EXHIBIT 10.5
EXCHANGE AGREEMENT
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THIS EXCHANGE AGREEMENT is made as of the 30th day of September, 1996, by
and between XXXXX X. XXXXX ("Xxxxx"), XXXXX INTERNATIONAL, LTD ("JI"), a
Colorado corporation (collectively with Xxxxx, the "Sellers"), and XXXXX
INTERNATIONAL NETWORKS, LTD, a Colorado corporation ("Buyer").
RECITALS
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A. Sellers own all of the issued and outstanding shares (the "Shares") of
Xxxxx Earth Segment, Inc., a Colorado corporation (the "Company"), as follows:
Xxxxx 1196 shares of Class A Common Stock and
1196 shares of Class B Common Stock
JI 5100 shares of Class A Common Stock and
5100 shares of Class B Common Stock
X. Xxxxxxx desire to sell their shares of the Company to Buyer, and Buyer
desires to acquire said shares from Sellers in exchange for the issuance of
certain shares of the Buyer, upon the terms and conditions set forth in this
Agreement.
C. The transaction described in this Agreement shall, as between
themselves, be effective as of September 30, 1996, although certain closing
documentation may occur at a different date.
AGREEMENT
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In consideration of the mutual promises contained in this Agreement and
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto hereby agree as follows:
1. The Exchange. Subject to the terms and conditions set forth in this
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Agreement, Sellers shall sell, convey, assign, transfer and deliver to Buyer,
and Buyer
shall acquire from Sellers, all of Sellers' shares in the Company, consisting of
an aggregate of 6,296 shares of Class A Common Stock and 6,296 shares of Class B
Common Stock, free and clear of all security interests, liens, pledges, claims,
charges and encumbrances.
2. Consideration. In consideration for the Shares, Buyer shall issue
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shares of Buyer's Class A Common Stock (the "Buyer's Stock") to the Sellers as
follows:
Xxxxx 110,833 shares
JI 472,500 shares
3. Sellers' Representations. Each Seller, severally and not jointly,
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hereby represents and warrants to Buyer, with respect to such Seller; that:
(a) The execution and delivery of this Agreement by such Seller has
been duly and validly authorized and approved by all necessary action of such
Seller. This Agreement is a valid and binding obligation of such Seller,
enforceable against it in accordance with its terms.
(b) Such Seller has good title to the Shares of the Company held by
such Seller, free and clear of all security interests, liens, pledges, charges
and encumbrances of every kind.
(c) The execution and delivery of this Agreement by such Seller will
not violate any provision of law and will not, with or without the giving of
notice or the passage of time, conflict with or result in any breach of any of
the terms or conditions of, or constitute a default under, any mortgage,
agreement or other instrument to which such Seller is a party or by which such
Seller is bound; provided, that the approval of the Federal Communications
Commission must be obtained regarding the transfer of control of certain
licenses held by the Company. The execution, delivery and performance of this
Agreement by such Seller will not result in the creation of any
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security interest, lien, pledge, charge or encumbrance upon the Shares owned by
such Seller.
4. Buyer's Representations. Buyer hereby represents and warrants to
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Sellers that:
(a) The execution and delivery of this Agreement and the issuance of
the Buyer's Stock have been duly and validly authorized and approved by all
necessary action of Buyer. This Agreement is a valid and binding obligation of
Buyer, enforceable against it in accordance with its terms.
(b) The execution and delivery of this Agreement by Buyer will not
violate any provision of law and will not, with or without the giving of notice
or the passage of time, conflict with or result in any breach of any of the
terms or conditions of, or constitute default under, any mortgage, agreement or
other instrument to which Buyer is a party or by which Buyer is bound.
Execution, delivery and performance of this Agreement by Buyer will not result
in the creation of any security interest, lien, pledge, charge or encumbrance
upon the Buyer's Stock.
5. Conditions Precedent to Buyer's Obligations. The obligations of Buyer
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under this Agreement are subject to the fulfillment of each of the following
conditions:
(a) All of the representations and warranties by Sellers contained in
this Agreement shall be true and correct in all material respects at and as of
the Closing Date. Sellers shall have complied with and performed all of the
agreements, covenants and conditions required by this Agreement to be performed
or complied with by it on or prior to the Closing Date.
(b) Seller shall have delivered to Buyer such instruments, consents
and approvals as are necessary to transfer the Shares.
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(c) The necessary regulatory approvals shall have been obtained.
6. Conditions Precedent to Sellers' Obligations. The obligations of
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Sellers under this Agreement shall be subject to the fulfillment of each of the
following conditions:
(a) The necessary regulatory approvals shall have been obtained.
(b) Buyer shall have delivered the Consideration to Seller in
accordance with this Agreement.
7. Closing. The closing hereunder (the "Closing") shall be held in the
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offices of Seller, 0000 X. Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, on such
date or dates as the parties hereto shall mutually agree (the "Closing Date").
At the Closing, all documents and other instruments and documents referred to or
contemplated by this Agreement shall be exchanged by the parties hereto, which
exchange shall be deemed effective between the parties as of the date first
above written.
8. Brokerage. Sellers represent and warrant to Buyer that Sellers will
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be solely responsible for, and pay in full, any and all brokerage or finder's
fees or agent's commissions or other like payment owing in connection with
Sellers' use of any broker, finder or agent in connection with this Agreement or
the transactions contemplated hereby. Buyer represents and warrants to Sellers
that Buyer will be solely responsible for, and pay in full, any and all
brokerage or finder's fees or agent's commissions or other like payment owing in
connection with Buyer's use of any broker, finder or agent in connection with
this Agreement or the transactions contemplated hereby. Each party hereto shall
indemnify and hold the other party hereto harmless against and in respect of any
breach by it of the provisions of this Paragraph.
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9. Investment Representations. The Buyer's Stock has not been registered
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under the Securities Act of 1933, as amended, or under any state securities
laws. Accordingly, Sellers understand and agree that they are acquiring their
respective shares of the Buyer's Stock for investment and they may not sell,
transfer, or convey any interest in or to the Shares unless the Shares have been
registered under the Securities Act of 1933, as amended, and under any
applicable state securities laws, or unless suitable exemptions from such
registration are available. The certificates representing the Buyer's Stock
shall bear a legend to the foregoing effect and the share transfer records of
Buyer shares be noted to the same effect.
10. Escrow. Sellers have delivered certificates representing the Shares
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to Buyer, to be held in escrow and delivered upon notice that any necessary
regulatory approvals have been received.
11. Miscellaneous.
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(a) Buyer shall have the right, upon notice to Sellers, to assign to
its rights and obligations hereunder to any affiliate of Buyer, or, subject to
Sellers' consent, to any other entity.
(b) This Agreement embodies the entire understanding and agreement
among the parties concerning the subject matter hereof and supersedes any and
all prior negotiations, understandings or agreements in regard thereto. This
Agreement shall be interpreted, governed and construed in accordance with the
internal laws of the State of Colorado. This Agreement may not be modified or
amended except by an agreement in writing executed by both Buyer and Sellers.
[EXECUTION PAGE FOLLOWS]
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IN WITNESS WHEREOF the parties have executed this Agreement as of the date
first above written.
SELLERS:
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XXXXX INTERNATIONAL, LTD
By: /s/ Xxxxx X. Xxxxx
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Title: President
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XXXXX X. XXXXX:
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/s/ Xxxxx X. Xxxxx
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BUYER:
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XXXXX INTERNATIONAL
NETWORKS, LTD
By: /s/ Xxxxxxx X. Xxxxxx
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Title: President
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