HERE IT IS IN BLACK AND WHITE_ so here's how the deal goes down - Lou Pearlman only has a contract for 5 years - so guess what - in a few years he can just up and leave or they can tell him bye-bye and keep his company's name and all their musicians.
THE SAME THING HAPPENED TO FAMOUS AMOS of famous amos cookies. Did you know that wally amos gets no money from any famous amos cookies anymore - he sold off his shares until he was no longer the majority shareholder and then the majority got together, kicked him out and kept the name don't get fooled people! Read it all here...
6.4 Chairman of the Board. The Parties agree that Mr. Louis J. Pearlman shall serve from the Closing Date as Buyer's Chairman of the Board for no less than sixty (60) months following the Closing Date. Mr. Pearlman covenants and agrees that during such period:
6.4.1 he shall be actively involved in the promotion of Buyer;
6.4.2 he shall use his best efforts to launch an episodic television show that will support the credibility and business objective of Buyer;
6.4.3 he shall allow or cause to be allowed, as necessary, links from websites maintained by Buyer to websites controlled or maintained by Mr. Pearlman, Transcontinental Records, and/or their respective Affiliates, including, without limitation, loupearlman.com; naturalofficialsite.com; o-townrecords.com; otownbands.com; t-con.com; and makingthehit.com;
6.4.4 Buyer shall be permitted to include the successes of Mr. Pearlman, Transcontinental Records, and any of their Affiliates in the promotional and marketing materials and efforts of Buyer; subject to Mr. Pearlman's review and reasonable consent with respect to such inclusion of any specific matter; 14
6.4.5 upon the reasonable request of Buyer, Mr. Pearlman shall arrange for personal/promotional appearances of artists and other Persons represented by Transcontinental Records and/or Mr. Pearlman at events held or arranged by Buyer, including, without limitation, one-time events and office guest appearances, the cost of which shall be on a most favored customer basis;
6.4.6 he shall fully participate in any "road show" or other promotional activities permitted under applicable securities Laws;
6.4.7 he shall fully participate in the development of strategy and execution of operations of Buyer;
6.4.8 Mr. Pearlman shall use their best efforts to facilitate the establishment of join ventures and licensing arrangement in the United States, Canada, Europe and Asia with respect to the objectives of Buyer;
6.4.9 he shall fully participate in the development and launch of a music-based franchising division of Buyer (similar to the current modeling-based franchise business of Buyer) in 2002 with the goal of 60 sales of such franchises by Buyer at approximately $20,000 during the first half of 2003; and
6.4.10 Mr. Pearlman shall, and shall cause any Affiliate of Mr. Pearlman to, enter into a license agreement, the form of which is attached hereto as Exhibit J (the "License Agreement"), which grants a royalty-free, worldwide license in any right, title and interest he and such Affiliate (s) have or will acquire in the name "Trans Continental" and related marks and trademark applications therefor to Buyer, which license shall be exclusive for all modeling related activities of Buyer and non-exclusive for other uses, which license Buyer may further sub-license to any wholly-owned subsidiary of Buyer.
6.5 Other Officers. The Parties agree that immediately following the Closing, Buyer shall appoint and shall cause TCTI to appoint the following persons to the following executive positions: Louis J. PearlmanChairman of the Board of Buyer and TCTI; President of Buyer and TCTI; Mark R. TolnerChief Executive Officer of Buyer and TCTI; and Anthony RubenChief Operating Officer and Acting Chief Financial Officer of Buyer and TCTI.
6.6 Fairness Opinion. The Parties agree to obtain promptly after Closing, but in no event later than fifteen (15) days after Closing, an opinion of a firm unaffiliated with any of the Parties as to the fairness of the Merger and the other transactions contemplated by this Agreement to Buyer and to its stockholders generally. To the extent said firm is unable to issue the fairness opinion because of one or more issues, the Parties agree to take all commercially reasonable measures to address such issues.
6.7 Reverse Stock Split; Conversion of Series C Preferred.
6.7.1 As soon as permitted following the Closing Date by applicable Law, including the Corporation Law and relevant federal securities laws, Buyer shall effect a reverse stock split at a ratio of one to 100 or as otherwise determined by Buyer's Board of Directors, in consultation with Mr. Pearlman, as Buyer's Chairman, to increase the trading price of Buyer's Stock for the purpose of potentially gaining admittance for such stock to trade on the NASDAQ National Market, NASDAQ SmallCap Market, or any of the national stock exchanges.
Buyer may elect to effect said reverse stock split (i) upon such terms and conditions so as not to require approval of Buyer's stockholders pursuant to Section 78.207 of the Nevada Revised Statutes, in which case, Buyer shall promptly thereafter obtain the approval by written consent of Buyer's stockholders to increase the authorized shares of Buyer Stock to 500,000, 000 (par value $0.001 per share) subject to compliance with the Requirement for an Information Statement or (ii) upon the approval by written consent of the holders of the required number of shares of the issued and outstanding capital stock of Buyer (without any reduction in the authorized share capital of Buyer), subject to compliance with 15 the Requirements for an Information Statement (the effective date of the increase of Buyer's authorized shares of Buyer Stock pursuant to clause (i) of this sentence or the effective date of such reverse stock split effected pursuant to clause (ii) of this sentence, the "Reverse Stock Split Effective Date").
6.7.2 Within five (5) business days following the Additional Share Distribution Date, Buyer and the Series C Holders agree that the Series C Preferred shall be converted into shares of Buyer Stock, at a rate reflecting said reverse stock split, in accordance with the terms and conditions of the Certificate of Designations.
6.8 Future Private Capital Raises. Mr. Pearlman shall use his best efforts to enable Buyer to facilitate one or two private debt or equity capital raises for Buyer in order to rapidly permit Buyer to achieve the financial and business objectives determined by Buyer's Board of Directors.
6.9 Series C Holders Standstill. Until such time as the reverse stock split provided for in Section 6.7.1 has been effected, but in no event later than December 31, the Series C Holders hereby (i) waive the requirement of Buyer that sufficient numbers of shares of Buyer Stock be reserved for issuance upon conversion of the Series C Preferred, (ii) agree not to enforce their respective rights to the payment upon liquidation set forth in Article Second, Section 4 of the Certificate of Designations solely to the extent such payment is payable as a result of the Merger, and (iii) agree not to enforce the adjustment to Conversion Price (as defined in the Certificate of Designations) set forth in Article Second, Section 6 (d) (iv) of the Certificate of Designations solely to the extent such Conversion Price would be adjusted as a result of the Buyer Stock issued in the Merger.
Janet
orlando, Florida
U.S.A.
0 comments