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EXHIBIT 10.16
INTERIM CLOSING AGREEMENT
THIS INTERIM CLOSING AGREEMENT ("Interim Agreement") is entered into on April
26, 1999, by and among Satellite Access Systems Inc. ("SAS"), a Nevada
corporation with a principal address of 000 Xxxxxx Xxxxxx X.X., 00xx Xxxxx, Xx.
Xxxxxxxxxx, XX, all the SAS shareholders, all the SAS directors, and Corsaire,
Inc. ("Corsaire"), a Delaware corporation, with a principal business address of
00 Xxxxxx Xxxxx, Xxxxx 000, Xxxxxx, XX 00000, and provides as follows, in
consideration of the mutual promises, covenants, and representations contained
herein:
1. OPERATING AGREEMENT. The parties are presently operating under a TAX FREE
ACQUISITION AGREEMENT ("Acquisition Agreement") dated April 21, 1999, in which
SAS and the SAS shareholders have provided for the exchange of 5,075,000 shares
of SAS common stock ("SAS Shares"), which represents one hundred-percent (100%)
of the outstanding and issued shares of SAS capital stock, to Corsaire in
return for 2,352,942 shares of Corsaire (restricted) common stock ("Corsaire
Shares"). The Corsaire shares shall be initially issued in a single master
certificate ("Master Certificate") in the name of SAS in accordance with the
escrow period requirements described in paragraph 3 below.
The parties agree that the Acquisition Agreement and this Interim Agreement
supersede the Letter of Intent dated April 9, 1999 between them, and that this
Interim Agreement and the Acquisition agreement supplement and operate
concurrently with each other.
2. TAX FREE EXCHANGE; REGISTRATION EXEMPTION
(a) TAX FREE EXCHANGE. The parties intend that the contemplated acquisition
reorganization be tax free pursuant to Section 368 of the Internal Revenue Code
of 1986. No revenue ruling or opinion of counsel is being sought in this regard.
(b) REGISTRATION EXEMPTION. The parties hereto intend that the stock to be
exchanged under the Acquisition Agreement and this Interim Agreement shall be
exempt from the registration requirements of the Securities Act of 1933 (1933
Act), as amended, and applicable state statutes. The Corsaire shares issued
under this Agreement are Restricted Securities as that term is defined in Rule
144 under the 1933 Act, and shall not be offered for sale or otherwise
transferred except pursuant to an effective registration statement under the
1933 Act, or pursuant to an exemption from registration under the 1933 Act, the
availability of which must be established to Corsaire's satisfaction.
3. DEFINITIVE AGREEMENT; OPERATION OF INTERIM AGREEMENT. The Definitive
Agreement between the parties, as that term is defined in the Acquisition
Agreement, (which shall be the final form memoralization of Corsaire's
acquisition of SAS), shall be completed by May 5, 1999. The parties agree to
the following closing procedures under this Interim Agreement:
(I) Corsaire shall issue and deliver the Master Certificate to SAS; SAS shall
endorse and deliver the SAS Shares to Corsaire. The delivery of the SAS Shares
hereunder will result in Corsaire's immediate acquisition of record and
beneficial ownership of all of SAS's capital stock, free and clear of all liens
and encumbrances, subject to sub-sections (II)-(VII) below.
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Each SAS shareholder holds the authority to exchange their shares hereunder,
and has had full opportunity to discuss the exchange offer with Corsaire's
officers, and Corsaire has made all documentation addressing this exchange
available to the SAS shareholders.
The Corsaire Shares represented by the Master Certificate and issued and
delivered in accordance with the provisions of this Interim Agreement will be
and are duly authorized, validly issued, fully paid and nonassessable.
(II) The parties shall hold their respective shares received under this
exchange for a period of not less than thirty (30) and not more than forty-five
(45) days after execution of this Interim Agreement by all parties concerned
("Escrow Period"). Corsaire shall advise SAS if the Escrow Period will have a
forty-five (45) day duration prior to the end of the 30th day. The exchanged
shares shall be delivered to the stock escrow holders, who shall be the
attorneys for Corsaire (Xxxxxx X. Xxxx, Esq., Xxxxxx X. Xxxx, P.A.) and the
attorneys for SAS (Xxxxx X. Xxxxxx, Esq.). Corsaire's transmission of stock
issuance instructions to the Corsaire stock transfer agent shall be deemed
issuance and delivery of the Corsaire Shares. (See attached Composite Exhibit
A. (Instructions to Corsaire stock transfer agent)).
(III) During the Escrow Period, Corsaire will obtain an opinion letter from
special intellectual property counsel ("IP Opinion Letter") on the SAS
copyright(s) regarding validity and infringement. SAS will provide Corsaire
with its documentation for the SAS copyrights, which documentation shall be
governed by the confidentiality clauses of the Acquisition Agreement.
(IV) During the Escrow period, the parties shall complete all the disclosures,
schedules and exhibits that will be attached to the Definitive Agreement,
recognizing that the main body of the Definitive Agreement will be completed
prior to the end of the Escrow Period.
(V) If during or at the conclusion of the Escrow Period the IP Opinion Letter
concludes that the SAS Copyright(s) are invalid or infringing, Corsaire will
assist SAS to cure the defect. If the SAS Copyright(s) cannot be cured, the
parties will endeavor to resolve the issues created by the defects, provided
that such resolution shall be cost effective and economically rational in
Corsaire's judgment.
(VI) If during or at the conclusion of the Escrow Period, the actual
liabilities of SAS are greater than Four Million Dollars ($4,000,000.00) SAS
will transfer back to Corsaire that amount of Corsaire Shares that equal the
excess liabilities, at a price of $12.75 per share.
(VII) The Escrow Period will be closed upon expiration of the Escrow Period.
Corsaire may, in writing, declare the Escrow Period closed at any time during
the Escrow Period. Upon the natural expiration of the Escrow Period or
declaration of its early closure, the exchanged shares shall be released from
escrow and SAS will advise Corsaire in writing as to the allocation of Corsaire
shares to be received by the SAS shareholders from the Corsaire Master
Certificate. This written allocation shall bear the concurring signatures of the
SAS shareholders. Corsaire shall immediately direct its transfer agent to issue
individual certificates to the SAS shareholders upon receipt of the written
allocation and Master Certificate.
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4. FURTHER ASSURANCES. The parties hereto each agree that from time to time,
as and when reasonably requested by the other, it will execute, acknowledge,
deliver and file all proper deeds, assurances, assignments, bills of sale,
assumptions and other documents, and do, or cause to be done, all other acts
and things necessary or proper in order to carry out the intent and purposes of
this Agreement at no cost or expense of the party requested.
5. MISCELLANEOUS
(i) AMENDMENTS. This Agreement may only be amended via written document by all
parties, provided that all requisite director and shareholder approvals are
obtained for any material amendments to the terms set forth in this Agreement.
(ii) AGREEMENT TERMINATION PROCEDURES. If the parties are unable to consummate
a Definitive Agreement, the Acquisition Agreement and this Interim Agreement
shall be deemed terminated and: (1) Corsaire shall immediately effect the
return of the SAS Shares to SAS with all endorsements canceled, and (2) SAS
shall immediately effect the return of the Corsaire Master Certificate to
Corsaire.
(ii) LIABILITIES, ATTORNEY FEES AND COSTS IN EVENT OF TERMINATION. In the event
of the termination of this Agreement for any reason, each party shall bear its
own costs and expenses, including attorney fees, and the parties shall have no
further legal obligation to each other, or be liable for any damages to each
other as a result of the termination of this Agreement and/or the Acquisition
Agreement.
(iii) PROPER PARTIES TO THE AGREEMENT. SAS confirms that the parties signing
this Initial Agreement represent all the SAS shareholders and directors, and
that there are no dissenting shareholders or directors.
(iv) NON-WAIVER. Except as expressly provided in this Initial Agreement, no
waiver of any covenant, condition, or provision of this agreement, shall be
deemed to have been made unless made expressly in writing and signed by the
party against whom such waiver is charged; and (a) the failure of any party to
insist in any one or more cases upon the performance of any of the provisions,
covenants, or conditions of this Initial Agreement shall not be construed as a
waiver or relinquishment for the future of any such provisions, covenants, or
conditions; and (b) the acceptance of performance of anything required to be
performed hereunder with the knowledge of the breach or failure of a covenant,
condition, or provision hereof shall not be deemed a waiver of such breach or
failure.
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(v) GOVERNING LAWS; SUCCESSORS AND ASSIGNS; COUNTERPARTS; ENTIRE AGREEMENT.
This Agreement (a) shall be construed under and in accordance with the internal
laws of the state of Florida, excluding conflict of laws principles; (b) shall
be binding on and shall inure to the benefit of the parties to the Agreement
and their respective successors and assigns; (c) may be executed by
telefacsimile and/or in one or more counterparts, all of which shall be
considered one and the same agreement, and shall become effective when one or
more counterparts shall have been signed by each of the parties and delivered
to SAS and Corsaire; and (d) embodies the entire agreement and understanding,
superseding all prior agreements and understandings between the parties hereto
relating to the subject matter of this Agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this Initial
Agreement to be executed by their duly authorized officers and in their
individual and official capacities, as the case may be, effective as of the
date first written above.
Corsaire, Inc. Satellite Access Systems Inc.
By: /s/ Xxxxxxx X. Xxxxxxxx By: /s/ Xxxxx X. Xxxxx
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Xxxxxxx X. Xxxxxxxx Xxxxx X. Xxxxx,
President President
SAS SHAREHOLDERS:
/s/ Illegible
--------------------------------- -----------------------------
[name] Director [name] Director
/s/ Xxxxx Xxxxx
--------------------------------- -----------------------------
[name] Director [name]
--------------------------------- -----------------------------
[name] [name]
SAS DIRECTORS:
--------------------------------- -----------------------------
[name] [name]
--------------------------------- -----------------------------
[name] [name]
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ADDENDUM TO INTERIM CLOSING AGREEMENT
THIS ADDENDUM dated May 14, 1999, by and among Satellite Access Systems Inc.
("SAS"), a Nevada corporation with a principal address of 000 Xxxxxx Xxxxxx
X.X., 00xx Xxxxx, Xx. Xxxxxxxxxx, XX and Net Command Tech, Inc. (f/k/a Corsaire,
Inc.), a Delaware corporation, with a principal business address of 00 Xxxxxx
Xxxxx, Xxxxx 000, Xxxxxx, XX 00000, and provides as follows, in consideration
of the mutual promises, covenants, and representations contained herein:
WHEREAS, the parties entered into that certain Interim Closing Agreement of
April 26, 1999 by and among Net Command Tech, Inc. (formerly Corsaire, Inc.),
SAS, the SAS shareholders, and the SAS directors;
WHEREAS, the president of SAS is empowered by the above-named SAS parties to
execute this Addendum; and
WHEREAS, the parties have decided to waive the requirement of a Definitive
Agreement (originally scheduled for May 5, 1999) as that term is defined in the
Acquisition Agreement and execute a final closing memorandum in its place on or
before the expiration of the due diligence period;
NOW, THEREFORE, in consideration of the mutual promises contained herein and in
the Agreement and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. PRECEDENCE AND INCORPORATION. This Addendum forms a part of the Interim
Closing Agreement and Acquisition Agreement. The Agreement and this Addendum
shall be considered one document. The terms contained in this Addendum shall
take precedence over any Agreement terms that are inconsistent with this
Addendum. Terms used in this Addendum shall have the same meaning as ascribed
to them in the Agreement.
2. WAIVER OF DEFINITIVE AGREEMENT. The parties are presently operating under
the Interim Closing Agreement which scheduled a DEFINITIVE CLOSING AGREEMENT by
May 5, 1999. The parties hereby waive the Definitive Closing Agreement, and
will proceed to a final closing memorandum to be executed on or before the
expiration of the due diligence period described in the Interim Closing
Agreement.
3. COUNTERPARTS. This Addendum may be executed in counterparts, each of which
shall be deemed an original. All such counterparts together shall constitute
one Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Addendum to be executed
as of the date first written above.
Satellite Access Systems Inc.
By: /s/ Xxxxxxx X. Xxxxxxxx By: /s/ Xxxxx X. Xxxxx
-------------------------- ---------------------------
Xxxxxxx X. Xxxxxxxx, Xxxxx X. Xxxxx,
President President
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SECOND ADDENDUM TO INTERIM CLOSING AGREEMENT
THIS SECOND ADDENDUM dated June 2, 1999, by and among Satellite Access Systems
Inc. ("SAS"), a Nevada corporation with a principal address of 000 Xxxxxx
Xxxxxx X.X., 00xx Xxxxx, Xx. Xxxxxxxxxx, XX and Net Command Tech, Inc. ("NTC,"
f/k/a Corsaire, Inc.), a Delaware corporation, with a principal business
address of 00 Xxxxxx Xxxxx, Xxxxx 000, Xxxxxx, XX 00000, and provides as
follows, in consideration of the mutual promises, covenants, and
representations contained herein:
WHEREAS, the parties entered into that certain Interim Closing Agreement of
April 26, 1999, and Addendum to Interim Closing Agreement of May 14, 1999
("First Addendum") by and among NTC (formerly Corsaire, Inc.), SAS, the SAS
shareholders, and the SAS directors;
WHEREAS, the president of SAS is empowered by the above-named SAS parties to
execute this Second Addendum; and
WHEREAS, the parties have decided to confirm and clarify Paragraph 3 VI of the
Interim Closing Agreement which addresses the procedure for SAS liabilities
exceeding four million dollars ($4,000,000.00).
NOW, THEREFORE, in consideration of the mutual promises contained herein and in
the Agreement and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. PRECEDENCE AND INCORPORATION. This Second Addendum forms a part of the
First Addendum, the Interim Closing Agreement and the Acquisition Agreement. The
Agreement and this Second Addendum shall be considered one document. The terms
contained in this Second Addendum shall take precedence over any Agreement
terms that are inconsistent with this Addendum. Terms herein shall have the
same meaning as ascribed to them in the above-noted Agreements.
2. INDEMNIFICATION. SAS and the SAS Stockholders, severally agree to
indemnify and hold Net Command Tech, Inc. harmless from and against any and all
liabilities, damages, losses, claims, demands, costs, or expenses (including
interest, penalties, reasonable attorneys' and accountants' fees and expenses,
court costs, and fees of expert witnesses) (all of the foregoing hereinafter
collectively referred to as the "Claims") which NTC shall suffer or incur in
excess of four million dollars ($4,000,000.00) ("Indemnification Sum"), whether
liquidated or unliquidated, accrued or contingent, connected with or arising
out of any Claims that existed or arose prior to June 10, 1999. This
indemnification shall survive until the expiration of the statute of
limitations attached to any individual or aggregate Claims (pursuant to the
respective laws governing the Claim(s));
Claims that exceed the Indemnification Sum, individually or in the aggregate,
shall be indemnified by the return of the NTC shares (represented in the Master
Certificate) to NTC in that amount exceeding the Indemnification Sum, as
calculated using a value of $12.75 per share. An amount of 235,295 shares from
the Master Certificate shall be reserved and held in escrow until the Claims
are determined to be settled or paid in full.
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3. DISPOSITION OF ESCROWED SHARES. If Claims associated with existing SAS
transactions with Virtual Products, Inc. ("VPI") and GRGI exceed the
Indemnification Sum, or cause the Indemnification Sum to be exceeded, and the
NTC stock held in escrow must be used to settle or fully pay such Claims, then
any balance of escrowed NTC stock remaining after the settlement or payment in
full of the VPI and GRGI claims shall be returned to the SAS shareholders within
sixty (60) days after the fully executed settlements are implemented or payment
is made in full. If Claims associated with SAS transactions with VPI and GRGI
are settled without need for the escrowed NTC shares, then all the escrowed NTC
shares shall be returned to the SAS stockholders within sixty (60) days after
the settlements are fully executed and implemented.
4. STOCKHOLDER OBLIGATIONS. Each of the undersigned SAS Stockholders hereby
acknowledges his or her obligation under this Second Addendum. Each SAS
stockholder further agrees to approve the transfer of his or her NTC shares in
that pro rata and aggregate amount that will comprise and constitute the NTC
shares held in escrow to pay Claims in excess of the Indemnification Sum.
These escrowed shares shall be contributed on an equal basis from all SAS
stockholders.
If the Claims exceed the Indemnification Sum and the escrowed shares are not
sufficient to pay or settle the Claims in full, each SAS stockholder further
agrees to and approves the transfer of his or her pro-rata share of the
1,568,628 shares that will be distributed to them once the threshold of NTC
sales described in Paragraph 2 of the Tax Free Acquisition Agreement
($10,000,000.00) has been met.
Each of the undersigned SAS Stockholders waives any right to require NTC to (i)
proceed against SAS if the NTC shares held in escrow are insufficient to pay or
settle the Claims in full; or (ii) proceed against any other SAS Stockholder
beyond the stockholder's pro rata obligation under this Addendum. Each of the
undersigned SAS Stockholders further waives any right of subrogation,
reimbursement, contribution, or indemnity up to their pro rata obligation
hereunder against or from SAS. Each of the undersigned SAS Stockholders further
waives the benefit of any statute of limitations affecting SAS liability with
respect to the Claims set forth above.
5. COUNTERPARTS. This Addendum may be executed, in counterparts, each of
which shall be deemed an original. All such counterparts together shall
constitute one Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Addendum to be executed
as of the date first written above:
Corsaire, Inc. Satellite Access Systems Inc.
By: /s/ Xxxxxxx X. Xxxxxxxx By: /s/ Xxxxx Xxxxx
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Xxxxxxx X. Xxxxxxxx, Xxxxx Xxxxx,
President Executive Vice President
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SAS SHAREHOLDERS:
/s/ Illegible
----------------------- --------------------------
[name]: [name]:
/s/ Xxx Xxxxx
----------------------- --------------------------
[name]: [name]:
/s/ Xxxxx Xxxxx
----------------------- --------------------------
[name]: [name]:
SAS DIRECTORS:
/s/ Illegible
----------------------- --------------------------
[name]: [name]:
/s/ Xxxxx Xxxxx
----------------------- --------------------------
[name]: [name]:
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THIRD ADDENDUM TO INTERIM CLOSING AGREEMENT
THIS THIRD ADDENDUM dated June 10, 1999, by and among Satellite Access Systems
Inc. ("SAS"), a Nevada corporation, with a principal address of 000 Xxxxxx
Xxxxxx X.X., 00xx Xxxxx, Xx. Xxxxxxxxxx, XX and Net Command Tech, Inc.
("NTC," f/k/a Corsaire, Inc.), a Delaware corporation, with a principal
business address of 00 Xxxxxx Xxxxx, Xxxxx 000, Xxxxxx, XX 00000, and provides
as follows, in consideration of the mutual promises, covenants, and
representations contained herein:
WHEREAS, the parties entered into the certain Interim Closing Agreement of
April 26, 1999, by and among NTC, SAS, the SAS shareholders, and the SAS
directors;
WHEREAS, the parties entered into that certain Addendum to Interim Closing
Agreement of May 14, 1999 ("First Addendum") and the Second Addendum to Interim
Closing Agreement of June 2, 1999 ("Second Addendum");
WHEREAS, the president of SAS is empowered by the above-named SAS parties to
execute this Addendum; and
WHEREAS, the parties have agreed to extend the closure of the due diligence
period until June 16, 1999 to enable the final preparation and issuance of an
intellectual opinion letter confirming the non-infringement and valid title of
the SAS copyright, Magic Modules.
NOW, THEREFORE, in consideration of the mutual promises contained herein and in
the Agreement and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. PRECEDENCE AND INCORPORATION. This Addendum forms a part of the Interim
Closing Agreement and Acquisition Agreement. The Agreement and this Addendum
shall be considered one document. The terms contained in this Addendum shall
take precedence over any Agreement terms that are inconsistent with this
Addendum. Terms used in this Addendum shall have the same meaning as ascribed
to them in the Agreement.
2. EXTENSION OF CLOSURE OF DUE DILIGENCE. The parties are presently operating
under the Interim Closing Agreement, the First Addendum and the Second
Addendum. In the First Addendum, the parties waived the Definitive Closing
Agreement, and agreed to proceed to a final closing memorandum to be executed
on or before the expiration of the due diligence period described in the
Interim Closing Agreement. The due diligence period expired on June 10, 1999.
The intellectual opinion letter confirming the non-infringement and valid title
of the SAS computer source code copyright requires additional finalization.
Accordingly, the parties hereby agree to extend closure of the due diligence
period until June 16, 1999 to complete the copyright due diligence, and shall
execute the final closing memorandum on or before June 18, 1999.
3. COUNTERPARTS. This Addendum may be executed in counterparts, each of which
shall be deemed an original. All such counterparts together shall constitute
one Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Addendum to be executed
as of the date first written above.
Corsaire, Inc. Satellite Access Systems Inc.
By: /s/ Xxxxxxx X. Xxxxxxxx By: /s/ Xxxxx X. Xxxxx,
-------------------------- --------------------------
Xxxxxxx X. Xxxxxxxx, Xxxxx X. Xxxxx,
President President
SAS SHAREHOLDERS:
/s/ Illegible
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[name]: [name]:
------------------------------ -----------------------------
[name]: [name]:
------------------------------ -----------------------------
[name]: [name]:
SAS DIRECTORS
/s/ Illegible
------------------------------ -----------------------------
[name]: Director [name]:
------------------------------ -----------------------------
[name]: [name]:
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