PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT ("Agreement"), is entered effective as of
this 31st day of January, 2006, by and among:
Connected Media Technologies, Inc. ("CMT"), a Delaware Corporation ("Seller");
and
Rothschild Trust Holdings, LLC ("Trust"), a Florida limited liability company
("Buyer").
Buyer and Seller are collectively referred to as "parties."
W I T N E S S E T H:
WHEREAS, Buyer desires to purchase from the Seller certain Intellectual
Property described on EXHIBIT A attached hereto (the "Assets"), free of any
obligations or other liabilities of the Seller, subject to the terms and
conditions and based upon the parties' representations, warranties and covenants
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and the mutual benefits to be derived therefrom, the parties
agree as follows:
1. Agreement To Sell. Seller agrees to sell, transfer and deliver to
Purchaser, and Purchaser agrees to purchase, upon the terms and conditions
hereinafter set forth, the Assets listed on Exhibit A.
2. Purchase Price. The consideration to be paid for the Assets by Purchaser
(subject to adjustment as hereinafter provided) shall be the following:
A. Purchaser agrees to deposit a total of Thirteen Million Two Hundred
Forty One Thousand Two Hundred and Twenty Three (13,241,223) shares of CMT
common stock owned by Purchaser into an escrow account (the "Escrow
Shares") pursuant to the terms of the Escrow Agreement, substantially in
the form of the agreement attached as EXHIBIT B. The Escrow Shares will be
held in escrow until such time as the Seller has deposited royalties
otherwise payable directly to the Trust according to the terms of that
certain Royalty Bearing License Agreement, totaling $690,000 into the
escrow account. Seller shall provide Notice to Purchaser within two (2)
days of the deposit of $690,000 into the escrow account by the Seller,
Pursuant to the terms of the Escrow Agreement, upon the deposit of $690,000
into the escrow account by the Seller, Purchaser shall have thirty (30)
days from the Notice date to deposit $ 728,267.26 into the escrow account,
or $514,868.21 upon the occurrence of the events set forth in Section 3(b)
herein, in exchange for the Escrow Shares. If the Purchaser has not
deposited such amount into the escrow account within 30 days, the Escrow
Agent shall immediately release the Escrow Shares to the Seller. If the
Seller shall default on either the Bristol Bank loan, or the Convertible
Debenture issued to Xxxxxxxxxx Equity Partners, LP ("MEP") dated as of the
date hereof, the Seller shall forfeit any and all claim to the Escrow
Shares, subject to the Seller's timely exercise of any applicable cure or
other similar provisions in the applicable documents.
B. To help induce MEP to enter into the Convertible Debenture, and
related documents (collectively, the "Funding Documents") with the Seller,
Purchaser agrees to allow MEP to obtain a first priority secured lien on
the Assets through the filing of a UCC-1. The MEP lien will be released
upon the earlier of the Sellers deposit of the $690,000 into the escrow
account or MEP's conversion of $690,000 of the Convertible Debenture plus
accrued interest.
C. Purchaser will grant Seller a license to use the Assets listed on
EXHIBIT A, pursuant to the terms of the Royalty Bearing License Agreement,
substantially in the form attached as EXHIBIT C.
3. Obligations of Seller.
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(a) Seller shall indemnify and hold the Buyer harmless against any of
Seller's accounts payable and other liabilities. Except as provided in
this agreement, Buyer is not acquiring, directly or indirectly, any of
Seller's liabilities, and no such assumption shall accrue to Buyer by
operation of law or otherwise.
(b) Seller shall not directly or indirectly make, create, incur, assume or
permit to exist any security interest or other secured lien in, to or
against any part of the Seller's assets, or offer or agree to do so,
other than the lien granted to MEP. If the Seller shall grant such a
secured interest or lien to any other party, Three Million Eight
Hundred Seventy Nine Thousand Nine Hundred and Eighty Three
(3,879,983) of the Escrow Shares, representing $213,399.05 owed to the
Purchaser pursuant to a Promissory Note issued by the Seller (the
"Note"), shall be immediately released from escrow back to the
Purchaser. Upon the release of the 3,879,983 shares of common stock to
the Purchaser, Seller shall be released from any further obligations
under the Note.
4. The Closing. The "closing" means the settlement of the obligations of
Seller and Purchaser to each other under this agreement.
5. Closing Documents. At the closing, Seller shall execute and deliver to
Purchaser such instruments as may be necessary or proper to transfer to
Purchaser all ownership interests in the Assets to be transferred under
this Agreement.
6. Formal Documents. Upon agreement of both Seller and Purchaser of this
Agreement of Sale of Assets, any necessary formal documents are to be
promptly prepared and executed by all parties.
7. Representations and Warranties of Seller. Seller represents and warrants to
Purchaser as follows:
(A) Seller have full power and authority to conduct its business as now
carried on, and to carry out and perform its undertakings and obligations
as provided herein.
(B) No action, approval, consent or authorization of any governmental
authority is necessary for Seller to consummate the transactions
contemplated hereby.
(C) Seller is the owner of and has good and marketable title to the Assets,
free of all liens, claims and encumbrances, except: (i) licenses to the
Assets that Seller has previously granted; (b) liens, claims and
encumbrances set forth in Seller's SEC Documents (as that term is defined
in that certain Stock Purchase and Share Agreement by and between the
Seller and NatCom of even date herewith; and MEP's UCC-1 lien referenced in
Section 2(b) herein.
(D) There are no violations of any law or governmental rule or regulation
pending against Seller or the Assets, and Seller has complied with all laws
and governmental rules and regulations applicable to the business or the
Assets.
(E) Seller has the legal authority to convey all Assets listed on EXHIBIT A
attached hereto, subject to the liens set forth in (C) above.
8. Representations and Warranties of Purchaser. Purchaser represent and
warrant to Seller as follows:
(A) Purchaser has full power and authority to carry out and perform its
undertakings and obligations as provided herein.
(B) No action, approval, consent or authorization of any governmental
authority is necessary for the Purchaser to consummate the transactions
contemplated hereby.
(C) There are no judgments, liens, suits, actions or proceedings pending
or, to the best of Purchaser' knowledge, threatened against Purchaser or
its property.
9. No Other Representations. Purchaser acknowledges that neither Seller nor
any representative or agent of Seller has made any representation or
warranty regarding the Assets or the business, or any matter or thing
affecting or relating to this agreement, except as specifically set forth
in this agreement. Purchaser has inspected the Assets, Purchaser agrees to
take the Assets "AS IS" and in their present condition, subject to
reasonable use, wear tear and deterioration between now and the closing
date.
10. Conditions To Closing. The obligations of the parties to close hereunder
are subject to the following conditions:
(A) The MEP Funding Documents are fully executed by the parties thereto and
Seller has received all necessary consents and/or lien releases from MEP
(and any other applicable party) to convey the Assets.
(B) All of the terms, covenants and conditions to be complied with or
performed by the other party under this agreement on or before the closing
shall have been complied with or performed in all material respects.
(C) All representations or warranties of the other party herein are true in
all material respects as of the closing date.
11. Assignment. Purchaser shall not assign this agreement without the prior
written consent of Seller. Any attempted assignment without Seller's
consent shall be null and void.
12. Notice. All notices and other communications hereunder shall be in writing
and shall be deemed to have been validly served, given or delivered five
(5) days after deposit in the United States mails, by certified mail with
return receipt requested and postage prepaid, when delivered personally,
one (1) day delivered to any overnight courier, or when transmitted by
facsimile transmission and upon confirmation of receipt and addressed to
the party to be notified as follows:
If to the Company, to: Connected Media Technologies, Inc.
00 XX 0xx Xxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Attn: Xxxxxxx Xxxx
If to the Trust, to: Rothschild Trust Holdings, LLC
00000 Xxxxxxx Xxxxxx #0000
Xxxxx Xxxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxx Xxxxxxxxxx
Or to such other address as each party may designate for itself by like
notice.
13. Entire Agreement. This agreement contains all of the terms agreed upon
between Seller and Purchaser with respect to the subject matter hereof.
This Agreement has been entered into after full investigation.
14. Changes Must Be In Writing. This agreement may not be altered, amended,
changed, modified, waived or terminated in any respect or particular unless
the same shall be in writing signed by the party to be bound.
15. Governing Law. This agreement shall be governed by and construed in
accordance with the laws of the State of Florida. The parties hereby agree
that any disputes arising hereunder shall be submitted to binding
arbitration before the American Arbitration Association located nearest to
the Business.
16. Binding Effect. This agreement shall not be considered an offer or an
acceptance of an offer by Seller, and shall not be binding upon Seller
until executed and delivered by both Seller and Purchaser. Upon such
execution and delivery, this agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective heirs, executors,
administrators, successors and permitted assigns.
IN WITNESS WHEREOF, the parties have executed this agreement the date first
above written.
DATED: CONNECTED MEDIA TECHNOLOGIES, INC.,
("Seller")
BY: /s/ Xxxxxxx Xxxx
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Xxxxxxx Xxxx
Chief Executive Officer
DATED: ROTHSCHILD TRUST HOLDINGS, LLC.,
("Purchaser")
BY: /s/ Xxxxx X. Xxxxxxxxxx
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Xxxxx X. Xxxxxxxxxx
Managing Member
