Exhibit 10.1
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement ("Agreement") is made and entered into as of
this 5th day of December, 2004, by and between 110 Media Group, Inc., a Delaware
corporation (the "Buyer"), and Global Reach, Inc., a Nevada corporation (the
"Seller").
RECITALS
A. Seller is an owner/operator of various internet properties, including
several subscription-based websites in the adult entertainment industry; and
B. Seller desires to sell its suite of free webhosting sites commonly known
as Xxx0000.xxx (and excluding any subdomains of xxx.xxx) ("Website") along with
the operating assets related to that Website to Buyer, and Buyer desires to
purchase those assets, on the terms and subject to the conditions hereinafter
set forth;
NOW, THEREFORE, in consideration of the premises and the respective
warranties, representations, covenants and agreements hereinafter set forth,
Seller and Buyer hereby mutually agree as follows:
1. PURCHASED ASSETS. Seller agrees to sell, assign, transfer and deliver to
Buyer, and Buyer agrees to purchase from Seller, on the Closing Date (as defined
in section 4 hereof), all of the right, title and interest of Seller in and to
all of the following assets (the "Purchased Assets") which are owned and/or used
by Seller in connection with the operation of the Website, free and clear of all
security interests, liens, claims and other encumbrances:
all operating assets used in the operation of the Website which shall
include, without limitation, all data, licenses (excluding patent
licenses which shall be addressed in a separate document), accounts
receivable for monies earned after the date of the asset purchase,
domain name(s), a non-exclusive license to all source codes, website
designs, trademarks and trade names, video and photo content, prepaid
expense, customer lists, leases and contracts which Buyer chooses to
assume, and books and records.
2. LIABILITIES ASSUMED BY BUYER. Buyer and Seller agree that Buyer shall
not assume, nor shall Buyer in any way be responsible for, any liability,
obligation, claim or commitment, contingent, actual or otherwise, known or
unknown, of Seller or any of its shareholders, directors, officers, employees or
agents, it being expressly understood and agreed that Seller shall continue to
be responsible for any and all liabilities, obligations, claims or commitments
of Seller or related to the Website entered into on or prior to the Closing
Date, including but not limited to, any sales, income, payroll or other taxes,
obligations to other creditors including vendors, employees and customers or
other liabilities, obligations, claims or commitments of the Seller incurred in
connection with the transactions contemplated hereby. Notwithstanding the
preceding sentence, Buyer agrees that it will, on the Closing Date, assume and
agree to perform and discharge solely and only those leases, licenses,
agreements and contracts set forth on Schedule 2(a).
3. PURCHASE PRICE AND PAYMENT. The purchase price (the "Purchase Price")
for the Purchased Assets shall be equal to the sum of Four Hundred Thousand
Dollars ($400,000.00). The Purchase Price shall be payable as follows:
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(a) $50,000.00 in cash (the "Cash") at the Closing; and
(b) $50,000.00 payable thirty (30) days from the Closing Date
evidenced by a promissory note ("Note 1") in the form of Exhibit 3(b).
(c) $100,000 payable in twelve equal monthly installments commencing
60 days from the Closing Date evidenced by a promissory note ("Note 2") in the
form of Exhibit 3(c).
(d) The issuance of Two Hundred Dollars ($200,000) worth of
registered and readily and publicly tradable shares of the Buyer's common stock
at the Closing. To determine the number of shares of common stock to be issued
at Closing, the value of the shares will be calculated by taking the closing
prices of the Buyer's common stock for the thirty trading days immediately
preceding the Closing Date, discarding the ten (10) highest and ten (10) lowest
closing prices and averaging the remaining ten days closing prices to determine
the value of the shares ("Share Value"). The Share Value will then be divided
into $200,000 to establish the number of shares to be issued at Closing.
4. CLOSING.
A. The Closing ("Closing" or "Closing Date") of the transactions
contemplated hereby shall take place at the office of Xxxxxx & Xxxxxxxxx LLP, at
000 Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx Xxxx, Xxx Xxxx 00000, at 10 a.m. on the
20th day of November, 2004, or at such other place, time or date as shall be
mutually agreed upon by Seller and Buyer, including an "attorney escrow closing
by mail".
B. At the Closing, Seller shall deliver to Buyer the following:
(i) such xxxx of sale or other good and sufficient instruments of
assignment, transfer and conveyance as Buyer shall reasonably request, to convey
and to transfer to Buyer all right, title and interest of Seller in the
Purchased Assets to Buyer, free and clear of all security interests, liens,
claims and encumbrances;
(ii) all appropriate instruments granting to Buyer the right to
the use of the corporate and tradename "Xxx0000.xxx" and all other tradenames
and trademarks owned or used by Seller in connection with the operation of the
Website;
(iii) such other instrument or instruments of transfer, if any,
as shall be necessary or appropriate to vest in the Buyer good and marketable
title to the Purchased Assets;
(iv) delivery of Required Consents (as defined in section 7(b);
and
(v) delivery, if necessary, of UCC-3 termination statements and
all other documents and instruments necessary to release and discharge all
liens, claims, security interests and other encumbrances on all Purchased
Assets.
C. At the Closing, Buyer shall deliver to Seller the following:
(i) the $50,000.00 in Cash;
(ii) Note 1;
(iii) Note 2; and
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(iv) Stock certificate representing 1,030,928 shares of the
Buyer's common stock registered in the name of the Seller.
5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER. Seller hereby
represents and warrants, and from and after this date, covenants to Buyer as
follows:
(a) Organization and Authority. Seller is a corporation, duly
organized, validly existing, and in good standing under the laws of the State of
Nevada and has all requisite corporate power and authority to carry on its
business as it is presently being conducted, to enter into this Agreement, and
to carry out and perform the transactions contemplated hereby. The execution,
delivery and performance of this Agreement by Seller has been duly authorized
and approved by its Board of Directors, and will not violate its Articles of
Incorporation, By-Laws, or any agreement to which it is a party or by which it
is bound or any law, rule, regulation or court order. This Agreement, and all
other instruments, documents and agreements to be delivered by Seller in
connection therewith, are the legal, valid and binding obligation of Seller
enforceable in accordance with its, and their, terms.
(b) Title. Seller has good and marketable title to all of the
Purchased Assets, free and clear of any liabilities, obligations, claims,
security interest, liens or encumbrances.
(c) No Material Adverse Change. Since August 27, 2004, there has been
no material adverse change in the Purchased Assets.
(d) Taxes. Seller has timely filed all required federal, state,
county and local income, excise, withholding, property, sales, use, franchise
and other tax returns, declarations and reports which are required to be filed
on or before the date hereof and has paid or reserved for all taxes which have
become due pursuant to such returns or pursuant to any assessment which has
become payable except for taxes which it has contested in good faith.
(e) Litigation. There is no litigation or proceeding or governmental
investigation pending or, to the knowledge of Seller, threatened against Seller
or relating to the Purchased Assets.
(f) Compliance with Laws. Since August 27, 2004, Seller has complied
in all material respects with all federal, state and local laws, statutes,
rules, regulations, ordinances and codes, and has received no written notice
from any governmental agency asserting that a violation has or may have
occurred.
(g) No Defaults. All leases, agreements and other contracts assumed
by Buyer are in full force and effect, with no default or breach existing or
which would occur but for the existence of notice or the lapse of time.
(h) Equipment. No equipment shall be included as part of this sale.
(i) Completeness of Assets. The Purchased Assets comprise all of the
assets which are necessary to operate the Website, excluding hardware,
connectivity, and collocation, and its related business in the manner that it
has been previously conducted.
6. REPRESENTATIONS, WARRANTIES AND COVENANTS OF BUYER. Buyer hereby
represents and warrants, and from and after this date covenants to Buyer as
follows:
(a) Organization and Authority. Buyer is a corporation, duly
organized, validly existing, and in good standing under the laws of the State of
Delaware and has all requisite corporate power and authority to carry on its
business as it is presently being conducted, to enter into this Agreement, and
to carry out and perform the transactions contemplated hereby. The execution,
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delivery and performance of this Agreement by Buyer has been duly authorized and
approved by its Board of Directors, and will not violate its Articles of
Incorporation, By-Laws, or any agreement to which it is a party or by which it
is bound or any law, rule, regulation or court order. This Agreement, and all
other instruments, documents and agreements to be delivered by Buyer in
connection therewith, are the legal, valid and binding obligation of Buyer
enforceable in accordance with its, and their, terms.
7. ACTIONS PRIOR TO THE CLOSING DATE. The respective parties hereto
covenant and agree to take the following actions between the date hereof and the
Closing Date:
(a) Investigation of Seller by the Buyer. Seller shall afford to the
officers, employees and authorized representatives (including, without
limitation, independent public accountants and attorneys) of the Buyer a full
and complete opportunity to conduct and complete its acquisition review and
analysis of the Purchased Assets and Assumed Liabilities (the "Acquisition
Review"), including a review of Seller's books and records, financial
information, contracts and agreements (including all non-competition and
non-solicitation covenants binding on Seller or its employees), inspection and
review of the physical operations of the Seller's business, and the right to
contact and communicate with Seller's vendors, creditors, customers, employees,
independent contractors and others having a business relationship with Seller.
Buyer agrees that it will keep and maintain any and all information obtained by
it, its agents, and counsel, confidential, and will not make use of any such
information other than for its evaluation of the proposed transaction.
(b) Consents and Approvals. Seller shall use its best efforts
promptly to obtain all consents and amendments from parties to leases,
contracts, licenses and other agreements set forth on Schedule 2(a) which
require consent, together with estoppel letters from parties to material
agreements (the "Required Consents").
(c) Exclusive Dealing. Seller and its affiliates shall deal
exclusively with the Buyer with respect to the sale of the Purchased Assets.
Seller shall not solicit, encourage or entertain offers or inquiries (nor shall
Seller or any of its affiliates authorize or permit any director, officer,
employee, attorney, accountant or other representative or agent to solicit,
encourage or entertain offers or inquiries) from other possible acquiring
companies, persons or entities, provide information to or participate in any
discussions or negotiations with any companies, persons or entities with a view
to an acquisition of all or substantially all of Seller's assets or stock or any
interest therein.
(d) Non-Compete/Non-Solicitation. Seller, and its affiliates, shall
not, individually or as a consultant, shareholder, partner, venturer, director,
officer, agent or otherwise, engage in any of the following actions:
(i) for a two(2) year period following the Closing, Seller shall
not engage in the business of hosting adult html-based web sites at no cost to
the website creator. Buyer understand that Seller is active in the 3-Dimensional
and Virtual Reality internet environment space (such as that currently run at
http;//xxx.xxxxxxxxxxxxxx.xxx and xxxx://xxx.xxxxxx com) and that Seller may
engage in any business whatsoever within that environment, which business may
involve providing free hosting of content specifically related to the services
and products provided at said web sites, without such activity being considered
a violation of this provision; and (ii) Seller may continue to operate free web
hosting from subdomains of the xxx.xxx domain, but shall not take new web site
registrations after the Closing Date. Seller shall stop allowing webmasters for
such subdomains to make any updates to their websites within 30 days of the
Closing Date. Seller shall be permitted to allow changes to such websites at any
time (i) for legal reasons, such as eliminating copyright infringement, (ii) to
permit a redirection of the site to another web host, (iii) to delete content,
or (iv) as part of a shutdown of all hosting operations of such subdomains.
In addition, Seller shall keep and maintain all confidential and
proprietary information regarding the Purchased Assets, including without
limitation, financial statements, customer and supplier lists, pricing
information, sales and purchases margins and practices, methods of telephone
solicitation and similar information regarding the business and affairs related
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to the Purchased Assets, confidential and shall not disclose such information to
any third person or exploit such information personally except as required under
law, or if such information is in the public domain.
Seller understands and agrees that this section is critical to this
Agreement, and in the event that Seller commits a breach of this section, Buyer
shall have the non-exclusive right and remedy to have this section specifically
enforced to the extent permitted by any court of competent jurisdiction, it
being acknowledged and agreed that any breach or threatened breach will cause
immediate irreparable injury to Buyer and that monetary damages will not provide
an adequate remedy at law. If any of the provisions contained herein are
construed to be invalid or unenforceable in any jurisdiction, (x) the same shall
not affect the remainder of the provisions or the enforceability thereof, which
shall be given full force and effect and (y) the court making such determination
shall have the power to reform the duration and/or scope of such section.
8. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER. The obligations of the
Seller under this Agreement shall be subject to the satisfaction, on or prior to
the Closing Date, of the conditions set forth below.
(a) No Misrepresentation or Breach of Representations, Warranties and
Covenants. There shall have been no breach by Buyer in the performance of any of
its covenants and agreements herein; each of the representations and warranties
of Buyer contained or referred to herein shall be true and correct in all
material respects on the Closing Date as though made on the Closing Date, except
for changes therein specifically permitted by this Agreement or resulting from
any transaction expressly consented to in writing by the Seller; and there shall
have been delivered to the Seller a certificate or certificates to that effect,
dated the Closing Date, signed by the Buyer, by its President.
(b) Corporate Action. Buyer shall have taken all corporate action
necessary to approve the transactions contemplated by this Agreement, and Buyer
shall have furnished the Seller with certified copies of the resolutions adopted
by the Board of Directors of Buyer, in form and substance reasonably
satisfactory to counsel for the Seller, in connection with such transactions.
(c) No Restraint or Litigation. No action, suit, investigation or
proceeding shall have been instituted or threatened by any third party,
governmental or regulatory agency to restrain, prohibit or otherwise challenge
the legality or validity of the transactions, or of the compensation or stock to
be used as compensation, contemplated hereby.
(d) Other Documentation. Seller shall have received all of the
documents and showings required to be delivered by the Buyer at the Closing
pursuant to section 4(C).
9. CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER. The obligations of the
Buyer under this Agreement shall be subject to the satisfaction, on or prior to
the Closing Date, of the conditions set forth below.
(a) No Misrepresentation or Breach of Representations, Warranties and
Covenants. There shall have been no breach by Seller in the performance of any
of its covenants and agreements herein; each of the representations and
warranties of Seller contained or referred to herein shall be true and correct
in all material respects on the Closing Date as though made on the Closing Date,
except for changes therein specifically permitted by this Agreement or resulting
from any transaction expressly consented to in writing by the Buyer; and there
shall have been delivered to the Buyer a certificate or certificates to that
effect, dated the Closing Date, signed by the Seller, by its President.
(b) Corporate Action. Seller shall have taken all corporate action
necessary to approve the transactions contemplated by this Agreement, and Seller
shall have furnished the Buyer with certified copies of the resolutions adopted
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by the Board of Directors of Seller, in form and substance reasonably
satisfactory to counsel for the Buyer, in connection with such transactions.
(c) No Restraint or Litigation. No action, suit, investigation or
proceeding shall have been instituted or threatened by any third party,
governmental or regulatory agency to restrain, prohibit or otherwise challenge
the legality or validity of the transactions contemplated hereby.
(d) Acquisition Review. Buyer shall have been satisfied, in its own
discretion, with its Acquisition Review.
(e) Other Documentation. Buyer shall have received all of the
documents and showings required to be delivered by the Seller at the Closing
pursuant to section 4(B).
10. MUTUAL INDEMNIFICATION.
A. Seller hereby agrees to indemnify and hold the Buyer, and its
shareholders, directors, officers, employees and agents, harmless from and
against any and all claims, suits, actions, judgments, liability, losses,
damages, fines, penalties, costs and expenses, including without limitation,
reasonable attorneys' fees and costs arising out of or relating to any event,
condition, contract, obligation, act, omission, non-fulfillment, non-assumed
liability, breach, inaccuracy or non-fulfillment of any representation,
warranty, covenant or agreement with respect to any of the terms of this
Agreement. Seller acknowledges and agrees that Buyer may withhold from and
offset any payments due under the Note by the amount due Buyer under this
section.
B. Buyer hereby agrees to indemnify and hold harmless the Seller, and
its shareholders, directors, officers, employees and agents, from and against
any and all claims, suits, actions, judgments, liability, losses, damages,
fines, penalties, costs and expenses, including without limitation, reasonable
attorneys' fees and costs arising out of or relating to any event, condition,
contract, obligation, act, omission, non-fulfillment, assumed agreements, breach
or misrepresentation of warranty, representation, covenant or agreement with
respect to any of the terms of this Agreement.
11. OTHER PROVISIONS.
A. All notices for which provision is made in this Agreement shall be
given in writing either by actual delivery of the notice into the hands of the
party entitled to the notice or by mailing the notice by registered or certified
mail, return receipt requested, in which case the notice shall be deemed to be
given on the date of its mailing, addressed as follows:
If to Seller: Xxxxx Xxxxxxx
Global Reach, Inc.
X.X. Xxx 00000
Xxxxxx Xxxx, XX 00000
If to Buyer: 110 Media Group, Inc.
00 Xxxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, XX 00000
B. The terms and provisions hereof shall inure to the benefit of and
be binding upon the undersigned and each of them and their respective successors
and assigns.
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C. The invalidity or unenforceability of any of the provisions hereof
shall not affect the validity or enforceability of the remainder hereof.
D. This Agreement together with all of the Exhibits, Schedules and
other documents referred to herein constitutes the entire Agreement between the
parties with reference to the subject matter hereof and supersedes all prior
agreements and understandings, whether written or oral, regarding the subject
matter hereof, and may only be changed or modified in writing.
E. All of the representations, warranties, covenants, agreements,
terms and provisions of this Agreement shall survive the Closing Date.
12. COMPLIANCE WITH DMCA AND REPORTING REQUIREMENTS.
As an internet service provider, xxx0000.xxx has been operated in
compliance with the safe harbor provisions of the Digital Millennium Copyright
Act ("DMCA"). As of the closing date, Seller shall cease to act as agent
pursuant to the DMCA, and Buyer shall indemnify and defend Seller for any
copyright lawsuit brought for actions subsequent to the closing date. In
addition, xxx0000.xxx is required to comply with federal law requiring mandatory
reporting of child pornography and suspected child pornography to the National
Center for Missing and Exploited Children. Seller shall be responsible for
continued compliance, to the extent required by law, as of the closing date
hereof, and Buyer may notify the National Center for Missing and Exploited
Children and any inquiring law enforcement agency of the same. While Buyer shall
remain solely liable for obtaining independent legal counsel regarding its
compliance obligations under the law with regard to copyright, child
pornography, and other matters, Seller shall provide Buyer with complete
information regarding the manner in which it complied with these requirements,
including tutorials in the automated child pornography reporting software
developed by Ideaflood, Inc. and licensed for use by Seller.
13. TRANSITION SERVICES.
Seller shall provide services to Buyer, at Buyer's expense,
consisting of reasonable advice, technical support, bandwidth, hosting
facilities, and access to hardware for the purpose of, and only so far as
necessary to effectuate, a transition of the Website to Seller. These services
shall be provided at Seller's actual cost for a period of sixty days after the
close of this Agreement. For an additional period of sixty days following the
termination of the initial sixty day period, Seller shall provide such services
at a reasonable market cost or at its actual cost, whichever is higher. After
the termination of both sixty day periods, Seller's obligation to provide such
services shall terminate. Notwithstanding the foregoing, Buyer understands that
all of Seller's employees are at will employees. and Seller's obligations
hereunder at any given time shall be limited to those transition services that
can be provided by Seller's then-current employees. For the purpose of
determining Seller's actual cost for bandwidth, bandwidth shall be sold in 100
megabit increments and invoiced at the peak usage level. For the purpose of
determining Seller's actual cost for hosting facilities, the cost shall be
determined by multiplying the cost to Seller for the whole facility by the
percentage of active machines in that facility being used for the Websites.
This Agreement is intended to be performed in the State of New York and
shall be governed by and construed and enforced in accordance with the laws of
that state.
This Agreement is intended for the benefit of the parties hereto and is not
intended to benefit any third party.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement, as of
the date and year first above written.
BUYER:
110 MEDIA GROUP, INC.
By: /s/ Xxxxxxx Xxxxxx
-------------------------------
Xxxxxxx Xxxxxx, President
SELLER:
GLOBAL REACH, INC.
By: /s/ Xxxxx Xxxxxxx
-------------------------------
Xxxxx Xxxxxxx, President
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EXHIBIT
Number Description
------ -----------
3(b) Note 1
3(c) Note 2
SCHEDULES
2(b) Assumed Leases, Licenses, Agreements and Contracts
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EXHIBIT 3(B)
PROMISSORY NOTE
$50,000.00 December 5, 2004
FOR VALUE RECEIVED, the undersigned, 110 Media Group, Inc., an Delaware
corporation ("Maker"), hereby promises to pay to the order of Global Reach,
Inc., an Nevada corporation ("Payee"), in lawful money of the United States of
America, the principal sum of Fifty Thousand Dollars ($50,000.00) with annual
interest at 6%, (the "Rate"). This Note shall be paid on December 15, 2004.
Maker shall have the right to prepay this Note, in whole or in part,
without premium or penalty. All prepayments shall be applied to the next
required monthly payments under this Note.
All payments hereunder shall be paid to Payee at the office of Payee,
___________, Zephyr Cove, Nevada, or at such other place or places as the Payee
or legal holder may from time to time designate in writing.
At the election of the Payee or legal holder hereof and without notice,
demand or legal process, the indebtedness remaining unpaid hereon shall become
at once due and payable at the place of payment aforesaid in case of default
("Default") as follows: (i) in the payment, when due and payable, of any payment
of principal or interest hereunder or in any other debt of Maker to Payee, or
any portion thereof, in accordance with the terms hereof after a ten (10) day
grace period or (ii) the filing by Borrower of a voluntary petition in
bankruptcy under the Bankruptcy Reform Act of 1978, as amended or succeeded by a
similar statute, the filing against Borrower of an involuntary petition in
bankruptcy under the Bankruptcy Reform Act of 1978, as amended or succeeded by a
similar statute which petition is not stayed or dismissed within sixty (60)
days, or an assignment for the benefit of creditors by Borrower. In the event of
a Default, the Payee or legal holder hereof shall be entitled to (a) interest on
all overdue payments at the Rate plus five percent (5%) and (b) reasonable costs
and expenses of collection, including reasonable attorneys' fees.
This Note is delivered pursuant to and subject to the terms of an Asset
Purchase Agreement (the "Purchase Agreement), dated December 5, 2004 by and
between Maker and Payee. It is understood and agreed that in the event that
Payee owes any sums to Maker pursuant to section 10(A) of the Purchase
Agreement, Maker may offset against the next due and owing payments under this
Note any amounts that are owed by Payee, and the amount owed under this Note
shall be reduced accordingly.
No delay or admission on the part of Payee or any holder hereof in
exercising any right or option herein given to such Payee or holder shall impair
such right or option or be considered as a waiver or acquiescence in any default
hereunder. Maker hereby waives presentment, demand, notice of dishonor and
protest; agrees to pay all expenses, including reasonable attorneys' fees and
legal expenses incurred by Payee in endeavoring to collect any amount payable
hereunder; and recognizes that Payee may demand payment of this Note on the date
of maturity hereof. Maker agrees that any action or proceeding to enforce this
Note may be commenced in the courts of the State of New York or the U.S. Federal
District Court for the Southern District of New York.
This Note shall be construed in accordance with the laws of the State of
New York.
110 MEDIA GROUP, INC.
By: _________________________
Xxxxxxx Xxxxxx, President
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EXHIBIT 3(C)
PROMISSORY NOTE
$100,000.00 December 5, 2004
FOR VALUE RECEIVED, the undersigned, 110 Media Group, Inc., an Delaware
corporation ("Maker"), hereby promises to pay to the order of Global Reach,
Inc., an Nevada corporation ("Payee"), in lawful money of the United States of
America, the principal sum of One Hundred Thousand Dollars ($100,000.00) with
annual interest at %, (the "Rate"). This Note shall be repaid in twelve (12)
consecutive equal monthly installments of principal and interest commencing on
January 1, 2005 and ending on December 1, 2005, each such monthly principal and
interest installment being $________.
Maker shall have the right to prepay this Note, in whole or in part,
without premium or penalty. All prepayments shall be applied to the next
required monthly payments under this Note.
All payments hereunder shall be paid to Payee at the office of Payee,
___________, Zephyr Cove, Nevada, or at such other place or places as the Payee
or legal holder may from time to time designate in writing.
At the election of the Payee or legal holder hereof and without notice,
demand or legal process, the indebtedness remaining unpaid hereon shall become
at once due and payable at the place of payment aforesaid in case of default
("Default") as follows: (i) in the payment, when due and payable, of any payment
of principal or interest hereunder or in any other debt of Maker to Payee, or
any portion thereof, in accordance with the terms hereof after a ten (10) day
grace period or (ii) the filing by Borrower of a voluntary petition in
bankruptcy under the Bankruptcy Reform Act of 1978, as amended or succeeded by a
similar statute, the filing against Borrower of an involuntary petition in
bankruptcy under the Bankruptcy Reform Act of 1978, as amended or succeeded by a
similar statute which petition is not stayed or dismissed within sixty (60)
days, or an assignment for the benefit of creditors by Borrower. In the event of
a Default, the Payee or legal holder hereof shall be entitled to (a) interest on
all overdue payments at the Rate plus five percent (5%) and (b) reasonable costs
and expenses of collection, including reasonable attorneys' fees.
This Note is delivered pursuant to and subject to the terms of an Asset
Purchase Agreement (the "Purchase Agreement), dated December 5, 2004 by and
between Maker and Payee. It is understood and agreed that in the event that
Payee owes any sums to Maker pursuant to section 10(A) of the Purchase
Agreement, Maker may offset against the next due and owing payments under this
Note any amounts that are owed by Payee, and the amount owed under this Note
shall be reduced accordingly.
No delay or admission on the part of Payee or any holder hereof in
exercising any right or option herein given to such Payee or holder shall impair
such right or option or be considered as a waiver or acquiescence in any default
hereunder. Maker hereby waives presentment, demand, notice of dishonor and
protest; agrees to pay all expenses, including reasonable attorneys' fees and
legal expenses incurred by Payee in endeavoring to collect any amount payable
hereunder; and recognizes that Payee may demand payment of this Note on the date
of maturity hereof. Maker agrees that any action or proceeding to enforce this
Note may be commenced in the courts of the State of New York or the U.S. Federal
District Court for the Southern District of New York.
This Note shall be construed in accordance with the laws of the State of
New York.
110 MEDIA GROUP, INC.
By: _________________________
Xxxxxxx Xxxxxx, President
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SCHEDULE 2(b)
LEASES, LICENSES, AGREEMENTS AND CONTRACTS
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