4
NOTE PAYMENT AGREEMENT
NOTE PAYMENT AGREEMENT, dated as of February 28, 2007, among Comtex News
Network, Inc., a Delaware corporation ("Comtex"); Tepco Ltd., a Bermuda
corporation ("Tepco"); and Xxxxxx X. Xxxxxxxx ("Zamfotis," and, jointly with
Tepco, the "Noteholders").
Tepco and Zamfotis are, as assignees thereof, the joint holders and
obligees in the respective ratio of 98% and 2%, of the outstanding promissory
note of Comtex in the outstanding principal amount of $856,954.00 (the "Note").
Comtex desires to pay the entire principal amount of the Note in complete
discharge of all obligations under the Note, and the Noteholders desire to
receive such payment on such terms.
Accordingly, the parties hereto agree as follows:
1. As promptly as practicable after the execution and delivery of this
instrument, but in no event later than 10 business days after the date hereof,
Comtex shall deliver to Xxxxxx Xxxxxxx, Esq., the agent of the Noteholders (the
"Agent"), at 000 Xxxxxxxx Xxxxxx, Xxxxxx Xxxxxx, XX 00000, the following and as
further provided in this agreement (the "Payment") in complete discharge of all
obligations under the Note:
Comtex will pay the Noteholders $650,000.00 in cash and 1,591,953 shares of
common stock of Comtex as follows:
Tepco: $637,000.00 in cash and 1,560,114 shares of common stock of Comtex;
and
Zamfotis: $13,000.00 in cash and 31,839 shares of common stock of Comtex.
Comtex shall deliver (a) the cash portion of the Payment described hereinabove
in the form of certified or bank checks to the order of the respective
Noteholders and the stock portion of the Payment described hereinabove in the
form of stock certificates as provided hereinbelow.
2. Promptly upon his receipt of the Payment in accordance with this
agreement, the Agent shall deliver the Note to Comtex for cancellation.
3. Comtex represents and warrants to the Noteholders as follows:
(a) Comtex is a corporation duly formed, validly existing and in good
standing under the laws of the state of its incorporation.
(b) Comtex has all requisite power to execute and deliver this agreement
and to carry out and perform its obligations under this agreement. This
agreement has been duly executed by Comtex and is a valid and binding agreement
of Comtex, enforceable against Comtex in accordance with its terms.
(c) All action of Comtex necessary for the authorization, execution,
delivery and performance of this agreement and the performance of its
obligations hereunder has been taken.
(d) The execution and delivery by Comtex of this agreement do not and the
performance by Comtex of its obligations under this agreement and the
consummation of the transactions contemplated hereby will not:
(i) conflict with or result in a violation or breach of the articles
of organization or bylaws of Comtex;
(ii) conflict with or result in a violation or breach of any judgment,
decree, injunction or similar order of any governmental or regulatory
authority or any law, rules, regulations, ordinances or other
pronouncements applicable to Comtex having the effect of law of the United
States or any political subdivision thereof, or
(iii) (A) conflict with or result in a violation or breach of, (B)
constitute (with or without notice or lapse of time or both) a default
under, (C) require Comtex to obtain any consent, approval or action of,
make any filing with or give any notice to any person or entity as a result
or under the terms of, or (D) result in the creation or imposition of any
lien or encumbrance upon Comtex under, any material contract or license to
which Comtex is a party, and which, individually or in the aggregate with
other such material contracts and licenses, is material to the validity or
enforceability of this agreement.
(e) The shares of Comtex common stock included in the Payment and described
hereinabove (the "Comtex Shares") shall be duly authorized and validly issued
and, upon receipt hereunder by Comtex of the Note from the Noteholders, fully
paid and nonassessable.
5. The Noteholders hereby severally and not jointly represent and warrant
to Comtex as follows (each representation and warranty being given by each
Noteholder only with respect to itself):
(a) The Noteholders have all requisite power to execute and deliver this
agreement and to carry out and perform their obligations under this agreement.
This agreement has been duly executed by the Noteholders and is their valid and
binding agreement, enforceable against them in accordance with its terms.
(b) Tepco is a corporation duly formed, validly existing and in good
standing under the laws of the jurisdiction of its incorporation. All action of
Tepco necessary for the authorization, execution, delivery and performance of
this agreement and the performance of its obligations hereunder has been taken.
(c) The execution and delivery by the Noteholders of this agreement do not
and the performance by them of their obligations under this agreement and the
consummation of the transactions contemplated hereby will not:
(i) in the case of Tepco, conflict with or result in a violation or
breach of the organizational documents or bylaws of Tepco;
(ii) conflict with or result in a violation or breach of any judgment,
decree, injunction or similar order of any governmental or regulatory
authority or any law, rules, regulations, ordinances or other
pronouncements applicable to the Noteholders having the effect of law of
the country in Bermuda in the case of Tepco or the U.S in the case of
Zamfotis, or, in either case, any political subdivision thereof, or 2
(iii) (A) conflict with or result in a violation or breach of, (B)
constitute (with or without notice or lapse of time or both) a default
under, (C) require the Noteholders to obtain any consent, approval or
action of, make any filing with or give any notice to any person or entity
as a result or under the terms of, or (D) result in the creation or
imposition of any lien or encumbrance upon the Noteholders under, any
material contract or license to which either Noteholder is a party, and
which, individually or in the aggregate with other such material contracts
and licenses, is material to the validity or enforceability of this
agreement.
(e) The Noteholders own their respective interests in the Note free and
clear of any lien, pledge, voting agreement, or other encumbrance or interest of
others, and there is no agreement to hypothecate, borrow, lend, or sell such
interest other than this agreement.
(f) The Noteholders are acquiring the Comtex Shares for investment and not
with a view toward, or for resale in connection with, any "distribution" thereof
in violation of the Securities Act of 1933, as amended. The Noteholders
understand that the Comtex Shares will not be registered under the Securities
Act of 1933, as amended, by reason of specific exemption therefrom, which
exemption depends upon, among other things, the bona fide nature of their
investment intent as expressed herein. The Noteholders are sophisticated
investors, have made an independent evaluation of the investment in the Comtex
Shares and/or have consulted with their own advisors concerning the investment
and understand fully the risks which may be involved therein. The Noteholders
agree that the certificates representing the Comtex Shares may bear the
following legend or such other legend to the same effect as Comtex's counsel may
deem appropriate:
"The shares of common stock represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or any state
securities laws and may in no event be offered, sold, transferred or
assigned unless and until the shares have been so registered or, in the
opinion of counsel to the company, an exemption from such registration is
available."
6. (a) The terms and conditions of this agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and assigns and upon Zamfotis's personal representative. Nothing in
this agreement, express or implied, is intended to confer upon any third party
any rights, remedies, obligations, or liabilities under or by reason of this
Agreement except as expressly provided in this agreement. The parties hereto
shall execute such other and further documents, and take such other and further
actions as are reasonably necessary to carry out the intents and purposes of
this agreement, without notice and additional consideration.
(b) This agreement shall be governed by and construed under the laws of the
State of Delaware.
(c) No modification or waiver of any provision of this agreement, or delay
in enforcing any right or remedy, or consent to departure therefrom shall be
effective unless in writing and approved by the parties.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
3
(d) This agreement may be executed in multiple counterparts, each of which
shall be deemed an original and all of which taken together shall be but a
single instrument.
COMTEX NEWS NETWORK, INC.
By: /s/ Chip Xxxxx
------------------------------
Name: Chip Xxxxx
Title: President and Chief
Executive Officer
TEPCO LTD.
By: /s/ Xxx Xxxxxx
------------------------------
Name: Xxx Xxxxxx
Title: Director
/s/ Xxxxxx X. Xxxxxxxx
------------------------------
Xxxxxx X. Xxxxxxxx
4
