EXHIBIT 10.1
STOCK PURCHASE AGREEMENT
BETWEEN
TELE-V, INC. AND A PRINCIPAL STOCKHOLDER
AND
NATIONAL MANAGEMENT CONSULTING, INC.
DATED: JULY 9, 2003
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of July 9, 2003 by and among
NATIONAL MANAGEMENT CONSULTING, INC., a Delaware corporation with a principal
business address located at 000 Xxxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000 ("National"), TELE-V, INC., a New York corporation ("Tele") and its
subsidiaries and affiliates--GENIO CARDS LLC, a Delaware limited liability
company ("Genio"), TELE-V, LLC, a Delaware limited liability company ("TVLLC"),
and TELE-V MEDIA LLC, a Delaware limited liability company ("TV Media"), each
with a principal business address located at 1120 Avenue of the Americas, Xxxxx
0000, Xxx Xxxx, Xxx Xxxx 00000 (Tele, Genio, TVLLC and TV Media are referred to
collectively as "TV"), and XXXX XXX-XXXX, an individual with a principal
business address located at 1120 Avenue of the Americas, Xxxxx 0000, Xxx Xxxx,
Xxx Xxxx 00000 who is an officer, director and substantial stockholder of TELE
(the "Principal Seller").
RECITALS
WHEREAS, the Principal Seller is the executive officer of TV and is the
owner of a significant portion of the issued and outstanding common stock of
Tele (the "Tele Common Stock");
WHEREAS, Tele is the sole member of Genio, TVLLC and TV Media,
respectively (the "Genio Membership Interest", the "TVLLC Membership Interest",
and the "TV Media Membership Interest", respectively and collectively, the
"Membership Interests"); and
WHEREAS, National has proposed the acquisition of all of the Tele
Common Stock in exchange for common stock of National which acquisition will
result in National's ownership of Tele as well as Genio, TVLLC and TV Media as
more fully set forth herein (collectively, the "Acquisition"); and
WHEREAS, National has provided to date $600,000 in bridge financing to
TV to enable TV to fund certain working capital needs prior to the consummation
of the Acquisition as set forth in that certain bridge note dated May 29, 2003
issued by Tele, Genio, TVLLC and TV Media in favor of National (the "Bridge
Note"); and
WHEREAS, Tele is planning to acquire two additional marketing companies
prior to the closing of the Acquisition--Innovative Marketing Alliances, LLC, a
Delaware limited liability company, and Galaxy Class Marketing, Inc., a Florida
corporation--in exchange for the issuance of certain shares of common stock of
Tele (collectively, the "IMA Acquisitions"); and
WHEREAS, the Boards of Directors of National and Tele deem it advisable
and in the best interests of their respective corporations to consummate the
Acquisition on the terms set forth herein; and
WHEREAS, National and Tele and the Principal Seller desire to make
certain representations, warranties, covenants and agreements in connection with
the Acquisition and also to prescribe various conditions to the Acquisition.
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NOW THEREFORE, in consideration of the mutual covenants and
undertakings and other good and valuable consideration, the receipt of which is
hereby acknowledged, the parties, intending to be bound, agree as follows:
ARTICLE I
PURCHASE, SALE AND TERMS OF SALE
1.1 PURCHASE AND SALE. Tele agrees to sell and National or its designee
agrees to purchase all of the Tele Common Stock on the terms and subject to the
conditions hereinafter set forth.
1.2 TERMS. National shall pay the following consideration and execute
the following agreements or deliver the following consents in exchange for the
Tele Common Stock and Tele and the Principal Seller and the remaining
shareholders of Tele (collectively, with the Principal Seller, the "Sellers")
shall deliver the appropriate stock certificates and consents upon the closing
of the Acquisition (the "Acquisition Closing") which shall take into
consideration the following:
A. The Tele Common Stock shall be acquired in consideration of the issuance of
such number of shares of National common stock, $.0001 par value (the
"Acquisition Shares"), which upon issuance, shall assure that the Sellers and
certain employee/shareholders of TV receive in the aggregate seventy five (75%)
percent of the issued and outstanding shares of National's common stock on a
fully diluted basis after giving effect to the Acquisition (the "Acquisition
Consideration"), provided however, that there shall be an adjustment in the
Acquisition Consideration according to the following formula: In the event that
National or its designee makes available to Tele, Genio, TVLLC, TV Media or any
combination thereof, funds on or before the Acquisition Closing that exceeds
$1,000,000 in the form of either, or both, loans or equity investments, then the
Acquisition Consideration will be subject to reduction of the percentage of the
issued and outstanding shares of National's common stock from 75% to a floor of
65%, with such reduction made on the basis of a reduction of 1% for each
additional $100,000 funded over and above $1,000,000 or the pro-rata fraction of
1% for amounts less than $100,000 over and above $1,000,000, up to a maximum
reduction of 10% in the event that the total funding is $2,000,000.
B. The Acquisition Consideration to be issued shall be restricted
securities as such term is defined under Rule 144 of the Securities Act of 1933,
as amended (the "Act"). Each certificate for the Acquisition Shares shall bear a
legend as follows:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended ("Act") or applicable
state law. The securities may not be offered for sale or sold in the absence of
an effective registration statement under the Act and applicable state law, or
an opinion of counsel, reasonably satisfactory to National, that registration is
not required."
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C. A minimum of five (5%) of the total shares of National common stock
outstanding at the Acquisition Closing shall be allocated to certain key
employees/shareholders of TV out of the Acquisition Consideration by the
Principal Seller in amounts set forth in employment agreements entered into by
such key employees with Tele (the "Employee Shares").
Each of the Sellers shall be entitled to receive his pro-rata share of
the Acquisition Shares subject to the allocation of Employee Shares and subject
to the escrowing of certain National common stock comprising the Acquisition
Shares at the Acquisition Closing as set forth in Section 1.3 below.
D. National shall assume the employment agreements between Tele and Xxxxxxx
Xxxxxxxx, Xxxxxxx Xxxx, and Xxxxx Xxx-Xxxxx to be entered into which will
provide that Xx. Xxxxxxxx will be President of Tele, Xx. Xxxx will be Chief
Marketing Officer of Tele, and Xx. Xxx-Xxxxx will be Chief Operating Officer of
Tele (the "Xxxxxxxx Employment Agreement", the "Levy Employment Agreement" and
the "Xxx-Xxxxx Employment Agreement" and collectively, the "Employment
Agreements"), which Employment Agreements shall be on terms that are acceptable
to National.
E. TV shall deliver a stock certificate or certificates evidencing the
Tele Common Stock duly endorsed by all of the Sellers to National or its
designee and shall deliver a schedule setting forth the allocation of the
Acquisition Shares to the Sellers and the Employee Shares to the key employees
of TV in the form of Schedule annexed hereto as Exhibit 1.2 (E).
F. TV shall deliver a duly executed employment agreement by Xxxx
Xxx-Xxxx pursuant to which Xxxx Xxx-Xxxx shall be employed as the Chairman of
National and Tele for a two (2) year term (the "Xxxx Xxx-Xxxx Employment
Agreement") on terms that are acceptable to National.
1.3 ESCROW SHARES. At the Acquisition Closing, fifteen percent (15%) of the
Acquisition Consideration, less the Employee Shares, (the "Escrowed Shares")
shall be escrowed with an escrow agent (the "Escrow Agent") and shall be
released as follows:
(A) fifty percent of the Escrowed Shares shall be released, provided
that the collective business of Tele, Genio, TVLLC and TV Media (collectively
the "Business") shall generate revenues of at least $5 million AND earnings
before interest, taxes, depreciation and amortization ("EBITDA") of at least $1
million for the first twelve month period (the "Initial Period") following the
Acquisition Closing; and
(B) fifty percent of the Escrowed Shares shall be released, provided
that the Business shall generate revenues of at least $7.5 million AND EBITDA of
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at least $2 million for the second twelve month period following the Acquisition
Closing (the "Second Period") provided however, that in the event that the
Business fails to satisfy either the revenue or EBITDA requirements during the
Initial Period, the Sellers shall still be entitled to some or all of the
Escrowed Shares if the Business generates combined revenues and EBITDA during
the Initial Period and the Second Period that meet or exceed the requirements
for revenues and EBITDA for the Initial Period, in which case, following the
Second Period, the Sellers shall receive such percentage of Escrowed Shares
equal to the quotient of the revenues generated by the Business during the
Second Period divided by $7,500,000. Any Escrowed Shares that are not to be
released to the Sellers in accordance with this Section shall be deemed
forfeited and all forfeited Escrowed Shares shall be turned over to National by
the Escrow Agent for cancellation.
(C) The determination of the revenue and EBITDA generated by the
Business for both the Initial Period and the Second Period shall be made by the
independent directors of National, or if there are no independent directors, by
the independent accounting firm retained at the time by National or its
successors and assigns as its independent auditing firm for purposes of
compliance with the securities laws. In the event that National does not have
such an independent auditing firm, the independent directors of National, or in
the event that National does not have any independent directors, the directors
of National who were not appointed by TV as described in Section 4.1, shall be
entitled to select a certified independent accounting firm for such
determination (in either case, the "Accounting Firm"). Such determination of the
revenue and the EBITDA of the Business shall be made in accordance with
generally accepted accounting principles ("GAAP") and shall be conclusive and
final. Such determination shall be made on or before 30 days following the
expiration of the Initial Period and the Second Period, respectively, subject to
a reasonable extension for good cause shown.
(D) In the event that TV seeks a determination prior to the expiration
of the Initial Period or the Second Period that the revenue and EBITDA targets
have been satisfied, the independent directors of National or the Accounting
Firm, as the case may be, shall be entitled to make its determination after
taking to account an additional sixty (60) days of performance of the Business
from the date of the request by TV.
(E) The Escrow Agent's duties and responsibilities will be more fully
set forth pursuant to the terms of an Escrow Agreement to be executed by the
Escrow Agent, National, Tele, and the Principal Seller in substantially the form
annexed hereto as Exhibit 1.3(v) (the "Escrow Agreement and together with the
GDM Consulting Agreement, the "Ancillary Agreements").
1.4 THE ACQUISITION CLOSING. The Acquisition Closing shall take place at
the offices of National, 000 Xxxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000
on or before July 22, 2003 or such other date and place as the parties shall
agree to in writing, provided that in the event that National is in good faith
seeking to obtain any regulatory approvals in connection with the Acquisition
Closing or comply with any regulatory filing requirements, the effective date of
the Acquisition Closing will be the date upon which such regulatory approvals or
compliance are satisfied (the last date of such event hereinafter referred to as
the "Effective Date"). ARTICLE II
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REPRESENTATIONS AND WARRANTIES OF NATIONAL
National makes the following representations and warranties to Tele and
the Principal Seller as of the date hereof and as of the Acquisition Closing
unless a different date is specifically provided herein:
2.1 ORGANIZATION AND STANDING. National has been duly incorporated and is
validly existing and in good standing under the laws of the State of Delaware
and has the requisite corporate power and authority necessary to own its
properties and to conduct its business as presently conducted. National is duly
qualified to transact business as a foreign corporation and is in good standing
in every jurisdiction in which the failure to so qualify would have a material
adverse effect on the operations or financial condition of National and has all
necessary licenses for the operation of its business as presently conducted and
such licenses shall remain in full force and effect through the Acquisition
Closing. National operates its business in compliance with all applicable laws.
2.2 AUTHORIZATION. National has full right and power to enter into and
perform pursuant to this Agreement and this Agreement constitutes National's
valid and legally binding obligations, enforceable in accordance with its terms,
except to the extent that its enforceability may be limited by applicable
bankruptcy, insolvency, reorganization or other laws affecting the enforcement
of creditors' rights generally or by general equitable principles. National is
authorized and otherwise duly qualified to purchase and hold the Tele Common
Stock and to enter into this Agreement. National has complied with all
applicable regulations and orders in connection with the execution, delivery and
performance of this Agreement, and the transactions contemplated hereby.
National is not required to submit any notice, report, or other filing with any
governmental authority in connection with National's execution or delivery of
this Agreement, nor the consummation of the transactions contemplated hereby,
except as required under the securities laws. No authorization, consent,
approval, exemption or notice is required to be obtained by National in
connection with the execution, delivery, and performance of this Agreement or
the transactions contemplated hereby. The execution, delivery and performance of
this Agreement by National and the consummation by it of the transactions
contemplated hereby will not violate or conflict with any provision of any law
applicable to National or by which any property or asset of National is bound or
violate, conflict with, result in a breach of or the acceleration of any
obligation under, constitute a default (or an event which with notice or the
passage of time or both would become a default) under, give to others any right
of termination, amendment, acceleration or cancellation of, or result in the
creation of any lien on any property or assets of National pursuant to any
provision of any indenture, mortgage, lien, lease, agreement, contract,
instrument, order, judgment, ordinance, regulation or decree to which National
is subject or by which National or any of its properties or assets are bound,
except to the extent the failure to give such notice make such filings, or
obtain such authorizations, consents or approvals, or the extent such
violations, conflicts, breaches or defaults, in the aggregate would not have a
material adverse effect on National.
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2.3 BROKERS OR FINDERS. No person has or will have, as a result of the
transactions contemplated by this Agreement or the Ancillary Agreements any
right, interest or valid claim against or upon Tele or the Principal Seller for
any commission, fee or other compensation as a finder or broker because of any
act or omission by National or its agents.
2.4 LITIGATION. There are no suits, investigations, arbitrations, mediations,
actions or proceedings threatened against National or with respect to any of its
properties or assets before any court, arbitrator, administrator or governmental
or regulatory authority or body which, in the aggregate, could reasonably be
expected to have a material adverse effect on National. Neither National nor any
of its properties or assets are subject to any orders, judgments, injunctions or
decrees which, in the aggregate, could have a material adverse effect on
National.
2.5 CAPITAL STOCK. The authorized capital stock of National consists of
200,000,000 shares of common stock, $.0001 par value and 2,000,000 shares of
preferred stock, of which as of June 30, 2003, approximately 8,505,282 shares of
common stock are issued and outstanding and no shares of preferred stock are
outstanding as of the date of this Agreement. All of the outstanding shares of
National common stock have been validly issued and are fully paid and
nonassessable and not subject to preemptive rights and were issued in compliance
with applicable securities laws and regulations. There are no outstanding
rights, subscriptions, warrants, calls, unsatisfied preemptive rights, options
or other agreements or arrangements of any kind to purchase or otherwise to
receive from National any shares of capital stock or any other security of
National and there are no outstanding securities of any kind convertible into or
exchangeable for such capital stock.
2.6 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since March 31, ,2003, the business of
National has been conducted in the ordinary course and there has not been (i)
any material adverse change in the financial condition, results of operations,
prospects, properties or business of National, (ii) any indebtedness incurred by
National or any other material transaction other than in the ordinary course of
business, except as provided in any subsequent filings made by National with the
Securities and Exchange Commission after March 31, 2003 and except that National
has undertaken to raise equity capital in the form of an offering of its common
stock for purposes of meeting the funding requirement for TV as set forth in
Section 5.2(B), with such offering in the form of units with each unit comprised
of (a) one share of common stock of National and (b) one warrant to acquire one
share of common stock of National and National proposes to raise up to
$2,000,000 through such offering, subject to increase in such amount in the sole
discretion of National, (iii) any incurrence of any material liabilities or
obligations of any nature not incurred in the ordinary course of business
consistent with past practice and of substantially the same character, type and
magnitude as incurred in the past, or any other failure by National to conduct
its business in the ordinary course consistent with past practice, (iv) any
damage, destruction, or losses, whether covered by insurance or not, which, in
the aggregate, could reasonably be expected to have a material adverse effect on
National or (v) any mortgage, pledge or subjection to lien, charge or
encumbrance of any kind of any of National's assets, tangible or intangible.
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2.7 EMPLOYMENT AGREEMENTS. National does not have any employment
agreements with any employee of National. National is not a party to nor is it
bound by any collective bargaining agreement. National does not know of any
organizational effort presently being made or threatened by or on behalf of any
labor union with respect to employees of National.
2.8 HEALTH BENEFIT PLANS. National has not established any health benefit plans,
compensation arrangements and other benefit arrangements covering employees of
National, including without limitation, any multi-employer plan with the meaning
of Section 3(37) of ERISA, employee welfare benefit plan (as defined in Section
3(1) of ERISA); or bonus, deferred compensation, stock purchase, stock option,
severance plan, salary continuation, vacation sick leave, fringe benefit
incentive insurance welfare or similar arrangement.
2.9 SEC FILINGS, FINANCIAL STATEMENTS. National is current in the filing of all
forms, reports, statements and documents (collectively, the "National Reports")
required to be filed by it with the Securities and Exchange Commission ("SEC").
Except as provided in the National Reports, each of the audited financial
statements and interim financial statements contained in the National Reports
complied in all material respects with all applicable accounting requirements
and was prepared in accordance with generally accepted accounting principles
applied on a consistent basis throughout the periods indicated (except as may be
indicated in the notes thereto) and each presented fairly, in all material
respects, the consolidated financial position of National at the respective
dates thereof and the consolidated results of operations and cash flows of
National for the respective periods indicated therein, except as otherwise noted
therein (subject, in the case of unaudited statements, to normal and recurring
year-end adjustments).
2.10 TAX MATTERS. National has not filed all tax returns required to be filed by
it (subject to permitted extensions) with any state or federal entities and
covenants to file such tax returns for prior years as soon as practical. All
taxes of National which are (i) due and payable or (iii) claimed or asserted by
any taxing authority to be due, have been paid, except for those taxes being
contested in good faith and for which adequate reserves have been established,
provided that National shall not be in default hereunder in the event that there
are any unpaid taxes provided that National covenants to pays any such unpaid
taxes on or before September 31, 2003. National has withheld and paid over to
the relevant taxing authority all federal, state, local or foreign income, gross
receipts, property, sales, use, license, excise, franchise, employment, payroll,
premium, withholding, alternative or added minimum, ad valorem, transfer or
excise tax, or any other tax, custom, duty, governmental fee or other like
assessment or charge of any kind whatsoever, together with any interest or
penalty, imposed by any governmental entity required to have been withheld and
paid in connection with payments to employees, independent contractors,
creditors, shareholders or other third parties, except for such taxes which
individually or in the aggregate would not have a material adverse effect on
National
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2.11 CONTRACTS. National has provided Tele and the Principal Seller
with true, correct and complete copies of all material contracts to which it is
a party. With respect to each material contract to which National is a party:
(i) the agreement is legal, valid, binding, enforceable, and in full force and
effect, (ii) the agreement will continue to be legal, valid, binding,
enforceable, and in full force and effect on identical terms following the
Acquisition Closing and the consummation of the transactions contemplated hereby
and (iii) to the knowledge of National, no party to such agreement is in breach
or default under such agreement and no event has occurred which with notice or
lapse of time would constitute a breach or default, or permit termination,
modification, or acceleration, under the agreement.
2.12 REAL PROPERTY. National does not own or lease any real property.
National maintains an office located at 000 Xxxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000.
2.13 PATENTS AND TRADEMARKS. National owns or possess sufficient legal
right, title to, owner of or valid licenses to use all of the intellectual
property necessary for the operation of its business as now conducted with no
known infringement of or conflict with rights of others.
2.14 DISCLOSURE. No representation or warranty of National and no
statement, information or certificate furnished or to be furnished by National
to Tele, Genio, TVLLC, TV Media and the Sellers in connection with the
transaction contemplated hereby 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 contained herein, in light of the circumstances under which they
were made, not misleading.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF TELE AND
THE PRINCIPAL SELLER
Tele and the Principal Seller make the following representations and
warranties to National as of the date hereof and as of the Acquisition Closing,
unless a different date is specifically provided herein.
3.1 ORGANIZATION AND STANDING. Tele has been duly incorporated and is
validly existing and in good standing under the laws of the State of New York
and has the requisite corporate power and authority necessary to own its
properties and to conduct its business as presently conducted. Tele is duly
qualified to transact business as a foreign corporation and is in good standing
in every jurisdiction in which the failure to so qualify would have a material
adverse effect on the operations or financial condition of Tele. Each of Genio,
TVLLC, and TV Media has been duly formed as a limited liability company and is
validly existing and in good standing under the laws of the State of Delaware
and has the requisite power and authority necessary to own its properties and to
conduct its business as presently conducted. Each of Genio, TVLLC and TV Media
is duly qualified to transact business as a limited liability company and is in
good standing in every jurisdiction in which the failure to so qualify would
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have a material adverse effect on the operations or financial condition of
Genio, TVLLC or TV Media. Each of Tele, Genio, TVLLC and TV Media have all
necessary licenses for the operation of their businesses as presently conducted
and such licenses shall remain in full force and effect through the Acquisition
Closing. Tele, Genio, TVLLC and TV Media operate their businesses in compliance
with all applicable laws.
3.2 SHAREHOLDERS AND MEMBERS. The Principal Seller is a principal owner of the
Tele Common Stock and he and the other Sellers own 100% of the Tele Common Stock
free and clear of all liens or encumbrances, except to sole extent of the pledge
of the Tele Common Stock in favor of National to secure the obligations of Tele
under the Bridge Note and have sole managerial and dispositive authority with
respect to the Tele Common Stock. All proxies granted with respect to the Tele
Common Stock, if any, have been validly revoked. Tele is the sole owner of the
Membership Interests free and clear of all liens or encumbrances, except to the
sole extent of the pledge of the Membership Interests in favor of National to
secure the obligations of Genio, TVLLC and TV Media under the Bridge Note and
has sole managerial and dispositive authority with respect to the Membership
Interests. Upon the Acquisition Closing, and the due execution this Agreement
and the Ancillary Agreements, and the requisite consents, set forth in Article I
above, the Sellers shall convey the Tele Common Stock to National or its
designee who will own and hold, good and marketable title to the Tele Common
Stock.
3.3 BROKERS OR FINDERS. No person has or will have, as a result of the
transactions contemplated by this Agreement or the Ancillary Agreements any
right, interest or valid claim against or upon National for any commission, fee
or other compensation as a finder or broker because of any act or omission by
either Tele, Genio, TVLLC, TV Media or any of the Sellers.
3.4 AUTHORIZATION. Tele and the Principal Seller have full right and power to
enter into and perform pursuant to this Agreement and the Ancillary Agreements
and this Agreement and the Ancillary Agreements constitute Tele and the
Principal Seller's valid and legally binding obligations, enforceable in
accordance with their terms, except to the extent that their enforceability may
be limited by applicable bankruptcy, insolvency, reorganization or other laws
affecting the enforcement of creditors' rights generally or by general equitable
principles. The Sellers are authorized to sell the Tele Common Stock and the
Principal Seller is authorized to enter into this Agreement and the Ancillary
Agreements. Tele has complied with all applicable regulations and orders in
connection with the execution, delivery and performance of this Agreement and
the Ancillary Agreements and the transactions contemplated hereby. Neither Tele
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nor Genio, TVLLC and TV Media are required to submit any notice, report, or
other filing with any governmental authority in connection with their execution
or delivery of this Agreement, and the Ancillary Agreements nor the consummation
of the transactions contemplated hereby. No authorization, consent, approval,
exemption or notice is required to be obtained by Tele, Genio, TVLLC and TV
Media in connection with the execution, delivery, and performance of this
Agreement and the Ancillary Agreements or the transactions contemplated hereby.
The execution, delivery and performance of this Agreement, and the Ancillary
Agreements by Tele, Genio, TVLLC, TV Media and the Principal Seller and the
consummation by them of the transactions contemplated hereby will not violate or
conflict with any provision of any law applicable to Tele, Genio, TVLLC, TV
Media or any of the Sellers or by which any property or asset of Tele, Genio,
TVLLC, TV Media or any of Sellers is bound or violate, conflict with, result in
a breach of or the acceleration of any obligation under, constitute a default
(or an event which with notice or the passage of time or both would become a
default) under, give to others any right of termination, amendment, acceleration
or cancellation of, or result in the creation of any lien on any property or
assets of either Tele, Genio, TVLLC, TV Media or any of the Sellers pursuant to
any provision of any indenture, mortgage, lien, lease, agreement, contract,
instrument, order judgment, ordinance, regulation or decree to which Tele,
Genio, TVLLC, TV Media or any of the Sellers is subject or by which or any of
their properties or assets are bound, except to the extent the failure to give
such notice, make such filings, or obtain such authorizations, consents or
approvals, or the extent such violations, conflicts, breaches or defaults, in
the aggregate would not have a material adverse effect on Tele, Genio, TVLLC, TV
Media or any of the Sellers.
3.5 LITIGATION. There are no suits, investigations, arbitrations, mediations,
actions or proceedings threatened against Tele, Genio, TVLLC, TV Media or any of
the Sellers or with respect to any of their properties or assets before any
court, arbitrator, administrator or governmental or regulatory authority or body
which, in the aggregate, could reasonably be expected to have a material adverse
effect on Tele, Genio, TVLLC, or TV Media. Neither Tele, Genio, TVLLC, TV Media
or any of the Sellers nor any of their properties or assets are subject to any
orders, judgments, injunctions or decrees which, in the aggregate, could have a
material adverse effect on Tele, Genio, TVLLC, or TV Media.
3.6 CAPITAL STOCK/MEMBERSHIP INTERESTS. (i) The authorized capital stock of Tele
consists of 200 shares of common stock, no par value and does not authorize any
shares of preferred stock. All of the outstanding shares of Tele common stock
have been validly issued and are fully paid and nonassessable and not subject to
preemptive rights and were issued in compliance with applicable securities laws
and regulations. There are no outstanding rights, subscriptions, warrants,
calls, unsatisfied preemptive rights, options or other agreements or
arrangements of any kind to purchase or otherwise to receive from Tele any
shares of capital stock or any other security of Tele and there are no
outstanding securities of any kind convertible into or exchangeable for such
capital stock. (ii) All of the membership Interests have been validly issued and
are fully paid and were issued in compliance with securities laws and
regulations. There are no outstanding rights, subscriptions, warrants, calls,
unsatisfied preemptive rights, options or other agreements or arrangements of
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any kind to purchase or otherwise to receive from Genio, TVLLC or TV Media any
membership interests or any other security of Genio, TVLLC or TV Media and there
are no outstanding securities of any kind convertible into or exchangeable for
such membership interests.
3.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since June 30, 2003,
the business of Tele, Genio, TVLLC and TV Media has been conducted in the
ordinary course and there has not been (i) any material adverse change in the
financial condition, results of operations, prospects, properties or business of
Tele, Genio, TVLLC and TV Media, (ii) any indebtedness incurred by Tele, Genio,
TVLLC or TV Media other than the Bridge Note or any other material transaction
other than in the ordinary course of business, (iii) any incurrence of any
material liabilities or obligations of any nature not incurred in the ordinary
course of business consistent with past practice and of substantially the same
character, type and magnitude as incurred in the past, or any other failure by
Tele, Genio, TVLLC or TV Media to conduct its business in the ordinary course
consistent with past practice, (iv) any damage, destruction, or losses, whether
covered by insurance or not, which, in the aggregate, could reasonably be
expected to have a material adverse effect on Tele, Genio, TVLLC or TV Media or
(v) any mortgage, pledge or subjection to lien, charge or encumbrance of any
kind of any of Tele, Genio, TVLLC or TV Media's assets, tangible or intangible,
other than the Bridge Note.
3.8 EMPLOYMENT AGREEMENTS. Tele, Genio, TVLLC and TV Media presently do
not have any written employment agreements with any of their employees, although
they expect to enter into the Employment Agreements and the Xxxx Xxx-Xxxx
Employment Agreement before the Acquisition Closing. Except for the Employment
Agreements and the Xxxx Xxx-Xxxx Employment Agreement, there are no Tele, Genio,
TVLLC and TV Media do not have any bonus, incentive compensation, deferred
compensation, profit sharing, stock option, stock bonus, stock purchase,
savings, severance, salary continuation, material consulting, retirement
(including health and life insurance benefits provided after retirement)
agreements and arrangements with or for the benefit of any officer, employee or
other person, or for the benefit of any group of officers, employees or other
persons, other than employee benefit plans. Neither Tele, Genio, TVLLC or TV
Media is a party to or bound by any collective bargaining agreement. Tele,
Genio, TVLLC and TV Media do not know of any organizational effort presently
being made or threatened by or on behalf of any labor union with respect to
employees of Tele, Genio, TVLLC or TV Media.
3.9 HEALTH BENEFIT PLANS. Neither Tele, Genio, TVLLC or TV Media have
established any health benefit plans, compensation arrangements and other
benefit arrangements covering employees of Tele, Genio, TVLLC or TV Media,
including without limitation, any multi-employer plan with the meaning of
Section 3(37) of ERISA, employee welfare benefit plan (as defined in Section
3(1) of ERISA); or bonus, deferred compensation, stock purchase, stock option,
severance plan, salary continuation, vacation sick leave, fringe benefit
incentive insurance welfare or similar arrangement.
3.10 REAL PROPERTY. Neither Tele, Genio, TVLLC or TV Media own any real
property. Tele, Genio, TVLLC and TV Media lease offices located at 1120 Avenue
of the Americas, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000 on a temporary
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month-to-month basis.
3.11 TANGIBLE ASSETS. Each of Tele, Genio, TVLLC and TV Media own or
lease all machinery, equipment and other tangible assets necessary for the
conduct of their business as presently conducted. Each such tangible asset is
free from material defects (patent and latent), has been maintained in
accordance with normal industry practice, is in good operating condition
(subject to normal wear and tear), and is suitable for the purposes for which it
presently is used.
3.12 TAX MATTERS. Tele, Genio, TVLLC and TV Media have not filed all
tax returns required to be filed by any of them (subject to permitted
extensions) with any state or federal entities and covenant to file such tax
returns for prior years as soon as practical. All taxes of Tele, Genio, TVLLC
and TV Media which are (i) due and payable or (iii) claimed or asserted by any
taxing authority to be due, have been paid, except for those taxes being in
tested in good faith and for which adequate reserves have been established. Each
of Tele, Genio, TVLLC and TV Media has withheld and paid over to the relevant
taxing authority all federal, state, local or foreign income, gross receipts,
property, sales, use, license, excise, franchise, employment, payroll, premium,
withholding, alternative or added minimum, ad valorem, transfer or excise tax,
or any other tax, custom, duty, governmental fee or other like assessment or
charge of any kind whatsoever, together with any interest or penalty, imposed by
any governmental entity required to have been withheld and paid in connection
with payments to employees, independent contractors, creditors, shareholders or
other third parties, except for such taxes which individually or in the
aggregate would not have a material adverse effect on Tele, Genio, TVLLC and TV
Media.
3.13 CONTRACTS. Tele, Genio, TVLLC and TV Media have provided National
with true, correct and complete copies of all material contracts to which any of
them is a party (collectively, the "Contracts"). With respect to each such
Contract: (i) the agreement is legal, valid, binding, enforceable, and in full
force and effect, (ii) the agreement will continue to be legal, valid, binding,
enforceable, and in full force and effect on identical terms following the
Acquisition Closing and the consummation of the transactions contemplated hereby
and (iii) to the knowledge of Tele, Genio, TVLLC, TV Media and the Sellers, no
other party to such agreement is in breach or default under such agreement and
no event has occurred which with notice or lapse of time would constitute a
breach or default, or permit termination, modification, or acceleration, under
the agreement.
3.14 BANKS. Tele maintains a checking account at Chase Manhattan Bank,
N.A. and this is the only bank account of any kind presently maintained by
either Tele, Genio, TVLLC or TV Media.
3.15 PATENTS AND TRADEMARKS. Tele, Genio, TVLLC and TV Media have
provided National with true, correct and complete copies of each patent,
trademark and copyright registration which has been issued to Tele, Genio, TVLLC
or TV Media and each pending application for patent, trademark or copyright
registration which Tele, Genio, TVLLC or TV Media has with respect to any of its
intellectual property and identifies any material license which Tele, Genio,
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TVLLC or TV Media has granted to any third party with respect to any of its
intellectual property (collectively, the "Intellectual Property"). Tele, Genio,
TVLLC and TV Media own or possess sufficient legal right, title to, owner of or
valid licenses to use all of the Intellectual Property necessary for the
operation of their business as now conducted with no known infringement of or
conflict with rights of others.
3.16 DISCLOSURE. No representation or warranty of Tele and the
Principal Seller and no statement, information or certificate furnished or to be
furnished by any of them to National in connection with the transaction
contemplated hereby 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 contained herein, or therein, in light of the circumstances under
which they were made, not misleading.
ARTICLE IV
COVENANTS AND AGREEMENTS
4.1 National covenants and agrees that:
(A) National shall take all actions required to be taken by it under state `blue
sky', securities or takeover laws and by the SEC, the OTC Bulletin Board and any
other regulatory body in connection with the Acquisition, if any.
(B) National shall take all actions necessary in accordance with Delaware law,
its certificate of incorporation, and its by-laws to secure stockholder approval
of the Acquisition, if required.
(C) Tele and the Sellers shall be entitled to designate three (3) members out of
a total of five (5) Board members to the Board of Directors of National
effective upon the Acquisition Closing (each a "Proposed Board Member" and
collectively, the "Proposed Board Members"), provided that the Proposed Board
Members submit written director questionnaires in the forms to be provided by
National and such persons are mutually acceptable to National.
(D) All of the Acquisition Shares shall be duly authorized and validly issued
and will be fully paid and nonassessable and not subject to preemptive rights
and will be issued in compliance with applicable securities laws and
regulations.
(E) National shall have divested itself of all assets and liabilities,
contractual or otherwise, including but not limited to all tax liabilities
relating to periods prior to the Acquisition Closing, provided however, that if
such divestiture is not completed as of the Acquisition Closing, such failure
shall not prevent the Acquisition Closing from occurring provided that National
has provided at the Acquisition Closing an adequate reserve in cash in its
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account to cover all such liabilities contractual or otherwise. National shall
in any event have resolved all liabilities owed to any existing National
officers and directors on or before the Acquisition Closing. Following the date
hereof and through the Acquisition Closing, National shall not engage in any
actions that may be reasonably expected to have a material adverse effect on its
business or financial condition, provided that National may continue to engage
in the raising of capital for purposes of funding its obligation to loan or make
an equity investment in Tele in accordance with Section 5.2(B) below.
4.2 Tele and the Principal Seller covenant and agree that:
(A) Tele shall take all actions necessary in accordance with New York law, its
certificate of incorporation, and its by-laws to secure stockholder approval of
the Acquisition. Tele shall take all actions as the sole member of Genio, TVLLC
and TV Media in accordance with Delaware law to secure the approval of Genio,
TVLLC and TV Media to the transactions contemplated hereby.
(B) Sellers hereby waive all rights of first offer, rights of first
refusal, co-sale rights or similar rights held by them, if any and all notices
thereof, with respect to the transactions contemplated hereby
(C) From and after the date of this Agreement, each of Tele, Genio,
TVLLC and TV Media shall conduct their respective businesses in the ordinary
course and consistent in all material respects with past practice.
(D) From and after the date of this Agreement through the Acquisition
Closing, Tele shall not amend its charter or bylaws and Genio, TVLLC and TV
Media shall not amend their articles of organization and neither Tele, Genio,
TVLLC nor TV Media shall (i) declare, set aside or pay any dividend or other
distribution or payment in cash, stock or property in respect of shares of
capital stock or membership interests, respectively (ii) make any direct or
indirect redemption, retirement, purchase or other acquisition of any capital
stock or membership interests, respectively (iv) split, combine or reclassify
outstanding shares of capital stock or membership interests, respectively (v)
issue or agree to issue any shares, or rights, substitutions, warrants, calls
options or other agreements or arrangements of any kind to acquire or otherwise
receive any shares of capital stock or any membership interests, respectively,
without the express written consent of National which consent may be withheld in
its sole discretion.
(E) From and after the date of this Agreement through the Acquisition
Closing, Tele shall use its commercially reasonable efforts to (a) obtain
promptly any consents or approvals required in connection with the Acquisition
including any licensor, if necessary, and (b) secure written two (2) year
employment agreements with Xxxxxxx Xxxxxxxx, Xxxxxxx Xxxx, Xxxxx Xxx-Xxxxx and
Xxxx Xxx-Xxxx and either Tele, Genio, TVLLC, TV Media or any combination thereof
which shall provide that upon the Acquisition Closing, the compensation provided
under such employment agreements shall be amended to include certain stock and
option grants from National in amounts and subject to certain vesting
requirements to be agreed upon by National on or before the Acquisition Closing.
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Tele, Genio, TVLLC and TV Media, their officers, directors or agents shall not
(i) increase the compensation payable or to become payable to any officer,
director, employee or consultant except in accordance with employment or
consulting agreements referred to Section 1.2; (ii) adopt or enter into, or
amend, except as required by applicable law, any stock option, bonus, profit
sharing, pension, retirement, deferred compensation, employment or other payment
or employee compensation plan, agreement or arrangement, (iii) grant any stock
options or stock appreciation rights, (iv) amend any employment agreement
disclosed in Exhibit 3.8, (v) make any loan or advance to, or enter into any
contract lease or commitment with any officer or director of Tele or any member
of Genio, TVLLC or TV Media, (vi) assume, guarantee, endorse or otherwise become
responsible for any material obligations of any other individual, firm or
corporation or make any loans or advances to any individual, firm or
corporation, (vii) except for investments in equipment and other assets in the
ordinary course of business consistent with existing capital expenditure
budgets, make any material investment of a capital nature either by purchase of
stock or securities, contributions to capital, property transfers or otherwise,
or by the purchase of any property or assets of any other individual, firm or
corporation, except the IMA Acquisitions, (viii) incur any indebtedness for
borrowed money excluding the Bridge Note (ix) purchase or acquire any material
interest in any business or any securities or assets of a business which in the
aggregate exceed $25,000 other than in the ordinary course of business, (x)
enter into any joint venture or partnership, (xi) settle any material
litigation, (xii) voluntarily accelerate payments on any indebtedness, (xiii)
enter into, modify or amend in any material respect or take any action to
terminate any of the Contracts, (xiv) waive, release, grant or transfer any
rights of material value, except in the ordinary course of business and
consistent with past practice (xv) transfer, lease, license, sell, mortgage,
pledge dispose of or encumber any material assets other than in the ordinary
course of business and consistent with past practice, (xvi) communicate,
solicit, initiate, encourage or participate in any discussions or negotiations
with regard to any proposal to acquire, directly or indirectly, any Tele Common
Stock or any of the Membership Interests or to invest any funds in Tele, Genio,
TVLLC or TV Media, whether such proposal, acquisition, investment or other
transaction involves a stock sale, a tender offer, exchange offer, merger or
other business combination involving Tele, Genio, TVLLC or TV Media, or for the
acquisition of a substantial portion of the assets of Tele, Genio, TVLLC or TV
Media. Tele, Genio, TVLLC or TV Media` shall immediately communicate to National
the identity of the other party and the initial terms of any proposal it or any
of the Sellers may received from any other party in respect of any of the
above-referenced proposals (each an "Acquisition Proposal"). The Board of
Directors of Tele and the managing member of Genio, TVLLC and TV Media and the
Sellers shall not (i) withdraw or modify or propose to withdraw or modify, their
approval of this Agreement, (ii) approve any letter of intent, agreement in
principle, acquisition agreement or similar agreement relating to any
Acquisition Proposal or (iii) approve or recommend, or propose to approve or
recommend, any Acquisition Proposal, or (xvii) enter into an agreement to do any
of the foregoing.
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(F) Provide National with all relevant financial information to enable
National to verify whether the financial conditions to the Acquisition Closing
set forth in Article V are satisfied, including a true and complete balance
sheet of each of Tele, Genio, TVLLC and TV Media in the form annexed hereto as
Exhibit 4.2(G).
(G) Provide National with true and complete copies of the Employment
Agreements and the Xxxx Xxx-Xxxx Employment Agreement.
(H) Provide National with a schedule setting forth the allocation of the
Acquisition Shares to the Sellers and the Employee Shares to certain key
employees of TV.
ARTICLE V
CONDITIONS TO ACQUISITION CLOSING
5.1 CONDITIONS TO THE OBLIGATION OF NATIONAL TO CONSUMMATE THE ACQUISITION. The
obligation of National to consummate the Acquisition shall be subject to the
fulfillment at or prior to the Acquisition Closing of the following conditions:
(A) All representations of Tele and the Principal Seller shall be true and
correct in all material respects, in each case as if such representations and
warranties were made as of the Acquisition Closing, except to the extent any
such representation or warranty is made on the date hereof and as of a specified
date, in which case such representation or warranty shall have been true and
correct as of such specified date.
(B) the IMA Acquisitions shall have been consummated by either Tele or any
of its subsidiaries, affiliates or designee.
(C) the total liabilities and obligations of Tele, Genio, TVLLC and TV
Media (contingent or otherwise) collectively shall not exceed in the aggregate
$100,000, excluding sums advanced under the Bridge Note and purchase orders for
goods, unless such total liabilities and obligations were incurred in the
ordinary course of business of Tele, Genio, TVLLC and TV Media.
(D) confirmation that any and all license agreements, that certain
consulting agreement between Tele and Global Direct Media Corp. that is not
presently signed but shall be signed on or before the Acquisition Closing and
any other material Contracts are in full force and effect..
(E) no material adverse change in the business, operations and/or condition
(financial and otherwise) of either Tele, Genio, TVLLC, or TV Media individually
or in the aggregate from June 30, 2003.
(F) Tele and the Principal Seller shall have performed in all material
respects their respective obligations and conditions under this Agreement and
the Ancillary Agreements required to be performed by them on or prior to the
Acquisition Closing pursuant to the terms hereof.
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(G) Unless otherwise waived in writing by National, all required consents
and approvals (including Board and stockholder and member consents and consents
of any licensors under any licensing agreements if necessary) having been
obtained and all necessary filings have been made.
5.2 CONDITIONS TO THE OBLIGATION OF TELE AND SELLERS TO CONSUMMATE THE
ACQUISITION. The obligation of Tele and Sellers to consummate the Acquisition
shall be subject to the fulfillment at or prior to the Acquisition Closing of
the following conditions:
(A) All representations of National shall be true and correct in all
material respects, in each case as if such representations and warranties were
made as of the Acquisition Closing, except to the extent any such representation
or warranty is made on the date hereof and as of a specified date, in which case
such representation or warranty shall have been true and correct as of such
specified date.
(B) National shall have made available to TV for use in the Business
through the Bridge Note and available working capital or additional lending
beyond any moneys provided pursuant to the Bridge Note for a minimum of
$1,000,000 (the "Initial Funding") on or before the date of the Acquisition
Closing. Tele, Genio, TVLLC, TV Media and the Principal Seller acknowledge that
National has made available to TV the sum of $600,000 as of the date of this
Agreement, leaving a balance of $400,000 to be funded by National or its
designees to satisfy this Initial Funding condition to the Acquisition Closing.
(C) National shall have performed in all material respects its respective
obligations and conditions under this Agreement and the Ancillary Agreements
required to be performed by it ion or prior to the Acquisition Closing pursuant
to the terms hereof.
(D) Unless otherwise waived in writing by Tele and Principal Seller, all
required consents and approvals (including Board and Stockholder consents)
having been obtained and all necessary filings have been made.
(E) National shall deliver a certificate setting forth all unpaid
obligations and liabilities, contractual or otherwise of National, as provided
in Section 4.1(E) and establish an adequate reserve with respect thereto.
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ARTICLE VI
CLOSING DELIVERIES
6.1 DELIVERIES BY NATIONAL. At the Acquisition Closing in addition to
any other documents or agreements required under this Agreement, National shall
deliver to Tele and the Sellers:
(A) Certificates, in genuine and unaltered form, representing all of the
Acquisition Shares, duly issued to the Sellers and the Employee Shares vesting
upon consummation of the Acquisition Closing duly issued to key employees of
Tele, Genio TVLLC and TV Media in the amounts as provided in Section 1.2,
provided however, that National shall deliver the Escrow Shares to the Escrow
Agent and provided further that National shall only issue the Acquisition Shares
upon the receipt of consents by all of the Sellers to the Acquisition upon the
terms set forth in this Agreement.
(B) the duly executed Escrow Agreement.
(C) and any other agreements, documents and instruments reasonably
requested by Tele and the Principal Seller to effectuate the transactions
contemplated in this Agreement and the Ancillary Agreements.
6.2 DELIVERIES BY TV. At the Acquisition Closing, in addition to any
other documents or agreements required under this Agreement, Tele and the
Sellers shall deliver to National the following:
(A) Certificates, in genuine and unaltered form, representing all of the
Tele Common Stock, duly endorsed to National or its designee or accompanied by
duly executed stock powers endorsed to National or its designee, for transfer to
National or its designee.
(B) the duly executed Escrow Agreement.
(C) the duly executed GDM Consulting Agreement.
(D) any other agreements, documents and instruments reasonably requested by
National to effectuate the transactions contemplated in this Agreement and the
Ancillary Agreements.
ARTICLE VII
7.1 SURVIVAL OF TERMS AND INDEMNIFICATION.
(A) SURVIVAL; KNOWLEDGE. All of the terms and conditions of this
Agreement, together with the representations, warranties and covenants contained
herein or the Ancillary Agreements or in any instrument or document delivered or
to be delivered pursuant to this Agreement or the Ancillary Agreements, shall
survive the execution of this Agreement and the Acquisition Closing
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notwithstanding any investigation heretofore or hereafter made by or on behalf
of any party hereto; provided, however, that (i) the agreements and covenants
set forth in this Agreement shall survive and continue until all obligations set
forth therein shall have been performed and satisfied; and (ii) all
representations and warranties shall survive and continue until twelve (12)
months from the Acquisition Closing (the "Anniversary Date"), except for
representations and warranties for which a claim for indemnification hereunder
(an "Indemnification Claim") shall be pending as of the Anniversary Date, in
which event such representations and warranties shall survive with respect to
such Indemnification Claim until the final disposition thereof.
(B) INDEMNIFICATION BY NATIONAL. National shall indemnify, defend and
hold harmless Tele and the Principal Seller and Tele's officers, directors,
employees, shareholders, members, attorneys, accountants, partners,
representatives, agents, successors and assigns (each an "Indemnified Party" and
collectively, the "Indemnified Parties"), at all times after the date of this
Agreement, from and against any liabilities, damages, losses, claims, liens,
costs, or expenses (including reasonable attorney's fees) of any nature (any or
all of the foregoing are hereinafter referred to as a "Loss") insofar as a Loss
or any action in respect thereof, whether now existing or accruing prior to or
subsequent to the Acquisition Closing, which arises out of or is based solely on
any express misrepresentation (or alleged express misrepresentation), breach (or
alleged breach) of any of the express warranties, express representations or
covenants made by National in this Agreement and the Ancillary Agreements or in
any certificate, schedule, document attached hereto or delivered pursuant to
this Agreement.
(C) INDEMNIFICATION BY TELE, GENIO, TVLLC AND TV MEDIA AND THE
PRINCIPAL SELLER. Tele, Genio, TVLLC, TV Media and Principal Seller shall
indemnify, defend and hold harmless National, its officers, directors,
employees, shareholders, attorneys, accountants, partners, representatives,
agents, successors and assigns of National (each a "NMC Indemnified Party" and
collectively, the "NMC Indemnified Parties"), at all times after the date of
this Agreement, from and against any liabilities, damages, losses, claims,
liens, costs, or expenses (including reasonable attorney's fees) of any nature
(any or all of the foregoing are hereinafter referred to as a "Loss") insofar as
a Loss or any action in respect thereof, whether now existing or accruing prior
to or subsequent to the Acquisition Closing, which arises out of or is based on
any misrepresentation (or alleged misrepresentation), breach (or alleged breach)
of any of the warranties, representations or covenants made by Tele and the
Principal Seller in this Agreement, the Ancillary Agreements or in any
certificate, schedule, document attached hereto or delivered pursuant to this
Agreement.
(D) THIRD PARTY CLAIMS. Except as otherwise provided in this Agreement, the
following procedures shall be applicable with respect to indemnification for any
third party claim, including, but not limited to, any action or proceeding by a
third party against any party hereto based upon any contract or tort based claim
relating to or arising out of any acts or omissions by any party hereto (a
"Claim"):
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(i) Promptly after receipt by any party hereto of any Claim, such party
will, if a Claim with respect thereto is to be made against any party obligated
to provide indemnification hereunder (the "Indemnifying Party"), give such
Indemnifying Party written notice of such Claim, but any failure to timely
notify the Indemnifying Party shall not relieve the Indemnifying Party of its
obligations hereunder except to the extent it was prejudiced thereby. Such
Indemnifying Party shall have the right, at its option, to settle, compromise or
defend, at its own expense and with its own counsel, any such Claim involving
the asserted liability of the party seeking such indemnification (the
"Indemnified Party"), provided that the Indemnifying Party shall not settle,
compromise or consent to the entry of any judgment in any pending or threatened
Claim, except with the consent of the Indemnified Party (which consent shall not
be unreasonably withheld). If the Indemnifying Party fails to assume the defense
of such Claim within 30 days of receipt of notice of such Claim, or if at any
time the Indemnifying Party shall fail to defend in good faith any such Claim,
the Indemnified Party may assume the defense thereof and may employ counsel with
respect thereto and all fees and expenses of such counsel shall be paid by the
Indemnifying Party and the Indemnified Party may conduct and defend such claim
in such manner as it may deem appropriate, subject to the last sentence of this
Section. If any Indemnifying Party undertakes to compromise, settle or defend
any such asserted liability, it shall promptly notify the Indemnified Party of
its intention to do so, and the Indemnified Party agrees to cooperate fully with
the Indemnifying Party and its counsel in the compromise of, or defense against
any such asserted liability. The Indemnified Party may appoint, at its own
expense, associate counsel to participate in the joint defense of any such
matter with respect to which the Indemnifying Party has undertaken the defense,
and the Indemnifying Party may appoint, at its own expense, associate counsel to
participate in the joint defense of any such matter which the Indemnified Party
is defending. No Indemnified Party shall settle, compromise or consent to the
entry of any judgment in any pending or threatened Claim, except with the
consent of the Indemnifying Party (which consent shall not be unreasonably
withheld).
(ii) The sole and exclusive monetary remedy of the parties hereto for any
and all Loss, including any Claim, with respect to the transactions contemplated
in this Agreement and the Ancillary Agreements, shall be the indemnity set forth
in this Article VII, as limited by the provisions set forth in this Article VII.
Any claim or request for indemnification not submitted in writing prior to the
expiration of the applicable survival period of the warranty or representation
provided in this Article VII on which such Loss or Claim is based shall be
deemed to have been waived and no party shall have any further liability with
respect thereto. The Principal Seller may satisfy an indemnification obligation
through the tendering to National of Acquisition Shares, provided that (a) the
value of such Acquisition Shares shall solely be based upon the average closing
price of the shares of National's common stock as reported by the OTC Bulletin
Board or the then applicable stock exchange during the five business days
immediately preceding the tender of such Acquisition Shares and (ii)
notwithstanding the foregoing, there shall be a cap in the amount of Five
Million Dollars ($5,000,000) in the aggregate for all indemnification claims
against either or both of the Principal Seller and Tele and a cap in the amount
of One Million Seven Hundred Thousand Dollars ($1,700,000) in the aggregate for
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all indemnification claims against National. No claim for indemnification may be
made by either National or Tele and the Principal Seller, as the case may be,
unless the aggregate of all claims for which indemnification is sought by either
party exceeds $25,000.
ARTICLE VIII
MISCELLANEOUS
8.1 NO WAIVER; CUMULATIVE REMEDIES. No failure or delay on the part of any
party to this Agreement in exercising any right, power or remedy hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
such right, power or remedy preclude any other or further exercise thereof or
the exercise of any other right, power or remedy hereunder. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
8.2 AMENDMENTS, WAIVERS AND CONSENTS. Any provision in the Agreement to the
contrary notwithstanding, and except as hereinafter provided, changes in,
termination or amendments of or additions to this Agreement may be made, and
compliance with any covenant or provision set forth herein may be omitted or
waived, if National shall obtain consent thereto in writing from Tele and the
Principal Seller. Any waiver or consent may be given subject to satisfaction of
conditions stated therein and any waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.
8.3 ADDRESSES FOR NOTICES. All notices, requests, demands and other
communications provided for hereunder shall be in writing and mailed by
certified mail, return receipt requested, overnight delivery service, or
delivered by hand to each applicable party at the address set forth on the first
page of this Agreement or at such other address as to which such party may
inform the other party in writing in compliance with the terms of this Article.
All such notices, requests, demands and other communications shall be considered
to be effective when delivered.
8.4 COSTS, EXPENSES AND TAXES. All parties shall bear their own expenses
incurred in the negotiation of this Agreement and the Ancillary Agreements.
8.5 EFFECTIVENESS; BINDING EFFECT; ASSIGNMENT. This Agreement shall be
binding upon and inure to the benefit of National, Tele, and Principal Seller
and their respective successors and assigns; PROVIDED, that no party to this
Agreement may assign any of its rights or obligations under this Agreement
without the prior written consent of the counter-party to this Agreement.
8.6 PRIOR AGREEMENTS. The Agreement and the Ancillary Agreements executed
and delivered in connection herewith constitute the entire agreement between the
parties and supersede any prior understandings or agreements concerning the
subject matter hereof.
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8.7 SEVERABILITY AND INCONSISTENCY. The provisions of the Agreement and
the Ancillary Agreements are severable and, in the event that any court of
competent jurisdiction shall determine that any one or more of the provisions or
part of a provision contained herein or in the Ancillary Agreement shall, for
any reason, be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision
or part of a provision of such Agreement or any of the Ancillary Agreements and
the terms thereof shall be reformed and construed as if such invalid or illegal
or unenforceable provision, or part of a provision, had never been contained
herein, and such provisions or part reformed so that it would be valid, legal
and enforceable to the maximum extent possible. In the event of any
inconsistency or conflict with any terms or conditions of this Agreement and the
Escrow Agreement, and the GDM Consulting Agreement, the terms and conditions of
this Agreement shall be controlling.
8.8 GOVERNING LAW; VENUE.
(A) This Agreement shall be enforced, governed and construed in
accordance with the laws the State of New York or federal securities law where
applicable without giving effect to choice of laws principles or conflict of
laws provisions and any action suit or proceeding may only be brought in the
state or federal courts of the state of New York.
(B) National and Tele and the Principal Seller hereby waive one against
the other, and agree not to assert against either of them, or any successor
assignee thereof, by way of motion, as a defense, or otherwise, in any such
suit, action or proceeding, (i) any claim that National, Tele, and the Sellers
are not personally subject to the jurisdiction of the state or federal courts
located in the State of New York, and (ii) to the extent permitted by applicable
law, any claim that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of any such suit, action or proceeding is
improper or that this Agreement or the Ancillary Agreements may not be enforced
in or by such courts.
8.9 TERM. This Agreement shall remain in effect through the Effective
Date unless:
(A) this Agreement is terminated by National if there has been a material
violation or material breach by Tele or the Principal Seller of any
representation, warranty or agreement contained in this Agreement or any failed
condition to the obligations of National under Article VI hereof or
(B) this Agreement is terminated by Tele or the Principal Seller if there
has been a material violation or material breach by National of any
representation, warranty or agreement contained in this Agreement or any failed
condition to the obligations of Tele or Sellers under Article VI hereof, unless
in either (A) or (B) there is a waiver of compliance by the other party with any
of the agreements or conditions herein. In the event of termination of this
23
Agreement, this Agreement shall forthwith become null and void but provided that
no such termination relieve any party hereto from liability for any breach by
such party of this Agreement.
8.10 HEADINGS. Article, section and subsection headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.
8.11 COUNSEL. Each of the parties hereto represents that it, she or he
has consulted legal counsel in connection with this Agreement and the Ancillary
Agreements, or has been given full opportunity to review this Agreement and the
Ancillary Agreements with counsel of his, her or its choice prior to execution
thereof. The parties hereto waive all claims that they were not adequately
represented in connection with the negotiation, drafting and execution of this
Agreement and the Ancillary Agreements. Each party further agrees to bear its
own costs and expenses, including attorneys' fees, in connection with this
Agreement and the Ancillary Agreements. Each of the parties hereto acknowledges
that the law firm of Moritt Xxxx Hamroff & Xxxxxxxx LLP has provided legal
services on behalf of TV and National, including legal services for both parties
in connection with the negotiation and preparation of this Agreement and the
Ancillary Agreements. Each of the parties hereto waives any conflict of interest
that may arise from such dual representation. If any party initiates any legal
action arising out of or in connection with enforcement of this Agreement or the
Ancillary Agreements, the prevailing party in such legal action shall be
entitled to recover from the other party all reasonable attorneys' fees, expert
witness fees and expenses incurred by the prevailing party in connection
therewith.
8.12 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.
8.13 FURTHER ASSURANCES AND BOOKS AND RECORDS. From and after the date
of this Agreement, upon the request of National, Tele, and the Principal Seller,
National and Tele, and the Principal Seller shall execute and deliver such
instruments, documents and other writings as may be reasonably necessary or
desirable to confirm and carry out and to effectuate fully the intent and
purposes of this Agreement and the Ancillary Agreements.
[REST OF PAGE LEFT INTENTIONALLY BLANK]
24
[SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT]
IN WITNESS WHEREOF, the parties hereto have caused this Stock Purchase
Agreement to be executed as of the date first above written.
NATIONAL MANAGEMENT CONSULTING, INC.
By: /S/ XXXXXX X. XXXXXXXX
-------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman and President
TELE-V, INC.
By: /S/ XXXX XXX-XXXX
--------------------------
Name: Xxxx Xxx-Xxxx
Title: Chairman and President
PRINCIPAL SHAREHOLDER OF
TELE-V, INC.
/S/ XXXX XXX-XXXX
---------------------------
Xxxx Xxx-Xxxx
25
[To be Delivered at the Acquisition Closing]
EXHIBIT 1.2 (E)
ALLOCATION OF ACQUISITION SHARES
Tele-V, Inc. SH No. Shares National Common Stock at Closing
Xxxx Xxx-Xxxx _______ ________
--------------- ------- --------
--------------- ------- --------
--------------- ------- --------
26
Exhibit 1.3 (v)
[FORM OF ESCROW AGREEMENT AMONG NATIONAL, TELE, TVLLC, GENIO TV MEDIA AND ESCROW
AGENT TO BE DELIVERED AT ACQUISITION CLOSING]
ESCROW AGREEMENT
ESCROW AGREEMENT dated as of [], 2003, by and among [], as escrow agent
("Escrow Agent"), TELE-V, INC., a New York corporation whose principal business
address is 1120 Avenue of the Americas, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000
("Tele") and its subsidiaries and affiliates--GENIO CARDS LLC, TELE-V, LLC, and
TELE-V MEDIA LLC, each a Delaware limited liability company with a principal
business address located at 1120 Avenue of the Americas, Xxxxx 0000, Xxx Xxxx,
Xxx Xxxx 00000 ("Genio", "TVLLC" and "TV Media", respectively, and collectively
with Tele, "TV") and XXXX XXX-XXXX, an officer, director and significant
shareholder of Tele (the "Principal Seller")and NATIONAL MANAGEMENT CONSULTING,
INC., a Delaware corporation whose principal business address is 000 Xxxxxxx
Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("National").
WITNESSETH
WHEREAS, the Principal Seller and the remaining shareholders of Tele
(collectively, the "Sellers") are the owners of all of the issued and
outstanding common stock of Tele (the "Tele Common Stock") and Tele is the sole
member of Genio, TVLLC and TV Media, respectively (the "Genio Membership
Interests", the "TVLLC Membership Interests", and the "TV Media Membership
Interests", respectively and collectively, the "Membership Interests"); and
WHEREAS, Tele and the Principal Seller and National are parties to that
certain Stock Purchase Agreement dated as of July [], 2003 (the "Purchase
Agreement"), pursuant to which National has agreed to acquire all of the Tele
Common Stock in exchange for common stock of National as more fully set forth in
the Purchase Agreement (collectively, the "Acquisition"); and
WHEREAS, the Purchase Agreement provides for the establishment of an
escrow account for the escrowing of certain shares of the National common stock
to be issued in connection with the Acquisition with an escrow agent for
potential release to the Sellers in the event that the business of TV (the
"Business") attains certain revenue and EBITDA targets during prescribed
periods; and
WHEREAS, the Escrow Agent has agreed to act as the escrow agent with
respect to the shares of National common stock to be escrowed in accordance with
the Purchase Agreement on the terms set forth herein.
NOW, THEREFORE, for good and valuable consideration, the adequacy and
receipt of which are hereby acknowledged, the parties do hereby agree as
follows:
27
1. DEFINITIONS. All capitalized terms not otherwise defined
herein shall have the meanings ascribed to them in the
Purchase Agreement.
2. APPOINTMENT. The Escrow Agent shall act as the escrow agent as
set forth herein, and as such shall receive, acknowledge
receipt, retain, release and deliver the Escrowed Shares on
the terms, and subject to the conditions, set forth herein.
3. RIGHTS, DUTIES AND IMMUNITIES.
(a) The duties and obligations of the Escrow Agent shall be
determined solely by the express provisions of this
Agreement. The Escrow Agent shall not be liable except for
the performance of such duties and obligations as are
specifically set out in this Agreement, and the Escrow Agent
shall not be deemed to have any knowledge of, or
responsibility for, the terms of any other agreement,
instrument or document.
(b) The Escrow Agent shall not be responsible in any manner
whatsoever for any failure or inability of any party hereto,
or of any one else, to deliver documents to the Escrow Agent
or otherwise to honor any of the provisions of this
Agreement or otherwise.
(c) Except as provided in Section 7(b) below, the Tele, Genio,
TVLLC, TV Media, the Principal Seller and National will
indemnify the Escrow Agent for, and defend and hold it
harmless against, any loss, liability or expense (including
but not limited to attorneys' fees and disbursements)
arising out of or in connection with, its acceptance of or
the performance of its duties and obligations under or the
interpretation of this Agreement; provided, however, that
this Section 3(c) shall not apply to losses, liabilities and
expenses caused by the bad faith, willful misconduct or
gross negligence of the Escrow Agent.
(d) The Escrow Agent shall be entitled to rely upon any
judgment, certification, demand, notice, instrument or other
writing delivered to it hereunder without being required to
determine the authenticity or the correctness of any fact
stated therein or the propriety or validity or the service
thereof. The Escrow Agent shall be fully protected in acting
on and relying upon any written notice, direction, request,
waiver, consent, receipt or other paper or document which
the Escrow Agent believes to be genuine. The Escrow Agent
may act in reliance upon any instrument or signature it
reasonably believes to be genuine and the Escrow Agent may
assume that any person purporting to give any advice or make
any statement in connection with the provisions hereof has
been duly authorized to do so.
28
(e) The Escrow Agent shall not be liable for any error of
judgment, or for any act done or step taken or omitted by it
in good faith, or for any mistake of fact or law, or for
anything which it may do or refrain from doing in connection
herewith, except its own bad faith, willful misconduct or
gross negligence.
(f) The Escrow Agent may seek the advice of legal counsel as to
any question arising from or relating to the construction of
any of the provisions of this Agreement or its duties or
obligations hereunder or otherwise, and it shall incur no
liability and shall be fully protected in respect of any
action taken, omitted or suffered by it in good faith in
accordance with the advice of such counsel.
(g) The Escrow Agent does not make and will not be required or
deemed to make any representation as to the validity or
genuineness of any agreement, document or other instrument
held by or delivered to it.
(h) If a dispute arises between one or more of the parties
hereto, or between any of the parties hereto and any person
not a party hereto, as to whether or not or to whom the
Escrow Agent shall deliver any of the Escrowed Shares or as
to any other matter arising from or relating to the Escrowed
Shares or this Agreement, the Escrow Agent shall not be
required to determine such dispute and need not make any
delivery of any of the Escrowed Shares, but will retain the
same until the rights of the parties to the dispute shall
have finally been determined by written agreement among the
parties to the dispute or by final non-appealable order of a
court of competent jurisdiction. In the event that the
Escrow Agent has received notice of such order or any such
agreement, the Escrow Agent shall cause the Escrowed Shares
to be released and delivered in accordance with such
agreement or order and in accordance with Section 5 below.
(i) The Escrow Agent shall be entitled to assume that no dispute
of the type referred to in Section 3(h) has arisen unless it
has received a written notice that such a dispute has
arisen, which written notice refers specifically to this
Agreement and identifies by name and address the adverse
claimants in such dispute. Any party delivering written
notice of a dispute pursuant to this Section 3(i) shall
simultaneously therewith deliver a copy of such notice to
all parties hereto in accordance with Section 10 hereof,
with such copies to such persons as are specified therein.
29
For purposes of this Section 3(i), the Escrow Agent shall
not be deemed to have received a written notice until all
parties to this Agreement have received such written notice.
If a dispute of the type referred to in Section 3(h) arises,
the Escrow Agent may, in its sole discretion (but shall not
be obligated to), commence interpleader or similar actions
or proceedings for determination of such dispute.
4. DELIVERY TO ESCROW OF THE ESCROWED SHARES.
(a) At the closing of the Acquisition (the
"Acquisition Closing"), fifteen percent (15%) of the
Acquisition Consideration [less the Employee Shares]
(the "Escrowed Shares") shall be escrowed with the
Escrow Agent.
5. RELEASE OF ESCROW. The Escrow Agent shall hold, release and
deliver the Escrowed Shares as follows:
(a) If at any time the Escrow Agent receives a written
certification from the independent directors of
National or from the Accounting Firm authorizing the
release of some or all of the Escrowed Shares, then the
Escrow Agent shall deliver the amount of Escrowed
Shares set forth in such certification (the
"Certification") to the Sellers with each Seller to
receive his pro-rata portion of the Escrowed Shares so
long as the Escrow Agent does not receive an objection
from National within three business days of the Escrow
Agent giving National written notice of its receipt of
the Certification.
(b) In the event that National raises an objection to the
release of any of the Escrowed Shares, the Escrow Agent
shall release such of the Escrowed Shares, if any, as
are not in controversy and shall continue to hold the
remaining Escrowed Shares until it receives the joint
written instructions of National and Tele.
(c) Any party delivering written instructions or objections
pursuant to Sections 5(a) or (b) above to the Escrow
Agent shall, simultaneously therewith, deliver a copy
of such instructions to all other parties at their
respective addresses set forth in Section 10 below,
with such copies to such persons as are specified
therein. For purposes of Sections 5(a) or (b), written
instructions or objections shall not be deemed to have
been received by the Escrow Agent until such time as a
copy thereof has been received by each party hereto
other than the party delivering such instructions. In
addition, the Escrow Agent shall deliver a copy of each
such instructions and objections to the other parties.
30
(d) Upon receipt of a Certification that all of the
Escrowed Shares may be released to the Sellers, and the
absence of any objection thereto as provided in Section
5(a) above, the Escrow Agent shall promptly transmit
the Escrowed Shares then in its possession to the
Sellers and the escrow account shall be terminated with
no further action required by any party hereto.
(e) In the event that any Escrowed Shares are not released
to the Sellers after the expiration of the Second
Period in accordance with the provisions of this
Section 5, such Escrowed Shares shall be deemed to be
forfeited and all forfeited Escrowed Shares shall be
delivered by the Escrow Agent to National for
cancellation.
6. SUCCESSOR ESCROW AGENT.
(a) The Escrow Agent may, at any time, resign as such with
or without the prior written consent of all the parties
hereto, in which case the Escrow Agent (and any
successor escrow agent) shall deliver the Escrowed
Shares to any successor escrow agent jointly designated
by National and the Sellers in writing, or to any court
of competent jurisdiction, whereupon the Escrow Agent
shall be discharged of and from any and all further
duties and obligations arising in connection with this
Agreement. The resignation of the Escrow Agent shall
take effect on the earlier of (i) the appointment of a
successor escrow agent, or (ii) the day which is 30
days after the date of the delivery of the Escrowed
Shares and a copy of this Agreement to any court of
competent jurisdiction. In the event that a successor
escrow agent has not been appointed at the expiration
of such 30-day period, the Escrow Agent's sole
responsibilities hereunder shall be: (i) to maintain
the safekeeping of the Escrowed Shares and any other
documents delivered to it hereunder, if any, and (ii)
to release and deliver the Escrowed Shares and any such
documents in accordance with Section 5 of this
Agreement.
(b) If the Escrow Agent receives a written notice signed by
National and the Sellers stating that they have
selected a successor escrow agent, the Escrow Agent
shall deliver the Escrowed Shares (and any other
documents then held by it hereunder, if any) to the
successor escrow agent named in the aforesaid notice
within 15 days after receipt of such written notice.
7. FEES AND COSTS OF THE ESCROW AGENT.
(a) The Escrow Agent shall be entitled to the reimbursement
of any reasonable expenses (including but not limited
to attorneys' fee and disbursements) actually incurred
by it in the performance of its duties hereunder.
Without limiting any other provision of this Agreement,
the amount of such reimbursements will be borne by
[National], except as provided in paragraph 7(b) below.
31
(b) Notwithstanding any provision in this Agreement to the
contrary, if National, Tele, Genio, TVLLC, TV Media or
the Sellers are determined to be in breach of or
default under any of the provisions hereof, or has been
determined by a court of competent jurisdiction to have
delivered any written notice or instructions in bad
faith or containing untrue statements, then such party
shall bear: (i) all the costs and expenses of the
Escrow Agent required to be paid by any party
hereunder, and (ii) all costs and expenses (including
but not limited to attorneys' fees and disbursements)
incurred by each other party as a result of, or in
connection with, such breach, default or dispute, or
written notice or instruction; provided, however, that
the foregoing shall not affect the Escrow Agent's right
to seek payment from any party hereunder.
8. VOTING RIGHTS AND/OR DIVIDENDS. Notwithstanding any provision
to the contrary in this Agreement or elsewhere, during the
time that the Escrowed Shares are held in escrow by the Escrow
Agent in accordance with this Agreement, Sellers or their
designees shall be entitled to exercise any and all voting
and/or other consensual rights accruing to the owner thereof
and to receive all dividends and other distributions made
thereupon.
9. CONSTRUCTION. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the
State of New York, without regard to such State's principles
of conflicts of law.
10. NOTICES. All notices, demands, requests, consents, approvals,
reports or other communications required or permitted to be
given pursuant to this Agreement shall be in writing and if
such notice is given pursuant to Section 5 hereof, such notice
shall be delivered to the following addresses (or such other
address as the recipient party may hereafter specify in the
same manner):
To National: National Management Consulting, Inc.
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx X. Xxxxxxxx, President
Facsimile: (000) 000-0000
With a Copy To: [ ]
Facsimile:
32
To Tele, Genio, TVLLC,
TV Media and Sellers: Xxxx Xxx-Xxxx
c/o Tele-V, Inc.
1126 Avenue of the Americas,
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (212) [ ]
To Escrow Agent: [ ]
Facsimile: ( )
Except as otherwise provided in Sections 3(i) and 5(c) hereof, all such
instructions, objections, notices, requests, consents and other communications,
if sent via facsimile shall be deemed to have been given when received, if sent
by overnight courier shall be deemed to have been given one (1) business day
after deposit with such overnight courier and if sent via U.S. mail, shall be
deemed to have been given three (3) business days after deposit in a U.S. postal
depository, certified mail, return receipt requested.
11. [ ].
(a) [Each party acknowledges that [] has acted as legal
counsel to and representative of [] and its
respective affiliates and agrees that such counsel
and representation do not and will not constitute a
grounds for disqualifying [] from acting as Escrow
Agent hereunder.
(b) Notwithstanding anything to contrary contained
herein, it is expressly understood by the parties
hereto that the Escrow Agent, in that capacity, at
any time that it is required or permitted to seek
legal counsel under this Agreement, may seek such
legal counsel from [], and that [] will be liable (as
provided in Sections 3(c), 7(a) and 7(b)) to [] for
any services performed and billed to the Escrow Agent
by [] at its customary hourly rates and all of []
disbursements in connection with the provision of
such services.]
12. HEADINGS. The headings of the sections of this Agreement are
inserted as a matter of convenience and for reference purposes
only, are of no binding effect, and in no respect define,
limit or describe the scope of this Agreement or the intent of
any section.
13. COUNTERPARTS. This Agreement may be signed in any number of
counterparts with the same effect as if the signatures to each
were upon the same instrument.
33
14. ENTIRE AGREEMENT. This Agreement represents the entire
understanding and agreement between the parties with respect
to the subject matter hereof, supersedes all prior
negotiations between the parties, and can be amended,
modified, supplemented, extended, terminated, discharged or
changed only by an agreement in writing which makes specific
reference to this Agreement and which is signed by all
parties.
15. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure solely to the benefit of the parties and their
respective permitted successors and assigns and shall not be
enforceable by or create or evidence any right of any third
party.
[Sellers shall be entitled to assign this Escrow Agreement and
all of their rights, privileges, interests, and remedies
hereunder to any other person, firm, entity, bank, or
corporation whatsoever without notice to or consent by
National and such assignee shall be entitled to the benefits
of this Escrow Agreement and to exercise all such rights,
interests, and remedies as fully as the Sellers. National may
not assign this Escrow Agreement without the express written
consent of the Sellers which may be withheld in its sole
discretion. ]
16. SEVERABILITY. Any provision of this Agreement that may
be determined by a court of competent jurisdiction to be
prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other
jurisdiction. It is expressly understood, however, that the
parties intend each and every provision of this Agreement to
be valid and enforceable and hereby knowingly waive all
rights to object to any provision of this Agreement.
17. FURTHER ASSURANCES. Each of the parties agrees that it shall
use its good [SIGNATURE PAGE TO ESCROW AGREEMENT]
faith efforts to take, or cause to be taken, all action and to
do, or cause to be done, all things necessary to consummate
and make effective this Agreement.
34
IN WITNESS WHEREOF, the parties have caused this Escrow Agreement to be
executed as of the date first above written.
[ ]
As Escrow Agent
By:___________________________
[]
NATIONAL MANAGEMENT CONSULTING, INC.
By: __________________________
Name: Xxxxxx X. Xxxxxxxx
Title: President and Chairman
TELE-V, INC.
By:
--------------------------
Name: Xxxx Xxx-Xxxx
Title: President
PRINCIPAL SHAREHOLDER OF TELE-V, INC.
By: __________________________
Xxxx Xxx-Xxxx
35
Exhibit 4.2(G)
[FORM OF BALANCE SHEET OF TELE-V, INC. TO BE DELIVERED AT ACQUISITION CLOSING]
Tele-V, Inc.
Balance Sheet
June 30, 2003
Assets
Current Assets $
Total Assets $
Liabilities
Current Liabilities $
Shareholders Equity
Total Liabilities $
36
[FORM OF BALANCE SHEET OF TELE-V, LLC TO BE DELIVERED AT ACQUISITION CLOSING]
Tele-V, LLC.
Balance Sheet
June 30, 2003
Assets
Current Assets $
Total Assets $
Liabilities
Current Liabilities $
Shareholders Equity
Total Liabilities $
37
[FORM OF BALANCE SHEET OF TELE-V, MEDIA LLC TO BE DELIVERED AT
ACQUISITION CLOSING]
Tele-V, Media LLC.
Balance Sheet
June 30, 2003
Assets
Current Assets $
Total Assets $
Liabilities
Current Liabilities $
Shareholders Equity
Total Liabilities $
38
[FORM OF BALANCE SHEET OF GENIO CARDS LLC TO BE DELIVERED AT
ACQUISITION CLOSING]
Genio Cards LLC.
Balance Sheet
June 30, 2003
Assets
Current Assets $
Total Assets $
Liabilities
Current Liabilities $
Shareholders Equity
Total Liabilities $
39
