INVESTMENT AGREEMENT
THIS AGREEMENT MADE THIS 24th day of March, 1999 by and between NEW
SKY COMMUNICATIONS, INC., a publicly-traded New York corporation with
offices at 731 Powers Building, 16 West Main Street, Rochester, New York
14614 (hereinafter referred to as "New Sky") and MICHAEL CIDONI, STEPHEN
MORSE and RICHARD HERRERA, d/b/a The Movie Place, with offices at 518
Benton Street, Rochester, New York (hereinafter referred to individually
and collectively as "The Movie Place").
WHEREAS, The Movie Place owns, produces and operates the Internet
site known as "movieplace.com" and the owners thereof are desirous of New
Sky investing therein, and New Sky being desirous of making such
investment;
NOW THEREFORE the parties hereto covenant and agree as follows:
1) New Sky Communications, Inc. agrees to acquire a forty percent
(40%) interest in the The Movie Place business and the Web site known as
"movieplace.com" for a purchase price of $25,000.00. The Movie Place shall
use the proceeds of the investment to promote the Web site, purchase
equipment and for working capital.
2) The Movie Place warrants and represents that Mike Cidoni,
Stephen Morse and Richard Herrera own the entire business known as The
Movie Place which owns and operates the Web site known as
"movieplace.com", and that there exist no other encumbrances, liens, or
restrictions upon the business and the Web site that would affect or
impair such investment by New Sky in the business or the Web site. The
Movie Place further warrants and represents that the Web address
"movieplace.com" is registered to The Movie Place and that the Web site
and its content were created by and is operated solely by The Movie Place
and that, to the best of their knowledge, there exist no other claims to
the Web address or the creative content of the site. The Movie Place
further warrants and represents that the Movie Place business and the
"movieplace.com" Web site are currently compliant with the so-called Y2K
problem and that such problem will not adversely affect the business or
the Web site.
3) That the investment by New Sky is made in material reliance
upon documents and the representations made therein, presented to New Sky
by The Movie Place, specifically the "Movie Place Business Plan" and an
outline of a budget. New Sky, or its designated agents or representatives,
shall have the right to examine all of the books and records of the
business
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of Movie Place at reasonable times and places. The investment by New Sky
is also made in material reliance on the representation that it is the
intention of The Movie Place to incorporate as soon as is practicable
after the execution of this Agreement. This Agreement shall survive and
not be merged into such incorporation.
4) The Movie Place agrees to consult with New Sky, its officers,
directors and agents regarding business, legal and creative matters
pertaining to the business of The Movie Place and the "movieplace.com" Web
site. All partners in the business shall undertake to assist to make the
business of the Web site a success and shall in no event take any action
which shall impair, hinder or delay full exploitation of the business and
the Web site. The primary duty and responsibility of Mike Cidoni is and
shall remain creation of film-related content of the Web site. Stephen
Morse's primary duty and responsibility is the technical aspects of the
Web site. New Sky shall provide business, legal, accounting and financial
consulting services as requested.
5) Mike Cidoni hereby agrees to provide exclusive Internet
film-related content services to the "movieplace.com" Web site for a
minimum period of one year from the date of this Agreement. Such
exclusivity shall not include Cidoni's other current Internet activities:
www.rochestertoday.com, www.moviebuff.com, www.wegmans.com and other
current radio- and TV-station Internet sites contributed to in connection
with Cidoni's appearances on their airwaves. Any additional involvement of
Cidoni in other Internet sites shall be undertaken only upon the consent
of The Movie Place. At no time, without the prior approval of the
remaining partners, shall any party hereto disclose the business methods,
plans or any other information reasonably deemed to be confidential
regarding the business of The Movie Place to any third party, unless
required by legal or regulatory mandate.
6) No party hereto, nor its officers, directors employees or
agents, shall be liable for any act or omission performed or omitted in
good faith. Nothing herein shall place any party in the relationship of
principal, agent, master and servant, partners, joint venturers or
employer and employee of any other party and no party shall have the
authority, express or implied, or represent themselves as having the
authority to make binding contracts for the other or to bind or obligate
the other in any way. No party hereto shall assume any liabilities of any
other party and each party agrees to indemnify and hold the other parties,
its officers, directors, employees and agents harmless from any manner of
claim, action, or liability past, present or future not directly related
to this Agreement.
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7) This Agreement shall be construed under the laws of the State of
New York. Should there be any dispute between the parties concerning the
interpretation of this Agreement or concerning an alleged breach, which
the parties are unable to resolve after consultation with each other, such
dispute shall be decided by arbitration pursuant to the regulations and
procedures of the American Arbitration Association at Syracuse, New York.
The parties agree that any award rendered by the American Arbitration
Association may be entered in the Supreme Court of New York. In no event,
shall any party seek injunctive relief or take any action which may
impair, hinder or delay the production and full exploitation of the
"movieplace.com" Web site or any of its ancillary rights.
8) The Movie Place shall maintain books and records of account in
accordance with generally accepted accounting principles and shall, within
120 days following the end of its fiscal year, render a statement of
financial condition and profit and loss. New Sky shall have the right to
audit the books and records of The Movie Place, upon reasonable notice,
but not more often than once a year.
9) This Agreement may not be assigned without the written
permission of the other party.
10) This Agreement may be amended in writing only and shall be
binding upon and inure to the benefit of the successors and assigns of the
parties.
NEW SKY COMMUNICATIONS, INC.
SEAL
By: /S/ CARL R. REYNOLDS
--------------------
President
/S/ STEPHEN MORSE
-----------------
Stephen Morse
/S/ MICHAEL CIDONI
------------------
Michael Cidoni
/S/ RICHARD HERRARA
--------------------
Richard Herrera
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PROMISSORY NOTE
$ 25,000.00
March 24, 1999
Rochester, New York
For value received, receipt of which is hereby acknowledged, the
undersigned does hereby promise to pay to the order of Carl R. Reynolds the sum
of Twenty-Five Thousand and 00/100 Dollars ($25,000.00) upon demand with
interest at the rate of ten percent (10%) per annum. The Maker(s) hereof agree
to be jointly and severally liable hereon.
If Maker shall default in any payments due on this Note, or any of the
terms hereof, the Holder may give notice of the default and if not cured within
fifteen (15) days, may declare all principal and accrued interest at once due
and payable and proceed to seek all remedies available at law. The Maker agrees
to pay, as part of this Note, all costs incurred in collecting the amount due on
this Note, including but not limited to reasonable attorneys' fees of 20 percent
of the amount due.
Presentment, protest and notice are hereby waived.
WITNESS: NEW SKY COMMUNICATIONS, INC.
_____________________ By:/S/ CARL R. REYNOLDS
--------------------
President
_____________________ /S/ CARL R. REYNOLDS
--------------------
SEAL
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