Item
1.01 Entry into a Material Definitive Agreement
Master
Agreement for the Exchange of Common Stock, Management, and Control
On
or about December 7 2016, KSIX Media Holdings, Inc., a Nevada corporation (the “Company”), executed and entered into
an “Master Exchange Agreement for the Exchange of Common Stock, Management, and Control” (the “ Exchange Agreement”)
with True Wireless, LLC (“TWL”) an Oklahoma Limited Liability Company, and Kevin Brian Cox (“Cox”). Cox,
a resident of the State of Tennessee, is the sole owner of 100% of TWL’s issued and outstanding membership interests (the
“Seller”) either personally on direct ownership basis or indirectly through his ownership of all of the membership
interests of EWP Communications, LLC, a Tennessee limited liability company.
Upon
the execution of this Exchange Agreement, TWL will become a wholly-owned subsidiary of the Company upon approval of the change
of control by the Federal Communication Commission (“FCC”). TWL’s primary business operation is a full service
telecommunications company specializing in the Lifeline program as set forth by the Telecommunications Act of 1996, and regulated
by the FCC which provides subsidized mobile phone services for low income individuals (“Lifeline Services”). TWL currently
has an FCC license to offer Lifeline Services in the following states: Texas (TX), Oklahoma (OK), Arkansas (AR), Maryland (MD),
Rhode Island (RI).
Pursuant
to the Exchange Agreement, the Company will purchase 100% of the membership interests in TWL for $24,000,000 USD to be paid by
the Company (e.g. cash, common stock, and promissory notes) to the Seller or his assigns (“Seller”) as follows:
|
|
(1)
|
Upon
execution of the Exchange Agreement, the Company shall pay: (a) 12,000,000 share of Common
Stock of the Company (valued at $0.50 per share), valued at $6,000,000 in the aggregate;
and (b) $500,000 USD as a non-refundable deposit prepaying guaranteed profit to Cox;
and
|
|
|
(2)
|
Upon
the FCC approval of the purchase of TWL by the Company as set forth in the Exchange Agreement,
the Company shall: (a) pay Cox a total of $6,000,000 USD on or before March 31, 2017
towards the purchase price of TWL; (b) execute a promissory note in the amount of $6,000,000
which shall be payable on or before December 31, 2017; and (c) issue an additional 12,000,000
shares of Common Stock of the Company (valued at 0.50 per share), valued at $6,000,000
USD in the aggregate.
|
Management
and Marketing Agreement
On
or about December 7 2016, KSIX Media Holdings, Inc., a Nevada corporation (the “Company”), executed and entered into
a “Management and Marketing Agreement” (“Management Agreement”) with Kevin Brian Cox (“Cox”).
Pursuant to the Management Agreement, the Company will act as the manager of TWL until such time as the Exchange Agreement, as
described above, is approved by the FCC, and TWL becomes a wholly-owned subsidiary of the Company.
During
the interim time the Management Agreement is active, the Company shall manage and direct the day-to-day operations of TWL necessary
to provide the Management Services in compliance with the Applicable Telecommunications Laws and Regulations, Company’s
ETC Designations, and the terms and conditions of this Agreement, subject to the oversight, review, supervision, and control of
the Company. The Company’s management responsibilities will include, but are not limited to:
|
|
●
|
Billing
Subscribers for the Services provided and collecting for the TWL accounts the amounts
billed, provided however, that Company shall not be responsible for preparing or filing
FCC Form 497 with the Universal Service Administrative Company to make claims for funding
under the federal Lifeline program;
|
|
|
●
|
Maintenance
and oversight of the provision of the Wireless Services by TWL;
|
|
|
|
|
|
|
●
|
Recommending
to TWL any changes to the terms of any price lists necessary for the TWL’s provision of the Wireless Services, provided
however, that any such change shall be subject to the final approval of the TWL;
|
|
|
|
|
|
|
●
|
Negotiation
of agreements with any vendors, subject to the final approval of TWL, including the negotiation and procurement of cost effective
resale or other similar agreements with other telecommunications service providers;
|
|
|
|
|
|
|
●
|
Implementation
of the TWL’s promotions, marketing and advertising programs;
|
|
|
|
|
|
|
●
|
Responsibility
to prepare all reports, applications and other submissions to the FCC or state and local regulatory authorities, subject to
the final approval of the TWL, that are required or otherwise necessary in the sole judgment of TWL to maintain its business
during the management period, provided however, that the TWL will be responsible for filing any such reports, applications
or other submissions with the FCC or state and local regulatory authorities;
|
|
|
●
|
Implementation
of standard operating procedures;
|
|
|
|
|
|
|
●
|
Implementation
of programs and policies to assure adherence to safety, environmental and other requirements under applicable federal, state
and local laws and regulations;
|
|
|
|
|
|
|
●
|
Day-to-day
bookkeeping and recordkeeping of the accounts relating to TWL’s provision of Wireless Services;
|
|
|
|
|
|
|
●
|
Consulting
with the TWL about the hiring or firing of Company employees during the term of this Agreement;
|
|
|
|
|
|
|
●
|
Performance
of all other functions consistent with the purposes of this Agreement, good business practice in the industry and Applicable
Telecommunications Laws and Regulations; and
|
|
|
|
|
|
|
●
|
Update
TWL on the Wireless Services and provide periodic reports on the status of the business conducted using the Assets.
|
Under
this Management Agreement, the Company shall be paid 80% of all profits from Subscriber and Lifeline subsidies from the Universal
Service Administrative Company and any state-administered funds, less the normal and prudently expenses incurred in the provision
of the Wireless services, operations, and employees of TWL.