ACQUISITION AGREEMENT
This ACQUISITION AGREEMENT dated as of December 3, 2002 (this "Agreement") is by
and between NetSalon Corporation, a Delaware corporation ("NSLN"), and Global
Investments Fund Pty Ltd., an Australian Corporation incorporated in the State
of Victoria ("GIF").
RECITALS
A. WHEREAS, SDR Communications Technologies Proprietary Limited ("SDRC") is
an Australian corporation ("SDRC"), incorporated in the State of Victoria; and
B. WHEREAS, SDRC is in the business of developing communications equipment
for the wireless communications industry in both the commercial and military
fields, developed over the last four years in Australia, and has ownership of
several patent applications, developed by its engineering division, for a
revolutionary new Software Defined Radio multiple protocol wireless base station
technology known as SpectruCell; and
C. WHEREAS, SDRC plans (1) to implement field trials with a US based
carrier, (2) to undertake an extensive joint venture relationship with one of
the largest semi-conductor companies in the USA, (3) to undertake to complete
active commercial negotiations with a large US based military contractor, and
(4) to undertake an active involvement in potential relationships with several
other International and US based communications companies and military
contractors; and
D. WHEREAS, SDRC plans to locate and establish a base of operations in the
United States for the continued development, marketing and distribution of the
SpectruCell SDR commercial and military products in the USA and Canada, such
base of operations will involve the establishment of engineering, research and
development, sales, marketing and distribution facilities; and
E. WHEREAS, SDRC plans to establish a joint venture operation in the United
States as the worldwide headquarters for the continued military development and
global distribution of military applications of the SpectruCell SDR technology;
and
F. WHEREAS, GIF is the majority shareholder in SDRC and has committed to
provide shares representing approximately 15% of its shareholding to NSLN that
will result in NSLN becoming a substantial shareholder in SDRC; and
G. WHEREAS, GIF will procure an agreement between SDRC and NSNL, whereby
NSNL will obtain, subject to the terms of that agreement, rights to represent
SDRC in the United States, and Canada for certain applications of the
SpectruCell SDR technology.
NOW, THEREFORE, The respective Boards of Directors of NSLN and GIF deem it
advisable and in the best interests of their corporations and the respective
shareholders of their corporations that NSLN acquire securities of SDRC from
GIF, in accordance with the terms and conditions of this Reorganization and
Stock Purchase Agreement.
1. Pre-Closing Actions of NSLN. Immediately upon execution of this
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Agreement and prior to any Closing as set forth herein, NSLN shall undertake the
-
following Actions:
- The Board of Directors of NSLN shall unanimously approve and deliver
resolutions with respect to (a) approving the Transactions set forth herein; (b)
electing five persons to the board of directors of NSLN, and (c) approving a
name change of the corporation to "Military Communications Technologies, Inc.".
- NSLN shall undertake a transaction or transactions pursuant to which the
company will cancel and have outstanding only Common Stock and no more than
11,939,232 shares of Common Stock.
- NSLN shall forward to Xxxxxx Law Group in escrow a total of 88,060,768
shares (the "Escrowed NSLN Shares"), representing approximately 88% of the
fully-diluted shares of NSLN, to be delivered to GIF at the Closing.
- NSLN shall complete conversions, releases or other agreements such that
the outstanding liabilities, obligations and other debts, direct or indirect,
contingent or existing, shall be no more than $340,000 (the "Outstanding
Obligations"). NSLN shall further covenant and agree to use its best efforts to
reduce the Outstanding Obligations to a lower dollar amount.
2. Pre-Closing Action of GIF. Immediately upon execution of this Agreement
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and prior to any Closing as set forth herein, GIF shall procure SDRC to
undertake the following Action:
- The Board of Directors of SDRC unanimously approving and delivering
resolutions with respect to approving the Transactions set forth herein as they
affect SDRC.
- The Shareholders of SDRC approving the Transactions contemplated hereby if
required.
- The Board of Directors of GIF unanimously approving and delivering
resolutions with respect to approving the Transactions set forth herein as they
affect GIF.
- The Shareholders of GIF approving the Transactions contemplated hereby if
required.
3. At the Closing.
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(a) At the Closing, Xxxxxx Law Group shall release the Escrowed NSLN Shares
to GIF.
(b) At the Closing, certain NSLN shareholders, as more fully set forth on
Exhibit A hereto, shall enter into Lock Up Agreements, similar in nature to
conventional Regulation 144 restrictions with NSLN, in the form attached hereto
as Exhibit A and incorporated herein by reference.MRCM. Xxxxxxx
Xxxxxx-1502876998Please note that this will need to include a substantial
majority of the 11,939,232 shares to make this deal work. The lockup will
include not only management, but all finders and others possible. The lockup
will provide for "dribble in" share releases based upon price/volume structure
in the market. Xxx Xxxxxx will provide a a shareholder list from which this
will be derived. Bridgewater will need to discuss this list with us prior to
execution. The lockups will certainly also provide that no shares shall be
tradeable until we reach 90/10 after the increase in authorized.
(c) At the Closing, NSLN shall provide a Declaration signed by its President
under penalty of perjury that the Outstanding Obligations shall be $340,000 or
less. Such declaration shall be accompanied by releases, agreements or other
documentation which reflects the reduction of the Outstanding Obligations from
the liabilities set forth in the Financial Statements to the $340,000 or less
amount.
(d) The parties hereto understand and agree that subsequent to the Closing,
the parties shall work to reach an agreement, binding under the applicable laws
of the United States and the place of incorporation of NSLN (and in compliance
with the provisions of the certificate of incorporation and by-laws of NSLN and
any relevant provisions of any capital market upon which stock in NSLN is
listed), with respect to a subsequent transaction pursuant to which the existing
business of NSLN shall be transferred to the prior management of NSLN (all of
which is held in NSLN I, Inc., ["NSLN1"] a wholly-owned subsidiary of NSLN) in
consideration of and subject to the assumption of the liabilities of such
existing business, and adequate undertakingsI and indemnities to meet any
liabilities there under from the prior management of NSLN that they are able to
meet those liabilities. Prior Management shall provide an Indemnification
Agreement with respect to Outstanding Obligations which shall be secured by
1,500,000 shares of NSLN held prior to the Closing. Management acknowledges
that such shares shall have been held for not less than 1 year prior to Closing,
with the result that they will become freely tradeable in accordance with Rule
144 as a bona fide pledge to secure the prior obligations. The shares securing
this Indemnification Agreement shall be released pro-rata upon reduction,
whether by payment, release or other agreement, of the Outstanding Obligations.
(e) Subsequent to Closing, NSLN shall cause its shareholders to increase its
authorized shares to 200,000,000, and shall immediately thereafter issue a total
of 19,293,320 additional shares to GIF (the "Additional NSLN Shares").
4. Timing of Closing. The Closing shall occur upon the satisfaction of the
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conditions set forth in this Agreement and upon instructions from the parties
hereto to the Escrow Agent. The Closing Date shall occur on December 2, 2002,
unless the Escrow Agent receives instructions otherwise from the parties or
notice from a party that the conditions set forth herein have not occurred. In
the event the Closing does not occur on or before January 31, 2003 (unless
otherwise extended in writing by the parties), the Escrow Agent shall return the
Escrowed NSLN Shares to NSLN.
5. Representations of NSLN. NSLN represents and warrants as follows:
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(a) Ownership of Shares. As of the Closing Date, GIF will become sole owner
of the Escrowed NSLN Shares. Upon completion of approval of the increase in the
authorized shares, GIF will become sole owner of the Additional NSLN Shares.
The Escrowed NSLN Shares and the Additional NSLN Shares will be free from
claims, liens or other encumbrances, except as provided under applicable federal
and state securities laws;
(b) Fully paid and Nonassessable. The Escrowed NSLN Shares and (upon
increase in the authorized shares) the Additional NSLN Shares constitute duly
and validly issued shares of NSLN, and are fully paid and nonassessable, and
they further represent that they have the power and the authority to execute
this Agreement and to perform the obligations contemplated hereby;
(c) Organization of NSLN; Authorization. NSLN is a corporation duly
organized, validly existing and in good standing under the laws of Delaware with
full corporate power and authority to execute and deliver this Agreement and to
perform its obligations hereunder. The execution, delivery and performance of
this Agreement have been duly authorized by all necessary corporate action of
NSLN and this Agreement constitutes a valid and binding obligation of NSLN;
enforceable against it in accordance with its terms. NSLN has one,
wholly-owned, subsidiary, NSLN1.
(d) Capitalization. The authorized capital stock of NSLN consists of
100,000,000 shares of common stock, par value $0.001 per share, and 20,000,000
shares of preferred stock. As of the date of this Agreement, NSLN has
19,630,900 shares of common stock issued and outstanding and no shares of
preferred stock issued and outstanding. As of the Closing, NSLN will have no
more than 11,939,232 10,000,000 shares of common stock issued and outstanding
and no shares of Preferred stock. No shares have otherwise been registered
under state or federal securities laws. As of the Closing Date, all of the
issued and outstanding shares of common stock of NSLN are validly issued, fully
paid and non-assessable and, there is not and as of the Closing Date there will
not be outstanding any warrants, options or other agreements on the part of NSLN
obligating NSLN to issue any additional shares of common or preferred stock or
any of its securities of any kind. NSLN will not issue any shares of capital
stock from the date of this Agreement through the Closing Date. NSLN is a
"reporting company" in accordance with Section 12(b) or 12(g) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and has filed all
required and/or appropriate annual, periodic and other reports required under
the Exchange Act with the Securities and Exchange Commission. The Common Stock
of NSLN is presently listed and trading on the over-the-counter bulletin board
under the symbol "NSLN".
(e) Ownership of NSLN Shares. The delivery of certificates provided herein
for the Escrowed NSLN Shares will result in GIF's or assigns, as the case may
be, immediate acquisition of record and beneficial ownership of the Escrowed
NSLN Shares, free and clear of all Encumbrances other than as required by
Federal and State securities laws.
(f) No Conflict as to NSLN and Subsidiaries. Neither the execution and
delivery of this Agreement nor the consummation of the exchange of the NSLN
Shares will (a) violate any provision of the certificate of incorporation or
by-laws (or other governing instrument) of NSLN or any of its Subsidiaries or
(b) violate, or be in conflict with, or constitute a default (or an event which,
with notice or lapse of time or both, would constitute a default) under, or
result in the termination of, or accelerate the performance required by, or
excuse performance by any Person of any of its obligations under, or cause the
acceleration of the maturity of any debt or obligation pursuant to, or result in
the creation or imposition of any Encumbrance upon any property or assets of
NSLN or any of its Subsidiaries under, any material agreement or commitment to
which NSLN or any of its Subsidiaries is a party or by which any of their
respective property or assets is bound, or to which any of the property or
assets of NSLN or any of its Subsidiaries is subject, or (c) violate any
statute or law or any judgment, decree, order, regulation or rule of any court
or other Governmental Body applicable to NSLN or any of its Subsidiaries except,
in the case of violations, conflicts, defaults, terminations, accelerations or
Encumbrances described in clause (b) of this Section for such matters which are
not likely to have a material adverse effect on the business or financial
condition of NSLN and its Subsidiaries, taken as a whole.
(g) Consents and Approvals of Governmental Authorities. Other than a filing
under Rule 14f-1, no consent, approval or authorization of, or declaration,
filing or registration with, any Governmental Body is required to be made or
obtained by NSLN or any of either of their Subsidiaries in connection with the
execution,
delivery and performance of this Agreement by NSLN or the consummation of
the sale of the NSLN Shares.
(h) Other Consents. No consent of any Person is required to be obtained by
NSLN to the execution, delivery and performance of this Agreement or the
consummation of the sale of the NSLN Shares, including, but not limited to,
consents from parties to leases or other agreements or commitments, except for
any consent which the failure to obtain would not be likely to have a material
adverse effect on the business and
financial condition of NSLN.
(i) Financial Statements. NSLN has delivered to SDRC consolidated balance
sheets of NSLN and its Subsidiaries as at June 30, 2002, June 30, 2001, and
statements of income and changes in financial position for each of the years in
the two-year periods then ended, together with the report thereon of NSLN's
independent accountants (the "NSLN Audited Financial Statements"). NSLN has
also delivered to SDRC unaudited consolidated balance sheets of NSLN and its
Subsidiaries as at September 30, 2002 and statements of income and changes in
financial position for the three-month period then ended (the "NSLN Unaudited
Financial Statement" and, together with the NSLN Audited Financial Statements,
the "NSLN Financial Statements"). Such NSLN Financial Statements and notes
fairly present the consolidated financial condition and results of operations of
NSLN and its Subsidiaries as at the respective dates thereof and for the periods
therein referred to, all in accordance with generally accepted United States
accounting principles consistently applied throughout the periods involved,
except as set forth in the notes thereto, and shall be utilizable in any SEC
filing in compliance with Rule 310 of Regulation S-B promulgated under the
Securities Act. NSLN has delivered or otherwise made available to SDRC copies
of all annual, quarterly and other periodic reports filed by NSLN with the SEC
in accordance with the Exchange Act.
(j) Title to Properties. NSLN or one of its Subsidiaries owns all the
material properties and assets that they purport to own (real, personal and
mixed, tangible and intangible), including, without limitation, all the material
properties and assets reflected in the NSLN Financial Statements and all the
material properties and assets purchased or otherwise acquired by NSLN or any
of its Subsidiaries since the date of the NSLN Financial Statements. All
properties and assets reflected in the NSLN Financial Statements are free and
clear of all material Encumbrances and are not, in the case of real property,
subject to any material rights of way, building use restrictions, exceptions,
variances, reservations or limitations of any nature whatsoever except, with
respect to all such properties and assets, (a) mortgages or security interests
shown on the NSLN Financial Statements as securing specified liabilities or
obligations, with respect to which no default (or event which, with notice or
lapse of time or both, would constitute a default) exists, (b) mortgages or
security interests incurred in connection with the purchase of property or
assets after the date of the NSLN Financial Statements (such mortgages and
security interests being limited to the property or assets so acquired), with
respect to which no default (or event which, with notice or lapse of time or
both, would constitute a default) exists, (c) as to real property, (i)
imperfections of title, if any, none of which materially detracts from the value
or impairs the use of the property subject thereto, or impairs the operations of
NSLN or any of its Subsidiaries and (ii) zoning laws that do not impair the
present or anticipated use of the property subject thereto, and (d) liens for
current taxes not yet due. The properties and assets of NSLN and its
Subsidiaries include all rights, properties and other assets necessary to permit
NSLN and its Subsidiaries to conduct NSLN's business in all material respects
in the same manner as it is conducted on the date of this Agreement.
(k) Buildings, Plants and Equipment. The buildings, plants, structures and
material items of equipment and other personal property owned or leased by NSLN
or its Subsidiaries are, in all respects material to the business or financial
condition of NSLN and its Subsidiaries, taken as a whole, in good operating
condition and repair (ordinary wear and tear excepted) and are adequate in all
such respects for the purposes for which they are being used. NSLN has not
received notification that it or any of its Subsidiaries is in violation of any
applicable building, zoning, anti-pollution, health, safety or other law,
ordinance or regulation in respect of its buildings, plants or structures or
their operations, which violation is likely to have a material adverse effect on
the business or financial condition of NSLN and its Subsidiaries, taken as a
whole or which would require a payment by NSLN or any of its subsidiaries in
excess of $2,000 in the aggregate, and which has not been cured.
(l) No Condemnation or Expropriation. Neither the whole nor any portion of
the property or leaseholds owned or held by NSLN or any of its Subsidiaries is
subject to any governmental decree or order to be sold or is being condemned,
expropriated or otherwise taken by any Governmental Body or other Person with or
without payment of compensation therefore, which Action is likely to have a
material adverse effect on the business or financial condition of NSLN and its
Subsidiaries, taken as a whole.
(m) Litigation. Except as set forth on Schedule 5(m) attached hereto, there
is no action, suit, inquiry, proceeding or investigation by or before any Court
or Governmental body pending or threatened in writing against or involving NSLN
or any of its Subsidiaries which is likely to have a material adverse effect on
the business or financial condition of NSLN and any of its Subsidiaries, taken
as whole, or which would require a payment by NSLN or its subsidiaries in excess
of $2,000 in the aggregate or which questions or challenges the validity of
this Agreement. Neither NSLN nor any or its Subsidiaries is subject to any
judgment, order or decree that is likely to have a material adverse effect on
the business or financial condition of NSLN or any of its Subsidiaries, taken
as a whole, or which would require a payment by NSLN or its subsidiaries in
excess of $2,000 in the aggregate.
(n) Absence of Certain Changes. Since the date of the NSLN Financial
Statements, neither NSLN nor any of its Subsidiaries has:
1. suffered the damage or destruction of any of its properties or assets
(whether or not covered by insurance) which is materially adverse to the
business or financial condition of NSLN and its Subsidiaries, taken as a whole,
or made any disposition of any of its material properties or assets other than
in the ordinary course of business;
2. made any change or amendment in its certificate of incorporation or
by-laws, or other governing instruments;
3. other than the NSLN Escrowed Shares, issued or sold any Equity Securities
or other securities, acquired, directly or indirectly, by redemption or
otherwise, any such Equity Securities, reclassified, split-up or otherwise
changed any such Equity Security, or granted or entered into any options,
warrants, calls or commitments of any kind with respect thereto;
4. organized any new Subsidiary or acquired any Equity Securities of any
Person or any equity or ownership interest in any business;
5. borrowed any funds or incurred, or assumed or become subject to, whether
directly or by way of guarantee or otherwise, any obligation or liability with
respect to any such indebtedness for borrowed money;
6. other than as contemplated herein, paid, discharged or satisfied any
material claim, liability or obligation (absolute, accrued, contingent or
otherwise), other than in the ordinary course of business;
7. other than as contemplated herein, prepaid any material obligation having
a maturity of more than 90 days from the date such obligation was issued or
incurred;
8. other than as contemplated herein, cancelled any material debts or waived
any material claims or rights, except in the ordinary course of business;
9. disposed of or permitted to lapse any rights to the use of any material
patent or registered trademark or copyright or other intellectual property owned
or used by it;
10. granted any general increase in the compensation of officers or
employees (including any such increase pursuant to any employee benefit plan);
11. purchased or entered into any contract or commitment to purchase any
material quantity of raw materials or supplies, or sold or entered into any
contract or commitment to sell any material quantity of property or assets,
except (i) normal contracts or commitments for the purchase of, and normal
purchases of, raw materials or supplies, made in the ordinary course business,
(ii) normal contracts or commitments for the sale of, and normal sales of,
inventory in the ordinary course of business, and (iii) other contracts,
commitments, purchases or sales in the ordinary course of business;
12. made any capital expenditures or additions to property, plant or
equipment or acquired any other property or assets (other than raw materials and
supplies) at a cost in excess of $2,000 in the aggregate;
13. written off or been required to write off any notes or accounts
receivable in an aggregate amount in excess of $2,000;
14. written down or been required to write down any inventory in an
aggregate amount in excess of $ 2,000;
15. entered into any collective bargaining or union contract or agreement;
or
16. other than the ordinary course of business, incurred any liability
required by generally accepted accounting principles to be reflected on a
balance sheet and material to the business or financial condition of NSLN and
its subsidiaries taken as a whole.
(o) No Material Adverse Change. Except with respect to an IRS lien for
$129,000 which has been filed, since the date of the NSLN Financial Statements,
there has not been any material adverse change in the business or financial
condition of NSLN and its Subsidiaries taken as a whole. The NSLN SEC filings
contain all material information with respect to the business, financial
condition and operations of NSLN.
(p) Contracts and Commitments. Neither NSLN nor any of its Subsidiaries is a
party to any:
1. Contract or agreement (other than purchase or sales orders entered into
in the ordinary course of business) involving any liability on the part of NSLN
or one of its Subsidiaries of more than $2,000 and not cancellable by NSLN or
the relevant Subsidiary (without liability to NSLN or such Subsidiary) within 60
days. NSLN has delivered to SDRC or the Escrow Agent copies of any and all
agreements, arrangements, contracts or other matters relating to NSLN.
2. Lease of personal property involving annual rental payments in excess of
$2,000 and not cancellable by NSLN or the relevant Subsidiary (without liability
to NSLN or such Subsidiary) within 90 days;
3. Employee bonus, stock option or stock purchase, performance unit,
profit-sharing, pension, savings, retirement, health, deferred or incentive
compensation, insurance or other material employee benefit plan (as defined in
Section 2(3) of ERISA) or program for any of the employees, former employees or
retired employees of NSLN or any of its Subsidiaries;
4. Commitment, contract or agreement that is currently expected by the
management of NSLN to result in any material loss upon completion or performance
thereof;
5. Contract, agreement or commitment that is material to the business of
NSLN and its Subsidiaries, taken as a whole, with any officer, employee, agent,
consultant, advisor, salesman, sales representative, value added reseller,
distributor or dealer; or
6. employment agreement or other similar agreement that contains any
severance or termination pay, liabilities or obligations.
All such contracts and agreements are in full force and effect. Neither NSLN nor
any or its Subsidiaries is in breach of, in violation of or in default under,
any agreement, instrument, indenture, deed of trust, commitment, contract or
other obligation of any type to which NSLN or any of its Subsidiaries is a party
or is or may be bound that relates to the business of NSLN or any of its
Subsidiaries or to which any of the assets or properties of NSLN or any of its
Subsidiaries is subject, the effect of which breach, violation or default is
likely to materially and adversely affect the business or financial condition of
NSLN and its Subsidiaries, taken as a whole.
(q) Labor Relations. Neither NSLN nor any of its Subsidiaries is a party to
any collective bargaining agreement. Except for any matter which is not likely
to have a material adverse effect on the business or financial condition of NSLN
and its Subsidiaries, taken as a whole, (a) NSLN and each of its Subsidiaries is
in compliance with all applicable laws respecting employment and employment
practices, terms and conditions of employment and wages and hours, and is not
engaged in any unfair labor practice, (b) there is no unfair labor practice
complaint against NSLN or any of its Subsidiaries pending before the National
Labor Relations Board, (c) there is no labor strike, dispute, slowdown or
stoppage actually pending or threatened against NSLN or any of its Subsidiaries,
(d) no representation question exists respecting the employees of NSLN or any
of its Subsidiaries, (e) neither NSLN nor any of its Subsidiaries has
experienced any strike, work stoppage or other labor difficulty, and (f) no
collective bargaining agreement relating to employees of NSLN or any of its
Subsidiaries is currently being negotiated.
(r) Employee Benefit Plans. No material employee pension and welfare benefit
plans covering employees of NSLN and its Subsidiaries is (1) a multi-employer
plan as defined in Section 3(37) of ERISA, or (2) a defined benefit plan as
defined in Section 3(35) of ERISA, any listed individual account pension plan is
duly qualified as tax exempt under the applicable sections of the Code, each
listed benefit plan and related funding arrangement, if any, has been maintained
in all material respects in compliance with its terms and the provisions of
ERISA and the Code.
(s) Compliance with Law. The operations of NSLN and its Subsidiaries have
been conducted in accordance with all applicable laws and regulations of all
Governmental Bodies having jurisdiction over them, except for violations thereof
which are not likely to have a material adverse effect on the business or
financial condition of NSLN and its Subsidiaries, taken as a whole, or which
would not require a payment by NSLN or its Subsidiaries in excess of $2,000 in
the aggregate, or which have been cured. Neither NSLN nor any of its
Subsidiaries has received any notification of any asserted present or past
failure by it to comply with any such applicable laws or regulations. NSLN and
its Subsidiaries have all material licenses, permits, orders or approvals from
the Governmental Bodies required for the conduct of their businesses, and are
not in material violation of any such licenses, permits, orders and approvals.
All such licenses, permits, orders and approvals are in full force and effect,
and no suspension or cancellation of any thereof has been threatened.
(t) Tax Matters. Except as set forth in Schedule 5(t):
1. NSLN and each of its Subsidiaries (1) shall file prior to Closing all
nonconsolidated and noncombined Tax Returns and all consolidated or combined Tax
Returns that include only NSLN and/or its Subsidiaries and not Seller or its
other Affiliates (for the purposes of this Section, such tax Returns shall be
considered nonconsolidated and noncombined Tax Returns) required to be filed
through the date hereof and will have paid any Tax due through the date hereof
with respect to the time periods covered by such nonconsolidated and noncombined
Tax Returns and shall timely pay any such Taxes required to be paid by it after
the date hereof with respect to such Tax Returns and (2) shall prepare and
timely file all such nonconsolidated and noncombined Tax Returns required to be
filed after the date hereof and through the Closing Date and pay all Taxes
required to be paid by it with respect to the periods covered by such Tax
Returns; (B) all such Tax Returns filed pursuant to clause (A) after the date
hereof shall, in each case, be prepared and filed in a manner consistent in all
material respects (including elections and accounting methods and conventions)
with such Tax Return most recently filed in the relevant jurisdiction prior to
the date hereof, except as otherwise required by law or regulation. Any such
Tax Return filed or required to be filed after the date hereof shall not reflect
any new elections or the adoption of any new accounting methods or conventions
or other similar items, except to the extent such particular reflection or
adoption is required to comply with any law or regulation.
2. NSLN represents that prior to Closing, all consolidated or combined Tax
Returns (except those described in subparagraph (1) above) required to be filed
by any person through the date hereof that are required or permitted to include
the income, or reflect the Activities, operations and Transactions, of NSLN or
any of its Subsidiaries for any taxable period shall have been timely filed, and
the income, activities, operations and Transactions of NSLN and Subsidiaries
shall have been properly included and reflected thereon. NSLN shall prepare and
file, or cause to be prepared and filed, all such consolidated or combined Tax
Returns that are required or permitted to include the income, or reflect the
activities, operations and Transactions, of NSLN or any Subsidiary, with
respect to any taxable year or the portion thereof ending on or prior to the
Closing Date, including, without limitation, NSLN's consolidated federal income
tax return for such taxable years. Prior to Closing, NSLN will timely file a
consolidated federal income tax return for the taxable year ended December 31,
2001 and such return shall include and reflect the income, activities,
operations and Transactions of NSLN and Subsidiaries for the taxable period then
ended, and hereby expressly covenants and agrees to file a consolidated federal
income tax return, and to include and reflect thereon the income, activities,
operations and Transactions of NSLN and Subsidiaries for the taxable period
through the Closing Date. All Tax Returns filed pursuant to this subparagraph
(2) after the date hereof shall, in each case, to the extent that such Tax
Returns specifically relate to NSLN or any of its Subsidiaries and do not
generally relate to matters affecting other members of NSLN's consolidated
group, be prepared and filed in a manner consistent in all material respects
(including elections and accounting methods and conventions) with the Tax Return
most recently filed in the relevant jurisdictions prior to the date hereof,
except as otherwise required by law or regulation. NSLN has paid or will pay
all Taxes that may now or hereafter be due with respect to the taxable periods
covered by such consolidated or combined Tax Returns.
3. Neither NSLN nor any of its Subsidiaries has agreed, or is required, to
make any adjustment (x) under Section 481(a) of the Code by reason of a change
in accounting method or otherwise or (y) pursuant to any provision of the Tax
Reform Act of 1986, the Revenue Act of 1987 or the Technical and Miscellaneous
Revenue Act of 1988.
4. Neither NSLN nor any of its Subsidiaries or any predecessor or Affiliate
of the foregoing has, at any time, filed a consent under Section 341(f)(1) of
the Code, or agreed under Section 341(f)(3) of the Code, to have the provisions
of Section 341(f)(2) of the Code apply to any sale of its stock.
5. There is no (nor has there been any request for an) agreement, waiver or
consent providing for an extension of time with respect to the assessment of any
Taxes attributable to NSLN or its Subsidiaries, or their assets or operations
and no power of attorney granted by NSLN or any of its Subsidiaries with respect
to any Tax matter is currently in force.
6. There is no action, suit, proceeding, investigation, audit, claim,
demand, deficiency or additional assessment in progress, pending or threatened
against or with respect to any Tax attributable to NSLN, its Subsidiaries or
their assets or operations.
7. All amounts required to be withheld as of the Closing Date for Taxes or
otherwise have been withheld and paid when due to the appropriate agency or
authority.
8. No property of NSLN is "tax-exempt use property " within the meaning of
Section 168(h) of the Code nor property that NSLN and/or its Subsidiaries will
be required to treat as being owned by another person pursuant to Section
168(f)(8) of the Internal Revenue Code of 1954, as amended and in effect
immediately prior to the enactment of the Tax Reform Act of 1986.
9. There shall be delivered or made available to GIF at or prior to Closing
true and complete copies of all income Tax Returns (or with respect to
consolidated or combined returns, the portion thereof) and any other Tax Returns
requested by the SDRC as may be relevant to NSLN, its Subsidiaries, or their
assets or operations for any and all periods ending after December 31, 1998, or
for any Tax years which are subject to audit or investigation by any taxing
authority or entity.
10. There is no contract, agreement, plan or arrangement, including but not
limited to the provisions of this Agreement, covering any employee or former
employee of NSLN or its Subsidiaries that, individually or collectively, could
give rise to the payment of any amount that would not be deductible pursuant to
Section 280G or 162 of the Code.
(u) Environmental Matters.
1. At all times prior to the date hereof, NSLN and its Subsidiaries have
complied in all material respects with applicable environmental laws, orders,
regulations, rules and ordinances relating to the Properties (as hereinafter
defined), the violation of which would have a material adverse effect on the
business or financial condition of NSLN and its Subsidiaries, taken as a whole,
or which would require a payment by NSLN or its Subsidiaries in excess of
$2,000 in the aggregate, and which have been duly adopted, imposed or
promulgated by any legislative, executive, administrative or judicial body or
officer of any Governmental Body.
2. The environmental licenses, permits and authorizations that are material
to the operations of NSLN and its Subsidiaries, taken as a whole, are in full
force and effect.
3. Neither NSLN nor any of its Subsidiaries has released or caused to be
released on or about the properties currently owned or leased by NSLN or any of
its Subsidiaries (the "Properties") any (i) pollutants, (ii) contaminants, (iii)
"Hazardous Substances," as that term is defined in Section 101(14) of the
Comprehensive Environmental Response Act, as amended or (iv) "Regulated
Substances," as that term in defined in Section 9001 of the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., as amended,
which would be required to be remediated by any governmental agency with
jurisdiction over the Properties under the authority of laws, regulations and
ordinances as in effect and currently interpreted on the date hereof, which
remediation would have a material adverse effect on the business or financial
condition of NSLN and its Subsidiaries, taken as a whole.
(v) Absence of Certain Commercial Practices. Neither NSLN nor any of its
Subsidiaries has, directly or indirectly, paid or delivered any fee, commission
or other sum of money or item of property, however characterized, to any finder,
agent, government official or other party, in the United States or any other
country, which is in any manner related to the business or operations of NSLN
or its Subsidiaries, which NSLN or one of its Subsidiaries knows or has reason
to believe to have been illegal under any federal, state or local laws of the
United States or any other country having jurisdiction; and neither NSLN nor any
of its Subsidiaries has participated, directly or indirectly, in any boycotts or
other similar practices affecting any of its Actual or potential customers in
violation of any applicable law or regulation.
(w) Transactions with Directors and Officers. NSLN and its Subsidiaries do
not engage in business with any Person in which any of NSLN's directors or
officers has a material equity interest. No director or officer of NSLN owns any
property, asset or right, which is material to the business of NSLN and its
Subsidiaries, taken as a whole.
(x) Borrowing and Guarantees. NSLN and its Subsidiaries (a) do not have any
indebtedness for borrowed money, (b) are not lending or committed to lend any
money (except for advances to employees in the ordinary course of business), and
(c) are not guarantors or sureties with respect to the obligations of any
Person.
6.Representations of Australian entities GIF and SDRC. GIF and SDRC for their
------------------------------------------------------
respective rights and interests represent and warrant as follows:
(a) Organization and SDRC; Authorization. SDRC is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Victoria in the commonwealth of Australia with full corporate power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder. The execution, delivery and performance of this Agreement have been
duly authorized by all necessary corporate Action of SDRC and this Agreement
constitutes a valid and binding obligation; enforceable against in accordance
with its terms.
(b) Capitalization SDRC. Under Australian law a company is not incorporated
with or required to have an authorized capital and outstanding shares need not
have a par value. As of the date of this Agreement, SDRC has an issued capital
of one million ordinary shares (similar to common stock). No shares have
otherwise been allotted, issued or registered by SDRC . As of the Closing Date,
all of the issued and outstanding ordinary shares of SDRC are validly issued,
fully paid and non-assessable and, there is not and as of the Closing Date there
will not be outstanding any warrants, options or other agreements on the part of
SDRC obligating SDRC to issue any additional shares of common or preferred stock
or any of its securities of any kind. SDRC will not issue any shares of its
capital or other securities convertible into shares or entitling the holder to
an issue of shares from the date of this Agreement through the Closing Date.
(c) No Conflict as to SDRC and their Subsidiaries. Neither the execution
and delivery of this Agreement nor the consummation of the NSLN Shares
transaction will (a) violate any provision of the constitution of SDRC or any
of its Subsidiaries or (b) violate, or be in conflict with, or constitute a
default (or an event which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination of, or accelerate the
performance required by, or excuse performance by any Person of any of its
obligations under, or cause the acceleration of the maturity of any debt or
obligation pursuant to, or result in the creation or imposition of any
Encumbrance upon any property or assets of SDRC or any of its Subsidiaries
under, any material agreement or commitment to which SDRC or any of its
Subsidiaries is a party or by which any of their respective property or assets
is bound, or to which any of the property or assets of SDRC or any of its
Subsidiaries is subject, or (c) violate any statute or law or any judgment,
decree, order, regulation or rule of any court or other Governmental Body
applicable to SDRC or any of its Subsidiaries except, in the case of violations,
conflicts, defaults, terminations, accelerations or Encumbrances described in
clause (b) of this Section for such matters which are not likely to have a
material adverse effect on the business or financial condition of SDRC and its
Subsidiaries, taken as a whole.
(d) Consents and Approvals of Governmental Authorities. No consent, approval
or authorization of, or declaration, filing or registration with, any
Governmental Body is required to be made or obtained by SDRC or any of either of
their Subsidiaries in connection with the execution, delivery and performance of
this Agreement by GIF and SDRC or the consummation of the sale of the SDRC
Shares.
(e) Other Consents. No consent of any Person is required to be obtained by
GIF or SDRC to the execution, delivery and performance of this Agreement or the
consummation of the sale of the SDRC Shares, including, but not limited to,
consents from parties to leases or other agreements or commitments, except for
any consent which the failure to obtain would not be likely to have a material
adverse effect on the business and financial condition of SDRC.
(f) Financial Statements. On or before that date which is fourteen days from
the execution of this Agreement, SDRC will deliver to NSLN (i) consolidated
balance sheets of SDRC and its Subsidiaries as at October 31st 2002 and
statements of income and changes in financial position from the date of
inception for the six month period then ended (the "SDRC Unaudited Financial
Statements". Such SDRC Financial Statements and notes will fairly present the
consolidated financial condition of SDRC and its Subsidiaries as at the
respective dates thereof and for the periods therein referred to, all in
accordance with generally accepted accounting principles consistently applied
throughout the periods involved, except as set forth in the notes thereto, and
shall be utilizable in any SEC filing in compliance with Rule 310 of Regulation
S-B promulgated under the Securities SDRC.
(g) Buildings, Plants and Equipment. The buildings, plants, structures and
material items of equipment and other personal property owned or leased by SDRC
or its Subsidiaries are, in all respects material to the business or financial
condition of SDRC and its Subsidiaries, taken as a whole, in good operating
condition and repair (ordinary wear and tear excepted) and are adequate in all
such respects for the purposes for which they are being used. SDRC has not
received notification that it or any of its Subsidiaries is in violation of any
applicable building, zoning, anti-pollution, health, safety or other law,
ordinance or regulation in respect of its buildings, plants or structures or
their operations, which violation is likely to have a material adverse effect on
the business or financial condition of SDRC and its Subsidiaries, taken as a
whole or which would require a payment by SDRC or any of its subsidiaries in
excess of $2,000 in the aggregate, and which has not been cured
(h) No Condemnation or Expropriation. Neither the whole nor any portion of
the property or leaseholds owned or held by SDRC or any of its Subsidiaries is
subject to any governmental decree or order to be sold or is being condemned,
expropriated or otherwise taken by any Governmental Body or other Person with or
without payment of compensation therefore, which Action is likely to have a
material adverse effect on the business or financial condition of SDRC and its
Subsidiaries, taken as a whole.
(i) Litigation. Except as set forth in Schedule 6(i), there is no Action,
suit, inquiry, proceeding or investigation by or before any court or
Governmental Body pending or threatened in writing against or involving SDRC or
any of its Subsidiaries which is likely to have a material adverse effect on the
business or financial condition of SDRC and any of its Subsidiaries, taken as
whole, or which would require a payment by SDRC or its subsidiaries in excess of
$2,000 in the aggregate or which questions or challenges the validity of this
Agreement. Neither SDRC nor any or its Subsidiaries is subject to any judgment,
order or decree that is likely to have a material adverse effect on the business
or financial condition of SDRC or any of its Subsidiaries, taken as a whole, or
which would require a payment by SDRC or its subsidiaries in excess of $2,000
in the aggregate.
(j) Absence of Certain Changes. Since the date of the SDRC Financial
Statements, neither SDRC nor any of its Subsidiaries has:
1. suffered the damage or destruction of any of its properties or assets
(whether or not covered by insurance) which is materially adverse to the
business or financial condition of SDRC and its Subsidiaries, taken as a whole,
or made any disposition of any of its material properties or assets other than
in the ordinary course of business;
2. made any change or amendment in its certificate of incorporation or
by-laws, or other governing instruments;
3. paid, discharged or satisfied any material claim, liability or obligation
(absolute, accrued, contingent or otherwise), other than in the ordinary course
of business;
4. prepaid any material obligation having a maturity of more than 90 days
from the date such obligation was issued or incurred;
5. cancelled any material debts or waived any material claims or rights,
except in the ordinary course of business;
6. disposed of or permitted to lapse any rights to the use of any material
patent or registered trademark or copyright or other intellectual property owned
or used by it;
7. granted any general increase in the compensation of officers or employees
(including any such increase pursuant to any employee benefit plan);
8. purchased or entered into any contract or commitment to purchase any
material quantity of raw materials or supplies, or sold or entered into any
contract or commitment to sell any material quantity of property or assets,
except (i) normal contracts or commitments for the purchase of, and normal
purchases of, raw materials or supplies, made in the ordinary course business,
(ii) normal contracts or commitments for the sale of, and normal sales of,
inventory in the ordinary course of business, and (iii) other contracts,
commitments, purchases or sales in the ordinary course of business;
9. made any capital expenditures or additions to property, plant or
equipment or acquired any other property or assets (other than raw materials and
supplies) at a cost in excess of $2,000 in the aggregate;
10. written off or been required to write off any notes or accounts
receivable in an aggregate amount in excess of $2,000;
11. written down or been required to write down any inventory in an
aggregate amount in excess of $ 2,000;
12. entered into any collective bargaining or union contract or agreement;
or
13. other than the ordinary course of business, incurred any liability
required by generally accepted accounting principles to be reflected on a
balance sheet and material to the business or financial condition of SDRC and
its subsidiaries taken as a whole.
(k) No Material Adverse Change. Since the date of the SDRC Financial
Statements, there has not been any material adverse change in the business or
financial condition of SDRC and its Subsidiaries taken as a whole.
(l) Labor Relations. Neither SDRC nor any of its Subsidiaries is a party to
any collective bargaining agreement. Except for any matter which is not likely
to have a material adverse effect on the business or financial condition of SDRC
and its Subsidiaries, taken as a whole, (a) SDRC and each of its Subsidiaries is
in compliance with all applicable laws respecting employment and employment
practices, terms and conditions of employment and wages and hours, and is not
engaged in any unfair labor practice, (b) there is no unfair labor practice
complaint against SDRC or any of its Subsidiaries pending before the National
Labor Relations Board, (c) there is no labor strike, dispute, slowdown or
stoppage Actually pending or threatened against SDRC or any of its Subsidiaries,
(d) no representation question exists respecting the employees of SDRC or any
of its Subsidiaries, (e) neither SDRC nor any of its Subsidiaries has
experienced any strike, work stoppage or other labor difficulty, and (f) no
collective bargaining agreement relating to employees of SDRC or any of its
Subsidiaries is currently being negotiated.
(m) Employee Benefit Plans. No material employee pension and welfare benefit
plans covering employees of SDRC and its Subsidiaries is (1) a multi-employer
plan as defined in Section 3(37) of ERISA, or (2) a defined benefit plan as
defined in Section 3(35) of ERISA, any listed individual account pension plan is
duly qualified as tax exempt under the applicable sections of the Code, each
listed benefit plan and related funding arrangement, if any, has been maintained
in all material respects in compliance with its terms and the provisions of
ERISA and the Code.
(n) Compliance with Law. The operations of SDRC and its Subsidiaries have
been conducted in accordance with all applicable laws and regulations of all
Governmental Bodies having jurisdiction over them, except for violations thereof
which are not likely to have a material adverse effect on the business or
financial condition of SDRC and its Subsidiaries, taken as a whole, or which
would not require a payment by SDRC or its Subsidiaries in excess of $2,000 in
the aggregate, or which have been cured. Neither SDRC nor any of its
Subsidiaries has received any notification of any asserted present or past
failure by it to comply with any such applicable laws or regulations. SDRC and
its Subsidiaries have all material licenses, permits, orders or approvals from
the Governmental Bodies required for the conduct of their businesses, and are
not in material violation of any such licenses, permits, orders and approvals.
All such licenses, permits, orders and approvals are in full force and effect,
and no suspension or cancellation of any thereof has been threatened.
(o) Tax Matters. SDRC and each of its Subsidiaries (1) shall file prior to
Closing all appropriate Tax Returns and other taxation filings as required by
and in compliance with the Australian Taxation Office, if any such filings or
returns are currently required to be submitted at this time, and will have
paid any Tax due through the date hereof with respect to the time periods
covered by any such Tax Returns and shall timely pay any such Taxes required to
be paid by it after the date hereof with respect to such Tax Returns and (2)
shall prepare and timely file all such nonconsolidated and noncombined Tax
Returns required to be filed after the date hereof and through the Closing Date
and pay all Taxes required to be paid by it with respect to the periods covered
by such Tax Returns; (B) all such Tax Returns filed pursuant to clause (A) after
the date hereof shall, in each case, be prepared and filed in a manner
consistent in all material respects (including elections and accounting methods
and conventions) with such Tax Return most recently filed in the relevant
jurisdiction prior to the date hereof, except as otherwise required by law or
regulation.
(p) Environmental Matters.
1. At all times prior to the date hereof, SDRC and its Subsidiaries have
complied in all material respects with applicable environmental laws, orders,
regulations, rules and ordinances relating to the Properties (as hereinafter
defined), the violation of which would have a material adverse effect on the
business or financial condition of SDRC and its Subsidiaries, taken as a whole,
or which would require a payment by SDRC or its Subsidiaries in excess of
$2,000 in the aggregate, and which have been duly adopted, imposed or
promulgated by any legislative, executive, administrative or judicial body or
officer of any Governmental Body.
2. The environmental licenses, permits and authorizations that are material
to the operations of SDRC and its Subsidiaries, taken as a whole, are in full
force and effect.
(q) Organization of GIF; Authorization. GIF is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Victoria in the commonwealth of Australia with full corporate power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder. The execution, delivery and performance of this Agreement have been
duly authorized by all necessary corporate Action of GIF and this Agreement
constitutes a valid and binding obligation of GIF; enforceable against it in
accordance with its terms.
(r) No Conflict as to GIF and Subsidiaries. Neither the execution and
delivery of this Agreement nor the consummation of the sale of the NSLN Shares
will (a) violate any provision of the constitution of GIF or (b) violate, or be
in conflict with, or constitute a default (or an event which, with notice or
lapse of time or both, would constitute a default) under, or result in the
termination of, or accelerate the performance required by, or excuse performance
by any Person of any of its obligations under, or cause the acceleration of the
maturity of any debt or obligation pursuant to, or result in the creation or
imposition of any Encumbrance upon any property or assets of GIF under, any
material agreement or commitment to which GIF is a party or by which any of its
property or assets is bound, or to which any of the property or assets of GIF is
subject, or (c) violate any statute or law or any judgment, decree, order,
regulation or rule of any court or other Governmental Body applicable to GIF
except, in the case of violations, conflicts, defaults, terminations,
accelerations or Encumbrances described in clause (b) of this Section for such
matters which are not likely to have a material adverse effect on the business
or financial condition of GIF, taken as a whole.
(s) Consents and Approvals of Governmental Authorities. No consent, approval
or authorization of, or declaration, filing or registration with, any
Governmental Body is required to be made or obtained by GIF in connection with
the execution, delivery and performance of this Agreement by GIF or by SDRC.
(t) Other Consents. No consent of any Person is required to be obtained by
GIF to the execution, delivery and performance of this Agreement.
(u) Litigation. There is no Action, suit, inquiry, proceeding or
investigation by or before any court or Governmental Body pending or threatened
in writing against or involving GIF.
7. Prohibited Acts. Except as otherwise expressly set forth herein, NSLN
----------------
shall not do any of the following things prior to the Closing Date:
(a) Declare or pay any dividends or other distributions on its stock or
purchase or redeem any of its stock; or
(b) Issue any stock or other securities, including any rights or options to
purchase or otherwise acquire any of its stock, and shall not issue any notes or
other evidences of indebtedness.
(c) Enter into any agreements or contracts binding NSLN with respect to any
matters.
8. Resignation of Officers and Directors of NSLN. Immediately prior to the
-----------------------------------------------
Closing Date, the directors of NSLN shall appoint five new directors designated
by GIF. Also immediately prior to the Closing, all officers and all directors
of NSLN will submit their resignations as officers and directors of NSLN, but
shall remain as officers and directors of NSLN1. The newly appointed directors
will appoint new management as directed by GIF and SDRC so as to effect an
orderly change of control.
9. Conditions to the Obligations of GIF and SDRC.
-----------------------------------------------------
(a) The obligations of GIF and SDRC to consummate the Transactions
contemplated by this Agreement are subject to the fulfilment, at or before the
Closing Date of the following further conditions: (i) each of the
representations and warranties of the NSLN contained in this Agreement, or in
any written statement, exhibit, addendum, financial statement or schedule or
other document delivered pursuant hereto or in connection with the Transactions
contemplated hereby shall be true in all respects as at the Closing Date, as
required specifically herein, as if then made (except to the extent waived
hereunder or as affected by the transactions contemplated hereby); (ii) NSLN
shall have performed and complied with all covenants, agreements and conditions
required by this Agreement to be performed or complied with by it prior to at
the Closing Date and SDRC shall have been furnished with a certificate of the
President and Treasurer of NSLN dated the Closing Date certifying in such
details as SDRC may reasonably request to the fulfilment of such conditions; and
(iii) all documents and proceedings of NSLN and SDRC in connection with the
Transactions contemplated hereby shall have been approved as to form and
substance by SDRC and its legal counsel.
(b) All of the representations and warranties of NSLN contained in this
Agreement, or any exhibit thereto shall have been acknowledged by NSLN and shall
be true in all material respects on the Closing Date as if then made. All such
representations and warranties shall survive the Closing Date of this
transaction.
(c) GIF and SDRC shall have completed to its reasonable satisfaction a due
diligence investigation of the books, records, assets and properties of NSLN and
shall not have found anything which would adversely impact on the financial
condition, operations or status of NSLN.
10. Conditions to the Obligations of NSLN.
--- -------------------------------------------
(a) The obligations of NSLN to consummate the Transactions contemplated by
this Agreement are subject to the fulfilment, at or before the Closing Date, of
the following further conditions; (i) each of the representations and warranties
of SDRC contained in this Agreement or in any written statement, exhibit,
addendum, financial statement or schedule or other document delivered pursuant
hereto or in connection with the transactions contemplated hereby shall be true
in all respects as at the Closing Date, as if then made (except to the extent
waived hereunder or as affected by the transactions contemplated hereby); and
(ii) SDRC shall have performed and complied with all covenants, agreements and
conditions required by this Agreement to be performed or complied with by them
prior to the Closing Date.
11. Notices. Any notice which any of the parties hereto may desire to
-------
serve upon any of the other parties hereto shall be in writing and shall be
conclusively deemed to have been received by the party at its address, if
mailed, postage prepaid, United States mail, registered, return receipt
requested, to the following addresses:
If to NSLN NetSalon Corporatio
0000 Xxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Attn:
If to SDRC or GIF: Global Investments Fund Pty Ltd: C/-
SDR Communications Technologies Pty ltd
000 Xxxxx Xxxxxx, Xxxxx 0
Xxxxxxxxx, Xxxxxxxx
Xxxxxxxxx 3000
Attn: Xxxxx Xxx
Copy to:
Xxxxxx Law Group
0000 Xxxx Xxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn. M. Xxxxxxx Xxxxxx, Esq.
12. Successors. This Agreement shall be binding upon and inure to the
----------
benefit of the heirs, personal representatives and successors and assigns of the
parties.
13. Choice of Law. This Agreement shall be construed and enforced in
---------------
accordance with the laws of the State of Florida, or in accordance with laws of
any other State of domicile that the corporation may be re-incorporated in after
the closing of this transaction.
14. Counterparts. This Agreement may be signed in one or more
------------
counterparts, all of which taken together shall constitute an entire agreement.
--
15. Confidential Information. Each of NSLN and GIF and SDRC hereby
-------------------------
acknowledges and agrees that all information disclosed to each other whether
written or oral, relating to the other's business Activities, its customer
names, addresses, all operating plans, information relating to its existing
services, new or envisioned products or services and the development thereof,
scientific, engineering, or technical information relating to the others
business, marketing or product promotional material, including brochures,
product literature, plan sheets, and any and all reports generated to customers,
with regard to customers, unpublished list of names, and all information
relating to order processing, pricing, cost and quotations, and any and all
information relating to relationships with customers, is considered confidential
information, and is proprietary to, and is considered the invaluable trade
secret of such party (collectively "Confidential Information"). Any disclosure
of any Confidential Information by any party hereto, its employees, or
representatives shall cause immediate, substantial, and irreparable harm and
loss to the other. Each party understands that the other desires to keep such
Confidential Information in the strictest confidence, and that such party's
agreement to do so is a continuing condition of the receipt and possession of
Confidential Information, and a material provision of this agreement, and a
condition that shall survive the termination of this Agreement. Consequently,
each party shall use Confidential Information for the sole purpose of performing
its obligations as provided herein.
16. Public Announcement. The parties shall make no public announcement
--------------------
concerning this agreement, their discussions or any other letters, memos or
agreements between the parties relating to this agreement until such time as
they agree to the contents of a mutually satisfactory press release which they
intend to release on the date of execution of this Agreement. Either of the
parties, but only after reasonable consultation with the other, may make
disclosure if required under applicable law.
17. Entire Agreement. This Agreement, together with the Exchange Agreement,
----------------
sets forth the entire agreement and understanding of the Parties hereto with
respect to the transactions contemplated hereby, and supersedes all prior
agreements, arrangements and understandings related to the subject matter
hereof. No understanding, promise, inducement, statement of intention,
representation, warranty, covenant or condition, written or oral, express or
implied, whether by statute or otherwise, has been made by any Party hereto
which is not embodied in this Agreement or the written statements, certificates,
or other documents delivered pursuant hereto or in connection with the
Transactions contemplated hereby, and no party hereto shall be bound by or
liable for any alleged understanding, promise, inducement, statement,
representation, warranty, covenant or condition not so set forth.
18. Attorney's Fees. Should any Action be commenced between the parties to
-----------------
this Agreement concerning the matters set forth in this Agreement or the right
and duties of either in relation thereto, the prevailing party in such Action
shall be entitled, in addition to such other relief as may be granted, to a
reasonable sum as and for its Attorney's Fees and Costs.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
For and on behalf of: NETSALON CORPORATION
a Delaware corporation
By:__________________________
Its: Xxxxx Xxxxx, ____________
For and on behalf of: GLOBAL INVESTMENTS FUND PTY LTD
an Australian corporation
By:-----------------------------------------__________________________
Its: Xxxxx Xxxxxx, Director
EXHIBIT A LOCK UP AGREEMENT AND LIST OF PARTIES SUBJECT TO LOCKUP
EXHIBIT B
SCHEDULES:
Schedule 5(m)
Schedule 5(t)
Balance Sheet of NSLN
Balance Sheet of SDRC
