AGREEMENT FOR THE PURCHASE AND SALE OF COMMON STOCK BY AND AMONG Faith TV LLC (a Florida corporation)
EXHIBIT
10.1
BY
AND AMONG
Faith
TV LLC (a Florida corporation)
A.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, individually,
▇▇▇▇▇▇▇
▇▇▇▇▇▇, individually,
▇▇▇
▇▇▇▇, individually,
▇▇▇▇
▇▇▇▇▇▇▇▇, individually,
AND
VALCOM,
INC., a Delaware Corporation,
December
15, 2008
THIS AGREEMENT FOR THE PURCHASE AND SALE
OF COMMON STOCK (the “Agreement”) is made and entered into this the
15th
December, 2008, by and between VALCOM, INC., a Delaware corporation
(the "Buyer") and A. ▇▇▇▇▇▇▇
▇▇▇▇▇▇, individually, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, individually, ▇▇▇ ▇▇▇▇, individually, ▇▇▇▇
▇▇▇▇▇▇▇▇, individually and Faith TV, LLC., a Florida
corporation (the “Company”), ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇▇ shall sometimes be
collectively referred to herein as the “Sellers.” Buyer, Sellers and
the Company are referred to collectively herein as the "Parties."
BACKGROUND:
A. The
Company is a TV broadcast network (the “Business”).
B. The
Company carries on this business through affiliate agreements with over the air
broadcasters and through internet protocol TV service providers.
C. The
company has various assets including an owned library of programming, a licensed
library of programming, and various assets necessary for the operation of the
broadcast network.
E. Control
of the Corporation is shared in unit shares (the Shares) as follows and all
payments of the consideration will be in proportion to the unit shares as
follows;
|
▇▇▇▇▇▇▇
▇▇▇▇▇▇
|
30 | % | ||
|
▇▇▇▇▇▇▇
▇▇▇▇▇▇
|
50 | % | ||
|
▇▇▇
▇▇▇▇
|
15 | % | ||
|
▇▇▇▇
▇▇▇▇▇▇▇▇
|
5 | % |
F. All Sellers
desire to sell and the Buyer desires to purchase from each of the Sellers,
one
hundred percent (100%) of their respective ownership in the Company, for a total
of one hundred percent (100%) of the total issued and outstanding common stock
and unit shares in the Company (collectively, the “Shares”) on the terms and
conditions set forth herein.
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 adequacy and sufficiency of which are hereby acknowledged, the
Parties hereto, intending to be legally bound, agree as follows:
1. Definitions.
"Adverse
Consequences" means all actions, suits, proceedings, investigations,
charges, complaints, claims, injunctions, judgments, orders, decrees, rulings,
damages, dues, penalties, fines, costs, reasonable amounts paid in settlement,
liabilities, obligations, taxes, liens, losses, expenses, and fees, including
court costs, arbitration costs and fees, and reasonable attorneys' fees and
expenses.
Page 2 of
36
"Affiliate" has the
meaning set forth in Rule 12b-2 of the regulations promulgated under the
Securities Exchange Act.
"Affiliated Group"
means any affiliated group within the meaning of Code §1504(a) or any similar
group defined under a similar provision of state or local law.
“Agreement” shall
have the meaning ascribed thereto in the Background Section of this
Agreement.
"Basis" means any
past or present fact, situation, circumstance, status, condition, activity,
practice, plan, occurrence, event, incident, action, failure to act, or
transaction that forms or could form the basis for any specified
consequence.
"Best Efforts" means
the efforts that a prudent person desirous of achieving a result would use in
similar circumstances to ensure that the desired result is achieved in a timely
fashion without depriving the person of the material benefits of the
Agreement.
“Business” shall have
the meaning ascribed thereto in the preamble of this Agreement.
“Buyer” means Valcom,
Inc., a Delaware corporation or its assigns.
"Closing" has the
meaning set forth in Section 2(f) below.
"Closing Date", as
set forth in Section 2(f) (i) and 2(f) (ii) below, means the actual date the
Closing takes place.
"COBRA" means the
requirements of Part 6 of Subtitle B of Title I of ERISA and Code
§4980B.
"Code" means the
Internal Revenue Code of 1986, as amended.
“Company” means Faith
TV, LLC., a Florida corporation.
"Confidential
Information" means any information concerning the businesses and affairs
of a Party other than information that (a) is lawfully in the public domain, (b)
is or becomes available to the public through no breach of this Agreement, (c)
was previously known by the receiving party without any obligation to hold it in
confidence; (d) is rightfully obtained from a person or entity not a party to
this Agreement without any obligation of confidentiality; (e) is approved for
release by written authorization of the disclosing party, but only to the extent
of such authorization; (f) is required by law or regulation to be disclosed to
any person, after the exhaustion of such Party’s rights and remedies under
applicable law to contest such disclosure, if any, but only to the extent and
for the purposes of such required disclosure; (g) is disclosed in response to a
valid order of a court or other governmental body or any political subdivision
thereof, after the exhaustion of such Party’s rights and remedies under
applicable law to contest such disclosure, if any, but only to the extent of and
for the purposes of such order; or (h) is independently developed
by the receiving party without use of or reference to the
Confidential Information of the disclosing party.
Page 3 of
36
"Controlled Group"
has the meaning set forth in Code §1563.
"Employee Benefit
Plan" means any (a) nonqualified deferred compensation or retirement plan
or arrangement, (b) qualified defined contribution retirement plan or
arrangement which is an Employee Pension Benefit Plan, (c) qualified defined
benefit retirement plan or arrangement which is an Employee Pension Benefit Plan
(including any Multiemployer Plan), or (d) Employee Welfare Benefit Plan or
material fringe benefit or other retirement, bonus, or incentive plan or
program.
"Employee Pension Benefit
Plan" has the meaning set forth in ERISA §3(2).
"Employee Welfare Benefit
Plan" has the meaning set forth in ERISA §3(1).
"ERISA" means the
Employee Retirement Income Security Act of 1974, as amended.
"ERISA Affiliate"
means each entity which is treated as a single employer with Company for
purposes of Code §414.
"Fiduciary" has the
meaning set forth in ERISA §3(21).
"Financial Statement"
has the meaning set forth in Section 3(g) below.
"GAAP" means
Generally Accepted Accounting Principles as in effect from time to
time.
"Indemnified Party"
has the meaning set forth in Section 9(d) below.
"Indemnifying Party"
has the meaning set forth in Section 9(d) below.
"Intellectual
Property" means (a) all inventions (whether patentable or unpatentable
and whether or not reduced to practice); all improvements thereto, and all
patents, patent applications, and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions, extensions, and
reexaminations thereof; (b) all trademarks, service marks, trade dress, logos,
trade names, and corporate names, together with all translations, adaptations,
derivations, and combinations thereof and including all goodwill associated
therewith, and all applications, registrations, and renewals in connection
therewith; (c) all copyrightable works, all copyrights, and all applications,
registrations, and renewals in connection therewith; (d) all mask works and all
applications, registrations, and renewals in connection therewith; (e) all trade
secrets and confidential business information (including ideas, research and
development, know-how, formulas, compositions, manufacturing and production
processes and techniques, technical data, designs, drawings, specifications,
customer and supplier lists, pricing and cost information, and business and
marketing plans and proposals); (f) all computer software (including data and
related documentation); (g) all other proprietary rights; and (h) all copies and
tangible embodiments thereof (in whatever form or medium).
Page 4 of
36
"Liability" means any
liability (whether known or unknown, whether asserted or unasserted, whether
absolute or contingent, whether accrued or unaccrued, whether liquidated or
unliquidated, and whether due or to become due but not until due), including any
liability for Taxes.
"Most Recent Balance
Sheet" means the balance sheet contained within the Most Recent Financial
Statements.
"Most Recent Financial
Statements" has the meaning set forth in Section 3(g) below.
"Most Recent Fiscal Year
End" has the meaning set forth in Section 3(g) below.
"Multiemployer Plan"
has the meaning set forth in ERISA §3(37).
"Ordinary Course of
Business" means the ordinary course of business consistent with past
custom and practice (including with respect to quantity and
frequency).
"Party" has the
meaning set forth in the preamble to this Agreement.
"PBGC" means the
Pension Benefit Guaranty Corporation.
"Person" means an
individual, a partnership, limited liability company, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, or a governmental entity (or any department, agency, or political
subdivision thereof).
"Prohibited
Transaction" has the meaning set forth in ERISA §406 and Code
§4975.
"Purchase Price" has
the meaning set forth in Section 2(b) of this Agreement.
“Real Property” shall
have the meaning ascribed thereto in Section 3(k) of the Agreement.
"Reportable Event"
has the meaning set forth in ERISA §4043.
"Securities Act"
means the Securities Act of 1933, as amended.
"Securities Exchange
Act" means the Securities Exchange Act of 1934, as amended.
"Security Interest"
means any mortgage, pledge, lien, encumbrance, charge, or other security
interest, other
than (a) mechanic's, materialmen's, and similar liens; (b) liens for
Taxes not yet due and payable; (c) purchase money liens and liens securing
rental payments under capital lease arrangements; and (d) other liens arising in
the Ordinary Course of Business and not incurred in connection with the
borrowing of money.
“Sellers” shall mean
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇▇, jointly and
severally.
“Shares” shall have
the meaning ascribed thereto in the preamble of this Agreement and shall
constitute, in the aggregate, one hundred percent (100%) of the issued and
outstanding common stock and share units of the Company.
Page 5 of
36
“Subsidiaries” shall
have the meaning ascribed thereto in Section 3(f) of the Agreement.
"Tax" means any
federal, state, local, or foreign income, gross receipts, license, payroll,
employment, excise, severance, stamp, occupation, premium, windfall profits,
environmental (including taxes under Code §59A), 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.
"Tax Return" means
any return, declaration, report, claim for refund, or information return or
statement relating to Taxes, including any schedule or attachment thereto, and
including any amendment thereof.
"Third Party Claim"
has the meaning set forth in Section 9 (d) below.
2. Purchase and Sale of
Shares.
(a) Basic Transaction. On
and subject to the terms and conditions of this Agreement, the Buyer agrees to
purchase from the Sellers, and the Sellers agree to sell to the Buyer, the
Shares, free and clear of any and all liens, claims and encumbrances of any kind
whatsoever. The Sellers shall issue, transfer, assign, convey and
deliver the Shares to Buyer on the Closing Date. At the Closing, the
Sellers shall deliver to the Buyer all of the Company's stock certificates
representing the Shares, duly endorsed or with appropriate stock powers
attached, in proper form for transfer, and with stamps for all applicable
Federal, state or local stock transfer taxes, if any, affixed thereto. The
Sellers shall be jointly and severally liable for the payment of any and all
documentary stamps or transfer taxes incurred in favor of the State of Florida,
if any, as a result of the transactions contemplated hereby (the “Transfer
Taxes”). The Buyer hereby acknowledges that the Shares have not been
registered under the Federal securities laws of any state, and that the Shares
may only be sold in compliance with such laws and any other applicable
laws.
(b) Purchase Price. The
purchase price for the Shares will be the total sum of Nine Hundred Thousand
US Dollars ($900,000.00) in Cash and One Hundred Thousand shares of
Valcom Preferred Class C Stock, valued at One Dollar (1$) per share which
Sellers agree constitutes good, valuable and sufficient consideration, and shall
be paid in the amounts and to those set out in the Payment Instruction which is
signed by the Sellers and attached herein as Exhibit E. The purchase
price shall be dispensed in two parts in accordance with Sections 2(c) and 2(d)
below.
1) Part
One. Two Hundred and Fifty Thousand Dollars ($150,000.00) and
the Preferred stock (100,000) shares valued at $1.00 per share will be paid to
the Sellers at the time of closing or as soon after closing as the stock can be
issued. The payment of this amount will be net of the deposit of $ 25,000 paid
as a refundable deposit with the Letter of Intent and attributable to the
purchase price at closing.
Page 6 of
36
2) Part Two: The Deferred
Payments. Seven Hundred and Fifty Thousand Dollars
($750,000.00) will be paid on the following dates:
|
(i) February
17th
2009
|
One hundred and fifty thousand dollars ($150,000) |
|
(ii) April
17th
2009
|
One hundred and fifty thousand dollars ($150,000) |
|
(iii) June 01st
2009
|
Two hundred thousand dollars ($200,000) |
|
(iv) Sept. 17th
2009
|
Two hundred and fifty thousand dollars ($250,000) |
(c) The Closing. The
closing of the transactions contemplated by this Agreement (the “Closing”) shall take
place at the offices of Buyer at ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇ commencing on: (a) December 15th, 2008;
or (b) such other date as the Buyer and Seller shall agree.(the “Closing
Date”).
(d) Security
Provided on Deferred Payments. Valcom will provide, by way of security
for the Deferred Payments, 1,000,000 shares of Valcom Common Stock (“the
Security Stock”) which is the personal property of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇. The
security stock will be held by an in escrow by Sichenzia ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
LLP of ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ (Attn.: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq) (“the Escrow
Agent”). The escrow arrangements will be put in place as soon as practicable
after closing but not later than 10 working days and the following will be the
arrangements controlling the escrow of the Secured Stock
|
(i)
|
In
the event that Escrow Agent receives notice from either of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
or ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ that Valcom have failed to make a payment due under 2
(d) above within 10 days of the due date and Valcom fails to show proof of
having made such payment, the Escrow Agent shall make available to the
Sellers, collectively represented by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, the Security Stock or
the amount of the Security Stock equivalent to the payment due and
remaining unpaid under 2.d.
|
|
(ii)
|
In
the event that Valcom provides proof of payment to the Sellers of all
amounts due under 2(d) above, then the Escrow Agent shall release the full
amount of all Security Stock remaining in the custody of the Escrow
Agent.
|
|
(iii)
|
In
the event the Escrow Agent has released a portion of Security Stock, the
Escrow can deem the payment due under 2.d which was due and unpaid, to be
fully paid following the release of the Security Stock or a portion
thereof.
|
3. Representations
and Warranties Concerning the Company.
The
Sellers and the Company jointly and severally represent and warrant to Buyer
that the statements contained in this Section 2 are true, correct, and complete
as of the date of this Agreement, and will remain true, correct, and complete as
of the Closing Date except as set forth on the Schedules attached hereto and
made a part hereof.
Page 7 of
36
(a) Organization of
Company. Company is a LLC corporation duly organized, validly existing,
and in good standing under the laws of the State of Florida. Attached
hereto as Schedule 2(a),
is a true and correct copy of the Company’s Articles of Incorporation and
By-Laws, and all amendments thereto. The Company has full power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder. This Agreement constitutes the valid and legally binding obligations
of the Company, enforceable in accordance with its terms and conditions. The
Company need not 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, except as
otherwise set forth herein.
(b) Capitalization. Schedule 2(b) attached hereto
sets forth a true and complete list of all outstanding capital stock and share
units of the Company, the names of the share unit owners and the % ownership
shall by deemed as final and fully represents the Capitalization of the
company. As of the Closing Date, the authorized capital stock of the
Company consists solely of Share Units have been duly and validly authorized,
and are outstanding and fully paid and non-assessable. After
consummation of the transactions contemplated by this Agreement, all issued and
outstanding common stock of the Company as set forth on Schedule 2(b) attached hereto
will be owned by the Buyer. There are no agreements or arrangements
among any shareholders of the Company with respect to voting or transfers of the
Shares. The Shares constitute One Hundred Percent (100%) of the total
issued and outstanding common stock of the Company, and has been duly and
validly authorized and issued in the name of Sellers and is fully paid and
non-assessable, and is free and clear of any and all liens, claims and
encumbrances of any kind whatsoever. Except as otherwise set forth in
Schedule 2(b) attached
hereto: (i) no subscription, warrant, option, convertible security or other
right (contingent or other) to purchase or acquire any shares of any class of
capital stock of Company is authorized or outstanding; (ii) there is not any
commitment of Company to issue any shares, warrants, options, or other such
rights or to distribute to holders of any class of their capital stock any
evidences of indebtedness or assets; and (iii) the Company does not have an
obligation (contingent or other) to purchase, redeem or otherwise acquire any
shares of its capital stock or any interest therein or to pay any dividend or
make any other distribution in respect thereof.
(c) Noncontravention.
Except as set forth on Schedule
2(c), neither the execution and the delivery of this Agreement, nor the
consummation of the transactions contemplated hereby will: (i) violate any
constitution, statute, regulation, rule, injunction, judgment, order, decree,
ruling, charge, or other restriction of any government, governmental agency, or
court to which the Company is subject or any provision of the Articles of
Incorporation, as amended or By-Laws of the Company, as amended; or (ii)
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 agreement, contract, lease, license,
instrument, or other arrangement to which the Company is a party or by which it
is bound or to which any of its assets is subject (or result in the imposition
of any Security Interest upon any of its assets), except where the violation,
conflict, breach, default, acceleration, termination, modification,
cancellation, failure to give notice, or Security Interest would not have a
material adverse effect on the Business, financial condition, operations,
results of operations, or future prospects of the Company or on the ability of
the Parties to consummate the transactions contemplated by this
Agreement. Except as set forth in Schedule 2(c), Company does
not need 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 the Parties to consummate the transactions contemplated by this
Agreement except where the failure to give notice, to file, or to
obtain any authorization, consent, or approval would not have a material adverse
effect on the business, financial condition, operations, results of operations,
or future prospects of the Company or on the ability of the Parties to
consummate the transactions contemplated by this Agreement.
Page 8 of
36
(d) Brokers' Fees. Except
as set forth in Schedule
2(d), the Company has no Liability or obligation to pay any fees or
commissions to any broker, finder, or agent with respect to the transactions
contemplated by this Agreement for which Buyer could become liable or
obligated.
(e) Title to
Assets. Except as set forth in Schedule 2(e), the Company has
good and marketable title to, or a valid leasehold interest in, the properties
and assets used by them, located on their premises, or shown on the Most Recent
Balance Sheet or acquired after the date thereof, free and clear of all Security
Interests, except for properties and assets disposed of in the Ordinary Course
of Business since the date of the Most Recent Balance Sheet.
(f) Subsidiary. Except as
set forth on Schedule
2(f), (collectively, the “Subsidiaries”), the Company has no subsidiaries
and is not engaged in any joint venture or partnership with any other Person, or
is an Affiliate of any other Person.
(g) Events Subsequent to Most
Recent Fiscal Year End. The Company’s Fiscal Year ends on
December 31. The most recent Fiscal year terminated December 31,
2007. Company Financial Statements include the Unaudited Profit and
Loss (P&L) and the Unaudited Balance Sheet; the most recent statements are
for the year ending December 31, 2007 and for the eleven months to 30th
November 2008. Except as set forth in Schedule 2(g), since the Most
Recent Fiscal Year End and the Period to 30th
November 2008, there has not been any material adverse change in the Business,
financial condition, operations, results of operations, or future prospects of
the Company. Without limiting the generality of the foregoing, since that date,
except as set forth in Schedule
2(g):
|
(i)
|
the
Company has not sold, leased, transferred, or assigned any material
portion of its assets, tangible or intangible, outside the Ordinary Course
of Business;
|
|
(ii)
|
the
Company has not entered into any agreement, contract, lease, or license
(or series of related agreements, contracts, leases, and
licenses) outside the Ordinary Course of Business involving
expenditures of more than Five Thousand Dollars
($5,0000);
|
|
(iii)
|
No
party has accelerated, terminated, materially modified, or cancelled any
agreement, contract, lease, or license (or series of related agreements,
contracts, leases, and licenses) involving more than [Five Thousand
Dollars ($5,000) to which the Company is a party or by which it is
bound;
|
|
(iv)
|
the
Company’s material assets, tangible or intangible, are free and clear of
any liens, claims, and
encumbrances;
|
Page 9 of
36
|
(v)
|
the
Company has not made any capital expenditure (or series of related capital
expenditures) outside the Ordinary Course of Business in excess of Five
Thousand Dollars ($5,000);
|
|
(vi)
|
the
Company has not made any capital investment in, any loan to, or any
acquisition of the securities or assets of any other Person (or series of
related capital investments, loans, and acquisitions) outside the Ordinary
Course of Business;
|
|
(vii)
|
the
Company has not created, incurred, assumed, or guaranteed more than Five
Thousand Dollars ($5,000) in aggregate indebtedness for borrowed money and
capitalized lease obligations;
|
|
(viii)
|
the
Company has not cancelled, compromised, waived, or released any right or
claim (or series of related rights and claims) outside the Ordinary Course
of Business involving more than Ten Thousand Dollars
($10,000);
|
|
(ix)
|
the
Company has not experienced any material damage, destruction, or loss
(whether or not covered by insurance) to its
property;
|
|
(x)
|
the
Company has not granted any increase in the base compensation of any of
its members, managers, directors, officers, and
employees;
|
|
(xi)
|
the
Company has not adopted, amended, modified, or terminated any bonus,
profit-sharing, incentive, severance, or other plan, contract, or
commitment for the benefit of any of its directors, officers, and
employees;
|
|
(xii)
|
the
Company has not made any other material change in employment terms for any
of its directors, officers, and employees; and
|
|
|
(xiii)
|
the
Company has not committed to any of the
foregoing.
|
(h) Legal
Compliance. Except as set forth on Schedule 2(h), the Company has
complied in all material respects 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), no action, suit, proceeding, hearing, investigation, charge,
complaint, claim, demand, or notice has been filed or commenced, or is
threatened or pending, against any of them alleging any failure so to comply,
except where the failure to comply would not have a material adverse effect on
the Business, financial condition, operations, results of operations, or future
prospects of the Company or the Shares.
(i) Tax
Matters.
|
(i)
|
The
Company has filed all Tax Returns that it was required to file other than
Tax Returns that are the subject of valid extensions. All such
Tax Returns were correct and complete in all material
respects. Except as set forth in Schedule 2(i), all Taxes
owed by the Company (whether or not shown on any Tax Return) have been
paid when due. Except as set forth in Schedule 2(i), the
Company currently is not the beneficiary of any extension of time within
which to file any Tax Return. No claim has ever been made by an
authority in a jurisdiction where the Company does not file Tax Returns
that it is or may be subject to taxation by that
jurisdiction. There are no Security Interests on any of the
assets of the Company that arose in connection with any failure (or
alleged failure) to pay any Tax.
|
Page 10 of
36
|
(ii)
|
The
Company has withheld and paid all Taxes required to have been withheld and
paid in connection with amounts paid or owing to or on account of any
employee, leased employee, independent contractor, creditor, member, or
other third-party.
|
|
(iii)
|
The
Company does not expect any authority to assess any additional Taxes on
the Company for any period for which Tax Returns have been filed. There is
no material dispute or claim concerning any Tax Liability of the Company
either (A) claimed or raised by any authority in writing, or (B) based
upon personal contact with any agent of such authority. Schedule 2(i) lists all
federal, state, local, and foreign income Tax Returns filed with respect
to the Company for taxable periods ended on December 31, 2007, and
indicates those Tax Returns that have been audited, and indicates those
Tax Returns that currently are the subject of audit. Prior to
Closing, the Company will have made available to Buyer correct and
complete copies of all federal income Tax Returns, examination reports,
and statements of deficiencies assessed against or agreed to by the
Company since December 31, 2007.
|
|
(iv)
|
The
Company has not waived any statute of limitations in respect of Taxes or
agreed to any pending extension of time with respect to a Tax assessment
or deficiency.
|
|
(v)
|
The
unpaid Taxes of the Company (A) did not, as of the Most Recent Fiscal Year
End, exceed by any material amount the reserve for Tax Liability (rather
than any reserve for deferred Taxes established to reflect timing
differences between book and Tax income) set forth on the face of the Most
Recent Balance Sheet (rather than in any notes thereto), and (B) do not
exceed that reserve as adjusted for the passage of time through the
Closing Date in accordance with the past custom and practice of the
Company in filing their Tax
Returns.
|
(j) Real
Property.
| (i) | Schedule 2(j) lists all of the Company’s real property by legal descriptionand a brief summary of each property (collectively, the “Real Property”); | |
|
(ii)
|
Schedule 2(j), lists and
describes all real property leased or subleased to the
Company. Prior to the Closing, the Company or the Sellers will
have made available to Buyer correct and complete copies of the leases and
subleases listed in Schedule 2(j). With
respect to each lease and sublease listed in Schedule 2(j), the
Company and Sellers further jointly and severally represent and warrant to
Buyer:
|
|
|
(A)
|
the
lease or sublease is legal, valid, binding, enforceable, and in full force
and effect in all material respects;
and
|
Page 11 of
36
|
|
(B)
|
no
party to the lease or sublease is in material breach or default, and no
event has occurred which, with notice or lapse of time, would constitute a
breach or default or permit termination, modification, or acceleration
thereunder.
|
|
|
(C)
|
no
party to the lease or sublease has repudiated any material provision
thereof;
|
|
|
(D)
|
there
are no material disputes, oral agreements, or forbearance programs in
effect as to the lease or sublease;
|
|
|
(E)
|
the
Company has not assigned, transferred, conveyed, mortgaged, deeded in
trust, or encumbered any interest in the leasehold or sublease hold;
and
|
|
|
(F)
|
all
facilities leased or subleased thereunder are supplied with utilities and
other services necessary for the operation of said facilities in the same
manner has they have been operated.
|
(k) Intellectual
Property.
|
(i)
|
Except
as set forth on Schedule
2(k), the Company owns or has the right to use pursuant to license,
sublicense, agreement, or permission all Intellectual Property necessary
for the operation of the Business of the Company as presently
conducted.
|
|
|
The
Company has no intellectual property interest in the library of
programming know as the Vision Video library which as been used previously
by the Company but is and remains at all time the property of Vision Video
Inc.
|
|
(ii)
|
the
Company has not interfered with, infringed upon, misappropriated, or
otherwise come into conflict with any Intellectual Property rights of
third-parties in any material respect, and the Company has not ever
received any charge, complaint, claim, demand, or notice alleging any such
interference, infringement, misappropriation, or violation (including any
claim that the Company must license or refrain from using any Intellectual
Property rights of any third party). No third party has
interfered with, infringed upon, misappropriated, or otherwise come into
conflict with any Intellectual Property rights of the
Company.
|
|
(iii)
|
Schedule 2(k) identifies
each trademark registration which has been issued to any of the Company
with respect to any of its Intellectual Property. Schedule 2(k) also
identifies each trade name, fictitious name or unregistered trademark used
by the Company in connection with any of its Business. With
respect to each item of Intellectual Property required by this Section
3(l)(iii) to be identified in Schedule 2(k)(iii), the
Sellers and the Company jointly and severally represent and warrant to the
Buyer:
|
|
|
(A)
|
the
Company possesses all right, title, and interest in and to the
Intellectual Property, free and clear of any Security Interest, license,
or other restriction;
|
Page 12 of
36
|
|
(B)
|
the
Intellectual Property is not subject to any outstanding injunction,
judgment, order, decree, ruling, or
charge;
|
|
|
(C)
|
no
action, suit, proceeding, hearing, investigation, charge, complaint,
claim, or demand is pending or is threatened which challenges the
legality, validity, enforceability, use, or ownership of the Intellectual
Property; and
|
|
|
(D)
|
the
Company has never agreed to indemnify any Person for or against any
interference, infringement, misappropriation, or other conflict with
respect to the Intellectual
Property.
|
(l) Tangible Assets.
Except as set forth on Schedule
2(l), the Company owns or leases all buildings, machinery, equipment, and
other tangible assets necessary for the conduct of their businesses as presently
conducted. The tangible assets, in the aggregate, are free from material defects
(patent and latent), have been maintained in accordance with normal industry
practice, are in good operating condition and repair (subject to normal wear and
tear), and are suitable for the purposes for which it presently is used, except
where the failure of the tangible assets to meet the foregoing standards would
not have a material adverse effect on the Business, financial condition,
operations, results of operations, or future prospects of the
Company.
(m) Contracts. Schedule 2(m) lists and
contains accurate copies of the following contracts and other agreements,
written or oral, to which the Company is a party:
|
(i)
|
any
agreement (or group of related agreements) for the lease of personal
property to or from any Person providing for lease
payments;
|
|
(ii)
|
any
agreement (or group of related agreements) for the purchase or sale of raw
materials, commodities, supplies, products, or other personal property, or
for the furnishing or receipt of services, the performance of which will
extend over a period of more than one year or involve consideration in
excess of Five Thousand Dollars
($5000);
|
|
(iii)
|
any
agreement concerning a partnership or joint venture in which Company
participates;
|
|
(iv)
|
any
agreement (or group of related agreements) under which it has created,
incurred, assumed, or guaranteed any indebtedness for borrowed money, or
any capitalized lease obligation or under which it has imposed a Security
Interest on any of its assets, tangible or
intangible;
|
|
(v)
|
any
agreement concerning confidentiality or
noncompetition;
|
|
(vi)
|
any
agreement with any member or any Affiliates thereof, of the
Company;
|
|
(vii)
|
any
profit sharing, stock option, stock purchase, stock appreciation, deferred
compensation, severance, or other plan or arrangement for the benefit of
its current or former directors, officers, and
employees;
|
Page 13 of
36
|
(viii)
|
any
collective bargaining
agreement;
|
|
(ix)
|
any
written agreement for the employment of any individual on a
full-time, part-time, consulting, or other basis or providing material
severance benefits;
|
|
(x)
|
any
agreement under which it has advanced or loaned any amount to any of its
directors, officers, and employees outside the Ordinary Course of
Business; and
|
|
(xi)
|
any
agreement under which the consequences of a default or termination could
have a material adverse effect on the Business, financial condition,
operations, results of operations, or future prospects of the
Company.
|
Prior to
the Closing, the Company and the Sellers will have made available to Buyer a
correct and complete copy of each written agreement listed in Schedule 2(m) (as amended to
date) and a written summary setting forth the terms and conditions of each oral
agreement referred to in Schedule 2(m). With respect to
each such agreement, the Sellers and the Company jointly and severally represent
and warrant to the Buyer, as follows: (A) the agreement is legal, valid,
binding, enforceable, and in full force and effect in all material respects; (B)
no party is in material breach or default, and no event has occurred which with
notice or lapse of time would constitute a material breach or default, or permit
termination, modification, or acceleration, under the agreement; and (C) no
party has repudiated any material provision of the agreement.
(n) Powers of Attorney.
Except as set forth on Schedule
2(n), there are no material outstanding powers of attorney executed on
behalf of the Company.
(o) Insurance. Schedule 2(o) sets forth the
following information with respect to each insurance policy (including policies
providing property, casualty, health, dental, life liability, and workers'
compensation coverage and bond and surety arrangements) to which the Company is
a party, a named insured, or otherwise the beneficiary of coverage:
|
(i)
|
the
name, address, and telephone number of the
agent;
|
|
(ii)
|
the
name of the insurer, the name of the policyholder, and the name of each
covered insured other than
employees;
|
|
(iii)
|
the
policy number and the period of
coverage;
|
|
(iv)
|
the
scope (including an indication of whether the coverage was on a claims
made, occurrence, or other basis) and amount (including a description of
how deductibles and ceilings are calculated and operate) of
coverage;
|
|
(v)
|
a
description of any retroactive premium adjustments or other loss-sharing
arrangements;
|
Page 14 of
36
|
(vi)
|
true
and complete copies of all existing policies of insurance to which the
Company is a party or under which any they or any director is
covered;
|
|
(vii)
|
true
and complete copies of all pending applications for policies of insurance
pending endorsements, policy changes, and current and historical program
financial agreements and plan
documents;
|
|
(viii)
|
any
material statement, letters, memoranda with regard to the adequacy of such
entity’s coverage or of the reserves for
claims;
|
|
(ix)
|
true
and complete loss runs for all insurance claims and workers’ compensation
claims for 2007 and 2008;
|
|
(x)
|
all
self-insurance arrangement by or interest in any “captive insurance”
company, including any reserves established
thereunder;
|
|
(xi)
|
all
contract or arrangement, other than a policy of insurance, for the
transfer or sharing of any risk;
and
|
|
(xii)
|
all
obligations to third-parties with respect to insurance (including such
obligations under leases and service agreements) and identifies the policy
under which such coverage is
provided.
|
The
Sellers and the Company further jointly and severally represent and warrant
that, all of the insurance agreements required to be disclosed pursuant to this
Section 2: (A) are
valid, outstanding and enforceable; (B) are issued by an insurer that is
financially sound and reputable; (C) the Financial Statements provide for all
obligations for the payment of all insurance claims, premiums and fees, and (D)
shall remain in full force and effect after the consummation of the transactions
contemplated hereby, including, but not limited to the Company’s workers’
compensation insurance.
(p) Litigation. Schedule 2(p) sets forth each
instance in which the Company is: (i) subject to any outstanding injunction,
judgment, order, decree, ruling, or charge; or (ii) a party or is threatened to
be made 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 or before any
arbitrator.
(q) Employees. Except
as set forth in Schedule
2(q), no executive, key employee, or group of employees has any plans to
terminate employment with the Company. The Company is not a party to
any agreement, contract or understanding with any past or present director,
officer, or employee of the Company, and the Company has no obligations
whatsoever to any past or present director, officer, or employee of the
Company. The Company is not a party to or bound by any collective
bargaining agreement, nor has it experienced any strikes, grievances, claims of
unfair labor practices, or other collective bargaining disputes. The
Sellers and the Company have no knowledge of any organizational effort presently
being made or threatened by or on behalf of any labor union with respect to
employees of the Company and confirm that all employees other than the Sellers
have been invited to remain with the company and will be provided with fixed
term contracts on terms and conditions similar to that which they currently
enjoy and that the term of such contracts will expire on June 01st
2009.
Page 15 of
36
(r) Accounts
Receivable. Attached hereto as Schedule 2(r) is a complete
list, as of the date hereof, of the Company’s accounts receivable: (i) Each
Account represents a bona fide sale or lease of services to customers in the
ordinary course of the applicable Company’s business; (ii) the amounts shown on
any aged receivable trial balance of any Company delivered to Buyer pursuant to
the terms of this Agreement and on the books and records of the Company are
actually owing to the applicable Company and are not in any way contingent upon
any further action by such Company; (iii) in the case of each Account, and to
the knowledge of the Sellers, there are no setoffs, claims or disputes existing
or asserted with respect to such Account and no Company has made any agreement
with any Account Debtor for any deduction therefrom except a discount or
allowance allowed by such Company in the ordinary course of its business for
prompt payment; (iv) to the knowledge of the Sellers, there are no facts, events
or occurrences which in any way impair the validity or enforcement of such
Account or tend to reduce the amount payable thereunder as shown on the aged
receivable trial balance of the applicable Company and such Company’s books and
records; (v) no Company has received notice of proceedings or actions which are
threatened or pending against any Account Debtor; and (vi) to the knowledge of
the Sellers no Account Debtor is unable generally to pay its debts as they
become due.
(s) No Undisclosed
Liabilities. Except as set forth on Schedule 2(s) attached hereto, the Company
has no liabilities (whether accrued, absolute, contingent or otherwise, and
whether due or to become due or asserted or unasserted), apart from: (i)
liabilities provided for in the Financial Statements (other than liabilities
which, in accordance with generally accepted accounting principles, need not be
disclosed); (ii) liabilities (other than accounts payable) incurred since the
Financial Statements, in the ordinary course of business consistent with past
practice; (iii) accounts payable since the Financial Statements incurred in the
ordinary course of business consistent with past practice; and (iv) accounts
payable with respect to legal fees and costs relating to the legal matters
described on Schedule
2(s) attached
hereto.
(t) Companies’ Bank
Accounts. Schedule 2(t) attached hereto lists any
and all Company bank accounts together with each respective account closing
balance on November 01, 2008.
(u) Disclosure.
Neither this Agreement nor any other agreement, document, certificate or written
statement furnished to the Buyer by or on behalf of the Sellers or the Company
in connection with the transactions contemplated hereby contains any untrue
statement of a material fact or omits to state a material fact relating directly
to the Company necessary in order to make the statements contained herein or
therein not misleading. There is no fact within the knowledge of the
Sellers or the Company which has not been disclosed herein or in writing to the
Buyer and which taken by itself would constitute a circumstance having a
material adverse effect on the Company’s business. Without limiting
the generality of the foregoing, neither the Company nor the Sellers have any
knowledge that there exists, or there is pending or planned, any statute, rule,
law, regulation, standard or code which would have a material adverse effect on
the Company’s business.
(v) Disclosure of Agreement
Terms. Prior to the Closing Date, none of the Sellers, the Company
nor Buyer, nor any of their affiliates, nor any of their respective agents or
representatives, shall issue any press release or public statement concerning
this Agreement or the Transactions without obtaining the prior written approval
of the Parties, unless such disclosure is required by applicable
law. Neither Sellers nor Buyer may disclose the terms
and conditions of this Agreement to any Person without the prior written consent
of the other Party or Parties, as applicable, except as may be required by
applicable law or an order from a court or administrative body of competent
jurisdiction (but only to the extent so required and only after giving
reasonable prior notice to the other Party or Parties, as applicable and
cooperating with the other Party or Parties, as applicable in any efforts to
legally oppose such disclosure). The foregoing notwithstanding, the
Parties shall be permitted to make such disclosures to their respective
accountants, lawyers, financial institutions, lending sources, senior employees
and related Persons as may be appropriate, provided that such Parties are bound
by the foregoing nondisclosure provisions.
Page 16 of
36
4. Representations and Warranties Regarding the Sellers and the Buyer:
(a) Representations and
Warranties of the Sellers. Each of Sellers represents and warrants to
Buyer that the statements contained in this Section 4(a) are correct and
complete as of the date of this Agreement and will be correct and complete as of
the Closing Date.
| (i) |
Authority. Sellers, after
consultation with counsel, understand all of the undertakings set forth in
this Agreement and have the right and power, as well as full capacity to
enter into, execute, deliver, and perform this Agreement. This
Agreement constitutes the valid and legally binding obligations of the
Sellers, enforceable in accordance with its terms and
conditions. The Sellers need not 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.
|
|
(ii)
|
Noncontravention. Neither
the execution and the delivery of this Agreement, nor the consummation of
the transactions contemplated hereby, will violate any constitution,
statute, regulation, rule, injunction, judgment, order, decree, ruling,
charge, or other restriction of any government, governmental agency, or
court to which the Sellers are
subject.
|
|
(iii)
|
Brokers'
Fees. The Sellers have no Liability or obligation to pay
any fees or commissions to any broker, finder, or agent with respect to
the transactions contemplated by this Agreement for which the Buyer could
become liable or obligated.
|
|
(iv)
|
Shares. The
Sellers are the holders of record and beneficially own the Shares, free
and clear of any restrictions on transfer (other than any restrictions
under the Securities Act and state securities laws), Taxes, Security
Interests, options, warrants, purchase rights, contracts, commitments,
equities, claims, and demands. The Sellers are not a party to any option,
warrant, purchase rights, or other contract or commitment that could
require the Sellers to sell, transfer, or otherwise dispose of the
Shares.
|
(b) Representations and
Warranties of the Buyer. Buyer represents and warrants to the
Company that the statements contained in this Section 4(b) are correct and
complete as of the date of this Agreement and will be correct and complete as of
the Closing Date, except as set forth herein.
|
(i)
|
Organization of
Buyer. Buyer is a corporation duly organized, validly existing, and
in good standing under the laws of the State of
Delaware. Attached hereto as Schedule 4(b)(i) are
true and correct copies of the Buyer’s Articles of Incorporation and
By-Laws, as amended.
|
|
(ii)
|
Authorization of
Transaction. Buyer has full power and authority (including full
corporate power and authority) to execute and deliver this Agreement and
to perform its obligations hereunder. This Agreement constitutes the valid
and legally binding obligation of Buyer, enforceable against Buyer in
accordance with its terms and conditions except insofar as enforceability
is limited by applicable bankruptcy, creditor, insolvency, or other laws
of similar effect and by general principles of
equity.
|
|
(iii)
|
Brokers' Fees.
Buyer has no Liability or obligation to pay any fees or commissions to any
broker, finder, or agent with respect to the transactions contemplated by
this Agreement.
|
Page 17 of
36
| (vi) |
Relocation of Faith TV. The
Buyer agreed not to relocate Faith TV and all its business and operations
to its facility at Myerlake lake Cycles, Clearwater until the payment due
under 2.d(i) on February 17th
2009 has been paid in full.
|
| (v) |
Programming of Vision Video
Library. The Buyer agrees that it will provide a program slot in
its weekly schedule to program up to one hour per week for a period of
three years from the date of this Agreement, programming from the Vision
Video Library provided by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇
▇▇▇▇▇▇. This programming, which ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇
▇▇▇▇▇▇ will have the option but not the obligation to provide, will be
provided free of charge to the Buyer and the Buyer, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ shall share in the advertising slots during the broadcast
of this programming with 50% of the slots being made available to be
shared by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇. The programming shall be
suitable family friendly programming and shall be scheduled at the sole
discretion of the Buyer.
|
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 their or its Best Efforts to take all action and to do all
things reasonably necessary, 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 Section 6
below).
(b) Notices and
Consents. The Company or the Sellers will give any notices to
third-parties, and the Company and Sellers will use its and their Best Efforts
to obtain any third party consents, that Buyer reasonably may request in
connection with the matters referred to in Section 3(c) above. Each
of the Parties will give any notices to, make any filings with, and use its Best
Efforts to obtain any authorizations, consents, and approvals of governments and
governmental agencies in connection with the matters referred to in this
Agreement.
(c) Operation of
Business. The Company will not engage in any practice, take any action,
or enter into any transaction outside the Ordinary Course of
Business. Without limiting the generality of the foregoing, Company
will not: (i) declare, set aside, or pay any dividend or make any distribution
with respect to its common stock or redeem, purchase, or otherwise acquire any
of its common stock; or (ii) otherwise engage in any practice, take any action,
or enter into any transaction of the sort described in Section 3(h)
above.
(d) Preservation of
Business. The Company will keep its Business and properties substantially
intact, including its present operations, physical facilities, working
conditions, and relationships with lessors, licensors, suppliers, customers, and
employees.
(e) Full Access. The
Company and Sellers will permit representatives of Buyer to have full access at
all reasonable times, and in a manner so as not to interfere with the normal
business operations of the Company to all premises, properties, personnel,
books, records (including Tax records), contracts, and documents of or
pertaining to the Company.
(f) Notice of
Developments. Each Party will give immediate written notice to the other
Party of any material adverse development causing, or potentially causing, a
breach of any of its own representations and warranties in Sections 3 and 4
above. No disclosure by any Party pursuant to this section, however,
shall be deemed to amend or supplement any Schedule attached hereto or to
prevent or cure any misrepresentation, breach of warranty, or breach of
covenant.
Page 18 of
36
6. Conditions to Obligation to
Close.
(a) Conditions to Obligation of
Buyer. The obligation of Buyer to consummate the transactions to be
performed by it in connection with the Closing is subject to satisfaction of the
following conditions and receipt of the following deliveries on or before the
Closing Date from the Company or Sellers;
| (i) |
the
representations and warranties set forth in Section 3 above shall be true
and correct in all material respects at and as of the Closing
Date;
|
|
(ii)
|
the
Company shall have performed and complied with all of its covenants
hereunder in all material respects through the
Closing;
|
|
(iii)
|
no
action, suit, or proceeding shall be pending or threatened before any
court or quasi-judicial or administrative agency of any federal, state,
local, or foreign jurisdiction or before any arbitrator wherein an
unfavorable injunction, judgment, order, decree, ruling, or charge would:
(A) prevent consummation of any of the transactions contemplated by this
Agreement; (B) cause any of the transactions contemplated by this
Agreement to be rescinded following consummation; and (C) affect adversely
the right of Buyer to own the
Interests;
|
|
(iv)
|
(iv)
is intentionally deleted
|
|
(v)
|
the
Company shall have provided Buyer with the Opinion Letter substantially in
the form set out in Exhibit D with a good standing certificate for the
Company from its jurisdiction of organization dated no more than twenty
(10) days from the Closing Date;
|
|
(vi)
|
the
stock certificates evidencing the Shares appropriately and legally
executed by an authorized officer of the Company, together with the
payment of Transfer Taxes, if any;
|
|
(vii)
|
the
Shareholders Agreement on such terms and conditions as are satisfactory to
the Buyer and its counsel;
|
| (viii) |
this
Agreement;
|
| (ix) | Intentionally deleted |
|
(x)
|
all
actions to be taken by the Company in connection with consummation of the
transactions contemplated hereby and all certificates, opinions,
instruments, and other documents required to effect the transactions
contemplated hereby will be reasonably satisfactory in form and substance
to Buyer and its counsel;
|
|
(x)
|
payment
from Sellers for Transfer Taxes, if any;
and
|
Page 19 of
36
| (xi) |
Buyer
shall have completed its due diligence investigation of the Company the
results of which are acceptable to Buyer and its counsel, in their sole
discretion. Buyer may waive any condition specified in this
Section 6(a), if it executes a writing so stating at or prior to the
Closing, or extend the Closing Date for up to an additional ten (10) days
during which period the Company and/or Sellers shall take all such actions
as are necessary and appropriate to satisfy the
condition.
|
(b) Conditions to Obligation of
the Company. The obligation of the Company and Sellers to consummate the
transactions to be performed by them in connection with the Closing is subject
to satisfaction of the following conditions and the receipt of the following
deliveries on or before the Closing Date from Buyer;
|
(i)
|
the
representations and warranties set forth in Section 4 above shall be true
and correct in all material respects at and as of the Closing
Date;
|
|
(ii)
|
Buyer
shall have performed and complied with all of its covenants hereunder in
all material respects through the
Closing;
|
|
(iii)
|
no
action, suit, or proceeding shall be pending or threatened before any
court or quasi-judicial or administrative agency of any federal, state,
local, or foreign jurisdiction or before any arbitrator wherein an
unfavorable injunction, judgment, order, decree, ruling, or charge would
(A) prevent consummation of any of the transactions contemplated by this
Agreement or (B) cause any of the transactions contemplated by this
Agreement to be rescinded following consummation (and no such injunction,
judgment, order, decree, ruling, or charge shall be in
effect);
|
(iv), (v) and (vi) are
intentionally deleted
|
(vii)
|
the
portion of the Purchase Price payable pursuant to Section
2(b)(1);
|
|
(viii)
|
this
Agreement; and
|
|
(ix)
|
all
actions to be taken by Buyer in connection with consummation of the
transactions contemplated hereby and all certificates, opinions,
instruments, and other documents required to effect the transactions
contemplated hereby will be reasonably satisfactory in form and substance
to Company and Sellers.
|
The
Company and Sellers may waive any condition specified in this Section 6(b) if
each of them executes a writing so stating at or prior to the Closing, or extend
the Closing Date for up to an additional ten (10) days, during which period the
Company shall take all reasonable actions as are necessary and appropriate to
satisfy the condition.
7. Termination.
(a) Termination of
Agreement. Buyer may terminate this Agreement by giving written notice to
the Company or Sellers at any time prior to the Closing in the event Sellers or
the Company has breached any material representation, warranty, or covenant
contained in this Agreement in any material respect, Buyer has notified Sellers
or the Company of the breach, and the breach has continued without cure for a
period of three (3) days after the notice of breach, or if Buyer discovers any
discrepancy in its due diligence. If the Buyer terminates this
Agreement, all rights and obligations of the Buyer hereunder shall terminate
without any Liability.
Page 20 of
36
8. Post-Closing
Covenants.
The
Parties agree as follows with respect to the period following the
Closing.
(a) General. In
case at any time after the Closing any further reasonable action is necessary to
carry out the purposes 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 or their counsel may reasonably request, all
at the sole cost and expense of the requesting Party (unless the requesting
Party is entitled to indemnification under Section 9 below).
(b) Litigation
Support. In the event and for so long as any Party actively is
contesting or defending against any action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand in connection with: (i) any
transaction contemplated under this Agreement; or (ii) any fact, situation,
circumstance, status, condition, activity, practice, plan, occurrence, event,
incident, action, failure to act, or transaction on or prior to the Closing Date
involving Company, each of the other Parties shall cooperate with such Party or
its counsel in the defense or contest, make available their personnel, and
provide such testimony and access to their books and records as shall be
reasonably necessary in connection with the defense or contest, all at the sole
cost and expense of the contesting or defending Party (unless the contesting or
defending Party is entitled to indemnification under Section 9
below).
(c) Transfer Taxes and Certain
Expenses. All Taxes and fees imposed with respect to this
transaction, including but not limited to Taxes and fees on the act of selling
or delivering the Shares or documents to Buyer or recording or lodging of
documents with any governmental entity, shall be paid by the
Sellers.
(d) Confidentiality. The
Company, the Sellers and Buyer will treat and hold as such all of the
Confidential Information that it receives from the other, refrain from using any
of the Confidential Information except in connection with this Agreement, and
deliver promptly to the disclosing Party or destroy, at the request and option
of the disclosing Party, all tangible embodiments (and all copies) of the
disclosing Party's Confidential Information which are in its possession. In the
event that a Party is requested or required (by oral question or request for
information or documents in any legal proceeding, interrogatory, subpoena, civil
investigative demand, or similar process) to disclose any Confidential
Information of another Party, such Party shall notify the disclosing Party
promptly of the request or requirement so that the disclosing Party may seek an
appropriate protective order or waive compliance with the provisions of this
section. If, in the absence of a protective order or the receipt of a
waiver hereunder, a Party is, on the advice of counsel, compelled to disclose
any Confidential Information of another Party to any tribunal or else stand
liable for contempt, such Party may disclose the Confidential Information to the
tribunal; provided,
however, that such Party shall use its Best Efforts to obtain an order or
other assurance that confidential treatment will be accorded to such portion of
the Confidential Information required to be disclosed as
the disclosing Party may designate.
9. Remedies
for Breaches of This Agreement.
Any
notice of breach of this Agreement shall be the subject of notice as set out in
10(f) and in the event of receipt of any notice of breach, the party receiving
the notice will have 10 business days to cure the breach from the receipt of any
such notice.
(a) Survival of Representations
and Warranties. All of the representations and warranties of
the Company and Sellers contained in Section 3, 8, and 9 as applicable and all
of the representations and warranties of Buyer contained in Section 4 shall
survive the Closing hereunder and the execution or delivery of any documentation
in connection therewith.
Page 21 of
36
(b) Indemnification Provisions
for Benefit of Buyer. In the event that: (A)
the Company or Sellers breaches any of its or his representations,
warranties, or covenants set forth herein, or a claim is made against Buyer; and
(B) Buyer makes a written claim for indemnification against the Company and/or
Sellers, then the Company and the Sellers shall jointly and severally indemnify,
hold harmless and defend Buyer from and against any Adverse Consequences claimed
of Buyer to the extent the same are alleged to be or have been caused by the
breach,
(c) Indemnification Provisions
for Benefit of the Company. In the event that: (A) Buyer breaches any of
its representations, warranties, or covenants set forth herein; and (B) the
Company or Sellers makes a written claim for indemnification against Buyer with
respect thereto within any applicable survival period as set forth in Section
9(a), then Buyer shall indemnify, hold harmless and defend the Company from and
against any Adverse Consequences claimed by the Company or Sellers to the extent
the same are alleged to be or have been caused by the breach.
(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 Section 9, then the Indemnified Party shall
promptly (and in any event within ten (10) business days after receiving
notice of the Third-Party Claim) notify each Indemnifying Party thereof in
writing; provided, however, that
failure to provide such notice on a timely basis shall not release the
Indemnifying Party from any of its obligations under this Section 9 except
to the extent the Indemnifying Party is materially prejudiced by such
failure.
|
|
(ii)
|
The
Indemnifying Party will have the right at any time to assume and
thereafter conduct the defense of the Third-Party Claim with counsel of
its choice; 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 (not to be unreasonably
withheld or delayed).
|
|
(iii)
|
Unless
and until the Indemnifying Party assumes the defense of the Third-Party
Claim as provided in Section 9(d)(ii) above, 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 each of the Indemnifying Parties (not to be
unreasonably withheld or delayed).
|
|
(v)
|
In
the event that any Party suffers damage or loss in respect of which it has
or makes a valid claim against another Party for indemnification, where it
is otherwise appropriate to do so, it must take reasonable steps to
mitigate its loss or damage.
|
(e) Offset
Rights. Buyer shall be entitled to offset any Adverse
Consequences which results in a liability from events which the Seller had
knowledge of or would reasonably have been expected to anticipate and which were
not disclosed to the Buyer , or breach of the Company’s or Sellers’
representations and warranties or covenants resulting in an actual loss or a
loss which can be reasonably estimated, against any issuances of compensation or
payments due the Sellers or the Company hereunder or under any other agreement
with Buyer.
Page 22 of
36
10. Miscellaneous.
(a) 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.
(b) Entire Agreement.
This Agreement (including the Schedules, Exhibits and documents referred to
herein) constitutes the entire agreement between the Parties and supersedes any
prior understandings, agreements, or representations by or between the Parties,
written or oral, to the extent they related in any way to the subject matter
hereof.
(c) 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; provided, however,
that Buyer may: (i) assign any or all of its rights and interests hereunder to
one or more of its Affiliates; and (ii) designate one or more of its Affiliates
to perform its obligations hereunder.
(d) Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original but all of which together will constitute one and the same
instrument, AND ORIGINAL SIGNATURES MAY BE TRANSMITTED BY FACSIMILE OR BY
ELECTRONIC MAIL.
(e) 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.
(f) 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 if (and then two business days after) it is sent by
registered or certified mail, return receipt requested, postage prepaid, and
addressed to the intended recipient as set forth below:
|
If to
Buyer:
|
Copy to: |
| Sichenzia ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP | |
|
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇.
|
▇▇ ▇▇▇▇▇▇▇▇ |
|
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇,
|
▇▇▇▇ ▇▇▇▇▇ |
|
▇▇▇▇▇▇▇
▇▇▇▇▇
|
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ |
|
Attn.: ▇▇.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
|
Attn.: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq. |
Page 23 of
36
|
If to
Sellers/Company:
|
Copy to: |
|
Attn.:
(Attorney’s Name to be provided)
|
|
|
Vision Video
Inc.
|
|
|
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇
|
|
|
▇▇ ▇▇▇
▇▇▇
|
|
|
▇▇▇▇▇▇▇▇▇. ▇▇
▇▇▇▇▇
|
|
|
Attn.:
▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
|
|
|
▇▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇
|
Any Party
may send any notice, request, demand, claim, or other communication hereunder to
the intended recipient at the address set forth above using any other means
(including personal delivery, expedited courier, messenger service, telecopy,
telex, ordinary mail, or electronic mail), but no such notice, request, demand,
claim, or other communication shall be deemed to have been duly given unless and
until it actually is received by the intended recipient. Any Party may change
the address to which notices, requests, demands, claims, and other
communications hereunder are to be delivered by giving the other Party notice in
the manner herein set forth.
Breach
and Cure
(g) Governing Law. This
Agreement shall be governed by and construed in accordance with the domestic
laws of the State of Florida without giving effect to any choice or conflict of
law provision or rule (whether of the State of Florida or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Florida.
(h) 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
Sellers. No waiver by any Party of any default, misrepresentation, or
breach of warranty or covenant hereunder, whether intentional or not, shall 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.
(i) 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.
(j) Expenses. Except as
provided in Section 9 and Section 10, each of Buyer and the Sellers shall bear
his, her or its own costs and expenses (including legal fees and expenses)
incurred in connection with this Agreement and the transactions contemplated
hereby. In the event of termination of this Agreement, the obligation
of each Party to pay his or its own expenses will be subject to any rights of
such party arising from a breach of this Agreement by another
Party.
Page 24 of
36
(k) 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.
(l) Incorporation of Exhibits
and Schedules. The Exhibits and Schedules identified in this Agreement
are incorporated herein by reference and made a part hereof.
(m) Submission to
Jurisdiction. The Parties acknowledge that a substantial portion of
negotiations, anticipated performance and execution of this Agreement occurred,
or shall occur, in Pinellas County, Florida and that, therefore, each of the
parties irrevocably and unconditionally: (i) agrees that
any suit, action or legal proceeding arising out of or relating to
this Agreement, or the transactions contemplated hereby, must be brought in
Pinellas County, Florida; (ii) consents to the jurisdiction of such court
in any suit, action or proceeding; (iii) waives any objection which it may
have to the laying of venue of any such suit, action or proceeding in any of
such courts; and (iv) agrees that service of any court paper may be
effected on such party by mail, as provided in this Agreement, or in such manner
as may be provided under applicable laws or court rules in the State of
Florida.
(n) Attorneys’
Fees. In the event any suit or other legal proceeding is
brought for the enforcement of any of the provisions of this Agreement, the
parties hereto agree that the prevailing party or parties shall be entitled to
recover from the other party or parties, upon final judgment on the merits,
reasonable attorneys' fees and costs, including attorneys' fees and costs for
any appeal, incurred in bringing such suit or proceeding.
(o) Representation by
Counsel. The Parties hereby acknowledge and represent that
they have each been separately represented and advised by counsel of their
choice with respect to the subject matters of, and their entry into, this
Agreement, that such counsel has reviewed and explained the provisions of this
Agreement to them, and that the terms and provisions of this Agreement are the
result of the free, voluntary and informed negotiation of the parties hereto
acting independently of each other and with the advise of counsel.
(o) No Inferences Regarding
Drafting. The terms and provisions of this Agreement are
mutual and shall be construed and enforced without regard to the fact that they
may have been initially prepared and/or proposed by counsel for a particular
party or parties.
(q) Exclusivity. Neither
the Company nor Sellers shall: (i) solicit, initiate, or encourage the
submission of any proposal or offer from any Person relating to the acquisition
of any of the Interests or other equity of the Company, or any substantial
portion of the assets of the Company (including any acquisition structured as a
merger or consolidation); or (ii) 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. The Company or Sellers shall notify Buyer immediately if
any Person makes any proposal, offer, inquiry, or contact with respect to any of
the foregoing.
[SIGNATURE
PAGE TO FOLLOW]
Page 25 of
36
IN WITNESS WHEREOF, the
Parties have executed this Agreement as of the date first above
written.
COMPANY:
Faith TV, LLC., a Florida
limited liability company
____________________________________
Signature:
Name: ___________
Its: ______________________
SELLERS:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, an
Individual
____________________________________
Signature:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, an
Individual
____________________________________
Signature:
▇▇▇ ▇▇▇▇, an
Individual
____________________________________
Signature:
▇▇▇▇ ▇▇▇▇▇▇▇▇, an
Individual
____________________________________
Signature:
BUYER:
VALCOM, INC., a Delaware
corporation
____________________________________
Signature:
Name: ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
Its: Chairman
Page 26 of
36
Appendix of Attached Exhibits
| Exhibit A- | No Exhibit A |
| Exhibit B- | Unaudited Financial Statements |
| For the Fiscal Year Ended 31st December 2007 | |
| For the period to 30th November 2008 | |
| The above Financial Statements have already been provided to the Buyer | |
| Exhibit C- | Schedule of Agreements Already Provided to the Buyer |
| Exhibit D | Opinion Letter |
| Exhibit E | Payment Instruction |
Page 27 of
36
Exhibit
D
FAITH TV,
L.L.C. December
14, 2008
▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Re: Proposed
sale to Valcom, Inc.
Dear
Members:
Per your request regarding the planned
sale of your LLC, I have reviewed the status of your LLC through the Secretary
of State in Tallahassee, Florida; have reviewed your operating agreement; and
have reviewed the Letter of Intent and the Resolution to Sell Corporate
Assets. It is my opinion that you are able to proceed with the sale
immediately, as more fully set forth below.
Faith TV, LLC is a Limited Liability
Company, duly organized, validly existing and in good standing under the laws of
the State of Florida. Paragraph 5.5 of the Operating Agreement gives
the Board of Managers the power and authority to purchase and own properties and
to conduct the business which it is presently conducting, as well as to sell the
assets and property of the Company. Although the Operating Agreement
included provisions requiring the members be given the opportunity to purchase
the interests in the Company prior to accepting outside offers, the Resolution
to Sell Corporate Assets was signed by all members, waiving that
requirement. The execution, delivery and performance of the Asset
Purchase Agreement and related documents by Seller has been duly authorized and
approved by all requisite action on the part of its Board of Members as
reflected in the Resolution to Sell Corporate Assets executed on October 20,
2008.
The Asset Purchase Agreement and
related documents are enforceable against the Seller and Members in accordance
with their terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium, and other similar laws relating to or
limiting creditors’ rights generally and by equitable principles.
The execution and delivery of the Asset
Purchase Agreement and related documents do not, and the consummation of the
transactions contemplated thereby and the compliance with the terms thereof will
not, (a) violate any law, judgment, order, decree, statute, ordinance, rule or
regulation applicable to Seller or Members, or any permit, license or approval
of any Governmental Entity, (b) conflict with any provision of Seller’s
certificate of incorporation or by-laws, (c) result in any violation of, and
will not conflict with, or result in a breach of any terms of, or constitute a
default under, any mortgage, instrument or agreement to which Seller or any
Member is a party or by which Seller or any Member or any of the Purchased
Assets is bound, or create any Lien upon any of the Purchased Assets, or (d)
require any notice to, or consent, approval, order or authorization of, or the
registration, declaration or filing with, any Governmental Entity or other third
party.
| Respectfully Submitted, | |
| ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ |
Page 28 of
36
Exhibit
E
Payment
Instructions signed by the Sellers
Page 29 of
36
Appendix of Attached
Schedules
| Schedule 2(a) | Organizational Documents of the Company |
|
Schedule (b)
|
Company Capitalization |
|
Schedule
2(c)
|
Conflicts, Consents and Approvals |
|
Schedule
2(d)
|
Broker’s Fees |
|
Schedule
2(e)
|
Title to Assets |
| Schedule 2(f) | Subsidiaries |
| Schedule 2(g) | Event Subsequent to Most Recent Fiscal Year End |
| Schedule 2(h) | Legal Compliance |
|
Schedule
2(i)
|
Tax Matters |
|
Schedule
2(j)
|
Real Property |
|
Schedule
2(j)(ii)
|
Leases / Sub-Leases |
| Schedule 2(k) | Intellectual Property |
| Schedule 2(l) | Tangible Assets |
| Schedule 2(m) | Contracts, other than those in Exhibit C |
| Schedule 2(n) | Powers of Attorney |
| Schedule 2(o) | Insurance |
| Schedule 2(p) | Litigation |
| Schedule 2(q) | List of Employees |
| Schedule 2(r) | Accounts Receivable |
| Schedule 2(s) | No Undisclosed Liabilities |
| Schedule 2(t) | Company’s Bank Accounts |
Page 30 of
36
Exhibit
A
No
exhibit A
Exhibit
B
Financial
Statements
Already
provided to the Buyer
Page 31 of
36
Exhibit
C
Schedule
2(c)(i)
Schedule
2(a)
Organizational
Documents of the Company
To be
provided
Schedule
2(b)
Company
Capitalization
Current Faith TV,
LLC.
Shareholders
|
Name
|
Address/
Telephone
|
No
Share
Certificates
|
Share
Units
|
Percentage
|
|
▇▇▇▇▇▇▇
▇▇▇▇▇▇
|
30%
|
|||
|
▇▇▇▇▇▇▇
▇▇▇▇▇▇
|
50%
|
|||
|
▇▇▇
▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇▇
|
15%
5%
|
Page 32 of
36
Schedule
2(c)
Conflicts,
Consents and Approvals
None.
Schedule
2(d)
Broker’s
Fees
None.
Schedule
2(e)
Title
to Assets
Fixed
Assets and Equipment Schedule already provided
Faith TV
Owned Film and TV Program Library already provided
Schedule
2(f)
Subsidiaries
None.
Schedule
2(g)
Events
Subsequent to Most Recent Fiscal Year End
None.
Schedule
2(h)
Legal
Compliance
None.
Schedule
2(i)
Tax
Matters
|
1.
|
All
tax returns for the year ending 2007 have been
provided.
|
Page 33 of
36
Schedule
2(j)
Real
Property
None
Schedule
2(j) (ii)
Leases/Sub-Leases
|
1.
|
The
company office is located at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇. The
company is currently renting on a month to month
basis;
|
Schedule
2(k)
Intellectual
Property
|
1.
|
Domain
registration
|
|
2.
|
Name
and Logo registration
|
|
3.
|
Other
copyrighted items, patents, registered trademarks (Attach
List)
|
None
Schedule
2(l)
Tangible
Assets
None
Schedule
2(m)
Contract
Work in Progress
None
Schedule
2(n)
Powers
of Attorney
None.
Schedule
2(o)
Insurance Already
Provided
Page 34 of
36
Schedule
2(p)
Litigation
None.
Schedule
2(q)
Employees
List
of Employees already provided
|
Name
|
SS#
|
Address/
Telephone
|
Compensation
|
Type
|
Comments
|
No
written employment contract exist for any employees
Schedule
2(r)
Accounts Receivable provided
as of 30th
November 2008
Schedule
2(s)
Undisclosed
Liabilities
None
Page 35 of
36
Schedule
2(t)
Company’s
Bank Accounts
To
be provided
Page 36 of
36