Sale of Technology Agreement - e-commerce Solutions Inc. and Stanley Wolfson
SALE OF TECHNOLOGY AGREEMENT
This Sale of Technology Agreement ("Agreement") is made and effective this
21 day of November 1999, by and between e-commerce Solutions, Inc. ("Buyer"),
and Stanley Wolfson ("Seller").
Seller has developed and owns all rights to certain computer software in
development as more fully described on Schedule A.
Buyer wishes to purchase, and Seller wishes to sell, such software, the
related goodwill and all other associated property rights, including all
copyrights and all rights to enhanced, modified and updated versions and
derivative works related thereto.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties agree as follows:
1. Transfer. (a). Software. Seller hereby sells, assigns, conveys and
transfers to Buyer all of Seller's right, title and interest in and to the
following described computer software (the "Software"): A software platform
engine in development that will create an ability to mass produce e-commerce web
sites, manage said sites and administration.
The Software shall include, but is not limited to :
(i) The Software in development in all versions and all forms of
expression thereof, including but not limited to proprietary rights and
intellectual property contained therein or connected therewith.
(i) The Software in development shall be delivered to Buyer upon the
execution of this Agreement. Seller shall from time to time, but without further
consideration, execute and deliver such instruments or documents and take such
other action as is reasonably necessary which Buyer may request in order to more
effectively carry out this Agreement and to vest in Buyer the Software and title
2. Representations and Warranties of Seller. Seller represents, warrants
and covenants as follows:
(a) Title; Infringement. Seller has good and marketable title to the
Software in development, and has all necessary rights to enter into this
Agreement without violating any other agreement or commitment of any sort.
Seller does not have any outstanding agreements or understandings, written or
oral, concerning the Software. The Software does not infringe or constitute a
misappropriation of any trademark, patent, copyright, trade secret, proprietary
right or similar property right. Seller agrees to defend, indemnify and hold
Buyer, its subsidiaries, affiliates and licensees harmless against any action,
suit, expense, claim, loss, liability or damage based on a claim that the
Software infringes or constitutes a misappropriation of any trademark, patent,
copyright, trade secret, proprietary right or similar property right. Buyer
shall give Seller prompt written notice of any such claim. Seller shall assume
responsibility for defending any suit or proceeding brought against Buyer based
on any claim that the Software infringes or constitutes a misappropriation of
any trademark, patent, copyright, trade secret, proprietary right or similar
property right; provided, however, that Buyer shall give Seller prompt notice in
writing of the assertion of any such claim and of the threat or institution of
any such suit or proceeding, and all authority, information and assistance
required for the defense of the same. Seller shall pay all costs awarded against
Buyer, but shall not be responsible for any cost, expense or compromise incurred
without Seller's consent.
(b) No Liens. The Software is not subject to any lien, encumbrance,
mortgage or security interest of any kind. Seller's conveyance of the Software
shall be free of any such interest.
(c) Authority Relative to this Agreement. This Agreement is a legal,
valid and binding obligation of Seller. The execution and delivery of this
Agreement by Seller and the performance of and compliance by Seller with the
terms and conditions of this Agreement will not result in the imposition of any
lien or other encumbrance on any of the Assets, and will not conflict with or
result in a breach by Seller of any of the terms, conditions or provisions of
any order, injunction, judgment, decree, statute, rule or regulation applicable
to Seller, the Software, or any note, indenture or other agreement, contract,
license or instrument by which any of the Software may be bound or affected. No
consent or approval by any person or public authority is required to authorize
or is required in connection with, the execution, delivery or performance of
this Agreement by Seller.
(d) No Default. There is no outstanding default by the Seller in
connection with the Software.
4. No Brokers. All negotiations relative to this Agreement have been
carried on by Buyer directly with Seller, without the intervention of any person
as the result of any act of Buyer or Seller (and, so far as known to either
party, without the intervention of any such person) in such manner as to give
rise to any valid claim against the parties hereto for brokerage commissions,
finder's fees or other like payment.
5. Consents, Further Instruments and Cooperation. Seller represents no
consent or approval by any person is required in order to permit it to
consummate the transactions contemplated hereby. Seller agrees to execute and
deliver such instruments and to take such other action as may be required to
carry out the transaction contemplated by this Agreement. Seller shall execute,
or cause its employees and agents to execute, any patent or copyright
application or other similar document or instrument, following Buyer's
6. Limitation of Liability. OTHER THAN AS SET FORTH IN SECTION 3.A. OR
UPON THE BREACH OF ANY WARRANTY, NEITHER BUYER NOR SELLER SHALL BE LIABLE TO THE
OTHER FOR ANY INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT
OF OR RELATED TO THIS AGREEMENT OR ANY PERFORMANCE
HEREUNDER, EVEN IF SUCH PARTY HAS ADVANCE NOTICE OF THE POSSIBILITY OF SUCH
DAMAGES, WHETHER BASED ON A THEORY OF CONTRACT, TORT, STRICT LIABILITY OR
7. Buyer's Use of the Software. Buyer may, at its sole discretion, market,
license and sell the Software under names and trade names of its own choosing,
and may develop updated and modified versions and derivative works of the
Software without attribution of authorship to Seller. Buyer shall own all rights
and title, including copyrights, in and to updated and modified versions and
derivative works of the Software without requiring permission from Seller and
without incurring payment obligations in addition to those provided herein.
Buyer may market or use the Software in whatever manner and at whatever prices
it sees fit.
8. Seller's Non-Use of the Assets. Seller retains no rights whatsoever in
the Software and does not retain the right to use the Software or any material
relating to the Software for any purpose, personal, commercial, or otherwise.
Seller furthermore shall maintain all information relating to the Software or
use of the Software in short confidence and shall not disclose any aspect of the
Software to any third party without the prior written consent of Buyer.
9. Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of New York.
10. Assignment. Seller may not assign this Agreement or any obligation
herein without the prior written consent of Buyer. This Agreement shall be
binding upon and inure to the benefit of the parties named herein and their
respective heirs, executors, personal representatives, successors and assigns.
11. Entire Agreement. This Agreement contains the entire understanding of
the parties, and supersedes any and all other agreements presently existing or
previously made, written or oral, between Buyer and Seller concerning its
subject matter. This Agreement may not be modified except by a writing signed by
12. Severability. If any provision of this Agreement is declared by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions of this Agreement nevertheless will continue in full force
and effect without being impaired or invalidated in any way.
13. Notices. All notices, requests, demands, and other communications
hereunder shall be deemed to have been duly given if delivered or mailed,
certified or registered mail with postage prepaid:
If to Buyer:
E-Commerce Solutions, Inc.
c/o Urban Cool Network, Inc.
1401 Elm Street
Dallas, Texas 75226
with a copy to:
Martin Licht, Esq.
Silverman, Collura & Chernis, P.C.
381 Park Avenue South
New York, New York 10016
If to Seller:
1030 Fifth Avenue
New York, New York 10022
14. Relationship of the Parties. The relationship between Buyer and Seller
under this Agreement is intended to be that of buyer and seller, and nothing in
this Agreement is intended to be construed so as to suggest that the parties
hereto are partners or joint venturers, or either party or its employees are the
employee or agent of the other. Except as expressly set forth herein, neither
Buyer nor Seller has any express nor implied right or authority under this
Agreement to assume or create any obligations on behalf of or in the name of the
other or to bind the other to any contract, agreement or undertaking with any
15. Headings. Headings used in this Agreement are provided for convenience
only and shall not be used to construe meaning or intent.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
[Buyer] _____________________ [Seller] _______________________
DESCRIPTION: EMPLOYMENT AGREEMENT
AGREEMENT made and entered into as of this 21 day of November, 1999
between e-commerce Solutions, Inc., a New York corporation (the "Corporation")
having an address at 600 West 57th Street, New York, New York 10019 and Stanley
Wolfson (the "Executive"), residing at 1030 Fifth Avenue, New York, New York
W I T N E S S E T H:
WHEREAS, Executive is presently employed by the Corporation; and
WHEREAS, the Company and the Executive desire to set forth the terms
of Executive's employment with the Company, pursuant to the terms and conditions
NOW, THEREFORE, in consideration of the covenants and agreements
herein contained, the parties hereto agree with each other as follows:
1. Term of Employment. The Corporation agrees to and does hereby employ
Executive, and Executive agrees to and does hereby accept employment by the
Corporation, as the President and Chief Executive Officer of the Corporation,
subject to the supervision and direction of its Board of Directors, for the
three (3) year period commencing November 1, 1999 (the "Term").
2. Duties of Executive. Executive shall devote such time, attention and
energy to the affairs of Corporation as shall be reasonably required to perform
his duties hereunder, and, in pursuance of the policies and directions of the
Board of Directors, Executive shall use his best efforts to promote the business
and affairs of the Corporation.
3. Base Compensation. In consideration of the Executive's services
pursuant to this
Agreement, Corporation shall pay to Executive, during the period of Executive's
employment under this Agreement (the "Base Compensation"), (i) a salary at the
rate of One Hundred Seventy Five Thousand Dollars ($175,000) per year during the
first year of this Agreement; and (ii) for each year thereafter, annual
compensation shall be determined by the Board of Directors, but not less than
$175,000 per year. The Base Compensation shall be payable in equal installments,
in accordance with the Corporation's customary procedures for executive
employees, subject to applicable tax and payroll deductions.
4. Incentive Compensation.
(a) As additional compensation, the Executive shall be paid an
amount equal to 2% of the gross sales of the Company.
(b) Provided Executive has duly performed his obligations pursuant
to this Agreement, Executive shall be eligible to receive, as additional
compensation for the services to be rendered by Executive under this Agreement,
incentive compensation. The amount of such incentive compensation, if any, shall
be determined by the Board of Directors in its sole discretion based on the
Executive's performance and contributions to the Corporation's success.
5. Other Benefits. During the term of this Agreement the Executive shall
be entitled to participate in any benefit plans adopted by the Corporation for
the general and overall benefit of all employees and/or for key executives of
the Corporation such as health care, life insurance, disability, stock option
plans, tax, legal and financial planning services, pension, profit sharing and
6. Vacation. Executive shall be entitled to a fully paid vacation of three
(3) weeks per calendar year, which vacation shall be scheduled at such time or
times as the Corporation in
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consultation with Executive may reasonably determine.
7. Expenses. (a) The Corporation shall pay or reimburse Executive for all
reasonable and necessary expenses incurred by him in connection with his duties
hereunder, upon submission by Executive to the Corporation of such reasonable
evidence of such expenses as the Corporation may require.
(b) Throughout the term of this Agreement, the Corporation will
provide Executive with the use of a motor vehicle of a class equivalent to that
currently utilized by the Executive for purposes within the scope of his
employment with Corporation and shall pay all expenses for fuel, maintenance,
and insurance in connection with such use of the motor vehicle.
8. Insurance. The Corporation shall apply for policies of life, health and
accident insurance or disability insurance upon the Executive in such amounts as
the Corporation deems appropriate which life insurance as key man insurance
shall designate the Corporation as the beneficiary. The Executive agrees to aid
the Corporation in procuring such insurance, including submitting to a physical
examination, if required, and completing any and all forms required for
application for any insurance policy.
9. Disclosure of Information. The Executive shall, during his employment
under this Agreement and thereafter, keep confidential and refrain from
disclosing to any unauthorized persons all data and information relating to the
respective businesses of the Corporation or any of its subsidiaries.
10. Intellectual Property Rights. (a) The Executive shall promptly
disclose to the Corporation in writing, any and all charts, layouts, maps,
inventions, improvements, techniques, markets, sales and advertising plans,
processes, concepts and plans, whether or not copyrightable or
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patentable, secret processes and "know-how," conceived by the Executive during
the term of his employment by the Corporation (the "Executive's Work Product"),
whether alone or with others and whether during regular working hours and
through the use of facilities and property of the Corporation or otherwise,
which directly relates to the present business of the Corporation. Upon the
Corporation's request at any time or from time to time during the Term of the
Executive's employment, the Executive shall (i) deliver to the Corporation
copies of the Executive's Work Product that may be in his possession or
otherwise available to him, and (ii) execute and deliver to the Corporation such
applications, assignments and other documents as it may reasonably require in
order to apply for and obtain copyrights or patents in the United States of
America and other countries with respect to any Executive's Work Product that it
deems to be copyrightable or patentable, and/or otherwise to vest in itself full
(b) All documents that pertain to the Corporation, including but not
limited to the Executive's Work Product, shall be the sole and exclusive
property of the Corporation. Upon the termination of the Executive's employment,
all such documents that may be in his possession or otherwise available to him
or shall thereafter come into his possession or control shall be promptly
returned to the Corporation without the necessity of a request therefor.
11. Non-Competition Covenant.
(a) The Executive shall not, during his employment by the
Corporation, engage, directly or indirectly, in any business competitive with
the business of the Corporation without the consent of the Board of Directors,
except for those businesses in which the Executive is currently involved.
(b) For a period of one (1) year after the termination of the
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employment hereunder (the "Non-Competition Period"), for any reason whatsoever,
other than a termination by the Corporation without good cause, the Executive
shall not (i) engage, directly or indirectly, as an officer, director,
shareholder, owner, partner, joint venturer or in a managerial capacity, whether
as an employee, independent contractor, consultant or advisor, or as a sales
representative in any competitive businesses which competes directly or
indirectly with the Corporation, and related activities throughout the United
States (the "Territory"), without the permission of the Board of Directors,
which permission shall not be unreasonably withheld or delayed or (ii) induce or
actively attempt to influence any other employee or consultant of the
Corporation to terminate his or her employment or consultancy with the
Corporation. Nothing herein contained shall be deemed to prevent ownership by
Executive and his associates (as said term is defined in regulation 14(A)
promulgated under the Securities Exchange Act of 1934 as in effect on the date
hereof), collectively, of not more than 5% of the outstanding capital stock of a
competitive corporation listed on a national securities exchange.
(c) (i) The parties to this Agreement consider the restrictions
contained herein reasonable as to the duration of the Non-Competition Period and
the extent of the Territory. However, if the duration of the Non-Competition
Period or the extent of the Territory herein specified should be judged
unreasonable by any Court or arbitration proceeding, the validity and effect of
the remaining provisions of this Agreement shall not be affected thereby and,
the duration of the Non-Competition Period shall be reduced by such number of
months and/or the area of the Territory shall be reduced such that, the
Territory and the Non-Competition Period shall be deemed reasonable so that the
foregoing covenant not to compete may be enforced .
(ii) The Company and the Executive agrees and recognizes that in the
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of a breach or threatened breach by either of the provisions of the foregoing
covenants, either party may suffer irreparable harm, and that money damages may
not be an adequate remedy. Therefore, either party shall be entitled as a matter
of right to specific performance of the covenants of Executive contained herein
by way of temporary or permanent injunctive relief in a Court of competent
12. Termination. This Agreement and Executive's employment may be
terminated in any one of the followings ways:
(a) Death. The death of Executive shall immediately terminate this
Agreement with no severance compensation due to Executive's estate.
(b) Disability. If, as a result of incapacity due to physical or
mental illness or injury, Executive shall have been absent from his full-time
duties hereunder for three (3) consecutive months, then thirty (30) days after
receiving written notice (which notice may occur before or after the end of such
three (3) month period, but which shall not be effective earlier than the last
day of such three (3) month period), the Corporation may terminate Executive's
employment hereunder provided Executive is unable to resume his full-time duties
at the conclusion of such notice period. Also, Executive may terminate his
employment hereunder if his health should become impaired to an extent that
makes the continued performance of his duties hereunder hazardous to his
physical or mental health or his life, provided that Executive shall have
furnished the Corporation with a written statement from a qualified doctor to
such effect and provided, further, that, at the Corporation's request made
within thirty (30) days of the date of such written statement, Executive shall
submit to an examination by a doctor selected by the Corporation who is
reasonably acceptable to Executive or Executive's doctor and such doctor shall
have concurred in the conclusion of
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Executive's doctor. In the event this Agreement is terminated as a result of
Executive's disability, Executive shall (i) receive from the Corporation, in a
lump-sum payment due within thirty (30) days of the effective date of
termination, the base salary for one (1) year and (ii) the Corporation shall
make the insurance premium payments contemplated by COBRA for a period of
eighteen (18) months after such termination.
(c) Good Cause. The Corporation may terminate this Agreement ten
(10) days after written notice to Executive for "Good Cause," which shall mean
any one or more of the following: (1) Executive's material failure of
performance; (2) Executive's willful, material and irreparable breach of this
Agreement; (3) Executive's gross negligence in the performance or intentional
nonperformance (continuing for ten (10) days after receipt of written notice of
need to cure) of any of Executive's material duties and responsibilities
hereunder; (4) Executive's willful dishonesty, fraud or misconduct with respect
to the business or affairs of the Corporation which materially and adversely
affects the operations or reputation of the Corporation; (5) Executive's
conviction of a felony crime; or (6) confirmed positive illegal drug test
result. In the event of a termination for Good Cause, as enumerated above,
Executive shall have no right to any severance compensation.
(d) Without Good Cause. At any time after the commencement of
employment, Executive may, without cause, terminate this Agreement and
Executive's employment, effective thirty (30) days after written notice is
provided to the Corporation pursuant to paragraph three of the shareholder
agreement between the parties of even date. Executive may only be terminated
without Good Cause by the Corporation during the Term hereof if such termination
is approved by a majority of the members of the Board of Directors of the
Corporation in accordance with paragraph three of
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the Shareholder Agreement of even date, and provided that the Executive receives
at least one (1) month written notice. In the event that Executive is terminated
without Good Cause during the Term, Executive shall receive from the
Corporation, on such dates as would otherwise be paid by the Corporation, the
compensation due pursuant to paragraphs 3 and 4. Further, if Executive is
terminated without Good Cause, the Corporation shall make the insurance premium
payments contemplated by COBRA for a period of eighteen (18) months after such
termination. Further, any termination without Good Cause by the Corporation
shall operate to shorten the period set forth in paragraph 11 hereof to one (1)
year from the date of termination of employment. If Executive resigns or
otherwise terminates his employment rather than the Corporation terminating his
employment pursuant to this paragraph 12, Executive shall receive no severance
13. Indemnification. In the event Executive is made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by the
Corporation against Executive), by reason of the fact that he is or was
performing services under this Agreement, then the Corporation shall indemnify
Executive against all expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement, as actually and reasonably incurred by Executive in
connection therewith to the maximum extent permitted by applicable law. The
advancement of expenses shall be mandatory. In the event that both Executive and
the Corporation are made a party to the same third-party action, complaint, suit
or proceeding, the Corporation agrees to engage competent legal representation,
and Executive agrees to use the same representation, provided that if counsel
selected by the Corporation shall have a conflict of interest that prevents such
counsel from representing Executive, Executive may engage separate counsel and
the Corporation shall pay all attorneys' fees of such separate counsel. Further,
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Executive is expected at all times to use his best efforts to faithfully
discharge his duties under this Agreement, Executive cannot be held liable to
the Corporation for errors or omissions made in good faith where Executive has
not exhibited gross, willful and wanton negligence and misconduct or performed
criminal and fraudulent acts which materially damage the business of the
14. Effect of Waiver. The waiver by either party of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach thereof.
15. Notices. Any notice permitted, required, or given hereunder shall be
in writing and shall be personally delivered; or delivered by any prepaid
overnight courier delivery service then in general use; or mailed, registered or
certified mail, return receipt requested, to the addresses designated herein or
at such other address as may be designated by notice given hereunder:
If to : Stanley Wolfson
1030 Fifth Avenue
New York, N.Y. 10022
If to : e-commerce Solutions, Inc.
West 23rd Street
New York, N.Y. and
600 West 57th Street
New York, NY 10014
With a copies to: Silverman, Collura & Chernis, P.C.
381 Park Avenue
New York, New York 10016
Attn: Marc G. Rosenberg, Esq.
and Urban Cool Network, Inc.
1401 Elm Street
Dallas, Texas 75626
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Delivery shall be deemed made when actually delivered, or if mailed, three
days after delivery to a United States Post Office.
16. Assignment. Executive shall not be entitled to assign his rights,
duties or obligations under this Agreement.
17. Amendments. The terms and provisions of this Agreement may be amended
or modified only by a written instrument executed by the party to be charged by
such amendment or modification.
18. Governing Law. The terms and provisions herein contained and all the
disputes or claims relating to this Agreement shall be governed by, interpreted
and construed in accordance with the internal laws of the State of New York,
without reference to its conflict of laws principles.
19. Arbitration. (a) In the event of a dispute between the parties arising
out of or relating to this Agreement, or the breach thereof, the parties shall
make every effort to amicably resolve, reconcile, and settle such dispute
between them. Should an amicable resolution not be possible, either party may
invoke binding arbitration.
(b) Subject to the provisions of Section 11(c)(ii) hereof, all
claims, disputes and other matters in controversy arising out of or related to
this Agreement or the performance or breach hereof, shall be decided by binding
arbitration in accordance with the Commercial Arbitration Rules of the American
Arbitration Association (the "AAA Rules"), by a panel of three (3) arbitrators,
in New York, New York. One (1) such arbitrator shall be appointed by each of the
parties within three (3) weeks after being requested by the other party to make
such appointment and the third arbitrator shall be appointed by the two (2)
arbitrators appointed by the parties. In the event that a party does
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not appoint its arbitrator within such three (3) week period, or the two (2)
arbitrators appointed by the parties shall fail to agree on the third
arbitrator, such appointed arbitrator or arbitrators shall be appointed by the
American Arbitration Association in accordance with the AAA Rules. The award
shall state the facts and findings and shall be rendered with reasons in
writing. The arbitrators shall have no authority or power to alter or modify any
express condition or provision of this Agreement, or to render any award which
by its terms shall have the effect of altering or modifying any express
conditions or provisions of this Agreement. The award rendered by the
arbitrators shall be final and judgement may be entered upon it in any court
having jurisdiction thereof. The successful party to the arbitration shall be
entitled to an award for reasonable attorney's fees, as determined by the
20. Captions. The captions of the sections of this Agreement are for
convenience of reference only and in no way define, limit or affect the scope or
substance of any section of this Agreement.
21. Merger and Severability. This Agreement shall constitute the entire
Agreement between the Corporation and Executive with respect to the subject
matter hereof. The invalidity or unenforceability of any provision hereof shall
in no way affect the validity or enforceability of any other provision.
22. Counterparts; Facsimile. This Agreement may be executed by facsimile
and in two (2) or more counterparts, each of which shall be deemed an original
and all of which together shall constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have affixed their signatures the
day and year first above written.
E-COMMERCE SOLUTIONS, INC.
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