800,000 shares of common stock valued at $.08
per share, 425,000 common stock options valued at $.03 per option, and a payable
of $45,000, was allocated $51,000 to oil and gas properties and $70,750 to
goodwill.
Note 4 - Notes Payable
Notes payable as of December 31, 1999, are as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
12% Note payable to a related party, secured by inventory,
interest and principal due December 1999, in default $ 200,000
Prime rate note payable to a bank, secured by common stock, interest
and principal due November 1999, in default
195,000
-------------------
$ 395,000
===================
</TABLE>
Note 5 - Long-Term Debt
Long-term debt as of December 31, 1999 and 1998 was as follows:
<TABLE>
<CAPTION>
December 31,
--------------------------------------------
1999 1998
--------------------- ---------------------
<S> <C> <C>
8% Unsecured note payable to a corporation, interest and
principal due November, 2002 $ 100,000 $ 100,000
8% Unsecured note payable to a corporation, interest and
principal due April, 2001 40,000 40,000
Prime plus 2% note payable to a bank, secured by land and building,
principal of $7,500 plus interest due quarterly, matures November 30,
2003, in default 210,000 232,500
10.25% Note payable to a finance company, secured by
vehicle, principal and interest of $379 due monthly,
matures May, 2000 2,861 5,970
--------------------- ---------------------
352,861 378,470
Less current maturities 9,300 236,624
--------------------- ---------------------
$ 343,561 $ 141,846
===================== =====================
</TABLE>
20
<PAGE>
AFFILIATED RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 1999 and 1998 and June 30, 1998
In March, 2000, the Company entered into an adjustable rate (currently
14.9%) promissory note agreement with a financial institution for $510,000,
secured by a deed of trust and assignment of rents, due in monthly installments
of $7,103, including interest, maturing April, 2015. $210,000 of the proceeds
from this note were used to pay off note payable to bank above, in default at
December 31, 1999. This refinancing is reflected in the schedule below.
Long-term debt is payable in the future as follows:
Year Ending December 31,
2000 $ 9,300
2001 50,932
2002 112,677
2003 14,700
2004 17,046
Thereafter 148,206
---------------------
$ 352,861
=====================
Note 6 - Stockholders' Equity
Preferred Stock
The Company has 10,000,000 shares of $1.00 par value voting Preferred
Stock authorized for issuance.
The Voting Preferred Shares are callable and redeemable at the option
of the Company. In addition to the cash redemption price of $1.00 per share,
holders of the Voting Preferred Shares are entitled to two shares of Common
Stock for each of the Voting Preferred Shares redeemed. Holders of the Voting
Preferred Shares are entitled to vote on all matters to be voted upon by the
shareholders, have a liquidation preference of $1.00 per share before any
winding-up of the Company, and are entitled to such dividend as may be declared
by the Board of Directors. The Voting Preferred Shares have no preemptive rights
or sinking fund provisions.
Common Stock
During the year ended June 30, 1998, 2,000,000 shares of subscribed
stock were canceled.
During the year ended June 30, 1998, 248,792 shares of stock valued at
$313,187 were issued for salaries and services. Another 20,000 shares of common
stock were sold for $16,000 cash.
21
<PAGE>
AFFILIATED RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 1999 and 1998 and June 30, 1998
During the six months ended December 31, 1998, 6,000 shares of stock
valued at $9,780 were issued for services; 562,225 shares were sold for
$1,005,000 cash; and 1,500,000 shares valued at $6,000,000 were issued to
purchase ChemWay Systems, Inc. An additional 641,026 shares were issued to
acquire CobolTexas, Inc. in a pooling of interests.
During the year ended December 31, 1999, the Company sold or issued
1,496,000 shares of common stock for $328,000 cash, $28,120 of expenses, and
$64,000 of investments.
Note 7 - Stock Options
The Company has established an employee stock compensation plan, an
incentive stock option plan, and a non-statutory stock option plan. 7,000,000
shares of common stock are registered.
During the year ended June 30, 1998, the Company granted 2,220,000
options for past and future compensation. Compensation expense recorded during
the year ended June 30, 1998 related to these options was $932,320. Unamortized
future compensation of $1,902,280 will be amortized straight-line over five
years.
During the year ended December 31, 1999, the Company granted 2,990,000
options for past and future compensation. Compensation expense recorded during
the year ended December 31, 1999 related to these options was $107,031.
Unamortized future compensation of $1,083,587 will be amortized straight-line
over five years.
During the year ended December 31, 1999, the Company issued 300,000
options for debt financing. Interest expense recorded during the year ended
December 31, 1999 related to these options was $18,000.
The following table summarizes stock option activity:
22
<PAGE>
AFFILIATED RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 1999 and 1998 and June 30, 1998
<TABLE>
<CAPTION>
For the Year Ended For the Six-Month For the Year Ended
December 31, 1999 Period June 30, 1998
Ended December 31, 1998
Stock Price Stock Price Stock Price
Options Per Share Options Per Share Options Per Share
--------------- ---------------- -------------- ---------------- --------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Beginning of 2,170,000 $ .15 - .50 2,282,000 $ .15 - .50 62,000 $ .15
period
Granted 2,065,000 .10 - .69 2,220,000 .15 - .50
Exercised (50,000) .20
Cancelled (20,000) .15 (62,000) .15
--------------- ---------------- -------------- ---------------- --------------- ----------------
End of period 4,215,000 $ .10 - .69 2,170,000 $ .15 - .50 2,282,000 $ .15 - $.50
============== ================ ============== ================ =============== ================
Exercisable at
end of period 3,395,000 $ .10 - .69 2,170,000 $ .15 - .50 2,282,000 $ .15 - $.50
============== ================ ============== ================ =============== ================
</TABLE>
<TABLE>
<CAPTION>
For the For the
Year Ended Year Ended
December 31, June 30,
1999 1998
--------------------- ----------------------
<S> <C> <C>
Weighted-average fair value of options granted during the
period $ 0.75 $ 1.59
The fair value of the options at date of grant was
estimated using the Black-Scholes Model with the following
weighted-average assumptions:
Risk-free interest rate 5.5% 5.64%
Expected life 2 - 4 years 4.98 years
Expected volatility 223% 114%
Expected dividends None None
</TABLE>
Had the Company elected to apply Financial Accounting Standards Board
Statement No. 123, "Accounting for Stock-Based Compensation," using the fair
value based method, the Company's net loss and loss per share would have been
increased to the pro forma amounts indicated below:
23
<PAGE>
AFFILIATED RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 1999 and 1998 and June 30, 1998
<TABLE>
<CAPTION>
For the For the Six For the
Year Ended Months Ended Year Ended
December 31, December 31, June 30,
1999 1998 1998
--------------------- --------------------- ---------------------
<S> <C> <C> <C>
Net loss as reported $ (2,401,396) $ (526,843) $ (1,928,080)
Net loss pro forma $ (2,542,448) $ (593,393) $ (1,971,688)
Basic loss per share as reported $ (.14) $ (.04) $ (0.14)
Basic loss pro forma $ (.15) $ (.04) $ (0.15)
</TABLE>
Note 8 - Income Taxes
At December 31, 1999 and 1998 and June 30, 1998, the Company had net
operating loss carryforwards available to offset future taxable income of
approximately $8,300,000, $5,900,000 and $5,332,000, respectively. These amounts
expire during the years 2012 through 2019. The Company most likely will not be
able to utilize the carryover incurred prior to fiscal 1997 due to change of
ownership and the requirement for the continuation of the same type of business.
Note 9 - Operating Leases
Affiliated Resources Corporation leases office space under an operating
lease agreement which expires in October, 2004.
ChemWay Systems, Inc. leases warehouse space and equipment under
various operating lease agreements which expire in years ranging from 2000 to
2007.
Net minimum lease payments are as follows:
Minimum Rental Payments
<TABLE>
<CAPTION>
Office and
Warehouse Warehouse
Space Equipment Total
---------------------- ---------------------- ----------------------
<S> <C> <C> <C> <C>
2000 $ 53,274 $ 7,354 $ 60,628
2001 54,480 3,560 58,040
2002 54,480 54,480
2003 70,917 70,917
2004 48,057 48,051
Thereafter 60,000 60,000
---------------------- ---------------------- ----------------------
$ 341,208 $ 10,914 $ 352,122
====================== ====================== ======================
</TABLE>
24
<PAGE>
AFFILIATED RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 1999 and 1998 and June 30, 1998
Rental expense for the Company was $92,338, $20,636 and $40,611 for the
year ended December 31, 1999, the six months ended December 31, 1998, and the
year ended June 30, 1998, respectively.
Note 10 - Related Party Transactions
During the years ended December 31, 1999 and June 30, 1998, debt in the
amount of $311,311 and $297,007, respectively, was forgiven by related parties.
The amount represents cash given to the Company.
The Company has accounts payable of $106,888 and $2,388 to related
parties as of December 31, 1999 and 1998, respectively.
The Company has cash advances of $40,000 and $23,000 from related
parties at December 31, 1999 and 1998, respectively.
Note 11 - Commitments and Contingencies
Effective January 2000, the Company entered into employment agreements
with four employees for total compensation of $900,000 to be paid over a
two-year period. In connection with the employment agreements, the Company is
obligated to issue up to 1,000,000 of common stock options with an exercise
price of $.50 per share. The issuance of the options is contingent upon the
completion of certain performance measures defined in the agreements.
The Company has entered into an agreement for marketing and retail
distribution services for ChemWay products. In connection with the agreement, a
shareholder transferred 500,000 shares of common stock to the distributor. In
addition, the Company is obligated to issue an additional 200,000 shares of
common stock for each $2,000,000 sales of the Company's products, up to
2,000,000 shares. The agreement may be terminated in September, 2000, if the
Company's sales for the first twelve months of the agreement are not $2,000,000.
Thereafter, the agreement may be terminated if annual sales are less than
$10,000,000.
25
<PAGE>
ITEM 12. EXHIBITS AND REPORTS ON FORM 8-K.
1. Reports on Form 8-K.
None.
2. Exhibits
Exhibit
Number Description
2 Asset Purchase Agreement by and betwee Swallen Investments
Corporation and Synaptix Systems Corporation, dated May, 1997
(1)
2.1 Asset Purchase Agreement by and betwee Synaptix Systems
Corporation and Mobilelink Communications, Inc., dated March
26, 1998 (2)
2.1.1 Modification Agreement by and between Synaptix Systems
Corporation and Mobilelink Communications, Inc., dated (3)
2.2 Plan and Agreement of Reorganization between Synaptix Systems
Corporation, CobolTexas, Inc., E. Lyle Flinn, Robert Burnside,
Gabriel C. Cox, and Robert G. Oliver, dated July 8, 1998 (4)
2.3 Contractor's Agreement between CobolTexas, Inc., and E. Lyle
Flinn, Robert Burnside, Gabriel C. Cox and Robert G. Oliver,
Jr. dated July 8, 1998 (4)
2.4 Stock Purchase Agreement by and among Synaptix Systems
Corporation, a Colorado corporation, doing business as
Affiliated Resources Corporation, Evans Systems, Inc., and Way
Energy, Inc., dated October 30, 1998 (5)
2.4.1 Amendment No. 1 to Stock Purchase Agreement by and among
Synaptix Systems Corporation, a Colorado corporation doing
business as Affiliated Resources Corporation, Evans Systems,
Inc., and Way Energy, Inc., dated December 29, 1998 (5)
2.4.2 Waiver and Second Amendment to Stock Purchase Agreement dated
March 11, 1999 from Evans Systems, Inc. (5)
2.4.3 Waiver and Third Amendment to Stock Purchase Agreement dated
April 26, 1999 (5)
2.5 Sale and Purchase Agreement by and among Seneca Energy
Partners L.P. and its general partner Lonestar Investment
Management L.L.C. and Affililiated Resources Corporation,
dated December 27, 1999
26
<PAGE>
Exhibit
Number Description
3.1 Amendment to Articles of Incorporation (6)
3.2 Restated Articles of Incorporation of the Company as filed
with the Secretary of State of Colorado on January 13, 1999
(7)
3.3 Amended Bylaws
4.1 Affiliated Resources Corporation 1997 Incentive and
Non-Statutory Stock Option Plan, As Amended (7)
4.1.1 Form of Affiliated Resources Corporation Employee Stock Option
Agreement
4.1.2 Stock Option Agreement by and between Peter C. Vanucci and
Affiliated Resources Corporation, dated May 20, 1998 (2)
4.1.2.(i)Stock Option Agreement by and between Peter C. Vanucci and
Affiliated Resources Corporation, dated January 3, 2000.
4.1.3 Stock Option Agreement by and between Virginia M. Lazar and
Affiliated Resources Corporation, dated May 20, 1998 (2)
4.1.4 Stock Option Agreement by and between Edward S. Fleming and
Affiliated Resources Corporation, dated May 20, 1998 (2)
4.1.5 Stock Option Agreement by and between David L. Deerman and
Affiliated Resources Corporation, dated March 30, 1999 (5)
4.1.6 Stock Option Agreement by and between Michael R. Bradle and
Affiliated Resources Corporation, dated January 3, 2000
4.1.7 Stock Option Agreement by and between Barry Goverman and
Affiliated Resources Corporation, dated February 9, 2000
4.1.8 Stock Option Agreement by and between Catherine A. Tamme and
Affiliated Resources Corporation, dated February 7, 2000
4.1.9 Stock Option Agreement by and between Patricia A. Bodley and
Affiliated Resources Corporation, dated September 15, 1999
4.1.10 Stock Option Agreement by and between Edward W. Johnson and
Affiliated Resources Corporation, dated October 28, 1999
4.1.11 Stock Option Agreement by and between Lone Star Investment
Management LLC and Affiliated Resources Corporation, dated
December 30, 1999
27
<PAGE>
Exhibit
Number Description
4.2.1 Amended Stock Option Agreement by and between Peter C. Vanucci
and Affiliated Resources Corporation, dated December 31, 1999
4.2.2 Amended Stock Option Agreement by and between Edward S.
Fleming and Affiliated Resources Corporation, dated December
31, 1999
4.2.3 Amended Stock Option Agreement by and between Virginia M.
Lazar and Affiliated Resources Corporation, dated December 31,
1999
4.2.4 Amended Stock Option Agreement by and between David L. Deerman
and Affiliated Resources Corporation, dated December 31, 1999
4.2.5 Amended Stock Option Agreement by and between Patricia A.
Bodley and Affiliated Resources Corporation, dated December
31, 1999
10.1 Promissory Note by and between Affiliated Resources
Corporation and Edward W. Johnson, dated October 28, 1999
10.2 Settlement Agreement and Release by an between Synaptix
Systems Corporation and Alan W. Harvey (8)
28
<PAGE>
Exhibit
Number Description
10.3 Settlement Agreement and Release by an between Affiliated
Resources Corporation and The Tiger Group LLC, and Matthew
Hutchins and Daniel Gillett, collectively, dated September 22,
1999
10.3.1 Promissory Note by and betwee Affiliated Resources Corporation
and The Tiger Group LLC, and Matthew Hutchins and Daniel
Gillett, collectively, dated September 22, 1999
10.3.2 Bill of Sale by and between Affiliated Resources Cororation
and The Tiger Group, LLC, dated September 22, 1999
10.4 Lease agreement by and between 4849 Greenville Partners and
Synaptix Systems Corporation d.b.a. Affiliated Resources
Corporation, dated September 15, 1999
10.5 Agreement between The London Manhattan Company and Affiliated
Resources Corporation, its subsidiaries, agents, affiliates,
successors and assigns in connection with investment banking
services provided by The London Manhattan Company to
Affiliated Resources Corporation, dated September 21, 1999
10.5.1 Agreement for Services by and between ComVest International
Incorporated and Affiliated Resources Corporation, dated
January 19, 2000
10.6 Legal and Consultation Services Agreement by and between
Michalk, Beatty & Alcozer, PLLC, effective as of January 18,
2000
10.7.1 Computer Consultant Agreement between Christopher Landrum and
Affiliated Resources Corporation, dated January 18, 2000
10.7.2 Computer Consultant Agreement between RD Technology, Inc. and
Affiliated Resources Corporation, dated January 18, 2000
10.8 Distribution and Compensation Agreemen by and between RTB
Ventures, Inc. and Affiliated Resources Corporation, dated
August 31, 1999 (9)
10.9 Employment Agreement by and between Virginia M. Lazar and
Affiliated Resources Corporation, dated December 30, 1998
10.10 Employment Agreement by and between Patricia A. Bodley and
Affiliated Resources Corporation, dated September 15, 1999
10.11 Employment Agreement by and between Peter C. Vanucci and
Affiliated Resources Corporation, dated January 3 2000
10.12 Employment Agreement by and between Michael R. Bradle and
Affiliated Resources Corporation, dated January3, 2000
10.13 Employment Agreement by and between Catherine Tamme and
Affiliated Resources Corporation, dated February 7, 2000
10.14 Employment Agreement by and between Barry Goverman and
Affiliated Resources Corporation, dated February 7, 2000
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Exhibit
Number Description
17 Resignation Letter of Mark F. Walz (2)
17.1 Resignation Letter of Edward F. Feigha (5)
27 Financial Data Schedule
__________________________________________
(1) Incorporated herein by reference in Registrant's Report on
Form 10-KSB for the year ended June 30, 1997, dated October
31, 1997.
(2) Incorporated herein by reference in Registrant's Quarterly
Report on Form 10-QSB for the quarterly period ended March 31,
1998, dated May 26, 1998.
(3) Incorporated herein by reference in Registrant's Report on
Amendment No. 2 to Form 10-KSB for the year ended June 30,
1998, dated November 16, 1998.
(4) Incorporated herein by reference in Registrant's Report on
Form 8-K, dated August 3, 1998.
(5) Incorporated herein by reference in Registrant's Report on
Form 10-KSB for the transition period July 1, 1998 to December
31, 1998, dated August 6, 1999.
(6) Incorporated herein by reference in Registrant's Report on
Form 14A, dated December 30, 1996.
(7) Incorporated herein by reference in Registrant's Report on
Form 14A, dated November 16, 1998.
(8) Incorporated herein by reference to Registrant's Annual Report
on Form 10-KSB for the year ended June 30, 1997, dated October
31, 1997.
(9) Incorporated herein by reference to Registrant's Quarterly
Report on Form 10-QSB for the period September 30, 1999, dated
November 18, 1999.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, hereunto duly authorized.
AFFILIATED RESOURCES CORPORATION
(Registrant)
By: /s/ Peter C. Vanucci
Peter C. Vanucci
Chairman and Chief Executive Officer
Dated: May 17, 2000
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in their capacities indicated and on the dates indicated.
Name Title Date
/s/ Peter C. Vanucci Chairman,Chief Executive May 17, 2000
Peter C.Vanucci Officer & Director
/s/ Edward S. Fleming President & Director May 17, 2000
Edward S. Fleming
/s/ J. Thomas McManamon Director May 17, 2000
J. Thomas McManamon
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Exhibit 2.5
AGREEMENT FOR PROFESSIONAL SERVICES AND COMPENSATION
This agreement made and entered into this 27th day of December, 1999
between Seneca Energy Partners L.P., a Texas Limited Liability Partnership
(SENECA) and its general partner Lonestar Investment Management L.L.C.
(LONESTAR), a Texas Limited Liability Company and Affiliated Resources
Corporation, a Colorado Corporation (AFFILIATED).
RECITALS
SENECA is engaged in the oil and gas business. LONESTAR is the general
partner of SENECA and is in the business of organizing and managing oil and gas
ventures. AFFILIATED desires to obtain an interest in oil and gas wells, and
also desires to obtain an oil and gas business to add to the AFFILIATED
holdings.
Whereas, it is the desire of the parties to enter into this agreement
for the sale and purchase of portion of SENECA and a management agreement with
LONESTAR and in consideration of the contractual promises contained in this
contract, the parties agree as follows:
1.) 85% of its limited partnership units shall be transferred to
AFFILIATED.
2.) Jan R. Beatty and Michael R. Bradle will retain 14% of the
remaining limited partnership units in SENECA.
3.) LONESTAR will remain the general partner and retain its
current 1% general partner interest in SENECA.
4.) SENECA currently has an interest in 16 oil and gas wells in
West Virginia with a reserve report value of approximately
$182,000.00.
5.) SENECA has identified and located additional working interests
which are to be funded by a two-million dollar preferred share
offering by AFFILIATED. Upon execution of this agreement,
LONESTAR will sign a letter of intent with the various
drillers.
6.) As compensation, AFFILIATED agrees, upon the execution of this
agreement, LONESTAR (or its assigns) shall receive 800,000
common shares of AFFILIATED. In addition, LONESTAR (or its
assigns) shall have an irrevocable option to purchase 425,000
shares of common stock in AFFILIATED for the price of $.10 per
share. All expenses of registration and transferring said
shares shall be the responsibility of AFFILIATED.
7.) LONESTAR will continue to manage SENECA. The partnership shall
reimburse LONESTAR for any direct out-of-pocket expenses
incurred by the General Partner on behalf of, or reasonably
allocated to SENECA business. LONESTAR has incurred $45,000 in
expenses. As part of this agreement, AFFILIATED agrees to
reimburse LONESTAR this expense as a priority debt.
ENTIRE AGREEMENT
This agreement constitutes the sole and only agreement of the parties
and supersedes any prior understandings or written or oral agreements between
the parties respecting this subject matter.
ASSIGNMENT
Neither this agreement nor any duties or obligations under it shall be
assignable without the prior written consent of all parties.
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SUCCESSORS AND ASSIGNS
Subject to the provisions regarding assignment, this agreement shall be
binding on and inure tot he benefit of the parties to it and their respective
heirs, executors, administrators, legal representatives, successors and assigns.
ATTORNEY'S FEES
If any action at law or in equity is brought to enforce or interpret
the provisions of this agreement, the prevailing party shall be entitled to
reasonable attorney's fees in addition to any other relief to which they may be
entitled.
GOVERNING LAW
The validity of this agreement and of any of its terms or provisions,
as well as the rights and duties of the parties, shall be governed by the laws
of the State of Texas. Venue shall be proper in Lampasas County, Texas.
AMENDMENT
This agreement may be amended by the mutual agreement of the parties to
it, in a writing to be attached to and incorporated in this agreement.
LEGAL CONSTRUCTION
In the event that any one or more of the provisions contained in this
agreement shall for any reason be held to be invalid, illegal, or unenforceable
in any respect, such invalidity, illegality, or unenforceability shall not
affect any other provisions, and the agreement shall be construed as if such
invalid, illegal, or unenforceable provision had never been contained in it.
Executed at Killeen, Texas, on the day and year first above written.
SENECA ENERGY PARTNERS, L.P.
Jay R. Beatty, Limited Partner
Michael R. Bradle, Limited Partner
LONESTAR INVESTMENT MANAGEMENT, L.L.C.
Michael R. Bradle, Its President
AFFILIATED RESOURCES CORPORATION
Peter C. Vanucci
Its Chairman & CEO
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Exhibit 3.3
AMENDED BYLAWS
OF
AFFILIATED RESOURCES CORPORATION
ARTICLE I
Offices
1.1 Principal Office: The principal office of the corporation shall
initially be in Houston, Texas, but the Board of Directors, in its discretion,
may keep and maintain offices wherever the business of the corporation may
require.
1.2 Registered Office and Agent: The corporation shall have and
continuously maintain in the State of Colorado a registered office, which may be
the same as its principal office, and a registered agent whose business office
is identical with such registered office. The corporation may change its
registered office or change its registered agent, or both, upon filing a
statement as specified by law in the office of the Secretary of State of
Colorado.
ARTICLE II
Meetings of Shareholders
2.1 Time and Place: Any meeting of the shareholders may be held at such
time and place, within or outside the State of Colorado, as may be fixed by the
Board of Directors or as shall be specified in the notice of the meeting or
waiver of notice of the meeting. If no designation is made, or if a special
meeting be otherwise called, the place of the meeting shall be the principal
office of the corporation or such other place as the Board of Directors, in its
discretion, may decide.
2.2 Annual Meeting: The annual meeting of the shareholders shall be
held at such place or date as the Board of Directors may determine.
2.3 Special Meetings: Special meetings of the shareholders, for any
purpose or purposes, may be called by the President or the Board of Directors,
and shall be called by the President at the request of the holders of record of
not less than 10% of all of the shares entitled to vote at the meeting. Subject
to the provisions of the Colorado Corporation Code, the date of special meetings
of shareholders, which are called by or at the request of person(s) other than
the Chairman or a member of the Board of Directors, shall be fixed by the Board
of Directors in its sole discretion.
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2.4 Closing of Transfer Books; Fixing of Record Date: For the purpose
of determining shareholders entitled to notice of or to vote at any meeting of
shareholders or any adjournment, thereof of shareholders entitled to receive
payment of any dividend, or in order to make a determination of shareholders for
any other purpose, the Board of Directors of the corporation may provide that
the stock transfer books shall be closed for a stated period but not to exceed,
in any case, more than fifty (50) days. If the stock transfer books shall be
closed for the purpose of determining shareholders entitled to notice of or to
vote at a meeting of shareholders, such books shall be closed for at least ten
(10) days immediately preceding such meeting. In lieu of closing the stock
transfer books, 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 fifty (50) days and, in the case of a meeting of shareholders, not
less than ten (10) days prior to the date on which the particular action
requiring such determination of shareholders is to be taken. If the stock
transfer books are not closed and no record date is given for the determination
of shareholders entitled to notice of or to vote at the meeting of shareholders,
or shareholders entitled to receive payment of a dividend, the date on which
notice of the meeting is mailed or the date on which the resolution 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.
2.5 Voting List: At least ten days before each meeting of shareholders,
the officer or agent having charge of the stock transfer books for the
corporation's shares shall make, or cause to be made, a complete list of the
shareholders entitled to vote at such meeting, or any adjournment of such
meeting, which list shall be arranged in alphabetical order and shall contain
the address of and number of shares held by each shareholder. This list shall be
kept on file at the principal office of the corporation for a period of ten (10)
days prior to such meeting, shall be produced and kept open at the meeting, and
shall be subject to inspection by any shareholder for any purpose germane to the
meeting during usual business hours of the corporation and during the whole time
of the meeting. The original stock transfer books shall be the prima facie
evidence as to who are the shareholders entitled to examine the record of
transfer books or to vote at any meeting of shareholders.
2.6 Notices: Written notice stating the place, day and hour of the
meeting and, in the case of a special meeting, the purpose or purposes for which
the meeting is called, shall, unless otherwise prescribed by statute, be
delivered not less than ten (10) nor more than fifty (50) days before the date
of the meeting, either personally or by mail, by or at the direction of the
Chairman, the Board of Directors or other person(s) calling the meeting, to each
shareholder of record entitled to vote at such meeting; provided, however, that
if the meeting is called by or at the request of any person(s) other than the
Chairman or the Board of Directors, or if the authorized shares of the
corporation are to be increased, at least thirty (30) days' notice shall be
given, and if sale of all or substantially all assets is to be voted upon, at
least twenty (20) days' notice shall be given. If mailed, such notice shall be
deemed to be delivered when deposited in the United States mail, postage
prepaid, addressed to the shareholder at his address as it appears on the stock
transfer books of the corporation. If delivered personally, such notice shall be
deemed to be delivered when handed to the shareholder or deposited at his
address as it appears on the stock transfer books of the corporation.
2.7 Meeting of All Shareholders: If all of the shareholders shall meet
at any time and place, either within or outside the State of Colorado, and
consent to the holding of the meeting at such time and place, such meeting shall
be valid without call or notice; and at such meeting any corporate action may be
taken.
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2.8 Quorum: Except as otherwise provided by the Colorado Corporation
Code and the Articles of Incorporation, one-third of the shares entitled to
vote, represented in person or by proxy, shall constitute a quorum at any
meeting of the shareholders. If a quorum shall not be present or represented, a
majority of the shares so represented may adjourn the meeting from time to time
for a period not to exceed sixty (60) days at any one adjournment. At any such
adjourned meeting at which a quorum is represented any business may be
transacted which might have been transacted at the meeting originally called.
The shareholders present or represented at a duly organized meeting may continue
to transact business until adjournment, notwithstanding the withdrawal of enough
shareholders to leave less than a quorum. Unless the adjournment is for more
than thirty (30) days, or unless after the adjournment a new record date is
fixed for the adjourned meeting, no notice of the adjourned meeting need be
given other than announcement at the meeting at which adjournment is taken.
2.9 Proxies: At all meetings of shareholders, a shareholder may vote in
person or by proxy executed in writing by the shareholder or by a duly
authorized attorney-in-fact. Such proxy shall be filed with the officer or agent
having charge of the stock transfer books for shares before or at the time of
the meeting. No proxy shall be valid after eleven (11) months from the date of
its execution, unless otherwise provided in the proxy.
2.10 Voting: If a quorum is present, the affirmative vote of the
majority of the shares represented at the meeting and entitled to vote on the
subject matter shall be the act of the shareholders, unless the vote of a
greater proportion or number or voting by classes is otherwise required by
statute or by the Articles of Incorporation or these Bylaws. Unless otherwise
provided by the Articles of Incorporation, each outstanding share entitled to
vote shall be entitled to one vote for each matter submitted to a vote at the
meeting of shareholders. Voting on any question or in any election may be by
voice vote unless the presiding officer shall order or any shareholder present
in person or by proxy and entitled to vote shall demand that voting be by
written ballot.
2.11 Waiver: Whenever the law or these Bylaws require a notice of a
meeting to be given, a written waiver of notice signed by a shareholder entitled
to notice, whether before, at or after the time stated in the notice, shall be
equivalent to the giving of notice. By attending a meeting, a shareholder: (a)
waives objection to lack of notice or defective notice of such meeting unless
the shareholder, at the beginning of the meeting, objects to the holding of the
meeting or the transacting of business at the meeting; and (b) waives objection
to consideration at such meeting of a particular matter not within the purpose
or purposes described in the meeting notice unless the shareholder objects to
considering the matter when it is presented.
2.12 Action by Shareholders Without a Meeting: Any action required or
permitted to be taken at a meeting of the shareholders may be taken without a
meeting if a consent in writing setting forth the action so taken shall be
signed by all of the shareholders entitled to vote with respect to such action.
Such consent may be executed in counterparts. Such action shall be effective
when all shareholders entitled to vote have signed the consent, unless the
consent specifies a different effective date. The record date for determining
shareholders entitled to take action without a meeting shall be the date the
first shareholder signs the consent.
2.13 Voting of Shares by Certain Shareholders: Shares standing in the
name of another corporation may be voted by such, officer, agent or proxy as the
bylaws of such corporation may prescribe, or, in the absence of such provision,
as the board of directors of such other corporation may determine. Shares
standing in the name of a deceased person, a minor ward or an incompetent person
may be voted by an administrator, executor, court-appointed guardian or
conservator, either in person or by proxy without a transfer of such shares into
the name of such administrator, executor, court-appointed guardian or
conservator. Shares standing
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in the name of a trustee may be voted by him, either in person or by proxy, but
no trustee shall be entitled to vote shares held by him without a transfer of
such shares into his name. Shares standing in the name of a receiver may be
voted by such receiver and shares held by or under the control of a receiver may
be voted by such receiver without the transfer thereof into the trustee's name
if authority so to do be contained in an appropriate order of the court by which
such receiver was appointed. A shareholder whose shares are pledged shall be
entitled to vote such shares until the shares have been transferred into the
name of the pledgee, and thereafter the pledgee shall be entitled to vote the
shares so transferred.
ARTICLE III
Directors
3.1 Authority of the Board of Directors: The business and affairs of
the corporation shall be managed by a Board of Directors which shall exercise
all the powers of the corporation except as otherwise provided by Colorado law
or the Articles of Incorporation of the corporation.
3.2 Number: The number of directors of this corporation shall in no
case be less than three. Subject to such limitation, the number of directors
shall be fixed by resolution of the Board of Directors and may be increased or
decreased by resolution of the Board of Directors but no decrease shall have the
effect of shortening the term of any incumbent director.
3.3 Chairman of the Board: There may be a Chairman of the Board who has
been elected from among the directors. He shall preside at all meetings of the
shareholders and of the Board of Directors. He shall have such other powers and
duties as may be prescribed by the Board of Directors.
3.4 Qualification: Directors shall be naturalized persons of the age of
eighteen years or older but need not be residents of the State of Colorado or
shareholders of the corporation.
3.5 Election: The Board of Directors shall be elected at the annual
meeting of the shareholders or at a special meeting called for that purpose.
3.6 Term: Each director shall be elected to hold office until the next
annual meeting of shareholders and until his successor shall have been elected
and qualified.
3.7 Removal and Resignation: Any director may be removed at a meeting
expressly called for that purpose with or without cause in the manner prescribed
in the Colorado Corporation Code. Any director may resign at any time by giving
written notice to the President or to the Secretary and acceptance of such
resignation shall not be necessary to make it effective unless the notice so
provides. The resignation of any director shall take effect upon receipt of
notice thereof or at such later time as shall be specified in such notice.
3.8 Vacancies: Any vacancy occurring on the Board of Directors and any
directorship to be filled by reason of an increase in the number of directors
may be filled by the affirmative vote of a majority though less than a quorum of
the remaining directors. A director elected to fill a vacancy shall hold office
during the unexpired term of his predecessor in office. A director chosen to
fill a position resulting from an increase in the number of directors shall hold
office until the next annual meeting of shareholders and until his successor
shall have been elected and qualified.
3.9 Meetings: A regular meeting of the Board of Directors shall be held
immediately after and at the same place as the annual meeting of shareholders.
No notice of this meeting of
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the Board of Directors other than this Bylaw need be given. The Board of
Directors or any committee designated by the Board of Directors may by
resolution establish a time and place for additional regular meetings which may
be held without further notice other than such resolution. Special meetings of
the Board of Directors or any committee designated by the Board of Directors may
be called by the President or a majority of the Board of Directors or of such
committee. The person or persons authorized to call special meetings of the
Board of Directors or committee thereof may fix any place either within or
without the State of Colorado as the place for holding any special meeting of
the Board of Directors called by them.
3.10 Notices: Written notice of any special meeting of directors shall
be given as follows: by mail to each director at his business address at least
three days prior to the meeting; or by personal delivery or telegram at least 24
hours prior to the meeting to the business address of each director or in the
event such notice is given on a Saturday, Sunday or holiday to the residence
address of each director. If mailed, such notice shall be deemed to be delivered
when deposited in the United States mail so addressed with postage prepaid. If
notice be given by telegram, such notice shall be deemed to be delivered when
the telegram is delivered to the telegraph company. Neither the business to be
transacted at nor the purpose of any regular or special meeting of the Beard of
Directors need be specified in the notice or waiver of notice of such meeting.
3.11 Waiver: Whenever the law or these Bylaws require a notice of a
meeting to be given, a written waiver of notice signed by a director entitled to
notice, whether before at or after the time stated in the notice shall be
equivalent to the giving of such notice. By attending or participating in a
regular or special meeting a director waives any required notice of such meeting
unless the director at the beginning of the meeting objects to the holding of
the meeting or the transacting of business at the meeting.
3.12 Quorum; Voting: Except as provided in these Bylaws a majority of
the number of directors fixed in accordance with these Bylaws shall constitute a
quorum for the transaction of business at all meetings of the Board of
Directors. The act of a majority of the directors present at any meeting at
which a quorum is present shall be the act of the Board of Directors, except as
otherwise specifically required by law or by the Articles of Incorporation.
3.13 Presumption of Assent: A director of the corporation who is
present at a meeting of the Board of Directors or any committee thereof at which
corporate action is taken shall be presumed to have assented to the action taken
unless he objects at the beginning of such meeting to the holding of the meeting
or the transacting of business thereat or he shall contemporaneously request
that his dissent from the action taken be entered in the minutes of the meeting
or he shall file his written dissent to such action with the person acting as
the secretary of the meeting before the adjournment thereof or shall forward
such dissent by registered mail to the Secretary of the corporation immediately
after adjournment of the meeting. Such right to dissent shall not apply to a
director who voted in favor of such action.
3.14 Attendance by Telephone: Members of the Board of Directors or any
committee designated by the Board of Directors may participate in a meeting of
the Board or committee by means of conference telephone or similar
communications equipment by which all persons participating in the meeting can
hear each other at the same time. Such participation shall constitute presence
in person at the meeting.
3.15 Action by Directors Without a Meeting: Any action required to or
which may be taken at a meeting of the Board of Directors executive committee or
other committee of the directors may be taken without a meeting if a consent in
writing setting forth the action so taken shall be signed by all of the
directors, executive or other committee members entitled to vote
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with respect to the proposed action and shall be delivered to the Secretary for
inclusion in the minutes or for filing with the corporate records. Such consent
shall be effective when all directors or committee members have signed the
consent unless the consent specifies a different date.
3.16 Compensation: By resolution of the Board of Directors and
irrespective of any personal interest of any of the members, each director may
be paid his expenses, if any, of attendance at each meeting of the Board of
Directors and may be paid a stated salary as director or a fixed sum for
attendance at each meeting of the Board of Directors, or both. No such payment
shall preclude any director from serving the corporation in any other capacity
and receiving compensation therefor.
3.17 Performance of Duties: A director of the corporation shall perform
his duties as a director, including his duties as member of any committee of the
Board upon which he may serve in good faith in a manner he reasonably believes
to be in the best interests of the corporation and with such care as an
ordinarily prudent person in a like position would use under similar
circumstances. In performing his duties, a director shall be entitled to rely on
information, opinions, reports, or statements, including financial statements
and other financial data in each case prepared or presented by persons and
groups listed in this Bylaw; but he shall not be considered to be acting in good
faith if he has knowledge concerning the matter in question that would cause
such reliance to be unwarranted. A person who so performs his duties shall not
have any liability by reason of being or having been a director of the
corporation. Those persons and groups on whose information, opinions, reports
and statements a director is entitled to rely are: one or more officers or
employees of the corporation whom the director reasonably believes to be
reliable and competent in the matters presented; counsel; public accountants; or
other persons, as to matters which the director reasonably believes to be within
such persons' professional or expert competence; or a committee of the Board
upon which he does not serve duly designated in accordance with a provision of
the Articles of Incorporation or these Bylaws as to matters within its
designated authority, which committee the director reasonably believes to merit
confidence.
ARTICLE IV
Committees
4.1 Executive and Other Committees Authorized: The Board of Directors,
by resolution adopted by a majority of the entire 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 the resolution shall have all
of the authority of the Board of Directors. The Board of Directors may provide
by resolution such powers, limitations and procedures for such committees as the
Board deems advisable. However no such executive or other committee shall have
the authority of the Board of Directors with reference to approving or
recommending to shareholders amendment of the Articles of Incorporation;
adoption of a plan of merger or consolidation; the sale, lease, exchange, or
other disposition of all or substantially all of the property and assets of the
corporation otherwise than in the usual and regular course of its business; a
voluntary dissolution of the corporation or a revocation thereof; amendment of
these Bylaws; declaring dividends or distributions; or approving any other act
of the corporation prohibited by the Colorado Corporation Code or the Articles
of Incorporation.
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ARTICLE V
Officers
5.1 Number Election and Term: The officers of the corporation shall be
a Chief Executive Officer, President, Executive Vice President, Sr. Vice
President, Vice President, Chief Financial Officer, Chief Communications
Officer, Secretary, Treasurer, Assistant Secretary, and Assistant Treasurer,
each of whom shall be elected by the Board of Directors. The Board of Directors
may elect one or more Vice Presidents and the Board of Directors or the Chief
Executive Officer may appoint one or more Assistant Secretaries or Assistant
Treasurers and such other subordinate officers as the Board or the Chief
Executive Officer shall deem necessary, each of whom shall hold office for such
term and shall exercise such powers and perform such duties as shall be
determined from time to time by the Chief Executive Officer. The officers of the
corporation to be elected by the Board of Directors shall be elected annually at
the first meeting of the Board of Directors held after the annual meeting of
shareholders. Each officer shall be a natural person of the age of eighteen
years or older and shall hold office until his successor shall have been duly
elected and shall have qualified or until his death or until he shall resign or
shall have been removed in the manner hereinafter provided.
5. 2 Chief Executive Officer: The Chief Executive Officer shall serve
in such capacities as may be reasonably assigned to the Chief Executive Officer
by the Board of Directors. Subject to the direction and control of the Board of
Directors the Chief Executive Officer shall have general and active management
and control of the business and affairs of the corporation and shall see that
all orders and resolutions of the Board of Directors are carried into effect. He
may sign with appropriate and duly authorized officers of the corporation
contracts, deeds and other instruments on behalf of the corporation as are
necessary and appropriate, including, without limitation, certificates for
shares of the corporation, the issuance of which has been authorized by the
Board of Directors. In connection with any capacities, the Chief Executive
Officer shall have such duties, responsibilities and authority as may from time
to time be reasonably assigned the Chief Executive Officer by the Board of
Directors.
5.3 President: The President, in the absence of a Chairman of the
Board, shall preside at all meetings of shareholders and of the Board of
Directors. The President shall have such duties, responsibilities and authority
as are usual and customary for executives who hold the same or a substantially
similar position with companies of comparable size in the same industry as the
corporation. He shall perform such additional functions and duties as are
appropriate and customary for the office of the President and as the Board of
Directors may prescribe from time to time.
5.4 Chief Operating Officer: The Chief Operating Officer, if there
shall be a Chief Operating Officer, shall serve in such capacity as may be
reasonably assigned to the office by the Board of Directors. The Chief Operating
Officer will, among other things, be in charge of day- to-day operations,
including overseeing the operations of the wholly owned subsidiaries of the
Corporation. In this capacity, the Chief Operating Officer shall have duties,
responsibilities and authorities as are usual and customary for executives who
hold the same or a substantially similar position with companies of comparable
size in the same industry as the corporation. In connection with any capacities,
the Chief Operating Officer shall have such duties, responsibilities and
authority as may from time to time be reasonably assigned to the office by the
Board of Directors.
5.5 Executive Vice President: The Executive Vice President, or if there
shall be more than one, the Executive Vice Presidents, in the order determined
by the Board of Directors, shall be the officer(s) next in seniority after the
President. Each Executive Vice President shall also perform such duties and
exercise such powers as are appropriate and as are prescribed by the Board of
Directors or the President. Upon the death, absence or disability of the
President, the
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Executive Vice President or Senior Vice President, or if there shall be more
than one, the Vice Presidents, in the order determined by the Board of
Directors, shall perform the duties and exercise the powers of the President.
5.6 Senior Vice President: The Senior Vice President, or if there shall
be more than one, the Senior Vice Presidents, in the order determined by the
Board of Directors, shall be the officer(s) next in seniority after the
Executive Vice President. Each Senior Vice President shall also perform such
duties and exercise such powers as are appropriate and as are prescribed by the
Board of Directors or President. Upon the death, absence or disability of the
President, or the Executive Vice President, or Senior Vice President, or if
there shall be more than one, the Vice Presidents, in the order determined by
the Board of Directors, shall perform the duties and exercise the powers of the
President.
5.7 Vice President: The Vice President, or if there shall be more than
one, the Vice Presidents, in the order determined by the Board of Directors,
shall be the officer(s) next in seniority after the Executive Vice President and
Senior Vice President. Each Vice President shall also perform such duties and
exercise such powers as are appropriate and as are prescribed by the Board of
Directors or President. Upon the death, absence or disability of the President,
the Executive Vice President or Senior Vice President, or if there shall be more
than one, the Vice Presidents, in the order determined by the Board of
Directors, shall perform the duties and exercise the powers of the President.
5.8 Chief Financial Officer: The Chief Financial Officer shall have
control of the funds and the care and custody of all stocks bonds and other
securities owned by the corporation and shall be responsible for the preparation
and filing of tax returns. He shall receive and give receipts for monies due and
payable to the corporation from any source whatsoever and deposit all such
monies in the name of the corporation in such banks, trust companies or other
depositories that shall be selected in accordance with the provisions of these
Bylaws. He shall perform such other duties and have such other powers as are
appropriate and customary for the office of Chief Financial Officer as the Board
of Directors or President may prescribe from time to time.
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5.9 Secretary: The Secretary shall see that all notices are duly given
in accordance with the provisions of these Bylaws or as required by law; keep
the minutes of the meetings of shareholders and the Board of Directors; have
charge of the corporate seal and corporate and stock records; be custodian for
all corporate records and files; prepare or cause to be prepared and filed
reports to governmental agencies, other than tax returns; have authority to
affix the corporate seal to any instrument requiring it (and when so affixed it
may be attested by his signature); sign with appropriate and duly authorized
officers of the corporation certificates for shares, the issuance of which shall
have been authorized by the Board of Directors; and perform such other functions
and duties as are appropriate and customary for the office of Secretary as the
Board of Directors or the President may prescribe from time to time.
5.10 Treasurer: The Treasurer shall have control of the funds and the
care and custody of all stocks bonds and other securities owned by the
corporation and shall be responsible for the preparation and filing of tax
returns. He shall receive and give receipts for monies due and payable to the
corporation from any source whatsoever and deposit all such monies in the name
of the corporation in such banks trust companies or other depositories that
shall be selected in accordance with the provisions of these Bylaws. He shall
perform such other duties and have such other powers as are appropriate and
customary for the office of Treasurer as the Board of Directors or President may
prescribe from time to time.
5.11 Chief Communications Officer: The Chief Communication Officer
shall serve in such capacities as may be reasonably assigned to the office by
the Board of Directors. The Chief Communications Officer will, among other
things, be in charge of shareholder relations and corporate communications. In
this capacity, the Chief Communications Officer shall have duties,
responsibilities and authorities as are usual and customary for executives who
hold the same or a substantially similar position with companies of comparable
size in the same industry as the corporation. In connection with any capacities,
the Chief Communications Officer shall have such duties, responsibilities and
authority as may from time to time be reasonably assigned to the office by the
Board of Directors.
5.12 Assistant Secretaries and Assistant Treasurers: The Assistant
Secretaries when authorized by the Board of Directors may sign with the Chairman
or Vice Chairman of the Board of Directors or the President or a Vice President,
certificates for shares of the corporation, the issuance of which shall have
been authorized by resolution of the Board of Directors. The Assistant
Secretaries and Assistant Treasurers in general shall perform such duties as
shall be assigned to them by the Secretary or the Treasurer, respectively, or by
the President or the Board of Directors.
5.13 Removal and Resignation: Any officer or agent may be removed at
any time by the Board of Directors or other executive committee, if any,
whenever in its judgment the best interests of the corporation shall be served.
Any such removal shall be without prejudice to the contract rights of any of
person so removed. Election or appointment of an officer or agent shall not of
itself create contract rights. Any officer may resign at any time by giving
written notice of resignation to the Chairman of the Board or to the Secretary
and acceptance of such resignation shall not be necessary to make it effective
unless the notice so provides. Subject to the authority of the Board of
Directors, any vacancy occurring in any other office of the corporation may be
filled by the President and Chief Operating Officer for the unexpired portion of
the term.
5.14 Compensation: Officers shall receive such compensation for their
services as may be authorized or ratified by the Board of Directors. Election or
appointment of an officer shall not of itself create a contract right to
compensation for services performed as such officer and no officer shall be
prevented from receiving a salary by reason of the fact that he is also a
director of the corporation.
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ARTICLE VI
Shares
6.1 Certificates: Certificates representing shares of the capital stock
of the corporation may be impressed with the corporate seal or a facsimile
thereof and shall be signed by the Chairman or Vice Chairman of the Board of
Directors or the President or any Vice President and by the Secretary or an
Assistant Secretary. All certificates shall be respectively numbered serially
for each class of shares or series thereof as they are issued and the names of
the owners, the number of shares, and the date of issue shall be entered on the
books of the corporation. Each certificate representing shares shall state upon
its face (a) that the corporation is organized under the laws of the State of
Colorado, (b) the name of the person to whom issued, (c) the number of shares
which the certificate represents, (d) the class (or series designation of any
class), and (e) the par value of the shares represented thereby or a statement
that the shares are without par value. If the corporation is authorized to issue
shares of more than one class, a statement of the designations, preferences,
qualifications, limitations, restrictions, and special or relative rights of the
shares of each class shall be set forth in full or summarized on the face or
back of the certificates which the corporation shall issue, or, in lieu thereof,
the certificate may set forth that such a statement or summary will be furnished
to any shareholder upon request without charge. Each certificate shall be
otherwise in such form as may be prescribed by the Board of Directors and shall
conform to the rules of any stock exchange on which the shares may be listed.
The corporation shall not issue certificates representing fractional shares and
shall not be obliged to make any transfers creating a fractional interest in a
share of stock. The corporation may, but shall not be obligated to, issue scrip
in lieu of any fractional shares, such scrip to have terms and conditions
specified by the Board of Directors.
6.2 Facsimile Signatures: Where a certificate is countersigned by a
transfer agent or registrar other than the corporation or its employee, any
signatures on the certificate may be facsimile. In case any officer who has
signed or whose facsimile signature has been placed upon any certificate shall
cease to be such officer, whether because of death, resignation, or otherwise,
before the certificate is issued by the corporation it may nevertheless be
issued by the corporation with the same effect as if he were such officer at the
date of issue.
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6.3 Cancellation of Certificates: All certificates surrendered to the
corporation for transfer shall be cancelled and no new certificates shall be
issued in lieu thereof until the former certificate for a like number of shares
shall have been surrendered and cancelled, except as herein provided with
respect to lost, stolen or destroyed certificates.
6.4 Lost, Stolen or Destroyed Certificates: Any shareholder claiming
that his certificate for shares is lost, stolen or destroyed may make an
affidavit or affirmation of that fact and lodge the same with the Executive Vice
President and Secretary of the corporation or its duly authorized transfer agent
or registrar, accompanied by a signed application for a new certificate.
Thereupon and upon the giving of the satisfactory bond of indemnity to the
corporation not exceeding an amount double the value of the shares as
represented by such certificate (the necessity for such bond and the amount
required to be determined by the President and Chief Financial Officer of the
corporation) a new certificate may be issued of the same tenor and representing
the same number, class and series of shares as were represented by the
certificate alleged to be lost, stolen or destroyed.
6.5 Transfer of Shares: Subject to the terms of any shareholder
agreement relating to the transfer of shares or other transfer restrictions
contained in the Articles of Incorporation or authorized therein, shares of the
corporation shall be transferable on the books of the corporation by the holder
thereof in person or by his duly authorized attorney upon surrender and
cancellation of the certificate or certificates for a like number of shares.
Upon presentation and surrender of a certificate for shares properly endorsed
and payment of all taxes therefor, the transferee shall be entitled to a new
certificate or certificates in lieu thereof. As against the corporation a
transfer of shares can be made only on the books of the corporation and the
manner herein above provided and the corporation shall be entitled to treat the
holder of record of any share as the owner thereof and shall not be bound to
recognize any equitable or other claim to or interest in such share on the part
of any other person whether or not it shall have express or other notice
thereof, save as expressly provided by the statutes of the State of Colorado.
ARTICLE VII
Miscellaneous
7.1 Corporate Seal: The Board of Directors shall adopt a seal which
shall be circular in form and shall bear the name of the corporation and the
words SEAL and COLORADO which when adopted shall constitute the corporate seal
of the corporation.
7.2 Fiscal Year: The Board of Directors has adopted the calendar year
as the corporation's fiscal year.
7.3 Amendment of Bylaws: These Bylaws may at any time and from time to
time be amended, supplemented or repealed and new Bylaws adopted by a majority
of the directors present at any meeting of the Board of Directors of the
corporation at which a quorum is present.
7.4 Emergency Bylaws: The Board of Directors may adopt emergency Bylaws
operative during any emergency in the conduct of the business of the corporation
resulting from an attack on the United States or any nuclear or atomic disaster,
notwithstanding any different provision in these Bylaws or in the Articles of
Incorporation of the corporation or in the Colorado Corporation Code. Emergency
Bylaws so adopted shall be subject to repeal or change by further action of the
Board of Directors or by action of the shareholders but no such repeal or change
shall hold any officer, director or employee acting in accordance with emergency
Bylaws so adopted liable, except for willful misconduct with regard to any
action taken prior to the time of such repeal or change.
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CERTIFICATE
The undersigned hereby certifies that he is the duly elected,
qualified, acting and hereunto authorized Secretary of the corporation and that
the foregoing Bylaws constitute a true and complete copy of the Bylaws of
Affiliated Resources Corporation, adopted by the Board of Directors of the
Corporation as of March __, 2000.
------------------------------
, Secretary
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Exhibit 4.1.1
SYNAPTIX SYSTEMS CORPORATION
dba
AFFILIATED RESOURCES CORPORATION
1997 INCENTIVE STOCK OPTION PLAN
AND
1997 NON-STATUTORY STOCK OPTION PLAN
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SYNAPTIX SYSTEMS CORPORATION
dba
AFFILIATED RESOURCES CORPORATION
1997 INCENTIVE STOCK OPTION PLAN
AND
1997 NON-STATUTORY STOCK OPTION PLAN
1. Plan Names and Purposes
(a) This Plan document is intended to implement and govern two
separate Stock Option Plans of Synaptix Systems Corporation, a
Colorado corporation doing business as Affiliated Resources
Corporation (the "Company"): the Synaptix Systems Corporation
dba Affiliated Resources Corporation 1997 Incentive Stock
Option Plan ("Plan A") and the Synaptix Systems Corporation
dba Affiliated Resources Corporation 1997 Non-Statutory Stock
Option Plan ("Plan B"; Plan A and Plan B are sometimes
collectively referred to herein as the "Plans"). Plan A
provides for the granting of options that are intended to
qualify as incentive stock options ("Incentive Stock Options")
within the meaning of Section 422(b) of the Code. Plan B
provides for the granting of options that are not intended to
so qualify. Unless specified otherwise, all the provisions of
this Plan document relate equally to both Plan A and Plan B,
and are reflected in one Plan document solely for purposes of
administrative convenience and are not intended to constitute
tandem plans.
(b) The purpose of the Plans is to promote the growth and general
prosperity of the Company and its Affiliated Companies, by
permitting the Company, through the grant of option(s)
("Option(s)") to purchase shares of its common stock ("Common
Stock"), to attract and retain the best available persons for
positions of substantial responsibility, and to provide
certain key employees with an additional incentive to
contribute to the success of the Company and its Affiliated
Companies.
2. Administration
(a) The Plans shall be administered by the Board.
(b) The Board shall have sole authority, in its absolute
discretion, to determine which of the eligible persons (the
"Optionees") of the Company and its Affiliated Companies shall
receive Options. Subject to the express provisions and
restrictions of the Plans, the Board shall have sole
authority, in its absolute discretion, to determine the time
when Options shall be granted, the terms and conditions of an
Option, other than those terms and conditions fixed under the
Plans, the number of shares which may be issued upon exercise
of an Option and the means of payment for such shares. In
addition, the Board shall have authority to do everything
necessary or appropriate to administer the Plans, including
but not limited to (i) setting different terms and conditions
for different Options and (ii) interpreting the Plans. All
decisions, determinations and interpretations of the Board
shall be final and binding upon all Optionees.
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(c) The Board shall have the authority to delegate some or all of
the powers granted to it pursuant to this Section 2 to a
Committee (the "Committee") appointed by the Board and
consisting of not fewer than three (3) members of the Board.
The Board may, from time to time, remove members from, or add
members to, the Committee, and vacancies on the Committee
shall be filled by the Board. In addition, the Board may at
any time, by resolution, abolish the Committee and revest in
the Board the administration of the Plans. All decisions,
determinations and interpretations of the Committee shall be
final and binding on all Optionees, unless otherwise
determined by the Board.
(d) The Committee, if appointed pursuant to Subsection (c), shall
report to the Board the names of employees and other eligible
persons granted Options(s), the number of shares covered by
each Option, and the terms and conditions of each such Option.
(e) Definitions.
(i) Affiliated Companies: For purposes of the Plans, the
term "Affiliated Companies" shall mean any component
member of a controlled group of corporations, as
defined under Section 1563 of the Code, in which the
Company is also a component member.
(ii) Code: The Internal Revenue Code of 1986, as amended.
(iii) Officer: The President, Chief Executive Officer,
Chief Administrative Officer, Chief Operating
Officer, Secretary, Chief Financial Officer, any Vice
President in charge of a principal business function
(such as Sales, Operations, Administration or
Finance) and any other person who performs similar
policy making functions for the Company.
(iv) Parent Corporation: A corporation as defined in
Section 424(e) of the Code.
(v) Restricted Shareholder: An individual who, at the
time an Option is granted under Plan A, owns stock
possessing more than 10% of the total combined voting
power of all classes of stock of the employer
corporation or of its Parent Corporation or
Subsidiary Corporation, with stock ownership to be
determined in accordance with the attribution rules
set forth in Section 424(d) of the Code.
(vi) Subsidiary Corporation: A corporation as defined in
Section 424(f) of the Code.
3. Eligibility. The following persons shall be eligible for the grant of
options:
(a) in the case of Plan A, any Officer or key employee of the
Company, Parent Corporation or any Subsidiary Corporation of
the Company who renders services which tend to contribute
materially to the success of the Company, Parent Corporation
or Subsidiary Corporation; and
(b) in the case of Plan B, any Officer or key employee described
in Subsection 3(a) above and any non-employee Directors of the
Company, Parent Corporation or Subsidiary Corporation who
renders services which tend to contribute materially to the
success of the Company, Parent Corporation or Subsidiary
Corporation.
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The determination as to whether an employee is eligible to receive
Options hereunder shall be made by the Board (or the Committee, if so
authorized) in its sole discretion, and the decision of the Board (or
Committee) shall be binding and final. Such Options may be granted to
one or more eligible persons without being granted to other such
persons, as the Board or Committee may deem fit.
4. Maximum Number of Shares to be Optioned; Limitation on Shares to
Directors.
(a) The maximum aggregate number of shares which may be optioned
under Plan A and Plan B is seven million shares of the
authorized Common Stock of the Company.
(b) All shares to be optioned under either Plan A or Plan B may be
either authorized but unissued shares or shares held in the
treasury. Shares of Common Stock that (i) are repurchased by
the Company after being issued hereunder pursuant to the
exercise of an Option or (ii) remain unissued as the result of
the lapse or expiration of an option, shall not be included in
the above-described maximum number of shares which may be
optioned hereunder.
(c) Notwithstanding anything to the contrary contained herein, no
Option may be granted hereunder if the aggregate of the shares
of stock subject to such Option and the number of shares of
Common Stock subject to outstanding Options previously granted
hereunder or under any other stock option plan of the Company
would exceed 10% of the total shares of voting stock of all
classes outstanding at such time.
(d) No more than seven fiscal year end million shares of the
maximum aggregate number of shares of Common Stock described
in Section 4(a) above may be optioned and sold to non-employee
Directors of the Company under Plan A and Plan B considered in
the aggregate.
5. Option Price.
(a) Plan A. The Option Price for shares of Common Stock to be
issued under Plan A shall be greater than or equal to the Fair
Market Value of such shares on the date on which the Option
covering such shares is granted by the Board (or the
Committee, if so authorized by the Board), except that if on
the date on which such Option is granted the Optionee is a
Restricted Shareholder, then such Option Price shall be
greater than or equal to 110% of the Fair Market Value of the
shares of Common Stock subject to the Option on the date such
Option is granted by the Board (or the Committee, if so
authorized by the Board).
(b) Plan B. The Option Price for shares of Common Stock to be
issued under Plan B shall be determined by the Board (or the
Committee, if so authorized by the Board) as of the date on
which the Option covering such shares is granted.
(c) The Fair Market Value of shares of Common Stock for all
purposes of both Plan A and Plan B shall be, if the Common
Stock is listed or admitted to trading on any major stock
exchange, the mean between the lowest and highest reported
sale price on such day on the principal stock exchange on
which the Common Stock is listed or admitted to trading, or if
no sale takes place on such principal stock exchange, then the
closing asked price of the Common Stock on such exchange on
such day. If the Fair Market Value of any shares of Common
Stock cannot be determined under the foregoing method, then
the Fair Market Value of such shares shall be determined by an
outside third party hired by the Board or set by the Board (or
the Committee, if so applicable) in its sole discretion,
exercised in good faith.
6. Exercise of Option. Subject to the restrictions, conditions and
limitations set forth in this Plan document and/or any applicable Stock
Option Agreement entered into hereunder, the Options granted under the
Plans shall be exercisable in accordance with the following rules:
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(a) Subject to the specific provisions of this Section 6, Options
shall become exercisable at such times and in such
installments (which may be cumulative) as the Board shall
provide in the terms of each individual Option; provided,
however, that by a resolution adopted after an Option is
granted, the Board may, on such terms and conditions as it may
determine to be appropriate and subject to the specific
provisions of this Section 6, accelerate the time at which
such Option or installment thereof may be exercised. For
purposes of the Plans, any currently exercisable installment
of an Option granted hereunder shall be referred to as an
"Accrued Installment".
(b) Subject to the provisions of Subsections 6(c), (d) or (e), an
Option may be exercised at any time prior to the Fifth
Anniversary Date, subject to the restrictions contained in
this Section 6 and in the applicable Stock Option Agreement.
In no event shall any Option be exercised subsequent to the
day prior to the Fifth Anniversary Date of such Option,
regardless of the circumstances then existing (including but
not limited to, the death or termination of employment of the
Optionee). As used herein, the term "Fifth Anniversary Date"
shall mean the fifth anniversary of date on which the Option
was granted hereunder.
(c) Notwithstanding the foregoing provisions of this Section 6, in
the event the Company or the shareholders of the Company enter
into an agreement to dispose of all or substantially all of
the assets or stock of the Company by means of a sale, merger,
consolidation, reorganization, liquidation, or otherwise, an
Option shall become immediately exercisable with respect to
the full number of shares subject to that Option during the
period commencing as of the date of execution of such
agreement and ending as of the earlier of (i) the applicable
expiration date for such Option, as provided for in the Stock
Option Agreement, or (ii) the day prior to the Fifth
Anniversary Date, or (iii) the date on which the disposition
of assets or stock contemplated by the agreement is
consummated. Upon the consummation of any such disposition of
assets or stock, the Plans and any unexercised Options issued
hereunder (or any unexercised portion thereof) shall terminate
and cease to be effective, unless provision is made in
connection with such transaction for assumption of Options
previously granted or the substitution for such Options of new
Options covering the securities of a successor corporation or
an affiliate thereof, with appropriate adjustments as to the
number and kind of securities and prices. Any change or
adjustment made pursuant to the terms of this Subsection 6(c)
with respect to Incentive Stock Options (Plan A) shall be made
in such manner so as not to constitute a "modification" as
defined in Section 424(h) of the Code, and so as not to cause
any Incentive Stock Option issued under Plan A to fail to
continue to qualify as an Incentive Stock Option, as defined
in Section 422(b) of the Code. Notwithstanding the foregoing,
in the event that any such agreement shall be terminated
without consummating the disposition of said stock or assets,
any unexercised unaccrued installments that had become
exercisable solely by reason of the provisions of this
Subsection 7(c) shall again become unaccrued and unexercisable
as of said termination of such agreement, subject, however, to
such installments accruing pursuant to the normal accrual
schedule provided in the terms under which such Option was
granted. Any exercise of an installment prior to said
termination of said agreement shall remain effective
notwithstanding that such installment became exercisable
solely by reason of the Company entering into said agreement
to dispose of the stock or assets of the Company.
(d) Subject to the provisions of Subsection 6(e) below, as of the
effective date of the termination of continuous employment or
Directorship of an Optionee with the Company (or Affiliated
Company) for any reason other than death or disability for
more than one year (the "Termination Date"), any unexercised
Options or Accrued Installments of Options granted hereunder
to such terminated Optionee shall expire and become
unexercisable as of the earlier of (i) the applicable
expiration date with respect to such Accrued Installments as
provided for in the Stock Option Agreement, (ii) the
applicable Fifth Anniversary Date, or (iii) thirty (30) days
following said Termination Date; provided, however, that the
Board may extend such thirty (30) day period in the case of an
Option under Plan A for the period not to exceed three (3)
months following the Termination Date and in the case of
Options under Plan B for a period not to exceed one (1) year
following the Termination Date, but in no event, beyond the
Expiration Date provided for in the Stock Option Agreement or
applicable Fifth Anniversary Date,
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whichever is earlier. Any installments under said Option which
have not accrued as of said Termination Date shall expire and
become unexercisable as of said Termination Date. Any portion
of an Option that expires hereunder shall remain unexercisable
and be of no effect whatsoever after such expiration,
notwithstanding that such Optionee may be reemployed by, or
again become a Director of, the Company or an Affiliated
Company. The Board or Committee shall determine the effect of
approved leaves of absence and all other matters relating to
"continuous employment."
(e) Notwithstanding the foregoing provisions of this Section 7, in
the event of the death of an Optionee while an employee or
Director of the Company (or an Affiliated Company), or in the
event of the termination of employment or directorship by
reason of the Optionee's permanent and total disability, any
unexercised Options or Accrued Installments of Options granted
hereunder to such Optionee shall expire and become
unexercisable as of the earlier of (i) the applicable
expiration date with respect to such Accrued Installments as
provided for in the Stock Option Agreement, (ii) the
applicable Fifth Anniversary Date, (iii) the first anniversary
of the date of death of such Optionee (if applicable), or (iv)
the first anniversary of the date of the termination of
employment or directorship by reason of permanent and total
disability (if applicable). Any such Accrued Installments of a
deceased Optionee may be exercised prior to their expiration
by (and only by) the person or persons to whom the Optionee's
Option rights shall pass by will or by the laws of descent and
distribution, if applicable, subject, however, to all of the
terms and conditions of the Plans and the applicable Stock
Option Agreement governing the exercise of Options granted
hereunder. Any installments under such a deceased or disabled
Optionee's Option that have not accrued as of the date of his
death or termination of employment or directorship due to
permanent and total disability, as the case may be, shall
expire and become unexercisable as of said date of death or
termination of employment or directorship. For purposes of
this Subsection 7(e), an Optionee shall be deemed employed by
the Company (or Affiliated Company) during any period of leave
of absence from active employment, as authorized by the
Company (or Affiliated Company). For purposes of the Plans,
the term "permanent and total disability" shall be defined
under Section 72(m)(7) of the Code.
(f) An Option shall be deemed exercised when written notice of
such exercise has been given to the Company at its principal
business office by the person entitled to exercise the Option
and full payment in cash or cash equivalents (or with shares
of Common Stock, pursuant to Section 10) for the shares with
respect to which the Option is exercised has been received by
the Company. Until the issuance of the stock certificates, no
right to vote or receive dividends or any other rights as a
stockholder, shall exist with respect to optioned shares,
notwithstanding the exercise of the Option. No adjustment will
be made for a dividend or other rights for which the record
date is prior to the date the stock certificate is issued,
except as provided in Section 20.
(g) An Option may be exercised in accordance with this Section 7
as to all or any portion of the shares covered by an Accrued
Installment of the Option, from time to time, during the
applicable Option Period, but shall not be exercisable with
respect to fractions of a share. The Board or Committee may
prescribe the minimum number of shares in which an Option is
exercisable.
(h) As soon as practicable after any proper exercise of an Option
in accordance with the provisions of the Plans, the Company
shall, without transfer or issue tax to the Optionee, deliver
to the Optionee at the main office of the Company, or such
other place as shall be mutually acceptable, a certificate or
certificates representing the shares of Common Stock as to
which the Option has been exercised. The time of issuance and
delivery of the Common Stock may be postponed by the Company
for such period as may be required for it, with reasonable
diligence, to comply with any applicable listing requirements
of any national or regional securities exchange and any law or
regulation applicable to the issuance and delivery of such
shares.
8. Authorization to Issue Options and Shareholder Approval. Options
granted under the Plans shall be conditioned upon the Company obtaining
any required permit from the California Department of Corporations
and/or other appropriate governmental agencies, free of any conditions
not
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acceptable to the Board, authorizing the Company to issue such Options;
provided, however, such condition shall lapse as of the effective date
of issuance of such permit(s) in a form to which the Company does not
object within sixty (60) days. The grant of Option(s) under the Plans
shall also be upon the condition that no shares shall be issued upon
exercise of any Option prior to the approval of the Plans by the vote
or written consent of the holders of a majority of the outstanding
shares of the Company's Common Stock.
9. Limit on Incentive Stock Option Grants.
(a) The aggregate Fair Market Value (determined as of the Option
Grant Date) of the shares of Common Stock, with respect to
which Incentive Stock Options are exercisable for the first
time by any employee of the Company during any calendar year
under all Incentive Stock Option Plans of the Company, and any
Parent or Subsidiary Corporation of the Company shall not
exceed Five Million $10,000,000 Dollars ($5,000,000) based on
the fair market value thereof at the date of the grant.
(c) The limitation imposed by this Section 9 shall not apply with
respect to Non-Statutory Stock Options granted under Plan B.
10. Payment of Exercise Price with Company Stock. The Board or the
Committee, if so authorized, may provide that, upon exercise of the
Option, the Optionee may elect to pay for all or some of the shares of
Common Stock underlying the Option with shares of Common Stock of the
Company previously acquired and owned at the time of exercise by the
Optionee, provided that the Optionee will make representations and
warranties satisfactory to the Company regarding his title to the
shares used to effect the purchase, including, without limitation,
representations and warranties that the Optionee has good and
marketable title to such shares, free and clear of any and all liens,
encumbrances, charges, equities, claims, security interests, options or
restrictions, and has full power to deliver such shares without
obtaining the consent or approval of any person or governmental
authority, other than those which have already given consent or
approval in a form satisfactory to the Company. The equivalent dollar
value of the shares used to effect the purchase shall be the Fair
Market Value of the shares as of the date of exercise of the Option
determined pursuant to Section 5(c) above.
11. Stock Option Agreement. The terms and conditions of Options granted
under the Plans shall be evidenced by a Stock Option Agreement
(hereinafter referred to as the "Agreement") executed by the Company
and the person to whom the Option is granted. Each Agreement shall
contain the following provisions approved by the Board (or the
Committee):
(a) A provision fixing the number of shares which may be issued
upon exercise of the Option;
(b) A provision establishing the Option Price per share;
(c) A provision establishing the times and the installments in
which Options may be exercised;
(d) A provision incorporating therein this Plan document by
reference;
(e) A provision clarifying which Options are intended to be
Incentive Stock Options under Plan A, and which are intended
to be Non-Statutory Stock Options under Plan B;
(f) A provision fixing the maximum duration of the Option as not
more than five (5) years from the Option Grant Date;
(g) Such representations and warranties by the employee as may be
required by Section 21 of this Plan document, or as may be
required by the Board (or the Committee) in its discretion;
(h) Any other restrictions (in addition to those established under
the Plans) as may be established by the Board (or the
Committee) with respect to the exercise of the Option,
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<PAGE>
the transfer of the Option, and/or the transfer of the shares
purchased by exercise of the Option, provided that such
restrictions are not in conflict with the Plans; and
(i) Such other terms and conditions not inconsistent with the
Plans as may be established by the Board (or the Committee).
12. Taxes, Fees and Expenses. The Company shall pay all original issue and
transfer taxes (but not income taxes, if any) with respect to the grant
of Options and/or the issue and transfer of shares pursuant to the
exercise of such Options, and all other fees and expenses necessarily
incurred by the Company in connection therewith, and will, from time to
time, use its best efforts to comply with all of the laws and
regulations which, in the opinion of counsel for the Company, shall be
applicable thereto.
13. Withholding of Taxes. The grant of Options hereunder and the issuance
of Common Stock pursuant to the exercise of such Options is conditioned
upon the Company's reservation of the right to withhold, in accordance
with any applicable law, from any compensation payable to the Optionee,
any taxes required to be withheld by Federal, State or local law, as a
result of the grant or exercise of any such Option. Alternatively, the
Optionee may elect to satisfy the Company's withholding obligation by
directing the Company to withhold exercisable shares of Common Stock,
or by delivering shares of Common Stock owned by the Optionee;
provided, however, that any such election shall:
(a) Be made prior to the date that the amount of tax to be
withheld is to be determined (the "Tax Date");
(b) Be irrevocable;
(c) Be subject to the disapproval of the Committee;
(d) For Officers and Directors of the Company, be made at least
six (6) months after the grant of the Stock Option (except
that this limitation shall not apply in the event that death
or disability of the Optionee occurs prior to the expiration
of the six-month period); and
(e) For Officers and Directors of the Company, be made either six
(6) months prior to the Tax Date, or in a ten (10) day "window
period" beginning on the third day following the release of
the Company's quarterly statement of sales or earnings.
14. Amendment or Termination of the Plan. The Board may modify, suspend,
discontinue, amend, terminate, revise and/or change the Plans at any
time; provided, however, that except as provided in Section 20 below,
the Board shall not amend the Plans in any of the following respects
without shareholder approval:
(a) To increase the maximum number of shares subject to the Plans;
(b) To change the designation of class of employees eligible to
receive Incentive Stock Options under the Plans;
(c) To extend the term of the Plans, or the maximum Option
exercise period; or
(d) To decrease the minimum price at which shares may be optioned
under the Plans, except as provided in Section 20 below.
Furthermore, the Plans may not, without the approval of the
shareholders, be amended in any manner that would cause Incentive Stock
Options issued under Plan A to fail to qualify as Incentive Stock
Options, as defined in Section 422(b) of the Code. Notwithstanding the
foregoing, no modification, amendment, revision, termination or change
of the Plans shall adversely affect Options granted on or prior to the
date thereof, as evidenced by the execution of an Option Agreement by
both the Company and the Optionee, without the consent of such
Optionee.
53
<PAGE>
15. Options Not Transferable. Options granted under the Plans may not be
sold, pledged, hypothecated, assigned, encumbered, gifted or otherwise
transferred or alienated in any manner, either voluntarily or
involuntarily by operation of law, otherwise than by will or the laws
of descent or distribution and may be exercised during the lifetime of
an Optionee only by such Optionee.
16. Restrictions on Transfer of Stock. The transfer of stock received
pursuant to the exercise of an Option granted under the Plans
(hereinafter "Optioned Stock") is prohibited unless such transfer is
exempt from registration under the Securities Act of 1933, as amended,
or a Rule or Regulation of the Securities and Exchange Commission
thereunder, or unless a Registration Statement covering such transfer
is in effect at the time the transfer is to occur. The certificate
evidencing said stock shall bear an appropriate legend on the face
thereof evidencing such restrictions, as provided in Section 23 below.
17. Reservation of Shares of Common Stock. The Company, during the term of
the Plans, will at all times reserve and keep available such number of
shares of its Common Stock as shall be sufficient to satisfy the
requirements of the Plans.
18. Restrictions on Issuance of Shares. The Company, during the term of the
Plans, will use its best efforts to seek to obtain from the appropriate
regulatory agencies (other than the Securities and Exchange Commission)
any requisite authorization in order to issue and sell such number of
shares of its Common Stock as shall be sufficient to satisfy the
requirements of the Plans. Nothing herein shall require the Company to
register shares of its Common Stock under the Securities Act of 1933.
The inability of the Company to obtain from any such regulatory agency
having jurisdiction thereover the authorization deemed by the Company's
counsel to be necessary to the lawful issuance and sale of any shares
of its stock hereunder, or the Company's unwillingness to register its
shares under the Securities Act of 1933, if deemed necessary by the
Company's counsel, shall relieve the Company of any liability in
respect of the non-issuance or sale of such stock as to which such
requisite authorization shall not have been obtained.
19. Notices. Any notice to be given to the Company pursuant to the
provisions of the Plans shall be addressed to the Company in care of
the Secretary at its principal office, and any notice to be given to an
employee to whom an Option is granted hereunder shall be addressed to
him at the address given beneath his signature on his Stock Option
Agreement, or at such other address as such employee or his transferee
(upon the transfer of optioned stock) may hereafter designate in
writing to the Company. Any such notice shall be deemed duly given when
enclosed in a properly sealed envelope or wrapper, addressed as
aforesaid, registered or certified and deposited, postage and registry
or certification fee prepaid, in a post office or branch post office
regularly maintained by the United States Postal Service. It shall be
the obligation of each Optionee and each transferee holding optioned
stock to provide the Secretary of the Company, by letter mailed as
provided hereinabove, with written notice of his correct mailing
address.
20. Adjustments Upon Changes in Capitalization. If the outstanding shares
of Common Stock of the Company are increased, decreased, changed into
or exchanged for a different number or kind of shares of stock of the
Company through reorganization, recapitalization, reclassification,
stock dividend, stock split or reverse stock split, upon proper
authorization of the Board, an appropriate and proportionate adjustment
shall be made in the total number of shares which may be optioned under
the Plans, the number of shares which may be optioned to Directors and
Officers of the Company under the Plans, and the number or kind of
shares, and the per-share Option Price thereof, which may be issued
upon exercise of Options granted under the Plans; provided, however,
that no such adjustment need be made if, upon the advice of counsel,
the Board determines that such adjustment may result in the receipt of
federally taxable income to holders of Options granted hereunder or the
holders of Common Stock or other classes of the Company's securities.
If any Option granted under the Plans shall terminate for any reason or
expire before such Option is exercised in full, the securities which
might otherwise have been issued upon exercise of such Option shall
again become available for purposes of the Plans.
21. Representations and Warranties. As a condition to the exercise of any
portion of an Option, the Company may require the person exercising
such Option to make any representation or warranty to the Company as
may, in the judgment of counsel to the Company, be required under any
applicable law or regulation, including, but not limited to, a
representation and warranty that the
54
<PAGE>
shares are being acquired only for investment and without any present
intention to sell or distribute such shares if such a representation is
required under the Securities Act of 1933, or any other applicable law,
regulation or rule of any governmental agency.
22. No Enlargement of Employee Rights. The Plans are purely voluntary on
the part of the Company, and the continuance of the Plans shall not be
deemed to constitute a contract between the Company and any employee,
or to be consideration for or a condition of the employment of any
employee. Nothing contained in the Plans shall be deemed to give any
employee the right to be retained in the employ of the Company or its
Affiliated Companies, or to interfere with the right of the Company or
an Affiliated Company to discharge any employee thereof at any time.
23. Legends on Stock Certificates. Unless an appropriate registration
statement is filed pursuant to the Securities Act of 1933, as amended,
with respect to the shares of Common Stock issuable under the Plans,
each certificate representing such Common Stock shall be endorsed on
its face with the following legend or its equivalent:
(a) "The shares represented by this Certificate have not been
registered under the federal Securities Act of 1933, as
amended (the "Act"). Transfer or sale of such securities or
any interest therein is unlawful except after registration, or
pursuant to an exemption from the registration requirements,
as provided in the Act and the Regulations thereunder."
(b) Any other legend(s) required by the California Commissioner of
Corporations.
24. Invalid Provisions. In the event that any provision of this Plan
document is found to be invalid or otherwise unenforceable under any
applicable law, such invalidity or unenforceability shall not be
construed as rendering any other provisions contained herein invalid or
unenforceable, and all such other provisions shall be given full force
and effect to the same extent as though the invalid or unenforceable
provision were not contained herein.
25. Applicable Law. The Plans shall be governed by and construed in
accordance with the laws of the State of California.
26. Successors and Assigns. The Plans shall be binding on and inure to the
benefit of the Company and each employee to whom an Option is granted
hereunder, and their respective, heirs, executors, administrators,
legatees, personal representatives, assignees, successors and
transferees.
26. Term of Plans. The Plans shall be effective as of May 1, 1997, and
shall continue in effect until May 1, 2002, unless terminated earlier
by action of the Board. No Option hereunder may be granted after five
years from the effective date.
IN WITNESS WHEREOF, pursuant to the due authorization and adoption of
the Plans by the Board on November 5, 1997, the Company has caused the Plans to
be executed by its duly authorized Officers, effective as of May 1, 1997, with
respect to Options granted on or after that date.
SYNAPTIX SYSTEMS CORPORATION
dba AFFILIATED RESOURCES CORPORATION
By:
Edward S. Fleming , Acting President
& Director
By:
Mark F. Walz, Director
55
<PAGE>
SYNAPTIX SYSTEMS CORPORATION
3050 Post Oak Boulevard, Suite 1080
Houston, Texas 77056
VOTING BALLOT
The undersigned hereby appoints Peter C. Vanucci and Virginia M. Lazar
as Proxies, each with power to appoint his substitute, to represent and to vote
on behalf of the undersigned all shares of Common Stock which the undersigned is
entitled to vote at the Annual Meeting of Shareholders scheduled to be held at
the executive offices of Synaptix Systems Corporation, Houston, Texas, on
Wednesday, December 16, 1998, and to any and all adjournments thereof, with all
powers the undersigned would possess if personally present and particularly with
respect to Proposals 1,2,3, 4 and 5, in their discretion, and upon such other
business as may properly come before the meeting. This proxy, when properly
executed, will be voted in the manner directed herein by the undersigned
shareholder. If no direction is made, this proxy will be voted "FOR" Proposals
1, 2, 3, 4 and 5, and in accordance with the best judgment of the proxies on any
other matters which may properly come before the meeting.
1. ELECTION OF DIRECTORS NOMINEES: Peter C. Vanucci, Edward F. Feighan,
Edward S. Fleming and J. Thomas McManamon (INSTRUCTION: To withhold
authority to vote for any individual nominee, write that nominee's name
in the space below.)
[ ] FOR all nominees listed, except [ ] WITHHOLD AUTHORITY
as marked to the contrary to vote for all nominees listed
2. APPROVAL OF AN AMENDMENT TO THE ARTICLES OF INCORPORATION TO CHANGE THE
NAME OF THE COMPANY TO AFFILIATED RESOURCES CORPORATION
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. RATIFICATION OF THE ADOPTION OF THE COMPANY'S INCENTIVE STOCK OPTION
PLAN AND NON-STATUTORY STOCK OPTION PLAN
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. APPROVAL OF THE CHANGE IN THE FISCAL YEAR END OF THE COMPANY TO
DECEMBER 31
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. RATIFICATION OF THE APPOINTMENT OF WEINSTEIN SPIRA & COMPANY, P.C. AS
THE COMPANY'S INDEPENDENT AUDITORS
[ ] FOR [ ] AGAINST [ ] ABSTAIN
6. TO TRANSACT SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING
OR ANY ADJOURNMENT OF THE MEETING.
DATED:
(Signature)
(Signature if held jointly)
Please sign exactly as name
appears in type. When the
shares are held for joint
tenants, both should sign.
When signing as attorney,
executor, administrator,
trustee or guardian, please
give full title as such. If
a corporation, please sign
in full corporate name by
President or other
authorized officer. If a
partnership, please sign in
partnership name by
authorized person.
56
<PAGE>
Exhibit 4.1.2(i)
AFFILIATED RESOURCES CORPORATION
EMPLOYEE STOCK OPTION AGREEMENT
This Agreement is made effective as of the 3rd day of January, 2000
(the "Option Grant Date"), by and between AFFILIATED RESOURCES CORPORATION (the
"Company") and PETER C. VANUCCI (the "Optionee").
RECITALS
WHEREAS, the Board of Directors of the Company has established the
Synaptix Systems Corporation (now known as Affiliated Resources Corporation)
1997 Incentive Stock Option Plan (the "Plan"); and
WHEREAS, pursuant to the provisions of said Plan, the Board of
Directors of the Company, by action duly taken on December 31, 1999, granted to
the Optionee an option or options (the "Option(s)") to purchase shares of the
common stock of the Company on the terms and conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants set forth herein and other good and valuable consideration, the
parties hereto agree as follows:
1. The Option(s). The Optionee may, at his option and on the terms and
conditions set forth herein and in accordance with the terms and conditions set
forth in PETER C. VANUCCI's Employment Agreement, attached hereto and made a
part hereof, purchase all or any part of an aggregate of EIGHT HUNDRED THOUSAND
(800,000) shares of common stock under the Plan, at the price of $.10 per share.
2. Plan Type and Exercise Dates. The Options (if more than one) are
intended as separate incentive stock options. The Option(s) shall be
exercisable at the option price(s) as to the specific number of shares
on and after the "Start" dates and on or before the "Terminate" dates
set forth below:
Numbers of Option Exercise Dates
Shares Price Start Date Terminate Date
800,000 $.10 January 3, 2000 January 3, 2004
Optionee acknowledges that he understands that he has no right
whatsoever to exercise the Option(s) granted hereunder with respect to any
Optioned Shares covered by any installment, until such installment accrues as
provided above. Optionee further understands that the Option(s) granted
hereunder shall expire and become unexercisable as provided in Section 3(c)
below.
3. Governing Plans. This Agreement hereby incorporates by reference the
Plan and all of the terms and conditions of the Plan and as the same may be
amended from time to time hereafter in accordance with the terms thereof, but no
such subsequent amendment shall adversely affect the Optionee's rights under
this Agreement and the Plan, except as may be required by applicable law. The
Optionee expressly acknowledges and agrees that the provisions of this Agreement
are subject to the Plan; the terms of this Agreement shall in no manner limit or
modify the controlling provisions of the Plan, and in case of any conflict
between the provisions of the Plan and this Agreement, the provisions of the
Plan shall be controlling and binding upon
57
<PAGE>
the parties hereto. The Optionee also hereby expressly acknowledges, represents
and agrees as follows:
(a) Acknowledges receipt of a copy of the Plan, a copy of which is
attached hereto and by reference, incorporated herein, and
represents that he is familiar with the terms and provisions
of said Plan, and hereby accepts this Agreement, subject to
all of the terms and provisions of said Plan.
(b) Agrees to accept as binding, conclusive and final, all
decisions or interpretations of the Board of Directors (or the
Committee, if so authorized) upon any questions arising under
the Plan.
(c) Acknowledges that he is familiar with Section 7 of the Plan
regarding the exercise of the Option(s) and represents that he
understands that said Option(s) must be exercised on or before
the earliest of the following dates, whichever is applicable;
(i) the "Terminate" date noted above in Section 2; (ii) the
day prior to the fifty anniversary of the Option(s) grant
Date, as provided in Section 7(b) of the Plan; (iii) the
Effective Date of a sale or other disposition of all or
substantially all of the stock or assets of the Company as
provided in Subsection 7(c) of the Plan; (iv) the date which
is 30 days following the Optionee's termination of employment
for any reason, other than death or total and permanent
disability, as provided under Subsection 7(d) of the Plan; or
(v) the date that is one year following his termination of
employment by reason of his death, or the date that is one
year following his termination of employment by reason of
total and permanent disability, whichever is applicable, as
provided in Subsection 7(e) of the Plan.
(d) Acknowledges and understands that the use by Optionee of
Company Stock to pay the exercise price of an Option, as
permitted by Section 4 of this Agreement, may have significant
adverse tax consequences for Optionee, and that Optionee
should consult with a knowledge tax advisor prior to utilizing
Company Stock to exercise an Option.
4. Exercise. In order to exercise an Option, the Optionee shall deliver
a written notice of exercise to the Company at its principal business office,
which notice shall specify the number of shares to be purchased and shall be
accompanied by payment in cash or check, made payable to the order of the
Company in the full amount of the purchase price of the shares to be purchased.
5. Representation and Warranties. As a condition to the exercise of any
portion of an Option, the Company may require the person exercising such Option
to make any representation and/or warranty to the Company as may, in judgment of
Counsel to the Company, be required under any applicable law or regulation,
including but not limited to, a representation and warranty that the shares are
being acquired only for investment and without any present intention to sell or
distribute such shares, in the opinion of counsel for the Company, such a
representation is required under the Securities Act of 1933, or any other
applicable law, regulations or rule of any governmental agency.
6. Options Not Transferable. The Option(s) may be exercised during the
lifetime of the Optionee, only by the Optionee. The Optionee's rights and
interests under this Agreement
58
<PAGE>
and in and to the Option(s) may not be sold, pledged, hypothecated, assigned,
encumbered, gifted or otherwise transferred in any manner, either voluntarily or
involuntarily, by operation of law, except by will or the laws of descent or
distribution, subject to the provisions of Section 7(e) of the Plan.
7. No Enlargement of Employee Rights. Nothing in this Agreement shall
be construed to confer upon the Optionee (if any employee) any right to continue
employment with the Company (or an Affiliated Company), or to restrict in any
way the right of the Company (or an Affiliated Company, if he is an employee
thereof) to terminate his employment.
8. Withholding of Taxes. Subject to any election by Optionee to deliver
stock owned by Optionee or to withhold shares of stock exercised pursuant to
such option to satisfy such withholding obligation, Optionee authorized the
Company to withhold, in accordance with any applicable law, from any
compensation payable to him, any taxes required to be withheld by Federal, State
or local law, as a result of the Grant of the Option(s) or the issuance of
stock, pursuant to the exercise of such Option(s).
9. Laws Applicable to Construction. This Agreement shall be construed
and enforced in accordance with the laws of the State of Texas.
10. Agreement Binding on Successors. The terms of this Agreement shall
be binding upon the executors, administrators, heirs, successors, transferees
and assignees of the Optionee.
11. Costs of Litigation. In any action at law or in equity to enforce
any of the provisions or rights under this Agreement or the Plan, the
unsuccessful party to such litigation, as determined by the Court in a final
judgment or decree, shall pay the successful party or parties all costs,
expenses and reasonable attorney's fees incurred by the successful party or
parties (including without limitation, costs, expenses and fees on any appeals),
and if the successful party recovers judgment in any such action or proceeding,
such costs, expenses and attorney's fees shall be included as part of the
judgment.
12. Necessary Acts. The Optionee agrees to perform all acts and execute
and deliver any documents that may be reasonably necessary to carry out the
provisions of this Agreement, including but not limited to, all acts and
documents related to compliance with Federal and/or State securities laws.
13. Counterparts. For convenience, this Agreement may be executed in
any number of identical counterparts, each of which shall be deemed a complete
original in itself, and may be introduced in evidence or used for any other
purpose without the production of any counterparts.
14. Invalid Provisions. In any event that any provision of this
Agreement is found to be invalid or otherwise unenforceable under any applicable
law, such invalidity or unenforceability shall not be construed as rendering any
other provisions contained herein invalid or unenforceable, and all such other
provisions shall be given full force and effect to the same extent as though the
invalid and unenforceable provision was not contained herein.
IN WITNESS WHEREOF, The Company and the Optionee have executed this
Agreement, effective as of the date first written hereinabove.
THE COMPANY: OPTIONEE:
AFFILIATED RESOURCES ______________________________
CORPORATION, INC., PETER C. VANUCCI
A Colorado Corporation 8221 Brecksville Road, Building 3, Suite 207
Brecksville, Ohio 44141
59
<PAGE>
BY:___________________________ ______________________________
Michael R. Bradle, President Social Security Number
60
<PAGE>
SPOUSAL CONSENT
By his or her signature below, the spouse of the Optionee, if such
Optionee be legally married as of the date of his execution of this Agreement,
acknowledges that he or she has read this Agreement and Plan, and is familiar
with the terms and provisions thereof, and agrees to be bound by all of the
terms and conditions of said Agreement and said Plan document.
Dated:______________________ ______________________________
Spouse
REPRESENTATION OF MARITAL STATUS
By his or her signature below, the Optionee represents that he or she
is not legally married as of the date of execution of this Agreement.
Dated:______________________ ______________________________
Optionee
61
<PAGE>
Exhibit 4.1.6
AFFILIATED RESOURCES CORPORATION
EMPLOYEE STOCK OPTION AGREEMENT
This Agreement is made effective as of the 3rd day of January, 2000
(the "Option Grant Date"), by and between AFFILIATED RESOURCES CORPORATION (the
"Company") and MICHAEL R. BRADLE (the "Optionee").
RECITALS
WHEREAS, the Board of Directors of the Company has established the
Synaptix Systems Corporation (now known as Affiliated Resources Corporation)
1997 Incentive Stock Option Plan (the "Plan"); and
WHEREAS, pursuant to the provisions of said Plan, the Board of
Directors of the Company, by action duly taken on December 31, 1999, granted to
the Optionee an option or options (the "Option(s)") to purchase shares of the
common stock of the Company on the terms and conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants set forth herein and other good and valuable consideration, the
parties hereto agree as follows:
1. The Option(s). The Optionee may, at his option and on the terms and
conditions set forth herein and in accordance with the terms and conditions set
forth in MICHAEL R. BRADLE's Employment Agreement, attached hereto and made a
part hereof, purchase all or any part of an aggregate of EIGHT HUNDRED THOUSAND
(800,000) shares of common stock under the Plan, at the price of $.10 per share.
2. Plan Type and Exercise Dates. The Options (if more than one) are
intended as separate incentive stock options. The Option(s) shall be exercisable
at the option price(s) as to the specific number of shares on and after the
"Start" dates and on or before the "Terminate" dates set forth below:
Numbers of Option Exercise Dates
Shares Price Start Date Terminate Date
800,000 $.10 January 3, 2000 January 3, 2004
Optionee acknowledges that he understands that he has no right
whatsoever to exercise the Option(s) granted hereunder with respect to any
Optioned Shares covered by any installment, until such installment accrues as
provided above. Optionee further understands that the Option(s) granted
hereunder shall expire and become unexercisable as provided in Section 3(c)
below.
3. Governing Plans. This Agreement hereby incorporates by reference the
Plan and all of the terms and conditions of the Plan and as the same may be
amended from time to time hereafter in accordance with the terms thereof, but no
such subsequent amendment shall adversely affect the Optionee's rights under
this Agreement and the Plan, except as may be required by applicable law. The
Optionee expressly acknowledges and agrees that the provisions of this Agreement
are subject to the Plan; the terms of this Agreement shall in no manner limit or
modify the controlling provisions of the Plan, and in case of any conflict
between the provisions of the Plan and this Agreement, the provisions of the
Plan shall be controlling and binding upon
62
<PAGE>
the parties hereto. The Optionee also hereby expressly acknowledges, represents
and agrees as follows:
(a) Acknowledges receipt of a copy of the Plan, a copy of which is
attached hereto and by reference, incorporated herein, and
represents that he is familiar with the terms and provisions
of said Plan, and hereby accepts this Agreement, subject to
all of the terms and provisions of said Plan.
(b) Agrees to accept as binding, conclusive and final, all
decisions or interpretations of the Board of Directors (or the
Committee, if so authorized) upon any questions arising under
the Plan.
(c) Acknowledges that he is familiar with Section 7 of the Plan
regarding the exercise of the Option(s) and represents that he
understands that said Option(s) must be exercised on or before
the earliest of the following dates, whichever is applicable;
(i) the "Terminate" date noted above in Section 2; (ii) the
day prior to the fifty anniversary of the Option(s) grant
Date, as provided in Section 7(b) of the Plan; (iii) the
Effective Date of a sale or other disposition of all or
substantially all of the stock or assets of the Company as
provided in Subsection 7(c) of the Plan; (iv) the date which
is 30 days following the Optionee's termination of employment
for any reason, other than death or total and permanent
disability, as provided under Subsection 7(d) of the Plan; or
(v) the date that is one year following his termination of
employment by reason of his death, or the date that is one
year following his termination of employment by reason of
total and permanent disability, whichever is applicable, as
provided in Subsection 7(e) of the Plan.
(d) Acknowledges and understands that the use by Optionee of
Company Stock to pay the exercise price of an Option, as
permitted by Section 4 of this Agreement, may have significant
adverse tax consequences for Optionee, and that Optionee
should consult with a knowledge tax advisor prior to utilizing
Company Stock to exercise an Option.
4. Exercise. In order to exercise an Option, the Optionee shall deliver
a written notice of exercise to the Company at its principal business office,
which notice shall specify the number of shares to be purchased and shall be
accompanied by payment in cash or check, made payable to the order of the
Company in the full amount of the purchase price of the shares to be purchased.
5. Representation and Warranties. As a condition to the exercise of any
portion of an Option, the Company may require the person exercising such Option
to make any representation and/or warranty to the Company as may, in judgment of
Counsel to the Company, be required under any applicable law or regulation,
including but not limited to, a representation and warranty that the shares are
being acquired only for investment and without any present intention to sell or
distribute such shares, in the opinion of counsel for the Company, such a
representation is required under the Securities Act of 1933, or any other
applicable law, regulations or rule of any governmental agency.
6. Options Not Transferable. The Option(s) may be exercised during the
lifetime of the Optionee, only by the Optionee. The Optionee's rights and
interests under this Agreement
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<PAGE>
and in and to the Option(s) may not be sold, pledged, hypothecated, assigned,
encumbered, gifted or otherwise transferred in any manner, either voluntarily or
involuntarily, by operation of law, except by will or the laws of descent or
distribution, subject to the provisions of Section 7(e) of the Plan.
7. No Enlargement of Employee Rights. Nothing in this Agreement shall
be construed to confer upon the Optionee (if any employee) any right to continue
employment with the Company (or an Affiliated Company), or to restrict in any
way the right of the Company (or an Affiliated Company, if he is an employee
thereof) to terminate his employment.
8. Withholding of Taxes. Subject to any election by Optionee to deliver
stock owned by Optionee or to withhold shares of stock exercised pursuant to
such option to satisfy such withholding obligation, Optionee authorized the
Company to withhold, in accordance with any applicable law, from any
compensation payable to him, any taxes required to be withheld by Federal, State
or local law, as a result of the Grant of the Option(s) or the issuance of
stock, pursuant to the exercise of such Option(s).
9. Laws Applicable to Construction. This Agreement shall be construed
and enforced in accordance with the laws of the State of Texas.
10. Agreement Binding on Successors. The terms of this Agreement shall
be binding upon the executors, administrators, heirs, successors, transferees
and assignees of the Optionee.
11. Costs of Litigation. In any action at law or in equity to enforce
any of the provisions or rights under this Agreement or the Plan, the
unsuccessful party to such litigation, as determined by the Court in a final
judgment or decree, shall pay the successful party or parties all costs,
expenses and reasonable attorney's fees incurred by the successful party or
parties (including without limitation, costs, expenses and fees on any appeals),
and if the successful party recovers judgment in any such action or proceeding,
such costs, expenses and attorney's fees shall be included as part of the
judgment.
12. Necessary Acts. The Optionee agrees to perform all acts and execute
and deliver any documents that may be reasonably necessary to carry out the
provisions of this Agreement, including but not limited to, all acts and
documents related to compliance with Federal and/or State securities laws.
13. Counterparts. For convenience, this Agreement may be executed in
any number of identical counterparts, each of which shall be deemed a complete
original in itself, and may be introduced in evidence or used for any other
purpose without the production of any counterparts.
14. Invalid Provisions. In any event that any provision of this
Agreement is found to be invalid or otherwise unenforceable under any applicable
law, such invalidity or unenforceability shall not be construed as rendering any
other provisions contained herein invalid or unenforceable, and all such other
provisions shall be given full force and effect to the same extent as though the
invalid and unenforceable provision was not contained herein.
IN WITNESS WHEREOF, The Company and the Optionee have executed this
Agreement, effective as of the date first written hereinabove.
THE COMPANY: OPTIONEE:
AFFILIATED RESOURCES ______________________________
CORPORATION, INC., MICHAEL R. BRADLE
A Colorado Corporation 1211 West Fourth Street
Lampasas, Texas 76550
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BY:___________________________ ______________________________
Peter C. Vanucci, Chairman Social Security Number
65
<PAGE>
SPOUSAL CONSENT
By his or her signature below, the spouse of the Optionee, if such
Optionee be legally married as of the date of his execution of this Agreement,
acknowledges that he or she has read this Agreement and Plan, and is familiar
with the terms and provisions thereof, and agrees to be bound by all of the
terms and conditions of said Agreement and said Plan document.
Dated:______________________ ______________________________
Spouse
REPRESENTATION OF MARITAL STATUS
By his or her signature below, the Optionee represents that he or she
is not legally married as of the date of execution of this Agreement.
Dated:______________________ ______________________________
Optionee
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Exhibit 4.1.7
AFFILIATED RESOURCES CORPORATION
EMPLOYEE STOCK OPTION AGREEMENT
This Agreement is made effective as of the 7th day of February, 2000
(the "Option Grant Date"), by and between AFFILIATED RESOURCES CORPORATION (the
"Company") and BARRY GOVERMAN (the "Optionee").
RECITALS
WHEREAS, the Board of Directors of the Company has established the
Synaptix Systems Corporation (now known as Affiliated Resources Corporation)
1997 Incentive Stock Option Plan (the "Plan"); and
WHEREAS, pursuant to the provisions of said Plan, the Board of
Directors of the Company, by action duly taken on December 31, 1999, granted to
the Optionee an option or options (the "Option(s)") to purchase shares of the
common stock of the Company on the terms and conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants set forth herein and other good and valuable consideration, the
parties hereto agree as follows:
1. The Option(s). The Optionee may, at his option and on the terms and
conditions set forth herein and in accordance with the terms and conditions set
forth in BARRY GOVERMAN's Employment Agreement, attached hereto and made a part
hereof, purchase all or any part of an aggregate of FIVE HUNDRED THOUSAND
(500,000) shares of common stock under the Plan, at the price of $.10 per share.
2. Plan Type and Exercise Dates. The Options (if more than one) are
intended as separate incentive stock options. The Option(s) shall be exercisable
at the option price(s) as to the specific number of shares on and after the
"Start" dates and on or before the "Terminate" dates set forth below:
Numbers of Option Exercise Dates
Shares Price Start Date Terminate Date
500,000 $.10 February 7, 2000 February 7, 2004
Optionee acknowledges that he understands that he has no right
whatsoever to exercise the Option(s) granted hereunder with respect to any
Optioned Shares covered by any installment, until such installment accrues as
provided above. Optionee further understands that the Option(s) granted
hereunder shall expire and become unexercisable as provided in Section 3(c)
below.
3. Governing Plans. This Agreement hereby incorporates by reference the
Plan and all of the terms and conditions of the Plan and as the same may be
amended from time to time hereafter in accordance with the terms thereof, but no
such subsequent amendment shall adversely affect the Optionee's rights under
this Agreement and the Plan, except as may be required by applicable law. The
Optionee expressly acknowledges and agrees that the provisions of this Agreement
are subject to the Plan; the terms of this Agreement shall in no manner limit or
modify the controlling provisions of the Plan, and in case of any conflict
between the provisions of the Plan and this Agreement, the provisions of the
Plan shall be controlling and binding upon
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the parties hereto. The Optionee also hereby expressly acknowledges, represents
and agrees as follows:
(a) Acknowledges receipt of a copy of the Plan, a copy of which is
attached hereto and by reference, incorporated herein, and
represents that he is familiar with the terms and provisions
of said Plan, and hereby accepts this Agreement, subject to
all of the terms and provisions of said Plan.
(b) Agrees to accept as binding, conclusive and final, all
decisions or interpretations of the Board of Directors (or the
Committee, if so authorized) upon any questions arising under
the Plan.
(c) Acknowledges that he is familiar with Section 7 of the Plan
regarding the exercise of the Option(s) and represents that he
understands that said Option(s) must be exercised on or before
the earliest of the following dates, whichever is applicable;
(i) the "Terminate" date noted above in Section 2; (ii) the
day prior to the fifty anniversary of the Option(s) grant
Date, as provided in Section 7(b) of the Plan; (iii) the
Effective Date of a sale or other disposition of all or
substantially all of the stock or assets of the Company as
provided in Subsection 7(c) of the Plan; (iv) the date which
is 30 days following the Optionee's termination of employment
for any reason, other than death or total and permanent
disability, as provided under Subsection 7(d) of the Plan; or
(v) the date that is one year following his termination of
employment by reason of his death, or the date that is one
year following his termination of employment by reason of
total and permanent disability, whichever is applicable, as
provided in Subsection 7(e) of the Plan.
(d) Acknowledges and understands that the use by Optionee of
Company Stock to pay the exercise price of an Option, as
permitted by Section 4 of this Agreement, may have significant
adverse tax consequences for Optionee, and that Optionee
should consult with a knowledge tax advisor prior to utilizing
Company Stock to exercise an Option.
4. Exercise. In order to exercise an Option, the Optionee shall deliver
a written notice of exercise to the Company at its principal business office,
which notice shall specify the number of shares to be purchased and shall be
accompanied by payment in cash or check, made payable to the order of the
Company in the full amount of the purchase price of the shares to be purchased.
5. Representation and Warranties. As a condition to the exercise of any
portion of an Option, the Company may require the person exercising such Option
to make any representation and/or warranty to the Company as may, in judgment of
Counsel to the Company, be required under any applicable law or regulation,
including but not limited to, a representation and warranty that the shares are
being acquired only for investment and without any present intention to sell or
distribute such shares, in the opinion of counsel for the Company, such a
representation is required under the Securities Act of 1933, or any other
applicable law, regulations or rule of any governmental agency.
6. Options Not Transferable. The Option(s) may be exercised during the
lifetime of the Optionee, only by the Optionee. The Optionee's rights and
interests under this Agreement
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and in and to the Option(s) may not be sold, pledged, hypothecated, assigned,
encumbered, gifted or otherwise transferred in any manner, either voluntarily or
involuntarily, by operation of law, except by will or the laws of descent or
distribution, subject to the provisions of Section 7(e) of the Plan.
7. No Enlargement of Employee Rights. Nothing in this Agreement shall
be construed to confer upon the Optionee (if any employee) any right to continue
employment with the Company (or an Affiliated Company), or to restrict in any
way the right of the Company (or an Affiliated Company, if he is an employee
thereof) to terminate his employment.
8. Withholding of Taxes. Subject to any election by Optionee to deliver
stock owned by Optionee or to withhold shares of stock exercised pursuant to
such option to satisfy such withholding obligation, Optionee authorized the
Company to withhold, in accordance with any applicable law, from any
compensation payable to him, any taxes required to be withheld by Federal, State
or local law, as a result of the Grant of the Option(s) or the issuance of
stock, pursuant to the exercise of such Option(s).
9. Laws Applicable to Construction. This Agreement shall be construed
and enforced in accordance with the laws of the State of Texas.
10. Agreement Binding on Successors. The terms of this Agreement shall
be binding upon the executors, administrators, heirs, successors, transferees
and assignees of the Optionee.
11. Costs of Litigation. In any action at law or in equity to enforce
any of the provisions or rights under this Agreement or the Plan, the
unsuccessful party to such litigation, as determined by the Court in a final
judgment or decree, shall pay the successful party or parties all costs,
expenses and reasonable attorney's fees incurred by the successful party or
parties (including without limitation, costs, expenses and fees on any appeals),
and if the successful party recovers judgment in any such action or proceeding,
such costs, expenses and attorney's fees shall be included as part of the
judgment.
12. Necessary Acts. The Optionee agrees to perform all acts and execute
and deliver any documents that may be reasonably necessary to carry out the
provisions of this Agreement, including but not limited to, all acts and
documents related to compliance with Federal and/or State securities laws.
13. Counterparts. For convenience, this Agreement may be executed in
any number of identical counterparts, each of which shall be deemed a complete
original in itself, and may be introduced in evidence or used for any other
purpose without the production of any counterparts.
14. Invalid Provisions. In any event that any provision of this
Agreement is found to be invalid or otherwise unenforceable under any applicable
law, such invalidity or unenforceability shall not be construed as rendering any
other provisions contained herein invalid or unenforceable, and all such other
provisions shall be given full force and effect to the same extent as though the
invalid and unenforceable provision was not contained herein.
IN WITNESS WHEREOF, The Company and the Optionee have executed this
Agreement, effective as of the date first written hereinabove.
THE COMPANY: OPTIONEE:
AFFILIATED RESOURCES ______________________________
CORPORATION, INC., BARRY GOVERMAN
A Colorado Corporation 42 Brentwood Drive
North Easton, Massachusetts 02356
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BY:___________________________ ______________________________
Peter C. Vanucci, Chairman Social Security Number
70
<PAGE>
SPOUSAL CONSENT
By his or her signature below, the spouse of the Optionee, if such
Optionee be legally married as of the date of his execution of this Agreement,
acknowledges that he or she has read this Agreement and Plan, and is familiar
with the terms and provisions thereof, and agrees to be bound by all of the
terms and conditions of said Agreement and said Plan document.
Dated:______________________ ______________________________
Spouse
REPRESENTATION OF MARITAL STATUS
By his or her signature below, the Optionee represents that he or she
is not legally married as of the date of execution of this Agreement.
Dated:______________________ ______________________________
Optionee
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Exhibit 4.1.8
AFFILIATED RESOURCES CORPORATION
EMPLOYEE STOCK OPTION AGREEMENT
This Agreement is made effective as of the 7th day of February, 2000
(the "Option Grant Date"), by and between AFFILIATED CORPORATION (the "Company")
and CATHERINE A. TAMME (the "Optionee").
RECITALS
WHEREAS, the Board of Directors of the Company has established the
Affiliated Resources Corporation 1997 Incentive Stock Option Plan (the "Plan");
and
WHEREAS, pursuant to the provisions of said Plan, the Board of
Directors of the Company, by action duly taken on December 30, 1999, granted to
the Optionee an option or options (the "Option(s)") to purchase up to 200,000
shares of the common stock of the Company on the terms and conditions set forth
herein, and further, that such grant of options shall be for a period of three
(3) years and five (5) months wherein said Optionee shall have the right to
purchase said shares, as the shares were granted to Optionee in consideration of
Ms. Tamme's acceptance of employment as Chief Financial Officer, in accordance
with a resolution that was adopted by the board of directors on December 30,
1999.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants set forth herein and other good and valuable consideration, the
parties hereto agree as follows:
1. The Option(s). The Optionee may, at her option and on the terms and
conditions set forth herein, purchase all or any part of an aggregate of Two
Hundred Thousand (200,000) shares of common stock under the Plan, at the price
of $.10 per share.
2. Plan Type and Exercise Dates. The Options (if more than one) are
intended as separate incentive stock options. The Option(s) shall be exercisable
at the option price(s) as to the specific number of shares on and after the
"Start" dates and on or before the "Terminate" dates set forth below:
Numbers of Option Exercise Dates
Shares Price Start Date Termination Date
200,000 $.10 February 7, 2000 May 13, 2003
Optionee acknowledges that he understands that he has no right
whatsoever to exercise the Option(s) granted hereunder with respect to any
optioned shares covered by any installment, until such installment accrues as
provided above. Optionee further understands that the Option(s) granted
hereunder shall expire and become unexercisable as provided in Section 3c below.
3. Governing Plans. This Agreement hereby incorporates by reference the
Plan and all of the terms and conditions of the Plan and as the same may be
amended from time to time hereafter in accordance with the terms thereof, but no
such subsequent amendment shall adversely affect the Optionee's rights under
this Agreement and the Plan, except as may be required by applicable law. The
Optionee expressly acknowledges and agrees that the provisions of this Agreement
are subject to the Plan; the terms of this Agreement shall in no manner limit or
modify the controlling provisions of the Plan, and in case of any conflict
between the provisions of the Plan and this Agreement, the provisions of the
Plan shall be
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controlling and binding upon the parties hereto. The Optionee also hereby
expressly acknowledges, represents and agrees as follows:
(a) Acknowledges receipt of a copy of the Plan, a copy of which is
attached hereto and by reference, incorporated herein, and
represents that he is familiar with the terms and provisions
of said Plan, and hereby accepts this Agreement, subject to
all of the terms and provisions of said Plan, with the
exception that the Optionee shall have the right to exercise
said options for a period of five (5) years, notwithstanding
the resignation of said director during the five year period.
(b) Agrees to accept as binding, conclusive and final, all
decisions or interpretations of the Board of Directors (or the
Committee, if so authorized) upon any questions arising under
the Plan.
(3) Acknowledges that he is familiar with Section 7 of the Plan
regarding the exercise of the Option(s) and represents that he
understands that said Option(s) must be exercised on or before
the earliest of the following dates, whichever is applicable:
(I) the "Terminate" date noted above in Section 2; (ii) the
day prior to the fifth anniversary of the Option(s) Grant
Date, as provided in Section 7(b) of the Plan; (iii) the
Effective Date of a sale or other disposition of all or
substantially all of the stock or assets of the Company, as
provided in Subsection 7(c) of the Plan; (iv) the date which
is 30 days prior to the Optionee's fifth anniversary of the
Options Grant Date, other than death or total and permanent
disability, as provided under Subsection 7(d) of the Plan; or
(v) the date that is one year following his death. or the date
that is one year following his total and permanent disability,
whichever is applicable, as provided in Subsection 7(e) of the
Plan.
(d) Acknowledges and understands that the use by Optionee of
Company Stock to pay the exercise price of an Option, as
permitted by Section 4 of this Agreement, may have significant
adverse tax consequences for Optionee, and that Optionee
should consult with a knowledgeable tax advisor prior to
utilizing Company Stock to exercise an Option.
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<PAGE>
4. Exercise. In order to exercise an Option, the Optionee shall deliver
a written notice of exercise to the Company at its principal business office,
which notice shall specify the number of shares purchased and shall be
accompanied by payment in cash or check, made payable to the order of the
Company in the full amount of the purchase price of the shares to be purchased.
5. Representation and Warranties. As a condition to the exercise of any
portion of an Option, the Company may require the person exercising such Option
to make any representation and/or warranty to the Company as may, in judgment of
Counsel to the Company, be required under any applicable law or regulation,
including but not limited to, a representation and warranty that the shares are
being acquired only for investment and without any present intention to sell or
distribute such shares, in the opinion of counsel for the Company, such a
representation is required under the Securities Act of 1933, or any other
applicable law, regulation or rule of any governmental agency.
6. Options Not Transferable. The Option(s) may be exercised during the
lifetime of the Optionee, only by the Optionee. The Optionee's rights and
interests under this Agreement and in and to the Option (s) may not be sold,
pledged, hypothecated, assigned, encumbered, gifted or otherwise transferred in
any manner, either voluntarily or involuntarily, by operation of law, except by
will or the laws of descent or distribution, subject to the provisions of
Section 7(e) of the Plan.
7. No Enlargement of Employee Rights. Nothing in this Agreement shall
be construed to confer upon the Optionee (if any employee) any right to continue
employment with the Company (or an Affiliated Company), or to restrict in any
way the right of the Company (or an Affiliated Company, if he is an employee
thereof) to terminate his employment.
8. Withholding of Taxes. Subject to any election by Optionee to deliver
stock owned by Optionee or to withhold shares of stock exercised pursuant to
such option to satisfy such withholding obligation, Optionee authorizes the
Company to withhold, in accordance with any applicable law, from any
compensation payable to him, any taxes required to be withheld by Federal, State
or local law, as a result of the Grant of the Option(s) or the issuance of
stock, pursuant to the exercise of such Option(s).
9. Laws Applicable to Construction. This Agreement shall be construed
and enforced in accordance with the laws of the State of Texas.
10. Agreement Binding on Successors. The terms of this Agreement shall
be binding upon the executors, administrators, heirs, successors, transferees
and assignees of the Optionee.
11. Costs of Litigation. In any action at law or in equity to enforce
any of the provisions or rights under this Agreement or the Plan, the
unsuccessful party to such litigation, as determined by the Court in a final
judgment or decree, shall pay the successful party or parties all costs,
expenses an reasonable attorney's fees incurred by the successful party or
parties (including without limitation, costs, expenses and fees on any appeals),
and if the successful party recovers judgment in any such action or proceeding,
such costs, expenses and attorney's fees shall be included as part of the
judgment .
12. Necessary Acts. The Optionee agrees to perform all acts and execute
and deliver any documents that may be reasonably necessary to carry out the
provisions of this Agreement, including but not limited to, all acts and
documents related to compliance with Federal and/or State securities laws.
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<PAGE>
13. Counterparts. For convenience, this Agreement may be executed in
any number of identical counterparts, each of which shall be deemed a complete
original in itself, and may be introduced in evidence or used for any other
purpose without the production of any counterparts.
14. Invalid Provisions. In the event that any provision of this
Agreement is found to be invalid or otherwise unenforceable under any applicable
law, such invalidity or unenforceability shall not be construed as rendering any
other provisions contained herein invalid or unenforceable, and all such other
provisions shall be given full force and effect to the same extent as though the
invalid and unenforceable provision was not contained herein.
IN WITNESS WHEREOF, the Company and the Optionee have executed
this Agreement, effective as of the date first written hereinabove.
AFFILIATED RESOURCES CORPORATION OPTIONEE
By:
Peter C. Vanucci, Catherine A. Tamme
Title: Chairman and CEO 8221 Brecksville Road, Bldg. 3, Ste 207
Brecksville, Ohio 44141
By:
Virginia M. Lazar
Title: Executive Vice President & Secretary
REPRESENTATION OF MARITAL STATUS
By his or her signature below, the Optionee represents that he or she
is not legally married as of the date of execution of this Agreement.
Dated: February 7, 2000
Catherine A. Tamme, Optionee
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Exhibit 4.1.9
AFFILIATED RESOURCES CORPORATION
EMPLOYEE STOCK OPTION AGREEMENT
This Agreement is made effective as of the 15th day of September, 1999 (the
"Option Grant Date"), by and between AFFILIATED RESOURCES CORPORATION (the
"Company") and PATRICIA A. BODLEY (the "Optionee").
RECITALS
WHEREAS, the Board of Directors of the Company has established the Synaptix
Systems Corporation 1997 Incentive Stock Option Plan (now known as Affiliated
Resources Corporation) (the "Plan"); and
WHEREAS, pursuant to the provisions of said Plan, the Board of Directors of
the Company, by action duly taken on September 15, 1999, granted to the Optionee
an option or options (the "Option(s)") to purchase shares of the common stock of
the Company on the terms and conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants set forth herein and other good and valuable consideration, the
parties hereto agree as follows:
1. The Option(s). The Optionee may, at her option and on the terms and
conditions set forth herein, purchase all or any part of an aggregate of Ten
Thousand (10,000) shares of common stock under the Plan, at the price of $.25
per share.
2. Plan Type and Exercise Dates. The Options (if more than one) are
intended as separate incentive stock options. The Option(s) shall be exercisable
at the option price(s) as to the specific number of shares on and after the
"Start" dates and on or before the "Termination" dates set forth below:
Numbers of Option Exercise Dates
Shares Price Start Date Termination Date
10,000 $.25 9/15/99 9/15/2004
Optionee acknowledges that she understands that she has no right whatsoever
to exercise the Option(s) granted hereunder with respect to any Optioned Shares
covered by any installment, until such installment accrues as provided above.
Optionee further understands that the Option(s) granted hereunder shall expire
and become unexercisable as provided in Section 3(c) below.
3. Governing Plans. This Agreement hereby incorporates by reference the
Plan and all of the terms and conditions of the Plan and as the same may be
amended from time to time hereafter in accordance with the terms thereof, but no
such subsequent amendment shall adversely affect the Optionee's rights under
this Agreement and the Plan, except as may be required by applicable law. The
Optionee expressly acknowledges and agrees that the provisions of this Agreement
are subject to the Plan; the terms of this Agreement shall in no manner limit or
modify the controlling provisions of the Plan, and in case of any conflict
between the provisions of the Plan and this Agreement, the provisions of the
Plan shall be controlling and binding upon the parties hereto. The Optionee also
hereby expressly acknowledges, represents and agrees as follows:
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<PAGE>
(a) Acknowledges receipt of a copy of the Plan, a copy of which is attached
hereto and by reference, incorporated herein, and represents that she
is familiar with the terms and provisions of said Plan, and hereby
accepts this Agreement, subject to all of the terms and provisions of
said Plan.
(b) Agrees to accept as binding, conclusive and final, all decisions or
interpretations of the Board of Directors (or the Committee, if so
authorized) upon any questions arising under the Plan.
(c) Acknowledges that she is familiar with Section 7 of the Plan regarding
the exercise of the Option(s) and represents that she understands that
said Option(s) must be exercised on or before the earliest of the
following dates, whichever is applicable: (i) the "Termination" date
noted above in Section 2; (ii) the day prior to the fifth anniversary
of the Option(s) Grant Date, as provided in Section 7(b) of the Plan;
(iii) the Effective Date of a sale or other disposition of all or
substantially all of the stock or assets of the Company, as provided in
Subsection 7(c) of the Plan; (iv) the date which is 30 days following
the Optionee's termination of employment for any reason, other than
death or total and permanent disability, as provided under Subsection
7(d) of the Plan; or (v) the date that is one year following her
termination of employment by reason of her death, or the date that is
one year following her termination of employment by reason of total and
permanent disability, whichever is applicable, as provided in
Subsection 7(e) of the Plan.
(d) Acknowledges and understands that the use by Optionee of Company Stock
to pay the exercise price of an Option, as permitted by Section 4 of
this Agreement, may have significant adverse tax consequences for
Optionee, and that Optionee should consult with a knowledge tax advisor
prior to utilizing Company Stock to exercise an Option.
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<PAGE>
4. Exercise. In order to exercise an Option, the Optionee shall deliver a
written notice of exercise to the Company at its principal business office,
which notice shall specify the number of shares to purchased and shall be
accompanied by payment in cash or check, made payable to the order of the
Company in the full amount of the purchase price of the shares to be purchased.
5. Representation and Warranties. As a condition to the exercise of any
portion of an Option, the Company may require the person exercising such Option
to make any representation and/or warranty to the Company as may, in judgment of
Counsel to the Company, be required under any applicable law or regulation,
including but not limited to, a representation and warranty that the shares are
being acquired only for investment and without any present intention to sell or
distribute such shares, in the opinion of counsel for the Company, such a
representation is required under the Securities Act of 1933, or any other
applicable law, regulation or rule of any governmental agency.
6. Options Not Transferable. The Option(s) may be exercised during the
lifetime of the Optionee, only by the Optionee. The Optionee's rights and
interests under this Agreement and in and to the Option (s) may not be sold,
pledged, hypothecated, assigned, encumbered, gifted or otherwise transferred in
any manner, either voluntarily or involuntarily, by operation of law, except by
will or the laws of descent or distribution, subject to the provisions of
Section 7(e) of the Plan.
7. No Enlargement of Employee Rights. Nothing in this Agreement shall be
construed to confer upon the Optionee (if an employee) any right to continue
employment with the Company (or an Affiliated Company), or to restrict in any
way the right of the Company (or an Affiliated Company, if she is an employee
thereof) to terminate her employment.
8. Withholding of Taxes. Subject to any election by Optionee to deliver
stock owned by Optionee or to withhold shares of stock exercised pursuant to
such option to satisfy such withholding obligation, Optionee authorizes the
Company to withhold, in accordance with any applicable law, from any
compensation payable to her, any taxes required to be withheld by Federal, State
or local law, as a result of the Grant of the Option(s) or the issuance of
stock, pursuant to the exercise of such Option(s).
9. Laws Applicable to Construction. This Agreement shall be construed
and enforced in accordance with the laws of the State of Texas.
10. Agreement Binding on Successors. The terms of this Agreement shall
be binding upon the executors, administrators, heirs, successors, transferees
and assignees of the Optionee.
11. Costs of Litigation. In any action at law or in equity to enforce any
of the provisions or rights under this Agreement or the Plan, the unsuccessful
party to such litigation, as determined by the Court in a final judgment or
decree, shall pay the successful party or parties all costs, expenses an
reasonable attorney's fees incurred by the successful party or parties
(including without limitation, costs, expenses and fees on any appeals), and if
the successful party recovers judgment in any such action or proceeding, such
costs, expenses and attorney's fees shall be included as part of the judgment.
12. Necessary Acts. The Optionee agrees to perform all acts and execute and
deliver any documents that may be reasonably necessary to carry out the
provisions of this Agreement, including but not limited to, all acts and
documents related to compliance with Federal and/or State securities laws.
13. Counterparts. For convenience, this Agreement may be executed in
any number of identical counterparts, each of which shall be deemed a complete
original in itself, and may be
78
<PAGE>
introduced in evidence or used for any other purpose without the production of
any counterparts.
14. Invalid Provisions. In the event that any provision of this Agreement
is found to be invalid or otherwise unenforceable under any applicable law, such
invalidity or unenforceability shall not be construed as rendering any other
provisions contained herein invalid or unenforceable, and all such other
provisions shall be given full force and effect to the same extent as though the
invalid and unenforceable provision was not contained herein.
IN WITNESS WHEREOF, the Company and the Optionee have executed this
Agreement, effective as of the date first written hereinabove.
AFFILIATED RESOURCES CORPORATION OPTIONEE
By:
Peter C. Vanucci Patricia A. Bodley
Title: Chairman & CEO 2400 Lazy Hollow #119D
Street Address
Houston, Texas 77063
By: City and State
Virginia M. Lazar ###-##-####
Title: Secretary Social Security Number
79
<PAGE>
SPOUSAL CONSENT
By his or her signature below, the spouse of the Optionee, if such
Optionee be legally married as of the date of his execution of this Agreement,
acknowledges that she has read this Agreement and Plan, and is familiar with the
terms and provisions thereof, and agrees to be bound by all of the terms and
conditions of said Agreement and said Plan document.
Dated:
Spouse
REPRESENTATION OF MARITAL STATUS
By his or her signature below, the Optionee represents that she is not
legally married as of the date of execution of this Agreement.
Dated: September 15, 1999
Patricia A. Bodley, Optionee
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Exhibit 4.1.10
AFFILIATED RESOURCES CORPORATION
EMPLOYEE STOCK OPTION AGREEMENT
This Agreement is made effective as of the 28th day of October, 1999 (the
"Option Grant Date"), by and between AFFILIATED RESOURCES CORPORATION (the
"Company") and EDWARD W. JOHNSON (the "Optionee").
RECITALS
WHEREAS, the Board of Directors of the Company has established the Synaptix
Systems Corporation 1997 Incentive Stock Option Plan (now known as Affiliated
Resources Corporation) (the "Plan"); and
WHEREAS, pursuant to the provisions of said Plan, the Board of Directors of
the Company, by action duly taken on October 27, 1999, granted to the Optionee
an option or options (the "Option(s)") to purchase shares of the common stock of
the Company on the terms and conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants set forth herein and other good and valuable consideration, the
parties hereto agree as follows:
1. The Options. The Optionee may, at his option and on the terms and
conditions set forth herein, purchase all or any part of an aggregate of Three
Hundred (300,000) shares of common stock under the Plan, at the price of $.18
per share.
2. Plan Type and Exercise Dates. The Options (if more than one) are
intended as separate incentive stock options. The Option(s) shall be exercisable
at the option price(s) as to the specific number of shares on and after the
"Start" dates and on or before the "Termination" dates set forth below:
Numbers of Option Exercise Dates
Shares Price Start Date Termination Date
300,000 $.18 10/28/99 10/27/2001
Optionee understands that the Option granted hereunder shall expire and
become unexercisable as provided in Section 3(c) below.
3. Governing Plans. This Agreement hereby incorporates by reference the
Plan and all of the terms and conditions of the Plan and as the same may be
amended from time to time hereafter in accordance with the terms thereof, but no
such subsequent amendment shall adversely affect the Optionee's rights under
this Agreement and the Plan, except as may be required by applicable law. The
Optionee expressly acknowledges and agrees that the provisions of this Agreement
are subject to the Plan; the terms of this Agreement shall in no manner limit or
modify the controlling provisions of the Plan, and in case of any conflict
between the provisions of the Plan and this Agreement, the provisions of the
Plan shall be controlling and binding upon the parties hereto. The Optionee also
hereby expressly acknowledges, represents and agrees as follows:
(a) Acknowledges receipt of a copy of the Plan, a copy of which is attached
hereto and by reference, incorporated herein, and represents that she
is familiar with the terms and provisions of said Plan, and hereby
accepts this Agreement, subject to all of the terms and provisions of
said Plan.
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(b) Agrees to accept as binding, conclusive and final, all decisions or
interpretations of the Board of Directors (or the Committee, if so
authorized) upon any questions arising under the Plan.
(c) Acknowledges that he is familiar with Section 7 of the Plan regarding
the exercise of the Option and represents that he understands that said
Option must be exercised on or before the earliest of the following
dates, whichever is applicable: (i) the "Termination" date noted above
in Section 2; (ii) the day prior to the second anniversary of the
Option(s) Grant Date, as provided in Section 7(b) of the Plan; (iii)
the Effective Date of a sale or other disposition of all or
substantially all of the stock or assets of the Company, as provided in
Subsection 7(c) of the Plan; (iv) the date which is 30 days following
the Optionee's termination of employment for any reason, other than
death or total and permanent disability, as provided under Subsection
7(d) of the Plan; or (v) the date that is one year following his
termination of employment by reason of his death, or the date that is
one year following his termination of employment by reason of total and
permanent disability, whichever is applicable, as provided in
Subsection 7(e) of the Plan.
(d) Acknowledges and understands that the use by Optionee of Company Stock
to pay the exercise price of an Option, as permitted by Section 4 of
this Agreement, may have significant adverse tax consequences for
Optionee, and that Optionee should consult with a knowledge tax advisor
prior to utilizing Company Stock to exercise an Option.
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4. Exercise. In order to exercise an Option, the Optionee shall deliver a
written notice of exercise to the Company at its principal business office,
which notice shall specify the number of shares to purchased and shall be
accompanied by payment in cash or check, made payable to the order of the
Company in the full amount of the purchase price of the shares to be purchased.
5. Representation and Warranties. As a condition to the exercise of any
portion of an Option, the Company may require the person exercising such Option
to make any representation and/or warranty to the Company as may, in judgment of
Counsel to the Company, be required under any applicable law or regulation,
including but not limited to, a representation and warranty that the shares are
being acquired only for investment and without any present intention to sell or
distribute such shares, in the opinion of counsel for the Company, such a
representation is required under the Securities Act of 1933, or any other
applicable law, regulation or rule of any governmental agency.
6. Options Not Transferable. The Option(s) may be exercised during the
lifetime of the Optionee, only by the Optionee. The Optionee's rights and
interests under this Agreement and in and to the Option (s) may not be sold,
pledged, hypothecated, assigned, encumbered, gifted or otherwise transferred in
any manner, either voluntarily or involuntarily, by operation of law, except by
will or the laws of descent or distribution, subject to the provisions of
Section 7(e) of the Plan.
7. No Enlargement of Employee Rights. Nothing in this Agreement shall be
construed to confer upon the Optionee (if an employee) any right to continue
employment with the Company (or an Affiliated Company), or to restrict in any
way the right of the Company (or an Affiliated Company, if he is an employee
thereof) to terminate his employment.
8. Withholding of Taxes. Subject to any election by Optionee to deliver
stock owned by Optionee or to withhold shares of stock exercised pursuant to
such option to satisfy such withholding obligation, Optionee authorizes the
Company to withhold, in accordance with any applicable law, from any
compensation payable to him, any taxes required to be withheld by Federal, State
or local law, as a result of the Grant of the Option(s) or the issuance of
stock, pursuant to the exercise of such Option(s).
9. Laws Applicable to Construction. This Agreement shall be construed
and enforced in accordance with the laws of the State of Texas.
10. Agreement Binding on Successors. The terms of this Agreement shall
be binding upon the executors, administrators, heirs, successors, transferees
and assignees of the Optionee.
11. Costs of Litigation. In any action at law or in equity to enforce any
of the provisions or rights under this Agreement or the Plan, the unsuccessful
party to such litigation, as determined by the Court in a final judgment or
decree, shall pay the successful party or parties all costs, expenses an
reasonable attorney's fees incurred by the successful party or parties
(including without limitation, costs, expenses and fees on any appeals), and if
the successful party recovers judgment in any such action or proceeding, such
costs, expenses and attorney's fees shall be included as part of the judgment.
12. Necessary Acts. The Optionee agrees to perform all acts and execute and
deliver any documents that may be reasonably necessary to carry out the
provisions of this Agreement, including but not limited to, all acts and
documents related to compliance with Federal and/or State securities laws.
13. Counterparts. For convenience, this Agreement may be executed in
any number of identical counterparts, each of which shall be deemed a complete
original in itself, and may be
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introduced in evidence or used for any other purpose without the production of
any counterparts.
14. Invalid Provisions. In the event that any provision of this Agreement
is found to be invalid or otherwise unenforceable under any applicable law, such
invalidity or unenforceability shall not be construed as rendering any other
provisions contained herein invalid or unenforceable, and all such other
provisions shall be given full force and effect to the same extent as though the
invalid and unenforceable provision was not contained herein.
IN WITNESS WHEREOF, the Company and the Optionee have executed this
Agreement, effective as of the date first written hereinabove.
AFFILIATED RESOURCES CORPORATION OPTIONEE
By:
Peter C. Vanucci Edward W. Johnson
Title: Chairman & CEO 1625 Kirby Drive
Street Address
Houston, Texas 77019
By: City and State
Virginia M. Lazar ###-##-####
Title: Secretary Social Security Number
84
<PAGE>
SPOUSAL CONSENT
By his or her signature below, the spouse of the Optionee, if such
Optionee be legally married as of the date of his execution of this Agreement,
acknowledges that she has read this Agreement and Plan, and is familiar with the
terms and provisions thereof, and agrees to be bound by all of the terms and
conditions of said Agreement and said Plan document.
Dated:
Spouse
REPRESENTATION OF MARITAL STATUS
By his or her signature below, the Optionee represents that she is not
legally married as of the date of execution of this Agreement.
Dated: October 28, 1999
Edward W. Johnson, Optionee
85
<PAGE>
Exhibit 4.1.11
AFFILIATED RESOURCES CORPORATION
STOCK OPTION AGREEMENT
This Agreement is made effective as of the 30th day of December, 1999 (the
"Option Grant Date"), by and between AFFILIATED RESOURCES CORPORATION (the
"Company") and LONE STAR INVESTMENT MANAGEMENT, L.L.C., a Texas Limited
Liability Company (the "Optionee").
RECITALS
WHEREAS, the Board of Directors of the Company has approved and agreed to
grant a straight option to Lone Star Investment Management, L.L.C., in the
amount of Four Hundred Twenty Five Thousand (425,000) shares of the common stock
of Affiliated Resources Corporation in connection with the purchase of 85% of an
interest in 16 oil and gas wells in West Virginia with a reserve report valued
at approximately $182,000, which will continue to be managed by Lone Star
Investment Management, L.L.C.;
WHEREAS, the Board of Directors of the Company, by action duly taken on
December 30, 1999, granted to the Optionee an option or options (the "Option")
to purchase shares of the common stock of the Company on the terms and
conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants set forth herein and other good and valuable consideration, the
parties hereto agree as follows:
1. The Option. The Optionee may, at its option and on the terms and
conditions set forth herein, purchase all or any part of an aggregate of four
Hundred Twenty Five Thousand (425,000) shares of the Company's common stock at
the price of $.10 per share.
2. Exercise Dates. The Option shall be exercisable at the option price
as to the specific number of shares on and after the "Start" date and on or
before the "Termination" date set forth below:
Numbers of Option Exercise Dates
Shares Price Start Date Termination Date
425,000 $.10 December 30, 1999 May 13, 2003
Optionee further understands that the Option granted hereunder shall expire
and become unexercisable as provided hereinabove.
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<PAGE>
3. Exercise. In order to exercise an Option, the Optionee shall deliver a
written notice of exercise to the Company at its principal business office,
which notice shall specify the number of shares to purchased and shall be
accompanied by payment in cash or check, made payable to the order of the
Company in the full amount of the purchase price of the shares to be purchased.
4. Representation and Warranties. As a condition to the exercise of any
portion of an Option, the Company may require the person exercising such Option
to make any representation and/or warranty to the Company as may, in judgment of
Counsel to the Company, be required under any applicable law or regulation,
including but not limited to, a representation and warranty that the shares are
being acquired only for investment and without any present intention to sell or
distribute such shares, in the opinion of counsel for the Company, such a
representation is required under the Securities Act of 1933, or any other
applicable law, regulation or rule of any governmental agency.
5. Option Not Transferable. The Option may be exercised during the lifetime
of the Optionee, only by the Optionee. The Optionee's rights and interests under
this Agreement and in and to the Option may not be sold, pledged, hypothecated,
assigned, encumbered, gifted or otherwise transferred in any manner, either
voluntarily or involuntarily, by operation of law, except by will or the laws of
descent or distribution.
6. Withholding of Taxes. Subject to any election by Optionee to deliver
stock owned by Optionee or to withhold shares of stock exercised pursuant to
such option to satisfy such withholding obligation, Optionee authorizes the
Company to withhold, in accordance with any applicable law, from any
compensation payable to him, any taxes required to be withheld by Federal, State
or local law, as a result of the Grant of the Option or the issuance of stock,
pursuant to the exercise of such Option.
7. Laws Applicable to Construction. This Agreement shall be construed
and enforced in accordance with the laws of the State of Texas.
8. Agreement Binding on Successors. The terms of this Agreement shall
be binding upon the executors, administrators, heirs, successors, transferees
and assignees of the Optionee.
9. Costs of Litigation. In any action at law or in equity to enforce any of
the provisions or rights under this Agreement, the unsuccessful party to such
litigation, as determined by the Court in a final judgment or decree, shall pay
the successful party or parties all costs, expenses an reasonable attorney's
fees incurred by the successful party or parties (including without limitation,
costs, expenses and fees on any appeals), and if the successful party recovers
judgment in any such action or proceeding, such costs, expenses and attorney's
fees shall be included as part of the judgment.
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<PAGE>
10. Necessary Acts. The Optionee agrees to perform all acts and execute and
deliver any documents that may be reasonably necessary to carry out the
provisions of this Agreement, including but not limited to, all acts and
documents related to compliance with Federal and/or State securities laws.
11. Counterparts. For convenience, this Agreement may be executed in
any number of identical counterparts, each of which shall be deemed a complete
original in itself, and may be introduced in evidence or used for any other
purpose without the production of any counterparts.
12. Invalid Provisions. In the event that any provision of this Agreement
is found to be invalid or otherwise unenforceable under any applicable law, such
invalidity or unenforceability shall not be construed as rendering any other
provisions contained herein invalid or unenforceable, and all such other
provisions shall be given full force and effect to the same extent as though the
invalid and unenforceable provision was not contained herein.
IN WITNESS WHEREOF, the Company and the Optionee have executed this
Agreement, effective as of the date first written hereinabove.
AFFILIATED RESOURCES CORPORATION OPTIONEE
By: LONE STAR INVESTMENT
Peter C. Vanucci MANAGEMENT, INC.
Title: Chairman & CEO
By: By:
Virginia M. Lazar Jay R. Beatty
Title: Executive Vice President & Title: President
Secretary
88
<PAGE>
Exhibit 4.2.1
AFFILIATED RESOURCES CORPORATION
FIRST AMENDED EMPLOYEE STOCK OPTION AGREEMENT
This Agreement is made effective as of the 31st day of December, 1999
(the"Option Repricing Date"), by and between AFFILIATED RESOURCES CORPORATION
(the"Company") and PETER C. VANUCCI (the "Optionee").
RECITALS
WHEREAS, the Board of Directors of the Company has established the
Affiliated Resources Corporation 1997 Incentive Stock Option Plan (the "Plan");
WHEREAS, pursuant to the provisions of said Plan, the Board of
Directors of the Company, by action duly taken on May 13, 1998 (the "Option
Grant Date"), granted to the Optionee an option or options (whether one or more,
the "Option") to purchase up to 1,000,000 shares of the common stock of the
Company on the terms and conditions set forth in the Employee Stock Option
Agreement dated effective May 13, 1998 (the "Option Agreement") , in
consideration of Mr. Vanucci's acceptance of employment as Chairman and Chief
Executive Officer, in accordance with a resolution that was adopted by the board
of directors on May 13, 1998; and
WHEREAS, by action of the Board of Directors of the Company, the
exercise price of the Option has been changed from $.50 to $.10, and the Company
and Optionee desire to amend the Option Agreement to reflect that change;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants set forth herein and other good and valuable consideration, the
parties hereto agree as follows:
1. The Option. The Optionee may, at his option and on the terms
and conditions set forth in the Option Agreement, purchase all
or any part of an aggregate of One Million (1,000,000) shares
of common stock under the Plan, at the price of $.10 per
share.
2. Effectiveness of Amendment. Except as otherwis expressly set
forth above, the Option Agreement shall remain in full force
and effect.
3. Counterparts. For convenience, this Agreement may be executed
in any number of identical counterparts, each of which shall
be deemed a complete original in itself, and may be introduced
in evidence or used for any other purpose without the
production of any counterparts.
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<PAGE>
4. Invalid Provisions. In the event that any provision of this
Agreement is found to be invalid or otherwise unenforceable
under any applicable law, such invalidity or unenforceability
shall not be construed as rendering any other provisions
contained herein invalid or unenforceable, and all such other
provisions shall be given full force and effect to the same
extent as though the invalid and unenforceable provision was
not contained herein.
IN WITNESS WHEREOF, the Company and the Optionee have executed this
Agreement, effective as of the Option Repricing Date.
AFFILIATED RESOURCES CORPORATION
------------------------------------
By: J. Thomas McManamon, Director
OPTIONEE
Peter C. Vanucci
REPRESENTATION OF MARITAL STATUS
SPOUSAL CONSENT
By his or her signature below, the spouse of the Optionee, if
such Optionee be legally married as of the date of his execution of this
Agreement, acknowledges that he or she has read this Agreement and Plan, and is
familiar with the terms and provisions thereof, and agrees to be bound by all of
the terms and conditions of said Agreement and said Plan document.
Dated: December 31, 1999
, Spouse
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Exhibit 4.2.2
AFFILIATED RESOURCES CORPORATION
FIRST AMENDED EMPLOYEE STOCK OPTION AGREEMENT
This Agreement is made effective as of the 31st day of December, 1999
(the"Option Repricing Date"), by and between AFFILIATED RESOURCES CORPORATION
(the"Company") and EDWARD S. FLEMING (the "Optionee").
RECITALS
WHEREAS, the Board of Directors of the Company has established the
Affiliated Resources Corporation 1997 Incentive Stock Option Plan (the "Plan");
WHEREAS, pursuant to the provisions of said Plan, the Board of
Directors of the Company, by action duly taken on October 13, 1997 (the "Option
Grant Date"), granted to the Optionee an option or options (whether one or more,
the "Option") to purchase up to350,000 shares of the common stock of the Company
on the terms and conditions set forth in the Employee Stock Option Agreement
dated effective October 13, 1997 (the "Option Agreement"), in consideration of
Mr. Fleming's acceptance of employment as Chief Financial Officer and a
Director, in accordance with a resolution that was adopted by the board of
directors on October 13, 1998; and
WHEREAS, pursuant to the provisions of said Plan, the Board of
Directors of the Company, by action duly taken on May 13, 1998 (the "Option
Grant Date"), granted to the Optionee an additional option or options (whether
one or more, the "Option") to purchase up to150,000 shares of the common stock
of the Company on the terms and conditions set forth in the Employee Stock
Option Agreement dated effective May 13, 1998 (the "Option Agreement"), in
consideration of Mr. Fleming's acceptance of employment as President and Chief
Operating Officer, in accordance with a resolution that was adopted by the board
of directors on May 13, 1998; and
WHEREAS, by action of the Board of Directors of the Company, the
exercise price of the Option to purchase up to 350,000 shares has been changed
from $.20 to $.10, and the Company and Optionee desire to amend the Option
Agreement to reflect that change;
WHEREAS, by action of the Board of Directors of the Company, the
exercise price of the Option to purchase up to 150,000 shares has been changed
from $.50 to $.10, and the Company and Optionee desire to amend the Option
Agreement to reflect that change;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants set forth herein and other good and valuable consideration, the
parties hereto agree as follows:
1. The Option. The Optionee may, at his option and on the terms
and conditions set forth in the Option Agreement, purchase all
or any part of an aggregate of Five Hundred Thousand (500,000)
shares of common stock under the Plan, at the price of $.10
per share.
2. Effectiveness of Amendment. Except as otherwis expressly set
forth above, the Option Agreement shall remain in full force
and effect.
3. Counterparts. For convenience, this Agreement may be executed
in any number of identical counterparts, each of which shall
be deemed a complete original in itself, and may be introduced
in evidence or used for any other purpose without the
production of any counterparts.
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4. Invalid Provisions. In the event that any provision of this
Agreement is found to be invalid or otherwise unenforceable
under any applicable law, such invalidity or unenforceability
shall not be construed as rendering any other provisions
contained herein invalid or unenforceable, and all such other
provisions shall be given full force and effect to the same
extent as though the invalid and unenforceable provision was
not contained herein.
IN WITNESS WHEREOF, the Company and the Optionee have executed this
Agreement, effective as of the Option Repricing Date.
AFFILIATED RESOURCES CORPORATION
---------------------------------------
By: Peter C. Vanucci, Chairman and CEO
OPTIONEE
--------------------------------
Edward S. Fleming
SPOUSAL CONSENT
By his or her signature below, the spouse of the Optionee, if such
Optionee be legally married as of the Option Repricing Date, acknowledges that
he or she has read this Agreement and Plan, and is familiar with the terms and
provisions thereof, and agrees to be bound by all of the terms and conditions of
said Agreement and said Plan document.
Dated: December 31, 1999
, Spouse
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<PAGE>
Exhibit 4.2.3
AFFILIATED RESOURCES CORPORATION
FIRST AMENDED EMPLOYEE STOCK OPTION AGREEMENT
This Agreement is made effective as of the 31st day of December, 1999
(the"Option Repricing Date"), by and between AFFILIATED RESOURCES CORPORATION
(the"Company") and VIRGINIA M. LAZAR (the "Optionee").
RECITALS
WHEREAS, the Board of Directors of the Company has established the
Affiliated Resources Corporation 1997 Incentive Stock Option Plan (the "Plan");
WHEREAS, pursuant to the provisions of said Plan, the Board of
Directors of the Company, by action duly taken on May 13, 1998 (the "Option
Grant Date"), granted to the Optionee an option or options (whether one or more,
the "Option") to purchase up to 500,000 shares of the common stock of the
Company on the terms and conditions set forth in the Employee Stock Option
Agreement dated effective May 13, 1998 (the "Option Agreement") , in
consideration of Ms. Lazar's acceptance of employment as Executive Vice
President and Corporate Secretary, in accordance with a resolution that was
adopted by the board of directors on May 13, 1998; and
WHEREAS, by action of the Board of Directors of the Company, the
exercise price of the Option has been changed from $.50 to $.10, and the Company
and Optionee desire to amend the Option Agreement to reflect that change;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants set forth herein and other good and valuable consideration, the
parties hereto agree as follows:
1. The Option. The Optionee may, at her option and on the terms
and conditions set forth in the Option Agreement, purchase all
or any part of an aggregate of Five Hundred Thousand (500,000)
shares of common stock under the Plan, at the price of $.10
per share.
2. Effectiveness of Amendment. Except as otherwis expressly set
forth above, the Option Agreement shall remain in full force
and effect.
3. Counterparts. For convenience, this Agreement may be executed
in any number of identical counterparts, each of which shall
be deemed a complete original in itself, and may be introduced
in evidence or used for any other purpose without the
production of any counterparts.
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<PAGE>
4. Invalid Provisions. In the event that any provision of this
Agreement is found to be invalid or otherwise unenforceable
under any applicable law, such invalidity or unenforceability
shall not be construed as rendering any other provisions
contained herein invalid or unenforceable, and all such other
provisions shall be given full force and effect to the same
extent as though the invalid and unenforceable provision was
not contained herein.
IN WITNESS WHEREOF, the Company and the Optionee have executed this
Agreement, effective as of the Option Repricing Date.
AFFILIATED RESOURCES CORPORATION
---------------------------------------
By: Peter C. Vanucci, Chairman and CEO
OPTIONEE
Virginia M. Lazar
REPRESENTATION OF MARITAL STATUS
By her signature below, the Optionee represents that she is not legally
married as of the Option Repricing Date.
Dated: 12/31/99
Virginia M. Lazar, Optionee
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<PAGE>
Exhibit 4.2.4
AFFILIATED RESOURCES CORPORATION
FIRST AMENDED EMPLOYEE STOCK OPTION AGREEMENT
This Agreement is made effective as of the 31st day of December, 1999
(the"Option Repricing Date"), by and between AFFILIATED RESOURCES CORPORATION
(the"Company") and DAVID L. DEERMAN (the "Optionee").
RECITALS
WHEREAS, the Board of Directors of the Company has established the
Affiliated Resources Corporation 1997 Incentive Stock Option Plan (the "Plan");
WHEREAS, pursuant to the provisions of said Plan, the Board of
Directors of the Company, by action duly taken on March 3, 1999, granted to the
Optionee an option or options (the "Option(s)") to purchase shares of the common
stock of the Company on the terms and conditions set forth herein, and in
accordance with the terms of Optionee's Employment Agreement dated December 30,
1998.
WHEREAS, by action of the Board of Directors of the Company, the
exercise price of the Option has been changed from $.50 to $.10, and the Company
and Optionee desire to amend the Option Agreement to reflect that change;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants set forth herein and other good and valuable consideration, the
parties hereto agree as follows:
1. The Option(s). The Optionee may at his option and in
accordance with the terms and conditions set forth herein and
in accordance with the terms and conditions of the Employee
Stock Option Agreement by and between David L. Deerman and the
Company, dated March 23, 1999, and in accordance with the
terms and conditions set forth in Mr. Deerman's Employment
Agreement dated December 30, 1998, purchase all or any part of
an aggregate of TWO HUNDRED FIFTY THOUSAND (250,000) shares of
common stock under the Plan, at the price of $.10 per share.
2. Effectiveness of Amendment. Except as otherwis expressly set
forth above, the Option Agreement shall remain in full force
and effect.
3. Counterparts. For convenience, this Agreement may be executed
in any number of identical counterparts, each of which shall
be deemed a complete original in itself, and may be introduced
in evidence or used for any other purpose without the
production of any counterparts. 4. Invalid Provisions. In the
event that any provision of this Agreement is found to be
invalid or otherwise unenforceable under any applicable law,
such invalidity or unenforceability shall not be construed as
rendering any other provisions contained herein invalid or
unenforceable, and all such other provisions shall be given
full force and effect to the same extent as though the invalid
and unenforceable provision was not contained herein.
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<PAGE>
IN WITNESS WHEREOF, the Company and the Optionee have executed this
Agreement, effective as of the Option Repricing Date.
AFFILIATED RESOURCES CORPORATION
---------------------------------------
By: Peter C. Vanucci, Chairman and CEO
OPTIONEE
David L. Deerman
SPOUSAL CONSENT
By her signature below, the spouse of the Optionee, if such
Optionee be legally married as of the date of his execution of this Agreement,
acknowledges that he or she has read this Agreement and Plan, and is familiar
with the terms and provisions thereof, and agrees to be bound by all of the
terms and conditions of said Agreement and said Plan document.
Dated: 2/29/00
Spouse
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<PAGE>
Exhibit 4.2.5
AFFILIATED RESOURCES CORPORATION
FIRST AMENDED EMPLOYEE STOCK OPTION AGREEMENT
This Agreement is made effective as of the 31st day of December, 1999
(the"Option Repricing Date"), by and between AFFILIATED RESOURCES CORPORATION
(the"Company") and PATRICIA A. BODLEY (the "Optionee").
RECITALS
WHEREAS, the Board of Directors of the Company has established the
Affiliated Resources Corporation 1997 Incentive Stock Option Plan (the "Plan");
WHEREAS, pursuant to the provisions of said Plan, the Board of
Directors of the Company, by action duly taken and ratified by the board on
December 30, 1999 (the "Option Grant Date"), granted to the Optionee an option
or options (whether one or more, the "Option") to purchase up to 30,000 shares
of the common stock of the Company on the terms and conditions set forth in the
Employee Stock Option Agreement dated effective September 15, 1998 (the "Option
Agreement") , in consideration of Ms. Bodley's acceptance of employment, in
accordance with a resolution that was duly ratified and adopted by the board of
directors on December 30, 1998; and
WHEREAS, by action of the Board of Directors of the Company, the
exercise price of the Option has been changed from $.25 to $.10, and the Company
and Optionee desire to amend the Option Agreement to reflect that change;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants set forth herein and other good and valuable consideration, the
parties hereto agree as follows:
1. The Option. The Optionee may, at her option in accordance with
the vesting periods and on the terms and conditions set forth
in the Option Agreement dated September 15, 1999, purchase up
to an aggregate of Thirty Thousand (30,000) shares of common
stock under the Plan on the exercise dates, as set forth in
the Option Agreement, at the price of $.10 per share.
2. Effectiveness of Amendment. Except as otherwis expressly set
forth above, the Option Agreement shall remain in full force
and effect.
3. Counterparts. For convenience, this Agreement may be executed
in any number of identical counterparts, each of which shall
be deemed a complete original in itself, and may be introduced
in evidence or used for any other purpose without the
production of any counterparts.
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4. Invalid Provisions. In the event that any provision of this
Agreement is found to be invalid or otherwise unenforceable
under any applicable law, such invalidity or unenforceability
shall not be construed as rendering any other provisions
contained herein invalid or unenforceable, and all such other
provisions shall be given full force and effect to the same
extent as though the invalid and unenforceable provision was
not contained herein.
IN WITNESS WHEREOF, the Company and the Optionee have executed this
Agreement, effective as of the Option Repricing Date.
AFFILIATED RESOURCES CORPORATION
---------------------------------------
By: Peter C. Vanucci, Chairman and CEO
OPTIONEE
Patricia A. Bodley
REPRESENTATION OF MARITAL STATUS
By her signature below, the Optionee represents that she is not legally
married as of the Option Repricing Date.
Dated: 12/31/99
Patricia A. Bodley, Optionee
98
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Exhibit 10.1
PROMISSORY NOTE
Date: October 28, 1999
Borrower: Affiliated Resources Corporation
Borrower's Mailing Address: [include county]
3050 Post Oak Boulevard, Suite 1080
Houston, Harris County, Texas
Lender: Edward V. Johnson
Place for Payment: [include county]
1625 Kirby Drive
Houston, Harris County, Texas 77019
Principal Amount: $200,000.00
Annual Interest Rate: 12%
Maturity Date: December 27, 1999
Annual Interest Rate on Matured, Unpaid Amounts: 12%
Terms of Payment (principal and interest):
Single payment of principal and interest 60 day from date of
Promissory Note.
Security for Payment:
Finished goods and raw material inventory of ChemWay, Inc.
Other Security for Payment:
None
Borrower promises to pay to the order of Lender the Principal amount plus
interest at the Annual Interest Rate. This note is payable at the Place for
Payment and according to the Terms of Payment. All unpaid amounts are due by the
Maturity Date. After maturity, Borrower promises to pay any unpaid principal
balance plus interest at the Annual Interest Rate on Matured, Unpaid Amounts.
If Borrower defaults in the payment of this note or in the performance of any
obligation in any instrument securing or collateral to this note, Lender may
declare the unpaid principal balance and earned interest on the note immediately
due. Borrower and each surety, endorser, and guarantor waive all demand for
payment, presentation for payment, notice of intention to accelerate maturity,
notice of acceleration of maturity, protest, and notice of protest, to the
extent permitted by law.
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Borrower also promises to pay reasonable attorney's fees and court and other
costs if this note is placed in the hands of an attorney to collect or enforce
the note. These expenses will bear interest from the date of advance at the
Annual Interest Rate on Matured, Unpaid Amounts. Borrower will pay Lender these
expenses and interest on demand at the Place for Payment. These expenses and
interest will become part of the note and will be secured by any security for
payment.
Interest on the debt evidenced by this note will not exceed the maximum rate or
amount of nonusurious interest that may be contracted for, taken, reserved,
charged, or received under law. Any interest in excess of that maximum amount
will be credited on the Principal Amount or, if the Principal Amount has been
paid, refunded. On any acceleration or required or permitted prepayment, any
excess interest will be canceled automatically as of the acceleration or
prepayment or, if the excess interest has already been paid, credited on the
Principal Amount or, if the Principal Amount has been paid, refunded. This
provision overrides any conflicting provisions in this note and all other
instruments concerning the debt.
Each Borrower is responsible for all obligations represented by this note.
When the context requires, singular nouns and pronouns include the plural.
AFFILIATED RESOURCES CORPORATION
By
Peter C. Vanucci, Chairman and CEO
ACCEPTED:
CHEMWAY, INC.
By
Peter C. Vanucci,
Chairman and CEO
100
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Exhibit 10.3
SETTLEMENT AGREEMENT AND RELEASE
This Settlement Agreement and Release (this "Agreement") is made and entered
into as of the _________ day of ________, 1999, by and between AFFILIATED
RESOURCES CORPORATION f/k/a SYNAPTIX SYSTEMS CORPORATION, a Colorado
corporation, ("Affiliated" or "the Company"), and MATTHEW HUTCHINS ("Hutchins"),
DANIEL GILLETT ("Gillett"), and THE TIGER GROUP, L.L.C. ("Tiger").
RECITALS
A. Hutchins, Gillett and Tiger have previously had a relationship with
the Company when known as Synaptix Systems Corporation.
B. The parties to this Agreement intend and desire to effect and
accomplish a full and final settlement of the claims and issues existing between
them.
C. The parties to this Agreement now desire to enter into a full and
complete settlement of all disputes by entering into certain covenants as set
forth below to completely discharge any and all claims and potential claims
between them.
AGREEMENT
NOW THEREFORE, it is agreed by and between the parties as follows:
1. Consideration. Hutchins, Gillett, and Tiger acknowledge receipt of
the following consideration:
a. Bill of Sale in the form attached as Exhibit "A".
b. Promissory Note in the amount of $16,000.00 in the form
attached as Exhibit "B", receipt of which is acknowledged by
Hutchins, Gillett, and Tiger.
c. Stock certificate for 50,000 shares of Affiliated stock in the
name of Hutchins which stock certificate shall bear a legend
that Hutchins has hereby agreed not to transfer such shares
until January 15, 2000 and further agreed that such shares
cannot be assigned, pledged, hypothecated, or otherwise
transferred and that such certificate and any right of
Hutchins in such shares shall be cancelled, void and of no
force and effect if any such transactions occur prior to
January 15, 2000.
d. Stock certificate for 50,000 shares of Affiliated stock in the
name of Gillett which stock certificate shall bear a legend
that Gillett has hereby agreed not to transfer such shares
until January 15, 2000 and further agreed that such shares
cannot be assigned, pledged, hypothecated, or otherwise
transferred and that such certificate and any right of Gillett
is such shares shall be cancelled, void and of no force and
effect if any such transactions occur prior to January 15,
2000.
2. Mutual Representations and Warranties of Partie Each party
hereby represents and warrants to each other party as follows:
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2.1 He, she, or it has not transferred, assigned or otherwise
subrogated or conveyed any of his, her or its interest in any of the claims
which are the subject matter of this Agreement to any person or entity not a
party to this Agreement.
2.2 He, she or it has obtained all such approvals and authorizations as
are necessary or appropriate to the execution, delivery and performance of this
Agreement including the consents of shareholders, directors, partners or joint
venturers, where applicable, and this Agreement has been validly executed and
delivered by him, her or it and is binding upon an enforceable against him, her
or it in accordance with its terms; and
2.3 Except for the parties to this Agreement, he, she or it has no
knowledge that any other person or entity has any right or interest in or to the
subject matter of this Agreement.
3. Covenants and Releases. For valuable consideration as recited above
and the receipt of which is hereby acknowledged, the parties to this Agreement
covenant and promise as follows:
3.1 Definitions.
(a) For purposes of this section, the term "party" or "parties"
shall mean:
(i) on the one hand, Hutchins, Gillett and Tiger, jointly and
severally, together with their respective agents, members,
shareholders, officers, managers, heirs, successors, personal
representatives and assigns; and
(ii) on the other hand, Affiliated, together with it respective
past and present officers, shareholders, directors, agents,
employees, servants, successors and assigns, including,
without limitation, Harris Ballow. . (b) The use of term
"party" or "parties" herein shall be inclusive, and usage of
the singular shall in every case also incorporate the
collective meaning set forth above.
3.2 Mutual Releases. Except for the performance of the undertakings set
forth herein, each party to this Agreement does hereby release and forever
discharge each other party from any and all claims, demands, damages, actions,
causes of action, defenses and liabilities of any kind whatsoever, whether in
law or in equity, whether contractual, common law, statutory, federal, state or
otherwise, whether known or unknown, whether suspected to exist or not, which
the parties now have, had or hereafter may have or claim to have, by reason of
any acts, omissions, transactions, or occurrences prior to the date hereof
arising out of any relationships, contracts and employment of Hutchins, Gillett,
or Tiger specifically including, without limitation, any claim under the (i)
Texas Deceptive Trade Practices Act, (ii) state and federal securities laws, or
(iii) the agreement of August 6, 1997 between Affiliated and Tiger (iv) any
right to participate or receive a commission in connection with any transaction
of Affiliated, or (v) any right to stock or options in favor of Hutchins,
Gillett, or Tiger, or (vi) any claim of fraudulent inducement of this Agreement
or similar claims based on any alleged statement not specifically set forth in
this Agreement.
3.3 General Release. Each of the parties to this release may have
claims by reason of acts, omissions, transactions or occurrences prior to the
date hereof against the other party, of which, at the time this agreement is
executed, the releasing party has no knowledge or suspicion. Except for the
performance of the undertakings expressly set forth herein, each party hereby
agrees and represents that this Agreement is specifically intended to, and does,
extend to any and all such claims that are based upon or arise out of any
relationship, contract or employment of
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Hutchins, Gillett, and Tiger, therefore, each party hereby expressly waives any
statutory protection with respect to the limited claims described in this
sentence against unknown claims, regardless of whether or not knowledge of such
unknown claims may have materially affected such party's decision.
3.4 Covenant Not to Sue. The parties mutually agree and covenant that
they will file no claims or suits against each other, other than the enforcement
of this Agreement. In the event of any claim arising out of the breach of this
Agreement, damages shall be limited to those arising out of the breach of this
Agreement and in no event will alleged causes of action or damages for matters
released herein be allowed, such claims and damages having been forever
released, waived and discharged.
3.5 No. Admission of Liability. The parties to this Agreement, and each
of them, agree and acknowledge that nothing contained in this Agreement, nor the
settlement which led to it, is intended to be, nor shall it be deemed, construed
or treated in any respect as, an admission of liability.
3.6 Scope of Release. This Agreement shall apply to and be binding upon
the respective officers, directors, agents, employees, servants, successors,
attorneys, heirs and assigns, if any, of each party to this Agreement. Provided
further, however, that, notwithstanding the terms of this Release, the indemnity
provisions set forth in the consultation agreement of August 6, 1997 shall
remain in full force and effect in accordance with their terms, and the same are
not hereby waived, released or otherwise adversely affected; and Affiliated, for
itself and its successors and assigns, hereby expressly ratifies, confirms and
remains bound by the terms and provisions of said indemnification.
4. Ratification and Agreement. Hutchins, Gillett, and Tiger hereby
specifically ratify, confirm and agree to the following terms and conditions.
4.1 Resignation of Hutchins and Gillett. To the extent such resignation
may have been necessary, Hutchins and Gillett have previously resigned as
chairman of the Board and Chief Executive Officer respectively and as directors
of the Company and hereby unconditionally ratify such resignation.
4.2 Termination of Consulting Agreement. Hutchins, Gillett, and Tiger
hereby terminate that consultation agreement of August 6, 1997 and acknowledge
that all rights thereunder are extinguished including all rights to stock
(except are expressly set forth in the Agreement in Paragraph 1) or options in
Affiliated or any right to participate in or receive commissions on future
transactions of Affiliated. Provided further, however, that, notwithstanding the
terms of this Release, the indemnity provisions set forth in the consultation
agreement of August 16, 1997 shall remain in full force and effect in accordance
with their terms, and the same are not hereby waived, released or otherwise
adversely affected; and Affiliated, for itself and its successors and assigns,
hereby expressly ratifies, confirms and remains bound by the terms and
provisions of said indemnification
4.3 Cancellation of Stock Options. Any right of Hutchins, Gillett, or
Tiger to stock options or any right to any security of Synaptix is cancelled
except as expressly set forth in this Agreement in Paragraph 1.
5. Access to Documents. Hutchins, Gillett, and Tiger acknowledge and
agree that they have had full access to the following documents with respect to
the Company and its actual and proposed business and affairs (such documents
being collectively referred as the "company documents").
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(a) Forms 10-KSB of the Company for the fiscal years ended
June 30, 1996, 1997, and 1998 filed with the Securities and Exchange Commission
"SEC" under the Securities Exchange Act of 1934, as amended (the "Exchange
Act");
(b) Forms 10-QSB of the Company through September 30, 1998;
(c) All Forms 8-K of the Company;
(d) any other filings of the Company with the SEC for the
period December 1, 1996 through the date of execution
of this agreement.
6. Representations and Warranties. Hutchins, Gillett, and Tiger hereby
acknowledge represent and warrant to, and agree with the Company as follows:
(a) They understand the information contained in the Company
documents and have had access to the same kind of information which would be
available in a registration statement filed by the Company under the Securities
Act of 1933, as amended (the "Securities Act"), and all other information
requested by them in order to make an informed decision with respect to the
transaction covered by this Agreement;
(b) all documents, records and books pertaining to the
transactions covered by this Agreement specifically including, without
limitations, the transfer, assignment, conveyance or cancellation of the Stock
Options have been produced and made available to their satisfaction for
inspection by them, their attorney, accountant or other representative advising
them in this transaction (hereinafter his "advisors");
(c) They and their advisors have had a reasonable opportunity
to ask questions of and receive answers from representatives of the Company
concerning the business and prospects of the Company, the Stock Options the
cancellation effected hereby, or any transaction covered by this Agreement and
all such questions have been answered to their full satisfaction;
(d) no oral or written representations have been made other
than as stated in this Agreement, and no oral or written information furnished
to them or their advisors in connection with any transaction covered by this
Agreement were in any way inconsistent with the information stated in this
Agreement or the Company documents;
(e) they had, or together with his advisors they have, such
knowledge and experience in financial, tax and business matters so as to enable
them to utilize the information made available to him in connection with the
transactions covered by this Agreement, to evaluate the merits and risks of such
transactions and to make an informed decision with respect thereto;
(f) they are not relying on the company with respect to the
tax and other economic considerations of the transactions covered by this
Agreement, and they have relied on the advice of and consulted with his own
advisors with respect thereto;
(g) the representations, warranties and agreements of
Hutchins, Gillett, and Tiger contained herein shall survive the execution and
delivery of this Agreement.
(h) the Company is relying on these representations and
warranties of Hutchins, Gillett, and Tiger in their decision to enter into the
Agreement.
7. Miscellaneous.
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7.1 Attorneys' Fees. If any legal action or any arbitration or
other proceeding is brought for the enforcement of this Agreement, or because of
an alleged dispute, breach, default or misrepresentation in connection with any
of the provisions of this Agreement, the successful or prevailing party or
parties shall be entitled to recover reasonable attorneys' fees and other costs
incurred in that action or proceeding, in addition to any other relief to which
it or they may be entitled.
7.2 Authority. Each person signing this document on behalf of
a party hereto warrants that he has been duly authorized by such party to do so.
7.3 Legal Counsel. Each party hereto hereby acknowledges the
receipt of advice of legal counsel prior to the execution hereof.
7.4 Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, but all of which
shall together constitute a single agreement, and this agreement shall become
effective upon the execution of a counterpart hereof by each of the parties
hereto.
7.5 Confidentiality. The parties agree that they shall each
keep the terms of this Settlement Agreement confidential, and shall not disclose
the same to any third party except as may be required by law or judicial
process.
7.6 Fees and Expenses. Each party will pay their respective
fees, expenses and disbursements incurred in connection with the subject matter
of this Agreement and any amendments thereto.
7.7 Voluntary Agreement. Each party is entering into this
agreement voluntarily, without duress, and of their own free will. Hutchins,
Gillett, and Tiger acknowledge by signing this Agreement that the consideration
for this Agreement is adequate and all that they are ever entitled to receive.
They agree that they will not request any additional consideration from
Affiliated or its subsidiaries or affiliates or successor, officers, directors
and shareholders. Hutchins, Gillett, and Tiger understands that Affiliated
intends to consummate an acquisition, enter into a merger or consolidation,
recapitalization or otherwise enter into a similar material transaction as soon
as practicable (all of the foregoing collectively " Fundamental Corporate
Transactions"). Affiliated has been exploring a variety of Fundamental Corporate
Transactions, and may enter into other Fundamental Corporate Transactions. At
such time as any Fundamental Corporate Transaction is effected, it is likely
that the value of Affiliated's stock would be effected and that such effect may
be material. Hutchins, Gillett, and Tiger will not be entitled to participate in
any such material change in value, if any, resulting from such Fundamental
Corporate Transactions by reasons of entering into this Agreement and
consummation of the transactions set forth in this Agreement except to the
extent of the consideration set forth in Paragraph 1.
7.8 Fees and Expenses. Each party will pay their respective
fees, expenses and disbursements incurred in connection with the subject matter
of this Agreement and any amendments thereto.
7.9 Notices. All notices of communication required or
permitted hereunder must be in writing and will be deemed to have been duly
given if delivered personally, mailed by United States certified or registered
mail, postage prepaid, return receipt requested, mailed by overnight courier, or
sent by facsimile transmission (provided that any such facsimile transmission is
promptly confirmed by delivering or mailing the original executed notice by one
of the other methods provided for in this Subsection), to the parties at the
following addresses:
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(a) If to Affiliated, addressed to:
Virginia M. Lazar
Affiliated Resources
3050 Post Oak Blvd, Suite 1080
Houston Texas 77056
Facsimile No.: (713) 355-9849
(b) If to Hutchins, Gillett, or Tiger, addressed to:
Mr. Matthew Hutchins
900 Jackson Street, Suite 450 LB14
Dallas, Texas 75202
Facsimile No.: (972) 380-9093
Any such notice or communication that is addressed as provided in this
Subsection will be deemed given (a) upon delivery, if delivered personally, (b)
on the third business day after deposit in a regular depository of the United
States mail, if delivered by United States mail, (c) on the day of transmission,
if delivered by facsimile transmission, provided that confirmation is promptly
sent, unless such transmission is sent after 3:00 p.m., local time of the
receiving party, or on a day which is not a business day of the receiving party,
in which case such transmission will be deemed given on the first business day
after the transmission, and (d) on the first business day of the receiving party
after the delivery to the courier, if delivered by overnight courier. Any party
from time to time may change its address for the purpose of this provision by
furnishing a notice in accordance with this Subsection, but no such notice will
be deemed to have been given until it is actually received by the party sought
to be charged with the contents thereof.
7.10 Governing Law. This Agreement shall be construed in
accordance with the laws of the State of Texas, without regard to the principles
of conflicts of law embodied therein that might refer construction of such
provisions to the laws of another jurisdiction.
7.11 Captions. The captions in this Agreement are for
convenience of reference only, and shall not be considered a part hereof or be
given any effect in the construction or interpretation of this Agreement.
7.12 Severability. If any provision of this Agreement is
invalid, illegal or unenforceable, the balance of this Agreement shall remain in
full force and effect and this Agreement shall be construed in all respects as
if such invalid, illegal or unenforceable provision were omitted.
7.13 Entire Agreement. This Agreement contains the entire
understanding of the parties and supersedes any prior written or oral agreements
or understandings between them concerning the subject matter set forth above.
There are no representations, warranties, covenants, promises, agreements,
arrangements, or understandings, oral or written, express or implied between the
parties hereto relating to the subject matter set forth above which have not
been fully expressed herein. The terms and provisions of this Agreement may be
altered, amended or modified only by a written instrument executed by the party
sought to be bound by such alteration, amendment or modification.
7.14 Binding Effect. This Agreement shall be binding on, and
shall inure to the benefit of, the parties to it and their respective heirs,
legal representatives, successors, and
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assigns. No party shall transfer or assign any rights or obligations hereunder
without the prior written consent of the other party thereto.
IN WITNESS WHEREOF, the parties have executed this Settlement Agreement
and Release on the date first set forth above.
AFFILIATED RESOURCES CORPORATION
By: _____________________________
----------------------------------
Peter C. Vanucci, Chairman Matthew Hutchins
-----------------------------
Daniel Gillett
TIGER GROUP, L.L.C.
By: _________________________
Name and Title
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Exhibit 10.3.1
PROMISSORY NOTE
$16,000.00
Houston, Texas
Date: September 22, 1999
FOR VALUE RECEIVED, Affiliated Resources Corporation ("Maker"), a
Colorado corporation, promises to pay to the order of Matthew Hutchins, Daniel
Gillett and The Tiger Group, L.L.C. the sum of Sixteen Thousand Dollars and
no/100 ($16,000.00) plus interest, if any, on the unpaid principal balance
thereof from time to time outstanding, as set forth below. All sums are payable
by wire transfer to a bank of Payee's choosing.
Interest
No interest shall accrue on the unpaid principal balance of this Note
unless and until Maker defaults on this Note. In the event of default, in
addition to Payee's other remedies Maker shall pay interest on the unpaid
balance of the Note at the rate of ten percent (10%) per year until this Note
and all interest accrued has been paid in full.
Payment of Principal
The principal of this Note shall be due and payable within sixty (60)
days from the date first set forth above. The Payee may from time to time, in
its sole discretion, extend the time for payment by giving written notice of
such extension to the Maker. The Maker may at its sole election extend the time
for payment by thirty (30) days by giving written notice of such extension to
Payee, however, Maker may make only one such extension and it must be made
within sixty (60) days of the date set forth above. During any such periods of
extension, the remaining terms and conditions of this note shall remain in full
force and effect. Payment on this Note shall be made without set off,
counterclaim or deduction, and without further notice or demand to the Maker or
any other party. The rights of Payee upon the bankruptcy, liquidation,
dissolution or winding up of the Maker shall rank in pari passu with the rights
of the other general unsecured creditors of the Maker, including those creditors
with accounts payable by the Maker.
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Default
On default of the payment due under this Note, interest shall begin to
accrue as specified above.
Waiver
Maker, sureties, and endorsers of this Note severally waive, to the
fullest extent permitted by law, presentment, demand, notice of maturity,
protest and notice of intention to accelerate and notice of acceleration, notice
of dishonor, diligence in collecting, grace and notice of protest, and agree to
all renewals, extensions, and partial payments before or after maturity without
prejudice to the Payee.
Attorneys' Fees
If this Note is not paid at maturity and is placed in the hands of an
attorney for collection, or if it is collected through a bankruptcy court, a
probate court, or any other court after maturity, then the Payee shall be
entitled to reasonable attorneys' fees.
Compliance With Usury Laws
All agreements between the Maker and the Payee are hereby expressly
limited so that in no contingency or event shall the amount paid or agreed to be
paid to the Payee for the use, forbearance, or detention of the money loaned
under this Note exceed the maximum amount permissible under the laws of the
State of Texas. If, at the time of any interest payment, the payment amount due
under this Note transcends the legal limit, the obligation shall be reduced to
the legal limit. If the Payee should ever receive as interest an amount that
exceeds the highest lawful rate, the amount that would be excessive as interest
shall be applied to the reduction of the principal amount owing under this Note,
and not to the payment of interest.
Other
No modification, change, waiver or amendment of this Note shall be
deemed to be made unless in writing signed by the party to be charged. This Note
shall inure to the benefit of and be binding upon the parties and their
respective successors and assigns. The invalidity, illegality, or
unenforceability of any provision of this Note shall not affect or impair the
validity, legality or enforceability of any other provision. This Note shall be
deemed to be made in, and shall be governed by the laws of, the State of Texas,
without reference to conflict of law provisions.
MS-Synaptix\Harvey\Promissory Note
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WITNESS, Affiliated Resources Corporation has caused this Note to be
executed by its duly authorized officers as of the date written above.
AFFILIATED RESOURCES CORPORATION
By: _________________________________
Name: Peter C. Vanucci
Title: Chairman
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Exhibit 10.3.2
BILL OF SALE
KNOW ALL MEN BY THESE PRESENTS that Affiliated Resources Corporation, a Colorado
corporation (the "Seller"), in consideration of the sum of Ten and No/100
Dollars, and other good and valuable consideration in hand paid or rendered by
The Tiger Group, L.L.C., a Texas limited liability company (the "Buyer"), the
receipt and sufficiency of which is hereby acknowledged and confessed by the
Seller, has BARGAINED, SOLD, GRANTED, ASSIGNED and CONVEYED, and by these
presents, does hereby unconditionally BARGAIN, SELL, GRANT, ASSIGN and CONVEY
unto Buyer and the Buyer's successors, transferees and assigns, that certain
Sony Laptop Computer (Model #PCG717C) currently in the possession of the Buyer
(the "Property").
TO HAVE AND TO HOLD the same unto Buyer and Buyer's successors, transferees and
assigns forever. The Seller covenants and agree to warrant and forever defend
title to the Property sold hereby against any person, firm, corporation or
association.
IN WITNESS WHEREOF, Seller has executed this Bill of Sale on the ____ day of
_________, 1999.
AFFILIATED RESOURCES CORPORATION
By:_________________________________
Peter Vanucci, Chairman
This Bill of Sale was duly acknowledged before me on the ____ day of
_____________, 1999 by Peter C. Vanucci, Chairman of Affiliated Resources
Corporation, a Colorado corporation, who acknowledged to me that he was acting
on behalf of said corporation.
----------------------------------------
Notary Public in and for the State of Texas
Commission Expires:______________________
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Exhibit 10.4
LEASE AGREEMENT BETWEEN
4849 GREENVILLE PARTNERS, AS LANDLORD, AND
SYNAPTIX SYSTEMS CORPORATION d.b.a. AFFILIATED RESOURCES
CORPORATION, AS TENANT
3050 POST OAK BLVD.
SUITE 1080
DATED SEPTEMBER 15, 1999
112
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TABLE OF CONTENTS
Page
1. DEFINITIONS...................................................... 1
2. PREMISES......................................................... 1
3. TERM............................................................. 1
4. USE.............................................................. 1
5. RENT............................................................. 1
5.1 Base Rent............................................... 1
5.2 Base Rent Adjustment.................................... 1
5.3 Additional Rent......................................... 1
5.4 Parking Charge.......................................... 2
5.5 Payment of Rent......................................... 2
5.6 Delinquent Payments and Handling Charge................. 2
5.7 Prepaid Rent and Security Deposit....................... 2
6. CONSTRUCTION OF IMPROVEMENTS..................................... 2
6.1 General................................................. 2
6.2 Access by Tenant Prior to Commencement of Term.......... 2
6.3 Commencement Date; Adjustments to Commencement Date..... 2
7. SERVICES TO BE FURNISHED BY LANDLORD............................. 2
7.1 General................................................. 2
7.2 Keys.................................................... 3
7.3 Tenant Identity......................................... 3
7.4 Charges.................................................. 3
7.5 Operating Hours......................................... 3
8. REPAIR AND MAINTENANCE........................................... 3
8.1 By Landlord............................................. 3
8.2 By Tenant............................................... 3
9. TAXES ON TENANT'S PROPERTY....................................... 4
10. TRANSFER BY TENANT............................................... 4
10.1 General................................................. 4
10.2 Conditions.............................................. 4
10.3 Liens................................................... 4
11. ALTERATIONS...................................................... 4
12. SPECIFICALLY PROHIBITED USES..................................... 4
13. ACCESS BY LANDLORD............................................... 5
14. CONDEMNATION..................................................... 5
15. CASUALTY......................................................... 5
15.1 General................................................. 5
15.2 Acts of Tenant.......................................... 5
16. SUBORDINATION AND ATTORNMENT..................................... 5
16.1 General................................................. 5
16.2 Attornment.............................................. 5
17. INSURANCE........................................................ 6
17.1 General................................................. 6
17.2 Waiver of Subrogation................................... 6
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18. TENANT'S INDEMNITY.............................................. 6
19. THIRD PARTIES; ACTS OF FORCE MAJEURE............................ 6
20. SECURITY INTEREST............................................... 6
21. CONTROL OF COMMON AREAS......................................... 6
22. RIGHT TO RELOCATE............................................... 6
23. QUIET ENJOYMENT................................................. 7
24. DEFAULT BY TENANT............................................... 7
24.1 Events of Default...................................... 7
24.2 Remedies of Landlord................................... 7
24.3 Payment by Tenant...................................... 7
24.4 Reletting.............................................. 7
24.5 Landlord's Right to Pay or Perform..................... 8
24.6 No Waiver; No Implied Surrender........................ 8
25. DEFAULTS BY LANDLORD............................................ 8
26. RIGHT OF REENTRY................................................. 8
27. MISCELLANEOUS.................................................... 8
27.1 Independent Obligations; No Offset...................... 8
27.2 Time of Essence......................................... 8
27.3 Applicable Law.......................................... 8
27.4 Assignment by Landlord.................................. 8
27.5 Commencement Date and Estoppel Certificates............. 8
27.6 Signs, Building Name and Building Address............... 9
27.7 Notices................................................. 9
27.8 Entire Agreement, Amendment and Binding Effect.......... 9
27.9 Severability............................................ 9
27.10 Number and Gender, Captions and References.............. 9
27.11 Attorneys' Fees......................................... 9
27.12 Brokers................................................. 9
27.13 Interest on Tenant's Obligations....................... 10
27.14 Authority.............................................. 10
27.15 Recording.............................................. 10
27.16 Exhibits............................................... 10
27.17 Multiple Counterparts.................................. 10
Signature Page 11
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LEASE AGREEMENT
THIS LEASE AGREEMENT (this "Lease") is entered as of September 15, 1999,
between 4849 GREENVILLE PARTNERS ("Landlord") and SYNAPTIX SYSTEMS CORPORATION
d.b.a. AFFILIATED RESOURCES CORPORATION ("Tenant").
1. DEFINITIONS. The definitions of certain of the capitalized terms used in this
Lease are set forth in the Glossary of Defined Terms attached as Exhibit A.
2. PREMISES. Subject to the provisions of this Lease, Landlord hereby leases to
Tenant, and Tenant hereby leases from Landlord, approximately 1,604 rentable
square feet of space in the Building known as 3050 Post Oak Boulevard, Houston,
Texas, which space is outlined on the floor plan attached hereto as Exhibit B
(the "Premises"). In connection with such demise, Landlord hereby grants to
Tenant the non-exclusive right to use during the Term all Common Areas designed
for the use of all tenants in the Building, in common with all tenants in the
Building and their invitees, for the purposes for which designed and in
accordance with all Legal Requirements. By occupying the Premises, Tenant
accepts the Premises as being suitable for Tenant's intended use of the
Premises.
3. TERM. The Term of this Lease shall commence on the Commencement Date (which
is scheduled to be November 1, 1999) and shall expire at 5:00 p.m. October 31,
2004 unless earlier terminated as provided herein (the "Term").
4. USE. Tenant shall occupy and use the Premises solely for lawful, general
business office purposes in strict compliance with the Building Rules and
Regulations from time to time in effect and all other Legal Requirements.
5. RENT.
5.1 Base Rent. In consideration of Landlord's leasing the Premises to Tenant,
Tenant shall pay to Landlord as follows:
Monthly
Term Amount
November 1, 1999 - October 31, 2000 $2,406.00 / month
November 1, 2000 - October 31, 2003 $2,539.67 / month
November 1, 2003 - October 31, 2004 $2,673.33 / month
The Base Rent set forth in this Section 5.1 is a negotiated figure and
shall govern whether or not the actual gross rentable square footage of the
Premises is the same as set forth in Section 2 hereof or changes pursuant to the
standards set in the definition of Net Rentable Area. Tenant shall have no right
to withhold, deduct or offset any amount of the monthly Base Rent or any other
sum due hereunder even if the actual gross rentable square footage of the
premises is less than that set forth in Section 2 hereof or changes pursuant to
the standards set forth in the definition of Net Rentable Area.
5.3 Additional Rent. For purposes of this Lease, Tenant's "Additional Rent" for
any Fiscal Year (or portion thereof) shall mean the sum of (a) Tenant's Prorata
Share of Operating Expenses plus (b) Tenant's Prorata Share of Impositions. For
purposes of this Lease, Tenant's Prorata Share of Operating Expenses shall mean
and be equal to the product of (x) Net Rentable Area of the Premises multiplied
by (y) the difference, if positive, between (i) the amount of Operating Expenses
divided by the Net Rentable Area of the Building minus (ii) the Expense Stop,
all as applicable for the period in question. For purposes of this Lease,
Tenant's Prorata Share of Impositions shall mean and be equal to the product of
(x) Net Rentable Area of the Premises multiplied by (y) the difference, if
positive, between (i) the amount of Impositions divided by the Net Rentable Area
of the Building minus (ii) the Impositions Stop, all as applicable for the
period in question. By the Commencement Date, Landlord shall estimate the
Additional Rent to be due by Tenant for the balance of the Fiscal Year in which
the Commencement Date occurs. Thereafter, unless Landlord delivers to Tenant a
revision of the estimated Additional Rent, Tenant shall pay to Landlord,
coincident with Tenant's payment of Base Rent, an amount equal to the estimated
Additional Rent for the remainder of such year divided by the number of months
remaining in such year. From time to time during any Fiscal Year, Landlord may
estimate and re-estimate the Additional Rent to be due by Tenant for that Fiscal
Year and deliver a copy of the estimate or re-estimate to Tenant. Thereafter,
the
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monthly installments of Additional Rent payable by Tenant shall be appropriately
adjusted in accordance with the estimation so that, by the end of the Fiscal
Year, Tenant shall have paid all of the Additional Rent as estimated by
Landlord. After the conclusion of each Fiscal Year during the Term, and after
the termination or expiration of the Term, Landlord shall deliver to Tenant a
statement of actual Additional Rent due by Tenant for the Fiscal Year (or, with
respect to termination or expiration, the portion of the Fiscal Year) just
ended. Within 30 days thereafter, Tenant shall pay to Landlord or Landlord shall
credit against the next installment of Additional Rent due by Tenant (or
Landlord shall refund to Tenant, if the Term has expired and all payments due by
Tenant to Landlord have been paid in full) the difference between the actual
Additional Rent due for such year and the estimated Additional Rent paid by
Tenant during such year. Tenant may review, at Tenant's expense and after giving
20-days' prior written notice to Landlord, Landlord's records relating to
Operating Expenses and Impositions for any periods within two Fiscal Years prior
to the review; provided, however, no review shall extend to periods of time
preceding the Commencement Date. In lieu of allowing Tenant to review Landlord's
records under this Section 5.3, Landlord may deliver to Tenant a report of the
Operating Expenses and Impositions prepared by a certified public accountant,
which report shall be conclusive for purposes of this Lease.
5.4 Parking Charge. Tenant shall at all times during the Term lease
from Landlord up to four (4) unassigned automobile parking spaces in the Parking
Facility for a monthly charge of $48.00 per space and one (1) reserved parking
space for a monthly fee of $100.00 .
5.5 Payment of Rent. Except as otherwise expressly provided in this
Lease, all Rent shall be due in advance monthly installments on the first day of
each calendar month during the Term. Rent shall be paid to Landlord at its
address recited in Section 27.7 or to such other person or at such other address
as Landlord may from time to time designate in writing. Rent shall be paid
without notice, demand, abatement, deduction or offset in legal tender of the
United States of America. If the Term commences or ends on other than the first
or the last day of a calendar month, the Rent for the partial month shall be
prorated on the basis of the number of days during the month for which the Term
was in effect. If the Term commences or ends on other than the first or the last
day of a Fiscal Year, the Additional Rent for the partial Fiscal Year shall be
prorated on the basis of the number of days during the Fiscal Year for which the
Term was in effect.
5.6 Delinquent Payments and Handling Charge. All Rent and other
payments required of Tenant hereunder shall bear interest from the date due
until the date paid at the rate of interest specified in Section 27.13.
Alternatively, Landlord may charge Tenant, as additional Rent hereunder, a fee
equal to five percent of the delinquent payment to reimburse Landlord for its
cost and inconvenience incurred as a consequence of Tenant's delinquency. In no
event, however, shall the charges permitted under this Section 5.6 or elsewhere
in this Lease, to the extent the same are considered to be interest under
applicable law, exceed the maximum rate of interest allowable under applicable
law.
5.7 Prepaid Rent and Security Deposit. Landlord hereby acknowledges
receipt of $2,406.00, representing the first monthly installment of Base Rent
paid in advance, to be applied to the Rent for the first month of the Term when
due .
6. CONSTRUCTION OF IMPROVEMENTS.
6.1 General. Subject to events of Force Majeure, Landlord shall
install, furnish, perform and apply, at its expense, the Landlord's Work as
specified in the Work Letter. Performance of the Landlord's Work shall
constitute Landlord's sole construction obligation to Tenant under this Lease.
6.2 Access by Tenant Prior to Commencement of Term. Provided that
Tenant obtains and delivers to Landlord the certificates or policies of
insurance called for in Section 17.1, Landlord, in its sole discretion, may
permit Tenant and its employees, agents, contractors and suppliers to enter the
Premises before the Commencement Date (and such entry, alone, shall not
constitute Tenant's taking possession of the Premises for the purpose of Section
6.3(c)) to prepare the Premises for Tenant's occupancy. Tenant and each other
person or firm who or which enters the Premises before the Commencement Date
shall conduct itself so as to not interfere with Landlord or other occupants of
the Building. Landlord may withdraw any permission granted under this Section
6.2 upon 24-hours' notice to Tenant if Landlord, in its sole discretion,
determines that any such interference has been or may be caused. Any prior entry
shall be under all of the terms of this Lease (other than the obligation to pay
Base Rent and Additional Rent) and at Tenant's sole risk. Landlord shall not be
liable in any way for personal injury, death or property damage (including
damage to any personal property which Tenant may bring into, or any work which
Tenant may perform in, the Premises) which may occur in or about the Complex by
Tenant or such other person or firm as a result of any prior entry.
6.3 Commencement Date; Adjustments to Commencement Date. For purposes
of this Lease, the "Commencement Date" shall mean the earliest of: (a) the date
on which Landlord substantially completes the Landlord's Work and tenders
possession of the Premises to Tenant; (b) the date on which Landlord would have
substantially completed the Landlord's Work and tendered possession of the
Premises to Tenant but for (i) the delay or failure of Tenant to furnish
information or other matters required in the Work Letter, (ii) Tenant's request
for changes in
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the Plans or non-Building Standard Items or (iii) any other action or inaction
of Tenant, or any person or firm employed or retained by Tenant or the date on
which Tenant takes possession of the Premises. If by the scheduled Commencement
Date specified in Section 3 the Landlord's Work has not been substantially
completed, and such failure to substantially complete renders the Premises
untenable for their intended purpose, all as reasonably determined by Landlord,
or Landlord is unable to tender possession of the Premises to Tenant, then the
Commencement Date (and the commencement of payment of Base Rent and Additional
Rent) shall be postponed until the Landlord's Work is substantially completed as
reasonably determined by Landlord or until possession of the Premises is
tendered to Tenant, as the case may be. Such postponement shall extend the
scheduled expiration of the Term for a number of days equal to the postponement.
The postponement of the payment of Base Rent and Additional Rent under this
Section 6.2 shall be Tenant's exclusive remedy for Landlord's delay in
completing the Landlord's Work or tendering possession of the Premises to
Tenant.
7. SERVICES TO BE FURNISHED BY LANDLORD.
7.1 General. Subject to applicable Legal Requirements and Tenant's
performance of its obligations hereunder, Landlord shall use all reasonable
efforts to furnish the following services:
(a) Air-conditioning and heating to the Premises during
Building Operating Hours, at such temperatures and in such amounts as are
considered by Landlord to be suitable and standard (thus excluding air-
conditioning or heating for electronic data processing or other specialized
equipment);
(b) Hot and cold water at those points of supply common to all
floors for lavatory and drinking purposes only;
(c) Janitor service and periodic window washing in and about
the Building and the Premises;
(d) Elevator service, if necessary, to provide access to and
egress from the Premises;
(e) Electric current during Building Operating Hours for
normal office machines and other machines of low electrical consumption (which
shall exclude electric current for electronic data processing equipment,
lighting in excess of Building Standard or any other item of electrical
equipment which singly consumes more than 0.5 kilowatts per hour at rated
capacity or requires a voltage other than l20 volts single phase); and
(f) Replacement of fluorescent lamps in Building Standard
light fixtures installed by Landlord and of incandescent bulbs or fluorescent
lamps in all public restrooms, stairwells and other common areas in the
Building.
If any of the services described above or elsewhere in this Lease are
interrupted, Landlord shall use reasonable diligence to promptly restore same.
However, neither the interruption or cessation of such services nor the failure
of Landlord to restore same shall render Landlord liable for damages to person
or property, or be construed as an eviction of Tenant, or work an abatement of
Rent or relieve Tenant from fulfilling any of its other obligations hereunder.
7.2 Keys. Landlord shall furnish Tenant, at Landlord's expense, with
N/A keys, and at Tenant's expense with such additional keys as Tenant may
request, to unlock each corridor door entering the Premises. Contemporaneously
with the payment of the first installment of Rent, Tenant shall pay to Landlord
as additional rent the product of the number of parking spaces which shall not
exceed one (1) space per 333 rentable square feet leased multiplied by $20.00
for the access cards needed to gain access to the Building. Tenant shall not
install, or permit to be installed, any additional lock on any door into or in
the Premises or make, or permit to be made, any duplicates of keys to the
Premises. Landlord shall be entitled at all times to possession of a duplicate
of all keys to all doors to or inside of the Premises. All keys referred to in
this Section 7.2 shall remain the property of Landlord. Upon the expiration or
termination of the Term, Tenant shall surrender all such keys and access cards
to Landlord and shall deliver to Landlord the combination to all locks on all
safes, cabinets and vaults which will remain in the Premises. Landlord shall be
entitled to install, operate and maintain security systems in or about the
Premises and the Complex which monitor, by closed circuit television or
otherwise, all persons leaving or entering the Complex, the Building and the
Premises.
7.3 Tenant Identity. Landlord shall provide and install, in Building
Standard graphics, letters or numerals identifying Tenant's name and suite
number on entrance doors to the Premises. Without Landlord's prior written
consent, no other signs, numerals, letters, graphics, symbols or marks
identifying Tenant shall be placed on the exterior, or on the interior if they
are visible from the exterior, of the Premises. Landlord shall install up to two
(2) directory strips for each 1,604 net rentable square feet in the Premises,
listing the names and suite numbers of Tenant on the Building directory board to
be placed in the main lobby of the Building.
7.4 Charges. Tenant shall pay to Landlord, monthly as billed, as
additional Rent, such charges as may be separately metered or as Landlord may
compute for (a) any utility services utilized by Tenant for computers, data
processing equipment or other electrical equipment in excess of that agreed to
be furnished by Landlord pursuant to Section 7.1(e), (b) lighting installed in
the Premises in excess of Building Standard lighting, (c) air-conditioning,
heating and other services in excess of that stated in Section 7.1(a) or
provided at times other than Building Operating Hours and (d) janitorial
services required with respect to Non-Building Standard Items within the
Premises. Landlord may elect to
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estimate the charges to be paid by Tenant under this Section 7.4 and bill such
charges to Tenant monthly in advance, in which event Tenant shall promptly pay
the estimated charges. When the actual charges are determined by Landlord an
appropriate cash adjustment shall be made between Landlord and Tenant to account
for any underpayment or overpayment by Tenant. Tenant shall pay all costs
associated with providing separate utility meters to the Leased Premises.
7.5 Operating Hours. Subject to Building Rules and Regulations and such
security standards as Landlord may from time to time adopt, the Building shall
be open to the public during the Building Operating Hours and the Premises shall
be open to Tenant during hours other than Building Operating Hours.
8. REPAIR AND MAINTENANCE.
8.1 By Landlord. Landlord shall maintain the Building (excluding
leasehold improvements which become fixtures thereto) in a good and operable
condition, and shall make such repairs and replacements as may be required to
maintain the Building in such condition. This Section 8.1 shall not apply to
damage resulting from a Taking (as to which Section 14 shall apply), or damage
resulting from a casualty (as to which Section 15.1 shall apply) or to damage
for which Tenant is otherwise responsible under this Lease.
8.2 By Tenant. Tenant shall maintain the Premises in a clean, safe,
operable, attractive condition, and will not commit or allow to remain any waste
or damage to any portion of the Premises. Tenant shall repair or replace,
subject to Landlord's direction and supervision, any damage to the Complex
caused by Tenant or Tenant's agents, contractors or invitees. If Tenant fails to
make such repairs or replacements, Landlord may make same at Tenant's cost. Such
cost shall be payable to Landlord by Tenant on demand as additional Rent. All
contractors, workmen, artisans and other persons which or who Tenant proposes to
retain to perform work in the Premises (or the Complex, pursuant to the second
sentence of this Section 8.2) pursuant to this Section 8.2 or Section 11 shall
be approved by Landlord prior to the commencement of any such work.
9. TAXES ON TENANT'S PROPERTY. Tenant shall be liable for and shall pay, before
their becoming delinquent, all taxes and assessments levied against any personal
property placed by Tenant in the Premises (even if same becomes a fixture by
operation of law or the property of Landlord by operation of this Lease),
including any additional Impositions which may be assessed, levied, charged or
imposed against Landlord or the Building by reason of Non-Building Standard
Items in the Premises. Tenant may withhold payments of any taxes and assessments
described in this Section 9 so long as Tenant contests its obligation to pay in
accordance with applicable law and the non-payment thereof does not pose a
threat of loss or seizure of the Building or any interest of Landlord therein.
10. TRANSFER BY TENANT.
10.1 General. Without the prior written consent of Landlord, Tenant
shall not effect or suffer any Transfer. Any attempted Transfer without such
consent shall be void. If Tenant desires to effect a Transfer, it shall deliver
to Landlord written notice thereof in advance of the date on which Tenant
proposes to make the Transfer, together with all of the terms of the proposed
Transfer and the identity of the proposed Transferee. Landlord shall have 30
days following receipt of the notice and information within which to notify
Tenant in writing whether Landlord elects (a) to refuse to consent to the
Transfer and to terminate this Lease as to the space proposed to be Transferred
as of the date so specified by Tenant, in which event Tenant will be relieved of
all further obligations hereunder as to such space, (b) to refuse to consent to
the Transfer and to continue this Lease in full force as to the entire Premises
or (c) to permit Tenant to effect the proposed Transfer. If Landlord fails to
notify Tenant of its election within said 30 day period, Landlord shall be
deemed to have elected option (b). The consent by Landlord to a particular
Transfer shall not be deemed a consent to any other Transfer. If a Transfer
occurs without the prior written consent of Landlord as provided herein,
Landlord may nevertheless collect rent from the Transferee and apply the net
amount collected to the Rent payable hereunder, but such collection and
application shall not constitute a waiver of the provisions hereof or a release
of Tenant from the further performance of its obligations hereunder.
10.2 Conditions. The following conditions shall automatically apply to
each Transfer, without the necessity of same being stated in or referred to in
Landlord's written consent:
(a) Tenant shall execute, have acknowledged and deliver to
Landlord, and cause the Transferee to execute, have acknowledged and deliver to
Landlord, an instrument in form and substance acceptable to Landlord in which
(i) the Transferee adopts this Lease and agrees to perform, jointly and
severally with Tenant, all of the obligations of Tenant hereunder, as to the
space transferred to it, (ii) the Transferee grants Landlord an express first
and prior security interest in its personal property brought into the
transferred space to secure its obligations to Landlord hereunder, (iii) Tenant
subordinates to Landlord's statutory lien and security interest any liens,
security interests or other rights which Tenant may claim with respect to any
property of the Transferee, (iv) Tenant agrees with Landlord that, if the rent
or other consideration due by the Transferee exceeds the Rent for the
transferred space, then Tenant shall pay Landlord as additional Rent hereunder
all such excess rent and other consideration immediately upon Tenant's receipt
thereof, (v) Tenant and the Transferee agree to provide to Landlord, at their
expense, direct access from a public corridor in the Building to the transferred
space, (vi) the Transferee agrees to use and occupy the transferred space solely
for the purpose specified in Section 4 and otherwise in strict accordance with
this Lease and (vii) Tenant acknowledges that, notwithstanding the Transfer,
Tenant remains directly and primarily liable for the performance of all the
obligations of
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Tenant hereunder (including, without limitation, the obligation to pay all
Rent), and Landlord shall be permitted to enforce this Lease against Tenant or
the Transferee, or both, without prior demand upon or proceeding in any way
against any other persons, and
(b) Tenant shall deliver to Landlord a counterpart of all
instruments relative to the Transfer executed by all parties to such transaction
(except Landlord).
10.3 Liens. Without in any way limiting the generality of the
foregoing, Tenant shall not grant, place or suffer, or permit to be granted,
placed or suffered, against the Complex or any portion thereof, any lien,
security interest, pledge, conditional sale contract, claim, charge or
encumbrance (whether constitutional, contractual or otherwise) and if any of the
aforesaid does arise or is asserted, Tenant will, promptly upon demand by
Landlord and at Tenant's expense, cause same to be released.
11. ALTERATIONS. Tenant shall not make, or permit to be made, any alteration,
improvement or addition to, or install, or permit to be installed, any fixture
or equipment (other than desk top electrical equipment) in, the Premises without
the prior written consent of Landlord. All such alterations, improvements and
additions (including all articles attached to the floor, wall or ceiling of the
Premises) shall become the property of Landlord and shall, at Landlord's
election, be (a) surrendered with the Premises as part thereof at the
termination or expiration of the Term, without any payment, reimbursement or
compensation therefor, or (b) removed by Tenant, at Tenant's expense, with all
damage caused by such removal repaired by Tenant. Tenant may remove Tenant's
trade fixtures, office supplies, movable office furniture and equipment not
attached to the Building provided such removal is made within five days after
the expiration of the Term, no uncured Event of Default has occurred and Tenant
promptly repairs all damage caused by such removal.
12. SPECIFICALLY PROHIBITED USES. Tenant will not (a) use, occupy or permit the
use or occupancy of the Premises for any purpose or in any manner which is or
may be, directly or indirectly, violative of any Legal Requirement, or dangerous
to life or property, or a public or private nuisance or disruptive or
obstructive of any other tenant of the Building, (b) keep, or permit to be kept,
any substance in or conduct, or permit to be conducted, any operation from the
Premises which might emit offensive odors or conditions into other portions of
the Building, or make undue noise or create undue vibrations, (c) commit or
permit to remain any waste to the Premises, (d) install or permit to remain any
improvements to the Premises (other than window coverings which have first been
approved by Landlord) which are visible from the outside of the Premises, or
exceed the structural loads of floors or walls of the Building, or adversely
affect the mechanical, plumbing or electrical systems of the Building or affect
the structural integrity of the Building in any way, (e) install any food, soft
drink or other vending machine (other than those for the exclusive,
non-commercial use of Tenant and its business invitees) in the Premises or (f)
commit, or permit to be committed, any action or circumstance in or about the
Building which, directly or indirectly, would or might justify any insurance
carrier in canceling or increasing the premium on the fire and extended coverage
insurance policy maintained by Landlord on the Building or contents, and if any
increase results from any act of Tenant, then Tenant shall pay such increase
promptly upon demand therefor by Landlord.
13. ACCESS BY LANDLORD. Landlord, its employees, contractors, agents and
representatives, shall have the right (and Landlord, for itself and such persons
and firms, hereby reserves the right) to enter the Premises at all hours (a) to
inspect, clean, maintain, repair, replace or alter the Premises or the Building,
(b) to show the Premises to prospective purchasers (or, during the last 12
months of the Term, to prospective tenants), (c) to determine whether Tenant is
performing its obligations hereunder and, if it is not, to perform same at
Landlord's option and Tenant's expense or (d) for any other purpose deemed
reasonable by Landlord. In an emergency, Landlord (and such persons and firms)
may use any means to open any door into or in the Premises without any liability
therefor. Entry into the Premises by Landlord or any other person or firm named
in the first sentence of this Section 13 for any purpose permitted herein shall
not constitute a trespass or an eviction (constructive or otherwise), or entitle
Tenant to any abatement or reduction of Rent, or constitute grounds for any
claim (and Tenant hereby waives any claim) for damages for any injury to or
interference with Tenant's business, for loss of occupancy or quiet enjoyment or
for consequential damages.
14. CONDEMNATION. If all of the Complex is Taken, or if so much of the Complex
is Taken that, in Landlord's opinion, the remainder cannot be restored to an
economically viable, quality office building, or if the awards payable to
Landlord as a result of any Taking are, in Landlord's opinion, inadequate to
restore the remainder to an economically viable, quality office building,
Landlord may, at its election, exercisable by the giving of written notice to
Tenant within 60 days after the date of the Taking, terminate this Lease as of
the date of the Taking or the date Tenant is deprived of possession of the
Premises (whichever is later). If this Lease is not terminated as result of a
Taking, Landlord shall restore the Premises remaining after the Taking to a
Building Standard condition. During the period of restoration, Base Rent shall
be abated to the extent the Premises are rendered untenantable and, after the
period of restoration, Base Rent and Tenant's Share shall be reduced in the
proportion that the area of the Premises Taken or otherwise rendered
untenantable bears to the area of the Premises just prior to the Taking. If any
portion of Base Rent is abated under this Section 14, Landlord may elect to
extend the expiration date of the Term for the period of the abatement. All
awards, proceeds, compensation or other payments from or with respect to any
Taking of the Complex or any portion thereof shall belong to Landlord, Tenant
hereby assigning to Landlord all of its right, title, interest and claim to
same. Tenant may assert a claim for and recover from the condemning authority,
but not from Landlord, such compensation as may be awarded on account of
Tenant's moving and relocation expenses, and depreciation to and loss of
Tenant's moveable personal property.
15. CASUALTY
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.
15.1 General. Tenant shall give prompt written notice to Landlord of
any casualty to the Complex of which Tenant is aware and any casualty to the
Premises. If the Complex or the Premises are totally destroyed, or if the
Complex or the Premises are partially destroyed but in Landlord's opinion, they
cannot be restored to an economically viable, quality office building, or if the
insurance proceeds payable to Landlord as a result of any casualty are, in
Landlord's opinion, inadequate to restore the portion remaining to an
economically viable and quality office building, Landlord may, at its election
exercisable by the giving of written notice to Tenant within 60 days after the
casualty, terminate this Lease as of the date of the casualty or the date Tenant
is deprived of possession of the Premises (whichever is later). If this Lease is
not terminated as a result of a casualty, Landlord shall (subject to Section
15.2) restore the Premises to a Building Standard condition. During the period
of restoration, Base Rent shall be abated to the extent the Premises are
rendered untenantable and, after the period of restoration, Base Rent and
Tenant's Share shall be reduced in the proportion that the area of the Premises
remaining tenantable after the casualty bears to the area of the Premises just
prior to the casualty. If any portion of Base Rent is abated under this Section
15.1, Landlord may elect to extend the expiration date of the Term for the
period of the abatement.
15.2 Acts of Tenant. Notwithstanding any provisions of this Lease to
the contrary, if the Premises or the Complex are damaged or destroyed as a
result of a casualty arising from the acts or omissions of Tenant, or any of
Tenant's officers, directors, shareholders, partners, employees, contractors,
agents, invitees or representatives, (a) Tenant's obligation to pay Rent and to
perform its other obligations under this Lease shall not be abated, reduced or
altered in any manner, (b) Landlord shall not be obligated to repair or restore
the Premises or the Complex and (c) subject to Section 17.2, Tenant shall be
obligated, at Tenant's cost, to repair and restore the Premises or the Complex
to the condition they were in just prior to the damage or destruction under the
direction and supervision of, and to the satisfaction of, Landlord and any
Landlord Mortgagee.
16. SUBORDINATION AND ATTORNMENT.
16.1 General. This Lease, Tenant's leasehold estate created hereby and
all of Tenant's rights, titles and interests hereunder and in and to the
Premises are subject and subordinate to any Mortgage presently existing or
hereafter placed upon all or any portion of the Complex. However, Landlord and
Landlord's Mortgagee may, at any time upon the giving of written notice to
Tenant and without any compensation or consideration being payable to Tenant,
make this Lease, and the aforesaid leasehold estate and rights, titles and
interests, superior to any Mortgage. Upon the written request by Landlord or by
Landlord's Mortgagee to Tenant, and within five (5) days of the date of such
request, and without any compensation or consideration being payable to Tenant,
Tenant shall execute, have acknowledged and deliver a recordable instrument
confirming that this Lease, Tenant's leasehold estate in the Premises and all of
Tenant's rights, titles and interests hereunder are subject and subordinate (or,
at the election of Landlord or Landlord's Mortgagee, superior) to the Mortgage
benefiting Landlord's Mortgagee.
16.2 Attornment. Upon the written request of any person or party
succeeding to the interest of Landlord under this Lease, Tenant shall
automatically become the tenant of and attorn to such successor in interest
without any change in any of the terms of this Lease. No successor in interest
shall be (a) bound by any payment of Rent for more than one month in advance,
except payments of security for the performance by Tenant of Tenant's
obligations under this Lease, (b) subject to any offset, defense or damages
arising out of a default or any obligations of any preceding Landlord or (c)
bound by any amendment of this Lease entered into after Tenant has been given
written notice of the name and address of Landlord's Mortgagee and without the
written consent of Landlord's Mortgagee or such successor in interest. The
subordination, attornment and mortgage protection clauses of this Section 16
shall be self-operative and no further instruments of subordination, attornment
or mortgagee protection need be required by any Mortgagee or successor in
interest thereto. Nevertheless, upon the written request therefor and without
any compensation or consideration being payable to Tenant, Tenant agrees to
execute, have acknowledged and deliver such instruments as may be requested to
confirm the same.
17. INSURANCE.
17.1 General. Tenant shall obtain and maintain throughout the Term the
following policies of insurance:
(a) fire and all risk insurance, with vandalism, malicious
mischief and sprinkler leakage endorsements, on all of Tenant's personal
property located in, and on all Non-Building Standard Items to, the Premises in
an amount not less than eighty percent of the replacement cost thereof;
(b) comprehensive general and contractual liability insurance
against claims for personal injury, bodily injury, death and property damage
occurring in or about the Premises, such insurance to afford protection to the
limits of (i) not less than $1,000,000 per occurrence;
(c) insurance required hereunder shall be written by companies
licensed to do business in the State of Texas and shall have a minimum rating of
A:X by Best's Key Rating Guide.
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(d) such other policy or policies of insurance as Landlord may
reasonably require or as Landlord is then requiring from one or more other
tenants in the Building.
Tenant shall deliver to Landlord, prior to the Commencement Date, certificates
of such insurance and shall, at all times during the Term, deliver to Landlord
upon request true copies of such insurance policies. The policy described in
clause (b) shall (i) name Landlord as an additional insured, (ii) provide that
it will not be canceled, reduced or non-renewed without 30-days' prior written
notice to Landlord, (iii) insure performance of the indemnities of Tenant
contained in Section 18 and elsewhere in this Lease and (iv) be primary
coverage, so that any insurance coverage obtained by Landlord shall be in excess
thereto. Tenant shall deliver to Landlord certificates of renewal at least 30
days before the expiration date of each such policy and copies of new policies
at least 30 days before terminating any such policies. All policies of insurance
required to be obtained and maintained by Tenant shall be subject to the
approval of Landlord as to terms, coverage, deductibles and issuer.
17.2 Waiver of Subrogation. Landlord and Tenant hereby waive all
claims, rights of recovery and causes of action that either party or any party
claiming by, through or under such party may now or hereafter have by
subrogation or otherwise against the other party or against any of the other
party's officers, directors, shareholders, partners or employees for any loss or
damage that may occur to the Complex, the Premises, Tenant's improvements or any
of the contents of any of the foregoing by reason of fire or other casualty, or
by reason of any other cause except gross negligence or willful misconduct (thus
including simple negligence of the parties hereto or their officers, directors,
shareholders, partners or employees), that could have been insured against under
the terms of (a) in the case of Landlord, the standard fire and extended
coverage insurance policies available in the state where the Complex is located
at the time of the casualty and (b) in the case of Tenant, the fire and extended
coverage insurance policy required to be obtained and maintained under Section
17.1; provided, however, that the waiver set forth in this Section 17.2 shall
not apply to any deductibles on insurance policies carried by Landlord or to any
coinsurance penalty which Landlord might sustain. Landlord and Tenant shall
cause an endorsement to be issued to their respective insurance policies
recognizing this waiver of subrogation.
18. TENANT'S INDEMNITY. Subject to Section 17.2, Tenant shall defend, indemnify
and hold harmless Landlord and Landlord's officers, directors, shareholders,
partners and employees from and against, all liabilities, obligations, losses,
damages, penalties, claims, actions, suits, costs, expenses and disbursements
(including court costs and reasonable attorneys' fees) resulting from any
injuries to or death of any person or damage to any property occurring during
the Term in or about the Premises.
19. THIRD PARTIES; ACTS OF FORCE MAJEURE. Landlord shall have no liability to
Tenant, or to Tenant's officers, directors, shareholders, partners, employees,
agents, contractors or invitees, for bodily injury, death, property damage,
business interruption, loss of profits, loss of trade secrets or other direct or
consequential damages occasioned by (a) the acts or omissions of any other
tenant or such other tenant's officers, directors, shareholders, partners,
employees, agents, contractors or other invitees within the Complex, (b) Force
Majeure, (c) vandalism, theft, burglary and other criminal acts (other than
those committed by Landlord and its employees), (d) water leakage or (e) the
repair, replacement, maintenance, damage, destruction or relocation of the
Premises.
20. SECURITY INTEREST. As security for Tenant's payment of Rent and performance
of all of its other obligations under this Lease, Tenant hereby grants to
Landlord a security interest in all property of Tenant now or hereafter placed
in the Premises. Landlord, as secured party, shall be entitled to all of the
rights, remedies and recourses afforded to a secured party under the Texas
Uniform Commercial Code, which rights, remedies and recourses shall be
cumulative of all other rights, remedies, recourses, liens and security
interests afforded Landlord by law, equity or this Lease. Contemporaneously with
the execution of this Lease, Tenant shall execute and deliver, as debtor,
promptly upon request and without any compensation or consideration being
payable to Tenant, such additional financing statement or statements as Landlord
may request. However, Landlord may at any time file a copy of this Lease as a
financing statement.
21. CONTROL OF COMMON AREAS. Landlord shall have the exclusive control over the
Common Areas. Landlord may, from time to time, create different Common Areas,
close or otherwise modify the Common Areas, and modify and the Building Rules
and Regulations with respect thereto.
22. RIGHT TO RELOCATE. Landlord retains the right and power, to be exercised
reasonably and at Landlord's expense, to relocate Tenant within the Building in
space which is comparable in size to the Premises and is suited to Tenant's use.
Instances when the exercise of Landlord's right and power to relocate Tenant
shall be deemed reasonable include, but shall not be limited to, instances where
Landlord desires to consolidate the rentable area in the Building to provide
Landlord's services more efficiently, or to provide contiguous vacant space for
a prospective tenant. Landlord shall not be liable to Tenant for any claims
arising in connection with a relocation permitted under this Section 22.
23. QUIET ENJOYMENT. Provided Tenant has performed all its obligations under
this Lease, Tenant shall and may peaceably and quietly have, hold, occupy, use
and enjoy the Premises during the Term subject to the provisions of this Lease.
Landlord shall warrant and forever defend Tenant's right to occupancy of the
Premises against the claims of any and all persons whomsoever lawfully claiming
the same or any part thereof, by, through or under Landlord, but not otherwise,
subject to the provisions of this Lease.
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24. DEFAULT BY TENANT.
24.1 Events of Default. Each of the following occurrences shall
constitute an Event of Default (herein so called):
(a) The failure of Tenant to pay Rent as and when due
hereunder and the continuance of such failure for a period of three days after
written notice from Landlord to Tenant specifying the failure; provided,
however, after Landlord has given Tenant written notice pursuant to this clause
(a) on two separate occasions Landlord shall not be required to give Tenant any
further notice under this clause (a);
(b) The failure of Tenant to perform, comply with or observe
any other agreement, obligation or undertaking of Tenant, or any other term,
condition or provision, in this Lease, and the continuance of such failure for a
period of ten days after written notice from Landlord to Tenant specifying the
failure;
(c) The abandonment of the Premises by Tenant or the failure
of Tenant to occupy the Premises or any significant portion thereof;
(d) The filing of a petition by or against Tenant (the term
"Tenant" also meaning, for the purpose of this clause (d), any guarantor of the
named Tenant's obligations hereunder) (i) in any bankruptcy or other insolvency
proceeding, (ii) seeking any relief under the Bankruptcy Code or any similar
debtor relief law, (iii) for the appointment of a liquidator or receiver for all
or substantially all of Tenant's property or for Tenant's interest in this Lease
or (iv) to reorganize or modify Tenant's capital structure; and
(e) The admission by Tenant in writing that it cannot meet its
obligations as they become due or the making by Tenant of an assignment for the
benefit of its creditors.
24.2 Remedies of Landlord. Upon any Event of Default, Landlord may, at
Landlord's option and in addition to all other rights, remedies and recourses
afforded Landlord hereunder or by law or equity, do any one or more of the
following:
(a) Terminate this Lease by the giving of written notice to
Tenant, in which event Tenant shall pay to Landlord the sum of (i) all Rent and
other amounts accrued hereunder to the date of termination, (ii) all amounts due
under Section 24.3 and (iii) liquidated damages in an amount equal to (A) the
total Rent that Tenant would have been required to pay for the remainder of the
Term discounted to present value at the prime lending rate (or equivalent rate,
however denominated) in effect on the date of termination at the largest
national bank in the state where the Complex is located minus (B) the then
present fair rental value of the Premises for such period, similarly discounted.
(b) Terminate Tenant's right to possession of the Premises
without terminating this Lease by the giving of written notice to Tenant, in
which event Tenant shall pay to Landlord (i) all Rent and other amounts accrued
hereunder to the date of termination of possession, (ii) all amounts due from
time to time under Section 24.3 and (iii) all Rent and other sums required
hereunder to be paid by Tenant during the remainder of the Term, diminished by
any net sums thereafter received by Landlord through reletting the Premises
during said period. Reentry by Landlord in the Premises will not affect the
obligations of Tenant hereunder for the unexpired Term. Landlord may bring
action against Tenant to collect amounts due by Tenant on one or more occasions,
without the necessity of Landlord's waiting until expiration of the Term. If
Landlord elects to proceed under this Section 24.2(b), it may at any time elect
to terminate this Lease pursuant to Section 24.2(a).
(c) Without notice, alter any and all locks and other security
devices at the Premises without being obligated to deliver new keys to the
Premises, unless Tenant has cured all Events of Default before Landlord has
terminated this Lease under Section 24.2(a) or has entered into a lease to relet
all or a portion of the Premises.
(d) If an Event of Default specified in Section 24.1(c)
occurs, Landlord may remove and store any property that remains on the Premises,
and, if Tenant does not claim such property within ten days after Landlord has
delivered to Tenant notice of such storage, Landlord may appropriate, sell,
destroy, or otherwise dispose of the property in question without notice to
Tenant or any other person and without any obligation to account for such
property.
24.3 Payment by Tenant. Upon any Event of Default, Tenant shall also
pay to Landlord all costs and expenses incurred by Landlord, including court
costs and reasonable attorneys' fees, in (a) retaking or otherwise obtaining
possession of the Premises, (b) removing and storing Tenant's or any other
occupant's property, (c) repairing, restoring, altering, remodeling or otherwise
putting the Premises into condition acceptable to a new tenant or tenants, (d)
reletting all or any part of the Premises, (e) paying or performing the
underlying obligation which Tenant failed to pay or perform and (f) enforcing
any of Landlord's rights, remedies or recourses arising as a consequence of the
Event of Default.
24.4 Reletting. Upon termination of this Lease or upon termination of
Tenant's right to possession of the Premises, Landlord shall use reasonable
efforts to relet the Premises on such terms and conditions as Landlord in its
sole discretion may determine (including a term different than the Term, rental
concessions, and alterations to, and
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improvements of, the Premises); however, Landlord shall not be obligated to
relet the Premises before leasing other portions of the Building. Landlord shall
not be liable, nor shall Tenant's obligations hereunder be diminished because
of, Landlord's failure to relet the Premises or collect rent due in respect of
such reletting. Tenant shall not be entitled to the excess of any rent obtained
by reletting over the Rent herein reserved.
24.5 Landlord's Right to Pay or Perform. Upon an Event of Default,
Landlord may, but without obligation to do so and without thereby waiving or
curing such Event of Default, pay or perform the underlying obligation for the
account of Tenant, and enter the Premises and expend the Security Deposit for
such purpose.
24.6 No Waiver; No Implied Surrender. Provisions of this Lease may only
be waived by the party entitled to the benefit of the provision evidencing the
waiver in writing. Thus, neither the acceptance of Rent by Landlord following an
Event of Default (whether known to Landlord or not), nor any other custom or
practice followed in connection with this Lease, shall constitute a waiver by
Landlord of such Event of Default or any other Event of Default. Further, the
failure by Landlord to complain of any action or inaction by Tenant, or to
assert that any action or inaction by Tenant constitutes (or would constitute,
with the giving of notice and the passage of time) an Event of Default,
regardless of how long such failure continues, shall not extinguish, waive or in
any way diminish the rights, remedies and recourses of Landlord with respect to
such action or inaction. No waiver by Landlord of any provision of this Lease or
of any breach by Tenant of any obligation of Tenant hereunder shall be deemed to
be a waiver of any other provision hereof, or of any subsequent breach by Tenant
of the same or any other provision hereof. Landlord's consent to any act by
Tenant requiring Landlord's consent shall not be deemed to render unnecessary
the obtaining of Landlord's consent to any subsequent act of Tenant. No act or
omission by Landlord (other than Landlord's execution of a document
acknowledging such surrender) or Landlord's agents, including the delivery of
the keys to the Premises, shall constitute an acceptance of a surrender of the
Premises.
25. DEFAULTS BY LANDLORD. Landlord shall not be in default under this Lease, and
Tenant shall not be entitled to exercise any right, remedy or recourse against
Landlord or otherwise as a consequence of any alleged default by Landlord under
this Lease, unless Landlord fails to perform any of its obligations hereunder
and said failure continues for a period of 30 days after Tenant gives Landlord
and (provided that Tenant shall have been given the name and address of
Landlord's Mortgagee) Landlord's Mortgagee written notice thereof specifying,
with reasonable particularity, the nature of Landlord's failure. If, however,
the failure cannot reasonably be cured within the 30-day period, Landlord shall
not be in default hereunder if Landlord or Landlord's Mortgagee commences to
cure the failure within the 30 days and thereafter pursues the curing of same
diligently to completion. If Tenant recovers a money judgment against Landlord
for Landlord's default of its obligations hereunder or otherwise, the judgment
shall be limited to Tenant's actual direct, but not consequential, damages
therefor and shall be satisfied only out of the interest of Landlord in the
Complex as the same may then be encumbered, and Landlord shall not otherwise be
liable for any deficiency. In no event shall Tenant have the right to levy
execution against any property of Landlord other than its interest in the
Complex. The foregoing shall not limit any right that Tenant might have to
obtain specific performance of Landlord's obligations hereunder.
26. RIGHT OF REENTRY. Upon the expiration or termination of the Term for
whatever cause, or upon the exercise by Landlord of its right to re-enter the
Premises without terminating this Lease, Tenant shall immediately, quietly and
peaceably surrender to Landlord possession of the Premises in "broom clean" and
good order, condition and repair, except only for ordinary wear and tear, damage
by casualty not covered by Section 15.2 and repairs to be made by Landlord
pursuant to Section 15.1. If Tenant fails to surrender possession as herein
required, Landlord may, without giving Tenant prior notice to vacate the
Premises or any other notice, initiate any and all legal action as Landlord may
elect to dispossess Tenant and all of its property, and all persons or firms
claiming by, through or under Tenant and all of their property, from the
Premises, and may remove from the Premises and store (without any liability for
loss, theft, damage or destruction thereto) any such property at Tenant's cost.
While Tenant remains in possession of the Premises after such expiration,
termination or exercise by Landlord of its re-entry right, Tenant shall be
deemed to be occupying the Premises as a tenant-at-sufferance, subject to all of
the obligations of Tenant under this Lease, except that the daily Rent shall be
twice the per day Rent in effect immediately before such expiration, termination
or exercise by Landlord. No such holding over shall extend the Term. If Tenant
fails to surrender possession of the Premises in the condition herein required,
Landlord may, at Tenant's expense, restore the Premises to such condition.
27. MISCELLANEOUS.
27.1 Independent Obligations; No Offset. The obligations of Tenant to
pay Rent and to perform the other undertakings of Tenant hereunder constitute
independent unconditional obligations to be performed at the times specified
hereunder, regardless of any breach or default by Landlord hereunder. Tenant
shall have no right, and Tenant hereby waives and relinquishes all rights which
Tenant might otherwise have, to claim any nature of lien against the Complex or
to withhold, deduct from or offset against any Rent or other sums to be paid to
Landlord by Tenant.
27.2 Time of Essence. Time is of the essence with respect to each date
or time specified in this Lease by which an event is to occur.
27.3 Applicable Law. This Lease shall be governed by, and construed in
accordance with, the laws of the State of Texas. All monetary and other
obligations of Landlord and Tenant are performable in the county where the
Complex is located.
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27.4 Assignment by Landlord. Landlord shall have the right to assign,
in whole or in part, any or all of its rights, titles or interests in and to the
Complex or this Lease and, upon any such assignment, Landlord shall be relieved
of all unaccrued liabilities and obligations hereunder to the extent of the
interest so assigned.
27.5 Commencement Date and Estoppel Certificates. From time to time at
the request of Landlord or Landlord's Mortgagee, Tenant will promptly and
without compensation or consideration execute, have acknowledged and deliver a
certificate stating (a) the Commencement Date and the date of expiration of the
Term, (b) the rights (if any) of Tenant to extend the Term or to expand the
Premises, (c) the Rent (or any components of the Rent) currently payable
hereunder, (d) whether this Lease has been amended in any respect and, if so,
submitting copies of or otherwise identifying the amendments, (e) whether,
within the knowledge of Tenant, there are any existing breaches or defaults by
Landlord hereunder and, if so, stating the defaults with reasonable
particularity and (f) such other information pertaining to this Lease as
Landlord or Landlord's Mortgagee may reasonably request.
27.6 Signs, Building Name and Building Address. Landlord may, from time
to time at its discretion, maintain any and all signs anywhere in the Complex,
and to change the name and street address of the Complex. Tenant shall not use
the name of the Building for any purpose other than as the address of the
business to be conducted by Tenant from the Premises.
27.7 Notices. All notices and other communications given pursuant to
this Lease shall be in writing and shall either be mailed by first class United
States mail, postage prepaid, registered or certified with return receipt
requested, and addressed as set forth in this Section 27.7, or delivered in
person to the intended addressee, or sent by prepaid telegram, cable or telex
followed by a confirmatory letter. Notice mailed in the aforesaid manner shall
become effective three business days after deposit; notice given in any other
manner, and any notice given to Landlord, shall be effective only upon receipt
by the intended addressee. Each party shall have the continuing right to change
its address for notice hereunder by the giving of 15 days' prior written notice
to the other party in accordance with this Section 27.7.
NOTICE ADDRESS:
Landlord: Tenant:
4849 Greenville Partners Affiliate Resources Corporation
c/o Cottonwood Partners 3050 Post Oak Blvd., Suite 1080
5956 Sherry Lane, Suite 850 Houston, Texas 77056
Dallas, Texas 75225
cProperty Manager
Cottonwood Management Services
3050 Post Oak Blvd., Suite 570
Houston, Texas 77056
PAYMENT ADDRESS:
CottonStar - Lakes on Post Oak L/B A/C
Newark Post Office
P. O. Box 35259
Newark, NJ 07193-5259
27.8 Entire Agreement, Amendment and Binding Effect. This Lease
constitutes the entire agreement between Landlord and Tenant relating to the
subject matter hereof and all prior agreements relative hereto which are not
contained herein are terminated. This Lease may be amended only by a written
document duly executed by Landlord and Tenant (and, if a Mortgage is then in
effect, by the Landlord's Mortgagee entitled to the benefits thereof), and any
alleged amendment which is not so documented shall not be effective as to either
party. The provisions of this Lease shall be binding upon and inure to the
benefit of the parties hereto and their heirs, executors, administrators,
successors and assigns; provided, however, that this Section 27.8 shall not
negate, diminish or alter the restrictions on Transfers applicable to Tenant set
forth elsewhere in this Lease.
27.9 Severability. This Lease is intended to be performed in accordance
with and only to the extent permitted by all Legal Requirements. If any
provision of this Lease or the application thereof to any person or circumstance
shall, for any reason and to any extent, be invalid or unenforceable, but the
extent of the invalidity or unenforceability does not destroy the basis of the
bargain between the parties as contained herein, the remainder of this Lease and
the application of such provision to other persons or circumstances shall not be
affected thereby, but rather shall be enforced to the greatest extent permitted
by law.
27.10 Number and Gender, Captions and References. As the context of
this Lease may require, pronouns shall include natural persons and legal
entities of every kind and character, the singular number shall include the
plural and the neuter shall include the masculine and the feminine gender.
Section headings in this Lease are for convenience of reference only and are not
intended, to any extent and for any purpose, to limit or define any section
hereof. Whenever the
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terms "hereof," "hereby," "herein", "hereunder" or words of similar import are
used in this Lease, they shall be construed as referring to this Lease in its
entirety rather than to a particular section or provision, unless the context
specifically indicates to the contrary. Any reference to a particular "Section"
shall be construed as referring to the indicated section of this Lease.
27.11 Attorneys' Fees. If either party hereto initiates any litigation
against the other party relating to this Lease, the prevailing party shall be
entitled to recover, in addition to all damages allowed by law and other relief,
all court costs and reasonable attorneys' fees incurred in connection with such
litigation.
27.12 Brokers. Tenant and Landlord hereby warrant and represent unto
the other that it has not incurred or authorized any brokerage commission,
finder's fees or similar payments in connection with this Lease, other than that
which is due to Cottonwood Partners, which payment shall be paid by Landlord.
Each party shall defend, indemnify and hold the other harmless from and against
any claim for brokerage commission, finder's fees or similar payment arising by
virtue of authorization of such party, or any Affiliate of such party, in
connection with this Lease.
27.13 Interest on Tenant's Obligations. Any amount due from Tenant to
Landlord which is not paid when due shall bear interest at the maximum rate
allowed by law from the date such payment is due until paid, but the payment of
such interest shall not excuse or cure the default in payment.
27.14 Authority. The person executing this Lease on behalf of Tenant
personally warrants and represents to Landlord that (a) Tenant is a duly
organized and existing legal entity, in good standing in the State of Texas; (b)
Tenant has full right and authority to execute, deliver and perform this Lease;
(c) the person executing this Lease on behalf of Tenant was authorized to do so;
and (d) upon request of Landlord, such person will deliver to Landlord
satisfactory evidence of his or her authority to execute this Lease on behalf of
Tenant.
27.15 Recording. Neither this Lease (including any Exhibit hereto) nor
any memorandum hereof shall be recorded without the prior written consent of
Landlord.
27.16 Exhibits. All Exhibits and written addenda hereto are
incorporated herein for any and all purposes.
27.17 Multiple Counterparts. This Lease may be executed in two or more
counterparts, each of which shall be an original, but all of which shall
constitute but one instrument.
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EXECUTED as of the date and year above first written.
TENANT ACKNOWLEDGES THAT LANDLORD HAS MADE NO WARRANTIES TO TENANT AS TO THE
CONDITION OF THE PREMISES, EITHER EXPRESS OR IMPLIED, AND LANDLORD AND TENANT
EXPRESSLY DISCLAIM ANY IMPLIED WARRANTY THAT THE PREMISES ARE SUITABLE FOR
TENANT'S INTENDED COMMERCIAL PURPOSE, AND TENANT'S OBLIGATION TO PAY RENT
HEREUNDER IS NOT DEPENDENT UPON THE CONDITION OF THE PREMISES OR THE PERFORMANCE
BY LANDLORD OF ITS OBLIGATIONS HEREUNDER, AND TENANT SHALL CONTINUE TO PAY THE
RENT, WITHOUT ABATEMENT (EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN), SET
OFF, DEDUCTION, NOTWITHSTANDING ANY BREACH BY LANDLORD OF ITS DUTIES OR
OBLIGATIONS HEREUNDER, WHETHER EXPRESS OR IMPLIED.
TENANT: SYNAPTIX SYSTEMS CORPORATION
d.b.a. AFFILIATED RESOURCES CORPORATION
By:
Name:
Title:
LANDLORD: 4849 GREENVILLE PARTNERS
BY: WallGlen Partners I, Ltd.
BY: WallGlen Properties I, Inc.
By:
Name: Robert J. Axley
Title: Chairman
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EXHIBIT INDEX
Exhibit A: Glossary
Exhibit B: Description of Premises
Exhibit C: Rules and Regulations
Exhibit D: Work Letter
Exhibit E: Property Legal Description
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EXHIBIT A
GLOSSARY OF DEFINED TERMS
1. "Addendum" shall mean the Addendum, if any, attached to this Lease.
2. "Affiliate" shall mean a person or party who or which controls, is
controlled by or is under common control with another person or party.
3. "Building" shall mean that certain 17 floor office building and
garage structure constructed on the Land, the street address of which is 3050
Post Oak Blvd., Houston, Texas, and is more particularly described in the deed
recorded under County Clerk's File No. S608060 in the Official Public Records of
Real Property of Harris County, Texas. The term "Building" shall include all
fixtures and appurtenances in and to the aforesaid structure, including
specifically but without limitation all above grade walkways and all electrical,
mechanical, plumbing, security, elevator, boiler, HVAC, telephone, water, gas,
storm sewer, sanitary sewer and all other utility systems and connections, all
life support systems, sprinklers, smoke detection and other fire protection
systems, and all equipment, machinery, shafts, flues, piping, wiring, ducts,
duct work, panels, instrumentation and other appurtenances relating thereto.
4. "Building Operating Hours" shall mean 7:00 a.m. to 6:00 p.m. Monday
through Friday and Saturday 8:00 a.m. to 1:00 p.m., exclusive of Sundays and
Holidays.
5. "Building Rules and Regulations" shall mean the rules and regulations
governing the Complex promulgated by Landlord from time to time. The current
Building Rules and Regulations maintained by Landlord are attached as Exhibit C
hereto.
6. "Building Standard", when applied to an item, shall mean such item as
has been designated by Landlord (orally or in writing) as generally applicable
throughout the leased portions of the Building.
7. "Commencement Date" shall mean the date of the commencement of the
Term as determined pursuant to Section 6.3.
8. "Common Areas" shall mean all areas and facilities within the Complex
which have been constructed and are being maintained by Landlord for the common,
general, non-exclusive use of all tenants in the Building, and shall include
restrooms, lobbies, corridors, service areas, elevators, stairs and stairwells,
the Parking Facility, driveways, loading areas, ramps, walkways and landscaped
areas.
9. "Complex" shall mean the Land and all improvements thereon,
including the Building and the Parking Facility.
10. "Expense Stop" shall mean that portion of the Operating Expenses,
expressed in terms of dollars per square foot of Net Rentable Area per Fiscal
Year, which will be excluded from the computation of Additional Rent. Unless
changed by mutual agreement of the parties, the "Expense Stop" shall equal the
actual operating expenses for calendar year 1999.
11. "Fiscal Year" shall mean the fiscal year (or portion thereof) of
Landlord as elapses during the Term. The Fiscal Year currently commences on
January 1; however, Landlord may change the Fiscal Year at any time or times.
12. "Force Majeure" shall mean the occurrence of any event which
hinders, prevents or delays the performance by Landlord of any of its
obligations hereunder and which is beyond the reasonable control of Landlord.
13. "Holidays" shall mean (a) New Year's Day, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day and Christmas Day, (b) other days on which
national or state banks located in the state where the Complex is located must
or may close for ordinary operations and (c) other days which are commonly
observed as holidays by the majority of tenants of the Building. If the Holiday
occurs on a Saturday or Sunday, the Friday preceding or the Monday following
may, at Landlord's discretion, be observed as a Holiday.
14. "HVAC" shall mean the heating, ventilation and air conditioning
systems in the Building.
15. "Impositions" shall mean (a) all real estate, personal property,
rental, water, sewer, transit, use, occupancy and other taxes, assessments,
charges, excises and levies (including any interest, costs or penalties with
respect thereto),
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general and special, ordinary and extraordinary, foreseen and unforeseen of any
kind and nature whatsoever which are assessed, levied, charged or imposed upon
or with respect to the Complex, or any portion thereof, or the sidewalks,
streets or alley ways adjacent thereto, or the ownership, use, occupancy or
enjoyment thereof (including but not limited to mortgage taxes and other taxes
and assessments passed on to Landlord by Landlord's Mortgagee) and (b) all
charges for any easement, license, permit or agreement maintained for the
benefit of the Complex. "Impositions" shall not include income taxes, estate and
inheritance taxes, excess profit taxes, franchise taxes, taxes imposed on or
measured by the income of Landlord from the operation of the Complex, and taxes
imposed on account of the transfer of ownership of the Complex or the Land. If
any or all of the Impositions be discontinued and, in substitution therefor,
taxes, assessments, charges, excises or impositions be assessed, levied, charged
or imposed wholly or partially on the Rents received or payable hereunder (a
"Substitute Imposition"), then the Substitute Imposition shall be deemed to be
included within the term "Impositions".
17. "Land" shall mean the real property on which the Building is
constructed and which is further described in Exhibit E hereto.
18. "Landlord's Mortgagee" shall mean the mortgagee of any mortgage, the
beneficiary of any deed of trust, the pledgee of any pledge, the secured party
of any security interest, the assignee of any assignment and the transferee of
any other instrument of transfer (including the ground lessor of any ground
lease on the Land) now or hereafter in existence on all or any portion of the
Complex, and their successors, assigns and purchasers. "Mortgage" shall mean any
such mortgage, deed of trust, pledge, security agreement, assignment or transfer
instrument, including all renewals, extensions and rearrangements thereof and of
all debts secured thereby.
19. "Landlord's Work" shall mean all improvements, components,
assemblies, installations, finish, labor, materials and services that Landlord
is required to furnish, install, perform, provide or apply to the Premises as
specified in the Work Letter.
20. "Premises" shall mean the area leased by Tenant pursuant to this
Lease as outlined on the floor plan drawing attached as Exhibit B hereto and all
other space added to the Premises pursuant to the terms of this Lease. The
Premises includes the space between the top surface of the floor slab of the
outlined area and the finished surface of the ceiling immediately above.
21. "Legal Requirements" shall mean any and all (a) judicial decisions,
orders, injunctions, writs, statutes, rulings, rules, regulations,
promulgations, directives, permits, certificates or ordinances of any
governmental authority in any way applicable to Tenant or the Complex, including
but not limited to the Building Rules and Regulations, zoning, environmental and
utility conservation matters, (b) requirements imposed on Landlord by any
Landlord's Mortgagee, (c) insurance requirements and (d) other documents,
instruments or agreements (written or oral) relating to the Complex or to which
the Complex may be bound or encumbered.
22. "Net Rentable Area" whether of the Premises or the Complex shall
mean the area determined pursuant to the American National Standard Method for
measuring floor space in office buildings, as set forth in American National
Standard's Institute publication Z65.1-1980 and as, from time to time, revised.
Landlord and Tenant hereby stipulate that, unless and until revised by virtue of
the application of the standards set forth in said publication or in a revised
publication, the Net Rentable Area of the Premises shall be 1,604 square feet
and the Net Rentable Area of the Building shall be 334,792 square feet.
23. "Operating Expenses" shall mean all costs and expenses which
Landlord pays or accrues by virtue of the ownership, use, management, leasing,
maintenance, service, operation, insurance or condition of the Complex during a
particular Fiscal Year or portion thereof as determined by Landlord or its
certified public accountants in accordance with generally accepted accounting
principles plus (in instances where the Building was not fully occupied for the
entire period in question) all additional costs and expenses which Landlord or
such accountant reasonably determines Landlord would
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have paid or accrued during such period if the Building has been fully occupied
(defined as 95% occupied). "Operating Expenses" shall include, but shall not be
limited to, the following to the extent they relate to the Complex:
(a) all Impositions and other governmental charges;
(b) all insurance premiums charged for policies obtained by
Landlord, which may include without limitation, at Landlord's election, (i) fire
and extended coverage insurance including earthquake, windstorm, hail,
explosion, riot, strike, civil commotion, aircraft, vehicle and smoke insurance,
(ii) public liability and property damage insurance, (iii) elevator insurance,
(iv) workmen's compensation insurance for the employees covered by clause (h),
(v) boiler, machinery, sprinkler, water damage, legal liability, burglary,
hold-up, fidelity and pilferage insurance, (vi) rental loss insurance and (vii)
such other insurance as Landlord may elect to obtain;
(c) all deductible amounts incurred in any Fiscal Year relating
to an insurable loss;
(d) all maintenance, repair, replacement and painting costs;
(e) all janitorial, custodial, cleaning, washing, landscaping,
landscape maintenance, trash removal and pest control costs;
(f) all security costs;
(g) all electrical, energy monitoring, water, water treatment,
gas, sewer, telephone and other utility and utility related charges; or the
property management company engaged by Landlord or affiliates of the Property
management company engaged by Landlord;
(h) all wages, salaries, salary burdens, employee benefits,
payroll taxes, social security and insurance for all persons engaged by Landlord
or an Affiliate of Landlord or the property management company engaged by
Landlord or affiliates of the Property management company engaged by Landlord;
(i) all costs of leasing or purchasing supplies, tools,
equipment and materials;
(j) all management fees and other charges for management
services (including, without limitation, travel and related expenses), whether
provided by an independent management company, by Landlord or by an Affiliate of
Landlord;
(k) all fees and other charges paid under all maintenance and
service agreements, including but not limited to window cleaning, elevator and
HVAC maintenance;
(l) all legal, accounting and auditing fees and expenses; and
(m) amortization of the cost of acquiring, financing and
installing capital items which are intended to reduce (or avoid increases in)
operating expenses or which are required by a governmental authority. Such costs
shall be amortized over the reasonable life of the items in accordance with
generally accepted accounting principles, but not beyond the reasonable life the
Building.
"Operating Expenses" shall not include (i) expenditures classified as capital
expenditures for federal income tax purposes except as set forth in clause (m),
(ii) costs for which Landlord is entitled to specific reimbursement by Tenant,
by any other tenant of the Building or by any other third party, (iii)
allowances specified in the Work Letter for expenses incurred by Landlord for
improvements to the Premises, (iv) leasing commissions, and all non-cash
expenses (including depreciation), except for the amortized costs specified in
clause (m), (v) land or ground rent, if applicable, and (vi) debt service on any
indebtedness secured by the Complex (except debt service on indebtedness to
purchase or pay for items specified as permissible "Operating Expenses" under
clause (a) through (m)).
24. "Parking Facility" shall mean (a) any parking garage and any other
parking lot or facility adjacent to or in the Complex servicing the Building and
(b) any parking area, open or covered, leased by Landlord to service the
Building.
25. "Rent" shall mean Base Rent, Additional Rent, the parking charge
called for in Section 5.4 and all other amounts provided for under this Lease to
be paid by Tenant, whether as additional rent or otherwise. "Base Rent" shall
mean the base rent specified in Section 5.1 as adjusted in accordance with
Section 5.2. "Base Rent Adjustment" shall
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mean the increase in the annual Base Rent as set forth in Section 5.2.
"Additional Rent" shall mean the additional rent specified in Section 5.3.
26. "Security Deposit" shall mean $ Waived paid by Tenant as security
for the full and faithful performance of the obligations of Tenant under this
Lease.
27. "Taking" or "Taken" shall mean the actual or constructive
condemnation, or the actual or constructive acquisition by or under threat of
condemnation, eminent domain or similar proceeding, by or at the direction of
any governmental authority or agency.
28. "Tenant's Share" shall mean the proportion by which the Net Rentable
Area of the Premises bears to the Net Rentable Area of the Building. "Tenant's
Share" shall be adjusted by Landlord from time to time to reflect adjustments to
the then current Net Rentable Area of the Building or the Premises. "Tenant's
Share" shall initially mean 1,604 net rentable square feet divided by 334,792
net rentable square feet x 100 = .4791 %.
29. "Transfer" shall mean (a) an assignment (direct or indirect,
absolute or conditional, by operation of law or otherwise) by Tenant of all or
any portion of Tenant's interest in this Lease or the leasehold estate created
hereby, (b) a sublease of all or any portion of the Premises or (c) the grant or
conveyance by Tenant of any concession or license within the Premises. If Tenant
is a corporation then any transfer of this Lease by merger, consolidation or
dissolution, or by any change in ownership or power to vote a majority of the
voting stock (being the shares of stock regularly entitled to vote for the
election of directors) in Tenant outstanding at the time of execution of this
Lease shall constitute a Transfer. If Tenant is a partnership having one or more
corporations as general partners, the preceding sentence shall apply to each
corporation as if the corporation alone had been the Tenant hereunder. If Tenant
is a general or limited partnership, joint venture or other form of association,
the transfer of a majority of the ownership interests therein shall constitute a
Transfer. "Transferee" shall mean the assignee, sublessee, pledgee,
concessionee, licensee or other transferee of all or any portion of Tenant's
interest in this Lease, the leasehold estate created hereby or the Premises.
30. "Work Letter" shall mean the agreement, if any, attached as Exhibit
D hereto between Landlord and Tenant for the construction of improvements in the
Premises.
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EXHIBIT B
PREMISES
Suite 1080
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(Approximately 1,604 Rentable Square Feet)
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EXHIBIT C
RULES AND REGULATIONS
1. Landlord may from time to time adopt appropriate systems and
procedures for the security or safety of the Building, any persons occupying,
using, or entering the Building, or any equipment, finishings, or contents of
the Building, and each tenant shall comply with such systems and procedures.
2. Tenant's employees, visitors, and licensees shall not loiter in or
interfere with the use of the Parking Facility or the Complex's driveway or
parking areas nor consume alcohol in the common areas of the Complex or the
Parking Facility. The sidewalks, halls, passages, exits, entrances, elevators,
escalators, and stairways of the Building will not be obstructed by any tenants
or used by any of them for any purpose other than for ingress to and egress from
their respective premises. The halls, passages, exits, entrances, elevators,
escalators, and stairways are not for the general public, and Landlord may
control and prevent access to them by all persons whose presence, in the
reasonable judgment of Landlord, would be prejudicial to the safety, character,
reputation and interests of the Building and its tenants; in determining whether
access will be denied, Landlord may consider attire worn by a person and its
appropriateness for an office building, whether shoes are being worn, use of
profanity, either verbally or on clothing, actions of a person (including,
without limitation, spitting, verbal abusiveness, and the like), and such other
matters as Landlord may reasonably consider appropriate.
3. No sign, placard, picture, name, advertisement, or notice visible
from the exterior of any tenant's premises shall be inscribed, painted, affixed,
or otherwise displayed by any tenant on any part of the Building without the
prior written consent of Landlord. All approved signs or lettering on doors will
be printed, painted, affixed, or inscribed at the expense of the tenant desiring
such by a person approved by Landlord. Material visible from outside the
Building will not be permitted. Landlord may remove such material without any
liability, and may charge the expense incurred by such removal to the tenant in
question.
4. No curtains, draperies, blinds, shutters, shades, screens, or other
coverings, hangings, or decorations will be attached to, hung, or placed in, or
used in connection with any window of the Building or the Premises.
5. The sashes, sash doors, skylights, windows, heating, ventilating, and
air conditioning vents and doors that reflect or admit light and air into the
halls, passageways, or other public places in the Building shall not be covered
or obstructed by any tenant, nor will any bottles, parcels, or other articles be
placed on any window sills.
6. No showcases or other articles will be put in front of or affixed to
any part of the exterior of the Building, nor placed in the public halls,
corridors, or vestibules without the prior written consent of Landlord.
7. No tenant will permit its Premises to be used for lodging or
sleeping. No cooking will be done or permitted by any tenant on its premises,
except in areas of the premises which are specially constructed for cooking, so
long as such use is in accordance with all applicable federal, state, and city
laws, codes, ordinances, rules, and regulations.
8. No tenant will employ any person or persons other than the cleaning
service of Landlord for the purpose of cleaning the premises, unless otherwise
agreed by Landlord in writing. If any tenant's actions result in any increased
expense for any required cleaning, Landlord may assess such tenant for such
expenses. Janitorial service will not be furnished on nights to offices which
are occupied after business hours on those nights unless, by prior written
agreement of Landlord, service is extended to a later hour for specifically
designated offices.
9. The toilets, urinals, wash bowls, and other plumbing fixtures will
not be used for any purposes other than those for which they were constructed,
and no sweepings, rubbish, rags, or other foreign substances will be thrown in
them. All damages resulting from any misuse of the fixtures will be borne by the
tenant who, or whose servants, employees, agents, visitors, or licensees, have
caused the damage.
10. No tenant will deface any part of the premises or the Building.
Without the prior written consent of Landlord, no tenant will lay linoleum, or
other similar floor covering, so that it comes in direct contact with the floor
of such tenant's premises. If linoleum or other similar floor covering is to be
used, an interlining of builder's deadening felt will be first affixed to the
floor, by a paste or other material, soluble in water. The use of cement or
other similar adhesive material is expressly prohibited.
11. No tenant will alter, change, replace, or rekey any lock or install
a new lock or a knocker on any door of the premises. Landlord, its agent or
employee, will retain a master key to all door locks on the premises. Any new
door locks required by a tenant or any change in keying of existing locks will
be installed or changed by Landlord following such
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tenant's written request to Landlord and will be at such tenant's expense. All
new locks and rekeyed locks will remain operable by Landlord's master key.
Landlord will furnish to each tenant, free of charge, two (2) keys to each door
lock on its premises. Landlord will have the right to collect a reasonable
charge for additional keys and cards requested by any tenant. Each tenant, upon
termination of its tenancy, will deliver to Landlord all keys and access cards
for the premises and Building which have been furnished to such tenant.
12. The elevator designated for freight by Landlord will be available
for use by all tenants in the Building during the hours and pursuant to such
procedures as Landlord may determine from time to time. The persons employed to
move tenant's equipment, material, furniture, or other property in or out of the
Building must be acceptable to Landlord; such persons must be a locally
recognized professional mover, whose primary business is the performing of
relocation services, and must be bonded and fully insured. A certificate or
other verification of such insurance must be received and approved by Landlord
prior to the start of any moving operations. Insurance must be sufficient, in
Landlord's sole opinion, to cover all personal liability, theft, or damage to
the Building, including without limitation floor coverings, doors, walls,
elevators, stairs, foliage, and landscaping. All moving operations will be
conducted at such times and in such a manner as Landlord may direct, and all
moving will take place during nonbusiness hours unless Landlord otherwise agrees
in writing. The moving tenant shall be responsible for the provision of Building
security during all moving operations, and shall be liable for all losses and
damages sustained by any party as a result of the failure to supply adequate
security. Landlord may prescribe the weight, size, and position of all
equipment, materials, furniture, or other property brought into the Buildings.
Heavy objects will, if considered necessary by Landlord, stand on wood strips of
such thickness as is necessary to distribute the weight properly. Landlord will
not be responsible for loss of or damage to any such property from any cause,
and all damage done to the Building by moving or maintaining such property will
be repaired at the expense of the moving tenant. Landlord may inspect all such
property to be brought into the Building and to exclude from the Building all
such property which violates any of these rules and regulations or the lease of
which these rules and regulations are a part. Supplies, goods, materials,
packages, furniture, and all other items of every kind delivered to or taken
from the premises will be delivered or removed through the entrance and route
designated by Landlord.
13. No tenant will use or keep in the premises or the Building any
kerosene, gasoline, or inflammable or combustible or explosive fluid or material
or chemical substance other than limited quantities of them reasonably necessary
for the operation or maintenance of office equipment or limited quantities of
cleaning fluids and solvents required in normal operation of the premises.
Without Landlord's prior written approval, no tenant will use any method of
heating or air conditioning other than that supplied by Landlord. No tenant will
keep any firearms within the Premises. No tenant will use or keep or permit to
be used or kept any foul or noxious gas or substance in the premises, or permit
of suffer the premises to be occupied or used in an manner offensive or
objectionable to Landlord or other occupants of the Building by reason of noise,
odors, or vibrations, or interfere in any way with other tenants or those having
business in the Building.
14. Landlord may without notice and without liability to any tenant,
change the name and street address of the Building.
15. Landlord will have the right to prohibit any advertising by tenant,
mentioning the Building, which, in Landlord's reasonable opinion, tends to
impair the reputation of the Building or its desirability as a Building for
offices, and upon written notice from Landlord, tenant will discontinue such
advertising.
16. Tenant will not bring any animals or birds into the Building, and
will not permit bicycles or other vehicles inside or on the sidewalks outside
the Building except in areas designated from time to time by Landlord for such
purposes.
17. All persons entering or leaving the Building at any time other than
the Building's business hours shall comply with such off-hour regulations as
Landlord may establish and modify from time to time. Landlord may limit or
restrict access to the Building during such periods.
18. Each tenant will store all its trash and garbage within its premise.
No material will be placed in the trash boxes or receptacles if such material is
of such nature that it may not be disposed of in the ordinary and customary
manner of removing and disposing of trash and garbage without being in violation
of any law or ordinance governing such disposal. All garbage and refuse disposal
will be made only through entryways and elevators provided for such purposes and
at such times as Landlord may designate. No furniture, appliances, equipment, or
flammable products of any type may be disposed of in the Building trash
receptacles.
19. Canvassing, peddling, soliciting, and distribution of handbills or
any other written materials in the Building are prohibited, and each tenant will
cooperate to prevent same.
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20. Each tenant shall keep the doors of the premises closed and locked
and shall shut off all water faucets, water apparatus, and utilities before
tenant or tenant's employees leave the premises, so as to prevent waste or
damage, and for any default or carelessness in this regard tenant shall be
liable for all injuries sustained by other tenants or occupants of the Building
or Landlord. On multiple-tenancy floors, all tenants will keep the doors to the
Building corridors closed at all times except for ingress and egress.
21. Smoking is not permitted in hallway corridors, stairwells,
elevators, restrooms, lobby areas, or any interior common areas within the
Building. Additionally, outdoor smoking is not permitted within twenty (20) feet
of any entrance to the Building. Tenants may smoke in their leased suites,
provided ventilation systems servicing their respective suites can be
sufficiently modified to prevent smoke and/or smoking odors from escaping into
common areas, hallway corridors, and plenum areas in which air distribution
ducts are located. Tenants must additionally install self-circulating air
purifiers in each room within their suites in which they desire to smoke. The
costs of all such air-quality equipment and ventilation improvements shall be
borne entirely by the Tenants desiring to smoke in their suites.
If smoke or smoking odors are intrusive or objectionable to any other
Tenant on a floor in which a smoking Tenant is located, the smoking Tenant shall
bear full responsibility for curing the objectionable condition within twenty
(20) days after receiving written notice that such a condition exists. If the
smoking Tenant is thereafter unable to rectify the intrusive or objectionable
condition, then it shall be required to immediately cease smoking in its suite
for the duration of its tenancy in the Building. Smoking Tenants are not
entitled to reimbursement or offset of any kind for the cost of air- quality
equipment or ventilation improvements.
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EXHIBIT D
WORK LETTER
Landlord agrees to construct the following improvements at Landlord's sole
expense.
12 linear feet of upper and lower cabinets; Install a dishwasher;
Install new, 30 ounce, direct glue carpet;
Install five (5) new duplex electrical outlets (location to be
determined); and Repaint the Premises (excluding existing millwork).
In all other respects, Tenant accepts the Premises in their present
condition, as is, with all faults, as being suitable for use and occupancy by
Tenant in accordance with this Lease. Landlord does not make any representation
or warranty, express of implied, as to the condition of the Premises or
suitability of the Premises for the uses to which Tenant intends to put the
Premises.
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EXHIBIT E
LEGAL DESCRIPTION OF PROPERTY
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Exhibit 10.5
THE LONDON MANHATTAN COMPANY
222 WEST COLEMAN BOULEVARD
MOUNT PLEASANT. SC 29464
September 21, 1999
Mr. Peter Vanucci
Affiliated Resources Corporation, Inc.
8221 Brecksville Road
Building 3, Suite 207
Brecksville, OH 44141
Dear Mr. Vanucci:
This letter sets forth the contractual relationship ("Agreement") between The
London Manhattan Company ("LMC") and Affiliated Resources Corporation, Inc., its
subsidiaries, agents, affiliates, successors and assigns (hereinafter referred
to as "ARC" or "the Company") in connection with investment banking services
("Services") provided by LMC to ARC.
ENGAGEMENT AND DUTIES OF LMC: Effective upon the execution of this Agreement,
ARC appoints LMC as its EXCLUSIVE INVESTMENT BANKER for the purposes of
providing senior debt facilities, and LMC agrees to arrange for and/or to
provide to ARC
o a real estate and equipment term loan in the approximate amount of
$1,250,000, for total financing of up to ONE MILLION TWO HUNDRED AND FIFTY
THOUSAND dollars ($1,250,000), (referred to collectively as the "Financing"),
subject to due diligence by the lender and/or LMC.
DUTIES OF ARC: ARC shall use its best efforts to support and assist LMC in the
execution of its duties hereunder in a timely manner. Pursuant thereto, the
Company shall provide LMC with full and timely disclosure of all information on
itself, and shall not withhold or cause to be withheld from LMC any information
which may be relevant to the Services including current financial data, market
information, pending litigation, personnel changes, discussions with potential
investors/strategic partners, relationships among shareholders and other
information which may have a material effect on the Services.
EXPENSES: ARC is responsible for the overnight express and copy service vendor
charges incurred by LMC in connection with providing Services to the Company
pursuant to this Agreement. ARC shall pay the costs of the services provided by
the overnight express and copy service vendors used by LMC directly to those
vendors. LMC shall bear the cost of any other expenses unless approved in
writing by the Company.
TERM: Except as provided herein, this Agreement shall have a term of three (3)
months, commencing with the signing of this Agreement by the Company. The
Agreement shall automatically renew every three (3) months unless otherwise
terminated by one of the parties in writing no less than fifteen (15) calendar
days prior to the expiration of the term.
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COMPENSATION: As compensation to LMC for providing the Services under this
Agreement, ARC shall pay to LMC:
o An Investment Banking Fee calculated on the basis of the aggregate of all
transactions (the maximum amount of a facility as set by a lender) in the
Financing including debt facilities provided, renegotiated and/or arranged
by LMC, the Company, or third parties during the term of this Agreement,
calculated using the Lehman Formulas follows:
% Fee Amount of Financing
5% From $0 to $1,000,000
4% For the next $1,000,000
3% For the next $1,000,000
2% For the next $1,000,000
1% For amounts greater than $4,000,000
In the event that all or any portion of the Financing includes a financing
arrangement or instruments not contemplated by this Agreement, other than
Subordinated Debt or Equity, then ARC shall pay an Investment Banking Fee to LMC
equal to the Lehman Formula as if the Financing had been contemplated by this
Agreement. The Investment Banking Fee for Subordinated Debt and/or Equity
financing shall be negotiated under a separate agreement.
EXCLUSIVITY: Under the terms of this Agreement, ARC appoints LMC as its
EXCLUSIVE INVESTMENT BANKER for the purposes specified in the ENGAGEMENT AND
DUTIES OF LMC paragraph. This means that the Company shall pay the Investment
Banking Fee specified in the COMPENSATION paragraph for any Financing originated
during the term (see TERM paragraph) of this Agreement, whether by LMC, by the
Company's employees or agents, or by any third parties.
PAYMENT: All Investment Banking Fees due shall be paid in US dollars to LMC
directly by the lender from the proceeds of any Financing upon a closing, in
whole or in part, under the terms and conditions of this Agreement. The Company
hereby concurs that the Lender shall use this Agreement as a directive to pay to
LMC the full amount of any Investment Banking Fees from the proceeds of a
closing. In the event this Agreement between the Company and LMC has been
terminated prior to the closing of a Financing and, within twelve (12) months of
the date of termination, the Company does close on a Financing with an
institution or individual previously introduced directly or indirectly by LMC to
the Company, then the Company shall pay LMC the full amount of the Investment
Banking Fees described above as if this Agreement were still in effect.
VALIDITY: ARC and LMC agree to take all actions and to execute and deliver all
documents reasonably required by any other party to effect the intent of this
Agreement. Each party warrants to the other that it has duly and validly
authorized, executed and delivered this Agreement, which is a binding obligation
enforceable against it in accordance with the terms hereof.
CONFIDENTIAL INFORMATION: LMC will treat as confidential all non-public
Information provided to LMC by ARC. LMC will not disclose such information to
any third party without first receiving written authorization from the Company's
Board of Directors unless such disclosure is required by law or a competent
court of jurisdiction, in which case LMC will
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provide appropriate documentation supporting such release of confidential
information. Additionally, all advice and opinions rendered by LMC to the
Company pursuant to this Agreement will be treated as confidential and shall not
be disclosed by the Company without the prior written approval of LMC unless
such disclosure is required by law or a competent court of jurisdiction, in
which case the Company will provide appropriate documentation supporting such
release of confidential information.
CORPORATE APPROVAL: ARC warrants that it has received all approvals required by
the Company's articles of incorporation, by-laws, shareholders' agreement or
other applicable documents prior to entering into this Agreement with LMC.
GOVERNANCE: This Agreement shall be subject to and enforced under the laws of
the State of South Carolina.
INDEMNIFICATI0N: ARC agrees to indemnify and hold LMC (and each of its
directors, officers and employees) harmless against any losses, claims, damages
or liabilities which LMC may be subject to in connection with services performed
as described in this Agreement unless such loss, claim, damage or liability
resulted from the willful misfeasance or gross neglect of LMC.
If the foregoing correctly sets forth our mutual agreement and understandings,
please initial each page, sign as indicated below and return an executed copy to
us.
Very truly yours,
THE LONDON MANHATTAN COMPANY
By: Ronald Giguere, Senior Managing Director
Agreed and Accepted this 21st day of September, 1999:
Affiliated Resources Corporation
By:
Name: Title
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Exhibit 10.5.1
AGREEMENT FOR SERVICES
RECITALS:
In consideration of the services to be provided by ComVest International
Incorporated for the benefit of the undersigned the PARTIES hereto agree as
follows:
WHEREAS, the requesting entity, hereinafter called CLIENT, is desirous of
conducting a financial transaction for the benefit of the CLIENT, and by
entering into this agreement authorizes ComVest International Inc., hereinafter
called CVI to negotiate and arrange financing for the CLIENT, and;
WHEREAS, CLIENT wishes to engage the services of CVI and share in the
established relationships and financing alliances of CVI for the purpose of
financing a corporate project, special financing or personal financing,
hereinafter called PROJECT, and;
WHEREAS, CVI and/or assigns, using best efforts, shall arrange, negotiate, and
secure financing for the PROJECT of the CLIENT with proprietary sources and
established entities of CVI, where CVI has proprietary business relationships,
and employ additional resources as CVI may determine to be needed, and;
WHEREAS, CLIENT acknowledges that the business relationships, programs and
sources are proprietary to CVI. The CLIENT acknowledges and agrees to abide with
and maintain total confidentiality and non-circumvention of sources, terms and
conditions of this agreement, and;
NOW THEREFORE, the CLIENT and CVI agree to abide by the following terms and
conditions set forth herein for that purpose:
ARTICLE 1: SIGNATORIES
Corporations entering into this agreement as a CLIENT signatory or signatories,
must provide an original copy of the Corporate Resolutions which authorize the
designated signatory(s) to act on behalf of the corporation for this
transaction. A fully executed original of said resolution shall be attached to
this agreement as Attachment "A". Signatories of this agreement certify that
they have the authority to enter into this agreement on behalf of the
corporation and therefore bind the corporation. This ARTICLE is waived for
private and personal agreements.
ARTICLE II: NON-CIRCUMVENTION AND CONFIDENTIALITY
The CLIENT herewith acknowledges and Agrees not to circumvent CVI for any reason
and further to maintain complete confidentiality regarding financing entities,
business means and processes that deliver financing, and services provided by
CVI and the sources made known to the CLIENT by CVI.
ARTICLE III: REGISTRATION
CVI , upon execution of this agreement, shall register this agreement with the
Sources with which the PARTIES are to be engaged for the period of this
transaction. Full disclosure of the Sources to be involved in this transaction
shall be made to the CLIENT by CVI within 10 days of the
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execution hereof. CVI shall also register this agreement with regulatory
agencies if so required and shall so notify the CLIENT in advance of any such
filing.
ARTICLE IV: FUNDING REQUEST
The CLIENT herewith makes an exclusive formal request to CVI to arrange for the
financing on behalf of the CLIENT in the amount of $300,000 USD, or other
acceptable amount, to be expended on the PROJECT as identified in Article V. The
CLIENT herewith authorizes CVI to arrange, negotiate, and coordinate financing
on behalf of the CLIENT. CLIENT shall not be subject to obligations of such
terms and conditions of a commitment letter prior to the formal written
acceptance of such terms of the commitment letter by the CLIENT. Written
acceptance of the such commitment shall constitute performance by CVI.. Further,
upon written acceptance of such terms and conditions of financing negotiated by
CVI, the CLIENT shall be obligated to comply with the conditions of the
commitment and close within the period specified in the commitment letter, or in
the case of a private placement, CLIENT shall conform to the terms of the PPM.
ARTICLE V: PARTIES
The entities identified below are the PARTIES to this agreement:
Dale P. Euga, Director
ComVest International Inc.
1674 Beacon Street, Suite 3
Brookline, MA 02146
herein referred to as CVI, and,
Affiliated Resources Inc.
3050 Post Oak Blvd.
Suite 1280
Houston, TX 77056
herein referred to jointly as CLIENT, and having a project described as:
CORPORATE FINANCING
hereafter referred to as PROJECT.
ARTICLE VI: COMPENSATION
The CLIENT agrees to compensate CVI based solely upon the delivery of funds for
the above referenced project. Compensation shall be a lump sum fee in the amount
of 4% of the gross amount of the financing commitment for each and every
transaction. Fee shall be considered fully earned based on any one of the
following conditions:
(1) The issuance of a Funding Commitment to the CLIENT from a bona fide
financing entity in the amount requested (or a lesser amount accepted
by the CLIENT) which meets the CLIENT's written funding parameters, or
(2) A letter of credit or guarantee for the amount of the loan request from
a bona fide financial institution, or
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(3) The issuance of a private placement memorandum by underwriter's bond
counsel for the sale of bonds, warrants or securities for the PROJECT
or corporation.
Upon delivery to the CLIENT of any one of the aforementioned, all retainer fees,
if any, shall be considered earned and may be credited toward the total
compensation. Compensation shall be paid in full for each and every transaction
as a lump sum payment as proceeds of the funding are received by the CLIENT from
the first disbursement of the funds. The CLIENT herewith authorizes the funding
entity to pay all fees as herein agreed, directly to CVI from the proceeds of
the first disbursement of funds.
ARTICLE VII: EQUITY
The CLIENT shall assign and transfer to CVI an equity share in the PROJECT equal
to zero % of the PROJECT EQUITY upon delivery of a valid funding commitment from
a bona fide lender. The CLIENT shall retain 100% equity. Shares shall be
transferred within two (2) banking days from the date of the commitment or
guarantee or executed private placement memorandum, into an escrow account of a
third party that is acceptable to the CLIENT and CVI. CLIENT agrees to language
in escrow agreement that states specifically that equity shares are to be
released to CVI simultaneously with the first disbursement of funds from the
lending entity.
ARTICLE VIII: FUNDING PROCEDURE
Upon acceptance by the CLIENT of the funding commitment, the CLIENT shall
identify the account into which funds shall be wired. The funding entity shall
designate a nationally recognized title company for the closing and disbursement
of funds, or in the case of a private placement, in accordance with the Private
Placement Memorandum and/or the Joint Venture Agreement.
ARTICLE IX: INFORMATION / DOCUMENTS / DATA
CLIENT shall promptly comply with all reasonable requests for information by CVI
and/or sources of CVI and agrees to cooperate fully to facilitate the closure of
the funding. CLIENT warrants that all of the information supplied to CVI and its
sources by the CLIENT, shall be true and correct to the best if its knowledge.
All documents shall be fully executed with all required signatures and
witnessing.
ARTICLE X: LIMITATIONS
Any provisions of this agreement which may not be in compliance with the
applicable court of jurisdiction as may be determined by a Court of competent
jurisdiction shall not effect any other provisions of this agreement and all
other provisions of this agreement shall remain in force to the extent permitted
by law. This agreement supercedes any other previous agreement between the
PARTIES, oral or in writing and shall be considered the sole governing agreement
between the PARTIES and shall be amended only in writing and signed by both
PARTIES hereto. This agreement shall be binding upon the PARTIES hereto, their
heirs, executors, administrators, assigns and or nominees. This agreement shall
in no way be interpreted to be an agreement of partnership in such a way that
any of the individual signatories to this document shall have any claim against
any other signatory or be liable for any other signatory's commitments or
liabilities in any personal or business matters.
ARTICLE XI: TERM
This agreement shall be have a term of 60 days from the date entered below.
Should the CLIENT desire to finance PROJECT with any other source during the
performance term of this agreement,
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CVI shall be notified immediately and have the right to match the competitive
financing and if matched, CLIENT agrees to accept CVI offer. If CVI cannot meet
terms requested, CVI shall not impede CLIENT, however CLIENT waives any retainer
held by CVI.
The CLIENT undersigned below, by affixing their signature, herewith declares
that he/she/they have read and understand all of the preceding.
IN WITNESS WHEREOF, THE PARTIES by their own free will, hereto execute this
agreement on the 19th day of January 2000.
By: By:
----------------------------------
Peter Vanucci, Chairman/CEO Dale P. Euga, Director
Affiliated Resources Corporation ComVest International, Inc.
ChemWay Systems, Inc.
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Exhibit 10.6
January 31, 2000
Mr. Peter C. Vanucci, Chairman
Affiliated Resources Corporation
8221 Brecksville Road, Building 3, Suite 207
Brecksville, Ohio 44141
RE: Legal and Consultation Services
Dear Mr. Vanucci:
In accordance with recent discussions with yourself and Mr. Michael Bradle, I am
writing to confirm the terms of our agreement of January 18, 2000, in which
Affiliated has retained this office. Pursuant to our agreement, Michalk, Beatty
& Alcozer, PLLC ("MBA") is to perform various legal and consulting services and
is going to receive as compensation 150,000 shares of Affiliated Resources
Corporation (ARCX) stock and receive an additional 100,000 option shares of ARCX
stock which may be exercised at the option rate of $.10 per share. All expenses
of registration and transfer of said shares shall be the responsibility of
Affiliated Resources Corporation.
"MBA" shall be required to review all corporate contracts, and review all
corporate minutes and corporate books for corporate compliance. MBA will review
all documentation concerning the ChemWay acquisition from EVANS Systems and make
recommendations on how to proceed. MBA will review all documentation concerning
the RTB venture agreement and make recommendations on how to proceed. MBA will
review all existing employment contracts and stock options agreements. MBA shall
prepare new employment contracts and stock options agreements for Michael
Bradle, Peter Vanucci, Barry Goverman, Catherine Tamme, and any other employment
contract which may become necessary. In addition, MBA will prepare consultant
contracts for RCD Technology, Inc., Christopher Landrum, RICHMAR Interest, Inc.
(Richard Hughert), Ronnie Hampton, and any other consultant contracts which may
be additionally required in the future. MBA will avail itself to Michael Bradle,
on an as needed basis, for any and all other review and consulting work
concerning Affiliated and its operations which he may require through December,
2000. MBA will work, as required, with the existing corporate and SEC counsel.
Any additional work requested will be performed pursuant to a separate agreement
with the terms to be negotiated at a later date.
Peter C. Vanucci
January 31, 2000
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Page Two:
If this meets with your complete approval, please date and sign the enclosed
copy of this letter where indicated and return it to this office.
We look forward to being of service to you. If you have any questions, please do
not hesitate to call us.
Sincerely,
MICHALK, BEATTY & ALCOZER, PLLC
- ----------------------------------
JAY R. BEATTY
Attorney at Law
APPROVED:
- -----------------------------------
PETER C. VANUCCI, Chairman & CEO of
AFFILIATED RESOURCES CORPORATION
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Exhibit 10.7.1
COMPUTER CONSULTANT AGREEMENT
This is a consultant services agreement between AFFILIATED RESOURCES
CORPORATION INC., referred to in this agreement as "CLIENT" and CHRISTOPHER
LANDRUM, referred to it this agreement as "CONSULTANT". CLIENT is a Colorado
Corporation located at 3 Brecksville Common Suite 207, 8221 Brecksville Road,
Brecksville, OH 44141. CONSULTANT is an individual with offices at Rt. 1 Box 59,
Lampasas, TX 76550. CLIENT and CONSULTANT are collectively referred to in this
agreement as the PARTIES.
RECITALS
CLIENT desires the following for AFFILIATED and its various
subsidiaries.
a) website development and maintenance; and
b) computer consultation and advice concerning any and all computer
and computer related items.
CLIENT accepts consultant as an expert for the purposes of providing
the consultation required by this agreement.
INDEPENDENT CONTRACTOR STATUS
CLIENT and CONSULTANT agree that CONSULTANT shall perform his duties
under this agreement as an independent contractor. The CONSULTANT is not to be
deemed an employee of the CLIENT, and CONSULTANT shall not have or claim any
right arising from employee status. CONSULTANT has the sole discretion to
determine the manner in which the consultation services are to be performed.
CONSULTANT will need to work with and coordinate his efforts with and through
RCD TECHNOLOGY, INC. CLIENT retains the right to exercise final judgment with
respect to the ultimate development of the Software and websites.
PERFORMANCE BY CONSULTANT
CONSULTANT acknowledges and agrees that the time is of the essence in
the value of CONSULTANT's services to CLIENT and agrees that all consultation
services are to be rendered within a reasonable period of time. CONSULTANT
agrees to devote such time as is reasonably necessary for a satisfactory
performance of its duties under this agreement.
COMPENSATION
CONSULTANT shall receive 10,000 shares of AFFILIATED RESOURCES
CORPORATION common stock (ARCX). All expenses of registration and transfer of
said shares shall be the responsibility of AFFILIATED RESOURCES CORPORATION.
CLIENT shall reimburse CONSULTANT for all expenses associated with the web
addresses.
EXPENSES
CLIENT shall also reimburse CONSULTANT for all other expenses
reasonably incurred by CONSULTANT in the performance of this agreement provided
the expenses are approved in advance and proper documentation is presented for
the expenses.
CONFIDENTIALITY
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CONSULTANT agrees that all information communicated to CONSULTANT with
respect to CLIENT, including any confidential information gained by CONSULTANT
or his representatives by reason of association or employment with CLIENT or its
associates is confidential. CONSULTANT further agrees that all information,
conclusions, recommendations, reports, advice, or other documents generated by
CONSULTANT pursuant to this agreement are confidential.
CONSULTANT promises and agrees that CONSULTANT shall not disclose any
confidential information to any other person unless specifically authorized in
writing by CLIENT to do so. If CLIENT gives CONSULTANT written authorization to
make any disclosures, CONSULTANT shall do so only within the limits and to the
extent of that authorization.
CONSULTANT shall use its best efforts to prevent inadvertent disclosure
of any confidential information to any third party by using the same care and
discretion that CONSULTANT uses with any similar data CONSULTANT designates as
confidential.
USE OF CONFIDENTIAL INFORMATION
CONSULTANT shall not use any confidential information or circulated it
to any other person or persons, except when specifically authorized in advance
by CLIENT and then only to the extend necessary for any of the following:
a) Conducting negotiations, discussions, or consultations with
designated CLIENT representatives;
b) Supplying CLIENT with goods or services at its order;
c) Preparing confidential estimates, bids or proposals, and
invitations for bids or requests for proposals for submission to
CLIENT; or
d) Accomplishing any purpose CLIENT may later specify in writing.
COPIES OF CONFIDENTIAL INFORMATION
CONSULTANT agrees that copies of confidential information may not be
made without the express written permission of CLIENT and that at the
termination of this agreement all such copies shall be returned to CLIENT along
with the originals.
RETURN OF MATERIALS
At CLIENT's request, CONSULTANT shall promptly return to CLIENT all
confidential materials at the conclusion of the work on, or consideration of
work on, the project to which the materials relate.
CONFIDENTIALITY OF RELATIONSHIP
The PARTIES acknowledge and agree that the fact that CLIENT is using
CONSULTANT's services is confidential. Neither of the PARTIES may disclose that
facts to others unless it has been approved by the other party's written
permission.
OWNERSHIP OF WORK PRODUCT
CONSULTANT agrees that all intellectual property including but not
limited to all ideas and concepts contained in websites, computer programs and
software, documentation or other literature or illustrations that are conceived,
developed, written, or contributed by CONSULTANT pursuant to this agreement,
either individually or in collaboration with others, shall belong to and be the
sole property of CLIENT.
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CONSULTANT agrees that all rights in all works prepared or performed by
CONSULTANT pursuant to this agreement, including patent rights and copyrights
applicable to any of the intellectual property described in the above paragraph,
shall belong exclusively to CLIENT and shall constitute "works made for hire"
for purposes of copyright law.
The provisions of the paragraph shall not be construed to assign to
CLIENT any of CONSULTANT's rights in any invention for which no equipment,
supplies, facilities, or trade secret information of CLIENT was used, that was
developed entirely on CONSULTANT's own time, and that:
a) Does not related at the time of conception or reduction to
practice of the invention to CLIENT's business or to CLIENT's
actual or demonstrably anticipated research or development; or
b) Does not result from any work performed by CONSULTANT for
CLIENT.
USE OF COPYRIGHTED MATERIALS
CONSULTANT warrants that any materials provided by CONSULTANT for use
by CLIENT pursuant to this agreement shall not contain any proprietary material
owned by any other party that is protected under the Copyright Act or any other
similar law. CONSULTANT shall be solely responsible for ensuring that any
materials provided by CONSULTANT pursuant to this agreement satisfy this
requirement and CONSULTANT agrees to hold CLIENT harmless from all liability or
loss to which CLIENT is exposed on account of CONSULTANT's failure to perform
this duty.
TERMINATION OF CONTRACT
Unless otherwise provided for, this agreement shall continue in force
for a period of one (1) year commencing on January 18, 2000, unless renewed in
writing by both parties.
ASSIGNMENT OF CONTRACT
Neither of the PARTIES may assign this agreement or any rights under
the agreement without the prior written consent of the other party.
GOVERNING LAW
The PARTIES agree that this agreement has been made in Texas and that
it shall be governed by and construed pursuant to the laws of the State of
Texas.
ENTIRE AGREEMENT
This agreement is the complete and exclusive statement of the mutual
understanding of the PARTIES. This agreement supersedes and cancels all previous
written and oral agreements and communications between the PARTIES relating to
the CONSULTANT services that are the subject matter of this agreement.
NOTICE
Any Notice required or permitted by this agreement shall be deemed to
have been completed if in writing and delivered personally or mailed by
first-class, registered, or certified mail, postage prepaid to the other party.
a) Notices to CLIENT shall be sent to:
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3 Brecksville Common Suite 207, 8221 Brecksville Road,
Brecksville, OH 44141 b) Notices to CONSULTANT shall be sent to:
Rt.1 Box 59, Lampasas, TX 76550
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ATTORNEY'S FEES
If any legal action is necessary to enforce the terms of this
agreement, the prevailing party shall be entitled to reasonable attorney's fees
in addition to any other relief to which that party may be entitled.
SEVERABILITY
If any court of competent jurisdiction determines that any part of this
agreement is invalid or unenforceable, that determination shall not impair or
nullify the remainder of this agreement.
AMENDMENT
The PARTIES agree that they may amend this agreement only by a written
agreement duly executed by persons authorized to execute agreements on behalf of
the PARTIES.
Executed at __________on January 18, 2000.
AFFILIATED RESOURCES CORPORATION, INC.
A Colorado Corporation
By:___________________________
MICHAEL R. BRADLE
President
CHRISTOPHER LANDRUM
By:___________________________
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Exhibit 10.7.2
COMPUTER CONSULTANT AGREEMENT
This is a consultant services agreement between AFFILIATED RESOURCES,
CORPORATION, referred to in this agreement as "CLIENT" and RCD TECHNOLOGY INC.,
referred to in this agreement as "CONSULTANT". CLIENT is a Colorado Corporation
located at 3 Brecksville Common Suite 207, 8221 Brecksville Road, Brecksville,
OH 44141. CONSULTANT is a Texas Corporation with offices at 1301 High Chapparal
Drive, Corperas Cove, TX 76522. CLIENT and CONSULTANT are collectively referred
to in this agreement as the PARTIES.
RECITALS
CLIENT desires the following for AFFILIATED and its various
subsidiaries.
a) website development and maintenance; and
b) data base development and online security; and
c) computer consultation and advice concerning any and all computer
and computer related items.
CLIENT accepts consultant as an expert for the purposes of providing
the consultation required by this agreement.
INDEPENDENT CONTRACTOR STATUS
CLIENT and CONSULTANT agree that CONSULTANT shall perform his duties
under this agreement as an independent contractor. The CONSULTANT is not to be
deemed an employee of CLIENT, and CONSULTANT shall not have or claim any right
arising form employee status. CONSULTANT has the sole discretion to determine
the manner in which the consultation services are to be performed. However,
CLIENT retains the right to exercise final judgment with respect to the ultimate
development of the Software and websites.
PERFORMANCE BY CONSULTANT
CONSULTANT acknowledges and agrees that time is of the essence in the
value of CONSULTANT's services to CLIENT and agrees that all consultation
services are to be rendered within a reasonable period of time. CONSULTANT
agrees to devote such time as is reasonably necessary for a satisfactory
performance of its duties under this agreement.
COMPENSATION
CONSULTANT shall receive 50,000 shares of AFFILIATED RESOURCES
CORPORATION common stock (ARCX). All expenses of registration and transfer of
said shares shall be the responsibility of AFFILIATED RESOURCES CORPORATION.
EXPENSES
CLIENT shall reimburse CONSULTANT for expenses that are reasonably
incurred by CONSULTANT in the performance of this agreement provided the
expenses are approved in advance and proper documentation is presented for the
expenses.
CONFIDENTIALITY
CONSULTANT agrees that all information communicated to CONSULTANT with
respect to CLIENT, including any confidential information gained by CONSULTANT
or his representatives
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by reason of association or employment with CLIENT or its associates is
confidential. CONSULTANT further agrees that all information, conclusions,
recommendations, reports, advice, or other documents generated by CONSULTANT
pursuant to this agreement are confidential.
CONSULTANT promises and agrees that CONSULTANT shall not disclose any
confidential information to any other person unless specifically authorized in
writing by CLIENT to do so. If CLIENT gives CONSULTANT written authorization to
make any disclosures, CONSULTANT shall do so only within the limits and to the
extent of that authorization.
CONSULTANT shall use its best efforts to prevent inadvertent disclosure
of any confidential information to any third party by using the same care and
discretion that CONSULTANT uses with any similar data CONSULTANT designates as
confidential.
USE OF CONFIDENTIAL INFORMATION
CONSULTANT shall not use any confidential information or circulate it
to any other person or persons, except when specifically authorized in advance
by CLIENT and then only to the extend necessary for any of the following:
a) Conducting negotiations, discussions, or consultations with
designated CLIENT representatives;
b) Supplying CLIENT with goods or services at it order;
c) Preparing confidential estimates, bids or proposals, and
invitations for bids or requests for proposals for submission
to CLIENT; or
d) Accomplishing any purpose CLIENT may later specify in writing.
COPIES OF CONFIDENTIAL INFORMATION
CONSULTANT agrees that copies of confidential information may not be
made without the express written permission of CLIENT and that at the
termination of this agreement all such copies shall be returned to CLIENT along
with the originals.
RETURN OF MATERIALS
At CLIENT's request, CONSULTANT shall promptly return to CLIENT all
confidential materials at the conclusion of the work on, or consideration of
work on, the project to which the materials relate.
CONFIDENTIALITY OF RELATIONSHIP
CONSULTANT agrees that all intellectual property including but not
limited to all ideas and concepts contained in websites, computer programs and
software, documentation or other literature or illustrations that are conceived,
developed, written, or contributed by CONSULTANT pursuant to this agreement,
either individually or in collaboration with others, shall belong to and be the
sole property of CLIENT.
CONSULTANT agrees that all rights in all works prepared or performed by
CONSULTANT pursuant to this agreement, including patent rights and copyrights
applicable to any of the intellectual property described in the above paragraph,
shall belong exclusively to CLIENT and shall constitute "works made for hire"
for purposes of copyright law.
The provisions of the paragraph shall not be construed to assign to
CLIENT any of CONSULTANT's rights in any invention for which no equipment,
supplies, facilities, or trade secret
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information of CLIENT was used, that was developed entirely on CONSULTANT's own
time, and that:
a) Does not related at the time of conception or reduction to
practice of the invention to CLIENT's business or to CLIENT's
actual or demonstrable anticipated research or development; or
b) Does not result from any work performed by CONSULTANT for
CLIENT.
USE OF COPYRIGHT MATERIALS
CONSULTANT warrants that any materials provided by CONSULTANT for use
by CLIENT pursuant to this agreement shall not contain any proprietary material
owned by any other party that is protected under the Copyright Act or any other
similar law. CONSULTANT shall be solely responsible for ensuring that any
materials provided by CONSULTANT pursuant to this agreement satisfy this
requirement and CONSULTANT agrees to hold CLIENT harmless from all liability or
loss to which CLIENT is exposed on account of CONSULTANT's failure to perform
this duty.
TERMINATION OF CONTRACT
Unless otherwise provided for, this agreement shall continue in force
for a period of two (2) years commencing on January 18, 2000, unless renewed in
writing by both parties.
ASSIGNMENT OF CONTRACT
Neither of the PARTIES may assign this agreement or any rights under
the agreement without the prior written consent of the other party.
GOVERNING LAW
The PARTIES agree that this agreement has been made in Texas and that
it shall be governed by and construed pursuant to the laws of the State of
Texas.
ENTIRE AGREEMENT
This agreement is the complete and exclusive statement of the mutual
understanding of the PARTIES. This agreement supersedes and cancels all previous
written and oral agreements and communications between the PARTIES and relating
to the CONSULTANT services that are the subject matter of this agreement.
NOTICE
Any notice required or permitted by this agreement shall be deemed to
have been complete if in writing and delivered personally or mailed by
first-class, registered, or certified mail, postage prepaid to the other party.
a) Notices to CLIENT shall be sent to:
3 Brecksville Common Suite 207, 8221 Brecksville Road,
Brecksville, OH 44141 b) Notices to CONSULTANT shall be sent to:
1301 High Chapparal Drive, Copperas Cove, TX 76522
ATTORNEY'S FEES
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If any legal action is necessary to enforce the terms of this
agreement, the prevailing party shall be entitled to reasonable attorney's fees
in additional to any other relief to which that party may be entitled.
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SEVERABILITY
If any court of competent jurisdiction determines that any part of this
agreement is invalid or unenforceable, that determination shall not impair or
nullify the remainder of this agreement.
AMENDMENT
The PARTIES agree that they may amend this agreement only by a written
agreement duly executed by persons authorized to execute agreements of behalf of
the PARTIES.
Executed at _________ on January 18, 2000.
AFFILIATED RESOURCES CORPORATION
A Colorado Corpoation
By:___________________________________
PETER C. VANUCCI
Chairman and CEO
RCD TECHNOLOGY INC.
By:___________________________________
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Exhibit 10.9
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT(the "Agreement") is made and entered into effective as
of December 30, 1998, by and between AFFILIATED RESOURCES CORPORATION, a
Colorado Corporation ("Affiliated" or the "Company"), and Ms. Virginia M. Lazar
(hereinafter referred to as the "Executive")
WITNESSETH:
WHEREAS, the Company desires to have the benefit of the Executive's efforts and
services;
WHEREAS, the Executive is willing to commit herself to serve the Company, on the
terms and conditions herein provided;
WHEREAS, on December 16, 1998, the Company's Board of Directors acted upon and
approved employment agreements be entered into by and between the Executive and
the Company; and
WHEREAS, in order to effect the foregoing, the Company and the Executive wish to
enter into an employment agreement on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants
and agreements hereinafter set forth, the parties hereto mutually covenant and
agree as follows:
(1) DEFINITIONS.
Whenever used in this Agreement, the following terms shall have the meanings set
forth below:
(1) "Accrued Benefits" shall mean the amount payable not later
than fourteen (14) days following an applicable Termination
Date, which shall be equal to the sum of the following
amounts:
(ii) All salary earned or accrued through the Termination
Date;
(iv) Reimbursement for any and all monies advanced in
connection with the Executive's employment for
reasonable and necessary expenses incurred by the
Executive through the Termination Date.
(vi) Any and other cash benefits previously earned through
the Termination Date and deferred at the election of
the Executive or pursuant to any deferred
compensation plans then in effect.
(viii)Allother payments an benefits to which the Executive may
be entitled under the terms of any benefit plan of
the Company or otherwise, including, but not limited
to, any bonus declared by the Board, any compensation
for earned, but unused, vacation days, and any unpaid
automobile allowance.
(4) "Affiliate" shall have the same meanin as given to that term
in Rule 12b-2 of Regulation 12B promulgated under the
Securities Exchange Act of 1934, as amended.
(5) "Board" shall mean the Board of Directors of the Company.
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(6) "Disability" shall mean a physical or mental condition whereby
the Executive is unable to perform on a full-time, continuous
basis the customary duties of the Executive under this
Agreement.
(7) "Notice of Termination" shall mean the notice described in
Section 9 hereof;
(8) "Termination Date" shall mean, except as otherwise provided in
Section 8 hereof or as otherwise agreed between the Company
and the Executive:
(ii) The Executive's date of death;
(iv) Thirty (30) days afte the delivery of the Notice of
Termination terminating the Executive's employment on
account of Disability pursuant to Subsection 8(b)
hereof, unless the Executive returns on a full-time
basis to the performance of Executive's duties prior
to the expiration of such period;
(vi) Thirty (30) days afte the delivery of the Notice of
Termination if the Executive's employment is
terminated by the Executive voluntarily; and
(viii)Fifteen (15) days after the delivery of the Notice of
Termination, if the Executive's employment is
terminated by the Company for any reason other than
the Executive's death or Disability.
(4) EMPLOYMENT.
The Company hereby agrees to employ the Executive and the Executive
hereby agrees to serve the Company, on the terms and conditions set forth
herein.
(5) TERM.
The Company's employment of the Executive under the provisions of
the Agreement shall commence on the effective date hereof ("the Closing") and
end on the second anniversary of the Closing, unless further extended or sooner
terminated as hereinafter provided.
(6) POSITION AND DUTIES.
The executive shall serve as Executive Vice President and Corporate
Secretary of the Company and in such additional capacities as may be reasonable
assigned to the Executive by the Board. In her capacity as Executive Vice
President and Corporate Secretary of the Company, the Executive shall have such
duties, responsibilities and authority as are usual and customary for executives
who hold the same or a substantially similar position with companies of
comparable size in the same industry as the Company. In connection with any
capacities, the Executive shall have such duties, responsibilities and authority
as may from time to time be reasonably assigned to the Executive by the Board.
The Executive shall devote substantially all the Executive's working time and
efforts to the business and affairs of the Company.
(7) PLACE OF PERFORMANCE.
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In connection with the Executive's employment by the Company, the
Executive shall be based at the Company's executive offices in Houston, Texas,
except for required travel on company business, and except as otherwise agreed
to between the Executive and the Company.
(8) COMPENSATION AND RELATED MATTERS.
(1) The Executive has been employed by the Company since May 1,
1998, at an annual salary of $90,000.00, payable in equal
installments on the first and fifteenth days of each month (or
in such other installments consistent with the Company's
policies and procedures and as agreed to by the Executive).
However, since May 1, 1998, the Executive's salary has been
accrued but not paid. Continuing on the date hereof, the
Company shall pay to the Executive an annual salary of
$90,000.00.
(2) The Executive's annual salary may be amended from time to time
in accordance with normal business practices of the Company at
the full discretion of the Board.
(3) During the Executive's employment hereunder, the Executive
shall be entitled to receive prompt reimbursement for all
reasonable expenses incurred by the Executive in performing
services hereunder, including all cellular telephone,
business, travel, and living expenses while away from home on
business or at the request of and in the service of the
Company, provided that such expenses are incurred and
accounted for in accordance with the Company's policies and
procedures. The Executive shall also be reimbursed for club
membership dues for membership in one (1) area
dining/fitness/country club establishment.
(4) The Executive shall be entitled to fou (4) weeks of vacation
in each calendar year, one (1) week of personal time, and to
compensation for earned but unused vacation days, determined
in accordance with the Company's vacation plan or policy. The
Executive shall also be entitled to all paid holidays provided
by the Company to its other executives.
(5) The Executive shall either be provided with a car allowance of
$500.00 per month, or the Company shall lease a company auto
for the executive, with any annual increase to be determined
by the Board, payable in according with the Company's policies
and procedures. In addition, the Executive shall be reimbursed
for business mileage at the rate and based on the same
criteria set forth in IRS Publication 463, as amended from
time to time.
(6) The Executive shall be entitled to suc other benefits,
including, but not limited to, medical insurance, dental,
vision, life insurance, short and long term disability
insurance, and officers' and directors' insurance, determined
in accordance with the Company's benefit plan or policy, or at
the discretion
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of the board of directors. The Company shall pay for all
payments and premiums to be due on the existing long term
disability insurance policy covering the Executive with
Provident Life Insurance Company, until this agreement is
terminated.
(7) In the event of any change of control over the Company, all
accrued but unpaid salary of the Executive shall be paid to
the executive within 15 days after the consummation of the
transaction causing the change of control. "Change of control"
for purposes of this subparagraph shall include but is not
limited to any merger involving the Company and any
acquisition of the Company.
(9) OFFICES.
The Executive agrees to serve without additional compensation, if
elected or appointed thereto, as a member of the Board or as a member of the
Board of Directors of any subsidiary of the Company; provided, however, that the
Executive is indemnified for serving in any and all such capacities to the
fullest extent provided by applicable law.
(10) TERMINATION.
(1) As a result of death: If the Executive should die during the
term of this agreement, the Executive's employment shall
terminate on the Executive's date of death and the Executive's
surviving spouse, shall be entitled to the Executive's Accrued
Benefits and stock options as of the Termination Date.
(2) As a result of Disability: If, as a result of the Executive's
Disability, the Executive shall have been unable to perform
the Executive's duties hereunder on a full-time, continuous
basis for three (3) consecutive months or for an aggregate of
four (4) months within any twelve (12) month period, the
Company may terminate the Executive's employment. During the
terms of the Executive's Disability prior to termination, the
Executive shall continue to receive all salary and benefits
payable under Section 6 hereof, including participation in all
employee benefit plans, programs, and arrangements in which
the Executive was entitled to participate immediately prior to
the Disability; provided, however, that the Executive's
continued participation is permitted under the terms and
provisions of such plans, programs, and arrangements. In the
event the Executive's employment is terminated on account of
the Executive's Disability in accordance with this Subsection
8(b), the Executive shall receive the Executive's Accrued
Benefits as of the Termination Date and shall remain eligible
for all benefits provided by any long-term disability program
of the Company in effect at the time of such termination. The
payment of the Accrued Benefits by the Company to the
Executive shall be in addition to, and not in lieu of, any
benefits payable by reason of the Executive's Disability to
the extent provided under any long-term disability program of
the Company in effect at the
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time of the Executive's termination, or under any disability
insurance policy, or otherwise.
(3) Termination Without Cause: Either part to this Agreement may
terminate the Executive's employment hereunder without cause
at any time upon notice to the other party, and upon any such
termination, the Executive shall be entitled to receive her
Accrued Benefits. In the event that the Company terminates the
Executive's employment pursuant to this Subsection 8c, the
Executive shall receive from the Company within fourteen (14)
days of the Termination Date a lump sum cash payment (the
"Severance Payment"), as severance, in an amount equal to one
hundred percent (100%) of the Executive's annual salary, as
set forth in Subsection 6(a) hereof. The executive under this
subparagraph (c) shall specifically have the right to
terminate this Agreement in the event of a takeover of the
Company. In the event this Agreement is terminated by either
party without cause, the Executive shall have the absolute
right to exercise any and all stock options until the later of
the two following dates: (a) the deadline for exercising the
stock option as granted to the Executive prior to the
termination without cause, (b) two years from the date of
termination without cause becomes effective.
(4) Termination as a result of cause. The Company may terminate
the Executive for cause, upon the occurrence of any one or
more of the following acts or omissions:
(ii) The determination in binding and final
judgment, order or decree by a court or
administrative agency of competent
jurisdiction, that the Executive has engaged
in fraudulent conduct, and the determination
by the Board, in its sole discretion that
such fraudulent conduct has a significant
adverse impact on the Company;
(iv) The conviction of the Executive on a felony
or misdemeanor involving moral turpitude (as
evidenced by a binding and final judgment,
order, or decree of a court of competent
jurisdiction) and the determination by the
Board, in its sole discretion, that such
conviction has a significant adverse impact
on the Company;
(vi) The refusal by the Executive to perform the
Executive's duties or responsibilities as
determined by the Board; or
(viii)Theperformance by th Executive of his duties
or responsibilities in a negligent manner
causing harm to the Company's revenues or
reputation, as determined by the Board; or
In the event of termination for cause, as
set forth above, the Executive will be
entitled to receive his Accrued Benefits,
but will not be entitled to the Severance
Payment, except as otherwise provided by
Texas law.
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(11) In the event that the Executive is terminated by the Company
pursuant to Subsections 8(a), 8(b) and 8(c), all stock options
granted pursuant to Subsection 6(g) as well as any stock
options subsequently granted shall become fully vested as of
the Termination Date.
(11) TERMINATION NOTICE.
Any termination by the Company or the Executive of the Executive's
employment hereunder shall be communicated by written Notice of
Termination to the Executive, if such Notice of Termination is
delivered by the Company, and to the Company, if such Notice of
Termination is delivered by the Executive. The Notice of Termination
shall indicate the specific termination provision in this Agreement
relied upon shall set forth the Termination Date.
(12) NONDISCLOSURE OF PROPRIETARY INFORMATION.
Recognizing that the Company is presently engaged, and may hereafter
continue to be engaged, in the research and development of processes,
the manufacturing of products, or the performance of services, which
involve experimental and inventive work and that the success of its
business depends upon the protection of such processes, products, and
services by patent, copyright or secrecy and that the Executive has
had, or during the course of Executive's engagement as an employee or
consultant may have, access to Proprietary Information, as hereinafter
defined, of the Company and that the Executive has furnished, or during
the course of the Executive's engagement may furnish, Proprietary
Information to the Company, the Executive agrees that:
(1) "Proprietary Information" shall mean any and all methods,
inventions, improvements or discoveries, whether or not
patentable or copyrightable, and any other information of a
secret, proprietary, confidential, or generally undisclosed
nature relating to the Company, its products, customers,
processes, and services, including information relating to
testing research, development, manufacturing, marketing, and
selling, disclosed to the Executive or otherwise made known to
the Executive as a consequence of or through the Executive's
engagement by the Company (including information originated by
the Executive) in any technological area previously developed
by the Company or developed, engaged in, or researched, by the
Company during the term of the Executive's engagement,
including, but not limited to, trade secrets, processes,
products, formulae, apparatus, techniques, know-how, marketing
plans, data, improvements, strategies, forecasts, customer
lists, and technical requirements of customers, unless such
information is in the public domain to such an extent as to be
readily available to the Company's competitors
(2) The Executive acknowledges that the Company has exclusive
property rights to all Proprietary Information, and the
Executive hereby assigns all rights that the
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Executive might otherwise possess in any Proprietary
Information to the Company. The Executive will not at any time
during or after the term of the Executive's engagement, which
term shall include any time in which the Executive may be
retained by the Company as a consultant, directly or
indirectly use, communicate, disclose, or disseminate any
Proprietary Information.
(3) All documents, records, notebooks, notes, memoranda, and
similar repositories of, or containing, Proprietary
Information made or compiled by the Executive at any time or
made available to the Executive prior to or during the term of
Executive's engagement by the Company, including any and all
copies thereof, shall be the property of the Company, shall be
held by the Executive in trust solely for the benefit of the
Company, and shall be delivered to the Company by the
Executive on the termination of the Executive's engagement or
at any other time on the request of the Company.
(4) The Executive will not assert any rights under any inventions,
copyrights, discoveries, concepts, or ideas, or improvements
thereof, or know-how related thereto, as having been made or
acquired by the Executive prior to the Executive's being
engaged by the Company or during the term of the Executive's
engagement if based on or otherwise related to Proprietary
Information.
(13) ASSIGNMENT OF INVENTIONS.
(1) For purposes of this Section 11, the term "Inventions" shall
mean discoveries, concepts, and ideas, whether patentable or
copyrightable or not, including, but not limited to,
improvements, know-how, data, processes, methods, formulae,
and techniques, as well as improvements thereof, or know-how
related thereto, concerning any past, present, or prospective
activities of the Company, which the Executive makes,
discovers, or conceives (whether or not during the hours of
the Executive's engagement or with the use of the Company's
facilities, materials, or personnel), either solely or jointly
with others during the Executive's engagement by the Company
or any Affiliate of the Company and, if based on or related to
Proprietary Information, at any time after termination of such
engagement. All inventions shall be the sole property of the
Company, and the Executive agrees to perform the provisions of
this Section 11 with respect thereto without the payment by
the Company of any royalty or any consideration therefor,
other than the regular compensation paid to the Executive in
her capacity of as an employee or consultant.
(2) The Executive shall maintain written notebooks in which the
Executive shall set forth, on a current basis, information as
to the Inventions, describing in detail the procedures
employed and the results achieved, as well as information as
to any
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<PAGE>
studies or research projects undertaken on the Company's
behalf. Th written notebooks shall at all times be the
property of the Company and shall be surrendered to the
Company upon termination of the Executive's engagement or,
upon request of the Company, at any time prior thereto.
(3) The Executive shall apply, at the company's request and
expense, for United States and foreign letters patent or
copyrights, either in the Executive's name or otherwise as the
Company shall desire.
(4) The Executive hereby assigns to the Company all of the
Executive's rights to the Inventions and to applications for
United States and/or foreign letters patent or copyrights and
to United States and/or foreign letters patent or copyrights
granted in respect of the Inventions.
(5) The Executive shall acknowledge and deliver promptly to the
Company, without charge to the Company, but at its expense,
such written instruments (including applications and
assignments) and do such other acts, such as giving testimony
in support of the Executive's inventorship, as may be
necessary in the opinion of the Company to obtain, maintain,
extend, reissue, and enforce United States and/or foreign
letters patent and copyrights relating to the Inventions and
to vest the entire right and title thereto in the Company or
its nominee. The Executive acknowledges and agrees that any
copyright developed or conceived of by the Executive during
the terms of the Executive's employment which is related to
the business of the Company shall be "work for hire" under the
copyright law of the United States and other applicable
jurisdictions.
(6) The Executive represents that the Executive's performance of
all of the terms of this Agreement and as an employee of or
consultant to the Company does not and will not breach any
trust existing prior to the Executive's employment by the
Company. The Executive agrees not to enter into any agreement,
either written or oral, in conflict herewith and represents an
agrees that the Executive has not brought and will not bring
with the Executive to the Company or use in the performance of
the Executive's responsibilities at the Company any materials
or documents of a former employer which are not generally
available to the public, unless the Executive has obtained
written authorization from the former employer for their
possession and use, and the Executive has provided a copy of
such written authorization to the Company.
(7) No provision of this Section 11 shall be deemed to limit the
restrictions applicable to the Executive under Section 10
hereof.
(14) EXECUTIVE REPRESENTATIONS.
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The Executive warrants and represents that it has identified
all prior obligations, written or oral, such as
confidentiality agreements or covenants restricting future
employment of the Executive. Executive further agrees that,
for a period of one year immediately following the termination
of Executive's employment with the Company, Executive will
inform each new employer, prior to accepting employment, of
the existence and details of this Agreement and provide the
employer with a copy of this Agreement. Executive agrees to
indemnify and hold harmless the Company from any and all
costs, expenses, and liabilities, of any kind, which the
Company may incur as a result of any failure of the
representations and warranties contained in this Section 13.
(15) REMEDIES AND JURISDICTION.
(1) The Executive hereby acknowledges and agrees that a breach of
the agreements contained in Section 13 of this Agreement will
cause irreparable harm and damage to the Company, that the
remedy at law for the breach or threatened breach of the
agreements set forth in Section 13 of this Agreement will be
inadequate, and that, in addition to all other remedies
available to the Company for such breach or threatened breach
(including, without limitation, the right to recover damages),
the Company shall be entitled to injunctive relief for any
breach or threatened breach of the agreements contained in
Section 13 of this Agreement.
(2) All claims, disputes, and other matter in question between the
parties arising under this Agreement, except those pertaining
to Section 13 hereof, shall, unless otherwise provided herein,
be decided by arbitration in the State of Texas in accordance
with the National Rules for the Resolution of Employment
Disputes of the American Arbitration Association (including
such procedures governing selection of the specific arbitrator
or arbitrators), unless the parties otherwise agree. The
Company shall pay the costs of any such arbitration. The award
by the arbitrator or arbitrators shall be final, and judgment
may be entered upon it in accordance with applicable law in
any state or federal court having proper jurisdiction.
(16) ATTORNEYS' FEES.
In the event that either party hereunder institutes any legal
proceedings in connection with its rights or obligations under this
Agreement, the prevailing party in such proceeding shall be entitled to
recover from the other party all reasonable attorneys' fees and
expenses incurred therein.
(17) SUCCESSORS.
This Agreement and all rights of the Executive hereunder shall inure to
the benefit of and be enforceable by the Executive's personal or legal
representatives, estate, executors, administrators, heirs, or beneficiaries. In
the event of the Executive's death, all amounts payable to the Executive under
this Agreement shall be paid to the Executive's surviving spouse, if the
Executive dies without a surviving spouse, to the Executive's estate. This
Agreement shall inure to the benefit of, be binding upon, and be enforceable by
or against, any successor, surviving or resulting corporation, or other entity
or any assignee of the Company to which all or substantially all of the business
and
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assets of the Company is transferred whether by merger, consolidation, exchange,
assignment, sale, lease, or other disposition or action.
(18) ENFORCEMENT.
The provisions of this Agreement shall be regarded a divisible, and if
any provisions or any part hereof is declared invalid or unenforceable by a
court of competent jurisdiction, the validity and enforceability of the
remainder of such provisions or the parts hereof add the applicability thereof
shall not be affected thereby.
(19) AMENDMENT OR TERMINATION.
This Agreement may not be amended or terminated during its term, except
by written instrument executed by both the Company and the Executive.
(20) SURVIVABILITY.
The provisions of Section 10, 11, 12 and 14 hereof and the
provisions hereof relating to the payment of the Accrued Benefits and the
Severance Payment shall survive the termination of this Agreement.
(21) ENTIRE AGREEMENT.
This Agreement sets forth the entire agreement between the
Executive and the Company with respect to the subject matter hereof and
supersedes all prior oral or written agreements, negotiations, commitments, and
understandings with respect thereof.
(22) GOVERNING LAW; VENUE.
This Agreement and the respective rights and obligations of
the Executive and the Company hereunder shall be governed by and construed in
accordance with the laws of the State of Texas without giving effect to the
provisions, principles, or policies thereof relating to choice of law or
conflict of laws. Venue of any arbitration or other legal proceeding or action
relating to this Agreement shall be proper in Harris County, Texas.
(23) NOTICE.
Notices given pursuant to this Agreement shall be in writing
and shall be deemed given when received, and if mailed, shall be mailed by
United States registered or certified mail, return receipt requested, postage
prepaid, if to the Company, to:
Affiliated Resources Corporation
3050 Post Oak Blvd., Suite 1080
Houston, Texas 77056
ATTN: Chairman and CEO
With a copy to corporate counsel for the Company to:
Short & Ketchand, L.L.P.
11 Greenway Plaza, Suite 1520
Houston, Texas 77046
Or to such other address as the Company shall have given to the Executive or, if
to the Executive to:
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14855 Memorial Drive #1013
Houston, Texas 77056
(24) NO WAIVER.
No waiver by either party at any time of any breach by the
other party of, or any failure by the other party to comply with, any condition
or provisions of the Agreement to be performed by the other party shall be
deemed a waiver of similar or dissimilar provisions or conditions at the same
time or at any prior or subsequent time.
(25) HEADINGS.
The headings herein contained are for reference only and shall
not affect the meaning or interpretation of any provision of this Agreement.
23. COUNTERPARTS.
This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed by its duly authorized officer, and the Executive has executed this
Agreement, on the date and year first above written.
THE COMPANY:
AFFILIATED RESOURCES CORPORATION
By:
-------------------------------
Peter C. Vanucci, Chairman & CEO
EXECUTIVE:
By:
----------------------------------------
Virginia M. Lazar, EVP & Secretary
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Exhibit 10.10
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT(the "Agreement") is made and entered
into effective as of September 15, 1999, by and between Affiliated
Resources Corporation, a Colorado Corporation ("Affiliated" or the
"Company"), and Ms. Patricia A. Bodley (hereinafter referred to as
the
"Bodley")
WITNESSETH:
WHEREAS, the Company desires to have the benefit of Bodley's efforts
and services;
WHEREAS, Bodley is willing to commit himself to serve the Company, on
the terms and conditions herein provided; and
WHEREAS, the Company and Bodley wish to enter into an employment
agreement on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements hereinafter set forth, the parties hereto mutually
covenant and agree as follows:
(1) DEFINITIONS.
Whenever used in this Agreement, the following terms shall have the
meanings set forth below:
(1) "Accrued Benefits" shall mean the amount payable not later
than fourteen (14) days following an applicable Termination
Date, which shall be equal to the sum of the following
amounts:
(ii) All salary earned or accrued through the Termination
Date;
(iv) Reimbursement for any and all monies advanced in
connection with the Executive's employment for
reasonable and necessary expenses incurred by the
Executive through the Termination Date.
(vi) Any and other cash benefits previously earned through
the Termination Date and deferred at the election of
the Executive or pursuant to any deferred
compensation plans then in effect.
(viii)Allother payments an benefits to which the Executive
may be entitled under the terms of any benefit plan
of the Company or otherwise, including, but not
limited to, any bonus declared by the Board, any
compensation for earned, but unused, vacation days,
and any unpaid automobile allowance.
(2) "Affiliate" shall have the same meanin as given to that term
in Rule 12b-2 of Regulation 12B promulgated under the
Securities Exchange Act of 1934, as amended.
(3) "Board" shall mean the Board of Directors of the Company.
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(4) "Disability" shall mean a physical or mental condition whereby
the Executive is unable to perform on a full-time, continuous
basis the customary duties of the Executive under this
Agreement.
(5) "Notice of Termination" shall mean the notice described in
Section 9 hereof;
(6) "Termination Date" shall mean, except as otherwise provided in
Section 8 hereof or as otherwise agreed between the Company
and the Executive:
(ii) The Executive's date of death;
(iv) Thirty (30) days afte the delivery of the Notice of
Termination terminating the Executive's employment on
account of Disability pursuant to Subsection 8(b)
hereof, unless the Executive returns on a full-time
basis to the performance of Executive's duties prior
to the expiration of such period;
(vi) Thirty (30) days afte the delivery of the Notice of
Termination if the Executive's employment is
terminated by the Executive voluntarily; and
(viii)Fifteen (15) days after the delivery of the Notice of
Termination, if the Executive's employment is
terminated by the Company for any reason other than
the Executive's death or Disability.
(2) EMPLOYMENT.
The Company hereby agrees to employ Bodley and Bodley hereby agrees
to serve the Company, on the terms and conditions set forth herein.
(3) TERM.
The Company's employment of Bodley under the provisions of the
Agreement shall commence on the effective date hereof ("the Closing") and end on
the first anniversary of the Closing, unless further extended or sooner
terminated as hereinafter provided.
(4) POSITION AND DUTIES.
Bodley shall serve as in such capacities as may be reasonably assigned
to Bodley. Bodley shall devote substantially all Bodley's working time and
efforts to the business and affairs of the Company.
(5) PLACE OF PERFORMANCE.
In connection with Bodley's employment by the Company, Bodley shall
be based at the Company's executive offices in Houston, Texas except for
required travel on company business, and except as otherwise agreed to between
Bodley and the Company.
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(6) COMPENSATION AND RELATED MATTERS.
(1) Bodley has been employed by the Compan since September 9,
1999, at an annual salary of $45,000.00, payable in equal
installments on the first and fifteenth days of each month (or
in such other installments consistent with the Company's
policies and procedures and as agreed to by Bodley).
Continuing on the date hereof, the Company shall pay to Bodley
an annual salary of $45,000.00.
(2) Bodley's annual salary may be amended from time to time in
accordance with normal business practices of the Company.
(3) During Bodley's employment hereunder, Bodley shall be entitled
to receive prompt reimbursement for all reasonable expenses
incurred by Bodley in performing services hereunder, including
all cellular telephone, business, travel, and living expenses
wile away from home on business or at the request of and in
the service of the Company, provided that such expenses are
incurred and accounted for in accordance with the Company's
policies and procedures.
(4) Bodley shall be entitled to two (2) weeks of vacation in each
calendar year, and one (1) week of personal time, and to
compensation for earned but unused vacation days, determined
in accordance with the Company's vacation plan or policy.
Bodley shall also be entitled to all paid holidays provided by
the Company to its other executives.
(5) Bodley shall be entitled to such other benefits, including,
but not limited to, medical insurance, dental, vision, life
insurance, short and long term disability insurance, and
officers' and directors' insurance, determined in accordance
with the Company's benefit plan or policy.
(6) In the event of any change of control over the Company, all
accrued but unpaid salary of Bodley and all earned but unused
vacation and personals days shall be paid to Bodley within 15
days after the consummation of the transaction causing the
change of control. "Change of control" for purposes of this
subparagraph shall include but is not limited to any merger
involving the Company and any acquisition of the Company.
(7) OFFICES.
Bodley agrees to serve without additional compensation, if elected
or appointed thereto, as a member of the Board or as a member of the Board of
Directors of any subsidiary of the Company; provided, however, that Bodley is
indemnified for serving in any and all such capacities to the fullest extent
provided by applicable law.
(8) TERMINATION.
(1) As a result of death: If Bodley should die during the term of
this agreement, Bodley's employment shall terminate on
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Bodley's date of death and Bodley's surviving spouse, or
Bodley's estate if Bodley dies without a surviving spouse,
shall be entitled to Bodley's Accrued Benefits as of the
Termination Date.
(2) As a result of Disability: If, as a result of Bodley's
Disability, Bodley shall have been unable to perform Bodley's
duties hereunder on a full-time, continuous basis for three
(3) consecutive months or for an aggregate of four (4) months
within any twelve (12) month period, the Company may terminate
Bodley's employment. During the terms of Bodley's Disability
prior to termination, Bodley shall continue to receive all
salary and benefits payable under Section 6 hereof, including
participation in all employee benefit plans, programs, and
arrangements in which Bodley was entitled to participate
immediately prior to the Disability; provided, however, that
Bodley's continued participation is permitted under the terms
and provisions of such plans, programs, and arrangements. In
the event Bodley's employment is terminated on account of
Bodley's Disability in accordance with this Subsection 8(b),
Bodley shall receive Bodley's Accrued Benefits as of the
Termination Date and shall remain eligible for all benefits
provided by any long-term disability program of the Company in
effect at the time of such termination. The payment of the
Accrued Benefits by the Company to Bodley shall be in addition
to, and not in lieu of, any benefits payable by reason of
Bodley's Disability to the extent provided under any long-term
disability program of the Company in effect at the time of the
Executive's termination, or under any disability insurance
policy, or otherwise.
(3) Termination Without Cause: Either part to this Agreement may
terminate Bodley's employment hereunder without cause at any
time upon notice to the other party, and upon any such
termination, Bodley shall be entitled to receive her Accrued
Benefits within 15 days after the termination becomes
effective. In the event that the Company terminates Bodley's
employment pursuant to this Subsection 8c, Bodley shall
receive from the Company within fourteen (14) days of the
Termination Date a lump sum cash payment (the "Severance
Payment"), as severance, an amount equal to the one hundred
percent (100%) of Bodley's annual salary, as set forth in
Subsection 6(a) hereof. Bodley under this subparagraph (c)
shall specifically have the right to terminate this Agreement
in the event of a takeover of the Company. In the event this
Agreement is terminated by either party without cause, Bodley
shall have the absolute right to exercise any and al stock
options until the later of the two following dates: (a) the
deadline for exercising the stock option as granted to Bodley
prior to the termination without cause, (b) two years from the
date of termination without cause becomes effective.
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(4) Termination as a result of cause. The Company may terminate
Bodley for cause, upon the occurrence of any one or more of
the following acts or omissions:
(ii) The determination in binding and final judgment,
order or decree by a court or administrative agency
of competent jurisdiction, that Bodley has engaged in
fraudulent conduct, and the determination by the
Board, in its sole discretion that such fraudulent
conduct has a significant adverse impact on the
Company;
(iv) The conviction of Bodley on a felony or misdemeanor
involving moral turpitude (as evidenced by a binding
and final judgment, order, or decree of a court of
competent jurisdiction) and the determination by the
Board, in its sole discretion, that such conviction
has a significant adverse impact on the Company;
(vi) The refusal by Bodley to perform Bodley's duties or
responsibilities as determined by the Board;
(viii)Theperformance by Bodley of her duties or
responsibilities in a negligent manner causing harm
to the Company's revenues or reputation, as
determined by the Board; or
In the event of termination for cause, as set forth
above, Bodley will be entitled to receive her Accrued
Benefits, but will not be entitled to the Severance
Payment, except as otherwise provided by Texas law.
(9) In the event that Bodley is terminated by the Company pursuant
to Subsections 8(a), 8(b) and 8(c), all stock options granted
pursuant to Subsection 6(g) as well as any stock options
subsequently granted shall become fully vested as of the
Termination Date.
(9) TERMINATION NOTICE.
Any termination by the Company or Bodley of Bodley's employment
hereunder shall be communicated by written Notice of Termination to
Bodley, if such Notice of Termination is delivered by the Company, and
to the Company, if such Notice of Termination is delivered by Bodley.
The Notice of Termination shall indicate the specific termination
provision in this Agreement relied upon shall set forth the Termination
Date.
(10) NONDISCLOSURE OF PROPRIETARY INFORMATION.
Recognizing that the Company is presently engaged, and may hereafter
continue to be engaged, in the research and development of processes,
the manufacturing of products, or the performance of services, which
involve experimental and inventive work and that the success of its
business depends upon the protection of such processes, products, and
services by patent, copyright or secrecy and that Bodley has had, or
during the course of Bodley's engagement as an employee or consultant
may have, access to Proprietary Information, as hereinafter defined, of
the Company and that Bodley has furnished, or during the course of
Bodley's engagement may furnish, Proprietary Information to the
Company, Bodley agrees that:
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(1) "Proprietary Information" shall mean any and all methods,
inventions, improvements or discoveries, whether or not
patentable or copyrightable, and any other information of a
secret, proprietary, confidential, or generally undisclosed
nature relating to the Company, its products, customers,
processes, and services, including information relating to
testing research, development, manufacturing, marketing, and
selling, disclosed to Bodley or otherwise made known to Bodley
as a consequence of or through Bodley's engagement by the
Company (including information originated by Bodley) in any
technological area previously developed by the Company or
developed, engaged in, or researched, by the Company during
the term of Bodley's engagement, including, but not limited
to, trade secrets, processes, products, formulae, apparatus,
techniques, know-how, marketing plans, data, improvements,
strategies, forecasts, customer lists, and technical
requirements of customers, unless such information is in the
public domain to such an extent as to be readily available to
the Company's competitors.
(2) Bodley acknowledges that the Company has exclusive property
rights to all Proprietary Information, and Bodley hereby
assigns all rights that Bodley might otherwise possess in any
Proprietary Information to the Company. Bodley will not at any
time during or after the term of Bodley's engagement, which
term shall include any time in which Bodley may be retained by
the Company as a consultant, directly or indirectly use,
communicate, disclose, or disseminate any Proprietary
Information.
(3) All documents, records, notebooks, notes, memoranda, and
similar repositories of, or containing, Proprietary
Information made or compiled by Bodley at any time or made
available to Bodley prior to or during the term of Bodley's
engagement by the Company, including any and all copies
thereof, shall be the property of the Company, shall be held
by Bodley in trust solely for the benefit of the Company, and
shall be delivered to the Company by Bodley on the termination
of Bodley's engagement or at any other time on the request of
the Company.
(4) Bodley will not assert any rights under any inventions,
copyrights, discoveries, concepts, or ideas, or improvements
thereof, or know-how related thereto, as having been made or
acquired by Bodley prior to Bodley's being engaged by the
Company or during the term of Bodley's engagement if based on
or otherwise related to Proprietary Information.
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(11) ASSIGNMENT OF INVENTIONS.
(1) For purposes of this Section 11, the term "Inventions" shall
mean discoveries, concepts, and ideas, whether patentable or
coopyrightable or nit, including, but not limited to,
improvements, know-how, data, processes, methods, formulae,
and techniques, as well as improvements thereof, or know-how
related thereto, concerning any past, present, or prospective
activities of the Company, which Bodley makes, discovers, or
conceives (whether or not during the hours of Bodley's
engagement or with the use of the Company's facilities,
materials, or personnel), either solely or jointly with others
during Bodley's engagement by the Company or any Affiliate of
the Company and, if based on or related to Proprietary
Information, at any time after termination of such engagement.
All inventions shall be the sole property of the Company, and
Bodley agrees to perform the provisions of this Section 11
with respect thereto without the payment by the Company of any
royalty or any consideration therefor, other than the regular
compensation paid to Bodley in her capacity of as an employee
or consultant.
(2) Bodley shall maintain written notebook in which Bodley shall
set forth on a current basis, information as to the
Inventions, describing in detail the procedures employed and
the results achieved, as well as information as to any studies
or research projects undertaken on the Company's behalf. The
written notebooks shall at all times be the property of the
Company and shall be surrendered to the Company upon
termination of Bodley's engagement or, upon request of the
Company, at any time prior thereto.
(3) Bodley shall apply, at the Company's request and expense, for
United States and Foreign letters patent or copyrights, either
in Bodley's name or otherwise as the Company shall desire.
(4) Bodley hereby assigns to the Company all of Bodley's rights to
the Inventions and to applications for United States and/or
foreign letters patent or copyrights and to United States
and/or foreign letters patent or copyrights granted in respect
of the Inventions.
(5) Bodley shall acknowledge and deliver promptly to the Company,
without charge to the Company, but at its expense, such
written instruments (including applications and assignments)
and do such other acts, such as giving testimony in support of
Bodley's inventorship, as may be necessary in the opinion of
the Company to obtain, maintain, extend, reissue and enforce
United States and or foreign letters patent and copyrights
relating to the Inventions and to vest the entire right and
title thereto in the Company or its nominee. Bodley
acknowledges and agrees that any copyright developed or
conceived of by Bodley during the terms of Bodley's employment
which is related to the Business of the Company
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shall be a "work for hire" under the copyright law of the
Unites States and other applicable jurisdictions.
(6) Bodley represents that Bodley's performance of all of the
terms of this Agreement and as an employee of or consultant to
the Company does not and will not breach any trust existing
prior to Bodley's employment by the Company. Bodley agrees not
to enter into any agreement, either written or oral, in
conflict herewith and represents and agrees that Bodley has
not brought and will not bring with Bodley to the Company or
use in the performance of Bodley's responsibilities at the
Company any materials or documents of a former employer which
are not generally available to the public, unless Bodley has
obtained written authorization from the former employer for
their possession and use, and Bodley has provided a copy of
such written authorization to the Company.
(7) No provision of this Section 11 shall be deemed to limit the
restrictions applicable to Bodley under Section 10 hereof.
(12) BODLEY REPRESENTATIONS.
Bodley warrants and represents that she has identified all
prior obligations, written or oral, such as confidentiality
agreements or covenants restricting future employment of
Bodley. Bodley further agrees that, for a period of one year
immediately following the termination of Bodley's employment
with the Company, Bodley will inform each new employer, prior
to accepting employment, of the existence and details of this
Agreement. Bodley agrees to indemnify and hold harmless the
Company from any and all costs, expenses, and liabilities, of
any kind, which the Company may incur as a result of any
failure of the representations and warranties contained in
this Section 13.
(13) REMEDIES AND JURISDICTION.
(1) Bodley hereby acknowledges and agrees that a breach of the
agreements contained in Section 13 of this Agreement will
cause irreparable harm and damage to the Company, that the
remedy at law for the breach or threatened breach of the
agreements set forth in Section 13 of this Agreement will be
inadequate, and that, in addition to all other remedies
available to the Company for such breach or threatened breach
(including, without limitation, the right to recover damages),
the Company shall be entitled to injunctive relief for any
breach or threatened breach of the agreements contained in
Section 13 of this Agreement.
(2) All claims, disputes, and other matter in question between the
parties arising under this Agreement, except those pertaining
to Section 13 hereof, shall, unless otherwise provided herein,
be decided by arbitration in the State of Texas in accordance
with the National Rules for the Resolution of Employment
Disputes of the American Arbitration Association (including
such procedures governing selection of the specific arbitrator
or
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arbitrators), unless the parties otherwise agree. The Company
shall pay the costs of any such arbitration. The award by the
arbitrator or arbitrators shall be final, and judgment may be
entered upon it in accordance with applicable law in any state
or federal court having proper jurisdiction.
(14) ATTORNEYS' FEES.
In the event that either party hereunder institutes any legal
proceedings in connection with its rights or obligations under this
Agreement, the prevailing party in such proceeding shall be entitled to
recover from the other party all reasonable attorneys' fees and
expenses incurred therein.
(15) SUCCESSORS.
This Agreement and all rights of Bodley hereunder shall inure to the
benefit of and be enforceable by Bodley's personal or legal representatives,
estate, executors, administrators, heirs, or beneficiaries. In the event of
Bodley's death, all amounts payable to Bodley under this Agreement shall be paid
to Bodley's surviving spouse, if Bodley dies without a surviving spouse, to
Bodley's estate. This Agreement shall inure to the benefit of, be binding upon,
and be enforceable by or against, any successor, surviving or resulting
corporation, or other entity or any assignee of the Company to which all or
substantially all of the business and assets of the Company is transferred
whether by merger, consolidation, exchange, assignment, sale, lease, or other
disposition or action.
(16) ENFORCEMENT.
The provisions of this Agreement shall be regarded a divisible, and if
any provisions or any part hereof is declared invalid or unenforceable by a
court of competent jurisdiction, the validity and enforceability of the
remainder of such provisions or the parts hereof add the applicability thereof
shall not be affected thereby.
(17) AMENDMENT OR TERMINATION.
This Agreement may not be amended or terminated during its term, except
by written instrument executed by both the Company and the Executive.
(18) SURVIVABILITY.
The provisions of Section 10, 11, 12 and 14 hereof and the
provisions hereof relating to the payment of the Accrued Benefits and the
Severance Payment shall survive the termination of this Agreement.
(19) ENTIRE AGREEMENT.
This Agreement sets forth the entire agreement between Bodley
and the Company with respect to the subject matter hereof and supersedes all
prior oral or written agreements, negotiations, commitments, and understandings
with respect thereof.
(20) GOVERNING LAW; VENUE.
This Agreement and the respective rights and obligations of
Bodley and the Company hereunder shall be governed by and construed in
accordance with the laws of the State of Texas without giving effect to the
provisions, principles, or policies thereof relating to choice of law or
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conflict of laws. Venue of any arbitration or other legal proceeding or action
relating to this Agreement shall be proper in Harris County, Texas.
(21) NOTICE.
Notices given pursuant to this Agreement shall be in writing
and shall be deemed given when received, and if mailed, shall be mailed by
United States registered or certified mail, return receipt requested, postage
prepaid, if to the Company, to:
Affiliated Resources Corporation
3050 Post Oak Blvd., Suite 1080
Houston, Texas 77056
ATTN: Chairman and CEO
With a copy to corporate counsel for the Company to:
Short & Ketchand, L.L.P.
11 Greenway Plaza, Suite 1520
Houston, Texas 77046
Or to such other address as the Company shall have given to the Executive or, if
to the Executive to:
2400 Lazy Hollow #119-D
Houston, Texas 77063
(22) NO WAIVER.
No waiver by either party at any time of any breach by the
other party of, or any failure by the other party to comply with, any condition
or provisions of the Agreement to be performed by the other party shall be
deemed a waiver of similar or dissimilar provisions or conditions at the same
time or at any prior or subsequent time.
(23) HEADINGS.
The headings herein contained are for reference only and shall
not affect the meaning or interpretation of any provision of this Agreement.
23. COUNTERPARTS.
This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed by its duly authorized officer, and Bodley has executed this
Agreement, on the date and year first above written.
THE COMPANY:
AFFILIATED RESOURCES CORPORATION
By: _________________________________
Peter C. Vanucci, Chairman & CEO
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BODLEY:
By: ________________________________________
Patricia A. Bodley
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Exhibit 10.11
EMPLOYMENT AGREEMENT
THISEMPLOYMENT AGREEMENT(the "Agreement") is made and entered into
effective as of January 3, 2000, by and between AFFILIATED RESOURCES
CORPORATION, a Colorado Corporation ("Affiliated" or the "Company"), and MR.
PETER C. VANUCCI (hereinafter referred to as the "Executive")
WITNESSETH:
WHEREAS, the Company desires to have the benefit of the Executive's
efforts and services;
WHEREAS, the Executive is willing to commit himself to serve the
Company, on the terms and conditions herein provided; and
WHEREAS, in order to effect the foregoing, the Company and the
Executive wish to enter into an employment agreement on the terms and conditions
set forth below.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements hereinafter set forth, the parties hereto mutually
covenant and agree as follows:
(1) DEFINITIONS.
Whenever used in this Agreement, the following terms shall have the
meanings set forth below:
(1) "Accrued Benefits" shall mean the amount payable not later
than fourteen (14) days following an applicable Termination
Date, which shall be equal to the sum of the following
amounts:
(ii) All salary earned or accrued through the Termination
Date;
(iv) Reimbursement for any and all monies advanced in
connection with the Executive's employment for
reasonable and necessary expenses incurred by the
Executive through the Termination Date.
(vi) Any and other cash benefits previously earned through
the Termination Date and deferred at the election of
the Executive or pursuant to any deferred
compensation plans then in effect.
(viii)Allother payments an benefits to which the Executive
may be entitled under the terms of any benefit plan
of the Company or otherwise, including, but not
limited to, any bonus declared by the Board, any
compensation for earned, but unused, vacation days,
and any unpaid automobile allowance.
(2) "Affiliate" shall have the same meanin as given to that term
in Rule 12b-2 of Regulation 12B promulgated under the
Securities Exchange Act of 1934, as amended.
(3) "Board" shall mean the Board of Directors of the Company.
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(4) "Disability" shall mean a physical or mental condition whereby
the Executive is unable to perform on a full-time, continuous
basis the customary duties of the Executive under this
Agreement.
(5) "Notice of Termination" shall mean the notice described in
Section 9 hereof;
(6) "Termination Date" shall mean, except as otherwise provided in
Section 8 hereof or as otherwise agreed between the Company
and the Executive:
(ii) The Executive's date of death;
(iv) Thirty (30) days afte the delivery of the Notice of
Termination terminating the Executive's employment on
account of Disability pursuant to Subsection 8(b)
hereof, unless the Executive returns on a full-time
basis to the performance of Executive's duties prior
to the expiration of such period;
(vi) Thirty (30) days afte the delivery of the Notice of
Termination if the Executive's employment is
terminated by the Executive voluntarily; and
(viii)Fifteen (15) days after the delivery of the Notice of
Termination, if the Executive's employment is
terminated by the Company for any reason other than
the Executive's death or Disability.
(2) EMPLOYMENT.
The Company hereby agrees to employ the Executive and the Executive
hereby agrees to serve the Company, on the terms and conditions set forth
herein.
(3) TERM.
The Company's employment of the Executive under the provisions of
the Agreement shall commence on the effective date hereof ("the Closing") and
end on the second anniversary of the Closing, unless further extended or sooner
terminated as hereinafter provided.
(4) POSITION AND DUTIES.
The executive shall serve as Chief Executive Officer (CEO) of the
Company and in such additional capacities as may be reasonable assigned to the
Executive by the Board. In this capacity as CEO of the Company, the Executive
shall have such duties, responsibilities and authority as are usual and
customary for executives who hold the same or a substantially similar position
with companies of comparable size in the same industry as the Company. In
connection with any capacities, the Executive shall have such duties,
responsibilities and authority as may from time to time be reasonably assigned
to the Executive by the Board.
(5) PLACE OF PERFORMANCE.
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In connection with the Executive's employment by the Company, the
Executive shall be based at Brecksville, Ohio, except for required travel on
company business, and except as otherwise agreed to between the Executive and
the Company.
(6) COMPENSATION AND RELATED MATTERS.
(1) Commencing on the date hereof, and during Executive's
employment, the Company shall pay to the Executive an annual
salary of $125,000.00, payable in equal installments on the
first and fifteenth days of each month (or in such other
installments consistent with the Company's policies and
procedures and as agreed to by the Executive). The Executive's
salary may be amended from time to time in accordance with
normal business practices of the Company at the full
discretion of the Board (2) At the Closing, the Executive will
receive $25,000.00 as a signing bonus. If, on the first
anniversary of the Closing, the Executive is employed by the
Company and neither the Executive not the Company has given
the other any Notice of Termination, the Executive shall be
entitled to a $20,000.00 retention bonus.
(3) During the Executive's employment hereunder, the Executive
shall be entitled to receive prompt reimbursement for all
reasonable expenses incurred by the Executive in performing
services hereunder, including all cellular telephone,
business, travel, and living expenses while away from home on
business or at the request of and in the service of the
Company, provided that such expenses are incurred and
accounted for in accordance with the Company's policies and
procedures. The Executive shall also be reimbursed for club
membership dues for membership in one (1) area
dining/fitness/country club establishment.
(4) The Executive shall be entitled to the number of vacation days
in each calendar year, and to compensation for earned but
unused vacation days, determined in accordance with the
Company's vacation plan or policy. The Executive shall also be
entitled to all paid holidays provided by the Company to its
other executives.
(5) The Executive shall receive a car allowance of $500.00 per
month, with any annual increase to be determined by the Board,
payable in accordance with the Company's policies and
procedures. In addition, the Executive shall be reimbursed for
business mileage at the rate and based on the same criteria
set forth in IRS Publication 463, as amended from time to
time.
(6) The Executive shall be entitled to suc other benefits,
including, but not limited to, medical insurance, life
insurance, disability insurance, and officers' and directors'
insurance, determined in accordance with the Company's benefit
plan or policy.
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(7) The Executive shall be granted options to purchase 500,000
(Five Hundred Thousand) shares of the Company's common stock
based on the following vesting schedule at the exercise prices
indicated:
(i) Upon the completion of the following, Executive will
be entitled to 250,000 shares in options at an
exercise price of $.10 per share: The completion of
corporate restructuring of operations and preparation
of a preferred share offering. The preferred share
offering should be designed to reduce debt, provide
working capital, and re- establish credit lines for
ChemWay, Inc. operations as well as fund oil and gas
acquisition and new drilling ventures which will
enhance Affiliated's cash flow and book value.
(iii) If, within the initia term of Executive's employment
term, the stock price of Affiliated reaches the price
of $2.00 per share, Executive shall be entitled to
250,000 shares in options of Affiliated stock at an
exercise price of $.10 per share.
(v) Affiliated will also grant additional bonuses from
time to time, within the discretion of the Board, for
service and performance which causes additional
benefit to Affiliated.
(7) OFFICES.
The Executive agrees to serve without additional compensation, if
elected or appointed thereto, as a member of the Board or as a member of the
Board of Directors of any subsidiary of the Company; provided, however, that the
Executive is indemnified for serving in any and all such capacities to the
fullest extent provided by applicable law.
(8) TERMINATION.
(1) As a result of death: If the Executive should die during the
term of this agreement, the Executive's employment shall
terminate on the Executive's date of death and the Executive's
surviving spouse, shall be entitled to the Executive's Accrued
Benefits and stock options as of the Termination Date.
(2) As a result of Disability: If, as a result of the Executive's
Disability, the Executive shall have been unable to perform
the Executive's duties hereunder on a full-time, continuous
basis for two (2) consecutive months or for an aggregate of
three (3) months within any twelve (12) month period, the
Company may terminate the Executive's employment. During the
terms of the Executive's Disability prior to termination, the
Executive shall continue to receive all salary and benefits
payable under Section 6 hereof, including participation in all
employee benefit plans, programs, and arrangements in which
the Executive was entitled to participate immediately prior to
the Disability; provided, however, that the Executive's
continued participation is permitted under the terms and
provisions of such plans, programs, and arrangements. In the
event the Executive's employment is terminated on account of
the Executive's Disability in accordance with this Subsection
8(b), the Executive shall receive the Executive's Accrued
Benefits as of
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the Termination Date and shall remain eligible for all
benefits provided by any long-term disability program of the
Company in effect at the time of such termination. The payment
of the Accrued Benefits by the Company to the Executive shall
be in addition to, and not in lieu of, any benefits payable by
reason of the Executive's Disability to the extent provided
under any long-term disability program of the Company in
effect at the time of the Executive's termination, or under
any disability insurance policy, or otherwise.
(3) Termination Without Cause: Either part to this Agreement may
terminate the Executive's employment hereunder without cause
at any time upon notice to the other party, and upon any such
termination, the Executive shall be entitled to receive his
Accrued Benefits. In the event that the Company terminates the
Executive's employment pursuant to this Subsection 8c, the
Executive shall receive from the Company within fourteen (14)
days of the Termination Date a lump sum cash payment (the
"Severance Payment"), as severance, in an amount equal to the
full amount of his contractual salary and stock options as set
forth in Subsection 6 hereof.
(4) Termination as a result of cause. The Company may terminate
the Executive for cause, upon the occurrence of any one or
more of the following acts or omissions:
(ii) The determination in binding and final judgment,
order or decree by a court or administrative agency
of competent jurisdiction, that the Executive has
engaged in fraudulent conduct, and the determination
by the Board, in its sole discretion that such
fraudulent conduct has a significant adverse impact
on the Company;
(iv) The conviction of the Executive on a felony or
misdemeanor involving moral turpitude (as evidenced
by a binding and final judgment, order, or decree of
a court of competent jurisdiction) and the
determination by the Board, in its sole discretion,
that such conviction has a significant adverse impact
on the Company;
(vi) The refusal by the Executive to perform the
Executive's duties or responsibilities as determined
by the Board;
In the event of termination for cause, as set forth
above, the Executive will be entitled to receive his
Accrued Benefits, but will not be entitled to the
Severance Payment, except as otherwise provided by
Texas law.
(9) In the event that the Executive is terminated by the Company
pursuant to Subsections 8(a), 8(b) and 8(c), all stock options
granted pursuant to Subsection 6(g) as well as any stock
options subsequently granted shall become fully vested as of
the Termination Date. In the event that the Executive is
terminated pursuant to Section 8(d), all stock option not
vested at the time of termination shall immediately lapse.
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(9) TERMINATION NOTICE.
Any termination by the Company or the Executive of the Executive's
employment hereunder shall be communicated by written Notice of
Termination to the Executive, if such Notice of Termination is
delivered by the Company, and to the Company, if such Notice of
Termination is delivered by the Executive. The Notice of Termination
shall indicate the specific termination provision in this Agreement
relied upon shall set forth the Termination Date.
(10) NONDISCLOSURE OF PROPRIETARY INFORMATION.
Recognizing that the Company is presently engaged, and may hereafter
continue to be engaged, in the research and development of processes,
the manufacturing of products, or the performance of services, which
involve experimental and inventive work and that the success of its
business depends upon the protection of such processes, products, and
services by patent, copyright or secrecy and that the Executive has
had, or during the course of Executive's engagement as an employee or
consultant may have, access to Proprietary Information, as hereinafter
defined, of the Company and that the Executive has furnished, or during
the course of the Executive's engagement may furnish, Proprietary
Information to the Company, the Executive agrees that:
(1) "Proprietary Information" shall mean any and all methods,
inventions, improvements or discoveries, whether or not
patentable or copyrightable, and any other information of a
secret, proprietary, confidential, or generally undisclosed
nature relating to the Company, its products, customers,
processes, and services, including information relating to
testing research, development, manufacturing, marketing, and
selling, disclosed to the Executive or otherwise made known to
the Executive as a consequence of or through the Executive's
engagement by the Company (including information originated by
the Executive) in any technological area previously developed
by the Company or developed, engaged in, or researched, by the
Company during the term of the Executive's engagement,
including, but not limited to, trade secrets, processes,
products, formulae, apparatus, techniques, know-how, marketing
plans, data, improvements, strategies, forecasts, customer
lists, and technical requirements of customers, unless such
information is in the public domain to such an extent as to be
readily available to the Company's competitors. Such
information does not include any information having to do with
Company involvement in the oil and gas industry.
(2) The Executive acknowledges that the Company has exclusive
property rights to all Proprietary Information, and the
Executive hereby assigns all rights that the Executive might
otherwise possess in any Proprietary Information to the
Company. The Executive will not at any time during or after
the term of the Executive's
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engagement, which term shall include any time in which the
Executive may be retained by the Company as a consultant,
directly or indirectly use, communicate, disclose, or
disseminate any Proprietary Information.
(3) All documents, records, notebooks, notes, memoranda, and
similar repositories of, or containing, Proprietary
Information made or compiled by the Executive at any time or
made available to the Executive prior to or during the term of
Executive's engagement by the Company, including any and all
copies thereof, shall be the property of the Company, shall be
held by the Executive in trust solely for the benefit of the
Company, and shall be delivered to the Company by the
Executive on the termination of the Executive's engagement or
at any other time on the request of the Company.
(4) The Executive will not assert any rights under any inventions,
copyrights, discoveries, concepts, or ideas, or improvements
thereof, or know-how related thereto, as having been made or
acquired by the Executive prior to the Executive's being
engaged by the Company or during the term of the Executive's
engagement if based on or otherwise related to Proprietary
Information.
(11) NON-COMPETE.
(a) Even though the Company is engaging in the oil and gas
industry, Executive is authorized to engage fully in any
additional oil and gas ventures and/or obtain additional
ownership and/or management positions in any oil and gas
business at his sole discretion.
(b) The remaining part of this Section 11 shall in no manner
be construed to hamper Executive's current, or future interest
in, management of, or investment in any oil and gas industry
or venture. With exception to its oil and gas industry
information, the Executive acknowledges the Company has and
will continue to provide the Executive access to the Company's
Proprietary Information, and further acknowledges that the
Proprietary Information is valuable to the Company. The
Executive further acknowledges that the Company has provided
other items of value to the Executive, including stock
options. In return, the Executive hereby agrees that during
the Executive's employment, and for a period of one year from
the termination thereof, the Executive will not, without the
written consent of the Company:
(ii) Within any jurisdiction or marketing area in which
the Company or any subsidiary thereof is doing
business, own manage, operate, or control any
Business, provided, however, that for purposes of the
Subsection 11(a), ownership of securities of not in
excess of five percent (5%) of any class of
securities of a public company shall not be
considered as owning, managing, operating, or
controlling any Business; or
(iv) Within any jurisdiction or marketing area in which
the Company or any subsidiary thereof is doing
business, act as, or become employed
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as, an officer, director, employee, consultant or
agent of any Business; or
(vi) Solicit any Business for, or sell any products that
are in competition with the Company's products to,
any company which is a customer or client of the
Company or any of it subsidiaries as of the
Termination Date; or
(viii)Solicit the employment of, or hire, any full time
employee employed by the Company or its subsidiaries
as of the Termination Date.
The term "Business" as used in this Section 11, shall mean any person
or entity which engages in the same or substantially similar business
as the Company, namely, the blending or packaging of chemicals for
aftermarket use.
(12) REMEDIES AND JURISDICTION.
(1) The Executive hereby acknowledges and agrees that a breach of
the agreements contained in Section 11 of this Agreement will
cause irreparable harm and damage to the Company, that the
remedy at law for the breach or threatened breach of the
agreements set forth in Section 11 of this Agreement will be
inadequate, and that, in addition to all other remedies
available to the Company for such breach or threatened breach
(including, without limitation, the right to recover damages),
the Company shall be entitled to injunctive relief for any
breach or threatened breach of the agreements contained in
Section 11 of this Agreement.
(2) All claims, disputes, and other matter in question between the
parties arising under this Agreement, except those pertaining
to Section 11 hereof, shall, unless otherwise provided herein,
be decided by arbitration in the State of Texas in accordance
with the National Rules for the Resolution of Employment
Disputes of the American Arbitration Association (including
such procedures governing selection of the specific arbitrator
or arbitrators), unless the parties otherwise agree. The
Company shall pay the costs of any such arbitration. The award
by the arbitrator or arbitrators shall be final, and judgment
may be entered upon it in accordance with applicable law in
any state or federal court having proper jurisdiction.
(13) ATTORNEYS' FEES.
In the event that either party hereunder institutes any legal
proceedings in connection with its rights or obligations under this
Agreement, the prevailing party in such proceeding shall be entitled to
recover from the other party all reasonable attorneys' fees and
expenses incurred therein.
(14) SUCCESSORS.
This Agreement and all rights of the Executive hereunder shall inure to
the benefit of and be enforceable by the Executive's personal or legal
representatives, estate, executors, administrators, heirs, or beneficiaries. In
the event of the Executive's death, all amounts payable to the Executive
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under this Agreement shall be paid to the Executive's surviving spouse, if the
Executive dies without a surviving spouse, to the Executive's estate. This
Agreement shall inure to the benefit of, be binding upon, and be enforceable by
or against, any successor, surviving or resulting corporation, or other entity
or any assignee of the Company to which all or substantially all of the business
and assets of the Company is transferred whether by merger, consolidation,
exchange, assignment, sale, lease, or other disposition or action.
(15) ENFORCEMENT.
The provisions of this Agreement shall be regarded a divisible, and if
any provisions or any part hereof is declared invalid or unenforceable by a
court of competent jurisdiction, the validity and enforceability of the
remainder of such provisions or the parts hereof add the applicability thereof
shall not be affected thereby.
(16) AMENDMENT OR TERMINATION.
This Agreement may not be amended or terminated during its term, except
by written instrument executed by both the Company and the Executive.
(17) SURVIVABILITY.
The provisions of Section 10, 11, 12 hereof and the provisions
hereof relating to the payment of the Accrued Benefits and the Severance Payment
shall survive the termination of this Agreement.
(18) ENTIRE AGREEMENT.
This Agreement sets forth the entire agreement between the
Executive and the Company with respect to the subject matter hereof and
supersedes all prior oral or written agreements, negotiations, commitments, and
understandings with respect thereof.
(19) GOVERNING LAW; VENUE.
This Agreement and the respective rights and obligations of
the Executive and the Company hereunder shall be governed by and construed in
accordance with the laws of the State of Texas without giving effect to the
provisions, principles, or policies thereof relating to choice of law or
conflict of laws. Venue of any arbitration or other legal proceeding or action
relating to this Agreement shall be proper in Harris County, Texas.
(20) NOTICE.
Notices given pursuant to this Agreement shall be in writing
and shall be deemed given when received, and if mailed, shall be mailed by
United States registered or certified mail, return receipt requested, postage
prepaid, if to the Company, to:
Affiliated Resources Corporation
3050 Post Oak Blvd., Suite 1080
Houston, Texas 77056
ATTN: Chairman
With a copy to corporate counsel for the Company to:
Short & Ketchand, L.L.P.
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11 Greenway Plaza, Suite 1520
Houston, Texas 77046
Or to such other address as the Company shall have given to the Executive or, if
to the Executive to:
8221 Brecksville Road, Building 3, Suite 207
Brecksville, Ohio 44141.
(21) NO WAIVER.
No waiver by either party at any time of any breach by the
other party of, or any failure by the other party to comply with, any condition
or provisions of the Agreement to be performed by the other party shall be
deemed a waiver of similar or dissimilar provisions or conditions at the same
time or at any prior or subsequent time.
(22) HEADINGS.
The headings herein contained are for reference only and shall
not affect the meaning or interpretation of any provision of this Agreement.
23. COUNTERPARTS.
This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed by its duly authorized officer, and the Executive has executed this
Agreement, on the date and year first above written.
THE COMPANY:
AFFILIATED RESOURCES CORPORATION, INC.,
A Colorado Corporation
BY: _________________________________
Michael R. Bradle, President
EXECUTIVE:
----------------------------------------
PETER C. VANUCCI
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Exhibit 10.12
EMPLOYMENT AGREEMENT
THISEMPLOYMENT AGREEMENT(the "Agreement") is made and entered into
effective as of January 3, 2000, by and between AFFILIATED RESOURCES
CORPORATION, a Colorado Corporation ("Affiliated" or the "Company"), and MR.
MICHAEL R. BRADLE (hereinafter referred to as the "Executive")
WITNESSETH:
WHEREAS, the Company desires to have the benefit of the Executive's
efforts and services;
WHEREAS, the Executive is willing to commit himself to serve the
Company, on the terms and conditions herein provided; and
WHEREAS, in order to effect the foregoing, the Company and the
Executive wish to enter into an employment agreement on the terms and conditions
set forth below.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements hereinafter set forth, the parties hereto mutually
covenant and agree as follows:
(1) DEFINITIONS.
Whenever used in this Agreement, the following terms shall have the
meanings set forth below:
(1) "Accrued Benefits" shall mean the amount payable not later
than fourteen (14) days following an applicable Termination
Date, which shall be equal to the sum of the following
amounts:
(ii) All salary earned or accrued through the Termination
Date;
(iv) Reimbursement for any and all monies advanced in
connection with the Executive's employment for
reasonable and necessary expenses incurred by the
Executive through the Termination Date.
(vi) Any and other cash benefits previously earned through
the Termination Date and deferred at the election of
the Executive or pursuant to any deferred
compensation plans then in effect.
(viii)Allother payments an benefits to which the Executive
may be entitled under the terms of any benefit plan
of the Company or otherwise, including, but not
limited to, any bonus declared by the Board, any
compensation for earned, but unused, vacation days,
and any unpaid automobile allowance.
(23) "Affiliate" shall have the same meanin as given to that term
in Rule 12b-2 of Regulation 12B promulgated under the
Securities Exchange Act of 1934, as amended.
(24) "Board" shall mean the Board of Directors of the Company.
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(25) "Disability" shall mean a physical or mental condition whereby the
Executive is unable to perform on a full-time, continuous basis the customary
duties of the Executive under this Agreement.
(26) "Notice of Termination" shall mean the notice described in Section
9 hereof;
(27) "Termination Date" shall mean, except as otherwise provided in
Section 8 hereof or as otherwise agreed between the Company and the Executive:
(ii) The Executive's date of death;
(iv) Thirty (30) days afte the delivery of the Notice of
Termination terminating the Executive's employment on
account of Disability pursuant to Subsection 8(b)
hereof, unless the Executive returns on a full-time
basis to the performance of Executive's duties prior
to the expiration of such period;
(vi) Thirty (30) days afte the delivery of the Notice of
Termination if the Executive's employment is
terminated by the Executive voluntarily; and
(viii)Fifteen (15) days after the delivery of the Notice of
Termination, if the Executive's employment is
terminated by the Company for any reason other than
the Executive's death or Disability.
(23) EMPLOYMENT.
The Company hereby agrees to employ the Executive and the Executive
hereby agrees to serve the Company, on the terms and conditions set forth
herein.
(24) TERM.
The Company's employment of the Executive under the provisions of
the Agreement shall commence on the effective date hereof ("the Closing") and
end on the second anniversary of the Closing, unless further extended or sooner
terminated as hereinafter provided.
(25) POSITION AND DUTIES.
The executive shall serve as President and COO of the Company and in
such additional capacities as may be reasonable assigned to the Executive by the
Board. In this capacity as President of the Company, the Executive shall have
such duties, responsibilities and authority as are usual and customary for
executives who hold the same or a substantially similar position with companies
of comparable size in the same industry as the Company. In connection with any
capacities, the Executive shall have such duties, responsibilities and authority
as may from time to time be reasonably assigned to the Executive by the Board.
(26) PLACE OF PERFORMANCE.
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In connection with the Executive's employment by the Company, the
Executive shall be based at Lampasas, Texas, except for required travel on
company business, and except as otherwise agreed to between the Executive and
the Company.
(27) COMPENSATION AND RELATED MATTERS.
(1) Commencing on the date hereof, and during Executive's
employment, the Company shall pay to the Executive an annual
salary of $120,000.00, payable in equal installments on the
first and fifteenth days of each month (or in such other
installments consistent with the Company's policies and
procedures and as agreed to by the Executive). The Executive's
salary may be amended from time to time in accordance with
normal business practices of the Company at the full
discretion of the Board (2) At the Closing, the Executive will
receive $25,000.00 as a signing bonus. If, on the first
anniversary of the Closing, the Executive is employed by the
Company and neither the Executive not the Company has given
the other any Notice of Termination, the Executive shall be
entitled to a $20,000.00 retention bonus.
(3) During the Executive's employment hereunder, the Executive
shall be entitled to receive prompt reimbursement for all
reasonable expenses incurred by the Executive in performing
services hereunder, including all cellular telephone,
business, travel, and living expenses while away from home on
business or at the request of and in the service of the
Company, provided that such expenses are incurred and
accounted for in accordance with the Company's policies and
procedures. The Executive shall also be reimbursed for club
membership dues for membership in one (1) area
dining/fitness/country club establishment.
(4) The Executive shall be entitled to the number of vacation days
in each calendar year, and to compensation for earned but
unused vacation days, determined in accordance with the
Company's vacation plan or policy. The Executive shall also be
entitled to all paid holidays provided by the Company to its
other executives.
(5) The Executive shall receive a car allowance of $500.00 per
month, with any annual increase to be determined by the Board,
payable in accordance with the Company's policies and
procedures. In addition, the Executive shall be reimbursed for
business mileage at the rate and based on the same criteria
set forth in IRS Publication 463, as amended from time to
time.
(6) The Executive shall be entitled to suc other benefits,
including, but not limited to, medical insurance, life
insurance, disability insurance, and officers' and directors'
insurance, determined in accordance with the Company's benefit
plan or policy.
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(7) The Executive shall be granted options to purchase 500,000
(Five Hundred Thousand) shares of the Company's common stock
based on the following vesting schedule at the exercise prices
indicated:
(i) Upon the completion of the following, Executive will
be entitled to 250,000 shares in options at an
exercise price of $.10 per share: The completion of
corporate restructuring of operations and preparation
of a preferred share offering. The preferred share
offering should be designed to reduce debt, provide
working capital, and re- establish credit lines for
ChemWay, Inc. operations as well as fund oil and gas
acquisition and new drilling ventures which will
enhance Affiliated's cash flow and book value.
(iii) If, within the initia term of Executive's employment
term, the stock price of Affiliated reaches the price
of $2.00 per share, Executive shall be entitled to
250,000 shares in options of Affiliated stock at an
exercise price of $.10 per share. (v) Affiliated will
also grant additional bonuses from time to time,
within the discretion of the Board, for service and
performance which causes additional benefit to
Affiliated.
(28) OFFICES.
The Executive agrees to serve without additional compensation, if
elected or appointed thereto, as a member of the Board or as a member of the
Board of Directors of any subsidiary of the Company; provided, however, that the
Executive is indemnified for serving in any and all such capacities to the
fullest extent provided by applicable law.
(29) TERMINATION.
(1) As a result of death: If the Executive should die during the
term of this agreement, the Executive's employment shall
terminate on the Executive's date of death and the Executive's
surviving spouse, shall be entitled to the Executive's Accrued
Benefits and stock options as of the Termination Date.
(2) As a result of Disability: If, as a result of the Executive's
Disability, the Executive shall have been unable to perform
the Executive's duties hereunder on a full-time, continuous
basis for two (2) consecutive months or for an aggregate of
three (3) months within any twelve (12) month period, the
Company may terminate the Executive's employment. During the
terms of the Executive's Disability prior to termination, the
Executive shall continue to receive all salary and benefits
payable under Section 6 hereof, including participation in all
employee benefit plans, programs, and arrangements in which
the Executive was entitled to participate immediately prior to
the Disability; provided, however, that the Executive's
continued participation is permitted under the terms and
provisions of such plans, programs, and arrangements. In the
event the Executive's employment is terminated on account of
the Executive's Disability in accordance with this Subsection
8(b), the Executive shall receive the Executive's Accrued
Benefits as of
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the Termination Date and shall remain eligible for all benefits
provided by any long-term disability program of the Company in
effect at the time of such termination. The payment of the
Accrued Benefits by the Company to the Executive shall be in
addition to, and not in lieu of, any benefits payable by
reason of the Executive's Disability to the extent provided
under any long-term disability program of the Company in
effect at the time of the Executive's termination, or under
any disability insurance policy, or otherwise.
(3) Termination Without Cause: Either part to this Agreement may
terminate the Executive's employment hereunder without cause
at any time upon notice to the other party, and upon any such
termination, the Executive shall be entitled to receive his
Accrued Benefits. In the event that the Company terminates the
Executive's employment pursuant to this Subsection 8c, the
Executive shall receive from the Company within fourteen (14)
days of the Termination Date a lump sum cash payment (the
"Severance Payment"), as severance, in an amount equal to the
full amount of his contractual salary and stock options as set
forth in Subsection 6 hereof.
(4) Termination as a result of cause. The Company may terminate
the Executive for cause, upon the occurrence of any one or
more of the following acts or omissions:
(ii) The determination in binding and final judgment,
order or decree by a court or administrative agency
of competent jurisdiction, that the Executive has
engaged in fraudulent conduct, and the determination
by the Board, in its sole discretion that such
fraudulent conduct has a significant adverse impact
on the Company;
(iv) The conviction of the Executive on a felony or
misdemeanor involving moral turpitude (as evidenced
by a binding and final judgment, order, or decree of
a court of competent jurisdiction) and the
determination by the Board, in its sole discretion,
that such conviction has a significant adverse impact
on the Company;
(vi) The refusal by the Executive to perform the
Executive's duties or responsibilities as determined
by the Board;
In the event of termination for cause, as set forth
above, the Executive will be entitled to receive his
Accrued Benefits, but will not be entitled to the
Severance Payment, except as otherwise provided by
Texas law.
(30) In the event that the Executive is terminated by the Company
pursuant to Subsections 8(a), 8(b) and 8(c), all stock options granted pursuant
to Subsection 6(g) as well as any stock options subsequently granted shall
become fully vested as of the Termination Date. In the event that the Executive
is terminated pursuant to Section 8(d), all stock option not vested at the time
of termination shall immediately lapse.
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(30) TERMINATION NOTICE.
Any termination by the Company or the Executive of the Executive's
employment hereunder shall be communicated by written Notice of
Termination to the Executive, if such Notice of Termination is
delivered by the Company, and to the Company, if such Notice of
Termination is delivered by the Executive. The Notice of Termination
shall indicate the specific termination provision in this Agreement
relied upon shall set forth the Termination Date.
(31) NONDISCLOSURE OF PROPRIETARY INFORMATION.
Recognizing that the Company is presently engaged, and may hereafter
continue to be engaged, in the research and development of processes,
the manufacturing of products, or the performance of services, which
involve experimental and inventive work and that the success of its
business depends upon the protection of such processes, products, and
services by patent, copyright or secrecy and that the Executive has
had, or during the course of Executive's engagement as an employee or
consultant may have, access to Proprietary Information, as hereinafter
defined, of the Company and that the Executive has furnished, or during
the course of the Executive's engagement may furnish, Proprietary
Information to the Company, the Executive agrees that:
(1) "Proprietary Information" shall mean any and all
methods, inventions, improvements or discoveries,
whether or not patentable or copyrightable, and any
other information of a secret, proprietary,
confidential, or generally undisclosed nature
relating to the Company, its products, customers,
processes, and services, including information
relating to testing research, development,
manufacturing, marketing, and selling, disclosed to
the Executive or otherwise made known to the
Executive as a consequence of or through the
Executive's engagement by the Company (including
information originated by the Executive) in any
technological area previously developed by the
Company or developed, engaged in, or researched, by
the Company during the term of the Executive's
engagement, including, but not limited to, trade
secrets, processes, products, formulae, apparatus,
techniques, know-how, marketing plans, data,
improvements, strategies, forecasts, customer lists,
and technical requirements of customers, unless such
information is in the public domain to such an extent
as to be readily available to the Company's
competitors. Such information does not include any
information having to do with Company involvement in
the oil and gas industry.
(2) The Executive acknowledges that the Company has
exclusive property rights to all Proprietary
Information, and the Executive hereby assigns all
rights that the Executive might otherwise possess in
any Proprietary Information to the Company. The
Executive will not at any time during or after the
term of the Executive's
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engagement, which term shall include any time in
which the Executive may be retained by the Company as
a consultant, directly or indirectly use,
communicate, disclose, or disseminate any Proprietary
Information.
(3) All documents, records, notebooks, notes, memoranda,
and similar repositories of, or containing,
Proprietary Information made or compiled by the
Executive at any time or made available to the
Executive prior to or during the term of Executive's
engagement by the Company, including any and all
copies thereof, shall be the property of the Company,
shall be held by the Executive in trust solely for
the benefit of the Company, and shall be delivered to
the Company by the Executive on the termination of
the Executive's engagement or at any other time on
the request of the Company.
(4) The Executive will not assert any rights under any
inventions, copyrights, discoveries, concepts, or
ideas, or improvements thereof, or know-how related
thereto, as having been made or acquired by the
Executive prior to the Executive's being engaged by
the Company or during the term of the Executive's
engagement if based on or otherwise related to
Proprietary Information.
(32) NON-COMPETE.
(a) The Company acknowledges that Executive has prior business
interests in, ownerships interests of, and is currently
holding executive positions with various companies who engage
in the oil and gas business. Executive will be free to engage
fully in those existing oil and gas businesses and ventures
and/or obtain additional ownership and management in any oil
and gas business at his sole discretion.
(b) The remaining part of this Section 11 shall in no manner
be construed to hamper Executive's current, or future interest
in, management of, or investment in any oil and gas industry
or venture. With exception to its oil and gas industry
information, the Executive acknowledges the Company has and
will continue to provide the Executive access to the Company's
Proprietary Information, and further acknowledges that the
Proprietary Information is valuable to the Company. The
Executive further acknowledges that the Company has provided
other items of value to the Executive, including stock
options. In return, the Executive hereby agrees that during
the Executive's employment, and for a period of one year from
the termination thereof, the Executive will not, without the
written consent of the Company:
(ii) Within any jurisdiction or marketing area in
which the Company or any subsidiary thereof
is doing business, own manage, operate, or
control any Business, provided, however,
that for purposes of the Subsection 11(a),
ownership of securities of not in excess of
five percent (5%) of any class of securities
of a public company shall not be considered
as owning, managing, operating, or
controlling any Business; or
(iv) Within any jurisdiction or marketing area in
which the Company or any subsidiary thereof
is doing business, act as, or become
employed
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as, an officer, director, employee,
consultant or agent of any Business; or
(vi) Solicit any Business for, or sell any
products that are in competition with the
Company's products to, any company which is
a customer or client of the Company or any
of it subsidiaries as of the Termination
Date; or
(viii)Solicit the employment of, or hire, any full
time employee employed by the Company or its
subsidiaries as of the Termination Date.
The term "Business" as used in this Section 11, shall mean any person
or entity which engages in the same or substantially similar business
as the Company, namely, the blending or packaging of chemicals for
aftermarket use.
(33) REMEDIES AND JURISDICTION.
(1) The Executive hereby acknowledges and agrees that a breach of
the agreements contained in Section 11 of this Agreement will
cause irreparable harm and damage to the Company, that the
remedy at law for the breach or threatened breach of the
agreements set forth in Section 11 of this Agreement will be
inadequate, and that, in addition to all other remedies
available to the Company for such breach or threatened breach
(including, without limitation, the right to recover damages),
the Company shall be entitled to injunctive relief for any
breach or threatened breach of the agreements contained in
Section 11 of this Agreement.
(2) All claims, disputes, and other matter in question between the
parties arising under this Agreement, except those pertaining
to Section 11 hereof, shall, unless otherwise provided herein,
be decided by arbitration in the State of Texas in accordance
with the National Rules for the Resolution of Employment
Disputes of the American Arbitration Association (including
such procedures governing selection of the specific arbitrator
or arbitrators), unless the parties otherwise agree. The
Company shall pay the costs of any such arbitration. The award
by the arbitrator or arbitrators shall be final, and judgment
may be entered upon it in accordance with applicable law in
any state or federal court having proper jurisdiction.
(34) ATTORNEYS' FEES.
In the event that either party hereunder institutes any legal
proceedings in connection with its rights or obligations under this
Agreement, the prevailing party in such proceeding shall be entitled to
recover from the other party all reasonable attorneys' fees and
expenses incurred therein.
(35) SUCCESSORS.
This Agreement and all rights of the Executive hereunder shall inure to
the benefit of and be enforceable by the Executive's personal or legal
representatives, estate, executors, administrators,
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heirs, or beneficiaries. In the event of the Executive's death, all amounts
payable to the Executive under this Agreement shall be paid to the Executive's
surviving spouse, if the Executive dies without a surviving spouse, to the
Executive's estate. This Agreement shall inure to the benefit of, be binding
upon, and be enforceable by or against, any successor, surviving or resulting
corporation, or other entity or any assignee of the Company to which all or
substantially all of the business and assets of the Company is transferred
whether by merger, consolidation, exchange, assignment, sale, lease, or other
disposition or action.
(36) ENFORCEMENT.
The provisions of this Agreement shall be regarded a divisible, and if
any provisions or any part hereof is declared invalid or unenforceable by a
court of competent jurisdiction, the validity and enforceability of the
remainder of such provisions or the parts hereof add the applicability thereof
shall not be affected thereby.
(37) AMENDMENT OR TERMINATION.
This Agreement may not be amended or terminated during its term, except
by written instrument executed by both the Company and the Executive.
(38) SURVIVABILITY.
The provisions of Section 10, 11, 12 hereof and the provisions
hereof relating to the payment of the Accrued Benefits and the Severance Payment
shall survive the termination of this Agreement.
(39) ENTIRE AGREEMENT.
This Agreement sets forth the entire agreement between the
Executive and the Company with respect to the subject matter hereof and
supersedes all prior oral or written agreements, negotiations, commitments, and
understandings with respect thereof.
(40) GOVERNING LAW; VENUE.
This Agreement and the respective rights and obligations of
the Executive and the Company hereunder shall be governed by and construed in
accordance with the laws of the State of Texas without giving effect to the
provisions, principles, or policies thereof relating to choice of law or
conflict of laws. Venue of any arbitration or other legal proceeding or action
relating to this Agreement shall be proper in Harris County, Texas.
(41) NOTICE.
Notices given pursuant to this Agreement shall be in writing
and shall be deemed given when received, and if mailed, shall be mailed by
United States registered or certified mail, return receipt requested, postage
prepaid, if to the Company, to:
Affiliated Resources Corporation
3050 Post Oak Blvd., Suite 1080
Houston, Texas 77056
ATTN: Chairman
With a copy to corporate counsel for the Company to:
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Short & Ketchand, L.L.P.
11 Greenway Plaza, Suite 1520
Houston, Texas 77046
Or to such other address as the Company shall have given to the Executive or, if
to the Executive to:
P.O. Box 1406
Lampasas, Texas 76550
(42) NO WAIVER.
No waiver by either party at any time of any breach by the
other party of, or any failure by the other party to comply with, any condition
or provisions of the Agreement to be performed by the other party shall be
deemed a waiver of similar or dissimilar provisions or conditions at the same
time or at any prior or subsequent time.
(43) HEADINGS.
The headings herein contained are for reference only and shall
not affect the meaning or interpretation of any provision of this Agreement.
23. COUNTERPARTS.
This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed by its duly authorized officer, and the Executive has executed this
Agreement, on the date and year first above written.
THE COMPANY:
AFFILIATED RESOURCES CORPORATION, INC.,
A Colorado Corporation
BY: _________________________________
Peter C. Vanucci, Chairman
EXECUTIVE:
----------------------------------------
MICHAEL R. BRADLE
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Exhibit 10.13
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT(the "Agreement") is made and entered into
effective as of February 7, 2000, by and between AFFILIATED RESOURCES
CORPORATION, a Colorado Corporation ("Affiliated" or the "Company"), and MS.
CATHERINE TAMME (hereinafter referred to as the "Executive")
WITNESSETH:
WHEREAS, the Company desires to have the benefit of the Executive's
efforts and services;
WHEREAS, the Executive is willing to commit himself to serve the
Company, on the terms and conditions herein provided; and
WHEREAS, in order to effect the foregoing, the Company and the
Executive wish to enter into an employment agreement on the terms and conditions
set forth below.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements hereinafter set forth, the parties hereto mutually
covenant and agree as follows:
(1) DEFINITIONS.
Whenever used in this Agreement, the following terms shall have the
meanings set forth below:
(1) "Accrued Benefits" shall mean the amount payable not later
than fourteen (14) days following an applicable Termination
Date, which shall be equal to the sum of the following
amounts:
(ii) All salary earned or accrued through the Termination
Date;
(iv) Reimbursement for any and all monies advanced in
connection with the Executive's employment for
reasonable and necessary expenses incurred by the
Executive through the Termination Date.
(vi) Any and other cash benefits previously earned through
the Termination Date and deferred at the election of
the Executive or pursuant to any deferred
compensation plans then in effect.
(viii)Allother payments an benefits to which the Executive
may be entitled under the terms of any benefit plan
of the Company or otherwise, including, but not
limited to, any bonus declared by the Board, any
compensation for earned, but unused, vacation days,
and any unpaid automobile allowance.
(2) "Affiliate" shall have the same meanin as given to that term
in Rule 12b-2 of Regulation 12B promulgated under the
Securities Exchange Act of 1934, as amended.
(3) "Board" shall mean the Board of Directors of the Company.
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(4) "Disability" shall mean a physical or mental condition whereby
the Executive is unable to perform on a full-time, continuous
basis the customary duties of the Executive under this
Agreement.
(5) "Notice of Termination" shall mean the notice described in
Section 9 hereof;
(6) "Termination Date" shall mean, except as otherwise provided in
Section 8 hereof or as otherwise agreed between the Company
and the Executive:
(ii) The Executive's date of death;
(iv) Thirty (30) days afte the delivery of the Notice of
Termination terminating the Executive's employment on
account of Disability pursuant to Subsection 8(b)
hereof, unless the Executive returns on a full-time
basis to the performance of Executive's duties prior
to the expiration of such period;
(vi) Thirty (30) days afte the delivery of the Notice of
Termination if the Executive's employment is
terminated by the Executive voluntarily; and
(viii)Fifteen (15) days after the delivery of the Notice of
Termination, if the Executive's employment is
terminated by the Company for any reason other than
the Executive's death or Disability.
(2) EMPLOYMENT.
The Company hereby agrees to employ the Executive and the Executive
hereby agrees to serve the Company, on the terms and conditions set forth
herein.
(3) TERM.
The Company's employment of the Executive under the provisions of
the Agreement shall commence on the effective date hereof ("the Closing") and
end on the second anniversary of the Closing, unless further extended or sooner
terminated as hereinafter provided.
(4) POSITION AND DUTIES.
The executive shall serve as Vice President and Chief Financial
Officer of the Company and in such additional capacities as may be reasonable
assigned to the Executive by the Board. The Executive will, among other things,
be in charge of corporate finance. In this capacity as Chief Financial Officer
of the Company, the Executive shall have such duties, responsibilities and
authority as are usual and customary for executives who hold the same or a
substantially similar position with companies of comparable size in the same
industry as the Company. In connection with any capacities, the Executive shall
have such duties, responsibilities and authority as may from time to time be
reasonably assigned to the Executive by the Board.
(5) PLACE OF PERFORMANCE.
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In connection with the Executive's employment by the Company, the
Executive shall be based at Brecksville, Ohio, except for required travel on
company business, and except as otherwise agreed to between the Executive and
the Company.
(6) COMPENSATION AND RELATED MATTERS.
(1) Commencing on the date hereof, and during Executive's
employment, the Company shall pay to the Executive an annual
salary of $60,000.00, payable in equal installments on the
first and fifteenth days of each month (or in such other
installments consistent with the Company's policies and
procedures and as agreed to by the Executive). The Executive's
salary may be amended from time to time in accordance with
normal business practices of the Company at the full
discretion of the Board. The Executive shall receive a minimum
of $3,500.00 per month with the remainder deferred if
necessary.
(2) During the Executive's employment hereunder, the Executive
shall be entitled to receive prompt reimbursement for all
reasonable expenses incurred by the Executive in performing
services hereunder, including all cellular telephone,
business, travel, and living expenses while away from home on
business or at the request of and in the service of the
Company, provided that such expenses are incurred and
accounted for in accordance with the Company's policies and
procedures.
(3) The Executive shall be entitled to the number of vacation days
in each calendar year, and to compensation for earned but
unused vacation days, determined in accordance with the
Company's vacation plan or policy. The Executive shall also be
entitled to all paid holidays provided by the Company to its
other executives.
(4) The Executive shall be entitled to suc other benefits,
including, but not limited to, medical insurance, life
insurance, disability insurance, and officers' and directors'
insurance, determined in accordance with the Company's benefit
plan or policy.
(7) OFFICES.
The Executive agrees to serve without additional compensation, if
elected or appointed thereto, as a member of the Board or as a member of the
Board of Directors of any subsidiary of the Company; provided, however, that the
Executive is indemnified for serving in any and all such capacities to the
fullest extent provided by applicable law.
(8) TERMINATION.
(1) As a result of death: If the Executive should die during the
term of this agreement, the Executive's employment shall
terminate
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on the Executive's date of death and the Executive's surviving
spouse, shall be entitled to the Executive's Accrued Benefits
and stock options as of the Termination Date.
(2) As a result of Disability: If, as a result of the Executive's
Disability, the Executive shall have been unable to perform
the Executive's duties hereunder on a full-time, continuous
basis for two (2) consecutive months or for an aggregate of
three (3) months within any twelve (12) month period, the
Company may terminate the Executive's employment. During the
terms of the Executive's Disability prior to termination, the
Executive shall continue to receive all salary and benefits
payable under Section 6 hereof, including participation in all
employee benefit plans, programs, and arrangements in which
the Executive was entitled to participate immediately prior to
the Disability; provided, however, that the Executive's
continued participation is permitted under the terms and
provisions of such plans, programs, and arrangements. In the
event the Executive's employment is terminated on account of
the Executive's Disability in accordance with this Subsection
8(b), the Executive shall receive the Executive's Accrued
Benefits as of the Termination Date and shall remain eligible
for all benefits provided by any long-term disability program
of the Company in effect at the time of such termination. The
payment of the Accrued Benefits by the Company to the
Executive shall be in addition to, and not in lieu of, any
benefits payable by reason of the Executive's Disability to
the extent provided under any long-term disability program of
the Company in effect at the time of the Executive's
termination, or under any disability insurance policy, or
otherwise.
(3) Termination Without Cause: Either part to this Agreement may
terminate the Executive's employment hereunder without cause
at any time upon notice to the other party, and upon any such
termination, the Executive shall be entitled to receive his
Accrued Benefits. In the event that the Company terminates the
Executive's employment pursuant to this Subsection 8c, the
Executive shall receive from the Company within fourteen (14)
days of the Termination Date a lump sum cash payment (the
"Severance Payment"), as severance, in an amount equal to the
full amount of his contractual salary and stock options as set
forth in Subsection 6 hereof.
(4) Termination as a result of cause. The Company may terminate
the Executive for cause, upon the occurrence of any one or
more of the following acts or omissions:
(ii) The determination in binding and final judgment,
order or decree by a court or administrative agency
of competent jurisdiction, that the Executive has
engaged in fraudulent conduct, and the determination
by the Board, in its sole discretion that such
fraudulent conduct has a significant adverse impact
on the Company;
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(iv) The conviction of the Executive on a felony or
misdemeanor involving moral turpitude (as evidenced
by a binding and final judgment, order, or decree of
a court of competent jurisdiction) and the
determination by the Board, in its sole discretion,
that such conviction has a significant adverse impact
on the Company;
(vi) The refusal by the Executive to perform the
Executive's duties or responsibilities as determined
by the Board;
In the event of termination for cause, as set forth
above, the Executive will be entitled to receive his
Accrued Benefits, but will not be entitled to the
Severance Payment, except as otherwise provided by
Texas law.
(9) In the event that the Executive is terminated by the Company
pursuant to Subsections 8(a), 8(b) and 8(c), all stock options
granted pursuant to Subsection 6(g) as well as any stock
options subsequently granted shall become fully vested as of
the Termination Date. In the event that the Executive is
terminated pursuant to Section 8(d), all stock option not
vested at the time of termination shall immediately lapse.
(9) TERMINATION NOTICE.
Any termination by the Company or the Executive of the Executive's
employment hereunder shall be communicated by written Notice of
Termination to the Executive, if such Notice of Termination is
delivered by the Company, and to the Company, if such Notice of
Termination is delivered by the Executive. The Notice of Termination
shall indicate the specific termination provision in this Agreement
relied upon shall set forth the Termination Date.
(10) NONDISCLOSURE OF PROPRIETARY INFORMATION.
Recognizing that the Company is presently engaged, and may hereafter
continue to be engaged, in the research and development of processes,
the manufacturing of products, or the performance of services, which
involve experimental and inventive work and that the success of its
business depends upon the protection of such processes, products, and
services by patent, copyright or secrecy and that the Executive has
had, or during the course of Executive's engagement as an employee or
consultant may have, access to Proprietary Information, as hereinafter
defined, of the Company and that the Executive has furnished, or during
the course of the Executive's engagement may furnish, Proprietary
Information to the Company, the Executive agrees that:
(1) "Proprietary Information" shall mean any and all methods,
inventions, improvements or discoveries, whether or not
patentable or copyrightable, and any other information of a
secret, proprietary, confidential, or generally undisclosed
nature relating to the Company, its products, customers,
processes, and services, including information relating to
testing research, development, manufacturing, marketing, and
selling, disclosed to the Executive or otherwise made known to
the Executive as a consequence of or through the Executive's
engagement by the Company (including
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information originated by the Executive) in any technological
area previously developed by the Company or developed, engaged
in, or researched, by the Company during the term of the
Executive's engagement, including, but not limited to, trade
secrets, processes, products, formulae, apparatus, techniques,
know-how, marketing plans, data, improvements, strategies,
forecasts, customer lists, and technical requirements of
customers, unless such information is in the public domain to
such an extent as to be readily available to the Company's
competitors. Such information does not include any information
having to do with Company involvement in the oil and gas
industry.
(2) The Executive acknowledges that the Company has exclusive
property rights to all Proprietary Information, and the
Executive hereby assigns all rights that the Executive might
otherwise possess in any Proprietary Information to the
Company. The Executive will not at any time during or after
the term of the Executive's engagement, which term shall
include any time in which the Executive may be retained by the
Company as a consultant, directly or indirectly use,
communicate, disclose, or disseminate any Proprietary
Information.
(3) All documents, records, notebooks, notes, memoranda, and
similar repositories of, or containing, Proprietary
Information made or compiled by the Executive at any time or
made available to the Executive prior to or during the term of
Executive's engagement by the Company, including any and all
copies thereof, shall be the property of the Company, shall be
held by the Executive in trust solely for the benefit of the
Company, and shall be delivered to the Company by the
Executive on the termination of the Executive's engagement or
at any other time on the request of the Company.
(4) The Executive will not assert any rights under any inventions,
copyrights, discoveries, concepts, or ideas, or improvements
thereof, or know-how related thereto, as having been made or
acquired by the Executive prior to the Executive's being
engaged by the Company or during the term of the Executive's
engagement if based on or otherwise related to Proprietary
Information.
(11) NON-COMPETE.
The Executive acknowledges the Company has and will continue
to provide the Executive access to the Company's Proprietary
Information, and further acknowledges that the Proprietary
Information is valuable to the Company. The Executive further
acknowledges that the Company has provided other items of
value to the Executive, including stock options. In return,
the Executive hereby agrees that
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during the Executive's employment, and for a period of one
year from the termination thereof, the Executive will not,
without the written consent of the Company:
(ii) Within any jurisdiction or marketing area in which
the Company or any subsidiary thereof is doing
business, own manage, operate, or control any
Business, provided, however, that for purposes of the
Subsection 11(a), ownership of securities of not in
excess of five percent (5%) of any class of
securities of a public company shall not be
considered as owning, managing, operating, or
controlling any Business; or
(iv) Within any jurisdiction or marketing area in which
the Company or any subsidiary thereof is doing
business, act as, or become employed as, an officer,
director, employee, consultant or agent of any
Business; or
(vi) Solicit any Business for, or sell any products that
are in competition with the Company's products to,
any company which is a customer or client of the
Company or any of it subsidiaries as of the
Termination Date; or
(viii)Solicit the employment of, or hire, any full time
employee employed by the Company or its subsidiaries
as of the Termination Date.
The term "Business" as used in this Section 11, shall mean any person
or entity which engages in the same or substantially similar business
as the Company, namely, the blending or packaging of chemicals for
aftermarket use.
(12) REMEDIES AND JURISDICTION.
(1) The Executive hereby acknowledges and agrees that a breach of
the agreements contained in Section 11 of this Agreement will
cause irreparable harm and damage to the Company, that the
remedy at law for the breach or threatened breach of the
agreements set forth in Section 11 of this Agreement will be
inadequate, and that, in addition to all other remedies
available to the Company for such breach or threatened breach
(including, without limitation, the right to recover damages),
the Company shall be entitled to injunctive relief for any
breach or threatened breach of the agreements contained in
Section 11 of this Agreement.
(2) All claims, disputes, and other matter in question between the
parties arising under this Agreement, except those pertaining
to Section 11 hereof, shall, unless otherwise provided herein,
be decided by arbitration in the State of Texas in accordance
with the National Rules for the Resolution of Employment
Disputes of the American Arbitration Association (including
such procedures governing selection of the specific arbitrator
or arbitrators), unless the parties otherwise agree. The
Company shall pay the costs of any such arbitration. The award
by the arbitrator or arbitrators shall be final, and judgment
may be entered upon it in accordance with applicable law in
any state or federal court having proper jurisdiction.
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(13) ATTORNEYS' FEES.
In the event that either party hereunder institutes any legal
proceedings in connection with its rights or obligations under this
Agreement, the prevailing party in such proceeding shall be entitled to
recover from the other party all reasonable attorneys' fees and
expenses incurred therein.
(14) SUCCESSORS.
This Agreement and all rights of the Executive hereunder shall inure to
the benefit of and be enforceable by the Executive's personal or legal
representatives, estate, executors, administrators, heirs, or beneficiaries. In
the event of the Executive's death, all amounts payable to the Executive under
this Agreement shall be paid to the Executive's surviving spouse, if the
Executive dies without a surviving spouse, to the Executive's estate. This
Agreement shall inure to the benefit of, be binding upon, and be enforceable by
or against, any successor, surviving or resulting corporation, or other entity
or any assignee of the Company to which all or substantially all of the business
and assets of the Company is transferred whether by merger, consolidation,
exchange, assignment, sale, lease, or other disposition or action.
(15) ENFORCEMENT.
The provisions of this Agreement shall be regarded a divisible, and if
any provisions or any part hereof is declared invalid or unenforceable by a
court of competent jurisdiction, the validity and enforceability of the
remainder of such provisions or the parts hereof add the applicability thereof
shall not be affected thereby.
(16) AMENDMENT OR TERMINATION.
This Agreement may not be amended or terminated during its term, except
by written instrument executed by both the Company and the Executive.
(17) SURVIVABILITY.
The provisions of Section 10, 11, 12 hereof and the provisions
hereof relating to the payment of the Accrued Benefits and the Severance Payment
shall survive the termination of this Agreement.
(18) ENTIRE AGREEMENT.
This Agreement sets forth the entire agreement between the
Executive and the Company with respect to the subject matter hereof and
supersedes all prior oral or written agreements, negotiations, commitments, and
understandings with respect thereof.
(19) GOVERNING LAW; VENUE.
This Agreement and the respective rights and obligations of
the Executive and the Company hereunder shall be governed by and construed in
accordance with the laws of the State of Texas without giving effect to the
provisions, principles, or policies thereof relating to choice of law or
conflict of laws. Venue of any arbitration or other legal proceeding or action
relating to this Agreement shall be proper in Harris County, Texas.
(20) NOTICE.
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Notices given pursuant to this Agreement shall be in writing
and shall be deemed given when received, and if mailed, shall be mailed by
United States registered or certified mail, return receipt requested, postage
prepaid, if to the Company, to:
Affiliated Resources Corporation
3050 Post Oak Blvd., Suite 1080
Houston, Texas 77056
ATTN: Chairman
With a copy to corporate counsel for the Company to:
Short & Ketchand, L.L.P.
11 Greenway Plaza, Suite 1520
Houston, Texas 77046
Or to such other address as the Company shall have given to the Executive or, if
to the Executive to:
8221 Brecksville Road, Building 3, Suite 207
Brecksville, Ohio 44141
(21) NO WAIVER.
No waiver by either party at any time of any breach by the
other party of, or any failure by the other party to comply with, any condition
or provisions of the Agreement to be performed by the other party shall be
deemed a waiver of similar or dissimilar provisions or conditions at the same
time or at any prior or subsequent time.
(22) HEADINGS.
The headings herein contained are for reference only and shall
not affect the meaning or interpretation of any provision of this Agreement.
23. COUNTERPARTS.
This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed by its duly authorized officer, and the Executive has executed this
Agreement, on the date and year first above written.
THE COMPANY:
AFFILIATED RESOURCES CORPORATION, INC.,
A Colorado Corporation
BY: _________________________________
Peter C. Vanucci, Chairman
EXECUTIVE:
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----------------------------------
CATHERINE TAMME
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Exhibit 10.14
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT(the "Agreement") is made and entered into
effective as of February 7, 2000, by and between AFFILIATED RESOURCES
CORPORATION, a Colorado Corporation ("Affiliated" or the "Company"), and MR.
BARRY GOVERMAN (hereinafter referred to as the "Executive")
WITNESSETH:
WHEREAS, the Company desires to have the benefit of the Executive's
efforts and services;
WHEREAS, the Executive is willing to commit himself to serve the
Company, on the terms and conditions herein provided; and
WHEREAS, in order to effect the foregoing, the Company and the
Executive wish to enter into an employment agreement on the terms and conditions
set forth below.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements hereinafter set forth, the parties hereto mutually
covenant and agree as follows:
(1) DEFINITIONS.
Whenever used in this Agreement, the following terms shall have the
meanings set forth below:
(1) "Accrued Benefits" shall mean the amount payable not later
than fourteen (14) days following an applicable Termination
Date, which shall be equal to the sum of the following
amounts:
(ii) All salary earned or accrued through the Termination
Date;
(iv) Reimbursement for any and all monies advanced in
connection with the Executive's employment for
reasonable and necessary expenses incurred by the
Executive through the Termination Date.
(vi) Any and other cash benefits previously earned through
the Termination Date and deferred at the election of
the Executive or pursuant to any deferred
compensation plans then in effect.
(viii)Allother payments an benefits to which the Executive
may be entitled under the terms of any benefit plan
of the Company or otherwise, including, but not
limited to, any bonus declared by the Board, any
compensation for earned, but unused, vacation days,
and any unpaid automobile allowance.
(2) "Affiliate" shall have the same meanin as given to that term
in Rule 12b-2 of Regulation 12B promulgated under the
Securities Exchange Act of 1934, as amended.
(3) "Board" shall mean the Board of Directors of the Company.
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(4) "Disability" shall mean a physical or mental condition whereby
the Executive is unable to perform on a full-time, continuous
basis the customary duties of the Executive under this
Agreement.
(5) "Notice of Termination" shall mean the notice described in
Section 9 hereof;
(6) "Termination Date" shall mean, except as otherwise provided in
Section 8 hereof or as otherwise agreed between the Company
and the Executive:
(ii) The Executive's date of death;
(iv) Thirty (30) days afte the delivery of the Notice of
Termination terminating the Executive's employment on
account of Disability pursuant to Subsection 8(b)
hereof, unless the Executive returns on a full-time
basis to the performance of Executive's duties prior
to the expiration of such period;
(vi) Thirty (30) days afte the delivery of the Notice of
Termination if the Executive's employment is
terminated by the Executive voluntarily; and
(viii)Fifteen (15) days after the delivery of the Notice of
Termination, if the Executive's employment is
terminated by the Company for any reason other than
the Executive's death or Disability.
(2) EMPLOYMENT.
The Company hereby agrees to employ the Executive and the Executive
hereby agrees to serve the Company, on the terms and conditions set forth
herein.
(3) TERM.
The Company's employment of the Executive under the provisions of
the Agreement shall commence on the effective date hereof ("the Closing") and
end on the second anniversary of the Closing, unless further extended or sooner
terminated as hereinafter provided.
(4) POSITION AND DUTIES.
The executive shall serve as Senior Vice President of the Company
and in such additional capacities as may be reasonable assigned to the Executive
by the Board. The Executive will, among other things, be in charge of
shareholder relations and corporate communications. In this capacity as Senior
Vice President of the Company, the Executive shall have such duties,
responsibilities and authority as are usual and customary for executives who
hold the same or a substantially similar position with companies of comparable
size in the same industry as the Company. In connection with any capacities, the
Executive shall have such duties, responsibilities and authority as may from
time to time be reasonably assigned to the Executive by the Board.
(5) PLACE OF PERFORMANCE.
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In connection with the Executive's employment by the Company, the
Executive shall be based at North Easton, Massachusetts, except for required
travel on company business, and except as otherwise agreed to between the
Executive and the Company.
(6) COMPENSATION AND RELATED MATTERS.
(1) Commencing on the date hereof, and during Executive's
employment, the Company shall pay to the Executive an annual
salary of $100,000.00, payable in equal installments on the
first and fifteenth days of each month (or in such other
installments consistent with the Company's policies and
procedures and as agreed to by the Executive). The Executive's
salary may be amended from time to time in accordance with
normal business practices of the Company at the full
discretion of the Board. The Executive shall receive a minimum
of $3,500.00 per month with the remainder deferred if
necessary.
(2) During the Executive's employment hereunder, the Executive
shall be entitled to receive prompt reimbursement for all
reasonable expenses incurred by the Executive in performing
services hereunder, including all cellular telephone,
business, travel, and living expenses while away from home on
business or at the request of and in the service of the
Company, provided that such expenses are incurred and
accounted for in accordance with the Company's policies and
procedures.
(3) The Executive shall be entitled to the number of vacation days
in each calendar year, and to compensation for earned but
unused vacation days, determined in accordance with the
Company's vacation plan or policy. The Executive shall also be
entitled to all paid holidays provided by the Company to its
other executives.
(4) The Executive shall be entitled to suc other benefits,
including, but not limited to, medical insurance, life
insurance, disability insurance, and officers' and directors'
insurance, determined in accordance with the Company's benefit
plan or policy.
(7) OFFICES.
The Executive agrees to serve without additional compensation, if
elected or appointed thereto, as a member of the Board or as a member of the
Board of Directors of any subsidiary of the Company; provided, however, that the
Executive is indemnified for serving in any and all such capacities to the
fullest extent provided by applicable law.
(8) TERMINATION.
(1) As a result of death: If the Executive should die during the
term of this agreement, the Executive's employment shall
terminate
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on the Executive's date of death and the Executive's surviving
spouse, shall be entitled to the Executive's Accrued Benefits
and stock options as of the Termination Date.
(2) As a result of Disability: If, as a result of the Executive's
Disability, the Executive shall have been unable to perform
the Executive's duties hereunder on a full-time, continuous
basis for two (2) consecutive months or for an aggregate of
three (3) months within any twelve (12) month period, the
Company may terminate the Executive's employment. During the
terms of the Executive's Disability prior to termination, the
Executive shall continue to receive all salary and benefits
payable under Section 6 hereof, including participation in all
employee benefit plans, programs, and arrangements in which
the Executive was entitled to participate immediately prior to
the Disability; provided, however, that the Executive's
continued participation is permitted under the terms and
provisions of such plans, programs, and arrangements. In the
event the Executive's employment is terminated on account of
the Executive's Disability in accordance with this Subsection
8(b), the Executive shall receive the Executive's Accrued
Benefits as of the Termination Date and shall remain eligible
for all benefits provided by any long-term disability program
of the Company in effect at the time of such termination. The
payment of the Accrued Benefits by the Company to the
Executive shall be in addition to, and not in lieu of, any
benefits payable by reason of the Executive's Disability to
the extent provided under any long-term disability program of
the Company in effect at the time of the Executive's
termination, or under any disability insurance policy, or
otherwise.
(3) Termination Without Cause: Either part to this Agreement may
terminate the Executive's employment hereunder without cause
at any time upon notice to the other party, and upon any such
termination, the Executive shall be entitled to receive his
Accrued Benefits. In the event that the Company terminates the
Executive's employment pursuant to this Subsection 8c, the
Executive shall receive from the Company within fourteen (14)
days of the Termination Date a lump sum cash payment (the
"Severance Payment"), as severance, in an amount equal to the
full amount of his contractual salary and stock options as set
forth in Subsection 6 hereof.
(4) Termination as a result of cause. The Company may terminate
the Executive for cause, upon the occurrence of any one or
more of the following acts or omissions:
(ii) The determination in binding and final judgment,
order or decree by a court or administrative agency
of competent jurisdiction, that the Executive has
engaged in fraudulent conduct, and the determination
by the Board, in its sole discretion that such
fraudulent conduct has a significant adverse impact
on the Company;
76
<PAGE>
(iv) The conviction of the Executive on a felony or
misdemeanor involving moral turpitude (as evidenced
by a binding and final judgment, order, or decree of
a court of competent jurisdiction) and the
determination by the Board, in its sole discretion,
that such conviction has a significant adverse impact
on the Company;
(vi) The refusal by the Executive to perform the
Executive's duties or responsibilities as determined
by the Board;
In the event of termination for cause, as set forth
above, the Executive will be entitled to receive his
Accrued Benefits, but will not be entitled to the
Severance Payment, except as otherwise provided by
Texas law.
(9) In the event that the Executive is terminated by the Company
pursuant to Subsections 8(a), 8(b) and 8(c), all stock options
granted pursuant to Subsection 6(g) as well as any stock
options subsequently granted shall become fully vested as of
the Termination Date. In the event that the Executive is
terminated pursuant to Section 8(d), all stock option not
vested at the time of termination shall immediately lapse.
(9) TERMINATION NOTICE.
Any termination by the Company or the Executive of the Executive's
employment hereunder shall be communicated by written Notice of
Termination to the Executive, if such Notice of Termination is
delivered by the Company, and to the Company, if such Notice of
Termination is delivered by the Executive. The Notice of Termination
shall indicate the specific termination provision in this Agreement
relied upon shall set forth the Termination Date.
(10) NONDISCLOSURE OF PROPRIETARY INFORMATION.
Recognizing that the Company is presently engaged, and may hereafter
continue to be engaged, in the research and development of processes,
the manufacturing of products, or the performance of services, which
involve experimental and inventive work and that the success of its
business depends upon the protection of such processes, products, and
services by patent, copyright or secrecy and that the Executive has
had, or during the course of Executive's engagement as an employee or
consultant may have, access to Proprietary Information, as hereinafter
defined, of the Company and that the Executive has furnished, or during
the course of the Executive's engagement may furnish, Proprietary
Information to the Company, the Executive agrees that:
(1) "Proprietary Information" shall mean any and all methods,
inventions, improvements or discoveries, whether or not
patentable or copyrightable, and any other information of a
secret, proprietary, confidential, or generally undisclosed
nature relating to the Company, its products, customers,
processes, and services, including information relating to
testing research, development, manufacturing, marketing, and
selling, disclosed to the Executive or otherwise made known to
the Executive as a consequence of or through the Executive's
engagement by the Company (including
77
<PAGE>
information originated by the Executive) in any technological
area previously developed by the Company or developed, engaged
in, or researched, by the Company during the term of the
Executive's engagement, including, but not limited to, trade
secrets, processes, products, formulae, apparatus, techniques,
know-how, marketing plans, data, improvements, strategies,
forecasts, customer lists, and technical requirements of
customers, unless such information is in the public domain to
such an extent as to be readily available to the Company's
competitors. Such information does not include any information
having to do with Company involvement in the oil and gas
industry.
(2) The Executive acknowledges that the Company has exclusive
property rights to all Proprietary Information, and the
Executive hereby assigns all rights that the Executive might
otherwise possess in any Proprietary Information to the
Company. The Executive will not at any time during or after
the term of the Executive's engagement, which term shall
include any time in which the Executive may be retained by the
Company as a consultant, directly or indirectly use,
communicate, disclose, or disseminate any Proprietary
Information.
(3) All documents, records, notebooks, notes, memoranda, and
similar repositories of, or containing, Proprietary
Information made or compiled by the Executive at any time or
made available to the Executive prior to or during the term of
Executive's engagement by the Company, including any and all
copies thereof, shall be the property of the Company, shall be
held by the Executive in trust solely for the benefit of the
Company, and shall be delivered to the Company by the
Executive on the termination of the Executive's engagement or
at any other time on the request of the Company.
(4) The Executive will not assert any rights under any inventions,
copyrights, discoveries, concepts, or ideas, or improvements
thereof, or know-how related thereto, as having been made or
acquired by the Executive prior to the Executive's being
engaged by the Company or during the term of the Executive's
engagement if based on or otherwise related to Proprietary
Information.
(11) NON-COMPETE.
The Executive acknowledges the Company has and will continue
to provide the Executive access to the Company's Proprietary
Information, and further acknowledges that the Proprietary
Information is valuable to the Company. The Executive further
acknowledges that the Company has provided other items of
value to the Executive, including stock options. In return,
the Executive hereby agrees that
78
<PAGE>
during the Executive's employment, and for a period of one
year from the termination thereof, the Executive will not,
without the written consent of the Company:
(ii) Within any jurisdiction or marketing area in which
the Company or any subsidiary thereof is doing
business, own manage, operate, or control any
Business, provided, however, that for purposes of the
Subsection 11(a), ownership of securities of not in
excess of five percent (5%) of any class of
securities of a public company shall not be
considered as owning, managing, operating, or
controlling any Business; or
(iv) Within any jurisdiction or marketing area in which
the Company or any subsidiary thereof is doing
business, act as, or become employed as, an officer,
director, employee, consultant or agent of any
Business; or
(vi) Solicit any Business for, or sell any products that
are in competition with the Company's products to,
any company which is a customer or client of the
Company or any of it subsidiaries as of the
Termination Date; or
(viii)Solicit the employment of, or hire, any full time
employee employed by the Company or its subsidiaries
as of the Termination Date.
The term "Business" as used in this Section 11, shall mean any person
or entity which engages in the same or substantially similar business
as the Company, namely, the blending or packaging of chemicals for
aftermarket use.
(12) REMEDIES AND JURISDICTION.
(1) The Executive hereby acknowledges and agrees that a breach of
the agreements contained in Section 11 of this Agreement will
cause irreparable harm and damage to the Company, that the
remedy at law for the breach or threatened breach of the
agreements set forth in Section 11 of this Agreement will be
inadequate, and that, in addition to all other remedies
available to the Company for such breach or threatened breach
(including, without limitation, the right to recover damages),
the Company shall be entitled to injunctive relief for any
breach or threatened breach of the agreements contained in
Section 11 of this Agreement.
(2) All claims, disputes, and other matter in question between the
parties arising under this Agreement, except those pertaining
to Section 11 hereof, shall, unless otherwise provided herein,
be decided by arbitration in the State of Texas in accordance
with the National Rules for the Resolution of Employment
Disputes of the American Arbitration Association (including
such procedures governing selection of the specific arbitrator
or arbitrators), unless the parties otherwise agree. The
Company shall pay the costs of any such arbitration. The award
by the arbitrator or arbitrators shall be final, and judgment
may be entered upon it in accordance with applicable law in
any state or federal court having proper jurisdiction.
79
<PAGE>
(13) ATTORNEYS' FEES.
In the event that either party hereunder institutes any legal
proceedings in connection with its rights or obligations under this
Agreement, the prevailing party in such proceeding shall be entitled to
recover from the other party all reasonable attorneys' fees and
expenses incurred therein.
(14) SUCCESSORS.
This Agreement and all rights of the Executive hereunder shall inure to
the benefit of and be enforceable by the Executive's personal or legal
representatives, estate, executors, administrators, heirs, or beneficiaries. In
the event of the Executive's death, all amounts payable to the Executive under
this Agreement shall be paid to the Executive's surviving spouse, if the
Executive dies without a surviving spouse, to the Executive's estate. This
Agreement shall inure to the benefit of, be binding upon, and be enforceable by
or against, any successor, surviving or resulting corporation, or other entity
or any assignee of the Company to which all or substantially all of the business
and assets of the Company is transferred whether by merger, consolidation,
exchange, assignment, sale, lease, or other disposition or action.
(15) ENFORCEMENT.
The provisions of this Agreement shall be regarded a divisible, and if
any provisions or any part hereof is declared invalid or unenforceable by a
court of competent jurisdiction, the validity and enforceability of the
remainder of such provisions or the parts hereof add the applicability thereof
shall not be affected thereby.
(16) AMENDMENT OR TERMINATION.
This Agreement may not be amended or terminated during its term, except
by written instrument executed by both the Company and the Executive.
(17) SURVIVABILITY.
The provisions of Section 10, 11, 12 hereof and the provisions
hereof relating to the payment of the Accrued Benefits and the Severance Payment
shall survive the termination of this Agreement.
(18) ENTIRE AGREEMENT.
This Agreement sets forth the entire agreement between the
Executive and the Company with respect to the subject matter hereof and
supersedes all prior oral or written agreements, negotiations, commitments, and
understandings with respect thereof.
(19) GOVERNING LAW; VENUE.
This Agreement and the respective rights and obligations of
the Executive and the Company hereunder shall be governed by and construed in
accordance with the laws of the State of Texas without giving effect to the
provisions, principles, or policies thereof relating to choice of law
80
<PAGE>
or conflict of laws. Venue of any arbitration or other legal proceeding or
action relating to this Agreement shall be proper in Harris County, Texas.
(20) NOTICE.
Notices given pursuant to this Agreement shall be in writing
and shall be deemed given when received, and if mailed, shall be mailed by
United States registered or certified mail, return receipt requested, postage
prepaid, if to the Company, to:
Affiliated Resources Corporation
3050 Post Oak Blvd., Suite 1080
Houston, Texas 77056
ATTN: Chairman
With a copy to corporate counsel for the Company to:
Short & Ketchand, L.L.P.
11 Greenway Plaza, Suite 1520
Houston, Texas 77046
Or to such other address as the Company shall have given to the Executive or, if
to the Executive to:
42 Brentwood Drive
North Easton, Massachusetts 02356
(21) NO WAIVER.
No waiver by either party at any time of any breach by the
other party of, or any failure by the other party to comply with, any condition
or provisions of the Agreement to be performed by the other party shall be
deemed a waiver of similar or dissimilar provisions or conditions at the same
time or at any prior or subsequent time.
(22) HEADINGS.
The headings herein contained are for reference only and shall
not affect the meaning or interpretation of any provision of this Agreement.
23. COUNTERPARTS.
This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed by its duly authorized officer, and the Executive has executed this
Agreement, on the date and year first above written.
THE COMPANY:
AFFILIATED RESOURCES CORPORATION, INC.,
A Colorado Corporation
BY: _________________________________
Peter C. Vanucci, Chairman
EXECUTIVE:
-------------------------------
BARRY GOVERMAN
81
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
Affiliated Resources, Inc. December 31, 1999 financial statements and
is qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000817125
<NAME> Affiliated Resources, Inc
<CURRENCY> US
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<EXCHANGE-RATE> 1.00
<CASH> 8,490
<SECURITIES> 0
<RECEIVABLES> 6,900
<ALLOWANCES> 0
<INVENTORY> 606,100
<CURRENT-ASSETS> 629,313
<PP&E> 3,709,601
<DEPRECIATION> 257,232
<TOTAL-ASSETS> 7,349,429
<CURRENT-LIABILITIES> 2,398,377
<BONDS> 343,561
0
0
<COMMON> 53,843
<OTHER-SE> 4,553,648
<TOTAL-LIABILITY-AND-EQUITY> 7,349,429
<SALES> 519,374
<TOTAL-REVENUES> 519,374
<CGS> 627,727
<TOTAL-COSTS> 627,727
<OTHER-EXPENSES> 2,415,735
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 71,967
<INCOME-PRETAX> (2,401,396)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,401,396)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,401,396)
<EPS-BASIC> (.14)
<EPS-DILUTED> (.14)
</TABLE>
