Exhibit 2.1.1
FORM
EMPLOYMENT AGREEMENT
(_____________________)
Exhibit 6.1.1
This EMPLOYMENT AGREEMENT is made as of October 30, 1999 by and between
Intek Information, Inc., a Delaware corporation (the "Company" or "Intek"),
Acorn Information Services, Inc., a Delaware corporation ("Acorn"), and
_________________, an individual residing in __________, _________ Connecticut
("Employee").
WHEREAS, concurrently herewith, the Company is purchasing all of the
capital stock of Acorn pursuant to that certain Share Purchase Agreement among
the Company, Acorn, the Employee and others of even date herewith (the "Share
Purchase Agreement"); and
WHEREAS, the Company desires to employ the Employee as an employee of the
Company and as ________________ of Acorn, and Employee desires to serve as an
employee of the Company and as ________________ of Acorn upon the following
terms and conditions and effective as of October 1, 1999 (the "Effective Date").
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants herein, the
parties agree as follows:
1. Employment. Upon the terms and subject to the conditions of this Agreement,
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the Company hereby employs and Acorn employs, and the Employee hereby
agrees to serve, as an employee of the Company and as ________________ of
Acorn.
2. Term. Subject to Section 5 hereof, the term of Employee's employment under
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this Agreement shall be for a period of three (3) years commencing on the
Effective Date and terminating on the third anniversary thereof. This
Agreement shall automatically extend for successive one-month periods after
the initial three (3) year term unless terminated as provided herein. The
initial three (3) year period and any extensions are collectively referred
to herein as the "Term".
3. Compensation.
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A. Base Salary. The Company shall, commencing on the Effective Date and
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during the Term, pay to the Employee, and the Employee agrees to
accept, a base salary of $________ per year, less applicable
withholding taxes, payable in accordance with the customary practices
of the Company, but not less than monthly, plus such salary increases
as approved by the Board of Directors of the Company. The annual base
salary, excluding all bonus payments, as in effect from time to time,
is referred to herein as the "Base Salary".
B. Signing Bonus. On the date hereof, the Company shall pay Employee a
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signing bonus (which shall be subject to withholding and other similar
taxes) of $________as described in Exhibit A.
C. Spider Stock. On the date hereof, the Company shall deliver to
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Employee three hundred eighty-eight thousand one hundred fifty-five
(388,155) shares of common stock of Spider Technologies, Inc., a
Delaware corporation ("Spider Stock"), which shall be subject to the
Stock Restriction Agreement attached hereto as Exhibit B. Employee
agrees to make a timely Section 83(b) election with the Internal
Revenue Service with respect to the Spider Stock, and a failure to do
so constitutes a material breach of this Agreement permitting the
Company to terminate this Agreement for "Cause".
D. Consideration. Employee agrees to accept the above amounts and the
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benefits described in this Agreement in full payment for the services
to be rendered by him hereunder; provided, however, that the Company's
Board of Directors or its Compensation Committee and Employee will
meet no later than six (6) months after the Effective Date and again
on each anniversary of the Effective Date to discuss an increase in
Base Salary. There is no assurance any increase in Base Salary will
occur. In no event shall Base Salary decrease.
4. Duties.
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A. Employee has been retained to occupy a position that constitutes part
of the professional, management and executive staff of the Company and
Acorn, whose duties will include the formulation and execution of
management policy.
B. The Employee shall during the Term:
(i) devote his full normal working time, energies and attention to
the duties of his employment as they may be established from time
to time by the Board of Directors of the Company and/or Acorn
consistent with the position and office occupied by Employee,
except that Employee may spend time managing Employee's personal,
financial and legal affairs and, upon the prior written consent
of the ________________ of the Company (which consent shall not
be unreasonably withheld), serving on corporate, civic or
charitable boards and committees, provided that such approval
shall be deemed to have been given if the ________________ of the
Company does not notify Employee that Employee may not so serve
within fifteen (15) business days of receipt of Employee's notice
of Employee's intent to serve on such boards or committees, and
further provided that in any event such time does not
unreasonably interfere with Employee's performance of his duties
hereunder;
(ii) comply with all reasonable rules, regulations and administrative
directions now or hereafter established by the Company;
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(iii) not engage in any activity or employment which materially
conflicts with or has a material adverse affect on, the present
or prospective business of the Company (including its
subsidiaries) and Employee's performance of his duties for the
Company or Acorn; and
(iv) notwithstanding the foregoing, if reasonably requested by the
Company, perform services for and/or be an officer of one or
more Intek subsidiaries, to the extent such duties are
consistent with Employee's executive position.
C. It is expressly understood and agreed that the Employee's continuing
with the same level of involvement to serve on any boards and
committees (i) on which he is serving or with which he is otherwise
associated on the Effective Date, and/or (ii) his service on any other
boards and committees of which he notifies the ________________ of the
Company and the Company gives prior written approval (which approval
will not be unreasonably withheld and shall be deemed to have been
given if the ________________ of the Company does not notify Employee
that Employee may not so serve within fifteen (15) business days of
receipt of Employee's notice), shall not be deemed to interfere with
the performance of the Employee's services to the Company.
D. Unless Employee consents otherwise in writing, which consent will not
be unreasonably withheld, the principal location for the performance
of his duties hereunder shall be at Acorn's offices in Shelton,
Connecticut.
5. Termination.
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A. Mutual Agreement. Notwithstanding the provisions of Sections 1 and 2
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hereof, this Agreement may be terminated at any time by the mutual
written agreement of the Company and Employee.
B. Termination of Employment Other Than by Employee. Notwithstanding the
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provisions of Sections 1 and 2 hereof, this Agreement may be
terminated prior to the expiration of the Term by the Company only
upon the occurrence of any of the following events:
(i) Death. Upon the death of the Employee.
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(ii) Disability. The inability of the Employee to perform his duties
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in any material respects on account of injury, illness or other
incapacity for the longest of (i) ninety (90) consecutive days,
or (ii) ninety (90) days in a three hundred sixty-five (365) day
period, or (iii) any longer period prescribed by any applicable
law, and the Board of Directors of the Company reasonably
determines that Employee has been unable to perform his duties
for such period as a result of injury, illness or other
incapacity ("Disability").
(iii) Cause. For "Cause", which shall be limited to:
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(1) the Employee is convicted or indicted of a felony, or of a
criminal offense involving any act or acts of moral turpitude or
any crime other than a vehicle offense that materially impairs
the Company's business, goodwill or reputation;
(2) the Employee has committed any material act of dishonesty with
respect to the Company, or any of the Company's subsidiaries or
affiliates, that materially impairs the Company's business,
goodwill or reputation and that is not the result of an
inadvertent or innocent mistake;
(3) willful malfeasance or nonfeasance of duty by the Employee
hereunder that materially injures the reputation, business or
business relationships of the Company or any of its subsidiaries
or any of their respective officers, directors or employees;
(4) the Employee materially breaches any term of this Agreement and
such action or failure to act is not remedied or cured, or
reasonable steps to fully effect such remedy or cure are not
commenced, within twenty (20) days of Employee's receipt of
written notice from the Company of such material breach;
(5) willful or prolonged absence from work by the Employee (other
than by reason of Disability) or material failure, neglect or
refusal by the Employee to perform his duties and
responsibilities without the same being remedied or corrected
upon twenty (20) days prior written notice; or
(6) a failure to properly and timely make the Section 83(b) election
provided for above regarding the Spider Stock.
C. Without Cause. Notwithstanding the provisions of Sections 1 and 2 hereof,
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the Company may terminate this Agreement at any time without Cause upon
thirty (30) days prior written notice to the Employee, in which case the
Company shall pay the Employee the amounts set forth in Section 5G(iv)
below.
D. Termination of Employment by Employee. Notwithstanding the provisions of
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Sections 1 and 2 hereof, this Agreement may be terminated prior to the
expiration of the Term by the Employee as follows:
(i) General. The Employee may terminate his employment at any time on
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ninety (90) days written notice, provided, however, that the Company
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may, in its sole discretion, elect to accelerate Employee's
termination under this Subsection by giving the Employee written
notice of its desire for the Employee to terminate his employment at
any time after thirty (30) days after receipt of Employee's notice of
termination hereunder.
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(ii) Hardship. The Employee may terminate his employment immediately and
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without prior notice due to a significant and long term family
medical emergency or similar hardship ("Hardship").
(iii) Good Reason. The Employee may terminate his employment at any time
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for Good Reason by giving Notice of Termination pursuant to Section
5.D. within sixty (60) days after the Employee has actual notice of
the occurrence of any of the following events (each or collectively,
"Good Reason") (provided the Company and Acorn do not cure such
event, or commence reasonable steps to fully effect such a remedy or
cure, on a retroactive basis to the extent possible within twenty
(20) days following its receipt of the Employee's Notice of
Termination):
(1) The Employee's Base Salary, bonuses and/or other compensation are
reduced or not paid for any reason other than in connection with
the termination of his employment.
(2) The Company otherwise materially breaches, or is unable to
perform its obligations under this Agreement and such breach is
not remedied or cured, or reasonable steps to fully effect a
remedy or cure have not commenced, within twenty (20) days of the
Company's receipt of written notice from Employee of such
material breach.
(3) For any reason, other than in connection with the termination of
Employee's employment for Cause, the Company materially reduces
any benefit provided to the Employee below the level of such
benefit provided generally to other actively employed executives
of the Company of similar compensation and responsibility levels,
unless the Company agrees to fully compensate the Employee for
any such material reduction.
E. Notice of Termination. Any termination of the Employee's employment by the
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Company hereunder, or by the Employee other than termination upon the
Employee's death, shall be communicated by written Notice of Termination to
the other party. For purposes of this Agreement, a "Notice of Termination"
means a notice that shall indicate the specific termination provision
relied upon in this Agreement, and shall set forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of the
Employee's employment under the specified provision or provisions.
F. Date of Termination. "Date of Termination" means:
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(i) If the Employee's employment is terminated by his death, the date of
his death.
(ii) If the Employee's employment is terminated by the Company as a result
of Disability pursuant to Section 5.B.(ii), the date that is thirty
(30) days after Notice of Termination is given.
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(iii) If the Employee terminates his employment for Good Reason pursuant to
Section 5.D(iii) the date that is twenty (20) days after Notice of
Termination is given (provided that the Company does not cure such
event during the twenty (20) day period).
(iv) If the parties terminate Employee's employment pursuant to Section
5(A) or if the Company terminates Employee's employment pursuant to
Section 5(C) or if Employee terminates his employment for Hardship
pursuant to Section 5(D)(ii), the date of Employee's last day of
work.
(v) If the Employee terminates his employment pursuant to Section
5(D)(i), the date that is ninety (90) days after Notice of
Termination is given, or such last day of employment as may be
specified by the Company in its notice to the Employee under Section
5(D)(i).
(vi) If the Employee's employment is terminated by the Company either for
Cause pursuant to Section 5(B)(iii), the date on which the Notice of
Termination is given.
G. Amounts Payable Upon Termination of Employment or During Disability.
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(i) Death. If the Employee's employment is terminated by his death, the
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Employee's beneficiary, as designated by the Employee in writing with
the Company prior to his death, shall be entitled to the following
payments and benefits (collectively, "Termination Payments"): (i) any
Base Salary that is accrued but unpaid, any bonus that is earned but
unpaid pursuant to the applicable terms and provisions of such bonus
plan, any vacation that is accrued but unused, and any business
expenses that are unreimbursed -- all, as of the Date of Termination;
and (ii) any benefit following the Date of Termination which may be
provided under the benefit plans, policies and programs described in
Section 7 in the amounts and for the time periods set forth in the
applicable terms and provisions of such plans. In the absence of a
beneficiary designation by the Employee, or, if the Employee's
designated beneficiary does not survive the Employee, or if required
by law, the Termination Payments shall be paid to the Employee's
estate.
(ii) Disability.
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During any period that the Employee fails to perform his duties
hereunder as a result of a Disability ("Disability Period"), the
Employee shall continue to receive his Base Salary at the rate then
in effect for such period until his employment is terminated pursuant
to Section 5(B)(ii) less any payments received pursuant to disability
policies or benefits (whether of the Company, Acorn or governmental);
and
Upon his termination of employment because of Disability, the
Employee shall be entitled to the Termination Payments as if the
Employee has died on his Date of
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Termination. In the event of the Employee's death prior to the time
that all Termination Payments have been paid, such payments and
benefits shall be paid to the Employee's beneficiary as designated
pursuant to Section 5(G)(i), or, in the absence of a beneficiary
designation or the designated beneficiary does not survive the
Employee, to the Employee's estate.
(iii) Hardship or Mutual Agreement. In the event the parties mutually
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agree to terminate this Agreement or Employee terminates his
employment due to Hardship before the expiration of the Term,
including any extension thereof, the Employee shall be entitled to
the Termination Payments as if the Employee had died on his Date of
Termination.
(iv) Termination by Company Without Cause or Termination by Employee for
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Good Reason. In the event the Company terminates the Employee's
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employment without Cause pursuant to Section 5(c) or the Employee
terminates his employment for Good Reason before the expiration of
the Term, including any extension thereof, the Employee shall be
entitled to the following payments and benefits:
(1) The Termination Payments as if the Employee had died on his Date
of Termination;
(2) Employee's Base Salary then in effect from and after the Date of
Termination through the earlier of (i) the expiration of the Term
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and (ii) the date twelve (12) months after the Date of
Termination (the "Initial Severance Period"), less all applicable
payroll deductions, including deductions for federal, state,
local and Social Security taxes (the "Initial Severance
Payments"). The Initial Severance Payments shall be paid in
accordance with the provisions of Section 3; and
(3) In Intek's sole discretion (based on factors such as, without
limitation, Employee diligently searching for future employment,
his reasonable cooperation with Intek during the Initial
Severance Period relating to activities Employee was actively
engaged in prior to the Date of Termination and Employee
refraining from any act or failure to act intended to materially
injure the reputation, business relationships or operations of
the Company), Employee's Base Salary then in effect from and
after the expiration of the Initial Severance Period through the
earlier of (i) the expiration of the Term, (ii) the date twelve
(12) months after the expiration of the Initial Severance Period,
and (iii) the date Employee commences other employment that, in
Employee's sole discretion, is suitable and comparable to his
employment with the Company (the "Extended Severance Period"),
less all applicable payroll deductions, including deductions for
federal, state, local and Social Security taxes (the "Extended
Severance Payments"). The Severance Payments shall be paid in
accordance with the provisions of Section 3.
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During the Initial Severance Period, payment of any life
insurance or other benefit of employment which may be provided
under the benefit plans, policies and programs described in
Section 7 will terminate on the Date of Termination (other than
COBRA at the Employee's expense).
During the Initial Severance Period and the Extended Severance
Period, the Company shall provide the Employee at the Company's
expense customary full executive level outplacement services with
a mutually acceptable outplacement firm for a period of up to
twelve (12) months after the Date of Termination to assist
Employee with his post-termination search for employment,
provided that in no event shall the Company be required to pay an
amount greater than fifteen percent (15%) of Employee's then
current Base Salary. In lieu of such outplacement services,
Employee may request equitable payment in cash or request that
the Company provide at its own expense for a period of up to
twelve (12) months (and in an amount that does not exceed the
amount that would have been payable by the Company under the
immediately preceding sentence) a mutually acceptable office,
together with secretarial assistance and customary office
facilities and services, for the purpose of facilitating
Employee's search for new employment. Employee acknowledges and
agrees that he will be responsible for the payment of all taxes
that are applicable in connection with the payments made by the
Company under this section.
In order to obtain payments pursuant to Subsections G(iv)(2) and
G(iv)(3) above, Employee shall submit a request for Severance Payments
identical to Exhibit C hereof following the last day of his
employment. The Company shall have no obligation to pay any such
payments unless and until the Employee shall have submitted such
request. The payments made hereunder, if any, shall be made on a
monthly basis at the time of the Company's regular payroll and shall
not be reduced by compensation the Employee may receive from other
sources.
(v) Termination by Employee Other Than for Good Reason, Hardship, Mutual
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Agreement or Termination by Company for Cause. In the event that the
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Employee voluntarily terminates his employment (other than for Good
Reason, Hardship or Mutual Agreement) or the Company terminates his
employment for Cause, the Employee shall not be entitled to any
compensation except as set forth below:
(1) Any Base Salary that is accrued but unpaid, any vacation that is
accrued but unused, any bonuses that are earned but unpaid
pursuant to the terms and provisions of such bonus plans, and any
business expenses that are unreimbursed -- all, as of the Date of
Termination; and
(2) Any other rights and benefits (if any) provided under plans and
programs of the Company (excluding any bonus program), determined
in accordance with the applicable terms and provisions of such
plans and programs.
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6. Expenses. The Company shall reimburse the Employee in accordance with the
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Company's regular procedures in effect from time to time (but at least
monthly) for all reasonable and necessary business expenses incurred by him
in the performance of his duties hereunder, provided that Employee shall
render to the Company such accounts and vouchers covering expenditures as
the Company reasonably requires or as are necessary for tax purposes, and
shall follow normal Company policy on expenses.
7. Vacation; Benefits. During the Term:
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A. Employee shall be eligible to participate in the benefit plans made
generally available to employees of the Company having similar
responsibility and compensation levels as Employee to the extent not
duplicative of compensation or benefits provided expressly herein.
Employee expressly acknowledges that the Company may alter, modify,
suspend or terminate any such benefit plans at any time and for any
reason, or no reason.
B. Employee shall be entitled to four (4) weeks vacation time annually
with pay, the time of which shall be determined in Employee's
discretion and shall not unreasonably interfere with Employee's
performance of his duties hereunder; and
C. Employee will receive an automobile allowance of $________ per month
and automobile insurance so long as premium levels are in accordance
with standard rates for safe drivers.
8. Non-Competition.
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A. The Company, Acorn and the Employee recognize that the Employee has
been retained to occupy a position that constitutes part of the
professional, management, and executive staff of the Company and
Acorn, whose duties will include the formulation and execution of
management policy. The Employee, for and in consideration of the
payments, rights and benefits provided herein, agrees that during the
Non-Compete Period (defined below), the Employee shall not compete
directly or materially with a Subject Company in the business of (i)
inbound or outbound telemarketing or teleservicing; (ii) outsourced
teleservicing; (iii) customer direct e-servicing business, which
includes, without limitation, the design, development, marketing and
sale of business tools (including business rules and processes) and
computer software that assists businesses and other organizations in
selling products directly to consumers on the Internet, or (iv) "data
mining" by which demographic data is either gathered or analyzed in
order to direct or improve marketing or customer service activities
(collectively the "Business"), during the Non-Compete Period. For
purposes of this Section, the "Non-Compete Period" shall begin on the
Closing Date (as defined in the Purchase Agreement) and end either:
(i) if the Date of Termination is before the EBITDA Threshold (as
defined in the Purchase Agreement) is achieved, the longer of one (1)
year after the Date of Termination or three (3) years after the
Closing Date; or (ii) if the Date of Termination is after the EBITDA
Threshold is achieved, one (1) year after the Date of Termination. The
parties agree that they shall not during such period make public
statements in derogation of each other,
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except as may be required by law. For the purposes of this Section,
the term "Subject Company" shall mean Intek and any direct or indirect
subsidiaries, parents and affiliates of Intek including Acorn.
Competing directly or materially with the Subject Company shall mean
(a) either (i) engaging or (ii) having a material interest (any
ownership or profit interest over 5% always being material), directly
or indirectly, as owner, employee, officer, director, partner,
venturer, shareholder, capital investor, consultant, agent, principal,
advisor or otherwise, either alone or in association with others, in
the operation of any individual or entity engaged in (b) the Business
within Canada or the continental United States, including the
California counties which would appear here if each county in
California was listed here. Competing directly or materially with the
Subject Company, as used in this Agreement, shall be deemed not to
include an ownership interest as an inactive investor, which for
purposes of this Section shall mean the beneficial ownership of less
than five percent (5%) of the outstanding shares of any series or
class of securities of any competitor of the Subject Company, which
shares are publicly traded in the securities markets. The Key
Shareholders agree that the Business is inherently nationwide in
scope.
B. Notwithstanding the foregoing, Employee shall have no obligation under
this Section 8 after termination if (i) both (1) (A) the Employee has
terminated this Agreement for Good Reason or the Company has
terminated this Agreement without Cause, and (B) the Company has
obligations to make post-termination continued Base Salary payments
under this Agreement, and (2) after twenty (20) days notice by the
Employee to the Company that the Company has failed to make such post-
termination payments, the Company has not cured such failure to make
payments; or (ii) if the Intek ________________ consents, which
consent shall not be unreasonably withheld, to Employee's employment
or performance of services for a business that does not directly
compete with Intek.
C. Upon the termination of the Employee's employment with the Company,
and for one year thereafter, upon written request of the Company, the
Employee shall promptly provide the Company a Certificate of
Compliance with this Section 8, which Certificate shall include
information regarding Employee's employment or agency relationships
with third parties engaged in a business which is directly or
materially in competition with the Business to the extent not
prohibited by confidentiality agreements with third parties. The
Company agrees to keep confidential and not to use or disclose any
information that Employee provides regarding Employee's employment or
agency relationships with third parties.
D. The Employee agrees that the restrictions contained in this Section 8
are reasonable as to time and geographic scope because of the nature
of the Business and the Employee agrees, in particular, that the
geographic scope of this restriction is reasonable because companies
engaged in the Business compete on a nationwide basis. The Employee
acknowledges that the Company is in direct competition with all other
companies engaged in the Business throughout the continental United
States, Canada, and other markets in which the Company may be
conducting business at the time the Employee's
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employment with the Company is terminated, and because of the nature
of the Business, the Employee agrees that the covenants contained in
this Section 8 cannot reasonably be limited to any smaller geographic
area.
E. The provisions of this Section 8 shall survive termination of this
Agreement for any reason.
9. Non-Raid.
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A. The Employee acknowledges that the Company has invested substantial
time and effort in assembling its present staff of personnel.
Accordingly, Employee covenants and agrees that during the term of the
Non-Compete Period, he will not (i) solicit or hire any of the
employees of a Subject Company who were employed by a Subject Company
at or within one month before or during the Employee's employment by a
Subject Company, (ii) interfere with the relationship of the Subject
Company with any such employees, or (iii) personally target or
solicit, or assist another to target or solicit, customers of the
Subject Company for activities related to the Business or influence,
or attempt to influence any of the customers of the Subject Company
not to do business with the Company.
B. Notwithstanding the foregoing, Employee shall have no obligation under
this Section 9 after termination if both (i) (A) the Employee has
terminated this Agreement for Good Reason or the Company has
terminated this Agreement without Cause, and (B) the Company has
obligations to make post-termination continued Base Salary payments
under this Agreement, and (ii) after twenty (20) days notice by the
Employee to the Company that the Company has failed to make such post-
termination payments, the Company has not cured such failure to make
payments.
C. The Employee agrees that the restrictions contained in this Section 9
are reasonable as to time and geographic scope because of the nature
of the Business and the Employee agrees, in particular, that the
geographic scope of this restriction is reasonable because companies
engaged in the Business compete on a nationwide basis. The Employee
acknowledges that the Company is in direct competition with all other
companies engaged in the Business throughout the continental United
States, Canada, and other markets in which the Company may be
conducting business at the time the Employee's employment with the
Company is terminated, and because of the nature of the Business, the
Employee agrees that the covenants contained in this Section 9 cannot
reasonably be limited to any smaller geographic area.
10. Blue Pencil Provision. Employee acknowledges that the scope, periods and
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geographic area of restriction imposed by Section 8 and Section 9 are fair
and reasonable and are reasonably required for the protection of the
Company. If any part or parts of Section 8 or Section 9 shall be held to be
unenforceable or invalid, the remaining parts thereof shall nevertheless
continue to be valid and enforceable as though the invalid portion or
portions were not a part hereof. If any of the provisions of Section 8 and
Section 9 relating to the scope, periods or
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geographic area of restriction shall be deemed to exceed the maximum scope,
periods of time or area which a court of competent jurisdiction would deem
enforceable, the scope, times and area shall, for the purposes of Section 8
and Section 9, be deemed to be the maximum scope, time periods and area
which a court of competent jurisdiction would deem valid and enforceable in
any state in which such court of competent jurisdiction shall be convened.
The invalidity or unenforceability of any provision hereof in one
jurisdiction shall not affect its validity or enforceability in another
jurisdiction.
11. Confidentiality. Employee acknowledges that Employee may have access to
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certain information related to the business, operations, future plans and
customers of the Company, the disclosure or use of which could cause the
Company substantial losses and damages. Accordingly, Employee covenants
that during the term of Employee's employment with the Company and
thereafter Employee will keep confidential all such information and
documents furnished to Employee by or on behalf of the Company and not use
the same to Employee's advantage, except to the extent such information or
documents are lawfully obtained from other sources on a non-confidential
(as to the Company) basis or are in the public domain through no fault on
Employee's part or is consented to in writing by the Company or are
disclosed to the extent required by a court, administrative agency,
government body, or applicable law, rule or regulation. Upon termination of
Employee's employment, Employee shall return to the Company all records,
lists, files, disks, documents, media and other Company property which are
in Employee's possession and which relate to the Company or its business.
12. Right to Injunctive Relief. Employee agrees and acknowledges that a
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violation of the covenants contained in Sections 8, 9, or 11 of this
Agreement will cause irreparable damage to the Company, and that it may be
impossible to estimate or determine the damage that will be suffered by the
Company in the event of a breach by Employee of any such covenant.
Therefore, Employee further agrees that in the event of any violation or
immediately threatened violation of such covenants, the Company shall be
entitled as a matter of course to seek an injunction from any court of
competent jurisdiction restraining such violation or threatened violation
by Employee, such right to an injunction to be cumulative and in addition
to whatever other remedies the Company may have.
13. Indemnification; Insurance. The Company shall provide for the coverage of
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Employee under the Company's standard directors' and officers' insurance
policy to protect Employee against any expense, liability or loss by reason
of the fact that Employee is or was a director or officer of the Company,
to the fullest extent permitted by applicable law and the terms and
conditions of such policy.
14. Integration; Forum. This Agreement together with the Stock Restriction
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Agreement and the Share Purchase Agreement shall constitute the entire
agreement between the parties. This Agreement shall be governed by the laws
of Colorado, excluding laws on choice of law. This Agreement specifically
supersedes any employment arrangements, or other compensation arrangement
(including bonus, option, appreciation, benefit or commission arrangements)
with Acorn. Any litigation regarding this Agreement shall only be brought
and heard in the
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federal or state courts located in Chicago, Illinois, which courts shall
apply the laws of the State of Colorado, excluding laws on choice of law,
and no transfer of venue outside such area shall be permitted. If the
Company is enforcing any provision hereof which is similar to a provision
in the Share Purchase Agreement (including, but not limited to, non-
compete, confidentiality and no-hire provisions) and Employee was a party
to such Share Purchase Agreement, the Company may require the resolution of
such issues to be decided in the arbitration or litigation conducted under
such Share Purchase Agreement. Termination of this Agreement or any
provision hereof, including Sections 8, 9, or 11, shall not affect any
similar provision in the Share Purchase Agreement, including any non-
compete covenant; provided, however, that the provisions of Sections 8 and
-------- -------
9 hereof relating to the time periods for the effectiveness of the
agreements addressed in such sections, shall control over a longer time
period in the corresponding provision of the Share Purchase Agreement. In
all other respects the agreements in the Share Purchase Agreement
(including, but not limited to, non-compete, confidentiality and no-hire
provisions) are separate and independent of this Agreement.
15. Unenforceability. If any paragraph or subparagraph of this Agreement or any
----------------
part thereof shall be unenforceable under any applicable laws,
notwithstanding such unenforceability the remainder of this Agreement shall
remain in full force and effect.
16. Attorneys' Fees; Costs. In the event of any legal or arbitration action or
----------------------
proceeding to enforce or interpret the provisions hereof, the prevailing
party shall be entitled to reasonable attorneys' fees and costs, and other
costs and expenses incurred in the action or proceeding, whether or not the
proceeding results in a final judgment. All costs and expenses, including
without limitation attorneys' fees and costs, incurred in connection with
the negotiation, preparation, execution, delivery and enforcement of this
Agreement and consummation of the transactions contemplated hereby shall be
paid by the party incurring such costs and expenses.
17. Survival. Terms which by their terms or sense are to survive termination
--------
hereof (including Sections 5, 8, 9, 11 and 12) shall so survive.
18. Notice. Any notice, direction or instruction required or permitted to be
------
given hereunder shall be given in writing and may be given by facsimile
transmission or similar method if confirmed by mail as herein provided; by
mail if sent postage prepaid by registered mail, return receipt requested;
or by hand delivery to any party at the address of the party set forth
below. If notice, direction or instruction is given by facsimile
transmission or similar method or by hand delivery, it shall be deemed to
have been given or made on the day on which it was given, and if mailed,
shall be deemed to have been given or made on the third business day
following the day after which it was mailed. Any party may, from time to
time, by like notice give notice of any change of address and in such
event, the address of such party shall be deemed to be changed accordingly.
If to the Company: Intek Information Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇/▇▇/ ▇▇▇▇▇
▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Copy to: ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.C.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: G. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Jr.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Employee: _____________________________
PERSONAL AND CONFIDENTIAL
c/o Acorn Information Services, Inc.
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Copy to: ▇▇▇▇▇▇ & ▇▇▇▇
Three Stamford Plaza
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
19. Inventions. Employee hereby agrees to assigns, and hereby assigns, to the
----------
Company all of Employee's interest (including copyrights and patent rights)
in any ideas, concepts, know-how, inventions, discoveries, works of
authorship, and the like ("Inventions"), which are conceived or made by
Employee during the term of Employee's employment with the Company or his
previous employment by Acorn, and which are or were developed on Company
time or with Company facilities, whether or not related to the Business.
Further, even if not developed on Company time or with Company facilities,
any Invention (conceived by or made by Employee during the term of
employment with the Company) is hereby assigned if it relates to or is
suggested by the Business. Employee also agrees that, independent of any
assignment, Employee's work is a work for hire and the Company owns all
right, title and interest in all Inventions, and all copyrights, patent
rights, and the like, concerning the Inventions. Employee will, from time
to time, execute such confidentiality and invention assignment agreements
as are generally signed by similarly situated Company employees.
20. Amendments; Waivers. This Agreement cannot be changed, modified or amended,
-------------------
and no provision or requirement hereof may be waived, without consent in
writing of the parties hereto.
14
21. Counterparts. This Agreement may be executed in two or more counterparts,
------------
each of which shall be deemed to be an original. It shall not be necessary
when making proof of this Agreement to account for more than one
counterpart.
22. Acorn as Substitute for Intek; Joint and Several Liability. Acorn and
----------------------------------------------------------
Intek acknowledge and agree that they are jointly and severally liable for
their duties under this Agreement. Throughout this Agreement references are
made to the Company performing certain acts. The Company may cause Acorn to
perform (in whole or in part) any act to be performed by the Company
hereunder; provided, however, that no such assignment or delegation of
duties shall relieve Acorn or Intek of their joint and several liability
hereunder.
[Signature page follows.]
15
IN WITNESS WHEREOF, the parties have executed this EMPLOYMENT AGREEMENT as of
the date first above written.
INTEK INFORMATION, INC. ACORN INFORMATION SERVICES, INC.
By: __________________________ By:__________________________________
▇▇▇▇▇▇▇ ▇'▇▇▇▇▇▇▇ Title: ______________________________
___________________
EMPLOYEE
__________________________________
EXHIBIT A
---------
In the event Acorn achieves Sustained Profitability by August 31, 1999, the
Company will pay Employee $________, less applicable taxes and withholding. The
bonus will be paid within thirty (30) days of Closing. "Sustained
Profitability" has the meaning set forth in the Share Purchase Agreement.
The Company's obligation to pay such signing bonus shall immediately expire in
the event Employee's employment is terminated for any reason set forth in the
attached Employment Agreement prior to the date such bonus is payable by
Company.
16
EXHIBIT B
---------
Stock Restriction Agreement
17
EXHIBIT C
---------
Request for Post-Employment Allowance
This request for severance allowance is made by _________________ (hereinafter
"the Employee") pursuant to the provisions of the Employment Agreement (the
"Agreement") between the Employee on the one hand, and Intek Information, Inc.
and Acorn Information Services, Inc. on the other (hereinafter collectively "the
Company").
1. In consideration of the execution of this request for post-employment
allowance, the Company agrees to pay me the amounts and provide me with the
benefits as set forth in Subsections G(iv)(2) and (3) of the Agreement.
2. In return for these payments and benefits, I fully and finally release, waive
and discharge all charges, claims and causes of action of any sort known to me
that I may have against any person (including the Company, its directors,
officers, employees, agents and owners), including but not limited to, claims
arising from or related to my employment or termination of my employment, any
age, race, any unlawful employment practices of any kind, or otherwise, whether
such claims arise under federal, state, local, common, contract (including, but
not limited to, the Agreement), tort or other laws or regulations, specifically
including Title VII of the Civil Rights Act of 1964 as amended by the Equal
Employment Opportunity Act of 1972 and the Age Discrimination in Employment Act,
42 U.S.C. Section 1981.
3. I represent and warrant that I have returned all property of the Company in
my possession, including but not limited to, documents, manuals, pertinent
business contacts (names and addresses), shareholder lists, software, computers
and computer disks, notes, keys, cellular phone, and other articles or equipment
I used in the course of my employment that were provided to me by the Company.
4. It is understood that the Company does not admit the existence or validity of
any such claims or any liability of any sort nor has the Company made any
agreement or promise to do or omit to do any act or thing not herein set forth.
5. I agree that I will not disclose this document or its terms or provisions
without first obtaining the written consent of the Company except to the extent
such information is lawfully obtained from other sources on a non-confidential
(as to the Company) basis or are in the public domain through no fault on
Employee's part, and except to my accountants, attorneys and immediate family
members.
6. I understand that this Request shall be governed by Colorado law.
7. I have read and completely understand this request and recognize that it
constitutes a general release and waiver of all claims, and I agree that this is
an acceptable compromise of any such
18
claims described in this request and knowingly and voluntarily intend to be
bound by these provisions without any further promises or consideration by the
Company.
____________________________________ Date __________________
19
EXHIBIT TO FORM OF EMPLOYMENT AGREEMENT
EMPLOYEE STOCK RESTRICTION AGREEMENT
This EMPLOYEE STOCK RESTRICTION AGREEMENT (the "Agreement") is made as of
the 4th day of November, 1999, by and between INTEK INFORMATION, INC., a
Delaware corporation (the "Company"), and ________________________ ("Employee").
RECITALS
--------
WHEREAS, the Company, Acorn Information Services, Inc., a Delaware
corporation ("Acorn"), Employee, a former shareholder and an employee of Acorn,
and certain other shareholders of Acorn (the "Acorn Shareholders") have entered
into a Share Purchase Agreement dated as of the date hereof (the "Purchase
Agreement") for the purchase by the Company of all of the outstanding capital
stock of Acorn from the Acorn Shareholders. All capitalized terms used, but not
otherwise defined, herein shall have the meaning ascribed to them in the
Purchase Agreement.
WHEREAS, Employee and the Company have entered into an Employment Agreement
of even date herewith (the "Employment Agreement") pursuant to which Employee is
entitled to receive [________________] shares of common stock of Spider
Technologies, Inc., a Delaware corporation and previously wholly owned
subsidiary of the Company ("Spider"), subject to the terms and conditions of
this Agreement.
WHEREAS, the [________________] shares of common stock of Spider, par
value $0.0001 per share, Employee is entitled to receive under the Employment
Agreement (the "Employee Shares") are subject to the restrictions contained in
this Agreement.
WHEREAS, in consideration of the Employment Agreement and the execution by
certain other employees of the Company and Acorn of similar agreements pursuant
to the Purchase Agreement, Employee desires to participate in the stock
restriction plan which this Agreement embodies.
NOW, THEREFORE, the parties agree as follows:
1. Delivery of Spider Common Stock. Employee and the Company agree that
-------------------------------
in consideration for services rendered and to be rendered by Employee to Acorn,
the Company has delivered to Employee [________________] shares of Spider
common stock subject to the terms and conditions of this Agreement. If the spin
off transaction between Intek and Spider (the "Spider Spin Off") closes on or
before the Closing Date (as defined in the Purchase Agreement) or at the
Company's election even if the Spider Spin Off has not occurred, the Company
shall exercise its warrant to purchase shares of Spider common stock and, upon
receipt of certificates evidencing such shares, shall deliver a
1
duly endorsed certificate to Employee representing [___________] shares of
Spider common stock free and clear of any liens, charges, claims or encumbrances
of any kind (other than this Agreement, the Spider Shareholders Agreement and
the Purchase Agreement) as compensation for certain services rendered and to be
rendered by Employee to Acorn. If the Spider Spin Off does not close on or
before the Closing Date, and the Company does not elect to deliver the Spider
common stock, the Company shall deliver to Employee a warrant entitling Employee
to receive [___________] shares of Spider common stock (subject to the same risk
of forfeiture as the Employee Shares as provided below) upon the closing of the
Spider Spin Off or 25 days after the date hereof, whichever is earlier;
provided, however, that in the event the Spider Spin Off is terminated prior to
-------- -------
such 25-day period, such warrant shall terminate automatically upon such
termination of the Spider Spin Off and Employee shall not be entitled to receive
any shares of Spider common stock.
2. Escrow of Employee Shares. Employee shall deposit the
-------------------------
certificate representing the Employee Shares (or the warrant as the case may be)
with ▇▇▇▇▇▇ & ▇▇▇▇ (the "Escrow Agent") to be held in escrow (the "Escrow") in
accordance with the terms of this Agreement and a mutually acceptable escrow
agreement entered into with the Escrow Agent. The certificate will be held in
Escrow until the expiration of the risk of forfeiture to which the Employee
Shares are subject as provided below, which in any event shall be no later than
30 days after the end of the close of the books of account of the Company for
the period ending on the third anniversary of the date of this Agreement (or
upon earlier expiration of the risk of forfeiture with respect to the Employee
Shares upon an acceleration event as described in Section 5.16 of the Purchase
Agreement) (the "Disbursement Date"). If all or any portion of the Employee
Shares is forfeited (as provided below), the Company will issue on or prior to
the Disbursement Date a new certificate in the name of Employee to the escrow
agent representing the number of Vested Employee Shares (defined below) for
disbursement to employee out of Escrow at the Disbursement Date. Subject to
Section 4, the Escrow Agent shall deliver to Employee the certificate
representing the Vested Employee Shares on the Disbursement Date.
As used herein, "Vested Employee Shares" means a number of shares of
Spider common stock equal to the number of shares of Intek common stock Employee
is entitled to receive under Section 2.2 of the Purchase Agreement in Year 1 (as
defined in the Purchase Agreement), subject to Sections 2.4 and 5.16 of the
Purchase Agreement, and adjusted for all stock splits, stock dividends, stock
combinations and recapitalizations of Spider common stock and Intek common
stock, respectively (and any securities issued in respect thereof) (an
"Adjusting Event"). "Unvested Employee Shares" means the Employee Shares that
are not Vested Employee Shares.
As used in this Agreement, the Employee Shares includes any and all
proceeds and products of the Employee Shares whether by dividend, distribution,
as consideration for a merger, or otherwise. In the event such proceeds or
products includes cash, any cash shall be placed in a mutually acceptable escrow
account with a financial
2
institution or similar party pursuant to an escrow agreement containing
substantially the terms as the Escrow Agreement entered into by the Company and
the Acorn Shareholders under the Purchase Agreement (provided that such escrow
shall not be created for indemnification claim purposes). Employee shall be
entitled to receive on the Disbursement Date the amount of such products or
proceeds in proportion to the number of Vested Employee Shares Employee is
entitled to receive on such date.
As a condition to receipt of the Employee Shares hereunder, Employee
agrees to execute and deliver to Spider a copy of any shareholders agreement
that is executed by the holders of seventy percent (70%) or more of the
outstanding common stock of Spider (the "Shareholders Agreement").
3. Section 83(b) Election. The Employee Shares received by Employee
----------------------
hereunder are subject to a risk of forfeiture as defined in Section 83(b) of the
Internal Revenue Code of 1986, as amended. Such risk of forfeiture shall
terminate at the same time and in the same manner as the shares of Intek common
stock payable pursuant to Section 2.2 (Contingent Earn-Out Consideration) and
Section 2.4 (Effect of Employee Departures and Minimum EBITDA Threshold) of the
Purchase Agreement. Employee agrees to promptly and timely file with the
----------------------------------------------------
Internal Revenue Service and the Company a Section 83(b) election with respect
------------------------------------------------------------------------------
to the Spider shares received by him hereunder and Employee acknowledges that he
--------------------------------------------------------------------------------
understands the consequences of such filing. Employee agrees that he is solely
-------------------------------------------
responsible for making such election and that he shall have no recourse against
the Company or its advisors with respect to such election.
4. Employee Shares Upon Termination of Employment. In the event
----------------------------------------------
that Employee shall cease to be an employee of Acorn at any time prior to three
(3) years from the date hereof, Employee shall be entitled to receive the Vested
Employee Shares on the Disbursement Date, except that a number of Employee
Shares shall be placed in the Earn-Out Pool (as defined in the Purchase
Agreement) equal to the shares of Intek common stock placed in the Earn-Out Pool
for Year 1 as Earn-Out Consideration pursuant to Section 2.4 of the Purchase
Agreement and shall be issued in the same manner as the Intek shares. Any
Employee Shares that are not placed in the Earn-Out Pool pursuant to this
Section 4, and that are not Vested Employee Shares, shall be deemed Unvested
Employee Shares and subject to the rights of the Company under Section 5 herein.
5. Unvested Employee Shares. Upon the earlier of the Disbursement
------------------------
Date or the Date of Termination, Employee shall automatically sell and transfer
to the Company at a price of $0.013 per share, as adjusted for any Adjusting
Events (the "Purchase Price"), all of the Unvested Shares as of the Disbursement
Date or the Date of Termination (as applicable) that are not placed in the Earn-
Out Pool as provided in Section 4 herein, without further consideration and
without written notice to such effect.
Unless the Company affirmatively elects not to purchase the Unvested
Shares within sixty (60) days following the Disbursement Date (or the Date of
3
Termination if earlier), or if the number of Unvested Employee Shares shall not
have been determined as of such time, then within thirty (30) days of the date
on which the Company makes such determination, the Unvested Employee Shares
shall be deemed to have been purchased by the Company. The Company shall pay
the Purchase Price at the closing of such sale, which closing shall occur within
the sixty (60) day period (or thirty day extended period, as applicable)
referenced in the preceding sentence. A failure of the Company to make any
payment under this Section 5 shall not void the transfer of the Spider common
stock to the Company, but will only result in a monetary claim by Employee
against the Company for the amount of such payment. References to Employee
herein shall be deemed to include Employee's legal representative, estate or
beneficiary in the case of Employee's death or Disability (as defined in the
Employment Agreement). If the Company affirmatively elects not to purchase the
Unvested Shares, such Unvested Shares shall be deemed Vested Shares and Employee
shall be entitled to receive such shares on the later of the Disbursement Date
or upon notice from the Company of its election not to purchase the Unvested
Shares.
Upon payment of the Purchase Price (in cash) in accordance with this
Agreement, Employee and the Company shall notify the Escrow Agent of such
payment and Escrow Agent shall deliver the certificate representing the Unvested
Employee Shares to the Company. The escrow agreement with the Escrow Agent
shall terminate as of the Disbursement Date. All transfer taxes and expenses
shall be paid by Employee.
4
6. Transfer by Employee. Employee may not sell, transfer, gift,
--------------------
assign, pledge, encumber or otherwise dispose ("Transfer") of any of his
Employee Shares during his lifetime until such shares are Vested Employee
Shares, unless to another Acorn Shareholder, to an immediate family member or
other trust or entity formed for estate planning purposes, or pursuant to
Section 5 or with the prior written consent of the Company, which consent may be
withheld for any reason or for no reason. Any Transfer of Employee Shares until
such shares are Vested Shares, whether voluntary or involuntary or by operation
of law, which is made in violation of this Section 6 (other than a Transfer
resulting from a merger or similar event required by applicable law to be
approved by a vote of the shareholders of Spider) shall be null and void and
have no effect, and the Company shall not recognize any such Transfer or
recognize the transferee as the holder of such Employee Shares for any purpose.
If Employee Transfers his Employee Shares in accordance with this Section 6,
then such Transfer may be consummated subject to the restrictions in the
Shareholders Agreement; provided, however, that any transferee thereof shall
-------- -------
become a party to this Agreement, shall execute and deliver a counterpart of
this Agreement and shall agree to be subject to the restrictions and obligations
hereunder. Employee agrees and acknowledges that any Transfer of his Vested
Employee Shares shall be subject to and made in accordance with the terms of the
Shareholders Agreement.
7. No Other Liability. No party hereto shall have by reason hereof
------------------
any liability to the other on account of a termination of Employee's employment
with the Company for any reason, except for any liability which may (or may not)
be established by a separate written mutual agreement signed by the parties,
including, but not limited to, the Employment Agreement or the Purchase
Agreement.
8. Restrictive Legend. Employee consents to the placement of an
------------------
appropriate restrictive legend on the certificate evidencing the Employee Shares
and any certificates issued in replacement or exchange therefor. In addition to
any restrictive legend required under the Spider Shareholders Agreement,
Employee understands that the restrictive legend shall be substantially in the
following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933. SUCH SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID
ACT. THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE
TRANSFERRED EXCEPT IN ACCORDANCE WITH THE RESTRICTIONS CONTAINED
IN AN EMPLOYEE STOCK RESTRICTION AGREEMENT DATED
__________________, 1999, A COPY OF WHICH OBTAINED AT NO COST BY
WRITTEN REQUEST TO THE SECRETARY OF THE CORPORATION AT ITS
CORPORATE HEADQUARTERS.
5
The Company agrees to remove such restrictive legend upon the issuance of
Vested Shares to Employee on the Disbursement Date.
9. Other. The terms of this Agreement shall apply to any additional
-----
shares of Spider common stock issued to or received by Employee in connection
with a stock dividend, stock split, or other distribution of Spider stock. All
certificates representing shares hereinafter issued Employee shall bear the
legend provided in Section 8. If there shall be any change in the capital stock
of Spider through merger, consolidation, reorganization, recapitalization,
reincorporation, stock dividend, or other change in the corporate structure of
Spider, the restrictions contained in this Agreement shall apply with equal
force to the new or additional securities, or both, if any are received by
Employee in exchange for, or by virtue of his ownership of, the Employee Shares.
An appropriate adjustment shall also be made to the Purchase Price set forth in
Section 4 upon the occurrence of any such events.
10. Rights as Shareholder. Subject to the provisions of this Agreement,
---------------------
Employee shall, during the term of this Agreement, be entitled to all rights and
privileges of a shareholder of Spider with respect to the Employee Shares.
11. Notice. Any notice required or permitted under this Agreement shall
------
be given in writing and shall be deemed effectively given upon personal delivery
or three (3) business days after deposit in the United States Post Office, by
registered or certified mail, with postage and fees prepaid, addressed to the
Company at its principal office and to Employee at his address as carried on the
Company's records, or at such other address as such party may designate by ten
(10) days' advance written notice to the other party hereto.
12. Assignment. This Agreement shall inure to the benefit of the
----------
successors and assigns of the Company and, subject to the restrictions on
transfer set forth in this Agreement, be binding upon Employee, his heirs,
administrators, successors and assigns.
13. Survival. The rights and obligations of the Company and of Employee
--------
under this Agreement shall survive any merger or sale of all or substantially
all of the capital stock or assets of Spider, or a public offering of Spider
capital stock.
14. Governing Law. This Agreement shall be governed by and construed
-------------
under the internal laws of the State of Colorado, without regard to the choice
of law rules therein.
6
15. Arbitration. Except as provided below in this paragraph, any and all
-----------
disputes arising under or related to this Agreement shall be submitted to
binding arbitration before the American Arbitration Association ("AAA") in
accordance with its rules of Commercial Arbitration. The decision of the
arbiter shall be final and binding upon the parties, and it may be entered in
any court of competent jurisdiction. The arbitration shall take place in
Chicago, Illinois. The arbiter shall be bound by the laws of the State of
Colorado applicable to all relevant privileges and the attorney work product
doctrine. The arbiter shall have the power to grant equitable relief where
applicable under Colorado law and shall not be entitled to make an award of
punitive damages. The arbiter shall issue a written opinion setting forth its
decision and the reasons therefor within thirty (30) days after the arbitration
proceeding is concluded. The obligation of the parties to submit any dispute
arising under or related to this Agreement to arbitration as provided in this
Section shall survive the expiration or earlier termination of this Agreement.
Notwithstanding the foregoing, any party may seek an injunction or other
appropriate relief from a court of competent jurisdiction to preserve or protect
the status quo with respect to any matter pending conclusion of the arbitration
proceeding, but no such application to a court shall in any way be permitted to
stay or otherwise impede the progress of the arbitration proceeding.
The Company and Employee hereby consent to the jurisdiction of the AAA
and the courts of the State of Illinois and the United States District Courts
for the Northern District of Illinois, as well as to the jurisdiction of all
courts from which an appeal may be taken from such courts, for the purpose of
any arbitration, suit, action or other proceeding arising out of any of their
obligations arising hereunder or with respect to the transactions contemplated
hereby and expressly waive any and all objections they may have as to venue in
any of such courts.
16. Section Titles. Section titles are for descriptive purposes only and
--------------
shall not control or alter the meaning of this Agreement as set forth in the
text.
17. Further Assurances. The parties shall execute and deliver such
------------------
further instruments and do such further acts and things as may be required to
carry out the intent and purposes of this Agreement.
18. Directly or Indirectly. Where any provision in this Agreement refers
----------------------
to action to be taken by any person, or which such person is prohibited from
taking, such provision shall be applicable whether the action in question is
taken directly or indirectly by such person.
19. Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed an original of this Agreement.
20. Entire Agreement. This Agreement together with the other agreements
----------------
and instruments entered into in connection herewith constitutes the entire
agreement among the parties hereto with respect to the transactions contemplated
herein, and
7
supersedes all other prior understandings or agreements between
Employee and the Company with respect to such transactions.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
8
IN WITNESS WHEREOF, the parties have executed this Restricted Stock
Agreement as the date first written above.
COMPANY: INTEK INFORMATION, INC.
A Delaware corporation
By: _______________________
Title: ____________________
EMPLOYEE: ____________________________
Print Name: ________________
9
EXHIBIT 8.8.3
ESCROW AGREEMENT
----------------
THIS AGREEMENT is made as of the 30th day of October, 1999 by and among
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, the
Sharma Family LLC, the Murali Family LLC and the ▇▇▇▇▇▇▇▇▇▇ Family LLC
(collectively, the "Shareholders"), Intek Information, Inc., a Delaware
corporation ("Buyer"); and Colorado State Bank and Trust ("Escrow Agent"), a
Colorado Corporation. All capitalized terms used, but not otherwise defined
herein shall have the meanings ascribed to them in the Purchase Agreement.
WHEREAS, contemporaneously with the execution hereof, the Shareholders and
Buyer will enter into that certain Share Purchase Agreement whereby Buyer will
purchase all of the issued and outstanding capital stock of Acorn ("Purchase
Agreement"); and
WHEREAS, pursuant to the Purchase Agreement, the parties have agreed to
place a portion of the purchase price in escrow upon the terms and conditions
herein.
In consideration of the mutual covenants and agreements contained in this
Agreement, the parties hereto agree as follows:
1. Receipt of Escrow Fund for Purchase Price. Upon the payment by
-----------------------------------------
Buyer to the Shareholders of the Sustained Profitability Consideration and the
cash portion of the Contingent Earn-Out Consideration in the amounts and at the
times set forth in the Purchase Agreement, Buyer shall deliver on the date of
such payments for a period expiring fifteen (15) months after the Closing Date a
bank cashier's check, certified check, wire transfer or other immediately
available funds in an amount which shall equal ten percent (10%) of such amounts
paid to the Shareholders on each such date, payable to the order of Escrow Agent
(the "Fund"). The Base Consideration and the stock portion of the Contingent
Earn-Out Consideration payable under the Purchase Agreement shall not be subject
to this Agreement and shall not be delivered to Escrow Agent as part of the
Fund. Escrow Agent agrees to hold the Fund pursuant to the terms and
conditions of this Agreement. Escrow Agent shall invest the Fund in an
interest-bearing account. Interest earned on the Fund shall be paid to, and
reported as interest by, the recipient of the Fund.
2. Release of Escrow for Purchase Price. Escrow Agent shall release
------------------------------------
and deliver the Fund together with accrued interest, to the Shareholders on
October 30, 2001, being the date that is eighteen (18) months after the Closing
Date ("Claim Expiration Date"), unless on or prior to the Claim Expiration Date,
Escrow Agent shall have received a Claim Notice (as defined in and in accordance
with Section 3 below) from Buyer, in which case disbursement will be as provided
herein. Upon release by Escrow Agent of the Fund, as provided for herein, this
Agreement shall terminate and Escrow Agent shall be discharged of any further
duties hereunder.
3. Claim Notice. If Buyer has a Claim for Damages for which Buyer
------------
believes it is entitled to indemnification under Article 8 of the Purchase
Agreement and which Buyer believes should be paid out of the Fund, prior to the
Claim Expiration Date Buyer shall deliver to each of
the Shareholders and on the Escrow Agent a written request ("Claim Notice")
setting forth the amount of indemnity claimed ("Claim Amount") and in reasonable
detail the basis therefor. If a Claim Notice is timely made, Escrow Agent shall
promptly furnish each of the Shareholders with a copy of such Claim Notice in
accordance with the notice provisions hereof and shall proceed in the following
manner:
(a) If within thirty (30) days of Escrow Agent's
receipt of the Claim Notice, the Buyer shall
deliver to the Escrow Agent joint written
instructions duly executed by Shareholders and
Buyer, the Escrow Agent shall release and deliver
the Funds in accordance with such written notice.
Escrow Agent shall have no obligation to verify
the accuracy or validity of the signatures on such
written instructions.
(b) If within thirty (30) days of Escrow Agent's
receipt of the Claim Notice, the Buyer or any
Shareholder shall deliver to the Escrow Agent and
on each of the Shareholders or Buyer (as
applicable) a written demand for arbitration in
accordance with Section 9 below, the Escrow Agent
shall withhold the Claim Amount until such
arbitration shall have been concluded. Upon
conclusion of such arbitration, Escrow Agent shall
make distribution of the amount awarded to Buyer
in such arbitration, if any, and release and
deliver the balance of the Claim Amount to the
Shareholders if the Claim Expiration Date has
passed (unless the Fund is the subject of another
Claim Notice) or return the balance to the Fund if
the Claim Expiration Date has not passed.
(c) If on the thirtieth (30/th/) day following Escrow
Agent's receipt of the Claim Notice, Escrow Agent
has received neither written instructions nor
demand for arbitration in accordance with Sections
3(a) or 3(b) above, the Escrow Agent shall release
and deliver the amount claimed in the Claim Notice
of the Fund together with accrued interest thereon
to the Buyer and shall continue to hold the
balance of the Fund pursuant to the terms of this
Agreement unless and until Escrow Agent receives
another Claim Notice hereunder, or this Agreement
expires or is terminated by written consent of the
parties hereto.
2
If Escrow Agent should at any time be confronted with
inconsistent claims or demands by the parties hereto, Escrow
Agent shall have the right to initiate arbitration proceedings
pursuant to Section 9 hereunder.
4. Disbursement at Claim Expiration Date. As to any amount for which a
-------------------------------------
Claim Notice has not been made before the Claim Expiration Date, the Escrow
Agent shall immediately release and deliver the balance of the Fund plus accrued
interest thereon to the Shareholders in accordance with Section 5 herein.
5. Sellers' Disbursements and Action. Escrow Agent shall make
---------------------------------
distributions of the Sustained Profitability Consideration and the cash portion
of the Contingent Earn-Out Consideration to each Shareholder in the percentages
set forth in the attached Exhibits B, which Exhibit shall be amended by the
Shareholders promptly upon any change to such percentages. Any action of the
Shareholders hereunder requires only the approval or consent of persons
representing 80% in interest of the percentages listed in Exhibit B (as the same
may be amended) and the Shareholders' payment and indemnification obligations
(if several and not joint) shall be in the same proportion as such percentages.
6. Notices. All notices and other communications required or permitted
-------
under this Agreement shall be deemed to have been duly given and made if in
writing and if served either by personal delivery to the party for whom intended
or by deposit with Federal Express or other overnight delivery service which
guarantees next day delivery, signature required, bearing the address shown in
this Agreement for, or such other address as may be designated in writing
hereafter by, such party:
If to any Shareholder: the address set forth on Exhibit A hereto
with a copy to ▇▇▇▇▇▇ & ▇▇▇▇
Three Stamford Plaza
Stamford, CT 06901
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Buyer: Intek Information Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
3
with a copy to: ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: G. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Escrow Agent: Colorado State Bank & Trust
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
A notice given in accordance with this Section 6 shall be deemed effective on
the same business day if delivered personally or on the following business day
if sent by Federal Express or other overnight delivery service in accordance
with this Section 6.
7. Performance of Escrow Agent's Duties. Escrow Agent undertakes to
------------------------------------
perform only such duties as are expressly set forth herein (or required by
applicable law), and no additional duties or obligations shall be implied
hereunder. In performing its duties under this Agreement, or upon the claimed
failure to perform any of its duties hereunder, Escrow Agent shall not be liable
to anyone for any damages, losses or expenses which may be incurred as a result
of Escrow Agent so acting or failing to so act; provided, however, that Escrow
-------- -------
Agent shall not be relieved from liability for damages to the extent a court of
competent jurisdiction or arbitrator pursuant to Section 9 herein determines by
final order that such damages arose out of the gross negligence, bad faith or
willful misconduct of Escrow Agent under this Agreement. Escrow Agent shall in
no event incur any liability with respect to (a) any action taken or omitted to
be taken in good faith upon advice of legal counsel, which may be counsel to any
party hereto, given with respect to any question relating to the duties and
responsibilities of Escrow Agent hereunder or (b) any action taken or omitted to
be taken in reliance upon any instrument delivered to Escrow Agent and believed
by it to be genuine and to have been signed or presented by the proper party or
parties. Except as set forth in Section 3(a) above, Escrow Agent shall not be
bound in any way by any agreement or contract between the Shareholders and
Buyer, whether or not Escrow Agent has knowledge of any such agreement or
contract, including, but not limited to the Purchase Agreement.
4
Escrow Agent may execute any of its powers or responsibilities hereunder
and exercise any rights hereunder either directly or by or through its agents or
attorneys. Escrow Agent shall not be responsible for and shall not be under a
duty to examine or pass upon the validity, binding effect, execution or
sufficiency of this Agreement or of any agreement amending or supplementing this
Agreement.
8. No Security Interests. The Shareholders and Buyer each warrant to and
---------------------
agree with Escrow Agent that, unless otherwise expressly set forth in this
Agreement, there is no security interest in the Fund or any part of the Fund; no
financing statement under the Uniform Commercial Code of any jurisdiction is on
file in any jurisdiction claiming a security interest in or describing, whether
specifically or generally, the Fund or any part of the Fund; and Escrow Agent
shall have no responsibility at any time to ascertain whether or not any
security interest exists in the Fund or any part of the Fund or to file any
financing statement under the Uniform Commercial Code of any jurisdiction with
respect to the Fund or any part thereof.
9. Dispute Resolution. Except as provided below in this paragraph, any
------------------
and all disputes arising under or related to this Agreement shall be submitted
to binding arbitration before the American Arbitration Association ("AAA") in
accordance with its rules of Commercial Arbitration. The decision of the
arbiter shall be final and binding upon the parties, and it may be entered in
any court of competent jurisdiction. If the Escrow Agent is a party to the
arbitration, the arbitration shall take place in Denver, Colorado, the arbiter
shall be bound by the laws of the State of Denver, Colorado applicable to all
relevant privileges and the attorney work product doctrine, and the arbiter
shall have the power to grant equitable relief where applicable under Colorado
law and shall not be entitled to make an award of punitive damages. The arbiter
shall issue a written opinion setting forth its decision and the reasons
therefor within thirty (30) days after the arbitration proceeding is concluded.
The obligation of the parties to submit any dispute arising under or related to
this Agreement to arbitration as provided in this Section shall survive the
expiration or earlier termination of this Agreement. Notwithstanding the
foregoing, any party may seek an injunction or other appropriate relief from a
court of competent jurisdiction to preserve or protect the status quo with
respect to any matter pending conclusion of the arbitration proceeding, but no
such application to a court shall in any way be permitted to stay or otherwise
impede the progress of the arbitration proceeding.
In the event of any arbitration being filed or instituted between the
parties concerning this Agreement, the prevailing party will be entitled to
receive from the other party or parties its attorneys' fees, experts' fees,
witness fees, costs and expenses, court costs and other reasonable expenses,
whether or not such controversy, claim or action is prosecuted to judgment or
other form of relief.
Buyer and the Shareholders specifically agree that arbitration shall
be invoked under this Agreement only if Escrow Agent is a necessary party and
that if the matter to be
5
decided is the validity of a claim under Article 8 of the Purchase Agreement
that the arbitration provisions of the Purchase Agreement will control and
govern the dispute.
As an additional consideration for and as an inducement for Escrow
Agent to act hereunder, it is understood and agreed that, in the event of any
disagreement between the parties to this Agreement or among them or any other
person(s) resulting in adverse claims and demands being made in connection with
or for any money or other property or rights involved in or affected by this
Agreement, Escrow Agent shall be entitled, at the option of Escrow Agent, to
refuse to comply with the demands of such parties, or any of such parties, so
long as such disagreement shall continue. In such event, Escrow Agent shall
make no delivery or other disposition of the Fund or any parts of such Fund.
Anything herein to the contrary notwithstanding, Escrow Agent shall not be or
become liable to such parties or any of them for the failure of Escrow Agent to
comply with the conflicting or adverse demands of such parties or any of such
parties.
Escrow Agent shall be entitled to continue to refrain and refuse to
deliver or otherwise dispose of the Fund or any part therefore or to otherwise
act hereunder, as stated above, unless and until:
(i) the rights of such parties have been finally settled by binding
arbitration or duly adjudicated in a court having jurisdiction of the
parties and the Fund; or
(ii) the parties have reached an agreement resolving their
differences and have notified Escrow Agent in writing of such agreement and
have provided Escrow Agent with indemnity satisfactory to Escrow Agent
against any liability, claims or damages resulting from compliance by
Escrow Agent with such agreement.
In the event of a disagreement between such parties as described above, Escrow
Agent shall have the right, in addition to the rights described above and at the
option of Escrow Agent, to tender into the registry or custody of any court of
competent jurisdiction, all money and other property or rights comprising the
Fund and may take such other legal action as may be appropriate or necessary, in
the opinion of Escrow Agent. Upon such tender, the parties hereto agree that
Escrow Agent shall be discharged from all further duties under this Agreement;
provided, however, that the filing of any such legal proceedings shall not
deprive Escrow Agent of its compensation earned hereunder prior to such filing
and discharge of Escrow Agent of its duties hereunder.
6
10. Escrow Agent's Fees.
-------------------
The Shareholders and Buyer shall share equally the fees, costs and
expenses (including reasonable attorneys' fees) of Escrow Agent incurred in
connection with this Agreement. In the event Escrow Agent is required to
perform extraordinary services in connection with the arbitration of any dispute
as set forth in Section 9 above, the non-prevailing party shall pay the
reasonable compensation for Escrow Agent's extraordinary services and reimburse
Escrow Agent for all costs and expenses reasonably incurred in connection with
such arbitration.
11. Resignation of Escrow Agent.
---------------------------
Escrow Agent may resign at any time from its obligations under this
Agreement by providing written notice to the parties hereto. Such resignation
shall be effective on the date set forth in such written notice which shall be
no earlier than thirty (30) days after such written notice has been given. In
the event no successor escrow agent has been appointed on or prior to the date
of such resignation is to become effective, Escrow Agent shall be entitled to
tender into the custody of a court of competent jurisdiction all assets then
held by it hereunder and shall thereupon be relieved of all further duties and
obligations under this Agreement. Escrow Agent shall have no responsibility for
the appointment of a successor escrow agent hereunder. Such resignation shall
not deprive Escrow Agent of its compensation earned prior thereto.
12. Indemnification.
---------------
Escrow Agent shall have no obligation to take any legal action in
connection with this Agreement or towards its enforcement, or to appear in,
prosecute or defend any action or legal proceeding which would or might involve
it in any cost, expense, loss or liability unless security and indemnity, as
provided in this paragraph, shall be furnished.
The Shareholders (as to one half) and Buyer (as to one half) severally
(not jointly) agree to indemnify Escrow Agent and its officers, directors,
employees and agents and save Escrow Agent and its officers, directors employees
and agents harmless from and against any and all Claims (as hereinafter defined)
and Losses (as hereinafter defined) which may be incurred by Escrow Agent or
any of such officers, directors, employees or agents as a result of Claims
asserted against Escrow Agent or any of Escrow Agent's officers, directors,
employees or agents as a result of or in connection with Escrow Agent's capacity
as such under this Agreement by any person or entity. For the purposes hereof,
the term "Claims" shall mean all claims, lawsuits, causes of action or other
legal actions and proceedings of whatever nature brought against (whether by way
of direct action, counterclaim, cross action or impleader) Escrow Agent or any
of Escrow Agent's officers, directors, employees or agents, even if groundless,
false or fraudulent, so long as the claim, lawsuit, cause of action or other
legal action or proceeding is alleged or determined, directly or indirectly, to
arise out of, result from, relate to or be based
7
upon, in whole or in part: (a) the acts or omissions of the Shareholders or
Buyer, (b) the appointment of Escrow Agent as escrow agent under this Agreement,
or (c) the performance by Escrow Agent of its powers and duties in accordance
with this Agreement; and the term "Losses" shall mean losses, costs, damages,
expenses, judgments and liabilities of whatever nature (including but not
limited to attorneys', accountants' and other professionals' fees, litigation
and court costs and expenses and amounts paid in settlement), directly or
indirectly resulting from, arising out of or relating to one or more Claims.
Upon the written request of Escrow Agent or any such officer, director, employee
or agent (each referred to hereinafter as an "Indemnified Party"). The
Shareholders (as to one-half) and Buyer (as to one-half) severally (not jointly)
agree to assume the investigation and defense of any Claim, including the
employment of counsel acceptable to the applicable Indemnified Party and the
payment of all expenses related thereto. The Shareholders and Buyer hereby agree
that the indemnifications and protections afforded Escrow Agent in this section
shall survive the termination of the Agreement. The Shareholders and Buyer have
no indemnification obligation in respect of Escrow Agent's action, or failure to
take action, in bad faith.
13. Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of Colorado, without regard to the choice
of law rules therein.
14. Miscellaneous. The headings herein are for convenience only and shall
-------------
not be of substantive effect. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective legal
representatives, heirs, successors and assignees. This Agreement together with
the Purchase Agreement constitutes the entire agreement among the parties with
respect to the subject matter hereof and supersedes all prior negotiations,
understandings and writings (or any part thereof) whether oral or written
between any of the parties relating to the subject matter of this Agreement.
This Agreement may be executed in one ore more counterparts, each of which shall
be deemed an original, and all of which taken together shall constitute one and
the same instrument.
[signature page follows]
8
IN WITNESS WHEREOF, the parties hereto have signed this Escrow Agreement as
of the date first above written.
SHAREHOLDERS: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇
----------------------------------
▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇
THE SHARMA FAMILY LLC
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇, Manager
THE MURALI FAMILY LLC
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇, Manager
THE ▇▇▇▇▇▇▇▇▇▇ FAMILY LLC
/s/ ▇▇▇▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Manager
9
BUYER: INTEK INFORMATION, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇'▇▇▇▇▇▇▇
-------------------------------
Its: Chief Executive Officer
-------------------------------
ESCROW AGENT: /s/
---------------------------------------
By: ___________________________________
Its: __________________________________
10
EXHIBIT A
---------
SHAREHOLDERS
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇
Ph: (▇▇▇) ▇▇▇-▇▇▇▇ (office)
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ (home)
SSN: ###-##-####
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇
▇▇▇: ###-##-####
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
SSN: ###-##-####
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
SSN: ###-##-####
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
SSN: ###-##-####
The Sharma Family LLC
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇
EIN#: ▇▇-▇▇▇▇▇▇▇
The Murali Family LLC
▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇
EIN#: ▇▇-▇▇▇▇▇▇▇
11
The ▇▇▇▇▇▇▇▇▇▇ Family LLC
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
EIN#: ▇▇-▇▇▇▇▇▇▇
12
EXHIBIT B
---------
SHAREHOLDERS' PERCENTAGES FOR
SUSTAINED PROFITABILITY CONSIDERATION
▇▇▇▇▇▇ ▇▇▇▇▇▇ 31.7935%
Sharma Family LLC 10.5978%
▇▇▇▇▇ ▇▇▇▇▇▇ 20.3261%
Murali Family LLC 13.5870%
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 12.7174%
▇▇▇▇▇▇▇▇▇▇ Family LLC 6.3587%
▇▇▇▇▇ ▇▇▇▇▇ 2.1739%
▇▇▇▇▇▇▇ ▇▇▇▇▇ 2.4456%
SHAREHOLDERS' PERCENTAGES
FOR CONTINGENT EARN-OUT CONSIDERATION
▇▇▇▇▇▇ ▇▇▇▇▇▇ 29.1116%
▇▇▇▇▇ ▇▇▇▇▇▇ 18.2262%
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 12.3500%
▇▇▇▇▇ ▇▇▇▇▇ 10.0000%
▇▇▇▇▇▇▇ ▇▇▇▇▇ 2.2500%
The Sharma Family LLC 9.7039%
The Murali Family LLC 12.1833%
The ▇▇▇▇▇▇▇▇▇▇ Family LLC 6.1750%
13
EXHIBIT 2.7
TRANSACTION ADVISOR FEE PAYMENT AGREEMENT
This TRANSACTION ADVISOR FEE PAYMENT AGREEMENT (the "Agreement") effective
October 1, 1999 is made by and among INTEK INFORMATION, INC., a Delaware
corporation (the "Company"), PROSPERO LLC., a Connecticut limited liability
company ("Prospero"), PROSPERO HOLDINGS LLC, a Connecticut limited liability
company ("Prospero Holdings"), Acorn Information Services, Inc. a Delaware
corporation ("Acorn") and certain shareholders of Acorn who are signatories to
this Agreement (collectively the "Acorn Shareholders") in connection with a
Share Purchase Agreement by and among the Company, Acorn and the Acorn
Shareholders of even date herewith (the "Purchase Agreement").
W I T N E S S E T H
-------------------
A. Prospero and Acorn are parties to that certain letter agreement dated
August 3, 1998 as amended December 2, 1998 (together, the "Engagement Letter").
▇. ▇▇▇▇▇▇▇▇ has provided Acorn with certain investment banking services
in connection with the Engagement Letter (the "Prospero Services"), including
without limitation advice regarding the sale of all of the outstanding capital
stock of Acorn to the Company under the terms and conditions of the Purchase
Agreement.
C. Concurrently herewith, Acorn and Prospero are entering into a letter
agreement regarding fee payment (the "Fee Payment Letter Agreement").
D. In connection with the Purchase Agreement and the Fee Payment Letter
Agreement and on the terms and conditions set forth in this Agreement, the
Company and the Acorn Shareholders have each agreed to pay a portion of the
amount payable by Acorn to Prospero in consideration for the Prospero Services.
▇. ▇▇▇▇▇▇▇▇ desires to assign its right to payment for the Prospero
Services to Prospero Holdings.
NOW, THEREFORE, in consideration of the mutual premises and covenants
contained herein, and for other good and valuable consideration, the sufficiency
of which is hereby acknowledged, the parties agree as follows:
1. Transaction Advisor Fees. In consideration for the Prospero Services,
------------------------
Intek will at the closing of the next round of private financing by the Company
(the "Financing"), issue to Prospero Holdings on behalf of Acorn such number of
shares of Intek common stock equal to the quotient obtained by dividing $100,000
by the price per share of Series F Preferred Stock of Intek at the time of the
closing of such Financing ("Transaction Advisor Shares"). If the Financing
does not close by December 31,
1999, the Company shall issue to Prospero Holdings such number of shares of
Intek common stock equal to $100,000 divided by the per share price of $1.61, as
may be adjusted for any stock splits, stock dividends, stock combinations or
recapitalizations, other than the spin off by the Company of Spider
Technologies, Inc. common stock (the "Spider Shares"). Prospero (including
Prospero Holdings) shall not be entitled to receive any Spider Shares as part of
or upon issuance of the Transaction Advisor Shares hereunder. The Company shall
have no obligation to register the Transaction Advisor Shares except piggyback
registration rights as set forth in the Form of Registration Rights Agreement
attached hereto as Exhibit A (the "Registration Rights Agreement"), and shall
have no obligation to register the Transaction Advisor Shares in violation of
any applicable law or regulation.
Notwithstanding the foregoing, upon the occurrence of a Change in Control (as
defined in the Purchase Agreement) prior to the earlier of the close of the
Financing or December 31, 1999, the Company shall issue to Prospero Holdings
such number of Transaction Advisor Shares obtained by dividing $100,000 by the
per share price of $1.61. The Company shall issue such shares immediately prior
to the closing of a transaction that results in a Change in Control.
Upon issuance of the Transaction Advisor Shares to Prospero Holdings, the
Company and Prospero Holdings shall enter into the Registration Rights
Agreement.
2. No Further Liability. Except for the fees for the Prospero Services,
--------------------
neither Acorn nor the Acorn Shareholders are indebted to Prospero or Prospero
Holdings for any amount. Upon (i) execution of this Agreement and (ii) receipt
of the Fee Balance (as defined in the Fee Payment Letter Agreement), Acorn and
the Acorn Shareholders shall have no further liability to Prospero or Prospero
Holdings. Upon (i) execution of this Agreement and (ii) receipt by Prospero
Holdings of the Transaction Advisor Shares, the Company shall have no further
liability to Prospero or Prospero Holdings. The Company shall assume no
liability for any taxes or other payments of Prospero or Prospero Holdings,
Acorn or the Acorn Shareholders in connection with services rendered by
Prospero. Prospero acknowledges that payment of the Transaction Advisor Shares
is being made on behalf of Acorn (and not on behalf of the Company), which is
Prospero's sole client with respect to the transactions contemplated by the
Purchase Agreement.
3. Shareholders Agreement. As a condition to receipt of the Transaction
----------------------
Advisor Shares, Prospero (and Prospero Holdings as applicable) shall execute and
deliver to the Company, and agree to be bound by the terms and conditions of,
the Shareholders Agreement of the Company then in effect and shall execute and
deliver such Shareholders Agreement and a subscription agreement to the Company
prior to the delivery of Transaction Advisor Shares hereunder. Prospero and
Prospero Holdings each acknowledges that the Shareholders Agreement may be
amended from time to time or may be terminated, whether before or after the time
Transaction Advisor Shares are issued, in accordance with the terms of the
Shareholders Agreement.
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4. Investor Representations. Prospero and Prospero Holdings each represents
------------------------
it is currently an "accredited investor" as defined in Regulation D promulgated
by the Securities and Exchange Commission and shall so represent at the time of
receipt of any Transaction Advisor Shares. Prospero and Prospero Holdings each
further represents that it has had an opportunity to ask questions of and
receive answers from representatives of the Company with respect to the
acquisition of the Transaction Advisor Shares and that the Company has made
available to Prospero and Prospero Holdings all documents requested and has
provided answers to all such questions relating to receipt of the Transaction
Advisor Shares. Prospero and Prospero Holdings each acknowledges that, because
the Transaction Advisor Shares will not have been registered under the
Securities Act of 1933, as amended (the "Act"), or applicable state securities
laws, any resale inconsistent with the Act may create liability on its part
and/or the part of Intek, and agrees not to assign, sell, pledge, transfer or
otherwise dispose of or transfer any of the Intek Shares unless registered under
the Securities Act and applicable state securities laws or he has delivered an
opinion of counsel satisfactory to Intek that such registration is not required.
Neither Prospero nor Prospero Holdings nor any "associate" of Prospero or
Prospero Holdings as such term is defined in Rule 12b-2 of the Securities
Exchange Act of 1934, as amended, or has a relationship with, a member of the
National Association of Securities Dealers, Inc. ("NASD"), or is an officer,
director, registered representative, lender, employee or beneficial owner of 10%
or more of a NASD member or any corporation or entity which owns a 10% or
greater ownership interest in an NASD member.
5. Restrictive Legend. Prospero and Prospero Holdings each acknowledges that
------------------
the certificate representing the Transaction Advisor Shares shall bear
substantially the following restrictive legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THEY
MAY NOT BE OFFERED OR TRANSFERRED BY SALE, ASSIGNMENT, PLEDGE OR OTHERWISE
UNLESS (I) A REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT IS IN EFFECT OR (II) THE CORPORATION HAS RECEIVED AN OPINION OF
COUNSEL, WHICH OPINION IS SATISFACTORY TO THE CORPORATION, TO THE EFFECT
THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT."
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED PURSUANT
TO, AND ARE SUBJECT TO A CERTAIN SHAREHOLDERS AGREEMENT AMONG INTEK
INFORMATION, INC. AND CERTAIN SHAREHOLDERS NAMED THEREIN, DATED OCTOBER 1,
1999 AS AMENDED FROM TIME TO TIME. A COPY OF SUCH
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AGREEMENT IS AVAILABLE AT THE OFFICES OF THE CORPORATION."
6. Notice. Any notice required or permitted hereunder shall be in writing and
------
shall be sufficiently given if (i) personally delivered, (ii) mailed by
certified or registered United States mail, return receipt requested, or (iii)
sent by recognized air express courier for next business day delivery, addressed
to the parties at the addresses set forth on the signature page hereof and shall
be deemed to have been delivered as of the date so personally delivered, three
business days after so mailed, or one business day after the date delivered to
the air express courier.
7. Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of Colorado exclusive of the conflict of
law provisions thereof.
8. Arbitration; Attorneys' Fees.Arbitration; Consent to Jurisdiction. Any and
---------------------------- ------------------------------------
all disputes arising under or related to this Agreement shall be submitted to
binding arbitration in accordance with the Arbitration provision contained in
the Purchase Agreement. In the event of any arbitration or litigation being
filed or instituted between two or more of the parties concerning this
Agreement, the Prevailing Party will be entitled to receive from the other party
or parties its attorneys' fees, experts' fees, costs and expenses, whether or
not such controversy, claim or action is prosecuted to judgment or other form of
relief. The "Prevailing Party" is that party which is awarded judgment or other
legal or equitable relief as a result of trial or arbitration, or who receives
or is entitled to receive a payment of money from the other party in settlement
of claims asserted by such party. If both parties receive a judgment or other
award of relief, the court or the arbiter shall determine which party is the
Prevailing Party, taking into consideration the merits of the claims asserted by
each party, the relative values of the judgments or other forms of relief
received by each party, and the relative equities between the parties.
9. Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument.
10. Entire Agreement. This Agreement and the documents referenced herein
----------------
constitute the entire agreement between the parties regarding the matters
herein.
11. Unenforceability. If any paragraph or subparagraph of this Agreement
----------------
or any part thereof shall be unenforceable under any applicable laws,
notwithstanding such unenforceability the remainder of this Agreement shall
remain in full force and effect.
12. Amendments; Waivers. This Agreement cannot be changed, modified or
-------------------
amended, and no provision or requirement hereof may be waived, without consent
in writing of the parties hereto.
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[Signature Page Follows]
5
IN WITNESS WHEREOF, the parties hereby execute this TRANSACTION ADVISOR FEE
PAYMENT AGREEMENT as of the date first written above.
PROSPERO LLC. INTEK INFORMATION, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇▇
------------------------------- ----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Managing Member ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇▇, President
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇/▇▇/ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Attn: ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
PROSPERO HOLDINGS LLC
By: /s/
---------------------------
Its: _________________________
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
AGREED AND ACKNOWLEDGED:
ACORN INFORMATION SERVICES, INC.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇, Chief Executive Officer
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ACORN SHAREHOLDERS:
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇ THE SHARMA FAMILY LLC
------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------- --------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, Manager
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ THE MURALI FAMILY LLC
------------------------------- --------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇ --------------------------------
-------------------------------- ▇▇▇▇▇ ▇▇▇▇▇▇, Manager
▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ THE ▇▇▇▇▇▇▇▇▇▇ FAMILY LLC
--------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
--------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Manager
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EXHIBIT A
Form of Registration Rights Agreement
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