MERGER AND SHARE EXCHANGE AGREEMENT
This MERGER AND SHARE EXCHANGE AGREEMENT (the "AGREEMENT") is entered
into as of January 11, 2007, by and among Strategic Gaming Investments, Inc., a
Delaware corporation (hereinafter referred to as the "SGME"), on the one hand,
and Neolink Wireless Content, Inc., a Nevada corporation (hereinafter referred
to as "NEOLINK"), and each of the holders of shares of Common Stock of NEOLINK
listed on Exhibit A attached hereto (individually, a "NEOLINK STOCKHOLDER", and
collectively, the "NEOLINK STOCKHOLDERS"). SGME and NEOLINK are collectively
referred to herein as the "PARTIES."
RECITALS
WHEREAS, NEOLINK is in the wireless content business;
WHEREAS, SGME is a publicly traded company with its common stock quoted
on the Over the Counter Bulletin Board under the symbol "SGME.OB" and is
preparing to launch a number of poker related projects;
WHEREAS, the NEOLINK Stockholders own 100% of the issued and outstanding
common stock of NEOLINK; and
WHEREAS, SGME desires to acquire 100% of the issued and outstanding
common stock of NEOLINK and the NEOLINK Stockholders desire to exchange all of
the NEOLINK Common Stock for shares of common stock of SGME ("SGME SHARES") in
a transaction intended to qualify as a "tax-free" reorganization under Section
368 of the Internal Revenue Code of 1986, as amended (the "CODE").
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and in reliance upon the representations and warranties
hereinafter set forth, the parties agree as follows:
SHARE EXCHANGE; OTHER MATTERS.
Share Exchange. Subject to the terms and conditions of this
Agreement, at the closing provided for in Section 2 hereof (the "CLOSING"),
each of the NEOLINK Stockholders shall sell, assign, transfer and deliver to
SGME the number of shares of Common Stock of NEOLINK set forth opposite each
such NEOLINK Stockholder's name on Exhibit A to be attached hereto prior to the
Closing (the shares of Common Stock of NEOLINK sold, assigned and transferred
to SGME hereunder are hereinafter referred to as the "NEOLINK SHARES").
Following the Closing, NEOLINK shall be a wholly owned subsidiary of SGME.
1.2 Consideration. Subject to the terms and conditions of this
Agreement and in consideration of the sale, assignment, transfer and delivery
of the NEOLINK Shares to SGME, at the Closing SGME shall issue, sell and
deliver to the NEOLINK Stockholders ONE MILLION (1,000,000) SGME Shares. Each
NEOLINK Stockholder shall receive, in consideration for the NEOLINK Shares
sold, assigned, transferred and delivered to SGME by such NEOLINK Stockholder,
a pro rata portion of SGME Shares based on the number of NEOLINK Shares owned
by such NEOLINK Stockholder, all as set forth on Exhibit A hereto. SGME Shares
issued hereby to the NEOLINK Stockholders shall include registration rights as
outlined in the Registration Rights Agreement attached hereto as Exhibit B.
1.3 Liabilities. Except as mutually agreed upon by the Parties
as set forth on Schedule 1.3 attached hereto, SGME shall not assume, and shall
not be responsible for, any liabilities, debts or obligations of NEOLINK of any
kind or nature whatsoever.
1.4 Funding Commitment.
(a) In addition to the consideration noted in Section 1.2
above, SGME shall provide financing to NEOLINK as follows: (i) $50,000 at the
Closing (the "INITIAL PAYMENT"); (ii) $50,000 on or before January 31, 2007;
(iii) $50,000 on or before March 15, 2007; (iv) $50,000 on or before April 30,
2007; and (v) $50,000 on or before June 15, 2007 (collectively, the "FUNDING
COMMITMENT"). The Funding Commitment shall be utilized (A) as set forth in the
mutually agreed upon budget set forth on Schedule 1.4(a) attached hereto, and
(B) as may otherwise be necessary in connection with NEOLINK's business,
operations and affairs, as reasonably determined by Xxxxxx X. Xxxx ("XXXX"),
President and Chief Executive Officer of NEOLINK.
(b) In the event that SGME fails to timely provide funding
on the dates set forth above, and such failure to fund is not rectified within
ten (10) days of the due date, then Xxxx shall have the right to reacquire One
Hundred Percent (100%) of the shares of NEOLINK from SGME for 15% of that
portion of the Funding Commitment provided by SGME prior to any such failure to
fund. The Parties shall execute such further documentation as necessary to
evidence Xxxx'x rights under this paragraph.
1.5 Management and Board of Directors. At the Closing, Xxxx
shall be appointed President, Chief Executive Officer and Chairman of the Board
of NEOLINK. Prior to the Closing, the Purchaser and Xxxx shall negotiate a
mutually agreeable employment contract ("EMPLOYMENT AGREEMENT") with Xxxx to
serve in the foregoing capacities. The Employment Agreement shall be executed
as soon as reasonably practicable following the Closing. The Board of
Directors of NEOLINK following the Closing shall consist of Xxxx, Xxxx Xxxxx,
Xxxxxxxx X. Xxxxxxxxx, Xxxxx X. Xxxxxxxx and Xxxxxxx Xxxxxxxxx.
CLOSING.
Time and Place. The Closing of the transaction contemplated
by this Agreement shall be held on January 5, 2007, assuming (a) all requisite
stockholder approval has been received by NEOLINK, and (b) satisfaction of all
conditions precedent to the obligations of the Parties specified in this
Agreement, unless duly waived by the party entitled to satisfaction thereof,
has been achieved. The date on which the Closing is to be held is referred to
herein as the "Closing Date." The Closing shall be held at the offices of
SGME, located at 0000 Xxxxxx Xxxxxxx Xx., Xxxxxxxxx, Xxxxxx 00000, at 10:00
a.m. on such date, or at such other time and place as the parties may agree
upon in writing.
Deliveries by the NEOLINK Stockholders. At the Closing, each
NEOLINK Stockholder shall deliver to SGME the following: (a) stock
certificates representing the number of NEOLINK Shares set forth opposite the
name of each NEOLINK Stockholder listed on Exhibit A hereto, duly endorsed or
accompanied by stock powers duly executed in blank and otherwise in form
acceptable for transfer on the books of NEOLINK, and (b) an investment
representation letter in the form attached hereto as Exhibit C executed by each
NEOLINK Stockholder.
Deliveries by NEOLINK. At the Closing, NEOLINK shall deliver
to SGME the documents referred to in Section 9.1 hereof.
Deliveries by SGME. At the Closing, in addition to the
documents referred to in Section 9.2 hereof, SGME shall deliver to the NEOLINK
Stockholders or their Agent (as defined in Section 13 below) a stock
certificate issued in the name of each NEOLINK Stockholder representing the
number of SGME Shares each NEOLINK Stockholder is entitled to receive in
accordance with Section 1.2 above.
3. INDIVIDUAL REPRESENTATIONS AND WARRANTIES OF THE NEOLINK
STOCKHOLDERS. Each of the NEOLINK Stockholders, severally but not jointly,
represents and warrants to SGME as follows:
3.1 Title. Such NEOLINK Stockholder owns the number of NEOLINK
Shares set forth opposite such Stockholder's name on Exhibit A to be attached
hereto prior to Closing, and shall transfer to SGME, at the Closing, good and
valid title to said number of NEOLINK Shares, free and clear of all
restrictions on transfer (other than any restrictions under federal and state
securities laws), liens, claims, options, charges, pledges, security interests,
and encumbrances of every kind, character or description. Such NEOLINK
Stockholder is not a party to any voting trust, proxy, or other agreement or
understanding with respect to the voting of any capital stock of NEOLINK.
3.2 Valid and Binding Agreement. Such NEOLINK Stockholder has
the full and unrestricted right, power and authority and capacity to execute
and deliver this Agreement and consummate the transactions contemplated herein.
This Agreement has been duly executed and delivered by such NEOLINK Stockholder
and constitutes the valid and binding obligation of such NEOLINK Stockholder,
enforceable in accordance with its terms.
3.3 Non-Contravention. The execution and delivery of this
Agreement and consummation of the transactions contemplated hereby do not
violate or conflict with or constitute a default under any contract,
commitment, agreement, understanding, arrangement or restriction of any kind to
which such NEOLINK Stockholder is a party or by which such NEOLINK Stockholder
or such NEOLINK Stockholder's property is bound, or to the knowledge of such
NEOLINK Stockholder any existing applicable law, rule, regulation, judgment, or
court order. Such NEOLINK Stockholder is not and will not be required to give
any notice to or obtain any consent from any Person in connection with the
execution and delivery of this Agreement or the consummation of the
transactions contemplated herein.
3.4 Investment Representations. Such NEOLINK Stockholder intends
to acquire SGME Shares for investment and not with a view to the public
distribution or resale thereof, and such NEOLINK Stockholder shall confirm such
intention to SGME by delivering to SGME at the Closing an investment
representation letter in the form attached as Exhibit C hereto executed by such
NEOLINK Stockholder. Such NEOLINK Stockholder agrees that SGME may endorse on
any stock certificate for SGME Shares to be delivered pursuant to this
Agreement an appropriate restrictive legend referring to the provisions of the
investment representation letter attached as Exhibit C hereto, and that SGME
may instruct its transfer agent not to transfer any SGME Shares unless advised
by SGME that such provisions have been satisfied.
4. REPRESENTATIONS AND WARRANTIES OF NEOLINK. NEOLINK represents and
warrants to SGME as follows:
4.1 Authority. NEOLINK has all requisite corporate power and
authority to enter into this Agreement and to consummate the transactions
contemplated herein. The execution and delivery of this Agreement and the
consummation of the transactions contemplated herein have been duly authorized
and approved by all necessary corporate action on the part of NEOLINK. This
Agreement has been duly executed and delivered by NEOLINK and constitutes the
valid and binding obligation of NEOLINK, enforceable in accordance with its
terms.
4.2 Organization.
NEOLINK is a corporation duly organized, validly
existing and in good standing under the laws of the State of Nevada. NEOLINK
has the corporate power and authority to carry on its business as presently
conducted and is qualified to do business as a foreign corporation in each
jurisdiction in which the failure to be so qualified would have a material
adverse effect on NEOLINK or its business.
The copies of the Articles of Incorporation of NEOLINK
and all amendments thereto, as certified by the Secretary of State of Nevada,
and the Bylaws of NEOLINK and all amendments thereto, as certified by the
Secretary of NEOLINK, are complete and correct copies of the Articles of
Incorporation and Bylaws of NEOLINK as amended and in effect on the date
hereof.
4.3 Capitalization.
The authorized capital stock of NEOLINK consists of
10,000,000 shares of Common Stock, par value $.001 per share. As of the date
of this Agreement, 5,000,000 shares of Common Stock of NEOLINK are issued and
outstanding. As of the Closing Date, the number of issued and outstanding
shares of common sock of NEOLINK shall be the number of shares set forth on
Exhibit A attached hereto. All of the issued and outstanding shares of common
stock of NEOLINK are duly authorized, validly issued, fully paid and non-
assessable, and are not subject to preemptive rights created by statute,
NEOLINK's Articles of Incorporation or Bylaws or any agreement to which NEOLINK
is a party or by which it is bound.
There are no options, warrants, subscriptions, calls,
rights, commitments or agreements of any character to which NEOLINK is a party
or by which it is bound obligating NEOLINK to issue, deliver or sell, or cause
to be issued, delivered or sold, additional shares of capital stock of NEOLINK
or obligating NEOLINK to grant, extend or enter into any such option, warrant,
subscription, call, right, commitment or agreement.
4.4 Equity Investments. NEOLINK has no subsidiaries and does not
own any equity interest in any other corporation or in any partnership, limited
liability company or other form of business entity.
4.5 Financial Statements. NEOLINK has delivered to SGME copies
of its unaudited financial statements, prepared in conformity with generally
accepted accounting principles in the United States, for each financial year
since its inception and for the interim period concluded on September 30, 2006.
Such financial statements consist of a balance sheet and related statements of
operations, changes in stockholders' equity and cash flows (collectively, the
"NEOLINK FINANCIAL STATEMENTS"), copies of which are attached hereto as
Schedule 4.5. The NEOLINK Financial Statements have been prepared in
conformity with generally accepted accounting principals in the United States
of America, consistently applied, and present fairly the financial condition
and results of operations of NEOLINK at the dates and for the periods covered
by the NEOLINK Financial Statements, subject in the case of the interim portion
of the NEOLINK Financial Statements for 2006 which are subject only to normal
year-end audit adjustments, which will not be material, and the absence of
certain footnote disclosures.
4.6 Intellectual Property. NEOLINK owns or has the right to use
pursuant to license, sublicense, agreement or permission all patents, patent
applications, trademarks, service marks, trade names, copyrights, computer
software (including data and related documentation), trade secrets, Internet
Websites, domain names and other proprietary rights and processes necessary for
its business as now conducted and as proposed to be conducted. To the best of
NEOLINK's knowledge, the business as conducted and as proposed to be conducted
by NEOLINK does not and will not cause NEOLINK to infringe or violate any of
the patents, trademarks, service marks, trade names, copyrights, computer
software, licenses, trade secrets, domain names or other proprietary rights of
any other Person. All registered and pending applications for intellectual
property holdings of NEOLINK are specifically delineated in Schedule 4.6
attached hereto.
4.7 Litigation. There is no claim, action, suit or proceeding,
at law or in equity, pending against NEOLINK that might result, either in any
case or in the aggregate, in any material adverse change in the business,
assets or financial condition of NEOLINK, nor is there any judgment, decree,
injunction, order or writ of any court, governmental authority or arbitrator
outstanding against NEOLINK having, or which insofar as can be reasonably
foreseen, in the future may have, any such effect.
4.8 Compliance with Contracts. NEOLINK is not in violation or
default of any material term or provision of any material agreement, contract,
lease, license or instrument to which NEOLINK is a party or by which it or any
of its properties or assets are bound.
4.9 No Conflict. The execution and delivery of this Agreement
and the consummation of the transactions contemplated herein do not and will
not conflict with, or result in a breach of any term or provision of, or
constitute a default under or result in a violation of, the Articles of
Incorporation or Bylaws of NEOLINK, as amended, or any material agreement,
contract, lease, license or instrument to which NEOLINK is a party or by which
it or any of its properties or assets are bound.
4.10 Compliance with Applicable Law. To NEOLINK'S knowledge,
NEOLINK has, in all material respects, complied with all laws, regulations and
orders applicable to its business, except in any case where the failure to
comply would not have a material adverse effect on NEOLINK or its business, and
NEOLINK has all permits and licenses required by such laws, regulations and
orders.
4.11 Governmental Consent. No consent, approval, order or
authorization of, or registration, declaration or filing with, any court,
administrative agency or commission or other governmental authority is required
by or with respect to NEOLINK in connection with the execution and delivery of
this Agreement or the consummation by NEOLINK of the transactions contemplated
herein.
4.12 Third Party Consent. NEOLINK has obtained or prior to
Closing will obtain all consents required to be obtained by NEOLINK from third
parties material to the business of NEOLINK in connection with the execution
and delivery of this Agreement and the consummation of the transactions
contemplated herein, other than such consents which if not obtained would not
have a material adverse effect on NEOLINK or its business.
4.13 Absence of Liabilities. As of the date hereof, NEOLINK has
no outstanding debts, liabilities and obligations other than those set forth on
Schedule 4.13 attached hereto.
4.14 Absence of Certain Changes or Events. Since the date of the
NEOLINK Financial Statements, NEOLINK has not:
(a) Conducted any business or engaged in any activities
other than activities in the ordinary course and scope of its business;
(b) Declared or made any payment of dividends or other
distributions to its stockholders or upon or in respect of any shares of its
capital stock or purchased, or obligated itself to purchase, retire or redeem,
any shares of its capital stock or other securities;
(c) Issued or sold or agreed to issue or sell any shares of
its capital stock or other securities, or issued, granted or sold or agreed to
issue, grant or sell, any options rights or warrants with respect thereto;
(d) Amended its Articles of Incorporation or Bylaws;
(e) Entered into or become bound by or agreed to enter into
or become bound by any contract, instrument, lease, license, agreement,
transaction, commitment or undertaking other than as set forth in Schedule
4.14(e) hereto; or
(f) Borrowed or agreed to borrow any funds; incurred or
agreed to incur or become subject to any debts, liabilities or obligations of
any kind whatsoever; subjected or agreed to subject any of the assets or
properties of NEOLINK to any lien, security interest, charge, interest or other
encumbrance or suffered such to be imposed; or guaranteed or agreed to
guarantee the debts or obligations of others.
4.15 Brokers or Finders. NEOLINK has not incurred, and will not
incur, directly or indirectly, as a result of any action taken by NEOLINK, any
liability for any brokerage or finders' fees or agents' commissions or any
similar charges in connection with this Agreement or any transaction
contemplated herein.
5. REPRESENTATIONS AND WARRANTIES OF SGME. SGME represents and
warrants to NEOLINK and the NEOLINK Stockholders as follows:
5.1 Authority. SGME has all requisite corporate power and
authority to enter into this Agreement and to consummate the transactions
contemplated herein. The execution and delivery of this Agreement, the
consummation of the transactions contemplated herein, and the issuance of SGME
Shares in accordance with the terms hereof, has been duly authorized by all
necessary corporate action on the part of SGME. This Agreement has been duly
executed and delivered by SGME and constitutes the valid and binding obligation
of SGME, enforceable in accordance with its terms.
5.2 Organization.
(a) SGME is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Delaware. SGME has the
corporate power and authority to carry on its business as presently conducted
and is qualified to do business as a foreign corporation and is in good
standing under the laws of each state in which either the ownership or use of
the properties owned or used by it, or the nature of the activities conducted
by it, requires such qualification, except where the failure to be so qualified
would not have a material adverse effect on the business or financial condition
of SGME.
(b) The copies of the Articles of Incorporation, and all
amendments thereto, of SGME, as certified by the Secretary of State of
Delaware, and the Bylaws of SGME and all amendments thereto, as certified by
the Secretary of SGME, which have heretofore been delivered to NEOLINK for
examination, are complete and correct copies of the Articles of Incorporation
and Bylaws of SGME as amended and in effect on the date hereof. All minutes of
meetings and actions in writing without a meeting of the Board of Directors and
stockholders of SGME are contained in the minute book of SGME heretofore
delivered to NEOLINK for examination, and no minutes or actions in writing
without a meeting have been included in such minute book since such delivery to
NEOLINK that have not also been delivered to NEOLINK. The minute book of SGME
contains complete and accurate records of all meetings and other corporate
actions of its Board of Directors and stockholders.
5.3 Capitalization.
(a) The authorized capital stock of SGME consists of
100,000,000 shares of Common Stock, par value $0.001 per share; and 25,000,000
shares of preferred stock. As of the date of this Agreement, 8,047,137 shares
of Common Stock of SGME are issued and outstanding and no shares of Class A
convertible preferred stock of SGME are issued and outstanding. All of the
issued and outstanding shares of Common Stock of SGME are duly authorized,
validly issued, fully paid and non-assessable, are not subject to preemptive
rights created by statute, SGME's Articles of Incorporation or Bylaws or any
agreement to which SGME is a party or by which it is bound, and were offered
and sold in compliance with applicable state and federal securities laws.
(b) There are no outstanding options, warrants,
subscriptions, calls, rights, demands, commitments, convertible securities or
other agreements or arrangements of any character or kind whatsoever to which
SGME is a party or by which it is bound obligating SGME to issue, deliver or
sell, or cause to be issued, sold or delivered, additional shares of capital
stock of SGME or obligating SGME to grant, extend or enter into any such
option, warrant, subscription, call, right, demand, commitment, convertible
security or other agreement.
(c) SGME Shares to be sold to the NEOLINK Stockholders,
when issued and delivered in accordance with the terms of this Agreement, will
be duly authorized, validly issued, fully paid and non-assessable.
5.4 Equity Investments.
(a) As of the date hereof, SGME has no subsidiaries and
does not own any capital stock or have any interest in any other corporation or
in any partnership, limited liability company or other form of business entity,
except as set forth on Schedule 5.4 attached hereto.
(b) As of the date of Closing, SGME will not have any
subsidiaries and will not own any capital stock or have any interest in any
corporation, partnership or other form of business entity.
5.5 Financial Statements.
(a) SGME has delivered to NEOLINK copies of its audited
balance sheet for the fiscal years ended December 31, 2005 and 2004, along with
the related audited statements of operations, changes in stockholders' equity
and cash flows together with appropriate notes to such financial statements,
and copies of its unaudited balance sheet as of June 30, 2006 (the "SGME
BALANCE SHEET") and the related unaudited statements of operations, changes in
stockholders' equity and cash flows for the six month period ended June 30,
2005 (collectively, the "SGME FINANCIAL STATEMENTS"). A copy of SGME's audited
financial statements delivered to NEOLINK pursuant to this Section 5.5 is
included in SGME's Annual Report on Form 10-KSB for the fiscal year ended
December 31, 2005 on file with the Securities and Exchange Commission ("SEC"),
and a copy of SGME's unaudited financial statements delivered to NEOLINK
pursuant to this Section 5.5 is included in SGME's Quarterly Report on Form 10-
QSB for the six month period ended June 30, 2006 filed by SGME with the SEC.
SGME Financial Statements have been prepared in accordance with generally
accepted accounting principles in the United States of America, consistently
applied, and present fairly the financial condition and results of operations
of SGME at the dates and for the periods covered by SGME Financial Statements.
(b) The books and records, financial and otherwise, of SGME
are in all material respects complete and correct and have been maintained in
accordance with sound business and bookkeeping practices so as to accurately
and fairly reflect, in reasonable detail, the transactions and dispositions of
the assets of SGME.
5.6 Tax Returns. Within the times and in the manner prescribed
by law, SGME has filed all federal, state, and local tax returns required by
law and has paid in full all taxes, including, without limitation, all net
income, gross receipts, sales, use, withholding, payroll, employment, social
security, unemployment, excise and property taxes, plus applicable penalties
and interest thereon (all such items are collectively referred to as "TAXES")
due to, or claimed to be due by, any governmental authority. SGME Balance
Sheet fully accrues all current and deferred Taxes. SGME has not been
delinquent in the payment of any Taxes and has no tax deficiency or claim
outstanding, proposed or assessed against it, and there is no basis for any
such deficiency or claim. As of the Closing Date, SGME will not have any
liability for Taxes.
5.7 Compliance with Applicable Law. SGME has complied with all
laws, regulations and orders applicable to its business and has all permits and
licenses required thereby.
5.8 Contracts and Agreements. Except as set forth on Schedule
5.8 attached hereto, SGME is not a party to or bound by nor are any of its
properties and assets subject to or bound by any contract, instrument, lease,
license, agreement, guaranty, commitment or other arrangement.
5.9 Employees; Employee Plans. Except as set forth on Schedule
5.9 attached hereto, SGME is not a party to or bound by any employment,
consulting, or retainer agreement, or any profit-sharing, deferred
compensation, bonus, savings, stock option, stock bonus, stock purchase,
severance, benefit, retirement, disability, insurance, vacation or any other
similar employee benefit plans, funds, programs, agreements or arrangements
which cover, are maintained for the benefit of, or related to any or all
current or former employees, officers or directors of SGME.
5.10 No Conflict. The execution and delivery of this Agreement
and the consummation of the transactions contemplated herein do not and will
not conflict with or result in a breach of any term or provision of, constitute
a default under or result in a violation of, the Articles of Incorporation or
Bylaws of SGME, as amended, or any agreement, contract, lease, license, or
instrument to which SGME is a party or by which it or any of its properties or
assets are bound.
5.11 Third Party Consent. SGME has obtained or prior to the
Closing will obtain all consents required to be obtained by SGME from third
parties in connection with the execution and delivery of this Agreement and the
consummation of the transactions contemplated by this Agreement.
5.12 Governmental Consent. Except as set forth on Schedule 5.12
attached hereto, SGME is not required to submit any notice, report, statement,
or other filing with and no consent, approval, order or authorization by any
court, administrative agency or commission or other governmental authority is
required to be obtained by SGME in connection with the execution and delivery
of this Agreement and the sale and issuance of SGME Shares pursuant hereto,
other than (a) the filing of a Current Report on Form 8-K with the SEC in
accordance with the rules and regulations of the Securities Exchange Act of
1934, as amended (the "EXCHANGE ACT"), and (b) such filings as may be required
to be made under federal and applicable state securities laws after the
issuance of SGME Shares.
6. COVENANTS RELATING TO CONDUCT OF BUSINESS OF NEOLINK. During the
period from the date of this Agreement and continuing until the Closing,
NEOLINK agrees (except to the extent that SGME shall otherwise consent in
writing) that NEOLINK shall carry on its business in the usual and ordinary
course, in substantially the same manner as heretofore conducted.
7. COVENANTS RELATING TO CONDUCT OF BUSINESS OF SGME. During the
period from the date of this Agreement and continuing until the Closing, SGME
agrees (except as expressly contemplated by this Agreement or to the extent
that NEOLINK shall otherwise consent in writing) that:
7.1 Ordinary Course. SGME shall carry on its business in the
usual and ordinary course, in substantially the same manner as heretofore
conducted.
7.2 Dividends or Other Distributions. SGME shall not and shall
not propose to (i) declare or pay any dividends on or make other distributions
to its stockholders or upon or in respect of any shares of its capital stock,
or (ii) purchase or obligate itself to purchase, retire or redeem any shares of
its capital stock or other securities.
8. ADDITIONAL AGREEMENTS.
1.1 Access to Information.
NEOLINK shall afford to SGME and shall cause its
independent accountants to afford to SGME, and its accountants, counsel and
other representatives, reasonable access during normal business hours during
the period prior to the Closing to all information concerning NEOLINK, as SGME
may reasonably request, provided that NEOLINK shall not be required to disclose
any information which it is legally required to keep confidential. SGME will
not use such information for purposes other than this Agreement and will
otherwise hold such information in confidence (and SGME will cause its
consultants and advisors also to hold such information in confidence) until
such time as such information otherwise becomes publicly available, and in the
event of termination of this Agreement for any reason SGME shall promptly
return, or cause to be returned, to the disclosing party all documents obtained
from NEOLINK, and any copies made of such documents, extracts and copies
thereof.
SGME shall afford to NEOLINK and the NEOLINK
Stockholders and shall cause its independent accountants to afford to NEOLINK
and the NEOLINK Stockholders, and their accountants, counsel and other
representatives, reasonable access during normal business hours during the
period prior to the Closing to all of SGME's properties, books, contracts,
commitments and records and to the audit work papers and other records of
SGME's independent accountants. During such period, SGME shall use reasonable
efforts to furnish promptly to NEOLINK and the NEOLINK Stockholders such
information concerning SGME as NEOLINK and the NEOLINK Stockholders may
reasonably request, provided that SGME shall not be required to disclose any
information which it is legally required to keep confidential. NEOLINK and the
NEOLINK Stockholders will not use such information for purposes other than this
Agreement and will otherwise hold such information in confidence (and NEOLINK
and the NEOLINK Stockholders will cause their respective consultants and
advisors also to hold such information in confidence) until such time as such
information otherwise becomes publicly available, and in the event of
termination of this Agreement for any reason NEOLINK and the NEOLINK
Stockholders shall promptly return, or cause to be returned, to the disclosing
party all documents obtained from SGME, and any copies made of such documents,
extracts and copies thereof.
8.2 Communications. Between the date hereof and the Closing
Date, neither NEOLINK nor SGME will, without the prior written approval of the
other party, furnish any communication to the public if the subject matter
thereof relates to the other party or to the transactions contemplated by this
Agreement, except as may be necessary, in the opinion of their respective
counsel, to comply with the requirements of any law, governmental order or
regulation.
8.3 Securities Laws. SGME shall take such actions as may be
necessary to comply with the federal securities laws and the securities laws of
all states which are applicable in connection with the issuance of SGME Shares
pursuant to this Agreement.
8.4 Payment of Liabilities. Prior to the Closing, NEOLINK shall
pay or otherwise satisfy or discharge all of its debts, obligations and
liabilities of any kind whatsoever, including, without limitation, all of the
debts, obligations and liabilities set forth on Schedule 4.13 attached hereto
or reflected on the NEOLINK Financial Statements.
9. CONDITIONS PRECEDENT.
9.1 Conditions to Obligations of SGME. The obligations of SGME
to consummate the transactions contemplated by this Agreement are subject to
the satisfaction on or before the date of Closing of the following conditions,
unless waived by SGME:
(a) List of NEOLINK Stockholders. NEOLINK shall have
delivered to SGME for attachment as Exhibit A to this Agreement a true and
correct copy of a list of the NEOLINK Stockholders who are parties to this
Agreement and the number of NEOLINK Shares owned by each such Stockholder, and
the total number of NEOLINK Shares set forth opposite the names of all of the
Stockholders listed on Exhibit A shall constitute 100% of the total number of
issued and outstanding shares of Common Stock of NEOLINK immediately prior to
the Closing.
(b) Schedule of Outstanding Shares. NEOLINK shall have
delivered to SGME for attachment to this Agreement a copy of Schedule 4.3(a)
which sets forth the total number of issued and outstanding shares of Common
Stock of NEOLINK immediately prior to the Closing.
(c) Minimum Number of NEOLINK Shares. NEOLINK Stockholders
holding 100% of the issued and outstanding shares of Common Stock of NEOLINK
shall have executed and delivered a copy of this Agreement, all of the
outstanding NEOLINK stock certificates, and the investment representation
letter referred to in Section 2.2 above and Exhibit C hereto.
(d) Representations and Warranties of the NEOLINK
Stockholders. The representations and warranties of the NEOLINK Stockholders
set forth in Article 3 of this Agreement shall be true and correct in all
material respects as of the date of this Agreement and on the date of the
Closing.
(e) Representations and Warranties of NEOLINK. The
representations and warranties of NEOLINK set forth in Article 4 of this
Agreement shall be true and correct in all material respects as of the date of
this Agreement and on the date of Closing, and SGME shall have received a
certificate to such effect signed by the Chief Executive Officer of NEOLINK.
(f) Additional Closing Documents. SGME shall have received
the following documents and instruments:
Certified resolutions of the NEOLINK Board of
Directors authorizing the execution and delivery of this Agreement and the
performance by NEOLINK of its obligations hereunder and attached as Schedule
9.1(f)(1) hereto.
A copy of the minutes of all meetings of the Board
of Directors of NEOLINK and attached as Schedule 9.1(f)(2) hereto.
(3) A copy of all unanimous written consents effected
by the Board of Directors of NEOLINK and attached as Schedule 9.1(f)(3) hereto.
(4) A copy of the minutes of all meetings of the
stockholders of NEOLINK and attached as Schedule 9.1(f)(4) hereto.
(5) A certificate of good standing for NEOLINK issued
by the Nevada Secretary of State and attached as Schedule 9.1(f)(5) hereto
dated as of a date no earlier than five (5) calendar days prior to the Closing.
(6) A copy of all tax filings made by NEOLINK since
its inception and attached as Schedule 9.1(f)(6) hereto.
(7) A copy of all outstanding agreements by and
between NEOLINK and any third party and attached as Schedule 9.1(f)(7) hereto.
(8) Articles of incorporation, including all
amendments thereto, of NEOLINK certified by the Nevada Secretary of State and
attached as Schedule 9.1(f)(8) hereto.
(9) Bylaws of NEOLINK certified by its Secretary and
attached hereto as Schedule 9.1(f)(9).
(10) Such other documents and instruments as are
required to be delivered pursuant to the provisions of this Agreement or
otherwise reasonably requested by SGME in advance of the Closing.
9.2 Conditions to Obligations of NEOLINK and the NEOLINK
Stockholders. The obligations of NEOLINK and the NEOLINK Stockholders to
consummate the transactions contemplated by this Agreement are subject to the
satisfaction on or before the Closing Date of the following conditions unless
waived by NEOLINK and the NEOLINK Stockholders or their Agent:
Representations and Warranties of SGME. The
representations and warranties of SGME set forth in Article 5 of this Agreement
shall be true and correct in all material respects as of the date of this
Agreement and on the Closing Date, and NEOLINK and the NEOLINK Stockholders
shall have received a certificate to such effect signed by the Chief Executive
Officer of SGME.
(b) Performance of Obligations of SGME. SGME shall have
performed in all material respects all obligations required to be performed by
it under this Agreement prior to the Closing Date, and NEOLINK and the NEOLINK
Stockholders shall have received a certificate to such effect signed by the
Chief Executive Officer of SGME.
(c) Election of Directors and Officers. The Board of
Directors of SGME shall have elected or appointed, or shall have caused to be
elected or appointed, Xxxx to serve as President, Chief Executive Officer and
Chairman of the Board of NEOLINK effective as of the Closing Date.
(d) Opinion of Counsel. SGME shall have delivered to
NEOLINK and the NEOLINK Stockholders an opinion of its counsel dated the
Closing Date on the matters set forth on Schedule 9.2(d) attached hereto.
(e) Additional Closing Documents. NEOLINK shall have
received the following documents and instruments:
Certified resolutions of SGME's Board of Directors
authorizing the execution and delivery of this Agreement and the performance by
SGME of its obligations hereunder;
(2) Such other documents and instruments as are
required to be delivered pursuant to the provisions of this Agreement or
otherwise reasonably requested by NEOLINK.
10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties contained herein shall survive the Closing, but shall expire on
the first anniversary date following the date of Closing, unless a specific
claim in writing with respect to these matters shall have been made, or any
action at law or in equity shall have been commenced or filed before such
anniversary date. Any investigations made by or on behalf of any of the
parties prior to the date of Closing shall not affect any of the parties'
obligations hereunder. Completion of the transactions contemplated herein
shall not be deemed or construed to be a waiver of any right or remedy of any
of the parties.
11. TERMINATION.
11.1 Termination. This Agreement may be terminated at any time
prior to the Closing Date:
by mutual written consent of SGME, NEOLINK and the
NEOLINK Stockholders or their Agent;
by SGME if there has been a material breach of any
representation, warranty, covenant or agreement contained in this Agreement by
NEOLINK or the NEOLINK Stockholders, and such breach is not cured within ten
(10) days after the breaching party's receipt of written notice of such breach;
by NEOLINK and the NEOLINK Stockholders or their Agent
if there has been a material breach of any representation, warranty, covenant
or agreement contained in this Agreement by SGME, and such breach is not cured
within ten (10) days after SGME's receipt of written notice of such breach; or
(d) by either SGME or NEOLINK and the NEOLINK Stockholders
or their Agent if the Closing shall not have occurred by January 31, 2007, or
such later date as shall have been approved by SGME, NEOLINK and the NEOLINK
Stockholders or their Agent.
11.2 Effect of Termination. Termination of this Agreement in
accordance with Section 11.1 may be effected by written notice from either SGME
or NEOLINK and the NEOLINK Stockholders or their Agent, as appropriate,
specifying the reasons for termination and shall not subject the terminating
party to any liability for any valid termination.
12. RIGHT TO REACQUIRE.
12.1 Company Sale - First Right of Negotiation and Last Right of
Refusal.
(a) If at any time during the twenty-four month period
commencing on the Closing Date, SGME elects to divest itself of all or a
majority of its ownership interest in NEOLINK, whether by way of a stock sale
or exchange, asset sale, merger, reorganization, consolidation or any other
form of disposition, in one transaction or in a series of related transactions
(each, a "COMPANY SALE TRANSACTION"), then prior to SGME commencing a Company
Sale Transaction, SGME shall notify Xxxx in writing of the same, and upon
receipt of such written notice, Xxxx shall have thirty days within which to
negotiate and agree to terms with SGME regarding the acquisition by Xxxx of all
or substantially all of the NEOLINK Shares or the assets of NEOLINK, as
determined by Xxxx. SGME and Xxxx agree to conduct such negotiation in good
faith and with an eye towards mutually agreeing upon fair and reasonable terms
regarding such acquisition, including the purchase price for such acquisition.
If SGME and Xxxx are unable to mutually agree on the terms of such acquisition
within such thirty day period, then, subject to Section 12.1(b) below, SGME
shall be free to negotiate with third parties regarding a Company Sale
Transaction.
(b) If, after failing to come to terms with Xxxx, SGME
desires to enter into a certain Company Sale Transaction with a third party,
then prior to entering into such Company Sale Transaction, SGME shall first
offer the Company Sale Transaction to Xxxx in writing on the same or more
favorable terms as proposed between SGME and such third party, and Xxxx shall
have ten business days after receipt of such written offer within which to
accept or reject same. If Xxxx rejects such offer, then SGME shall be free to
enter into such Company Sale Transaction with such third party; provided,
however, that if SGME does not consummate such Company Sale Transaction within
the thirty day period following Xxxx'x rejection of such offer, then SGME shall
not thereafter enter into any Company Sale Transaction unless and until such
Company Sale Transaction is again made subject to the last right of refusal in
favor of Xxxx, as set forth herein.
12.2 Company Dissolution - First Right to Acquire.
(a) If at any time during the twenty-four month period
commencing on the Closing Date, SGME desires to wind up, liquidate and dissolve
NEOLINK, then prior to commencing the same, SGME shall notify Xxxx in writing
of the same, and Xxxx shall have the right, exercisable within ten business
days after Xxxx'x receipt of such written notice, to acquire all or
substantially all of the NEOLINK Shares or the assets of NEOLINK, as determined
by Xxxx. If Xxxx exercises such right, then SGME shall sell, transfer and
assign to Xxxx, and Xxxx shall acquire from SGME, the NEOLINK Shares or the
assets of NEOLINK designated in Xxxx'x exercise election, at a purchase price
(the "PURCHASE PRICE") upon which SGME and Xxxx shall mutually agree. If SGME
and Xxxx are unable to mutually agree on the Purchase Price, then the Purchase
Price shall be based on NEOLINK's fair market value, as determined by an
independent appraiser whom SGME and Xxxx jointly select. If SGME and Xxxx are
unable to agree on an independent appraiser, then SGME and Xxxx shall each
select one independent appraiser, and the two appraisers selected shall then
appoint a third independent appraiser, who shall be a senior appraiser
accredited by the American Society of Appraisers. The third appraiser shall
determine the fair market value of the NEOLINK Shares.
(b) Xxxx shall pay the Purchase Price, at his option,
either in full in immediately available funds on the closing date of the
acquisition or by the payment of at least 10% of the Purchase Price in
immediately available funds on the closing date of the acquisition and the
payment of the unpaid balance of the Purchase Price by the execution and
delivery of a promissory note. Such promissory note shall bear interest at a
rate equal to one percentage point above the "prime rate" (or "base rate")
reported in the "Money Rates" column or section of the United States version of
The Wall Street Journal in the last published edition prior to the closing date
of the acquisition, and shall provide for the original principal amount thereof
to be paid in equal monthly installments of principal and interest so that such
amount is fully paid over a five year term.
12.3 For purposes of this Section 12, the term "Xxxx" shall mean
Xxxxxx X. Xxxx, individually, or, as the case may be, any designee of Xxxxxx X.
Xxxx or entity with which Xxxxxx X. Xxxx is affiliated.
13. MISCELLANEOUS.
13.1 Tax Treatment. The transaction contemplated herein is
intended to qualify as a "tax-free" reorganization under the provisions of
Section 368 of the Internal Revenue Code of 1986, as amended. SGME, NEOLINK
and the NEOLINK Stockholders acknowledge, however, that no party hereto has
made any representation or warranty to the other with respect to the treatment
of such transaction or the effect thereof under applicable tax laws,
regulations, or interpretations; and that no attorney's opinion or private
revenue ruling has been obtained with respect to the effects thereof under the
Internal Revenue Code of 1986, as amended.
13.2 Further Assurances. From time to time, at the other party's
request and without further consideration, each of the parties will execute and
deliver to the others such documents and take such action as the other party
may reasonably request in order to consummate more effectively the transactions
contemplated hereby.
13.3 Attorney's Fees and Expenses. If any legal action or any
arbitration or other proceeding is brought for the enforcement of this
Agreement, or because of an alleged dispute, breach, default, or
misrepresentation in connection with any of the provisions of this Agreement,
the successful or prevailing party or parties shall be entitled to recover
reasonable attorneys' fees and other costs incurred in that action or
proceeding, in addition to any other relief to which it or they may be
entitled.
13.4 Parties in Interest. Except as otherwise expressly provided
herein, all the terms and provisions of this Agreement shall be binding upon,
shall inure to the benefit of and shall be enforceable by the respective heirs,
beneficiaries, personal and legal representatives, successors and assigns of
the parties hereto.
13.5 Entire Agreement; Amendments. This Agreement, including the
Schedules, Exhibits and other documents and writings referred to herein or
delivered pursuant hereto, which form a part hereof, contains the entire
understanding of the parties with respect to its subject matter. There are no
representations, warranties or covenants other than those expressly set forth
herein or therein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to its subject matter. This
Agreement may be amended only by a written instrument duly executed by the
parties or their respective successors or assigns.
13.6 Headings. The section and paragraph headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
13.7 Pronouns. All pronouns and any variations thereof shall be
deemed to refer to the masculine, feminine or neuter, singular or plural, as
the identity of the person, persons, entity or entities may require.
13.8 Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. Facsimile transmission
of any signed original document and/or retransmissions of any signed facsimile
transmission will be deemed the same as delivery of an original. At the
request of any party, the parties will confirm facsimile transmission by
signing a duplicate original document.
13.9 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware.
13.10 Person. For purposes of this Agreement, the term "Person"
shall mean any individual, corporation, partnership, joint venture or other
business enterprise or entity and any governmental agency, federal, state or
local.
13.11 Notices. Any and all notices, demands or other
communications required or desired to be given hereunder by any party shall be
in writing and shall be validly given or made to another party if given by
personal delivery, telex, facsimile, telegram or if deposited in the United
States mail, certified or registered, postage prepaid, return receipt
requested. If such notice, demand or other communication is given by personal
delivery, telex, facsimile or telegram, service shall be conclusively deemed
made at the time of receipt. If such notice, demand or other communication is
given by mail, such notice shall be conclusively deemed given forty-eight (48)
hours after the deposit thereof in the United States mail addressed to the
party to whom such notice, demand or other communication is to be given as
hereinafter set forth:
If to NEOLINK: At the address set
forth below its name on the signature
page of this Agreement.
If to the NEOLINK Stockholders: At the addresses set forth below
their names on Exhibit A attached
hereto.
If to SGME: At the address
set forth below its name on the
signature page of this Agreement.
13.12 Payment of Expenses.
(a) At or prior to the Closing, SGME shall pay and fully
satisfy all of its own legal fees, accounting fees and other fees, costs and
expenses incurred in connection with the negotiation and execution of this
Agreement and the consummation of the transactions contemplated herein.
(b) SGME and NEOLINK shall each pay for its own legal fees,
accounting fees and all other fees, costs and expenses incurred in connection
with the negotiation and execution of this Agreement and the consummation of
the transactions contemplated herein.
13.13 Waiver. Any term or condition of this Agreement may be
waived at any time by the party that is entitled to the benefit thereof, but no
such waiver shall be effective unless set forth in a written instrument duly
executed by or on behalf of the party waiving such condition. No waiver by any
party of any term or condition of this Agreement, in any one or more instances,
shall be deemed to be or construed as a waiver of the same or any other term or
condition of this Agreement on any future occasion.
14. APPOINTMENT OF AGENT. The NEOLINK Stockholders hereby irrevocably
constitute and appoint Xxxx as their true and lawful attorney (the "Agent")
with full right and power in their names and stead to take any and all action
by and on behalf of them necessary or desirable to consummate the transactions
contemplated by this Agreement, including without limitation, the right and
power to receive certificates representing SGME Shares on behalf of each of the
NEOLINK Stockholders, to deliver to SGME the certificates representing the
NEOLINK Shares, to waive performance of any of the obligations of SGME or waive
satisfaction of any of the conditions to Closing specified in Section 9.2
hereof, to deliver investment representation letters of the NEOLINK
Stockholders referred to in Section 2.2(a) hereof, and to amend or terminate
this Agreement as herein provided. Any such action taken by the Agent on behalf
of a NEOLINK Stockholder shall be binding upon the NEOLINK Stockholders. SGME
shall not have any responsibility to the NEOLINK Stockholders or any of them
for the distribution by the Agent of the certificates representing SGME Shares
to be delivered to the NEOLINK Stockholders, nor shall SGME be liable in any
manner whatsoever to the NEOLINK Stockholders or any of them by or on account
of any act or omission of the Agent.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the parties hereto as of the date first above written.
STRATEGIC GAMING INVESTMENTS, INC.,
a Delaware corporation
By: /s/ Xxxxxxxx X. Xxxxxxxxx
_____________________
Xxxxxxxx X. Xxxxxxxxx
President & Chief Executive Officer
Address: 0000 Xxxxxx Xxxxxxx Xx.
Xxxxxxxxx, XX 00000
NEOLINK WIRELESS CONTENT, INC.,
a Nevada corporation
By: /s/ Xxxxxx X. Xxxx
______________
Xxxxxx X. Xxxx
President & Chief Executive Officer
Address: Marina Studio
0000 Xxxxxxx Xxxxxx, Xxxxx X-000
Xxxxxx Xxx Xxx, XX 00000
[SIGNATURES OF NEOLINK STOCKHOLDERS COMMENCES ON THE NEXT PAGE]
NEOLINK STOCKHOLDERS
SIGNATURE PAGE
/s/ Xxxxxx X. Xxxx /s/ Xxx Xxxxx
______________ _____________
Xxxxxx X. Xxxx Xxxx Xxxxx
/s/ Xxxx Xxxxxxxx /s/ Xxx Xxxxxx
______________ _____________
Xxxx Xxxxxxxx Xxx Xxxxxx
/s/ Xxxxx Xxxxxx /s/ Xxxxxx Xxxxxxxxxxx
______________ __________________
Xxxxx Xxxxxx Xxxxxx Xxxxxxxxxxx
/s/ Xxxx Xxxxxxx /s/ Xxxx Xxxxx
______________ _____________
Xxxx Xxxxxxx Xxxx Xxxxx
/s/ Xxxxxxx Xxxxxx
____________
Xxxxxxx Xxxxxx
Wolf, Rifkin, Xxxxxxx & Xxxxxxxx, LLP
By: /s/ Xxxxxxx Xxxx
____________
Xxxxxxx Xxxx, Managing Partner
EXHIBIT A
---------
NAMES AND ADDRESSES OF NUMBER OF NEOLINK NUMBER OF
---------------------- ----------------- ------------
SGME
----
NEOLINK STOCKHOLDERS SHARES OWNED SHARES TO BE
---------------------- ----------------- ------------
ISSUED
Xxxxxx X. Xxxx 3,000,000 600,000
0000 Xxx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Xxxx Xxxxx 1,000,000 200,000
0000 Xxxxxxxxx Xxxx
Xxx Xxxxx, Xxxxxx 00000
Xxxx Xxxxxxxx 200,000 40,000
0000 Xxxxxxxxx Xxxxx Xxxxxxxxx, Xxx. X
Xxxxxxxxx Xxxxx, Xxxxxxxxxx 00000
Xxxxxxx X. Xxxxxx 200,000 40,000
0000 Xxxxxxxx Xxxxxx
Xxx Xxxxx, Xxxxxx 00000
Xxxxx Xxxxxx 125,000 25,000
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx Xxxx, Xxxxxxxxxx 00000
Xxxxxx Xxxxxxxxxxx 100,000 20,000
0000 Xxx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Xxxx Xxxxxxx 75,000 15,000
0000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Xxxx Xxxxx 25,000 5,000
0000 Xxxxx Xxxxx
Xxx Xxxxx, Xxxxxx 00000
Xxxxxxx Xxxxxx 25,000 5,000
0000 Xxx Xxx Xxx Xxx
Xxx Xxxxx, Xxxxxx 00000
Wolf, Rifkin, Xxxxxxx & Xxxxxxxx, LLP 250,000 50,000
00000 X. Xxxxxxx Xxxxxxxxx, Xxxxx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
EXHIBIT B
FORM OF REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT ("AGREEMENT") is entered into as of
the date set forth below by and between Strategic Gaming Investments, Inc., a
Delaware corporation (the "COMPANY"), and __________________________, an
individual (the "HOLDER"), whose address is
__________________________________________________.
WHEREAS, Holder is the owner of shares of common stock of the Company
(the "SHARES"), including shares issued in connection with the acquisition of
100% of the issued and outstanding capital stock of Neolink Wireless Content,
Inc. by the Company;
WHEREAS, the Company, pursuant to the terms of its Merger and Share
Exchange Agreement with Neolink Wireless Content, Inc. (the "MERGER AGREEMENT")
has granted Holder certain registration rights for the Shares, and the parties
are entering into this Agreement in order to set forth such registration
rights; and
WHEREAS, capitalized terms used in this Agreement and not otherwise
defined have the meanings set forth in Section 9 below.
NOW, THEREFORE, the parties agree as follows:
1. REGISTRATION:
(a) Registration. If at any time or from time to time the
Company shall determine to register under the Securities Act of 1933, as
amended, or any similar successor federal statute and the rules and regulations
thereunder, as such shall be in effect from time to time (the "SECURITIES
ACT"), any of its securities (whether for its own account or the account of a
security holder or holders), pursuant to an underwritten offering, other than a
registration on Form S-4 or Form S-8 or their then equivalents, the Company
will:
(i) promptly give to Holder written notice thereof;
and
(ii) include in such registration (and any related
qualification under blue sky laws or other compliance) and in any underwriting
involved therein, all the Shares (collectively, the "REGISTRABLE SECURITIES"),
subject only to the express "cut-back" provisions set forth in the last
sentence of Section 1(b) below. The term "Registrable Securities" shall also
mean (i) any common shares or other securities of the Company issued or
issuable with respect to, or in exchange for or in replacement of the Shares
and such additional or lesser amount of shares upon any stock split, stock
dividend, recapitalization, or similar event; provided, however, that common
shares of the Company or other securities shall only be treated as Registrable
Securities for the purposes of this Section 1 to the extent that they have not
been sold to the public pursuant to Rule 144.
(b) Underwriting. If the registration referred to in
Section 1(a) hereof is for a registered public offering involving an
underwriting, the Company shall so advise Holder as a part of the written
notice given pursuant to Section 1(a) hereof. In such event, however, the
right of Holder to registration pursuant to this Section 1 shall not be
conditioned upon Holder's participation in such underwriting or the inclusion
of Registrable Securities in the underwriting. If Holder proposes to
distribute Registrable Securities through such underwriting, Holder shall
(together with the Company) enter into an underwriting agreement in customary
form with the representative of the underwriter or underwriters selected for
such underwriting by the Company. Notwithstanding any other provision of this
Agreement, if the managing underwriter determines that marketing factors
require a limitation of the number of shares to be underwritten, and the
managing underwriter notifies Company and Holder in writing thereof, the
managing underwriter may eliminate or partially limit the number of Registrable
Securities to be distributed through such underwriting for the account of
Holder; provided, however, such elimination or partial limitation, as the case
may be, shall be on a pari passu basis with all other selling shareholders who
notify the Company in writing of their intention to have their respective
shares of common stock included in such underwriting; provided, further, that
in the event any Registrable Securities are not included in such underwriting,
the registration statement shall not be deemed a registration for purposes of
the limitation on registration set forth in Section 1(d) hereof.
(c) Right to Terminate Registration. The Company shall
have the right to terminate or withdraw any registration initiated by it under
this Agreement prior to the effectiveness of such registration. Any
registration terminated or withdrawn prior to the effectiveness of such
registration shall not be deemed a Registration for purposes of Section 1(d)
hereof. The Registration Expenses of such withdrawn registration shall be borne
by the Company in accordance with Section 2 hereof.
(d) Number of Registrations. The Company is obligated to
effect only one (1) registration pursuant to this Agreement.
2. EXPENSES OF REGISTRATION
All Registration Expenses (as defined below) incurred in connection
with registration pursuant to Section 1 shall be borne by the Company. For
purposes of this Agreement, "REGISTRATION EXPENSES" shall mean all fees, costs
and expenses, including all costs and expenses of an underwriting (including
underwriters' or placement agent's fees or discounts), except as expressly
stated below, incurred by the Company in complying with this Agreement and
undertaking any underwriting contemplated by this agreement, including, all
registration, qualification and filing fees, printing expenses, escrow fees,
fees, charges, costs and disbursements of counsel for the Company and otherwise
(other than Holder's separate legal counsel), blue sky fees and expenses, fees
to issue the Shares, and the expense of any special audits incident to or
required by any such registration. All selling expenses (which shall consist
of underwriting discounts) shall be borne exclusively by the Holder.
3. REGISTRATION PROCEDURES
In the case of a registration effected by the Company pursuant to
this Agreement, and at all times while the Company is under an obligation
pursuant to this Agreement to register Registrable Securities, at its sole
expense the Company will keep Holder advised in writing as to the initiation of
the registration and as to the completion thereof. In addition, at its sole
expense, the Company will:
(a) Prepare and file with the Securities and Exchange
Commission (the "SEC") a registration statement with respect to such securities
and cause such registration statement to become and remain effective for at
least twelve (12) months or, if earlier, until the distribution described in
the registration statement relating thereto has been completed; provided,
however, that (i) such 12 month period shall be extended for a period of time
equal to the period Holder refrains from selling any securities included in
such registration at the request of an underwriter, and (ii) in the case of any
registration of securities on Form S-3 that are intended to be offered on a
continuous or delayed basis, such 12 month period shall be extended up to 180
days in order to keep the registration statement effective until all
Registrable Securities are sold;
(b) Prepare and file with the SEC during the period
specified in Section 3(a) such amendments and supplements to such registration
statement and the prospectus used in connection with such registration
statement as may be necessary to comply with the provisions of the Securities
Act with respect to the disposition of all securities covered by such
registration statement and otherwise necessary to keep such registration
statement effective in the manner required by this Agreement;
(c) Furnish (at least five business days before filing such
registration statement) to Holder and to the underwriters of the securities
being registered such reasonable number of copies of the registration
statement, preliminary prospectus, final prospectus and such other documents as
Holder and such underwriters may reasonably request in order to facilitate the
public offering of such securities (including all documents to be filed);
(d) Notify in writing Holders promptly (i) of the receipt
by the Company of any notification with respect to any comments by the SEC with
respect to such registration statement or prospectus or any amendment or
supplement thereto or any request by the SEC for the amending or supplementing
thereof or for additional information with respect thereto, (ii) of the receipt
by the Company of any notification with respect to the issuance by the SEC of
any stop order suspending the effectiveness of such registration statement or
prospectus or any amendment or supplement thereto or the initiation or
threatening of any proceeding for that purpose and (iii) of the receipt by the
Company of any notification with respect to the suspension of the qualification
of such Registrable Securities for sale in any jurisdiction or the initiation
or threatening of any proceeding for such purposes;
(e) Register or qualify the Registrable Securities under
such other securities or blue sky laws of such jurisdictions as Holder
reasonably requests and do any and all other acts and things which may be
reasonably necessary or advisable to enable Holder to consummate the
disposition in such jurisdictions of the Registrable Securities;
(f) Furnish to Holder such number of copies of a summary
prospectus, if any, or other prospectus, including a preliminary prospectus, in
conformity with the requirements of the Act, and such other documents as Holder
may reasonably request in order to facilitate the public sale or other
disposition of Registrable Securities;
(g) Notify Holder on a timely basis at any time when a
prospectus relating to Registrable Securities is required to be delivered under
the Act, of the happening of any event as a result of which the prospectus
included in such registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing and, at the request of Holder, prepare
and furnish to Holder a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as thereafter
delivered to the offerees of such shares, such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
in light of the circumstances then existing;
(h) Use its best efforts to obtain from its counsel an
opinion or opinions in customary form as reasonably required by Holder;
(i) Provide a transfer agent and registrar (which may be
the same entity and which may be the Company) for the Registrable Securities;
and
(j) Enter into such agreements (including an underwriting
agreement in form, scope and substance as is customary in underwritten
offerings) and take all such other appropriate and reasonable actions requested
by Holder in order to expedite or facilitate the disposition of the Registrable
Securities, and in such connection, (i) use commercially reasonable efforts to
obtain opinions of counsel to the Company and updates thereof (which counsel
and opinions (in form, scope and substance) shall be reasonably satisfactory to
the managing underwriters and counsel to Holder), addressed to Holder and each
of the underwriters as to the matters customarily covered in opinions requested
in underwritten offerings and such other matters as may be reasonably requested
by such counsel and underwriters, (ii) use commercially reasonable efforts to
obtain "cold comfort" letters and updates thereof from the independent
certified public accountants of the Company (and, if necessary, any other
independent certified public accountants of any subsidiary of the Company or of
any business acquired by the Company for which financial statements and
financial data are, or are required to be, included in the Registration
Statement), addressed to Holder (unless such accountants shall be prohibited
from so addressing such letters by applicable standards of the accounting
profession) and each of the underwriters, such letters to be in customary form
and covering matters of the type customarily covered in "cold comfort" letters
in connection with underwritten offerings, (iii) if requested, provide
indemnification provisions and procedures customary for underwritten public
offerings, but in any event no less favorable to Holder than provided below.
The above shall be done at each closing under such underwriting or similar
agreement, or as and to the extent required thereunder.
4. TRANSFERABLE REGISTRATION RIGHTS
The rights of Holder under this Agreement and the other benefits of
this Agreement, including Holder's rights under this Agreement may be assigned
to any individual, entity or trust that acquires a number of Registrable
Securities equal to no less than 10% of the Registrable Securities that are
acquired by Holder under the Merger Agreement, provided that Holder gives
Company written notice of such transfer, which notice also provides Company
with the name and address of the transferee and the number of Registrable
Securities transferred.
5. INDEMNIFICATION FOR REGISTRATION
(a) To the extent permitted by law, Holder will indemnify
the Company, each of its directors and officers, each underwriter, if any, of
the Company's securities covered by such a registration statement, and each
person who controls the Company or such underwriter within the meaning of
Section 15 of the Securities Act, against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any such registration statement, prospectus, offering circular or other
document, or any omission (or alleged omission) to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and will reimburse the Company and such directors, officers,
underwriters or control persons for any legal or any other expenses reasonably
incurred in connection with investigating or defending any such claim, loss,
damage, liability or action, in each case to the extent, but only to the
extent, that such untrue statement (or alleged untrue statement) or omission
(or alleged omission) is made in such registration statement, prospectus,
offering circular or other document in reliance upon and in conformity with
written information furnished to the Company by Holder and stated to be
specifically for use therein. Notwithstanding the foregoing, the liability of
Holder under this subsection (a) shall be limited to the lesser of (i) the
proportion that the public offering price of shares sold by Holder under such
registration statement bears to the total public offering price of all
securities sold thereunder, but not to exceed the net proceeds received by
Holder for the sale of Registrable Securities covered by such registration
statement and (ii) the amount of any damages which Holder would have otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. Notwithstanding the foregoing, any party guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act), shall not be entitled to contribution from any person who is
not guilty of such fraudulent misrepresentation.
(b) In connection with each registration statement relating
to disposition of Registrable Securities, the Company shall indemnify and hold
harmless each Holder and each underwriter of Registrable Securities and each
person, as that term is defined in the Act, if any, who controls such Holder or
underwriter (within the meaning of Section 15 of the Act or Section 20 of the
Securities and Exchange Act of 1934, as amended (the "EXCHANGE ACT") against
any and all losses, claims, damages and liabilities, joint or several
(including any reasonable investigation, legal and other expenses incurred in
connection with, and any amount paid in settlement of any action, suit or
proceeding or any claim asserted), to which they, or any of them, may become
subject under the Act, the Exchange Act or other Federal or state law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in any registration statement,
prospectus or preliminary prospectus or any amendment thereof or supplement
thereto, or arise out of or are based upon any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading; provided, however, that such
indemnity shall not inure to the benefit of any Holder or underwriter (or any
person controlling such Holder or underwriter within the meaning of Section 15
of the Act or Section 20 of the Exchange Act) on account of any losses, claims,
damages or liabilities arising from the sale of the Registrable Securities if
such untrue statement or omission was made in such registration statement,
prospectus or preliminary prospectus, or such amendment or supplement, in
reliance upon and in conformity with information furnished in writing to the
Company by such Holder or underwriter specifically for use therein. The Company
shall also indemnify selling brokers, dealer managers and similar securities
industry professionals participating in the distribution, their officers and
directors and each person who controls such person (within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act) to the same extent as
provided above with respect to the indemnification of the Holders of
Registrable Securities, if requested. The indemnity provisions set forth herein
shall be in addition to any liability which the Company may otherwise have.
(c) Any party that proposes to assert the right to be
indemnified hereunder will, promptly after receipt of notice of commencement of
any action, suit or proceeding against such party in respect of which a claim
is to be made against an indemnifying party or parties under this Section,
notify each such indemnifying party of the commencement of such action, suit or
proceeding, enclosing a copy of all papers served. No indemnification provided
for in Section 5(a) or 5(b) shall be available to any party who shall fail to
give notice as provided in this Section 5(c) if the party to whom notice was
not given was unaware of the proceeding to which such notice would have related
and was prejudiced by the failure to give such notice, but the omission so to
notify such indemnifying party of any such action, suit or proceeding shall not
relieve it from any liability that it may have to any indemnified party for
contribution otherwise than under this Section. In case any such action, suit
or proceeding shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate in, and, to the extent that it shall
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel reasonably satisfactory to such indemnified
party, and after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof and the approval by the
indemnified party of such counsel, the indemnifying party shall not be liable
to such indemnified party for any legal or other expenses, except as provided
below. The indemnified party shall have the right to employ its counsel in any
such action, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the employment of counsel by such
indemnified party has been authorized in writing by the indemnifying parties,
(ii) it shall have been reasonably concluded that there may be a conflict of
interest between the indemnifying parties and the indemnified party in the
conduct of the defense of such action (in which case the indemnifying parties
shall not have the right to direct the defense of such action on behalf of the
indemnified party; it being understood, however, that the Company shall not be
liable for the fees and expenses of more than one separate counsel representing
the indemnified parties) or (iii) the indemnifying parties shall not have
employed counsel to assume the defense of such action within a reasonable time
after notice of the commencement thereof, in each of which cases the reasonable
fees and expenses of counsel shall be at the expense of the indemnifying
parties. An indemnified party shall not be liable for any settlement of any
action, suit, proceeding or claim effected without its written consent.
(d) In connection with each registration statement relating
to the disposition of Registrable Securities, if the indemnification provided
for in subsection (a) hereof is unavailable to an indemnified party thereunder
in respect to any losses, claims, damages or liabilities referred to therein,
then the indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsections (a) or (b) of this Section 5 in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party on the one hand and of the indemnified party on the other in connection
with the statements or omissions that resulted in such losses, claims, damages
or liabilities, or actions in respect thereof, as well as any other relevant
equitable considerations. Relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the indemnifying party or the indemnified
party and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission.
(e) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement (if any) entered into in connection with an underwritten public
offering of the Registrable Securities are in conflict with the foregoing
provisions, the provisions in such underwriting agreement shall control.
6. INFORMATION BY HOLDER.
Holder shall furnish to the Company such information regarding
Holder, the Registrable Securities held by him and the distribution proposed by
Holder in connection with an underwriting (if any) as the Company may
reasonably request in writing and as shall be required in connection with any
registration, qualification or compliance in connection with a registration.
7. MISCELLANEOUS.
(a) If one or more of the provisions contained herein 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
provisions hereof, and this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein.
(b) Waiver of any default shall not constitute waiver of
any other or subsequent default.
(c) Except as otherwise expressly set forth herein, any
notice, request or other communication required or permitted hereunder shall be
in writing and shall be deemed to have been duly given if personally delivered
or if faxed with confirmation of receipt by telephone or if mailed be
registered or certified mail or by courier, to the respective the addresses of
the parties as set forth hereinabove. Any party hereto may by notice so given
change its address for future notice hereunder. Notice shall conclusively be
deemed to have been given when personally delivered, at the time of
confirmation of fax or five business days after the time when deposited in the
mail in the manner set forth above and shall be deemed to have been received
when delivered.
(d) This Agreement may be executed in one or more
counterparts, all of which shall be deemed one and the same agreement. This
Agreement may be signed by facsimile.
(e) No amendment to this Agreement will be valid or binding
unless set forth in writing and duly executed by all of the parties hereto. No
waiver of any breach of any provision of this Agreement will be effective or
binding unless made in writing and signed by the party purporting to give the
same and, unless otherwise provided in the written waiver, will be limited to
the specific breach waived.
(f) The division of this Agreement into Articles and
Sections and the insertion of headings are for the convenience of reference
only and will not affect the construction or interpretation of this Agreement.
(g) This agreement shall be construed, enforced, and
administered in accordance with the laws of the State of Nevada, under the
jurisdiction of the State of Nevada, without giving effect to any provision
thereof that would compel the application of the substantive laws of any other
jurisdiction and without regard to the conflicts of law provisions. The parties
consent to the jurisdiction of the federal and state courts located in the
State of Nevada regarding all matters under this Agreement.
(h) This Agreement constitutes the entire agreement between
the parties with respect to the subject matter hereof and cancels and
supersedes any prior understandings and agreements between the parties. There
are no representations, warranties, forms, conditions, undertakings or
collateral agreements, express, implied or statutory between the parties other
than as expressly set forth in this Agreement. Should any provision of this
Agreement conflict with any provision of the Merger Agreement, the provisions
of this Agreement shall govern and control.
8. RULE 144 INFORMATION. With a view to making available the
benefits of certain rules and regulations of the SEC which may at any time
permit the sale of Registrable Securities to the public without registration,
the Company agrees to use its best efforts to:
(a) Make and keep public information available, as those
terms are understood and defined in Rule 144 under the Act, at all times after
the effective date that the Company becomes subject to the reporting
requirements of the Act or the Exchange Act, and for so long as the Company
remains subject to the periodic reporting requirements under Section 13 or
15(d) of the Exchange Act;
(b) File with the SEC in a timely manner all reports and
other documents required of the Company under the Act and the Exchange Act (at
any time after it has become subject to such reporting requirements); and
(c) Furnish to Holder forthwith upon request a written
statement by the Company as to its compliance with the reporting requirements
of Rule 144 under the Act (at any time after 90 days after the effective date
of the first registration statement filed by the Company for an offering of its
securities to the general public), and of the Act and the Exchange Act (at any
time after it has become subject to such reporting requirements), a copy of the
most recent annual or quarterly report of the Company, and such other reports
and documents of the Company and other information in as Holder may reasonably
request in availing itself of any rule or regulation of the SEC allowing Holder
to sell any such securities without registration under the Securities Act or
otherwise.
9. CERTAIN DEFINED TERMS. As used in this Agreement:
(a) "COMMON STOCK" means all shares of the Company's common
stock, including such common stock issued or issuable upon the exercise of any
other capital stock or securities of the Company, including by reason of a
merger, consolidation, reorganization or recapitalization;
(b) "EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended from time to time, or any successor statute;
(c) "RULE 144" means Rule 144 promulgated by the SEC under
the Securities Act;
(d) "SHARES" means all shares of Common Stock that Holder
owns at any time, whether beneficially or otherwise, including Common Stock
that Holder has heretofore acquired or acquires after the date of this
Agreement, whether pursuant to the Asset Agreement or otherwise; and
(e) "WARRANT SHARES" means all shares of Common Stock that
Holder acquires or may acquire at any time as a result of the exercise of any
option, warrant or other security convertible into Common Stock.
IN WITNESS WHEREOF, this Agreement has been executed as of the ___ day of
November, 2006.
STRATEGIC GAMING INVESTMENTS, INC.
By: _____________________________________
Xxxxxxxx X. Xxxxxxxxx
President and Chief Executive Officer
_________________________________
Signature of Holder
_________________________________
(Print Name of Holder)
Address: ______________________________
______________________________
EXHIBIT C
FORM OF INVESTMENT REPRESENTATION LETTER
Strategic Gaming Investments, Inc.
0000 Xxxxxx Xxxxxxx Xx.
Xxxxxxxxx, XX 00000
Attn: General Counsel
Re: Investor Representation Letter
Ladies and Gentlemen:
In connection with the issuance to the undersigned of shares of common
stock (the "Shares") of Strategic Gaming Investments, Inc., a Delaware
corporation (the "COMPANY"), pursuant to that certain Merger and Share
Agreement ("Agreement") by and between the COMPANY, Neolink Media, Inc., a
Nevada corporation ("NEOLINK") and the stockholders of NEOLINK, the undersigned
stockholder of NEOLINK ("NEOLINK Stockholder") hereby represents, warrants and
covenants to the COMPANY that:
1. NEOLINK Stockholder either (a) is an accredited investor within the
meaning of Rule 501(a) under the Securities Act of 1933 (the "Securities Act"),
or (b) has such business or financial experience that NEOLINK Stockholder has
the capacity to protect NEOLINK Stockholder's interests in connection with the
acquisition of the Shares.
2. NEOLINK Stockholder has received and reviewed the Agreement and all
other information NEOLINK Stockholder considers necessary or appropriate for
deciding whether to acquire the Shares. NEOLINK Stockholder further represents
that he/she/it has had an opportunity to ask questions and receive answers from
the COMPANY and its officers and directors regarding the business, financial
affairs and other aspects of the COMPANY and has further had the opportunity to
obtain any information (to the extent the COMPANY possesses or can acquire such
information without unreasonable effort or expense) which NEOLINK Stockholder
deems necessary to evaluate the investment and to verify the accuracy of
information otherwise provided to NEOLINK Stockholder.
3. NEOLINK Stockholder acknowledges that the Shares have not been
registered under the Securities Act of 1933, as amended (the "Act"), or
qualified under the securities laws of any state, in reliance, in part, on the
representations and warranties herein. Such Shares are being acquired by
NEOLINK Stockholder for investment purposes for his/her/its own account only
and not for sale or with a view to distribution of all or any part of such
Shares. No other person will have any direct or indirect beneficial interest
in the Shares.
4. NEOLINK Stockholder understands (a) that the Shares have not been
registered or qualified under the Securities Act or any state securities or
"Blue Sky" laws, on the basis that the offer and sale of the Shares pursuant to
the Agreement is exempt from registration and qualification under Section 4(2)
of the Securities Act and/or SEC Rule 506 and Section 18 of the Securities Act,
(b) that the Shares are "restricted securities" as such term is defined in Rule
144 under the Securities Act, and (c) that under such laws and applicable
regulations such securities may be resold without registration under the Act
only in certain limited circumstances and that otherwise such securities must
be held indefinitely. In connection therewith, NEOLINK Stockholder represents
that NEOLINK Stockholder understands the resale limitations imposed by the
Securities Act and is familiar with SEC Rule 144, as presently in effect, and
the conditions which must be met in order for that Rule to be available for
resale of "restricted securities," including the requirement that the
securities must be held for at least one year after purchase thereof from the
COMPANY prior to resale (two years in the absence of publicly available
information about the COMPANY) and the condition that there be available to the
public current information about the COMPANY under certain circumstances.
5. Without in any way limiting the representations set forth above,
NEOLINK Stockholder further agrees not to make any disposition of all or any
portion of the Shares unless and until:
(a) There is then in effect a registration statement under the
Securities Act covering such proposed disposition and such disposition is made
in accordance with such registration statement and any applicable requirements
of state securities laws; or
(b) (i) NEOLINK Stockholder shall have notified the COMPANY of
the proposed disposition and shall have furnished the COMPANY with a detailed
statement of the circumstances surrounding the proposed disposition, and (ii)
NEOLINK Stockholder shall have furnished COMPANY with a written opinion of
counsel, reasonably satisfactory to the COMPANY, that such disposition will not
require registration of any securities under the Securities Act or the consent
of or a permit from appropriate authorities under any applicable state
securities law.
(c) In the case of any disposition of any of the Shares pursuant
to Rule 144, in addition to the matters set forth in paragraph 5(b) above,
NEOLINK Stockholder shall promptly forward to the COMPANY a copy of any Form
144 filed with the SEC with respect to such disposition and a letter from the
executing broker satisfactory to the COMPANY evidencing compliance with Rule
144. If Rule 144 is amended or if the SEC's interpretations thereof in effect
at the time of any such disposition by NEOLINK Stockholder have changed from
its present interpretations, NEOLINK Stockholder shall provide the COMPANY with
such additional documents as it may reasonably require.
6. NEOLINK Stockholder understands that the certificates evidencing
the Shares will bear the following restrictive legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THEY MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT
TO THE SECURITIES UNDER THE ACT OR AN OPINION OF COUNSEL THAT REGISTRATION IS
NOT REQUIRED IN CONNECTION WITH SUCH PROPOSED SALE OR TRANSFER."
7. NEOLINK Stockholder represents and warrants to the COMPANY that
NEOLINK Stockholder is a resident of the state specified in the address of
NEOLINK Stockholder set forth below, has a principal residence within such
state, maintains all drivers licenses and voter registrations only within such
state and intends to remain a citizen of such state for the foreseeable future.
Dated: _______________ , 2006
___________________________________
(Signature)
___________________________________
(Print name of NEOLINK Stockholder)
___________________________________
___________________________________
Address of NEOLINK Stockholder
