AGREEMENT
This Agreement is entered into as of the 20th day of May, 2005, and sets
forth certain agreements between Cyber Defense Systems, Inc., a Florida
corporation ("Cyber"); Techsphere Systems International, LLC, a Georgia LLC
(referred to herein as "TSI"); ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Cherokee
Raiders, L.P. ("Cherokee Raiders") and Proxity, Inc., being Persons owning a
majority of the issued and outstanding voting shares of capital stock of Cyber
(the "Existing Cyber Controlling Shareholders"); and ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, being Persons owning a majority of
the issued and outstanding voting equity interests in TSI (the "Existing
Controlling TSI Equity Owners"), with respect to a loan by Cyber to TSI in the
amount of $1 million, and the grant to Cyber by TSI and the Existing Controlling
TSI Equity Owners of an option to acquire TSI through a merger.
The following terms assume that, at the time of the consummation of the
merger contemplated below, TSI, will be a corporation eligible to participate in
a tax-free "A" reorganization under Internal Revenue Code ss. 368.
1. Loan. Cyber agrees to loan TSI the sum of $1 million for the purpose of
allowing TSI to pay all or a major part of its remaining $1 million on the
license fee owed to 21st Century Airships, Inc. ("C21") no later than May
25th, pursuant to the License Agreement dated January 16, 2004 (the "C21
License Agreement"), assuming C21 acknowledges that such payment shall
cure any existing default (the "C21 Payment"). In the event that TSI or
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, acting on behalf of TSI, can negotiate the payment of
less than the $1 million to C21 by replacement of the remaining amount
owed to C21 with Cyber stock or other consideration, the difference will
be immediately made available to TSI as working capital and to pay
outstanding legal and accounting fees. In addition, no later than July 1,
2005, in order for TSI to avoid litigation, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, acting on
behalf of TSI, shall use his best efforts to renegotiate certain other
obligations of TSI (▇▇▇▇▇▇▇/▇▇▇▇▇▇/▇▇▇▇▇▇▇▇), copies of which are attached
to this Agreement as Exhibit A. The loan from Cyber to TSI shall be
represented by a promissory note in the form set forth as Exhibit B, in
the principal amount of $1 million; provided, however, the principal
amount of such note shall be increased by the sum of the following: (i)
the value of any Cyber stock or other consideration Cyber may furnish to
C21 in connection with such negotiation, and (ii) the amount of cash or
the value of any Cyber stock or other consideration Cyber may pay or issue
to ▇▇▇▇▇▇▇/▇▇▇▇▇▇/▇▇▇▇▇▇▇▇ in connection with such renegotiation (the "TSI
Note"). The TSI Note shall bear interest at a variable rate equal to the
"Prime Rate" regularly published in The Wall Street Journal, plus 1.5%,
and shall mature 12 months following the date of this Agreement. The TSI
Note shall be secured by a first lien in all of TSI's assets; provided,
however, at the effective time of the Merger (as hereafter defined) such
security interest shall be released by Cyber. TSI hereby grants Cyber a
first lien in all of its assets pursuant to the Security Agreement
attached as Exhibit C and agrees to execute such other documents that
Cyber may be necessary to allow Cyber to perfect its security interest is
such assets. It is further understood and agreed that the payments for
these debts are in addition to and not to be considered a part of the $75M
being paid for TSI stock.
2. Option. Provided that the C21 Payment has been made as set forth above,
TSI and the Existing Controlling TSI Equity Owners hereby grant Cyber the
right to merge a wholly-owned subsidiary of Cyber into TSI, with TSI being
the surviving corporation, pursuant to the terms set forth herein (the
"Option"). The term of the Option shall commence on the date of this
Agreement and shall expire at 5 pm Central Standard Time on the 180th day
following the date of this Agreement, unless extended by the agreement of
the parties or unless exercised prior to such time by Cyber providing
notice to TSI. Cyber has or will file a registration statement under Form
SB-2 to register certain shares of its capital stock. In addition, ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇ and Cherokee Raiders and their Affiliates will not sell, trade
or otherwise dispose of their stock in Cyber pending the closing of the
Merger. TSI will become a corporation eligible to participate in a
tax-free "A" reorganization under Internal Revenue Code ss. 368.
3. Merger. Upon exercise of the Option, Cyber will form a wholly-owned
subsidiary (which subsidiary shall be called "Newco" for purposes hereof)
which shall merge with and into TSI, with TSI being the surviving
corporation (the "Merger"). Following the Merger, TSI will continue to
manufacture, sell and lease Airships and will be managed through the Board
of Directors described in Section 4 below.
(a) Upon the approval of the Merger by the holders of a majority of the
issued and outstanding capital stock of Cyber and of TSI, at the
effective time of the Merger, all of the shares of issued and
outstanding capital stock of TSI shall automatically be converted to
(i) 23,076,923 shares of Cyber Class A Common Stock, par value
$0.001 per share ("Cyber Class A Stock"), and (ii) such number of
shares of Cyber Class B Common Stock, par value $0.001 per share
("Cyber Class B Stock"), as may be required so that, as of the time
of consummation of the Merger and the issuance of shares
contemplated thereby, the holders of Cyber Class B Stock existing
immediately prior to the Merger shall own 55% of the issued and
outstanding shares of Cyber Class B Stock and the Existing TSI
Equity Owners shall own 45% of such stock. The class of Cyber
capital stock called Class C Common Stock, par value $0.001 per
share, currently held by Affiliates (as defined below) of ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, shall be surrendered by the holders thereof and cancelled
by Cyber at the effective time of the Merger.
(b) As of May 16, 2005, there are 28,173,285 shares of Cyber Class A
Stock issued and outstanding. The 23,076,923 shares to be issued to
Existing TSI Equity Owners in the Merger will constitute 45.216% of
the issued and outstanding shares of Cyber Class A Stock immediately
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following the Merger. If prior to the Merger, Cyber issues
additional shares of Cyber Class A Stock to Persons who are not
Affiliates of the Existing Cyber Controlling Shareholders for the
purposes contemplated by this Agreement or for other funding needs,
the Existing TSI Equity Owners will incur the same pro rata dilution
incurred by the Existing Cyber Controlling Shareholders as a result
of any such issuance of stock.
(c) It is anticipated that the number of shares of Cyber Class A Stock
issuable to the Existing TSI Equity Owners upon consummation of the
Merger shall be 23,076,923 shares with a minimum aggregate market
value of $75 million, based upon an expected market price of $3.25
per share. However, it is agreed that the number of shares of Cyber
Class A Stock issuable to the Existing TSI Shareholders upon
consummation of the Merger shall remain at 23,076,923 shares,
regardless of the market price of Cyber Class A Stock on the date of
issuance of the shares.
(d) Cyber shall ensure that the existing assets of TSI shall not be
encumbered by any security instruments executed by Cyber
(specifically those described in the 10-K filed April 26, 2005 as
the AJW Notes) prior to the date of Merger. Further, Cyber will
assure that there are no outstanding options or warrants issued to
Affiliates of Cyber as of the date of the Merger.
4. TSI Board.
(a) From and after the date of this Agreement, and continuing for a
period of 180 days or until the effective time of the Merger (the
"Option Period"), TSI and the Existing Controlling TSI Equity Owners
shall take such steps as may be necessary to appoint a person
designated by the Existing Cyber Controlling Shareholders to serve
as a member of TSI's Board of Managers or Board of Directors, as the
case may be.
(b) Commencing the effective time of the Merger, and subject to the
remaining provisions of this Section 4, during the three (3) (or
such longer time period agreed to by the Parties) twelve (12) month
periods beginning April 1, 2006, the Existing Controlling TSI Equity
Owners (as defined below) shall have the right to designate a
majority of the seven (7) person TSI Board of Directors and the
Existing Cyber Controlling Shareholders (as hereafter defined) shall
have the right to designate the remaining members of the TSI Board.
At the annual election of the TSI board, Cyber shall vote its shares
in favor of the individuals designated by each of the Existing Cyber
Controlling Shareholders and the Existing Controlling TSI Equity
Owners in accordance with the foregoing.
(i) In the event TSI fails to earn a positive Adjusted Net Income
(as hereafter defined) for any twelve (12) month period (i.e.,
April 1 to March 31) during the three-year (or extended) term
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beginning April 1, 2006, at the next annual election of the
TSI Board the post-Merger Cyber Board of Directors shall
nominate the members to the TSI Board. As used herein (1)
"Existing Cyber Controlling Shareholders" shall mean ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Cherokee Raiders, L.P. ("Cherokee
Raiders") and Proxity, Inc.) during such time as they each
individually own at least 10% of the outstanding shares of
non-TSI Cyber shares or are managing officers of Cyber, (2)
"Existing Controlling TSI Equity Owners" shall mean ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇
▇▇▇▇▇▇▇▇▇ during such time as they each individually own at
least 10% of the outstanding shares of the "TSI owned Cyber
shares," (3) "TSI owned Cyber shares" shall mean the
23,076,923 shares to be issued to the Existing TSI Equity
Owners in the Merger, and (4) "Adjusted Net Income" shall mean
the sum of the net income (or net loss) of TSI for the twelve
(12) month period, but shall not include the following amounts
paid by TSI during the twelve (12) month period: (i) all
license fees paid by TSI or on behalf of TSI as described
herein to 21st Century Airships, Inc. ("C21"), pursuant to the
License Agreement dated January 16, 2004 (the "C21 License
Agreement"), and (ii) all amounts paid by or on behalf of TSI
to ▇▇▇▇▇▇/▇▇▇▇▇▇▇/▇▇▇▇▇▇▇▇ for the outstanding notes,
including principal and interest.
(ii) As of the effective time of the Merger, the Marketing and
Sales Agreement dated May 1, 2004 between Cyber and TSI and
the Agreement dated April 24, 2005 between Cyber and TSI (the
"April 24 Agreement") shall be cancelled, and Cyber shall
present a marketing and sales business plan with a budget for
both companies for approval by the boards of TSI and Cyber.
Cyber will actively work with the TSI Board of Directors or
its designee on the sales and marketing of TSI Airships.
(iii) Except as otherwise provided in Section 4(b)(ii), Cyber's Post
Merger Board shall have the right to approve TSI's budget and
business plan immediately following the Merger and at least
annually thereafter, and the TSI Board shall have the right to
operate the Airship business (including leasing) and make all
business decisions within such approved budget and business
plan without need of prior approval by Cyber.
(iv) Cyber's Post Merger Board shall have the right to approve all
compensation for the management of TSI, and all contracts
between TSI and any Affiliate of TSI's management or the
Existing TSI Equity Owners.
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(v) Unless it is determined by the Cyber compensation committee
that the TSI Employment Agreements do not comply with the
applicable ▇▇▇▇▇▇▇▇-▇▇▇▇▇ guidelines, the Employment
Agreements for the post-Merger management employees of TSI
will be accepted by Cyber. In the event these Employment
Agreements do not meet the applicable guideline, the Parties
shall agree upon adjustments to be made so that the agreements
are in compliance. The post-Merger management Employment
Agreements will be sent to Cyber for review prior to the
Merger.
5. Cyber Board.
(a) Commencing the date of this Agreement, and continuing for a period
of 180 days or until the effective time of the Merger, Cyber and the
Existing Cyber Controlling Shareholders shall take such steps as may
be necessary to appoint a person designated by the Existing
Controlling TSI Equity Owners to serve as a director on Cyber's
Board of Directors.
(b) Commencing the effective time of the Merger, the nomination
procedure for the individuals who shall stand for election to the
Cyber Board of Directors (the "Cyber Board") shall be as follows:
Existing Controlling TSI Equity Owners will have the right to
nominate 3 nominees; the Existing Cyber Controlling Shareholders
will have the right to nominate 3 nominees; each group of 3 will
have the right to nominate 1 outside nominee; and those 2 outside
nominees will nominate a 3rd outside nominee for a total of 9
nominees to stand for election to Cyber's Board. At the annual
election of the Cyber Board, the Existing Cyber Controlling
Shareholders and the Existing Controlling TSI Equity Owners shall
vote their respective shares in favor of the nominees chosen in
accordance with the above procedures.
6. Other Post-Merger Rights and Obligations of the Parties.
(a) If TSI secures a contract with Sierra Nevada Corporation ("SNC") to
build at least six (6) Airships during the twelve (12) month period
following the Merger, upon request of the TSI Board, Cyber will use
its best efforts to fund (or in the alternative back the funding of)
the expansion of the existing facility or leasing (or purchase) of
another facility in Columbus or elsewhere in Georgia to enable TSI
to meet its contractual obligations.
(b) If TSI obtains viable Commercial contracts, Cyber will use its best
efforts to fund (or in the alternative back the funding of)
expansion of TSI's facilities to meet the demands of expected
increased production.
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(c) If SNC cannot or will not complete funding the existing SA 90
Airship being manufactured at the Columbus facility within thirty
(30) days following the date of the Agreement and Cyber has obtained
the agreement of SNC to the terms set forth in this subsection 6(c),
then Cyber shall have the first option to fund (or in the
alternative back the funding of) the completion of such Airship and
to acquire the exclusive right to lease and/or sell such SA 90
Airship. If the SA 90 Airship is subsequently leased by Cyber or one
of its Affiliates, then the payment schedule laid out in the April
24 Agreement will be in force notwithstanding that the April 24
Agreement may no longer be in effect. If the SA 90 Airship is sold
by Cyber, then TSI will receive 45% of the profits of such sale.
(d) Cyber will use its best efforts to fund (or in the alternative back
the funding of) the four (4) Marketing Airships as described the
April 24 Agreement over a two (2) year period as previously agreed,
notwithstanding that the April 24 Agreement may no longer be in
effect.
(e) Cyber will register and diligently prosecute the right of the
Existing TSI Equity Owners to sell $7.5 million of the Existing TSI
Equity Owners' Cyber Class A Stock. The Existing TSI Equity Owners
shall sell the stock in accordance with the rules governing the sale
of publicly traded stock and agree that this right to sell is
subject to any currently existing agreement with Cyber's investors
regarding the sale of their stock, a copy of which is attached as
Exhibit D. This right to sell shall also be subject to any
restrictions that may be imposed by any Persons who may become
future investors in Cyber for the purpose of funding any part of the
funds Cyber may furnish pursuant to this Agreement, provided such
investors are not Affiliates of the Existing Cyber Controlling
Shareholders, and such restrictions will apply to the Existing Cyber
Controlling Shareholders to the same extent they will apply to the
Existing TSI Equity Owners. Otherwise, Existing TSI Equity Owners
will have the same rights of sale as the current investors in Cyber.
6
(f) If either Cyber or TSI is found, by final order of a court of
competent jurisdiction, arbitration panel or a final determination
by the OIG/SEC, to have committed any pre-merger fraud in its
transactions with the government or securities fraud within the
applicable statute of limitations, the aggrieved party shall have a
right of rescission.
(g) If another Person wants to acquire a majority interest in Cyber,
then tag-a-long rights shall be given to all Existing TSI Equity
Owners to participate pro rata. In addition, if another Person wants
to acquire all of the issued and outstanding shares of Cyber Class A
Stock, the holders of a majority of such stock shall have drag-along
rights to compel the minority holders of such stock to sell their
shares at the same price and terms as the majority.
(h) "Best efforts," as used in this Agreement with respect to specified
goals, shall mean Cyber's or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇'▇ agreement (as the
case may be) to pursue the goals in good faith and in a manner
consistent with Cyber's or ▇▇. ▇▇▇▇▇▇▇▇'▇ past practices without
resort to extraordinary measures.
7. Representations and Warranties. Each party represents and warrants to the
other the following:
(a) The execution and delivery of this Agreement and the consummation by
it of the transactions contemplated herein have been duly authorized
by all necessary action on the part of the party's governing board
and a majority of the equity owners. The vote of the Existing
Controlling TSI Equity Owners shall be sufficient to convert TSI to
a corporation. Upon exercise of the Option, the consent of the
majority of the directors of Cyber, the majority of the directors of
TSI, the Existing Cyber Controlling Shareholders and the Existing
Controlling TSI Equity Owners, shall be sufficient to approve the
Merger.
(b) The party has full power and authority to enter into this Agreement.
(c) This Agreement and the transactions contemplated hereby are valid
and binding upon the party and enforceable in accordance with their
terms.
(d) To the extent the party has furnished financial statements pursuant
to this Agreement, the party has no liabilities or obligations of
any nature whatsoever, whether accrued, absolute, contingent, or
otherwise (including, without limitation, tax liability, express or
implied contract or tort liability involving persons or property of
any kind) except as reflected in such financial statements, and no
facts or circumstances exist that could give rise to any such
liabilities or obligations.
8. Audit Rights.
(a) Attached hereto as Exhibit E are the current balance sheet and
income statement of TSI, and a detailed list of current accounts
payables and projections of financial needs of TSI. TSI acknowledges
receipt of Cyber's most recent financial statements filed with the
Securities and Exchange Commission.
(b) Upon execution of this Agreement, each of Cyber and TSI shall have
the right, at its own expense, to audit the books and records of the
other and shall allow the other party and its independent auditors
complete access to such books and records for the purpose of such
audit. For this purpose, the confidentiality obligations of the
7
parties pursuant to Section 13 of this Agreement shall govern the
information transferred pursuant to such audit.
9. Certain Definitions. As used herein, the following capitalized terms shall
have the meanings ascribed to them:
(a) With respect to any specified Person, "Affiliate" means, (i) any
Person that, directly or indirectly, controls, is controlled by, or
is under common control with, such specified Person, (ii) any
officer, director, partner, manager or controlling equity holder of
such specified Person; and (iii) any Person that, directly or
indirectly, controls, is controlled by, or is under common control
with, any officer, director, partner, manager or controlling equity
holder of such specified Person. For the purposes of this
definition, "control" (including, with correlative meaning, the
terms "controlled by," "under common control with" and
"controlling") as used with respect to any specified Person, shall
mean the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such
Person, whether through the ownership of voting securities or by
contract or otherwise.
(b) "Person" means any individual, partnership, limited liability
company, corporation, joint venture, trust, business trust,
cooperative or association, and the heirs, executors,
administrators, legal representatives, successors and assigns of
such Person where the context so admits.
10. Exclusive Dealing. Provided payments are timely made by Cyber as described
in Section 1 above, during the Option Period, neither Cyber, TSI nor any
Existing Controlling TSI Equity Owner shall enter into any negotiations
with any Person to effect any agreement contrary to the terms set forth in
this Agreement.
11. Costs. Each party will each be solely responsible for and bear all of its
own respective expenses, including, without limitation, expenses of legal
counsel, accountants, and other advisors, incurred at any time in
connection with pursuing or consummating this Agreement and the
transaction contemplated hereby.
12. Public Disclosure. Neither Cyber nor TSI nor any Existing Controlling TSI
Equity Owner shall make any public release of information regarding the
matters contemplated herein except (i) that a press release in agreed form
may be issued by Cyber as promptly as is practicable after the execution
of this Agreement, (ii) that Cyber and TSI may each continue such
communications with employees, customers, suppliers, franchises, lenders,
lessors, shareholders, and other particular groups as may be legally
required or necessary or appropriate and not inconsistent with the best
interests of the other party or the prompt consummation of the
transactions contemplated by this Agreement, and (iii) as required by law.
8
13. Confidentiality. Each of Cyber and TSI (the "Receiving Party") agrees to
treat all information concerning the other furnished, or to be furnished,
by or on behalf of such party (the "Delivering Party") in accordance with
the provisions of this paragraph (collectively, the "Information"), and to
take, or abstain from taking, other actions set forth herein. The
Information will be used solely for the purpose of this Agreement, and
will be kept confidential by the Receiving Party and its officers,
directors, managers, employees, representatives, agents, and advisors;
provided that (i) any of such Information may be disclosed to the
Receiving Party's officers, directors, managers, employees,
representatives, agents, and advisors who need to know such Information
for the purpose of this Agreement, (ii) any disclosure of such Information
may be made to which Delivering Party consents in writing and (iii) such
Information may be disclosed if so required by law. If the Merger is not
consummated, the Receiving Party will return to Delivering Party all
material containing or reflecting the Information and will not retain any
copies, extracts, or other reproductions thereof. The provisions of this
Section 13 shall survive termination of this Agreement.
14. General.
(a) This Agreement shall not confer any rights or remedies upon any
Person other than the parties hereto and their respective successors
and permitted assigns.
(b) This Agreement 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) This Agreement shall be binding upon and inure to the benefit of the
parties named herein and their respective heirs, personal
representatives, successors and assigns.
(d) 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.
(e) 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) 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:
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If to TSI or any
Existing Controlling
TSI Equity Owner: Techsphere Systems International, L.L.C.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇, President
If to Cyber: Cyber Defense Systems Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, CEO
Any party may change the address to which notices, requests,
demands, claims, or other communications hereunder are to be
delivered by giving the other party notice in the manner herein set
forth.
(g) This Agreement shall be governed by and construed in accordance with
the domestic laws of the State of Oklahoma without giving effect to
any choice or conflict of law provision or rule (whether of the
State of Oklahoma or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of
Oklahoma.
(h) No amendment of any provision of this Agreement shall be valid
unless the same shall be in writing and signed by both parties. 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) 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) Each party agrees to make, execute, and deliver such additional
documents and instruments and take such actions as may be necessary
or appropriate to carry out the full intent and purpose of this
Agreement and the transactions contemplated hereby.
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(k) 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.
(l) Whenever the context may require, any pronoun used in this Agreement
shall include the corresponding masculine, feminine or neuter forms,
and the singular form of nouns, pronouns and verbs shall include the
plural and vice versa.
(m) Any controversy or claim arising out of or relating to this
Agreement, or the breach thereof, shall after the parties have met
and conferred in good faith to resolve the problem or dispute, first
be referred to mediation to be conducted by an independent mediator
selected by mutual agreement, or in the absence of mutual agreement
within fifteen (15) days after a party has requested mediation, then
by a mediator appointed by the American Arbitration Association
("AAA") through its office located in St. Louis, Missouri. If any
controversy or claim arising out of or related to this Agreement, or
the breach thereof, cannot be resolved through good faith mediation,
the parties agree that either party may submit the dispute to final
and binding arbitration before a single arbitrator under the AAA
Commercial Arbitration Rules to be held at the AAA office described
above (or at any other place mutually acceptable to the parties so
involved). Any dispute between the parties as to whether an issue is
subject to arbitration shall be resolved by the arbitrator. The
arbitrator shall have no authority to award punitive damages or
other damages not measured by the prevailing party's actual damages
and may not, in any event, make any ruling, finding or award that
does not conform to the terms and conditions of this Agreement. The
expenses of the arbitration shall be borne equally by the parties to
the arbitration; provided that each party shall pay for and bear the
cost of its own experts, evidence and counsel's fees unless the
arbitrator determines otherwise. Judgment on the award rendered by
the arbitrator may be entered into any court having jurisdiction
thereof. Each party agrees that a final judgment in any action or
proceeding so brought shall be conclusive and may be enforced by
suit on the judgment or in any other manner provided by law or in
equity.
(n) If any action is brought to enforce, or to construe or determine the
validity of, any term or provision of this Agreement, the prevailing
party shall be entitled to reasonable attorney's fees and costs of
the action.
(signatures follow)
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
"Cyber"
Cyber Defense Systems, Inc.
By:
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, CEO
"TSI"
` Techsphere Systems International, LLC
By:
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▇▇▇▇ ▇▇▇▇▇▇, President
"Existing Cyber Controlling Shareholders"
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇
Cherokee Raiders, L.P.
By:
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Title:
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"Existing Controlling TSI Equity Owners"
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▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Exhibits:
A Copies of ▇▇▇▇▇▇▇/▇▇▇▇▇▇/▇▇▇▇▇▇▇▇ Notes/Obligations
B TSI Note
C Security Agreement
D Stock Restrictions
E TSI Financial Statements and Projections
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