AGREEMENT
Reference is hereby made to the Agreement and Plan of Merger, dated as of
June 29, 2004, as supplemented and amended (the "Merger Agreement"), by and
among Othnet, Inc., a Delaware corporation ("Othnet"), Othnet Merger Sub, Inc.,
a Delaware corporation and wholly owned subsidiary of Othnet ("Merger Sub"), and
Association of Volleyball Professionals, Inc., a Delaware corporation (the
"Company"). Capitalized terms not otherwise defined herein shall have the
meanings ascribed to them in the Merger Agreement.
The undersigned parties agree as follows:
1. The Company hereby waives the conditions set forth in Section 8.7 of
the Merger Agreement and releases Othnet from the provisions thereof.
2. Othnet hereby represents that as of the date hereof, except for $3,140
which has been paid to Xxxxxx & Xxxxxx, the Liabilities which total $159,171.11
in the aggregate listed on Schedule A hereto are still outstanding together with
an additional $3,777.26 owed to US Stock Transfer and $750 owed to Xxxxx Xxxxxx
(the "Listed Liabilities"). In connection therewith, additional Merger Shares
shall be issued at Closing for the Listed Liabilities which currently total
$160,558.37 as provided for in Section 2.5(a)(iv) of the Merger Agreement.
3. Xxxxxxx Xxxxxxxxxx ("Xxxxxxxxxx") hereby represents that (i) since
January 1, 2003, he has not received any demand for payment on any claim or
other notice of outstanding amounts owed ("Demand") from any presently unpaid
known or unknown creditor of Othnet, except for Xxxxxx & Xxxxxx (which has been
paid in full), US Stock Transfer, Xxxxx Xxxxxx, and the liabilities described in
Sections 4 and 5 hereof, and (ii) any and all brokerage or finder's fees or
other commissions incurred by Othnet or its Affiliates in connection with the
Bridge Financing, or conversion of the Notes included thereunder to any party
other than Wattenberg or any Affiliate of Wattenberg ("Bridge Commissions"),
have been paid.
4. AVP acknowledges that it has been advised by Othnet that Savage Beast
Technologies ("Savage Beast") is also owed from Othnet $53,336 in connection
with an agreement dated as of May 9, 2002 between Othnet and Savage Beast, and
Xxxxxx Xxxxxx & Xxxxx is owed from Othnet $30,000 together with interest from
January 1, 2002 at the rate of 10% per annum (together, the "Savage Beast and
KMZ Liabilities").
5. Wattenberg shall have no responsibility to pay the Savage Beast and KMZ
Liabilities, the amounts due to US Stock Transfer and Xxxxx Xxxxxx as described
in Section 2 and any of the other Listed Liabilities, except as otherwise
provided in Section 9 hereof.
6. The parties agree that the following amounts will be paid directly from
the proceeds of the Private Placement (the "Paid Liabilities") and releases
shall be furnished to AVP with respect thereto:
Danzig Xxxx Xxxxxx Xxxxx & Xxx, LLP $ 112,000
Montecito Capital Partners, LLC $ 40,000
7. In addition to the Merger Shares being issued at Closing for the Listed
Liabilities as provided in Section 2 hereof, additional Merger Shares shall be
issued at Closing for the amount of the Savage Beast and KMZ Liabilities and the
Paid Liabilities calculated and distributed in accordance with the methodology
set forth in Section 2.5(a)(iv).
8. Wattenberg represents that all such Bridge Commissions equal or exceed
the sum of (i) the amounts presently due US Stock Transfer and Xxxxx Xxxxxx
described above, (ii) the Savage Beast and KMZ Liabilities, and (iii) and
$122,000 of the Paid Liabilities.
9. Wattenberg agrees to indemnify and hold harmless Othnet and AVP from
any and all losses and expenses (including reasonable counsel fees) suffered or
incurred by Othnet or AVP arising out of a breach of any of the representations
set forth in Section 3 or Section 8. hereof, provided, however, that with
respect to clause (i) of Xxxxxxx 0, Xxxxxxxxxx shall indemnify Othnet and AVP
only in the event (a) it shall have been determined that a Demand was made and
received by Wattenberg subsequent to January 1, 2003 and prior to the date
hereof, and (b) the amount of the liability as indicated in such Demand which
was received by Wattenberg is greater than as listed on Schedule A hereto (which
in the case of a claim not constituting a Listed Liability, means in excess of
zero), in which case, and only in the event both (a) and (b) have been
determined, Wattenberg shall be responsible solely for the excess amount of the
liability indicated in such Demand which was received by Wattenberg over the
amount listed on Schedule A (which in the case of a claim not constituting a
Listed Liability, means in excess of zero). Othnet or AVP shall promptly give
Wattenberg notice of any such claim, but the failure to give such notice shall
not relieve Wattenberg of his obligations hereunder except to the extent that
Wattenberg has actually been damaged by such failure. All claims to be asserted
hereunder must be made by the second anniversary of the date hereof.
10. In the event within 24 months from the date of Closing, it shall be
determined that, as of the Closing Date, Othnet shall have had any unpaid
Liability in excess of the Listed Liabilities, the Savage Beast and KMZ
Liabilities, Paid Liabilities and Notes which have not been converted pursuant
to the Bridge Financing (and excluding any Liability for which indemnification
is provided by Wattenberg as set forth herein), additional Merger Shares or
Othnet common stock shall be issued pro rata as provided in Section 2.5(a)(iv)
of the Merger Agreement among those persons who were holders of Merger Shares
immediately after the Closing.
11. All representations of Wattenberg set forth herein shall survive for a
period of two years only from the date hereof.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
OTHNET, INC., A DELAWARE CORPORATION
By: /s/ Xxxxxxx Xxxxxxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxxxxxx
Title: President
OTHNET MERGER SUB, INC., A DELAWARE
CORPORATION
By: /s/ Xxxxxxx Xxxxxxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxxxxxx
Title: President
/s/ Xxxxxxx Xxxxxxxxxx
XXXXXXX XXXXXXXXXX
ASSOCIATION OF VOLLEYBALL PROFESSIONALS,
INC., A DELAWARE CORPORATION
By: /s/ Xxxxxxx Xxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxx
Title: President
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