Document:

Unassociated Document

         

       

      
        	 	
                Jingwei
      International Limited

              	 

      

       

    

     

    JINGWEI
INTERNATIONAL LIMITED, Nevada, USA

    

    September
29, 2009

    

    Mr. Rick Luk, by hand (in
Shenzhen, PRC)

    

    Subject: Employment Offer
Letter

    

    

    Dear Mr.
Luk,

    

    On behalf
of the Board of Jingwei International Limited, a US public company, we are
pleased to offer you the position as Chief Executive Officer for the Company,
reporting directly to the Chairman, Mr. Du Jian Guo.

    

    General
responsibilities (and near term objectives) of this position are summarized
below:

    

    
      	
               
      

            	
              1.

            	
              Chief
      Representative supported by the CFO, to liaise with investors, capital
      operating, and to deal with issues related to capital market to improve
      the company’s market value.

            

    

    
      	
               
      

            	
              2.

            	
              Review
      current structure and provide recommendation to improve corporate business
      portfolio positioning and management credibility in the overseas
      investment community.

            

    

    
      	
               
      

            	
              3.

            	
              Develop
      and enhance Board governance to attain international best practice
      standard.

            

    

    
      	
               
      

            	
              4.

            	
              Company
      strategy and business plan development (shared objective with Chairman
      & President of Company)

            

    

    
      	
               
      

            	
              5.

            	
              Develop
      operating strategies and KPIs for all functions including sales,
      marketing, finance, HR, operation and customer support. (shared objective
      with President)

            

    

    
      	
               
      

            	
              6.

            	
              Business
      development to grow the business, enhance market share; and meet or exceed
      business performance targets (shared objective with
    President)

            

    

    
      	
               
      

            	
              7.

            	
              Oversee
      financial performance results (shared objective with CFO of
      Company)

            

    

    
      	
               
      

            	
              8.

            	
              Be
      the spokesperson and represent the company on overseas business
      activities

            

    

    
      	
               
      

            	
              9.

            	
              Strategic
      alliance and Investment recommendations where
  appropriate

            
	 	      
              10.

            	      
              Report
      to the Board of Director on operating and financial results periodically
      (shared objective with the President and CFO
      of  Company)

            

    

    
      	
               

            	
               

            

    

    

    The
general terms of our compensation plan for your position are summarized in the
enclosed approved C&B term sheet.  Below is a summary of the major
components of this plan

    

    
      	
              HIRING
      ENTITY:

            	
              Jingwei
      International Limited, Nevada, USA

            
	 
      	 
      
	
              POSITION
      TITLE:

            	
              Chief
      Executive Officer

            
	 
      	 
      
	
              PLANNED START
      DATE:

            	
              October
      1, 2009

            
	 
      	 
      
	
              WORK
      LOCATION

            	 
      

    

    

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    

    This
position will be based in Hong Kong with frequent travel to Shenzhen and other
locations in the People Republic of China (PRC) and North America as business
required.

    

    COMPENSATION  SUMMARY

    

    
      	
              Annual
      Base Earnings:

            	 
      	
              $800,000
      RMB payable in US$ from the hiring entity, as follows:

            
	 
      	 
      	
              -   80%
      or 640,000 RMB is fixed and paid monthly

            
	 
      	 
      	
              -   20%
      or 160,000 RMB is paid quarterly (upon completion of every three months of
      service).

            
	 
      	 
      	
              (NB:
      portion of the 640,000 RMB may be paid in form of housing reimbursement
      against rental receipts in Hong Kong)

            
	 
      	 
      	 
      
	
              Performance
      Bonus:

            	 
      	
              Variable
      bonus; and the amount is based on company performance at year end as well
      as contribution to capital market performance and fund raising for the
      relevant year.

            
	 
      	 
      	 
      
	
              Initial
      Stock Options Award:

            	 
      	
              This
      is a long term incentive program.  Upon signing of this offer,
      the company will “grant” you an option to purchase 200,000 shares of the
      Company’s common stock at a per-share exercise price equal to the closing
      price of the common stock on the Grant date (date of offer signing and
      acceptance).

            
	 
      	 
      	 
      
	 
      	 
      	
              Additional
      options in 2nd year and so forth may be granted, but not guaranteed, based
      on performance and approval by the Board.

            
	 
      	 
      	 
      
	
               Options
      Vesting Schedule:

            	 
      	
              To
      reflect your commitment to the Company, the 200,000 option shares are to
      be vested over 3 years, with a vesting schedule and special terms outlined
      in the C&B term sheet dated Sept 22,
2009

            

    

    

    For
purposes of the foregoing, and in reference to the C&B term
sheet:

    Termination
for “cause” or “misconduct” means (i) your conviction of a felony or any crime
of theft, dishonesty or moral turpitude at work; or (ii) gross omission or gross
dereliction of any statutory or common law duty of loyalty to the Company; or
(iii) gross or material violation of the Company’s Code of Conduct (if copy is
provided to you at time of employment).

    

    COMPANY
BENEFITS

    

    
      	
              Medical
      Insurance Coverage:

            	
              Reimbursement
      of up to annual maximum of 35,000 RMB for you and your spouse (against
      medical or insurance payment
receipts)

            

    

    

    
      	
              Statutory
      MPF Plan:

            	
              Provided
      by Company

            

    

    

    
      	
              Income
      Taxes Obligation:

            	
              Employment
      based in Hong Kong Tax Rates

            

    

    

    Tax
Consultation & Preparation Service:   Reimbursement of up to
annual maximum of 10,000 RMB to meet local taxes obligations in Hong
Kong

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    

    

    
      	
              Company
      Officer Indemnity Provision & Legal Support:

            	
              Reimbursement
      of reasonable expenses for legal consultation and support on needed
      basis

            
	 
      	 
      
	
              Annual
      Vacation:

            	
              Average
      of 20 working days, pro-rata for number of months worked, if you do not
      complete a full year service.

            
	 
      	 
      
	
              T&L
      Expenses in Shenzhen:

            	
              Reimbursed
      for reasonable expenses for living and accommodation while working in
      Shenzhen.

            

    

    

    

    GENERAL TERMS OF EMPLOYMENT
AGREEMENT

    

    
      	
               
      

            	
              1.

            	
              This
      employment agreement is for three years, but may be terminated by either
      party giving to the other at least three (3) months’ notice in
      writing.

            

    

    
      	
               
      

            	
              2.

            	
              Amendment
      to terms in this agreement must be in writing and signed by both
      parties.

            

    

    
      	
               
      

            	
              3.

            	
              As
      a senior executive of the Company, you have an obligation to keep all
      company information confidential. As well, you are expected to make
      disclosure to the Board and seek approval on other official titles you
      might continue to hold and have active duties with other
      companies.  Accordingly, the Board may review such requests, and
      if the Board feels such position(s) would constitute a threat to the
      Company, or such activities would jeopardize your position with Jingwei
      International, the Board maintains the right to reject; and you should
      resign from those positions, if so requested by the
  Board.

            

    

    
      	
               
      

            	
              4.

            	
              You
      are responsible to comply with the tax laws of HK arising from this
      employment.

            

    

    
      	
               
      

            	
              5.

            	
              All
      of your benefits commence on your first day of employment with the
      Company.

            

    

    

    On behalf
of the Board and the management team, we look forward to working with you in
developing our business to create value for our customers, partners, employees
and shareholders.

    

    

    Sincerely
Yours,

    

    
      	 	
               

            
	 
      	
              I accept the above
      offer – conditional
      upon   legal review of officer indemnity rights
      considerationwith associated terms to be included in this agreement (as addendum to be finalized before Oct
      23,
      09)

            
	
              Geroge
      Du

            	 
      
	
              Chairman
      of the Board

            	
              _______________________________

            
	
              Jingwei
      International Limited

            	
              Rick
      Luk                        Sept
      29, 2009

            

    

    

    

    Encl:
Approved C&B Term Sheet for CEO Position

    

    
      
         

      

      
        3f8k0911_x101-cmgo.htm

Exhibit 10.1 - Letter of Intent

 

Tuesday, September 22, 2009

 

Personal and Confidential

 

 

Nathaniel T. Bradley

AudioEye, Inc.

9070 S. Rita Rd., #1550

Tuscon, AZ 85747

Re:  Acquisition Letter of Intent

 

Dear Mr. Bradley:

 

This letter confirms our understanding of the mutual present intentions of CMG Holdings, Inc.  (the "Purchaser"), Audio Eye, Inc. (the "Company") with respect to the principal terms and conditions under which the Purchaser will acquire
all of the outstanding capital stock of the Company. Such transaction is hereinafter referred to as the "Acquisition." It is the intent of this letter to set out basic parameters for negotiation of a Definitive Agreement referred to in paragraph 3 below. The parties intend this letter agreement to be non-binding provided, however, that the provisions set forth in paragraphs 7,9,10,11,12 and 13 below and this paragraph shall be binding upon the parties hereto.  The parties acknowledge that they have
non reached agreement on major issues such as valuation, stock conversion, earn out formula, subsidiary operations, board representation, ongoing working capital requirements, and the right to review financials, and that either party must terming this Letter at its sole discretion in the event of non-agreement on these or other points. This letter shall not confer on any person or entity, other than the parties hereto, any rights or remedies.

 

1.           Purchase of Stock.  At the closing (the "Closing"), subject to the satisfaction of all conditions precedent contained in the Purchase Agreement, the Purchaser will purchase all of the outstanding
capital stock of the Company, free and clear of any liens, charges, restrictions or encumbrances thereon (collectively, the "Shares"). The Purchaser may assign some or all of its rights hereunder prior to the Closing to one or more of its subsidiaries.  After further review, at the Purchaser's election, the Acquisition may be modified so that the Purchaser acquires the Shares through a merger between the Purchaser or one of its subsidiaries and the Company (the "Merger").

 

2.           Purchase Price.  The purchase price for the Shares will consist of the following:

 

	
·  
	
$500,000 cash to be delivered at closing to fund the Company's working capital requirements

 

	
·  
	
An additional working capital commitment of up to $3 million dollars over a period of 24 months post-closing to be determined and mutually agreed upon by the parties hereto and to be specified in the Purchase Agreement as referenced in Section 3 below.

 

	
·  
	
A number of shares of the common stock of CMG Holdings, Inc. to be determined and mutually agreed upon by the parties hereto and to be specified in the Purchase Agreement as referenced in Section 3 below.

 

 

1

 

	
·  
	
A deferred payment to be paid in cash and stock of the Purchaser based on a multiple of Company’s average net income during an earn-out period to be determined by parties hereto and to be specified in the Purchase Agreement as referenced in Section 3 below.

 

3.           Definitive Agreement.  The Purchaser, the Principal Shareholder and the Company hereby agree to use reasonable diligence to commence good faith negotiations in order to execute and deliver a definitive
stock purchase or merger agreement relating to the Acquisition (the "Purchase Agreement") acceptable to parties hereto subsequent to execution of this letter and within 90 days after the Company’s receipt of the executed Patent License Agreement referenced in paragraph 5i below. All terms and conditions concerning the Acquisition shall be stated in the Purchase Agreement(or agreements to be entered into pursuant to the Purchase Agreement),
including without limitation, representations, warranties, covenants, holdback provisions and indemnities that are usual and customary in a transaction of this nature as such may be mutually agreed upon between the parties.

 

4.           Representations and Warranties.  The Purchase Agreement will contain representations and warranties customary to transactions of this type, including without limitation, representations and warranties
by the selling shareholders and the Company as to (a) the accuracy and completeness of the Company's financial statements for the past three years  and current financial statements; (b) disclosure of all the Company's contracts, commitments and liabilities, direct or contingent; (c) the physical condition, suitability, ownership and absence of liens, claims and other adverse interests with respect to the Company's assets; (d) the selling shareholders’ ownership of the Shares; (e) the absence
of liabilities with respect to the Company, other than as set forth in the balance sheet dated September 1, 2009 and liabilities incurred in the ordinary course of business since that date; (f) the absence of a material adverse change in the condition (financial or otherwise), business, properties, assets or prospects of the Company; (g) the absence of pending or threatened litigation, claims, investigations or other matters affecting the Acquisition; (h) the Company's compliance with laws and regulations
applicable to its business and obtaining all licenses and permits required for its business; and (i) the due incorporation, organization, valid existence, good standing and capitalization of the Company. (j) Company acknowledges and agrees if during a period of twenty-four (24) months following the termination of this letter, the Company completes an equity or debt investment from a party introduced by Purchaser during the term of this letter (as evidenced by a list submitted by Purchaser and delivered to the
Company within thirty (30) days after the termination of this letter) then Purchaser shall be entitled to receive a finder's fee equal to ten percent (10%) of the aggregate gross proceeds or value of the investment received by Company. Said finder's fee shall be paid to Purchaser by wire transfer upon the closing of the investment.

 

5.           Conditions to Consummation of the Acquisition.  The obligation of the Purchaser with respect to the Acquisition shall be subject to satisfaction of conditions customary to transactions of this type,
including without limitation, (a) receipt and approval by the Purchaser of the Company's last year end financial statements and current financial statements; (b) execution of the Purchase Agreement by all parties; (c) the obtaining of all requisite regulatory, administrative, governmental or third party authorizations and consents; (d) absence of a material adverse change in the condition (financial or otherwise), business, properties, assets or prospects of the Company; (e) absence of pending or threatened
litigation, claims, investigations or other matters affecting the Company or the Acquisition; (f) satisfactory completion by the Purchaser of a due diligence investigation of the Company; and (g) confirmation that the representations and warranties of the selling shareholders and the Company are true and accurate in all respects;  (h) the Principal Shareholder having entered into a consulting and non-competition agreement acceptable to the Purchaser; (i) the receipt by Purchaser of an executed copy
of a Patent License Agreement by and between Modavox, Inc. and the Company; (j) commitment of financing from the Purchaser's capital partners.

 

 

2

 

6.           Access to Company. The Company will give the Purchaser and its representatives full access to any personnel and all properties, documents, contracts, books, records and operations of the Company relating
to its business. The Company will furnish the Purchaser with copies of documents and with such other information as the Purchaser may request.

 

7.           No Other Offers.  The Comany and the Principal Shareholder each acknowledeges that the Purchaser will incur significant expense in connectionwith its due diligence reveiw and preparation and negotiation
of the Purchase Agreement. As a result, upon execution of this letter and until this letter is terminated, the Company and the Principal Shareholder shall terminate any existing discussions or negotiations with, and shall cease to provide information to or otherwise cooperate with, any party other than the Purchaser and its representatives with respect to an Acquisition Transaction (as defined below).  In addition, from and after the date hereof, none of the Company nor any of its shareholders, subsidiaries
or affiliates or any of their respective officers, directors, employees, members managers, representatives or agents, will directly or indirectly encourage, solicit, initiate, have or continue any discussions, or negotiations with or participate in any discussions or negotiatios with or provide any information to other otherwise cooperate in any other way with, or enter into any agreement, letter of intent, or agreement in principle with, or facilitate or encourage any effort or attempt by any cooperationi, partnership,
company, person or other entity or group (other than the Purchase and its shareholders, subsidiaries, or affiliates or any of their respective officers, directors, employees, members, managers, representatives, or agents) concerning any merger joring venture, recapitalization, reorganization, sales of substantial assets, sales of any shaers of capital stock, investment or similar transaction involving the Company or any subsidiary or division of the Company (each, an "Acquisition Transaction"). The Company shall
notify the Purchaser promptly of any inquiries, proposals, or offers made by third parties to the Company or any of its shareholders, subsidiaries, or affiliates, or any of their respective officers, director, employees, members, managers, representative or agents with respect to an Aquisition Transaction and furnish the Purchaser the terms thereof  (includind without limitation, the type of consideration offered and the identify of the third party). The Company and the Principals Shareholder shall deal
exclusively with the Purchaser with respect to any possible Acquisition Transaction and the Purchase shall have the right to match the terms of any proposed transactions in lieu of such parties. 

 

8.           Conduct of Business.  The Company shall use its reasonable best efforts to preserve intact the business organization and employees and other business relationships
of the Company; shall continue to operate in the ordinary course of business and maintain its books, records and accounts in accordance with generally accepted accounting principles, consistent with past practice; shall use its reasonable best efforts to maintain the Company's current financial condition, including working capital levels; shall not incur any indebtedness or enter into any agreements to make business or product line acquisitions; and shall not declare or make any dividend or stock distributions.

 

9.           Expenses.  Each of the parties shall pay all of its expenses incident to this letter, the Purchase Agreement and consummation of the transactions contemplated hereby and thereby.  The
Principal Shareholder and the Company each represent and warrant that there are no brokerage or finder's fees which are or will be payable in connection with the Acquisition.

 

10.           Confidentiality.  The Purchaser and the Company have executed a Confidentiality Agreement, dated as of June 22, 2009, which agreement shall survive the execution and
deliver of this letter.

 

 

3

 

11.           Disclosure.  Without the prior written consent of the Purchaser, the Company will, and each party hereto will cause its directors, officers, shareholders,  employees, agents, other representatives
and affiliates not to, disclose to any person the fact that discussions or negotiations are taking place concerning the transactions contemplated hereby, the status thereof, or the existence of this letter and the terms thereof, unless in the opinion of such party disclosure is required to be made by applicable law, regulation or court order, and such disclosure is made after prior consultation with the Purchaser.

 

12.           Termination.  Subject to the terms of this letter, upon the earlier of (a) the mutual written agreement of the parties hereto or (b) the failure by the parties hereto to execute and deliver the
Purchase Agreement subsequent to execution of this letter and within 60 days after the Company’s receipt of the executed Patent License Agreement referenced in paragraph 5i above, this letter shall terminate and the parties shall be released from all liabilities and obligations with respect to the subject matter hereof with the exception of paragraph 4(j), 9, 10, 12, and 13 which shall survive the termination of this letter.

 

13.       Dispute Resolution.    In the event of any dispute arising out of or relating to this letter such dispute shall be resolved exclusively by confidential binding arbitration with the Chicago, Illinois branch of
JAMS to be governed by JAMS’ commercial rules of arbitration in effect at the time of the commencement of arbitration and heard before one arbitrator. Each party shall bear its own attorneys’ fees, expert witness fees, and costs incurred in connection with any arbitration.

 

14.  Right to Complete Due Diligence and Acquisition.  For valuable consideration, the receipt of which is hereby acknowledged, the Company and the Principal Shareholder agree that the Purchaser shall have the right to complete its due diligence and to
consummate the Acquisition on the terms outlined herein, and the Company and the Principal Shareholder agree to cooperate fully and in good faith to complete the transaction as expeditiously as possible after the Purchaser has confirmed its due diligence investigation to its satisfaction.

 

15.           Counterparts.    This letter may be executed in one or more counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument.

 

16.           Governing Law.  This letter shall
be governed by the laws of the State of Illinois without regard to such state’s principles of conflicts of laws.

 

 

*   *    *    *

 

  

4

  

If the foregoing correctly sets forth our mutual understanding, please so indicate by signing two copies of this letter in the spaces provided below and returning one copy to us no later than 11:59 p.m. on September 22nd, 2009.  This letter will expire
if you have not returned to us an executed copy of this letter by said time.

 

 

Very truly yours,

 

CMG Holdings, Inc.

By:  /s/Jim Ennis_____

Jim Ennis, COO

 

 

Accepted and agreed.

 

Audio Eye, Inc.

 

By: /s/Nathaniel T. Bradley                                                                      

By:    Nathaniel T. Bradley, CEO                                                                  

  

5

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