UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported)

February 19, 2015

 

SELECT-TV SOLUTIONS, INC.

(Exact name of registrant as specified in its charter)

 

NEVADA		333-186461		99-0378854
(State or other jurisdiction of incorporation		(Commission File Number)		(IRS Employer Identification No._

 

1395 BRICKELL AVENUE, STE. 800

MIAMI, FLORIDA, 33131

(Address of principal executive offices)

 

(418)-264-7134

Registrant’s telephone number, including area code

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

[_] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

Item 1.01 Entry into a Material Definitive Agreement.

 

In an effort to grow our business, we have entered into a series of agreements pursuant to which we have or will acquire assets related to end-to-end IPTV (Internet Protocol Television) and related solutions within the hospitality sector. We set out below a description of those agreements.

 

Acquisition of MyStay, Inc. Assets

 

On March 1, 2015, our wholly-owned subsidiary, Select-TV USA Holdings, Inc. entered into an Asset Purchase Agreement with MyStay, Inc. (“MyStay”) and Brooks Pickering for the immediate sale of certain assets of MyStay. The assets acquired under the Agreement include:

 

●

supply, sale, consulting and customer agreements or contracts between MyStay, and its customers, including hotels and other clients; and

 

●

MyStay’s equipment, inventory, goodwill, certain accounts receivable and certain intellectual property.

 

The assets of MyStay that were excluded from the acquisition include, MyStay’s gaming business, cash on hand, and any accounts receivable related to the excluded contracts or gaming business.

 

In exchange for the assets acquired under the Asset Purchase Agreement, we paid MyStay $400,000 (of which $250,000 had been paid prior to the date of the Asset Purchase Agreement) and 9,500,000 shares of our common stock.

 

One of the terms of the Asset Purchase Agreement was that we enter into an Employment Agreement with Brooks Pickering as described in Item 5.02 below. As concerns the Asset Purchase Agreement, Brooks Pickering is a related party as he is Chairman and Chief Executive Officer of MyStay, Inc, with an 85% ownership position.

 

Acquisition of Hotel in-room entertainment assets from JIFM Holdings

 

On February 19, 2015, our wholly-owned subsidiary, Select-TV USA Holdings, Inc. entered into an Asset Purchase Agreement with JIFM Holdings, LLC (“JIFM”).  Pursuant to the Agreement, we purchased assets, including four (4) proprietary IPTV software and hardware systems, accounts receivable, inventory, personal property and customer contracts that expand our technology base and customer base in our core market of hotel in-room entertainment systems. In exchange for the assets to be acquired under the Agreement, we are to pay JIFM $550,000, of which $300,000 was paid in cash on the date of the Agreement, $50,000 was paid within two days of the date of the Agreement and the remaining $200,000 is to be paid in the form of a 2% interest bearing note due May 15, 2015 issued by Select-TV USA Holdings, Inc. to JIFM on March 2, 2015.

 

The physical assets transferred under this Agreement include:

 

·

all source code for programs related to the delivery of interactive entertainment services to hotels; this source code has successfully been deployed in a significant number of hotels;

·

the inventory of in-room equipment, servers, TVs and ancillary products such as cabling that run or support the core applications deployed at hotels; the in-room inventory count is 200 units, the server count is 50 units and the TV count is 82 units;

·

all drawings and other material pertaining to the hardware and software products used in the delivery of IPTV services to hotels including the set-top box specifications, firmware specifications, system software, applications software;

·

all hotel customers currently under contract;

·

all accounts receivable; and

·

all other related physical assets (office equipment, furniture, IT equipment, etc.).

 

Acquisition of IPTV and other assets for delivery of Hotel services from Zon Capital;

 

On March 2, 2015, our wholly-owned subsidiary, Select-TV USA Holdings, Inc. entered into a Loan Purchase Agreement with Zon Capital Partners, LP for the purchase of certain loans owed to Zon Capital Partners, LP and the associated physical IPTV software and hardware assets, accounts receivable, inventory, personal property and customer contracts controlled by Zon Capital Partners, LP. In exchange for the loan acquired under the Agreement, we have paid Zon Capital $250,000 on the date of the Agreement.

 

 

We are foreclosing on the loan acquired under the Agreement, and upon completion the physical assets to be acquired include:
 

Item 2.01 Completion of Acquisition or Disposition of Assets.

 

Please see the information in Item 1.01 discussing the acquisition of the assets from MyStay.

 

Item 3.02 Unregistered Sales of Equity Securities.

 

As set out above in Item 1.01, we issued 9,500,000 shares of our common stock to MyStay as partial consideration for the acquisition of the assets under Asset Purchase Agreement. Additionally, as discussed in Item 5.01, we issued options to acquire up to 5,000,000 of our common shares to Brooks Pickering pursuant to an employment agreement, as discussed in Item 5.02. Each of these issuances of unregistered equity was exempt from registration under the Securities Act of 1933, as amended, pursuant to Section 4(2) thereunder.

 

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

On March 1, 2015, we appointed Brooks Pickering as our President and our Chief Operating Officer. Prior to founding MyStay, Mr. Pickering has held several senior management positions with both public and private enterprises. He has successfully led six Companies as either CEO or President. Mr. Pickering is also a bonded State Court Receiver and Federal Bankruptcy Trustee and has served more than 30 appointments. As a successful real estate developer, Mr. Pickering completed multiple single-family home projects in the greater L.A. area, condominium developments in Redondo Beach, Santa Monica and Pacific Palisades, and was the developer of the largest adaptive re-use project in Downtown Los Angeles. In the last five years Mr. Pickering has worked for MyStay as its CEO (7/2011-present) and for Kelley Technologies as its President and CEO (4/2008-6/2011).

 

We entered into an Employment Agreement with Mr. Pickering dated, March 1, 2015, that set out the terms of his appointment. In exchange for acting as our President, Mr. Pickering is to receive:

 

●

A monthly salary, of $12,500 per month to be paid semi-monthly on the same schedule as the other employees of the Company (though this salary is to be increased to $25,000 (the “Base Salary”), if during the term of the Agreement, we have three months of positive EBITDA, or our shares of common stock are quoted on the AIM Stock Exchange, or the Board of Directors agrees to an increase at its sole discretion;

●

A semi-annual bonus equal to 75% of the Initial/Base Salary paid in the prior six-month period if we achieve our semi-annual target goals (the “Target Bonus”) (provided that if we achieve goals superior to those set by the Board of Directors, Mr. Pickering is eligible to receive additional bonuses of up to a total of 150% of the Initial/Base Salary. The Target Bonus has yet to be set by the Board of Directors;

●

The grant of options to acquire 2,500,000 shares of our common stock at $0.10 a share (i) 40% of which shall vest if we obtain gross advertising revenue in our 2015 fiscal year in an amount to be mutually agreed upon by us and Mr. Pickering, (ii) 50% of which shall vest upon the achievement of performance objectives in our 2015 fiscal year to be agreed upon based upon the budget and business plan for our 2015 fiscal year and (iii) 10% of which shall vest upon performance objectives to be mutually agreed upon relating to business leadership; and

●

The grant of options to acquire 2,500,000 shares of our common stock at $0.10 a share which shall vest if we obtain performance objectives in our 2016 fiscal year which objectives are to be mutually agreed upon by us and Mr. Pickering prior to November 30, 2015.

 

The term of the Agreement shall last until February 28, 2017, unless terminated prior thereto in accordance with the Agreement. If Mr. Pickering and the Company continue the Agreement after February 28, 2017, the term shall be extended on a month-to-month basis. We may terminate this Agreement without cause with 30 days’ notice, provided that we pay a fee equal to six months’ of Base Salary. We had paid Mr. Pickering a fee of $12,500 in each January and February of 2015 for work as a consultant.

 

The positions of President and Chief Operating Officer had been vacant for several months prior to Mr. Pickering’s appointment.

 

Item 9.01 Financial Statements and Exhibits.

 

	Exhibit	Title
	10.1	Asset Purchase Agreement, dated March 1, 2015, among Select-TV USA Holdings, Inc., MyStay Inc. and Brooks Pickering

10.2

Asset Purchase Agreement, dated February 19, 2015, between Select-TV USA Holdings, Inc. and JIFM Holdings, LLC†

10.3

Form of Note issued by Select-TV USA Holdings, Inc.

	10.4	Loan Purchase Agreement, dated March 2, 2015, between Select-TV USA Holdings, Inc. and Zon Capital Partners, LP†
	10.5	Employment Agreement, dated March 1, 2015, between us and Brooks Pickering

 

†	Confidential treatment has been requested with respect to certain portions of this exhibit. Omitted portions have been separately filed with the Securities and Exchange Commission

 

 

 

 

 

 

 

 

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

	Select-TV Solutions, Inc.
Dated: March 11, 2015	By:	/s/ Geoffrey Mott
		Geoffrey Mott CEO

 

 

 

Exhibit 10.1

 

MYSTAY ASSET PURCHASE AGREEMENT

 

THIS AGREEMENT made as of the March 1, 2015

 

BETWEEN:

 

Select-TV USA Holdings, Inc., a corporation existing under the laws of Nevada (the "Purchaser");

 

-and-

 

MYSTAY INC., a corporation existing under the laws of Nevada (the "Vendor");

 

-and-

 

BROOKS PICKERING, a businessman residing in the state of Nevada ("Principal");

 

(collectively, the "Parties")

 

RECITALS

 

A. The Vendor carries on an interactive media and advertising company (the "Business").

 

B. The Purchaser wishes to purchase, and the Vendor wishes to sell, specific assets, property and undertaking of the Business on the terms and conditions herein contained.

 

The Parties agree as follows:

ARTICLE 1

INTERPRETATION

 

1.1 Definitions.

 

In this Agreement and in the schedules, the following terms and expressions will have the following meanings:

 

(a)

"Agreement" means this asset purchase agreement and all instruments amending it; "hereof, "hereto" and "hereunder" and similar expressions mean and refer to this Agreement and not to any particular Article, Section, or other subdivision; "Article", "Section" or other subdivisions of this Agreement followed by a number means and refers to the specified Article, Section or other subdivision of this Agreement;

 

(b)

"Assumed Contracts" means any and all supply, sale, consulting and customer agreements or Contracts between the Vendor, VRN and their respective customers, including hotels and other clients listed in Schedule 1.1(b);

 

 

 

 

 

"Assumed Liabilities" means (i) only the obligations to be performed after the MyStay Asset Acquisition Closing Date under the Assumed Contracts;

 

(c)

"Business" has the meaning ascribed thereto in the recitals to this Agreement;

 

(d)

"Claims" means all claims, litigation, liabilities, demands, costs, damages, expenses, losses, suits, orders, actions> causes of action, choses in action, right of recovery, right of set off, proceedings (governmental, administrative or otherwise), arbitration, judgments, reviews, inquiries> investigations, audits, obligations, liabilities and debts, including interest, penalties, fines, court costs and reasonable legal and other professional fees and disbursements and "Claim" shall have a similar meaning;

 

(e)

"Consent" means any required notice, consent, approval, authorization, waiver or order that is a condition to the lawful consummation of the Transactions, whether pursuant to a Contract or a Permit or otherwise;

 

(f)

"Contract" means any agreement, understanding, indenture, contract, lease, deed of trust> license, option, instrument or other commitment, whether written or oral;

 

(g)

"Effective Time" means 12:01 a.m. in New York, New York on the MyStay Asset Acquisition Closing Date;

 

(h)

"Encumbrances" means mortgages, charges, pledges, security interests, liens, hypothecs, prior claims, title retention agreements, rights of first refusal, encumbrances, actions, Claims, reservations, easements, rights of occupation or use, any matters capable of registration against title or otherwise affecting title, options, rights of pre-emption, privileges, demands and equities of any nature whatsoever or howsoever arising and any rights or privileges capable of becoming any of the foregoing;

 

(i)

"Excluded Assets" means the Excluded Contracts, the Vendor's gaming business, cash on hand, and any accounts receivable related to the excluded contracts or gaming business

 

(j)

"Excluded Contracts" means all Contracts of the Vendor other than the Assumed Contracts;

 

(k)

"Excluded Liabilities" means, the liabilities related to the Excluded Assets and all of the liabilities of the Vendor other than the Assumed Liabilities, including any and all liability, debt or obligation of the Vendor, of whatsoever nature, kind or description, whether absolute, accrued, contingent or otherwise and whether arising prior or subsequent to the MyStay Asset Acquisition Closing Date, including the liabilities listed in Schedule 1.1(k);

 

 

 

 

(l)

"GAAP" means the generally accepted accounting principles so described and promulgated by the Financial Accounting Standards Board which are applicable on the date on which any calculation is to be effective or at the date of any financial statements referred to herein, as the case may be;

 

(m)

"Governmental Authority" means any government, regulatory or administrative authority, agency, commission, utility or board (federal, provincial, municipal or local, domestic or foreign) having jurisdiction in the relevant circumstances and any person acting under the authority of any of the foregoing and any judicial, administrative or arbitral court, authority, tribunal or commission having jurisdiction in the relevant circumstances;

 

(n)

"Intellectual Property" means, individually and collectively, howsoever created and wherever located:

 

(i)

all domestic and foreign patents and applications thereof and all reissues, divisions, continuations, renewals, extensions and continuations-in-part thereof;

 

(ii)

all inventions (whether patentable or not), invention disclosures, improvements, trade secrets, proprietary information, know-how, technology, technical data, schematics and customer lists, and all documentation relating to any of the foregoing;

 

(iii)

all copyrights, copyright registrations and applications thereof, and all other rights corresponding thereto throughout the world;

 

(iv)

all trade names, domain names, corporate names, trade dress, logos, common law trade-marks, trade-mark registrations, including the names "MyStay" and "MyStay Inc.", and applications thereof;

 

(v)

all computer programs, applications (including for mobile devices) and software (both in source code and object code form) and any proprietary rights in those computer programs, applications and software, including documentation and other materials related thereto;

 

(vi)

all integrated circuit design, mask work, or topography registrations or applications thereof;

 

(vii)

other intellectual or industrial property whatsoever;

 

(viii)

all income, royalties, damages and payments now and hereafter due and/or payable with respect to any of the foregoing, including without limitation, damages and payments for past or future infringements or misappropriations thereof; and

 

(ix)

the intellectual property of VRN owned by the Vendor;

 

 

 

 

(o)

"Jurisdictions of Operation" means the state of Nevada;

 

(p)

"Law" or "Laws" means all applicable laws (including the common law and principles of equity), statutes, regulations, treaties, rules, ordinances, by-laws, decrees, codes, judgments, orders, rulings, decisions, approvals, notices, permits, guidelines, standards, policies or directives of any Governmental Authority;

 

(q)

"Material Adverse Change" means any change, effect, event or occurrence that individually or when taken together with all other changes, effects, events or occurrences that have occurred during any relevant period of time before the determination of the occurrence of that change, effect, event or occurrence is or is reasonably likely to be materially adverse to the business, affairs, prospects, operations, condition (financial or otherwise), assets or liabilities or results of operations of the Business or that otherwise materially adversely affects the ability of the Purchaser to conduct the Business after the MyStay Asset Acquisition Closing Date substantially as the Business has been conducted up to such date; and references in this Agreement to dollar amounts are not intended to be, and shall not be deemed to be, interpretive of the amount used for the purpose of determining whether a "Material Adverse Change" has occurred;

 

(r)

"MyStay Asset Acquisition Closing Date" means February 23, 2015;

 

(s)

"Parties" means the Vendor, the Purchaser, the Principals and any other person that may become a party to this Agreement, and Party means any one of them;

 

(t)

"Permit" means a license, permit, approval, consent, certificate, certification, registration, or authorization (including without limitation those made or issued by a Governmental Authority, a standards agency or otherwise);

 

(u)

"Person" includes any individual, corporation, partnership, firm, joint venture, syndicate, association, trust, government, Governmental Authority and any other form of entity or organization;

 

(v)

"Purchased Assets" means:

 

(i)

all of the property and assets used in connection with or otherwise relating to the Business (other than the Excluded Assets) as a going concern, whether real or personal, tangible or intangible, of every kind and description and, wheresoever situated;

 

(ii)

Vendor's and Principal's hospitality business plans, financial models, hospitality market strategies, advertising market strategies, sales strategies and systems, market research, customer lists, strategic relationships, hospitality sector experience, technology sector experience, integration sector experience, management experience and personnel contacts;

 

(iii)

VRN Assets

 

(iv)

all of the Vendor's rights and interest in the assets or entities listed in the acquisition matrix set forth in Schedule l.l(v)(iv) including with respect to any letters of intent, agreement or commitment, deposits; and

 

(v)

the assets listed in Schedule 1.1(v), as well as all warranties relating thereto;

  

 

(w)

"Purchase Price" has the meaning ascribed in Section 3.1;

 

(x)

"Records" means all technical, business and financial records relating to the Business, including, without limitation, product lists, product specifications, customer lists, sales and revenues details, expenses details, supplier lists, costs of goods and materials, operating data, files, financial books, correspondence, credit information, research materials, contract documents, title documents, leases, surveys, records of past sales, supplier lists, employee documents, inventory data, accounts receivable data, financial statements and any other similar records in any form whatsoever (including written, printed, electronic or computer printout form);

 

(y)

"Shares" means common shares in the capital of Select-TV Solutions, Inc., a Nevada Corporation currently trading on the OTCQB under the symbol SELT;

 

(z)

''Tax" and "Taxes" means any or all United States federal, State, local or foreign income, gross receipts, immovable property gains, goods and services, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, immovable property, personal property, sales, use, transfer, registration, value added, alternative or add on minimum, or other taxes, levies, governmental charges or assessments of any kind whatsoever, including, without limitation, any estimated tax payments, interest, penalties or other additions thereto, whether or not disputed;

 

(aa)

"Transactions" means the purchase and sale of the Purchased Assets and all other transactions contemplated by this Agreement;

 

(bb)

"VRN" means Video River Networks LLC; and

 

"VRN Assets" means all customer and vendor contracts, hardware, software, firmware and other technologies, inventions, source code, drawing and all other items necessary to fulfill VRN customer purchase orders for its 3000 and 6000 series set-top boxes, and all other assets included in the agreement between VRN and MyStay.

 

1.2

General.

 

(a)

Unless otherwise indicated, all references to dollar amounts in this Agreement are expressed in United States of America currency.

 

(b)

This Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of Nevada and the federal laws applicable therein.

 

(c)

Each of the provisions contained in this Agreement is distinct and severable and a declaration of invalidity or unenforceability of any such provision or part thereof by a court of competent jurisdiction shall not affect the validity or enforceability of any other provision hereof.

 

(d)

The preamble hereof and the schedules attached hereto form an integral part of this Agreement.

 

ARTICLE 2

PURCHASE AND SALE

 

2.1

Purchased Assets.

 

The Vendor hereby sells, assigns and transfers to the Purchaser, and the Purchaser hereby purchases from the Vendor, all rights, title and interest in the Purchased Assets, effective as of the Effective Time on the MyStay Asset Acquisition Closing Date.

 

2.2

Liabilities.

 

Except for the Assumed Liabilities, the Purchaser shall not assume any debts, liabilities or obligations of the Vendor and the Vendor shall remain liable for all of the Excluded Liabilities.

 

2.3

Employment of Principal.

 

Purchaser agrees to hire Principal under the terms of the contract attached hereto as Schedule 2.3. Principal will be allowed to remain as an employee of the (to be renamed) Vendor, so long as Vendor does not compete with Purchaser in the non-gaming hospitality marketplace and so long as such employment does not restrict the Principal's ability to perform his full duties under the contracts with Purchaser.

 

 

 

ARTICLE 3

PURCHASE PRICE AND TAXES

 

3.1

Purchase Price.

 

(1) Subject to the terms and conditions of this Agreement, the aggregate purchase price (the "Purchase Price") to be paid by the Purchaser to the Vendor for the Purchased Assets is:

  

(a)

$400,000 cash ("Cash Portion");

 

(b)

9,500,000 Shares; plus

 

(c)

the assumption of the Assumed Liabilities.

 

The Purchaser and the Vendor shall allocate the Purchase Price and any adjustments to the Purchase Price among the Purchased Assets and shall report the purchase and sale of the Purchased Assets for all Tax purposes in a manner consistent with that allocation. If any Governmental Authority does not agree with that allocation, the Purchaser and the Vendor shall use their best efforts (which is not to be construed as requiring the Purchaser or the Vendor to commence or participate in any litigation or administrative process challenging the determination of any Governmental Authority) to agree on a different allocation acceptable to that Governmental Authority, and the Purchaser and the Vendor shall amend the original allocation and the relevant Tax Returns accordingly. For the purposes hereof, the Shares are issued on the basis of a valuation of $.10 per Share.

 

3.2

Payment of Purchase Price.

 

(1) The Vendor acknowledges having received the following payments of a portion of the Cash Purchase Price in the following installments on the following dates:

 

(a)

$50,000 in November, 2014

 

(b)

$60,000 on December 12, 2014

 

(c)

$100,000 on January 15,2015

 

(d)

$40,000 on January 30, 2015

 

(2) On the MyStay Asset Acquisition Closing Date, the Purchaser shall assume the Assumed Liabilities.

 

3.3

Taxes.

 

The Vendor hereby represents and warrants that the Purchased Assets represent substantially all of the assets relating to the Business, therefore, the Vendor and the Purchaser hereby agree to timely jointly execute and file an election, in the prescribed form in the Jurisdictions of Operation which apply to the sale and purchase of the Purchased Assets hereunder so that no tax is payable in respect of such sale and purchase under any provision of applicable law applicable to the Transactions in the Jurisdictions of Operation.

 

 

 

 

ARTICLE 4

REPRESENTATIONS AND WARRANTIES

 

4.1

Representations and Warranties of the Vendor and the Principal.

 

The Vendor and Principal hereby jointly and severally makes the following representations and warranties to the Purchaser and acknowledges that the Purchaser is relying on such representations and warranties in entering into this Agreement and completing the Transactions:

 

(1) Incorporation and Organization. The Vendor is a corporation duly incorporated and validly subsisting under the laws of the State of Nevada. The Vendor has the corporate power and authority to own or lease its property and to carry on the Business as now being conducted by it. The Vendor is duly qualified, licensed or registered to carry on business and is in good standing in the Jurisdictions of Operation. The Jurisdictions of Operation include all jurisdictions in which the nature of the Business or the property owned or leased by the Vendor in respect of the Business makes such qualification necessary or where the Vendor owns or leases any properties or assets or conducts any business.

 

(2) Options. Except for the Purchaser's right in this Agreement, no person has any option, warrant, right, call, commitment, conversion right, right of exchange or other agreement or Contract or any right or privilege (whether by-law, pre-emptive or contractual) capable of becoming an option, commitment, conversion right, right of exchange or other agreement or Contract for the purchase from the Vendor of any of the Purchased Assets.

 

(3)

Validity of Agreement.

 

(a)

The Vendor has all necessary corporate power to own the Purchased Assets and to enter into and perform its obligations under this Agreement, and the Vendor has all necessary corporate power to enter into and perform its obligations under any other agreements or instruments to be delivered or given by it pursuant to this Agreement.

 

(b)

The Vendor's execution and delivery of, and performance of its obligations under, this Agreement and the other agreements or instruments to be delivered or given by it pursuant to this Agreement and the consummation of the Transactions have been duly authorized by all necessary corporate action on the part of the Vendor.

 

(c)

This Agreement and any other agreements entered into pursuant to this Agreement to which any of the Vendor or the Principals is a party have been duly executed by the Vendor and the Principals and constitute legal, valid and binding obligations of each of the Vendor and the Principals party thereto enforceable against each of them in accordance with their respective terms.

 

(d)

The Vendor is not an insolvent Person within the meaning of any bankruptcy and insolvency laws, and has not made an assignment in favour of its creditors or a proposal in bankruptcy to its creditors or any class thereof, and no petition for a receiving order has been presented in respect of it. It has not initiated proceedings with respect to a compromise or arrangement with its creditors or for its winding up, liquidation or dissolution. No receiver or interim receiver has been appointed in respect of the Vendor or any of its undertakings, property or assets (including the Purchased Assets) and no execution or distress has been levied on any of its undertakings, property or assets (including the Purchased Assets), nor have any proceedings been commenced in connection with any of the foregoing.

 

 

 

 

(4) No Violation. The execution and delivery of this Agreement and the other agreements entered into pursuant to this Agreement by the Vendor and the Principals, the consummation of the Transactions and the fulfillment by the Vendor and the Principals of the terms, conditions and provisions hereof and thereof will not (with or without the giving of notice or lapse of time, or both):

 

(a)

contravene or violate or result in a breach or a default under or give rise to a right of termination, amendment or cancellation or the acceleration of any obligations of the Vendor in respect of the Business under:

 

(i)

any applicable Law;

 

(ii)

any judgment, order, writ, award, injunction or decree of any Governmental Authority having jurisdiction over any of the Vendor or Principal or any of their direct or indirect shareholders or beneficiaries;

 

(iii)

the articles, by-laws or any resolutions or any shareholders' agreement of the Vendor or the Principals or any of their direct or indirect shareholders or beneficiaries;

 

(iv)

any Permit held by the Vendor or necessary to the ownership of the Purchased Assets or the operation of the Business; or

 

(v)

the provisions of any Contract, including the Assumed Contracts, to which the Vendor or Principal or any of their direct or indirect shareholders or beneficiaries is a party or by which it is, or any of its properties or assets are, bound subject to obtaining the Consents listed in Schedule 4.1(4), which have already been obtained and delivered to the Purchaser; or

 

(b)

result in the creation or imposition of any Encumbrance on any of the Purchased Assets;

 

(c)

result in the requirement on the part of the Vendor or Principal or any of their direct or indirect shareholders or beneficiaries to make any filing, give any notice to or obtain any Consent.

 

(5)

Permits. No permits are required to operate the Vendor's Business.

 

(6)

Intellectual Property.

 

 

 

(a)

The Intellectual Property comprises all trademarks, trade names, business names, patents, inventions, know-how, copyrights, service marks, brand names, industrial designs and all other industrial or intellectual property necessary to conduct the Business. The Vendor has the right and authority to use, and the Purchaser will be entitled to continue to use after the MyStay Asset Acquisition Closing Date, the Intellectual Property in connection with the conduct of the Business in the manner presently conducted by Vendor.

 

(b)

For the Intellectual Property which is not owned by the Vendor and which is used in the conduct of the Business by the Vendor, that Intellectual Property is used by the Vendor with the consent of or license from the rightful owners thereof, all those consents and licenses relating to the Intellectual Property are in good standing, binding and enforceable in accordance with their respective terms and no default exists on the part of the Vendor thereunder.

 

(c)

The Vendor is the legal and beneficial owner of the Intellectual Property, free and clear of all Encumbrances, and is not a party to or bound by any Contract or other obligation whatsoever that limits or impairs its ability to sell, transfer, assign or convey, or that otherwise affects, the Intellectual Property.

 

(d)

All of the Intellectual Property that has been developed or created by Employees, or pursuant to Contracts with consultants or contractors, has been assigned to the Vendor in writing or in such other enforceable manner and can be further assigned by the Vendor to the Purchaser without consent.

 

(e)

None of the Vendor and the Shareholders have any knowledge of any infringement or breach of any industrial or intellectual property rights of any other Person by the Vendor, have not received any notice that the conduct of the Business, including the use of the Intellectual Property, infringes on or breaches any industrial or intellectual property rights of any other Person and have any knowledge of any infringement or violation of any of their rights or the rights of the Vendor in the Intellectual Property. The Vendor has maintained or caused to be maintained the rights to any of the registered Intellectual Property in full force and effect.

 

(f)

No royalty or other fee is required to be paid by the Vendor to any other Person in respect of the use of any of the Intellectual Property and there are no restrictions on the ability of the Vendor or any successor to, or assignee from, the Vendor to use and exploit all rights in the Intellectual Property.

 

(7) Compliance with Laws. The Vendor has complied, and the Business is now being conducted in compliance with all Laws applicable to the Vendor, the Business or the Purchased Assets (including those relating to Taxes, Intellectual Property, privacy, protection of personal information, employment, workers compensation, labor and environment).

 

 

 

 

 

(8) Conduct of Business in Ordinary Course. Since the last two years, the Business has been carried on in the ordinary course consistent with a start-up operation. The Purchased Assets are sufficient to carry on the Business at the MyStay Asset Acquisition Closing Date as carried on prior to such date and are the only assets used in carrying the Business at the MyStay Asset Acquisition Closing Date as carried during the 2 years prior to the date hereof. Except for the items marked with an asterisk (*) in Schedule 1.1(i), the Purchased Assets are all of the assets used by the Vendor in connection with the Business.

 

(9) Condition of Assets. All tangible personal property included in the Purchased Assets is being sold "as-is, where-is" with no warranty.

 

(10) Title to Personal and Other Property. All of the Purchased Assets are owned by the Vendor as the legal and beneficial owner with a good and marketable title, free and clear of all Encumbrances and no person has any right relating directly or indirectly to the Purchased Assets.

 

(11) Litigation. There are no Claims pending or threatened, by or against or affecting the Vendor or the Purchased Assets, at law or in equity, or before or by any Governmental Authority in respect of the Business. To the knowledge of the Vendor and the Principals, there are no grounds on which any such Claim might be commenced with any reasonable likelihood of success. There is not presently outstanding against the Vendor any judgment, injunction or other order of any Governmental Authority in respect of the Business.

 

(12) Restrictions on Business. Neither the Vendor, the Principal, the Business nor the Purchased Assets are subject to or encumbered by any non-competition, non-solicitation or other restrictive covenants or obligations that restrict the Business or would restrict any successor to or assignee of, the Vendor, or the acquirer of the Business or the Purchased Assets in any material way.

 

(13) Brokers. The Vendor has not engaged any broker or other agent in connection with the Transactions and, accordingly, there is no commission, fee or other remuneration payable to any broker or agent who purports or may purport to act or have acted for the Vendor.

 

(14) Labour and Employee Matters. All of the employees relating to the Business have been duly terminated and all amounts payable to them have been duly paid and each of them signed a full and final release to that effect.

 

(15) No Material Adverse Undisclosed Fact. There is no fact known to the Vendor which materially adversely affects or may materially adversely affect the Business, the Purchased Assets, prospects, operations or conditions (financial or otherwise) of the Business, or which should be disclosed to the Purchaser in order to make any of the warranties and representations herein not misleading and no state of facts is known . to the Vendor which materially adversely affects or may materially adversely affect the Business or would operate to prevent the Business from continuing to be carried on in the manner in which it is carried on at the date hereof. No representation or warranty of the Vendor contained in this Agreement, and no statement of information contained in any Schedule annexed hereto or in any certificate or other document

furnished to the Purchaser pursuant hereto contains any untrue statement of material fact or omits to state a material fact necessary to make the statements herein not false or misleading.

 

 

 

 

4.2

Representations and Warranties of Purchaser.

 

As an inducement to Vendor and Principal to enter into this Agreement and to consummate there transactions, Purchaser represents, warrants and covenants to Seller as follows:

 

(1) Incorporation and Organization. The Purchaser is a corporation duly incorporated and validly subsisting under the laws of the State of Nevada. The Purchaser has the requisite power and authority to enter into this Agreement and to perform the terms of this Agreement. The Purchaser is duly qualified, licensed or registered to carry on business and is in good standing in the Jurisdictions of Operation.

 

(2) Authority of Purchaser. Purchaser has full power and authority to enter into this Agreement, to consummate the transactions contemplated hereby and to comply with the terms, conditions and provisions hereof. This Agreement is, and each other agreement or instrument of Purchaser contemplated by it will be, the legal, valid and binding agreement of Purchaser, enforceable against Purchaser in accordance with its terms, except where such enforceability is limited by any applicable bankruptcy, reorganization, insolvency, moratorium, fraudulent conveyance or similar laws or equitable principles affecting the enforcement of creditor's rights. Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated by it will conflict with or result in any violation of or constitute a default under any term of the certificate of incorporation or bylaws of Purchaser, or any agreement, mortgage, debt instrument, indenture, franchise, license, permit, authorization, lease or other instrument, judgment, decree, order, award, law or regulation by which Purchaser is bound.

 

(3) Broker of Finder. Neither Purchaser nor any party acting on its behalf has paid or become obligated to pay any fee or commission to any broker, finder or intermediary for or on account of these transactions.

 

(4) Litigation. There is no action, suit or proceeding pending or, to the knowledge of Purchaser threatened to which Purchaser is party that questions the legality or propriety of the transaction contemplated by this Agreement. Purchaser is not subject to any order, judgment or decree, or any other restriction, that is likely to prevent or hinder the transaction contemplated by this Agreement.

 

4.3

Survival of Representations and Warranties of the Parties.

 

The representations and warranties of the Parties contained in this Agreement and any agreement, instrument, certificate or other document executed or delivered pursuant to this Agreement shall survive the MyStay Asset Acquisition Closing Date and shall continue for the benefit of the opposing Party for a period of 12) months notwithstanding such MyStay Asset Acquisition Closing Date, nor any investigation made by or on behalf of the Purchaser or any knowledge of the Purchaser, except that: the representations and warranties set out in Section 4.1(1) to and including 4.1(4) and Sections 4.1(7) and 4.1(13) to 4.1(14) shall survive the MyStay Asset Acquisition Closing Date and continue in full force and effect without limitation of time; and the representations and warranties relating to Tax matters shall survive the MyStay Asset Acquisition Closing Date and continue in full force and effect until, but not beyond, the expiration of the period, if any, during which an assessment or other form of recognized document assessing liability for Tax, interest or penalties under Laws applicable to Tax in respect of any taxation year to which such representations and warranties extend could be issued under such Laws to the Vendor, including any additional period resulting from the Vendor filing a waiver or other document extending such period prior to the MyStay Asset Acquisition Closing Date;

 

 

 

ARTICLE 5

COVENANTS

 

5.1

Post-Closing Obligations.

 

Following the MyStay Asset Acquisition Closing Date, the Vendor and Principal agree that (i) it shall refrain from making any negative or derogatory statements concerning the Business (including the Business' products, services, customers, suppliers, employees and agents) or the Purchaser; (ii) it shall cooperate with the Purchaser in its efforts to continue and maintain for the benefit of the Purchaser those business relationships of the Vendor existing prior to the MyStay Asset Acquisition Closing Date and relating to the Business, including relationships with customers and suppliers, (iii) it shall satisfy the Excluded Liabilities in a manner that is not detrimental to the Business and the Purchaser, (iv) it shall promptly deliver to the Purchaser all payments that it receives to the extent that the payments pertain to the Business after the MyStay Asset Acquisition Closing Date, and (v) it shall and shall cause its affiliates and representatives to, keep confidential and not, directly or indirectly, divulge to anyone or use or otherwise appropriate for its own benefit, any confidential information or confidential documents of or relating to the Business, including this Agreement and the Purchased Assets.

 

ARTICLE 6

MYSTAY ASSET ACQUISITION CLOSING DATE DELIVERIES

 

6.1

Deliveries of the Vendor and the Principals.

 

(1) On the MyStay Asset Acquisition Closing Date, there shall have been delivered to the Purchaser the following:

 

(a)

the Purchased Assets in the condition described in Schedule 1.1;

 

(b)

a non-competition agreement to be entered between the Purchaser and the Vendor and the Principal, a copy of which is attached as Schedule 6.1 (b)

 

(c)

an employment agreement between the Purchaser and Principal, a copy of which is attached as Schedule 2.3;

 

 

 

 

 

(d)

all necessary consents, approvals, exemptions, filings, notifications and Consents with, to or from Governmental Authorities and third parties, including those listed in Schedule 4.1(4), required to permit the change of ownership of the Purchased Assets contemplated hereby without resulting in the violation of or a default under or any termination, amendment or acceleration of any obligation under any license, Permit, lease, or Contract affecting the Business, the Purchased Assets, the Vendor or the Principals or otherwise adversely affecting the Business, the Purchased Assets, the Vendor or the Principals;

 

(e)

all documentation and other evidence reasonably requested by the Purchaser in order to establish the due authorization and consummation of the Transactions, including the taking of all corporate proceedings by the Vendor required to effectively carry out the obligations of the Vendor pursuant to this Agreement; and

 

(f)

all necessary deeds, conveyances, bills of sale, discharges, assurances, transfers, assignments and any other documentation necessary or reasonably required to transfer the Purchased Assets to the Purchaser with a good and marketable title, free and clear of all Encumbrances whatsoever.

 

(2) The Vendor shall, within 10 days from the MyStay Asset Acquisition Closing Date, change its name and the name of any of its associates or affiliates that include the word "MyStay" to a name that does not include that word. From and after the MyStay Asset Acquisition Closing Date, neither the Vendor nor any of its associates or affiliates shall use the word "MyStay".

 

ARTICLE 7

INDEMNIFICATION

 

7.1

Indemnification by the Vendor and Principal.

 

Subject to Section 4.2, the Vendor and Principal shall jointly and severally indemnify and save the Purchaser and its affiliates harmless for and from any loss, damages or deficiencies suffered by the Purchaser as a result of:

 

(1) any breach of representation, warranty or covenant on the part of the Vendor and Principal contained in this Agreement or in any agreement, certificate or document delivered pursuant to or contemplated by this Agreement;

 

(2) any breach or non-performance by the Vendor or Principal of any covenant to be performed by it that is contained in this Agreement or in any agreement, certificate or document delivered pursuant to or contemplated by this Agreement;

 

(3) any Claim relating to the Excluded Assets or the Excluded Liabilities; and

 

(4) all Claims in respect of the foregoing.

 

 

 

 

 

7.2

Indemnification by the Purchaser.

 

Purchaser agrees to indemnify Vendor, Principal and their affiliates, successors and assigns (collectively the "Vendor Parties") and hold the Vendor Parties harmless against any Loss that any of the Vendor Parties may suffer, sustain or become subject to, as the result of (i) any breach of any covenant or agreement of Buyer herein; (ii) the inaccuracy or breach of any representation or warranty made by Buyer in this Agreement; (iii) any claims of any brokers or finders claiming by, through or under Buyer, (iv) the assertion against any of the Seller Parties of any liability or claim relating to any Assumed Liability, or (v) the operation of the Business on and after the MyStay Asset Acquisition Closing Date.

 

7.3

Rights of Set-Off.

 

The Purchaser may apply or keep any portion of the balance of the Purchase Price in respect thereof to satisfy any amounts payable or potentially payable to it by the Vendor or the Principals, including pursuant to this Article 7.

 

ARTICLE 8

GENERAL

 

8.1

Assignment.

 

The Vendor and Principal may not assign any of their rights or obligations under this Agreement.

 

8.2

Public Announcements.

 

Neither Purchaser nor Vendor will, without the approval of the other (which may not be unreasonably withheld), make any press release or other public announcement concerning these transactions, except as and to the extent that such party will be so obligated by law, in which case the other party will be advised and Purchaser and Seller will use their best efforts to cause a mutually agreeable release or announcement to be issued.

 

8.3

Expenses.

 

Unless otherwise provided, each of the Parties shall be responsible for the expenses (including fees and expenses of legal advisers, accountants and other professional advisers) incurred by them, respectively, in connection with the negotiation and settlement of this Agreement and the completion of the Transactions.

 

8.4

Further Assurances.

 

Each of the Parties shall promptly do, make, execute, deliver, or cause to be done, made, executed or delivered, all such further acts, documents and things as the other Parties may reasonably require from time to time after the MyStay Asset Acquisition Closing Date at the expense of the requesting Party for the purpose of giving effect to this Agreement and shall use reasonable efforts and take all such steps as may be reasonably within its power to implement to their full extent the provisions of this Agreement.

 

 

 

 

8.5

Entire Agreement.

 

This Agreement, including all schedules, constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior agreements, understandings, negotiations and discussions, whether written or oral, including the letter of intent between the Parties.

 

8.6

Waiver, Amendment.

 

Except as expressly provided in this Agreement, no amendment of this Agreement shall be binding unless executed in writing by both Parties, and no waiver under this Agreement shall be binding unless executed in writing by the Party to be bound. No waiver of any provision of this Agreement shall constitute a waiver of any other provision, nor shall any waiver of any provision of this Agreement constitute a continuing waiver unless otherwise expressly provided.

 

8.7

Rights Cumulative.

 

The rights and remedies of the Parties are cumulative and not alternative.

 

8.8

Counterparts.

 

This Agreement may be executed in any number of counterparts, and/or by facsimile or e mail transmission of Adobe Acrobat files, each of which shall constitute an original and all of which, taken together, shall constitute one and the same instrument. Any Party executing this Agreement by fax or PDF file shall, immediately following a request by any other Party, provide an originally executed counterpart of this Agreement provided, however, that any failure to so provide shall not constitute a breach of this Agreement.

 

8.9

Notices.

 

All notices or other communications required or permitted hereunder will be in writing and will be deemed given when delivered personally, by registered or certified mail, by legible facsimile transmission, electronic mail or by prepaid overnight courier addressed as follows:

 

If to Purchaser, to:

 

Select-TV Solutions, Inc.

1395 Brickell Avenue, Suite 800

Miami, FL 33131

Attention: Philippe Germain, Chairman of the Board

Email: pgermain@selectvsolutions.com

 

 

 

 

 

If to Vendor or Principal, to:

 

MyStay, Inc,

9484 South Eastern Avenue

Suite 105-330

Las Vegas, NV 89123

Attention: Brooks Pickering, CEO

Email: brooks_pickering@yahoo.com

 

 

Notice will be deemed received the same day (when delivered personally, via electronic mail or by facsimile transmission), 5 days after mailing (when sent by registered or certified mail) and the next business day (when delivered by overnight). Any party to this Agreement may change its address to which all communications and notices may be sent by addressing notices of such change in the manner provided.

 

 

 

 

 

[signature page follows)

 

 

 

IN WITNESS WHEREOF this Asset Purchase Agreement has been executed by the Parties.

 

 

 

 

SELECT-TV USA HOLDINGS, INC.

 

 

Per: /s/ Philippe Germain

        Name: Philippe Germain

        Title: CEO

 

 

MYSTAY INC.

 

 

Per: /s/ Brooks Pickering

        Name: Brooks Pickering

        Title: Chairman and CEO

 

 

/s/ Brooks Pickering

BROOKS PICKERING

 

 

 

 

 

Schedule 1.1(b)

 

Assumed Contracts

 

·

All customer contracts

 

·

All letters of intent between the Vendor and prospective acquisitions.

 

 

 

 

 

 

 

 

 

 

 

 

Schedule 1.1(k)

 

Excluded Liabilities

 

(a)

any Taxes payable or incurred relating to any period prior to the MyStay Asset Acquisition Closing Date or Taxes payable by the Vendor relating to the Transactions;

 

(b)

any Claims in connection directly or indirectly with any past, present or future employees of the Vendor (including all employee-related accruals, liabilities amounts payable or obligations, including in connection with any employee plan, incentive plans, salaries, bonuses, commissions, vacation accruals, banked overtime and statutory or benefits deductions, as well as any severance or termination costs and other amounts owed to employees, including with respect to loans or advances made by employees);

 

(c)

any loss, damages or deficiencies suffered by the Purchaser as a result of any Claim relating to its waiver of any applicable bulk sales legislation;

 

(d)

any account payable of the Vendor;

 

(e)

any existing Claim against the Vendor;

 

(f)

any liability or obligation under or relating to the Excluded Contracts or the Excluded Assets;

 

(g)

any liability or obligations under the Assumed Contracts for periods up to the Effective Time; and

 

(h)

any Claim relating to the operations of the Business up to the Effective Time and any cause of action that arose prior to the Effective Time (including any recall of products).

 

 

 

 

 

 

 

 

 

 

Schedule 1.1(v)

 

Purchased Assets

 

Purchased Assets

Agreements - all rights, title and interest under the Assumed Contracts;

Equipment - all machinery, equipment, fixtures, furniture, furnishings, parts and other fixed assets used in connection with the operation of the Business;

Inventory - all inventories and supplies of every kind or nature related to the Business, including all finished goods, packaging and labeling materials, new and unused production and shipping supplies, work in process;

Computer Hardware and Software - all computer hardware and software, including all rights under licences and other agreements or instruments relating thereto;

Accounts Receivable - all accounts receivable, trade accounts, notes receivable, book debts and other debts due or accruing due to the Vendor related to the Business and the benefit of all security for such accounts, notes and debts;

Records - all Records (other than those required by law to be retained by the Vendor, copies of which have been provided to the Purchaser);

Goodwill- all goodwill, together with the exclusive right for the Purchaser to represent itself as carrying on the Business in succession to the Vendor and the right to use any words indicating that the Business is so carried on; and

Intellectual Property - all of the Vendor's Intellectual Property, except for the Intellectual Property related to the Excluded Assets.

 

 

 

Schedule 1.1(v)(iv)

 

Acquisition Matrix

 

 

See attached.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Schedule 2.3

 

Employees - Employment Agreement

See attached.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Schedule 6.1(b)

 

Non-Competition Agreement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 10.2

 

ASSET PURCHASE AGREEMENT

 

 

between

 

 

JIFM HOLDINGS, LLC

 

 

and

 

 

SELECT-TV USA HOLDINGS, INC.

 

 

dated as of

 

February 19, 2015

 

 

 

ASSET PURCHASE AGREEMENT

 

This Asset Purchase Agreement (this "Agreement"), dated as of February 19, 2015 (the ''Effective Date"), is entered into between JIFM HOLDINGS, LLC, a New York limited liability company ("Seller") and Select-TV USA Holdings, Inc., a Nevada corporation ("Buyer").

 

RECITALS

 

WHEREAS, promptly following the Effective Date of this Agreement, Seller will purchase an interest bearing promissory note (the "Note") together with a first lien and security interest (the "Security Interest") securing the Note pursuant to Article 9 of the New York Uniform Commercial Code ("NYUCC") in the principal amount of TWO MILLION FIVE HUNDRED THOUSAND 500,000.00) US DOLLARS issued by [***] a New York corporation, as maker and borrower ([***] or "Borrower");

 

WHEREAS, the Security Interest secures the Note in the following assets of Borrower (each of the following capitalized terms having the same meaning, respectively, as it has in Article 9 of the NYUCC): (1) all Accounts, (2) all Chattel Paper (whether tangible or electronic), (3) all Deposit Accounts, (4) all Documents, (5) all General Intangibles (including Payment Intangibles and Software), (6) all Goods (including Inventory, Equipment, Fixtures and Accessions), (7) all Instruments (including promissory notes), (8) all Investment Property, (9) all Letter-of-Credit Rights, (10) all Letters of Credit, (11) all Money, (12) all Supporting Obligations, (13) all other assets of Borrower, and (14) all proceeds and products of the foregoing (such assets described in the foregoing clauses 1 through 14, inclusive, also being sometimes referred to herein, jointly and severally, as the Collateral"); and,

 

WHEREAS, no part of the principal of such Note has been paid, and the Note is in default; and,

 

WHEREAS, Borrower was engaged in the business of video on demand for the hospitality industry (the "Business"); and

 

WHEREAS, the Borrower has indicated its desire to consent in an authenticated record to an acceptance by Seller, as secured party, of the Collateral in full satisfaction of the Note as permitted pursuant to NYUCC §9-620. "Acceptance of Collateral in Full or Partial Satisfaction of Obligation; Compulsory Disposition of Collateral"; and,

 

_______________

[***] Confidential treatment has been requested with respect to the omitted language. The omitted language has been separately filed with the Securities and Exchange Commission.

 

 

 

WHEREAS, the Seller, in any event, as secured party pursuant to its purchase of the Note and the Security Interest, shall have the powers and rights of a secured party pursuant to Article 9 of the NYUCC to foreclose upon the Collateral and to the dispose of the Collateral in all manner permitted under the NYUCC; and,

 

WHEREAS, the Buyer desires to cause and enable Seller to acquire such Collateral, and to purchase the Collateral from Seller, in accordance with the terms and conditions set forth in this Agreement; and,

 

WHEREAS, the Buyer desires to cause and enable Seller, as the secured party pursuant to the purchase of the Note and the Security Interest, to act in such manner as to foreclose and acquire the assets comprising the Collateral; and,

 

WHEREAS, Seller wishes to sell and assign to Buyer, and Buyer wishes to purchase and assume from Seller substantially all of the Collateral, subject to the terms and conditions set forth herein;

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

ARTICLE I

PURCHASE AND SALE

 

Section 1.01 Purchase and Sale of Assets. Subject to the terms and conditions set forth herein, Seller shall sell, assign, transfer, convey and deliver to Buyer, and Buyer shall purchase from Seller, all of Seller's right, title and interest in the assets formerly comprising the Collateral as set forth on Section 1.01 of the disclosure schedules ("Disclosure Schedules") attached hereto as and to the extent available to Seller (collectively, the "Purchased Assets"), free and clear of any mortgage, pledge, lien, charge, security interest, claim or other encumbrance ("Encumbrance"), other than a Permitted Encumbrance (as set forth on Disclosure Schedules, section 1.01), and except as otherwise may be expressly provided herein including:

 

(a) all Accounts of [***]

(b) all Chattel Paper (whether tangible or electronic) [***]

(c) all Deposit Accounts of [***]

(d) all Documents of [***]

(e) all General Intangibles (including Payment Intangibles and Software) of [***]

(f) all Goods (including Inventory, Equipment, Fixtures and Accessions) of [***]

(g) all Instruments (including promissory notes) of [***]

 

 

_______________

[***] Confidential treatment has been requested with respect to the omitted language. The omitted language has been separately filed with the Securities and Exchange Commission.

 

(h) all Investment Property of [***]

(i) all Letter-of-Credit Rights of [***]

(j) all Letters of Credit of [***]

(k) all Money of [***]

(l) all Supporting Obligations of [***]

(m) all other assets of [***]

(n) all proceeds and products of the foregoing.

 

Section 1.02 Excluded Assets. Notwithstanding the foregoing, the Purchased Assets shall not include the following assets and properties of Seller (the "Excluded Assets"):

 

(a) all cash and cash equivalents, bank accounts and securities of Seller;

 

(b) all contracts and contract rights of Seller that were not a part of the Collateral and those which were a part of the Collateral, if any, unless and except to the extent that Buyer expressly requests the same in a written request and Seller consents thereto as provided in Section 3.06 herein below;

 

(c) all Intellectual Property other than Intellectual Property (the "Intellectual Property Assets") that formerly formed a part of the Collateral;

 

(d) the corporate seals, organizational documents, minute books, stock books, Tax Returns, books of account or other records having to do with the corporate organization of Seller and/or [***] all employee-related or employee benefit related files or records, and any other books and records which Seller is prohibited from disclosing or transferring to Buyer under applicable Law and is required by applicable Law to retain;

 

(e) all insurance policies of Seller and/or [***] and all rights to applicable claims and proceeds thereunder;

 

(f) all employee Benefit Plans and trusts or other assets attributable thereto;

 

(g) all Tax assets (including duty and Tax refunds and prepayments) of Seller and/or [***] and/or any of either's Affiliates;

 

(h) all rights to any action, suit or claim of any nature available to or being pursued by Seller and/or [***] whether arising by way of counterclaim or otherwise;

 

(i) all assets, properties and rights used by Seller and/or [***] their respective businesses other than the Business;

 

 

_______________

[***] Confidential treatment has been requested with respect to the omitted language. The omitted language has been separately filed with the Securities and Exchange Commission.

 

(j) the assets, properties and rights specifically set forth on Section 1.02(j) of the Disclosure Schedules;

 

(k) the rights which accrue or will accrue to Seller under the Transaction Documents (as defined below); and,

 

(l) any asset that was not a part of the Collateral.

 

Section 1.03 No Liabilities/Assumption of Liabilities. Other than the Assumed Liabilities (defined below), Buyer shall not assume any liabilities or obligations of Seller of any kind, whether known or unknown, contingent, matured or otherwise, whether currently existing or hereinafter created. Subject to the terms and conditions set forth herein, Buyer shall assume and agree to pay, perform and discharge the liabilities and obligations set forth on Section 1.03 of the Disclosure Schedules (collectively, the "Assumed Liabilities") including, without limitation, the following:

 

(a) all liabilities and obligations for (i) sales, use, transfer (including realty transfer), documentary stamp and other Taxes and all recording, filing and other fees and costs with respect to the transactions contemplated hereby, including without limitation Taxes relating to the Business, the Purchased Assets or the Assumed Liabilities for any taxable period ending after the Closing Date and (ii) Taxes for which Buyer is liable pursuant to Section 5.03;

 

(b) all other liabilities and obligations arising out of or relating to Buyer's ownership or operation of the Business and the Purchased Assets on or after the Closing; and,

 

Section 1.04 Purchase Price. The aggregate purchase price for the Purchased Assets shall be five hundred fifty thousand ($550,000.00) US dollars (the "Purchase Price"), plus (i) the assumption of the Assumed Liabilities. The Purchase Price shall be paid as follows: (a) an initial tranche ("Initial Tranche") is paid upon the execution of this Agreement by the parties, in that the execution hereof shall be deemed the issuance of written authority to M. Scott Vayer, Esq. to pay and release to Seller the two hundred ninety-nine thousand nine hundred ninety ($299,990.00) U.S. dollars (the Initial Tranche) heretofore sent by Buyer via wire transfer to the lOLA Trust Account (Chase #000000271205692) of M Scott Vayer, Esq., counsel to Seller; and, (b) an additional sum (the "Second Tranche") in the amount of fifty thousand ($50,000) US dollars shall be paid by wire transfer of immediately available funds to the IOLTA Trust Account (Chase #000000271205692) of M Scott Vayer, Esq., counsel to Seller (or to such other lOLA Trust account as may be designated in writing by Seller) within two (2) Business Days from the execution of this Agreement by the parties, which Second Tranche is hereby authorized for release to Seller immediately upon Closing, and (c) by the delivery to Seller of Buyer's duly executed and acknowledged (before a notary public) two (2%) percent interest bearing secured promissory note (with twelve (12%) percent "Default Interest" accruing upon any default) (in the form annexed hereto as Exhibit K) in the amount of two hundred thousand ($200,000) US dollars payable to the order of Seller and due in full on May 15, 2015 (the "Remaining Purchase Price Note" or "RPP Note"), the original signed copy of which RPP Note shall be delivered by overnight courier to M Scott Vayer, Esq., counsel to Seller, within two (2) Business Days from the execution of this Agreement by the parties, to be held by such counsel in escrow until he receives from either party an original or facsimile/scan/photocopy of the signed Buyer Closing Certificate (as defined below), whereupon he shall deliver the RPP Note to Seller. In any event, at the Closing pursuant to Section 2.02, et seq., Buyer shall deliver to M Scott Vayer, Esq., as counsel to Seller, a true copy of the RPP Note in the from of a facsimile/scan/photocopy thereof, and such Seller's counsel is authorized and directed to release such copy of the RPP Note to Seller upon Seller's delivery of a Bill of Sale for the Purchased Assets to Buyer (or to [***] or another mutually acceptable person, who shall be deemed Buyer's agent (aa) for this purpose, (bb) for the acceptance of the Purchased Assets, and (cc) for the purpose of executing the Buyer Closing Certificate). Buyer's (or [***] acceptance of the Bill of Sale shall be deemed the issuance of written authority to M. Scott Vayer, Esq. to release to Seller the signed original copy of the RPP Note.

 

 

_______________

[***] Confidential treatment has been requested with respect to the omitted language. The omitted language has been separately filed with the Securities and Exchange Commission.

 

 

Section 1.05 Security Interest. As collateral security for the payment of the Purchase Price of the Purchased Assets (including without limitation the RPP Note) and performance in full of all the obligations of the Buyer under this Agreement, the Buyer hereby pledges and grants to the Seller, a lien on and security interest in and to all of the right, title and interest of the Buyer in, to and under the Purchased Assets, wherever located, and whether now existing or hereafter arising or acquired from time to time, and in all accessions thereto and replacements or modifications thereof, as well as all proceeds (including insurance proceeds) of the foregoing. The security interest granted under this provision constitutes a purchase money security interest under the Uniform Commercial Code. Buyer agrees that on or prior to Closing it shall duly execute and deliver to Seller, a security agreement in favor of Seller as provided herein in a customary form to be furnished by Seller and satisfactory to Seller in form and substance (the "Security Agreement").

 

Section 1.06 Allocation of Purchase Price. Within 30 days after the Closing Date, Seller shall deliver a schedule allocating the Purchase Price (including any Assumed Liabilities treated as consideration for the Purchased Assets for Tax purposes) (the "Allocation Schedule"). The Allocation Schedule shall be prepared in accordance with Section 1060 of the Code. The Allocation Schedule shall be deemed final unless Buyer notifies Seller in writing that Buyer objects to one or more items reflected in the Allocation Schedule within 10 days after delivery of the Allocation Schedule to Buyer. In the event of any such objection, Seller and Buyer shall negotiate in good faith to resolve such dispute; provided, however, that if Seller and Buyer are unable to resolve any dispute with respect to the Allocation Schedule within 30 days after the delivery of the Allocation Schedule to Buyer, such dispute shall be resolved by an impartial firm of independent certified public accountants mutually appointed by Buyer and Seller. The fees and expenses of such accounting firm shall be borne equally by Seller and Buyer. Buyer and Seller shall file all tax returns (including amended returns and claims for refund) and information reports in a manner consistent with such allocation.

 

 

 

 

Section 1.07 Non-assignable Assets.

 

(a) Notwithstanding anything to the contrary in this Agreement, and subject to the provisions of this Section 1.07, to the extent that the sale, assignment, transfer, conveyance or delivery, or attempted sale, assignment, transfer, conveyance or delivery, to Buyer of any Purchased Asset would result in a violation of applicable law, or would require the consent, authorization, approval or waiver of a Person who is not a party to this Agreement or an Affiliate of a party to this Agreement (including any Governmental Authority), and such consent, authorization, approval or waiver shall not have been obtained prior to the Closing, this Agreement shall not constitute a sale, assignment, transfer, conveyance or delivery, or an attempted sale, assignment, transfer, conveyance or delivery, thereof; provided, however, that, subject to the satisfaction or waiver of the conditions contained in Article VI, the Closing shall occur notwithstanding the foregoing without any adjustment to the Purchase Price on account thereof. Following the Closing, Seller and Buyer shall use commercially reasonable efforts, and shall cooperate with each other, to obtain any such required consent, authorization, approval or waiver, or any release, substitution or amendment required to transfer the same to Buyer; provided, however, that neither Seller nor Buyer shall be required to pay any consideration therefor. Once such consent, authorization, approval waiver, release, substitution or amendment is obtained, Seller shall sell, assign, transfer, convey and deliver to Buyer the relevant Purchased Asset to which such consent, authorization, approval waiver, release, substitution or amendment relates for no additional consideration. Applicable sales, transfer and other similar Taxes in connection with such sale, assignment, transfer, conveyance or license shall be paid by Buyer in accordance with Section 5.03.

 

(b) To the extent that any Purchased Asset and/or Assumed Liability cannot be transferred to Buyer following the Closing pursuant to this Section 1.07, on the condition that Seller shall not be required to pay any cost or consideration therefor, Buyer and Seller shall use commercially reasonable efforts to enter into such arrangements (such as subleasing, sublicensing or subcontracting) to provide to the parties the economic and, to the extent permitted under applicable Law, operational equivalent of the transfer of such Purchased Asset and/or Assumed Liability to Buyer as of the Closing and the performance by Buyer of its obligations with respect thereto. Buyer shall, as agent or subcontractor for Seller pay, perform and discharge fully the liabilities and obligations of Seller thereunder from and after the Closing Date. To the extent permitted under applicable Law, Seller shall, at Buyer's expense, hold in trust for and pay to Buyer promptly upon receipt thereof, such Purchased Asset and all income, proceeds and other monies received by Seller to the extent related to such Purchased Asset in connection with the arrangements under this Section 1.07. Seller shall be permitted to set off against such amounts all direct costs associated with the retention and maintenance of such Purchased Assets.

 

 

 

ARTICLE II

CLOSING

 

Section 2.01 Closing. To the extent that a physical closing is necessary and subject to the terms and conditions of this Agreement, the consummation of the transactions contemplated by this Agreement (the "Closing") shall take place at the offices of M. Scott Vayer, Esq., 45 Rockefeller Plaza, 201 Floor, Rockefeller Center, New York, NY 10111-3193 on February 23, 2015, at 12:00PM, or if all of the Buyer's conditions to closing after all of the conditions to Closing set forth in Section 6.01 and 6.02 cannot be fulfilled by February 23, 2015, then, by written notice to Buyer, Seller may reschedule the Closing to a date within two (2) Business Days after all of the conditions to Closing set forth in Section 6.01and 6.02 are either satisfied or waived (other than conditions which, by their nature, are to be satisfied on the Closing Date, defined below), or to such other time, date or place as Seller and Buyer may mutually agree upon in writing (subject to availability of any counsel holding the second tranche of the Purchase Price in an IOLTA Trust Account). In the event Seller unilaterally reschedules the Closing to a date later than February 28, 2015, Seller undertakes to provide Buyer with a lease for use and possession of the Purchased Assets until the Closing Date at a weekly rent often ($10.00) US dollars. The date on which the Closing is to occur is herein referred to as the "Closing Date".

 

Section 2.02 Closing Deliverables.

 

(a) At the Closing, Seller shall deliver to Buyer the following ("Seller's Deliverables"):

 

(i) a bill of sale in the form of Exhibit A hereto (the "Bill of Sale") and duly executed by Seller, transferring the tangible personal property included in the Purchased Assets to Buyer;

 

(ii) an assignment and assumption agreement in the form of Exhibit B hereto (the "Assignment and Assumption Agreement'') and duly executed by Seller, effecting the assignment to and assumption by Buyer of the Purchased Assets and the Assumed Liabilities;

 

(iii) assignment(s) (the "Intellectual Property Assignments") duly executed by Seller, transferring all of Seller's right, title and interest, in and to, if any, the trademark registrations and applications, patents and patent applications, copyright registrations and applications and domain name registrations included in the Purchased Assets/Purchased IP (as defined herein) to Buyer;

 

 

 

 

 

 

(iv) with respect to each parcel of Owned Real Property, if any, a special warranty deed in the form of Exhibit C hereto (each, a "Deed") and duly executed and notarized by Seller;

 

(v) with respect to each Lease, if any, an Assignment and Assumption of Lease substantially in the form of Exhibit D (each, an "Assignment and Assumption of Lease"), duly executed by Seller and, if necessary, Seller's signature shall be witnessed and/or notarized;

 

(vi) the Seller Closing Certificate (hereinafter defined at Section 6.02(d));

 

(vii) the FIRPTA Certificate (pursuant to Treasury Regulations Section 1.1445-2(b) that Seller is not a foreign person within the meaning of Section 1445 of the Internal Revenue Code duly executed by Seller);

 

(viii) the certificates of the Secretary or Assistant Secretary (or Managing Member or Manager, if an LLC) of Seller required by Section 6.02(e) and Section 6.02(f);

 

(ix) such other customary instruments of transfer, assumption, filings or documents, in form and substance reasonably satisfactory to Buyer, as may be required to give effect to this Agreement.

 

(b) At the Closing, Buyer shall have already delivered (if and as required herein) or shall then deliver to Seller the following ("Buyer's Deliverables"):

 

(i) The Initial Tranche of the Purchase Price;

 

(ii) The Second Tranche of the Purchase Price;

 

(iii) The duly executed Remaining Purchase Price Note;

 

(iv) the Assignment and Assumption Agreement duly executed by Buyer;

 

(v) with respect to each Lease, if any, an Assignment and Assumption of Lease duly executed by Buyer and, if necessary, Buyer's signature shall be witnessed and/or notarized;

 

(vi) the Buyer Closing Certificate (hereinafter defined at Section 6.03(d));

 

(vii) the certificates of the Secretary or Assistant Secretary (or Managing member or Manager if an LLC) of Buyer required by Section 6.03(e) and Section 6.03(f).

 

Section 2.03 Failure of Buyer or Seller to Close. In the event that after all of the Buyer's conditions to Closing set forth in Section 6.01 and 6.02 are either satisfied or waived Buyer, the Buyer shall fail to deliver the Buyer's Deliverables to Seller at Closing, Buyer shall be in material breach of this Agreement. In the event that after all of the Seller's conditions to Closing set forth in Section 6.01 and 6.03 are either satisfied or waived by Seller, the Seller shall fail to deliver the Seller's Deliverables to Buyer at Closing, Seller shall be in material breach of this Agreement.

 

 

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES OF SELLER.

 

Seller represents and warrants to Buyer that the statements contained in this Article III, including and subject to the Disclosure Schedules annexed hereto, are true and correct as of the date hereof For purposes of this Article III, "Seller's knowledge," "knowledge of Seller", "best knowledge of Seller" and any similar phrases shall mean the actual knowledge of any director or officer of Seller.

 

Section 3.01 Organization and Authority of Seller; Enforceability. Seller is a limited liability company duly organized, validly existing and in good standing under the Laws of the state of New York and has all necessary power and authority to own, operate or lease the properties and assets now owned, operated or leased by it and to carry on its Business as currently conducted. Seller has full power and authority to enter into this Agreement and the documents to be delivered hereunder, to carry out its obligations hereunder and to consummate the transactions contemplated hereby. The execution, delivery and performance by Seller of this Agreement and the documents to be delivered hereunder and the consummation of the transactions contemplated hereby have been duly authorized by all requisite company action on the part of Seller. This Agreement and the documents to be delivered hereunder have been duly executed and delivered by Seller, and (assuming due authorization, execution and delivery by Buyer) this Agreement and the documents to be delivered hereunder constitute legal, valid and binding obligations of Seller, enforceable against Seller in accordance with their respective terms.

 

Section 3.02 No Conflicts; Consents. The execution, delivery and performance by Seller of this Agreement and the documents to be delivered hereunder, and the consummation of the transactions contemplated hereby, do not and will not: (a) violate or conflict with the certificate of organization, operating agreement or by-laws of Seller; (b) violate any judgment, order, decree, statute, law, ordinance, rule or regulation applicable to Seller or the Purchased Assets; or (c) result in the creation or imposition of any Encumbrance on the Purchased Assets. No consent, approval, waiver or authorization is required to be obtained by Seller from any person or entity (including any governmental authority) in connection with the execution, delivery and performance by Seller of this Agreement and the consummation of the transactions contemplated hereby.

 

Section 3.03 Title to Purchased Assets. Seller owns and has good title to the Purchased Assets, free and clear of Encumbrances.

 

 

 

 

Section 3.04 Condition of Assets. The Purchased Assets are sold as-is. To the knowledge of Seller, unless otherwise disclosed to Buyer in writing prior to Closing, they are in working condition, subject to routine maintenance, updates or repairs.

 

Section 3.05 Intellectual Property.

 

(a) "Intellectual Property" means any and all of the following in any jurisdiction throughout the world: (i) trademarks and service marks, including all applications and registrations and the goodwill connected with the use of and symbolized by the foregoing; (ii) copyrights, including all applications and registrations related to the foregoing; (iii) trade secrets and confidential know-how; (iv) patents and patent applications; (v) websites and internet domain name registrations; and (vi) other intellectual property and related proprietary rights, interests and protections (including all rights to sue and recover and retain damages, costs and attorneys' fees for past, present and future infringement and any other rights relating to any of the foregoing).

 

(b) Section 3.05(b) of the Disclosure Schedules lists all Intellectual Property included in the Purchased Assets ("Purchased IP''). Seller owns or has adequate, valid and enforceable rights to use all the Purchased IP, free and clear of all Encumbrances. Seller expressly discloses that Purchased IP may include licenses ("IP Licenses") of intellectual property owned by others ("Third Party IP"), and the parties agree such IP Licenses form a part of the Purchased IP only to the extent of Seller's subsisting licenses and that the underlying Third Party IP is and remains the exclusive property of its owner(s); while Seller will seek to assign and transfer to Buyer all such IP Licenses that it owns in Third Party IP, Seller neither represents nor warrants that it is delivering, nor will deliver any Third Party IP, nor shall Seller have any obligation to deliver ownership to Buyer of such underlying Third Party IP or IP License(s). Such Third Party IP may be embedded in software, firmware and/or software code which is not readily accessible to Seller, however, to the extent Seller becomes aware prior to Closing of such IP Licenses and/or Third Party IP, Seller will disclose the same to Buyer and Buyer shall be responsible for directly obtaining its own versions of such IP Licenses upon such terms and conditions as it may directly negotiate with the licensor of such Third Party IP and Buyer shall have no obligation or liability to Seller to assume any such IP Licenses. To the extent that Seller discovers the existence of Purchased IP, IP Licenses and/or Third Party IP forming a part of, required by, or used in connection with Purchases Assets, it shall be permitted to freely add such assets to the appropriate Disclosure Schedules, including without limitation Disclosure Schedules 3.05(b) and 3.06, and the omission and/or inclusion of such intellectual property and/or licenses therein shall not constitute a breach of any Seller's warranty, representation or covenant hereunder, nor shall non-delivery of any license or assignment of a license to Buyer be deemed a failure of Seller to make delivery of any Seller's Deliverable(s) required hereunder.

 

 

 

 

 

 

(c) Notwithstanding the foregoing, Seller will cooperate with Buyer, upon Buyer's request and at Buyer's sole cost, in efforts to procure IP Licenses for Buyer to the extent such licenses were previously held by Seller and/or [***] upon terms and conditions not less favorable to Buyer than are available to Seller. To Seller's knowledge, Seller is not bound by any outstanding judgment, injunction, order or decree restricting the use of the Purchased IP, or restricting the licensing thereof to any person or entity. With respect to the registered Intellectual Property listed on Section 3.06(b) of the Disclosure Schedules, to the knowledge of Seller (i) all such Intellectual Property is valid, subsisting and in full force and effect and (ii) all maintenance fees have been paid and all filings required to maintain Seller's ownership thereof have been made. For all such registered Intellectual Property, Section 3.06(b) of the Disclosure Schedules, Seller shall endeavor to list (A) the jurisdiction where the application or registration is located, (B) the application or registration number, and (C) the application or registration date.

 

(d) To the knowledge of Seller, Seller's prior and current use of the Purchased IP has not and does not infringe, violate, dilute or misappropriate the Intellectual Property of any person or entity and there are no claims pending or threatened by any person or entity with respect to the ownership, validity, enforceability, effectiveness or use of the Purchased IP. To the knowledge of Seller, no person or entity is infringing, misappropriating, diluting or otherwise violating any of the Purchased IP, and neither Seller nor any affiliate of Seller has made or asserted any claim, demand or notice against any person or entity alleging any such infringement, misappropriation, dilution or other violation.

 

Section 3.06 Assigned Contracts. To the best knowledge of Seller, Seller will receive no valid and subsisting contracts as part of the Purchased Assets, as further described in Section 3.06 of the Disclosure Schedules. If any contract(s) and/or contract right(s) are, in fact, included in the Collateral acquired by Seller pursuant to the NYUCC 9-620 foreclosure it intends to conduct, then such contracts and contract rights shall NOT be included in the Purchased Assets and shall not be assigned to and assumed by Buyer (the "Assigned Contracts") unless the Buyer expressly requests the same in a written request within 15 days after the Closing and Seller consents thereto, whereupon any such contract(s) and contract rights(s) shall be assigned to and assumed by Buyer. Buyer recognizes and acknowledges that [***] was substantially inactive in performing and managing its Business for more than the past one year and that certain events may have occurred or failed to occur which may negatively have affected or may affect the Assigned Contracts and/or rights of Seller (as successor to [***] therein; however, Buyer understands and will accept any such Assigned Contracts that it requests on an "as-is" basis, in their respective then existing condition(s) as of the Closing Date. In light of the fact that the Purchased Assets conveyed hereunder were formerly a part of the Collateral and that Seller has acquired such Collateral as forms a part of the Purchased Assets pursuant to Seller's rights to accept the same as a secured party under the NYUCC, including without limitation NYUCC 9-620, no discrepancy in the validity or enforceability of the Assigned Contracts from the state of facts represented by Seller herein or hereafter shall constitute or comprise, in whole or in part, a breach of any Seller 's warranty, representation or covenant hereunder, nor shall non-delivery to Buyer of any assignment of such an Assigned Contract be deemed a failure of Seller to make delivery of any Seller's Deliverable(s) required hereunder. To the knowledge of Seller, Section 3.06 of the Disclosure Schedules sets forth Seller's information about the possible type and kind of contract(s) and/or contract right(s), if any, that Seller may acquire pursuant to the said foreclosure .

 

 

_______________

[***] Confidential treatment has been requested with respect to the omitted language. The omitted language has been separately filed with the Securities and Exchange Commission.

 

Section 3.07 Permits. Section 3.07 of the Disclosure Schedules lists all permits, licenses, franchises, approvals, authorizations, registrations, certificates, variances and similar rights obtained from governmental authorities included in the Purchased Assets (the "Transferred Permits"). To the knowledge of Seller, except as disclosed in Section 3.07 of the Disclosure Schedules: (i) the Transferred Permits are valid and in full force and effect; (ii) all fees and charges with respect to such Transferred Permits as of the date hereof have been paid in full; (iii) no event has occurred that, with or without notice or lapse of time or both, would reasonably be expected to result in the revocation, suspension, lapse or limitation of any Transferred Permit.

 

Section 3.08 Non-foreign Status. Seller is not a "foreign person" as that term is used in Treasury Regulations Section 1.1445-2.

 

Section 3.09 Compliance With Laws. To the knowledge of Seller, Seller has complied, and is now complying, with all applicable federal, state and local laws and regulations applicable to ownership and use of the Purchased Assets.

 

Section 3.10 Legal Proceedings. To the knowledge of Seller, there is no claim, action, suit, proceeding or governmental investigation ("Action") of any nature pending or, to Seller's knowledge, threatened against or by Seller (a) relating to or affecting the Purchased Assets; or (b) that challenges or seeks to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement. No event has occurred nor circumstances exist, to the knowledge of Seller, that may give rise to, or serve as a basis for, any such Action.

 

Section 3.11 Brokers. No broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Seller.

 

Section 3.12 Full Disclosure. To the knowledge of Seller, no representation or warranty by Seller in this Agreement and no statement contained in the Disclosure Schedules to this Agreement or any certificate or other document furnished or to be furnished to Buyer pursuant to this Agreement contains any untrue statement of a material fact, or, to the knowledge of Seller, omits to state a material fact necessary to make the statements contained therein, in light of the circumstances in which they are made, not misleading.

 

 

 

 

Section 3.13 No Other Representations and Warranties. Except for the representations and warranties contained in this Article III (including the related portions of the Disclosure Schedules), neither Seller nor any other Person has made or makes any other express or implied representation or warranty, either written or oral, on behalf of Seller, including any representation or warranty as to the accuracy or completeness of any information regarding the Business and the Purchased Assets furnished or made available to Buyer and its Representatives (including any information, documents or material, management presentations or in any other form in expectation of the transactions contemplated hereby) or as to the future revenue, profitability or success of the Business, use or condition of the Purchased Assets, or any representation or warranty arising from statute or otherwise in law.

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF BUYER

 

Buyer represents and warrants to Seller that the statements contained in this Article IV are true and correct as of the date hereof For purposes of this Article IV, "Buyer's knowledge," "knowledge of Buyer," "best knowledge of Buyer" and any similar phrases shall mean the actual of any director or officer of Buyer, after due inquiry.

 

Section 4.01 Organization and Authority of Buyer; Enforceability. Buyer is a corporation duly organized. validly existing and in good standing under the laws of the state of Nevada. Buyer has full corporate power and authority to enter into this Agreement and the documents to be delivered hereunder, to carry out its obligations hereunder and to consummate the transactions contemplated hereby. The execution, delivery and performance by Buyer of this Agreement and the documents to be delivered hereunder and the consummation of the transactions contemplated hereby have been duly authorized by all requisite corporate action on the part of Buyer. This Agreement and the documents to be delivered hereunder have been duly executed and delivered by Buyer, and (assuming due authorization, execution and delivery by Seller) this Agreement and the documents to be delivered hereunder constitute legal, valid and binding obligations of Buyer enforceable against Buyer in accordance with their respective terms.

 

Section 4.02 No Conflicts; Consents. The execution, delivery and performance by Buyer of this Agreement and the documents to be delivered hereunder, and the consummation of the transactions contemplated hereby, do not and will not: (a) violate or conflict with the certificate of incorporation, by-laws or other organizational documents of Buyer; or (b) violate or conflict with any judgment, order, decree, statute, law,

ordinance, rule or regulation applicable to Buyer. No consent, approval, waiver or authorization is required to be obtained by Buyer from any person or entity (including any governmental authority) in connection with the execution, delivery and performance by Buyer of this Agreement and the consummation of the transactions contemplated hereby.

 

 

 

 

_______________

[***] Confidential treatment has been requested with respect to the omitted language. The omitted language has been separately filed with the Securities and Exchange Commission.

 

Section 4.03 Legal Proceedings. There is no Action of any nature pending or, to Buyer's knowledge, threatened against or by Buyer that challenges or seeks to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement. No event has occurred or circumstances exist that may give rise to, or serve as a basis for, any such Action.

 

Section 4.04 Brokers. No broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Buyer.

 

Section 4.05 Sufficiency of Funds. Buyer has sufficient cash on hand or other sources of immediately available funds to enable it to make payment of the Purchase Price and consummate the transactions contemplated by this Agreement.

 

Section 4.06 Independent Investigation. Buyer has conducted its own independent investigation, review and analysis of the Business and the Purchased Assets, (including its own review, and/or review by advisers and consultants reporting to it, of the Collateral during times preceding the Seller's acquisition of the same as a secured creditor pursuant to the NYUCC, and including when such Collateral was in the hands of [***] and acknowledges that it has been provided adequate access to the personnel, properties, assets, premises, books and records, and other documents and data of Seller for such purpose. Buyer acknowledges and agrees that: (a) in making its decision to enter into this Agreement and to consummate the transactions contemplated hereby, Buyer has relied solely upon its own investigation and the express representations and warranties of Seller set forth in Article Ill of this Agreement (including related portions of the Disclosure Schedules); and (b) neither Seller nor any other Person has made any representation or warranty as to Seller, the Business, the Purchased Assets or this Agreement, except as expressly set forth in Article m of this Agreement (including the related portions of the Disclosure Schedules).

 

ARTICLE V

COVENANTS

 

Section 5.01 Public Announcements. Unless otherwise required by applicable law, neither party shall make any public announcements regarding this Agreement or the transactions contemplated hereby without the prior written consent of the other party (which consent shall not be unreasonably withheld or delayed).

 

 

 

_______________

[***] Confidential treatment has been requested with respect to the omitted language. The omitted language has been separately filed with the Securities and Exchange Commission.

 

Section 5.02 Bulk Sales Laws. The parties hereby waive compliance with the provisions of any bulk sales, bulk transfer or similar laws of any jurisdiction that may otherwise be applicable with respect to the sale of any or all of the Purchased Assets to Buyer.

 

Section 5.03 Transfer Taxes. All transfer, documentary, sales, use, stamp, registration, value added and other such taxes and fees (including any penalties and interest) incurred in connection with this Agreement and the documents to be delivered hereunder shall be borne and paid by Buyer when due. Buyer shall, at its own expense, timely file any tax return or other document with respect to such taxes or fees (and Seller shall cooperate with respect thereto as necessary).

 

Section 5.04 Further Assurances. Following the Closing, each of the parties hereto shall execute and deliver such additional documents, instruments, conveyances and assurances and take such further actions as may be reasonably required to carry out the provisions hereof and give effect to the transactions contemplated by this Agreement and the documents to be delivered hereunder.

 

ARTICLE VI

CONDITIONS TO CLOSING

 

Section 6.01 Conditions to Obligations of All Parties. The obligations of each party to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment, at or prior to the Closing, the condition that no Governmental Authority shall have enacted, issued, promulgated, enforced or entered any Governmental Order which is in effect and has the effect of making the transactions contemplated by this Agreement illegal, otherwise restraining or prohibiting consummation of such transactions or causing any of the transactions contemplated hereunder to be rescinded following completion thereof.

 

"Transaction Documents" means this Agreement, and the other agreements, instruments and documents required to be delivered at the Closing, including without limitation, Buyer's Deliverables and Seller's Deliverables.

 

Section 6.02 Conditions to Obligations of Buyer. The obligations of Buyer to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment or Buyer's waiver, at or prior to the Closing, of each of the following conditions:

 

(a) The representations and warranties of Seller contained in Article IV shall be true and correct in all material respects as of the Closing Date with the same effect as though made at and as of such date (except those representations and warranties that address matters only as of a specified date, which shall be true and correct in all respects as of that specified date), except where the failure of such representations and warranties to be true and correct would not have a Material Adverse Effect (defined below).

 

 

 

 

(b) Seller shall have duly performed and complied in all material respects with all agreements, covenants and conditions required by this Agreement and each of the other Transaction Documents required to be performed or complied with by it prior to or on the Closing Date.

 

(c) Seller shall have delivered to Buyer duly executed counterparts to the Transaction Documents and such other documents and deliveries set forth in Section 2.02(b).

 

(d) Buyer shall have received a certificate, dated the Closing Date and signed by a duly authorized officer of Seller, that each of the conditions set forth in Section 6.02(a) and Section 6.02(b) have been satisfied (the "Seller Closing Certificate").

 

(e) Buyer shall have received a certificate of the managing member or a manager of Seller certifying that in accordance with its Operating Agreement Seller has duly authorized the execution, delivery and performance of this Agreement and the other Transaction Documents and the consummation of the transactions contemplated hereby and thereby, and that all such resolutions are in full force and effect and are all the resolutions adopted in connection with the transactions contemplated hereby and thereby.

 

(f) Buyer shall have received a certificate pursuant to Treasury Regulations Section 1.1445-2(b) (the "FIRPTA Certificate") that Seller is not a foreign person within the meaning of Section 1445 of the Code duly executed by Seller.

 

Section 6.03 Conditions to Obligations of Seller. The obligations of Seller to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment or Seller's waiver, at or prior to the Closing, of each of the following conditions:

 

(a) The representations and warranties of Buyer contained in Article IV shall be true and correct in all material respects as of the Closing Date with the same effect as though made at and as of such date (except those representations and warranties that address matters only as of a specified date, which shall be true and correct in all respects as of that specified date), except where the failure of such representations and warranties to be true and correct would not have a material adverse effect on Buyer's ability to consummate the transactions contemplated hereby.

 

(b) Buyer shall have duly performed and complied in all material respects with all agreements, covenants and conditions required by this Agreement and each of the other Transaction Documents to be performed or complied with by it prior to or on the Closing Date.

 

 

 

 

(c) Buyer shall have delivered to Seller the Purchase Price, duly executed counterparts to the Transaction Documents and such other documents and deliveries set forth in Section 3.02(b).

 

(d) Seller shall have received a certificate, dated the Closing Date and signed by a duly authorized officer of Buyer, that each of the conditions set forth in Section 6.03(a) and Section 6.03(b) have been satisfied (the "Buyer Closing Certificate").

 

(e) Seller shall have received a certificate of the Secretary or an Assistant Secretary (or equivalent officer) of Buyer certifying that attached thereto are true and complete copies of all resolutions adopted by the board of directors of Buyer authorizing the execution, delivery and performance of this Agreement and the other Transaction Documents and the consummation of the transactions contemplated hereby and thereby, and that all such resolutions are in full force and effect and are all the resolutions adopted in connection with the transactions contemplated hereby and thereby.

 

(f) Seller shall have received a certificate of the Secretary or an Assistant Secretary (or equivalent officer) of Buyer certifying the names and signatures of the officers and agents of Buyer authorized to sign this Agreement, the Transaction Documents and the other documents to be delivered hereunder and thereunder.

 

ARTICLE VII

MISCELLANEOUS

 

Section 7.01 Expenses. All costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby, except to the extent otherwise expressly stated herein shall be paid by the party incurring such costs and expenses.

 

Section 7.02 Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next business day if sent after normal business hours of the recipient; or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the following addresses (or at such other

address for a party as shall be specified in a notice given in accordance with this Section 7.02):

 

 

 

 

 

 

 

 

If to Seller:	JIFM HOLDINGS, LLC
	315 Oser Avenue, Suite 2
	Hauppauge, NY 117788
	Facsimile:
	E-mail:
with a copy to:	Law Offices of M. Scott Vayer
	45 Rockefeller Plaza Ste 2000
	New York, NY 10111-3193
	Attention: M. Scott Vayer
	Facsimile: 212-332-3372
	E-mail: svayer@vayerlaw.com
If to Buyer:	SELECT-TV USA HOLDINGS, INC.
	2360 Corporate Circle Ste 400
	Henderson, NV 89074-7739
	Fascimile:
	E-mail:
	Attention: Brooks Pickering
with a copy to:	Sanders ortoli Vaughn-Flam Rosenstadt LLP
	501 Madison Avenue - 14th Floor
	New York, NY 10022
	Facsimile: 212-829-8937
	E-mail: wsr@sovrlaw.com
	Attention: William S. Rosenstadt

 

 

 

 

 

Headings and Definitions. The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement. Unless otherwise defined herein, capitalized terms shall have the respective meanings, as required by context, which are set forth, in order of priority, in the RPP Note, the Security Agreement and the other Transact ion Documents. The following defined terms shall have the meanings here set forth: "Material Adverse Effect" means any event, occurrence, fact, condition or change that is materially adverse to (a) the Purchased Assets, taken as a whole, or (b) the ability of Seller to consummate the transactions contemplated hereby; provided, however, that "Material Adverse Effect" shall not include any event, occurrence, fact, condition or change, directly or indirectly, arising out of or attributable to: (i) general economic or political conditions; (ii) conditions generally affecting the industries in which the Business operates; (iii) any changes in financial, banking or securities markets in general, including any disruption thereof and any decline in the price of any security or any market index or any change in prevailing interest rates; (iv) acts of war (whether or not declared), armed hostilities or terrorism, or the escalation or worsening thereof; (v) any action required or permitted by this Agreement or any action taken (or omitted to be taken) with the written consent of or at the written request of Buyer; (vi) any matter of which Buyer is aware on the date hereof; (vii) any changes in applicable Laws or accounting rules (including GAAP) or the enforcement, implementation or interpretation thereof; (viii) the announcement, pendency or completion of the transactions contemplated by this Agreement, including losses or threatened losses of employees, customers, suppliers, distributors or others having relationships with the Seller and/or the Business; or (ix) any natural or man-made disaster or acts of God.

 

Section 7.03 Severability. If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction.

 

Section 7.04 Entire Agreement. This Agreement and the documents to be delivered hereunder constitute the sole and entire agreement of the parties to this Agreement with respect to the subject matter contained herein, and supersede all prior and contemporaneous understandings and agreements, both written and oral with respect to such subject matter. In the event of any inconsistency between the statements in the body of this Agreement and the documents to be delivered hereunder, the Exhibits and Disclosure Schedules (other than an exception expressly set forth as such in the Disclosure Schedules), the statements in the body of this Agreement will control.

 

Section 7.05 Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. Neither party may assign its rights or obligations hereunder without the prior written consent of the other party, which consent shall not be unreasonably withheld or delayed. No assignment shall relieve the assigning party of any of its obligations hereunder.

 

Section 7.06 No Third-party Beneficiaries. This Agreement is for the sole benefit of the parties hereto and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other person or entity any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

 

 

 

 

 

Section 7.07 Amendment and Modification. This Agreement may only be amended, modified or supplemented by an agreement in writing signed by each party hereto.

 

Section 7.08 Waiver. No waiver by any party of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. No waiver by any party shall operate or be construed as a waiver in respect of any failure, breach or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any right, remedy, power or privilege arising from this Agreement shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

 

Section 7.09 Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York without giving effect to any choice or conflict oflaw provision or rule (whether of the State of New York or any other jurisdiction).

 

Section 7.10 Submission to Jurisdiction. Any legal suit, action or proceeding arising out of or based upon this Agreement or the transactions contemplated hereby may be instituted in the federal courts of the United States of America or the courts of the State of New York in each case located in the city of New York and county of New York, and each party irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action or proceeding.

 

Section 7.11 Waiver of Jury Trial. Each party acknowledges and agrees that any controversy which may arise under this Agreement is likely to involve complicated and difficult issues and, therefore, each such party irrevocably and unconditionally waives any right it may have to a trial by jury in respect of any legal action arising out of or relating to this Agreement or the transactions contemplated hereby.

 

Section 7.12 Specific Performance. The parties agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the parties shall be entitled to specific performance of the terms hereof, in addition to any other remedy to which they are entitled at law or in equity.

 

 

 

 

 

Section 7.13 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

 

 

 

 

 

[SIGNATURE PAGE FOLLOWS]

 

 

 

 

 

 

 

 

 

 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.

 

 

 

JIFM HOLDINGS, LLC

 

By: /s/ signature

Name: [***]

Title: Managing Member

 

 

SELECT-TV USA HOLDINGS, INC.

 

By: /s/ Philippe Germain

Name: Philippe Germain

Title: CEO

 

By:

Name:

Title:

 

 

 

 

 

_______________

[***] Confidential treatment has been requested with respect to the omitted language. The omitted language has been separately filed with the Securities and Exchange Commission.

 

Exhibit 10.13

 

SECURITY AGREEMENT

 

THIS SECURITY AGREEMENT dated as of March 2, 2015 ("Security Agreement") made by Select-TV USA Holdings, Inc., a Nevada corporation, located at 2360 Corporate Circle Ste 400, Henderson, NV 89074-7739 ("Borrower"), to and in favor of JIFM HOLDINGS, LLC, a New York limited liability company, located at 315 Oser Avenue, Suite 2, Hauppauge, NY 117788 (the "Lender") to secure the obligations of Borrower under that certain promissory note in the original principal amount of $200,000 dated as of the date hereof (as the same may be amended, supplemented, waived or otherwise modified from time to time (the "Note").

 

In consideration of the Lender providing credit under the Note to Borrower, Borrower hereby agrees as follows:

 

Section 1. Definitions. As used in this Security Agreement, the following terms have the following meanings (terms defined in the singular to have the same meaning when used in the plural and vice versa):

 

"Borrower" has the meaning specified in the preamble.

 

"Collateral" has the meaning specified in "Grant of Security Interest".

 

"Contracts" means each contract, agreement, instrument, and indenture sold, assigned or transferred to Borrower as part of the Purchased Assets (defined below) and/or arising as proceeds and/or products thereof, to which Borrower is a party or under which Borrower has any right, title and interest or to which Borrower or its property is subject.

 

"Lender" has the meaning specified in the preamble. "Loan Documents" has the meaning specified in the Note. "Note" has the meaning specified in the preamble.

 

"Purchased Assets" has the meaning specified in the Asset Purchase Agreement dated February 19, 2015 between Borrower (as "Buyer" therein) and Lender (as "Seller" therein), a summary thereof being annexed hereto (as Schedule I-SA) in the form of a copy of Schedule Ito the Bill of Sale issued by Seller to Buyer as provided by and subject to such Asset Purchase Agreement.

 

"Secured Obligations" means any and all present and future liabilities and obligations of Borrower to Lender under or pursuant to the Note or any of the other Loan Documents entered into with Lender in connection with the Note, including this Security Agreement, together with all reasonable, out-of-pocket fees and expenses incurred in collecting any or all of the items specified in this definition or enforcing any rights under any of the documents executed in connection with any such liabilities and obligations (including all reasonable fees and expenses of Lender's counsel and reasonable, out-of-pocket fees, costs or expenses which may be paid or incurred by Lender in collecting any such items or enforcing any such rights).

 

"Security Agreement" means this Security Agreement.

 

"UCC" means the Uniform Commercial Code of the State of New York, except to the extent that the validity or perfection of the security interest under this Security Agreement, or remedies under this Security Agreement, in respect of any particular Collateral are governed by the laws of a jurisdiction other than the State of New York, then "UCC" shall be deemed to refer to the Uniform Commercial Code of such other jurisdiction.

 

 

All terms defined in the UCC that are used in this Security Agreement have the meaning specified in the UCC. Unless otherwise specified in this Security Agreement, terms defined in the Note will have the same meaning specified in the Note when used in this Security Agreement.

 

Section 2. Rules of Interpretation. When used in this Security Agreement: (1) "or" is not exclusive, (2) a reference to a law includes any amendment or modification to such law, and a reference to an agreement, instrument or document includes any amendment or modification of such agreement, instrument or document.

 

Section 3. Grant of Security Interest. Borrower hereby grants to Lender a continuing security interest in and lien on all right, title and interest of Borrower in and to all assets and properties of Borrower in whole or in part comprised of the Purchased Assets, its proceeds and products, (for purposes of this Security Agreement, called the "Collateral"), including to the extent they/it include(s) and/or forms a part of such Purchased Assets, their proceeds and products (and if commingled with or inseparable from the following items, then extending to the entirety thereof), each of the following items in which Borrower has any right, title or interest, whether now owned or hereafter acquired, created or existing: (1) all Accounts, (2) all Chattel Paper (whether tangible or electronic), (3) all Deposit Accounts, (4) all Documents, (5) all General Intangibles (including Payment Intangibles and Software), (6) all Goods (including Inventory, Equipment, Fixtures and Accessions), (7) all Instruments (including promissory notes), (8) all Investment Property, (9) all Letter-of-Credit Rights, (10) all Letters of Credit, (11) all Money, (12) all Supporting Obligations, (13) all other assets of Borrower, and (14) all proceeds and products of the foregoing.

 

Section 4. Security for Secured Obligations. The Collateral secures the prompt and complete payment when due of all Secured Obligations.

 

Section 5. Filing of Financing Statement. Borrower hereby authorizes Lender, his counsel or his representative, at any time and from time to time, to file financing statements and amendments covering the Collateral in such jurisdictions as Lender may deem necessary or desirable to perfect the security interests granted by Borrower under this Security Agreement, provided that prior to the filing thereof, Lender shall obtain Borrower's approval of the form of such financing statements and amendments, which approval will not be unreasonably withheld or delayed.

 

Section 6. Actions to Perfect Security Interest. Borrower agrees that from time to time, it will promptly execute and deliver all instruments and documents, and take all act ions, that may be necessary or desirable, or that Lender may reasonably request, for the attachment, perfection and maintenance of the priority of, the security interest of Lender in any and all of the Collateral or to enable Lender to exercise and enforce any and all of his rights, powers and remedies under this Security Agreement with respect to any and all of the Collateral.

 

 

Section 7. Continued Perfection of Security Interest. Unless Borrower has provided Lender with thirty (30) days prior written notice of its intention to do any of the following and prior to taking such proposed action Borrower has executed and delivered all such additional document and performed all additional acts as Lender may reasonably request, in his reasonable discretion, to continue or maintain the existence and priority of the security interest of Lender in the Collateral and subject to the other provisions of this Security Agreement, Borrower shall not: (1) change its name, (2) change its jurisdiction of incorporation, or (3) change the location where the books and records related to the Collateral are maintained.

 

Section 8. Representations and Warranties. At the time of execution of this Security Agreement, Borrower represents and warrants to Lender as follows:

 

(1)     Name of Borrower. The exact legal name of Borrower is the name specified in the preamble to this Security Agreement. The Borrower has not been known by any other name during the five (5) years prior to the date of this Security Agreement.

 

(2)     Location of Borrower. Borrower is organized under the laws of the State of Nevada. All of the assets used in the operation of its business are in the possession of, and under the control of, Borrower and none of the assets used by Borrower in the conduct of its business are held by any third party except that substantially all of the Inventory and Equipment is held in public warehouses and on premises of hotel customers.

 

(3)     Location for Filing of Financing Statement. With respect to any item of Collateral in which a security interest can be perfected by the filing of a UCC financing statement, the filing of such a statement with the Secretary of State of the State of Nevada will perfect the security interest of Lender in such Collateral.

 

(4)     Formation, Good Standing, Power and Due Qualification. Borrower (a) is a corporation, duly incorporated, validly existing, and in good standing under the laws of the State of Nevada, (b) has the corporate power and authority to own its assets and to transact the business in which it now engages or proposes to engage in, and (c) is duly qualified as a foreign corporation, and, except where the failure to do so, individually or in the aggregate, would not reasonably be expected to result in a material adverse effect on the business, financial condition or results of operations of Borrower or the Collateral (a "Material Adverse Effect"), is in good standing under the laws of each other jurisdiction in which such qualification is required.

 

(5)     Authority. The execution, delivery and performance by Borrower of this Security Agreement are within its corporate powers, have been duly authorized by all necessary corporate action, and do not (a) require any consent or approval of its stockholders which has not been obtained, or (b) contravene its charter or bylaws.

 

(6)     No Contravention. The execution, delivery and performance by Borrower of this Security Agreement do not (a) violate any provision of any law, order, writ, judgment, injunction, decree, determination, or award presently in effect applicable to Borrower, (b) result in a breach of or constitute a default under any indenture or loan or credit agreement or any other agreement, lease, or instrument to which Borrower is a party or by which Borrower's properties may be bound or affected, or (c) result in, or require, the creation or imposition of any lien upon or with respect to any of the properties now owned or hereafter acquired by Borrower except for the lien created under this Security Agreement, which in any case is reasonably likely to result in a Material Adverse Effect.

 

 

(7)     Governmental Authority. No authorization, approval or other action by, and no notice to or filing with, any governmental authority is required for the due execution, delivery and performance by Borrower of this Security Agreement, except for the filing of financing statements under the UCC.

 

(8)     Legally Enforceable Security Agreement. This Security Agreement is the legal, valid and binding obligation of Borrower, enforceable against Borrower in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, moratorium, fraudulent conveyance and other laws applicable to the rights of creditors generally and by general equitable principles.

 

(9)     No Restrictions on Collateral. None of the Collateral is subject to a restriction that prohibits, restricts or limits the grant of a security interest in such Collateral pursuant to this Security Agreement, the perfection of the security interest granted by this Security Agreement (including the priority of such security interest) or the exercise by Lender of his rights, remedies and powers under this Security Agreement or otherwise.

 

(10)   Security Interest and Claims. This Security Agreement creates a valid security interest in the Collateral. The security interest of Lender in the Collateral is a first priority security interest in the Collateral. Borrower owns the Collateral free and clear of any security interest or other liens or encumbrances except for the security interest created by this Security Agreement.

 

(11)   Acquisition in Ordinary Course of Business. All of the Collateral, including all Equipment and all Inventory, was acquired in the ordinary course of business.

 

(12)   Compliance with Law. All of the Collateral was acquired, used, produced and sold or disposed of in accordance with all applicable laws, including in the case of inventory, the Fair Labor Standards Act.

 

(13)   Inventory. None of the Inventory is held on consignment or subject to a sale or return or sale on approval or similar arrangement.

 

(14)   Equipment. All Equipment which is useful or necessary to the business of Borrower is in good repair, ordinary wear and tear excepted.

 

(15)   Accounts. Borrower has originated all Accounts. None of the Accounts have either been sold to another party or otherwise transferred or delivered to any party for the purpose of collecting such Account.

 

(16)   Contracts. All of the Contracts material to the operation of the business of Borrower are in full force and effect and Borrower has performed in all material respects its obligations under each such Contract, and to the knowledge of Borrower, the other parties to each such Contract have performed in all material respects their respective obligations under each such Contract, except that contracts acquired as part of the Purchased Assets were acquired as-is, parties to such Contracts may not have so performed and such Contracts may not be enforceable in accordance with their terms.

 

 

Section 9. Covenants. Borrower agrees:

 

(1)     Reporting Requirements. Borrower will as soon as reasonably practicable notify Lender if (a) any claim, including any attachment, levy, execution or other legal process, is made against any or all of the Collateral, (b) there is any material loss or damage to, or material decline in the value of, or material change in the nature of, any of the Collateral or (c) there is a redemption or exchange of any or all of the Collateral other than the collection of Accounts or the sale of Inventory in the ordinary course of business. Borrower will furnish to Lender from time to time statements and schedules further identifying and describing the Collateral and such other reports in connection with such Collateral as Lender may reasonably request, all in reasonable detail.

 

(2)     Records. Borrower will keep and maintain at its expense complete and accurate in all material respects records related to the Collateral, including records of all payments made, all credits granted, and all other documentation related to the Collateral.

 

(3)     Inspection. Upon reasonable notice to Borrower and during normal business hours, Borrower will allow Lender or his respective designees to visit its offices and each location under its control where any Collateral is located to inspect its books and records, make copies thereof, and inspect the Collateral. Such inspections will be made on a periodic basis or at any time there is an outstanding Event of Default.

 

(4)     Restrictions on Collateral. Borrower will not enter into any agreement or undertaking that restricts or limits the right or ability of Borrower or Lender to sell, assign, or transfer any of the Collateral.

 

(5)     Defense of Collateral. Borrower will defend the Collateral against all claims and demands of all parties, other than Lender.

 

(6)     No Security Interest or Claims. Borrower will not create, permit or suffer to exist, any security interest on any of the Collateral other than the security interest under this Security Agreement. Borrower will discharge or cause to be discharged all security interests and claims on any or all of the Collateral, except for the security interest under this Security Agreement. Borrower will pay when due all property and other taxes, assessments and governmental charges or levies imposed upon and all claims (including claims for labor, materials and supplies) against the Collateral.

 

(7)     Transfer and Other Security Interests. Borrower shall not sell, assign (by operation of law or otherwise), transfer or otherwise dispose of any of the Collateral except for sales, assignments and transfers of Collateral in the ordinary course of business.

 

(8)     Compliance with Law. Borrower will comply in all material respects with all laws applicable to any or all of the Collateral, except to the extent the failure to comply will not have a material adverse effect on the rights of Lender under this Security Agreement, the priority of the security interest of Lender in the Collateral or the value of the Collateral.

 

(9)     Insurance. Borrower shall, at its own expense, maintain insurance with respect to all the Equipment, Inventory and other Collateral in such amounts, against such risks, in such form and with such insurers as are usually carried by companies engaged in the same or similar business as Borrower and such other insurance as reasonably required by Lender. Each policy for liability insurance shall (a) designate Lender as an additional insured and (b) provide for all losses to be paid on behalf of Lender and Borrower as their respective interests may appear. Reimbursement under any liability insurance maintained by Borrower may be paid directly to the party who shall have incurred liability covered by such insurance.

 

 

In addition, each such policy shall (a) name Lender as an additional insured party under such policy, and (b) provide that there shall be no recourse against Lender for payment of premiums or other amounts with respect to such policy and (c) provide that at least thirty (30) days prior written notice of cancellation of or lapse shall be given to Lender by the insurer.

 

If requested by Lender, Borrower shall deliver to Lender (a) original or duplicate policies of such insurance policies, (b) a report of a reputable insurance broker with respect to such insurance, and (c) duly executed instruments of assignment of such insurance policies to perfect Lender's security interest in such policy, including without limitation, acknowledgments of such assignments from the respective insurers.

 

In case of any loss involving damage to Equipment, Inventory or any other Collateral, after an Event of Default and during the continuation thereof, Lender will determine whether such insurance proceeds shall be used (a) to make or cause to be made the necessary repairs to or replacements of such assets or rights, or (b) to pay the Secured Obligations, and if there are any contingent Secured Obligations, to provide cash collateral to cover such Secured Obligations.

 

(10)     Equipment. Borrower shall cause the Equipment necessary for the conduct of its business to be maintained and preserved in good working order, repair and condition, ordinary wear and tear excepted, and shall forthwith, or in the case of any loss or damage to any of its Equipment as quickly as practicable after the occurrence thereof, make or cause to be made all repairs, replacements, and other improvements in connection therewith which are reasonably necessary or desirable to so maintain and preserve such Equipment.

 

(11)     Inventory. In accordance with reasonable business practice, Borrower will maintain all Inventory in good saleable or useable condition, Borrower will (a) not sell, assign, lease, mortgage, transfer or otherwise dispose of any interest in any Inventory other than sales of Inventory in the ordinary course of business, and (b) not use or permit any of the Inventory to be used for any unlawful purpose or in violation of any law, or for hire.

 

(12)     Accounts. Except as otherwise provided in this Security Agreement, Borrower shall continue to collect, at its own expense, all amounts due or to become due to Borrower under the Accounts. In connection with such collections, Borrower may take (and after the occurrence and during the continuation of an Event of Default, at Lender's reasonable discretion, shall take) such action, as Borrower or Lender may reasonably deem necessary or advisable to enforce collection of the Accounts.

 

(13)     Contracts. Borrower will perform in all material respects all of its duties and obligations under each contract material to the operation of its business. It will use reasonable commercial efforts to require that all other parties to each such contract perform all of their respective duties and obligations.

 

 

Section 10. Rights and Remedies. If Borrower fails to perform any agreement contained in this Security Agreement, Lender may himself perform, or cause performance of, such agreement. Upon and during the continuation of an Event of Default, Lender may exercise in respect of any or all of the Collateral one or more of the following rights, remedies and powers and Borrower agrees that each of the following rights, remedies and powers is commercially reasonable:

 

(1)     General Remedies. Lender may exercise in respect of any or all of the Collateral all rights, remedies and powers provided for in this Security Agreement, by law, in equity or otherwise available to him, including all the rights and remedies of a secured party under the UCC (whether or not the UCC applies to the affected Collateral)

 

(2)     Right to Accelerate Obligations Owed to Borrower. To the extent that any obligation to make payment on any Collateral is not then due or a demand for payment has not been made and Borrower has the right, in accordance with the term of such Collateral, to require or make a demand for payment on such Collateral, Lender has the right to require and to make a demand for payment on such Collateral.

 

(3)     Accounts, Contracts, and Other Collateral. Lender, has the right to notify the account debtors or obligors under any Accounts, Contracts, and other Collateral of the security interest of Lender in such Account, Contract, or other Collateral and to direct such account debtors or obligors to make payment of all amounts due or to become due to Borrower thereunder directly to Lender or to an account designated by Lender for collection of any such Accounts, Contracts, and other Collateral, and to adjust, settle or compromise the amount or payment thereof, in the same manner and to the same extent as Borrower might have done. After receipt by Borrower of such notice from Lender, (a) all amounts and proceeds (including wire transfers, checks and other instruments) received by Borrower in respect of any Accounts, Contracts, or other Collateral shall be received in trust for the benefit of Lender under this Security Agreement, shall be segregated from other funds of Borrower and shall be forthwith deposited to such account or paid over or delivered to Lender in the same form as so received (with any necessary endorsement or assignment) to be held as Collateral, or be applied as provided by this Section, as determined by Lender, and (b) Borrower shall not adjust, settle or compromise the ainount or payment of any such Account (except in the ordinary course of business), Contract, or other Collateral or release wholly or partly any account debtor or obligor thereof, or allow any discount thereon, other than any discount allowed for prompt payment.

 

(4)     Assembly of Collateral. Lender may require Borrower to, and Borrower hereby agrees that it will at its expense and upon the request of Lender as soon as reasonably practicable, assemble all or any part of the Collateral as directed by Lender and make it available to Lender at a place to be designated by Lender that is reasonably convenient to both Lender and Borrower.

 

(5)     Entering Premises. Lender or his designated agents may enter, with or without judicial process, upon any premises of Borrower and take possession of all or any part of the Collateral, and remove such Collateral to a location specified by Lender.

 

(6)     Use of Premises. Lender shall have the right to enter and remain upon each and every location of Borrower without cost or charge to Lender, and use the same together with inaterials, supplies, books and records of Borrower for the purpose of collecting and liquidating the Collateral, or for preparing for sale and conducting the sale of the Collateral, whether by foreclosure, auction or otherwise.

 

 

(7)     Sale or Other Disposition of Collateral. Lender, may, without notice, except as specified below, sell, lease, license or otherwise dispose of and grant options to purchase, lease, license or otherwise acquire, any or all of the Collateral in one or more parcels at public or private sale or other disposition, for cash, on credit, for future delivery or otherwise and upon such other terms, including price, as Lendor may deem commercially reasonable.

 

(8)     Notice of Sale or Other Disposition of Collateral. Borrower agrees that, to the extent notice of sale shall be required by law, at least ten (10) days notice to Borrower of the time and place of any public or private sale is to be made shall constitute reasonable notification. Lender shall not be obligated to make any sale of any or all of the Collateral after any notice of sale has been given. Lender may adjourn any public or private sale from time to time by announcement at the time and place fixed for such sale, and such sale may, without further notice, be made at the time and the place to which it was so adjourned.

 

(9)     Commercially Reasonable Sale. Borrower agrees that it is not commercially unreasonable for Lender (a) to fail to incur expenses reasonably deemed significant by Lender to prepare Collateral for disposition or otherwise to fail to complete raw material or work in process into fmished goods or other finished products for disposition, (b) to fail to obtain third party consents for access to Collateral to be disposed of, or to obtain or, if not required by law. to fail to obtain governmental or third party consents for the collection or disposition of Collateral to be collected or disposed of, (c) to fail to exercise collection remedies against account debtors or other persons obligated on Collateral or to fail to remove liens or encumbrances on or any adverse claims against Collateral, (d) to exercise collection remedies against account debtors and other persons obligated on Collateral directly or through the use of collection agencies and other collection specialists, (e) to advertise dispositions of Collateral through publications or media of general circulation, whether or not the Collateral is of a specialized nature, (f) to contact other persons, whether or not in the same business as Borrower, for expressions of interest in acquiring all or any portion of the Collateral, (g) to hire one or more professional auctioneers to assist in the disposition of Collateral, whether or not the collateral is of a specialized nature, (h) to dispose of Collateral by utilizing Internet sites that provide for the auction of assets of the types included in the Collateral or that have the reasonable capability of doing so, or that match buyers and sellers of assets, (i) to dispose of assets in wholesale rather than retail markets, (j) to disclaim disposition warranties, including disclaimers of warranties of title, possession, quiet enjoyment and the like, (k) to purchase insurance or credit enhancements to insure Lender against risk of loss, collection or disposition of Collateral or to provide to Lender a guaranteed return from the collection or disposition of Collateral, or (1) to the extent deemed appropriate by Lender, to obtain the services of other brokers, investment bankers, consultants and other professionals to assist Lender in the collection or disposition of any of the Collateral. Borrower agrees that the purpose of this Section is to provide non-exhaustive indications of what actions or omissions by Lender under the UCC of the State or any other relevant jurisdiction in the exercise by Lender of remedies against the Collateral and that other actions or omissions by Lender shall not be deemed to fail to fulfill such duties solely on account of not being indicated in this Section. Without limitation upon the foregoing, nothing contained in this Section shall be construed to grant any rights to Borrower or to impose any duties on Lender that would not have been granted or imposed by this Security Agreement or by applicable law in the absence of this Section.

 

 

(10)     Proceeds. If any of the Collateral is sold by Lender upon credit or for future delivery, Lender shall not be liable for the failure of the purchaser to purchase or pay for the same and, in the event of any such failure, Lender may resell such Collateral. In no event shall Borrower be credited with any part of the proceeds of sale of any Collateral until and to the extent cash payment in respect thereof has actually been received by Lender. To the extent any of the Secured Obligations are contingent, cash proceeds received by Lender in respect of any sale of, collection from, or other realization upon all or any part of the Collateral may, in the discretion of Lender, be held by Lender as collateral for such contingent Secured Obligations. Any cash held by Lender as Collateral and all cash proceeds received by Lender in respect of any sale of, collection from, or other realization upon all or any part of the Collateral may, in the discretion of Lender, be applied, first, to pay all reasonable, out-of-pocket costs and expenses incurred by Lender in connection with or incident to the custody, preservation, use or operation of, or the sale of, collection from, or other realization upon, any and all of the Collateral, second, to pay all reasonable attorney's fees and legal expenses incurred by Lender in connection with or incident to the custody, preservation, use or operation of, or the sale of, collection from, or other realization upon, any and all of the Collateral, third, to pay all matured and unpaid Secured Obligations, in whole or in part by Lender against, all or any part of the Secured Obligations in such order as Lender shall elect, fourth, if and to the extent any of the Secured Obligations are unmatured or contingent, to provide cash collateral for all such Secured Obligations, and fifth, in accordance with applicable law. If the proceeds of the sale of the Collateral are insufficient to pay all of the Secured Obligations, Borrower agrees to pay upon demand any deficiency to Lender. Any remaining proceeds shall be paid to Borrower.

 

Lender shall not by any act, delay, omission or otherwise be deemed to have waived any of his rights or remedies under this Security Agreement. A waiver by Lender of any right or remedy under this Security Agreement on any one occasion, shall not be construed as a bar to or waiver of any such right or remedy which Lender would have had on any future occasion nor shall Lender be liable for exercising or failing to exercise any such right or remedy.

 

Section 11. Appointment of Lender's Attorney-in-Fact. Borrower hereby irrevocably appoints Lender attorney-in-fact, with full authority in the place and stead of Borrower and in the name of Borrower, Lender or otherwise (1) to take any and all action and exercise all rights and remedies granted to Lender under this Security Agreement, and (2) to execute any instrument which Lender may reasonably deem necessary or advisable to accomplish the purpose of this Security Agreement.

 

Borrower hereby ratifies and approves all acts of Lender as its attorney in-fact in accordance with this Section, and Lender, as its attorney in-fact, will not be liable for any acts of commission or omission, nor for any error of judgment or mistake of fact or law, other than those which result from Lender's gross negligence or willful misconduct. This power, being coupled with an interest, is irrevocable so long as this Security Agreement remains in effect.

 

Section 12. Borrower Remains Liable. In all events, including the exercise by Lender of any of the rights under this Security Agreement, Borrower remains liable to perform all of its duties and obligations under the contracts and agreements included in the Collateral to which it is a party to the same extent as if this Security Agreement had not been executed. Lender shall not have any obligation or liability under any such contracts and agreements by reason of this Security Agreement, nor shall Lender be obligated to perform any of the obligations or duties of Borrower under, or to take any action to collect or enforce any claim or rights under, any such contract or agreement.

 

 

The powers conferred on Lender under this Security Agreement are solely to protect his interest in the Collateral and shall not impose any duty upon him to exercise any such powers. Except for the safe custody of any Collateral in his possession and the accounting for moneys actually received by him under this Security Agreement and as required by the UCC or other applicable law, Lender shall not have any duty as to any such Collateral or as to the taking of any necessary steps to preserve rights against prior parties or any other rights pertaining to any such Collateral.

 

Section 13. Indemnity and Expenses. Borrower agrees to indemnify Lender and each of his respective employees, agents and affiliates from and against any and all claims, losses and liabilities arising out of or resulting from this Security Agreement or the transactions contemplated by this Security Agreement (including, without limitation, enforcement of this Security Agreement), except to the extent any such claims, losses or liabilities result from the gross negligence or willful misconduct of the person to be indemnified.

 

Borrower will upon demand pay to Lender the amount of any and all reasonable, out-of-pocket expenses, including the reasonable fees and out of pocket disbursements of his counsel and of any experts and agents, which Lender may reasonably incur in connection with (1) the preparation of any revised or amended Loan Documents (up to a maximum amount of $10,000), (2) any amendment to this Security Agreement, (3) the administration of this Security Agreement, (4) filing or recording fees incurred with respect to or in connection with this Security Agreement, (5) the custody, preservation, use or operation of, or the sale of, collection from, or other realization upon, any of the Collateral, (6) the exercise or enforcement of any of the rights of Lender under this Security Agreement, or (7) the failure by Borrower to perform or observe any of the provisions of this Security Agreement.

 

Section 14. Amendments. No amendment or waiver of any provision of this Security Agreement nor consent to any departure by Borrower from this Security Agreement shall in any event be effective unless the same shall be in writing and signed by Lender and Borrower, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

 

Section 15. Addresses for Notices. All notices and other communications provided for under this Security Agreement shall be in writing and mailed or delivered by messenger or overnight delivery service, addressed to the party at that party's address set forth above or as to any such party at such other address as shall be designated by such party in a written notice to the other party complying as to delivery with the terms of this Section. All such notices and other communications shall, when mailed by registered or certified mail, be effective five (5) Business Days after the mailing thereof, or when delivered by messenger or overnight delivery service, be effective one (1) Business Day after being delivered to the messenger or overnight delivery service, respectively, addressed as specified above. A copy of all notices sent to the Lender shall in a like manner be sent to: : Law Offices of M. Scott Vayer, 45 Rockefeller Plaza, Sutie 2000, New York, NY 10111, Attention: M. Scott Vayer.

 

 

Section 16. Continuing Security Interest, Transfer of Secured Obligations. This Security Agreement shall create a continuing security interest in all of the Collateral until such time as the Secured Obligations are irrevocably paid to Lender in full. This Security Agreement shall be binding upon Borrower and inure to Lender and his respective successors, transferees and permitted assigns to which the Note is assigned or transferred. Borrower may not transfer or assign its obligations under this Security Agreement. Lender may assign or otherwise transfer all or a portion of his rights or obligations with respect to the Secured Obligations to any other party, and such other party shall then become vested with all the benefits in respect of such transferred Secured Obligations and the security interest granted to Lender pursuant to this Security Agreement or otherwise. Borrower agrees that Lender can provide information regarding Borrower to any prospective or actual successor, transferee, or assign subject to such successor, transferee or assignee providing a confidentiality undertaking reasonably acceptable to Lender, such successor, transferee or assignee and Borrower.

 

Section 17. Submission to Jurisdiction. Borrower hereby irrevocably submits to the jurisdiction of any federal or state court sitting in New York County in the State of New York over any action or proceeding arising out of or related to this Security Agreement and agrees with Lender that personal jurisdiction over Borrower rests with such courts for purposes of any action on or related to this Security Agreement. Borrower agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any manner provided by law. Borrower further waives any objection to venue in any such action or proceeding on the basis of inconvenient forum. Borrower agrees that any action on or proceeding brought against Lender shall only be brought in such courts.

 

Section 18. Governing Law. This Security Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to its principles of conflicts of law, except to the extent that the validity or perfection of the security interest under this Security Agreement, or remedies under this Security Agreement, in respect of any particular Collateral are governed by the laws of a jurisdiction other than the State of New York.

 

Section 19. Miscellaneous. This Security Agreement is in addition to and not in limitation of any other rights and remedies Lender may have by virtue of any other instrument or agreement heretofore, contemporaneously herewith or hereafter executed by Borrower or by law or otherwise including the Loan Documents. If any provision of this Security Agreement is contrary to applicable law, such provision shall be deemed ineffective without invalidating the remaining provisions of this Security Agreement. If and to the extent that applicable law confers any rights in addition to any of the provisions of this Security Agreement, the affected provision shall be considered amended to conform to such law. The headings in this Security Agreement are for convenience of reference only, and shall not affect the interpretation or construction of this Security Agreement.

 

Section 20. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT THAT PARTY MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS SECURITY AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS PARAGRAPH.

 

 

IN WITNESS WHEREOF, Borrower has duly executed and delivered this Security Agreement as of the date of this Security Agreement.

 

Borrower:

 

Select-TV USA Holdings, Inc.

 

 

By: _______________________

Name:

Title:

 

 

 

 

 

 

 

 

Attachments:

 

Schedule I-SA (copy of Schedule I to the Bill of Sale)

Notarized acknowledgement of Borrower.

 

 

STATE OF NEVADA	)
	)	ss:
COUNTY OF CLARK	)

 

On the 4^th day of March, 2015, before me personally came Brooks Pickering to me known, who being by me duly sworn, did depose and say that he resides at 2198 County Cove Ct., Las Vegas, Nevada 89135; that he is the Chief Executive Officer of SELECT-TV (USA) HOLDINGS, INC. the Nevada Corporation described in and which executed the foregoing instruments (Promissory Note and Security Agreement); that he knows the seal of said Corporation; that the seal affixed to said instruments is such seal and was affixed thereto by order of the board of directors; and that he signed his name thereto by like order.

 

 

 

 

My commission expires: 10/5/2018

 

 

Exhibit 10.4

 

 

LOAN SALE AGREEMENT

 

This LOAN SALE AGREEMENT is made as of this 2nd day of March, 2015, by and between SELECT-TV (USA) HOLDINGS, INC. (the "Buyer"), and ZON CAPITAL PARTNERS, L.P. (the "Seller"), owner and holder of the Loan Assets described herein.

 

W I TN E S S E T H

 

WHEREAS, Seller is the owner of and intends to sell the loan assets more particularly described in Exhibit A attached hereto and made a part hereof (individually, a "Loan Asset" and together, the "Loan Assets") as well as the Physical Assets described in Exhibit B attached hereto (collectively the “Purchased Assets”); and

 

WHEREAS, Buyer intends to buy the Purchased Assets; and

 

WHEREAS, Seller and Buyer are entering into this Agreement to set forth the terms and conditions of the purchase and sale of the Purchased Assets;

 

NOW, THEREFORE, in consideration of the mutual promises, covenants and conditions hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby expressly acknowledged, the parties hereto agree as follows:

 

ARTICLE 1

GENERAL

 

1.1. Definitions. For purposes of this Agreement, the following terms shall have the meanings indicated below:

 

"Agreement" means this Loan Sale Agreement, including all Exhibits and Schedules attached hereto and referenced herein and any written amendments hereto.

 

"Borrower" means [***] ., a Delaware corporation.

 

"Business Day" means any day other than a Saturday, Sunday, federal holiday or any other day on which the Principal Office of Seller is closed.

 

"Closing" means the payment of the Purchase Price prescribed in Section 2.3 by Buyer and the delivery of the Closing Documents by Seller.

 

"Closing Date" means the date on which the Closing occurs, which date shall be no later than March 2, 2015.

 

"Closing Documents" means the documents required to be delivered under the terms of this Agreement at the Closing by Seller.

 

 

 

_______________

[***] Confidential treatment has been requested with respect to the omitted language. The omitted language has been separately filed with the Securities and Exchange Commission.

 

"Collateral" means any real, personal, or intangible property or rights securing the Loan Assets.

 

"Credit Files" means all documents in the possession of Seller pertaining to the Loan Assets, which files shall include original documents (or copies thereof if for any reason originals are not readily available), and may also include general credit information, credit records from Seller, payment histories, appraisals, and property insurance policies, but shall exclude Seller's internal memoranda, internal approvals, communications with Seller's participants, communications and documentation from the Obligors with respect to the Obligors' other credit relationships with Seller, documentation from other financial institutions with respect to any of the Obligors' loans from such other financial institutions, communications with other potential purchasers of the Loan Assets, and privileged, confidential or other communications between Seller and its legal counsel and any other internal and/or confidential documents relating to Seller's review, analysis, reporting, valuation or classification of the Loan Assets as may be determined by Seller.

 

"Loan and Security Agreement" means that certain Loan and Security Agreement dated December 21, 2006 by and between Square 1 Bank and Borrower.

 

"Loan Assets" shall have the meaning ascribed thereto in the recitals hereof and shall also include the Credit Files. For the avoidance of doubt, the Loan Assets shall not include (i) the credit card facility of Borrower with Seller in effect as of the Closing Date, (ii) the money market account at Square 1 Bank securing such credit card facility, or (iii) any documents relating to such facility or such account, including without limitation that certain Pledge and Security Agreement dated as of July 3, 2008 by Borrower in favor of Square 1 Bank.

 

"Obligor" means each person or entity who is now or hereafter may become liable for the full or partial payment or performance of any obligation under the Loan Assets, whether such obligation is direct, indirect, primary, secondary, joint or several.

 

"Principal Office" means, as to Buyer and Seller, the business office designated in or pursuant to Section 6.1 of this Agreement.

 

"Purchase Price" means TWO HUNDRED AND FIFTY THOUSAND DOLLARS ($250,000).

 

ARTICLE 2

PURCHASE AND SALE OF LOAN ASSETS

 

2.1. Agreement to Buy and Sell Loan Assets. Seller hereby agrees to sell to Buyer, and Buyer hereby agrees to buy from Seller, on and subject to the terms hereof on the Closing Date, all of Seller's right, title and interest in the Purchased Assets, for the Purchase Price. The Purchased Assets are to be sold "AS-IS" and without warranty or recourse of any kind except as expressly set forth in Article 3 hereof.

 

 

 

 

2.2. Closing. The Closing of the purchase and sale of the Loan Assets shall take place on the Closing Date at the Principal Office of Seller or other such place mutually agreed upon by Buyer and Seller.

 

2.3. Payment of Purchase Price. On or before 12:00 noon on the Closing Date, Buyer agrees to pay Seller the Purchase Price. Buyer shall remit payment of the Purchase Price to Seller by wire transfer pursuant to Seller's wiring instructions below.

 

Bank:	PNC Bank, N.A. (Palmer Square, Princeton, NJ 08542)
ABA #	031-207-607
Credit to:	Zon Capital Partners L.L.C.
A/C #:	80 4249 4092

 

2.4 Termination of Agreements. Upon payment of the amounts set forth in Section 2.3, all obligations of the guarantor under the (i) Unconditional Guaranty, dated as of March 31, 2011 by Paul Capital Partners IX, L.P. in favor of Seller (the "Paul Capital Guaranty"), and (i i) Unconditional Guaranty, dated as of December 20, 2007 by Buyer in favor of Seller (the "Zon Capital Guaranty'', and together with the Paul Capital Guaranty, the "Guarantees") will be fully paid, performed and discharged and the Guarantees will be terminated and all other obligations of the guarantors thereunder will be released and discharged.

 

2.5. Assignments and Endorsements.

 

2.5.1. Upon payment of the Purchase Price specified in and, in accordance with, the terms of Section 2.3, Seller shall execute and deliver to Buyer, and Buyer shall take delivery from Seller of, the Purchased Assets in the manner set forth in Section 2.5.3 and Section 2.5.4 below. In addition, Seller shall execute and deliver such individual assignments as may be reasonably required or requested by Buyer for the legal transfer of Seller's perfected right, title and interest (to the extent so perfected by Seller) in the Purchased Assets purchased by Buyer. Buyer shall be responsible for the preparation and recording of such assignments and for payment of any costs and recording fees associated with recording such assignments.

 

2.5.2. Should any assignments in addition to those delivered pursuant to Section 2.5.1 above be required by applicable law, Buyer shall prepare and submit such additional assignments to Seller for execution within ninety (90) days after the Closing Date. Buyer shall be responsible for the preparation of and any costs associated with the preparation of such additional assignments and for any costs, including legal fees and expenses, incurred by Seller in connection with the review thereof. Buyer shall also pay any costs or filing fees associated with the recording of such additional assignments. Additionally, any such assignments, including those provided for in Section 2.6.1, shall be without recourse or warranty (except as provided herein) and in a form acceptable to Seller and its counsel. Seller shall have no obligation to execute any additional assignment that is not received by Seller within ninety (90) days after the Closing Date.

 

 

 

 

2.5.3. Seller shall endorse each Note evidencing the Loan Assets, if any, purchased hereunder in the following manner:

 

Pay to the order of Select-TV (USA) Holdings, Inc., WITHOUT RECOURSE, REPRESENTATION OR WARRANTY except as provided in the Loan Sale Agreement dated March 2, 2015

 

Zon Capital Partners, L.P.

 

By: ______________________________

Title: _____________________________

Date: _____________________________

 

 

2.5.4. The assignment as to the Loan Assets (other than Notes) shall be in substantially the following form:

 

"For value received and without recourse, except as provided in the Loan Sale Agreement dated March 2, 2015, Zon Capital Partners, L.P. does hereby assign, transfer and convey unto Select–TV (USA) Holdings, Inc. the following:".

 

 

2.6. Transfer of Loan Assets. On or promptly after the Closing Date, Seller shall physically deliver to Buyer all original promissory notes comprising Loan Assets (to the extent that the Seller has originals thereof), a Lost Note Affidavit (to the extent that the Seller does not have originals of such promissory notes), each original Loan Asset (to the extent that Seller has originals) and each other assignment instrument necessary to transfer perfected ownership to the extent of Seller's perfection of the Loan Assets, in each case, endorsed as described above (as applicable), and the Credit Files. Thereafter, risk of loss with respect to any Loan Asset, assignment instruments and Credit Files shall rest with Buyer.

 

2.7. Transfer of Physical Assets. On the Closing date, after Seller’s receipt of the Purchase Price, Seller shall allow Buyer to ship all Physical Assets from their current location to Buyer’s location, at Buyer’s expense.

 

2.8. Survival of Responsibilities. The responsibilities and agreements contained in Article 2 shall survive the Closing.

 

 

 

 

ARTICLE 3

REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER

 

3.1. Seller's Warranties and Representations. Seller hereby represents and warrants to Buyer that the following statements are true and correct, as of the date of this Agreement, and shall be true and correct as of the Closing Date:

 

3.1.1. Ownership of the Loan Assets gives Seller the right to transfer ownership of the Physical Assets to Buyer without any encumbrances.

 

3.1.2. Seller owns the Loan Assets, has good and valid title thereto, and has the right to sell the Loan Assets to Buyer.

 

3.1.3. Seller has the proper authority to sell the Loan Assets.

 

3.1.4. This Agreement has been duly authorized, executed and delivered by Seller and constitutes the legal, valid and binding obligation of Seller, enforceable in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency, moratorium, receivership or similar debtor relief laws and general principles of equity.

 

3.1.5. All documents in Seller's possession or control made available to Buyer are, to the best of Seller's knowledge and belief, true, accurate and correct copies of the originals thereof.

 

3.1.6. Seller makes no warranty or representation as to the enforceability of any of the documents included among the Loan Assets. Seller makes no warranty or representation with respect to the effect of applicable bankruptcy, insolvency, reorganization, moratorium, and other laws affecting the rights of creditors generally as they may relate to the Loan Assets. Buyer acknowledges that Seller has disclosed that all materials and/or documents that have been, or may have been, in the possession of Seller with respect to the Loan Assets may not have been located or otherwise available for review or transfer to Buyer. Notwithstanding the foregoing sentence, Seller represents and warrants that it intends to transfer all of Seller's right, title and interest in and to the Loan Assets to Buyer pursuant to this Agreement.

 

3.2. DISCLAIMER OF WARRANTIES AND REPRESENTATIONS NOT EXPRESSED HEREIN. EXCEPT FOR THOSE EXPRESSED IN SECTION 3.1, NO WARRANTIES OR REPRESENTATIONS, EXPRESS OR IMPLIED, HAVE BEEN MADE BY SELLER OR BY ANYONE ACTING ON ITS BEHALF, PARTICULARLY, BUT WITHOUT IN ANY WAY LIMITING THE GENERALITY OF THE FOREGOING, NO WARRANTIES OR REPRESENTATIONS REGARDING (i) THE COLLECTABILITY OF THE LOAN ASSETS, (ii) THE CREDITWORTHINESS OF ANY OBLIGOR, (iii) THE VALUE OF ANY COLLATERAL SECURING PAYMENT OF THE LOAN ASSETS, (iv) THE ENFORCEABILITY OF THE LOAN ASSETS, OR (v) THE CONDITION OF THE UNDERLYING COLLATERAL INCLUDING BUT NOT LIMITED TO ANY ENVIRONMENTAL MATTERS OR CONDITION, WHETHER LATENT OR OBSERVABLE. EXCEPT IN THE EVENT OF BREACH OF REPRESENTATION, WARRANTY OR COVENANT, FRAUD OR WILLFUL MISCONDUCT, ALL LOAN ASSETS SOLD TO BUYER UNDER THIS AGREEMENT ARE SOLD AND TRANSFERRED WITHOUT RECOURSE. EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT, ALL OF THE LOAN ASSETS SOLD TO BUYER UNDER THIS AGREEMENT ARE SOLD AND TRANSFERRED "AS-IS, WHERE-IS, AND WITH ALL FAULTS AND DEFECTS".

 

 

 

 

 

3.3. Seller's Covenants to Buyer.

 

ARTICLE 4

REPRESENTATIONS, WARRANTIES AND COVENANTS OF BUYER

 

4.1. Buyer's Representations and Warranties. Buyer hereby represents and warrants to Seller that the following statements are true and correct as of the date of this Agreement and shall be true and correct as of the Closing Date.

 

4.1.1. Decision to Purchase. Buyer has had an opportunity to independently review the Loan Assets, and has made its decision to buy the Loan Assets based upon its own independent review and evaluation of the Loan Assets and has not relied upon any oral or written information provided by any agent, employee or representative of Seller or any summaries of the Loan Assets. Buyer has not relied on any statements or representations of Seller or its agents, officers, employees or counsel other than those specifically contained in this Agreement or in exhibits or schedules hereto. Buyer acknowledges that Seller has not given any investment advice or rendered any opinion as to whether the purchase of the Loan Assets is prudent. Buyer is aware that the amount ultimately paid or recovered on account of the Loan Assets may be less than the consideration paid to Seller by Buyer pursuant to this Agreement and/or less than Seller's records now indicate is due and owing in connection with the Loan Assets. Buyer acknowledges that neither the Loan Assets as a whole nor any individual Loan Asset is a security. Buyer has made, independently and without reliance on Seller, its own analysis of the Loan Assets. Buyer is purchasing the Loan Assets in the ordinary course of its business for commercial purposes and not for resale. Buyer acknowledges that the Loan Assets will not be managed or serviced by Seller or any affiliate of Seller and that Buyer is not relying upon the entrepreneurial or managerial efforts of any other entity for any profit to be derived from the Loan Assets. Buyer acknowledges that Seller has offered the Loan Assets for purchase hereunder only in a limited sol icitation to sophisticated financial or commercial purchasers and not to the general public. Buyer has received ample notice that the Loan Assets are being sold on a whole loan, servicing released basis, and Buyer is not acquiring an investment in a business enterprise.

 

 

 

4.1.2. Authority. Buyer is duly and legally authorized to enter into this Agreement and, to the best of Buyer's knowledge, Buyer has complied with all laws, rules and regulations related, or applicable, to this Agreement and the Loan Assets to which Buyer may be subject.

 

4.1.3. Enforceability. This Agreement, when duly executed and delivered, and all of Buyer's obligations hereunder will be the legal, valid and binding obligations of Buyer, enforceable in accordance with the terms of this Agreement.

 

4.1.4. Performance. Buyer's performance of its duties and obligations under this Agreement will not conflict with, result in a breach of, or default under, or be adversely affected by, any decrees, judgments, injunctions, orders, writs, laws, rules or regulations, or any determination or award of any arbitrator, to which Buyer is a party or by which Buyer or its assets are bound. There is no suit, action, claim, arbitration, proceeding or investigation by any governmental entity or any other person, pending against Buyer arising out of or relating to the transactions contemplated by this Agreement.

 

4.1.5. Bankruptcy. Buyer (i) is not currently insolvent, nor will Buyer be rendered insolvent by virtue of making the payments required hereunder, (ii) has no present intent to file any voluntary petition in bankruptcy under any Chapter of the Bankruptcy Code, (iii) has no present intent to seek relief, protection, reorganization, liquidation, dissolution or similar relief for debtors under any federal, state or local law or in equity, and (iv) has no present intent to cause the Loan Assets to be the subject of or attached in connection with any bankruptcy or insolvency proceedings or the property of any bankruptcy or insolvency estate.

 

4.1.6. Investment Representations. Buyer represents and warrants that it is purchasing the Loan Assets for investment purposes only and for Buyer's own account, with no present intention of selling or distributing the Loan Assets, or any interest therein, except in strict compliance with any and all federal, state or local securities laws. Buyer further represents and warrants that it is an "accredited investor" within the meaning of Regulation D of the Securities and Exchange Commission. Buyer further acknowledges that the Loan Assets may be subject to subsequent restrictions on transferability and resale under the Securities Act of 1933, as amended, and applicable state securities laws.

 

4.2. Buyer's Covenants to Seller.

 

4.2.1. Notification of Obligors. Buyer shall promptly after the Closing Date with respect to the Loan Assets purchased under this Agreement, notify each Obligor of Buyer's purchase of the Loan Assets and direct that all payments on and communications regarding the Loan Assets be sent to Buyer's attention after the Closing Date, and Seller will cooperate as reasonably requested by Buyer in completing such notifications. Notwithstanding any or all of the foregoing, Seller may on its own and in its sole and absolute discretion notify Obligors and other interested third parties of the sale of Loan Assets after the Closing Date.

 

 

 

 

 

4.2.2. Borrower’s Dissolution. Buyer shall work in cooperation with Seller to affect the corporate dissolution of Borrower.

 

4.2.3. Insurance. Buyer shall promptly after the Closing Date notify all companies providing hazard, liability, or any other type of insurance for the protection of the Loan Assets or the Collateral, as may be required under existing policies, of the sale of the Loan Assets. If required or requested, Seller shall confirm such assignments of insurance in writing to the insurers.

 

4.2.4. Use of Seller's Name. Buyer shall not, without the express written consent of Seller, said consent to be given or withheld in the Seller's sole and exclusive discretion, institute any legal action in the name of Seller or any affiliate thereof; nor shall Buyer use the name of Seller or otherwise refer to Seller or any affiliate thereof, or any name derived therefrom or confusingly similar therewith, to promote Buyer's sale, collection or management of the Loan Assets purchased under this Agreement. Buyer acknowledges that there is no adequate remedy at law for violation of this provision and consents to the entry of an order by a court of competent jurisdiction enjoining any violation or threatened violation of this provision.

 

4.2.5. Informational Tax Reporting. As of the Closing Date, Buyer agrees to assume and indemnify and hold Seller harmless from all obligations with respect to federal and state income tax informational reporting related to the Loan Assets purchased under this Agreement, including obligations with respect to Forms I 099 and I 098 and back-up withholding. Buyer further agrees to cooperate with Seller to the extent necessary to allow Seller to fulfill its obligations with respect to such informational reporting for such Loan Assets for the period prior to the Closing Date.

 

4.2.6. Collection Practices. Buyer acknowledges that certain laws relating to unfair collection practices may apply to Buyer in connection with the Loan Assets purchased by Buyer hereunder and that Buyer has a responsibility to abide by such laws. Buyer shall indemnify and hold Seller harmless from any liability arising from Buyer's failure to abide by such laws. Buyer agrees to notify Seller within ten (10) Business Days of receiving notice or knowledge of any such claim, demand or assertion.

 

4.2.7. Servicing. From and after the Closing Date, Buyer shall assume and fully discharge all of Seller's obligations and duties with respect to servicing the Loan Assets purchased hereunder and shall indemnify and hold Seller harmless from any and all costs, loss, damage, expense or attorneys' fees incurred by Seller in connection therewith.

 

4.2.7 Compliance with Terms. Buyer agrees to abide by and be bound by all of the terms and conditions of the Loan Assets purchased hereunder to the extent that such terms and conditions continue to bind the holder of the Loan Assets. By its execution below, Buyer agrees that, as of the Closing Date and upon payment of the amount of the Purchase Price prescribed by Section 2.3, Buyer shall assume all of the obligations of Seller under and pursuant to the Loan Assets arising from and after the date of Closing.

 

4.2.8. Taxes and Other Liens. Buyer acknowledges that any Collateral may be subject to property taxes and other liens, charges or encumbrances and that these taxes and other liens are not the responsibility of Seller and shall not affect the Purchase Price.

 

 

 

ARTICLE 5

INDEMNIFICATION

 

5.1 Buyer Indemnification. Subject to the provisions of Section 5.3, Buyer hereby agrees to indemnify, hold harmless and defend Seller and its agents, attorneys, servants, directors, officers, employees, predecessors, successors, assigns and affiliates (collectively, the "Indemnified Seller Party"), from and against any and all losses, causes of action, liabilities, claims, demands, obligations, damages, costs and expenses, including reasonable attorneys' and accountants' fees and costs, to which any Indemnified Seller Party may become subject on account of, arising out of, or related to any act, omission, conduct or activity of Buyer or any of its officers, directors, employees, agents, servants, shareholders, successors or assigns, on account of, arising out of or related to Buyer's breach of this Agreement, any agreement between Buyer and any of the Obligors under the Loan Assets, or the servicing, collection, reporting or administration of the Loan Assets. Buyer's obligation to indemnify each Indemnified Seller Party shall remain in effect and survive any future sale, assignment or other disposition of this Agreement and/or any of the Loan Assets.

 

5.2 Procedure Regarding Indemnification. Promptly after receipt by an Indemnified Seller Party of notice of any claim or demand that may give rise to a right of indemnification hereunder or the commencement of any action to which Section 5.1 shall apply, the Indemnified Seller Party shall notify Buyer in writing of the commencement of such action and of the possibility of a claim by the Indemnified Seller Party against Buyer under Section 5.1; however, failure of the Indemnified Seller Party to notify Buyer will not relieve Buyer of liability hereunder. Buyer shall be entitled to participate in such action and may, with the consent of the Indemnified Seller Party, assume the defense of such action with counsel selected by Buyer with the prior approval of the Indemnified Seller Party. After Buyer's assumption of the defense, Buyer shall not be liable for any legal expenses subsequently incurred by the Indemnified Seller Party in connection with the defense of such action, unless (i) such expenses are incurred with the prior written approval of Buyer, or (ii) if the Indemnified Seller Party reasonably determines that its interests may be adverse in whole or in part to those of Buyer and that there may be legal defenses available to the Indemnified Seller Party that are different from, in addition to or inconsistent with defenses available to Buyer, in which case the Indemnified Seller Party may retain its own counsel and be indemnified by Buyer for all legal and other expenses and costs reasonably incurred in connection with the investigation and defense of the action.

 

Notwithstanding the foregoing, no settlement of any claim or proceeding to which an Indemnified Seller Party is a party will be binding on Buyer until approved by Buyer in writing.

 

5.3 Settlement or Judgment. Buyer shall not be liable for the settlement of any action effected without its express written consent, said consent not to be unreasonably withheld, conditioned or delayed. If any action is settled with Buyer's written consent or if there is a final judgment against the Indemnified Seller Party in any action covered by the indemnification provisions of Article 5, Buyer shall indemnify, hold harmless and defend the Indemnified Seller Party from and against all loss or liability incurred by reason of such settlement or judgment.

 

 

 

 

 

ARTICLE 6

MISCELLANEOUS PROVISIONS

 

6.1. Notices. Any notice, request, demand or other communication required or permitted under this Agreement shall be given in writing and shall be sent by certified mail, return receipt requested, in a prepaid envelope, or via telefax and shall be deemed given when delivery is first attempted (with regard to mailing notice) or when actually transmitted (with regard to telefax notice, to the extent the party giving notice produces a transmission confirmation in connection therewith) to the party to whom notice is directed at the address or telefax number set forth on the signature page hereto or such other address or telefax number as such party shall hereafter specify.

 

6.2. Assignment. Subject to Buyer's agreement to be bound by all terms of this Agreement, and without releasing or discharging Buyer from any of the covenants, warranties or agreements set forth herein, this Agreement may be assigned to any entity owned by or affiliated with Buyer at any time; provided, however, the recourse provided hereunder against Seller for the breach of a representation or warranty is intended to run exclusively to Buyer, and no further or subsequent assignee of such rights in any of the Loan Assets shall have any right to make a claim against Seller for any breach hereunder.

 

6.3. Severability. Each part of this Agreement is intended to be severable. If any term, covenant, condition or provision of this Agreement is unlawful, invalid or unenforceable, such illegality, invalidity or unenforceability shall not affect the remaining provisions of this Agreement, which shall remain in full force and effect and shall be binding upon the parties.

 

6.4. Headings. The headings of the Articles and Sections of this Agreement are inserted for convenience only and shall not affect the meaning or interpretation of this Agreement or any provision thereof.

 

6.5. Governing Law. The parties agree that this Agreement shall be construed, and the rights and obligations of the parties under the Agreement shall be determined, in accordance with the laws of the Commonwealth of Pennsylvania (excluding the conflict of law rules). The parties further agree and stipulate that this Agreement shall be deemed to have been entered into in the Commonwealth of Pennsylvania. The parties hereto consent to submit to the personal jurisdiction of the United States District Court for the Eastern District of Pennsylvania, or the state courts of Philadelphia County, Pennsylvania, either of which shall be the exclusive forum for the resolution of any claim or cause of action arising out of the breach of this Agreement. The parties further hereby unconditionally and irrevocably, and as an independent covenant, waive any right to a jury trial in any action or proceeding hereunder or otherwise related hereto.

 

6.6. Survival. Seller and Buyer agree that the agreements, covenants, warranties and representations herein contained shall survive the Closing, shall not merge into the Closing Documents, and shall be independently enforceable.

 

 

 

 

 

6.7. Entire Agreement; Amendments. This Agreement, including any attachments and exhibits referred to in this Agreement, and any other documents executed by Seller or Buyer at Closing in connection with this Agreement, constitute the entire agreement between the parties pertaining to the subject matter hereof and supersedes any and all prior agreements, representations and understandings of the parties, written or oral. The terms of this Agreement shall not be modified or amended except by subsequent written agreement of the parties.

 

6.8. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which shall constitute one and the same instrument.

 

6.9. Construction. Unless the context requires otherwise, singular nouns and pronouns used herein shall be deemed to include the plural, and pronouns of one gender shall be deemed to include the equivalent pronoun of the other gender. The parties hereto have each been fully advised and represented by legal counsel and accordingly the normal rule that ambiguities are construed against the drafter shall not be applied in connection with the interpretation or construction hereof.

 

6.10. Waiver. No waiver by either party of the other party's breach of any term, covenant or condition contained in this Agreement shall be deemed to be a waiver of any subsequent breach of the same or any other term, covenant or condition of this Agreement. In addition, no waiver by Seller of any condition prior to Closing is enforceable unless in writing.

 

6.11 Attorneys Fees. In the event of any legal action to enforce the rights of a party under this Agreement, the party prevailing in such action shall be entitled, in addition to such other relief as may be granted, to all reasonable costs and expenses, including reasonable attorneys' fees, incurred in such action.

 

6.12 Brokers. Each party represents and warrants that all actions by it relative to this Agreement and the transactions contemplated hereby were carried out in such manner so as not to give rise to any claim for finder's fees, brokerage commissions or similar payments. Each party agrees to indemnify and hold harmless the other party hereto of and from any and all loss, injury, damage, claim, suit, expense or cost, including attorneys' fees and all costs of litigation, actually incurred as the result of any breach of the representation and warranty set forth herein.

 

 

[Signature Page Follows]

 

 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and sealed as of the day and year first written above.

 

 

BUYER:

 

 

/s/ signature

 

 

Chairman

 

 

SELLER:

 

 

 

 

 

 

 

EXHIBIT A

 

LOAN ASSETS

 

1.

Loan and Security Agreement dated as of December 21, 2006 by and between Seller and Borrower.

 

2.

First Amendment to Loan and Security Agreement dated as of June 18, 2007 by and between Seller and Borrower.

 

3.

Forbearance Agreement dated as of December 3, 2007 by and between Seller and Borrower.

 

4.

Second Amendment to Loan and Security Agreement dated as of January 2, 2008 by and between Seller and Borrower.

 

5.

Third Amendment to Loan and Security Agreement dated as of March 28, 2008 by and between Seller and Borrower.

 

6.

Fourth Amendment to Loan and Security Agreement dated as of August 11, 2008 by and between Seller and Borrower.

 

7.

Fifth Amendment to Loan and Security Agreement dated as of January 5, 2009 by and between Seller and Borrower.

 

8.

Sixth Amendment to Loan and Security Agreement dated as of June 18, 2009 by and between Seller and Borrower.

 

9.

Seventh Amendment to Loan and Security Agreement dated as of July 29, 2009 by and between Seller and Borrower.

 

10.

Eighth Amendment to Loan and Security Agreement dated as of September 29, 2009 by and between Seller and Borrower.

 

11.

Ninth Amendment to Loan and Security Agreement dated as of November 10, 2009 by and between Seller and Borrower.

 

12.

Tenth Amendment to Loan and Security Agreement dated as of January 25, 2010 by and between Seller and Borrower.

 

13.

Eleventh Amendment to Loan and Security Agreement dated as of June 22, 2010 by and between Seller and Borrower.

 

14.

Forbearance Agreement and Twelfth Amendment to Loan and Security Agreement dated as of May 27, 2011 by and between Seller and Borrower.

 

 

 

 

 

15.

Thirteenth Amendment to Loan and Security Agreement dated as of June 17, 2011 by and between Seller and Borrower.

 

16.

Fourteenth Amendment to Loan and Security Agreement dated as of September 29, 2011 by and between Seller and Borrower.

 

17.

Fifteenth Amendment to Loan and Security Agreement dated as of October 27, 2011 by and between Seller and Borrower.

 

18.

Sixteenth Amendment to Loan and Security Agreement dated as of December 14, 2011 by and between Seller and Borrower.

 

19.

Seventeenth Amendment to Loan and Security Agreement dated as of November 1, 2012 by and between Seller and Borrower.

 

20.

Intellectual Property Security Agreement dated December 21, 2006 by and between Seller and Borrower.

 

21.

Subordination Agreement dated December 21, 2006 by and between Global Direct Response, Inc. and Seller.

 

22.

The Credit Files.

 

23.

UCC-1 Financing Statement filed with the Delaware Secretary of State, File No. 2007-0083500.

 

24.

UCC-3 Financing Statement Amendment filed with the Delaware Secretary of State, File No. 201 1-0225337.

 

25.

UCC-3 Financing Statement Amendment filed with the Delaware Secretary of State, File No. 2011-3316349

 

 

 

 

 

EXHIBIT B

 

PHYSICAL

ASSETS

 

 

1. All source code for programs owned or licensed by [***]

 

2. All servers housing source code and any other code belonging to or licensed by [***]

 

3. All drawings and other material pertaining to [***] products

 

4. All hardware inventory

 

5. All written and electronic documentation, technical guides, reference materials and other material pertaining to the operation and maintenance of [***] hardware and software

 

6. All furniture, workstations and other non-computer hardware housed in the [***] facility in Pennsylvania

 

7. All customer contracts and other written or electronic material relevant to the management of existing customers

 

8. All marketing literature

 

9. Any and all templates and systems for managing billings, receivables and other aspects of business management.

 

10. All other material housed in the [***] facility in Pennsylvania.

 

 

 

_______________

[***] Confidential treatment has been requested with respect to the omitted language. The omitted language has been separately filed with the Securities and Exchange Commission.

 

Exhibit 10.5

 

 

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

This Executive Employment Agreement (the "Agreement") is made and entered into as of March 1, 2015, by and between Select-TV Solutions, Inc., a Nevada Company (the "Company") and Brooks E. Pickering, an individual (the "Executive").

 

WHEREAS, the Company desires to employ the Executive on the terms and conditions set forth herein; and

 

WHEREAS, the Executive desires to be employed by the Company on such terms and conditions.

 

NOW, THEREFORE, in consideration of the mutual covenants, promises and obligations set forth herein, the parties agree as follows:

 

1.

Term. This Agreement shall commence on March 1st, 2015 (the "Effective Date") and shall terminate on February 28, 2017, unless terminated by either Party in accordance with Section 9 of this Agreement, or as extended by the Parties by written agreement. Should the Executive continue providing the Services after February 28, 2017 without a further agreement in writing, the terms of this Agreement shall continue to apply on a month-to month basis until the Parties enter into a further agreement.

 

2.

Position and Duties.

 

2.1.

Position. During the Employment Term, the Executive shall serve as the President and Chief Operating Officer, reporting directly to the Company's Board of Directors (the "Board"). In such position, the Executive shall have such duties, authority and responsibility as shall be determined from time to time by the Board, which duties, authority and responsibility are consistent with the Executive's position.

 

2.2.

Duties. The initial duties of the Executive are described in Exhibit A- Duties of Executive, attached hereto.

 

 

 

 

3.

Compensation

 

3.1.

Salary. Effective March 1, 2015, the Executive shall be paid an initial monthly salary of US$12,500 (the "Initial Salary") until either (a) the Company (or any of its subsidiaries or successor entities) completes an initial public offering on the AIM Stock Exchange or equivalent market; or (b) the Company has three months of positive EBITDA, after which the Initial Salary shall increase to US$25,000 (the "Base Salary") per month; OR (C) THE Company has not reached the milestones in (a) or (b) but has made good progress, in which case the Board will work with Executive to determine an appropriate increase in compensation. Salary payments shall be made semi-monthly in accordance with the Company's payroll policy.

 

3.2.

Semi-Annual Bonus.

 

(a) For each complete semi-annual period (ending August and February) of the Contract Term, the Executive shall have the opportunity to earn a semi-annual bonus (the "Semi-Annual Bonus") equal to 75% of the total consulting fee earned during the same period (the "Target Bonus"), based on achievement of semi-annual target performance goals established by the Board; provided that, if the Executive achieves performance goals superior to those established by the Board, then the Executive shall be eligible to receive additional bonuses up to a total of 150% of the Target Bonus.

 

(b) The Semi-Annual Bonus, if any, will be paid within 30 days after the end of the applicable period.

 

3.3.

Performance Options. The Executive shall be eligible to receive annual stock option grants (the "Performance Options") in connection with meeting specific performance objectives (the "Performance Objectives") established by the Company's Board. The Parties agree to the following minimum Performance Options:

 

Option Grant Period	Number of Performance Options Granted	Exercise Price per Share
Upon achievement of 2015 Objectives	2,500,000	US$0.10
Upon achievement of 2016 Objectives	2,500,000	US$0.10

 

The Performance Options shall be subject to the terms and conditions set forth in a formal award agreement to be mutually agreed upon between the parties. Performance Options shall expire, if unexercised, on the earlier of: (i) 180 days following Termination as defined in this Agreement, or (ii) 3 years from their issuance date.

 

 

 

 

3.3.1.

Performance Objectives for Year 1. The basic Performance Objectives for 2015 and corresponding award weighing are as follows:

 

3.3.1.1.

Achieving minimum gross advertising revenue mutually agreed upon between the Parties: 40% of total Performance Options;

 

3.3.1.2.

Other Performance Objectives to be mutually agreed upon between the Parties based upon the approved budget and business plan for 2015, including: (i) earnings before interest, taxes, depreciation and amortization ("EBITDA"); and (ii) installed base, mobile users, total revenue, and cost management: 50% of total Performance Options;

 

3.3.1.3.

Certain qualitative Performance Objectives related to business leadership, to be mutually agreed upon between the parties: 10% of total Performance Options.

 

3.3.2.

Performance Objectives for Year 2. No later than December 31, 2015, the parties shall agree upon the specific Performance Objectives for Year 2.

 

4.

Expenses. The Executive shall be entitled to reimbursement of all reasonable and necessary out-of-pocket business, entertainment, travel, cellular and data expenses incurred by the Executive in connection with the performance of Executive's duties hereunder in accordance with the Company's expense reimbursement policies and procedures.

 

5.

Employee Benefits. During the Employment Term, the Executive shall be entitled to participate in all employee benefit plans, practices and programs maintained by the Company, as in effect from time to time (collectively, "Employee Benefit Plans"), on a basis which is no less favorable than is provided to other similarly situated executives of the Company, to the extent consistent with applicable law and the terms of the applicable Employee Benefit Plans. The Company reserves the right to amend or cancel any Employee Benefit Plans at any time in its sole discretion, subject to the terms of such Employee Benefit Plan and applicable law.

 

6.

Vacation; Paid Time-off. During the Employment Term, the Executive shall be entitled to fifteen (15) days of paid vacation days per calendar year (prorated for partial years) in accordance with the Company's vacation policies, as in effect from time to time. The Executive shall receive other paid time-off in accordance with the Company's policies for executive officers as such policies may exist from time to time.

 

 

 

 

7.

Company Indemnification. During the term of the Executive's engagement with the Company, and for a period of two (2) years thereafter, the Company or any successor to the Company shall purchase and maintain, at its own expense, directors' and officers' liability insurance providing coverage to the Executive on terms that are no less favorable than the coverage provided to other directors and similarly situated executives of the Company. If the Company fails to provide adequate coverage, the indemnification language below shall apply;

 

To the extent that directors' and officers' liability insurance provides inadequate coverage in the event that Executive is made a party or threatened to be made a party to any action, suit, or proceeding, whether civil, criminal, administrative or investigative (a "Proceeding"), the Executive shall be indemnified and held harmless by the Company to the extent and on terms that are no less favorable than the indemnification terms afforded to other directors and Executives or executives performing similar roles in the Company, from and against any liabilities, costs, claims and expenses, including all costs and expenses incurred in defense of any Proceeding (including attorneys' fees).

 

8.

Executive Indemnification. The Executive agrees to indemnify and hold harmless the Company and its directors, officers, agents, representatives and employees (including attorney's fees) from and against all claims, demands, and causes of action arising from Executive's failure to perform job functions or duties as required, or resulting from conduct while engaging in any activity outside the scope of this Agreement, before, during or after the termination of this Agreement or any wrongful or negligent act or omission of the Executive. Upon the Company's request, the Executive shall at his own cost defend the Company and its directors, officers, agents, representatives and employees against such claims and demands.

 

9.

Termination. The Employment Term and the Executive's employment hereunder may be terminated by either the Company or the Executive at any time and for any reason; provided that, unless otherwise provided herein, either party shall be required to give the other party at least thirty (30) days advance written notice of any termination of the Executive's employment. Upon termination of the Executive's employment during the Employment Term, the Executive shall be entitled to the compensation and benefits described in this Section 9 and shall have no further rights to any compensation or any other benefits from the Company or any of its affiliates.

 

9.1.

Definitions.

 

9.1.1.

Cause. For the purposes of this Agreement, "Cause" shall mean:

 

 

 

 

9.1.1.1.

the wilful refusal or failure of the Executive to perform the duties and responsibilities established under this Agreement;

 

9.1.1.2.

the Executive commits a dishonest act such as theft, fraud, embezzlement, misappropriation against the Company or its affiliates;

 

9.1.1.3.

the Executive breaches the confidentiality and non-solicitation undertakings set forth in this Agreement; or

 

9.1.1.4.

any other cause deemed sufficient in law or in any other circumstances in which no notice or payment in lieu thereof is required by law.

 

9.1.2.

Change of Control. For the purposes of this Agreement, "Change of Control" shall mean:

 

9.1.2.1.

one person (or more than one person acting as a group) acquires ownership of stock of the Company that, together with the stock held by such person or group, constitutes more than 50% of the total fair market value or total voting power of the stock of such Company; provided that, a Change in Control shall not occur if any person (or more than one person acting as a group) owns more than 50% of the total fair market value or total voting power of the Company's stock and acquires additional stock;

 

9.1.2.2.

one person (or more than one person acting as a group) acquires (or has acquired during the twelve-month period ending on the date of the most recent acquisition) ownership of the Company's stock possessing 50% or more of the total voting power of the stock of such Company;

 

9.1.2.3.

a majority of the members of the Board are replaced during any twelve month period by directors whose appointment or election is not endorsed by a majority of the Board before the date of appointment or election; or

 

9.1.2.4.

the sale of all or substantially all of the Company's assets.

 

9.2.

Termination For Cause. This Agreement may be terminated by the Company at any time without notice for Cause (as defined above). If the Agreement is terminated for Cause, the Executive shall not be entitled to any payments in the nature of severance or termination payments, however the Executive shall be entitled to receive:

 

9.2.1.

Any accrued but unpaid Professional Fees, which shall be paid on the termination date;

 

9.2.2.

Any earned but unpaid Semi-Annual Bonus with respect to any completed semi annual periods immediately preceding the termination date, which shall be paid on the otherwise applicable payment date;

 

 

 

 

9.2.3.

Reimbursement for unreimbursed business expenses properly incurred by the Executive, which shall be subject to and paid in accordance with the Company's expense reimbursement policy.

 

Items 9.2.1 through 9.2.3 are referred to herein collectively as the "Accrued Amounts".

 

9.3.

Termination Without Cause or for Convenience. The Company may terminate this Agreement without Cause or for Convenience at any time by providing to the Executive 30 days prior written notice. If terminated without cause or for Convenience, the Executive shall be entitled to receive:

 

9.3.1.

The Accrued Amounts, as defined above;

 

9.3.2.

A lump sum payment equal to six months of the Base Salary, which shall be paid within thirty (30) days following the Termination Date.

 

9.4.

Termination Due to a Change of Control. In the event that a Change in Control (as defined above) occurs during the Contract Term, the Executive may terminate his employment for any reason during the 180-day period following the Change in Control and such termination shall be deemed to be for Good Reason, except in the case where an acquirer requires the Executive to continue performing his role or a similar role in the company for a mutually agreed upon period of time post-acquisition (the "Extension Period") and is prepared to adequately compensate Executive for performing such services, in which case Executive agrees to waive his right to terminate his employment until the end of the agreed upon Extension Period. In the event of a Change of Control, and subject to any agreed upon Extension Period, the Executive may terminate this Agreement by providing the Company or its successor with 30 days prior written notice. If terminated due to a Change in Control, the Executive shall be entitled to receive:

 

9.4.1.

The Accrued Amounts, as defined above;

 

9.4.2.

A lump sum payment equal to six months of the Base Salary, which shall be paid within thirty (30) days following the Termination Date.

 

9.4.3.

For the purposes of this Agreement, the merger of Select-TV Solutions, Inc. and Select-TV Malaysia, if and when it happens, does not constitute a Change of Control.

 

9.5.

In All Cases. Notwithstanding the terms of any Stock Plan or any applicable award agreements, if terminated for any reason, the Executive shall be entitled to receive the following:

 

9.5.1.

All Restricted Shares shall become fully vested;

 

 

 

 

 

9.5.2.

All outstanding earned but unvested stock options granted to the Executive during the Contract Term shall become fully vested and exercisable for a period of one hundred eighty (180) days. Earned but unvested options are calculated according to the following formula: the number of months worked in the period when an option grant is being earned divided by twelve times the number of options granted for that Option Grant Period (as specified in the table in para 3.3 above), subject to meeting the Performance Objectives described in Section 3.3.1 or 3.3.2 above. For example, if terminated in November, 2015, Executive would immediately vest 1,875,000 options (9/12 times 2.5m) provided the Performance Objectives associated with the period of engagement (in this case March to November, 2015) have successfully been achieved. If the Performance Objectives have not been met, there will be no earned options and no option vesting.

 

10.

Confidentiality Agreement. Concurrent with the execution of this Agreement, Executive shall execute the Company's Confidential Information, Non-Compete and Invention Assignment Agreement, attached hereto as Exhibit B.

 

11.

Governing Law: Jurisdiction and Venue. This Agreement, for all purposes, shall be construed in accordance with the laws of Nevada without regard to conflicts of law principles. Any action or proceeding by either of the parties to enforce this Agreement shall be brought only in a state or federal court located in the state of Nevada, county of Clark. The parties hereby irrevocably submit to the exclusive jurisdiction of such courts and waive the defense of inconvenient forum to the maintenance of any such action or proceeding in such venue.

 

12.

Entire Agreement. Unless specifically provided herein, this Agreement contains all of the understandings and representations between the Executive and the Company pertaining to the subject matter hereof and supersedes all prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, with respect to such subject matter. The parties mutually agree that the Agreement can be specifically enforced in court and can be cited as evidence in legal proceedings alleging breach of the Agreement.

 

13.

Modification and Waiver. No provision of this Agreement may be amended or modified unless such amendment or modification is agreed to in writing and signed by the Executive and by the Chairman of the Board of the Company. No waiver by either of the parties of any breach by the other party hereto of any condition or provision of this Agreement to be performed by the other party hereto shall be deemed a waiver of any similar or dissimilar provision or condition at the same or any prior or subsequent time, nor shall the failure of or delay by either of the parties in exercising any right, power or privilege hereunder operate as a waiver thereof to preclude any other or further exercise thereof or the exercise of any other such right, power or privilege.

 

 

 

 

14.

Severability. Should any provision of this Agreement be held by a court of competent jurisdiction to be enforceable only if modified, or if any portion of this Agreement shall be held as unenforceable and thus stricken, such holding shall not affect the validity of the remainder of this Agreement, the balance of which shall continue to be binding upon the parties with any such modification to become a part hereof and treated as though originally set forth in this Agreement.

 

The parties further agree that any such court is expressly authorized to modify any such unenforceable provision of this Agreement in lieu of severing such unenforceable provision from this Agreement in its entirety, whether by rewriting the offending provision, deleting any or all of the offending provision, adding additional language to this Agreement or by making such other modifications as it deems warranted to carry out the intent and agreement of the parties as embodied herein to the maximum extent permitted by law.

 

The parties expressly agree that this Agreement as so modified by the court shall be binding upon and enforceable against each of them. In any event, should one or more of the provisions of this Agreement be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions hereof, and if such provision or provisions are not modified as provided above, this Agreement shall be construed as if such invalid, illegal or unenforceable provisions had not been set forth herein.

 

15.

Captions. Captions and headings of the sections and paragraphs of this Agreement are intended solely for convenience and no provision of this Agreement is to be construed by reference to the caption or heading of any section or paragraph.

 

16.

Counterparts. This Agreement may be executed in separate counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument.

 

17.

Survival. Upon the expiration or other termination of this Agreement, the respective rights and obligations of the parties hereto shall survive such expiration or other termination to the extent necessary to carry out the intentions of the parties under this Agreement.

 

18.

Notice. Notices and all other communications provided for in this Agreement shall be in writing and shall be delivered personally or sent by registered or certified mail, return receipt requested, or by overnight carrier to the parties at the addresses set forth below (or such other addresses as specified by the parties by like notice):

 

If to the Company:

 

Select-TV Solutions, Inc.

1395 Brickell Avenue

Suite 800

Miami, FL 33131

Attention: Philippe Germain, Chairman

 

 

 

 

If to the Executive:

 

9484 So. Eastern Avenue

Suite 105-330

Las Vegas, NV 89123

 

19.

Successors and Assigns. This Agreement is personal to the Executive and shall not be assigned by the Executive. Any purported assignment by the Executive shall be null and void from the initial date of the purported assignment. The Company may assign this Agreement to any successor or assign (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company. This Agreement shall inure to the benefit of the Company and permitted successors and assigns.

 

20.

Withholding. The Company shall have the right to withhold from any amount payable hereunder any Federal, state and local taxes in order for the Company to satisfy any withholding tax obligation it may have under any applicable law or regulation.

 

21.

Executive Acknowledgement. The Executive acknowledges that he has had the necessary time to read and understand this Agreement and the opportunity to ask any relevant questions that he may have, and that he has verified the scope of his rights and obligations and has had the opportunity to consult a legal advisor of his choosing. Furthermore, the Executive acknowledges that the components of this Agreement were reached following negotiation and that, consequently, he understands and accepts the nature and scope of his rights and the obligations set out herein.

 

 

 

 

[Signature page follows]

 

 

 

 

 

 

IN WITNESS WHEREOF, THE PARTIES HAVE SIGNED TillS AGREEMENT ON THE DATE FIRST INDICATED ABOVE, TO BE EFFECTIVE AS OF THE EFFECTIVE DATE.

 

SELECT-TV SOLUTIONS, INC.

 

 

 

 

By /s/ Philippe Germain		/s/ Brooks E. Pickering
Name: Philippe Germain		Brooks E. Pickering
Title: Chairman

 

 

 

 

 

 

 

 

 

 

 

Exhibit A

 

Duties of Executive

 

Job Purpose. Responsible for establishing the company's goals and strategies and presiding over the entire workforce. Oversees budgets and ensures resources are properly allocated. Ensures departments meet individual goals. Responsible for overall accountability to shareholders and the general public.

 

Essential Duties and Responsibilities:

 

1.

Provide visionary and strategic leadership for the Company.

2.

Develop a strategic plan to advance the Company's mission and objectives and to promote revenue, profitability, and growth as an organization.

3.

Develop and implement strategies and set the overall direction of the Company.

4.

Collaborate with the Board to develop the policies and direction of the Company.

5.

Provide adequate and timely information to the Board to enable it to effectively execute its oversight role.

6.

Meet with the Board and other executives to determine if Company is in accordance with goals and policies.

7.

Present company report at Annual Stockholder and Board of Director meetings.

8.

Direct the Company's financial goals, objectives, and budgets.

9.

Review activity reports and financial statements to determine progress and status in attaining objectives and revise objectives and plans in accordance with current conditions.

10.

Oversee foreign operations (the Americas) to include evaluating operating and financial performance.

11.

Oversee all other executives and staff within the Company.

12.

Direct Company planning and policy-making committees.

13.

Direct staff, including organizational structure, professional development, motivation, performance evaluation, discipline, compensation, personnel policies, and procedures.

14.

Approve Company operational procedures, policies, and standards.

15.

Implement the organization's guidelines on a day-to-day basis.

16.

Oversee the hiring, training, and termination of employees.

17.

Preside over quality control.

18.

Oversee the investment of funds and manage associated risks, supervise cash management activities, execute capital-raising strategies to support the Company's expansion, and deal with mergers and acquisitions.

19.

Develop and maintain relationships with other associations, industry, and government officials that are in the best interest of the company.

20.

Manage press releases and public relations.

21.

Promote the company through written articles and personal appearances at conferences and on radio and TV.

22.

Represent the company at legislative sessions, committee meetings, and at formal functions.

23.

Promote and encourage investment in the Company.

24.

Other duties as assigned.

 

Future Position. The Parties agree that Executive is intended to become, subject to the terms of this Agreement, the Chief Executive Officer of all operations in the Americas (North America, Central America, South America, Hawaii and the Caribbean).

 

 

 

 

Exhibit B

 

Select-TV Solutions, Inc.

Confidential Information,

Non-Compete and Invention Assignment Agreement

 

As a condition of my employment as a Consultant (the "Employment") with Select-TV Solutions, Inc., its subsidiaries, affiliates, successors or assigns (together the "Company"), and in consideration of my further employment with the Company and my receipt of the compensation now and hereafter paid to me by Company and the Company's agreement in Section l(a)(i), I agree to the following terms and conditions of this Confidential Information and Invention Assignment Agreement (the "Agreement"):

 

1.

Confidential Information.

 

(a)

Company Information.

 

(i) The Company agrees that upon the commencement of my employment, it will make available to me that Confidential Information of the Company that will enable me to optimize the performance of my duties to the Company. In exchange, I agree to use such Confidential Information solely for the Company's benefit. Notwithstanding the preceding sentence, I agree that upon the termination of my employment in accordance with Section 1, the Company shall have no obligation to provide or otherwise make available to me any of its Confidential Information. I understand that "Confidential Information" means any Company proprietary information, technical data, trade secrets or know-how, including, but not limited to, research, product plans, products, services, customer lists and customers (including, but not limited to, customers of the Company on whom I called or with whom I became acquainted during the term of my employment), markets, software, developments, inventions, processes, formulas, technology, designs, drawings, engineering, hardware configuration information, marketing, finances or other business information disclosed to me by the Company either directly or indirectly in writing, orally or by drawings or observation of parts or equipment. I further understand that Confidential Information does not include any of the foregoing items which has become publicly known and made generally available through no wrongful act or omission of mine or of others who were under confidentiality obligations as to the item or items involved or improvements or new versions thereof.

 

(ii) I agree at all times during the term of my employment and thereafter, to hold in strictest confidence, and not to use, except for the exclusive benefit of the Company, or to disclose to any person, firm or corporation without written authorization of the Board of Directors of the Company, any Confidential Information of the Company.

 

(b) Former Employer Information. I agree that I will not, during my employment with the Company, improperly use or disclose any proprietary information or trade secrets of any former or concurrent employer or other person or entity and that I will not bring onto the premises of the Company any unpublished document or proprietary information belonging to any such employer, person or entity unless consented to in writing by such employer, person or entity.

 

 

 

 

(c) Third Party Information. I recognize that the Company has received and in the future will receive from third parties their confidential or proprietary information subject to a duty on the Company's part to maintain the confidentiality of such information and to use it only for certain limited purposes. I agree to hold all such confidential or proprietary information in the strictest confidence and not to disclose it to any person, firm or corporation or to use it except as necessary in carrying out my work for the Company consistent with the Company's agreement with such third party.

 

2. Inventions.

 

(a) Inventions Retained and Licensed. I have attached hereto, as Exhibit A, a list describing all inventions, original works of authorship, developments, improvements, and trade secrets which were made by me prior to my employment with the Company (collectively referred to as "Prior Inventions"), which belong to me, which relate to the Company's proposed business, products or research and development, and which are not assigned to the Company hereunder; or, if no such list is attached, I represent that there are no such Prior Inventions. I agree that I will not incorporate, or permit to be incorporated, any Prior Invention owned by me or in which I have an interest into a Company product, process or machine without the Company's prior written consent. Notwithstanding the foregoing sentence, if, in the course of my employment with the Company, I incorporate into a Company product, process or machine a Prior Invention owned by me or in which I have an interest, the Company is hereby granted and shall have a nonexclusive, royalty free, irrevocable, perpetual, worldwide license to make, have made, modify, use and sell such Prior Invention as part of or in connection with such product, process or machine.

 

(b) Assignment of Inventions. I agree that I will promptly make full written disclosure to the Company, will hold in trust for the sole right and benefit of the Company, and hereby assign to the Company, or its designee, all my right, title, and interest in and to any and all inventions, original works of authorship, developments, concepts, improvements, designs, discoveries, ideas, trademarks or trade secrets, whether or not patentable or registrable under copyright or similar laws, which I may solely or jointly conceive or develop or reduce to practice, or cause to be conceived or developed or reduced to practice, during the period of time I am in the employ of the Company (collectively referred to as "Inventions"), except as provided in Section 2(f) below. I further acknowledge that all original works of authorship which are made by me (solely or jointly with others) within the scope of and during the period of my employment with the Company and which are protectable by copyright are "works made for hire," as that term is defined in the United States Copyright Act. I understand and agree that the decision whether or not to commercialize or market any Invention developed by me solely or jointly with others is within the Company's sole discretion and for the Company's sole benefit and that no royalty will be due to me as a result of the Company's efforts to commercialize or market any such Invention.

 

(c) Inventions Assigned to the United States. I agree to assign to the United States government all my right, title, and interest in and to any and all Inventions whenever such full title is required to be in the United States by a contract between the Company and the United States or any of its agencies.

 

(d) Maintenance of Records. I agree to keep and maintain adequate and current written records of all Inventions made by me (solely or jointly with others) during the term of my employment with the Company. The records will be in the form of notes, sketches, drawings, and any other format that may be specified by the Company. The records will be available to and remain the sole property of the Company at all times.

 

 

 

 

(e) Patent and Copyright Registrations. I agree to assist the Company, or its designee, at the Company's expense, in every proper way to secure the Company's rights in the Inventions and any copyrights, patents, mask work rights or other intellectual property rights relating thereto in any and all countries, including, but not limited to, the disclosure to the Company of all pertinent information and data with respect thereto, the execution of all applications, specifications, oaths, assignments and all other instruments which the Company shall deem necessary in order to apply for and obtain such rights and in order to assign and convey to the Company, its successors, assigns, and nominees the sole and exclusive rights, title and interest in and to such Inventions, and any copyrights, patents, mask work rights or other intellectual property rights relating thereto. I further agree that my obligation to execute or cause to be executed, when it is in my power to do so, any such instrument or papers shall continue after the termination of this Agreement. If the Company is unable because of my mental or physical incapacity or for any other reason to secure my signature to apply for or to pursue any application for any United States or foreign patents or copyright registrations covering Inventions or original works of authorship assigned to the Company as above, then I hereby irrevocably designate and appoint the Company and its duly authorized officers and agents as my agent and attorney in fact, to act for and in my behalf and stead to execute and file any such applications and to do all other lawfully permitted acts to further the prosecution and issuance of letters patent or copyright registrations thereon with the same legal force and effect as if executed by me.

 

(f) Exception to Assignments. I understand that the provisions of this Agreement requiring assignment of Inventions to the Company shall not apply to any invention that I have developed entirely on my own time without using the Company's equipment, supplies, facilities, trade secret information or Confidential Information except for those inventions that either (i) relate at the time of conception or reduction to practice of the invention to the Company's business, or actual or demonstrably anticipated research or development of the Company or (ii) result from any work that I performed for the Company. I will advise the Company promptly in writing of any inventions that I believe meet the foregoing criteria and not otherwise disclosed on Exhibit A.

 

3. Returning Company Documents, etc. I agree that, at the time of leaving the employ of the Company, I will deliver to the Company (and will not keep in my possession, recreate or deliver to anyone else) any and all devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings blueprints, sketches, materials, equipment, other documents or property, or reproductions of any aforementioned items developed by me pursuant to my employment with the Company or otherwise belonging to the Company, its successors or assigns, including, but not limited to, those records maintained pursuant to paragraph 2(d). In the event of the termination of my employment, I agree to sign and deliver the "Termination Certification" attached hereto as Exhibit B.

 

4. Solicitation of Employees. I agree that for a period of eighteen (18) months immediately following the termination of my relationship with the Company for any reason, whether with or without good cause or for any or no cause, at the option either of the Company or myself, with or without notice, I will not hire any employees of the Company and I will not, either directly or indirectly, solicit, induce, recruit or encourage any of the Company's employees to leave their employment, or take away such employees, or attempt to solicit, induce, recruit, encourage or take away employees of the Company, either for myself or for any other person or entity.

 

 

 

 

5. Interference. I agree that during the course of my employment and for a period of eighteen (18) months immediately following the termination of my relationship with the Company for any reason, whether with or without good cause or for any or no cause, at the option either of the Company or myself, with or without notice, I will not, either directly or indirectly, interfere with the Company's contracts and relationships, or prospective contracts and relationships, including, but not limited to, the Company's customer or client contracts and relationships.

 

6. Covenant Not to Compete.

 

(a) I agree that during the course of my employment and for a period of eighteen (18) months immediately following the termination of my relationship with the Company for any reason, whether with or without good cause or for any or no cause, at the option either of the Company or myself, with or without notice, I will not, without the prior written consent of the Company, (i) serve as a partner, employee, consultant, officer, director, manager, agent, associate, investor, or otherwise for, (ii) directly or indirectly, own, purchase, organize or take preparatory steps for the organization of, or (iii) build, design, finance, acquire, lease, operate, manage, invest in, work or consult for or otherwise affiliate myself with, any business in competition with or otherwise similar to the Company's business. The foregoing covenant shall cover my activities in every part of the Territory in which I may conduct business during the term of such covenant as set forth above. "Territory" shall mean (i) all counties in the State of Nevada, (ii) all other states of the United States of America and (iii) all other countries of the world; provided that, with respect to clauses (ii) and (iii), the Company derives at least five percent (5%) of its gross revenues from such geographic area prior to the date of the termination of my relationship with the Company.

 

(b) I acknowledge that I will derive significant value from the Company's agreement in Section 1(a)(i) to provide me with that Confidential Information of the Company to enable me to optimize the performance of my duties to the Company. I further acknowledge that my fulfillment of the obligations contained in this Agreement, including, but not limited to, my obligation neither to disclose nor to use the Company's Confidential Information other than for the Company's exclusive benefit and my obligation not to compete contained in subsection (a) above, is necessary to protect the Company's Confidential Information and, consequently, to preserve the value and goodwill of the Company. I further acknowledge the time, geographic and scope limitations of my obligations under subsection (a) above are reasonable, especially in light of the Company's desire to protect its Confidential Information, and that I will not be precluded from gainful employment if I am obligated not to compete with the Company during the period and within the Territory as described above.

 

(c) The covenants contained in subsection (a) above shall be construed as a series of separate covenants, one for each city, county and state of any geographic area in the Territory. Except for geographic coverage, each such separate covenant shall be deemed identical in terms to the covenant contained in subsection (a) above. If, in any judicial proceeding, a court refuses to enforce any of such separate covenants (or any part thereof), then such unenforceable covenant (or such part) shall be eliminated from this Agreement to the extent necessary to permit the remaining separate covenants (or portions thereof) to be enforced. In the event the provisions of subsection (a) above are deemed to exceed the time, geographic or scope limitations permitted by applicable law, then such provisions shall be reformed to the maximum time, geographic or scope limitations, as the case may be, then permitted by such law.

 

 

 

 

 

7. Representations. I agree to execute any proper oath or verify any proper document required to carry out the terms of this Agreement. I represent that my performance of all the terms of this Agreement will not breach any agreement to keep in confidence proprietary information acquired by me in confidence or in trust prior to my employment by the Company. I have not entered into, and I agree I will not enter into, any oral or written agreement in conflict herewith.

 

8. Arbitration and Equitable Relief.

 

(a) Arbitration. Except as provided in subsection (b) below, I agree that any dispute, claim or controversy concerning my employment or the termination of my employment or any dispute, claim or controversy arising out of or relating to any interpretation, construction, performance or breach of this Agreement, shall be settled by arbitration to be held in Las Vegas, Nevada in accordance with the rules then in effect of the American Arbitration Association. The arbitrator may grant injunctions or other relief in such dispute or controversy. The decision of the arbitrator shall be final, conclusive and binding on the parties to the arbitration. Judgment may be entered on the arbitrator's decision in any court having jurisdiction. The Company and I shall each pay one-half of the costs and expenses of such arbitration, and each of us shall separately pay our counsel fees and expenses.

 

(b) Equitable Remedies. I agree that it would be impossible or inadequate to measure and calculate the Company's damages from any breach of the covenants set forth in Sections 1, 2, 4, 5 and, 6 herein. Accordingly, I agree that if I breach any of such Sections, the Company will have available, in addition to any other right or remedy available, the right to obtain an injunction from a court of competent jurisdiction restraining such breach or threatened breach and to specific performance of any such provision of this Agreement. I further agree that no bond or other security shall be required in obtaining such equitable relief and I hereby consent to the issuance of such injunction and to the ordering of specific performance.

 

9. General Provisions.

 

(a) Governing Law; Consent to Personal Jurisdiction. THIS AGREEMENT WILL BE GOVERNED BY THE LAWS OF THE STATE OF NEVADA WITHOUT REGARD FOR CONFLICTS OF LAWS PRINCIPLES. I HEREBY EXPRESSLY CONSENT TO THE PERSONAL JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN THE STATE OF NEVADA FOR ANY LAWSUIT FILED THERE AGAINST ME BY THE COMPANY CONCERNING MY EMPLOYMENT OR THE TERMINATION OF MY EMPLOYMENT OR ARISING FROM OR RELATING TO THIS AGREEMENT.

 

(b) Entire Agreement. This Agreement sets forth the entire agreement and understanding between the Company and me relating to the subject matter herein and supersedes all prior discussions between us. No modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, will be effective unless in writing signed by the party to be charged. Any subsequent change or changes in my duties, salary or compensation will not affect the validity or scope of this Agreement.

 

(c) Severability. If one or more of the provisions in this Agreement are deemed void by law, including, but not limited to, the covenant not to compete in Section 6, then the remaining provisions will continue in full force and effect.

 

 

 

 

(d) Successors and Assigns. This Agreement will be binding upon my heirs, executors, administrators and other legal representatives and will be for the benefit of the Company, its successors, and its assigns.

 

(e) Construction. The language used in this Agreement will be deemed the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against either party.

 

(f) Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be enforceable, and all of which together shall constitute one agreement.

 

13. I acknowledge and agree to each of the following items:

 

(a) /s/ I am executing this Agreement voluntarily and without any duress or undue influence by the Company or anyone else; and

 

(b) /s/ I have carefully read this Agreement. I have asked any questions needed for me to understand the terms, consequences and binding effect of this Agreement and fully understand them; and

 

(c) /s/ I sought the advice of an attorney of my choice if I wanted to before signing this Agreement.

 

 

 

[Remainder of this page intentionally left blank]

 

 

 

 

 

IN WITNESS WHEREOF, the parties have executed this Agreement on the day, month and year first set forth below; provided, however, that the Company executed this Agreement solely for the purpose of entering into the covenants contained in Section 1(a)(i).

 

 

Date: 3-1-15

 

COMPANY:

 

 

____________________________________

Company Representative’s Signature

 

 

____________________________________		Date: _________________________
Company Representative’s Printed Name

 

 

EMPLOYEE:

 

/s/ signature                                              

Employee’s Signature

 

Brooks E. Pickering		Date: 3-1-15
Employee’s Printed Name

 

 

WITNESS:

 

                                                            

Witness Signature

 

		Date:
Witness Printed Name

 

 

 

 

 

 

 

EXHIBIT A

LIST OF PRIOR INVENTIONS

AND ORIGINAL WORKS OF AUTHORSHIP

 

 

Title	Date	Identifying Number or Brief Description

 

 

[X] No inventions or improvements

 

[_] Additional Sheets Attached

 

Signature of Employee: /s/ signature                 

 

Print Name of Employee: Brooks E. Pickering                  

 

Date: 3-1-15                         

 

 

  

 

EXHIBIT B

SELECT-TV SOLUTIONS, INC.

TERMINATION CERTIFICATION

 

I certify that I do not have in my possession, nor have I failed to return, any devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, materials, equipment, other documents or property, or reproductions of any aforementioned items belonging to Select-TV Solutions, Inc., its subsidiaries, affiliates, successors or assigns (together, the "Company").

 

I further certify that I have complied with all the terms of the Company's Confidential Information, Non-Complete and Invention Assignment Agreement signed by me, including, but not limited to, the reporting of any Inventions and original works of authorship (as defined therein), conceived or made by me (solely or jointly with others) covered by that agreement.

 

I confirm my agreements contained in Section 1 (Confidential Information), Section 4 (Solicitation of Employees), Section 5 (Interference) and Section 6 (Covenant Not to Compete) of the Confidential Information, Non-Compete and Invention Assignment Agreement.

 

 

[Employee’s Signature]		[Date]
__________________________________
[Typed or Printed Name of Employee]