STOCK PURCHASE AGREEMENT AND SHARE EXCHANGE
by and among
CONNECTED MEDIA TECHNOLOGIES, INC.
a Delaware Corporation
and
NATCOM MARKETING INTERNATIONAL
a Puerto Rico Corporation
and
the NATCOM MARKETING INTERNATIONAL
SHAREHOLDERS.
effective as of January 31, 2006
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT, made and entered into this 31st day of
January, 2006, by and among Connected Media Technologies, Inc., a Delaware
corporation with its principal place of business located at 000 Xxxxx Xxxx
Xxxxxx Xxxx, Xxxxx X000-0000, Xxxxxxxxxx, Xxxxxxx 00000 ("CMT") and Natcom
Marketing International, a Puerto Rico corporation with its principal place of
business at 00 XX 0xx Xxxxxx, Xxxxx 0000, Xxxxx, Xxxxxxx 00000 ("NATCOM") and
the NATCOM selling shareholders listed on Exhibit "A" ("Shareholders") (NATCOM
and its Shareholders shall collectively be referred to herein as "NATCOM").
Premises
A. This Agreement provides for the acquisition by CMT of 100% of the issued
and outstanding shares of common stock of NATCOM from the NATCOM Shareholders in
exchange for 300,507,663 shares of CMT common stock, whereby NATCOM shall become
a wholly owned subsidiary of CMT.
B. The shareholders and boards of directors of NATCOM and board of
directors of CMT have determined, subject to the terms and conditions set forth
in this Agreement, that the transaction contemplated hereby is desirable and in
the best interests of their stockholders, respectively. This Agreement is being
entered into for the purpose of setting forth the terms and conditions of the
proposed acquisition.
Agreement
NOW, THEREFORE, on the stated premises and for and in consideration of the
mutual covenants and agreements hereinafter set forth and the mutual benefits to
the parties to be derived here from, it is hereby agreed as follows:
ARTICLE I
REPRESENTATIONS, COVENANTS AND WARRANTIES OF
NATCOM and the NATCOM Shareholders
As an inducement to and to obtain the reliance of CMT, NATCOM and the
NATCOM Shareholders represent and warrant as follows:
Section 1.1 Organization. NATCOM is a corporation duly organized, validly
existing, and in good standing under the laws of Puerto Rico and has the
corporate power and is duly authorized, qualified, franchised and licensed under
all applicable laws, regulations, ordinances and orders of public authorities to
own all of its properties and assets and to carry on its business in all
material respects as it is now being conducted, including qualification to do
business as a foreign corporation in the jurisdiction in which the character and
location of the assets owned by it or the nature of the business transacted by
it requires qualification. Included in the Schedules attached hereto
(hereinafter defined) are complete and correct copies of the articles of
incorporation, bylaws and amendments thereto as in effect on the date hereof.
The execution and delivery of this Agreement does not and the consummation of
the transactions contemplated by this Agreement in accordance with the terms
hereof will not violate any provision of NATCOM's articles of incorporation or
bylaws. NATCOM has full power, authority and legal right and has taken all
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action required by law, its articles of incorporation, and its bylaws or
otherwise to authorize the execution and delivery of this Agreement.
Section 1.2 Capitalization. The authorized capitalization of NATCOM
consists of 1,000 Common Shares, $.001 par value per share, and no Preferred
Shares authorized. As of the date hereof, NATCOM has 1,000 common shares issued
and outstanding. All issued and outstanding shares are legally issued, fully
paid and non-assessable and are not issued in violation of the preemptive or
other rights of any person. NATCOM has no securities, warrants or options
authorized or issued.
Section 1.3 Subsidiaries. NATCOM has no subsidiaries.
Section 1.4 Tax Matters: Books and Records.
(a) The books and records, financial and others, of NATCOM are in all
material respects complete and correct and have been maintained in
accordance with good business accounting practices; and
(b) NATCOM has no liabilities with respect to the payment of any country,
federal, state, county, or local taxes (including any deficiencies,
interest or penalties).
(c) NATCOM currently has approximately $150,000 in outstanding liabilities
as set forth on Schedule 1.4(a). At or prior to closing, all of the
outstanding liabilities set forth on Schedule 1.4(a) shall be
satisfied, cancelled, or otherwise extinguished, except as set forth
on Schedule 1.4(b).
Section 1.5 Information. The information concerning NATCOM as set forth in
this Agreement and in the attached Schedules is complete and accurate in all
material respects and does not contain any untrue statement of a material fact
or omit to state a material fact required to make the statements made in light
of the circumstances under which they were made, not misleading.
Section 1.6 Title and Related Matters. NATCOM has good and marketable title
to and is the sole and exclusive owner of all of its properties, inventory,
interest in properties and assets, real and personal (collectively, the
"Assets") free and clear of all liens, pledges, charges or encumbrances. NATCOM
owns free and clear of any liens, claims, encumbrances, royalty interests or
other restrictions or limitations of any nature whatsoever and all procedures,
techniques, marketing plans, business plans, methods of management or other
information utilized in connection with NATCOM's business. No third party has
any right to, and NATCOM has not received any notice of infringement of or
conflict with asserted rights of other with respect to any product, technology,
data, trade secrets, know-how, proprietary techniques, trademarks, service
marks, trade names or copyrights which, singly on in the aggregate, if the
subject of an unfavorable decision ruling or finding, would have a materially
adverse affect on the business, operations, financial conditions or income of
NATCOM or any material portion of its properties, assets or rights.
Section 1.7 Litigation and Proceedings. Except for the matter referred to
as Massillon Sign Co. v. Natcom International, Inc. as more fully described on
Schedule 1.7, there are no actions, suits, proceedings or investigations pending
or threatened by or against or affecting NATCOM or its properties, at law or in
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equity, before any court or other governmental agency or instrumentality,
domestic or foreign or before any arbitrator of any kind that would have a
material adverse affect on the business, operations, financial condition or
income of NATCOM. NATCOM is not in default with respect to any judgment, order,
writ, injunction, decree, award, rule or regulation of any court, arbitrator or
governmental agency or instrumentality or of any circumstances which, after
reasonable investigation, would result in the discovery of such a default.
Section 1.8 Material Contract Defaults. Except as set forth on Schedule
1.8, NATCOM is not in default in any material respect under the terms of any
outstanding contract, agreement, lease or other commitment which is material to
the business, operations, properties, assets or condition of NATCOM, and there
is no event of default in any material respect under any such contract,
agreement, lease or other commitment in respect of which NATCOM has not taken
adequate steps to prevent such a default from occurring.
Section 1.9 Contracts On the closing date:
(a) Except as set forth on Schedule 1.9, there are no material contracts,
agreements franchises, license agreements, or other commitments to
which NATCOM is a party or by which it or any of its properties are
bound.
(b) Except for the matter referred to as Massillon Sign Co. v. Natcom
International, Inc. as more fully described on Schedule 1.7, NATCOM is
not a party to any contract, agreement, commitment or instrument or
subject to any charter or other corporate restriction or any judgment,
order, writ, injunction, decree or award materially and adversely
affects, or in the future may (as far as NATCOM can now foresee)
materially and adversely affect, the business, operations, properties,
assets or conditions of NATCOM; and
(c) NATCOM is not a party to any material oral or written: (I) contract
for the employment of any officer or employee; (ii) profit sharing,
bonus, deferred compensation, stock option, severance pay, pension
benefit or retirement plan, agreement or arrangement covered by Title
IV of the Employee Retirement Income Security Act, as amended; (iii)
agreement, contract or indenture relating to the borrowing of money;
(iv) guaranty of any obligation for the borrowing of money or
otherwise, excluding endorsements made for collection and other
guaranties, of obligations, which, in the aggregate exceeds $12,000;
(v) consulting or other contract with an unexpired term of more than
one year or providing for payments in excess of $1,000 in the
aggregate; (vi) collective bargaining agreement; (vii) contract,
agreement or other commitment involving payments by it for more than
$1,000 in the aggregate.
Section 1.10 Compliance With Laws and Regulations. To the best of NATCOM's
knowledge and belief, NATCOM has complied with all applicable statutes and
regulations of any federal, state or other governmental entity or agency
thereof, except to the extent that noncompliance would not materially and
adversely affect the business, operations, properties, assets or condition of
NATCOM or would not result in NATCOM incurring material liability.
Section 1.11 Insurance. All of the insurable properties of NATCOM are
insured for NATCOM`s benefit under valid and enforceable policy or policies
containing substantially equivalent coverage and will be outstanding and in full
force at the Closing Date.
Section 1.12 Approval of Agreement. As of the Closing the directors of
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NATCOM shall have authorized the execution and delivery of the Agreement by and
have approved the transactions contemplated hereby.
Section 1.13 No Conflict With Other Instruments. The execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, or
constitute an event of default under, any material indenture, mortgage, deed of
trust or other material contract, agreement or instrument to which NATCOM is a
party or to which any of its properties or operations are subject
Section 1.14 Governmental Authorizations. NATCOM has all licenses,
franchises, permits or other governmental authorizations legally required to
enable it to conduct its business in all material respects as conducted on the
date hereof. Except for compliance with federal and state securities and
corporation laws, as hereinafter provided, no authorization, approval, consent
or order of, or registration, declaration or filing with, any court or other
governmental body is required in connection with the execution and delivery by
NATCOM of this Agreement and the consummation of the transactions contemplated
hereby.
Section 1.15 Investment Intent. Each of the NATCOM shareholders is entering
into this Agreement for its own account and not with a view to any distribution
of the CMT Shares acquired by it, and it has no present arrangement to sell any
of its CMT Shares to or through any Person, provided that this representation
shall not be construed as an undertaking to hold any CMT Shares for any minimum
or other specific term, and each of the NATCOM shareholders reserves the right
to dispose of its CMT Shares at any time in accordance with Applicable Law.
Section 1.16 Sophistication. Each of the NATCOM Shareholders is a
sophisticated investor, as described in Rule 506(b)(2)(ii) under the Securities
Act and has such experience in business and financial matters that it is capable
of evaluating the merits and risks of an investment in the CMT Common Stock. The
Transferors acknowledge that an investment in the CMT Common Stock is
speculative and involves a high degree of risk.
Section 1.17 Access to Information. Each of the NATCOM shareholders has
received or had access to all documents, records and other information
pertaining to its investment in the CMT Common Stock that it has requested,
including documents filed by CMT under the Exchange Act, and has been given the
opportunity to meet or have telephonic discussions with the CMT Representatives,
to ask questions of them, to receive answers concerning the terms and conditions
of this investment and to obtain information that CMT possesses or can acquire
without unreasonable effort or expense that is necessary to verify the accuracy
of the information provided to the NATCOM shareholders.
Section 1.18 Manner of Sale. At no time were the NATCOM shareholders
presented with or solicited by or through any leaflet, public promotional
meeting, television advertisement or any other form of general solicitation or
advertising relating to CMT or any investment in the CMT Common Stock.
Section 1.19 Financial Statements. Complete and accurate copies of the
audited Balance Sheets (together with any supplementary information thereto) of
NATCOM for the calendar year end 2004 and 2005 will be provided to CMT prior to
close from an AICPA certified accounting firm which is a member in good standing
of the SEC Practice Section. The NATCOM Financial Statements will fairly
present, in all material respects, the financial position of NATCOM, as of and
for the respective dates thereof. Since December 31, 2005, NATCOM shall not have
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made any change in the accounting practices or policies applied in the
preparation of its financial statements, except as may be required by GAAP.
ARTICLE II
REPRESENTATIONS, COVENANTS AND WARRANTIES
OF CMT
As an inducement to, and to obtain the reliance of NATCOM, CMT represents
and warrants as follows:
Section 2.1 Organization. CMT is a corporation duly organized, validly
existing and in good standing under the laws of Delaware and has the corporate
power and is duly authorized, qualified, franchised and licensed under all
applicable laws, regulations, ordinances and orders of public authorities to own
all of its properties and assets and to carry on its business in all material
respects as it is now being conducted, including qualification to do business as
a foreign entity in the country or states in which the character and location of
the assets owned by it or the nature of the business transacted by it requires
qualification. Included in the Attached Schedules (as hereinafter defined) are
complete and correct copies of the articles of incorporation, bylaws and
amendments thereto as in effect on the date hereof. The execution and delivery
of this Agreement does not and the consummation of the transactions contemplated
by this Agreement in accordance with the terms hereof will not, violate any
provision of CMT's certificate of incorporation or bylaws. CMT has full power,
authority and legal right and has taken all action required by law, its articles
of incorporation, bylaws or otherwise to authorize the execution and delivery of
this Agreement.
Section 2.2 SEC Reporting and Compliance. To the best of its knowledge, CMT
has filed with the Securities and Exchange Commission all registration
statements, proxy statements, information statements and periodic reports
required to be filed pursuant to the Securities Exchange Act of 1934
(collectively, the "SEC documents") since August 25, 2004. The Parties
acknowledge that CMT has a pending registration statement on Form SB-2 and all
Parties have had the opportunity to review all comments, amendments and other
documentation relating thereto.
Section 2.3 Capitalization. The authorized capitalization of CMT consists
of 750,000,000 shares of Common Stock, $.0001 par value, and 10,000,000
preferred shares, $.0001 par value. As of the date hereof, there are 300,507,663
common shares issued and outstanding, and no preferred issued and outstanding.
CMT also has 62,000,000 shares held in treasury, of which 60,000,000 are subject
to a lien by Xxxxxxxxxx Equity Partners, LP.
As of the date hereof, CMT has outstanding a two year warrant for 200,000
shares of CMT's common stock with an exercise price of $0.01 per share, and
3,200,000 employee stock options with exercise prices ranging from $0.02 per
share to $0.04 per share.
All issued and outstanding common shares have been legally issued, fully
paid, are non-assessable and not issued in violation of the preemptive rights of
any other person. CMT has no other securities, warrants or options authorized or
issued other than as described in the SEC documents.
Section 2.4 Subsidiaries. CMT has two wholly-owned subsidiaries: (a) Trust
Licensing, Inc., a Florida corporation; and (b) Connected Media, Inc., an
inactive California corporation.
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Section 2.5 Tax Matters; Books & Records
(a) The books and records, financial and others, of CMT are in all
material respects complete and correct and have been maintained in
accordance with good business accounting practices; and
(b) Except as set forth in the SEC Documents, CMT has no outstanding
liabilities with respect to the payment of any country, federal,
state, county, local or other taxes (including any deficiencies,
interest or penalties), except as set forth in Section 6.4 herein. .
(c) CMT shall remain responsible for all debts incurred prior to the
closing.
Section 2.6 Information. The information concerning CMT as set forth in
this Agreement and in the attached Schedules is complete and accurate in all
material respects and does not contain any untrue statement of a material fact
or omit to state a material fact required to make the statements made, in light
of the circumstances under which they were made, not misleading.
Section 2.7 Title and Related Matters. Except as set forth collectively in
the SEC documents and in Schedule 2.7, CMT has good and marketable title to and
is the sole and exclusive owner of all of its properties, inventory, interests
in properties and assets, real and personal (collectively, the "Assets") free
and clear of all liens, pledges, charges or encumbrances. Except as set forth in
the SEC Documents and in the Schedules attached hereto, CMT owns free and clear
of any liens, claims, encumbrances, royalty interests or other restrictions or
limitations of any nature whatsoever and all procedures, techniques, marketing
plans, business plans, methods of management or other information utilized in
connection with CMT's business. Except as set forth in the SEC Documents and in
the attached Schedules, no third party has any right to, and CMT has not
received any notice of infringement of or conflict with asserted rights of
others with respect to any product, technology, data, trade secrets, know-how,
proprietary techniques, trademarks, service marks, trade names or copyrights
which, singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would have a materially adverse affect on the business,
operations, financial conditions or income of CMT or any material portion of its
properties, assets or rights.
Section 2.8 Litigation and Proceedings. Except as set forth in the SEC
documents, there are no actions, suits or proceedings pending or threatened by
or against or affecting CMT, at law or in equity, before any court or other
governmental agency or instrumentality, domestic or foreign or before any
arbitrator of any kind that would have a material adverse effect on the
business, operations, financial condition, income or business prospects of CMT.
CMT does not have any knowledge of any default on its part with respect to any
judgment, order, writ, injunction, decree, award, rule or regulation of any
court, arbitrator or governmental agency or instrumentality.
Section 2.9 Contracts. Except as set forth in the SEC documents, on the
Closing Date, CMT is not a party to any contract, agreement, commitment or
instrument or subject to any charter or other corporate restriction or any
judgment, order, writ, injunction, decree or award which materially and
adversely affects, or in the future may (as far as CMT can now foresee)
materially and adversely affect, the business, operations, properties, assets or
conditions of CMT; and
Section 2.10 No Conflict With Other Instruments. The execution of this
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Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, or
constitute an event of default under, any material indenture, mortgage, deed of
trust or other material contract, agreement or instrument to which CMT is a
party or to which any of its properties or operations are subject. Pursuant to
the terms of the Convertible Debentures issued to Xxxxxxxxxx Equity Partners, LP
("MEP") as of the Effective Date, the written consent of MEP will be obtained by
CMT to enter into this Agreement.
Section 2.11 Material Contract Defaults. To the best of CMT's knowledge and
belief, except as set forth in Schedule 2.11, it is not in default in any
material respect under the terms of any outstanding contract, agreement, lease
or other commitment which is material to the business, operations, properties,
assets or condition of CMT, and there is no event of default in any material
respect under any such contract, agreement, lease or other commitment in respect
of which CMT has not taken adequate steps to prevent such a default from
occurring.
Section 2.12 Governmental Authorizations. To the best of CMT's knowledge,
CMT has all licenses, franchises, permits and other governmental authorizations
that are legally required to enable it to conduct its business operations in all
material respects as conducted on the date hereof. Except for compliance with
federal and state securities or corporation laws, no authorization, approval,
consent or order of, or registration, declaration or filing with, any court or
other governmental body is required in connection with the execution and
delivery by CMT of the transactions contemplated hereby.
Section 2.13 Compliance with Laws and Regulations. To the best of CMT's
knowledge and belief, CMT has complied with all applicable statutes and
regulations of any federal, state or other governmental entity or agency
thereof, except to the extent that noncompliance would not materially and
adversely affect the business, operations, properties, assets or condition of
CMT or would not result in CMT's incurring any material liability.
Section 2.14 Approval of Agreement. The directors of CMT have authorized
the execution and delivery of the Agreement and have approved the transactions
contemplated hereby.
ARTICLE III
EXCHANGE PROCEDURE AND OTHER CONSIDERATION
Section 3.1 Share Exchange/Delivery of Natcom. On the Closing Date, the
holders of all of the NATCOM Common Shares shall deliver to CMT (i) certificates
or other documents evidencing all of the issued and outstanding NATCOM Common
Shares, duly endorsed in blank or with executed power attached thereto in
transferable form. On the Closing Date, all previously issued and outstanding
Common Shares of NATCOM shall be transferred to CMT such that NATCOM shall
become a wholly owned subsidiary of CMT.
Section 3.2 Issuance of CMT Common Shares. In exchange for all of the
shares of NATCOM Common Shares tendered pursuant to Section 3.1, CMT shall issue
to the NATCOM Shareholders a total of 300,507,663 shares of CMT common shares
representing a total of fifty (50%) percent of the outstanding shares of CMT at
the Effective Date, which shall be distributed pursuant to Exhibit B attached.
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Section 3.3 Additional Consideration.
(a) On the Closing Date, CMT will reserve up to $250,000 of the
funding provided by MEP for distribution to NATCOM which shall be used
toward the acquisition of fifty one percent (51%) of the membership
interest of NewsProNet Interactive, LLC pursuant to the terms of Section
3.6(b) herein.
(b) On the Closing Date, CMT will distribute $50,000 of the funding
provided by MEP to NATCOM which shall be applied to the debt owed by NATCOM
to United Bank of DC. Additional distributions by CMT to NATCOM to be
applied to such shall be made according to the following schedule:
$50,000 Three months from the Closing Date, and
$50,000 Twelve months from the Closing Date.
Accrued interest payments on the debt owed to United Bank of DC shall be made
monthly.
Section 3.4 The right to use the names and tradenames "Natcom" and "Natcom
Marketing" are specifically excluded from this Agreement, and the parties hereby
agree to avoid any reference to such tradenames in the business activity of
NATCOM and/or CMT as of the Closing Date.
Section 3.5 Events Prior to the Effective Date.
(a) NewsProNet Interactive, LLC Acquisition. Prior to or on the
Effective Date, NATCOM will have entered into a Letter of Intent for the
acquisition of fifty one percent (51%) of the membership interest of
NewsProNet Interactive, LLC, a Georgia limited liability company.
(b) Trust Documents. Prior to or on the Effective Date, CMT shall have
transferred all intellectual property rights and title to existing issued
patents and pending patents to Rothschild Trust Holdings, a Florida Limited
Liability Corporation pursuant to the terms set forth in a Purchase and
Sale Agreement and a Royalty Bearing License Agreement, substantially in
the form attached hereto as Schedule 3.5(b).
(c) MEP Funding Transaction. Prior to or on the Effective Date, CMT
shall have entered into funding documents with Xxxxxxxxxx Equity Partners,
LP ("MEP"), pursuant to which CMT shall issue One Million Six Hundred and
Sixty Thousand ($1,660,000) of Convertible Debentures, of which Six Hundred
Thousand ($600,000) shall be used to repay the convertible debenture
currently outstanding with Cornell Capital Partners, LP and Sixty Thousand
($60,000) shall be issued to MEP as a redemption fee for such repayment
(the "MEP Funding Transaction").
Section 3.6 Events Prior to Closing.
(a) Closing Deliverables. Upon execution hereof or as soon thereafter
as practical, management of NATCOM and CMT shall execute, acknowledge and
deliver (or shall cause to be executed, acknowledged and delivered) any and
all certificates, opinions, financial statements, schedules, agreements,
resolutions rulings or other instruments required by this Agreement to be
so delivered, together with such other items as may be reasonably requested
by the parties hereto and their respective legal counsel in order to
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effectuate or evidence the transactions contemplated hereby, subject only
to the conditions to Closing referenced herein below.
(b) NewsProNet Interactive, LLC Acquisition. Prior to or on the
Closing Date, NATCOM will have completed the acquisition of fifty one
percent (51%) of the membership interest of NewsProNet Interactive, LLC
("NewProNet"). To complete such acquisition, CMT will have reserved up to
$250,000 for distribution to NATCOM, of which $150,000 shall be paid to the
stockholders of NewsProNet and $100,000 shall be used to pay off existing
corporate obligations of NewsProNet, pursuant to the terms of the
Acquisition Agreement between NewsProNet and NATCOM.
(c) Financial Statements. Complete and accurate copies of the audited
Balance Sheets (together with any supplementary information thereto) of
NATCOM for the calendar year end 2004 and 2005 will be provided to CMT
prior to close from an AICPA certified accounting firm which is a member in
good standing of the SEC Practice Section. The NATCOM Financial Statements
will fairly present, in all material respects, the financial position of
NATCOM, as of and for the respective dates thereof. Since December 31,
2005, NATCOM shall not have made any change in the accounting practices or
policies applied in the preparation of its financial statements, except as
may be required by GAAP.
(d) Employment Agreements. Prior to or on the Closing Date, CMT shall
have negotiated and executed employment agreements and/or settlements of
existing agreements with Xxxxxxx Xxxx, Xxxxx Xxxxxxxxxx, Xxxxxx Xxxxxxxxx,
Xxxxxxx Xxxxx, and Xxxxxx Xxxxxxxxx, substantially in the form of the
agreements included hereto as Schedule 3.6(d).
(e) Accrued Salary. Prior to or on the Closing Date, CMT shall have
negotiated and executed Convertible Debentures with Xxxxxxx Xxxx and
Xxxxxxx Xxxxx for 50% of the total amount of accrued salary due and owing
to Xx. Xxxx and Xx. Xxxxx as of the Closing Date. The number of shares
deposited into escrow by the Trust, pursuant to the Purchase and Sale
Agreement between the Trust and the Company dated as of the date hereof,
shall be reduced by the value of the accrued salary due and owning to Xxxxx
Xxxxxxxxxx, the primary beneficiary of the Trust.
(f) NATCOM Name Change. Prior to or on the Closing Date, NATCOM shall
have filed a Certificate of Amendment to NATCOM's Articles of Incorporation
changing NATCOM's name to a name which shall be approved by the Board of
Directors of NATCOM.
Section 3.7 Closing. The closing ("Closing") of the transactions
contemplated by this Agreement shall be on or about March 31, 2006 ("Closing
Date").
Section 3.8 Termination.
(a) This Agreement may be terminated by the board of directors or majority
interest of Shareholders of either NATCOM or CMT, respectively, at any
time prior to the Closing Date if:
(i) there shall be any action or proceeding before any court or any
governmental body which shall seek to restrain, prohibit or
invalidate the transactions contemplated by this Agreement and
which, in the judgment of such board of directors, made in good
faith and based on the advice of its legal counsel, makes it
inadvisable to proceed with the exchange contemplated by this
Agreement; or
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(ii) any of the transactions contemplated hereby are disapproved by
any regulatory authority whose approval is required to consummate
such transactions.
In the event of termination pursuant to this paragraph (a) of this Section
3.8, no obligation, right, or liability shall arise hereunder and each party
shall bear all of the expenses incurred by it in connection with the
negotiation, drafting and execution of this Agreement and the transactions
herein contemplated.
(b) This Agreement may be terminated at any time prior to the Closing Date
by action of the board of directors of NATCOM if CMT shall fail to
comply in any material respect with any of its covenants or agreements
contained in this Agreement or if any of the representations or
warranties of CMT contained herein shall be inaccurate in any material
respect, which noncompliance or inaccuracy is not cured after 20 days
written notice thereof is given to CMT. If this Agreement is
terminated pursuant to this paragraph (b) of this Section 3.8, this
Agreement shall be of no further force or effect and no obligation,
right or liability shall arise hereunder.
(c) This Agreement may be terminated at any time prior to the Closing Date
by action of the board of directors of CMT if NATCOM shall fail to
comply in any material respect with any of its covenants or agreements
contained in this Agreement or if any of the representations or
warranties of NATCOM contained herein shall be inaccurate in any
material respect, which noncompliance or inaccuracy is not cured after
20 days written notice thereof is given to NATCOM. If this Agreement
is terminated pursuant to this paragraph (d) of this Section 3.8, this
Agreement shall be of no further force or effect and no obligation,
right or liability shall arise hereunder.
In the event of termination pursuant to paragraph (b) and (c) of this
Section 3.8, the breaching party shall bear all of the expenses incurred by the
other party in connection with the negotiation, drafting and execution of this
Agreement and the transactions herein contemplated.
Section 3.9 Directors of NATCOM After Acquisition. On the Closing Date, the
following persons shall be elected as directors of NATCOM in accordance with
procedures set forth in the NATCOM bylaws:
NAME POSITION
--------------------------------------------------
Xxxxxx Xxxx-Xxxxxx Chairman
Xxxxxx Xxxxxxxxx Vice-Chairman
Xxxxx Xxxxxxxxxx Vice-Chairman
Xxxxxxx Xxxx Director
Xxxx Xxxxxx Director
Xxxxxxx Xxxxxxxx Director
Xxxx Xxxx Director
All other Directors of NATCOM shall resign in all capacities effective at Close
and acknowledge they have no claims against the company for any compensation, in
any form whatsoever.
Section 3.10 Officers of NATCOM. On the Closing Date, the following persons
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shall be elected as officers of NATCOM in accordance with procedures set forth
in the NATCOM bylaws:
NAME OFFICE
-------------------------------------------------------------------
Xxxxxx X. Xxxxxxxxx President/Chief Executive Officer
Xxxx Xxxxxxxxx Secretary
All other Officers of NATCOM shall resign in all capacities effective at Close
and acknowledge they have no claims against the company for any compensation, in
any form whatsoever.
Section 3.11 Directors of CMT. On the Closing Date, the following persons
shall be elected as directors of CMT in accordance with procedures set forth in
the CMT bylaws:
NAME POSITION
---------------------------------------------
Xxxxxx Xxxx-Xxxxxx Chairman
Xxxxxx Xxxxxxxxx Vice-Chairman
Xxxxx Xxxxxxxxxx Vice-Chairman
Xxxxxxx Xxxx Director
Xxxx Xxxxxx Director
Xxxxxxx Xxxxxxxx Director
Xxxx Xxxx Director
Except as disclosed herein, as disclosed in the SEC Documents, and as previously
disclosed to Natcom in the course of customary due diligence, the Directors of
CMT acknowledge that they have no claims against CMT for any compensation or for
any debt owed, in any form whatsoever.
Section 3.12 Officers of CMT. On the Closing Date, the following persons
shall be elected as officers of CMT in accordance with procedures set forth in
the CMT bylaws:
NAME OFFICE
----------------------------------------------------------------
Xxxxxxx Xxxx President/Chief Executive Officer
Xxx Xxxxxx Linn Chief Financial Officer
Except as disclosed herein, as disclosed in the SEC Documents, and as previously
disclosed to Natcom in the course of customary due diligence, the Officers of
CMT acknowledge that they have no claims against CMT for any compensation or for
any debt owed, in any form whatsoever.
ARTICLE IV
SPECIAL COVENANTS
Section 4.1 Access to Properties and Records. Prior to closing, NATCOM and
CMT will each afford to the officers and authorized representatives of the other
full access to the properties, books and records of each other, in order that
12
each may have full opportunity to make such reasonable investigation as it shall
desire to make of the affairs of the other and each will furnish the other with
such additional financial and operating data and other information as to the
business and properties of each other, as the other shall from time to time
reasonably request.
Section 4.2 Availability of Rule 144. NATCOM and CMT shareholders holding
"restricted securities", as that term is defined in Rule 144 promulgated
pursuant to the Securities Act will remain as "restricted securities". NATCOM is
under no obligation to register such shares under the Securities Act, or
otherwise. The stockholders of NATCOM and CMT holding restricted securities of
NATCOM and CMT as of the date of this Agreement and their respective heirs,
administrators, personal representatives, successors and assigns, are intended
third party beneficiaries of the provisions set forth herein. The covenants set
forth in this Section 4.2 shall survive the Closing and the consummation of the
transactions herein contemplated.
Section 4.3 Special Covenants and Representations Regarding the CMT Common
Shares to be Issued in the Exchange. The consummation of this Agreement,
including the issuance of the CMT Common Shares to the Shareholders of NATCOM as
contemplated hereby, constitutes the offer and sale of securities under the
Securities Act, and applicable state statutes. Such transaction shall be
consummated in reliance on exemptions from the registration and prospectus
delivery requirements of such statutes which depend, inter alia, upon the
circumstances under which the NATCOM Shareholders acquire such securities.
Section 4.4 Third Party Consents. NATCOM and CMT agree to cooperate with
each other in order to obtain any required third party consents to this
Agreement and the transactions herein contemplated.
Section 4.5 Actions Prior and Subsequent to Closing.
(a) From and after the date of this Agreement until the Closing Date,
except as permitted or contemplated by this Agreement, NATCOM and CMT will each
use its best efforts to:
(i) maintain and keep its properties in states of good repair and
condition as at present, except for depreciation due to ordinary
wear and tear and damage due to casualty;
(ii) maintain in full force and effect insurance comparable in amount
and in scope of coverage to that now maintained by it;
(iii) perform in all material respects all of its obligations under
material contracts, leases and instruments relating to or
affecting its assets, properties and business;
(b) From and after the date of this Agreement until the Closing Date,
NATCOM will not, without the prior consent of CMT:
(i) except as otherwise specifically set forth herein, make any
change in its articles of incorporation or bylaws;
13
(ii) declare or pay any dividend on its outstanding Common Shares,
except as may otherwise be required by law, or effect any stock
split or otherwise change its capitalization, except as provided
herein;
(iii) enter into or amend any employment, severance or agreements or
arrangements with any directors or officers;
(iv) grant, confer or award any options, warrants, conversion rights
or other rights not existing on the date hereof to acquire any
Common Shares; or
(v) purchase or redeem any Common Shares.
Section 4.6 SEC Filings. CMT shall file all documents and forms with the
SEC required in connection with the execution of this Agreement in accordance
with the requirements of the Exchange Act and the Securities Act, including but
not limited to Form 8-K and Form 14C.
Section 4.7 Indemnification.
(a) NATCOM and Selling Shareholders hereby agree to indemnify CMT, each of
the officers, agents and directors and current shareholders of CMT as
of the Closing Date against any loss, liability, claim, damage or
expense (including, but not limited to, any and all expense whatsoever
reasonably incurred in investigating, preparing or defending against
any litigation, commenced or threatened or any claim whatsoever), to
which it or they may become subject to or rising out of or based on
any inaccuracy appearing in or misrepresentation made in this
Agreement. The indemnification provided for in this paragraph shall
survive the Closing and consummation of the transactions contemplated
hereby and termination of this Agreement; and
(b) CMT hereby agrees to indemnify NATCOM, each of the officers, agents,
directors and current shareholders of NATCOM as of the Closing Date
against any loss, liability, claim, damage or expense (including, but
not limited to, any and all expense whatsoever reasonably incurred in
investigating, preparing or defending against any litigation,
commenced or threatened or any claim whatsoever), to which it or they
may become subject arising out of or based on any inaccuracy appearing
in or misrepresentation made in this Agreement. The indemnification
provided for in this paragraph shall survive the Closing and
consummation of the transactions contemplated hereby and termination
of this Agreement.
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS OF CMT
The obligations of CMT under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions:
Section 5.1 Accuracy of Representations. The representations and warranties
made by NATCOM in this Agreement were true when made and shall be true at the
Closing Date with the same force and effect as if such representations and
warranties were made at the Closing Date (except for changes therein permitted
14
by this Agreement), and NATCOM shall have performed or compiled with all
covenants and conditions required by this Agreement to be performed or complied
with by NATCOM prior to or at the Closing. CMT shall be furnished with a
certificate, signed by a duly authorized officer of NATCOM and dated the Closing
Date, to the foregoing effect.
Section 5.2 Director Approval. The Board of Directors of NATCOM shall have
approved this Agreement and the transactions contemplated herein.
Section 5.3 Officer's Certificate. CMT shall have been furnished with a
certificate dated the Closing Date and signed by a duly authorized officer of
NATCOM to the effect that: (a) the representations and warranties of NATCOM set
forth in the Agreement and in all Exhibits, Schedules and other documents
furnished in connection herewith are in all material respects true and correct
as if made on the Effective Date; (b) NATCOM has performed all covenants,
satisfied all conditions, and complied with all other terms and provisions of
this Agreement to be performed, satisfied or complied with by it as of the
Effective Date; (c) since such date and other than as previously disclosed to
CMT, NATCOM has not entered into any material transaction other than
transactions which are usual and in the ordinary course if its business; and (d)
no litigation, proceeding, investigation or inquiry is pending or, to the best
knowledge of NATCOM, threatened, which might result in an action to enjoin or
prevent the consummation of the transactions contemplated by this Agreement or,
to the extent not disclosed in the NATCOM Schedules, by or against NATCOM which
might result in any material adverse change in any of the assets, properties,
business or operations of NATCOM.
Section 5.4 No Material Adverse Change. Prior to the Closing Date, there
shall not have occurred any material adverse change in the financial condition,
business or operations of nor shall any event have occurred which, with the
lapse of time or the giving of notice, may cause or create any material adverse
change in the financial condition, business or operations of NATCOM.
Section 5.5 Assumption of Liability. At closing, NATCOM shall assume with
CMT any and all obligations owed by CMT to Xxxxxxxxxx Equity Partners, LLC and
collateralize such obligations with a Senior Security Interest on all the assets
of NATCOM.
Section 5.6 Other Items. CMT shall have received such further documents,
certificates or instruments relating to the transactions contemplated hereby as
CMT may reasonably request.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF NATCOM
The obligations of NATCOM under this Agreement are subject to the
satisfaction, at or before the Closing date (unless otherwise indicated herein),
of the following conditions:
Section 6.1 Accuracy of Representations. The representations and warranties
made by CMT in this Agreement were true when made and shall be true as of the
Closing Date (except for changes therein permitted by this Agreement) with the
same force and effect as if such representations and warranties were made at and
as of the Closing Date, and CMT shall have performed and complied with all
covenants and conditions required by this Agreement to be performed or complied
with by CMT prior to or at the Closing. NATCOM shall have been furnished with a
certificate, signed by a duly authorized executive officer of CMT and dated the
Closing Date, to the foregoing effect.
Section 6.2 Director Approval. The Board of Directors of CMT shall have
approved this Agreement and the transactions contemplated herein.
15
Section 6.3 Officer's Certificate. NATCOM shall be furnished with a
certificate dated the Closing date and signed by a duly authorized officer of
CMT to the effect that: (a) the representations and warranties of CMT set forth
in the Agreement and in all Exhibits, Schedules and other documents furnished in
connection herewith are in all material respects true and correct as if made on
the Effective Date; and (b) CMT had performed all covenants, satisfied all
conditions, and complied with all other terms and provisions of the Agreement to
be performed, satisfied or complied with by it as of the Effective Date.
Section 6.4 Tax Liabilities. Prior to or on the Closing Date, any and all
outstanding tax liabilities shall be paid by CMT.
Section 6.5 No Material Adverse Change. Prior to the Closing Date, there
shall not have occurred any material adverse change in the financial condition,
business or operations of nor shall any event have occurred which, with the
lapse of time or the giving of notice, may cause or create any material adverse
change in the financial condition, business or operations of CMT.
Section 6.6 Stock Pledge. CMT agrees to pledge the NATCOM shares to be
acquired at the Closing Date to secure the obligations incurred by CMT with
Xxxxxxxxxx Equity Partners, LLC.
ARTICLE VII
DEFINITIONS
Definitions. Unless the context otherwise requires, the terms defined in
this Agreement shall have the meanings herein specified for all purposes of this
Agreement, applicable to both the singular and plural forms of any of the terms
herein defined.
"Affiliate" shall mean any Person that directly or indirectly controls, is
controlled by, or is under common control with, the indicated Person.
"Agreement" shall mean this Agreement.
---------
"Closing" and "Closing Date" shall have the meanings assigned to such terms
in Section 3.7 hereof, and shall be subject to the completion of certain
conditions as set forth in Section 3.6.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
----
"SEC" shall mean the U.S. Securities and Exchange Commission.
---
"Default" shall mean a default or failure in the due observance or
performance of any covenant, condition or agreement on the part of the Company
to be observed or performed under the terms of this Agreement, if such default
or failure in performance shall remain unremedied for five (5) days.
"Effective Date" shall mean the date of execution of this Agreement by all
parties named herein.
"Environmental Laws" means the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. xx.xx. 9601, et seq.; the Emergency
Planning and Community Right-to-Know Act of 1986, 42 U.S.C. xx.xx. 11001, et
seq.; the Resource Conservation and Recovery Act, 42 U.S.C. xx.xx. 6901, et
seq.; the Toxic Substances Control Act, 15 U.S.C. xx.xx. 2601 et seq.; the
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. xx.xx. 136, et
16
seq. and comparable state statutes dealing with the registration, labeling and
use of pesticides and herbicides; the Clean Air Act, 42 U.S.C. xx.xx. 7401 et
seq.; the Clean Water Act (Federal Water Pollution Control Act), 33 U.S.C.
xx.xx. 1251 et seq.; the Safe Drinking Water Act, 42 U.S.C. xx.xx. 300f, et
seq.; the Hazardous Materials Transportation Act, 49 U.S.C. xx.xx. 1801, et
seq.; as any of the above statutes have been amended as of the date hereof, all
rules, regulations and policies promulgated pursuant to any of the above
statutes, and any other foreign, federal, state or local law, statute,
ordinance, rule, regulation or policy governing environmental matters, as the
same have been amended as of the date hereof.
"Equity Security" shall mean any stock or similar security of an issuer or
any security (whether stock or Indebtedness for Borrowed Money) convertible,
with or without consideration, into any stock or similar equity security, or any
security (whether stock or Indebtedness for Borrowed Money) carrying any warrant
or right to subscribe to or purchase any stock or similar security, or any such
warrant or right.
"ERISA" shall mean the Employee Retirement Income Securities Act of 1974,
as amended.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
------------
"Event of Default" shall mean (a) the failure of the Company to pay any
Indebtedness for Borrowed Money, or any interest or premium thereon, within five
(5) days after the same shall become due, whether such Indebtedness shall become
due by scheduled maturity, by required prepayment, by acceleration, by demand or
otherwise, (b) an event of default under any agreement or instrument evidencing
or securing or relating to any such Indebtedness, or (c) the failure of the
Company to perform or observe any material term, covenant, agreement or
condition on its part to be performed or observed under any agreement or
instrument evidencing or securing or relating to any such Indebtedness when such
term, covenant or agreement is required to be performed or observed.
"GAAP" shall mean generally accepted accounting principles in the United
States, as in effect from time to time.
"Indebtedness" shall mean any obligation of a party which under generally
accepted accounting principles is required to be shown on the balance sheet of
the Company as a liability. Any obligation secured by a Lien on, or payable out
of the proceeds of production from, property of the Company shall be deemed to
be Indebtedness even though such obligation is not assumed by the Company.
"knowledge" and "know" means, when referring to any person or entity, the
actual knowledge of such person or entity of a particular matter or fact, and
what that person or entity would have reasonably known after due inquiry. An
entity will be deemed to have "knowledge" of a particular fact or other matter
if any individual who is serving, or who has served, as an executive officer of
such entity has actual "knowledge" of such fact or other matter, or had actual
"knowledge" during the time of such service of such fact or other matter, or
would have had "knowledge" of such particular fact or matter after due inquiry.
"Lien" shall mean any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind, including, without limitation, any conditional sale
or other title retention agreement, any lease in the nature thereof and the
filing of or agreement to give any financing statement under the Uniform
Commercial Code of any jurisdiction and including any lien or charge arising by
statute or other law.
"Person" shall include all natural persons, corporations, business trusts,
associations, limited liability companies, partnerships, joint ventures and
other entities and governments and agencies and political subdivisions.
"SEC Documents" shall mean all registration statements, proxy statements,
information statements and periodic reports filed with the Securities and
Exchange Commission required to be filed pursuant to the Securities Exchange Act
of 1934.
17
"Securities Act" shall mean the Securities Act of 1933, as amended.
--------------
"Stockholders" shall mean all of the stockholders of the Company.
------------
"Tax" or "Taxes" shall mean (a) any and all taxes, assessments, customs,
duties, levies, fees, tariffs, imposts, deficiencies and other governmental
charges of any kind whatsoever (including, but not limited to, taxes on or with
respect to net or gross income, franchise, profits, gross receipts, capital,
sales, use, ad valorem, value added, transfer, real property transfer, transfer
gains, transfer taxes, inventory, capital stock, license, payroll, employment,
social security, unemployment, severance, occupation, real or personal property,
estimated taxes, rent, excise, occupancy, recordation, bulk transfer,
intangibles, alternative minimum, doing business, withholding and stamp),
together with any interest thereon, penalties, fines, damages costs, fees,
additions to tax or additional amounts with respect thereto, imposed by the
United States (federal, state or local) or other applicable jurisdiction; (b)
any liability for the payment of any amounts described in clause (a) as a result
of being a member of an affiliated, consolidated, combined, unitary or similar
group or as a result of transferor or successor liability, including, without
limitation, by reason of Regulation section 1.1502-6; and (c) any liability for
the payments of any amounts as a result of being a party to any Tax Sharing
Agreement or as a result of any express or implied obligation to indemnify any
other Person with respect to the payment of any amounts of the type described in
clause (a) or (b).
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Brokers and Finders. Each party hereto hereby represents and
warrants that it is under no obligation, express or implied, to pay certain
finders in connection with the bringing of the parties together in the
negotiation, execution, or consummation of this Agreement. The parties each
agree to indemnify the other against any claim by any third person for any
commission, brokerage or finder's fee or other payment with respect to this
Agreement or the transactions contemplated hereby based on any alleged agreement
or understanding between the indemnifying party and such third person, whether
express or implied from the actions of the indemnifying party.
Section 8.2 Law, Forum and Jurisdiction. This Agreement shall be construed
and interpreted in accordance with the laws of the State of Delaware, United
States of America.
Section 8.3 Notices. Any notices or other communications required or
permitted hereunder shall be sufficiently given if personally delivered to it or
sent by registered mail or certified mail, postage prepaid, or by prepaid
telegram addressed as follows:
If to NATCOM: Natcom Marketing International, Inc.
00 XX 0xx Xxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxx 00000
If to CMT: Connected Media Technologies, Inc.
000 Xxxxx Xxxx Xxxxxx Xxxx, Xxxxx X000-0000
Xxxxxxxxxx, Xxxxxxx 00000
18
or such other addresses as shall be furnished in writing by any party in the
manner for giving notices hereunder, and any such notice or communication shall
be deemed to have been given as of the date so delivered, mailed or telegraphed.
Section 8.4 Attorneys' Fees. In the event that any party institutes any
action or suit to enforce this Agreement or to secure relief from any default
hereunder or breach hereof, the breaching party or parties shall reimburse the
non-breaching party or parties for all costs, including reasonable attorneys'
fees, incurred in connection therewith and in enforcing or collecting any
judgment rendered therein.
Section 8.5 Confidentiality. Each party hereto agrees with the other party
that, unless and until the transactions contemplated by this Agreement have been
consummated, they and their representatives will hold in strict confidence all
data and information obtained with respect to another party or any subsidiary
thereof from any representative, officer, director or employee, or from any
books or records or from personal inspection, of such other party, and shall not
use such data or information or disclose the same to others, except: (i) to the
extent such data is a matter of public knowledge or is required by law to be
published; and (ii) to the extent that such data or information must be used or
disclosed in order to consummate the transactions contemplated by this
Agreement.
Section 8.6 Schedules; Knowledge. Each party is presumed to have full
knowledge of all information set forth in the other party's schedules delivered
pursuant to this Agreement.
Section 8.7 Third Party Beneficiaries.This contract is solely between
NATCOM and CMT and except as specifically provided, no director, officer,
stockholder, employee, agent, independent contractor or any other person or
entity shall be deemed to be a third party beneficiary of this Agreement.
Section 8.8 Entire Agreement.This Agreement and related schedules
represents the entire agreement between the parties relating to the subject
matter hereof. This Agreement alone fully and completely expresses the agreement
of the parties relating to the subject matter hereof. There are no other courses
of dealing, understanding, agreements, representations or warranties, written or
oral, except as set forth herein. This Agreement may not be amended or modified,
except by a written agreement signed by all parties hereto.
Section 8.9 Survival; Termination. The representations, warranties and
covenants of the respective parties shall survive the Closing Date and the
consummation of the transactions herein contemplated for 18 months.
Section 8.10 Counterparts. 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.
Section 8.11 Amendment or Waiver. Every right and remedy provided herein
shall be cumulative with every other right and remedy, whether conferred herein,
at law, or in equity, and may be enforced concurrently herewith, and no waiver
by any party of the performance of any obligation by the other shall be
construed as a waiver of the same or any other default then, theretofore, or
thereafter occurring or existing. At any time prior to the Closing Date, this
Agreement may be amended by a writing signed by all parties hereto, with respect
to any of the terms contained herein, and any term or condition of this
Agreement may be waived or the time for performance hereof may be extended by a
writing signed by the party or parties for whose benefit the provision is
intended.
19
Section 8.12 Expenses. Each party herein shall bear all of their respective
costs and expenses incurred in connection with the negotiation of this Agreement
and in the consummation of the transactions provided for herein and the
preparation thereof.
Section 8.13 Headings; Context. The headings of the sections and paragraphs
contained in this Agreement are for convenience of reference only and does not
form a part hereof and in no way modify, interpret or construe the meaning of
this Agreement.
Section 8.14 Benefit. This Agreement shall be binding upon and shall inure
only to the benefit of the parties hereto, and their permitted assigns
hereunder. This Agreement shall not be assigned by any party without the prior
written consent of the other party.
Section 8.15 Public Announcements. Except as may be required by law,
neither party shall make any public announcement or filing with respect to the
transactions provided for herein without the prior consent of the other party
hereto.
Section 8.16 Severability. In the event that any particular provision or
provisions of this Agreement or the other agreements contained herein shall for
any reason hereafter be determined to be unenforceable, or in violation of any
law, governmental order or regulation, such unenforceability or violation shall
not affect the remaining provisions of such agreements, which shall continue in
full force and effect and be binding upon the respective parties hereto.
Section 8.17 Failure of Conditions; Termination. In the event of any of the
conditions specified in this Agreement shall not be fulfilled on or before the
Closing Date, either of the parties have the right either to proceed or, upon
prompt written notice to the other, to terminate and rescind this Agreement. In
such event, the party that has failed to fulfill the conditions specified in
this Agreement will liable for the other parties legal fees. The election to
proceed shall not affect the right of such electing party reasonably to require
the other party to continue to use its efforts to fulfill the unmet conditions.
Section 8.18 No Strict Construction. The language of this Agreement shall
be construed as a whole, according to its fair meaning and intendment, and not
strictly for or against either party hereto, regardless of who drafted or was
principally responsible for drafting the Agreement or terms or conditions
hereof.
Section 8.19 Execution Knowing and Voluntary. In executing this Agreement,
the parties severally acknowledge and represent that each: (a) has fully and
carefully read and considered this Agreement; (b) has been or has had the
opportunity to be fully apprized by its attorneys of the legal effect and
meaning of this document and all terms and conditions hereof; (c) is executing
this Agreement voluntarily, free from any influence, coercion or duress of any
kind.
Section 8.20 Amendment. At any time after the Closing Date, this Agreement
may be amended by a writing signed by both parties, with respect to any of the
terms contained herein, and any term or condition of this Agreement may be
waived or the time for performance hereof may be extended by a writing signed by
the party or parties for whose benefit the provision is intended.
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21
IN WITNESS WHEREOF, the corporate parties hereto have caused this Agreement
to be executed by their respective officers, hereunto duly authorized, and
entered into as of the date first above written.
CONNECTED MEDIA TECHNOLOGIES, INC.
ATTEST:
------------------------- By:
---------------------------------
Name:
---------------------------
Title:
--------------------------
ATTEST: NATCOM MARKETING INTERNATIONAL, INC.
------------------------- By:
----------------------------------
Name:
---------------------------
Title:
--------------------------
NATCOM MARKETING INTERNATIONAL, INC.
SHAREHOLDERS
-------------------------
-------------------------
-------------------------
22
EXHIBIT "A"
NATCOM SELLING SHAREHOLDERS
Shareholder No. of Shares Sold
-------------------------------------------------
Xxx Xxxxxxxxx 1,000
23
EXHIBIT "B"
DISTRIBUTION OF CMT SHARES TO NATCOM SHAREHOLDERS
Shareholder No. of Shares Received
------------------------------------------------------
Xxx Xxxxxxxxx 300,507,663
24
SCHEDULE 1.4(a): NATCOM Outstanding Liabilities
25
SCHEDULE 1.4(b): NATCOM Outstanding Liabilities After the Closing Date
26
SCHEDULE 1.7: NATCOM Litigation and Proceedings
Massillon Sign Co. v. Natcom International, Inc.
------------------------------------------------
27
SCHEDULE 1.8: NATCOM Defaults on Material Contracts
28
SCHEDULE 1.9 NATCOM Material Contracts, Agreements,
Franchises, and License Agreements
29
SCHEDULE 19: NATCOM Financial Statements
30
SCHEDULE 2.7: CMT Liens, Pledges, Charges, or Encumbrances on Assets
(Other than disclosed in the SEC documents)
Xxxxxxxxxx Equity Partners, LP has a secured lien on all the assets of CMT
pursuant to a Security Agreement dated as of the Effective Date hereof.
31
SCHEDULE 2.11: CMT Material Contract Defaults
CMT is currently in default under the following agreements:
1. $600,000 Convertible Debenture issued to Xxxxxxxxxx Equity Partners, LP
dated April 14, 2006
2. Standby Equity Distribution Agreement entered into with Cornell Capital
Partners, LP dated April 14, 2006, which shall be terminated as of the date
hereof
3. $202,000 Promissory Notes issued to Irrevocable Trust Number Three, Xxx
Xxxxxx Xxxx Trustee
Additionally, CMT will be in default under the Loan documents issued to CMT by
Bristol Bank if the required payment is not made by January 31, 2006.
32
SCHEDULE 3.5(b): Trust Documents--Purchase and Sale Agreement and
Royalty Bearing License Agreement
33
SCHEDULE 3.6(d): Employment Agreements
34
