EXHIBIT 10.1
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT (this "Agreement") is made as of November 9,
2001 by and among Select Media Communications, Inc., a New York corporation (the
"Company"), Antra Holdings Group, Inc., a Delaware corporation ("Antra"), and
the holders of common stock, $.001 par value, of Antra listed on the Schedule of
Holders ("Schedule of Holders") attached hereto as Exhibit A (the "Holders").
The parties, intending to be legally bound, agree as follows:
1. Authorization and Exchange of Company Common Stock for Antra Common
Stock.
1.1 Authorization. The Company has authorized the issuance and
exchange pursuant to the terms and conditions hereof of up to 2,750,000 shares
of its common stock, $.001 par value (the "Company Common Stock").
1.2 Exchange of Company Common Stock for Antra Common Stock.
Subject to the terms and conditions hereof, at the Closing (as defined below),
the Company will issue to each Holder, and each Holder agrees, severally and not
jointly, to accept from the Company the number of shares of Company Common Stock
set forth opposite each Holder's name on Exhibit A in exchange for a certificate
or certificates representing the number of shares of Antra common stock, $.001
par value, (the "Antra Common Stock") set forth opposite such Holder's name on
Exhibit A. The ratio of Company Common Stock to be issued for Antra Common Stock
shall be 0.22 shares of Company Common Stock for each share of Antra Common
Stock.
2. Closing Date; Delivery.
2.1 Closing Date. The closing pursuant to this Agreement shall
be held at the offices of Wolf, Block, Xxxxxx and Xxxxx-Xxxxx LLP, 000 Xxxx
Xxxxxx, Xxx Xxxx, XX 00000 on November 30, 2001, or on such other date as shall
be mutually agreed upon by the parties hereto which shall not be more than ten
(10) days after all of the conditions to closing set forth herein shall have
been satisfied or waived in writing, but in any case not later than December 31,
2001. The closing referred to in this Section 2.1 shall be herein referred to as
the "Closing" and the date of the Closing is herein referred to as the "Closing
Date".
2.2 Delivery. Subject to the terms of this Agreement, at the
Closing the Company will deliver to each Holder a certificate registered in such
Holder's name representing the number of shares of Company Common Stock set
forth opposite such Holder's name on Exhibit A, and each Holder will deliver to
the Company a stock certificate or certificates representing the number of
shares of Antra Common Stock set forth opposite each Holder's name on Exhibit A,
duly endorsed in blank or with appropriate stock powers executed by the Holder
in blank attached.
2.3 Reset Provision. One year from the date of Closing, there
will be a one time recalculation of pricing based upon the average for each of
the 20 previous trading days of the daily volume weighted average price of the
common stock of the Company, as reported by Bloomberg Financial using the VAP
function (the "VAP"). If the VAP is less than $2.50 per share of common stock of
the Company, additional shares shall be issued to each Holder valued at the VAP
to make up the difference for all Company Common Stock then held, in order for
the total value of the Company Common Stock held by each Holder after issuance
of the VAP additional shares to be equal to the product resulting from the
number of shares of Company Common Stock held by such Holder immediately prior
to such issuance multiplied by $2.50. Accordingly, the formula to be used to
determine the number of additional shares at VAP to be issued to each Holder is
as follows: the Number of Additional Shares of Common Stock of the Company to be
issued to each Holder = Number of Shares of Company Common Stock held by such
Holder immediately prior to such issuance multiplied by ($2.50 - VAP) / VAP. For
example, if VAP were $2.00 and a Holder owned 100 shares, the Additional Shares
of Common Stock to be issued to such Holder would be 25.
All shares of common stock of the Company issued pursuant to this
Section 2.3 shall thereafter be deemed Company Common Stock.
2.4 Volume Restrictions. For a period of four (4) years from
the Closing Date, the Holders jointly and severally agree not to sell publicly
(i.e., whether pursuant to a registration statement or Rule 144) a number of
shares of common stock of the Company (through short positions or otherwise) in
excess of the greater of (i) 15% of the weekly volume (calculated based upon the
five (5) trading day period immediately prior to the date of the sale) in any
given five (5) trading day period and (ii) on any given day, 15% of the volume
on such day. Violations of the limitation set forth in the preceding sentence
due to the inability to obtain up to the minute updated information prior to
making the trade shall not be a breach of this Agreement to the extent that such
violations occur infrequently and are not substantially in excess of such
limitation. In order for the Company to track the Holders' compliance with this
section, each Holder initially with 200,000 or more shares of Company Common
Stock shall provide the Company with notice of its daily sales of common stock
within ten (10) business days of the end of each month in which any such sales
occur.
3. Representations and Warranties of the Company. The Company hereby
represents and warrants to each Holder that:
3.1 Corporate Power. The Company has now all corporate power
necessary for the authorization, execution and delivery of this Agreement and
the issuance of the Company Common Stock, and this Agreement constitutes the
valid and binding obligation of the Company enforceable against the Company in
accordance with its terms, except as the same may be limited by bankruptcy,
insolvency, moratorium, and other laws of general application affecting the
enforcement of creditors' rights.
3.2 Capitalization. The authorized capital stock of the
Company consists of 35,000,000 shares of common stock, par value $.001 per
share. As of the date hereof, there are 17,487,683 shares of the Company's
common stock issued and outstanding. All of the issued and outstanding shares of
common stock have been duly authorized and validly issued, are fully paid and
nonassessable, and were issued in compliance with all applicable state and
federal laws concerning the issuance of securities. The Company has reserved
2,515,000 shares of its common stock for issuance upon the exercise of warrants,
options and the conversion of securities.
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3.3 Authorization.
(a) Corporate Action. All corporate action on the
part of the Company, its officers, directors and shareholders necessary for the
authorization, execution and delivery of this Agreement, the performance of all
obligations of the Company hereunder and the authorization, issuance and
delivery of the Company Common Stock has been taken.
(b) Valid Issuance. The Company Common Stock when
issued in compliance with the provisions of this Agreement, will be validly
issued, fully paid and nonassessable and will be free and clear of any liens or
encumbrances; provided, however, that all such securities may be subject to
restrictions on transfer under state and/or federal securities laws as set forth
therein, and as may be required by future changes in such laws.
3.4 No Preemptive Rights. No person has any right of first
refusal or any preemptive rights in connection with the issuance of the Company
Common Stock or any future issuances of securities by the Company.
3.5 SEC Reports. The Company's Annual Report on Form 10-K for
the year ended December 31, 2000, and its Quarterly Reports on Form 10-Q filed
with the Securities and Exchange Commission for the quarters ended March 31,
2001 and June 30, 2001 (the "SEC Documents") and all filings required to be made
with the Securities and Exchange Commission ("SEC") after the date hereof
through and including the Closing Date ("Subsequent SEC Filings") (including the
financial statements included therein) was or will be in the case of the
Subsequent SEC Filings, complete and correct in all material respects as of its
date and, as of its date, did not or will not, in the case of the Subsequent SEC
Filings, contain any untrue statement of material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading.
3.6 Absence of Certain Changes. Since June 30, 2001, there has
not been any material adverse change in the assets or any material adverse
change in the financial condition or results of operations of the Company or the
business of the Company (collectively, the "Condition of the Business") or any
event, occurrence or circumstance that could reasonably be expected to cause
such a material adverse change.
3.7 Claims and Proceedings. Except as set forth on Schedule
3.7 annexed hereto or as disclosed in the SEC Documents, there are no actions,
suits, claims or counterclaims or legal, administrative, governmental, arbitral
or other proceedings or investigations (collectively, "Claims") pending or to
the knowledge of the Company threatened on the date hereof, against or involving
the Company except for Claims which individually or in the aggregate could not
reasonably be expected to cause a material adverse effect upon the Condition of
the Business.
3.8 Disclosure. No representation or warranty by the Company
in this Agreement, or in any document or certificate furnished or to be
furnished to the Holders pursuant hereto or in connection with the transactions
contemplated hereby, when taken together, contains or will contain any untrue
statement of a material fact or omits or will omit to state a material fact
necessary to make the statements made herein and therein, in the light of the
circumstances under which they were made, not misleading.
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4. Representations and Warranties of Antra. As a material inducement to
the Company to enter into this Agreement and to consummate the transactions
contemplated hereby, Antra makes the following representations and warranties to
the Company, as well as the additional representations and warranties set forth
on Schedule 4.6 annexed hereto, both as of the date hereof and as of the Closing
Date:
4.1 Corporate Power. Antra has now all corporate power
necessary for the authorization, execution and delivery of this Agreement and
this Agreement constitutes the valid and binding obligation of Antra enforceable
against Antra in accordance with its terms, except as the same may be limited by
bankruptcy, insolvency, moratorium, and other laws of general application
affecting the enforcement of creditors' rights.
4.2 Capitalization. The authorized capital stock of Antra
consists of 50,000,000 shares of common stock, $.001 par value, and 5,000,000
shares of preferred stock, $.001 par value. As of the date hereof there were,
and immediately prior to Closing there will be, 12,354,620 shares of Antra's
common stock issued and outstanding and no shares of Antra's preferred stock
issued and outstanding. All of the issued and outstanding shares of Antra's
common stock have been duly authorized and validly issued, are fully paid and
nonassessable, and were issued in compliance with all applicable state and
federal laws concerning the issuance of securities. Antra has reserved shares of
its common stock for issuance upon (i) the exercise of warrants or options, and
(ii) the conversion of securities, as more particularly described on Schedule
4.2 annexed hereto. Except as described on Schedule 4.2, there are no
outstanding preemptive rights or other rights, plans, options, warrants,
conversion rights or agreements for the purchase or acquisition from the Company
of any shares of its capital stock.
4.3 Authorization. All corporate action on the part of Antra,
its officers, directors and shareholders necessary for the authorization,
execution and delivery of this Agreement and the performance of all obligations
of Antra hereunder has been taken.
4.4 No Preemptive Rights. No person has any right of first
refusal or any preemptive rights in connection with any future issuances of
securities by Antra.
4.5 Disclosure. No representation or warranty by Antra in this
Agreement, or in any document or certificate furnished or to be furnished to the
Holders pursuant hereto or in connection with the transactions contemplated
hereby, when taken together, contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact necessary to make
the statements made herein and therein, in the light of the circumstances under
which they were made, not misleading.
4.6 Additional Representations and Warranties of Antra. See
Schedule 4.6 annexed hereto and made a part hereof.
4.7 Investment Company Status. Antra does not hold of record
nor does it own beneficially any shares of any entity (including, but not
limited to, Teltran International Group, Ltd.) which would subject Antra to the
rules and regulations of the Investment Company Act of 1940.
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4.8 Recording Agreement. The Recording Agreement between AMG
(as defined in subsection (k)(xvii) of Schedule 4.6) and Xxxxxxx X. Xxxxx (also
known as "Xxxxxx"), attached to this Agreement as Schedule 4.8 is true, complete
and correct, such Agreement is in full force and effect, neither Xx. Xxxxx nor
AMG is in default thereunder, the current term of the Recording Agreement ends
upon delivery of the seventh full length album, three albums having been
delivered to date; and there are no other agreements or instruments between Xx.
Xxxxx and AMG and/or any affiliate of either of them;
5. Representations and Warranties of Holders and Restrictions on
Transfer Imposed by the Securities Act.
5.1 Representations and Warranties by the Holders. Each
Holder, severally and not jointly, represents and warrants to the Company as
follows:
(a) Ownership of Antra Stock. Holder has good,
marketable and unencumbered title to, and holds of record and owns beneficially,
all of the shares of Antra Common Stock set forth opposite Holder's name on
Exhibit A, free and clear of any restrictions on transfer (other than any
restrictions under federal and state securities laws), Taxes (as defined in
subsection (k) of Schedule 4.6), Liens, options, warrants, purchase rights,
contracts, commitments, claims and demands. Holder is not a party to any option,
warrant, purchase right, or other contract or commitment that could require
Holder to sell, transfer or otherwise dispose of any Antra common stock (other
than pursuant to this Agreement). Holder is not a party to any voting trust,
proxy, or other agreement or understanding with respect to the voting of any
Antra Common Stock. The shares of Holder's Antra Common Stock have been duly
issued, are fully paid and non-assessable. Upon payment for Holders' Antra
Common Stock, as herein provided, the Company will acquire good and valid title
to such Antra Common Stock, free and clear of any Lien. For purposes hereof,
"Lien" shall mean any lien, pledge, mortgage, deed of trust, security interest,
claim, lease, license, charge, option, right of first refusal, transfer
restriction, encumbrance or any other restriction or limitation whatsoever.
(b) Authorization. Holder has full power and
authority to execute and deliver this Agreement and all other agreements,
instruments, certificates and documents to be executed or delivered under the
terms of this Agreement, to perform all acts contemplated by this Agreement and
to sell Holder's Antra Common Stock pursuant to the term hereof.
To the extent that Holder is a corporation or other entity, the execution,
delivery and performance of this Agreement has been duly authorized by all
necessary corporate and other action on behalf of Holder. This Agreement
constitutes the legal, valid and binding obligation of Holder and each
instrument contemplated by this Agreement, when executed and delivered by Holder
in accordance with the provisions hereof, will be the legal, valid and binding
obligation of Holder, in each case enforceable against Holder in accordance with
their respective terms, except as the same may be limited by bankruptcy,
insolvency, moratorium and other laws of general application executing the
enforcement of creditors' rights.
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(c) Investment Intent. This Agreement is made with
the Holder in reliance upon such Holder's representation to the Company,
evidenced by Holder's execution of this Agreement, that Holder is acquiring the
Company Common Stock set forth opposite such Holder's name on Exhibit A
(collectively the "Securities") for such Holder's own account, for investment
and not with a view to, or for resale in connection with, any distribution or
public offering thereof within the meaning of the Securities Act of 1933, as
amended ("Securities Act"). Holder has the full right, power and authority to
enter into and perform this Agreement and this Agreement constitutes the valid
and binding obligation of the Holder, enforceable against the Holder in
accordance with its terms, except as the same may be limited by bankruptcy,
insolvency, moratorium, and other laws of general application affecting the
enforcement of creditors' rights.
(d) Securities Not Registered. Holder understands and
acknowledges that the offering of the Securities pursuant to this Agreement will
not be registered under the Securities Act or qualified under applicable blue
sky laws on the grounds that the offering and sale of securities contemplated by
this Agreement are exempt from registration under the Securities Act and exempt
from qualifications available under applicable blue sky laws, and that the
Company's reliance upon such exemptions is predicated upon such Holder's
representations set forth in this Agreement. Holder acknowledges and understands
that the Securities must be held indefinitely unless the Securities are
subsequently registered under the Securities Act and qualified under applicable
blue sky laws or an exemption from such registration and such qualification is
available.
(e) No Transfer. Holder covenants that in no event
will such Holder dispose of any of the Securities (other than in conjunction
with an effective registration statement for the Securities under the Securities
Act or in compliance with Rule 144 promulgated under the Securities Act) unless
and until (i) such Holder shall have notified the Company of the proposed
disposition and shall have furnished the Company with a statement of the
circumstances surrounding the proposed disposition, and (ii) if reasonably
requested by the Company, such Holder shall have furnished the Company, with an
opinion of legal counsel who shall be reasonably satisfactory to the Company,
addressed to the Company and reasonably satisfactory in form and substance to
the Company's counsel, to the effect that (x) such disposition will not require
registration under the Securities Act and (y) appropriate action necessary for
compliance with the Securities Act and other applicable state, local or foreign
law has been taken.
(f) Permitted Transfers. Notwithstanding the
provisions of subsection (c) above, no registration statement or opinion of
counsel shall be necessary for a transfer by a Holder which is a partnership to
a partner of such partnership or a former partner of such partnership who leaves
such partnership after the date hereof, or to the estate of any such partner or
former partner or the transfer by gift, will or intestate succession of any
partner to his spouse or lineal descendants or ancestors, if the transferee
agrees in writing to be bound by the terms of this Agreement to the same extent
as if the transferee were an original Holder hereunder. For purposes of this
paragraph (d), a limited liability company shall be deemed to be a partnership
and the members of a limited liability company shall be deemed to be partners of
such partnership.
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(g) Knowledge and Experience. Except with respect to
Xxxxxx Xxxxxxx, Teltran International Group., Ltd., Relocate 000.xxx, Inc.,
Xxxxx Xxxxxx, Xxxxx Xxxxxx and Xxxxx Xxxxx, each of whom is excepted from making
this representation, Holder (i) is an "Accredited Investor" as that term is
defined in Rule 501 of Regulation D promulgated under the Securities Act or has
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of such Holder's prospective investment in
the Securities; and (ii) has the ability to bear the economic risks of such
Holder's prospective investment, including a complete loss of Holder's
investment in the Securities.
(h) Access to Information; No General Solicitation.
Holder (i) has been furnished with and has had access to such information as
such Holder has considered necessary to make a determination as to the purchase
of the Securities together with such additional information as is necessary to
verify the accuracy of the information supplied; (ii) has had all questions
which have been asked by such Holder satisfactorily answered by the Company; and
(iii) has not been offered the Securities by any form of advertisement, article,
notice or other communication published in any newspaper, magazine, or similar
media or broadcast over television or radio, or any seminar or meeting whose
attendees have been invited by any such media.
(i) Not Organized to Purchase. If Holder is not an
individual, Holder has not been organized for the purpose of purchasing the
Securities.
5.2 Legends. Each certificate representing the Securities may
be endorsed with the following legends:
(a) Federal Legend. THE SECURITIES EVIDENCED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE
IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES,
THE TRANSFER IS MADE IN COMPLIANCE WITH RULE 144 PROMULGATED UNDER SUCH ACT OR
THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THESE SECURITIES
REASONABLY SATISFACTORY TO THE COMPANY, STATING THAT SUCH SALE, TRANSFER,
ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS
DELIVERY REQUIREMENTS OF SUCH ACT.
(b) Other Legends. Any other legends required by
applicable state blue sky laws.
The Company need not register a transfer of legended Securities, and the Company
may also instruct its transfer agent not to register the transfer of the
Securities, unless the conditions specified in each of the foregoing legends are
satisfied.
5.3 Removal of Legend and Transfer Restrictions. Any legend
endorsed on a certificate pursuant to subsection 5.2(a) and the stop transfer
instructions with respect to such legended Securities shall be removed, and the
Company shall issue a certificate without such legend to the holder of such
Securities if such Securities are registered under the Securities Act and a
prospectus meeting the requirements of Section 10 of the Securities Act is
available or if such holder satisfies the requirements of Rule 144(k).
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6. Conduct of Business Pending Closing.
6.1 Antra Management. Between the date of this Agreement and
the Closing hereunder, the businesses of Antra and its Subsidiaries (as defined
in subsection (b) of Schedule 4.6) shall be managed and operated in the ordinary
course of business, consistent with past practices if operated by Antra. In
addition, Antra shall ensure that, unless the Company manages Antra and its
Subsidiaries during such interim period, or unless the Company shall otherwise
agree in writing, Antra and each Subsidiary shall:
(a) not take or suffer or permit any action which
would render untrue any of the representations or warranties of Antra herein
contained, and not omit to take any action, the omission of which would render
untrue any such representation or warranty;
(b) maintain its books and records in accordance with
past practices;
(c) not sell, assign or transfer any of its assets;
(d) use its best efforts to preserve its business's
relationships with employees, customers, suppliers and others with whom it
deals;
(e) keep all tangible assets in good order and repair
and perform all necessary repairs and maintenance;
(f) not incur any long-term debt or short-term debt
other than in the ordinary course of business; and
(g) not encumber in any way any of the assets, not
issue, redeem or repurchase any capital stock, equity related securities or
securities convertible into capital stock or equity related securities, not make
any dividends or distributions to its shareholders, not make any loans in excess
of $25,000 in any one instance, not enter into any transactions with affiliates
and not grant or pay any increases in salary or fringe benefits to any of its
employees, except for normal annual raises in accordance with past practice, and
not make any material modifications to any Plans (as defined in subsection (n)
of Schedule 4.6) other than such amendments as may be required for compliance
with applicable laws, nor enter into any new employment, consulting or severance
arrangements.
From and after the date hereof, Antra and each Subsidiary shall give to
the Company and its representatives access to the books, records, employees and
assets of Antra and each Subsidiary.
6.2 Company Managed. At the Company's option, the Company may
manage the business of Antra during the aforementioned interim period. In such
event, non-compliance with covenants set forth in Section 6.1 above shall not be
deemed to be a breach by Antra except if such breach was caused by Antra. In
addition, in connection with the Company's management of Antra and its
Subsidiaries:
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s
(a) Antra agrees to indemnify and hold harmless the
Company, its affiliates and their respective directors, officers, employees,
agents and each such person or entity, if any, who controls the Company or any
of its affiliates within the meaning of the Securities Exchange Act of 1934 (the
Company and all of the above-described entities or persons being an "Indemnified
Party") from and against any and all losses, claims, damages, liabilities and
expenses whatsoever, joint or several (including all reasonable fees of counsel
and other expenses incurred by an Indemnified Party in connection with the
preparation for or defense of any claim, action or proceeding, whether or not
resulting in liability), as incurred, to which such Indemnified Party may become
subject under any applicable federal or state law, or otherwise, relating to or
arising out of any act of commission or omission made or taken by an Indemnified
Party in the management of Antra and its Subsidiaries, except that Antra will
not be liable hereunder to the extent that any loss, claim, damage, liability or
expense is found in a final judgment by an arbitrator or a court to have
resulted primarily from an Indemnified Party's gross negligence or willful
malfeasance in the performance of such services.
(b) Antra and the Company agree that if any
indemnification or reimbursement sought pursuant to the preceding paragraph is
finally judicially determined to be unavailable (except by reason of the gross
negligence or willful malfeasance of the Company or its controlling person(s),
directors, officers, employees or agents, as the case may be), then Antra and
the Company shall contribute to the liabilities for which such indemnification
or reimbursement is held unavailable in such proportions as is appropriate to
reflect (a) the relative benefits to Antra on the one hand, and the Company on
the other hand, in connection with the transaction to which such indemnification
or reimbursement relates, (b) the relative fault of the parties, and (c) other
considerations.
(c) Antra and the Company mutually agree to notify
each other promptly of the assertion against it or any other person of any claim
or the commencement of any action or proceeding relating to any activity or
transaction contemplated by this Agreement.
7. Conditions to the Obligations of the Holders. The obligations of the
Holders to exchange the Antra Common Stock for Company Common Stock as provided
herein shall be subject to the following conditions, any or all of which may be
waived in writing by the Holders:
(a) that the representations and warranties of the
Company set forth in this Agreement are now, and at all times after the date of
this Agreement to and including the time of Closing shall be, true and correct;
(b) that the Company shall have in all respects
performed and complied with all terms and conditions required by this Agreement
to be performed or complied with by the Company on or before the Closing Date;
(c) that on or prior to the Closing Date, the Company
shall have obtained a bridge loan in the amount of at least $250,000, to be used
for the purpose of paying, at its discretion, certain liabilities and
obligations as more fully described on attached Schedule 7(c) and for working
capital purposes of Antra during the initial four-month period following the
Closing;
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(d) that Holders shall receive a piggy-back
registration rights agreement from the Company subject to certain volume
limitations as set forth herein and therein, in the form substantially as set
forth in the attached Exhibit B; and
(e) execution and delivery of a collateral assignment
of certain publishing rights held by Antra Publishing, Inc. to OCF to secure
payment of the outstanding balance of the OCF Note (as defined in Section
10.1(i)).
8. Conditions to the Obligations of the Company. The obligations of the
Company to exchange the Company Common Stock for Antra Common Stock as provided
herein shall be subject to the following conditions, any or all of which may be
waived in writing by the Company:
(a) each of Antra and the Holders shall have in all
respects performed and complied with all terms and conditions required by this
Agreement to be performed and complied with on or before the Closing Date;
(b) the representations and warranties of each of
Antra and the Holders set forth in this Agreement are now, and at all times
after the date of this Agreement to and including the time of Closing shall be,
true and correct;
(c) all necessary third party and governmental
consents and approvals, if any, shall have been obtained and all legal and
regulatory requirements shall have been satisfied;
(d) Antra shall have delivered to the Company, (i)
true and complete copies of all Exhibits and Schedules to the Operating
Agreement (as defined in subsection (f) of Schedule 4.6), each of which shall be
reasonably satisfactory in form and substance to the Company and, (ii) a
certificate executed by Artemis (as defined in subsection (f) of Schedule 4.6)
as described in Section 10.1(g);
(e) Holders owning, beneficially and of record, not
less than 90% (or such lesser percentage determined by subtracting from the
percentage of shares of common stock owned by the Holders, the percentage of
common stock owned by Select, if any) of the issued and outstanding common
stock, $.001 par value, of Antra, on a fully diluted basis, shall have delivered
their Antra Common Stock pursuant to the terms hereof;
(f) the termination of all employment or consulting
agreements between Antra and/or its Subsidiaries and all of its employees,
directors, officers and consultants, if any; and
(g) the resignation of all officers and directors of
Antra and its Subsidiaries effective as of the Closing Date.
Anything herein to the contrary notwithstanding, in the absence of
fraud on the part of Antra, the Holders or any of them in connection with the
performance of their respective obligations under this Agreement, upon the
satisfaction by the Holders of the condition set forth in Section 8 (e) hereof,
all of the conditions of this Section 8 shall be deemed to be satisfied.
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9. Compliance with Securities Laws. In connection with the transactions
contemplated by this Agreement, the Company and Antra shall take all steps
necessary to prepare and disseminate to the Holders all private placement
memorandum, offering circulars and other communications required of them
respectively by federal and state securities laws. In addition, the Company and
Antra shall make all filings, if any, necessary to be made in connection with
the transaction contemplated by this Agreement with all state and federal
securities regulators. The Company and Antra shall cooperate with each other in
performing the undertakings set forth in this Section.
10. Closing.
10.1 Deliveries of Antra and the Holders. At the Closing,
Antra and the Holders will deliver to the Company:
(a) a "good standing" certificate issued by each
jurisdiction in which Antra and each Subsidiary is incorporated or qualified to
do business as a foreign corporation and certified copies of Antra's and each
Subsidiary's Certificate of Incorporation and all amendments thereto, and a
certified copy of the by-laws of each such entity, all of which shall be dated
as of a date within fifteen (15) days prior to the Closing Date;
(b) a stock certificate or certificates representing
the number of shares of Antra Common Stock set forth opposite each Holder's name
on Exhibit A, with stock powers relating thereto duly endorsed in blank by each
Holder;
(c) copies of the minutes of the meetings of the
board of directors and shareholders (if necessary) of Antra authorizing the
execution and performance of the Agreement by Antra, certified by the Antra's
Secretary;
(d) the favorable legal opinion of counsel for Antra
and the Holders in the form attached hereto as Exhibit C;
(e) all minute books and stock books of Antra and all
other books and records of Antra, and the resignations of all officers and
directors of Antra and each Subsidiary, effective as of the Closing Date;
(f) a general unconditional and irrevocable release
(excluding, however, any claims of any Holder for the breach by the Company or
Antra of the representations and covenants under this Agreement) in favor of
Antra and the Company executed by each Holder, in form and substance reasonably
satisfactory to the Company;
(g) a certificate executed by Artemis in form and
substance reasonably satisfactory to the Company to the effect that (i) the
Operating Agreement of the LLC attached hereto as Schedule 4.6(f)(A) is a true,
correct and complete copy of such Operating Agreement and there are no
amendments thereto; and the Distribution Agreement between AMG (as defined in
subsection (k)(xvii) of Schedule 4.6) and Artemis dated July 28, 1999 and the
amendment thereto dated December 21, 1999 (collectively, the "Artemis
Distribution Agreement") attached hereto as Schedule 10.1(g) is a true, correct
and complete copy of the Artemis Distribution Agreement, and there are no
amendments thereto; both such Agreements are in full force and effect, and
neither party has sent any notice to the other party specifying that the term of
either such Agreement ends prior to the current term thereof, which is December
17, 2002, for the Operating Agreement and July 27, 2002, for the Distribution
Agreement; (ii) Artemis is not in default and, to the knowledge of Artemis, AMG
is not in default, of such Operating Agreement or Distribution Agreement, except
for AMG's failure to submit an Annual Budget for 2001, which failure Artemis
hereby waives; (iii) the exchange transaction contemplated by this Agreement
will not constitute a violation of the Operating Agreement or Artemis
Distribution Agreement; and (iv) except for the above referenced agreements,
there are no other agreements or instruments among AMG, Artemis and/or any
affiliate of either of them;
-11-
(h) evidence in form and substance satisfactory to
the Company, of the satisfaction of the conditions required by the provisions of
Sections 8(f) and 8(g) hereof.
(i) a certificate and agreement between the Organized
Crime Family, Inc. ("OCF"), on the one hand, and the Company, Antra and AMG on
the other hand, that: (1) attached to this Agreement as Schedule 10.1(i) are
true and correct copies of the $405,000 promissory note of AMG to OCF dated
August 1, 2000 (the "OCF Note"), the Assignment Agreement of the same date
between AMG and OCF and all other related loan documents, as amended, arising
out of this transaction (collectively the "OCF Loan Documents"); (2) the OCF
Loan Documents are valid and binding and in full force and effect; (3) the
current principal balance of the OCF Note is $125,000; and (4) AMG is not in
default of any of its obligations under the OCF Note;
(j) a certificate of Antra with respect to Antra that
all of the conditions referred to in Section 8 hereof have been met;
(k) all such further documents, instruments and
agreements which may be reasonably requested by the Company or its counsel in
order to more effectively effectuate and carry out any provision of this
Agreement.
10.2 Deliveries of the Company. At the Closing, the Company
will deliver to the Holders:
(a) stock certificates registered in the name of each
Holder representing the number of shares of Company Common Stock set forth
opposite such Holder's name on Exhibit A;
(b) the favorable legal opinion of counsel for the
Company in the form attached hereto as Exhibit D; and
(c) a certificate of the Company that all of the
conditions referred to in Section 7 hereof has been met.
11. Miscellaneous.
11.1 Survival of Representations and Warranties. The
representations and warranties of Antra set forth in Section 4 hereof shall not
survive the Closing and shall be of no further force and effect after the
Closing has occurred. The representations and warranties of the Holders set
forth in Section 5.1 (a) and (b) hereof shall survive indefinitely (the Holders
each hereby waive all applicable statutory limitation periods in connection
therewith), and all other representations and warranties of the Holders shall
survive for the applicable statutory limitation periods. The representations and
warranties of the Company set forth in Section 3.1 hereof shall survive
indefinitely (the Company hereby waives all applicable statutory limitation
periods in connection therewith), and all other representations and warranties
of the Company shall survive for the applicable statutory limitation periods.
-12-
11.2 Holder's Representative. The Holders hereby appoint
Xxxxxx Xxxxxx as their representative ("Holders' Representative") to exercise
the powers, to do or cause to be done and to exercise all rights of any Holder
under and pursuant to this Agreement. All decisions of the Holders'
Representative shall be binding upon the Holders. The Holders' Representative is
authorized to take any action deemed by him appropriate or necessary to carry
out the provisions of, and to determine the rights of the Holders under this
Agreement. Without limiting the foregoing, the Holders' Representative shall
serve as the agent of the Holders for all purposes of this Agreement.
11.3 Amendment and Waiver. This Agreement may be amended or
modified or any provision waived only upon the written consent of the Company,
Antra and the Holders of at least a majority of the shares of Antra Common Stock
held by all Holders.
11.4 Indulgences, Etc. Neither the failure nor any delay on
the part of either party to exercise any right under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right preclude any other or further exercise of the same or of any other right
nor shall any waiver of any right with respect to any occurrence be construed as
a waiver of such right with respect to any other occurrence. No waiver shall be
effective unless it is in writing and is signed by the party asserted to have
granted such waiver. No investigation of any party shall be deemed to negate or
impair the representations and warranties of any other party contained in this
Agreement.
11.5 Controlling Law. This Agreement and all questions
relating to its validity, interpretation, performance and enforcement
(including, without limitation, provisions concerning limitations of actions),
shall be governed by and construed in accordance with the laws of the state of
New York (notwithstanding any conflict-of-law doctrines of either state or other
jurisdiction to the contrary), and without the aid of any canon, custom or rule
of law requiring construction against the draftsman.
11.6 Notices. All notices, requests, demands and other
communications required or permitted under this Agreement shall be in writing
and shall be deemed to have been duly given, made and received only when
delivered (personally, by courier service such as Federal Express, or by other
messenger) or four days following the day when deposited in the United States
mails, registered or certified mail, postage prepaid, return receipt requested,
addressed as set forth below:
-13-
(a) If to Antra:
Antra Holdings Group, Inc.
0000 Xxxxxx Xxxxxx
0xx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: President
with a copy, given in the manner prescribed above, to:
Xxxxxxx XxXxxxxxxx, Esquire
Xxxxxx Xxxxxx Xxxxxx & Xxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(b) If to Company:
Select Media Communications, Inc.,
000 Xxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxxxx
with a copy, given in the manner prescribed above, to:
Xxxxxxxx X. Xxxxxx, Esquire
Wolf, Block, Xxxxxx and Xxxxx-Xxxxx LLP
22nd Floor
0000 Xxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
(c) If to a Holder:
c/o Mr. Xxxxxx Xxxxxx
00 Xxxxxxxx Xxxxx
Xxxx Xxxx, XX 00000
Any party may alter the address to which communications or copies are
to be sent by giving notice of such change of address in conformity with the
provisions of this paragraph for the giving of notice.
11.7 Exhibits and Schedules. All Exhibits and Schedules
attached hereto are hereby incorporated by reference into, and made a part of,
this Agreement.
11.8 Binding Nature of Agreement. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
heirs, personal representatives, successors and assigns, except that neither
Antra nor the Holders nor the Company may assign or transfer their rights or
obligations under this Agreement without the prior written consent of the other
parties hereto, except that the Company may assign this Agreement to a
subsidiary of the Company.
-14-
11.9 Execution in Counterparts. This Agreement may be executed
in any number of counterparts, each of which shall be deemed to be an original
as against any party whose signature appears thereon, and all of which shall
together constitute one and the same instrument. This Agreement shall become
binding when one or more counterparts hereof, individually or taken together,
shall bear the signatures of all of the parties reflected hereon as the
signatories.
11.10 Provisions Separable. The provisions of this Agreement
are independent of and separable from each other, and no provision shall be
affected or rendered invalid or unenforceable by virtue of the fact that for any
reason any other or others of them may be invalid or unenforceable in whole or
in part.
11.11 Entire Agreement. This Agreement contains the entire
understanding among the parties hereto with respect to the subject matter
hereof, and supersedes all prior and contemporaneous agreements and
understandings, inducements or conditions, express or implied, oral or written,
except as herein contained. The express terms hereof control and supersede any
course of performance and/or usage of the trade inconsistent with any of the
terms hereof.
11.12 Paragraph Headings. The paragraph headings in this
Agreement are for convenience only; they form no part of this Agreement and
shall not affect its interpretation.
11.13 Gender, Etc. Words used herein, regardless of the number
and gender specifically used, shall be deemed and construed to include any other
number, singular or plural, and any other gender, masculine, feminine or neuter,
as the context indicates is appropriate.
11.14 Number of Days. In computing the number of days for
purposes of this Agreement, all days shall be counted, including Saturdays,
Sundays and holidays; provided, however, that if the final day of any time
period falls on a Saturday, Sunday or holiday on which federal banks are or may
elect to be closed, then the final day shall be deemed to be the next day which
is not a Saturday, Sunday or such holiday.
11.15 Enforcement Costs. The parties hereto hereby agree that
the prevailing party in any litigation or other proceeding to enforce this
Agreement shall be reimbursed by the other party(ies) for out of pocket costs
and expenses, including, without limitation, legal fees and expenses incurred by
the prevailing party in connection with such litigation or proceeding, and if
such reimbursement is not made within fifteen days after demand therefor, the
amount thereof shall thereafter bear interest until paid at the rate 12% per
annum or, if less, the highest rate permitted by applicable law.
11.16 Place of Litigation. The parties agree that litigation
or other proceeding brought by any of the parties hereto against any of the
other parties hereto arising out of this Agreement shall be brought in a state
or federal court sitting in the Southern District of New York. The parties
hereto hereby submit to and accept generally and unconditionally the
jurisdiction of such courts with respect to its respective person and property.
The parties hereby irrevocably waive any objection to laying of venue for any
such legal proceeding in the above described courts.
-15-
11.17 Expenses. Except as otherwise specifically provided
herein, all costs and expenses incurred in connection with the transactions
contemplated by this Agreement, shall be paid by the party incurring such
expenses. Antra will bear the legal costs and expenses of Xxxxxx Xxxxxx Xxxxxx &
Xxxx in representing both Antra and the Holders in connection with the
transactions contemplated by this Agreement.
11.18 Further Assurances. Antra and the Holders shall,
promptly after request therefor by the Company, execute any and all such other
documents, and take any and all further action, as the Company shall reasonably
request in order to effectuate the provisions of this Agreement.
11.19 Knowledge. As used in this Agreement, any reference to
the "knowledge" of a person shall be deemed to be their actual knowledge.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
SELECT MEDIA COMMUNICATIONS, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
-----------------------------
Xxxxx X. Xxxxxxxxx,
Chief Executive Officer
ANTRA HOLDINGS GROUP, INC.
By: /s/ Xxxxxx Xxxxxxx
-----------------------------
Xxxxxx Xxxxxxx,
Chief Executive Officer
-16-
HOLDERS:
Calanish Limited
By: /s/
-----------------------------
Craignure Limited
By: /s/
-----------------------------
/s/ Xxxxx Xxxxx
---------------------------------
Xxxxx Xxxxx
Broadford Limited
By: /s/
-----------------------------
Corrie Limited
By: /s/
-----------------------------
/s/ Xxxx Xxxxx
---------------------------------
Xxxxxxx Xxxxx
/s/ Xxxxx Xxxxx
---------------------------------
Xxxxx Xxxxx
/s/ X. Xxxxxxxxx
---------------------------------
X. Xxxxxxxxx
-------------------------------
Xxxx Xxxxx
By: /s/
-----------------------------
Xxxxx
Calgary Limited
By: /s/
-----------------------------
Sleat Limited
By: /s/
-----------------------------
Rothesay Limited
By: /s/
-----------------------------
/s/ Xxxxx Xxxxxx
---------------------------------
Xxxxx Xxxxxx
-17-
Carbost Limited
By: /s/
-----------------------------
-------------------------------
Xxxxxxx Xxxxxx
-------------------------------
Xxx Xxxxxx
Aran Limited
By: /s/
-----------------------------
Craighouse Limited
By: /s/
-----------------------------
/s/ Xxxx XxXxxxxx Xxxxxxxxxxx
---------------------------------
Xxxx XxXxxxxx Xxxxxxxxxxx
/s/ Xxxx Xxxxxx
---------------------------------
Xxxx Xxxxxx
/s/ Xxxxx Xxxxxx
---------------------------------
Xxxxx Xxxxxx
/s/ Xxxxxx Xxxxxx
---------------------------------
Xxxxxx Xxxxxx
/s/ Xxxxxx Xxxxxxxxx
---------------------------------
Xxxxxx Xxxxxxxxx
/s/ Xxxxxxxxx Xxxxxxx
---------------------------------
Xxxxxxxxx Xxxxxxx
/s/ Xxxxx Xxxxxx
---------------------------------
Xxxxx Xxxxxx
/s/ Xxxxx Xxxxxxxxx
---------------------------------
Xxxxx Xxxxxxxxx
/s/ Xxxx Xxxxxxxxx
---------------------------------
Xxxx Xxxxxxxxx
Percival Limited
By: /s/
-----------------------------
-18-
Lamlash Limited
By: /s/
-----------------------------
/s/ Xxxxxx Xxxxxxxxxx
---------------------------------
Xxxxxx Xxxxxxxxxx
/s/ Xxxxxx Xxxxxxx
---------------------------------
Xxxxxx Xxxxxxx
Teltran International Group, Ltd
By: /s/
-----------------------------
Relocate 000.xxx Inc.
By: /s/
-----------------------------
Salen Limited
By: /s/
-----------------------------
Xxxxxxx Enterprise Ltd
By: /s/
-----------------------------
Fir Enterprise Ltd
By: /s/
-----------------------------
Sumburgh Limited
By: /s/
-----------------------------
/s/ Xxxxxx XxXxxxxx
---------------------------------
Xxxxxx XxXxxxxx
/s/ Xxxxxxx XxXxxxxx
---------------------------------
Xxxxxxx XxXxxxxx
/s/ Xxxxxx XxXxxxxx
---------------------------------
Xxxxxx XxXxxxxx
Southern Properties
By: /s/
-----------------------------
---------------------------------
Xxxx Xxxxx
---------------------------------
Xxxxx Xxxx
-19-
---------------------------------
X. Xxxxxxx
Newcard
By: /s/
-----------------------------
Coastal Provinces
By: /s/
-----------------------------
/s/ Xxxxxx Xxxxxx Xxxxxx
---------------------------------
Xxxxxx Xxxxxx Xxxxxx
/s/ Xxxxx Xxxxxx
---------------------------------
Xxxxx Xxxxxx
/s/ Xxxx Xxxxxx
---------------------------------
Xxxx Xxxxxx
Staffin Limited
By: /s/
-----------------------------
Brae Limited
By: /s/
-----------------------------
Brodick Limited
By: /s/
-----------------------------
Millport Limited
By: /s/
-----------------------------
Newco Management
By: /s/
-----------------------------
/s/ Xxxxx Xxxxxx
---------------------------------
Xxxxx Xxxxxx
/s/ Xxxxxxx Xxxxxx
---------------------------------
Xxxxxxx Xxxxxx
Xxxxxxx Enterprise
By: /s/
-----------------------------
/s/ Xxxxx Xxxxx
---------------------------------
Xxxxx Xxxxx
-20-
SCHEDULE 4.6
Additional Representations, Warranties and Agreements of Antra:
a. Organization and Good Standing. Antra is a corporation duly
organized and in good standing under the laws of the state of Delaware and is
duly qualified to do business as a foreign corporation in the jurisdictions
specified on Schedule 4.6(a), which constitute all of the jurisdictions where
failure to qualify would have a material adverse effect on Antra or its
business.
b. Subsidiaries. Set forth on Schedule 4.6(b) is a list of all of
Antra's subsidiaries (individually, a "Subsidiary" and collectively, the
"Subsidiaries"), their respective states of incorporation, the authorized and
issued capital stock of each Subsidiary and the percentage interest in the
equity of each Subsidiary which is owned, directly or indirectly, by Antra.
Except as set forth on Schedule 4.6(b), Antra does not directly or indirectly
own, nor is Antra obligated to purchase or invest in (through the making of a
loan, a capital contribution or otherwise) any interest of any kind in any other
person, corporation, partnership, joint venture, association or other entity.
Each Subsidiary specified on Schedule 4.6(b) is a corporation duly organized and
in good standing under the laws of its state of incorporation and is duly
qualified to do business as a foreign corporation in the jurisdictions specified
on Schedule 4.6(b), which constitute all of the jurisdictions where failure to
qualify would have a material adverse effect on such Subsidiary or its business.
c. Charter Documents and Corporate Records. Antra has heretofore
delivered to the Company true and complete copies of the Articles of
Incorporation and By-laws, as amended to date, or comparable organization
documents, of Antra and its Subsidiaries, as in effect on the date of this
Agreement. Antra has made available to the Company and its representatives all
of the minute books or comparable records and the stock books or comparable
records of Antra and its Subsidiaries and all such books and records are true
and complete. Neither Antra, its Subsidiaries nor any shareholder thereof is a
party to any shareholders' or other agreement relating to the management of
Antra or any of its Subsidiaries or imposing rights or obligations with respect
to the transfer of the shares of the capital stock of Antra or its Subsidiaries.
d. No Breach or Violation. Neither the execution and delivery of the
Agreement nor the consummation of the transactions contemplated hereby will (i)
conflict with or result in a violation or breach of, or constitute a default or
require any party's consent under, any term or provision of the Articles of
Incorporation or By-laws of Antra or any of its Subsidiaries, or any agreement
or other arrangement to which Antra or any of its Subsidiaries, or any
shareholder thereof, is a party or by which any of them are bound; (ii) result
in the creation of any lien or other encumbrance upon any property, (iii)
violate any judgment, order, permit, injunction, decree or award of any court,
administrative agency or governmental body against, or binding upon, Antra or
its Subsidiaries or any such shareholder, (iv) constitute a violation by Antra,
its Subsidiaries, or any shareholder thereof of any law, rule or regulation or
(v) require the consent of any governmental body or other third party.
-21-
e. Financial Statements. Schedule 4.6(e)(A) contains the unaudited
consolidated balance sheet and profit and loss statement of Antra and its
Subsidiaries as of and at June 30, 2001 (the "Specified Date Balance Sheet") and
for the six months then ended, the audited consolidated balance sheet and income
statements of Antra and its Subsidiaries for the years ended December 31, 1998
and 1999 and the unaudited consolidated balance sheet and income statements of
Antra and its Subsidiaries for the year ended December 31, 2000. The foregoing
financial statements were prepared in accordance with generally accepted
accounting principles, consistently applied, are true, complete and correct, and
fairly and accurately present the financial position and results of operations
of Antra and its Subsidiaries (on a consolidated basis with respect to the 1998,
1999 and 2000 financial statements) as of the dates of such balance sheets and
income statements and for the periods then ended. Schedule 4.6(e)(B) is a list
of all "management" or "audit letters" received by Antra or its Subsidiaries
from its auditors in connection with any of the financial statements referred to
above and Schedule 4.6(e)(C) is a copy of all letters sent by counsel to Antra
or its Subsidiaries to its auditors in connection with the preparation of such
financial statements related to pending or threatened litigation involving Antra
or its Subsidiaries. Antra has not yet submitted any annual budgets of the LLC
(as hereinafter defined) for 2001 and 2002 under Section 2.02 of the Operating
Agreement (as hereinafter defined) and will not hereafter do so without the
Company's consent, which consent shall not be unreasonably withheld.
f. Joint Ventures. Antra, indirectly, owns a membership interest in a
Delaware limited liability company known as Antra Records LLC (the "LLC")
pursuant to an Operating Agreement for the LLC dated December 21, 1999 (the
"Operating Agreement") between Antra and Sheridan Square Entertainment LLC d/b/a
Artemis Records ("Artemis"). Schedule 4.6(f)(A) is a complete and current copy
of such Operating Agreement (with the exception of the Exhibits thereto which
will be delivered to the Company prior to Closing), and there are no amendments
thereto. Neither Antra nor any of its Subsidiaries has any obligations or
liabilities with respect to the LLC or its business, except as set forth in the
Operating Agreement. Neither Antra, any of its Subsidiaries, nor, to the
knowledge of Antra, Artemis is in material breach of the Operating Agreement,
and neither party thereto has sent notice to the other party of any breach or
alleged breach. The representations of Antra or its Subsidiaries contained in
the Operating Agreement were true and correct when made, and, to the knowledge
of Antra, the representations of Artemis contained therein are true and correct.
Based on a statement of Profit and Loss submitted by Artemis which is attached
as Schedule 4.6(f)(B), the estimated Net Loss (as that term is used in Section
2.01(a)(iii)(A) of the Operating Agreement) of the LLC for the period from
inception through September 30, 2000 was $1,161,945.54.
g. Directors, Officers. Schedule 4.6(g) is a correct and complete list
of all directors and officers of Antra and its Subsidiaries.
h. Undisclosed Liabilities. As of the date hereof and the Closing Date,
neither Antra nor its Subsidiaries had, and will not have, any obligations or
liabilities, due or not yet due, liquidated or unliquidated, fixed or
contingent, or otherwise, of any nature whatsoever, except (i) liabilities or
obligations specifically reflected on the Specified Date Balance Sheet; or (ii)
current liabilities (as determined in accordance with GAAP) incurred since such
date in the ordinary course of business, none of which is adverse to Antra or
its Subsidiaries.
-22-
i. Accounts Receivable. Except as shown on Schedule 4.6(i): (A) each of
the accounts receivable of Antra and its Subsidiaries constitutes a valid claim
in the full amount thereof against the debtor charged therewith on the books of
Antra or its Subsidiaries, as the case may be, and has arisen in the ordinary
course of Antra's and its Subsidiaries' businesses, as the case may be, and (B)
no account debtor has any valid set-off, deduction or defense with respect
thereto and no account debtor has asserted any such set-off, deduction or
defense.
j. Absence of Certain Changes. Since June 30, 2001 (the "Specified
Date"), there have been no changes in the assets, liabilities, operations, or
business prospects of Antra, its Subsidiaries or (to the knowledge of Antra) the
LLC, which individually or in the aggregate has been materially adverse and none
of the following has occurred: (a) any changes in Antra's or any Subsidiary's
recording of receivables; (b) the incurrence of any new bank debt, contractual
obligations or any other obligation to third parties other than those incurred
in the ordinary course of business; (c) the creation of any liens, attachments
or any other encumbrances on Antra's or any Subsidiary's assets; or (d) any
changes in the operation of the business of Antra or its Subsidiaries which
conflict with past practice or which have an adverse impact on the goodwill of
Antra's or any Subsidiary's customers, employees, creditors, suppliers and other
persons with whom Antra or any Subsidiary, as the case may be, has commercial
dealings.
k. Taxes.
(i) Definitions. The following terms shall have the meanings
set forth in this Section 4.6 (k).
"Return" and "Returns" mean any return, report,
declaration, estimate, information statement, claim for refund, notice, form or
any other kind of document, including any schedule or attachment thereto, and
including amended versions of any of the foregoing, relating to or required to
be filed in connection with any Tax.
"Tax" and "Taxes" means any federal, state (including
District of Columbia), local, foreign (including possessions or territories of
the United States) or other tax (whether income, gross receipts, franchise,
excise, customs, sales, use, value added, ad valorem, real or personal property,
license, transfer, employment, social security or any other kind of tax or
payment in lieu of tax no matter how denominated including any amount payable
pursuant to a tax-sharing or other agreement relating to the sharing or payment
of tax), or any assessment, levy, impost, withholding, fee or other governmental
charge in the nature of a tax, and shall include all additions to tax, interest,
penalties and fines with respect thereto.
"Antra" shall mean Antra, its Subsidiaries and the
LLC.
"Code" shall mean the Internal Revenue Code of 1986,
as amended.
(ii) Except as disclosed on Schedule 4.6(k), Antra has filed
or will file when due in a timely fashion all Returns that are required to be
filed on or before the date hereof and the Closing Date by or with respect to
Antra. All such Returns are true, correct, and complete. No claim has been made
by a taxing authority in a jurisdiction where Antra does not file Returns that
it is or may be subject to or liable for any Tax imposed by that jurisdiction.
-23-
(iii) Except as disclosed on Schedule 4.6(k), all Taxes for
which Antra is liable and that are due on or before the date hereof and the
Closing Date (whether or not shown to be due on any Return) have been paid when
due in a timely fashion. There are no liens on any assets of Antra that arose in
connection with any failure (or alleged failure) to pay any Tax other than liens
for Taxes not yet due and payable or for Taxes that Antra is contesting in good
faith through appropriate proceedings as set forth on Schedule 4.6(k).
(iv) Except as disclosed on Schedule 4.6(k), Antra has
withheld or collected and paid or deposited all Taxes required to have been
withheld or collected and paid or deposited in connection with amounts paid or
owing to any employee, independent contractor, creditor, shareholder or other
party.
(v) No taxing authority has asserted, or threatened to assert,
any adjustment, deficiency or assessment for any Taxes against Antra or its
assets or properties and no basis exists for any such adjustment, deficiency or
assessment which would result in additional taxes owed by Antra for any period
for which Returns have been filed. Schedule 4.6(k) lists all federal, state,
local, and foreign income Returns filed with respect to Antra for all taxable
periods and indicates those Returns of Antra that have been audited and those
Returns of Antra that currently are the subject of audit. Antra has delivered to
the Company correct and complete copies of all federal, state, local and foreign
income tax Returns filed, examination reports issued, and statements of
deficiencies assessed against or agreed to by Antra.
(vi) Antra has not waived any statute of limitations in
respect of Taxes or agreed to any extension of time with respect to a Tax
adjustment, assessment or deficiency except for such waivers or extensions
which, by their terms, have elapsed as of the date of this Agreement.
(vii) Antra has no income or gain that may be reportable for a
period ending after the date hereof without the receipt of an equal amount of
cash during such period, which is attributable to a transaction occurring in, or
a change in accounting method made for, a period ending on or prior to the date
hereof.
(viii) There are no currently outstanding requests made by
Antra for tax rulings, determinations or information that could affect the Taxes
of Antra.
(vix) Schedule 4.6(k) lists all Returns (other than income tax
returns) filed with respect to Antra for all taxable periods.
(x) Antra has not been obligated to deduct and withhold Taxes
under Code Section 1441.
(xi) Antra is a United States person within the meaning of
Code Section 7701(a) and each shall deliver at Closing a "Nonforeign
Certification" meeting the requirements of Code Section 1445.
(xii) Antra is not or was not at any time, a party to any Tax
allocation, indemnification or sharing agreement. Antra has not been a member of
an affiliated group defined in Code Section 1504(a) filing a consolidated
federal income Tax Return and does not have any liability for the Taxes of any
person under Treasury Regulation Section 1.1502-6 (issued under the Code) or any
similar provision of state, local, or foreign law, as a transferee or successor
by contract or otherwise. Antra has not been a member of a group of companies
filing a unitary, consolidated or combined state Return.
-24-
(xiii) Antra has not made, is not obligated to make, and will
not, as a result of the transactions contemplated hereby, make or become
obligated to make any "excess parachute payment" within the meaning of Section
280G of the Code (determined without regard to subsection (b)(4) thereof).
(xiv) Antra has not been a United States real property holding
corporation within the meaning of Code Section 897(c)(2) during the applicable
period specified in Code Section 897(c)(1)(A)(ii).
(xv) Antra has disclosed on its federal income Tax Returns all
positions taken therein that could give rise to a substantial understatement of
federal income Tax within the meaning of Code Section 6662.
(xvi) The LLC is taxable as a partnership for federal and
state income tax purposes.
(xvii) Antra's employer identification number is 00-0000000,
its taxable year ends December 31, and the address it will use on its federal
income tax return that includes the Closing Date is 0000 Xxxxxx Xxxxxx, 0xx
Xxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000. The employer identification number of
Antra's Subsidiary, Antra Music Group, Inc. ("AMG") is 00-0000000, its taxable
year ends December 31, and the address it will use on its federal income tax
return that includes the Closing Date is 0000 Xxxxxx Xxxxxx, 0xx Xxxxx,
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000.
l. Litigation. Except as set forth on Schedule 4.6(l), there are no
claims, actions, suits or legal or administrative arbitrations or other
proceedings or investigations (including, without limitation, any internal
charges of employment discrimination or harassment) pending or threatened
against Antra, its Subsidiaries, or to Antra's knowledge, the LLC.
m. 1934 Act. None of the capital stock of Antra is registered, or
required to be registered, under The Securities Exchange Act of 1934, as
amended, (the "1934 Act") and Antra is not subject to the reporting requirements
or the proxy rules under the 1934 Act.
n. Labor Matters; Employee Benefits.
(i) Definitions. The following terms shall have meanings set forth in
this Section 4.6(n)(i):
"Code" means the Internal Revenue Code of 1986, as
amended, or any successor statute. All references to specific sections of the
Internal Revenue Code shall be deemed to include any provisions of the Internal
Revenue Code (or a related statute) which replace or supersede the sections in
effect at the time this Agreement is executed.
"ERISA Affiliate" means any direct or indirect
subsidiary of Antra and all persons treated as being under common control or as
a single employer (under Section 414(b), (c), (m) or (o) of the Code) with
Antra. A subsidiary for purposes of this definition shall include any entity in
which Antra owns directly or indirectly a majority of the equity interest or
which is consolidated with the financial statements of Antra or any ERISA
Affiliate.
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"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended, or any successor statute. All references to specific
sections of ERISA shall be deemed to include any provisions of ERISA which
replace or supersede the sections in effect at the time this Agreement is
executed.
"IRS" means the Internal Revenue Service.
"Multiemployer Plan" means a multiemployer plan (as
defined in Section 4001(a)(3) of ERISA) to which Antra or any ERISA Affiliate
makes, is obligated to make, or has made or has been obligated to make
contributions.
"PBGC" means the Pension Benefit Guaranty
Corporation.
"Plan" means any employee benefit plan (as defined in
Section 3(3) of ERISA), severance bonus or other incentive compensation,
vacation, change of control, stock option, stock appreciation right, service
award, company car, club membership, relocation, educational assistance, patent
award, employee loan, policy, practice or arrangement employment or consultancy
as to which Antra or any ERISA Affiliate sponsors, maintains or makes or is
obligated to make contributions or payments.
"412 Plan" means a pension plan (as defined in
Section 3(2) of ERISA) which Antra or any ERISA Affiliate sponsors or maintains,
and is covered under Section 412 of the Code.
"Withdrawal Liabilities" means the amount of
liability determined or which may be determined pursuant to Section 4201 of
ERISA with respect to a Multiemployer Plan.
(ii) Schedule 4.6(n)(ii) separately lists all Plans, and separately
identifies all Plans providing retiree benefits.
(iii) Schedule 4.6(n)(iii) lists each employment or consultancy
agreement with respect to which Antra or any ERISA Affiliate is a party, and
each other such agreement with any individual engaged in or performing services
for Antra or any ERISA Affiliate, and a true and complete copy of each such
agreement has been provided to the Company.
(iv) True and complete copies of the following documents with respect
to any Plan (as applicable) have been delivered to the Company: (a) the most
recent plan document and trust agreement (including any amendments thereto and
prior plan documents, if amended within the last two years), (b) the most recent
Form 5500 and schedules thereto, (c) the most recent IRS determination letter,
(d) all of the summary plan descriptions, (e) a written description of each
material non-written Plan, and (f) each written communication to employees
intended to describe a Plan or 412 Plan or any benefit provided by a Plan.
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(v) Each Plan is and has been maintained in compliance in all material
respects with applicable law, including but not limited to ERISA, and the Code
and with any applicable collective bargaining agreements or other contractual
obligations.
(vi) Each Plan intended to be tax qualified under Section 401(a) of the
Code has been determined by the IRS to so qualify, and the trusts created
thereunder have been determined to be exempt from tax under the provisions of
Section 501 of the Code, and nothing has occurred which would cause the loss of
such qualification or tax-exempt status.
(vii) No Plan constitutes a 412 Plan or a Multiemployer Plan nor is any
Plan subject to Title IV of ERISA.
(viii) No Plan which is a welfare plan (as defined in Section 3(1) of
ERISA) provides benefits or coverage extending beyond a participant's
termination of employment except as may be required by Section 4980B of the
Code. Antra and each ERISA Affiliate has complied in all material respects with
the notice and continuation coverage requirements of Section 4980B of the Code.
(ix) There are no pending or threatened claims, actions or lawsuits,
other than routine claims for benefits in the ordinary course, asserted or
instituted against any Plan or its assets, Antra or any ERISA Affiliate with
respect to any Plan, or any fiduciary with respect to any Plan for which Antra,
the LLC or any ERISA Affiliate may be directly or indirectly liable, through
indemnification obligations or otherwise.
(x) Neither Antra nor any ERISA Affiliate has engaged, directly or
indirectly, in a non-exempt prohibited transaction (as defined in Section 4975
of the Code or Section 406 of ERISA) in connection with any Plan.
(xi) Except as disclosed on Schedule 4.6(n)(xi), during the last two
years there have been no amendments to any Plan, nor has any Plan been
established, which resulted in a material increase in the accrued or promised
benefits of any employee of Antra or any ERISA Affiliate.
(xii) Neither Antra nor any ERISA Affiliate sponsors, maintains or has
obligations, direct, contingent or otherwise, with respect to any Plan that is
subject to the laws of any country other than the United States law.
(xiii) Neither Antra nor any ERISA Affiliate maintains an employee
stock ownership plan or other plan holding securities of Antra or any of its
affiliates.
(xiv) There is no obligation on Antra or any ERISA Affiliate to make to
any current or former employee of Antra or any ERISA Affiliate any payment
(whether in the form of wages or as any other form of consideration) pursuant to
any employment agreement, and Plan, or otherwise, that will constitute, in the
aggregate, an "excess parachute payment" (within the meaning of Section 280G of
the Code) as a consequence in whole or in part of the transactions contemplated
by this Agreement, nor shall Antra or any ERISA Affiliate of Antra take on any
such obligation in the future.
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(xv) Except as shown in Schedule 4.6(n)(ii), neither Antra nor any
ERISA Affiliate is a party to any written or oral employment agreement,
consulting agreement, personal service agreement or agreement with any
independent contractor, and there are no actual or threatened controversies
related to or arising out of any such existing or alleged agreements.
(xvi) Neither Antra nor any ERISA Affiliate is a party to any
collective bargaining agreement. Neither Antra nor any ERISA Affiliate is a
party to any pending or threatened labor dispute. With respect to employees of
Antra or any ERISA Affiliate none of the following events or circumstances exist
and none is threatened: a controversy, a claim of illegal or improper conduct or
activities, an unresolved grievance or charge of unfair labor practice, an
arbitration proceeding or a union organizing effort. Antra or any ERISA
Affiliate has not received notice of any claim that it has not complied with any
applicable law or regulation relating to the employment of labor, including any
provisions thereof relating to wages, hours, collective bargaining, the payment
of social security and similar taxes, retirement plans, health and welfare
plans, equal employment opportunity, employment discrimination and employment
safety, or that Antra or any ERISA Affiliate is liable for any arrears of wages
or any taxes or penalties or interest for failure to comply with any of the
foregoing. Antra and its ERISA Affiliates have not been the subject of any
organizational efforts by any labor organizing, strike, work stoppage, "sickout"
or picketing by any group of persons (whether or not employees).
(xvii) Antra and its ERISA Affiliates have complied with all laws
relating to the employment of employees/labor or provision of employee benefits,
including but not limited to the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), the Fair Labor Standards Act, the American with
Disabilities Act, the New York Human Rights Law, Title VII of the Civil Rights
Act of 1964, the Worker Adjustment and Retraining Act, the Equal Pay Act, the
Family Medical Leave Act, and any provisions of employment or labor laws thereof
relating to wages, hours, benefits, pensions, safety, discrimination, the filing
of all reports and forms required to be filed with state or federal agencies,
collective bargaining, recognition and dealing with labor organizations, the
payment of social security and unemployment compensation taxes, the withholding
of income tax, and the payment and withholding of similar taxes. Antra and its
ERISA Affiliates are not liable for any arrearages of wages, taxes, benefit
payments or contributions, or penalties or interest for failure to comply with
any of the foregoing.
(xviii) Antra and its ERISA Affiliates currently have and have had for
the past ninety (90) days fewer than one hundred (100) employees.
(xix) Schedule 4.6(n)(xix) discloses a complete and correct list of all
employees of Antra and its ERISA Affiliates, showing for each his or her status
(full-time, part-time, on leave of absence, etc.), gross rate of annual
compensation, title, original date of hire, accrued vacation time (or
compensation in lieu of vacation and/or sick time), any bonus or deferred
compensation arrangements, fringe benefits and service credited for purposes of
vesting and/or eligibility under any plan, including without limitation, any
profit sharing, retirement or vacation plan or any other employment-related
benefit plan or program.
(xx) Antra has provided Buyer with copies of all Confidentiality
Agreements, Non-Compete Agreements, Non-Disclosure Agreements, Intellectual
Property Requests Agreements and Non-Solicitation Agreements that its and its
ERISA Affiliates, employees, officers, directors, agents or independent
contractors signed.
-28-
o. Conflicting Interests. No director, officer or employee of Antra or
its Subsidiaries and no shareholder of Antra or its Subsidiaries, nor any
relative or any affiliate of any of the foregoing (i) has any pecuniary interest
in any supplier or customer of Antra or its Subsidiaries or in any other
business enterprise with which Antra or its Subsidiaries conducts business or
with which Antra or its Subsidiaries is in competition or (ii) is indebted to
Antra or its Subsidiaries for money borrowed.
p. Property. Except as set forth on Schedule 4.6(p), Antra and its
Subsidiaries have good, valid and marketable title to all of their respective
assets (including but not limiting all of the assets referred on the Specified
Date Balance Sheet and those acquired since the Specified Date), except for
inventory sold since such date in the ordinary course of business, free and
clear of all liens, security interests and encumbrances. Antra and each of its
Subsidiaries, as the case may be, is the owner of all the personal property now
located in or upon the premises occupied by it and of all personal property
which each of them uses in the operation of their respective businesses. All
equipment, furniture and fixtures, and other tangible personal property of Antra
and its Subsidiaries used in the operation of their respective businesses as
well as all real property occupied by each of them and all improvements thereon
are in good order, operating condition and repair, normal wear and tear
excepted, and does not require any repairs other than normal maintenance to
maintain such property in good operating condition and repair.
q. Intellectual Property. Schedule 4.6(q) contains a true, correct and
complete list and an accurate description of all trademarks, trade names,
service marks, copyrights and other intellectual property and proprietary rights
owned by Antra and its Subsidiaries or used by Antra and its Subsidiaries in
connection with the operation of their respective businesses separately
identifying the property owned and not owned, and if owned by a third party, the
owner thereof, and separately listing whether any such property is registered
with the U.S. Patent and Trademark Office. Antra and its Subsidiaries have the
right to use all of such intellectual property and such use does not infringe on
the rights of any other party.
r. Real Property. Neither Antra nor any of its Subsidiaries owns any
real property.
s. (A) Contracts, Leases, Agreements and Other Commitments. Neither
Antra nor any of its Subsidiaries is a party to or bound by any written, oral or
implied contract, agreement, lease, power of attorney, guaranty, surety
arrangement, or other commitment, except for the following (which are
hereinafter collectively called the "Antra Agreements"):
(i) The agreements described in Schedule 4.6(s)(A); and
(ii) To the extent, if any, not described in such Schedule, agreements
involving a maximum possible liability or obligation on the part of Antra or its
Subsidiaries of less than $10,000; provided, however, that all agreements under
which Antra or its Subsidiaries has granted to any other party, or has received
from any other party, any rights which are material to the operation of Antra or
its Subsidiaries or their respective businesses are listed on Schedule
4.6(s)(A). Antra has previously delivered to the Company true and complete
copies of all of the Antra Agreements.
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All of the Antra Agreements are valid, binding and enforceable against
the respective parties thereto in accordance with their respective terms. Antra,
its Subsidiaries and, to the best knowledge of Antra, all other parties to all
of the Antra Agreements have performed all obligations required to be performed
to date under the Antra Agreements and neither Antra nor, to the best knowledge
of Antra, any such other party, is in default or in arrears under the terms
thereof, and no condition exists or event has occurred which, with the giving of
notice or lapse of time or both, would constitute a default thereunder. All of
the statements as they relate to Antra and its Subsidiaries required to be set
forth in the certificates referred to in Sections 10.1 (g), 10.1(h) and 10.1(i)
hereof are true and, as they relate to the entity giving such certificate, are,
to Antra's knowledge, true.
The Prior Works referred to in the letter agreement dated April 7, 1999
between AMG (then known as Wall Street Records, Inc.) and A&M Records, Inc. are
limited to the album "Kuruption".
There are no outstanding proposals, bids or offers which, if accepted,
would impose an obligation or liability upon Antra or its Subsidiaries.
(B) Contracts, Leases, Agreements and Other Commitments of the LLC. To
Antra's knowledge, the LLC is not a party to or bound by any written, oral or
implied contract, agreement, lease, power of attorney, guaranty, surety
arrangement, or other commitment, except for the following (which are
hereinafter collectively called the "LLC Agreements"):
(iii) The agreements described in Schedule 4.6(s)(B); and
(iv) To the extent, if any, not described in such Schedule, agreements
involving a maximum possible liability or obligation on the part of the LLC of
less than $10,000; provided, however, that all agreements under which the LLC
has granted to any other party, or has received from any other party, any rights
which are material to the operation of the LLC or its business are listed on
Schedule 4.6(s)(B). Antra has previously delivered to the Company true and
complete copies of all of the LLC Agreements.
To Antra's knowledge: all of the LLC Agreements are valid, binding and
enforceable against the respective parties thereto in accordance with their
respective terms. The LLC and, to the best knowledge of Antra all other parties
to all of the LLC Agreements, have performed all obligations required to be
performed to date under the LLC Agreements and neither the LLC nor, to the best
knowledge of the Antra, any such other party is in default or in arrears under
the terms thereof, and no condition exists or event has occurred which, with the
giving of notice or lapse of time or both, would constitute a default
thereunder.
To Antra's knowledge, there are no outstanding proposals, bids or
offers which, if accepted, would impose an obligation or liability upon the LLC.
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t. Permits and Licenses; Compliance with Laws. Except as shown on
Schedule 4.6(t), (i) Antra and each Subsidiary is in substantial compliance, and
Antra and each Subsidiary has at all times since its founding, substantially
complied with all federal, foreign, state and local laws, rules and regulations
and all requirements of all governmental bodies or agencies having jurisdiction
over it, that materially affect the conduct of the business of Antra and each
Subsidiary, as the case may be, the use of their respective properties and
assets, and all premises occupied by them (and to the knowledge of Antra, the
LLC has substantially complied, and is in substantial compliance with all laws,
rules, regulations and requirements), and (ii) without limiting the foregoing,
Antra and each Subsidiary has to the best of its knowledge paid all monies and
obtained all licenses, permits, certificates and authorizations needed for the
conduct of their respective businesses and the use of their respective
properties and the premises occupied by them. Antra and each Subsidiary has
properly filed all reports and other documents required to be filed with any
federal, state, local and foreign government or subdivision or agency thereof.
Neither Antra nor any Subsidiary has received a notice, not heretofore complied
with, from any federal, state or municipal authority or any insurance or
inspection body that any of its properties, facilities, equipment, or business
procedures or practices, fails to comply with any applicable law, ordinance,
regulation, building or zoning law, or requirement of any public authority or
body. All licenses, permits, orders and approvals issued by any governmental
body or agency currently in effect and pertaining to the property, assets or
business of Antra and each Subsidiary are listed on Schedule 4.6(t).
u. Documents and Records. The documents and records being delivered to
the Company are true and complete in all material respects.
v. Insurance. Schedule 4.6(v) contains a list identifying all insurance
policies and indemnity and surety bonds with respect to the assets and the
operation of the business of Antra and each Subsidiary. All such policies and
bonds are in full force and effect.
w. Environmental Matters.
(i) To Antra's knowledge, each of the properties occupied by Antra and
each Subsidiary (the "Properties") and all activities thereon have been and are
in substantial compliance with all applicable foreign, federal, state and local
statutes, ordinances, regulations, orders and requirements of common law
concerning the protection of human health, safety or the environment including,
without limitation, those concerning discharges to the air, soil, surface water
or groundwater and concerning the generation, storage, treatment, disposal or
remediation of any waste or any Hazardous Substances (as defined below). To
Antra's knowledge, no significant Contamination is present in, on or under any
of the Properties. "Contamination" shall mean the presence of Hazardous
Substances that may require remediation under any Environmental Statute.
"Hazardous Substances" shall mean materials that are or contain "hazardous
substances", "pollutants or contaminants", as defined pursuant to any
Environmental Statute, including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. ss.ss.9601 et
seq., as amended, "regulated substances" as defined pursuant to any
Environmental Statute, including, without limitation, Subtitle I of the Resource
Conservation and Recovery Act, 42 U.S.C. ss.ss.6991-6991(I), as amended, or any
hazardous materials, toxic substances, hazardous wastes, or other substances
regulated pursuant to any Environmental Statute. Neither Antra nor any
Subsidiary has treated or disposed of any Hazardous Substances.
-31-
x. Governmental Approval. No consent, approval, waiver, order or
authorization of, or registration, declaration or filing with, any governmental
authority is required in connection with the execution and delivery of the
Agreement or the consummation of the transactions contemplated hereby.
y. Material Misstatements or Omissions. No information or statements
concerning Antra, its Subsidiaries, the LLC or their respective assets,
financial condition, business or operations contained in this Agreement or in
any Exhibit or Schedule hereto or certificate furnished or to be furnished
pursuant hereto or any other information furnished by Antra, any Subsidiary or
the LLC to Buyer contains or will contain any untrue statement of a material
fact or omits to state a material fact necessary to make the statements and
information contained herein or therein not misleading.
z. Master Recordings and certain other Issues. Except as specified in
Schedule 4.6(z)(1): there are no advances from any third parties to Antra or any
Subsidiary which are recoupable by such third parties from income derived from
the exploitation of any master recordings owned by Antra or any Subsidiary (the
"Master Recordings") or which would reduce any earnings of or receipts from such
third parties with respect to the master recordings, except as disclosed on
Schedule 4.6(z)(1) attached hereto and made a part hereof. The Master Recordings
do not infringe upon any other works or upon the rights of any third party. All
royalties and other payments payable or accrued through the Closing Date have
been and/or will be timely paid by Antra or its Subsidiaries, as the case may
be. The Master Recordings are subject only to payments required to be made
pursuant to the provisions of the applicable recording agreements, which have
been disclosed on Schedule 4.6(z)(2) attached hereto and made a part hereof. All
provisions in recording artist agreement relating to royalties fall within
ranges normal and customary in the music industry. There are no restrictions
against assignment by Antra or any Subsidiary contained in any recording artist
agreement. Schedule 4.6(z)(3) attached hereto is complete and correct and
accurately reflects Antra's and each Subsidiary's artist and writer royalty
obligations during the periods indicated of Antra and each Subsidiary. Schedule
4.6(z)(4) attached hereto is a true and correct list of unrecouped advances made
by Antra and each Subsidiary as of the date of this Agreement. No loans or other
obligations are owed to Antra, any Subsidiary or the LLC by Xxxxxxx X. Xxxxx or
any of the other recording artists of Antra, any Subsidiary or the LLC.
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EXHIBIT A
Exchange Agreement
Schedule of Holders
No. of Shares of Antra
Common Stock to be No. of Shares of Company
Exchanged Common Stock to be Received
Name
Teltran International Group, Ltd. 1,000,000 220,000
Xxxxxx Xxxxxxx 1,900,000 418,000
Salen Limited 400,000 88,000
Xxxxxx Enterprise Ltd. 217,641 47,882
Fir Enterprise Ltd. 265,100 58,322
Sumburgh Limited 298,175 65,599
Xxxxxx Xxxxxxxx 247,500 54,450
Xxxxxxx Xxxxxxxx 50,000 11,000
Xxxxxx Xxxxxxxx 50,000 11,000
Xxxx Xxxxxxxx Xxxxxxxxxxx 50,000 11,000
Xxxx Xxxxxx 100,000 22,000
Xxxxx Xxxxxx 10,000 2,200
Xxxxxx Xxxxxx 10,000 2,200
Xxxxxx Xxxxxxxxx 50,000 11,000
Xxxxxxxxx Xxxxxxx 50,000 11,000
Xxxxx Xxxxxx 100,000 22,000
Xxxxx Xxxxxxxxx 50,000 11,000
Xxxx Xxxxxxxxx 50,000 11,000
Percival Limited 305,000 67,100
Lamlash Limited 1,453,815 319,840
Calanish Limited 50,000 11,000
Craignure Limited 192,100 42,262
Xxxxx Xxxxx 55,000 12,100
Broadford Limited 11,000 2,420
Corrie Limited 327,350 72,017
Xxxxxxx Xxxxx 75,000 16,500
Xxxxx Xxxxx 75,000 16,500
X. Xxxxxxxxx 47,500 10,450
Xxxx Xxxxx 39,410 8,671
Xxxxx 11,500 2,530
Calgary Limited 16,914 3,722
Sleat Limited 16,238 3,573
Rothesay Limited 11,460 2,522
Xxxxx Xxxxxx 70,000 15,400
Carbost Limited 24,000 5,280
Xxxxxxx Xxxxxx 15,865 3,491
Xxx Xxxxxx 425 94
Aran Limited 23,400 5,148
Craighouse Limited 31,900 7,018
Staffin Limited 12,913 2,841
Brae Limited 126,127 27,748
Brodick Limited 16,300 3,586
Millport Limited 2,500 550
Newco Management 34,438 7,577
Xxxxx Xxxxxx 400,000 88,000
Xxxxx Xxxxx 400,000 88,000
Xxxxx Xxxxxx 160,000 35,200
Southern Properties Limited 4,500 990
Xxxx Xxxxx 12,000 2,640
Xxxxx Xxxx 13,000 2,860
X. Xxxxxxx 500 110
Newcard 409,610 90,115
Coastal Provinces United 73,175 16,099
Relocate 000.xxx, Inc. (to be transferred to 800,000 176,000
International Global Communications, Inc.)
TOTAL 10,216,356 2,247,607
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EXHIBIT B
SELECT MEDIA COMMUNICATIONS, INC.
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is entered into
as of ________ __, 2001, by and between Select Media Communications, Inc., a New
York corporation (the "Company"), and _____________________________, a
____________ (the "Owner").
AGREEMENT
In consideration of the mutual promises and covenants hereinafter set
forth, the parties hereto agree as follows:
B. 1. Certain Definitions. As used in this Agreement, the terms defined
in the preamble to this Agreement shall have the meanings given therein and the
following terms shall have the following respective meanings:
"Affiliate" shall mean as to any person or entity, a person or entity
that, directly or indirectly, through one or more intermediaries, controls, or
is controlled by, or is under direct or indirect common control with, such
person or entity. For purposes of this definition, "control" means the power to
direct the management and policies of such person or entity, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Commission" shall mean the Securities and Exchange Commission or any
other Federal agency at the time administering the Securities Act.
"Common Stock" shall mean all shares of Common Stock of the Company.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any similar successor Federal statute and the rules and regulations
thereunder, all as the same shall be in effect from time to time.
"Exchange Agreement" shall mean any Person (including the Owner) (x)
who holds of record Registrable Securities and (y) to whom the registration
rights conferred by this Agreement have been granted herein or transferred
thereto in compliance with Section 9 hereof.
"Holder" shall mean any Person (including the Owner) (x) who holds of
record Registrable Securities and (y) to whom the registration rights conferred
by this Agreement have been granted herein or transferred thereto in compliance
with Section 9 hereof.
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"Person" shall mean a corporation, an association, a partnership, a
joint venture, a trust, an organization, a business, an individual, a government
or political subdivision thereof or a governmental body.
"Registrable Securities" shall mean all shares of Company Common Stock
(as that term is defined in the Exchange Agreement) issued pursuant to the
Exchange Agreement, provided that Registrable Securities shall not include
shares of Company Common Stock that (I) have been sold, assigned, conveyed,
transferred or otherwise disposed of pursuant to a registration or to the public
pursuant to Rule 144 (or any similar provision then in force) under the
Securities Act or (ii) may be sold without volume restrictions pursuant to Rule
144(k) (or any similar provision then in force) under the Securities Act.
The terms "register", "registered" and "registration" shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of the effectiveness of such
registration statement.
"Registration Expenses" shall mean all expenses incurred by the Company
in compliance with Section 3 hereof, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel for the Company which shall include any fees and disbursements for legal
services provided by counsel for the Company on behalf of the Holders, blue sky
fees and expenses for state qualifications or registrations, and the expense of
any audit of the Company's fiscal year-end financial statements incident to or
required by any such registration (but excluding the compensation of regular
employees of the Company, which shall be paid in any event by the Company),
provided, however, that the Company shall not pay more than one Commission
filing fee with respect to each share of Common Stock constituting Registrable
Securities.
"Securities Act" shall mean the Securities Act of 1933, as amended, or
any similar successor federal statute and the rules and regulations thereunder,
all as the same shall be in effect from time to time.
"Selling Expenses" shall mean all underwriting discounts, selling
commissions and expense allowances applicable to the sale of Registrable
Securities and all fees and disbursements of counsel for any Holder (other than
the fees and disbursements of the Company's counsel included in Registration
Expenses and the fees of one special counsel to the Holders and Similar Holders,
which shall be borne by the Company).
"Similar Holder" shall mean any holder of Common Stock of the Company
(or securities convertible into Common Stock of the Company), other than a
Holder, who has been granted or will be granted, registration rights in
connection with the issuance of Common Stock of the Company (or securities
convertible into Common Stock of the Company).
C. 2. Restrictive Legend. Each certificate representing the Registrable
Securities held by any Holder and any other securities issued in respect of the
foregoing upon any stock split, stock dividend, recapitalization, merger,
consolidation or similar event, shall be stamped or otherwise imprinted with a
legend substantially in the following form (in addition to any legend required
under applicable law or other agreement):
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"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
TERMS AND CONDITIONS OF THE REGISTRATION RIGHTS AGREEMENT, DATED AS OF ________
___, 2001, BY AND BETWEEN SELECT MEDIA COMMUNICATIONS, INC. AND THE HOLDER OF
THESE SECURITIES. COPIES OF SUCH AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST
TO THE SECRETARY OF SELECT MEDIA COMMUNICATIONS, INC.
D. 3. Piggyback Registration.
1. (a) If, at any time after the date hereof, the Company
shall determine to register any of its Common Stock either for its own account
or the account of a security holder or holders, other than (w) a registration
relating solely to employee benefit plans or (x) a registration relating solely
to a Commission Rule 145 transaction involving the acquisition of a business
(but not a Commission Rule 145 transaction designed solely to exchange
restricted securities for registered securities in a manner that is the
functional equivalent of registration rights) (each, an "Excepted
Registration"), the Company will:
1.1 (i) promptly give to each Holder written notice thereof
(which shall include a list of the jurisdictions in which the Company intends to
attempt to qualify such securities under the applicable blue sky or other state
securities laws); and
1.2 (ii) include in such registration (and any related
qualification under blue sky or other state securities laws), and in any
underwriting involved therein, all of the Registrable Securities specified in a
written request or requests made by any Holder within 20 days after receipt of
the written notice from the Company described in clause (I) above, except as set
forth in Section 3(b) below. Such written request may specify all or a part of a
Holder's Registrable Securities.
2. (b) If a registration statement under which the Company gives notice
under Section 3(a) is for an underwritten offering, and if the managing
underwriter or underwriters of such underwritten offering have informed the
Company and the Holders of Registrable Securities requesting inclusion in such
offering, in writing, that in such underwriter's or underwriters' good faith
opinion the total number of securities eligible for immediate sale upon the
effectiveness of the registration statement (the "Immediate Securities") which
the Company, such Holders, Similar Holders and any other persons desiring to
participate in such registration intend to include in such offering is such that
they may adversely affect or interfere with the success of such offering,
including the price at which such securities can be sold, then the Company will
be required to include in such registration as Immediate Securities only the
number of securities which it is so advised should be included in such
registration, which shall be allocated as follows and in the following order of
priority: (I) first, the securities which the Company proposes to register, and
(ii) second, the securities of all Holders, Similar Holders and any other
Persons who have given notice timely of their desire to participate in such
offering shall be included on a pro rata basis based upon the number of
securities sought to be registered by such Holders, Similar Holders and other
Persons. In no event shall the Owner have fewer securities deferred on a
pro-rata basis than any other person included in such registration statement
(exclusive of the Company) or shall the Owner's Immediate Securities be deferred
for longer periods of time than any such other person. Notwithstanding the
foregoing, any Immediate Securities of Holders not included in such registration
statement by virtue of the foregoing, shall be included in such registration
statement for a delayed offering to commence for a period of ninety (90) days
after the expiration of any lock-up period required by Section 10 of this
Agreement.
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If, as a result of the provisions of this Section 3(b), any Holder
shall not be entitled to include all Registrable Securities in a "piggyback"
registration that such Holder has requested to be included, such Holder may
elect to withdraw his request to include Registrable Securities in such
registration.
3. (c) If, at any time after giving written notice of its intention to
register any of its Common Stock for its own account or the account of a
security holder or holders pursuant to Section 3(a) and prior to the effective
date of the registration statement filed in connection with such registration,
the Company shall determine for any reason either not to register or to delay
registration of such securities, the Company may, at its election, give written
notice of such determination to each Holder of Registrable Securities and,
thereupon, (I) in the case of a determination not to register, shall be relieved
of its obligation to register any Registrable Securities in connection with such
registration (but not from its obligation to pay the Registration Expenses in
connection therewith) and (ii) in the case of a determination to delay
registering, shall be permitted to delay registering any Registrable Securities.
E. 4. Expenses of Registration. The Company shall bear all Registration
Expenses incurred in connection with any registration, qualification or
compliance pursuant to this Agreement and all underwriting discounts, selling
commissions and expense allowances applicable to the sale of any securities by
the Company for its own account in any registration. All Selling Expenses shall
be borne by the Holders, if any, whose securities are included in such
registration pro rata on the basis of the number of their Registrable Securities
so registered.
F. 5. Registration Procedures. In the case of each registration
effected by the Company pursuant to this Agreement, the Company will keep each
Holder who is entitled to registration rights hereunder advised in writing as to
the initiation of each registration and as to the completion thereof. At its
expense, the Company will:
1. (a) Prepare and file with the Commission such amendments and
supplements, including, without limitation, post-effective amendments, to such
registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of securities covered by such
registration statement and, subject to Section 5(k)(I), prepare and file all
necessary documents in order to qualify the sale of the applicable Registrable
Securities under the blue sky or other state securities laws for each state in
the United States requested by the Holders or the underwriter;
2. (b) Furnish such reasonable number of prospectuses and other
documents incident thereto, including supplements and amendments, as a Holder
may reasonably request;
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3. (c) Notify each seller of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a fact required to be stated therein or necessary to make the statements
therein not misleading or incomplete in the light of the circumstances then
existing (in which case each person who can sell under such registration
statement will immediately suspend use of such registration statement until it
is supplemented or amended as provided herein), and at the request of any such
seller, prepare and furnish to such seller a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary so that, as
thereafter delivered to the purchaser of such shares, such prospectus shall not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading or incomplete in light of the circumstances then existing;
4. (d) Use its commercially reasonable efforts to cause all such
Registrable Securities to be listed on each securities exchange or interdealer
quotation system on which the same securities issued by the Company are then
listed;
5. (e) Provide a transfer agent and registrar for all such Registrable
Securities and a CUSIP number for all such Registrable Securities not later than
the effective date of such registration;
6. (f) Make available for inspection by a representative of the Holders
of Registrable Securities participating in the offering, any underwriter
participating in any disposition pursuant to such registration statement, and
any attorney or accountant retained by any such seller or underwriter, all
financial and other records, pertinent corporate documents and properties of the
Company (the "Records"), and cause the Company's officers and directors to
supply all information reasonably requested by any such representative,
underwriter, attorney or accountant in connection with such registration
statement; provided, however, that such respresentative, underwriter, attorney
or accountant shall agree to hold in confidence and trust all information so
provided; and provided, further, that the Company shall not be required to
comply with this subsection (f) if there is a reasonable likelihood, in the
judgment of the Company, that such delivery could result in the loss of any
attorney-client privilege related thereto.
7. (g) Furnish to each selling Holder a signed counterpart, addressed
to the selling Holder, of (1) an opinion of counsel for the Company, dated the
effective date of the registration statement, and (2) "comfort" letters signed
by the Company's independent public accountants who have examined and reported
on the Company's financial statements included in the registration statement, to
the extent permitted by the standards of the AICPA or other relevant
authorities, covering substantially the same matters with respect to the
registration statement (and the prospectus included therein) and (in the case of
the accountants' "comfort" letters, with respect to events subsequent to the
date of the financial statements), in each case as are customarily covered in
opinions of issuer's counsel and in accountants' "comfort" letters delivered to
the underwriters in underwritten public offerings of securities;
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8. (h) Furnish to each selling Holder a copy of all documents filed
with and all correspondence from or to the Commission in connection with any
such offering other than nonsubstantive cover letters and the like;
9. (i) Otherwise use its commercially reasonable efforts to comply with
all applicable rules and regulations of the Commission, and make available to
its security holders, as soon as reasonably practicable, an earnings statement
covering the period of at least twelve months, but not more than eighteen
months, beginning with the first month after the effective date of the
registration statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder;
10. (j) In connection with any underwritten offering pursuant to a
registration statement filed pursuant to Section 3 hereof, the Company will
enter into any underwriting agreement reasonably necessary to effect the offer
and sale of Common Stock, provided such underwriting agreement contains
customary underwriting provisions and provided further that if the underwriter
so requests the underwriting agreement will contain customary indemnification
and contribution provisions;
11. (k) Notwithstanding the foregoing, the Company shall not be
obligated to take any action pursuant to Section 3 of this Agreement (A) in any
particular jurisdiction in which the Company would be required to execute a
general consent to service of process in effecting such registration,
qualification or compliance, unless the Company is already subject to service in
such jurisdiction and except as may be required by the Securities Act, (B) in
any non-U.S. jurisdiction in which the Company would be required to qualify as a
foreign corporation eligible to do business in such jurisdiction, if the Company
shall not then be so qualified in that jurisdiction or (C) in any non-U.S.
jurisdiction that would subject the Company to taxation where it would not
otherwise be subject to tax.
The Company may require each Holder who is a seller of Registrable
Securities as to which any registration is being effected to furnish the Company
with such information regarding such Holder and the distribution of such
Registrable Securities as the Company may from time to time reasonably request
in writing for purposes of preparing the relevant registration statement and
amendments and supplements thereto.
Each Holder of Registrable Securities covenants and agrees that, upon
receipt of any notice from the Company of the occurrence of any event of the
kind described in Section 5(c), such Holder will forthwith discontinue such
Holder's disposition of Registrable Securities pursuant to the registration
statement relating to such Registrable Securities until such Holder's receipt of
the copies of the supplemented or amended prospectus contemplated by of Section
5(c).
No Person may participate in any registered underwritten offering
hereunder unless such Person (I) agrees to sell such Person's securities on the
basis provided in any underwriting arrangement approved by the Company and (ii)
completes and executes all agreements, questionnaires, indemnities and other
documents (other than powers of attorney) required under the terms of such
underwriting arrangements.
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G. 6. Indemnification.
1. (a) The Company will indemnify each Holder, each of its officers,
directors, agents, employees and partners, and each person controlling such
Holder, with respect to each registration, qualification or compliance effected
pursuant to this Agreement, and each underwriter, if any, and each person who
controls any underwriter, against all claims, losses, damages and liabilities
(or actions, proceedings or settlements in respect thereof) arising out of or
based on any untrue statement (or alleged untrue statement) of a material fact
contained in any prospectus, offering circular or other document prepared by the
Company (including any related registration statement, notification or the like)
incident to any such registration, qualification or compliance, or based on any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse each such Holder, each of its officers, directors, agents,
employees and partners, and each person controlling such Holder, each such
underwriter and each person who controls any such underwriter, for any legal and
any other expenses as they are reasonably incurred in connection with
investigating and defending any such claim, loss, damage, liability or action,
provided that the Company will not be liable in any such case to the extent that
any such claim, loss, damage, liability or expense arises out of or is based on
any untrue statement (or alleged untrue statement) or omission (or alleged
omission) based upon written information furnished to the Company by such Holder
or underwriter and stated to be specifically for use therein.
2. (b) Each Holder whose Registrable Securities are included in any
registration, qualification or compliance effected pursuant to this Agreement
will indemnify the Company, each of its directors and officers and each
underwriter, if any, of the Company's securities covered by such a registration
statement, each person who controls the Company or such underwriter within the
meaning of the Securities Act and the rules and regulations thereunder, each
other such Holder and each of their officers, directors and partners, and each
person controlling such Holder, against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any such registration statement, prospectus, offering circular or other
document, or any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse the Company and such Holders, directors,
officers, partners, persons, underwriters or control persons for any legal or
any other expenses as they are reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability or action, in
each case to the extent, but only to the extent, that such untrue statement (or
alleged untrue statement) or omission (or alleged omission) is made in such
registration statement, prospectus, offering circular or other document in
reliance upon and in conformity with written information furnished to the
Company by such Holder and stated to be specifically for use therein; provided,
however, that the obligations of a Holder hereunder shall be limited to an
amount equal to the net proceeds to such Holder from shares sold under such
registration statement, prospectus, offering circular or other document as
contemplated herein.
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3. (c) Each party entitled to indemnification under this Section 6 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense at the Indemnified Party's expense; and provided further that if any
Indemnified Party reasonably concludes that there may be one or more legal
defenses available to it that are not available to the Indemnifying Party, or
that such claim or litigation involves or could have an effect on matters beyond
the scope of this Agreement, then the Indemnified Party may retain its own
counsel at the expense of the Indemnifying Party; and provided further that the
failure of any Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its obligations under this Agreement unless
and only to the extent that such failure to give notice results in material
prejudice to the Indemnifying Party. In no event shall an Indemnifying Party be
liable for fees and expenses of more than one counsel (in addition to one local
counsel for each relevant jurisdiction) separate from its own counsel for all
Indemnified Parties in connection with any one action or separate but similar or
related actions. No Indemnifying Party, in the defense of any such claim or
litigation, shall, except with the consent of each Indemnified Party, consent to
entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation. Each Indemnified Party shall furnish such information regarding
itself or the claim in question as an Indemnifying Party may reasonably request
in writing and as shall be reasonably required in connection with defense of
such claim and litigation resulting therefrom.
H. (d) If the indemnification provided for in this Section 6 is held by
a court of competent jurisdiction to be unavailable to an Indemnified Party with
respect to any loss, liability, claim, damage or expense referred to herein,
then the Indemnifying Party, in lieu of indemnifying such Indemnified Party
hereunder, shall contribute to the amount paid or payable by such Indemnified
Party as a result of such loss, liability, claim, damage or expense in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party on the one hand and of the Indemnified Party on the other in connection
with the statements or omissions which resulted in such loss, liability, claim,
damage or expense as well as any other relevant equitable considerations. The
relative fault of the Indemnifying Party and of the Indemnified Party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the Indemnifying Party or by the Indemnified
Party and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. Notwithstanding
anything to the contrary in this Section 6, no Indemnifying Party shall be
required, pursuant to this Section 6, to contribute any amount in excess of the
net proceeds received by such Indemnifying Party from the sale of securities in
the offering to which the losses, claims, damages, liabilities or expenses of
the Indemnified Party relate.
I. 7. Information by Holder. Each Holder of Registrable Securities to
be included in a registration referred to in this Agreement shall furnish in
writing to the Company such information regarding such Holder, the securities to
be offered and sold and the intended plan of distribution of the securities by
such Holder as the Company may reasonably request in writing and as shall be
reasonably required in connection with any registration, qualification or
compliance referred to in this Agreement and shall promptly advise the Company
in writing of any material changes to such information while the registration is
in effect.
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J. 8. Rule 144 Reporting. With a view to making available the benefits
of certain rules and regulations of the Commission which may permit the sale of
the Registrable Securities to the public without registration, the Company
agrees to:
1. (a) Use commercially reasonable efforts to make and keep public
information available, as those terms are understood and defined in Rule 144
under the Securities Act, at all times from and after the effective date of the
first registration under the Securities Act filed by the Company for an offering
of its securities to the general public;
2. (b) Use commercially reasonable efforts to file with the Commission
in a timely manner all reports and other documents required of the Company under
the Securities Act and the Exchange Act at any time after it has become subject
to such reporting requirements; and
3. (c) So long as a Holder owns any Registrable Securities, furnish to
the Holder forthwith upon request a written statement by the Company as to its
compliance with the reporting requirements of Rule 144 (at any time from and
after ninety (90) days following the effective date of the first registration
statement filed by the Company for an offering of its securities to the general
public), and of the Securities Act and the Exchange Act (at any time after it
has become subject to such reporting requirements), a copy of the most recent
annual or quarterly report of the Company, and such other reports and documents
as a Holder may reasonably request in availing itself of any rule or regulation
of the Commission allowing a Holder to sell any such securities without
registration.
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K. 9. Transfer of Rights; Termination of Rights. The rights to cause
the Company to register a Holder's securities granted by the Company under this
Agreement may only be transferred or assigned by a Holder to a transferee of
some or all of such Holder's Registrable Securities, provided that the Company
is given written notice prior to the time that such right is exercised, stating
the name and address of said transferee or assignee and identifying the
Registrable Securities with respect to which such registration rights are being
transferred or assigned, and provided further that the transferee or assignee of
such rights assumes in an agreement reasonably acceptable to the Company the
obligations of the Holder under this Agreement.
L. 10. "Lock-Up" Agreement. Each Holder agrees, if requested by the
Company and an underwriter of Common Stock of the Company in connection with a
registration effected by the Company pursuant to this Agreement, not to sell or
otherwise transfer or dispose of any Common Stock (or other securities) of the
Company or request registration thereof held by such Holder during a period of
time determined by the Company and its underwriters (not to exceed 180 days)
following the date the related registration statement under the Securities Act
relating to such registration becomes effective, provided that all officers and
directors of the Company (other than designees of such Holders) who then hold
Common Stock (or other securities) of the Company enter into similar agreements,
and provided further that, in no event shall a Holder be prohibited from
transferring or selling Common Stock or other securities of the Company to an
Affiliate of such Holder.
Such agreement shall be in writing in a form reasonably satisfactory to
the Company and such underwriter. The Company may impose stop-transfer
instructions with respect to the shares of Common Stock subject to the foregoing
restriction until the end of said period. The Company agrees that any release of
shares subject to the foregoing lock-up agreement shall be made on a pro rata
basis among all Holders and Similar Holders based upon their percentage
ownership of the outstanding shares of Common Stock of the Company.
M. 11. Governing Law; Venue. This Agreement shall be deemed to be a
contract made under the laws of the State of New York and for all purposes shall
be construed in accordance with the laws of said State applicable to contracts
made and to be performed within said State without regard to the conflict of law
principles thereof. Venue for any action to enforce the provisions of this
Agreement shall be exclusive in the federal and state courts located in the City
of New York, State of New York.
N. 12. Entire Agreement. This Agreement constitutes the full and entire
agreement and understanding between the parties hereto with regard to the
subject matter hereof and shall supersede any prior agreements and
understandings between the parties hereto with respect to the subject matter
hereof.
O. 13. Successors and Assigns. Except as otherwise provided herein, the
provisions hereof shall inure to the benefit of and be binding upon the
successors and permitted assigns of the parties hereto.
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P. 14. Notices, etc. All notices and other communications required or
permitted hereunder shall be in writing and shall be deemed effectively given
upon delivery to the party to be notified in person or by courier service or
five days after deposit with the United States mail, by First Class mail,
postage prepaid, addressed (a) if to the Owner, at , Attention: or (b) if to any
Holder at such address as such Holder shall have furnished the Company, or,
until any such Holder so furnishes an address to the Company, then to and at the
address of such Holder set forth in Exhibit A to the Exchange Agreement, or (c)
if to the Company, to Select Media Communications, Inc., 000 Xxxxxxx Xxxxxx,
Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000, and addressed to the attention of the
President, or at such other address as the Company shall have furnished to the
Holder, with a copy to Xxxxxxxx X. Xxxxxx, Esq., Wolf, Block, Xxxxxx &
Xxxxx-Xxxxx, 22nd Floor, 0000 Xxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx, 00000.
Q. 15. Amendments or Waivers. This Agreement may not be amended,
waived, discharged or terminated other than by written instrument signed by the
Company and Holders' Representative (as defined in the Exchange Agreement).
R. 16. Counterparts. This Agreement may be executed in any number of
counterparts, each of which may be executed by fewer than all parties hereto,
each of which shall be enforceable against the parties actually executing such
counterparts, and all of which together shall constitute one instrument.
S. 17. Confidentiality. Each party hereto agrees that, except with the
prior written permission of the other parties, it shall at all times keep
confidential and not divulge, furnish or make accessible to anyone (other than
its Affiliates, partners, shareholders, employees, counsel, agents and
representatives who have been advised of the confidentiality obligations
hereunder) any confidential information, knowledge or data concerning or
relating to the business or financial affairs of the other parties to which such
party has been or shall become privy by reason of this Agreement or the related
agreements, except as required by law or under applicable rules of any self
regulatory organization under the Exchange Act. The parties hereto further agree
that there shall be no press release or other public statement issued by either
party relating to this Agreement or the transactions contemplated hereby, unless
the parties otherwise agree in writing and except as required by law, or by
applicable rules of any self regulatory organization under the Exchange Act.
T. 18. Exchange Agreement. This Agreement is being executed and
delivered pursuant to Section 7(d) of the Exchange Agreement and the provisions
of the Exchange Agreement, including without limitation, Section 2.4, remain in
full force and effect in accordance with its terms.
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first above written.
SELECT MEDIA COMMUNICATIONS, INC.
By: /s/
-----------------------------
Name:
Title:
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