EXHIBIT 10.36
NOTE AND WARRANT PURCHASE AGREEMENT
NOTE AND WARRANT PURCHASE AGREEMENT, dated as of January 30, 1998
(the "Agreement"), between Kideo Productions, Inc., a Delaware corporation (the
"Company"), and Xxxxxxxx Xxxxxx and Xxxxxxx Xxxxxx (each a "Buyer" and together
the "Buyers").
WHEREAS, each of the Buyers wishes to acquire from the Company (a) a
note in the aggregate principal amount of $250,000 bearing interest at the rate
of 10% per annum, due April 15, 1999, in the form attached hereto as Exhibit A
(each a "Note" and together the "Notes"), and (b) warrants to purchase 250,000
shares of its common stock, par value $.0001 per share (the "Common Stock"), to
be in the form of warrants attached hereto as Exhibit B (each a "Warrant" and
together the "Warrants"); and
WHEREAS, the Company is willing to sell to each Buyer a Note and a
Warrant in consideration of the payment to the Company by the Buyers of $250,000
each (an aggregate of $500,000).
NOW, THEREFORE, in consideration of the foregoing premises and the
respective representations warranties, covenants, agreements and conditions
hereinafter set forth, and intending to be legally bound hereby, the parties
hereto agree as follows:
I. THE CLOSING.
A. Time and Place of Closing. The consummation of the transactions
contemplated by this Agreement (the "Closing") will take place by exchange of
all documents and instruments required hereby concurrently with the execution of
this Agreement at such place and time as the parties may agree.
B. Purchase and Sale of the Notes and the Warrants. At the Closing, the
Company will, and hereby does, issue and sell to the Buyers the Notes and the
Warrants and the Buyers will, and hereby do purchase, acquire, accept and pay
for, as hereinafter provided, the Notes and the Warrants.
C. Consideration for the Notes and the Warrants. The aggregate
consideration for the Note and the Warrants shall consist of immediately
available funds in the amount of $500,000 (the "Consideration").
D. Deliveries by the Company. At the Closing, the Company shall deliver
the following to the Buyers:
1. A duly executed copy of this Agreement.
2. Two duly executed Notes, one to each of the Buyers.
3. Two duly executed certificates representing a Warrant, one to
each of the Buyers.
4. A duly executed copy of a security agreement in the form of
Exhibit C hereto (the "Security Agreement").
5. Any other documents and instruments incident to the
transactions contemplated hereby as the Buyers may reasonably
request.
E. Deliveries by the Buyers. At the Closing, the Buyers shall deliver the
following to the Company:
1. A duly executed copy of this Agreement.
2. Cash in immediately available funds in the aggregate amount of
$500,000 by wire transfer to an account or accounts designated
by the Company prior to the Closing.
3. Any other documents and instruments incident to the
transactions contemplated hereby as the Company may reasonably
request.
II. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to the Buyers as follows:
A. Organization. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
all requisite corporate power and authority to own and operate its properties,
to carry on its business as now conducted and as proposed to be conducted, to
enter into this Agreement, to issue and sell the Notes and the Warrants and to
carry out the terms of this Agreement, the Notes, the Warrants and the Security
Agreement (collectively, the "Operative Agreements").
B. Authority Relative to this Agreement. The Company has full corporate
power and authority to execute and deliver the Operative Agreements and to
consummate the transactions contemplated thereby. The execution and delivery of
the Operative Agreements and the consummation of the transactions contemplated
thereby have been duly and validly authorized by the Board of Directors of the
Company and no other corporate proceedings on the part of the Company are
necessary to authorize the Operative Agreements or to consummate the
transactions contemplated thereby. The Operative Agreements have been duly and
validly executed and delivered by the Company and
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constitute valid and binding agreements or obligations of the Company,
enforceable against the Company in accordance with their respective terms.
C. Compliance with Other Instruments. The Company is not in violation of
any term of its certificate or articles of incorporation or by-laws, nor is the
Company in violation of any term of any agreement or instrument to which it is a
party or by which it is bound or any term of any applicable law, ordinance, rule
or regulation of any governmental authority or any term of any applicable order,
judgment or decree of any court, arbitrator or governmental authority, the
consequences of which violation would have a materially adverse effect on the
business, operations, affairs, condition (financial or otherwise), properties or
assets of the Company; the execution, delivery and performance of the Operative
Agreements will not result in any violation of or be in conflict with or
constitute a default under any such term or result in the creation of (or impose
any obligation on the Company to create) any lien upon any of the properties or
assets of the Company pursuant to any such term (other than in accordance with
the Security Agreement), the consequences of which violation would have a
materially adverse effect on the business, operations, affairs, condition
(financial or otherwise), properties or assets of the Company.
D. Capitalization. As of the date hereof and prior to the consummation of
the transactions contemplated hereby, the authorized capital stock of the
Company consists of 15,000,000 shares of the Common Stock, of which 3,682,128
shares are issued and outstanding, and 5,000,000 shares of preferred stock, par
value $.0001 per share, none of which are issued and outstanding. As of the date
hereof and prior to the consummation of the transactions contemplated hereby,
2,126,898 shares of the Common Stock are reserved for issuance upon the exercise
of outstanding options and warrants. All of the outstanding shares of the Common
Stock are, and all shares of the Common Stock which may be issued pursuant to
the exercise of options and warrants or otherwise (including the Warrants) or
upon conversion of convertible securities (including the Note) will be, when
issued in accordance with the respective terms thereof, duly authorized, validly
issued, fully paid and nonassessable and free of any preemptive rights in
respect thereto. Other than with respect to the transactions contemplated
hereby, as of the date hereof there are no outstanding obligations to sell or
convey any shares of capital stock of the Company or any securities exercisable
for or convertible into shares of capital stock of the Company.
E. Reports. The Company has filed all forms, reports, statements and other
documents required to be filed with (i) the Securities and Exchange Commission
(the "SEC") including, without limitation, (A) all Annual Reports on Form
10-KSB, (B) all Quarterly Reports on Form 10-QSB, (C) all Reports on Form 8-K,
(D) all other reports or registration statements and (E) all amendments and
supplements to all such reports and registration statements (collectively
referred to as the "SEC Reports") and (ii) any other applicable state securities
authorities (all such forms, reports, statements and other documents in (i) and
(ii) of this Section 2.5 being referred to herein, collectively, as the
"Reports"). The Reports (i) were prepared in all material respects in accordance
with the requirements of applicable law (including, with respect to the SEC
Reports, the Securities
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Act of 1933 (the "Securities Act") and the Securities Exchange Act of 1934 (the
"Exchange Act"), as the case may be, and the rules and regulations of the SEC
thereunder applicable to such SEC Reports) and (ii) did not at the time they
were filed contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
F. Security Interest. Upon the recording of UCC-1s and such other filings
as may be necessary or requested by the Buyers under the Security Agreement,
including an assignment of patent to be filed in the United States Patent and
Trademark Office, each of which the Company agrees to prepare and file promptly
after the Closing (and in no event more than three business days following the
Closing), the Security Agreement will create a perfected first priority lien in
and to the Collateral (as defined in the Security Agreement).
III. REPRESENTATIONS AND WARRANTIES OF THE BUYER.
Each of the Buyers represents and warrants to the Company as
follows:
A. The Buyer is sufficiently experienced in financial and business matters
to be capable of evaluating the merits and risks of this investment and to make
an informed decision relating thereto. The Buyer has the financial capability
for making the investment, can afford a complete loss of the investment, and the
investment is a suitable one for the Buyer.
B. Prior to the execution of this Agreement, the Buyer has had the
opportunity to ask questions of and receive answers from representatives of the
Company concerning the finances, operations, business and prospects of the
Company.
C. The Buyer understands that the Company shall not be deemed to have made
to the Buyer any representation or warranty other than as expressly made in this
Agreement.
D. The Buyer understands that the Notes and Warrants (and the Common Stock
into which they may be converted and exercised for) are not registered under the
Securities Act, and are not registered under any state "blue sky" laws, and the
Notes and Warrants (and such Common Stock) may not be transferred except in
compliance with such laws.
E. The Buyer understands that the Notes and Warrants (and such Common
Stock) are "restricted securities" as that term is defined in Rule 144 under the
Securities Act and that the Notes and Warrants (and such Common Stock) must be
held indefinitely unless they are subsequently registered under the Securities
Act or an exemption from such registration is available. The Buyer understands
that in the case of sales in which Rule 144
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is not available, compliance with Regulation A under the Securities Act or some
other exemption under the Securities Act will be required.
F. The Buyer represents that the Buyer is purchasing the Notes and
Warrants for the Buyer's own account for investment and not with a view to the
distribution thereof or with any present intention of distributing or selling
any of the Notes and Warrants. The Buyer further represents that the Buyer is an
accredited investor within the meaning of Rule 501 under the Securities Act.
IV. CERTAIN AGREEMENTS.
A. Registration and Limitations on Sale.
1. The Company agrees to include the 500,000 (as appropriately
adjusted for any stock splits, stock dividends or similar events) shares of
Common Stock for which the Warrants may be exercised and the 500,000 (as
appropriately adjusted for any stock splits, stock dividends or similar events)
shares of Common Stock into which the Notes may be converted (the "Registrable
Securities") in a registration statement (the "Registration Statement") which
shall be filed no later than sixty (60) days following the Closing. The Company
will use its reasonable best efforts to have the Registration Statement declared
effective as promptly as practicable thereafter and shall keep the Registration
Statement effective in order to permit a public offering and sale of the
Registrable Securities thereunder. The Company shall also use its best efforts
to register or qualify all of the Registrable Securities under such other
securities or blue sky laws of such States of the United States of America where
an exemption is not available and as the Buyers shall reasonably request. In the
event the Registration Statement is not effective on or before May 1, 1998, the
per share exercise price of the Warrants and the per share conversion price of
the Notes shall each be reduced $.10 and shall be reduced an additional $.10 per
share on the first day of each month thereafter through and including the month
in which the Registration Statement is declared effective. The $.10 referred to
above shall be appropriately adjusted for any stock splits, stock dividends or
similar events occurring after the date hereof.
2. The Company will pay all Registration Expenses (as defined below)
in connection with the Registration Statement. "Registration Expenses" means all
costs, fees and expenses incident to the Company's performance of or compliance
with its obligation to register the Registrable Securities, including, without
limitation, all registration, filing and NASD fees, all fees and expenses of
complying with securities or blue sky laws, all printing expenses, and delivery
expenses, the fees and disbursements of counsel for the Company and of its
independent public accountants, and any fees and disbursements customarily paid
by issuers or sellers of securities (excluding any underwriting discounts or
commissions or transfer taxes with respect to the Registrable Securities and the
fees and disbursements of more than one counsel for the Buyers).
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3. The Company may require, and the Buyers hereby agree, to furnish
the Company such information regarding the Buyers and the distribution of the
Registrable Securities as the Company may from time to time reasonably request
in writing.
4. The Company will use its reasonable best efforts to keep the
Registration Statement effective in order to permit a public offering and sale
of any Registrable Securities registered thereunder until the earlier of (i) the
date that all of the Registrable Securities have been sold pursuant to the
Registration Statement, (ii) the date the Buyer may sell such securities under
the provisions of Rule 144(k) and (iii) the third anniversary of the effective
date of the Registration Statement.
5. At any time during which the Registration Statement is effective,
if any Buyer desires to sell shares of Registrable Securities, such Buyer hereby
agrees to give the Company written notice (the "Notice") on the third business
day prior to the date of such proposed sale (the "Sale Date") and the Company
agrees that such Buyer may sell Registrable Securities for a period of 90 days
commencing on the Sale Date; provided, however, no such sale shall be made if
after the receipt of the Notice and prior to the Sale Date the Company shall
inform such Buyer in writing that in the good faith judgement of the Company's
counsel, the sale or transfer of shares of Registrable Securities by such Buyer
would, at such time, require the disclosure of material information that the
Company has a bona fide business purpose for preserving as confidential or the
Company would be required to provide information required by the SEC or the
Securities Act (or the rules and regulations promulgated thereunder), such as
pro forma financial information, that at such time the Company would be unable
to provide; provided further, that in no event shall the Company prohibit any
sales pursuant to the foregoing proviso for more than 60 consecutive days or
more than 90 days in any 12 month period.
6. The Company shall (a) promptly notify the Buyers upon discovery
that, or upon the happening of any event as a result of which, the prospectus
included in the Registration Statement, as then in effect, includes an untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, in
the light of the circumstances under which they were made, and (b) at the
request of the Buyers, promptly prepare and furnish to the Buyers a reasonable
number of copies of a supplement to or an amendment of such prospectus as may be
necessary so that, as thereafter delivered to the purchasers of such securities,
such prospectus shall not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances under which
they were made. The Buyers agree that, upon receipt of any notice from the
Company of the happening of any event of the kind described in this Section
4.1.7, the Buyers will forthwith discontinue disposition of Registrable
Securities pursuant to the Registration Statement until the receipt by the
Buyers of the copies of the supplemented or amended prospectus and, if so
directed by the Company, will promptly deliver to the Company (at the Company's
expense) all copies,
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other than permanent file copies, then in the Buyers' possession of the
prospectus relating to such Registrable Securities current at the time of
receipt of such notice.
B. Expenses. Except as provided in Section 4.1.2, all costs and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby will be paid by the party incurring such costs and expenses; provided,
however, the Company will pay directly the fees and expenses of counsel to the
Buyers in an amount equal to $10,000.
C. Best Efforts. Subject to the terms and conditions of this Agreement,
each of the parties hereto will use its best efforts to take, or cause to be
taken, all action, and to do, or cause to be done, all things necessary, proper
or advisable under applicable laws and regulations to consummate and make
effective the transactions contemplated by this Agreement.
D. Restrictions on Transfer of Notes and Warrants. The Notes and the
Warrants issued under this Agreement, including any Notes or Warrants issued
upon the transfer of the Notes or the Warrants, shall be stamped or otherwise
imprinted with a legend in substantially the following form:
"This [security] has not been registered under the Securities Act of
1933, as amended, or applicable State securities laws, if any, and
may not be transferred in the absence of such registration or
receipt by the Company of an opinion of counsel reasonably
satisfactory to the Company that the transfer may be properly made
under an exemption from registration under such Act and such laws."
E. Information. From and after the date hereof and through April 15, 1999,
the Company shall provide the Buyers with such information related to the
Company as may be reasonably requested by the Buyers.
F. Indemnification in Connection with the Registration Statement.
1. Indemnification by the Company. The Company will, and hereby
does, indemnify and hold harmless, the Buyers against any losses, claims,
damages or liabilities to which the Buyers may become subject under the
Securities Act or otherwise, including, without limitation, the fees and
expenses of legal counsel, insofar as such losses, claims, damages or
liabilities (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Registration Statement,
any preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein in light of the circumstances in which
they were made not misleading, or any violation by the Company
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of the Securities Act or any rule or regulation thereunder applicable to the
Company and the Company will promptly reimburse the Buyers for any legal or any
other expenses reasonably incurred by the Buyers in connection with
investigating or defending any such loss, claim, liability, action or
proceeding; provided, that the Company shall not be liable in any such case to
the extent that any such loss, claim, damage, liability (or action or proceeding
in respect thereof) or expense arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
the Registration Statement, any such preliminary prospectus, final prospectus,
summary prospectus, amendment or supplement in reliance upon and in conformity
with written information furnished to the Company through an instrument duly
executed by or on behalf of the Buyer specifically stating that it is for use in
the preparation thereof. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the Buyers and shall
survive the transfer of the Registrable Securities by the Buyers.
2. Indemnification by the Buyers. The Buyers hereby agree to
indemnify and hold harmless (in the same manner and to the same extent as set
forth in Section 4.6.1) the Company, and each director, officer and employee of
the Company and each other person, if any, who participates as an underwriter in
the offering or sale of securities pursuant to the Registration Statement, with
respect to any untrue statement or alleged untrue statement of a material fact
contained in or any omission or alleged omission to state therein a material
fact in the Registration Statement, any preliminary prospectus, final prospectus
or summary prospectus contained therein, or any amendment or supplement thereto,
if such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company through an instrument duly executed by or on behalf of
the Buyers specifically stating that it is for use in the preparation of the
Registration Statement, preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement; provided, however, that the liability of
the Buyers under this Section 4.6.2 shall be limited to the amount of proceeds
received by the Buyers in the offering giving rise to such liability. Such
indemnity shall remain in full force and effect, regardless of any investigation
made by or on behalf of the Company or any such director, officer or employee
and shall survive the transfer of such securities by such seller.
3. Notices of Claims. Promptly after receipt by an indemnified party
of notice of the commencement of any action or proceeding involving a claim
referred to in this Section 4.6, such indemnified party will, if a claim in
respect thereof is to be made against an indemnifying party, give written notice
to the latter of the commencement of such action; provided, however, that the
failure of any indemnified party to give notice as provided herein shall not
relieve the indemnifying party of its obligations under this Section 4.6, except
to the extent that the indemnifying party is actually prejudiced by such failure
to give notice. In case any such action is brought against an indemnified party,
the indemnifying party shall be entitled to participate in and to assume the
defense thereof, jointly with any other indemnifying party similarly notified to
the extent that it may wish, with counsel reasonably satisfactory to such
indemnified party, and after notice from the
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indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to such indemnified
party for any legal or other expenses subsequently incurred by the latter in
connection with the defense thereof other than reasonable costs of
investigation; provided, however, that if the indemnified party reasonably
believes it is advisable for it to be represented by separate counsel because
there exists a conflict of interest between its interests and those of the
indemnifying party with respect to such claim, or there exist defenses available
to such indemnified party which may not be available to the indemnifying party,
or if the indemnifying party shall fail to assume responsibility for such
defense, the indemnified party may retain counsel satisfactory to it and the
indemnifying party shall pay all fees and expenses of such counsel. No
indemnifying party shall be liable for any settlement of any action or
proceeding effected without its written consent, which consent shall not be
unreasonably withheld or delayed. No indemnifying party shall, without the
consent of the indemnified party, consent to entry or any judgment or enter into
any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a release from
all liability in respect to such claim or litigation or which requires action
other than the payment of money by the indemnifying party. Each indemnified
party shall furnish such information regarding itself or the claim in question
as an indemnifying party may reasonably request in writing and as shall be
reasonably requested in connection with the defense of such claim and litigation
resulting therefrom.
4. Contribution. If the indemnification provided for in this Section
4.6 shall for any reason be held by a court of competent jurisdiction to be
unavailable to an indemnified party in respect of any loss, claim, damage or
liability, or any action in respect thereof, then, in lieu of the amount paid or
payable under Section 4.6.1 or 4.6.2 hereof, the indemnified party and the
indemnifying party shall contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in connection
with investigating the same), (a) in such proportion as is appropriate to
reflect the relative fault of the Company and the Buyers in connection with the
statement or omissions which resulted in such loss, claim, damage or liability,
or action in respect thereof, as well as any other relevant equitable
consideration (the relative fault of the Company and such prospective sellers to
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or the Buyers and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission) or (b) if the allocation
provided by clause (a) above is not permitted by applicable law, in such
proportion as shall be appropriate to reflect the relative benefits received by
the Company and the Buyers from the offering of the securities covered by the
Registration Statement. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. In addition, no person shall be obligated to contribute
hereunder any amounts in payment of any settlement of any action or claim
effected without such person's consent, which consent shall not be unreasonably
withheld or delayed.
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5. Other Indemnification. Indemnification and contribution similar
to that specified in the preceding sections of this Section 4.6 (with
appropriate modifications) shall be given by the Company and the Buyers with
respect to any required registration or other qualification of securities under
any federal or state law, rule or regulation of any governmental authority other
than the Securities Act.
6. Indemnification Payments. The indemnification and contribution
required by this Section 4.6 shall be made by prompt periodic payments of the
amount thereof during the course of the investigation or defense, as and when
bills are received or expense, loss, damage or liability is incurred.
G. Other Company Registrations. While the Note is outstanding, the Company
will not file any other registration statement pursuant to which any shares of
the Common Stock would be saleable prior to February 1, 1999. Notwithstanding
the foregoing, the Company may include in the Registration Statement 140,000
shares of the Common Stock issuable upon exercise of outstanding warrants
provided that the holders thereof may not sell any shares received upon exercise
of such warrants until January 31, 1999.
H. Right of First Offer for Additional Offerings.
1. If at any time prior to the repayment or conversion in full of
the Notes, and other than in connection with a merger, consolidation, sale of
assets, disposition or acquisition of a business, product or license by the
Company, strategic alliance, bank loan or other credit facility agreement,
public offering, exercise of options or warrants or exchange of capital stock
for assets, stock or other joint venture interests, the Company determines to
offer to sell securities of the Company, the Company shall first offer the
Buyers the opportunity to purchase the securities being offered by delivering to
the Buyers written notice (the "Notice of Offer") which shall specify (i) the
type and number or amount of securities the Company wishes to sell (the "Offered
Securities"); (ii) the proposed sale price for the Offered Securities (the
"Offer Price"); and (iii) all other terms and conditions of the offer. The
Notice of Offer shall constitute an irrevocable offer by the Company to sell to
the Buyer the Offered Securities at the Offer Price.
2. Within 10 business days following their receipt of the Notice of
Offer, the Buyers shall notify the Company whether they elect to purchase all or
a portion of the Offered Securities (such notification shall be referred to as
the "Acceptance"). The Acceptance shall be deemed to be an irrevocable
commitment to purchase from the Company the number or amount of the Offered
Securities specified in the Acceptance. If the Buyers do not deliver an
Acceptance within 10 business days following their receipt of the Notice of
Offer, the Buyers shall be deemed to have declined to purchase the Offered
Securities. If the Buyers deliver an Acceptance for a portion of the Offered
Securities, the Buyers shall be deemed to have declined to purchase the balance
of the Offered Securities.
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3. If the Buyers do not elect to purchase all of the Offered
Securities available for purchase, the Company may, within a period of six
months from the date of the Notice of Offer, sell the remaining Offered
Securities to one or more third parties (each a "Third Party Transferee"), for
not less than the Offer Price and on such other terms and conditions as are no
more favorable to the proposed Third Party Transferee than those specified in
the Notice of Offer. If the Company does not complete a sale within such
six-month period, the provisions of this Section 4.8 shall again apply to the
Offered Securities, and no sale of such Offered Securities shall be made
otherwise than in accordance with the terms of this Agreement.
4. Any closing of a purchase of Offered Securities by the Buyer
pursuant to this Section 4.8 shall take place on the 30th day after the delivery
of the Acceptance at 11:00 A.M. at the principal office of the Company, or at
such other date, time or place as the parties to the sale may agree. At such
closing, the Company shall sell, convey, transfer and deliver to the Buyers full
right, title and interest in and to the Offered Securities so purchased by the
Buyers, free and clear of all liens, security interests or adverse claims of any
kind or nature, shall make representations and warranties and, unless the Notice
of Offer specifically provides otherwise and shall carry over to the terms
offered to a third party as provided above, enter into an agreement providing
rights substantially similar to those contained herein (including registration
rights) and shall deliver to the Buyers a certificate or certificates
representing the Offered Securities sold to such party, in each case duly
endorsed for transfer or accompanied by appropriate stock transfer powers duly
endorsed. The Buyers shall deliver to the Company, in full payment of the
purchase price of the Offered Securities purchased, a certified or bank check
payable to the order of the Company in an amount equal to the Offer Price and,
if there is consideration other than cash included in the Offer Price, such
other consideration.
5. For purposes of this Section 4.8, the Buyers shall apportion the
Offered Securities they desire to purchase among themselves in their sole
discretion.
V. MISCELLANEOUS PROVISIONS.
A. Survival of Representations. All representations and warranties made by
either party pursuant to this Agreement shall survive the Closing.
B. Indemnification. In addition to the indemnification provided for in
Section 4.6, each of the parties hereto (the "Indemnifying Party") shall, to the
fullest extent permitted under applicable law, indemnify and hold the other (the
"Indemnified Party") harmless against any losses, claims, damages, liabilities,
actions, judgments, causes of action, costs or expenses including without
limitation, interest, penalties and attorneys' fees and expenses (the
"Liabilities") asserted against, resulting from, imposed upon or incurred or
suffered by an Indemnified Party as a result of, arising out of or relating to
any breach of a representation, warranty, covenant or agreement contained in the
Operative Agreements.
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All procedural and operating terms of such indemnification shall be as set forth
in Section 4.6.
C. Amendment and Modification. This Agreement may be amended, modified or
supplemented only by written agreement of the Company and the Buyer.
D. Waiver of Compliance; Consents. Except as otherwise provided in this
Agreement, any failure of any of the parties to comply with any obligation,
covenant, agreement or condition herein may be waived by the party or parties
entitled to the benefits thereof only by a written instrument signed by the
party granting such waiver, but such waiver or failure to insist upon strict
compliance with such obligation, covenant, agreement or condition shall not
operate as a waiver of, or estoppel with respect to, any subsequent or other
failure. Whenever this Agreement requires or permits consent by or on behalf of
any party hereto, such consent shall be given in writing in a manner consistent
with the requirements for a waiver of compliance as set forth in this Section
5.3.
E. Investigations. The respective representations and warranties of the
Company and the Buyer contained herein shall not be deemed waived or otherwise
affected by any investigation made by any party hereto.
F. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered faxed to the numbers set forth
below with a record of receipt, personally or mailed by registered or certified
mail (return receipt requested), postage prepaid, to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice, provided that notices of a change of address shall be effective
only upon receipt thereof):
(a) if to the Company, to
Kideo Productions, Inc.
000 Xxxxxxxx
Xxxxx 000
Xxx Xxxx, Xxx Xxxx 00000
Attention: President
Fax: 000-000-0000
with a copy to
Xxxxxxx Xxxxxxxx & Xxxxx, P.C.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Fax: 000-000-0000
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(b) if to the Buyers, to
Xxxxxxxx Xxxxxx
Hollister Ranch Xxx 00
Xxxxxxx, Xxxxxxxxxx 00000
Fax: 000-000-0000
with a copy to
Squadron Ellenoff Plesent & Xxxxxxxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxx, Esq.
Fax: 000-000-0000
G. Assignment. This Agreement and all of the provisions hereof shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, but neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto without the prior written consent of the other parties, nor is
this Agreement intended to confer upon any other person except the parties
hereto any rights or remedies hereunder.
H. Governing Law. This Agreement shall be governed by the laws of the
State of New York (regardless of the laws that might otherwise govern under
applicable Delaware principles of conflicts of law) as to all matters, including
but not limited to matters of validity, construction, effect, performance and
remedies.
I. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
J. Interpretation. The article and section headings contained in this
Agreement are solely for the purpose of reference, are not part of the agreement
of the parties and shall not in any way affect the meaning or interpretation of
this Agreement.
K. Entire Agreement. This Agreement, including the exhibits hereto and the
documents and instruments referred to herein, embodies the entire agreement and
understanding of the parties hereto in respect of the transactions contemplated
by this Agreement. There are no restrictions, promises, representations,
warranties, covenants or undertakings, other than those expressly set forth or
referred to herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such transactions.
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L. Survival of Certain Agreements. All agreements contained in this
Agreement which by their terms shall survive the Closing hereunder, including,
without limitation, the agreements contained in Sections 4.1 through 4.8 and 5.2
hereof and this Section 5.12, shall survive the Closing for an indefinite period
of time.
IN WITNESS WHEREOF, the Company and the Buyer have caused this
Agreement to be signed by their respective duly authorized officers as of the
date first above written.
KIDEO PRODUCTIONS, INC.
By: ___________________________
Xxxxxxx Xxxxxx, President
-------------------------------
XXXXXXXX XXXXXX
-------------------------------
XXXXXXX XXXXXX
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