EXHIBIT 10.2
CONTRIBUTION AGREEMENT
This CONTRIBUTION AGREEMENT ("Agreement") is
entered into as of October 1, 2002, by and between
Orbit E-Commerce, Inc., a Nevada corporation ("Orbit"),
and Phoenix TelNet, LLC, a Delaware limited liability
company ("Phoenix") (sometimes referred to hereinafter,
individually, as AParty@ and, collectively, as
Parties@).
WHEREAS, pursuant to and in furtherance of the
Operating Agreement of Phoenix TelNet, LLC, of even
date herewith ("Operating Agreement") between Orbit and
GAN & Associates, Inc. ("GAN"), Orbit is receiving an
ownership interest in Phoenix, and as consideration for
said ownership interest has agreed to transfer and
assign to Phoenix all of Orbit's rights, title and
interest in and to certain intangible assets and
intellectual property; and
WHEREAS, pursuant to the Operating Agreement,
Phoenix is issuing Orbit an ownership interest in
Phoenix in exchange for Orbit's obligations thereunder,
including without limitation assignment of the
aforesaid intangible assets and intellectual property;
and
WHEREAS, Orbit and Phoenix desire to enter into
this Agreement to effect the transfer and assignment of
the assets and intellectual property, free and clear of
all claims, liens, encumbrances, mortgages, pledges,
security interests adverse claims or restrictions of
any nature (collectively "Liens");
NOW THEREFORE, for valuable consideration, the
receipt and sufficiency of which are hereby
acknowledged, the Parties agree as follows:
1. Transfer and Assignment. (a) In
consideration of the receipt by Orbit of a forty-nine
percent (49%) ownership interest in Phoenix, Orbit
hereby transfers, assigns and delivers to Phoenix all
of Orbit's rights, title and interest in and to that
certain software and associated patents and copyrights,
materials, processes, methods, know-how, expertise and
systems necessary and proper for the provision of
Internet access and long distance voice over the
Internet ("VoIP") services (collectively, the
"Assets"). Specifically excluded from this Agreement
are the following: (i) any and all trademarks or
licenses associated with Orbit's business; (ii) any and
all of Orbit's customer lists; (iii) any and all
goodwill associated with Orbit's business; and (iv) any
and all tangible items utilized by Orbit in the
operation of its business.
(b) Phoenix is not assuming and will not be
responsible for any liabilities or obligations of
Orbit, whether arising out of or in connection with the
Assets, Orbit's business operations or otherwise.
(c) Orbit will be responsible for effectuating
the transfer and assignment to Phoenix, and for payment
of any and all applicable fees in connection with the
transfer or assignment to Phoenix of any and all
patents or copyrights associated with the software
included in the Assets. The Parties shall cooperate in
good faith and exercise their reasonable best efforts
to obtain all necessary consents from any governmental
or regulatory authorities or other third-parties to the
transfer and assignment of said patents and copyrights.
2. Representations and Warranties. Orbit hereby
represents and warrants to Phoenix as follows:
(a) Orbit has good and marketable title
to all of the Assets, free and clear of all
Liens and claims, whether absolute,
contingent or otherwise. Orbit has the
unrestricted right to transfer and assign
said Assets to Phoenix, free and clear of all
Liens. This Agreement, the Operating
Agreement and the transactions contemplated
hereby and thereby have been duly authorized
and approved by all required corporate action
by Orbit, including without limitation the
consent of each of Orbit's board of
directors.
(b) Orbit is in good standing and duly
qualified to do business in its jurisdiction
of incorporation, and in all other
jurisdictions in which it does business (if
any). Neither the execution nor the delivery
of this Agreement nor the consummation of the
transactions contemplated hereby will, with
or without the giving of notice or passage of
time or both, conflict with or result in any
loss of rights or violation or default under
any term of Orbit's articles of
incorporation, by-laws or other
organizational documents or any agreement,
mortgage, indenture, license, permit, lease
or other instrument, judgment, decree, order,
law or regulation by which Orbit or the
Assets are bound.
(c) All patents or copyrights included
in the Assets are validly issued and in good
standing. Orbit is in compliance with all
applicable laws, regulations, and
administrative orders applicable to Orbit or
the patents or copyrights, and Orbit is not
aware of any reason why the patents or
copyrights would not be valid, might be
revoked, or might not be assigned to Phoenix
without adverse restrictions or limitations.
There is no pending or threatened action by
any other governmental agency or third party
to suspend, revoke, terminate or challenge
any of the patents or copyrights included in
the Assets or otherwise investigate Orbit.
(d) Orbit has not given consent to
allow any other party to utilize any of the
said Assets. No person or entity holds or
has been granted a right of first refusal or
option to purchase all or any other portion
of the Assets, nor has any party been granted
any management rights regarding the same.
(e) Except as otherwise expressly set
forth on Schedule 2(e) to this Agreement
which is incorporated herein by reference,
there is no claim, legal action,
counterclaim, suit, arbitration, governmental
investigation or litigation of any kind
threatened or pending which would have a
material adverse effect on the Assets, on
Orbit's authority to consummate the
transactions contemplated hereunder, or to
Phoenix's title to the Assets. There is not
outstanding any order, writ, judgment,
injunction, decree of any Court, governmental
agency or arbitration tribunal which would,
individually or in the aggregate, have a
materially adverse effect on the Assets,
Orbit's ability to consummate the
transactions contemplated hereunder, or
Phoenix's title to the Assets.
(f) No claim for taxes has been
asserted against Orbit, and no deficiencies
for taxes have been assessed against Orbit or
the Assets. Orbit has not received notice of
any tax audit or investigation and is not a
party to any proceeding for the collection of
taxes.
(g) Orbit is not assigning any
employment agreements to Phoenix and the
consummation of the transactions contemplated
herein will not violate or result in the
breach of any of Orbit's employment
agreements or agreements with third parties
or give rise to a basis for any suit against
Phoenix by any of Orbit's employees or agents
or any third party rendering services to
Orbit. Orbit has made no representations or
promises to any existing, former or
perspective employees that they will be
employed by Phoenix. Orbit consents to each
of Messrs. Xxxxxxx Xxxxx, Xxxxxx X. Xxxxx,
Xxxx Xxxxxxxxx, Xxxx Xxxxx and Xxxxxxx
Xxxxxxxxxx ("Xxxxx Group") entering into an
employment agreement with Phoenix and/or an
affiliate of Phoenix, and acknowledges that
any intangible property developed by any of
the Xxxxx Group pursuant thereto shall be the
property of Phoenix and not Orbit.
(h) All information provided by Orbit
to Phoenix concerning the Assets or Orbit's
business is true, accurate and complete and
no representation or warranty of Orbit
contains any untrue facts or omits material
information.
Each of Orbit's representations and warranties shall
survive for a period of five (5) years following the
execution and delivery of this Agreement by the Parties
("Effective Date").
3. Conflicting Agreements. Orbit warrants that
it is not a party to nor are any of the Assets subject
to any contract or arrangement that would preclude or
would be violated by Orbit's performance of its
obligations hereunder or by the consummation of the
transactions contemplated herein.
4. Indemnity. On and after the Effective Date,
Orbit shall indemnify, defend and hold Phoenix harmless
from and against all demands, claims, actions, losses,
damages, liabilities, costs and expenses, including,
without limitation, reasonable attorneys' fees and
expenses asserted against, imposed upon or incurred by
Phoenix resulting from:
(a) any breach of any covenant,
agreement, representation or warranty of
Orbit contained in or made pursuant to this
Agreement;
(b) any and all liabilities (including
successor liabilities) or obligations
relating to periods prior to the Effective
Date resulting from Orbit's operation,
ownership, use or sale of the Assets or from
Orbit's employment or termination of
employees or agents; and
(c) any and all actions, suits,
proceedings, claims, demands, assessments,
judgments, costs and expenses, including,
without limitation, attorneys' fees and court
costs and expenses, incident to any of the
foregoing or incurred in investigating or
attempting to avoid the same or avoid the
imposition thereof or in enforcing this
indemnity.
Orbit's obligations under this Section 5 shall survive
for a period of five (5) years following the Effective
Date.
5. Equitable Relief. Orbit acknowledges that the
Assets are unique and the loss to Phoenix due to
Orbit's failure to perform this Agreement could not be
easily measured with damages. In addition to and not
in lieu of any remedy at law, Phoenix will be entitled
to equitable relief without proof of specific monetary
damages, but without waiving any right thereto, in the
event of breach of this Agreement by Orbit. Without
limiting the foregoing, Phoenix shall be entitled to
obtain a temporary restraining order, preliminary
injunction, permanent injunction or other relief to
specifically enforce the terms of the Agreement. Orbit
hereby waives all requirements and demands that Phoenix
post a bond or other surety arrangement in connection
with the issuance of any such decree, and further
waives any defense in any such proceeding that Phoenix
has an adequate remedy at law and agrees to interpose
no objection, legal or otherwise, as to the propriety
of specific performance as a remedy.
6. Entire Agreement; Amendments; Waivers. The
Operating and this Agreement (together with the
schedules and exhibits thereto and hereto) contain the
entire and final understanding of the Parties with
respect to the subject matter contained herein. In the
event of any conflict between this Agreement and the
Operating Agreement, the Operating Agreement shall
govern. GAN is an intended beneficiary of this
Agreement. This Agreement may be amended only by a
written instrument executed by the Parties or their
respective successors or permitted assigns. The
section headings contained in this Agreement are for
reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement. No
provision in this Agreement shall be deemed waived by
course of conduct, unless such waiver is in writing,
signed by both Parties and states specifically that it
is intended to waive a provision of this Agreement.
Any failure by either Party hereto to comply with any
of its obligations, agreements or covenants hereunder
may be waived, in writing, by the other Party, but no
such waiver shall be deemed a waiver of any other
breach or default.
7. Notice. All written notices permitted or
required under this Agreement shall be given by
facsimile, or by recognized overnight courier,
delivered on a business day, addressed as follows:
(a) If to Orbit: Orbit E-Commerce, Inc.
Attn.: Xxxxxxx Xxxxx
00 Xxxxxxxxxxxx Xxxxxx
Xxxxxx, XX X0X0X0 Xxxxxx
Fax No.: 000-000-0000
(b) If to Phoenix:
Phoenix TelNet, LLC
Attn.: Xxxxxx Xxxxxxxxx
000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Fax No.: (000) 000-0000
or to such other address as either Party may from time
to time specify by written notice to the other.
8. Governing Law; Jurisdiction. This Agreement
shall be construed in accordance with and governed by
the laws of the State of Ohio. Each of the Parties
hereby acknowledges and agrees that any suit arising
out of this Agreement must be brought in a local, state
or federal court of competent jurisdiction located
within Cuyahoga County in the State of Ohio. THE
PARTIES CONSENT TO THE JURISDICTION OF ANY LOCAL, STATE
OR FEDERAL COURT LOCATED IN CUYAHOGA COUNTY IN THE
STATE OF OHIO, AND WAIVE ANY OBJECTION RELATING TO
IMPROPER VENUE OR FORUM NON CONVENIENS, TO THE CONDUCT
OF ANY PROCEEDING BY SUCH COURT. THE PARTIES
IRREVOCABLY WAIVE ANY RIGHT TO TRIAL BY JURY.
9. Attorneys' Fees and Costs. Should either
Party be required to retain the services of an attorney
to file an action to enforce any of the rights
hereunder, or under any other document executed and
delivered pursuant to this Agreement, the Party
substantially prevailing in such action shall be
entitled to recover reasonable attorneys' fees and
court costs in connection therewith in an amount to be
fixed by the court hearing such action.
11. Severability. In the event that any covenant,
condition or other provision contained in the Agreement
is held to be invalid, void or unlawful by any
administrative agency or court of competent
jurisdiction, that provision shall be deemed severable,
if possible, from the remainder of the Agreement and
shall in no way affect, impair or invalidate any other
covenant, condition or other valid and lawful
provision, so as to preserve the rights and obligations
of the Parties hereto. The Parties agree to use their
best efforts to modify immediately the offending
provision to conform to the relevant law or regulation,
while preserving the material benefits to each Party
contemplated by this Agreement.
12. Authority and Capacity. Each of the persons
signing this Agreement represents and warrants that he
or she is duly authorized to execute and deliver this
Agreement and that this Agreement is binding upon the
Party for whom such person has signed, and that the
signature of no other party or person is required in
order to bind such Party.
13. Counterparts. This Agreement may be executed
in one or more counterparts, and all counterparts so
executed shall constitute one agreement, binding on
both Parties.
IN WITNESS WHEREOF, the Parties have duly executed
this Contribution Agreement as of the day and year
first above-written.
ORBIT E-COMMERCE, INC.
By: /s/ Xxxxxxx Xxxxx
Xxxxxxx Xxxxx,
President & Director
By:/s/ Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx, Chief Financial Officer
& Director
PHOENIX TELNET, LLC
By: GAN & Associates, Inc., Managing Member
Xxxxxxx X. Xxxxx, President
By: /s/ Xxxxxxx X. Xxxxx, President
Xxxxxxx X. Xxxxx, President
