ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (the "Agreement") is made to be effective
September 5, 1997 (the "Effective Date"), among NEW FRONTIER MEDIA, INC., a
Colorado corporation, COLORADO SATELLITE BROADCASTING, INC. ("Buyer"), a
wholly owned subsidiary of New Frontier Media, Inc., and 1248663 ONTARIO
INC., an Ontario corporation ("Seller"). New Frontier Media, Inc. and Buyer
are collectively referred to in this Agreement as "Buyers."
This Agreement sets forth the terms and conditions upon which Buyers agree
to purchase from Seller, and Seller agrees to sell to Buyers, certain properties
and assets of Seller ("Subject Assets").
NOW THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties contained in this Agreement, the parties agree as
follows:
DEFINITIONS
"Newco" means 1248663 Ontario Inc., an Ontario corporation.
"Adult Movies Business" means any and all of Buyer's present or contemplated
satellite broadcast services on television or any other medium, including cable
television and the Internet, which broadcasts, replays, and/or otherwise
exploits feature length adult programming and all related promotional content
and other programming of a non-rated or X-rated nature and whose main theme
embodies nudity and/or sexually explicit material between consenting adults and
such other related business assets as are necessary for the operation thereof.
"adverse or adversely", when used alone or in conjunction with other terms
(including without limitation "affect," "change" and "effect"), means any event
discovered by either party after the date hereof which is reasonably likely in
the respective business judgment of either Buyers or Seller, as the case may be,
to be expected to (a) adversely affect the validity or enforceability of this
Agreement, or (b) adversely affect the business, operation, management or
properties of Seller taken as a whole or Buyers, or (c) impair Seller or Buyers,
or (d) adversely affect the respective aggregate rights and remedies of either
party under this Agreement.
"Agreement" means this Agreement as originally in effect, including unless the
context otherwise specifically requires, all schedules and all exhibits hereto,
and as any of the same may from time to time be supplemented, amended, modified
or restated in the manner herein or therein provided.
"Applicable Law" shall mean any Law of any Authority, whether domestic or
foreign, including without limitation all federal and state securities and
environmental laws, to which a person or entity is subject or by which it or any
of its business or operations is subject or any of its property or assets is
bound.
1
"Authority" means any governmental or quasi-governmental authority, whether
administrative, executive, judicial, legislative or other, or any combination
thereof, including without limitation, any federal, provincial, state,
territorial, county, municipal or other government or governmental or
quasi-governmental agency, arbitrator, authority, board, body, branch, bureau,
central bank or comparable agency, or Entity, commission, corporation, court,
department, instrumentality, master, mediator, panel, referee, system, or other
political unit or subdivision or other Entity of any of the foregoing whether
domestic or foreign.
"Buyers' Disclosure Schedule" means the schedule attached as SCHEDULE 8.2(a).
"Closing" means the closing of the transactions contemplated herein and "Closing
Date" means the date on which the closing takes place.
"Collateral Agreements" means agreements and other documents executed or
required to be executed pursuant to the terms of this Agreement.
"Entity" means any corporation, firm, unincorporated organization, association,
partnership, limited liability company, trust (inter vivos or testamentary),
estate of a deceased, individual, business trust, joint stock company, joint
venture or other organization, entity or business, whether acting in an
individual, fiduciary or other capacity, or any Authority.
"Governmental Authorizations" means all approvals, concessions, consents,
franchises, licenses, permits, and other authorizations of all applicable
Authorities.
"material, materially or materiality", unless specifically stated otherwise,
shall be determined without regard to the fact that various provisions of this
Agreement set forth specific dollar amounts.
"New Frontier" means New Frontier Media, Inc.
"Private Authorizations" means all approvals, concessions, consents, franchises,
licenses, permits, and other authorizations of all persons (other that
Authorities) including without limitation those with respect to copyrights,
computer software programs, patents, service marks, trademarks, trade names,
technology and know-how.
"Subject Assets" means:
(a) that equipment (including without limitation essential spares and
replacement parts) and software technology, furniture, machinery,
appliances, and other tangible personal property and technology used
in and historically allocated to the operation of a satellite
operation uplink facility as specifically set forth in SCHEDULE 1(a),
"the Uplink Facilities Equipment List", and which shall be in
operating order;
(b) all hardware, equipment, software license assignments, furniture,
machinery, appliances and other tangible personal property as set
forth in SCHEDULE 1(b), "The Call Center Equipment List"; and
2
(c) any tort or insurance proceeds arising out of any damages or
destruction of any of the Subject Assets herein between the date of
this Agreement and the Closing Date to the extent required to repair
or replace any subject asset being acquired hereunder.
"Transactions" means the transactions contemplated by this Agreement and all
Collateral Agreements.
ARTICLE 1. TRANSFER OF ASSETS
Subject to the terms and conditions set forth in this Agreement, Seller agrees
to sell, convey, transfer, assign and deliver to Buyer, and Buyers agrees to
purchase from Seller at the Closing described in ARTICLE 3, all of the Subject
Assets, whether tangible, intangible, real, personal or mixed, and wherever
located, including those assets set forth in the lists of SCHEDULES 1(a) and (b)
and as further described in this ARTICLE 1.
1.1 UPLINK FACILITY. Pursuant to SCHEDULE 1.1, the Uplink Management Services
Agreement, Newco agrees to operate, maintain, manage, and sustain an uplink and
playback facility (at 0000 Xxx Xxxx Xxxxx, Xxxxxx, Xxxxxxx) capable of providing
continual uninterrupted services on behalf of Buyer for its Adult Movies
Business. The term of the Uplink Management Services Agreement shall be three
(3) years with the right at Buyers' option to successive one year renewals on
terms to be negotiated. Newco may at its option acquire a building suitable for
relocating the current satellite broadcast uplink facility in order to fulfill
its obligations under the Uplink Management Services Agreement. In the event of
such move, Newco shall be responsible for all uplink moving/installations costs,
to the New Uplink Facility. Buyers shall be responsible for the reasonable costs
associated with the necessary tenant finish at the New Uplink Facility. Newco
shall ensure that Buyers have the right to use and operate the existing Uplink
Facility under the terms of the Uplink Management Services Agreement until the
New Uplink Facility is ready for use.
1.2 CALL CENTER FACILITY. Pursuant to SCHEDULE 1.2, the Call Center Interim
Services Agreement, Newco agrees to receive and process subscriber calls on
behalf of Buyers from a call center to be located at 0000 Xxxxxxxx Xxxxx,
Xxxxxx, Xxxxxxx using the call center assets included in the Subject Assets for
a period of up to nine (9) months from the Closing, at a flat, prepaid monthly
rental of US$275,000.00 and on other terms to be negotiated in a Call Center
Lease Agreement. Prior to the end of the nine (9) month period, Buyers shall
have the right to unilaterally terminate such agreement upon sixty (60) days
prior written notice. Pursuant to the Call Center Interim Services Agreement,
Newco agrees to deposit all amounts collected thereto into a merchant account
and a checking account to be established in the name of Buyer.
1.3 INVESTMENT CANADA ACT. The parties agree that the Transactions do not
require notice, review, approval or allowance under the INVESTMENT CANADA ACT
and it is not a condition precedent to the Closing of the Transactions that any
notice be given or approval, allowance or consent be obtained in respect
thereof. Notwithstanding anything to the contrary in this
3
Agreement, no representation, warranty or covenant given by any party under or
pursuant to this Agreement is intended or shall be deemed to include a
representation, warranty or covenant related to the INVESTMENT CANADA ACT.
ARTICLE 2. PURCHASE PRICE
2.1 PAYMENT OF PURCHASE PRICE. In consideration for the transfer and assignment
of the Subject Assets and in consideration of the representations, warranties
and covenants of Seller set forth herein, Buyers on the conditions set forth
herein:
(a) shall pay subject to ARTICLE 5, an xxxxxxx money deposit in the amount
of US$10,000.00;
(b) shall deliver to Seller at the Closing (as hereinafter defined)
US$660,172.00 plus taxes as provided in ARTICLE 6, payable in cash as
more fully described in SECTION 3.2;
(c) shall deliver to Seller at the Closing a promissory note in the amount
of US$185.711.00 executed by Buyer and payable to Seller in the form
substantially similar to that set forth in SCHEDULE 2.1(c). Buyer's
performance under the promissory note shall be guaranteed by New
Frontier. Additionally, in order to secure Buyer's obligations
pursuant to the promissory note, at the Closing Buyer shall execute
and deliver to Seller a security agreement in the form attached as
Exhibit A to SCHEDULE 2.1(c) pursuant to which Buyer shall grant to
Seller a security interest/lien in all of its furniture, fixtures,
equipment and inventory, ranking first in priority over all other
security interests/lienholders, except the interests of Buyers' chief
financial institutions which shall have a first priority up to an
amount of US $2,000,000.00 and the interests another secured creditor
approved by Seller which shall have a second priority up to an amount
of US$725,510; and
(d) shall assume and discharge, and shall indemnify Seller against,
liabilities and obligations of Seller under the leases, contracts or
other agreements, if any, specified on SCHEDULE 4 but only to the
extent that such liabilities or obligations accrue on or after the
Closing Date.
2.2 ALLOCATION OF THE PURCHASE PRICE. The parties agree that the Purchase Price
(defined as the sum of the amounts specified in SECTIONS 2.1(b) and (c) above
shall be allocated as set forth in SCHEDULE 2.2 and that such allocation will be
used by the parties in reporting the transaction contemplated by this Agreement
for tax purposes.
2.3 ELECTIONS. Seller and Buyers will on or before the Closing Date jointly
execute an election, in prescribed form and containing the prescribed
information, to have subsection 167(1.1) of the EXCISE TAX ACT (Canada) apply
to the sale and purchase of the Subject Assets hereunder so that no tax is
payable in respect of under Part IX of the EXCISE TAX ACT (Canada). The
Buyers will file such election with the Minister of National Revenue within
the
4
time prescribed by the Excise Tax Act (Canada).
ARTICLE 3. THE CLOSING
The closing of the purchase and sale of the Subject Assets by Seller to Buyers
(the "Closing") shall take place at 0000 Xxx Xxxx Xxxxx, Xxxxxx, Xxxxxxx,
sixty-four (64) days after the date of this Agreement or at such other place
and/or time as the parties may agree in writing (the "Closing Date"). In the
event that the conditions specified in this Agreement have not be fulfilled by
such date, either Seller or Buyers may extend the Closing Date for a period or
periods not exceeding an aggregate of thirty (30) days by written notice to the
other parties.
3.1. SELLER'S OBLIGATIONS AT CLOSING.
(a) At the Closing Seller shall deliver or cause to be delivered to Buyer:
(i) assignment and assumption agreements for personal property
leases, all contracts and agreements of Seller to be assumed in
connection herewith, in form and substance reasonably
satisfactory to Buyers' counsel, and accompanied by all consents
required by this Agreement and the personal property leases,
contracts and agreements being assigned;
(ii) instruments of assignment and transfer (including a xxxx of sale)
of all the Subject Assets in form and substance reasonably
satisfactory to Buyers' counsel; and
(iii) such other documents as shall be reasonably requested by Buyers
or Buyers' counsel (for example, a BULK SALES ACT affidavit).
(b) Simultaneously, with the consummation of the transfer, Seller, through
its officers, agents and employees, shall put Buyer into full
possession and enjoyment of all the Subject Assets to be sold,
conveyed, transferred, assigned and delivered by this Agreement.
(c) Seller, at any time before or after the Closing Date shall execute,
acknowledge, and deliver any further deeds, assignments, conveyances
and other assurances, documents and instruments of transfer,
reasonably requested by Buyers and shall take any other action
consistent with the terms of this Agreement that may be reasonably
requested by Buyers for the purpose of assigning, transferring,
granting, conveying and confirming to Buyers, or reducing to
possession, any or all property and assets to be conveyed or
transferred by this Agreement. If requested by Buyers, Seller further
agrees to prosecute or otherwise enforce in their own names for the
benefit of Buyers any claims, rights, or benefits that are transferred
to Buyers by this Agreement and that require prosecution or
enforcement in any of Seller's names. Any prosecution or enforcement
of claims, rights, or benefits under this Section shall be solely at
Buyer's expense, unless the
5
prosecution or enforcement is made necessary by a breach of this
Agreement by Seller.
3.2. BUYER'S OBLIGATIONS AT CLOSING. At the Closing Buyers shall deliver to
Seller against delivery of the items specified in SECTION 2.1, a certified bank
or cashier's check, or a wire transfer of immediately available funds, in the
amount of US$660,172.00 plus taxes pursuant to ARTICLE 6 payable to Seller and
the promissory note payable to Seller in the amount of US$185,711.00. Seller
shall notify Buyers within five (5) days of the Closing Date whether the amount
payable at Closing shall be delivered by certified bank or cashier's check, or
by wire transfer. At closing, Buyers shall deliver to Seller such documents
that shall be reasonably requested by Seller or Seller's counsel.
ARTICLE 4. ASSUMPTION OF LIABILITIES
Buyers are not assuming any debt, liability or obligation of Seller, whether
known or unknown, fixed or contingent, except as herein specifically otherwise
provided. Seller agrees to indemnify and hold Buyers harmless against all debts,
claims, liabilities and obligations of Seller not expressly assumed by Buyers
hereunder, and to pay any and all attorneys' fees and legal costs incurred by
Buyers, its successors and assigns in connection therewith. Buyers shall have
the benefit of and shall perform and assume all leases, contracts and
agreements, if any, specifically listed on SCHEDULE 4, in accordance with the
terms and conditions thereof, except to the extent modifications are
specifically set forth in SCHEDULE 4 and except to the extent set forth in the
assignments or assignment and assumption agreements for such leases, contract
and agreements.
ARTICLE 5. RETURN OF DEPOSIT
Upon execution of this Agreement, Buyers shall pay to Seller an xxxxxxx money
deposit of US$2,500. Upon parties' final acceptance of the form and content of
the schedules to this Agreement, Buyers shall pay to Seller a further xxxxxxx
money deposit of US$7,500. Such deposits shall be returned to Buyers if the
Transactions are not closed due to: (a) the failure of any conditions set forth
in ARTICLE 11 to be met at or before the Closing as a result of any act or
omission by Seller; or (b) the occurrence of any default by Seller described in
SECTION 17.3. If the Transactions are not closed for any other reason, the
deposit shall be retained by Seller. Upon Closing, the deposit shall be applied
towards the payment due to Seller under SECTION 2.1(b).
ARTICLE 6. TAXES
Buyers shall pay all sales, use and transfer taxes arising out of the transfer
of the Subject Assets, including any foreign transfer taxes and shall pay its
portion, prorated as of the Closing Date, of state, provincial, and local real
and personal property taxes of the business being sold hereunder. Buyers shall
not be responsible for any business, occupation, withholding or similar tax, or
for any income, sales, use, value-added or similar taxes related to any period,
or transaction
6
occurring during any period, before the Closing Date.
ARTICLE 7. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyers that the following facts and
circumstances are and will be at all times up to the Closing Date, except as
contemplated hereby, true and correct, and hereby acknowledge that such facts
and circumstances constitute the basis upon which Buyers are induced to enter
into and perform this Agreement. Each warranty set forth in this ARTICLE 7 shall
survive eighteen (18) months past the Closing Date and any investigation made by
or on behalf of Buyers. Buyers shall conduct their own due diligence
investigation and that investigation shall include an investigation into whether
Seller are or have operated in accordance with the warranties and
representations of Seller. If prior to the closing date, Buyers believe they
have discovered any breach of the representations and warranties of Seller, they
shall forthwith advise Seller in writing of such breach. If Seller does not or
cannot cure such breach prior to the Closing Date, Buyers may elect to close (in
which case the breach shall be deemed non-material) or not close provided such
breach is material. If Buyers fail to give such notice then the breach will be
deemed non-material.
7.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. Newco is a corporation
organized, validly existing, and in good standing under the laws of Ontario.
Seller has all necessary corporate powers to own its properties and to carry on
its business as now owned and operated by it, and is duly qualified to transact
any business and is in good standing in all jurisdictions in which the nature of
its business or its properties makes such qualification necessary.
7.2 ABSENCE OF SPECIFIED CHANGES. Since March 31, 1997, there has not been any:
(a) material and adverse destruction, damage to, or loss of any of the
Subject Assets (whether or not covered by insurance);
(b) labor trouble or other event or condition of any character materially
and adversely effecting the financial condition, business, assets or
prospects of Seller;
(c) revaluation by Seller of any of the Subject Assets in a manner that
would be materially adverse to Buyers;
(d) execution, creation, amendment, nonrenewal or termination of any
material contract, agreement or license to which Seller is a party,
except in the ordinary course of business or except as can be
terminated prior to the Closing Date without materially adversely
effecting the Subject Assets;
(e) creation or assumption by Seller of any mortgage, pledge, security
interest or lien or other encumbrance on any of the Subject Assets,
except as set forth in SCHEDULE 7.2(e);
(f) other event or condition of any character of which Seller has
knowledge that has
7
or might reasonably have a material adverse effect on the Subject
Assets, except as set forth in SCHEDULE 7.2(f); or
(g) agreement by Seller to do any of the things described in the preceding
clauses (a) through (f).
7.3 SUBJECT ASSETS SUFFICIENT FOR OPERATIONS. The Subject Assets constitute
all assets (other than premises) necessary for the continued uninterrupted
operation by Seller of a call center and uplink facility for the Buyers'
Adult Movies Business. Except as stated in SCHEDULE 4, none of the Subject
Assets are held under any lease, security agreement, conditional sales,
contract, or other title of retention or security agreement, or are in the
possession of anyone other than Seller.
7.4 TRADE NAMES, TRADEMARKS AND COPYRIGHTS. Seller does not own any
trademark, service xxxx trade name, trade secret, or brand name. To the
actual knowledge of Seller, no person has made any outstanding claims against
Seller in respect of any trademark, trademark registration or application,
service xxxx, trade name, copyright, copyright registration or application or
brand name, the use of which is necessary or contemplated in connection with
the performance of any contract to which Seller is a party.
7.5 TITLE TO ASSETS. To the best of Seller's knowledge, Seller shall at Closing
have good and marketable title to all the Subject Assets free and clear of
mortgages, liens, pledges, charges, encumbrances, equities, claims, easements,
rights of way, covenants, conditions, or restrictions, except for (i) the lien
of current taxes not yet due and payable; and (ii) possible minor matters that,
in the aggregate, are not substantial in amount and do not materially detract
from or interfere with the present or intended use of any of these assets. The
parties acknowledge that Seller will not own all of the Subject Assets on the
date this Agreement is executed, but will be acquiring Subject Assets prior to
Closing and no representation, warranty, condition or covenant contained herein
is intended to state otherwise. All the Subject Assets are in good operating
condition and repair, ordinary wear and tear excepted.
7.6 INSURANCE POLICIES. SCHEDULE 7.6 to this Agreement is a description of all
insurance policies held by Seller concerning the Subject Assets. All these
policies are in the respective principal amounts set forth in SCHEDULE 7.6.
Seller has maintained and now maintains (a) insurance on all the Subject Assets
of a type customarily insured, covering property damage by fire or other
casualty, and (b) adequate insurance protection against all liabilities, claims,
and risks against which it is customary to insure. Such insurance coverage will
be cancelled as of Closing.
7.7 OTHER CONTRACTS. Copies of all contracts which will be assigned to or
assumed by Buyers under this Agreement are attached as part of SCHEDULE 4.
Except as set forth in SCHEDULE 4 and to the best of Seller's knowledge, the
Subject Assets will not at Closing or thereafter (as a result of actions or
conduct of Seller) be bound or potentially bound by, any distributor's or
manufacturer's representative or agency agreement, any output or requirements
agreement, any agreement not entered into in the ordinary course of business,
any indenture, mortgage, deed of trust, lease or any other agreement that is
unusual in nature, duration or amount (including, without limitation, any
agreement requiring the performance by Seller of any obligation for a period of
time extending beyond one year from Closing Date or calling for consideration of
more
8
than US$ 10,000.00 or requiring purchases at prices in excess of, or sales at
prices lower than, prevailing market prices). To the best of Seller's knowledge,
there is no default or event that with notice or lapse of time, or both, would
constitute a default by any party to any of the agreements listed in SCHEDULE 4
and such contracts remain in full force and effect. Seller has not received
notice that any party to any of the agreements listed in SCHEDULE 4 intends to
cancel or terminate any of these agreements or to exercise or not exercise any
options under any of these agreements. Seller is not a party to, nor is Seller
or the Subject Assets bound by, any agreement that is materially adverse to the
business, assets, property, operating results, prospects or financial condition
of Seller.
7.8 COMPLIANCE WITH LAWS. Seller has received no notice of any violation of any
statutes, laws or regulations (including, without limitation any applicable
obscenity, environmental, health, building, zoning, or other law, ordinance or
regulations) from any Authority the violation of which may materially adversely
affect its ability to fulfill its obligations under this Agreement. Seller is
not in violation of or default under any provisions of their Articles of
Incorporation or Bylaws, both as amended. The execution, delivery and
performance of the Agreement and the consummation of the Transactions will not
result in any such violation or default, or be in conflict with or constitute,
with or without the passage of time or the giving of notice or both, a default
under Seller's Articles of Incorporation or Bylaws, both as amended.
7.9 LITIGATION. There is no suit, action, arbitration or legal, administrative
or other proceeding, or governmental investigation ("Actions") pending or, to
the best knowledge of Seller, threatened, against or affecting Seller, or any of
its business, assets or financial condition, or against any officer, director or
employee of Seller in connection with such officer's, director's or employee's
relationship with or actions taken on behalf of Seller. Seller is not a party
to or subject to the provisions of any order, writ, injunction, judgment or
decree of any court or government agency or instrumentality, and there are no
actions or claims by Seller currently pending or, to which Seller intends to
initiate. To the best knowledge of Seller, there has not occurred any event nor
does there exist any condition on the basis of which any litigation, proceeding
or investigation is likely to be instituted by or against Seller. Seller is not
in default with respect to any order, writ, injunction or decree of any federal,
state, local or foreign court, department, agency or instrumentality.
7.10 AGREEMENT WILL NOT CAUSE BREACH OR VIOLATION. Neither the entry into this
Agreement nor the consummation of the transactions contemplated hereby will
result in or constitute any of the following events where the occurrence of such
event would render Seller materially unable to comply with this Agreement: (a) a
default or an event that, with notice or lapse of time or both, would be a
default, breach or violation of any lease, license, promissory note, conditional
sales contract, commitment, indenture, mortgage, deed of trust or other
agreement, instrument or arrangement; (b) an event that would permit any party
to terminate any agreement or to accelerate the maturity of any indebtedness or
other obligation; (c) the creation or imposition of any lien, charge or
encumbrance on any of the Subject Assets; or (d) the violation of any law,
regulation, ordinance, judgment, order or decree.
7.11 AUTHORITY AND CONSENTS. Except as set forth in SCHEDULE 7.11, Seller has
the right, power, legal capacity and authority to enter into, and perform their
obligations under this Agreement,
9
and no approvals or consents of any persons other than the shareholders of
Seller are necessary in connection with it. The execution and delivery of this
Agreement and the consummation of this transaction by Seller has been, or prior
to the Closing will have been, duly authorized by all necessary corporate action
of Seller (including any necessary action by Seller's security holders). This
Agreement constitutes a legal, valid and binding obligation of Seller
enforceable in accordance with its terms except as limited by bankruptcy and
insolvency laws and by other laws affecting the rights of creditors generally.
7.12 INTEREST IN CUSTOMERS, SUPPLIERS AND COMPETITORS. Except as set forth in
SCHEDULE 7.12 or as contemplated by a Collateral Agreement, neither Seller nor
any officer or director or shareholder of Seller, nor any spouse or child of any
of them has any direct or indirect interest in any competitor, supplier or
customer of Seller or in any person with whom Seller is doing business.
7.13 INFORMATION FURNISHED TO BUYER FOR BULK TRANSFER NOTICE. For the purposes
of furnishing notices under the BULK SALES ACT (Ontario), SCHEDULE 7.13 is a
true, complete and correct list of all names and business addresses used by
Newco.
7.14. DOCUMENTS DELIVERED. Each copy or original of any agreement, contract or
other instrument which is identified in any exhibit or schedule delivered by
Seller or its counsel to Buyers (or their counsel or representatives), whether
before or after the execution hereof, is in fact what it is purported to be by
Seller and has not been amended, canceled or otherwise modified.
7.15 FULL DISCLOSURE. None of the representations and warranties made by Seller
or made in any letter, certificate or memorandum furnished or to be furnished by
Seller or on its behalf, contains or will contain any untrue statement of a
material fact, or omits any material fact the omission of which would make the
statements made misleading and materially adverse to Buyers.
7.16 SUBJECT ASSETS ARE SUFFICIENT TO OPERATE BUSINESS.
(a) The Buyers are acquiring the ownership, possession or use under this
Agreement of all or substantially all of the property and assets that
can reasonably be regarded as necessary for Buyer to be capable of
operating an uplink facility and call center facility as contemplated
herein (excluding premises for such facilities) as a business within
the meaning of section 167 of the EXCISE TAX ACT (Canada).
(b) Newco will be at Closing registered under Part IX of the EXCISE TAX
ACT (Canada).
7.17 SOLVENCY. As of the execution and delivery of this Agreement, and, after
giving effect to the consummation of the Transactions, Seller will be solvent.
7.18 TAX MATTERS. Seller shall continue to be responsible for and will discharge
all obligations and liabilities in respect to taxes pertaining to the Subject
Assets which arise or accrue for all periods ending on or before the Closing
Date (but excluding the taxes referred to in ARTICLE 6). Seller will indemnify
and hold harmless Buyers against any and all claims and demands incurred
10
by Buyers that directly or indirectly arise out of such obligations or
liabilities. Without limiting the foregoing, Seller will be responsible for all
federal, state, provincial, local, foreign and other net income, gross income,
gross receipts, alternative or add on minimum, profits, sales, use, occupation,
value-added, ad valorem, transfer, franchise, license, lease, service use,
withholding, payroll, employment, excise, severance, premium, property, windfall
profits, customs, duties, or other taxes, fees assessments, or charges of any
kind whatsoever, together with any interest, penalties or additions to tax
imposed with respect thereto, or any obligations to any agreements or
arrangements with respect to and taxes described above.
7.19 EMPLOYMENT MATTERS. Buyer shall be under no obligation to offer employment
to any of Seller's employees ("affected employees"), except as otherwise stated
in this Agreement. Buyer may, however, choose to retain the services of or to
offer employment to one or more of the affected employees, should it wish to do
so, subject to SECTION 13.4.
Seller will continue to be responsible for and will discharge all obligations
and liabilities in respect of the affected employees which arise or accrue prior
to, on or after the Closing Date. Seller will indemnify and save harmless Buyers
against any and all claims and demands incurred by Buyers that directly or
indirectly pertain to or arise out of such obligations or liabilities. Without
limiting the forgoing, Seller will be responsible for and will bear and
discharge any and all obligations and liabilities for wages, severance pay,
termination pay, notice of termination of employment or pay in lieu of such
notice, damages for wrongful discharge or other employee benefits or claims,
including vacation pay, which may arise in connection with the employment or
dismissal of any of the affected employees, including any interest, award,
judgment or penalty relating thereto and any costs or expenses incurred by
Buyers in defending against any claim or demand relating to such obligation or
liabilities.
ARTICLE 8. BUYERS' REPRESENTATIONS AND WARRANTIES
Buyers represents, warrants, and covenants to, and agrees with Seller as
follows:
8.1 ORGANIZATION AND BUSINESS: POWER AND AUTHORITY: EFFECT OF TRANSACTION.
(a) Each Buyer (i) is a corporation duly organized, validly existing and
in good standing under the laws of its jurisdiction of incorporation;
(ii) has all requisite power and authority to own or hold under lease
its properties and to conduct its business as now conducted and as
presently proposed to be conducted, and has in full force and effect
all Governmental Authorizations and Private Authorizations and has
made all governmental filings, to the extent required for such
ownership and lease of its property and conduct of its business and is
in good standing in such jurisdictions in which the failure to be in
good standing would have a material adverse effect upon its property
or the nature of its business or operations.
(b) Each Buyer has all requisite power and authority and has in full force
and effect all Governmental Authorizations and Private Authorizations
in order to enable it
11
to execute and deliver, and to perform its obligations under, this
Agreement and each Collateral Agreement executed or required to be
executed pursuant hereto or thereto or to consummate the Transactions
and the Collateral Agreements; and the execution, delivery and
performance of this Agreement and each Collateral Agreement has been
duly authorized by all requisite corporate or other action. No further
action or approval on the part of Buyers' stockholders is required in
connection with the execution, delivery and performance of this
Agreement or each Collateral Agreement or the consummation of the
Transactions. This Agreement has been duly executed and delivered by
each Buyer and constitutes, and each Collateral Agreement executed or
required to be executed pursuant hereto or thereto or to consummate
the Transactions when executed and delivered by Buyers will
constitute, legal, valid and binding obligations of Buyers enforceable
in accordance with their respective terms.
(c) Neither the execution and delivery of this Agreement or any Collateral
Agreement, nor the consummation of the Transactions, nor compliance
with the terms, conditions and provisions hereof or thereof by Buyers
will conflict with, or result in a material breach or violation of; or
constitute a material default under, any Applicable Law on the part of
Buyers or will conflict with, or result in a material breach or
violation of, or constitute a material default under, or permit the
acceleration of any obligation or liability in, or but for any
requirement of giving notice or passage of time or both would
constitute such a conflict with, material breach or violation of, or
material default under, or permit any such acceleration in, any
contractual obligation of Buyers.
8.2 FINANCIAL AND OTHER INFORMATION
(a) Buyers have heretofore furnished to Seller copies of the consolidated
financial statements of New Frontier and all of its subsidiaries
("Buyers' Financial Statements"). Buyers' Financial Statements,
including in each case the notes thereto, have been prepared in
accordance with GAAP applied on a consistent basis throughout the
periods covered thereby, except as otherwise noted therein or as set
forth in SCHEDULE 8.2(a) (Buyers' Disclosure Schedule), and are true,
accurate and complete, do not contain any untrue statement of material
fact or omit to state a material fact required by GAAP to be stated
therein or necessary in order to make the statements contained therein
not misleading, and fairly present the financial condition and the
results of operations of Buyers, on the bases therein stated, as of
the respective dates thereof; and for the respective periods covered
thereby subject, in the case of unaudited financial statements, to
normal year-end audit adjustments and accruals.
(b) Neither Buyers' Disclosure Schedule, Buyers' Financial Statements,
this Agreement, any Collateral Agreement, or any data, information or
statement furnished or to be furnished by or on behalf of Buyers
pursuant to this Agreement or any Collateral Agreement or required to
consummate the Transactions, contains or will contain any untrue
statement of material fact or omits or will omit
12
to state a material fact required to be stated herein or therein or
necessary in order to make statements contained herein or therein not
misleading and all Collateral Agreements, data, information or
statements are and will be true, accurate and complete.
8.3 CHANGES IN CONDITION. Since the date of the most recent financial
statements forming part of Buyers' Financial Statements, there has been no
material adverse change in Buyers taken as a whole or individually. Except
matters of general applicability to Buyers' industries, there is no event known
to Buyers which materially adversely affects Buyers taken as a whole or
individually, or the ability of Buyers to perform any of the obligations set
forth in this Agreement or any Collateral Agreement or to consummate the
Transactions.
8.4 COMPLIANCE WITH PRIVATE AUTHORIZATION. Each Buyer has obtained all Private
Authorizations which are necessary for the ownership by such Buyer of its
properties and the conduct of its business as now conducted or as presently
proposed to be conducted or which, if not obtained and maintained, could, singly
or in the aggregate, materially adversely affect such Buyer. Neither Buyer is in
breach or violation of; or is in default in the performance, observance or
fulfillment of; any Private Authorization, and no event exists or has occurred,
which constitutes, or but for any requirement of giving of notice or passage of
time or both would constitute, such a breach, violation or default, under any
contractual obligation of such Buyer or Private Authorization, except for such
defaults, breaches or violations, as do not and will not have in the aggregate
any material adverse affect on such Buyer or the ability of such Buyer to
perform any of its obligations set fourth in this Agreement or any Collateral
Agreement or to consummate the Transactions. No Private Authorization is the
subject of any pending or, to Buyers' knowledge, information or belief;
threatened attack, revocation or termination.
8.5 COMPLIANCE WITH GOVERNMENTAL AUTHORIZATIONS AND APPLICABLE LAW.
(a) Each Buyer has obtained all other Governmental Authorizations which
are necessary for the ownership or uses of its properties and the
conduct of its business as now conducted or as presently proposed to
be conducted and which, if not obtained and maintained, would singly
or in the aggregate, have any material adverse affect on such Buyer
and its subsidiaries taken as a whole. No other Governmental
Authorization is subject of any pending or, to Buyers' knowledge,
information and belief; threatened challenge or proceeding to revoke
or terminate any such Governmental Authorization. Buyers' have no
reason to believe that any other Governmental Authorization would not
be renewed in the name of Buyer by the granting Authority in the
ordinary course.
(b) Neither Buyer nor any officer or director (in connection with the
business, operations and properties of such Buyer) is in or is charged
with or, to Buyer's knowledge, information and belief; at any time
since its organization has been in or has been charged with, or is
threatened or under investigation with respect to, breach or violation
of; or default in the performance, observance or fulfillment of; any
Governmental Authorization or any Applicable Law, and no event exists
or has occurred, which constitutes, or but for any requirement of
13
giving notice or passage of time or both would constitute, such a
breach, violation or default, under:
(i) any Governmental Authorization or any Applicable Law, except for
such breaches, violations or defaults as do not and will not have
in the aggregate any material adverse affect on Buyers taken as a
whole or the ability of Buyers to perform any of the obligations
set forth in this Agreement or any Collateral Agreement or to
consummate the Transactions, or
(ii) any requirement of any insurance carrier, applicable to its
business, operations or properties.
8.6 GST REGISTRATION. Buyer will be registered under Part IX of the EXCISE TAX
ACT (Canada) at Closing.
8.7 DISCLOSURE. None of the representations and warranties made by Buyers or
made in any letter, certificate or memorandum furnished or to be furnished by
Buyers or on their behalf, contains or will contain any untrue statement of a
material fact, or omits any material fact the omission of which would make the
statements made misleading and materially adverse to Seller.
8.8 CONTINUING REPRESENTATION AND WARRANTY. Except for those representations
and warranties which speak as of a specific date, all of the representations and
warranties of Buyers set forth in this Article shall be true and correct on the
Closing Date with the same force and effect as though made on and as of that
date and those, if any which speak as of a specific date shall be true and
correct on the Closing Date.
8.9 SOLVENCY. As of the execution and delivery of this Agreement, and, after
giving effect to the consummation of the transactions contemplated herein,
Buyers taken as a whole and individually will be solvent.
8.10 INTERPRETATION. For the purposes of this ARTICLE 8, New Frontier and
Colorado Satellite Broadcasting, Inc. are each considered to be a "Buyer".
ARTICLE 9. SELLER'S OBLIGATIONS BEFORE CLOSING
Seller covenants that, except as otherwise agreed in writing by Buyer, from the
date of this Agreement until the Closing:
9.1 BUYERS' ACCESS TO PREMISES AND INFORMATION. Buyers and its counsel,
accountants and other representatives shall be entitled to have full access
during normal business hours to all Seller's properties, books, accounts,
records, contracts and documents of or relating to the Subject Assets. Seller
shall furnish or cause to be furnished to Buyers and its representatives all
data and information concerning the Subject Assets that may reasonably be
requested.
14
9.2 MAINTENANCE OF INSURANCE. Seller shall continue to carry its existing
insurance, subject to variations in amounts required by the ordinary operations
of their businesses. At the request of Buyers and at Buyers' sole expense, the
amount of insurance against fire and other casualties which, at the date of this
Agreement, Seller carries on any of the Subject Assets shall be increased by
such amount or amounts as Buyers shall specify.
9.3 NEW TRANSACTIONS. Seller shall not do or agree to enter into any contract,
commitment or transaction which would materially adversely effect the ability of
Seller to perform any obligation set forth in this Agreement of any Collateral
Agreement.
9.4 EXISTING AGREEMENTS. Except in ordinary course of business, Seller shall
not modify, amend, cancel or terminate any of its existing contracts or
agreements, or agree to do any of those acts without the consent of Buyers, if
doing so would materially adversely affect Seller's ability to fulfill its
obligations under this Agreement.
9.5 CONSENT OF OTHERS. As soon as reasonably practical after the execution and
delivery of this Agreement, and in any event on or before the Closing Date,
Seller shall obtain the written consent of the persons described in SCHEDULE
7.11 in form and substance satisfactory to Buyers and will furnish to Buyers
executed copies of those consents.
9.6 REPRESENTATIONS AND WARRANTIES TRUE AT CLOSING. Seller shall use its
reasonable commercial efforts to assure that all representations and warranties
of Seller set forth in this Agreement and in any written statements delivered to
Buyers by Seller under this Agreement will also be true and correct as of the
Closing Date as if made on that date and that all conditions precedent to
Closing shall have been met. Seller shall promptly disclose to Buyers any
information contained in the Schedules to this Agreement which, because of an
event occurring after the date hereof, is incomplete or is no longer correct as
of all times after the date hereof until the Closing Date; provided, however,
that none of such disclosures shall be deemed to modify, amend or supplement the
representations and warranties of Seller or the schedules hereto for the
purposes of ARTICLE 11, unless Buyer shall have consented thereto in writing.
9.7 STATUTORY FILINGS. Seller shall cooperate fully with Buyers in preparing
and filing all information and documents required under any statutes or
governmental rules or regulations pertaining to the Transactions, including but
not limited to, any licenses required by Industry Canada and the rules
promulgated thereunder.
ARTICLE 10. BUYERS' OBLIGATIONS BEFORE CLOSING
10.1 GENERAL OBLIGATIONS AND CONFIDENTIALITY. Prior to the Closing Date (or, in
the event the Closing does not occur, for a period of two years following the
date of this Agreement) Buyers shall use their best efforts to preserve the
confidentiality of any commercial information which is confidential and which
Seller identifies in writing as confidential which is disclosed to Buyers or to
their representatives by Seller; provided that Buyers at all times shall not be
materially restricted in their investigation of the assets or matters relating
thereto. The above provisions of this Section shall not apply to any information
which (i) is already known to Buyers at the time
15
of disclosure by Seller, (ii) is published or through no fault of Buyers becomes
published or (iii) is lawfully disclosed to Buyer by a third party. Whether or
not the Closing shall take place, Seller waives any cause of action, right or
claim arising out of the access of Buyers or their representatives to any trade
secrets or other confidential business information of Seller from the date of
this Agreement until the Closing Date, except for the intentional competitive
misuse by Buyers or its representatives of such trade secrets or other
confidential business information (identified as confidential as required by
this Article) if the Closing does not take place.
10.2 SELLER'S ACCESS TO PREMISES AND INFORMATION. Seller and its counsel,
accountants and other representatives shall be entitled to have full access
during normal business hours to all Buyers' properties, books, accounts,
records, contracts and documents. The Buyers shall furnish or cause to be
furnished to Seller and its representatives all data and information concerning
Buyers that may reasonably be requested.
ARTICLE 11. CONDITIONS PRECEDENT TO BUYER'S PERFORMANCE
The obligation of Buyers to purchase the Subject Assets under this Agreement are
subject to the satisfaction, at or before the Closing, of all the conditions set
out below in this Article. Buyers may waive any or all of these conditions;
provided, however, that no such waiver of a condition shall constitute a waiver
by Buyers of any of its other rights or remedies, at law or in equity, if Seller
shall be in default of any of their representations, warranties or covenants
under this Agreement.
11.1 ACCURACY'S OF SELLER'S REPRESENTATIONS AND WARRANTIES. All representations
and warranties by Seller contained in this Agreement or in any Collateral
Agreement or in any written statement delivered by Seller thereunder shall be
true on and as of the Closing as though such representations and warranties were
made on and as of that date. Buyers shall have received a certificate, dated the
Closing Date, signed by Seller's President certifying, in such detail as Buyers
and their counsel may reasonably request, that the representations and
warranties set out herein are true and correct as of the Closing Date.
11.2 SELLER'S PERFORMANCE. Seller shall have performed, satisfied, and complied
with all covenants, agreements, and conditions required by this Agreement to be
performed or complied with by Seller on or before the Closing Date.
11.3 CERTIFICATION BY SELLER. Buyers shall have received a certificate, dated
the Closing Date, signed by Seller' Presidents certifying, in such detail as
Buyer and its counsel may reasonably request, that the representations and
warranties set out herein are true and correct as of the Closing Date.
11.4 OPINION OF SELLER'S COUNSEL. Buyers shall have received from counsel for
Seller, opinions dated the Closing Date, in form and substance reasonably
satisfactory to Buyers and their counsel, stating that:
(a) Seller is a corporation duly organized, validly existing and in good
standing under
16
the applicable laws of the jurisdiction of its incorporation and has
all necessary corporate power to own its properties as now owned and
operate its businesses as now operated;
(b) all corporate proceedings required by law or by the provisions of this
Agreement to be taken by Seller on or before the Closing Date in
connection with the execution and delivery of this Agreement and the
consummation of the Transactions have been duly and validly taken;
(c) this Agreement has been duly and validly authorized and, when executed
and delivered by Seller will be valid and binding on Seller and
enforceable in accordance with its terms, except as limited by
bankruptcy and insolvency laws and by other laws affecting the rights
of creditors generally; and
(d) neither the execution nor delivery of this Agreement nor the
consummation of the Transactions will constitute a default, or an
event that would with notice or lapse of time or both constitute a
default under, or violation or breach of Seller's articles of
incorporation or bylaws.
In rendering their opinions, counsel for Seller may rely on certificates of
governmental authorities, certificates of Seller's officers, directors or
shareholders, and on opinions of associate counsel.
11.5 ABSENCE OF LITIGATION. No action, suit or proceeding before any court or
any governmental body or authority, pertaining to the Transactions or their
consummation shall have been instituted or threatened on or before the Closing
Date.
11.6 CORPORATE APPROVAL. The execution and delivery of this Agreement by Seller,
and the performance of its covenants and obligations under it, shall have been
duly authorized by all necessary corporate action, and Buyer shall have received
copies of all resolutions pertaining to that authorization, certified by the
secretary of Seller.
11.7 CONSENTS. All necessary agreements and consents of any parties (other than
Buyers, their shareholders or directors, and Authorities in the United States of
America) to the consummation of the Transaction, or otherwise pertaining to the
matters covered by this Agreement, shall have been obtained.
11.8 APPROVAL OF DOCUMENTATION. The form and substance of all certificates,
instruments, opinions and other documents delivered to Buyers under this
Agreement shall be satisfactory in all reasonable respects to Buyers and their
counsel.
11.9 BULK SALES ACT. The Buyers will have been furnished with evidence
satisfactory that the sale and purchase of the Subject Assets is in compliance
with the provisions of the Bulk Sales Act (Ontario).
11.10 CONDITION OF ASSETS. The Subject Assets shall not have been materially or
adversely
17
affected in any way as a result of any fire, accident, storm or other casualty
or labor or civil disturbance or act of God or the public enemy.
11.11 NON-COMPETITION AGREEMENT. The shareholders of Seller shall each have duly
executed and delivered to Buyers a Non-competition Agreement substantially in
the form of SCHEDULE 11.11.
11.12 RETAIL SALES TAX CERTIFICATE. Buyers shall have received, from Newco, a
retail sales tax certificate issued under the RETAIL SALES TAX ACT (Ontario).
11.13 AGREEMENT ON SCHEDULES. At the date of execution of this Agreement by the
parties, the form and content of the schedules to this Agreement had not be
settled by the parties and it is a condition precedent to Buyers' performance
under this Agreement that such schedules be settled prior to Closing.
ARTICLE 12. CONDITIONS PRECEDENT TO SELLER'S PERFORMANCE
The obligations of Seller to sell and transfer the Subject Assets under this
Agreement are subject to the satisfaction, at or before the Closing, of all the
following conditions:
12.1 ACCURACY OF BUYERS' REPRESENTATIONS AND WARRANTIES. All representations and
warranties by Buyers contained in this Agreement or in any Collateral Agreement
or in any written statement delivered by Buyers thereunder shall be true on and
as of the Closing as though such representations and warranties were made on and
as of that date. Seller shall have received a certificate, dated the Closing
Date, signed by Buyers' Presidents certifying, in such detail as Seller and its
counsel may reasonably request, that the representations and warranties set out
herein are true and correct as of the Closing Date.
12.2 BUYERS' PERFORMANCE. Buyers shall have performed and complied with all
covenants and agreements, and satisfied all conditions that it is required by
this Agreement to perform, comply with, or satisfy, before or at the Closing.
12.3 OPINION OF BUYERS' COUNSEL. Buyers shall have furnished Seller with an
opinion from counsel for Buyers, dated the Closing Date, satisfactory to Seller
and its counsel, stating that:
(a) Buyers are corporations duly organized, validly existing and in good
standing under the laws of the State of Colorado and have all
requisite corporate power to perform their obligations under this
Agreement;
(b) all corporate proceedings required by law or by the provisions of this
Agreement to be taken by Buyers on or before the Closing Date in
connection with the execution and delivery of this Agreement and the
consummation of the Transactions shall have been duly and validly
taken;
(c) this Agreement has been duly and validly authorized and, when executed
and
18
delivered by Buyers will be valid and binding on Buyers and
enforceable in accordance with its terms, except as limited by
bankruptcy and insolvency laws and by other laws affecting the rights
of creditors generally;
(d) neither the execution nor delivery of this Agreement nor the
consummation of the Transactions will constitute a default, or an
event that would with notice or lapse of time or both constitute a
default under, or violation or breach of Buyers' articles of
incorporation or bylaws; and
(e) to the best of such counsel's knowledge, there is no legal action
pending or threatened against either of Buyers which could have a
material adverse affect on Buyers.
In rendering its opinion, counsel for Buyers may rely on certificates of
governmental authorities and on opinions of associate counsel.
12.4 BUYERS' CORPORATE APPROVAL. Buyers shall have received corporate
authorization and approval for the execution and delivery of this Agreement and
all corporate action necessary or proper to fulfill the obligations of Buyers to
be performed under this Agreement on or before the Closing Date.
12.5 AGREEMENT ON SCHEDULES. At the date of execution of this Agreement by the
parties, the form and content of the schedules to this Agreement had not be
settled by the parties and it is a condition precedent to Seller's performance
under this Agreement that such schedules be settled prior to Closing and shall
be initialled by the signing officers of the parties.
12.6 CAPITALIZATION OF BUYERS. Prior to the Closing Date, the Buyers shall have
raised and received the proceeds from a share offering of not less than
US$7,000,000.
ARTICLE 13. SELLER'S OBLIGATIONS AFTER THE CLOSING.
13.1 PRESERVATION OF GOODWILL. Following the Closing, Seller will restrict its
activities so that Buyers' reasonable expectations with respect to the goodwill,
business reputation, employee relations and prospects connected with the Subject
Assets will not be materially impaired. In furtherance but not in limitation of
this general obligation, Seller agrees that, for the period of two (2) years
following the Closing Date, or as long as Buyers or its assigns or successors in
interest carry on a like business in the counties or areas specified, whichever
is shorter:
(a) Seller and its shareholders will not engage in an Adult Movies
Business and will execute the non-competition agreement attached as
SCHEDULE 11.11. If, in any judicial proceeding, a court shall refuse
to enforce any of the separate covenants deemed included in this
Section, then this unenforceable covenant shall be deemed eliminated
from these provisions for the purpose of those proceedings to the
extent necessary to permit the remaining separate covenants to be
enforced.
19
(b) Seller and its shareholders will not disclose to any person or use for
their own benefit any price lists, pricing data, customer lists or
similar matters possessed by them relating to the Subject Assets or
the business transferred to Buyer unless they first clearly
demonstrate to Buyer that such matters are at the time of the proposed
disclosure or use of common knowledge within the trade.
13.2 SELLER'S INDEMNITIES. Seller shall indemnify, defend and hold harmless
Buyers against and in respect of any and all claims, demands, losses, costs,
expenses, obligations, liabilities, damages, recoveries and deficiencies,
including interest, penalties and reasonable attorneys' fees, that Buyers shall
incur or suffer, which arise, result from or relate to any breach of, or failure
by Seller to perform any of its representations, warranties, covenants or
agreements in this Agreement or in any schedule, certificate, exhibit or other
instrument furnished or to be furnished by Seller under this Agreement.
Notwithstanding any other provision of this Agreement, Seller shall not be
liable to Buyer on any warranty, representation or covenant made by Seller in
this Agreement, or under any of its indemnities in this Agreement, regarding any
single claim, loss, expense, obligation or other liability that does not exceed
US$2,500.00; provided, however, that when the aggregate amount of all such
claims, losses, expenses, obligations and liabilities not exceeding US$2,500.00
each reaches US$25,000.00, Seller shall thereafter be liable in full for all
such breaches and indemnities and regarding all those claims, losses, expenses,
obligations, and liabilities.
13.3 ACCESS TO RECORDS. From and after the Closing, Seller shall allow Buyers,
and its counsel, accountants and other representatives, such access to records
which after the Closing are in the custody or control of Seller as Buyers
reasonably require in order to comply with its obligations under the law or
under contracts assumed by Buyers pursuant to this Agreement.
13.4 NONSOLICITATION OF EMPLOYEES. Except with the prior written consent of
Seller, Buyers shall not, prior to the first anniversary of the Closing, solicit
any employee of Seller or of any affiliate of Seller to leave such employment if
such employee was at any time between the date hereof and the Closing an
employee of any Seller.
13.5 RISK OF LOSS.
(a) Until the Closing Date the Subject Assets will remain at the risk of
Seller. Seller will maintain all risk insurance in respect of loss or
damage to or any other casualty in respect of the Subject Assets which
provides for loss settlement on a replacement cost basis if the
Subject Assets are repaired or replaced and on an actual cash value
basis if the Subject Assets are not repaired or replaced. In the event
of any loss, damage or claim, in respect of any risk for which
insurance is to be carried as aforesaid arising before the Closing
Date, Buyers, as an additional condition of closing, will be entitled
to be satisfied that the insurers have accepted the claim of Seller
for payment in accordance with the terms of the policies. If any
destruction or damage occurs to the Subject Assets on or before the
Closing Date or if any or all of the Subject Assets are appropriated,
expropriated or seized by governmental or other lawful authority on or
before the Closing Date, Seller will forthwith give notice thereof to
Buyers and Buyers will have the option,
20
exercisable by notice to Seller on or before the Closing Date:
(i) to reduce the Purchase Price by an amount equal to the cost of
repair or, if destroyed or damaged beyond repair or if
appropriated, expropriated or seized, by an amount equal to
the replacement cost of the assets forming the part of the
Subject Assets so damaged or destroyed or appropriated,
expropriated or seized and to complete the purchase;
(ii) to complete the purchase without reduction of the Purchase
Price, in which event all proceeds of insurance or
compensation for the destruction or damage or appropriation,
expropriation or seizure will be payable to Buyers and all
right and claim of Seller to any such amounts not paid by the
Closing Date will be assigned to Buyers; or
(iii) to rescind this Agreement and not complete the purchase if; in
the opinion of Buyers, such destruction, damage,
appropriation, expropriation or seizure is material and in
such event Seller and Buyers will be released from all
obligations hereunder and the deposit referred to in SECTION
2.1(a) shall be returned to Buyers.
(b) If Buyers elect to reduce the Purchase Price pursuant to SECTION
13.5(a)(i), Seller and Buyers will at the Closing Date determine the
amount of the reduction to the extent that it is then determinable and
will undertake to adjust such amount after the Closing Date, if
necessary.
ARTICLE 14. COSTS
14.1 FINDER'S OR BROKER'S FEES. Each party shall be responsible for its on
costs or for any commission or finder's fee incurred on behalf of that party in
connection with the Transactions.
14.2 EXPENSES. Each of the parties shall pay all costs and expenses, including,
but not limited to attorneys' fees, incurred or to be incurred by it in
negotiating and preparing this Agreement and in closing and carrying the
Transactions.
ARTICLE 15. FORM OF AGREEMENT
15.1 HEADINGS. The subject headings of the Articles and Sections of this
Agreement are included for purposes of convenience only and shall not affect the
construction or interpretation of any of its provisions.
15.2 ENTIRE AGREEMENT; MODIFICATION; WAIVER. This Agreement constitutes the
entire agreement between the parties pertaining to the subject matter contained
in it and supersedes all prior and contemporaneous agreements, representations,
and understandings of the parties. No supplement, modification or amendment of
this Agreement shall be binding unless executed in
21
writing by all the parties. No waiver of any of the provisions of this Agreement
shall be deemed, or shall constitute, a waiver of any other provision, whether
or not similar, nor shall any waiver constitute a continuing waiver. No waiver
shall be binding unless executed in writing by the party making the waiver.
15.3 COUNTERPARTS. This Agreement may be executed simultaneously in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
ARTICLE 16. PARTIES
16.1 PARTIES IN INTEREST. Nothing in this Agreement, whether express or implied,
is intended to confer any rights or remedies under or by reason of this
Agreement on any persons other than the parties to it and their respective
successors and permitted assigns, nor is anything in this Agreement intended to
relieve or discharge the obligation or liability of any third persons to any
party to this Agreement, nor shall any provision give any third persons any
right of subrogation or action over against any party to this Agreement.
16.2 ASSIGNMENT. No party can assign this Agreement without the express written
consent of the other parties. This Agreement shall be binding on and shall inure
to the benefit of the parties to it and their respective heirs or legal
representatives, and their respective successors and permitted assigns.
ARTICLE 17. REMEDIES
17.1 RECOVERY OF LITIGATION COSTS. If any legal action or any arbitration or
other proceeding is brought for the enforcement of this Agreement, or because of
an alleged dispute, breach, default or misrepresentation in connection with any
of the provisions of this Agreement, the successful or prevailing party or
parties shall be entitled to recover reasonable attorneys' fees and other costs
incurred in that action or proceeding, in addition to any other relief to which
it or they may be entitled.
17.2 CONDITIONS PERMITTING TERMINATION. Subject to the provisions of ARTICLE 3
relating to the postponement of the Closing Date, either party may on the
Closing Date terminate this Agreement by written notice to the other, without
liability to the other, if any bona fide action or proceeding shall be pending
against either party on the Closing Date that could result in a materially
adverse judgment, decree or order that would prevent or make unlawful the
carrying out of this Agreement.
17.3 DEFAULTS PERMITTING TERMINATION. If a Buyer or Seller materially defaults
in the due and timely performance of any of its material warranties, covenants,
or agreements under this Agreement, the non-defaulting party or parties may on
the Closing Date give notice of termination of this Agreement, in the manner
provided in ARTICLE 19. The notice shall specify with particularity the default
or defaults on which the notice is based. The termination shall be
22
on the first to occur of the 10th day after such notice or the Closing Date,
unless the specified default or defaults have been cured by such time.
ARTICLE 18. NATURE AND SURVIVAL OF REPRESENTATIONS AND
WARRANTIES
All representations, warranties, covenants and agreements of the parties
contained in this Agreement, or in any instrument, certificate, opinion or other
writing provided for in it, shall survive the Closing.
ARTICLE 19. NOTICES
All notices, requests, demands and other communications under this Agreement
shall be in writing and shall be deemed to have been duly given on the date of
service if served personally on the party to whom notice is to be given, or on
the third day after mailing if mailed to the party to whom notice is to be
given, by first class mail registered or certified, postage prepaid, and
properly addressed as follows:
Seller: Xxxxxxx Xxxxxx
0000 Xxx Xxxx Xxxxx
Xxxxxxx, Xxxxxx
X0X 0X0
Xxxxxx Xxxxxx
0000 Xxx Xxxx Xxxxx
Xxxxxxx, Xxxxxx
X0X 0X0
Xxxxxx Xxxxxx
00000 Xxxxxx Xxxxxx Xxxx
Xxxxxx Xxxxxx, Xxxxxxxxxx
00000
with copy to: Xxxxx Xxxxxx, Esq.
Yegendorf, Brazeau, Seller, Prehogan & Xxxxxx
00 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxx
X0X 0X0
23
Buyers: New Frontier Media, Inc.
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn.: Xxxx X. Xxxxxxx
with copy to: The Law Office of Xxxx X. Driver, P.C.
0000 Xxxx Xxxxx Xxx. Xxxxx 000
Xxxxxx, XX 00000
Attn.: Xxxx X. Driver
Any party may change its address for purposes of this Article by giving the
other parties written notice of the new address in the manner set forth above.
ARTICLE 20. GOVERNING LAW
This Agreement shall be construed in accordance with, and governed by, the laws
of the State of Colorado.
ARTICLE 21. MISCELLANEOUS
21.1 ANNOUNCEMENTS. Seller will not make any announcements to the public
concerning this Agreement or the Transactions without the prior approval of
Buyers, which will not be unreasonably withheld. Notwithstanding any failure of
Buyers to approve it, Seller may make an announcement of substantially the same
information as therefore announced to the public by Buyers, or any announcement
required by applicable law, but Seller shall in either case notify Buyers of the
contents thereof reasonably promptly in advance of its issuance.
24
21.2 REFERENCES. Unless otherwise specified, references to Sections or Articles
are to sections or articles in this Agreement.
IN WITNESS WHEREOF, the parties to this Agreement have duly executed it as of
the day and year first above written.
BUYERS: New Frontier Media, Inc.
By: /s/ [ILLEGIBLE]
---------------
Its: President
----------------------------
Colorado Satellite Broadcasting, Inc.
By: /s/ [ILLEGIBLE]
---------------
Its: President
-------------------------
SELLER: 1248663 Ontario Inc.
By: /s/ [ILLEGIBLE]
---------------
Its authorized signing officer
25
[SCHEDULES TO THE 124 AGREEMENT]
SCHEDULE 1(a)
UPLINK FACILITIES EQUIPMENT LIST
DESCRIPTION MODEL SERIAL NUMBER NUMBER/COMMENTS
----------- ----- ------------- ---------------
EXOTICA
Exciter WB461 126090
Audio Compressor MDC 2001 CK277816
TBC DPS235 5E235020
XXX XXXXX 0 000 0
XXX XXXXX 3 204A 2
Monitor PANASONIC SB70 EK1650001
Patch panel ADC
VAX CPU 630QY-A2 WF83010504
UNIDEN SAT. RX SQ530
Comstream digital RX DBR401 7929
VCII & scrambler SP2000080
VCII & descrambler P00150371
terminal VT420 TA514F6330
Keyboard HJ432V7987
Smart Ups 700
Digital Printer LA75 TY40141234
VARIAN GEN 1 TXMTR. VZJ2700D4F1 S159XXX
EXXTASY
VideoProc. Amp. VPA331N 951222
Audio Processor MDC2001 000-00000-0000
Patch panel
VAX CPU WF63507157
GI SAT RX. 650I
VCII & scrambler SP2000050
VCII & descrambler A020086DB
terminal VT420 TA245S9300
keyboard 108RX33S-1E
Exiter WB461 107
VARIAN GEN II TXMTR. VZJ2700GAA033 559
Monitor S901 KA4420329
Modem PM14400FXMT
Micro Mixer 2
TRUE BLUE
Exiter WB461 123
Monitor BT-S901Y KA4440151
2
TBC DPS-235 4K235050
Audio Compressor MDC2001 000-00000-0000
VDA VDA108 2
Patch panel
VAX CPU WF71610562
DIGITAL RX DBR401 7931
SAT RX GI 650I
VCII PLUS SCRAMBLER S0000003
VCII PLUS DESCRAMBLER P00264197
VARIAN GEN I TXMTR X31599FG
APC UPS 600
Micro Mixer 2
PROMO
VARIAN GEN II TXMTR. VZJ2700GAA033 317
W/G switch 24019-G1 27
Dummy Load 1.5KW
SA video Exiter 7550B
Neico Waveguide switch 24019-G1 16
Neico Waveguide switch 19
Neico Waveguide switch 36
Neico Waveguide switch 26
Neico Waveguide switch 61
Waveguide switch 880
Termination 3KW
termination 2
HYPBIDS 2
AYDIN TXMTR. 103-E1 4
XXXXXX 4.5 meter antenna
l PORT feed
POL control
POL control panel
TX Reject filter
6.1 meter antenna
DE-ICING 6.1 meter
1.8 meter RX only
KU LNB
Block Down Converter 140059 4370000411
Block Down Converter 140059 4370000410
Xxxxxx Video Processing VPA-331 ?
Xxxx Xxxxxxxx XX000 XX000X0000
Keyboard LK401-AA HJ347E4009
Comstream Digital Broadcast DBR101 1069
receiver
Video Exiter VEL-6-8506 194200
Video Exiter VEL-6-8506 194201
3
Radiation Meter 8616 21009
TEST EQUIPMENT
TMS 3551A 2214A12107
Radiation Meter 8616 21010
Radiation Probe 8621C 22015
Vector Scope 520A 833079
Power Meter 436A 2709A27119
Transmission set test 3555B 0992A03445
Test oscillator 654A 0951A02640
Spectrum analyzer 757 1416A02117
Frequency Counter 534A 2805
Video Waveform Monitor RM529 M0D1880
Video Waveform Monitor RM529 14423
TECHS
Racks
83" with 2 power bars
85" with 1 power strip
& 1 power bar
86" with 2 power strips
Work Bench 6 with upper shelf
Desk 5 1
Chairs 2
Shelf 4 1
Book shelf 34" 1
Book Shelf 48" 1
Storage Cabinet 3x6 2
3 phase 225 Amp power panel NLAB442A l
3 phase 50 amp breakers 4
30 amp Dual 1
15 amp 7
15 amp Dual 1
60 amp Dual 1
40 amp Dual 1
3 phase 225 Amp Power panel NBC324 0
0 xxxxx 00 amp Breakers 2
15 amp 7
30 amp 1
Dehydrator 1
Misc. Tolls 1
75 Kua 600v Transformer 2
45 Kua 600v Transformer 1
Air handling mix units 2
3 pole 600v CCT Breakers 3
100x3 Interconnect cable between Pwr rm. &
4
transformers
125 amp 3 phase panel QL424125 antenna deice
50amp 2 pole 2
15 amp 2
LIBRARY
cabinets full frame pullout 70027 2
1/2" large Betacam shelves T7402 24
Add-on frame pullout cabinet 70028 1
1/2" large Beracam shelves T7402 6
7 rack Stationary shelves 9
6 rack Stationary shelves 4 - 15 Beta/shelf
capacity
6 rack Stationary shelf 1 - 20 Beta/shelf
capacity
3x6x1 steel storage shelf 1
3x6x2 steel storage shelf 1
6x6x2 steel storage shelf 2
UPSTAIRS SCREENING
Betacam recorder UVW-1800 11858
3/4" U-matic recorder VO-5600 25568
3/4" U-matic recorder VO-5850 20248
Audiolab Tape Degausser TD511560 51404
PROGRAMMING OFFICE
3x6x1 steel storage shelf
6 rack stationary shelf 15 Beta/shelf
capacity
5x2.5 office desk
3 shelf computer trolley
Samsung Syncmaster 3Ne H1BD900695 Color computer
monitor
Hewlett Packard Vectra VL MX55050221 Pentium computer
5/75 series 3
RACK 1- PLAYOUT AREA
19X32X84 INCHES
Xxxxxx lolo generator
inseter LGI-1302N
Hedco Hedline 4x1 switch SVS 345 A932188 SVS 345
Hedco Hedline 4xl switch SVS 345 A931938
Hedco Hedline 4x1 switch SVS 345 A932187
Xxxxxx Sync pulse generator SPG-1302N 9607586
PP1 ADC 24X2 Audio patch
panel
HEDCO (10 VIDEO DAS) DA-6000 87C170
PP2 26X3 Video patch panel
5
PP3 26X3 Video patch panel
PP4 26X3 Video patch panel
PP5 26X3 Video patch panel
PP6 26X3 Video patch panel
PP7 26X3 Audio patch panel
WBS Audio DA M605A 5
PP8 26X2 Audio patch panel
XXXXXX DA FR-662 841437
(7+2POWER SUPPLIES)
ROLLING RACK - PLAYOUT AREA
26X18X36 INCHES
Monitor - JVC 8 INCH 10132484
Computer monitor- TTX 15 2E1-61006011
INCH
COMPAQ DESKPRO 5100 6617HWZ5P990
PENTIUM COMPUTER
COMPAQ KEYBOARD 1LJ39D302954
RACK 2 - PLAYOUT AREA
19X32X84 INCHES
Monitor - PANASONIC 8 XX0000000
INCH
Monitor - BURLE 8 INCH 117721
Monitor - Sony 8 INCH 2005004
Monitor - Sony 8 INCH 2000515
Panasonic WJ-MX50 Digital
AV mixer
Plastic Trays
Tektronix type 528 Wavefrom
monitor
Tektronix 1420 NTSC B040742
Vectorscope
Monitor - CITIZEN 9 INCH 31201696
Fostec Personal Monitor 6301B 0236580KU
speaker
Videoquip Research PHASE 3 RS-41A 6317
stereo audio 4X1 RTR
Videoquip Research PHASE 3 RS-41V 6316
video 4X1 RTR
Sony Betacam SP PVW-2600 13190
Videocassette player
rack drawer 17X18X5" DEEP
RACK 3 - PLAYOUT AREA
19X32X84 INCHES
6
Monitor - HITACHI 13 INCH 3060578
Dorrough Loudness monitor MODEL 40-A
Dorrough Loudness monitor MODEL 40-A
Sony Betacam SP PVW-2600 15379
Videocassette player
Sony Betacam 5P PVW-2600 11677
Videocassette player
Videotech VIS-1201 12X1
switcher
ALPHA STAR STARTRAK PIHB0040854
1000
Satellite receiver
Monitor - Panasonic 8 INCH KA4420172
Monitor - Panasonic 8 INCH KA6230050
Sony Betacam SP PVW-2600 12829
Videocassette player
RACK 4 - PLAYOUT AREA
19X32X84 INCHES
Monitor - Burle 8 INCH 117712
Monitor - JVC 8 INCH 7030254
Clock
Sony Betacam SP PBC-2600 401
Videocassette player
Sony Betacam SP PVW-2600 104030
Videocassette player
Sony Betacam SP PVW-2600 15294
Videocassette player
Sony Betacam SP PVW~2600 15256
Videocassette player
Ravk drawer 17X18X5" DEEP
Panasonic Editing AG-A770 2A1574KB
Controller power supply
EXXXTASY/TRUE BLUE PLAYOUT
CABINET 72X57X78 INCHES
Monitor - Burle 8 INCH 109112
Monitor - Burle 8 INCH 117731
Monitor - Burle 8 INCH 92545
Monitor - Burle 8 INCH 92559
Monitor - Bur1e 8 INCH 92521
Monitor - Burle 8 INCH 92525
Monitor - JVC 8 INCH 10132495
Monitor - JVC 8 INCH 10132489
Monitor - Citizen 9 INCH 31201462
Monitor - Citizen 9 INCH 31201241
7
Monitor - Sony HR 2015899
TRINITRON 13"
Fostex personal Monitor 6301B 0236579KU
speaker
Fostex personal Monitor 6301B 0235566KI
speaker
Dorrough Loudness Monitor 40-A
Dorrough Loudness Monitor 40-A
Thomson CSF 5500A
LABORATORIES INC.color
corrector
Thomson CSF
LABORATORIES NC. Color
collector Remote
5TH DIMENSION logo
ON/OFF switch
Tektronix type 528 Waveform
Monitor
Tektronix 1420 NTSC
Vectorscope
5TH DIMENSION VCR TBC
Remote control panel
5TH DIMENSION VCR TBC
Remote control panel
5TH DIMENSION audio
monitor control panel
Panasonic systems Editing AG-A770
controller
Panasonic special Effects WJ-5500A
generator/switcher
Viewfinder transport controller 2
Videotek 12X1 switcher VIS-1201
Monitor - Commodore 13" 1084S 1052733
Commodore Armiga 2000 HD XX0000000
CPU
Commodore Armiga keyboard MT9004
Rolling cabinet 24X24X32"
VIEWING ROOM
Monitor - JVC 8 INCH TM-923 7030255
Sony Betacam SP PVW-2800 20630
Videocassette recorder
Sony Betacam SP UVW-1600 10457
Videocassette player
Monitor - HITACHI 13 INCH 3080612
Monitor - Panasonic 13" CT-1331YC XX0000000
8
Tektronix l740A B015212
Waveform/vectorscope monitor
Sony Dynamic MDR-7502 stereo headphones
Monitor-Sanyo 13" VMC-7514 H8201655
Table 60X30X29"
Cabinet 60X68X16"
Rolling Table 47X33X32
Cabinet 27X22X48
RACK 5 - VIEWING ROOM
Videoquip audio amplifier MP204A 6640
Digital video systems TBC DPS-170 60530126
PP1 26X1 video patch panel
PP2 26X3 audio patch pane1
Panasonic S-VHS AG-7355 L1TB00065
Videocassette recorder
Sony Betacam SP PVW-2800 17174
Videocassette recorder
Sony 0/0 XXXX X-XXXXX XXX-000 00000
Xxxxxxxxxxxxx recorder
Sony Betacam SP UVW-1200 10652
Videocassette player
Rack drawer l7X18X5
SES COM stereo line driver PO-55
APHEX 10/4 Interface 124A 10356
RACK 6 - VIEWING ROOM
PP1 26X3 Audio/video patch
panel
Videoquip Research PHASE 3 VDA-l08 6323
video DA
Sony Betacam SP PVW-2600 15440
Videocassette player
OTHER ITEMS
Chairs 8
Tables 2 - 60X30X27"
4 Drawer legal size fi1ling
cabinet
Desk with 4 drawers 60X30X29
Room divider 60X73"
12" fan
12 Pigeon-hole message sender
5-slot wall-mounted file holder
Combination peg board/white 23X35"
board
9
Horizontal blind 47X84"
Horizonta1 Blind 2 - 24X84"
EDIT SUITE
Ampex ADO 3000 Keyboard 1420180-016 1631189
ADO Terminal W/disk drive 1465092-030 971939
ADO preview monitor-Sanyo VMC-7514 H 8101590
Audio Patch panel x 24 input N/A N/A
Video Patch panel x 24 input N/A N/A
Amiga Computer 3000 MT 9201 Tower W/Toaster
Sony Betacam P1ayer PVW-2600 10430
Sony Betacam Recorder PVW-2800 20630
Panasonic S-VHS Recorder AG-D5850P F4T00436
Panasonic TV Monitor BT-S9014 KA4420172
Panasonic TV Monitor BT-S9014 XX0000000
Panasonic TV Monitor BT-S1360Y FE4120037
TTX Computer Monitor TTX-3501 424A046672
Xxxxxx Video D.A. FR-662
Xxxxxx Video D.A. rack frame (A) FR682AV
Waveform/Vectorscope Tektronix 1740 B011764
Videotek Prodigy Switcher 1950560
Videotek Prod.Frame 1950561
Panasonic Edit controller AV-950 H3A1336D1
Keytronic keyboard (edit input)EO3435 6159366
SoundCraft Audio mixer RW1277 851
SoundCraft mixer power supply CPS 150 RW8000 020356
SoundCraft GPI interface VSA 24 II
Peavey Interface Amplifier 1A 10/4 W/O 7521237
Peavey Interface Amplifier 1A 10/4 W/O 7521241
Sony Compact Disk player CDP-311 A700765
Tectonix audio cassette player RS-TR979 FH3BA01358
Samson audio amplifier Servo 150
Ramsa speakers 160 xxxxx XX-A10-K 372005
Ramsa speakers 160 xxxxx XX-A10-K 372006
Burle B&W monitor TC1909 92545
Burle B&W monitor TC1909 92559
T.B.C. Remote controller RMC 11 Grimms Enterprises
Xxxxxxxx Edit console W/22.5" metal
racks
3 level wood shelf unit- custom made
monitors
metal tape shelves 2
4 wheel computer workstation 2
high back 5-wheel chairs 2
1 Microphone stand
Microphone boom/holder
Electrovoice 635-A microphone 2
10
power bars 3
Monitor TMA-9U 1603044 shop use
VTR Betacam PVW-2600 15305 under repair
Character Generator WJ-KB50 3XZ04473 spare
Character Generator WJ-KB50 20Z00815 spare
Video XX XXXXXX A940244 spare
Video switcher RS 41-V 6659 to be installed
Audio switcher RS 41-A 6660 to be installed
Audio Meter VP-2 6633 to be installed
Audio Meter VP-2 6318 to be installed
Audio DA ADA 204 A 6320 to be installed
Effect Generator WJ-MX 50 3XA03302 spare
VHS VCR SVP-3000 0010145-D4 under repair
VHS VCR SLV-770HF under repair
Computer interface ISP-15 1001 spare
Computer interface ISP-15 1002 spare
Computer interface ISP-15 1003 spare
Computer interface ISP-15 1004 spare
Computer interface ISP-15 1005 spare
Computer interface ISP-15 1006 spare
Effect Generator WJ-5500 52516 under repair
Service manual Sony UVW 1600/1800
vol.1
Service manual Sony UVW 1600/1800
vol.2
Service manual Sony PVW 2600
vol.l
Service manual Sony PVW 2600 vol.2
Head protrusion Meter
Xxxxxx soldering station
Ditheral adjusting screw J-6080-013-A 4
Drum eccentricity gauge J-6001-820-A 1
Drum eccentricity gauge J-6001-830-A l
Drum eccentricity gauge J-6001-840-A l
Drum eccentricity gauge J-6087-000-A 1
Flatness plate J-6086-570-A
Rell table tension gauze J-6080-011-A
Reel motor shaft gauze J-6320-870-A
Reel motor shaft jig J-6150-960-A
Inspection mirror 7-723-902-00
Tension scale 50G 7-723-050-20
Tension scale 100G 7-723-050-30
Tension scale 20G 7-723-050-01
Tension scale 500G 7-723-050-50
Alignment tape CR2-1B 8-960-096-01
Alignment tape CR5-1A 8-960-096-01
11
Thickness gauge 9-911-053-00
Tentelometer
Wire clearance gauge J-6152-450-A
Reel high table gauge J-6320-680-A
Tension regulator J-6190-800-A
Thickness gauge J 6041-670-A
Tape guide adjust tool J 0000-000-X
Dial tension gauge
Cassette reference
Tension adjust fixture
Extension board
L shaped wrench 2
wrench
Extension board EX 278 J-6332-780-A
Extension board A-6766-389-A
Extension board EX 279
Thickness gauge J 6041-670-A
Tape guide adjust tool J 0000-000-X
Dial tension gauge
Cassette reference
Tension adjust fixture
Extension board
L shaped wrench
L shaped wrench
wrench
Oil NT 68
Extension board EX 278 J-6332-780-A
Extension board
Extension board EX 279
Work bench
chair
Rubbermaid mobile cart
MILD FINANCING EQUIPMENT
PVW 2800 Betacam SP 21351
Recorder
PVW 2600 Betacam SP Player 15294
PVW 2600 Betacam SP Player 15305
PVW 2600 Betacam SP P1ayer 15213
PVW 2600 Betacam SP Player 15440
S-VHS Recorder SONY SVT 10145
3000
UVW-1200 Betacam SP Player 10652
DPS 235 TBC Frame SYNC. 4K235050
TEKTRONIX 1740A BO 15212
12
WFM/VECT
TEKTRONIX TSG 130A
GEN.AUD/VID
AUDIO Monitor XX 000X 0000
XXXXX 3 Extended Range 6633
Audio Meter
RS 41V 4X1 Video Routing 6659
RS 41A 4X1 Stereo Audio 6660
Routing
RS 41V 4X1 Video Routing 6316
RS 41A 4X1 Stereo Audio 6317
Routing
ADA 204 A Audio DA 6638
VDA 108 Video DA 6319
ADA 204 A Audio DA 6320
VDA 108 Video DA 6323
ADA 204 A Audio DA 6321
VDA 108 Video DA 6635
Phase 3 Extended Range Audio 6318
Meter
ISP-15 Computer Interface 1001
ISP-15 Computer Interface 1002
ISP-15 Computer Interface 1003
ISP-15 Computer Interface 1004
ISP-15 Computer Interface 1005
ISP-15 Computer Interface 1006
386 PC Computer & VGA
Monitor
PELCO VS5104 Video 1682 4K
Switcher
APHEX 10/4 Audio Interface 10356
Model 124A
HITACHI CM 151U Color 3060578
Monitor
HITACHI CM 151U Color 3080612
Monitor
HITACHI CT 1396VM X0X000000
Video/Audio Monitor
SANYO VMC-7514 Co1or H8101558
Audio/Video
SANYO VMC-7514 Color H8101472
Audio/Video
SANYO VMC-7514 Color H8101590
Audio/Video
SANYO VMC-7514 Color H8101437
Audio/Video
1
SANYO VMC-7514 Color H8201655
Audio/Video
MCL Klystron Power Amps 1363
MCL Klystron Power Amps 1364
Aydin Klystron Power Amp
Miteq video exciters (2) 194201
Uniden Satellite Receivers (2)
Domestic 2.4 metre TVRO.
Make unkhown
Mitsubishi UPS 30KVA
4kw Exide UPS
Miteq Transmit Interface Unit 194650
Specialty uWave 1:1 Protection 3379-001
switch
VA936L 12 Varian 12 ch 71226
klystron tubes
VA936L 12 Varian 12 ch 71170
klystron tubes
Xxxxxxxx 12 ch klystron tube OOO.26O
Delta 30 kva transformer 600-
380 VAC
transformer
General Instruments 1.2m vsat
Comstream modem
lot of waveguide and w/g
switches
Square D AC mains enclosed
switches (4)
3 phase 125 amp distribution
box
Videocipher RS Module
SCHEDULE 1(b)
CALL CENTER EQUIPMENT LIST
DESCRIPTION MODEL SERIAL NUMBER NUMBER
----------- ------ -------------- ------
FURNITURE
24x45 desk oak 3
pull-out shelf oak 7
30x60 flush right oak 1
paper catcher oak 1
kd mini station oak 2
2
opus chair gas lift blue 7
45"x53" chair mat 8
4 dr lateral xxxx 1
stat cabinet xxxx 1
30x48 adj table xxxx 1
letter tray 12
wastebaskets xxxx 6
24x45 desk oak 6
opus chair gas lift blue 6
pull-out shelf oak 6
4 dr lateral xxxx 1
letter tray 12
45"x53" chair mat 6
blinds 6
high back chair 4
30x48 desk oak 3
36x72 desk oak 1
2 dr lateral oak 1
30x48 desk oak 5
opus chair gas lift burgundy 8
pull-out shelf oak 5
45x43 chair mat 5
letter tray 14
4 dr lateral xxxx 1
Stat cabinet xxxx 1
opus chair gas lift burgundy 2
45x53 chair mat 1
wastebasket xxxx 5
legal tray 2
30x60 sierra 2+2 oak 1
4 dr lateral xxxx 1
36x72 desk oak 1
45x53 chair mat 2
4 dr lateral xxxx 1
30x60 sierra 2+2 oak 3
steno chair blue 2
steno chair burgundy 2
20x72 oxford cred oak 2
2 dr lateral oak 1
60x60 divider blue 3
60x60 divider came 3
30x60 desk oak 3
20x45 desk oak 1
steno chair burgundy 4
hi back leather burgundy 2
visitor tweed burgundy 2
3
tower comp stn oak 1
letter tray burgundy 6
Phone Equipment
cables bix, installation etc
Work Station 1
winsted work surface 2
winsted editor shelf 2
Xxxxx 0
Xxxxx "Consortium" carpet 1
roller blinds 5
chairs black 41
6' bookcase mahogany 2
stationary stool black 6
PV-4366 SVHS recorder player l
TV stand 1
SLV-730 VHS VTR (Sony) 2
T-160VB CHS Tapes (10) 2
WS-A10 PA Speakers 2
PA-Serv0150 PA Power Amp 1
inv 13681 tv's 2
desk 24x42 38
single panel 42x24 23
filler bar to connect tables 21
sliding shelf for keyboard 38
1 drawer unit 18 1/2 x 16 1/4 x 7 38
panel filler 13
3 drawer mobile file 3
table 36x30x29 1
filler bar 2
decorative moulding 2
2 drawer lateral file 1
open desk bookcase 60x12x24 2
desk 60x30x29 fill modesty panel 1
desk 60x30x29 with 3/4 modesty panel xxxx 2
avm- 1423 television (Sony) 4
VHR-9417 Sanyo VHS VCR 2
DT331 Xxxxx Dynamic Headphones 4
36x72 wood top bench 2
Gas drafting chair 2
Stat cabinet tan l
blue xxxx panel 18x40 4
blue xxxx panel 60x60 2
blue xxxx panel 18x80 3
blue xxxx panel 30x80 6
overhead flipper door cabinet 2
counter surface 60 x l8 3
4
counter surface 61x18 2
open bookshelf 60x14x7 xxxx 12
Steel shelf unit 1
Desks 4
Booth 1
4dr Lateral Grey Filling Cabinet 1
Desk 36 X 72 1
Shelves 60x 14x7 4
Tape Storage Cabinet 1
Filling Cabinet 1
BBS Shelf 1
tape cabinet 1
Filling Cabinet l
Desk 2
7.5 ft Sat dish
Feed system: chaparral PR1 polarotor c/w
cal
amp 25 deg LNB
Xxx Xxxxx actuator
4.5" to 3.5" reducer red 4535
Dual RG6 sat ribbon cable
Installation including 15' pole, 660lbs
concrete
UHF remote
2dr filling cabinet grey 1
4dr Filling Cabinets 2
COMPUTER SOFTWARE
207-0151AV311 win for gruops V3.11 2
Kallista mom & objectspy V2.0 bundle 1
menu object mgr additional lan user 2
objectspy, additional lan user 2
wool2wool ezdialogs 1
021-051v420 ms office win 4.2(3.5") 1
02l4050v420 office mlp (regular) 9
MYOB 1
Maverick 540MB INT IDE 3.5" 1
3D STUDIO 1
Time Clock 1
000-00000-00, graphics xpression 2mb ISA 1
000-000-000 windows'95 upg cd 2
vga cable db 15 M-to-F 6 1
PDC8023A-T16 Concentrator 16 1
port/tpcdax
WFUL16005 Winframe 5 User Lic pk 1
5
86-751 Avail HSM Base Netspace 1
86-752 OLHP20 Capacity Kit for HP Avail 1
Video over the internet 1
Corel Print House 1
CWWPS70-UG-CAN0 WP suite v7.0 upg 1
cd'95
00-00-00000 winfax pro v7.5 cd w95 1
Office Pro 97 w/bookshelf 1
FirstLink Activation software
203-00101 Visual Basic Pro 5.0 Upg CD 1
021-00703 Up Office CD 1
FLD20D01, Macromeida Flash V2.0 1
Go Software - Charging Interface between
Netserver and CTS Software
EG Software Webtrand (usage taking)
CTS Subscription software
TELEPHONE SYSTEM
SX2000 Microlight Basic System 1
SX2000 Light Software and Practices 1
Megalink /ISDN Node 1
Communications Processor Card 1
ON Premises Line Card (16ports) 1
DNI Line Card (16 ports,32 Channel) 4
E & M Tie Trunk Card (4ports) 1
Traffic Reporting Software 1
Answer Plus MCD Software 1
HCI Basic Telephony Software 1
HCI Advanced Telephony Software 1
HCI 100 Agent Software 1
ANI/DNIS Software 1
Superconsole 1000 1
Superset 420's 59
2103 Sync/Async datasets 3
Fibre Optics Jumper Cable 1
Interalia 4 Port RAD with battery Backup 1
TASKE ACD Report Generator/Call centre
Management Software 1
TIE VMX 4002 or 2002 8 Port Voicemail
system with auto attendant 1
AP 900 UPS 1
H5 1 Plantonics Headsets 5
M10 Modular Adaptor Base 5
H51 Plantonics Headsets 10
M10 Modular Adaptor Base 10
6
COMPUTERS
HP Vectra 486/66 3401S01112
Clone 486/40 N/A
HP Vectra 486/66 3332A04367
NEC 586/90 5917834UN
Clone 486/100 N/A
Clone 686/200 97013390
HP Vectra 586/75 MX55050533
HP Vectra 486/33 33390S3190
Compaq 586/100 148130-003
HP Vectra 486/66 3449Y00536
HP Vectra 486/33 3407A00444
HP Vectra 486/33 3237A07590
HP Vectra 486/33 3404A00157
AST Bravo 586/100 375AQJ010836
Clone 486/33 N/A
Clone 486/40 N/A
Clone 486/33 B.T.C. 04252
HP Vectra 486/33 3248500329
Clone 486/40 N/A
HP Vectra 486/33 3324A00149
HP Vectra 486/33 3323F21007
HP Vectra 486/33 3237A07322
HP Vectra 486/33 3340500237
HP Vectra 486/33 3407A07012
Clone 486/40 N/A
AST Bravo 586/100 375AQJ01 1529
AST Bravo 586/100 375AQJ011541
AST Bravo 586/100 375AQJ011518
AST Bravo 586/100 375AQJ010823
AST Bravo 586/101 375AQ3010315
AST Bravo 586/100 375AQJ01 1554
AST Bravo 586/100 375AQJ010329
HP Vectra 586/75 MX55050416
HP Vectra 586/75 MX55050643
HP Vectra 586/75 MX55050631
HP Vectra 586/75 MX55050398
HP NetSrv 586/66 3438Y22189
HP Vectra 486/66 3402A02407
Compaq 486/66 A507HNC3G10
HP XU 586/133 SG53300170
AST Bravo 586/100 375AQJ010329
HP Vectra 586/133 US64050404
HP NetSrv 486/66 3319S00216
7
HP Vectra 586/166 US61454975
HP Vectra 486/66 3449Y00543
HP Vectra 486/66 3502Y01193
HP Vectra 486/66 3502Y60988
HP NetSrv 586/66 3434S21054
Pinnacle Micro CD Burner 447100408
HP Scanjet Scanner 3265A45856
TTX Monitor 740014237
TTX Monitor 274B007673
TTX Monitor 30121095
TTX Monitor 5130273815
TTX Monitor 630854423
TTX Monitor 43 9770243AL
TTX Monitor 3430211636
TTX Monitor 5130029914
TTX Monitor 30476091
IBM Monitor 14 Inch/No Seria1
TTX Monitor 494A005057
TTX Monitor 540012980
Mistsubishi Monitor 303015008
TTX Monitor 165A011016
TTX Monitor 439780500AJ
TTX Monitor KFO-53907449
TTX Monitor 4325601 08AI
TTX Monitor 4505700032AM
TTX Monitor 2140012434
TTX Monitor 30368928
TTX Monitor 439770245AJ
TTX Monitor 439780036AJ
TTX Monitor KFO-53907173
TTX Monitor 30252725
TTX Monitor 24001427
TTX Monitor 240001311
TTX Monitor 20406079
TTX Monitor 240001075
TTX Monitor 439780498AJ
TTX Monitor 30371000
TTX Monitor 240001257
TTX Monitor 2140012432
TTX Monitor KFO-53907180
TTX Monitor KFO-53907367
TTX Monitor KFO-53907253
TTX Monitor KFO-53907453
TTX Monitor KFO-53907249
TTX Monitor 2E1-61006274
TTX Monitor KFO-53907171
8
TTX Monitor KFO-53907459
TTX Monitor AFO-51902907
TTX Monitor KFO-53907141
TTX Monitor KFO-53907238
EverVision Monitor MNG-1 1200306
TTX Monitor 5130029763
TTX Monitor 0000000000
TTX Monitor 4530005163
BLACKBOX
BLACKBOX
BLACKBOX
TTX Monitor 439780030AJ
BLACKBOX
BLACKBOX
BLACKBOX
BLACKBOX
Clone 486/33 N/A
Clone 486/33 N/A
Clone 486/33 B.T.C. 04166
HP Vectra 486/40 3406A07048
HP Vectra 486/33 3304A19063
HP Vectra 486/33 3318500681
HP Vectra 486/33 3237A07585
HP Vectra 486/33 3339S02378
Clone 486/33 N/A
Clone 486/33 N/A
HP Vectra 586/75 MX55050232
HP Vectra 586/75 MX55050245
HP Vectra 586/75 MX55050182
HP Vectra 586/75 MX55050154
HP Vectra 586/75 NX55050239
HP Vectra 586/75 MX55050248
HP Vectra 586/75 MX55050074
HP Vectra 586/75 MX55050157
HP Vectra 586/66 MX55050233
TTX Monitor 3930001976
TTX Monitor KFO-53907366
TTX Monitor KFO-53907361
TTX Monitor KFO-53907364
TTX Monitor KFO-35907165
TTX Monitor KFO-53907162
TTX Monitor KFO-53907450
TTX Monitor XXX-00000000
XXX Monitor 384A005811
PRINTERS
9
Panasonic 3FMBNH49841
Panasonic 3FMBNH49825
Epson 40U1I09152
HP DeskJet 660C SG5BI1C04B
IBM Lexmark 11-A1916
Mitsubishi M63257
Lexmark Optra R 11B9752
Genicom 9625-D-33518
HP 4 Plus Printer JPGK241537
SCHEDULE 1.1
UPLINK MANAGEMENT SERVICES AGREEMENT
[attached]
SCHEDULE 1.1
UPLINK MANAGEMENT SERVICES AGREEMENT
THIS AGREEMENT made as of the ______ day of __________, 1997.
BETWEEN:
COLORADO SATELLITE BROADCASTING, INC.
a corporation incorporated under the laws of Colorado
("CSB")
- and -
1248663 ONTARIO INC.
a corporation incorporated under the laws of Ontario
("124")
WHEREAS CSB is engaged in the adult movies business (the "Business");
AND WHEREAS under the terms of an Asset Purchase Agreement made September 5,
1997 among New Frontier Media, Inc., CSB and 124 (the "Asset Purchase
Agreement"), the parties hereto have agreed to enter into this Agreement;
AND WHEREAS CSB wishes to engage 124 and 124 wishes to be so engaged to provide
the Services, as, defined in SECTION 1, on behalf of CSB;
NOW THEREFORE THE PARTIES AGREE as follows in consideration of the payment of
$2.00, the receipt and sufficiency of which is hereby acknowledged:
ARTICLE 1. PROVISION OF SERVICES BY 124
124 agrees to operate, maintain, manage and sustain analog turnkey uplink,
playback and editing facilities utilizing the Leased Assets to transmit CSB's
programming on up to four C-Band satellite transponders serving the United
States market (the "Services"). 124 warrants that the playback and uplink to
such transponders, taken together, shall be available 99.5% of the time during
each year of the Term (as defined below). 124's responsibilities hereunder shall
include those duties set out in SCHEDULE "A". 124 expressly covenants to
perform the Services and all functions necessary for the operation of the Uplink
Facility as defined below. In order to assist 124 in this regard, CSB shall have
one of its own employees at the Uplink Facility; such
2
employee shall be familiar with all current programming needs of CSB; such
employee shall comply with all reasonable rules and regulations from time to
time implemented by management of the Uplink Facility.
ARTICLE 2. LEASE OF EQUIPMENT BY COLORADO
2.1 LEASE. in consideration of the provision of Services by 124 in accordance
with the terms hereof, CSB agrees to lease to 124, for the Term those assets
(the "Leased Assets") identified on SCHEDULE "B" for a nominal lease payment of
US$2.00.
2.2 TITLE. Title to the Leased Assets shall at all times remain in CSB and at
no time during the Term shall title become vested in 124. Immediately upon
termination of this Agreement provided CSB is not then in default under this
Agreement, 124 shall release the Leased Assets to CSB and the Leased Assets
shall be removed from 124's premises at CSB's expense within 7 days after the
final day of the Term. All Leased Assets will be returned to CSB in the
operating order, repair and condition and in as good a condition as when
originally delivered to 124, ordinary wear and tear excepted, and be free and
clear of all liens other than those placed thereupon by CSB.
2.3 SECURITY INTEREST. CSB may register a security interest in the Leased
Assets as against 124 under the PERSONAL PROPERTY SECURITY ACT (Ontario) as a
cautionary filing for a period of three years which registration will be
discharged upon termination of this Agreement and the fulfillment of any
obligations owed by 124 to CSB under this Agreement.
2.4 REMOVAL OF LEASED ASSETS. The Leased Assets shall not be removed from the
Uplink Facility (as defined below), or the New Uplink Facility (as defined
below), without the prior written consent of CSB except where any of such Leased
Assets require off-site repair and maintenance.
2.5 MAINTENANCE COSTS. All labor costs related to the maintenance of the Leased
Assets shall be the responsibility of 124. 124 shall maintain industry-accepted
maintenance and repair standards. Subject to SECTION 2.6, 124 shall invoice
CSB, and CSB shall pay 124 upon receipt thereof, for all actual costs incurred
to purchase replacement parts for the Leased Assets or to replace any of the
Leased Assets. 124 shall not purchase any replacement part for the Leased Assets
with a cost exceeding US$5,000 without the prior consent of CSB and 124 shall
not be responsible for any service failure under this Agreement caused by any
delay in obtaining such consent.
2.6 LOSS OR DESTRUCTION. In the event of any loss or destruction of any
Leased Assets attributable solely to the negligence or wilful misconduct of
124, its subcontractors, or their employees, 124 shall provide a substitution
therefor of comparable quality which substitution shall be deemed to form
part of the Leased Assets.
2.7 ADDITIONAL ASSETS. Subject to SECTION 2.5, if 124 requires assets other
than the Leased Assets to comply with its obligations hereunder, the
responsibility for obtaining such assets, which shall not form part of the
Leased Assets, shall be that of 124.
3
2.8 INSPECTION RIGHTS. CSB shall have access to the Leased Assets at all
times. CSB shall have the right, during 124's normal business hours and upon
reasonable notice to 124, to inspect 124's records with respect thereto
provided that CSB will conduct no such inspection which is likely to disrupt
124's business operations.
2.9 LICENSES, ETC. 124 shall maintain in effect, all licenses certificates,
permits, approvals and consents required by applicable law or by any
governmental body, agency or authority in connection with the use, operation and
maintenance of the Leased Assets and the Uplink Facility and no proceedings
which may result in the revocation, cancellation, suspension or modification of
any such licenses, certificates, permits, approvals or consents shall occur
without notice to CSB.
2.10 CONDITION OF ASSETS. CSB leases the Leased Assets to 124 on an as-is,
where-is basis and except as otherwise expressly stated in this Agreement, CSB
expressly disclaims and makes no representation or warranty of any sort in
respect of the Leased Assets. 124 expressly covenants that it has reviewed all
the Leased Assets and that the same are sufficient and necessary for the
provision of the Services.
ARTICLE 3. TERM
The term of this Agreement (the "Term") shall run for a period of a period of 3
years from the "Closing" (as that term is defined in the Asset Purchase
Agreement).
ARTICLE 4. PRICE
4.1 MONTHLY FEE. CSB agrees to pay to 124 the sum of US$80,000 per month plus
applicable taxes (the "Monthly Fee"). The Monthly Fee shall be payable by wire
transfer or by delivery of a certified cheque to be received by 124 on the _____
day of each calendar month during the Term.
4.2 TAXES. CSB will be subject to any goods and services tax under the EXCISE
TAX ACT (Canada) and any other consumer, retail, use or value-added tax that may
be chargeable in respect of the Monthly Fee.
4.3 INTERRUPTION. In the event of interruptions of the Services as a result of
failure by 124 to satisfy the terms and conditions hereof (which failure is not
coincidental with an event of Force Majeure), the Monthly Fee payable by CSB to
124 during the next calendar month shall be reduced pro rata having regard to
the proportion that the time of the interruptions of services bears to the total
number of hours in such month.
4
ARTICLE 5. EARLY TERMINATION
5.1 PAYMENT ON EARLY TERMINATION. If CSB desires to terminate this Agreement
prior to the end of the Term, CSB shall give 124 not less than 30 days prior
written notice of its desire to do so and shall pay to 124, not as a penalty but
as a pre-estimation of damages sustained by 124, an amount equivalent to the
product of US$21,800 and the number of full calendar months then remaining in
the Term (the "Early Termination Fee"). CSB shall pay one-half of the Early
Termination Fee or US$200,000 (whichever is greater) on the effective date of
the termination and the remainder of the Early Termination Fee on the first to
occur of the first anniversary of the effective date of termination or on the
date which is half way between the effective date of termination and the date on
which this Agreement was originally intended to expire, whichever first occurs.
5.2 SPECIAL CIRCUMSTANCES. "Special Circumstances" exist when 124 is unable to
provide playback and uplink to CSB's four transponders so that the programming
on the transponders, taken together, is operative 99.5% of the time during each
year of the Term or when the action of transporting tape recordings from CSB to
124 for play-back consistently encounters unreasonable delays due solely to new
statutory, regulatory or policy-oriented governmental enforcements (and which
delays cannot be avoided by CSB and/or 124 acting reasonably) or where such
transportation becomes illegal. If Special Circumstances exist, CSB may
terminate the Agreement on 60 days notice to 124 and upon payment by CSB to 124
of all amounts owing hereunder to the effective date of termination, which
amounts shall not be paid where 124 is otherwise in default hereunder.
ARTICLE 6. DEFAULT
6.1 EVENTS OF DEFAULT. An event of default ("Event of Default") hereunder shall
be deemed to occur upon:
(a) any merger of 124 or conveyance, transfer or loan on substantially all
of the stock or assets of 124 other than to Xxxxxxx X. Xxxxxx, Xxxxxx
X. Xxxxxx or a company controlled by them or either of them;
(b) the failure of 124 or CSB to observe or perform any covenant set out
in this Agreement, provided such failure has continued for 30 days
after notice thereof is given by the party not in default to the party
in default (and further provided that the failure need only continue
for 5 days if the default relates to a failure by CSB to pay the
Monthly Fee);
(c) the insolvency, bankruptcy, assignment for the benefit of creditors,
voluntary or involuntary petitioning for creditors' relief or the
appointment of a transferee or receiver by or for any party hereto; or
(d) the commencement of any proceeding which may result in the revocation,
cancellation, suspension or modification of any license, certificate,
permit,
5
approval or consent required to operate the Leased Assets or the
Uplink Facility, which proceedings are not adjourned, dismissed, or
abandoned within 30 days after commencement thereof.
6.2 OCCURRENCE OF DEFAULT. Where an Event of Default has occurred, the party
not in default shall be entitled to rescind this Agreement upon notice to the
other party, which rescission shall be effective on the date and time specified
in such notice.
ARTICLE 7. INSURANCE
124 is not required to maintain insurance on the Leased Assets, however it shall
maintain comprehensive general liability insurance of not less than $2,000,000
per occurrence. CSB shall insure the Leased Assets for their replacement cost.
Each party will, upon request from the other, provide evidence reasonably
satisfactory to the other that such insurance is in full force and effect.
ARTICLE 8. FACILITIES
The services of 124 shall be principally carried on at 0000 Xxx Xxxx Xxxxx,
Xxxxxx, Xxxxxxx, X0X 0X0 (the "Uplink Facility"). If 124 wishes to relocate
the Uplink Facility to a new facility, (the "New Uplink Facility"), the cost of
such relocation including uplink moving and installation costs will be borne by
124. CSB will be responsible for all reasonable costs, approved by CSB in
writing, in advance, such approval not to be unreasonably withheld, associated
with any necessary tenant finishes at the New Uplink Facility where such
finishes are solely attributable to the provision of the Services. Subsequent to
approval of such finishes by CSB, 124 shall submit invoices for same to CSB
subsequent to completion of such finishes and upon receipt of invoices from the
contractor providing such finishes, excluding invoices for cost-overruns which
will not be the responsibility of CSB except as expressly agreed to in writing
by CSB in advance; CSB shall pay such invoices upon receipt.
ARTICLE 9. INDEMNIFICATION
9.1 INDEMNIFICATION OF CSB. 124 shall hold harmless and indemnify CSB, its
subsidiaries, affiliates, agents and their respective officers, directors,
employees and customers and each of them from any portion of any loss, cost,
damage, claim, expense or liability, including but not limited to, liability
or alleged liability, as a result of injury to, or death of, any person or
damage to, or destruction or loss of any property arising out of, as a result
of, or in connection with the performance of this Agreement and directly or
indirectly caused by the acts or omissions, negligent or otherwise, or
willful misconduct of 124 or a contractor or an agent or a representative of
124, be it active or passive, except where such loss, cost, damage, claim,
expense or liability arises in material respect from the gross negligence or
willful misconduct of CSB, its officers, directors and other employees or
agents. As used in the preceding sentence, the words "any person" shall
include, but shall not be limited to, a contractor or an agent of 124 or
6
CSB, or an employee of CSB, 124 or any such contractor or agent; and the words
"any property" shall include, but shall be limited to, property of CSB and
CSB's customers, or any such contractor or agent or an employee of any one of
them. Upon the request of CSB, 124 shall, at no cost or expense to CSB defend
any suit asserting claim for any loss, damage or liability specified above, and
124 shall pay any costs and legal fees that may be incurred by CSB in connection
with any such claims or suits or in enforcing the indemnity granted above.
9.2 INDEMNIFICATION OF 124. CSB shall hold harmless and indemnify 124, its
subsidiaries, affiliates, agents and their respective officers, directors,
employees and customers and each of them from any portion of any loss, cost,
damage, claim, expense or liability, including but not limited to, liability
or alleged liability, as a result of injury to, or death of, any person or
damage to, or destruction or loss of any property arising out of, as a result
of, or in connection with the performance of this Agreement and directly or
indirectly caused by the acts or omissions, negligent or otherwise, or
willful misconduct of the CSB or a contractor or an agent or a representative
of CSB, be it active or passive, except where such loss, cost, damage, claim,
expense or liability arises in material respect from the gross negligence or
willful misconduct of 124, its officers, directors and other employees or
agents. As used in the preceding sentence, the words "any person" shall
include, but shall not be limited to, a contractor or an agent of 124 or CSB,
or an employee of CSB 124 or any such contractor or agent and the words "any
property" shall include, but shall be limited to, property of 124, or any
such contractor or agent or an employee of any one of them. Upon the request
of 124, CSB shall, at no cost or expense to 124 defend any suit asserting
claim for any loss, damage or liability specified above, and CSB shall pay
any costs and legal fees that may be incurred by 124 in connection with any
such claims or suits or in enforcing the indemnity granted above.
ARTICLE 10. FORCE MAJEURE
10.1 DEFINITION. "Force Majeure" shall mean any of the following: prohibition
of acts by government or public agency, riot, war, hostility, strikes,
epidemics, fire, flood, earthquake, storm, tidal wave or other acts of nature
(including other extreme weather conditions), and all other reasonably
unpredictable or unforeseeable events beyond the control of the parties hereto.
10.2 EFFECT OF FORCE MAJEURE. Neither party shall be liable for its failure to
perform any of its obligations hereunder during any time period in which its, or
its contractor's or vendor's performance, is delayed by Force Majeure precluding
performance, provided the cause for such failure is beyond reasonable control
and without the material fault or negligence of the nonperforming party or its
subcontractors, and further provided that the party suffering from such delay
notifies the other party of the delay as provided in SECTION 10.3 (an "Excusable
Delay").
10.3 NOTIFICATION. If one party has been prevented from performing its
responsibilities stipulated in this Agreement because of an event of Force
Majeure, it shall notify the other party writing within fourteen (14) days after
the occurrence of such event and shall act to mitigate damages, if possible. If
any event of Force Majeure occurs, no party shall be liable for any damage,
increased costs or losses that another party may sustain by reason of Excusable
Delay. The party claiming Force Majeure shall take appropriate measures to
mitigate or remove the effects of
7
Force Majeure and, within the shortest possible time, resume as soon as possible
performance under this Agreement affected by the event of Force Majeure.
ARTICLE 11. DISPUTE RESOLUTION
If a dispute arises from or in connection with this Agreement, the claiming
party shall promptly notify the other party in a dated notice that a dispute has
arisen and describe the nature of the dispute. If no settlement can be reached
through consultation, a demand in writing may be made by either party to the
other that such dispute, controversy or claim be submitted to arbitration. Each
of 124 and CSB shall be entitled to appoint one arbitrator and the two
arbitrators so chosen shall select a third arbitrator. All arbitrations
authorized by this Agreement shall be conducted in accordance with the rules of
the Arbitration and Mediation Institute of Ontario and the ARBITRATION ACT, 1991
(Ontario). If either party does not reasonably comply with a final decision or
award made by the arbitrators, such non-complying party shall bear all costs and
expenses, including attorney's fees incurred by the other party in obtaining
enforcement of the decision or award. Otherwise, all costs of the arbitration
authorized by this Agreement shall be borne equally by the parties unless
otherwise ordered in the arbitration award. The parties agree not to take any
steps or actions to prevent or delay the enforcement of the decision or award.
ARTICLE 12. COSTS
Should any dispute be commenced between the parties concerning any provision of
this Agreement or the rights and duties of any party in relation thereto, the
party prevailing in such dispute shall be entitled, in addition to such other
relief as may be granted, to a reasonable sum as and for its attorneys fees in
such connection with enforcing its rights or defending itself, as the case may
be.
ARTICLE 13. NOTICE
Any notice, demand or other communication required or permitted to be given to
any party to this Agreement shall be in writing and shall be either personally
delivered or sent by registered mail, courier or telecopier. Any notice given
pursuant to this Agreement shall be sent to the intended recipient at its
address as follows:
To: Colorado Satellite Broadcasting Inc.
0000 Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx
X.X.X. 00000
Attention: Xxxx Xxxxxxx
8
To: 1248663 Ontario Inc.
0000 Xxx Xxxx Xxxxx
Xxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Attention: Xxxxxx Xxxxxxxx
or such other address, facsimile number or individual as may be designated by
notice by any party to the other. Any communication given by personal delivery
shall be conclusively deemed to have been given on the day of actual delivery
thereof and, if given by registered mail, on the 5th business day following the
deposit thereof in the mail and, if given by facsimile, on the day of
transmittal thereof. If the party giving any communication knows or ought
reasonably to know of any difficulties with the postal system which might affect
the delivery of mail, any such communication shall not be mailed but shall be
given by personal delivery or by telex.
ARTICLE 14. ENTIRE AGREEMENT
This Agreement constitutes the entire Agreement between parties pertaining to
its subject matter and supersedes all prior and contemporaneous agreements,
understandings, negotiations, discussions, whether oral or written of the
parties.
ARTICLE 15. ASSIGNMENT
Neither party may, without the prior written consent of the other party, assign,
sublease or otherwise transfer its rights or obligations hereunder.
Notwithstanding the foregoing, the parties acknowledge that 124 may and intends
to subcontract its rights and obligations hereunder to Fifth Dimension Satcom
Inc. ("Satcom") provided that Satcom shall throughout the Term be controlled
directly or indirectly by Xxxxxx X. Xxxxxx and/or Xxxxxxx X. Xxxxxx. 124 shall
be responsible for all acts and omissions of Satcom in relation to the
performance of such subcontract.
ARTICLE 16. GOVERNING LAW
This Agreement shall be given by and construed in accordance with the laws in
force in the Province of Ontario and federal laws applicable therein.
ARTICLE 17. NO PARTNERSHIP
The parties agree that this Agreement is an agreement for the purchase of
services and does not create any partnership or joint venture between the
parties.
9
ARTICLE 18. COUNTERPARTS
This Agreement and amendment thereto may be executed in any number of
counterparts, all of which taken together, shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
ARTICLE 19. SUCCESSORS AND ASSIGNS
This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns.
IN WITNESS WHEREOF the parties have executed this Agreement.
COLORADO SATELLITE BROADCASTING, INC.
Per:
1248663 ONTARIO INC.
Per:
SCHEDULE "A"
SERVICES
124 shall
(a) review scheduling;
(b) maintain film title inventory;
(c) provide DIVICAM digital capabilities along with DVD play-back operations;
(d) provide notification to CSB of any interruption of services to CSB's
subscribers as soon as reasonably possible after 124 becomes aware of such
interruption;
(e) provide an employee on-site at the Uplink Facility on a twenty-four hour
basis, which employee shall have the technical expertise to respond quickly
and effectively to any problems experienced by CSB's subscribers; and
(f) provide office facilities for a representative of CSB who shall have full
access on a twenty-four hours basis to the Uplink Facility.
SCHEDULE "B"
LIST OF LEASED ASSETS
DESCRIPTION MODEL SERIAL NUMBER NUMBER/COMMENTS
----------- ----- ------------- ---------------
EXOTICA
Exciter WB461 126090
Audio Compressor MDC 2001 CK277816
TBC DPS235 5E235020
XXX XXXXX 0 000 0
XXX XXXXX 3 204A 2
Monitor PANASONIC SB70 EK1650001
Patch panel ADC
VAX CPU 630QY-A2 WF83010504
UNIDEN SAT. RX SQ530
Comstream digital RX DBR401 7929
VCII & scrambler SP2000080
VCII & descrambler P00150371
terminal VT420 TA5I4F6330
Keyboard HJ432V7987
SmartUps 700
Digital Printer LA75 TY40141234
VARIAN GEN 1 TXMTR. VZJ2700D4F1 S159XXX
EXXTASY
Video Proc. Amp. VPA331N 951222
Audio Processor MDC2001 000-00000-0000
Patch panel
VAX CPU WF63507157
GI SAT RX. 650I
VCII & scrambler SP2000050
VCII & descrambler A020086DB
terminal VT420 TA245S9300
keyboard 108RX33S-1E
Exiter WB461 107
VARIAN GEN II TXMTR. VZJ2700GAA033 559
Monitor S901 KA4420329
Modem PM14400FXMT
Micro Mixer 2
TRUE BLUE
Exiter WB461 123
Monitor BT-S901Y KA4440151
TBC DPS-235 4K235050
Audio Compressor MDC2001 000-00000-0000
2
VDA VDA108 2
Patch panel
VAX CPU WF71610562
DIGITAL RX DBR401 7931
SAT RX GI 650I
VCII PLUS SCRAMBLER S0000003
VCII PLUS DESCRAMBLER P00264197
VARIAN GEN I TXMTR X31599FG
APC UPS 600
Micro Mixer 2
PROMO
VARIAN GEN II TXMTR. VZJ2700GAA033 317
W/G switch 24019-G1 27
Dummy Load 1.5KW
SA video Exiter 7550B
Neico Waveguide switch 24019-GI 16
Neico Wavegaide switch 19
Neico Waveguide switch 36
Neico Waveguide switch 26
Neico Waveguide switch 61
Waveguide switch 880
Termination 3KW
termination 2
HYPBIDS 2
AYDIN TXMTR. 103-E1 4
XXXXXX 4.5 meter antenna
1 PORT feed
POL control
POL control panel
TX Reject filter
6.1 meter antenna
DE-ICING 6.1 meter
1.8 meter RX only
KU LNB
Block Down Converter 140059 4370000411
Block Down Converter 140059 4370000410
Xxxxxx Video Processing VPA-331 ?
Xxxx Xxxxxxxx XX000 XX000X0000
Keyboard LK401-AA HJ347E4009
Comstream Digital Broadcast DBR101 1069
receiver
Video Exiter VEL-6-8506 194200
Video Exiter VEL-6-8506 194201
Radiation Meter 8616 21009
3
TEST EQUIPMENT
TMS 3551A 2214A12107
Radiation Meter 8616 21010
Radiation Probe 8621C 22015
Vector Scope 520A 833079
Power Meter 436A 2709A27119
Transmission set test 3555B 0992A03445
Test oscillator 654A 0951A02640
Spectrum analyzer 757 1416A02117
Frequency Counter 534A 2805
Video Waveform Monitor RM529 M0D1880
Video Waveform Monitor RM529 14423
TECHS
Racks
83" with 2 power bars
85" with 1 power
strip & 1 power
86" bar with 2 power
Work Bench 6 strips with upper
shelf
Desk 5 1
Chairs 2
Shelf 4 1
Book shelf 34" 1
Book Shelf 48" 1
Storage Cabinet 3x6 2
3 phase 225 Amp power panel NLAB442A 0
0 xxxxx 00 amp breakers 4
30 amp Dual 1
15 amp 7
15 amp Dual 1
60 amp Dual 1
40 amp Dual 1
3 phase 225 Amp Power panel NBC324 0
0 xxxxx 00 amp Breakers 2
15 amp 7
30 amp 1
Dehydrator 1
Misc. Tolls 1
75 Kua 600v Transformer 2
45 Kua 600v Transformer 1
Air handling mix units 2
3 pole 600v CCT Breakers 3
100x3 Interconnect cable between Pwr rm. &
transformers
125 amp 3 phase panel QL42412 5 antenna deice
4
50amp 2 pole 2
l5 amp 2
LIBRARY
cabinets full frame pullout 70027 2
1/2" large Betacam shelves T7402 24
Add-on frame pullout cabinet 70028 1
1/2" large Beracam shelves T7402 6
7 rack Stationary shelves 9
6 rack Stationary shelves 4 - 15 Beta/shelf
capacity
6 rack Stationary shelf 1 - 20 Beta/shelf
capacity
3x6x1 steel storage shelf 1
3x6x2 steel storage shelf 1
6x6x2 steel storage shelf 2
UPSTAIRS SCREENING
Betacam recorder UVW-1800 11858
3/4" U-matic recorder VO-5600 25568
3/4" U-matic recorder VO-5850 20248
Audiolab Tape Degausser TD511560 51404
PROGRAMMING OFFICE
3x6x1 steel storage shelf
6 rack stationary shelf 15 Beta/shelf
capacity
5x2.5 office desk
3 shelf computer trolley
Samsung Syncmaster 3Ne H1BD900695 Color computer
monitor
Hewlett Packard Vectra VL MX55050221 Pentium computer
5/75 series 3
RACK 1- PLAYOUT AREA
19X32X84 INCHES
Xxxxxx lolo generator inseter LGI-1302N
Hedco Hedline 4xl switch SVS 345 A932188 SVS 345
Hedco Hedline 4xl switch SVS 345 A931938
Hedco Hedline 4x1 switch SVS 345 A932187
Xxxxxx Sync pulse generator SPG-1302N 9607586
PP1 ADC 24X2 Audio patch
panel
HEDCO (10 VIDEO DAS) DA-6000 87C170
PP2 26X3 Video patch panel
PP3 26X3 Video patch panel
PP4 26X3 Video patch panel
5
PP5 26X3 Video patch panel
PP6 26X3 Video patch panel
PP7 26Xf Audio patch panel
WBS Audio DA M605A 5
PP8 26X2 Audio patch panel
XXXXXX DA FR-662 841437
(7+2POWER SUPPLIES)
ROLLING RACK -- PLAYOUT AREA
26X18X36 INCHES
Monitor - JVC 8 INCH 10132484
Computer monitor- TTX 15 2E1-61006011
INCH
COMPAQ DESKPRO 5100 6617HWZ5P990
PENTIUM COMPUTER
COMPAQ KEYBOARD 1LJ39D302954
RACK 2 -- PLAYOUT AREA
19X32X84 INCHES
Monitor - PANASONIC 8 XX0000000
INCH
Monitor - BURLE 8 INCH 117721
Monitor - Sony 8 INCH 2005004
Monitor - Sony 8 INCH 2000515
Panasonic WJ-MX50 Digital
AV mixer
Plastic Trays
Tektronix type 528 Wavefrom
monitor
Tektronix 1420 NTSC B040742
Vectorscope
Monitor - CITIZEN 9 INCH 31201696
Fostec Personal Monitor 6301B 0236580KU
speaker
Videoquip Research PHASE 3 RS-41A 6317
stereo audio 4X1 RTR
Videoquip Research PHASE 3 RS-41V 6316
video 4X1 RTR
SonyBetacam SP PVW-2600 13190
Videocassette player
rack drawer 17X18X5" DEEP
RACK 3 -- PLAYOUT AREA
19X32X84 INCHES
Monitor - HITACHI 13 INCH 3060578
Dorrough Loudness monitor MODEL 40-A
6
Dorrough Loudness monitor MODEL 40-A
Sony Betacam SP PVW-2600 15379
Videocassette player
Sony Betacam SP PVW-2600 11677
Videocassette player
Videotech VIS-1201 12X1
switcher
ALPHA STAR STARTRAK PIHB0040854
1000
Satellite receiver
Monitor -Panasonic 8 INCH KA4420172
Monitor - Panasonic 8 INCH KA6230050
Sony Betacam SP PVW-2600 12829
Videocassette player
RACK 4 - PLAYOUT AREA
19X32X84 INCHES
Monitor - Burle 8 INCH 117712
Monitor - JVC 8 INCH 7030254
Clock
Sony Betacam SP PBC-2600 401
Videocassette player
Sony Betacam SP PVW-2600 104030
Videocassette player
Sony Betacam SP PVW-2600 15294
Videocassette player
Sony Betacam SP PVW-2600 15256
Videocassette player
Ravk drawer 17X18X5" DEEP
Panasonic Editing AG-A770 2A1574KB
Controller power supply
EXXXTASY/TRUE BLUE PLAYOUT
CABINET 72X57X78 INCHES
Monitor - Burle 8 INCH 109112
Monitor - Burle 8 INCH 117731
Monitor - Burle 8 INCH 92545
Monitor - Burle 8 INCH 92559
Monitor - Burle 8 INCH 92521
Monitor - Burle 8 INCH 92525
Monitor - JVC 8 INCH 10132495
Monitor - JVC 8 INCH 10132489
Monitor - Citizen 9 INCH 31201462
Monitor - Citizen 9 INCH 31201241
Monitor - Sony HR 2015899
TRINITRON 13"
7
Fostex personal Monitor 6301B 0236579KU
speaker
Fostex personal Monitor 6301B 0235566KI
speaker
Dorrough Loudness Monitor 40-A
Dorrough Loudness Monitor 40-A
Thomson CSF 5500A
LABORATORIES INC.color
corrector
Thomson CSF
LABORATORIES INC. Color
collector Remote
5TH DIMENSION logo
ON/OFF switch
Tektronix type 528 Waveform
Monitor
Tektronix 1420 NTSC
Vectorscope
5TH DIMENSION VCR TBC
Remote control panel
5TH DIMENSION VCR TBC
Remote control panel
5TH DIMENSION audio
monitor control panel
Panasonic systems Editing AG-A770
controller
Panasonic special Effects WJ-5500A
generator/switcher
Viewfinder transport
controller 2
Videotek 12X1 switcher VIS-1201
Monitor - Commodore 13" 1084S 1052733
Commodore Amiga 2000 HD XX0000000
CPU
Commodore Amiga keyboard MT9004
Rolling cabinet 24X24X32"
VIEWING ROOM
Monitor - JVC 8 INCH TM-923 7030255
Sony Betacam SP PVW-2800 20630
Videocassette recorder
Sony Betacam SP UVW-1600 10457
Videocassette player
Monitor - HITACHI 13 INCH 3080612
Monitor -Panasonic 13" CT-1331YC XX0000000
Tektronix 1740A B015212
Waveform/vectorscope monitor
8
Sony Dynamic MDR-7502 stereo headphones
Monitor - Sanyo 13" VMC-7514 H8201655
Table 60X30X29"
Cabinet 60X68X16"
Rolling Table 47X33X32
Cabinet 27X22X48
RACK 5 - VIEWING ROOM
Videoquip audio amplifier MP204A 6640
Digital video systems TBC DPS-170 60530126
PPI 26X1 video patch panel
PP2 26X3 audio patch panel
Panasonic S-VHS AG-7355 L1TB00065
Videocassette recorder
Sony Betacam SP PVW-2800 17174
Videocassette recorder
Sony 0/0 XXXX X-XXXXX XXX-000 00000
Xxxxxxxxxxxxx recorder
Sony Betacam SP UVW-1200 10652
Videocassette player
Rack drawer 17X18X5
SES COM stereo line driver PO-55
APHEX 10/4 Interface 124A 10356
RACK 6 - VIEWING ROOM
PPI 26X3 Audio/video patch
panel
Videoquip Research XXXXX 0 XXX-000 0000
video DA
Sony Betacam SP PVW-2600 15440
Videocassette player
OTHER ITEMS
Chairs 8
Tables 2 - 60X30X27"
4 Drawer legal size filling
cabinet
Desk with 4 drawers 60X30X29
Room divider 60X73"
12" fan
12 Pigeon-hole message sender
5-slot wall-mounted file holder
Combination peg board/white 23X35"
board
Horizontal blind 47X84"
Horizontal Blind 2 - 24X84"
9
EDIT SUITE
Ampex ADO 3000 Keyboard 1420180-016 1631189
ADO Terminal W/disk drive 1465092-030 971939
ADO preview monitor-Sanyo VMC-7514 H 8101590
Audio Patch panel x 24 input N/A N/A
Video Patch panel x 24 input N/A N/A
Amiga Computer 3000 MT 9201 Tower W/Toaster
Sony Betacam Player PVW-2600 10430
Sony Betacam Recorder PVW-2800 20630
Panasonic S-VHS Recorder AG-D5850P F4T00436
Panasonic TV Monitor BT-S9014 KA4420172
Panasonic TV Monitor BT-S9014 XX0000000
Panasonic TV Monitor BT-S1360Y FE4120037
TTX Computer Monitor TTX-3501 424A046672
Xxxxxx Video D.A. FR-662
Xxxxxx Video D.A. rack frame (A) FR682AV
Waveform/Vectorscope Tektronix 1740 B011764
Videotek Prodigy Switcher 1950560
Videotek Prod.Frame 1950561
Panasonic Edit controller AV-950 H3A1336D1
Keytronic keyboard (edit
input) EO3435 6159366
SoundCraft Audio mixer RWI277 851
SoundCraft mixer power supply CPS 150 RW8000 020356
SoundCraft GPI interface VSA 24 II
Peavey Interface Amplifier 1A 10/4 W/O 7521237
Peavey Interface Amplifier 1A 10/4 W/O 7521241
Sony Compact Disk player CDP-311 A700765
Tectonix audio cassette player RS-TR979 FH3BA01358
Samson audio amplifier Servo 150
Ramsa speakers 160 xxxxx XX-A10-K 372005
Ramsa speakers 160 xxxxx XX-A10-K 372006
Burle B&W monitor TC1909 92545
Burle B&W monitor TC1909 92559
T.B.C. Remote controller RMC 11 Grimms
Enterprises
Xxxxxxxx Edit console W/ 2 2.5" metal
racks
3 level wood shelf unit- custom made
monitors
metal tape shelves 2
4 wheel computer workstation 2
high back 5-wheel chairs 2
1 Microphone stand
Microphone boom/holder
Electrovoice 635-A microphone 2
power bars 3
Monitor TMA-9U 1603044 shop use
10
VTR Betacam PVW-2600 15305 under repair
Character Generator WJ-KB50 3XZ04473 spare
Character Generator WJ-KB50 20ZOO815 spare
Video XX XXXXXX A940244 spare
Video switcher RS 41-V 6659 to be installed
Audio switcher RS 41-A 6660 to be installed
Audio Meter VP-2 6633 to be installed
Audio Meter VP-2 6318 to be installed
Audio DA ADA 204 A 6320 to be installed
Effect Generator WJ-MX 50 3XA03302 spare
VHS VCR SVP-3000 0010145-D4 under repair
VHS VCR SLV-770HF under repair
Computer interface ISP-15 1001 spare
Computer interface ISP-15 1002 spare
Computer interface ISP-15 1003 spare
Computer interface ISP-15 1004 spare
Computer interface ISP-15 1005 spare
Computer interface ISP-15 1006 spare
Effect Generator WJ-5500 52516 under repair
Service manual Sony UVW 1600/1800
vol.1
Service manual Sony UVW 1600/1800
vol.2
Service manual Sony PVW 2600
vol.1
Service manual Sony PVW 2600 vol.2
Head protrusion Meter
Xxxxxx soldering station
Ditheral adjusting screw J-6080-013-A 4
Drum eccentricity gauge J-6001-820-A l
Drum eccentricity gauge J-6001-830-A 1
Drum eccentricity gauge J-6001-840-A 1
Drum eccentricity gauge J-6087-000-A l
Flatness plate J-6086-5 70-A
Rell table tension gauze J-6080-01 1-A
Reel motor shaft gauze J-6320-870-A
Reel motor shaft jig J-6 150-960-A
Inspection mirror 7-723-902-00
Tension scale 50G 7-723-050-20
Tension scale 100G 7-723-050-30
Tension scale 20G 7-723-050-01
Tension scale 500G 7-723-050-50
Alignment tape CR2-1B 8-960-096-01
Alignment tape CR5-1A 8-960-096-01
Thickness gauge 9-911-053-00
Tentelometer
11
Wire clearance gauge J-6152-450-A
Reel high table gauge J-6320-680-A
Tension regulator J-6190-800-A
Thickness gauge J 6041-670-A
Tape guide adjust tool J 0000-000-X
Dial tension gauge
Cassette reference
Tension adjust fixture
Extension board
L shaped wrench 2
wrench
Extension board EX 278 J-6332-780-A
Extension board A-6766-389-A
Extension board EX 279
Thickness gauge J 6041-670-A
Tape guide adjust tool J 0000-000-X
Dial tension gauge
Cassette reference
Tension adjust fixture
Extension board
L shaped wrench
L shaped wrench
wrench
Oil NT 68
Extension board EX 278 J-6332-780-A
Extension board
Extension board EX 279
Work bench
chair
Rubbermaid mobile cart
MILD FINANCING EQUIPMENT
PVW 2800 Betacam SP 21351
Recorder
PVW 2600 Betacam SP Player 15294
PVW 2600 Betacam SP Player 15305
PVW 2600 Betacam SP Player 15213
PVW 2600 Betacam SP Player 15440
S-VHS Recorder SONY SVT 10145
3000
UVW-1200 Betacam SP Player 10652
DPS 235 TBC Frame SYNC. 4K235050
TEKTRONIX 1740A BO 15212
WFM/VECT
TEKTRONIX TSG 130A
12
GEN.AUD/VID
AUDIO Monitor MP 204A 6640
PHASE 3 Extended Range 6633
Audio Meter
RS 41V 4X1 Video Routing 6659
RS 41A 4X1 Stereo Audio 6660
Routing
RS 41V 4X1 Video Routing 6316
RS 41A 4X1 Stereo Audio 6317
Routing
ADA 204 A Audio DA 6638
VDA 108 Video DA 6319
ADA 204 A Audio DA 6320
VDA 108 Video DA 6323
ADA 204 A Audio DA 6321
VDA 108 Video DA 6635
Phase 3 Extended Range Audio 6318
Meter
ISP-15 Computer Interface 1001
ISP-15 Computer Interface 1002
ISP-15 Computer Interface 1003
ISP-15 Computer Interface 1004
ISP-15 Computer Interface 1005
ISP-15 Computer Interface 1006
386 PC Computer & VGA
Monitor
PELCO VS5104 Video 1682 4K
Switcher
APHEX 10/4 Audio Interface 10356
Model 124A
HITACHI CM 151U Color 3060578
Monitor
HITACHI CM 151U Color 3080612
Monitor
HITACHI CT 1396VM X0X000000
Video/Audio Monitor
SANYO VMC-7514 Color H8101558
Audio/Video
SANYO VMC-7514 Color H8101472
Audio/Video
SANYO VMC-7514 Color H8101590
Audio/Video
SANYO VMC-7514 Color H8101437
Audio/Video
SANYO VMC-7514 Color H8201655
Audio/Video
13
MCL Klystron Power Amps 1363
MCL Klystron Power Amps 1364
Aydin Klystron Power Amp
Miteq video exciters (2) 194201
Uniden Satellite Receivers (2)
Domestic 2.4 metre TVRO.
Make unknown
Mitsubishi UPS 30KVA
4kw Exide UPS
Miteq Transmit Interface Unit 194650
Specialty uWave 1:1 Protection 3379-001
switch
VA936L12 Varian 12 ch 71226
klystron tubes
VA936L12 Varian 12 ch 71170
klystron tubes
Xxxxxxxx 12 ch klystron tube 000.260
Delta 30 kva transformer 600-
380 VAC
transformer
General Instruments 1.2m vsat
Comstream modem
lot of waveguide and w/g
switches
Square D AC mains enclosed
switches (4)
3 phase 125 amp distribution
box
Videocipher RS Module
SCHEDULE 1.2
CALL CENTER INTERIM SERVICES AGREEMENT
[attached]
SCHEDULE 1.2
CALL CENTER INTERIM SERVICE AGREEMENT
THIS AGREEMENT made as of the _____ day of __________, 1997.
BETWEEN:
COLORADO SATELLITE BROADCASTING, INC.
a corporation incorporated under the laws of Colorado
("CSB")
- and -
1248663 ONTARIO INC.
a corporation incorporated under the laws of Ontario
("124")
WHEREAS CSB is engaged in the adult movies business (the "Business");
AND WHEREAS under the terms of an Asset Purchase Agreement made September 5,
1997 among New Frontier Media, Inc., CSB and 124 (the "Asset Purchase
Agreement"), the parties hereto have agreed to enter into this Agreement;
AND WHEREAS CSB wishes to engage 124 and 124 wishes to be so engaged to
provide the Services, as defined in SECTION 1, for the call center to be
located at 0000 Xxxxxxxx Xxxxx, Xxxxxx, Xxxxxxx (the "Call Center") on an
interim basis on behalf of CSB;
NOW THEREFORE THE PARTIES AGREE as follows in consideration of the payment of
$2.00, the receipt and sufficiency of which is hereby acknowledged:
ARTICLE 1. PROVISION OF SERVICES BY 124
1.1 SERVICES. Subject to the terms and conditions of this Agreement, CSB
shall retain 124 to carry out the services and 124 shall render the services
as set out in SCHEDULE "A" (the "Services"). 124 hereby expressly covenants
to perform the Services and all other functions reasonably necessary for the
operation of a call center in respect of the Business.
2
1.2 COLLECTIONS. 124 agrees to deposit all amounts collected from subscribers
to the programming offered by the Business in such accounts as directed from
time to time by CSB, and until deposited all such amounts will be held in trust
by 124 for the benefit of CSB.
ARTICLE 2. LEASE OF EQUIPMENT
2.1 LEASE. In consideration of the provision of the Services by 124 in
accordance with the terms and conditions of this Agreement CSB agrees to
lease to 124, for the Term (as defined in ARTICLE 3) those assets (the
"Leased Assets") identified on SCHEDULE "B" for a nominal lease payment of
US$2.00.
2.2 TITLE. Title to the Leased Assets shall at all times remain in CSB and at
no time during the Term shall title become vested in 124. Immediately upon
termination of this Agreement provided CSB is not then in default under this
Agreement, 124 shall release the Leased Assets to CSB and the Leased Assets
shall be removed from 124's premises at CSB's expense within 7 days after the
final day of the Term. All Leased Assets will be returned to CSB in the
operating order, repair and condition and in as good a condition as when
originally delivered to 124, ordinary wear and tear excepted, and be free and
clear of all liens other than those placed thereupon by CSB.
2.3 SECURITY INTEREST. CSB may register a security interest in the Leased
Assets as against 124 under the PERSONAL PROPERTY SECURITY ACT (Ontario) as a
cautionary filing for a period or one year which registration will be
discharged upon termination of this Agreement and the fulfillment of any
obligations owed by 124 to CSB under this Agreement.
2.4 REMOVAL OF LEASED ASSETS. The Leased Assets shall not be removed from the
Call Center without the prior written consent of CSB, except where any such
Leased Assets require off-site repair and maintenance.
2.5 MAINTENANCE COSTS. All labor costs related to the maintenance of the
Leased Assets shall be the responsibility of 124. 124 shall maintain
industry-accepted maintenance and repair standards. Subject to SECTION 2.6,
124 shall invoice CSB, and CSB shall pay 124 upon receipt thereof, for all
actual costs incurred to purchase replacement parts for the Leased Assets or
to replace any of the Leased Assets.
2.6 LOSS OR DESTRUCTION. In the event of any loss or destruction of any
Leased Assets attributable solely to the negligence or wilful misconduct of
124, its subcontractors, or their employees, 124 shall provide a substitution
therefor of comparable quality which substitution shall be deemed to form
part of the Leased Assets.
2.7 ADDITIONAL ASSETS. Subject to SECTION 2.5, if 124 requires assets other
than the Leased Assets to comply with its obligations hereunder, the
responsibility for obtaining such assets, which shall not form part of the
Leased Assets, shall be that of 124.
3
2.8 INSPECTION RIGHTS. CSB shall have the right, during 124's normal business
hours and upon reasonable notice to 124, to inspect the Leased Assets and
124's records with respect thereto provided that CSB will conduct no such
inspection which is likely to disrupt 124's business operations.
2.9 LICENSES, ETC. 124 shall maintain in effect, all licenses, certificates,
permits, approvals and consents required by applicable law or by any
governmental body, agency or authority in connection with the use, operation
and maintenance of the Leased Assets.
2.10 CONDITION OF ASSETS. CSB leases the Leased Assets to 124 on an as-is,
where-is basis and except as otherwise expressly stated in this Agreement,
CSB expressly disclaims and makes no representation or warranty of any sort
in respect of the Leased Assets. 124 expressly covenants that it has reviewed
all the Leased Assets and that the same are sufficient and necessary for the
provision of the Services.
ARTICLE 3. TERM
The term of this Agreement (the "Term") shall run for a period of 9 months from
the "Closing" (as that term is defined in the Asset Purchase Agreement).
ARTICLE 4. PRICE AND PAYMENT
4.1 MONTHLY FEE. CSB agrees to pay to 124 the sum of US$275,000.00 per month
plus applicable taxes (the "Monthly" Fee"). The Monthly Fee shall be payable
by wire transfer or by delivery of a certified cheque to be received by 124
on the ___day of each calendar month during the Term.
4.2 TAXES. CSB will be subject to any goods and services tax under the EXCISE
TAX ACT (Canada) and any other consumer, retail, use or value-added tax that
may be chargeable in respect of the Monthly Fee.
4.3 INTERRUPTION. In the event of any interruption of the Services as a
result of failure by 124 to satisfy the terms and conditions hereof (which
failure is not coincidental with in event of Force Majeure), the Monthly Fee
payable by CSB to 124 during the next calendar month shall be reduced by the
actual amount of damages sustained by CSB as a result of such interruption.
ARTICLE 5. EARLY TERMINATION
5.1 NOTICE OF TERMINATION. CSB may terminate this Agreement upon the delivery
by CSB, on not fewer than 30 days written notice (the "Termination Notice"),
to 124 of its intention to terminate. Termination shall be deemed to occur on
the 30th day following the Termination Notice (the "Termination Date").
4
5.2 PAYMENT ON EARLY TERMINATION. Upon termination pursuant to SECTION 5.1,
provided an Event of Default on the part of 124 is not then in effect, CSB
shall pay to 124 any Monthly Fee due under this Agreement prior to the
Termination Date. Upon payment thereof together with any other amounts owing
by CSB to 124 under this Agreement, CSB shall be deemed to have been
completely released by 124 in respect of its obligations under this Agreement.
ARTICLE 6. DEFAULT
6.1 EVENTS OF DEFAULT. An event of default ("Event of Default") shall be
deemed to occur upon:
(a) any merger of 124 or conveyance, transfer or loan of
substantially all of the stock or assets of 124 other than to
Xxxxxxx X. Xxxxxx, Xxxxxx X. Xxxxxx or a company controlled by
them or either of them;
(b) the failure of 124 or CSB to observe or perform any covenant set
out in this Agreement, provided such failure has continued for 30
days after notice thereof is given by the party not in default to
the party in default (and further provided that the failure need
only continue for 5 days if the default relates to a failure by
CSB to pay the Monthly Fee); or
(c) the insolvency, bankruptcy, assignment for the benefit of
creditors, voluntary or involuntary petitioning for creditors'
relief or the appointment of a transferee or receiver by or for
any party hereto.
6.2 OCCURRENCE OF DEFAULT. Where an Event of Default has occurred, the party
not in default shall be entitled to rescind this Agreement upon notice to the
other party, which rescission shall be effective on the date and time
specified in such notice.
ARTICLE 7. INSURANCE
124 is not required to maintain insurance on the Leased Assets, however it shall
maintain comprehensive general liability insurance of not less than $2,000,000
per occurrence. CSB shall insure the Leased Assets for their replacement cost.
Each party will, upon request from the other, provide evidence reasonably
satisfactory to the other that such insurance is in full force and effect.
ARTICLE 8. INDEMNIFICATION
8.1 INDEMNIFICATION OF CSB. 124 shall hold harmless and indemnify CSB, its
subsidiaries, affiliates, agents and their respective officers, directors,
employees and customers and each of them from any portion of any loss, cost,
damage, claim, expense or liability, including but not limited to, liability
or alleged liability, as a result of injury to, or death of, any person or
damage to, or destruction or loss of any property arising out of, as a
result of, or in connection with the
5
performance of this Agreement and directly or indirectly caused by the acts
or omissions, negligent or otherwise, or willful misconduct of 124 or a
contractor or an agent or a representative of 124, be it active or passive,
except there such loss, cost, damage, claim, expense or liability arises in
material respect from the gross negligence or willful misconduct of CSB, its
officers, directors and other employees or agents. As used in the preceding
sentence, the words "any person" shall include, but shall not be limited to,
a contractor or an agent of 124 or CSB, or an employee of CSB, 124 or any
such contractor or agent; and the words "any property" shall include, but
shall be limited to, property of CSB and CSB's customers, or any such
contractor or agent or an employee of any one of them. Upon the request of
CSB, 124 shall, at no cost or expense to CSB defend any suit asserting claim
for any loss, damage or liability specified above, and 124 shall pay any
costs and legal fees that may be incurred by CSB in connection with any such
claims or suits or in enforcing the indemnity granted above.
8.2 INDEMNIFICATION OF 124. CSB shall hold harmless and indemnify 124, its
subsidiaries, affiliates, agents and their respective officers, directors,
employees and customers and each of them from any portion of any loss, cost
damage, claim, expense or liability, including but not limited to, liability
or alleged liability, as a result of injury to, or death of, any person or
damage to, or destruction or loss of any property arising out of, as a result
of, or in connection with the performance of this Agreement and directly or
indirectly caused by the acts or omissions, negligent or otherwise, or
willful misconduct of the CSB or a contractor or an agent or a representative
of CSB, be it active or passive, except where such loss, cost, damage, claim,
expense or liability arises in material respect from the gross negligence or
willful misconduct of 124, its officers, directors and other employees or
agents. As used in the preceding sentence, the words "any person" shall
include, but shall not be limited to, a contractor or an agent of 124 or CSB,
or an employee of CSB. 124 or any such contractor or agent and the words "any
property" shall include, but shall be limited to, property of 124, or any
such contractor or agent or an employee of any one of them. Upon the request
of 124, CSB shall, at no cost or expense to 124 defend any suit asserting
claim for any loss, damage or liability specified above, and CSB shall pay
any costs and legal fees that may be incurred by 124 in connection with any
such claims or suits or in enforcing the indemnity granted above.
ARTICLE 9. FORCE MAJEURE
9.1 DEFINITION. "Force Majeure" shall mean any of the following: prohibition
of acts by government or public agency, riot, war, hostility, strikes,
epidemics, fire, flood, earthquake, storm, tidal wave or other acts of nature
(including other extreme weather conditions), and all other reasonably
unpredictable or unforeseeable events beyond the control of the parties
hereto.
9.2 EFFECT OF FORCE MAJEURE. Neither party shall be liable for its failure to
perform any of its obligations hereunder during any time period in which its,
or its contractor's or vendor's performance, is delayed by Force Majeure
precluding performance, provided the cause for such failure is beyond
reasonable control and without the material fault or negligence of the
non-performing party or its subcontractors and further provided that the
party suffering from such delay notifies the other party of the delay as
provided in SECTION 9.3 (an "Excusable Delay").
6
9.3 NOTIFICATION. If one party has been prevented from performing its
responsibilities stipulated in this Agreement because of an event of Force
Majeure, it shall notify the other party in writing within 14 days after the
occurrence of such event and shall act to mitigate damages, if possible. If
any event of Force Majeure occurs, no party shall be liable for any damage,
increased costs or losses that either party may sustain by reason of
Excusable Delay. The party claiming Force Majeure shall take appropriate
measures to mitigate or remove the effects of Force Majeure and, within the
shortest possible time, resume as soon as possible performance under this
Agreement affected by the event of Force Majeure.
ARTICLE 10. DISPUTE RESOLUTION
If a dispute arises from or in connection with this Agreement the claiming
party shall promptly notify the other party in a dated notice that a dispute
has arisen and describe the nature of the dispute. If no settlement can be
reached through consultation, a demand in writing may be made by either party
to the other that such dispute, controversy or claim be submitted to
arbitration. Each of 124 and CSB shall be entitled to appoint one arbitrator
and the two arbitrators so chosen shall select a third arbitrator. All
arbitrations authorized by this Agreement shall be conducted in accordance
with the rules of the Arbitration and Mediation Institute of Ontario and the
ARBITRATION ACT, 1991 (Ontario). If either party does not reasonably comply
with a final decision or award made by the arbitrators, such non-complying
party shall bear all costs and expenses, including attorney's fees incurred
by the other party in obtaining enforcement of the decision or award.
Otherwise, all costs of the arbitration authorized by this Agreement shall be
borne equally by the parties unless otherwise ordered in the arbitration
award. The parties agree not to take any steps or actions to prevent or delay
the enforcement of the decision or award.
ARTICLE 11. COSTS
Should any dispute be commenced between the parties concerning any provision of
this Agreement or the rights and duties of any party in relation thereof, the
party prevailing in such dispute shall be entitled, in addition to such other
relief as may be granted, to a reasonable sum as and for its attorney's fees in
such connection with enforcing its rights or defending itself, as the case may
be.
ARTICLE 12. NOTICE
Any notice, demand or other communication required or permitted to be given to
any party to this Agreement shall be in writing and shall be either personally
delivered or sent by registered mail, courier or telecopier. Any notice given
pursuant to this Agreement shall be sent to the intended recipient at its
address as follows:
7
To: Colorado Satellite Broadcasting Inc.
0000 Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx
X.X.X. 00000
Attention: Xxxx Xxxxxxx
To: 1248663 Ontario Inc.
0000 Xxx Xxxx Xxxxx
Xxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Attention: Xxxxxxx Xxxxxx
or such other address, facsimile number or individual as may be designated by
notice by any party to the other. Any communication given by personal
delivery shall be conclusively deemed to have been given on the day of actual
delivery thereof and, if given by registered mail, on the 5th business day
following the deposit thereof in the mail and, if given by facsimile, on the
day of transmittal thereof. If the party giving any communication knows or
ought reasonably to know of any difficulties with the postal system which
might affect the delivery of mail, any such communication shall not be mailed
but shall be given by personal delivery or by telex.
ARTICLE 13. ENTIRE AGREEMENT
This Agreement constitutes the entire Agreement between parties pertaining to
its subject matter and supersedes all prior and contemporaneous agreements,
understandings, negotiations, discussions, whether oral or written of the
parties.
ARTICLE 14. ASSIGNMENT
Neither party may, without the prior written consent of the other party, assign,
sublease or otherwise transfer its rights or obligations hereunder.
ARTICLE 15. GOVERNING LAW
This Agreement shall be given by and construed in accordance with the laws in
force in the Province of Ontario and federal laws applicable therein.
8
ARTICLE 16. RELATIONSHIP OF PARTIES
This Agreement is an agreement for the purchase of services and does not create
any partnership or joint venture between the parties.
ARTICLE 17. RIGHT TO AUDIT
CSB or a representative of CSB shall have the right, at CSB's expense, once
every calendar quarter to cause an audit to be done on the books and records of
124 that are related to the obligations of 124 under this Agreement. Such audit
shall be commenced with not less than 5 business days prior notice to 124 and
shall proceed only on business days (i.e. Monday to Friday, holidays excluded)
between 9:00 am and 4:30 p.m.
IN WITNESS WHEREOF the parties have executed this Agreement.
COLORADO SATELLITE
BROADCASTING, INC.
Per:
1248663 ONTARIO INC.
Per:
SCHEDULE "A"
CALL CENTER SERVICES
124 shall:
(a) receive and process subscriber calls on a twenty-four hour basis from the
Call Center using the Leased Assets as described in SCHEDULE "B" to this
Agreement;
(b) maintain and manage all accounting functions relating to the operations of
the Call Center and the management of subscriber accounts, including but
not limited to, issuing invoices;
(c) employ personnel in such numbers as is required to perform the Services
under this Agreement;
(d) issue monthly statements to CSB, in a form acceptable to CSB, indicating
the subscription revenues for such month and other information required by
CSB;
(e) coordinate subscriptions with the entity providing CSB's uplink services;
(f) operate the Call Center from 0000 Xxxxxxxx Xxxxx, Xxxxxx, Xxxxxxx or such
other location as CSB may consent to (such consent not to be unreasonably
withheld);
(g) provide marketing services which shall include maintaining the current
programming guide ("Inside") and require a monthly marketing budget
consistent with the historical levels of marketing expenditures on the
business over the prior 12 month period;
(h) maintain the 24/7 Web Server, update content on the websites and respond to
customer inquiries generated from the web sites;
(i) advertise the services and programs through advertisement placement,
developing conference/show materials, a monthly advertising budget
consistent with the historical levels of advertising expenditures on the
business over the prior 12 month period, and provide written reports on
current and proposed advertising placement;
(j) maintain current dealer relations; provide a monthly list of active and
inactive dealers, provide a monthly dealer status report which shall
include reports of dealer representative orders by product, number of
orders and gross dollars; and
(k) maintain current distributor relations; provide a monthly list of active
and inactive distributors, provide a monthly distributor status report
which shall include reports of distributor orders off site, by distributor
and by product, number of orders and gross dollars;
2
(l) provided daily GI reports on activations and deactivations by tier bit and
port channels and PPV, weekly reconciliation reports between GI activations
and deactivations compared with distributor activations and deactivations;
(m) report on house orders by product, number of orders and gross dollars; and
(n) report monthly on third party product sales.
SCHEDULE "B"
LIST OF LEASED ASSETS
DESCRIPTION MODEL SERIAL NUMBER NUMBER/COMMENTS
----------- ----- ------------- ---------------
FURNITURE
24x45 desk oak 3
pull-out shelf oak 7
30x60 flush right oak 1
paper catcher oak 1
kd mini station oak 2
opus chair gas lift blue 7
45"x53" chair mat 8
4 dr lateral xxxx 1
stat cabinet xxxx 1
30x48 adj table xxxx 1
letter tray 12
wastebaskets xxxx 6
24x45 desk oak 6
opus chair gas lift blue 6
pull-out shelf oak 6
4 dr lateral xxxx 1
letter tray 12
45"x53" chair mat 6
blinds 6
high back chair 4
30x48 desk oak 3
36x72 desk oak 1
2 dr lateral oak 1
30x48 desk oak 5
opus chair gas lift burgundy 8
pull-out shelf oak 5
45x43 chair mat 5
letter tray 14
4 dr lateral xxxx 1
Stat cabinet xxxx 1
opus chair gas lift burgundy 2
45x53 chair mat 1
wastebasket xxxx 5
legal tray 2
30x60 sierra 2+2 oak 1
4 dr lateral xxxx 1
36x72 desk oak 1
45x53 chair mat 2
2
4 dr lateral xxxx 1
30x60 sierra 2+2 oak 3
steno chair blue 2
steno chair burgundy 2
20x72 oxford cred oak 2
2 dr lateral oak 1
60x60 divider blue 3
60x60 divider came 3
30x60 desk oak 3
20x45 desk oak 1
steno chair burgundy 4
hi back leather burgundy 2
visitor tweed burgundy 2
tower comp stn oak 1
letter tray burgundy 6
Phone Equipment
cables bix, installation etc
Work Station 1
winsted work surface 2
winsted editor shelf 2
Xxxxx 0
Xxxxx "Consortium" carpet 1
roller blinds 5
chairs black 41
6' bookcase mahogany 2
stationary stool black 6
PV-4366 SVHS recorder player 1
TV stand 1
SLV-730 VHS VTR (Sony) 2
T-160VB CHS Tapes (10) 2
WS-A1O PA Speakers 2
PA-Serv0150 PA PowerAmp 1
inv 13681 tv's 2
desk 24x42 38
single panel 42x24 23
filler bar to connect tables 21
sliding shelf for keyboard 38
1 drawer unit
18 1/2 x 16 1/4 x 7 38
panel filler 13
3 drawer mobile file 3
table 36x30x29 1
filler bar 2
decorative moulding 2
2 drawer lateral file 1
open desk bookcase 60x12x24 2
desk 60x30x29 fill modesty
panel 1
3
desk 60x30x29 with 3/4 modesty
panel xxxx 2
avm-1423 television (Sony) 4
VHR-9417 Sanyo VHS VCR 2
DT331 Xxxxx Dynamic Headphones 4
36x72 wood top bench 2
Gas drafting chair 2
Stat cabinet tan 1
blue xxxx panel 18x40 4
blue xxxx panel 60x60 2
blue xxxx panel 18x80 3
blue xxxx panel 30x80 6
overhead flipper door cabinet 2
counter surface 60x18 3
counter surface 61x18 2
open bookshelf 60x14x7 xxxx 12
Steel shelf unit 1
Desks 4
Booth 1
4dr Lateral Grey Filling
Cabinet 1
Desk 36 X 72 1
Shelves 60 x 14 x 7 4
Tape Storage Cabinet 1
Filling Cabinet 1
BBS Shelf 1
tape cabinet 1
Filling Cabinet 1
Desk 2
7.5 ft Sat dish
Feed system: chaparral PRI
polarotor c/w cal
amp 25 deg LNB
Xxx Xxxxx actuator
4.5", to 3.5" reducer
red 4535
Dual RG6 sat ribbon cable
Installation including 15'
pole, 660lbs concrete
UHF remote
2dr filling cabinet grey 1
4dr Filling Cabinets 2
COMPUTER SOFTWARE
207-0151AV311 win for
groups V3.11 2
Kallista mom & objectspy
V2.0 bundle 1
menu object mgr additional
lan user 2
objectspy, additional lan
user 2
4
wool2wool ezdialogs 1
021-051v420 ms office win
4.2(3.5") 1
0214050v420 office
mlp (regular) 9
MYOB 1
Maverick 540MB INT IDE 3.5" 1
3D STUDIO 1
Time Clock 1
000-00000-00, graphics
xpression 2mb ISA 1
000-000-000 windows'95 upg cd 2
vga cable dbl5 Mi-to-F 6 1
PDC8023A-T16 Concentrator 16 1
port/tpcdax
WFULI6005 Winframe 5 User
Lic pk 1
86-751 Avail HSM Base
Netspace 1
86-752 OLHP20 Capacity Kit
for HP Avail 1
Video over the internet 1
Corel Print House 1
CWWP510-UG-CAN0 WP suite
v7.0 upg 1
cd'95
00-00-00000 winfax pro
v7.5 cd w95 1
Office Pro 97 w/bookshelf 1
Firstlink Activation software
203-00101 Visual Basic Pro
5.0 Upg CD 1
021-00703 Up Office CD 1
FLD20D01, Macromedia Flash
V2.0 1
Go Software - Charging
Interface between
Netserver and CTS Software
EG Software Webtrand (usage
traking)
CTS Subscription software
TELEPHONE SYSTEM
SX2000 Microlight Basic System 1
S?(2000 Light Software and
Practices 1
Megalink /ISDN Node 1
Communications Processor Card 1
ON Premises Line Card
(16ports) 1
DNI Line Card (16 ports,
32 Channel) 4
E& M Tie Trunk Card (4ports) 1
Traffic Reporting Software 1
Answer Plus MCD Software 1
HCI Basic Telephony Software 1
HCI Advanced Telephony
Software 1
HCI 100 Agent Software 1
ANI/DNIS Software 1
Superconsole 1000 1
5
Superset 420's 59
2103 Sync/Async datasets 3
Fibre Optics Jumper Cable 1
Interalia 4 Port WAD with
battery Backup 1
TASKE ACD Report
Generator/Call centre
Management Software 1
TIE VMX 4002 or 2002 8 Port
Voicemail system with
auto attendant 1
AP 900 UPS 1
H51 Plantonics Headsets 5
M10 Modular Adaptor Base 5
H51 Plantonics Headsets 10
M10 Modular Adantor Base 10
COMPUTERS
HP Vectra 486/66 3401S01112
Clone 486/40 N/A
HP Vectra 486/66 3332A04367
NEC 586/90 5917834UN
Clone 486/100 N/A
Clone 686/200 97013390
HP Vectra 586/75 MX55050533
HP Vectra 486/33 33390S3190
Compaq 586/100 148130-003
HP Vectra 486/66 3449Y00536
HP Vectra 486/33 3407A00444
11P Vectra 486/33 3237A07590
HP Vectra 486/33 3404A00157
AST Bravo 586/100 375AQJ010836
Clone 486/33 N/A
Clone 486/40 N/A
Clone 486/33 B.T.C. 04252
HP Vectra 486/33 3248500329
Clone 486/40 N/A
HP Vectra 486/33 3324A00149
HP Vectra 486/33 3323F21007
HP Vectra 486/33 3237A07322
HP Vectra 486/33 3340500237
HP Vectra 486/33 3407A07012
Clone 486/40 N/A
AST Bravo 586/100 375AQJ011529
AST Bravo 586/100 375AQJ011541
AST Bravo 586/100 375AQJ011518
AST Bravo 586/100 375AQJ010823
AST Bravo 586/101 375AQJ010315
6
AST Bravo 586/100 375AQJ011554
AST Bravo 586/100 375AQJ010329
HP Vectra 586/75 MX55050416
HP Vectra 586/75 MX55050643
HP Vectra 586/75 MX55050631
HP Vectra 586/75 MX55050398
HP NetSrv 586/66 3438Y22189
HP Vectra 486/66 3402A02407
Compaq 486/66 A507HNC3G10
HPXU 586/133 SG53300170
AST Bravo 586/100 375AQJ010329
HP Vectra 586/133 US64050404
HP NetSrv 486/66 3319S00216
HP Vectra 586/166 US61454975
HP Vectra 486/66 3449Y00543
HP Vectra 486/66 3502Y01193
HP Vectra 486/66 3502Y00988
HP NetSrv 586/66 3434S21054
Pinnacle Micro CD Burner 447100408
HP Scanjet Scanner 3265A45856
TTX Monitor 740014237
TTX Monitor 274B007673
TTX Monitor 30121095
TTX Monitor 5130273815
TTX Monitor 630854423
TTX Monitor 439770243A3
TTX Monitor 3430211636
TTX Monitor 5130029914
TTX Monitor 30476091
IBM Monitor 14 Inch/No Serial
TTX Monitor 494A005057
TTX Monitor 540012980
Mistsubishi Monitor 303015008
TTX Monitor 165A011016
TTX Monitor 439780500AJ
TTX Monitor KFO-53907449
TTX Monitor 432560108AI
TTX Monitor 4505700032AM
TTX Monitor 2140012434
TTX Monitor 30368928
TTX Monitor 439770245AJ
TTX Monitor 439780036AJ
TTX Monitor KFO-53907173
TTX Monitor 30252725
TTX Monitor 24001427
TTX Monitor 240001311
7
TTX Monitor 20406079
TTX Monitor 240001075
TTX Monitor 439780498AJ
TTX Monitor 30371000
TTX Monitor 240001257
TTX Monitor 2140012432
TTX Monitor KFO-53907180
TTX Monitor KFO-53907367
TTX Monitor KFO-53907253
TTX Monitor KFO-53907453
TTX Monitor KFO-53907249
TTX Monitor 2E1-61006274
TTX Monitor KFO-53907171
TTX Monitor KFO-53907459
TTX Monitor AFO-51902907
TTX Monitor KFO-53907141
TTX Monitor KFO-53907238
EverVision Monitor MNG-11200306
TTX Monitor 5130029763
TTX Monitor 0000000000
TTX Monitor 4530005163
BLACKBOX
BLACKBOX
BLACKBOX
TTX Monitor 439780030AJ
BLACKBOX
BLACKBOX
BLACKBOX
BLACKSOX
Clone 486/33 N/A
Clone 486/33 N/A
Clone 486/33 B.T.C. 04166
HP Vectra 486/40 3406A07048
HP Vectra 486/33 3304A19063
HP Vectra 486/33 3318500681
HP Vectra 486/33 3237A07585
HP Vectra 486/33 3339S02378
Clone 486/33 N/A
Clone 486/33 N/A
HP Vectra 586/75 MX55050232
HP Vectra 586/75 MX55050245
HP Vectra 586/75 MX55050182
HP Vectra 586/75 MX55050154
HP Vectra 586/75 MX55050239
HP Vectra 586/75 MX55050248
HP Vectra 586/75 MX55050074
8
HP Vectra 586/75 MX55050157
HP Vectra 586/66 MX55050233
TTX Monitor 3930001976
TTX Monitor KFO-53907366
TTX Monitor KFO-53907361
TTX Monitor KFO-53907364
TTX Monitor KFO-35907165
TTX Monitor KFO-53907162
TTX Monitor KFO-53907450
TTX Monitor KFO-53907357
TTX Monitor 384A005811
PRINTERS
Panasonic 3FMBNH49841
Panasonic 3FMBNH49825
Epson 40U1I09152
HP DeskJet 660C SG5BI1C04B
IBM Lexmark 11-A1916
Mitsubishi M63257
Lexmark Optra R 11B9752
Genicom 9625-D-33518
HP 4 Plus Printer JPGK241537
SCHEDULE 2.1(c)
PROMISSORY NOTE
[attached]
PROMISSORY NOTE
$185,711(USD) ,1997
FOR VALUE RECEIVED, Colorado Satellite Broadcasting, Inc. ("Maker")
promises to pay to the order of 1248663 Ontario, Inc. ("Holder") at Ottawa,
Canada, or at such other place as the holder hereof may from time to time
designate in writing, the principal sum of ONE HUNDRED EIGHTY FIVE THOUSAND
SEVEN HUNDRED ELEVEN DOLLARS (USD$185,711) plus interest thereon as set forth
herein.
Interest shall be calculated at the rate of prime plus one percent (1%),
based on the prime rate of Bank One as of the date hereof, and recalculated at
the beginning of each quarter, but in no event shall the interest rate be
greater than nine percent (9%) per annum, nor less than six percent (6%) per
annum.
This Note shall accrue interest at the aforesaid rate, compounded monthly
and all accrued interest shall be paid on [date which is twelve months from
closing] and thereafter, interest shall be paid monthly until the principal and
all accrued interest is paid in full.
On [date which is thirty six months from closing] Maker shall pay to Holder
the entire remaining balance of principal and all accrued but unpaid interest.
Principal and interest shall be paid in lawful money of the United States
and in immediately available funds.
1. Maker may at any time prepay all or any part of this note or accrued
interest thereon at any time without penalty.
2. Each of the following events will constitute an event of default (an "Event
of Default") under this Note and under the Security Agreement executed of
even date herewith, and each other document securing or executed in
connection with this Note (collectively, the "Credit Documents") and any
material Event of Default under any Credit Document shall constitute an
Event of Default hereunder and under each of the other Credit
Documents:
A. If Maker shall sell all or substantially all its assets;
B. If the Maker shall default in the making of any payment of
principal and/or interest due hereunder and if the same remains
unpaid for five (5) days following receipt by Maker of written notice
of such default; or
C. If Maker shall have made a voluntary assignment for the benefit
of creditors, or if proceedings shall have been commenced under the
bankruptcy laws by or against Maker, or if a receiver or trustee shall
have been appointed for the benefit of creditors against Maker;
provided, however, that Maker shall not be deemed to be in default due
to any involuntary proceedings brought against it if such proceedings
are dismissed or resolved in favor of Maker within sixty (60) days
from the commencement of such proceedings.
3. Upon the occurrence of any Event of Default, the entire balance of
principal, accrued interest, and other sums owing hereunder shall, at the
option of Holder, become at once due and payable without notice or demand,
and Holder shall have the option, in its sole discretion, to exercise any
remedies available to it under the Credit Documents, at law or in equity.
No delay or omission by the Holder in exercising any right hereunder shall
operate as a waiver of such right or any other right of the Holder. A
waver of any right by Holder on one occasion shall not be construed as a
bar to or as a waiver of any right in the future. None of the provisions
hereof and none of the rights of the Holder shall be deemed to have been
waived by acceptance of any partial amount or by any other indulgence
granted to the Maker.
(a) The entire balance of principal, interest, and other sums due upon the
maturity hereof, by acceleration or otherwise, shall bear interest from the
date due until paid at the greater of (i) eighteen percent (18%) per annum
or (ii) a per annum rate equal to five percent (5%) over the prime rate
(for corporate loans at large United States money center commercial banks)
published in THE WALL STREET JOURNAL on the first business day of each
month (the "Default Rate"); provided, however, that such rate shall not
exceed the maximum permitted by applicable state or federal law. In the
event THE WALL STREET JOURNAL is no longer
2
published or no longer publishes such prime rate, Holder shall select a
comparable reference.
(b) If any payment under this Note is not made when due, interest shall
accrue at the Default Rate from the date five (5) days after the date such
payment was due until payment is actually made.
4. In addition to interest as set forth herein, Maker shall pay to Holder a
late charge equal to five percent (5%) of any amounts due under this Note
in the event any such amount is not paid when due.
5. All payments hereunder shall be applied first to the payment of late
charges, if any, then to the payment of prepayment premiums, if any, then
to the payment of accrued and unpaid interest, and then to the reduction of
principal.
6. The Maker of this Promissory Note, for itself and its legal
representatives, successors and assigns, hereby expressly waives
presentment, demand, protest, notice of protest, presentment for the
purpose of accelerating maturity, diligence in collection, and the benefit
of any exemption under the homestead exemption laws, if any, or any other
exemption or insolvency laws, and consents that the Holder may extend the
time for payment of any part or the whole of the indebtedness evidenced
hereby.
7. If this Promissory Note shall not be paid when due and shall be placed by
the Holder hereof in the hands of any attorney for collection, through
legal proceedings or otherwise, the Maker shall pay a reasonable attorney's
fee to the Holder hereof together with reasonable costs and expenses of
collection.
8. The provisions of this Note and of all agreements between Maker and Holder
are, whether now existing or hereinafter made, hereby expressly limited so
that in no contingency or event whatever, whether by reason of acceleration
of the maturity hereof, prepayment, demand for payment or otherwise, shall
the amount paid, or agreed to be paid, to Holder for the use, forbearance,
or detention of the principal hereof or interest hereon, which remains
unpaid from time to time, exceed the maximum amount permissible under
applicable law, it particularly being the intention of the parties hereto
to conform strictly to Colorado and Federal law, whichever is applicable.
If from any circumstance whatever,
3
the performance or fulfillment of any provision hereof or of any other
agreement between Maker and Holder shall, at the time performance or
fulfillment of such provision is due, involve or purport to require any
payment in excess of the limits prescribed by law, then the obligation to
be performed or fulfilled is hereby reduced to the limit of such validity,
and if from any circumstance whatever Holder should ever receive as
interest an amount which would exceed the highest lawful rate, the amount
which would be excessive interest shall be applied to the reduction of the
principal balance owing hereunder (or, at Holder's option, be paid over to
Maker) and shall not be counted as interest. To the extent permitted by
applicable law, determination of the legal maximum amount of interest shall
at all times be made by amortizing, prorating, allocating and spreading in
equal parts during the period of the full stated term of this Note, all
interest at any time contracted for, charged, or received from Maker in
connection with this Note and all other agreements between Maker and
Holder, so that the actual rate of interest on account of the indebtedness
represented by this Note is uniform throughout the term hereof.
9. This Promissory Note, together with all the rights and obligations of the
Holder and Maker hereunder shall be governed by, and construed,
interpreted, and enforced in accordance with, the applicable laws of the
State of Colorado.
10. This Note is secured by a Security Agreement, Fixture Filing, and Financing
Statement, all dated of even date herewith granted by Maker for the benefit
of the named Holder hereof.
11. If any provision hereof or of any other document securing or related to the
indebtedness evidenced hereby is, for any reason and to any extent, invalid
or unenforceable, then neither the remainder of the document in which such
provision is contained, nor the application of the provision to other
persons, entities, or circumstances, nor any other document referred to
herein, shall be affected thereby, but instead shall be enforceable to the
maximum extent permitted by law.
12. Each provision of this Note shall be and remain in full force and effect
notwithstanding any negotiation or transfer hereof and any interest herein
to any other Holder.
4
13. The remedies provided to Holder in this Note, the Security Agreement and
the other Credit Documents are cumulative and concurrent and may be
exercised singly, successively or together against Maker, and other
security, or any guarantor of this Note, at the sole and absolute
discretion of the Holder.
14. If Maker is more than one entity, or if this Note is guaranteed by another
entity, then (a) all entities comprising Maker and any guarantor are
jointly and severally liable for all of the Maker's obligations hereunder;
(b) all representations, warranties, and covenants made by Maker shall be
deemed representations, warranties, and covenants of each of the entities
comprising Maker; and (c) any breach, Default or Event of Default by any of
the entities comprising Maker or any guarantor hereunder shall be deemed to
be a breach, Default, or Event of Default of Maker.
Maker
------------------------
by:
Guarantee:
FOR VALUABLE CONSIDERATION, the receipt of which is hereby acknowledged,
the undersigned ("Guarantor") unconditionally guarantees to Holder (i) the full
and prompt performance by _________________, a ___________________
corporation ("Maker"), of all obligations which Maker presently or hereafter
may have to Holder and (ii) payment when due of all sums presently or hereafter
owing by Maker to Holder. Guarantor further agrees to indemnify Holder against
any losses Holder may sustain and expenses Holder may incur as a result of any
wrongful act of Maker. This is an unconditional guarantee of payment of all
indebtedness of Maker to Holder, or any part thereof, by Guarantor and Guarantor
acknowledges and agrees that Holder may proceed against Guarantor without first
exercising Holder's rights against Maker or any collateral.
5
For the purposes of this guarantee and indemnity, all sums owing to Holder
by Maker shall be deemed to have become immediately due and payable if (a) Maker
defaults in any of its obligations to Holder; (b) a petition under any Chapter
of the Bankruptcy Act, as amended, or for the appointment of a receiver of any
part of the property of Maker be filed against Maker, and is not dismissed
within thirty (30) days; (c) such a petition is filed by Maker; (d) Maker makes
a general assignment for the benefit of creditors, suspends business or commits
any act amounting to a business failure; or (e) Maker sells all or substantially
all of its assets.
This shall be a continuing guarantee and indemnity, and irrespective of the
lack of any notice to or consent of the undersigned, their obligations hereunder
shall not be impaired in any manner whatsoever by any renewal, extension or
indulgence. Guarantor hereby authorizes assured party, without notice or
demand, to (a) change the terms of all or any part of the obligation guaranteed
hereby, including without limitation, releasing, extending, or compromising the
same, changing the time for payment thereof, and changing the rate of interest
thereon; (b) take, or decline to take, collateral for the payment of the
obligation guaranteed hereby and exchange, enforce or fail to enforce, fail to
perfect, or release its interest in any such collateral; and (c) release or
substitute, or impair or suspend, any remedy against any principal Maker, or any
other guarantor of, or anyone else liable on the obligation guaranteed hereby.
Notice of assured party's acceptance hereof, of default and nonpayment by
Maker or any other parties, of presentment, protest and demand, and of all other
matters of which the undersigned otherwise might be entitled are hereby waived
by the undersigned. The obligations hereunder of Guarantor shall be binding on
my heirs and personal representatives.
Guarantor shall reimburse Holder, on demand, for any and all expenses
incurred by Holder in the enforcement or attempted enforcement of any of
Holder's rights hereunder against Guarantor including, but not limited to, all
reasonable attorneys' fees and costs.
This Guarantee and indemnity is assignable by Holder, shall be construed
liberally in Holder's favor and shall inure to the benefit of Holder's
successors and assigns. Until all indebtedness covered hereby has been paid in
full, Guarantor shall not be subrogated to any of Holder's rights against Maker,
or any collateral and any funds or other
6
property at any time received by Guarantor from Maker shall be held in trust for
and shall be paid or transferred to Holder upon demand therefor. Legal rights
and obligations hereunder shall be determined in accordance with the laws of the
State of Colorado.
Guarantor:
--------------------------
7
EXHIBIT A TO SCHEDULE 2.1(c)
SECURITY AGREEMENT
[attached]
SECURITY AGREEMENT
This Security Agreement, dated as of ____ 1997, is entered into between Colorado
Satellite Broadcasting, Inc., (Debtor), Fifth Dimension Communications, Inc.,
and Xxxxxx Xxxxxx, Inc. (collectively, Secured Party).
WHEREAS, Debtor has agreed to grant to Secured Party a security interest in all
of the Collateral (as hereinafter defined) as security for Debtor's obligations
owing to Secured Party arising under the Promissory Note dated ________ between
Debtor and Secured Party (the "Note") and other credit documents executed by
Debtor in Connection therewith.
WHEREAS, Debtor has or will grant to its senior lender a first position security
interest in the Collateral up to the amount of $2,000,000 and Secured Party
acknowledges that the security interests granted herein is subordinate to that
security interest.
WHEREAS, Debtor may grant to a lender to be approved by Secured Party a security
interest in the Collateral up to the amount of US$725,5100 and as to the
Promissory Note for US$185,711, given by Debtor to 1248663 Ontario, Inc. only,
Secured Party acknowledges that the security interests granted herein will be
subordinate to that security interest in the amount set forth in this paragraph.
NOW, THEREFORE, in consideration of the mutual promises, covenants, conditions,
representations, and warranties hereinafter set forth, and for other good and
valuable consideration, the parties hereto agree as follows:
1. DEFINITIONS
As used in this Agreement, all initially capitalized terms used but not defined
herein shall have the meaning ascribed thereto in the Note, or if said term is
not in the Note, then said initially capitalized term shall have the meaning
ascribed thereto in the Purchase Agreements. In addition, the following terms
shall have the following meanings.
"AGREEMENT" shall mean this Security Agreement, any concurrent or subsequent
exhibits or schedules to this Security Agreement, and any extensions,
supplements, amendments, or modifications to or in connection with this Security
Agreement, or to any such schedules or exhibits.
"NOTE" shall have the meaning set forth in the recitals to this Agreement.
"CODE" shall mean the Colorado Uniform Commercial Code, and any and all terms
used in this Agreement which are defined in the Code shall be construed and
defined in accordance with the meaning and definition ascribed to such terms
under the Code, unless otherwise defined herein.
"COLLATERAL" shall mean any and all of the furniture, equipment, fixtures and
inventory, of Debtor, in each case whether now existing or hereafter acquired or
created, and any proceeds or products of any of the foregoing, including
proceeds of insurance covering the collateral or any portion thereof, or any and
all substitutions, replacements, additions, and accessions.
"DEBTOR" shall have the meaning set forth in the introduction to this Agreement.
"FURNITURE", "EQUIPMENT", and "FIXTURES" shall mean any and all of Debtor's
presently existing and hereafter acquired machinery, equipment, tools, motors,
motor vehicles, rolling stock, jibs, and other goods (other than Inventory, farm
products, and consumer), of every kind and description, wherever located,
including without limitations those items listed in schedules 1(a) and 1(b) of
the "124 Agreement" which are incorporated herein by reference, together with
any and all parts, improvements, additions, attachments, replacements,
accessories, and substitutions thereto or therefore, and all other rights of
Debtor relating thereto, whether in the possession and control of Debtor, or in
the possession and control of a third party for the account of Debtor.
"Event of Default" shall have the meaning set forth in the Note.
"INVENTORY" shall mean any and all of Debtor's presently existing and hereafter
acquired goods of every kind and description, held for sale or lease or to be
furnished under a contract of service or which have been so leased or furnished,
wherever located, including film videos, magnetic tape, optical disks, CD's and
any and all media upon which images of any kind are stored and recorded for
later use or viewing, amplifiers, transmitters, converters, cables, antennas,
connections, towers, decoder boxes, converter boxes, addressable boxes,
microwave transmitters, and earth stations.
"OBLIGATIONS" shall mean any and all debts, liabilities, obligations, or
undertakings owing by Debtor to Secured Party arising under, advanced pursuant
to, or evidenced by the Note, or this Agreement, whether direct or indirect,
absolute or contingent, due or to become due, voluntary or involuntary, whether
now existing or hereafter arising, and including all interest not paid when due
and all Secured Party's Expenses which Debtor is required to pay or reimburse
pursuant to this Agreement, the
2
Note, any other credit documents between Secured Party and Debtor, or by law.
"PURCHASE AGREEMENTS" shall mean the Purchase Agreements between New Frontier
Media, Inc., and Colorado Satellite Broadcasting, Inc., on the one hand and
Fifth Dimension Communications, Inc., Xxxxxx Xxxxxx, Inc., and 1248663 Ontario
Inc., on the other hand, executed on September 5, 1997, including all exhibits
and agreements referenced therein.
"SECURED PARTY" shall have the meaning set forth in the introduction to this
Agreement.
"SECURED PARTY'S EXPENSES" shall mean: any and all reasonable costs or expenses
required to be paid by Debtor under this Agreement which are paid or advanced by
Secured Party; all reasonable costs and expenses of Secured Party, including
their or its reasonable attorneys' fees and expenses, incurred or expended to
correct any default or enforce any provision of this Agreement, or in gaining
possession of, maintaining, handling, preserving, storing, shipping, selling,
preparing for sale, or advertising to sell the Collateral, irrespective of
whether a sale is consummated; and all reasonable costs and expenses of suit
incurred or expended by Secured Party, including its reasonable attorneys' fees
and expenses in enforcing or defending this Agreement, irrespective of whether
suit is brought.
"SENIOR LENDER" shall mean Debtor's chief financial institutions as chosen by
debtor and an unsecured creditor approved by Maker.
2. CONSTRUCTION
Unless the context of this Agreement clearly requires otherwise, references to
the plural include the singular, references to the singular include the plural,
the part includes the whole, "including" is not limiting, and "or" has the
inclusive meaning represented by the phrase "and/or." References in this
Agreement to "determination" by Secured Party include reasonable estimates
(absent manifest error) by Secured Party, as applicable (in the case of
quantitative determinations) and reasonable beliefs (absent manifest error) by
Secured Party, as applicable (in the case of qualitative determinations). The
words "hereof, "herein", "hereby," "hereunder," and similar terms in this
Agreement refer to this Agreement as a whole and not to any particular provision
of this Agreement. Article, section, subsection, exhibit, and schedule
references are to this Agreement unless otherwise specified.
3. CREATION OF SECURITY INTEREST
3.1 Subject to the provisions of 3.2 hereof, Debtor hereby grants to Secured
Party a continuing security interest in all presently
3
existing and hereafter acquired or arising Collateral in order to secure the
prompt payment and performance of all of the Obligations. Such security interest
in the Collateral shall attach to all Collateral without further act on the part
of secured Party or Debtor.
3.2 Debtor has granted or will grant to [its senior lender] a first position
security interest in the Collateral up to the maximum amount of $2,000,000 and
Secured Party acknowledges that the security interest granted herein is or will
be subordinate in priority to that security interest, but only to a maximum of
$2,000,000. Additionally, Debtor has granted or will grant upon the approval of
Secured Party, which approval will not be unreasonably withheld, a second
position security interest in the Collateral up to the maximum amount of
$725,510.00 and Secured Party acknowledges that the security interest herein is
or will be subordinate in priority to that security interest.
4. FURTHER ASSURANCES
4.1 Debtor shall execute and deliver to Secured Party, concurrently with
Debtor's execution of this Agreement, and from time to time at the request of
Secured Party, all financing statements, continuation financing statements,
fixture filings, security agreements, collateral assignments, chattel mortgages,
assignments, and all other documents that Secured Party may reasonably request,
in form reasonably satisfactory to Secured Party, to perfect and maintain
perfected Secured Party's security interests in the Collateral and in order to
consummate fully all of the transactions contemplated by this Agreement and the
Note. Debtor hereby irrevocably makes, constitutes, and appoints Secured Party
(and Secured Party's officers, employees, or agents) as Debtor's true and lawful
attorney with power to sign the name of Debtor on any of the above-described
documents or on any other similar documents which need to be executed, recorded
or filed, and to do any and all things necessary in the name and on behalf of
Debtor in order to perfect, or continue the perfection of, Secured Party's
security interests in the Collateral. Debtor agrees that neither Secured Party,
nor any of its designees or attorneys-in-fact, will be liable for any act of
commission or omission, or for any error of judgment or mistake of fact or law
with respect to the exercise of the power of attorney grated under this Section
4.1, other than as a result of its or their gross negligence or willful
misconduct. The power of attorney granted under this Section 4.1 is coupled
with an interest and shall be irrevocable until all of the Obligations have been
paid in full, the Note terminated, and Debtor's duties hereunder have been
discharged in full.
4.2 Without limiting the generality of the foregoing section 4.1 or any of the
provisions of the Note, Debtor will: (a) at the request of tee Secured Party,
appear in and defend any action or
4
proceeding which may affect Debtor's title to, or the security interest of
Secured Party in, any of the Collateral; and (b) upon demand of Secured Party,
allow inspection of Collateral by Secured Party or persons designated by Secured
Party at any time during normal business hours and, provided that no Event of
Default has occurred and is continuing, upon three (3) Business Days' notice to
Debtor.
4.3 After the occurrence and during the continuance of an Event of Default,
Debtor agrees to take all actions and do all things reasonably requested of
Debtor to carry out the intent of this Agreement.
5. RIGHTS AND REMEDIES
5.1 Upon the occurrence and during the continuance of an Event of Default,
Secured Party, without notice or demand, may do any one or more of the
following, all of which are authorized by Debtor:
(a) Make such payments and do such acts as it considers necessary or reasonable
to protect Secured Party's security interest in the Collateral. Debtor agrees to
assemble and make available any or all of the Collateral if Secured Party so
requires. Debtor authorizes Secured Party to enter the premises where the
Collateral is located, take and maintain possession of the Collateral, or any
part of it, and to pay, purchase, contest, or compromise any encumbrance,
charge, or lien which, in the opinion of the Secured Party, appears to be prior
or superior to Secured Party's security interest, and to pay all costs and
expenses incurred in connection therewith;
(b) Ship, reclaim, recover, store, finish, maintain, repair, prepare for sale,
advertise for sale, or sell (in the manner provided for herein), the Collateral;
(c) Sell the Collateral, at either a public or private sale, or both, by way of
one or more contracts or transactions, for cash or on terms, in such manner and
at such places (including Debtor's premises) as is commercially reasonable; and
apply any proceeds of any sale or other disposition of the Collateral in the
order provided in C.R.S. Section 4-9-504, including the payment of Secured
Party's Expenses. It is not necessary that the Collateral be present at any such
sale;
(d) Without constituting a retention of collateral in satisfaction of
indebtedness as provided for in C.R.S. Section 4-9-505, notify account debtors
and other obligors of Debtor of Secured Party's security interests in the
Collateral, and proceed to collect the same and apply the net cash proceeds
therefrom to the Obligations;
5
(e) Secured Party shall give notice of any disposition of the collateral as
follows:
(1) Secured Party shall give Debtor and each holder of a security interest in
the Collateral who has filed with Secured Party a written request for notice, a
written notice stating the time and place of a public sale, or, if the
disposition is to be either a private sale or some other disposition that is not
a public sale, the time on or after which the private sale or other disposition
is to be made;
(2) The notice described in the immediately preceding paragraph shall be
delivered to Debtor as provided in Section 9.1 of the Note at least ten (10)
calendar days before the date fixed for a public sale, or at least five (5)
calendar days before the date on or after which the private sale or other
disposition is to be made, unless the Collateral is perishable or threatens to
decline speedily in value. Notice to persons other than Debtor claiming an
interest in the Collateral shall be sent to such addresses as such persons have
furnished to Secured Party prior to the date of such notice;
(3) If the disposition is to be a public sale, Secured Party shall also give
notice of the time and place of said sale by publishing a notice at least five
(5) calendar days before the date of the sale in a newspaper of general
circulation, if one exists, in the county in which the sale is to be held;
(g) Secured Party may, in its own name, or in the name of a designee or
nominee, credit bid and purchase at any public sale;
(h) Debtor shall pay Secured Party's reasonable Expenses; and
(i) Any portion of the Obligations which remains unpaid after disposition of
the Collateral as provided above shall be paid immediately by Debtor provided
that Secured Party has complied in all material respects with Section [9-504?]
of the Code, as in effect at the time of such disposition. Any excess which
exists after disposition of the Collateral shall be returned promptly,
without interest and subject to the rights of third parties, to Debtor by
Secured Party.
(j) Apply to any court of competent jurisdiction for the appointment of a
receiver for the benefit of the creditors of Debtor. In said receivership
application, Debtor agrees that Secured Party shall only need to prove to the
Court that an Event of Default shall have occurred and be continuing, and that
no bond for more than $10,000 shall be required.
5.2 (a) Subject to the provisions of Section 5.2(e) below, if an Event of
Default shall have occurred and be continuing, Debtor waives, releases and
stipulates it shall not raise any defense,
6
claim or objection it otherwise right be able to raise or advance in general to
the appointment of a receiver to protect the interests of creditors, provided
that Debtor may make bona fide objections to the appointment of any particular
receiver.
(b) The receiver shall in addition have the power to dispose of the Collateral
in any manner lawful in the jurisdiction in which his appointment is confirmed,
including the power to conduct a public or private sale of the Collateral.
Secured Party may bid at any such public or private sale.
(c) Notwithstanding anything herein contained to the contrary, Debtor's
execution and delivery of this Agreement and any related agreements (i) do not
have the purpose of and will not constitute, create, or have the effect of
constituting or creating, directly or indirectly, actual or practical ownership
or control, affirmative or negative, direct or indirect, of Debtor by Secured
Party, or control, affirmative or negative, direct or indirect, by Secured Party
over the programming, management, or any other aspect of the operation of Debtor
or any of its properties, which ownership and control will remain exclusively
and at all times in Debtor: and (ii) do not and will not constitute the
transfer, assignment, or disposition in any manner, voluntarily or
involuntarily, directly or indirectly, of any Governmental Authorizations at any
time issued to Debtor or the transfer of control of Debtor.
5.3 The rights and remedies of Secured Party under this Agreement, the Note,
the Purchase Agreements, and all other agreements contemplated hereby and
thereby shall be cumulative. Secured Party shall have all other rights and
remedies not inconsistent herewith as provided under the Code, by law, or in
equity. No exercise by Secured Party of any one right or remedy shall be deemed
an election of remedies, and no waiver by Secured Party of any default on
Debtor's part shall be deemed a continuing waiver of any further defaults. No
delay by Secured Party shall constitute a waiver, election or acquiescence with
respect to any right or remedy.
6. REPRESENTATIONS AND WARRANTIES. Debtor hereby represents and warrants to
the Secured Party that:
a. The Debtor is a corporation duly organized and validly existing under
the laws of the State of Colorado; the execution and performance of this
Agreement have been duly authorized by all appropriate action with respect to
the Debtor; the execution and performance of this Agreement will not violate or
contravene any provisions of law or regulation or of the Debtor's articles of
incorporation, by-laws, or other agreements to which it is a party or by which
it is bound; and no consent or approval of directors or shareholders or any
governmental agency or authority is required in connection with the Debtor's
execu-
7
tion, delivery or performance of this Agreement which has not been obtained.
b. The Debtor's principal office is at 0000 Xxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxx, Xx 00000, and the Debtor maintains its books of account and records
only at such address.
c. All of the Equipment and Inventory is kept and located only at Ottawa,
Canada, and is in the possession of the secured party, affiliate or subsidiary
thereof.
d. The Debtor is the owner of the Collateral free and clear of all
encumbrances and security interests other than the Secured Party's security
interest.
e. Excepting only those assets subject to the Call Center Agreement and
Uplink Center Agreement (as those terms are defined in the Purchase Agreements)
during the term of those agreements, none of the Collateral is in the possession
of any third party or subject to any document of title.
7. WAIVERS
So long as Secured Party complies with the obligations, if any, imposed by CRS
Section 4-9-207 of the Code, Secured Party shall not otherwise be liable or
responsible in any way or manner for: (a) the safekeeping of the Equipment or
Inventory, or any of Debtor's Books relating to any of the Collateral; (b) any
loss or damage thereto occurring or arising in any manner or fashion or from any
cause; (c) any diminution in the value thereof; or (d) any act or default of any
carrier, warehouseman, bailee, forwarding agency, or other person whomsoever.
All notices, requests, demands or other communications provided for in this
Agreement shall be in writing and shall be delivered by hand, sent prepaid by
Federal Express (or a comparable overnight delivery service) or sent by the
United States mail, certified, postage prepaid, return receipt requested, as
follows:
If to the Secured Party:
With copies to:
If to the Debtor:
Colorado Satellite Broadcasting, Inc.
8
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn.: Xxxx Xxxxxxx
With copies to:
The Law Office of Xxxx X. Driver, P.C.
0000 Xxxx Xxxxx Xxx., Xxxxx 000
Xxxxxx, XX 00000
Any notice, request, demand or other communication delivered or sent in the
foregoing manner shall be deemed given or made (as the case may be) upon the
earliest of (a) the date it is actually received, (b) on the business day after
the day on which it is delivered by hand, (c) on the business day after the day
on which it is properly delivered to Federal Express (or a comparable overnight
delivery service, or (d) on the third business day after the day on which it is
deposited in the Untied States mail. The Debtor or the Secured Party may change
its address by notifying the other party of the new address in any manner
permitted by this paragraph 8.
9. GOVERNING LAW: JURISDICTION AND VENUE
9.1 GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO HAVE BEEN MADE IN THE
STATE OF COLORADO AND THE VALIDITY, CONSTRUCTION, INTERPRETATION, AND
ENFORCEMENT HEREOF, AND THE RIGHT OF THE PARTIES HEREOF SHALL BE DETERMINED
UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE
STATE OF COLORADO, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
9.2 JURISDICTION AND VENUE. THE PARTIES HERETO AGREE THAT ANY PROCEEDING
PURSUANT TO SECTION 9 ARISING IN CONNECTION WITH THIS AGREEMENT SHALL BE HELD
ONLY IN THE STATE OF COLORADO OR AT THE SOLE OPTION OF SECURED PARTY, IN ANY
OTHER FORUM IN WHICH SECURED PARTY INITIATES PROCEEDINGS AND WHICH HAS
JURISDICTION OVER THE SUBJECT MATTER AND PARTIES IN CONTROVERSY. THE PARTIES
HERETO HEREBY WAIVE ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON
CONVENIENCE OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN
ACCORDANCE WITH THIS SECTION 9.2 AND STIPULATE THAT ANY FORUM LOCATED IN
COLORADO, SHALL HAVE IN PERSONAM JURISDICTION AND VENUE OVER EACH SUCH PARTY FOR
THE PURPOSE OF ARBITRATING ANY SUCH DISPUTE, CONTROVERSY, OR PROCEEDING ARISING
OUT OF OR RELATED TO THIS AGREEMENT. SERVICE OF PROCESS SUFFICIENT FOR PERSONAL
JURISDICTION IN ANY ACTION AGAINST DEBTOR MAY BE MADE BY REGISTERED OR CERTIFIED
MAIL, RETURN RECEIPT REQUESTED, TO ITS ADDRESS SPECIFIED FOR NOTICES PURSUANT TO
SECTION 8.
9
10. GENERAL PROVISIONS
10.1 This Agreement shall be binding and deemed effective when executed and
delivered by Debtor and accepted and executed by Secured Party.
10.2 This Agreement shall bind and inure to the benefit of the respective
successors and assigns of Debtor and Secured Party; PROVIDED, HOWEVER, that
Debtor may not assign this Agreement or any rights hereunder without Secured
Party's prior written consent and any prohibited assignment shall be
absolutely void, No consent by Secured Party to an assignment by Debtor shall
release Debtor from its Obligations. Secured Party reserves its right to
sell, assign, transfer, negotiate, or grant participation in all or any part
of, or any interest in, the rights and benefits hereunder pursuant to and in
accordance with the provisions of the Note. In connection therewith, Secured
Party may disclose all documents and information which Secured Party now or
hereafter may have relating to Debtor, Debtor's business, or the Collateral
to any such prospective or actual Transferee PROVIDED that such Transferee
has first agreed to be bound by the provisions of Section 10.3 hereof.
10.3 Secured Party agrees to keep confidential any information relating to
Debtor delivered by Debtor hereunder; PROVIDED that nothing herein shall
prevent Secured Party from disclosing such information: (a) to any affiliate
of Secured Party or any prospective or actual transferee that agrees to be
bound by this Section 10.3, (b) upon order, subpoena, or other process of any
court or administrative agency, (c) upon the request or demand of any
regulatory agency or authority having jurisdiction over Secured Party, (d)
which has been publicly disclosed (other than by Secured Party unless such
disclosure was otherwise permitted hereunder), (e) which has been obtained
from any Person that is not a party hereto or an affiliate of any such party,
(f) in connection with the exercise of any remedy, or the resolution of any
dispute, hereunder or under any of the Purchase Agreements, this Agreement or
the Note, (g) to the legal counsel or certified public accountants for
Secured Party, or (h) as otherwise expressly required by the Note, this
Agreement or the Purchase Agreements.
10.4 Section headings and numbers have been set forth herein for convenience
only. Unless the contrary is compelled by the context, everything contained
in each Section hereof applies equally to this entire Agreement.
10.5 Neither this Agreement nor any uncertainty or ambiguity herein shall be
construed or resolved against Secured Party or Debtor, whether under any rule
of construction or otherwise. On the contrary, this Agreement has been
reviewed by each of the parties and their counsel and shall be construed and
interpreted
10
according to the ordinary meaning of the words used so as to accomplish fairly
the purposes and intentions of all parties hereto.
10.6 Each provision of this Agreement shall be severable from every other
provision of this Agreement for the purpose of determining the legal
enforceability of any specific provision.
10.7 This Agreement cannot be changed, modified, amended, or terminated,
except by a written document executed by both Debtor and Secured Party. All
prior agreements, understandings, representations, warranties, and
negotiations, if any, are merged into this Agreement, the Note, the Purchase
Agreements and the other documents and agreements entered into in connection
herewith and therewith.
10.8 The parties intend and agree that their respective rights, duties,
powers, liabilities, obligations, and discretion shall be performed, carried
out, discharged, and exercised reasonably and in good faith.
10.9 After termination of the Note and when Secured Party has received
payment and performance in full of all Obligations, Secured Party shall
execute and deliver to Debtor a termination of all of the security interests
granted by Debtor hereunder.
10.10 This Agreement may be executed in any number of counterparts and by
different parties on separate counterparts, each of which counterparts, when
so executed and delivered, shall be deemed to be an original. All of such
counterparts, taken together, shall constitute but one and the same
Agreement. This Agreement shall become effective upon the execution of a
counter-part of this Agreement by each of the parties hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first set forth above.
Debtor
By
Title:
Secured Party
By
Title:
11
SCHEDULE 2.2
ALLOCATION OF PURCHASE PRICE
The Purchase Price is allocated to the Subject Assets as follows:
US$510,305 to that equipment (including without limitation essential
spares and replacement parts) and software technology,
furniture, machinery, appliances, and other tangible
personal property and technology used in and historically
allocated to the operation of a satellite operation uplink
facility as specifically set forth in SCHEDULE 1(a) of the
Asset Purchase Agreement, "the Uplink Facilities Equipment
List"
US$335,578 to all hardware, equipment, software license assignments,
furniture, machinery, appliances and other tangible personal
property as set forth in SCHEDULE 1(b) of the Asset Purchase
Agreement, "The Call Center Equipment List"
SCHEDULE 4
LEASES, CONTRACTS, AND AGREEMENTS
None.
SCHEDULE 7.2(e)
ENCUMBRANCES
None.
SCHEDULE 7.2(f)
MATERIAL ADVERSE EVENTS AND CONDITIONS
None.
SCHEDULE 7.6
INSURANCE POLICIES
The Subject Assets are insured under Zurich Insurance Company Policy Nos.
8422185 and 8422187. The Subject Assets are insured on a replacement value
basis.
SCHEDULE 7.11
APPROVALS AND CONSENTS
As contemplated by section 7.5 of the Asset Purchase Agreement, Seller will be
acquiring the Subject Assets from Fifth Dimension Capital Corporation ("5D
Capital"), 841161 Ontario Limited ("841"), Fifth Dimension Communications (1996)
Corporation ("Communications") and 1043133 Ontario Inc. Prior to the acquisition
of the Subject Assets by Seller for resale to Buyer:
1. 5D Capital must purchase certain of the Subject Assets from CIBC Equipment
Finance Limited "CIBC Finance" (such assets being subject to an existing
lease agreement between 5D Capital and CIBC Finance).
2. 841 must obtain a release of a security interest registered by Royal Bank
of Canada over certain of the Subject Assets.
3. 841 must purchase certain of the Subject Assets from Mild Financing N.V.
"Mild" (such assets being subject to an existing lease agreement between 5D
Capital and Mild).
4. Communications must obtain a release of a security interest registered by
Xxxxx Xxxxxxxx Xxxxxxx Inc. over certain of the Subject Assets.
SCHEDULE 7.12
COMPETING INTERESTS
Xxxxxx X. Xxxxxx and Xxxxxxx X. Xxxxxx, officers and directors of Seller, are
the beneficial owners of stock in the capital of Fifth Dimension Satcom Inc.
("Satcom"). Satcom will be a subcontractor to Seller in respect of the Uplink
Management Services Agreement.
SCHEDULE 7.13
ADDRESSES OF SELLER
1. 0000 Xxxxxxxx Xxxxx
Xxxxxx, Xxxxxxx
X0X 0X0
2. 0000 Xxx Xxxx Xxxxx
Xxxxxx, Xxxxxxx
X0X 0X0
SCHEDULE 8.2(a)
BUYERS' DISCLOSURE STATEMENT
[attached]
SCHEDULE 8.2(a)
BUYERS' DISCLOSURE STATEMENT
Buyers make no further disclosures concerning Buyers' Financial Statements
and the notes thereto, which were prepared in accordance with GAAP applied on a
consistent basis throughout the periods covered thereby and reaffirm that the
Financial Statements are true, accurate and complete, do not contain any untrue
statement of material fact or omit to state a material fact required by GAAP to
be stated therein or necessary in order to make the statements contained therein
not misleading, and fairly present the financial condition and the results of
operations of Buyers, on the bases therein stated, as of the respective dates
thereof, and for the respective periods covered thereby subject, in the case of
unaudited financial statements, to normal year-end audit adjustments and
accruals.
SCHEDULE 11.11
NON-COMPETITION AGREEMENT
[attached]
NONCOMPETITION AND CONFIDENTIALITY AGREEMENT
THIS NONCOMPETITION AND CONFIDENTIALITY AGREEMENT is entered into as of this
_____ day of__________ , 1997, by and among New Frontier Media, Inc., and
Colorado Satellite Broadcasting, Inc., a Colorado corporation, (collectively
"Buyers") and 1248663 Ontario Inc. ("Seller"),
Background
Buyers are acquiring certain assets and contracting for certain services
from Seller for an Adult Movies Business;
As a condition to Buyers' willingness to consummate the transactions
contemplated by the Purchase Agreement to which this Agreement is an exhibit,
Buyers have required that Seller and Seller agrees to the covenants not to
compete and the confidentiality agreements provided in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein and in the Purchase Agreement and foregoing premises, the parties
hereby covenant and agree as follows.
1. DEFINITIONS. The following terms shall have the following meanings:
(a) "Adult Movies Business" means any and all present or contemplated
satellite broadcast services on television or any other medium, including cable
television and the Internet, which broadcasts, replays, and/or otherwise
exploits feature length adult programming and all related promotional content
and other programming of a non-rated or X-rated nature and whose main theme
embodies nudity and/or sexually explicit material between consenting adults and
such other related business assets as are necessary for the operation thereof.
(b) "Purchase Agreement" shall mean the Asset Purchase Agreement between
New Frontier Media, Inc. and Colorado Satellite Broadcasting, Inc. as buyers and
1248663 Ontario Inc., as seller, dated September 5, 1997.
2. NONCOMPETITION. During the period commencing on the Closing Date of
the Purchase Agreement, and ending on the expiration of five years following
that date, Seller and its officers or directors shall not, directly or
indirectly, manage, operate, join, advise, control, or be connected as an
officer, director, employee, partner, guarantor, adviser, or consultant in or
beneficially own or control, directly or indirectly, ten (10) percent or more of
the voting, profit sharing, or equity interests in, any corporation,
partnership, joint venture, or other business venture (an "Interest in a
Business") which competes in the Adult Movies Business of Buyers in any location
throughout the world.
1
3. CONFIDENTIALITY. Seller shall keep confidential all of and shall not
disclose to any other party or provide any other party access to, the
confidential or proprietary information of the assets and services being
acquired by Buyers pursuant to the purchase Agreement not in the public domain,
including but not limited to, information relating to such matters as Buyers or
the Adult Movies Business' products, services, finances, methods of operation
and competition, research data, market reports, distribution methods, marketing
plans and strategies, operational requirements, personnel, customers and
suppliers and distributors, trade secrets, technical information, processes,
systems, procedures, know-how, improvements, price lists, projections and other
financial data, invoices, financial statements, or any other compilation of
information used in the Adult Movies Business which gives Buyers an opportunity
to obtain an advantage over its competitors who do not know or use such
information. This shall include both information acquired by Seller before and
after the date of this Agreement (collectively "Confidential Information")
4. NONSOLICITATION OF EMPLOYEES. For the period commencing on the Closing
Date of the Purchase Agreement, and ending on the expiration date of five years
follow that date, Seller shall not, either on its own account or for any person,
firm, or company, solicit, interfere with, or endeavor to cause any officer,
employee or consultant of Buyers, who is employed or otherwise engaged to
provide services to buyers, to leave his or her employment or engagement with
Buyers or induce or attempt to induce any such person to terminate or breach any
employment, noncompetition, or confidentiality agreement such person may have
with Buyers.
5. NONSOLICITATION OF CUSTOMERS. For the duration of this Agreement,
Seller shall not solicit, induce, or attempt to induce any past or current
customer or distributor of Buyers to do business with Seller or any affiliate in
regard to a matter included in the Adult Movies Business or to cease doing
business in whole or in part with Buyers.
6. STAY OF TIME. In the event Seller violates any provision of this
Agreement, the running of the term of this agreement shall be automatically
tolled starting on the day of such violation and resuming on the date such
violation ceases.
7. EQUITABLE RELIEF. The parties acknowledge and agree that in the
event of any breach of this Agreement by Seller (i) Buyers' remedies at law
are and will be inadequate; (ii) such breach will substantially diminish the
value of the assets proprietary interest that are being acquired by Buyers
through the Purchase Agreement; and (iii) will cause irreparable injury in a
short period of time. In the event of a breach or threatened breach by Seller
of the provisions of this Agreement, the parties hereto agree that Buyers
shall be entitled to equitable relief to protect its interests therein,
including, but not limited to, preliminary and permanent injunctive relief.
Such relief and all other rights and remedies of Buyers provided herein shall
be cumulative with any other rights provided to it in the Purchase agreement
or otherwise provided to it under applicable law and nothing herein shall
preclude Buyers from pursuing any other remedies available to it for a breach
or threatened breach, including without limitation the recovery of damages
for Seller.
2
8. NOTICES. (a) In the event a party believes that there has been a
breach of this Agreement, it shall notify in writing the other party of the
belief and provide a brief statement of the basis for such belief, provided that
any failure to give such notice shall not act as a waiver of or otherwise affect
in any way any rights or remedies the non-breaching party may have or relieve
the other party from any duty or liability hereunder. In the event Seller
acquires or comes to own, control, directly or indirectly, an interest in a
business, whether voluntarily or involuntarily, which business may reasonably be
deemed to compete with the Adult Movies Business, Seller shall promptly notify
Buyers of such fact and identify the interest in the business and the nature of
such business's activities as they may relate to the Adult Movies Business.
(b) All notices or other communications which may be or are required to be
given under this Agreement shall be in writing and shall be deemed to have been
duly given on the date of service if served personally on the party to whom
notice is to be given, or on the third day after mailing if mailed to a party to
whom notice is to be given, by first class registered or certified, postage
prepaid, and properly addressed as follows:
Buyers: New Frontier Media, Inc.
0000 Xxxxxx Xx. Xxxxx 000
Xxxxxxx, XX 00000
Att.: Xxxx X. Xxxxxxx
with a copy to:Xxxx X. Driver, Esq.
The Law Office of Xxxx X. Driver, P.C.
0000 Xxxx Xxxxx Xxx., Xxxxx 000
Xxxxxx, XX 00000
Seller: Xxxxxxx Xxxxxx
0000 Xxx Xxxx Xxxxx
Xxxxxxx, Xxxxxx
X0X 0X0
Xxxxxxx Xxxxxx
0000 Xxx Xxxx Xxxxx
Xxxxxxx, Xxxxxx
X0X 0X0
with a copy to:Xxxxx Xxxxxx, Esq.
Yegendorf, Brazeau, Sell, Prehogan & Xxxxxx
00 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxx
X0X 0X0
3
9. SUCCESSORS AND ASSIGNS. This Agreement shall be binding on and inure
to the benefit of the parties hereto and their permitted and respective heirs,
successors and assigns. No party shall have the right to assign this Agreement
without the prior written consent of the other party, except that Buyers shall
have the right to assign its rights hereunder to any successor in interest of
the Adult Movies Business whether by merger, consolidation, purchase of assets
or otherwise, or any other person or entity controlling or which at any time
controls or is under common control with either Buyer or any of their
subsidiaries or successors.
10. SEPARATE COVENANTS. This Agreement shall be deemed to consist of a
series of separate covenants. Seller expressly agrees that the character,
duration, and geographical scope of this Agreement are reasonable in light of
the circumstances as they exist on the date upon which this Agreement has been
executed. However, should a determination nonetheless be made by a court of
competent jurisdiction at a later date that the character, duration or
geographic scope of this Agreement is unreasonable in light of the circumstances
as the now or then exist, then it is the intention and agreement of the parties
that this Agreement shall be construed by the court in such a manner as to
impose only those restrictions on the conduct of Seller which is reasonable in
light of such circumstances and are necessary to assure Buyers of the intended
benefit of this Agreement. If any of the provision of this Agreement shall
otherwise contravene or be deemed invalid under the laws of any state or
jurisdiction, such contravention or invalidity shall not invalidate all of the
provisions of this Agreement but rather is shall be construed as not containing
the provisions or provisions contravening or invalid under the laws of the state
or jurisdiction, and the all other rights and obligations created hereby shall
be construed and enforced accordingly.
11. GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of Colorado, without
regard to principles of conflicts of laws and the parties irrevocable commit to
the jurisdiction and venue of the United States District Court for the District
of Colorado to resolve any dispute arising hereunder or related hereto.
12. AMENDMENTS AND WAIVERS. Any amendments or modifications to this
Agreement must be in writing signed by each party hereto or their successors or
assigns. No breach of any covenant, agreement, warranty, or representation shall
be deemed waived unless expressly waived in writing by the party who might
assert such breach. No waiver of any right hereunder shall operate as a waiver
of any other right or the same or similar right on another occasion.
13. ATTORNEYS' FEES. In the event that any action or proceeding is
commenced by any party hereto for the purpose of enforcing any provision of this
Agreement, the parties to such action or proceeding may receive as part of any
award, judgment, decision, or other resolution of such action or proceeding,
their costs, and reasonable attorneys' fees.
4
14. ENTIRE AGREEMENT. This Agreement and the agreements referred to herein
contain the entire understanding of the parties and supersede all prior or
contemporaneous agreements and understandings.
15. COUNTERPARTS. This Agreement may be executed by the parties in
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute but one and the
same instrument.
In Witness whereof, the parties hereto have executed this Agreement on the
date first above written.
Buyers: New Frontier Media, Inc.
By:
---------------------------
Its:
--------------------------
Colorado Satellite Broadcasting, Inc.
By:
---------------------------
Its:
--------------------------
SELLER:
1248663 Ontario Inc.
By:
---------------------------
Its:
---------------------------
5
[SCHEDULES TO THE 104 AGREEMENT]
SCHEDULE 1(a)
TRADEMARKS LIST
EXXXTASY ADULT TELEVISION (U.S. Trademark Registration No. 1931208)
XTC-COM (U.S. Trademark Application No. 255506/75)
EXXXTASY (U.S. Trademark Registration No. 1916844)
TRUE BLUE (U.S. Trademark Application No. 255508/75)
SCHEDULE 1.1
FIRST LINK LICENSE AGREEMENT
THIS AGREEMENT made the - day - of, 1997.
BETWEEN:
1043133 ONTARIO INC.
("104")
THE FIRST PARTY
AND:
COLORADO SATELLITE BROADCASTING, INC.
("CSB")
THE SECOND PARTY
WHEREAS:
(1) pursuant to the terms of an Asset Purchase Agreement made 5 September 1997
among New Frontier Media, Inc., CSB and 104, 104 is required to grant to
CSB a license for certain subscription management software (known as "First
Link" version 2 and herein called the "Software"); and
(2) the parties desire to set forth below the terms of such license.
FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which are
acknowledged, the parties agree as follows:
1. GRANT OF LICENSE. In consideration of CSB's agreement to abide by the
terms and conditions of this License Agreement, 104, as licensor, grants to
CSB a non-exclusive, royalty-free license to use and display the Software
on a single computer with a single central processing unit (collectively,
the "CPU") at a single location so long as CSB complies with the terms of
this License Agreement and to use the source code related to the Software
solely for the purpose of maintaining the Software (and, in this Agreement,
the term "Software" includes such source code). The CPU on which CSB uses
the Software may be a multiuser system and this License Agreement covers
all users who have access to the CPU. 104 reserves all rights not
expressly granted to CSB. CSB may not loan, rent, lease, or transfer the
Software to another except as part of a permanent transfer of the Software
(as provided below) of all of the Software and printed materials.
2
2. OWNERSHIP OF SOFTWARE. CSB shall own the magnetic or other physical media
on which the Software is originally or subsequently recorded or fixed, but
an express condition of this License Agreement is that 104 retains title
and ownership of the Software recorded on the original copy(ies) and all
subsequent copies of the Software, regardless of the form or media in or on
which the original and other copies may exist. This license is not a sale
of the original Software or any copy.
3. COPY RESTRICTIONS. This Software (including any images, photographs,
animations, videos, audio, music, and text incorporated therein) and the
accompanying written materials are copyrighted. Unauthorized copying of
the Software, including Software which has been modified, merged, or
included with other software, or of the written materials is expressly
forbidden. CSB may be held legally responsible for any copyright
infringement which is caused or encouraged by its failure to abide by the
terms of this License Agreement. Subject to the aforementioned
restrictions, CSB may make one copy of the Software solely for backup
purposes. CSB must reproduce and include the copyright notice on the backup
copy.
4. USE RESTRICTIONS. CSB may physically transfer the Software from one
computer to another provided that the Software is used on only one
computer at a time. CSB may not distribute copies of the Software or
accompanying written materials to others. CSB may not modify, adapt,
translate, reverse engineer, decompile, disassemble, or create derivative
works based on the Software. CSB may not modify, adapt, translate or
create derivative works based on the written materials.
5. TRANSFER RESTRICTIONS. This software is licensed only to CSB and may be
transferred by CSB only on a permanent basis provided the transfer is made
in conjunction with the purchase of substantially all of the outstanding
capital stock or assets of CSB by the third party and further provided that
CSB retains no copies and such third party agrees to the terms of this
License Agreement. If the Software is an upgrade, any transfer must
include the most recent version and all prior versions. In no other event
may CSB transfer, assign, rent, lease, sell or otherwise dispose of the
Software on a temporary or permanent basis.
6. TERMINATION. This license is effective until terminated. This license
will terminate automatically without notice from 104 if CSB fails to comply
with any provision of this License Agreement. Upon termination CSB shall
destroy the written materials and all copies of the Software, including
modified copies, if any.
7. UPDATE POLICY. 104 may create, from time to time, updated versions of the
Software. 104 will make such updates available at no cost to CSB. 104
makes a commitment to provide any updates or revisions to the Software.
8. LIMITED WARRANTY. The Software and accompanying written materials are
provided "as is" without warranty of any kind. 104 does not warrant,
guarantee or make any representations regarding the use, or the results of
use, of the Software or written materials in terms of correctness,
accuracy, reliability, currentness, or otherwise. The
3
entire risk as to the results and performance of the Software is assumed by
CSB. If the Software or written materials are defective CSB, and not 104,
shall assume the entire cost of all necessary servicing, repair, or
correction. 104 warrants to CSB that the media on which the Software is
recopied is free from defects in materials and workmanship under normal use
and service for a period of 90 days from the date of delivery as evidenced
by a copy of the receipt.
THE ABOVE IS THE ONLY WARRANTY OF ANY KIND, EITHER EXPRESS OR IMPLIED,
STATUTORY OR OTHERWISE, INCLUDING BUT NOT LIMITED TO THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE THAT
IS MADE BY 104. NO ORAL OR WRITTEN INFORMATION OR ADVICE GIVEN BY 104,
ITS AGENTS OR EMPLOYEES SHALL CREATE A WARRANTY OR IN ANY WAY INCREASE
THE SCOPE OF THIS WARRANTY AND CSB MAY NOT RELY ON ANY SUCH INFORMATION
OR ADVICE.
Neither 104 nor anyone else who has been involved in the creation,
production or delivery of the Software shall be liable for any direct,
indirect, consequential or incidental damages (including damages for loss
of business profits, business interruption, loss of business information,
and the like) arising out of the use or inability to use the Software
even if CSB has been advised of the possibility of such damages.
In the event of any conflict between any provision in this limited
warranty and any applicable provincial or state legislation, the
applicable provincial or state legislation takes precedence over the
contravening provision.
9. GOVERNING LAW. This License Agreement is governed by the laws of the
Province of Ontario and the laws of Canada applicable therein and shall
benefit the parties and their successors.
4
10. LEGAL COSTS. Should any dispute be commenced between the parties
concerning any provision of this Agreement or the rights and duties of
any party in relation thereto, the party prevailing in such dispute shall
be entitled, in addition to such other relief as may be granted, to a
reasonable sum as and for its attorneys' fees in such connection with
enforcing its rights or defending itself, as the case may be.
IN WITNESS OF WHICH the parties have executed this Agreement.
)
) 1043133 ONTARIO INC.
)
)
) Per:
) ------------------------------
) Authorized Signing Officer
)
)
) COLORADO SATELLITE
) BROADCASTING, INC.
)
)
) Per:
) ------------------------------
) Authorized Signing Officer
)
