Arrangement Terms. The parties hereto agree that it is their intent to enter into an Arrangement whereby DTV shareholders would transfer their shares to a yet to be created wholly owned Yukon subsidiary of INPM and in return receive freely tradable INPM shares. The ratio of exchange of DTV Shares for shares of INPM would be one share of DTV for one and a half (1 1/2) newly created shares of INPM. Upon closing of the Arrangement, current DTV shareholders would own 84.99% of the issued and outstanding shares of INPM on a currently outstanding basis, or 81.64% on a fully diluted basis. Warrants and options to purchase shares in DTV would be exchanged for warrants and options to purchase INPM Shares at the same ratio. ISOLATION OF BUSINESS RISK. As a condition precedent to the closing (the "Closing") of the transaction to be completed in the Arrangement, INPM shall have transferred its pre-existing business into its wholly owned subsidiary Inprimis Technologies, Inc., and Datawave is reasonably satisfied that Inprimis' maximum aggregate liability for all matters arising out of that business at or prior to Closing is less than One Million Seven Hundred Thousand Dollars ($1,700,000). ARRANGEMENT AGREEMENT. DTV and INPM will negotiate and execute a formal Arrangement Agreement that has the terms and conditions set out herein and contains representations and warranties as are normal and prudent for Share Exchange Agreements conducted among Nasdaq listed companies. The specific terms of the Arrangement will be made with a view to reducing any negative tax implications for DTV and INPM shareholders. The Arrangement Agreement will be negotiated and signed at such time as the parties deem it expedient.
Arrangement Terms a. This Arrangement shall begin when signed by both parties and will remain in effect until all funds awarded by it and the interest earned by those funds have been expended.
