Xxx Xxxxxxxxxx
MBBRAMAR, INC.
April 29, 2002
Page 5
FIRST RESTATED LETTER OF INTENT
April 29, 2002
MBBRAMAR, INC.
00000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000
Attn: Xxx Xxxxxxxxxx
Dear Xx. Xxxxxxxxxx:
WHEREAS, XxxxXxxxx, MBB, and SSFS are parties to that certain Letter of
Intent dated November 29, 2001 (the "Original LOI");
WHEREAS, the parties have agreed to re-negotiate the terms of the Original
LOI, as reflected in this First Restated Letter of Intent;
NOW, THEREFORE, for mutual consideration, of the receipt and sufficiency of
which is hereby acknowledged, the parties agree to the terms of this First
Restated Letter of Intent as follows:
This will confirm our understanding concerning the proposed acquisition of
CardReady International, Inc., a California corporation ("CardReady") and
majority-owned subsidiary of MBBRAMAR, INC., a California corporation ("MBB") by
Single Source Financial Services Corporation, a New York Corporation ("SSFS")
(the "Transaction"). This letter does not contain all terms of the agreement
that must be reached in order for the Transaction to be consummated, but is
intended as an outline of certain material provisions and to create an
irrevocable option in favor of SSFS. The terms of our understanding are as
follows:
A. MBB owns over 96% of the issued and outstanding voting securities of
CardReady, including options, warrants, and other instruments convertible into
voting securities (the "CardReady Shares").
B. MBB is controlled by certain individuals who are shareholders of
SSFS.
C. MBB hereby grants to SSFS an exclusive irrevocable option (the
"Option"), exercisable at any time on thirty (30) days written notice (unless
extended because of the requirements of the Securities and Exchange Commission,
SSFS' principal exchange, or the corporate laws of the State of New York) for a
period of eighteen (18) months from the date hereof (the "Option Period"), to
acquire all of the CardReady Shares, including any CardReady securities issued
to MBB between the date hereof and the date of exercise of said option. As
consideration for MBB granting SSFS the Option, SSFS agrees that if SSFS
exercises the Option during the Option Period, the purchase price it will pay
for the CardReady Shares, plus any additional CardReady securities as outlined
above, will be equal to four million (4,000,000) shares of common stock of SSFS
(the "SSFS Shares").
D. The SSFS Shares shall be restricted in accordance with Rule 144 and
will carry an appropriate restrictive legend, and will be further subject to
transfer and pledge restrictions as set forth in this agreement.
E. The SSFS Shares will not contain registration rights.
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F. As a material term of the Transaction, SSFS will acquire all of the
assets of CardReady and will assume all of the debts and obligations of
CardReady and any agreed-upon debts of MBB.
G. For a period of three (3) years from the closing of the Transaction,
if (i) the closing bid price of SSFS common stock as quoted on its primary
exchange is less than $1.00 per share for thirty (30) consecutive trading days,
or (ii) if SSFS common stock is not listed for trading on any public exchange
for a period of thirty (30) consecutive trading days, or (iii) if the trading
volume of SSFS common stock on its primary exchange is less than 250,000 shares
per month for three (3) consecutive full-calendar months, then MBB shall have
the right, but not the obligation, to purchase the CardReady Shares back from
SSFS for consideration equal to the SSFS Shares (as adjusted for any stock
splits or recapitalizations).
H. For a period of three (3) years from the closing of the Transaction,
if XxxxXxxxx fails for a period of thirty (30) consecutive business days to
maintain a relationship with a back-end processor and a bank, then SSFS shall
have the right, but not the obligation, to "put" the CardReady Shares back to
MBB for consideration equal to the SSFS Shares (as adjusted for any stock splits
or recapitalizations). MBB agrees that it will not assign, transfer,
hypothecate, pledge, or otherwise encumber the SSFS Shares during this three (3)
year period.
I. SSFS will maintain from the date hereof until this agreement is
terminated or the end of the Option Period, out of its authorized but unissued
shares of common stock, that number of shares of common stock represented by the
SSFS Shares.
J. As additional consideration for the grant of this option, SSFS
agrees to, loan to CardReady up to $500,000.00 (Five Hundred Thousand Dollars)
payable in traunches as agreed between the parties, bearing no interest and
payable in a balloon payment at the end of three (3) years from the date
thereof.
K. At its next meeting of shareholders, SSFS agrees to seek shareholder
ratification of the Transactions contemplated hereby. The parties acknowledge
and agree that approval of the SSFS shareholders is not required in order to
consummate the transaction.
Following the date of exercise of the Option, the parties will cause their
respective officers, employees, counsel, agents, investment bankers,
accountants, and other representatives working on the Transaction to cooperate
with each other with respect to the Transaction until the Transaction is
consummated or negotiations with respect thereto are terminated. If MBB and/or
CardReady do not conduct the business and operations of CardReady in the
ordinary course, unless consented to by SSFS, then SSFS may terminate this
option agreement immediately, in its sole discretion.
Following the date hereof, MBB and CardReady agree that until the
Transaction is consummated, or until termination of the Option, whichever shall
occur first, to conduct the business and operations of CardReady in all respects
only in the ordinary course unless otherwise consented to in writing by SSFS.
Following the date hereof, the parties agree that until the Transaction is
consummated, or until termination of the Option, whichever shall occur first,
each party will afford to the officers, employees, counsel, agents, investment
bankers, accountants, and other representatives of the other party working on
the Transaction and lenders, investors, and prospective lenders and investors of
SSFS free and full access to its plants, properties, books, and records, will
permit them to make extracts from and copies of such books and records, and will
from time to time furnish them with such additional financial and operating data
and other information as to its financial condition, results of operations,
business, properties, assets, liabilities, or future prospects as they from time
to time may request. Each party will cause its independent certified public
accountants to make available to the other party and its independent certified
public accountant, the work papers relating to any audit of its financial
statements in the last five years.
Each party shall insure that all confidential information which such party
or any of its respective officers, directors, employees, counsel, agents,
investment bankers, or accountants and, in the case of SSFS, its lenders,
investors, or prospective lenders or investors may now possess or may hereafter
create or obtain relating to the financial condition, results of operations,
business, properties, assets, liabilities, or future prospects of the other
party, any affiliate of the other party, or any customer of supplier of such
other party or any such affiliate shall not be published, disclosed, or made
accessible by any of them to any other person or entity at any time or used by
any of them, in each case without the prior written consent of the other party;
provided, however, that the restrictions of this sentence shall not apply (a) as
may otherwise be required by law, (b) as may be necessary or appropriate in
connection with the enforcement of this Agreement, (c) to the extent such
information shall have otherwise become publicly available, or (d) as to SSFS,
to disclose by or on its behalf to lenders, investors, or prospective lenders or
investors or to others whose consent may be required or desirable in connection
with obtaining the financing or consents which are required or desirable to
consummate the Transaction. Each party shall, and shall cause all of such other
persons and entities who received confidential data from it to, deliver to the
other party all tangible evidence of such confidential information to which the
restrictions of the foregoing sentence apply at such time as negotiations with
respect to the Transaction are terminated before the parties enter into any
formal agreement as contemplated by this letter of intent.
It is understood that this is a binding letter of intent which creates a
legal obligation on behalf of the parties (including those obligations contained
in this paragraph and the preceding paragraph of this letter, and the
obligations contained in the preceding paragraph and the last sentence of this
paragraph shall continue to apply after the Option has expired). This letter
may not be assigned by either of the parties hereto. Neither party shall be
responsible for any of the other's expenses in connection with the negotiations,
documents, or transactions contemplated hereby.
This writing constitutes the entire agreement between the parties. There
are no covenants, conditions, or promises relating to the subject matter of this
agreement which are not contained herein. This Agreement shall be governed by
and construed and enforced in accordance with the laws of the State of
California (regardless of that jurisdiction or any other jurisdiction's choice
of law principles). To the extent permitted by law, the parties hereto agree
that all actions or proceedings arising in connection herewith, shall be
litigated in the state and federal courts located in the County of Los Angeles,
State of California, and each party hereby waives any right it may have to
assert the doctrine of Forum Non Conveniens or to object to venue. The parties
each hereby stipulate that the state and federal courts located in the County of
Los Angeles, State of California, shall have personal jurisdiction and venue
over each party for the purpose of litigating any such dispute, controversy or
proceeding arising out of or related to this Agreement.
This Agreement shall be binding upon and inure to the benefit of the
parties and their respective successors, heirs and permitted assigns. This
Agreement may not be altered, modified, changed or discharged except in writing
signed by all the parties. If any one or more of the provisions (or any part
thereof) of this Agreement shall be held to be invalid, illegal or unenforceable
in any respect, the validity, legality and enforceability of the remaining
provisions (or any part thereof) shall not in any way be affected or impaired
thereby. Time is of the essence in the performance of the obligations of the
parties in connection with this Agreement. All parties shall cooperate fully in
carrying out the terms of this Agreement and shall prepare, execute, and deliver
all documents reasonably necessary to carry out the terms of this Agreement.
If this letter accurately reflects our understanding, please so indicate by
signing the original and duplicate of this letter, and returning a fully
executed copy to me.
Very truly yours,
Single Source Financial Services Corporation
a New York corporation
/s/ Xxxxxx X. Sock
_________________________________
By: Xxxxxx X. Xxxx
Its: President
Accepted and agreed to: Accepted and agreed to:
MBBRAMAR, INC., CardReady International, Inc.,
a California corporation a California corporation
/s/ Xxx Xxxxxxxxxx /s/ Xxx Xxxxxxx
_________________________________ ______________________________
By: Xxx Xxxxxxxxxx By: Xxx Xxxxxxx
Its: President Its: President
Dated: 4/29/2002 Dated: 4/29/2002
