PURCHASE AGREEMENT
PURCHASE AGREEMENT (the "Agreement"), dated as of August 11, 2004, by
and among DST Media, Inc., a Delaware corporation, as Buyer (the "Buyer");
Xxxxxxx X. Xxxxx (the "OKID Seller"); and the persons listed on Schedule A
hereto (the "Toyopia Sellers") (the OKID Seller and the Toyopia Sellers are
collectively referred to herein as the "Sellers").
WITNESSETH
WHEREAS, the Toyopia Sellers own an aggregate of 32,120,000 shares (the
"Toyopia Shares") of common stock, $.001 par value, of Toyopia Holdings
Corporation, a Nevada corporation ("Toyopia"), representing 67.34% of the
47,696,500 outstanding shares of Common Stock of Toyopia;
WHEREAS, the OKID Seller owns 1,000 OKID Shares (defined below),
representing one hundred (100%) percent of the outstanding Class B common stock
(the "OKID Shares") of OKID Interactive Corporation, an Arizona corporation
("OKID");
WHEREAS, the Toyopia Sellers desire to sell, and the Buyer desires to
purchase, the Toyopia Shares on the Closing Date (as defined herein);
WHEREAS, subject to compliance with applicable law, Buyer desires to
purchase, within sixty days of the Closing Date, the remaining outstanding
shares of Common Stock of Toyopia; and
WHEREAS, the OKID Seller desires to sell, and the Buyer desires to
purchase, the OKID Shares on the Closing Date;
NOW, THEREFORE, in consideration of the premises and the
representations, warranties and agreements herein contained, the parties hereto
intending to be legally bound, hereby agree as follows:
Article I
SALE OF SHARES
Section 1.1 Delivery of Toyopia Shares/Assignment of OKID Shares.
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(a) To the Buyer. On the terms and subject to the
conditions set forth in this Agreement, on the Closing Date, (i) each of the
Toyopia Sellers shall deliver to the Buyer a certificate or certificates
representing the number of Toyopia Shares set forth opposite each Seller's name
on Schedule A hereto, duly endorsed for transfer or accompanied by appropriate
stock powers, duly executed, in either case in favor of the Buyer, and each
certificate shall have all necessary stock transfer stamps affixed thereto at
the expense of the Seller, and (ii) the OKID Seller shall deliver to the Buyer a
certificate or certificates representing the OKID Shares duly endorsed for
transfer or accompanied by appropriate stock powers, duly executed, in either
case in favor of the Buyer, and each certificate shall have all necessary stock
transfer stamps affixed thereto at the expense of the Seller,
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Section 1.2 Purchase Consideration. The aggregate consideration to be
paid for the Toyopia Shares and the OKID Shares (the "Purchase Price") shall
consist of 21,683,561 shares of Common Stock, $.001 par value, of the Buyer
("Buyer's Shares"), of which (i) an aggregate of 1,683,561 shares shall be
issued to the Toyopia Sellers, with each such Seller to receive the number of
Buyer's shares set forth opposite such Seller's name on Schedule A hereto, and
(ii) 20,000,000 shares shall be issued to the OKID Seller. At the closing,
Xxxxxx Xxxxx, sole stockholder of the Buyer, shall surrender to the Buyer,
properly endorsed for cancellation, certificates evidencing 8,280,000 shares of
Common Stock of the Buyer, which constitute all of the issued and outstanding
Common Stock of the Buyer. The Buyer agrees to pay Xxxxxx Xxxxx, as provided
herein, an aggregate of $842,500 in consideration of the following: for the
surrender and cancellation of her Common Stock of Buyer ($110,000); for deferred
compensation owing to her by Toyopia ($250,000); for the payment by her of
certain professional fees of Toyopia and other miscellaneous expenses ($32,500);
and for amounts owing to her by Toyopia for certain designs and products
($450,000). Such $842,500 shall be payable as follows: $100,000 upon closing of
a capital raising transaction by the Buyer having minimum net proceeds to Buyer
of $450,000 ("Bridge"); $142,500 shall be payable upon the earlier to occur of
(i) December 31, 2004, and (ii) the closing of a capital raising transaction by
the Buyer which results in the Buyer raising additional minimum net proceeds of
$2,000,000 ("Major Financing"); $200,000 no later than June 1, 2005; and
$400,000 no later than December 31, 2005. The Buyer agrees to pay Xxxxxx ("Xxx")
Xxxx an aggregate of $157,500 in consideration of deferred compensation owing to
him by Toyopia. Such $157,500 shall be payable as follows: $100,000 upon the
closing of the Bridge and the remaining $57,500 shall be payable upon the
earlier to occur of (i) December 31, 2004, and (ii) the closing of the Major
Financing. In order to secure the Buyer's obligation to pay an aggregate of
$200,000 upon the closing of the Bridge, the OKID Seller shall, within twenty
days of the Closing Date, grant Xxxxxx Xxxxx and Xxxxxx ("Xxx") Xxxx a security
interest in the 20,000,000 shares of Buyer's common stock being issued to the
OKID Seller hereunder. In the event that the Buyer defaults on the payment of
such $200,000 obligation (payable upon closing of the Bridge), the Buyer shall
without further consideration immediately transfer the OKID Shares back to the
OKID Seller.
Section 1.3 Transfer Taxes. The Buyer shall pay any stock transfer
taxes, recording fees and other sales, use, purchase or similar taxes resulting
from the transactions contemplated hereby.
Section 1.4 Purchase Entirely for Own Account. Each Seller agrees that
the Buyer's Shares to be acquired by such Seller pursuant to the terms hereof
will be acquired for investment for such Sellers' own account, not as a nominee
or agent, and not with a view to the resale or distribution of any part thereof.
Each of the Sellers agrees that he/she has no present intention of selling,
granting any participation in, or otherwise distributing the Buyer's Shares
acquired hereunder. Each Seller agrees that he/she has no contract, undertaking,
agreement or arrangement with any person to sell or transfer, or grant any
participation to such person or to any third person, with respect to any Buyer's
Shares to be acquired hereunder.
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Section 1.5 Access to Information, Experience, Etc.
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(a) Each Seller acknowledges that he/she has received and
read and is familiar with this Agreement. Each Seller also acknowledges that
he/she has had an opportunity to ask questions of and receive answers from the
Buyer concerning the terms and conditions of this purchase. Each Seller
represents that he/she has substantial experience in evaluating non-liquid
investments such as the Buyer's Shares and is capable of evaluating the merits
and risks of an investment in the Buyer. Each Seller further represents that
he/she is an "accredited investor" on the basis that such Seller meets one or
more of the following definitions of "Accredited Investor" (in accordance with
Rule 501 of Regulation D promulgated under the Securities Act of 1933, as
amended):
(1) A trust (i) with total assets in excess of
$5,000,000, (ii) not formed for the specific
purpose of acquiring the Securities, (iii)
whose purchase is directed by a person who,
either alone or with his purchaser
representative, has such knowledge and
experience in financial and business matters
that he is capable of evaluating the merits
and risks of the proposed investment.
(2) A corporation, business trust, partnership,
or an organization described in section
501(c)(3) of the Internal Revenue Code,
which was not formed for the specific
purpose of acquiring the Securities, and
which has total assets in excess of
$5,000,000.
(3) Individuals with income from all sources for
each of the last two full calendar years
whose reasonably expected income for this
calendar year exceeds either of: (i)
$200,000 individual income; or (ii) $300,000
joint income with spouse.
(4) Individuals with net worth as of the date
hereof (individually or jointly with your
spouse), including the value of home,
furnishings, and automobiles, in excess of
$1,000,000.
(5) Directors, executive officers or general
partners of the Issuer.
(6) Any entity in which all of the equity owners
are "accredited investors."
(b) Each of the Sellers acknowledges that he/she has been
furnished access to such information and documents as he/she has requested and
has been afforded an opportunity to ask questions of, and receive answers from,
the Buyer concerning the terms and conditions of this Agreement and the purchase
of the Buyer's Shares and all other matters deemed relevant to such Sellers.
(c) Each Seller acknowledges that he/she has had an
opportunity to evaluate all information regarding purchase of the Buyer's Shares
as he/she deemed necessary or desirable in connection with the transactions
contemplated by this Agreement, has independently evaluated the transactions
contemplated by this Agreement and has reached his/her own decision to enter
into this Agreement.
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(d) Each of the Sellers represents that he/she is capable
of bearing the economic risk of an investment in the Buyer's Shares and
acknowledges that the Buyer's Shares will not be transferable without
registration under the Securities Act of 1933 or an exemption therefrom.
Article II
CLOSING
Section 2.1 Closing Date. The closing (the "Closing") of the
transactions contemplated by this Agreement shall take place as soon as
practicable at the offices of the OKID Interactive Corporation, 0000 Xxxxx 00xx
Xxxxxx, Xxxxxxxx Xxxxxx, Xxxxxxx 00000, or at such other time and place as the
Buyer and the Sellers shall agree (the date on which such closing occurs being
herein referred to as the "Closing Date").
Article III
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Each of the Sellers hereby represents and warrants to the Buyer with
respect to himself/herself as follows:
Section 3.1 Ownership. Each Toyopia Seller owns the number of Toyopia
Shares set forth opposite his/her name on Schedule A hereto and the OKID Seller
owns the OKID Shares, in each case free and clear of all liens, claims or
encumbrances of any nature. Each Seller has full right, power, legal capacity
and authority to transfer and deliver his/her Toyopia Shares and the OKID
Shares, as applicable, pursuant to this Agreement.
Section 3.2 Authority Relative to and Validity of this Agreement. Each
Seller has all requisite power and authority to enter into this Agreement, to
perform all of his/her respective obligations hereunder and to consummate the
transactions contemplated hereby without the approval of any third party. All
necessary action has been taken by each Seller with respect to the execution,
delivery and performance by it of this Agreement and the consummation of the
transactions contemplated hereby and no further authorization will be necessary
to authorize the execution and delivery by it hereof, and the performance of its
respective obligations hereunder. There are no contractual, statutory or other
restrictions of any kind upon the power and authority of each Seller to execute
and deliver this Agreement, and to consummate the transactions contemplated
hereunder and no action, waiver or consent by any federal, state, municipal or
other governmental department, commission or agency ("Governmental Authority")
is necessary to make this Agreement a valid instrument binding upon each Seller
in accordance with its terms. This Agreement has been duly executed and
delivered by each Seller and constitutes, legal, valid and binding obligations
of each Seller, enforceable against each Seller in accordance with its terms,
except (i) as such enforceability may be limited by or subject to any
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally, (ii) as such obligations are subject to
general principles of equity and (iii) as rights to indemnity may be limited by
federal or state securities laws or by public policy.
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Section 3.3 Required Filings and Consents; No Conflict. No Seller is
required to submit any notice, report or other filing with any Governmental
Authority in connection with the execution, delivery or performance of this
Agreement.
Section 3.4 Broker. No broker, finder or investment banker is entitled
to any brokerage or finder's fee or other commission in connection with the
transactions contemplated hereby based on the arrangements made by or on behalf
of such Seller.
Article IV
THE REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer hereby represents and warrants to each Seller as follows:
Section 4.1 Organization and Qualification. The Buyer is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation. The copies of the Charter and By-Laws of the
Buyer, as amended to date, which have been furnished to OKID's counsel by the
Buyer, are correct and complete.
Section 4.2 Subsidiaries. The Buyer has no investments in any other
corporation or business organization.
Section 4.3 Capitalization. The authorized capital stock of the Buyer
consists (i) of 100,000,000 shares of Common Stock, $.001 par value, of which
8,280,000 shares are validly issued and outstanding, fully paid and
non-assessable and (ii) 20,000,000 shares of Preferred Stock, $.001 par value,
of which none are issued and outstanding. There are no outstanding warrants,
options or other rights to purchase or acquire the Buyer's Common Stock. There
are no securities of the Buyer or any Subsidiary directly or indirectly
convertible into or exchangeable for shares of capital stock of the Buyer or any
Subsidiary. There are no restrictions on the transfer of the Buyer's Common
Stock, except under applicable securities laws. All of the 8,280,000 shares of
Common Stock issued and outstanding are "restricted securities" within the
meaning of Rule 144 under the Securities Act of 1933, as amended (the "Act").
Section 4.4 Approvals; Compliance With Laws. Neither the Buyer nor any
Subsidiary is in violation of its Charter or by-laws as of the date hereof.
Section 4.5 Financial Statements. Attached hereto as Exhibit A are the
audited consolidated financial statements of the Buyer and its Subsidiaries for
the quarter ended March 31, 2003 and the year ended December 31, 2002, all of
which statements are complete and correct and fairly present the financial
position of the Buyer and its Subsidiaries on a consolidated basis, on the dates
of such statements and the results of their operations on the applicable basis
for the periods covered thereby and have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved and prior periods.
The most recent balance sheet included in the above financial
statements is sometimes referred to hereinafter as the "Base Balance Sheet".
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Section 4.6 Absence of Undisclosed Liabilities. Neither the Buyer nor
any Subsidiary has any material accrued or contingent liability arising out of
any transaction or state of facts existing prior to the date hereof other than
as reflected or reserved against in the Base Balance Sheet.
Section 4.7 Absence of Certain Changes. Since the date of the Base
Balance Sheet, there has not been:
(a) any change in the financial condition, properties,
assets, liabilities, business or operations of the Buyer or any Subsidiary which
change by itself or in conjunction with all other such changes, whether or not
arising in the ordinary course of business, has had or will have a material
adverse effect with respect to the Buyer or any Subsidiary;
(b) any contingent liability incurred by the Buyer or any
Subsidiary as guarantor or otherwise with respect to the obligations of others;
(c) any mortgage, encumbrance or lien placed on any of
the properties of the Buyer or any Subsidiary which remains in existence on the
date hereof; or
(d) any obligation or liability incurred by the Buyer or
any Subsidiary other than obligations and liabilities incurred in the ordinary
course of business.
Section 4.8 Contracts and Commitments. Neither the Buyer nor any
Subsidiary has any contract, obligation or commitment which is material or which
involves a potential commitment in excess of $10,000 or any employment contract,
stock redemption or purchase agreement, financing agreement, license, lease,
franchise, pension, profit-sharing, retirement or stock option plan. Neither the
Buyer nor any Subsidiary is in default under any contract, obligation or
commitment.
Section 4.9 Compliance with Other Instruments. Neither the Buyer nor
any Subsidiary is in default in the performance of any material obligation,
agreement or condition contained in any bond or debenture or any other evidence
of indebtedness or any indenture or loan agreement of the Buyer or any
Subsidiary which default affords to any person the unconditional right to
accelerate any material indebtedness or terminate any material right or
agreement of the Buyer or any Subsidiary.
Section 4.10 Litigation. There is no litigation pending or, to the
knowledge of the Buyer or any Subsidiary, threatened against the Buyer or any
Subsidiary and there are no outstanding court orders, court decrees, or court
stipulations to which the Buyer or any of its Subsidiaries is a party which will
or could result in any materially adverse change in the condition, financial or
otherwise, of Buyer or any of its Subsidiaries. The Buyer has no reason to
believe that any such action, suit, proceeding or investigation may be brought
against the Buyer or any of its Subsidiaries.
Section 4.11 Compliance with Law. Neither the Buyer nor any Subsidiary
has violated any law, regulation, authorization or order of any public
authority, including without limitation, any federal or state securities laws.
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Section 4.12 Sales of Securities. The Buyer has complied with all
applicable state "blue-sky" and federal securities laws in connection with the
issuance and sale of its Common Stock and other securities.
Section 4.13 Assets and Liabilities. The Buyer has no assets and no
liabilities as of this date.
Section 4.14 Disclosure. The representations and warranties contained
herein do not contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements contained herein not
misleading in light of the circumstances under which they are made. All of the
Buyer's reports and other filings made pursuant to the Buyer's reporting
obligations under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), are accurate and complete, comply with the Exchange Act and do not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements contained therein, in light of
the circumstances under which they were made, not misleading.
Section 4.15 Authorization. The Buyer has all necessary power and
authority to enter into this Agreement, to perform its obligations hereunder and
to consummate the transactions contemplated hereby. This Agreement has been duly
authorized and approved by the Buyer and no further action on the part of the
Buyer will be necessary to authorize the execution and delivery by it of, and
the performance of its obligations under, this Agreement. There are no
contractual, statutory or other restrictions of any kind upon the power and
authority of the Buyer to execute and deliver this Agreement and to consummate
the transactions contemplated hereunder, and no action, waiver or consent by any
Governmental Authority is necessary to make this Agreement a valid instrument
binding upon the Buyer in accordance with its terms. The Buyer's Shares, when
issued in accordance with this Agreement, will be duly authorized, validly
issued, fully paid and non-assessable.
Section 4.16 Execution and Delivery. This Agreement has been duly
executed and delivered by the Buyer and constitutes a legal, valid and binding
obligation, enforceable against the Buyer in accordance with its terms, except
(i) as such enforceability may be limited by or subject to any bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally, (ii) as such obligations are subject to general
principles of equity and (iii) as rights to indemnity may be limited by federal
or state securities laws or by public policy.
Section 4.17 Required Filings and Consents; No Conflict. The Buyer is
not required to submit any notice, report or other filing with any Governmental
Authority in connection with the execution, delivery or performance of this
Agreement, except as may be required by applicable securities laws.
Section 4.18 Broker. The Buyer shall be responsible for any brokerage
or finder's fee or other commission in connection with the transactions
contemplated hereby based on the arrangements made by or on behalf of the Buyer.
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Article V
COVENANTS OF THE SELLERS AND THE BUYER
Section 5.1 Each of the Sellers and the Buyer covenants and agrees:
(a) Best Efforts. To use its or their best efforts to
take or cause to be taken all actions and to do or cause to be done all things
necessary, proper and advisable to consummate the transactions contemplated by
this Agreement.
(b) Compliance. To comply in all material respects with
all applicable rules and regulations of any Governmental Authority in connection
with the execution, delivery and performance of this Agreement and the
transactions contemplated hereby.
(c) Notice. To give prompt notice to the other party of
(i) the occurrence, or failure to occur, of any event whose occurrence or
failure to occur, would be likely to cause any representation or warranty
contained in this Agreement to be untrue or incorrect in any material respect
and (ii) any material failure on its part, or on the part of any of its
officers, directors, employees or agents, to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder; provided, however, that the delivery of any such notice shall not
limit or otherwise affect the remedies available hereunder to the party
receiving such notice.
(d) Announcements. That all public announcements,
statements and press releases concerning the transactions contemplated by this
Agreement shall be mutually agreed to by the Buyer and the Sellers before the
issuance or the making thereof and, subject to the advice of counsel, no party
shall issue any such press releases or make any such public statement prior to
such mutual agreement, except as may be required by law.
Section 5.2 Registration Rights. The Buyer agrees to register at its
expense the Buyer's Shares for resale by the Sellers under the Securities Act of
1933 within one hundred twenty (120) days after the Closing Date.
Article VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLERS
Section 6.1 Conditions to Obligations of the Seller. The obligations
of the Sellers under this Agreement are subject to the satisfaction, on or prior
to the Closing Date, unless waived in writing by the Sellers, of each of the
following conditions:
(a) Representations and Warranties. Buyer's
representations and warranties set forth in Article IV of this Agreement shall
have been true and correct in all material respects when made and shall be true
and correct in all material respects at and as of the Closing as if such
representations and warranties were made as of the Closing.
(b) Performance of Agreement. All covenants, conditions
and other obligations under this Agreement which are to be performed or complied
with by the Buyer shall have been performed and complied with in all material
respects on or prior to the Closing including the delivery of stock certificates
evidencing the Buyer's Shares and the fully executed instruments and documents
in accordance with this Agreement.
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(c) No Adverse Proceeding. There shall be no pending or
threatened claim, action, litigation or proceeding, judicial or administrative,
or governmental investigation against the Buyer or any of the Sellers by a third
party for the purpose of enjoining or preventing the consummation of this
Agreement, or otherwise claiming that this Agreement or the consummation hereof
is illegal.
(d) Certificates. The Buyer shall have delivered to the
Sellers a certificate, dated the Closing Date, executed by the Buyer to the
effect that the conditions set forth in subsections (a), (b) and (c) of this
Section 6.1 have been satisfied.
(e) Consents and Approvals. All filings and registrations
with, and notifications to, all federal, state, local and foreign authorities
required for consummation of the transactions contemplated by this Agreement
shall have been made, and all consents, approvals and authorizations of all
federal, state, local and foreign authorities required for consummation of the
transactions contemplated by this Agreement shall have been received and shall
be in full force and effect.
(f) Directors and Officers of Buyer and Toyopia. The
Buyer's and Toyopia's boards of directors shall be comprised of Xxxxxxx X.
Xxxxx, and Xxxxxx Xxxxxx. The Buyer's and Toyopia's officers shall be the
following persons: Xxxxxxx X. Xxxxx, Chairman, President and Chief Executive
Officer, and Xxxxxx Xxxxxx, Vice Chairman, Chief Operating Officer, Treasurer
and Secretary. In order to accomplish the foregoing, the Buyer's and Toyopia's
Boards of Directors shall be enlarged as needed and the foregoing persons shall
be appointed to the Board of Directors of each corporation. The existing
officers and directors of the Buyer and Toyopia shall resign and the foregoing
persons shall be appointed officers of the Buyer and Toyopia.
Article VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER
Section 7.1 Conditions to Obligations of the Buyer. The obligations of
the Buyer under this Agreement are subject to the satisfaction, on or prior to
the Closing Date, unless waived in writing by the Buyer, of each of the
following conditions:
(a) Representations and Warranties. The representations
and warranties of each of the Sellers set forth in Article III of this Agreement
shall have been true and correct in all material respects when made and shall be
true and correct in all material respects at and as of the Closing as if such
representations and warranties were made as of the Closing.
(b) Performance of Agreement. All covenants, conditions
and other obligations under this Agreement which are to be performed or complied
with by the Sellers shall have been performed and complied with in all material
respects on or prior to the Closing including, without limitation, the delivery
of (i) the OKID Shares and certificates representing the Toyopia Shares pursuant
to the terms hereof and (ii) fully executed instruments and documents in
accordance with this Agreement.
(c) No Adverse Proceeding. There shall be no pending or
threatened claim, action, litigation or proceeding, judicial or administrative,
or governmental investigation against the Buyer or the Sellers by any third
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party for the purpose of enjoining or preventing the consummation of this
Agreement, or otherwise claiming that this Agreement or the consummation hereof
is illegal.
(d) Certificates. The Sellers shall have delivered to the
Buyer a certificate, dated the Closing Date to the effect that the conditions
set forth in subsections (a), (b) and (c) of this Section 7.1 have been
satisfied.
(e) Consents and Approvals. All filings and registrations
with, and notifications to, all federal, state, local and foreign authorities
required for consummation of the transactions contemplated by this Agreement
shall have been made, and all consents, approvals and authorizations of all
federal, state, local and foreign authorities required for consummation of the
transactions contemplated by this Agreement shall have been received and shall
be in full force and effect.
Article VIII
INDEMNIFICATION
Section 8.1 Survival of Representations Warranties and Agreements.
Subject to the limitations set forth in this Article VIII and notwithstanding
any investigation conducted at any time with regard thereto by or on behalf of
the Buyer or the Sellers, all representations, warranties, covenants and
agreements of the Buyer and the Sellers in this Agreement shall survive the
execution, delivery and performance of this Agreement for the applicable statute
of limitations period. The obligation of indemnity provided herein shall survive
the Closing. All statements contained in any Exhibit, Schedule, statement,
certificate or other writing pursuant to this Agreement shall be deemed
representations and warranties of the Buyer or the Sellers, as the case may be,
set forth in this Agreement within the meaning of this Article.
Section 8.2 Indemnification.
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(a) Subject to the limitations set forth in this Article
VIII, each of the Sellers shall indemnify and hold harmless the Buyer from and
against any and all losses, liabilities, damages, demands, claims, suits,
actions, judgments or causes of action, assessments, costs and expenses
including, without limitation, interest, penalties, reasonable attorneys' fees,
any and all reasonable expenses incurred in investigating, preparing or
defending against any litigation, commenced or threatened, or any claim
whatsoever, and any and all amounts paid in settlement of any claim or
litigation (collectively, "Damages"), asserted against, resulting to, imposed
upon, or incurred or suffered by the Buyer, directly or indirectly, as a result
of or arising from any inaccuracy in or breach of any of the representations,
warranties or agreements made in this Agreement by that Seller or the
non-performance of any covenant or obligation to be performed by the Seller
under this Agreement (individually an "Indemnifiable Claim" and collectively
"Indemnifiable Claims" when used in the context of the Buyer as the Indemnified
Party (as defined below)).
(b) Subject to the limitations set forth in this Article
VIII, the Buyer shall indemnify and hold each Seller harmless from and against
any and all Damages asserted against, resulting to, imposed upon, or incurred or
suffered by any Seller, directly or indirectly, as a result of or arising from
any inaccuracy in or breach of any of the representations, warranties or
agreements made in this Agreement by the Buyer or the non-performance of any
covenant or obligation to be performed by the Buyer under this Agreement
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(individually an "Indemnifiable Claim" and collectively "Indemnifiable Claims"
when used in the context of Sellers as the Indemnified Party).
Section 8.3 Procedure for Indemnification with Respect to Third Party
Claims. The Indemnified Party shall give the Indemnifying Party prompt written
notice of any third party claim, demand, assessment, suit or proceeding to which
the indemnity set forth in this Article VIII applies which notice shall describe
said claim in reasonable detail (the "Indemnification Notice"). Notwithstanding
the foregoing, the Indemnified Party shall not have any obligation to give any
notice of any assertion of liability by a third party unless such assertion is
in writing, and the rights of the Indemnified Party to be indemnified hereunder
in respect of any third party claim shall not be adversely affected by its
failure to give notice pursuant to the foregoing unless and, if so, only to the
extent that, the Indemnifying Party is materially prejudiced thereby. The
Indemnifying Party shall have the right to control the defense or settlement of
any such action subject to the provisions set forth below in the event such
claim solely involves an action for monetary damages and could not affect the
Indemnified Party's business going forward, but the Indemnified Party may, at
its election, participate in the defense of any action or proceeding at its sole
cost and expense. Notwithstanding the foregoing, if there exists a conflict of
interest that would make it inappropriate for the same counsel to represent both
the Indemnified Party, on the one hand, and the Indemnifying Party, on the other
hand, in connection with any Indemnifiable Claim, then the Indemnified Party
shall be entitled to retain its own counsel as is reasonably satisfactory to the
Indemnifying Party at the Indemnifying Party's expense. In the event that such
Indemnified Party shall seek indemnification as provided herein, such
Indemnified Party shall make available to the Indemnifying Party, at its
expense, all witnesses, pertinent records, materials and information in the
Indemnified Party's possession or under the Indemnified Party's control relating
thereto as is reasonably required by the Indemnifying Party. Should the
Indemnifying Party fail to defend any such Indemnifiable Claim (except for
failure resulting from the Indemnified Party's failure to timely give notice of
such Indemnifiable claim), then, in addition to any other remedy, the
Indemnified Party may settle or defend such action or proceeding through counsel
of its own choosing and may recover from the Indemnifying Party the amount of
such settlement, demand, or any judgment or decree and all of its costs and
expenses, including reasonable fees and disbursements of counsel. Except as
permitted in the preceding sentence, the Indemnifying Party shall not be liable
for any settlement effected without its written consent, which consent shall not
be unreasonably withheld; provided, however, if such approval is unreasonably
withheld, the Indemnifying Party shall be liable to the Indemnified Party for
the amount of the proposed compromise or settlement and the amount of the
Indemnified Party's reasonable counsel fees incurred in defending and settling
such claim, as permitted by the preceding sentence. Notwithstanding the
preceding sentence, the right of the Indemnified Party to compromise or settle
any claim without the prior written consent of the Indemnifying Party shall only
be available if a complete release of the Indemnifying Party is contemplated to
be part of the proposed compromise or settlement of such third party claim.
17
Article IX
MISCELLANEOUS
Section 9.1 Expenses. All costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby shall be paid by
the Buyer, including, without limitation, the legal fees and expenses of the
Sellers; provided, that, in the event of the breach of this Agreement by a
party, such party shall pay all costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby by the other party.
Section 9.2 Notices. All notices, requests, demands and other
communications which are required or may be given under this Agreement shall be
in writing and shall be deemed to have been duly given when delivered personally
or by facsimile transmission, in either case with receipt acknowledged, or three
days after being sent by registered or certified mail, return receipt requested,
postage prepaid:
(a) If to the OKID Seller, to:
Xxxxxxx X. Xxxxx
0000 Xxxxx 00xx Xxxxxx
Xxxxxxxx Xxxxxx, Xxxxxxx 00000
with a copy to:
Xxxxx Xxxxxxx Berlack Israels LLP
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxx X. Xxxxxxx, Esquire
(b) If to the Toyopia Sellers, to:
Xxxxxx Xxxxx
00000 Xxxx Xxxxxx Xxxxx
Xxxxx, XX 00000
(c) If to Buyer, to:
DST Media, Inc.
0000 Xxxxxxxx Xxxxxx, #000
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attn: Xxxxxx Xxxxx, President
or to such other address as any party shall have specified by notice in writing
to the other in compliance with this Section 9.2.
Section 9.3 Specific Performance. The parties hereto recognize that,
became of the nature of the subject matter of this Agreement, it would be
impractical and extremely difficult to determine actual damages in the event of
a breach of this Agreement. Accordingly, if any party commits a breach of any of
the provisions of hereof, as applicable, of this Agreement, the other party
shall have the right to seek and receive a temporary restraining order,
injunction or other equitable remedy relating to the prevention or cessation of
18
such breach, including, without limitation, the right to have the provisions of
this Agreement specifically enforced by any court having equity jurisdiction, it
being acknowledged and agreed that any such breach or threatened breach will
cause irreparable injury and that money damages will not provide an adequate
remedy.
Section 9.4 Entire Agreement. This Agreement constitutes the entire
agreement among the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements, representations and understandings among the
parties hereto.
Section 9.5 Binding Effect; Benefits. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
successors and assigns; nothing in this Agreement, expressed or implied, is
intended to confer on any other person, other than the parties hereto or their
respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement. This Agreement may not be
assigned without the prior written consent of the other parties hereto.
Section 9.6 Applicable Law. This Agreement and the legal relations
between the parties hereto shall be governed by and construed in accordance with
the laws of the State of Delaware, without regard to conflicts of law rules of
such state.
Section 9.7 Jurisdiction. Each of the parties hereto hereby
irrevocably submits to the exclusive jurisdiction of any Arizona state court or
Federal court sitting in the State of Arizona over any action or proceeding
arising out of or relating to this Agreement and the transactions contemplated
hereby and each of the parties hereto hereby irrevocably agrees that all claims
in respect of such action or proceeding shall be heard and determined in such
Arizona state or Federal court. Each of the parties hereto hereby irrevocably
waives, to the fullest extent legally possible, the defense of an inconvenient
forum to the maintenance of such action or proceeding.
Section 9.8 Further Assurances. At, and from time to time after the
Closing Date, at the request of either party but without further consideration,
each of the Sellers will execute and deliver such other instruments of
conveyance, assignment, transfer, and delivery and take such other action as the
Buyer reasonably may request in order more effectively to convey, transfer,
assign and deliver to the Buyer, and to place the Buyer in possession and
control of the Toyopia Shares and the OKID Shares, or to enable the Buyer to
exercise and enjoy all rights and benefits of the Sellers with respect to such
Shares and Interest.
Section 9.9 Severability. With respect to any provision of this
Agreement finally determined by a court of competent jurisdiction to be
unenforceable, such court shall have jurisdiction to reform such provision so
that it is enforceable to the maximum extent permitted by law, and all the
parties hereto shall abide by such court's determination. In the event that any
provision of this Agreement cannot be reformed, such provision shall be deemed
to be severed from this Agreement, but every other provision of this Agreement
shall remain in full force and effect.
Section 9.10 Headings. The headings and captions in this Agreement are
included for purposes of convenience only and shall not affect the construction
or interpretation of any of its provisions.
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Section 9.11 Counterparts. This Agreement may be executed
simultaneously 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.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year hereinabove first set forth.
DST MEDIA, INC.
By: /s/ XXXXXX XXXXX
-------------------------------------
Name: Xxxxxx Xxxxx
Title: President
OKID Seller:
/s/ XXXXXXX X. XXXXX
-----------------------------------------
Xxxxxxx X. Xxxxx
Toyopia Sellers:
/s/ XXXXXXX XXXX /s/ XXXXXX XXXXX
----------------------------------- -----------------------------------------
Xxxxxxx Xxxx Xxxxxx Xxxxx
/s/ XXXX XXXXXXX /s/ XXXXXX ("XXX") XXXX
----------------------------------- -----------------------------------------
Xxxx Xxxxxxx Xxxxxx ("Xxx") Xxxx
X.X. Family Trust
(All Trustees must sign)
/s/ XXXXXXXX XXXXXXXXX
----------------------------------- -----------------------------------------
___________________, Trustee Xxxxxxxx Xxxxxxxxx
/s/ XXXX XXXXXXXX
----------------------------------- -----------------------------------------
__________________, Trustee Xxxx Xxxxxxxx
-----------------------------------
__________________, Trustee
/s/ XXXXXX XXXX
-----------------------------------
Xxxxxx Xxxx
20
