TERMINATION OF PRIOR AGREEMENTS
This Termination of Prior Agreements (the "Termination") is made as of
the 30th day of June, 2000, (the "Effective Date"), by and between American
Interactive Media, Inc., having a principal place of business at 000 Xxxxxxxx,
Xxxxx 000, Xxx Xxxx, Xxx Xxxx 00000 ("AIM"), PowerChannel, Inc., having a
principal place of business at 00 Xxxxxxxx Xxxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000
("PowerChannel"), PowerChannel Holdings, Inc., having a principal place of
business at 00 Xxxxxxxx Xxxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("PowerChannel
Holdings"), and Long Distance Direct Holdings, Inc., ("LDDH").
RECITALS
AIM, PowerChannel and LDDH have previously entered into a series of
agreements relating to the AIM WebPassport System and associated technology and
intellectual property. It is the desire of the parties thereto to terminate all
such prior agreements in consideration of warrant and subscription agreements,
being executed contemporaneously herewith, for common shares in PowerChannel
Holdings, Inc., the parent company of PowerChannel.
NOW, THEREFORE, in consideration of the premises and mutual promises
set forth herein, the parties hereby agree as follows:
ARTICLE I - Definitions
When used in this Termination, the terms set forth in this Article
whether in the plural or singular shall have the following meanings:
1.1 "Prior Agreements" shall mean, collectively, the following agreements
previously entered into by AIM, PowerChannel and LDDH:
o the Sales and Supply Agreement ("Sales Agreement") between
PowerChannel and AIM, executed on May 19, 1999 (attached
hereto as Appendix A);
o the License Agreement ("License Agreement") between
PowerChannel and AIM, executed on May 19, 1999 (attached
hereto as Appendix B);
o the Convertible Promissory Note ("Note") executed on May 19,
1999, by PowerChannel and guaranteed as primary obligor by
LDDH (attached hereto as Appendix C);
o the Common Stock Purchase Warrant ("Warrant") for Fifty
Thousand (50,000) shares of PowerChannel Common Stock,
executed on May 19, 1999, by PowerChannel and held by AIM
(attached hereto as Appendix D);
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o the WebPassport License Agreement amendment letter of May 25,
1999, between PowerChannel and Aim (attached hereto as
Appendix E);
o the Guarantee executed on May 19, 1999, by LDDH (attached
hereto as Appendix F);
o the Security Agreement between PowerChannel and AIM, executed
on May 19, 1999 (attached hereto as Appendix G); and
o any and all other agreements, between any of the parties
hereto, including those which are identified in the
appendices of any of the agreements listed above.
1.2 "Server Infrastructure" shall have the meaning set forth in the
License Agreement.
1.3 "WebPassport Equipment" shall have the meaning set forth in the
License Agreement.
ARTICLE 2 - Termination of Prior Agreements
2.1 Termination. Subject to the terms and conditions of this Termination,
the parties hereby expressly terminate the Prior Agreements. The
parties agree that this Termination shall supersede, extinguish and
cancel the Prior Agreements and (with exception to the warrant and
subscription agreements entered into in conjunction with this
Termination) all other representations and agreements related thereto,
express or implied, oral or otherwise, between AIM and PowerChannel or
PowerChannel Holdings.
2.2 Mutual Release. Each party expressly agrees to waive, release or
otherwise refrain from asserting any and all causes of action and any
other legal rights that have arisen or may arise from or involving the
Prior Agreements. This release shall encompass all officers, directors
and other employees of the parties.
2.3 Cancellation of Note. Among other consideration, AIM agrees to
exchange the entire outstanding principal and interest of the Note for
two hundred and eighty-eight thousand (288,000) shares of common stock
in PowerChannel Holdings, Inc., the parent company of PowerChannel,
the shares being transferred pursuant to the terms and conditions of
the subscription agreement set forth at Appendix H. AIM shall
surrender the original Note to be attached hereto as Appendix C of the
copy of the Termination retained by PowerChannel Holdings.
2.4 Repricing of Warrant. In further consideration for the termination of
the Prior Agreements, PowerChannel Holdings shall execute, on even
date herewith, a warrant entitling AIM to purchase an aggregate of
fifty thousand (50,000) shares of common stock of PowerChannel
Holdings at two dollars and fifty cents ($2.50) a share under the
terms and conditions set forth in Appendix I.
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2.5 Server Infrastructure. The parties acknowledge that PowerChannel has
not taken possession of the Server Infrastructure as specified in
Section 5.3 of the License Agreement. AIM shall hold all rights, title
and interest in the Server Infrastructure.
2.6 WebPassport Equipment. The parties acknowledge that PowerChannel has
taken possession of the WebPassport Equipment pursuant to Section 5.1
of the License Agreement. PowerChannel shall hold all rights, title
and interest in all WebPassport Equipment in PowerChannel's
possession.
ARTICLE 3 - Miscellaneous
3.1 Severability. The parties agree that if any provision of this
Termination is determined to be invalid or unenforceable, such
provision shall be deemed automatically amended to the extent
necessary to comply with the law and shall be enforceable to the full
extent allowable under the law, and the validity and enforceability of
the remaining provisions shall remain unaffected.
3.2 Waiver. The waiver of any breach hereunder may be effected only by a
written instrument signed by the waiving party and shall not
constitute a waiver of any other breach. Any failure by either party
to insist upon the strict performance of any of the terms and
provisions hereof shall not be deemed to be a waiver of any of the
terms and provisions hereof.
3.3 Amendment. The parties may amend this Termination only by a written
instrument signed by both parties.
3.4 Additional Instruments. Each party shall execute any instruments
reasonably believed by the other party to be necessary to implement
the provisions of this Termination.
3.5 Governing Law. This Termination shall be construed and enforced in
accordance with the laws of the State of New York. The Courts of the
State of New York and the United States District Court for the
District of New York shall have exclusive jurisdiction over any
dispute relating to this Termination and no legal action relating to
this Termination shall be brought in any other jurisdiction.
3.6 Notices. All notices, demands or documents to be delivered under this
Termination shall be given in writing and sent by registered or
certified mail addressed to the parties at their respective addresses
as set forth on the first page of this Termination. Such addresses may
be changed by the addressee by serving notice as above provided.
Service of such notice shall be deemed complete on the earlier to
occur of the actual date of delivery or three (3) days after mailing.
3.7 Parties in Interest. As and when used herein, the terms
"PowerChannel", "PowerChannel Holdings", "AIM" and "LDDH" shall mean
and include PowerChannel,
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PowerChannel Holdings, AIM and LDDH and their respective heirs,
personal representatives, successors and permitted assigns.
3.8 Effective Date. This Termination shall become effective as the date
first above written.
3.9 Authority. By signing below, the signatories warrant and represent
their authority to execute this Termination on behalf of the parties.
IN WITNESS WHEREOF, the parties hereto have executed this Termination
as of the Effective Date.
AMERICAN INTERACTIVE MEDIA, POWERCHANNEL, INC.
INC.
By: xxxxxxxxxxxxxxx By: /s/ Xxxxx X. Xxxxxxxx
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Name: Name: Xxxxx X. Xxxxxxxx
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Title: Title: President
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POWERCHANNEL HOLDINGS, INC. LONG DISTANCE DIRECT HOLDINGS, INC.
By: /s/ Xxxxx X. Xxxxxxxx By: /s/ Xxxxxx Xxxxxxx
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Name: Xxxxx X. Xxxxxxxx Name: Xxxxxx Xxxxxxx
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Title: President Title: President
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