Exhibit 10.16
Heads of Agreement
Roo Media Corporation Inc. / I.T. Technology, Inc.
1. ▇▇▇▇▇▇ ▇▇▇▇▇ and Roo Media Corporation ("ROO") agrees to sell and I.T.
Technology, Inc. (the "Company") agrees to buy the Business and
"Business Assets" of ROO as defined below (the "Acquisition"):
"Business" shall mean the business carried on by and under the name of ROO. "
Business Assets" shall mean the following assets used in the Business which are
the assets sold by ROO to the Company under this Agreement:
(a) the Assets including but not limited to the "Assigned
Assets" as listed in Schedule 1 attached;
(b) the Business Names;
(c) The Business Records;
(d) the Goodwill;
(e) the Intellectual Property Rights;
(f) the Plant and Equipment;
(g) the Property;
(h) the Clients;
(i) the SalesForce Database
(j) Domain Names
(k) Trademarks and patents
hereafter referred to as the ("Business Assets")
2. It shall be a condition of this agreement and the consummation of the
Acquisition, that ▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇ Consulting, Inc. agree that
▇▇▇▇▇▇ ▇▇▇▇▇ shall be engaged to the Company for a period of not less than
36 months from the date of this agreement in a principal executive role as
shall be determined by the Board of Directors from time to time and as is
further defined in clause 7 below. It is agreed that in this role, subject
to the approval of the Board of Directors, ▇▇▇▇▇▇ ▇▇▇▇▇ shall amongst
other things, be responsible for: developing and fostering the goals and
strategies of the Company, setting the Company 's strategic direction and
maintaining responsibility for the Company 's overall financial results.
3. Upon the consummation of the Acquisition, the Company will issue a total
of 20,000,000 $0.0002 par value shares of restricted common stock in the
Company (Common Stock") to ▇▇▇▇▇▇ ▇▇▇▇▇ and/or ROO or their nominated
affiliates in consideration for the Business and Business Assets.
4. Upon the consummation of the Acquisition (the "Closing"), the Company will
grant to ▇▇▇▇▇▇ ▇▇▇▇▇ and/or ROO or their nominated affiliates
non-qualified stock options to purchase up to a total of an additional
20,000,000 shares of restricted Common Stock, at $.05 per share. (the "New
▇▇▇▇▇ Options"). The New ▇▇▇▇▇ Options will vest and be exercisable in
twelve quarterly installments commencing three months from the Closing, as
follows
a. 1st Installment 3 months after the Closing, options to
purchase 1,666,666 shares exercisable;
b. 2nd Installment 6 months after the Closing, options to
purchase a total of 3,333,333 shares exercisable;
c. 3rd Installment 9 months after the Closing, options to
purchase a total of 5,000,000 shares exercisable;
d. 4th Installment 12 months after the Closing, options to
purchase a total of 6,666,666 shares exercisable;
e. 5th Installment 15 months after the Closing, options to
purchase a total of 8,333,333 shares exercisable;
f. 6th Installment 18 months after the Closing, options to
purchase a total of 10,000,000 shares exercisable;
g. 7th Installment 21 months after the Closing, options to
purchase a total of 11,666,666 shares exercisable;
h. 8th Installment 24 months after the Closing, options to
purchase a total of 13,333,333 shares exercisable;
i. 9th Installment 27 months after the Closing, options to
purchase a total of 15,000,000 shares exercisable;
j. 10th Installment 30 months after the Closing, options to
purchase a total of 16,666,666 shares exercisable;
k. 11th Installment 33 months after the Closing, options to
purchase a total of 18,333,333 shares exercisable;
l. 12th Installment 36 months after the Closing, options to
purchase a total of 20,000,000 shares exercisable;
These options will have a term of 4 years from the date of grant.
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5. The Company will organize the surrender and cancellation by BM of its
existing option to acquire a 25% equity interest in ROO.
6. ▇▇▇▇▇▇ ▇▇▇▇▇ agrees to underwrite all funding requirements concerning
the operations of the Business of ROO, including fees of $US 6000 per
month payable to ▇▇▇▇▇ Consulting, Inc. for the services of ▇▇▇▇▇▇
▇▇▇▇▇ ("the operations") in the form of a loan which shall be no less
than $US40,000 to the Company ("the Loan"). ▇▇▇▇▇▇ ▇▇▇▇▇ undertakes
that the Loan will ensure adequate funding of the operations for at
least 90 days from the date of this agreement. The Loan shall bear
interest at a rate of 8% per annum, calculated monthly and may only be
repaid in the event that after the repayment of the Loan the Company
retains working capital (determined in accordance with generally
accepted accounting principles ("GAAP")), adjusted as set forth in the
following sentence, of no less than $US500,000 (the "Adjusted Working
Capital"). For the purposes hereof, the Adjusted Working Capital shall
exclude any proceeds or current assets derived from proceeds of a
transaction involving the sale, transfer, disposition or liquidation of
(i) assets currently owned by the Company or (ii) assets acquired in
connection with proposed Sale or the Company's proposed acquisition of
the business and assets of VideoDome or Streamcom.
7. ▇▇▇▇▇ Consulting Inc, shall enter into a 3 year consulting agreement
with the Company to provide the services of ▇▇▇▇▇▇ ▇▇▇▇▇ on an
exclusive basis to serve as a President, Chief Executive Officer and
Director of the Company, or such other position as the Board of
Directors of the Company shall determine on such terms and conditions
as the parties shall mutually agree upon.
8. ▇▇▇▇▇ Consulting Inc, shall enter into a 1 year consulting agreement
with the Company to provide the services of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ to serve an
executive officer of the Company or such other position as the Board of
Directors of the Company shall determine on such terms and conditions
as the parties shall mutually agree upon.
9. ▇▇▇▇▇ Consulting, Inc. and ▇▇▇▇▇▇ ▇▇▇▇▇ both agree that all previous
amounts of consulting fees previously deemed outstanding from the
Company's affiliate, ▇▇▇▇▇▇▇▇▇.▇▇▇ Networks, Inc shall no longer be
payable or of any force or effect.
10. ▇▇▇▇▇▇ ▇▇▇▇▇ and ROO both agree, that all previous share options in the
Company either granted and/or vested to both ▇▇▇▇▇▇ ▇▇▇▇▇ and ROO,
pursuant to the two separate Option Agreements dated July 30, 2001
shall terminate and no longer be of any force or effect.
11. ▇▇▇▇▇▇ ▇▇▇▇▇ and ROO agree to sell and the Company agrees to buy the
Business and the Business Assets of ROO for the purchase price as
described in Clause 3 above, free of any mortgage, lien, charge,
pledge, claim, covenant, or other encumbrance granted by ▇▇▇▇▇▇ ▇▇▇▇▇,
ROO or any other party.
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12. ROO agrees to use all reasonable endeavours to achieve the transfer of
the Business Assets and any business records, documents and information
as soon as practically possible not currently in the possession of the
Company.
13. ▇▇▇▇▇▇ ▇▇▇▇▇ and ROO agree that upon completion of this Heads of
Agreement, the Company will complete a due diligence review on ROO and
a formal definitive agreement will be prepared between the parties with
standard representations and warranties.
14. ▇▇▇▇▇▇ ▇▇▇▇▇ and ROO hereto covenants, represents and warrants that
each such party has full right, power, legal capacity and authority to
execute this Heads of Agreement has been approved by the board of
directors of ROO; that except as contemplated herein, no other consents
or approvals of any other third parties are required or necessary for
the transactions contemplated by this term sheet to be consummated..
15. ▇▇▇▇▇▇ ▇▇▇▇▇ and ROO agree that this term sheet shall be subject to the
approval of the Board of Directors of the Company.
Dated this 7th day of November, 2001
Agreed to and accepted by:
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
President (Principal Executive Officer)
▇▇▇▇▇ Consulting, Inc.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
President (Principal Executive Officer)
ROO Media Corporation, Inc.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
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SCHEDULE 1
Assigned Assets
The Assigned Assets, as defined and described in Section 1 of the Term Sheet,
include, but are not limited to, the following items:
1. Names, trademarks, service marks. Logos, or other branding devices, and
federal registrations therefore, which the Company is currently using
or intends to use in the course of business. Including, without
limitation "Roo Media" and "Roo Media Corporation, Inc" and derivations
thereof.
2. Domain names which the Company is currently using or intends to use in
the course of business, including without limitation, ▇▇▇.▇▇▇▇▇▇▇▇.▇▇▇
3. All designs, software, presentations, demonstration, source code,
inventions, software architecture specifications, and provisional
patent applications related to the business of the Company, the
organization of all information in a database format, the product
portal, and the dynamic creation of web pages providing organized
access to information from the database (collectively "Company
Technology")
4. All confidential information related to the business of the Company,
including methods of promoting the use of Company Technology, strategic
partners and alliances for furthering the adoption of Company
Technology, future functions or features of Company Technology, revenue
projections, market research, business models, methods of exploiting
Company Technology, business plans, and business development
strategies.
LOAN AGREEMENT
THIS DEED is made this 7th day of November 2001
BETWEEN:
▇▇▇▇▇▇ ▇▇▇▇▇ of ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇ , ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇
(hereinafter referred to as "the Lender") of the first part;
AND
I.T. TECHNOLOGY, INC. of ▇▇-▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
(hereinafter referred to as "the Borrower")
of the second part.
WHEREAS:
A. The Borrower wishes to borrow monies from the Lender.
B. The Lender is prepared to advance to the Borrower a minimum sum of
FORTY THOUSAND AMERICAN DOLLARS ($US40,000.00), on such terms and
conditions as noted in this Agreement, or such higher amounts as shall
be recorded in the Schedule of Loan Advances in this Agreement.
IN CONSIDERATION of the terms and conditions set out hereunder the parties
heretofore agree as follows:-
1. The Lender agrees to lend to the Borrower the amount specified in
Recital B hereof (hereinafter referred to as "the said Loan").
2. The details of every advance of funds by the Lender to the Borrower
pursuant to this Agreement shall be recorded in the Schedule of Loan
Advances in this Agreement, which shall be signed by a Director of the
Lender and a Director of the Borrower.
3. Said Loan shall be repaid by the Borrower to the Lender only in the
event that the Borrower retains after such repayment, working capital
(determined in accordance with generally accepted accounting principles
("GAAP")), adjusted as set forth in the following sentence, of no less
than $500,000. (the "Adjusted Working Capital") For the purposes
hereof, the Adjusted Working Capital shall exclude any proceeds or
current assets derived from proceeds of a transaction involving the
sale, transfer, disposition or liquidation of (y) assets currently
owned by the Company or (z) assets acquired in connection with proposed
Sale or the Company's proposed acquisition of the business and assets
of VideoDome or Streamcom.
4. Interest calculated monthly at a rate of 8% per annum on all loan funds
from time to time advanced pursuant to this Agreement shall be paid by
the Borrower to the Lender upon repayment of the said Loan.
5. This Agreement shall be governed by and construed in accordance with
the laws of the State of Victoria, Australia.
6. This Agreement shall be binding on and enure to the benefit of the
assignees and successors in title of the parties.
7. If any provision of this Agreement is held invalid, unenforceable or
illegal for any reason, this Agreement shall remain otherwise in full
force and the said provision shall be read down to such extent as may
be necessary to ensure that it does not infringe the laws of the said
State and as may be reasonable in all the circumstances so as to give
it a valid operation of a partial character and in the event that such
provision cannot be so read down it shall be deemed void and severable.
IN WITNESS WHEREOF the parties hereto have hereunto set their hands and seals
the day and year hereinbefore written.
THE LENDER
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
THE COMMON SEAL of the Borrower }
was hereto affixed }
in the presence of authorised persons: }
Director /s/ Yam-Hin Tan............... Director/Secretary /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Full Name Yam-Hin Tan.................. Full Name ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
SCHEDULE OF LOAN ADVANCES
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Advance Date Amount ($US) Lender's Signature Borrower's Signature
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