SCHEDULE 14C
(RULE 14C-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c)
of the Securities Exchange Act of 1934
Check the appropriate box:
[X] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14c-5(d)(2))
[ ] Definitive Information Statement
MINDSET INTERACTIVE CORP.
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(Name of Registrant as Specified in Charter)
Payment of Filing Fee (Check the appropriate box):
[ ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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MINDSET INTERACTIVE CORP.
5 Corporate Park, Suite 160
Irvine, California 92606
To Our Shareholders:
This Information Statement is being mailed to the shareholders of
Mindset Interactive Corp., a Nevada corporation (the "Company") pursuant to the
requirements of Regulation 14C under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), in connection with an action taken by written
consent of the holders of a majority of the outstanding voting stock of our
Company.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
On April 26, 2002, the holders of a majority of the outstanding voting
securities (the "Consenting Shareholders") of our Company executed a written
consent approving the following action by our Company:
The execution and performance by our Company of the Corporate
Separation Agreement and Mutual General Releases, dated as of April 15,
2002, and entered into by and among our Company, Mindset Interactive,
Inc. ("MII"), a Nevada corporation and a wholly-owned subsidiary of our
Company, and Vinay Jatwani, Mike Sullivan and Scott Walker
(collectively, the "Shareholders"), pursuant to which Mindset will sell
to the Shareholders all of the outstanding shares of common stock,
$0.001 par value per share, of MII (the "MII Shares") in exchange for
the cancellation of 6,484,645 shares of our common stock, $0.001 par
value per share, beneficially owned by the Shareholders. Each of the
Shareholders is also an officer and director of both our Company and
MII.
The Board of Directors of our Company had previously approved the above
action and fixed the close of business on April 9, 2002 as the record date for
the determination of shareholders entitled to vote with respect to the above
action. The Consenting Shareholders, whose shares represent approximately 60.9%
of our Company's voting securities entitled to vote, have consented to the above
action. Therefore, no special meeting of shareholders will be held.
This Information Statement is being first sent or given to shareholders
of our Company on or about May 28, 2002.
BY ORDER OF THE BOARD OF DIRECTORS
/S/ Scott Walker,
-----------------
Scott Walker, President
Irvine, California
May 16, 2002
MINDSET INTERACTIVE CORP.
5 Corporate Park, Suite 160
Irvine, California 92606
_____________________________
INFORMATION STATEMENT
_____________________________
The Board of Directors of MINDSET INTERACTIVE CORP., a Nevada
corporation (the "Company") is furnishing this Information Statement to
shareholders in connection with the approval of the Corporate Separation
Agreement and Mutual General Releases (the "Corporate Separation Agreement"),
dated as of April 15, 2002, and entered into by and among our Company, Mindset
Interactive, Inc. ("MII"), a Nevada corporation and a wholly-owned subsidiary of
our Company, and Vinay Jatwani, Mike Sullivan and Scott Walker (collectively,
the "Shareholders"), pursuant to which our Company will sell to the Shareholders
all of the outstanding shares of common stock, $0.001 par value per share, of
MII (the "MII Shares") in exchange for the cancellation of 6,484,645 shares of
our common stock, $0.001 par value per share, beneficially owned by the
Shareholders. Each of the Shareholders is also an officer and director of both
our Company and MII.
This Information Statement is first being sent on or before the close
of business on May 28, 2002, to shareholders of record as of April 9, 2002 (the
"Record Date"). On April 26, 2002, the holders of a majority of the outstanding
voting securities of our Company on the Record Date (the "Consenting
Shareholders") executed written consents approving the above action. Our Company
will cause the sale of the MII Shares and the Corporate Separation Agreement to
become effective 20 days after this Information Statement is first sent to the
shareholders.
WE ARE NOT ASKING YOU FOR A PROXY AND
YOU ARE REQUESTED NOT TO SEND US A PROXY
QUESTIONS AND ANSWERS
Q: What am I being asked to approve?
A: You are not being asked to approve anything. This Information
Statement is being provided to you solely for your
information. Shareholders holding a majority of the
outstanding voting common stock of our Company have already
approved the sale of the MII Shares and the Corporate
Separation Agreement.
Q: Who can I call with questions?
A: Please call Vinay Jatwani at (949) 419-0262.
GENERAL INFORMATION
OUTSTANDING SHARES AND VOTING RIGHTS
On April 9, 2002, our Board of Directors unanimously approved and
authorized by written consent, subject to shareholder approval, the sale of the
MII Shares to the Shareholders and the Corporate Separation Agreement, which the
Board of Directors deemed to be in the best interest of our Company and our
shareholders. The Board of Directors further authorized the preparation and
circulation of this Information Statement and a shareholders' consent to the
holders of a majority of the outstanding shares of our common stock.
MII constitutes all of our Company's assets, business and operations.
As a result, the transactions contemplated by the Corporate Separation Agreement
may constitute a sale of substantially all of the property and assets of our
Company within the meaning of Section 78.565 of the Nevada Revised Statutes.
Because a transaction subject to Section 78.565 requires the approval of a
majority of the corporation's outstanding voting shares, the Board of Directors
of our Company obtained approval for this transaction by written consent of
shareholders holding a majority of the shares of our Company's common stock.
There are currently 18,594,217 shares of our common stock issued and
outstanding, and each share of our common stock is entitled to one vote. Except
for the common stock, there is no other class of voting securities outstanding
at this date. As of April 26, 2002, shareholders holding 11,316,137 shares,
representing approximately 60.9% of the outstanding voting securities of our
Company, have provided their written consent to the sale of the MII Shares and
the Corporate Separation Agreement.
In addition to the above requirement, Section 78.140 of the Nevada
Revised Statutes provides that any transaction between a corporation and one or
more of its directors or officers is not void or voidable if the fact of common
directorship, office or financial interest is known to the shareholders, and
they approve or ratify the contract or transaction in good faith by a majority
vote of shareholders holding a majority of the voting power. The votes of the
common or interested directors or officers must be counted in any such vote of
shareholders.
There will not be any material differences in the rights of
shareholders of our Company as a result of the sale of the MII Shares. There are
no rights of appraisal or similar rights of dissenting shareholders with respect
to the sale of the MII Shares.
SHAREHOLDERS ARE URGED TO READ THIS INFORMATION STATEMENT
AND THE EXHIBIT HERETO IN THEIR ENTIRETY.
EXPENSES OF INFORMATION STATEMENT
The expenses of mailing this Information Statement will be borne by our
Company, including expenses in connection with the preparation and mailing of
this Information Statement and all documents that now accompany or may hereafter
supplement it. It is contemplated that brokerage houses, custodians, nominees,
and fiduciaries will be requested to forward the Information Statement to the
beneficial owners of our common stock held of record by such persons and that
our Company will reimburse them for their reasonable expenses incurred in
connection therewith.
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SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of April 26, 2002, certain
information as to shares of our common stock owned by (i) each person known to
beneficially own more than 5% of the outstanding common stock, (ii) each of our
directors, and named executive officers, and (iii) all of our executive officers
and directors as a group. Unless otherwise indicated, the address of each named
beneficial owner is the same as that of our Company's principal executive
offices located at 5 Corporate Park, Suite 160, Irvine, California 92606.
NUMBER OF PERCENTAGE
SHAREHOLDER (1) SHARES (2) OWNERSHIP
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Vinay Jatwani 2,084,645 11.2%
Mike Sullivan 2,200,000 11.8%
Scott Walker 2,200,000 11.8%
All Officers and Directors
as a Group (3 persons) 6,484,645 34.9%
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(1) Beneficial ownership has been determined in accordance with Rule 13d-3
under the Exchange Act. Pursuant to the rules of the Securities and
Exchange Commission (the "Commission"), shares of common stock that
each named person and group has the right to acquire within 60 days
pursuant to options, warrants, or other rights, are deemed outstanding
for purposes of computing shares beneficially owned by and the
percentage ownership of each such person and group. However, such
shares are not deemed outstanding for purposes of computing the shares
beneficially owned by or percentage ownership of any other person or
group.
(2) Unless otherwise noted, all shares listed are owned of record and the
record owner has sole voting and investment power, subject to community
property laws where applicable.
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APPROVAL OF THE SALE OF THE MII SHARES
AND THE CORPORATE SEPARATION AGREEMENT
Our Board of Directors authorized the sale of the MII Shares and
approved the material terms of the Corporate Separation Agreement by written
consent dated April 9, 2002. A copy of the Corporate Separation Agreement is
attached hereto as Exhibit "A."
As of the Record Date for this transaction, our Company had outstanding
approximately 18,594,217 shares of common stock, of which the Shareholders
beneficially own 6,484,645 shares. On April 26, 2002, shareholders holding
11,316,137 shares of our common stock, representing 60.9% of the issued and
outstanding shares of our voting stock, approved by written consent in lieu of a
meeting the sale of the MII Shares and the Corporate Separation Agreement. As a
result, the sale of the MII Shares and the Corporate Separation Agreement were
approved by a majority of the shares of voting stock as required by Nevada law.
BACKGROUND OF AND REASONS FOR THE SALE
In July 2000, MII entered into an investment banking agreement pursuant
to which the investment banker was to provide funding to MII in the amount of
$2,500,000 in consideration for the issuance of shares to the investment banker
representing 60% of the outstanding common stock of MII. In March 2001, our
Company acquired all of the outstanding shares of MII from the Shareholders
pursuant to the terms of a stock purchase agreement.
As the investment banker only raised a portion of the funds it
committed to raise in the investment banking agreement, our Company must seek
additional funds to continue operations and to grow our business. The investment
banker has acknowledged its inability to raise further capital to fulfill its
original obligation. Since November 2001, our Board of Directors has been
exploring various strategic alternatives for raising capital under our Company's
present capital structure. However these efforts have been unsuccessful. Under
our present financial condition, management does not believe that our Company
can continue to grow and meet our strategic objectives or achieve profitability.
In April 2002, the Shareholders offered to acquire MII in exchange for
the cancellation of approximately 6,484,645 shares of our common stock,
essentially reversing the original stock purchase agreement. On April 9, 2002,
our Board of Directors approved the terms of the Corporate Separation Agreement.
The Board of Directors believes the separation is a more favorable alternative
for our Company and our shareholders than a possible reorganization or
bankruptcy. The proposed sale of the MII Shares was submitted and approved by
written consent of holders of our common stock holding a majority of our
Company's voting stock, in compliance with the requirements of Nevada law.
Following the consummation of the transactions contemplated by the
Corporate Separation Agreement, our Company will no longer have any revenue
generating assets or operations but will be free to seek new acquisition or
business opportunities under new management. The Shareholders will at that time
be the sole owners of MII and will resign from all positions as officers and
directors of our Company.
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NO DISSENTERS' RIGHTS
Under the Nevada Revised Statutes, the corporate actions described in
this Information Statement will not afford to our shareholders the opportunity
to dissent from the actions described herein or to receive an agreed or
judicially appraised value for their shares.
AVAILABLE INFORMATION
We are subject to the informational requirements of the Exchange Act,
and accordingly file reports and other information with the Commission relating
to our business, financial statements and other matters. Reports and information
filed pursuant to the informational requirements of the Exchange Act and other
information filed with the Commission can be inspected and copied at the Public
Reference Room maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549. The public may obtain information on the operation of
the Public Reference Room by calling the Commission at 1-800-SEC-0330. Copies of
our filings may also be obtained electronically by visiting the Commission's web
site on the Internet at http://www.sec.gov.
COMPANY CONTACT INFORMATION
All inquiries regarding our Company should be addressed to our
Company's principal executive offices: Mindset Interactive Corp., 5 Corporate
Park, Suite 160, Irvine, California 92606, Attention: President; telephone (949)
419-0262.
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CORPORATE SEPARATION AGREEMENT AND MUTUAL GENERAL RELEASES
THIS CORPORATE SEPARATION AGREEMENT AND MUTUAL GENERAL RELEASES (this
"Agreement") is made and entered into as of this 15th day of April 2002 by and
among MIKE SULLIVAN ("Sullivan"), SCOTT WALKER ("Walker") and VINAY JATWANI
("Jatwani") (collectively, the "Shareholders") and MINDSET INTERACTIVE, INC., a
Nevada corporation and wholly-owned subsidiary of the Company ("Mindset") on
the one hand, and MINDSET INTERACTIVE CORP., a Nevada corporation (formerly
Ecklan Corporation) (the "Company"), on the other hand.
RECITALS
A. The Company is a reporting company under the Securities Exchange Act
of 1934, as amended.
B. Pursuant to a Share Purchase Agreement by and among the Company,
Mindset and the Shareholders dated January 16, 2001 (the "Purchase Agreement"),
the Company purchased all of the issued and outstanding shares of Mindset (the
"Mindset Shares") from the Shareholders in consideration for the issuance to the
Shareholders of 7,000,145 shares of the Company's common stock (the "Company
Shares").
C. The parties hereto wish to reverse the share exchange made pursuant
to the Purchase Agreement.
D. Each of the parties hereto desires to enter into a full and final
settlement and mutual general release of each and all claims each party has
against the other parties.
NOW, THEREFORE, in consideration of the promises hereinafter set forth
and for good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties agree as follows:
1. SHARE CANCELLATION AND TRANSFER.
1.1 The Shareholders hereby agree to return and surrender to the
Company for immediate cancellation 6,484,645 shares of the Company's common
stock (the "Shares").
1.2 In consideration for the return and surrender of the Shares, the
Company hereby agrees to:
(a) Transfer to the Shareholders or their designees, as set
forth in Schedule "A" hereto, the Mindset Shares.
(b) Pay to the trust account of Jeffers, Shaff & Falk, LLP an
amount equal to US$25,000, by check or wire transfer of immediately
available funds, which funds will be applied to pay for the costs
associated with the audit of the Company and Mindset's financial
statements to be filed with the Form 10-KSB for the fiscal year ended
December 31, 2001.
2. ROYALTY.
2.1 Mindset hereby agrees to pay the Company a royalty equal to five
percent (5%) of all net profits of Mindset (the "Royalty") pursuant to Section
2.2 below.
2.2 The Royalty will be calculated based on the after-tax net profits
realized by Mindset commencing with the fiscal year ended December 31, 2002 and
terminating on the earlier to occur of (a) the tenth (10th) anniversary of the
date of this Agreement or (b) upon the Company's receipt of an aggregate of
US$2,000,000 in Royalty payments.
2.3 The Royalty will be payable on an annual basis within 60 days of
the end of the Company's fiscal year.
3. LIABILITIES OF MINDSET.
3.1 Mindset hereby represents that the Accounts Payable list attached
hereto as Schedule "B" presents fairly the liabilities of Mindset as at the date
hereof.
3.2 Mindset hereby represents that the Accounts Receivable list
attached hereto as Schedule "C" presents fairly the receivables of Mindset as at
the date hereof.
3.3 Mindset and the Shareholders hereby acknowledge that the
receivables listed in Schedule "C" will be used by Mindset to extinguish the
payables listed in Schedule "B" and that the Company shall in no way indemnify
Mindset nor shall it accept any obligation on behalf of Mindset with respect to
its payables.
3.4 Mindset agrees to indemnify and hold harmless the Company from and
against all claims, costs, expenses and/or judgments arising from the civil
action filed in Jackson County, Missouri, entitled VIRTUMUNDO, INC. V. MINDSET
INTERACTIVE, INC. AND INURV, INC. (the "Action"). The Company agrees that
Mindset will be responsible for selecting and retaining counsel to represent the
Company in the Action, if necessary, provided that the Company will cooperate
reasonably with counsel in the defense of the Action, including in connection
with discovery and/or trial.
4. LIABILITIES OF COMPANY. The Company hereby agrees to assume the liability of
Mindset under the terms of two (2) promissory notes dated October 13, 2000 and
December 18, 2000 for an aggregate principal amount of $550,000.
5. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS. The Shareholders
represent and warrant as follows:
5.1 All Company Shares owned by the Shareholders are owned free and
clear of all liens, charges, encumbrances and security interests.
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5.2 The Shareholders do not beneficially own any of the assets of the
Company.
5.3 Except as set forth in this Agreement, the Company does not have
any liability or obligation, contingent or otherwise, to the Shareholders.
5.4 The Shareholders do not have any options, warrants or other rights
to acquire any of the Company's shares.
5.5 No person has any option, warrant or other right to acquire any of
the Company's Shares from the Shareholders.
5.6 There are no actions, suits or proceedings pending or threatened
against or affecting the Shareholders with respect to the Company Shares.
6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby represents
and warrants as follows:
6.1 The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Nevada.
6.2 The Mindset Shares to be delivered to the Shareholders are owned by
the Company free and clear of all liens, charges, encumbrances and security
interests.
6.3 No person has any option, warrant or other right to acquire any of
the Mindset Shares from the Company.
6.4 There are no actions, suits or proceedings pending or threatened
against or affecting the Company with respect to the Mindset Shares.
6.5 The Company hereby acknowledges that it is a holding company and
that Mindset is its sole operating subsidiary. The Company also hereby
acknowledges that Mindset owns all rights, title and interest in and to the
operating assets of Mindset, including, but not limited to, those set forth on
Schedule "D".
6.6 The Company hereby undertakes to obtain all required corporate and
shareholder consents to the transactions contemplated in this Agreement.
7. CLOSING.
7.1 The closing (the "Closing") shall take place on April 12, 2002 (the
"Closing Date") at the offices of Jeffers, Shaff & Falk, LLP, 18881 Von Karman
Ave., Suite 1400, Irvine, California 92612 at 10:00 am or at such other time and
place as the parties may mutually agree.
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7.2 At the Closing:
(a) The Shareholders shall deliver to the Company the
certificates representing the Shares duly endorsed in blank for
transfer or with a stock power of attorney (in either case with the
signature guaranteed by the appropriate official).
(b) The Company shall deliver to the Shareholders share
certificates representing the Mindset Shares duly endorsed in blank for
transfer or with a stock power of attorney (in either case with the
signature guaranteed by the appropriate official).
7.3 CONDITION TO CLOSING. Concurrently with the execution of this
Agreement, Mindset shall enter into a Memorandum Agreement with No. 130
Corporate Ventures Ltd., a form of which is attached hereto as Exhibit "A."
8. RELEASE OF CLAIMS; INDEMNIFICATION.
(a) MUTUAL RELEASE. In consideration of and conditioned upon receipt of
the full and complete consideration and performance of all conditions set forth
herein, the Company, Mindset and the Shareholders shall mutually release each
other, their past, present or future parent corporations, subsidiaries,
predecessors, affiliates, partners, successors, assigns, associates, employees,
independent contractors, officers, directors, shareholders, agents and
attorneys, whether DE FACTO or DE JURE, and any of their successors and assigns
and legal representatives, and any of their heirs, executors, administrators, or
any person claiming by, through, or on behalf of any of them, in whatever
capacity, either personal or representative, and each of them, from any and all
manner of action or actions, cause or causes of action, suits, debts,
liabilities, demands, agreements, sums of money in controversy, damages,
accounts, reckonings and liens of every kind or nature whatsoever, whether
known, suspected or unsuspected, which they shall have, own or hold, which they
at any time heretofore had, owned or held, or could, shall or may hereafter own,
or hold, by reason of, arising out of, or in connection with such matters which
relate to or in any way arise out, or could relate to or arise out of, their
business relationship to the date of this Agreement (collectively, the "Claim"
or "Claims"). From and after the date hereof, neither the Company, Mindset, nor
the Shareholders, nor their successors or assigns, shall have any Claim of any
kind or nature on or against each other, their legal successors and assigns,
their heirs, executors, administrators, and personal representatives, employees,
or agents directly or indirectly on any such matter or cause, fact, thing, act
or omission existing, done or admitted to be done at any time whatsoever to and
including the date hereof, on matters related to or in any way arising out of or
which could relate to or arise out of their business relationship to the date of
this Agreement, but excluding their obligations hereunder.
(b) FUTURE CLAIMS. Except as to the executory provisions of this
Agreement, the parties each acknowledge that they are aware of the fact that it
is the intention of the parties hereto, in which intention each of the parties
agree, that, upon execution by the parties, this Agreement shall be effective as
a full and final accord and satisfaction in settlement of and as a bar to, any
and all Claims heretofore referred to and released which any party hereto has,
may have in the future, or has had against the other party hereto. In connection
with such waiver and relinquishment, the parties hereto acknowledge that each is
aware that they or their attorneys may hereafter discover facts different from
or in addition to, facts known and believed true with respect to the subject
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matter of this Agreement, but that it is each party's intention hereby to fully,
finally, absolutely and forever settle any and all Claims, heretofore referred
to, disputes and differences which do exist, may exist or heretofore have
existed between any of the parties to this Agreement and that, in furtherance of
such intention, the releases herein given shall be and remain in effect as full
and complete releases, notwithstanding the discovery of any such different or
additional facts. Therefore, each of the parties hereto acknowledge that each
has been informed by their respective attorneys and advisors of, and each is
familiar with, Section 1542 of the Civil Code of the State of California, which
provides as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE
TIME OF EXECUTING A RELEASE, WHICH IF KNOWN BY HIM MUST HAVE
MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
Each of the parties does hereby waive and relinquish all rights and
benefits each has or may have under Section 1542 of the Civil Code of the State
of California, to the fullest extent that each may lawfully waive such rights
and benefits pertaining to the subject matter of this Agreement, and
acknowledges that this waiver is a material inducement to the other party's
execution of the Agreement.
(c) INDEMNIFICATION. In the event any of the Shareholders were, are or
become a party to or witness or other participant in, or is threatened to be
made a party to or witness or other participant in, a claim by reason of (or
arising in part out of) an Indemnifiable Event (as defined below), the Company
shall indemnify each such Shareholder to the fullest extent permitted by law
against any and all reasonable expenses, judgments, fines, penalties and amounts
paid in settlement (including all interest, assessments and other charges paid
or payable in connection with or in respect of such expenses, judgments, fines,
penalties or amounts paid in settlement) of such claim. For purposes of this
Agreement, "Indemnifiable Event" means any event or occurrence that takes place
either prior to or after the execution of this Agreement related to the fact
that such Shareholder(s) are or were, is or was an officer, director, employee,
agent or fiduciary of the Company, or is or was serving at the request of the
Company as a director, officer, employee, trustee, agent or fiduciary of another
corporation, partnership, joint venture, employee benefit plan, trust or other
enterprise, or by reason of anything done or not done by such Shareholder in any
such capacity.
9. NO PENDING OR FUTURE LAWSUITS. Each of the parties hereto represents that he
or it has no lawsuits, claims or actions pending in his or its name, or on
behalf of any other person or entity, against the other parties or any other
person or entity referred to herein. Each of the parties hereto also represents
that he or it does not intend to bring any claims on his or its own behalf or on
behalf of any other person or entity against the other parties hereto or any
other person or entity referred to herein.
10. NO ADMISSION OF LIABILITY. No action by the parties hereto, either
previously or in connection with this Agreement, shall be deemed or construed to
be an admission of the truth or falsity of any matter pertaining to any Claim
referred to herein or relating to the subject matter of this Agreement, or an
acknowledgment by any of the parties of any liability to the other parties
hereto, or to any other person.
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11. CONFIDENTIALITY. The parties and their attorneys expressly agree that they
shall keep the terms and conditions of this Agreement confidential, and that
neither the parties, nor their attorneys, agents or employees, shall disclose
those terms and conditions to any other person unless compelled by law to do so;
provided, however, that they may disclose the terms and conditions of this
Agreement to tax or financial advisors and to legal counsel, on condition that
each of those individuals expressly agrees not to disclose the terms and
conditions of this Agreement to anyone else.
12. SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall be binding
and extend to and inure to the benefit of the partners, employees, legal
successors, assigns, heirs, executors, and administrators of each of the
parties, including, without limitation, any partnerships, corporations or other
entities in which any of them have a controlling interest or position, and shall
also be binding upon their agents, servants, representatives, attorneys and
persons acting for them or on their behalf.
13. COMPLETE DEFENSE. This Agreement may be used by any one or more of the
parties hereto as a full and complete defense to, and the parties hereby consent
that it may be used as the basis for an injunction against, any action, suit or
other proceeding based on any Claim released by this Agreement as to any one or
more of the parties.
14. ENTIRE AGREEMENT. This Agreement is the entire agreement between the parties
hereto relating to the subject matter hereof and supersedes and replaces all
prior negotiations or proposed agreements, written or oral, relating thereto.
Each of the parties hereto acknowledges that no other party, nor any agent or
attorney of any other party, has made any promise, representation or warranty
whatsoever, express or implied, not contained herein concerning the subject
matter hereof, to induce them to execute this Agreement in reliance upon any
such promise, representation or warranty not contained herein. No provision of
this Agreement may be amended or added hereto except by an agreement in writing
signed by all parties hereto or their respective successors-in-interest.
15. REPRESENTATIONS OR WARRANTIES. Each of the parties represents and warrants
that (1) he or it is the sole and absolute owner of the Claim or Claims and that
he or it has not heretofore nor will in the future, assign or transfer or
purport to assign or transfer to any person or entity, either voluntarily or
involuntarily, the Claim or Claims, or portion thereof; (2) that each party has
full authority to release and forever discharge the Claim or Claims and to
execute this Agreement and bind himself or itself to this Agreement by execution
hereof; and (3) that to the best of his or its knowledge, the execution and
delivery of this Agreement will not violate any agreement, court order,
administrative order of any governmental entity, or any law or governmental
regulation.
16. TIME IS OF THE ESSENCE. Time is of the essence as to the performance of all
obligations herein.
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17. COUNTERPARTS; SEVERANCE. This Agreement may be executed in any number of
counterparts, including electronically transmitted counterparts, and if so
executed, each such counterpart shall have the same force and full effect of an
original. If any term or provision of this Agreement is determined to be invalid
or unenforceable, the remaining terms and provisions shall not be affected
thereby and shall remain in full force and effect to the maximum extent
permitted by law.
18. SURVIVAL. All the agreements, representations, warranties and obligations of
the parties set forth in this Agreement shall survive the execution of this
Agreement.
19. CHOICE OF LAW. This Agreement shall be governed by and construed under the
laws of the State of California, without regard to its conflict of law rules.
20. ATTORNEYS' FEES; ARBITRATION. In the event that a dispute arises between the
parties regarding or relating to this Agreement, the prevailing party shall be
entitled to recover the full amount of their attorneys' fees, expert fees and
costs incurred in connection with such dispute. Any dispute between the parties
hereof shall be submitted to arbitration under the rules of the American
Arbitration Association in the office of such association handling matters
arising in the County of Orange, State of California.
21. GOOD FAITH. The parties shall act reasonably and in good faith in carrying
out all terms and conditions contained in this Agreement.
22. REPRESENTATION BY COUNSEL. Each party hereto acknowledges and represents to
the other that he or it has had the advice of attorneys of its own choosing in
connection with the evaluation of the dispute and the negotiation and execution
of this Agreement, and has had an adequate opportunity to consider this
Agreement, understand it and voluntarily accept its terms.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first set forth above.
"Company"
Mindset Interactive Corp.,
a Nevada corporation
By:
------------------------------------
Name:
----------------------------------
Its:
----------------------------------
"Mindset"
Mindset Interactive, Inc.,
a Nevada corporation
7
By:
------------------------------------
Name:
----------------------------------
Its:
----------------------------------
"Shareholders"
/s/ Vinay Jatwani
---------------------------------------
VINAY JATWANI
/s/ Scott Walker
---------------------------------------
SCOTT WALKER
/s/ Mike Sullivan
---------------------------------------
MIKE SULLIVAN
8
SCHEDULE "A"
------------
SCHEDULE OF TRANSFEREES OF MINDSET SHARES
- -------------------------- -------------------------- --------------------------
Name and Address Number of Shares to be Percentage of Shares to be
of Transferee Transferred Transferred
- -------------------------- -------------------------- --------------------------
Mike Sullivan 2,450,051 35%
427 East 17th Street
Costa Mesa, CA 92627
- -------------------------- -------------------------- --------------------------
Scott Walker
427 East 17th Street
Costa Mesa, CA 92627 2,450,051 35%
- -------------------------- -------------------------- --------------------------
Vinay Jatwani
427 East 17th Street
Costa Mesa, CA 92627 2,100,043 30%
- -------------------------- -------------------------- --------------------------
TOTAL 7,000,145 100%
- -------------------------- -------------------------- --------------------------
SCHEDULE "B"
------------
ACCOUNTS PAYABLE LIST
CURRENT 1 - 30 31 - 60 61 - 90 > 90 TOTAL
------------- ------------- ------------ ------------- ------------- --------------
ADVERTISING.COM 0.00 0.00 0.00 0.00 0.00 0.00
AIRBORNE EXPRESS 0.00 166.32 0.00 0.00 0.00 166.32
ALLEGIANCE TELECOM 1,569.86 0.00 0.00 0.00 0.00 1,569.86
AMERICAN OFFICE CENTERS 0.00 249.00 0.00 0.00 0.00 249.00
AUDIO GALAXY 27,376.50 0.00 0.00 0.00 0.00 27,376.50
BLACKSTONE 0.00 13,397.00 0.00 0.00 0.00 13,397.00
CLEAR BLUE MEDIA 0.00 0.00 0.00 0.00 0.00 0.00
DIMECLICKS 0.00 0.00 0.00 0.00 0.00 0.00
E&E COMMUNICATIONS 0.00 1,000.00 0.00 0.00 0.00 1,000.00
ENTERTAINDOM 0.00 0.00 0.00 0.00 0.00 0.00
FLIPSIDE 0.00 0.00 0.00 750.60 14,832.40 15,583.00
HASKELL & WHITE 22,500.00 0.00 0.00 4,060.00 0.00 26,560.00
HEADSETS.COM 0.00 264.86 0.00 0.00 0.00 264.86
HOST PRO 0.00 3,990.00 0.00 0.00 3,990.00 7,980.00
IMPERIAL PREMIUM FINANCE 6,448.77 0.00 0.00 0.00 0.00 6,448.77
INTERNETFUEL 0.00 0.00 0.00 1,293.54 0.00 1,293.54
JATWANI, VINAY 0.00 628.56 0.00 0.00 0.00 628.56
JEFFERS, SHAFF, & FALK 12,180.00 13,593.12 0.00 979.31 0.00 26,752.43
L90 INC. 0.00 0.00 0.00 0.00 0.00 0.00
LANIER 0.00 0.00 2,269.65 0.00 0.00 2,269.65
LIFEMINDERS.COM 0.00 0.00 0.00 0.00 0.00 0.00
LUCKYSURF.COM 0.00 0.00 0.00 0.00 9,000.00 9,000.00
MAGELLAN STRATEGIC MKTG. 0.00 0.00 0.00 0.00 0.00 0.00
NATIONAL DATA SERVICES 50,032.67 24,167.29 -11,732.44 24,076.15 10,813.36 97,357.03
NEOPETS 5,294.90 24,298.95 1,002.32 0.00 0.00 30,596.17
PALADIN GLOBAL GROUP 0.00 0.00 0.00 0.00 7,652.44 7,652.44
PSBUSINESS PARKS 7,228.00 0.00 0.00 0.00 0.00 7,228.00
RACE TECHNOLOGIES 2,800.00 300.00 0.00 0.00 0.00 3,100.00
VIAPOINTE 0.00 0.00 1,350.00 0.00 0.00 1,350.00
VISIONAIRE 0.00 2,880.00 205.50 0.00 0.00 3,085.50
WEBCLIENTS.NET 0.00 0.00 0.00 0.00 0.00 0.00
WESTON MERCHANDISING CORP. 0.00 0.00 0.00 0.00 0.00 0.00
ZMEDIA 0.00 0.00 0.00 0.00 301.00 301.00
ZONFIRE 0.00 0.00 0.00 0.00 0.00 0.00
------------- ------------- ------------ ------------- ------------- --------------
TOTAL 135,430.70 84,935.10 -6,904.97 31,159.60 46,589.20 291,209.63
ACCRUED COS (POSSIBLE DISPUTES) 75,000.00
3/5 PAYROLL 34,000.00
--------------
TOTAL 400,209.63
==============
SCHEDULE "C"
------------
ACCOUNTS RECEIVABLE LIST
CURRENT 1 - 30 31 - 60 61 - 90 > 90 TOTAL
---------- ---------- ------------ ----------- ----------- ------------
1800FLOWERS 4,931.17 0.00 0.00 0.00 0.00 4,931.17
AADCOM 0.00 4,472.45 3,670.07 10,296.80 3,657.37 22,096.69
AD POWER ZONE 136.73 0.00 0.00 0.00 97.44 234.17
ADDYNAMIX 1,492.00 1,100.80 0.00 0.00 0.00 2,592.80
ADSTOP 0.00 23,938.53 0.00 0.00 0.00 23,938.53
ADVERTISING 6,937.09 3,953.03 0.00 0.00 0.00 10,890.12
ARGONAUT INTERACTIVE 1,316.48 0.00 0.00 0.00 0.00 1,316.48
AUTOFUSION 1,575.00 0.00 0.00 0.00 0.00 1,575.00
AVENUE A 110.00 0.00 0.00 0.00 0.00 110.00
BAY9 0.00 0.00 882.80 3,583.52 1,921.80 6,388.12
BELMONT WEB SERVICES 0.00 -730.00 0.00 0.00 0.00 -730.00
BETTERGOLF 0.00 0.00 0.00 0.00 12,148.75 12,148.75
BIDCLIX 0.00 0.00 0.00 137.46 0.00 137.46
BLACKSTONE DATA CORP 0.00 0.00 0.00 0.00 0.00 0.00
BLS FUNDING 0.00 0.00 0.00 0.00 2,195.50 2,195.50
CIMO 771.15 0.00 0.00 0.00 0.00 771.15
COLUMBUS INTERNET
ADVERTISING 0.00 1,314.75 0.00 0.00 0.00 1,314.75
COMMUNICATE.COM, INC. 0.00 0.00 0.00 0.00 0.00 0.00
CUSTOMOFFERS 831.48 0.02 0.00 0.00 0.00 831.50
DIGITAL ROOT 2,700.24 1,678.78 3,497.84 0.00 0.00 7,876.86
DIRECT MEDIA BUYERS 2,052.40 819.52 362.39 0.00 0.00 3,234.31
EDEMOGRAPHICS 0.00 0.00 0.00 73.10 0.00 73.10
EMANAGEMENT GROUP 0.00 0.00 0.00 -2,000.00 0.00 -2,000.00
EPIC RESORT 0.00 0.00 0.00 0.00 0.00 0.00
FINDWHAT 0.00 1,792.22 0.00 71.46 214.06 2,077.74
FLASH SPOT 619.00 497.60 0.00 105.20 0.00 1,221.80
FORWARD SLASH 0.00 0.00 -5,000.00 0.00 0.00 -5,000.00
FUTUREVISION 0.00 0.00 0.00 0.00 0.00 0.00
HI SPEED MEDIA 0.00 0.00 0.00 2,142.81 7,139.57 9,282.38
INDULGEYOURCELL 0.00 434.70 0.00 0.00 0.00 434.70
INFINITY ONE 0.00 0.00 0.00 0.00 1,500.00 1,500.00
INTER WEB DATA CONCEPTS 0.00 2,500.00 0.00 0.00 0.00 2,500.00
INTERNET FUEL 1,360.01 0.00 0.00 0.00 0.00 1,360.01
ITT 2,500.00 0.00 0.00 0.00 0.00 2,500.00
IWIN/UPROAR 0.00 0.00 0.00 0.00 0.00 0.00
L90 0.00 -6,754.00 0.00 0.00 0.00 -6,754.00
LINEAR 0.00 0.00 0.00 0.00 -619.80 -619.80
LOTTO FOREVER 0.00 0.00 4,055.68 0.00 0.00 4,055.68
LOWERMYBILLS 3,054.80 0.00 0.00 0.00 0.00 3,054.80
MAGELLAN STARTEGIC
MARKETING 0.00 0.00 0.00 0.00 0.00 0.00
MEGAMAAL 0.00 734.76 20.00 0.00 0.00 754.76
MONEYDAZE 0.00 0.00 0.00 5,000.00 0.00 5,000.00
MOTHERSHIP 0.00 0.00 0.00 0.00 0.00 0.00
MT MARKETING GROUP 0.00 0.00 0.00 0.00 2,000.00 2,000.00
MYOC 0.00 -5,000.00 0.00 0.00 0.00 -5,000.00
NATIONAL ASSOC FOR SELF
EMPLOYED 0.00 900.00 0.00 0.00 0.00 900.00
NETGRAB 0.00 0.00 151.80 213.60 0.00 365.40
NETWORK COMMERCE 0.00 0.00 0.00 0.00 0.00 0.00
NEXTIVA 0.00 -300.00 0.00 0.00 0.00 -300.00
OLD REPUBLIC TITLE 0.00 0.00 0.00 0.00 0.00 0.00
OPTIONHOTLINE 0.00 0.00 0.00 0.00 0.00 0.00
PLAYSYS 0.00 0.00 0.00 0.00 -2,113.17 -2,113.17
RIDE CONSULTING 0.00 4,560.00 0.00 0.00 0.00 4,560.00
STANDARD INTERNET 0.00 0.00 0.00 0.00 0.00 0.00
STRAT MARKETING 0.00 9,063.00 0.00 0.00 0.00 9,063.00
STRATEGIC ADVERTISING
SERVICES 0.00 0.00 0.00 -9,908.75 0.00 -9,908.75
TOTAL EDATA 0.00 0.00 19,153.28 0.00 0.00 19,153.28
TRAFFICMARKETPLACE.COM 0.00 0.00 0.00 0.00 0.00 0.00
TRAFFIX 10,360.39 0.00 13,260.30 0.00 0.00 23,620.69
TRANZACT 0.00 27,145.18 83,157.30 0.00 0.00 110,302.48
VCA 0.00 -10,000.00 0.00 0.00 0.00 -10,000.00
UPMARKIT 0.00 0.00 0.00 0.00 0.00 0.00
USABANNERS.COM 0.00 0.00 0.00 0.00 0.00 0.00
WEB SPONSORS 0.00 0.00 0.00 351.25 0.00 351.25
WEBCLIENTS 144.88 0.00 0.00 2,505.80 0.00 2,650.68
WHENU 0.00 0.00 0.00 0.00 0.00 0.00
WINDAILY 0.00 0.00 0.00 58.11 0.00 58.11
Z MEDIA 49,575.19 6,179.21 984.32 1,715.15 0.00 58,453.87
ZING WIRELESS 960.00 0.00 0.00 0.00 0.00 960.00
---------- ---------- ------------ ----------- ----------- ------------
TOTAL 91,428.01 68,300.55 124,195.78 14,345.51 28,141.52 326,411.37
========== ========== ============ =========== =========== ============
SCHEDULE "D"
MINDSET ASSETS
EXHIBIT A
FORM OF MEMORANDUM AGREEMENT