EXHIBIT 10.1
AGREEMENT, dated as of January 11, 2005, between MILITARY RESALE
GROUP, INC., a New York corporation with offices located at 2180 Executive
Circle Colorado Springs, Colorado 80906 (the "COMPANY"); and LEE BRUKMAN, an
individual residing at c/o Data Recovery Continuum, Inc., P.O. Box 105, La
Jolla, California 92038 ("BRUKMAN").
INTRODUCTION
Brukman has served as a director and officer of the Company on dates
prior to the date hereof. In such capacity, Brukman incurred expenses on behalf
of the Company (the "BRUKMAN EXPENSES") and was entitled to, but did not
receive, salary during his period of service as an officer of the Company (the
"BRUKMAN UNPAID SALARY"). On JUNE 11, 2004, Brukman made a loan (the "BRUKMAN
LOAN") to the Company in the amount of $75,000 represented by the 8% note, dated
June 11, 2004, by the Company in favor of Brukman. On June 11, 2004, Brukman
caused his affiliate Data Recovery Continuum, Inc. to transfer its ownership of
Ohio Street Partners, LLC ("OHIO STREET") to the Company in exchange for
1,920,000 shares (the "DISPUTED SHARES") of common stock, par value $0.0001 per
share (the "COMPANY COMMON STOCK"), of the Company, and warrants (the "DISPUTED
WARRANTS", and, together with the Disputes Shares, the "DISPUTED SECURITIES") to
purchase an aggregate of 960,000 shares of Company Common Stock.
Disputes exist between the Company and Brukman with respect to (i)
whether Brukman is currently serving in any capacity with the Company, (ii) the
amount and existence of the Brukman Expenses, (iii) the amount of the Brukman
Unpaid Salary, and (iv) the title to the assets of Ohio Street.
The parties desire to resolve such disputes on the terms, and subject
to the conditions, set forth herein.
The parties hereto, intending to be legally bound, hereby agree as
follows:
I. RESIGNATION
SECTION 1.01 OFFICERSHIPS.
To the extent that Brukman is or may be currently serving as an officer
of the Company, effective upon the execution hereof, Brukman hereby resigns from
all positions as an officer of the Company.
SECTION 1.02 DIRECTORSHIPS.
To the extent that Brukman is or may be currently serving as a director
of the Company, effective upon the execution hereof, Brukman hereby resigns from
his position as a director of the Company.
SECTION 1.03 BENEFITS.
Commencing upon the execution and delivery hereof, the parties hereto
hereby agree that Brukman shall no longer be eligible to participate in any
employee or executive benefit, pension, health, or other plan or program of the
Company, subject to availability of healthcare benefits under any applicable
COBRA continuation and other legal requirements.
II. BRUKMAN LOAN; BRUKMAN EXPENSES; BRUKMAN UNPAID SALARY
SECTION 2.01 AGREEMENT AS TO AGGREGATE AMOUNTS.
The parties hereby agree that the amount of the Brukman Loan is and
shall be $75,000. the amount of the Brukman Expenses shall be $20,000; and the
amount of the Brukman Unpaid Salary shall be $25,000.
SECTION 2.02 STRUCTURE OF PAYMENT.
The aggregate amount of the Brukman Loan, the Brukman Expenses, and the
Brukman Unpaid Salary shall be paid as set forth in the note attached hereto as
Exhibit 2.02 hereof.
III. UNWINDING OF OHIO STREET TRANSACTION
SECTION 3.01 DELIVERY OF EVIDENCE OF OWNERSHIP.
Upon the execution and delivery hereof, the Company shall deliver to
Brukman evidence of the Company's ownership of Ohio Street, duly endorsed and in
proper form for transfer.
SECTION 3.02 DELIVERY OF DISPUTED SECURITIES.
Upon the execution and delivery hereof, Brukman shall cause his
affiliates to deliver to the Company the stock certificates and warrants
comprising the Disputed Securities, duly endorsed and in proper form for
transfer. Upon receipt thereof, the Company shall cause the Disputed Shares to
become authorized, but unissued, shares of Company Common Stock, and shall
cancel the Disputed Warrants.
IV. RELEASES; INDEMNIFICATION; NON-DISPARAGEMENT
SECTION 4.01 RELEASES.
(a) Except as otherwise as set forth, and to the extent set forth,
herein, the Company hereby fully and unconditionally releases and discharges all
claims and causes of action which it or its successors (if applicable), or
assigns ever had, now have, or hereafter may have against Brukman, in connection
with any and all matters relating to the matters set forth herein, provided,
however, that the Company expressly does not release Brukman for (i) violations
by Brukman of, and actions of Brukman in contravention of, Federal, state, and
other laws, rules, and regulations, whether in his capacity as an officer or
director of the Company or otherwise or (ii) this Agreement.
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(b) Except as otherwise as set forth, and to the extent set forth,
herein, Brukman hereby fully and unconditionally releases and discharges all
claims and causes of action which he or his heirs, successors (if applicable),
or assigns ever had, now have, or hereafter may have against the Company and its
officers, directors, employees, counsel, agents, and stockholders, in each case
past, present, or as they may exist at any time after this date, and each
person, if any, who controls, controlled, or will control any of them within the
meaning of Section 15 of the Securities Act of 1933, as amended, or Section
20(a) of the Securities Exchange Act of 1934, as amended (collectively, the
"COMPANY PARTIES"), provided, however, that Brukman expressly does not release
the Company Parties with respect to (i) indemnification and contribution
hereunder, under or pursuant to the certificate of incorporation or by-laws of
the Company, or pursuant to the General Corporation Law of the State of New
York, or (ii) this Agreement; provided, however, that Brukman expressly does not
release the Company for violations by the Company of, and actions of the Company
(and its officers, directors, employees, and agents) in contravention of
Federal, state, and other laws, rules, and regulations.
SECTION 4.02 INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless Brukman from any
and all losses, liabilities, damages, and expenses whatsoever (which shall
include for all purposes of this Section 4.02, but not be limited to, reasonable
counsel fees and any and all reasonable expenses whatsoever incurred in
investigating, preparing, or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in settlement
of any claim or litigation) as and when incurred arising out of, based upon, or
in connection with this Agreement, to the maximum extent permitted by the New
York General Corporation Law. The foregoing agreement to indemnify shall be in
addition to any liability the Company may otherwise have, including liabilities
arising under this Agreement.
(b) Brukman agrees to indemnify and hold harmless the Company from any
and all losses, liabilities, damages, and expenses whatsoever (which shall
include for all purposes of this Section 4.02, but not be limited to, reasonable
counsel fees and any and all reasonable expenses whatsoever incurred in
investigating, preparing, or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in settlement
of any claim or litigation) as and when incurred arising out of, based upon, or
in connection with this Agreement, and violations by Brukman of, and actions of
Brukman in contravention of, Federal, state, and other laws, rules, and
regulations, whether in his capacity as an officer or director of the Company or
otherwise, in each case to the maximum extent permitted by the New York General
Corporation Law. The foregoing agreement to indemnify shall be in addition to
any liability Brukman may otherwise have, including liabilities arising under
this Agreement
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SECTION 4.03 NON-DISPARAGEMENT.
Each party hereto hereby agrees that it or he will not make, and that
it or he will use its or his best efforts to prevent its affiliates from making,
any written or oral statements that are damaging or disparaging to to the
activities, image or reputation of the other party hereto. Each party hereto
hereby agrees that any breach by it or him of the provisions of this paragraph
will cause the other party hereto irreparable harm and loss and a breach of this
clause will be considered a material breach of this Agreement and, without
limiting any other remedies that any party hereto may have, each party hereto
hereby consents to the issuance of an injunction to prohibit any actual or
threatened such breach by it, its agents, or its affiliates. The right of each
party hereto to obtain such injunction shall not preclude any other remedy
available thereto, including the right to obtain damages. Notwithstanding the
foregoing, nothing shall prevent either party to make any disclosures which, in
the opinion of counsel, are legally required to be made by such party.
V. REPRESENTATIONS AND WARRANTIES
SECTION 5.01 REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
(a) Brukman has all necessary right and power to enter into this
Agreement and to carry out the obligations hereunder and to consummate the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by Brukman, and constitutes a valid and binding obligation of Brukman,
and is enforceable against Brukman in accordance with its terms.
(b) Brukman is an individual who has reached the age majority in his
state of residence and has all necessary requisite power and authority, and all
necessary consents, authorizations, approvals, orders, licenses, certificates,
and permits of and from, and declarations and filings with, all federal, state,
local, and other governmental authorities and all courts and other tribunals, to
own, lease, license, and use his properties and assets and to carry on the
business in which he is now engage and the businesses in which she contemplates
engaging.
(c) The Disputed Securities are owned of record and beneficially solely
by Brukman free and clear of any security interest, pledge, mortgage, lien
(including, without limitation, environmental and tax liens), charge,
encumbrance, adverse claim, preferential arrangement or restriction of any kind,
including, without limitation, any restriction on the use, voting, transfer
(except as otherwise provided herein), receipt of income or other exercise of
any attributes of ownership. The Disputed Securities are not subject to any
options, warrants, convertible securities or other rights, agreements,
arrangements or commitments of any character relating to interests therein.
There are no voting trusts, member agreements, proxies, or other agreements or
understandings in effect with respect to the voting or transfer of any of the
Disputed Securities.
SECTION 5.02 REPRESENTATIONS AND WARRANTIES OF BRUKMAN.
The Company has all requisite power and authority to execute, deliver,
and perform each of this Agreement and the Note. All necessary corporate
proceedings of the Company have been duly taken to authorize the execution,
delivery, and performance thereby of each of this Agreement and the Note. Each
of this Agreement and the Note has been duly authorized, executed, and delivered
by the Company, constitutes the legal, valid, and binding obligation of the
Company, and is enforceable as to the Company in accordance with its respective
terms.
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VI. MISCELLANEOUS
SECTION 6.01 FURTHER ACTIONS.
At any time and from time to time, each party agrees, at its or his
expense, to take such actions and to execute and deliver such documents as may
be reasonably necessary to effectuate the purposes of this Agreement.
SECTION 6.02 AVAILABILITY OF EQUITABLE REMEDIES.
Since a breach of the provisions of this Agreement could not adequately
be compensated by money damages, any party shall be entitled, in addition to any
other right or remedy available to it, to an injunction restraining such breach
or a threatened breach and to specific performance of any such provision of this
Agreement, and in either case no bond or other security shall be required in
connection therewith, and the parties hereby consent to the issuance of such an
injunction and to the ordering of specific performance.
SECTION 6.03 SURVIVAL.
The covenants, agreements, representations, and warranties contained in
or made pursuant to this Agreement shall survive any delivery of the
consideration described herein, irrespective of any investigation made by or on
behalf of any party.
SECTION 6.04 MODIFICATION.
This Agreement sets forth the entire understanding of the parties with
respect to the subject matter hereof, supersedes all existing agreements between
them concerning such subject matter, and may be modified only by a written
instrument duly executed by each party.
SECTION 6.05 NOTICES.
Any notice or other communication required or permitted to be given
hereunder shall be in writing and shall be mailed by certified mail, return
receipt requested (or by the most nearly comparable method if mailed from or to
a location outside of the United States) or by Federal Express, Express Mail, or
similar overnight delivery or courier service or delivered (in person or by
telecopy, telex, or similar telecommunications equipment) against receipt to the
party to whom it is to be given at the address of such party set forth in the
preamble to this Agreement (or to such other address as the party shall have
furnished in writing in accordance with the provisions of this Section 6.05)
with a copy to each of the other party hereto. Any notice given to any corporate
party shall be addressed to the attention of the Corporate Secretary. Notice to
the estate of any party shall be sufficient if addressed to the party as
provided in this Section 6.05. Any notice or other communication given by
certified mail (or by such comparable method) shall be deemed given at the time
of certification thereof (or comparable act), except for a notice changing a
party's address which will be deemed given at the time of receipt thereof. Any
notice given by other means permitted by this Section 6.05 shall be deemed given
at the time of receipt thereof.
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SECTION 6.06 WAIVER.
Any waiver by any party of a breach of any term of this Agreement shall
not operate as or be construed to be a waiver of any other breach of that term
or of any breach of any other term of this Agreement. The failure of a party to
insist upon strict adherence to any term of this Agreement on one or more
occasions will not be considered a waiver or deprive that party of the right
thereafter to insist upon strict adherence to that term or any other term of
this Agreement. Any waiver must be in writing and, in the case of a corporate
party, be authorized by a resolution of the Board of Directors or by an officer
of the waiving party.
SECTION 6.07 BINDING EFFECT.
The provisions of this Agreement shall be binding upon and inure to the
benefit of the the Company, Brukman, and their respective successors and and
assigns (if not a natural person) and his assigns, heirs, and personal
representatives (if a natural person).
SECTION 6.08 NO THIRD PARTY BENEFICIARIES.
This Agreement does not create, and shall not be construed as creating,
any rights enforceable by any person not a party to this Agreement (except as
provided in Section 6.07).
SECTION 6.09 SEPARABILITY.
If any provision of this Agreement is invalid, illegal, or
unenforceable, the balance of this Agreement shall remain in effect, and if any
provision is inapplicable to any person or circumstance, it shall nevertheless
remain applicable to all other persons and circumstances.
SECTION 6.10 HEADINGS.
The headings in this Agreement are solely for convenience of reference
and shall be given no effect in the construction or interpretation of this
Agreement.
SECTION 6.11 COUNTERPARTS; GOVERNING LAW.
This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument. It shall be governed by and construed in accordance
with the laws of the State of New York, without giving effect to conflict of
laws. Any action, suit, or proceeding arising out of, based on, or in connection
with this Agreement or the transactions contemplated hereby may be brought in
the United States District Court for the Southern District of New York and each
party covenants and agrees not to assert, by way of motion, as a defense, or
otherwise, in any such action, suit, or proceeding, any claim that it or he is
not subject personally to the jurisdiction of such court, that its or his
property is exempt or immune from attachment or execution, that the action,
suit, or proceeding is brought in an inconvenient forum, that the venue of the
action, suit, or proceeding is improper, or that this Agreement or the subject
matter hereof may not be enforced in or by such court.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first written above.
MILITARY RESALE GROUP, INC.
BY:---------------------------------
NAME:
TITLE:
------------------------------------
LEE BRUKMAN
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