STOCK PURCHASE AGREEMENT among ARIEL WAY, INC. and dbsXmedia, INC February 15, 2005
Exhibit
99.3
among
ARIEL
WAY, INC.
and
dbsXmedia,
INC
February
15, 2005
TABLE OF
CONTENTS
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§1.
Definitions. |
4 |
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§2.
Purchase and Sale of Purchased Shares. |
6 |
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(a)
Basic Transaction. |
6 |
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(b)
Purchase Consideration. |
6 |
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(c)
Closing. |
7 |
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(d)
Deliveries at Closing. |
7 |
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§3.
Seller's Representations and Warranties. |
7 |
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(a)
Organization, Qualification, and Corporate Power. |
7 |
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(b)
Authorization of Transaction. |
7 |
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(c)
Noncontravention. |
7 |
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(d)
Capitalization. |
7 |
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(e)
Subsidiaries and Equity Investments. |
8 |
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(f)
No Material Adverse Change; Subsequent Events. |
8 |
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(g)
Legal Compliance. |
8 |
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(h)
Litigation. |
8 |
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(i)
Certain Business Relationships with Affiliates. |
8 |
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(j)
Brokers' Fees. |
8 |
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(k)
Purchased Shares. |
8 |
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(l)
Disclaimer of Other Representations and Warranties. |
9 |
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§4
Buyer's Representations and Warranties. |
9 |
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(a)
Organization, Qualification, and Corporate Power. |
9 |
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(b)
Authorization of Transaction. |
9 |
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(c)
Noncontravention. |
9 |
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(d)
Brokers' Fees. |
9 |
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(e)
Investment. |
9 |
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§5.
Pre-Closing Covenants. |
10 |
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(a)
General. |
10 |
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(b)
Operation of Business. |
10 |
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(c)
Full Access. |
10 |
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(d)
Notice of Developments. |
10 |
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(e)
Exclusivity. |
10 |
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§6.
Post-Closing Acknowledgements and Covenants. |
11 |
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(a)
Mutual Acknowledgements Regarding Post-Closing BTV Business Asset Purchase
Agreement. |
11 |
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(b)
Further Assurances. |
11 |
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§7.
Conditions to Obligation to Close. |
11 |
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(a)
Conditions to Buyer's Obligation. |
11 |
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(b)
Conditions to Seller's Obligation. |
12 |
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§8.
Remedies for Breaches of This Agreement. |
12 |
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(a)
Survival of Representations and Warranties. |
12 |
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(b)
Indemnification Provisions for Buyer's Benefit. |
12 |
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(c)
Indemnification Provisions for Seller's Benefit. |
13 |
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(d)
Matters Involving Third Parties. |
13 |
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(e)
Determination of Losses. |
13 |
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(f)
Exclusive Remedy. |
13 |
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§9.
Termination. |
13 |
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(a)
Termination of Agreement. |
13 |
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(b)
Effect of Termination. |
14 |
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§10.
Miscellaneous. |
14 |
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(a)
Incorporation of Exhibits, Annexes, and Schedules. |
14 |
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(b)
Press Releases and Public Announcements. |
14 |
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(c)
No Third-Party Beneficiaries. |
14 |
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(d)
Construction. |
14 |
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(e)
Entire Agreement. |
15 |
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(f)
Succession and Assignment. |
15 |
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(g)
Counterparts. |
15 |
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(h)
Headings. |
15 |
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(i)
Notices. |
15 |
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(j)
Governing Law; Jurisdiction. |
15 |
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(k)
Amendments and Waivers. |
16 |
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(l)
Severability. |
16 |
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(m)
Expenses. |
16 |
Exhibit
A—
Purchase Consideration
Exhibit
B - Disclosure Schedule
Annex I —
Exceptions to Seller's Representations and Warranties
Annex
II —
Exceptions to Buyer's Representations and Warranties
This
Stock Purchase Agreement (this "Agreement") is
entered into as of February 15, 2005, by and among Netfran Development Corp.,
(under name change to Ariel Way, Inc.) a Florida corporation ("Buyer"), and
dbsXmedia, Inc. a Delaware corporation ("Seller"). Buyer
and Seller may be referred to individually herein as a "Party" and,
collectively, as the "Parties."
WHEREAS, Buyer
and Seller mutually desire to consummate a transaction whereby Buyer will
purchase from Seller, and Seller will sell to Buyer, one thousand five hundred
(1,500) shares (the "Purchased
Shares") of the
common stock, par value $0.001 per share, of Seller (the "Seller
Common Stock"), in
exchange for Buyer's payment of the Purchase Consideration as described (and
defined) below;
NOW,
THEREFORE, in
consideration of the premises and the mutual promises herein made, and in
consideration of the representations, warranties, and covenants herein
contained, the Parties agree as follows.
§1. Definitions. As used
in this Agreement, the following terms shall have the following
meanings:
"Accredited
Investor" has the
meaning set forth in Regulation D promulgated under the Securities Act.
"Affiliate" has the
meaning set forth in Rule 12b-2 of the regulations promulgated under the
Securities Exchange Act.
"Buyer" has the
meaning set forth in the preamble hereto.
"Closing" has the
meaning set forth in §2(c) below.
"Closing
Date" has the
meaning set forth in §2(c) below.
"Confidential
Information" means
any information concerning the Purchased Shares and/or the businesses and
affairs of Seller and its Affiliates that is not already generally available to
the public.
"Development/Support
Services Consideration" has the
meaning set forth in §2(b) below.
"DGCL" means
the General Corporation Law of the State of Delaware, as from time to time
amended and in effect.
"Disclosure
Schedule" has the
meaning set forth in §3 below.
"FGCL" means
the General Corporation Law of the State of Florida, as from time to time
amended and in effect.
"Indemnified
Party" has the
meaning set forth in §8(d) below.
"Indemnifying
Party" has the
meaning set forth in §8(d) below.
"Knowledge" means
actual knowledge without independent inquiry or investigation, which, in the
case of an entity or Person other than a natural person, shall mean the actual
knowledge of the directors and senior executive officers of such entity or other
Person without independent inquiry or investigation.
"Lien" means
any mortgage, pledge, lien, encumbrance, charge, or other security interest,
other than (a) liens incurred or arising (other than in connection with the
borrowing of money) in the Ordinary Course of Business for amounts (x) not yet
due and payable or (y) otherwise being actively contested in good faith through
appropriate proceedings, in each case for which appropriate reserves are being
maintained in accordance with generally accepted accounting principles, and (b)
solely in the case of the Purchased Shares, transfer restrictions and similar
limitations imposed thereon pursuant to the express provisions of the
Certificate of Incorporation or Bylaws of Seller, the DGCL, the Securities Act
or federal and state securities laws.
"Losses" means
all actions, suits, proceedings, hearings, investigations, charges, complaints,
claims, demands, injunctions, judgments, orders, decrees, rulings, damages,
dues, penalties, fines, costs, liabilities, obligations, Taxes, liens, losses,
expenses, and fees, including court costs and reasonable attorneys' fees and
expenses.
"dbsXmedia
Business Consideration" has the
meaning set forth in §2(b) below.
"Material
Adverse Effect" or
"Material
Adverse Change" means
any effect or change that would be materially adverse to the business of Seller
and its Subsidiaries, taken as a whole, or on the ability of any Party to
consummate timely the transactions contemplated hereby; provided that
none of the following shall be deemed to constitute, and none of the following
shall be taken into account in determining whether there has been, a Material
Adverse Effect or Material Adverse Change: (a) any adverse change, event,
development, or effect arising from or relating to (1) general business or
economic conditions, including such conditions related to the business of Seller
and its Subsidiaries, (2) national or international political or social
conditions, including the engagement by the United States in hostilities,
whether or not pursuant to the declaration of a national emergency or war, or
the occurrence of any military or terrorist attack upon the United States, or
any of its territories, possessions, or diplomatic or consular offices or upon
any military installation, equipment or personnel of the United States, (3)
financial, banking, or securities markets (including any disruption thereof and
any decline in the price of any security or any market index), (4) changes in
United States generally accepted accounting principles, (5) changes in law,
rules, regulations, orders, or other binding directives issued by any
governmental entity, or (6) the taking of any action contemplated by this
Agreement and the other agreements contemplated hereby, (b) any existing event,
occurrence, or circumstance with respect to which Buyer has Knowledge as of the
date hereof, and (c) any adverse change in or effect on the business of Seller
and its Subsidiaries that is cured by Seller before the earlier of (1) the
Closing Date and (2) the date on which this Agreement is terminated pursuant to
§10 hereof.
"Ordinary
Course of Business" means
the ordinary course of business of any specified Person(s) consistent with past
custom and practice (including with respect to quantity and frequency) of such
Person(s).
"Party" has the
meaning set forth in the preamble hereto.
"Person" means
an individual, a partnership, a corporation, a limited liability company, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, any other business entity or a governmental entity (or any
department, agency, or political subdivision thereof).
"Purchase
Consideration" has the
meaning set forth in §2(b) below.
"Purchased
Shares" has the
meaning set forth in the recital above.
"Securities
Act" means
the Securities Act of 1933, as amended.
"Securities
Exchange Act" means
the Securities Exchange Act of 1934, as amended.
"Seller" has the
meaning set forth in the preamble hereto.
"Seller
Common Stock" has the
meaning set forth in the recital above.
"Subsidiary" shall
mean, at any time, with respect to any Person (the "Subject Person"), (i) any
Person of which either (x) more than 50% of the shares of stock or other
interests entitled to vote in the election of directors or comparable Persons
performing similar functions (excluding shares or other interests entitled to
vote only upon the failure to pay dividends thereon or other contingencies) or
(y) more than a 50% interest in the profits or capital of such Person are at the
time owned or controlled directly or indirectly by the Subject Person or through
one or more Subsidiaries of the Subject Person or by the Subject Person and one
or more Subsidiaries of the Subject Person, or (ii) any Person whose assets, or
portions thereof, are consolidated with the net earnings of the Subject Person
and are recorded on the books of the Subject Person for financial reporting
purposes in accordance with GAAP.
"Tax" or
"Taxes" means
any federal, state, local, or foreign income, gross receipts, license, payroll,
employment, excise, severance, stamp, occupation, premium, windfall profits,
customs duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, including any interest, penalty,
or addition thereto, whether disputed or not.
"Third
Party Claim" has the
meaning set forth in §8(d) below.
§2. Purchase
and Sale of Purchased Shares.
(a) Basic
Transaction. On and
subject to the terms and conditions of this Agreement, Buyer agrees to purchase
from Seller, and Seller agrees to sell to Buyer, all of the Purchased Shares for
the Purchase Consideration specified below in §2(b).
(b) Purchase
Consideration. Buyer
agrees to deliver to Seller at the Closing a commitment to the benefit of the
Seller for a Conditional Guaranty in favor of Loral Skynet Network Services,
Inc., a Delaware corporation, CyberStar, L.P., a Delaware limited partnership,
CyberStar, LLC, a Delaware limited liability company, and Loral Skynet, a
division of Loral SpaceCom Corporation, a Delaware corporation (collectively,
the “Loral Entities”) having a total value to Seller of Three Million and No/100
Dollars ($3,000,000.00) (the "Purchase
Consideration").
Buyer
agrees that the Seller shall provide employment contracts and full benefits for
both Xxxxx Xxxxxxxxxx and Xxxxx Xxxxxxx for three years. The minimum salary
levels are agreed to be: Xxxxx Xxxxxxxxxx - $150,000 US Dollars per annum and
Xxxxx Xxxxxxx - £100,000 GBP per annum. Xxxxx Xxxxxxxxxx shall be President and
COO for the Seller. Xxxxx Xxxxxxx shall be CEO and VP Sales and Marketing for
the Seller. The Seller is intended to operate as a subsidiary within the Ariel
Way group using synergies with sister companies to advantage but with autonomous
offices and management control. The Seller will furnish staff employment
contracts as required by industry and legal norms.
The
acquisition by the Seller of certain assets from the Loral Entities is expected
to be a cash-less transaction as $250,000 Dollars purchase price will be taken
from prepaid revenue owing to the Seller on closing. All other monies due by the
Seller to the Loral Entities in the transaction agreement will be taken from
operating funds and are not part of the Seller’s equity purchase.
The Buyer
shall provide, in a timely fashion, capitalization funding to the Seller to
cover certain cash flow and capital expenditures deficit for a period of two
years per business plan submitted and upon the Buyers approval and according to
a certain Stockholders Agreement between the Buyer and the Seller.
Capitalization levels may be reviewed after 18 months to assess investment
return.
The Buyer
shall, within 180 days, replace the $250,000 purchase price for the certain
assets from the Loral Entities as acquired by the Seller and paid from the
Seller’s cash balance at Closing.
The Buyer
and the Seller shall assume responsibility to settle Seller fee agreement with
Xxxxxx Financial Corporation as Consultant in a prompt manner upon closing of
the acquisition of certain assets from the Loral Entities. At present the Buyer
understands that this responsibility is approximately $25,000, and a warrant for
2% of Seller’s stock at refinance valuation, payable according to terms of the
engagement letter between the Seller and Xxxxxx Financial Corporation, and there
is no other consideration, in cash, securities or warrants owed to Xxxxxx
Financial Corporation.
(c) Closing. The
closing of the transactions contemplated by this Agreement (the "Closing") shall
take place at the offices of Xxxxxx Xxxx & Xxxxxx LLP, in Vienna, Virginia,
commencing at 10:00 a.m. local time on the third (3rd)
business day following the satisfaction or waiver of all conditions to the
obligations of the Parties to consummate the transactions contemplated hereby
(other than conditions with respect to actions the respective Parties will take
at the Closing itself) or such other date as Buyer and Seller may mutually
determine in writing (the "Closing
Date").
(d) Deliveries
at Closing. At the
Closing, (i) Seller shall deliver to Buyer the various certificates,
instruments, and documents referred to in §7(a) below, (ii) Buyer will deliver
to Seller the various certificates, instruments, and documents referred to in
§7(b) below, (iii) Seller will deliver to Buyer newly-issued stock certificates
representing all of the Purchased Shares, and (iv) Buyer will deliver to Seller
the Purchase Consideration specified in §2(b) above.
§3. Seller's
Representations and Warranties. Seller
represents and warrants to Buyer that the statements contained in this §3 are
correct and complete as of the date of this Agreement and will be correct and
complete in all material respects as of the Closing Date (as though made then
and as though the Closing Date were substituted for the date of this Agreement
throughout this §3(a)), except as set forth in the Disclosure
Schedule
delivered by Seller to Buyer as attached hereto as Exhibit B, Annex I on and as
of the date hereof (the "Disclosure
Schedule").
(a) Organization,
Qualification, and Corporate Power. Seller
is duly incorporated, validly existing, and in good standing under the laws of
the State of Delaware. Seller is duly authorized to conduct business and is in
good standing under the laws of each jurisdiction where such qualification is
required, except where the lack of such qualification would not have a Material
Adverse Effect. Seller has full corporate power and authority to carry on the
businesses in which it is engaged and to own and use the properties owned and
used by it. §3(a) of the Disclosure Schedule lists the directors and officers of
Seller.
(b) Authorization
of Transaction. Seller
has corporate full power and authority to execute and deliver this Agreement and
to perform its obligations hereunder. This Agreement constitutes the valid,
legal and binding obligation of Seller, enforceable against Seller in accordance
with its terms and conditions. Seller is not required to give any notice to,
make any filing with, or obtain any authorization, consent, or approval of any
government or governmental agency in order for Seller to duly and fully perform
its obligations as stipulated in this Agreement. The execution, delivery and
performance of this Agreement and all other agreements contemplated hereby have
been duly authorized by all requisite corporate action of Seller.
(c) Non-contravention. Neither
the execution and the delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will (A) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge, or other
restriction of any government, governmental agency, or court to which Seller is
subject or any provision of Seller's charter, bylaws, or other governing
documents, (B) conflict with, result in a breach of, constitute a default under,
result in the acceleration of, create in any party the right to accelerate,
terminate, modify, or cancel, or require any notice under any material
agreement, contract, lease, license, instrument, or other arrangement to which
Seller is a party or by which Seller is bound or to which any of its assets is
subject, or (C) result in the imposition or creation of a Lien upon or with
respect to Purchased Shares.
(d) Capitalization. The
entire authorized capital stock of Seller consists of one million (1,000,000)
shares of Seller Common Stock out of which one thousand (1,000) shares are
issued and outstanding, one thousand five hundred (1,500) shares are reserved
for issuance as the Purchase Shares. All of the issued and outstanding shares of
Seller Common Stock as aforesaid have been duly authorized, are validly issued,
fully paid, and non-assessable, and are owned of record by such Persons and in
such amounts as listed in §3(d) of the Disclosure Schedule. There are no
outstanding or authorized options, warrants, purchase rights, subscription
rights, conversion rights, exchange rights, or other contracts or commitments
(other than this Agreement) that could require Seller to issue, sell, or
otherwise cause to become outstanding any of its capital stock. There are no
outstanding or authorized stock appreciation, phantom stock, profit
participation, or similar rights with respect to any capital stock of Seller.
Section 3(d) of the Disclosure Schedule sets forth true, correct, and complete
copies of the unaudited balance sheet, and the related profit and loss statement
for the Seller and each Subsidiary, on a consolidated basis, as, at and for the
period beginning on February 4, 2005 and ending on February 14, 2005 (the
"Seller Financial Statements"). The Seller Financial Statements (i) have been
prepared from, and are consistent with, the books and records of the Seller and
each respective Subsidiary; (ii) are accurate and complete in all material
respects; and (iii) fairly present, in all material respects, the financial
condition and results of operations of the Seller and its Subsidiaries, on a
consolidated basis, as at the dates, and for the periods, stated therein. The
financial books and records of the Seller and each of its Subsidiaries are
maintained in accordance with sound business practices and applicable legal
requirements.
(e) Subsidiaries
and Equity Investments. Except
as set forth in §3(e) of the Disclosure Schedule, Seller does not have or
maintain any direct or indirect subsidiaries, nor does Seller otherwise own or
have any right or commitment to acquire, directly or indirectly, any outstanding
capital stock of, or other equity interests in, any Person.
(f) No
Material Adverse Change; Subsequent Events. At no
time since the date of Seller's original incorporation in Delaware on February
4, 2005, has there occurred or existed any Material Adverse Change. Without
limiting the generality of the foregoing, at no time since such date has Seller
or any of its Affiliates engaged in any practice, taken any action, or entered
into any transaction outside the Ordinary Course of Business the primary purpose
or effect of which has been to decrease, deplete or impair the value of any of
its assets, businesses or prospects in any material respect.
(g) Legal
Compliance. To the
Knowledge of Seller, Seller has complied with all applicable laws (including
rules, regulations, codes, plans, injunctions, judgments, orders, decrees,
rulings, and charges thereunder) of federal, state, local, and foreign
governments (and all agencies thereof), except where the failure to comply would
not have a Material Adverse Effect.
(h) Litigation. §3(h)
of the Disclosure Schedule sets forth each instance in which Seller (i) is
subject to any outstanding injunction, judgment, order, decree, ruling, or
charge or (ii) is a party to any action, suit, proceeding, hearing, or
investigation of, in, or before any court or quasi-judicial or administrative
agency of any federal, state, local, or foreign jurisdiction, except where the
injunction, judgment, order, decree, ruling, action, suit, proceeding, hearing,
or investigation would not have a Material Adverse Effect.
(i) Certain
Business Relationships with Affiliates. Except
as set forth in §3(i) of the Disclosure Schedule, no Affiliate, director or
officer of Seller has been involved in any material business arrangement or
relationship with Seller within the past 12 months nor owns any material asset,
tangible or intangible, that is used in the business of Seller.
(j) Brokers'
Fees. Neither
Seller nor any of its Affiliates has any liability or obligation to pay any fees
or commissions to any broker, finder, or agent with respect to the transactions
contemplated by this Agreement except as set forth in §3(i) of the Disclosure
Schedule.
(k) Purchased
Shares. Upon
Buyer's delivery of the Purchase Consideration at Closing as and in the manner
provided in §2 above, the Purchased Shares shall be duly authorized, validly
issued, fully paid and non-assessable, and shall be issued to Buyer free and
clear of any and all Liens. The Purchased Shares are not and, upon issuance
thereof at Closing, shall not be subject to any (x) option, warrant, purchase
right, or other contract or commitment in favor of any Person other than Buyer
or (y) voting trust, proxy, or other agreement or understanding with respect to
the voting thereof.
(l) Disclaimer
of Other Representations and Warranties. Except
as expressly set forth in this §3, Seller makes no representation or warranty,
express or implied, at law or in equity, as to the Purchased Shares or otherwise
in respect of Seller, any Affiliate of Seller, or any of their respective
assets, liabilities or operations, including with respect to merchantability or
fitness for any particular purpose, and any such other representations or
warranties are hereby expressly disclaimed. Buyer hereby acknowledges and agrees
that, except to the extent specifically set forth in this §3, Buyer is
purchasing the Purchased Shares on an "as-is, where-is" basis.
§4 Buyer's
Representations and Warranties. Buyer
represents and warrants to Seller that the statements contained in this §4 are
correct and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date (as though made then and as though the Closing
Date were substituted for the date of this Agreement throughout this §4), except
as set forth in Exhibit B, Annex
II attached
hereto.
(a) Organization,
Qualification, and Corporate Power. Buyer
is a corporation duly organized, validly existing, and in good standing under
the laws of the State of Florida. Buyer is duly authorized to conduct business
and is in good standing under the laws of each jurisdiction where such
qualification is required, except where the lack of such qualification would not
have a Material Adverse Effect. Buyer has full corporate power and authority to
carry on the businesses in which it is engaged and to own and use the properties
owned and used by it. §4(a) of the Disclosure Schedule lists the directors and
officers of Buyer.
(b) Authorization
of Transaction. Buyer
has full power and authority to execute and deliver this Agreement and to
perform its obligations hereunder and under any and all agreements relating the
Purchase Consideration as contemplated hereby. This Agreement (and each related
agreement as aforesaid) constitutes the valid, legal and binding obligation of
Buyer, enforceable against Buyer in accordance with its terms and conditions.
Buyer is not required to give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any government or governmental agency in
order to consummate the transactions contemplated by this Agreement. The
execution, delivery and performance of this Agreement and all other agreements
contemplated hereby have been duly authorized by Buyer.
(c) Non-contravention. Neither
the execution and the delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will (A) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge, or other
restriction of any government, governmental agency, or court to which Buyer is
subject or any provision of Buyer's charter, bylaws, or other governing
documents or (B) conflict with, result in a breach of, constitute a default
under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
material agreement, contract, lease, license, instrument, or other arrangement
to which Buyer is a party or by which it is bound or to which any of its assets
is subject.
(d) Brokers'
Fees. Neither
Buyer nor any of its Affiliates has any liability or obligation to pay any fees
or commissions to any broker, finder, or agent with respect to the transactions
contemplated by this Agreement.
(e) Investment. Buyer
(A) understands that the Purchased Shares have not been, and will not be,
registered under the Securities Act, or under any state securities laws, and are
being offered and sold in reliance upon federal and state exemptions for
transactions not involving any public offering, (B) is acquiring the Purchased
Shares solely for its own account for investment purposes and, other than any
proposed dividend thereof (which shall not constitute a "distribution" for
purposes of this §4(e)(B)) by Buyer to its stockholders as expressly
acknowledged by the Parties under §6(a) below, not with a view to the
distribution thereof; (C) is a sophisticated investor with knowledge and
experience in business and financial matters, (D) has received certain
information concerning Seller and the Purchased Shares and has had the
opportunity to obtain additional information as desired in order to evaluate the
merits and the risks inherent in holding the Purchased Shares, (E) is able to
bear the economic risk and lack of liquidity inherent in holding the Purchased
Shares, and (F) together with its applicable Affiliate(s), is an Accredited
Investor.
§5. Pre-Closing
Covenants. The
Parties agree as follows with respect to the period between the execution of
this Agreement and the Closing.
(a) General. Each of
the Parties will use its reasonable best efforts to take all action and to do
all things necessary or otherwise reasonably proper or advisable in order to
consummate and make effective the transactions contemplated by this Agreement
(including satisfaction, but not waiver, of the Closing conditions set forth in
§7 below).
(b) Operation
of Business. Seller
will not, and will not cause or permit any of its Affiliates to, engage in any
practice, take any action, or enter into any transaction with respect to Seller
outside the Ordinary Course of Business of Seller. Without limiting the
generality of the foregoing, Seller will not, and will not cause or permit any
of its Affiliates to, engage in any practice, take any action, or enter into any
transaction outside the Ordinary Course of Business the primary purpose or
effect of which is to decrease, deplete or impair the value of any of its
assets, businesses or prospects in any material respect. Seller will cause its
executive officers to use their respective commercially reasonable efforts to
preserve intact Seller's business organization and the good will of its
customers, suppliers, employees and others having material business relations
with Seller.
(c) Full
Access. Seller
will permit representatives of Buyer (including legal counsel and accountants)
to have full access at all reasonable times, and in a manner so as not to
interfere with the normal business operations of Seller and its Affiliates, to
all premises, properties, personnel, books, records (including tax records),
contracts, and documents of or pertaining to Seller and the Purchased Shares.
Buyer will treat and hold as such any Confidential Information it receives from
any of Seller and/or its Affiliates and representatives in the course of the
reviews contemplated by this §5(c), will not use any of the Confidential
Information except in connection with this Agreement, and, if this Agreement is
terminated for any reason whatsoever, will return to Seller all tangible
embodiments (and all copies) of the Confidential Information which are in its
possession.
(d) Notice
of Developments.
(i) Seller
may elect at any time to notify Buyer of any development causing a breach of any
of the representations and warranties in §3 above. Unless Buyer has the right to
terminate this Agreement pursuant to §9(a)(ii) below by reason of the
development and exercises that right within the period of fifteen (15) business
days referred to in §9(a)(ii) below, the written notice pursuant to this
§5(d)(i) will be deemed to have amended the Disclosure Schedule, to have
qualified the representations and warranties contained in §3 above, and to have
cured any misrepresentation or breach of warranty that otherwise might have
existed hereunder by reason of the development.
(ii) Each
Party will give prompt written notice to the others of any material adverse
development causing a breach of any of his or its own representations and
warranties in §3 above. No disclosure by any Party pursuant to this §5(d)(ii),
however, shall be deemed to amend or supplement Annex I or the Disclosure
Schedule or to prevent or cure any misrepresentation or breach of warranty.
(e) Exclusivity. Seller
will not (and will not cause or permit any Affiliate, officer, director,
employee or agent to) solicit, initiate, or encourage the submission of any
proposal or offer (including by engaging in any discussions or negotiations or
furnishing any information with respect to any such matters) from any Person
relating to the acquisition or disposition of any material portion of the
capital stock or assets of Seller (including any acquisition structured as a
merger, consolidation, or share exchange); provided,
however, that
Seller, its Affiliates and their respective directors and officers will remain
free to participate in any discussions or negotiations regarding, furnish any
information with respect to, assist or participate in, or facilitate in any
other manner any effort or attempt by any Person to do or seek any of the
foregoing to the extent (x) relating to any proposed acquisition or
equity-financing transaction with respect to Seller Common Stock held in
treasury as referred to in §3(d) above, or (y) their fiduciary duties may
require.
§6. Post-Closing
Acknowledgements and Covenants. The
Parties agree as follows with respect to the period following the Closing.
(a) Mutual
Acknowledgements Regarding Post-Closing BTV Business Asset Purchase
Agreement. BTV
Business Asset Purchase Agreement by and among dbsXmedia Inc., a Delaware
corporation (the "Agreement’s Buyer"); Loral Skynet Network Services, Inc., a
Delaware corporation ("LSNS"), CyberStar L.P., a Delaware limited partnership
("CLP"), and CyberStar, LLC ("CL") (collectively, LSNS, CLP, and CL are referred
to herein as the "Agreement’s Seller"); and Netfran Development Corp. under name
change to Ariel Way, Inc., a Florida corporation (the “Agreement’s AWI”) is
intended to be signed and executed on or about February 16, 2005. Subject to the
conditions therein set forth, the Agreement’s Seller desires to sell, assign,
convey and transfer to the Agreement’s Buyer, and the Agreement’s Buyer desires
to purchase and acquire from the Agreement’s Seller, certain intangible and
tangible assets used in connection with the business and operations of the
Agreement’s Seller's business television services business (the "BTV Business")
as more specifically described therein.
(b) Further
Assurances. In case
at any time after the Closing any further action is necessary or reasonably
appropriate to carry out the purposes and intent (including the Parties' intent
as expressed in the foregoing §6(a)) of this Agreement, each of the Parties will
take such further action (including the execution and delivery of such further
instruments and documents) as any other Party reasonably may request, all at the
sole cost and expense of the requesting Party (unless the requesting Party is
entitled to indemnification therefor under §8 below).
§7. Conditions
to Obligation to Close.
(a) Conditions
to Buyer's Obligation. Buyer's
obligation to consummate the transactions to be performed by it in connection
with the Closing is subject to satisfaction of the following conditions:
(i) the
representations and warranties set forth in §3 above shall be true and correct
in all material respects at and as of the Closing Date, except to the extent
that such representations and warranties are qualified by terms such as
"material" and "Material Adverse Effect," in which case such representations and
warranties shall be true and correct in all respects at and as of the Closing
Date;
(ii) Seller
shall have performed and complied with all of its pre-Closing covenants
hereunder in all material respects as of and through the Closing, except to the
extent that such covenants are qualified by terms such as "material" and
"Material Adverse Effect," in which case Seller shall have performed and
complied with all of such covenants in all respects as of and through the
Closing;
(iii) there
shall not be in effect any injunction, judgment, order, decree, ruling, or
change in law, rule or regulation preventing consummation of any of the
transactions contemplated by this Agreement; and
(iv) Seller
shall have delivered to Buyer a certificate to the effect that each of the
conditions specified above in §7(a)(i)-(iii) has been, and remains as of the
Closing Date, satisfied in all respects.
(v) Seller
shall have presented a complete set of transaction documentation to the
satisfaction of the Buyer related to the BTV Business Asset Purchase Agreement
by and among dbsXmedia Inc.; Loral Skynet Network Services, Inc., CyberStar
L.P., and CyberStar,; and Netfran Development Corp. under name change to Ariel
Way, Inc.
Buyer may
waive any condition specified in this §7(a) by written notice to such effect
delivered in Buyer's sole and absolute discretion at any time prior to or as of
the Closing.
(b) Conditions
to Seller's Obligation.
Seller's obligation to consummate the transactions to be performed by it in
connection with the Closing is subject to satisfaction of the following
conditions:
(i) the
representations and warranties set forth in §4 above shall be true and correct
in all material respects at and as of the Closing Date, except to the extent
that such representations and warranties are qualified by terms such as
"material" and "Material Adverse Effect," in which case such representations and
warranties shall be true and correct in all respects at and as of the Closing
Date;
(ii) Buyer
shall have performed and complied with all of its pre-Closing covenants
hereunder in all material respects as of and through the Closing, except to the
extent that such covenants are qualified by terms such as "material" and
"Material Adverse Effect," in which case Buyer shall have performed and complied
with all of such covenants in all respects as of and through the Closing;
(iii) Seller
shall have received from Buyer duly-executed counterparts of the agreements with
respect to the Purchase Consideration referred to in clauses (i) and (ii) of
§2(b) above, with such agreements in each case being in form and substance
satisfactory to Seller;
(iv) there
shall not be in effect any injunction, judgment, order, decree, ruling, or
change in law, rule or regulation preventing consummation of any of the
transactions contemplated by this Agreement; and
(v) Buyer
shall have delivered to Seller a certificate to the effect that each of the
conditions specified above in §7(b)(i)-(iv) has been, and remains as of the
Closing Date, satisfied in all respects.
Seller
may waive any condition specified in this §7(b) by written notice to such effect
delivered in Seller's sole and absolute discretion at any time prior to or as of
the Closing.
§8. Remedies
for Breaches of This Agreement.
(a) Survival
of Representations and Warranties. All of
the representations and warranties of Seller contained in §3 above shall survive
the Closing hereunder (unless Buyer had Knowledge of any misrepresentation or
breach of warranty at the time of Closing) and continue in full force and effect
until the twelve (12) month anniversary of the Closing Date, whereupon any
right, remedy or claim by, through or on behalf of Buyer with respect to
misrepresentation or breach of any thereof shall be immediately and irrevocably
waived and forever barred. All of the representations and warranties of Buyer
contained in §4 above shall survive the Closing hereunder (unless Seller knew or
had reason to know of any misrepresentation or breach of warranty at the time of
Closing) and continue in full force and effect until the twelve (12) month
anniversary of the Closing Date, whereupon any right, remedy or claim by,
through or on behalf of Seller with respect to misrepresentation or breach of
any thereof shall be immediately and irrevocably waived and forever
barred.
(b) Indemnification
Provisions for Buyer's Benefit. In the
event Seller breaches any of its representations, warranties, and covenants
contained herein, and provided that Buyer makes a written claim for
indemnification against Seller within the survival period (if there is an
applicable survival period pursuant to §8(a) above), then Seller shall indemnify
Buyer from and against any and all Losses (but excluding any
Losses suffered after the end of any applicable survival period) reasonably and
proximately resulting from such breach; provided that
Seller will be obligated only to indemnify Buyer from and against such Losses to
the extent that (A) the total amount of all such Losses incurred by Buyer as of
and through the relevant date equals or exceeds Twenty-Five Thousand Dollars
($25,000) in the aggregate (which indemnity shall commence from the first Dollar
of Loss exceeding such threshold amount), and (B) the total amount of Losses for
which Seller has previously indemnified Buyer would not, when added together
with the indemnifiable Losses currently claimed by Buyer, exceed the total value
to Seller of the Purchase Consideration recited in §2(b) above, which amount
shall constitute Seller's maximum liability under any indemnity obligation
hereunder or any other theory or claim of damages or recovery asserted or
alleged by, through or on behalf of Buyer in connection with any matters subject
or in any manner related to this Agreement.
(c) Indemnification
Provisions for Seller's Benefit. In the
event Buyer breaches any of its representations, warranties, and covenants
contained herein, and provided that Seller makes a written claim for
indemnification against Buyer within the survival period (if there is an
applicable survival period pursuant to §8(a) above), then Buyer shall indemnify
Seller from and against any and all Losses (but excluding any
Losses suffered after the end of any applicable survival period) reasonably and
proximately resulting from such breach; provided that
Buyer will be obligated only to indemnify Seller from and against such Losses to
the extent that (A) the total amount of all such Losses incurred by Seller as of
and through the relevant date equals or exceeds Twenty-Five Thousand Dollars
($25,000) in the aggregate (which indemnity shall commence from the first Dollar
of Loss exceeding such threshold amount), and (B) the total amount of Losses for
which Buyer has previously indemnified Seller would not, when added together
with the indemnifiable Losses currently claimed by Seller, exceed the total
value to Seller of the Purchase Consideration recited in §2(b) above, which
amount shall constitute Buyer's maximum liability under any indemnity obligation
hereunder or any other theory or claim of damages or recovery asserted or
alleged by, through or on behalf of Seller in connection with any matters
subject or in any manner related to this Agreement.
(d) Matters
Involving Third Parties.
(i) If any
third party shall notify any Party (the "Indemnified
Party") with
respect to any matter (a "Third
Party Claim") which
may give rise to a claim for indemnification against any other Party (the
"Indemnifying
Party") under
this §8, then the Indemnified Party shall promptly (and in any event within five
(5) business days after receiving notice of the Third Party Claim) notify each
Indemnifying Party thereof in writing.
(ii) Any
Indemnifying Party will have the right at any time to assume and thereafter
conduct the defense of the Third Party Claim with counsel of his or its choice
reasonably satisfactory to the Indemnified Party; provided,
however, that
the Indemnifying Party will not consent to the entry of any judgment or enter
into any settlement with respect to the Third Party Claim without the prior
written consent of the Indemnified Party (such consent not to be unreasonably
withheld, conditioned or delayed if the applicable judgment or proposed
settlement involves only the payment of money damages and does not impose an
injunction or other equitable relief upon the Indemnified Party).
(iii) Unless
and until an Indemnifying Party assumes the defense of the Third Party Claim as
provided in §8(d)(ii) above, however, the Indemnified Party may defend against
the Third Party Claim in any manner it reasonably may deem appropriate.
(iv) In no
event will the Indemnified Party consent to the entry of any judgment or enter
into any settlement with respect to the Third Party Claim without the prior
written consent of the Indemnifying Party (not to be unreasonably withheld,
conditioned or delayed).
(e) Determination
of Losses. All
indemnification payments under this §8 shall be paid by the Indemnifying Party
net of any Tax benefits and insurance coverage that may be available to the
Indemnified Party.
(f) Exclusive
Remedy. Buyer
and Seller acknowledge and agree that the foregoing indemnification provisions
in this §8 shall be the exclusive remedy of Buyer and Seller with respect to
Seller, Buyer, their respective Affiliates, the Purchased Shares and the
transactions contemplated by this Agreement.
§9. Termination.
(a) Termination
of Agreement. This
Agreement shall be subject to termination as follows:
(i) Buyer and
Seller may terminate this Agreement by mutual written consent at any time prior
to the Closing;
(ii) Buyer may
terminate this Agreement by giving written notice to Seller at any time prior to
the Closing in the event (A) Seller has within the then-previous ten (10)
business days given Buyer any notice pursuant to §5(d)(i) above and (B) the
development that is the subject of the notice has had a Material Adverse Effect;
(iii) Buyer may
terminate this Agreement by giving written notice to Seller at any time prior to
the Closing (A) in the event Seller has breached any material representation,
warranty, or covenant contained in this Agreement in any material respect, Buyer
has notified Seller of the breach, and the breach has continued without cure for
a period of fifteen (15) business days after the notice of breach or (B) if the
Closing shall not have occurred on or before February 25, 2005, by reason of the
failure of any condition precedent under §7(a) hereof (unless the failure
results primarily from Buyer itself breaching any representation, warranty, or
covenant contained in this Agreement); and
(iv) Seller
may terminate this Agreement by giving written notice to Buyer at any time prior
to the Closing (A) in the event Buyer has breached any material representation,
warranty, or covenant contained in this Agreement in any material respect,
Seller has notified Buyer of the breach, and the breach has continued without
cure for a period of fifteen (15) business days after the notice of breach or
(B) if the Closing shall not have occurred on or before February 25, 2005, by
reason of the failure of any condition precedent under §7(b) hereof (unless the
failure results primarily from Seller breaching any representation, warranty, or
covenant contained in this Agreement).
(b) Effect
of Termination. If any
Party terminates this Agreement pursuant to §9(a) above, all rights and
obligations of the Parties hereunder shall terminate without any liability of
any Party to any other Party (except for any liability of any Party then in
breach); provided,
however, that
the confidentiality provisions contained in §5(d) above shall survive
termination.
§10. Miscellaneous.
(a) Incorporation
of Exhibits, Annexes, and Schedules. The
Exhibits, Annexes, and Schedules identified in this Agreement are incorporated
herein by reference and made a part hereof.
(b) Press
Releases and Public Announcements. No
Party shall issue any press release or make any public announcement relating to
the subject matter of this Agreement without the prior written approval of the
other Party, except for such public disclosures to the minimum extent reasonably
and in good faith believed by a Party, on the advice of its legal counsel, to be
required by applicable law or any listing or trading agreement concerning the
publicly-traded securities of such Party (in which case the disclosing Party
will use its best efforts to advise and cooperate with the other Party prior to
making such disclosure in order to minimize the scope and effect thereof to the
extent practicable in the circumstances).
(c) No
Third-Party Beneficiaries. This
Agreement shall not confer any rights or remedies upon any Person other than the
Parties and their respective successors and permitted assigns. Without limiting
the foregoing, no stockholder or Affiliate of Buyer shall, by virtue of any
Purchased Shares dividend or distribution reference made in §6(a) above or
otherwise, have any right or interest whatsoever in any transactions or other
matters contemplated by this Agreement.
(d) Construction. The
Parties have participated jointly in the negotiation and drafting of this
Agreement. In the event an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by the Parties
and no presumption or burden of proof shall arise favoring or disfavoring any
Party by virtue of the authorship of any of the provisions of this Agreement.
Any reference to any federal, state, local, or foreign statute or law shall be
deemed also to refer to all rules and regulations promulgated thereunder, unless
the context requires otherwise. The word " including" shall mean including
without limitation.
(e) Entire
Agreement. This
Agreement (including the documents referred to herein) constitutes the entire
and exclusive agreement between the Parties and supersedes any prior
understandings, agreements, or representations by or among the Parties, written
or oral, to the extent they relate in any way to the subject matter hereof.
(f) Succession
and Assignment. This
Agreement shall be binding upon and inure to the benefit of the Parties named
herein and their respective successors and permitted assigns. No Party may
assign either this Agreement or any of its rights, interests, or obligations
hereunder without the prior written approval of the other Party hereto (such
approval not to be unreasonably withheld, condition or delayed in the case of
any proposed assignment by a Party of any or all of its rights and interests
hereunder to one or more of its Affiliates, subject to such Party's remaining
fully responsible for the performance of all of its obligations hereunder).
(g) Counterparts. This
Agreement may be executed in one or more counterparts (including by means of
facsimile), each of which shall be deemed an original but all of which together
will constitute one and the same instrument.
(h) Headings. The
section headings contained in this Agreement are inserted for convenience only
and shall not affect in any way the meaning or interpretation of this Agreement.
(i) Notices. All
notices, requests, demands, claims, and other communications hereunder will be
in writing. Any notice, request, demand, claim, or other communication hereunder
shall be deemed duly given (i) when delivered personally to the recipient, (ii)
one business day after being sent to the recipient by reputable overnight
courier service (charges prepaid), (iii) one business day after being sent to
the recipient by facsimile transmission or electronic mail, or (iv) four
business days after being mailed to the recipient by certified or registered
mail, return receipt requested and postage prepaid, and addressed to the
intended recipient as set forth below:
If
to
Seller: Copy
to:
0000 Xxxx
Xxxxxxxxx Xxxxx The
Shieling
Frederick,
MD. 21702
Broadhembury
Attn:
Xxxxxxxxx
Xxxxx.
XX00 0XX. Xxxxxx Xxxxxxx
Fax:
000-000-0000
Attn:
CEO
Fax: x00-000-0000000
If
to Buyer: Copy
to:
Ariel
Way, Inc. Xxxxxx
Xxxx & Xxxxxx LLP
0000
Xxxxxx Xxxxxxxx Xxxxx
0000
Xxxxxx Xxxxxxxx Xxxxx
Xxxxx
0000
Xxxxx
0000
Xxxxxx,
XX 00000 Xxxxxx,
XX 00000
Attention:
Xx. Xxxx Xxxxxx
Attention:
Xxx Xxxxxxxxxx, Esq.
Facsimile:
000-000-0000 Facsimile:
000-000-0000
Any Party
may change the address to which notices, requests, demands, claims, and other
communications hereunder are to be delivered by giving the other Parties notice
in the manner herein set forth.
(j) Governing
Law; Jurisdiction.
This
Agreement shall be governed by and construed in accordance with the domestic
laws of the Commonwealth of Virginia without giving effect to any choice or
conflict of law provision or rule (whether of the Commonwealth of
Virginia or any
other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the Commonwealth of Virginia. Each
Party hereby irrevocably and unconditionally submits to the non-exclusive
jurisdiction, forum and venue of any federal or state court located in the
Commonwealth of Virginia with respect to any dispute, controversy or suit
arising under or in connection with this Agreement or any matter(s) contemplated
hereby.
(k) Amendments
and Waivers. No
amendment of any provision of this Agreement shall be valid unless the same
shall be in writing and signed by Buyer and Seller. No waiver by any Party of
any provision of this Agreement or any default, misrepresentation, or breach of
warranty or covenant hereunder, whether intentional or not, shall be valid
unless the same shall be in writing and signed by the Party making such waiver,
nor shall such waiver be deemed to extend to any prior or subsequent default,
misrepresentation, or breach of warranty or covenant hereunder or affect in any
way any rights arising by virtue of any prior or subsequent such occurrence.
(l) Severability. Any
term or provision of this Agreement that is invalid or unenforceable in any
situation in any jurisdiction shall not affect the validity or enforceability of
the remaining terms and provisions hereof or the validity or enforceability of
the offending term or provision in any other situation or in any other
jurisdiction.
(m) Expenses. Each of
Buyer and Seller will bear its own costs and expenses (including legal fees and
expenses) incurred in connection with this Agreement and the transactions
contemplated hereby; provided,
however, that all
transfer, documentary, sales, use, stamp, registration and other such Taxes, and
all conveyance fees, recording charges and other fees and charges (including any
penalties and interest) incurred in connection with the consummation of the
transactions contemplated by this Agreement shall be paid by Buyer when due, and
Buyer shall, at its own expense, file all necessary Tax returns and other
documentation with respect to all such Taxes, fees and charges, and, if required
by applicable law.
* * * * *
IN
WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date
first above written.
Seller: dbsXmedia,
INC.
/s/ Xxxxx
Xxxxxxx
By:
Xxxxx Xxxxxxx
Title:
President & CEO
|
Buyer: |
NETFRAN
DEVELOPMENT CORP. (UNDER NAME CHANGE TO ARIEL WAY,
INC. |
______________________________
By: Xxxx
Xxxxxx
Title:
Chairman & CEO
EXHIBIT
A
PURCHASE
CONSIDERATION
Purchase
Consideration. Buyer
agrees to deliver to Seller at the Closing a commitment to the benefit of the
Seller for a Conditional Guaranty in favor of Loral Skynet Network Services,
Inc., a Delaware corporation, CyberStar, L.P., a Delaware limited partnership,
CyberStar, LLC, a Delaware limited liability company, and Loral Skynet, a
division of Loral SpaceCom Corporation, a Delaware corporation (collectively,
the “Loral Entities”) having a total value to Seller of Three Million and No/100
Dollars ($3,000,000.00) (the "Purchase
Consideration"),
presentation of such Guaranty to be effected by Buyer's execution and delivery
to Seller at Closing.
Buyer
agrees that the Seller shall provide employment contracts and full benefits for
both Xxxxx Xxxxxxxxxx and Xxxxx Xxxxxxx for three years. The minimum salary
levels are agreed to be: Xxxxx Xxxxxxxxxx - $150,000 US Dollars per annum and
Xxxxx Xxxxxxx - £100,000 GBP per annum. Xxxxx Xxxxxxxxxx shall be President and
COO for the Seller. Xxxxx Xxxxxxx shall be CEO and VP Sales and Marketing for
the Seller. The Seller is intended to operate as a subsidiary within the Ariel
Way group using synergies with sister companies to advantage but with autonomous
offices and management control. The Seller will furnish staff employment
contracts as required by industry and legal norms.
The
acquisition by the Seller of certain assets from the Loral Entities is a
cash-less transaction as $250,000 Dollars purchase price will be taken from
prepaid revenue owing to the Seller on closing. All other monies due by the
Seller to the Loral Entities in the transaction agreement will be taken from
operating funds and are not part of the Seller’s equity purchase.
The Buyer
shall provide, in a timely fashion, capitalization funding to the Seller to
cover certain cash flow and capital expenditures deficit for a period of two
years per business plan submitted and upon the Buyers approval and according to
a Stockholders Agreement between the Buyer and the Seller. Capitalization levels
may be reviewed after 18 months to assess investment return.
The Buyer
shall, within 180 days, replace the $250,000 purchase price for the certain
assets from the Loral Entities as acquired by the Seller and paid from the
Seller’s cash balance at Closing.
The Buyer
and the Seller shall assume responsibility to settle Seller fee agreement with
Xxxxxx Financial Corporation as Consultant in a prompt manner upon closing of
the acquisition of certain assets from the Loral Entities. At present the Buyer
understands that this responsibility is approximately $25,000, and a warrant for
2% of Seller’s stock at refinance valuation, payable according to terms of the
engagement letter between the Seller and Xxxxxx Financial Corporation, and there
is no other consideration, in cash, securities or warrants owed to Xxxxxx
Financial Corporation.
EXHIBIT
B
DISCLOSURE
SCHEDULE
ANNEX
I
EXCEPTION
TO SELLER’S REPRESENTATIONS AND WARRANTIES
§3(d) Issued
and outstanding shares of Seller Common Stock:
Zygot,
LLC 1,000
shares
Total
Issued
1,000
shares
§3(d) Outstanding
Options
None
Outstanding
§3(d) Outstanding
Warrants
None
Outstanding
§3(d) Seller
Financial Statements
| a. |
See
separate document “dbsXmedia, Inc., Balance Sheet, As of February 14,
2005” |
| b. |
See
separate document “dbsXmedia, Inc., Profit & Loss, February 4, 2005
through February 14, 2005” |
§3(i) Brokers'
Fees
Seller
has engaged Mr. Xxxx Xxxxx of Xxxxxx Financial Corporation as Consultant, on a
non-exclusive basis to locate and refer to Seller companies that wish to engage
in M&A activities with Seller and to refer companies to Seller. Consultant
is to be paid upon the closing of a transaction as defined as the execution of a
definitive agreement and closing of a transaction between Seller and a company,
referred to Seller by Consultant. The Buyer and the Seller shall assume
responsibility to settle Seller fee agreement with Xxxxxx Financial Corporation
as Consultant in a prompt manner upon closing of the acquisition of certain
assets from the Loral Entities. At present the Buyer understands that this
responsibility is approximately $25,000, and a warrant for 2% of Seller’s stock
at refinance valuation, payable according to terms of the engagement letter
between the Seller and Xxxxxx Financial Corporation, and there is no other
consideration, in cash, securities or warrants owed to Xxxxxx Financial
Corporation.
EXHIBIT
B
DISCLOSURE
SCHEDULE
ANNEX
II
EXCEPTION
TO BUYER’S REPRESENTATIONS AND WARRANTIES
