EXHIBIT 10.1
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT, dated as of the date of
acceptance set forth below, is entered into by and between KIDEO PRODUCTIONS,
INC., a Delaware corporation, with headquarters located at 000 Xxxxxxxx, Xxxxx
000, Xxx Xxxx, Xxx Xxxx 00000 (the "Company"), and the undersigned (the
"Buyer").
W I T N E S S E T H:
WHEREAS, the Company and the Buyer are executing and
delivering this Agreement in reliance upon exemptions from securities
registration afforded under Regulation D ("Regulation D") as promulgated by the
United States Securities and Exchange Commission (the "SEC") under the
Securities Act of 1933, as amended (the "1933 Act") and/or Section 4(2) of the
1933 Act; and
WHEREAS, the Buyer wishes to purchase, upon the terms and
subject to the conditions of this Agreement, Series A 6% Convertible Preferred
Stock, $.0001 par value per share (the "Preferred Stock"), of the Company which
will be convertible into shares of Common Stock, $.0001 par value per share (the
"Common Stock"), of the Company upon the terms and subject to the conditions of
such Preferred Stock (the Common Stock and Preferred Stock sometimes referred to
herein as "Securities"), and subject to acceptance of this Agreement by the
Company;
NOW THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. AGREEMENT TO PURCHASE; PURCHASE PRICE.
a. Purchase. The undersigned hereby agrees to purchase from
the Company Preferred Stock of the Company, in the amount set forth on the
signature page of this Agreement, out of a total offering of $2,000,000.00 of
Preferred Stock, and having the terms and conditions set forth in the
Certificate of Designations attached hereto as Annex I. The purchase price for
the Preferred Stock shall be as set forth on the signature page hereto and shall
be payable in United States Dollars.
b. Form of Payment. The Buyer shall pay the purchase price for
the Preferred Stock by delivering immediately available good funds in United
States Dollars to the escrow agreement by the Buyer to the Escrow Agent of the
purchase price of the Preferred Stock, the Company shall deliver a Certificate
for the Preferred
Stock duly executed on behalf of the Company, to the Escrow Agent. By signing
this Agreement, the Buyer and the Company, and subject to acceptance by the
Escrow Agent, each agrees to all of the terms and conditions of, and becomes a
party to, the Joint Escrow Instructions, all of the provisions of which are
incorporated herein by this reference as if set forth in full.
c. Method of Payment. Payment into escrow of the purchase
price for the Preferred Stock shall be made by wire transfer of funds to:
Bank of New York
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
ABA# 000000000
For credit to the account of Xxxxxxx & Xxxxxx, Esqs.
Account No. 637-0000000
Not later than 1:00 p.m., New York time, on the date which is three (3) NASD
trading days after the Company shall have accepted this Agreement and returned a
signed counterpart of this Agreement to the Escrow Agent by facsimile, the Buyer
shall deposit with the Escrow Agent the aggregate purchase price for the
Preferred Stock, in immediately available funds. Time is of the essence with
respect to such payment, and failure by the Buyer to make such payment shall
allow the Company to cancel this Agreement.
2. BUYER REPRESENTATIONS, WARRANTIES, ETC.; ACCESS TO
INFORMATION; INDEPENDENT INVESTIGATION.
The Buyer represents and warrants to, and covenants and agrees
with, the Company as follows:
a. The Buyer is purchasing the Preferred Stock and will be
acquiring the shares of Common Stock issuable upon conversion of the Preferred
Stock for its own account for investment only and not with a view towards the
resale, public sale or distribution thereof and not with a view to or for sale
in connection with any distribution thereof;
b. The Buyer is (i) an "accredited investor" as that term is
defined in Rule 501 of the General Rules and Regulations under the 1933 Act by
reason of Rule 501(a)(3), (ii) experienced in making investments of the kind
described in this Agreement and the related documents, (iii) able, by reason of
the business and financial experience of its officers (if an entity) and
professional advisors (who are not affiliated with or compensated in any way by
the Company or any of its affiliates or selling agents), to protect its own
interests in connection with the transactions described in this Agreement, and
the related documents, and (iv) able to afford the entire loss of its
investment in the Preferred Stock;
c. All subsequent offers and sales of the Preferred Stock and
the shares of Common Stock issuable upon conversion of, or issued as o the
Preferred Stock pursuant to an exemption from registration;
d. The Buyer understands that the Preferred Stock is being
offered and sold, and the Shares are being offered, to it in reliance on
specific exemptions from the registration requirements of United States federal
and state securities laws and that the Company is relying upon the truth and
accuracy of, and the Buyer's compliance with, the representations, warranties,
agreements, acknowledgments and understandings of the Buyer set forth herein in
order to determine the availability of such exemptions and the eligibility of
the Buyer to acquire the Preferred Stock and to receive an offer of the Shares;
e. The Buyer and its advisors, if any, have been furnished
with all materials relating to the business, finances and operations of the
Company and materials relating to the offer and sale of the Preferred Stock and
the offer of the Shares which have been requested by the Buyer, including Annex
V hereto. The Buyer and its advisors, if any, have been afforded the opportunity
to ask questions of the Company and have received complete and satisfactory
answers to any such inquiries. Without limiting the generality of the foregoing,
the Buyer has also had the opportunity to obtain and to review the Company's (1)
Annual Report on Form 10-KSB for the fiscal year ended July 31, 1996, (2)
Quarterly Report on Form 10-QSB for the fiscal quarters ended October 31, 1996
and January 31, 1997; and (3) Form 8-K dated September 6, 1996 (the "Company's
SEC Documents").
f. The Buyer understands that its investment in the Securities
involves a high degree of risk;
g. The Buyer understands that no United States federal or
state agency or any other government or governmental agency has passed on or
made any recommendation or endorsement of the Securities;
h. This Agreement has been duly and validly authorized,
executed and delivered on behalf of the Buyer and is a valid and binding
agreement of the Buyer enforceable in accordance with its terms, subject as to
enforceability to general principles of equity and to bankruptcy, insolvency,
moratorium and other similar laws affecting the enforcement of creditors' rights
generally.
i. Neither Buyer, nor any affiliate of Buyer, has any
intention of entering into, or will enter into any put option, short position,
or other similar position with respect to the Preferred Stock or the Shares.
j. Notwithstanding the provisions hereof, in no event (except
with respect to an Event of Mandatory Conversion) shall the holder be entitled
to convert any Preferred Stock in excess of that number of shares upon
conversion of which the sum of (1) the number of shares of Common Stock
beneficially owned by the Buyer and its affiliates (other than shares of Common
Stock which may be deemed beneficially owned through the ownership of the
unconverted portion of the Preferred Stock), and (2) the number of shares of
Common Stock issuable upon the conversion of the Preferred Stock with respect to
which the determination of this proviso is being made, would result in
beneficial ownership by the Buyer and its affiliates of more than 4.9% of the
outstanding shares of Common Stock. For purposes of the proviso to the
immediately preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended, and Regulation 13 D-G thereunder, except as otherwise provided in
clause (1) of such proviso.
3. COMPANY REPRESENTATIONS, ETC.
Except as disclosed in Annex V, delivered in writing to the
Buyer, the Company represents and warrants to the Buyer that:
a. Concerning the Shares. The Common Shares have been duly
authorized and, when issued upon conversion of, or as dividends on, the
Preferred Stock, will be duly and validly issued, fully paid and non-assessable
and will not subject the holder thereof to personal liability by reason of being
such holder. There are no preemptive rights of any stockholder of the Company,
as such, to acquire the Common Shares.
b. Reporting Company Status. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and is duly qualified as a foreign corporation in all jurisdictions in
which the failure to so qualify would have a material adverse effect on the
Company and its subsidiaries taken as a whole. The Company has registered its
Common Stock pursuant to Section 12 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and the Common Stock is listed and traded on the
NASDAQ\Small Cap Market. The Company has timely filed all material required to
be filed pursuant to all reporting obligations under either Section 13(a) or
15(d) of the Exchange Act for a period of at least twelve (12) months
immediately preceding the offer or sale of the Preferred Stock, and has received
no notice, either oral or written, with respect to the continued eligibility of
the Common Stock for such listing.
c. Authorized Shares. The Company has sufficient authorized
and unissued Shares as may be reasonably necessary to effect the conversion of
the Preferred Stock. The Common Shares have been duly authorized and, when
issued upon conversion of, or as interest on, the Preferred Stock, will be duly
and validly
issued, fully paid and non-assessable and will not subject the holder thereof to
personal liability by reason of being such holder.
d. Stock Purchase Agreement; Registration Rights Agreement and
Stock. This Agreement and the Registration Rights Agreement, the form of which
is attached hereto as Annex IV (the "Registration Rights Agreement"), have been
duly and validly authorized by the Company, this Agreement has been duly
executed and delivered by the Company and this Agreement is, and the
Registration Rights Agreement, when executed and delivered by the Company, will
be, valid and binding agreements of the Company enforceable in accordance with
their respective terms, subject as to enforceability to general principles of
equity, the indemnification provisions of the Registration Rights Agreement, and
to bankruptcy, insolvency, moratorium, and other similar laws affecting the
enforcement of creditors' rights generally; and the Preferred Stock will be duly
and validly issued, fully paid and non-assessable when delivered on behalf of
the Company upon payment therefor in accordance with this Agreement, subject to
general principles of equity and to bankruptcy, insolvency, moratorium, or other
similar laws affecting the enforcement of creditors' rights generally.
e. Non-contravention. The execution and delivery of this
Agreement and the Registration Rights Agreement by the Company, the issuance of
the Securities, and the consummation by the Company of the other transactions
contemplated by this Agreement, the Registration Rights Agreement, and the
Preferred Stock do not and will not conflict with or result in a breach by the
Company of any of the terms or provisions of, or constitute a default under, the
(i) certificate of incorporation or by-laws of the Company, (ii) any indenture,
mortgage, deed of trust, or other material agreement or instrument to which the
Company is a party or by which it or any of its properties or assets are bound,
(iii) any material existing applicable law, rule, or regulation or any
applicable decree, judgment, or (iv) order of any court, United States federal
or state regulatory body, administrative agency, or other governmental body
having jurisdiction over the Company or any of its properties or assets, except
such conflict, breach or default which would not have a material adverse effect
on the transactions contemplated herein.
f. Approvals. No authorization, approval or consent of any
court, governmental body, regulatory agency, self-regulatory organization, or
stock exchange or market or the Stockholders of the Company is required to be
obtained by the Company for the issuance and sale of the Securities to the Buyer
as contemplated by this Agreement, except such authorizations, approvals and
consents that have been obtained.
g. SEC Filings. None of the SEC Filings with the
Securities and Exchange Commission since the filing of the 10-KSB on November
13, 1996, at the time they were filed, contained any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading. Except as set forth on
Annex V hereto, the Company has since June 24, 1996 timely filed all requisite
forms, reports and exhibits thereto with the Securities and Exchange Commission.
h. Absence of Certain Changes. Since January 1, 1997, there
has been no material adverse change and no material adverse development in the
business, properties, operations, financial condition, or results of operations
of the Company, except as disclosed in Annex V or in the Company's SEC
Documents.
i. Full Disclosure. There is no fact known to the Company
(other than general economic conditions known to the public generally), and
other than facts disclosed in the Company's SEC Documents, that has not been
disclosed in writing to the Buyer that (i) could reasonably be expected to have
a material adverse effect on the condition (financial or otherwise), earnings,
business affairs, properties or assets of the Company or (ii) could reasonably
be expected to materially and adversely affect the ability of the Company to
perform its obligations pursuant to this Agreement.
j. Absence of Litigation. Except as set forth in Annex V
hereto, and in the Company's SEC Documents, which the Buyer has reviewed, there
is no action, suit, proceeding, inquiry or investigation before or by any court,
public board or body pending or, to the knowledge of the Company or any of its
subsidiaries, threatened against or affecting the Company or any of its
subsidiaries, wherein an unfavorable decision, ruling or finding would have a
material adverse effect on the properties, business, condition (financial or
otherwise), results of operations or prospects of the Company and its
subsidiaries taken as a whole or the transactions contemplated by this Agreement
or any of the documents contemplated hereby or which would adversely affect the
validity or enforceability of, or the authority or ability of the Company to
perform its obligations under, this Agreement or any of such other documents.
k. Absence of Events of Default. Except as set forth in Annex
V hereto and Section 3(e), no Event of Default, as defined in the respective
agreement to which the Company is a party, and no event which, with the giving
of notice or the passage of time or both, would become an Event of Default (as
so defined), has occurred and is continuing, which would have a material adverse
effect on the Company's financial condition or results of operations.
l. No Default. The Company is not in default in the
performance or observance of any material obligation, agreement, covenant or
condition contained in any indenture, mortgage, deed of trust or other material
instrument or agreement to which it is a party or by which it or its property is
bound, and neither the execution of, nor the delivery by the Company of, nor the
performance by the Company of its obligations under, this Agreement or the
Preferred Stock, other than the conversion provision thereof, will conflict with
or result in the breach or violation of any of the terms or provisions of, or
constitute a default or result in the creation or imposition of any lien or
charge on any assets or properties of the Company under, (i) any material
indenture, mortgage, deed of trust or other material agreement applicable to the
Company or instrument to which the Company is a party or by which it is bound,
(ii) any statute applicable to the Company or its property, (iii) the
Certificate of Incorporation or By-Laws of the Company, (iv) any decree,
judgment, order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Company or its properties, or (v) the Company's
listing agreement for its Common Stock.
m. Prior Issues. During the twelve (12) months preceding the
date hereof, the Company has not issued any securities other than (i) as
reflected in the Company's SEC Documents, and (ii) options and warrants to
purchase shares of Common Stock which have been granted to employees and
consultants of the Company.
n. Offshore Transaction. The Company has not offered or sold
the Preferred Stock to any person in the United States, or, to the best
knowledge of the Company, any identifiable groups of U.S. citizens abroad, or
any U.S. person as that term is defined in Regulation S. At the time the buy
order for the Preferred Stock was originated, the Company and/or its agents
reasonably believed Buyer was outside the United States and was not a U.S.
Person.
o. No Directed Selling Efforts. In regard to this transaction,
the Company has not conducted any "direct selling efforts" as that term is
defined in Rule 902 of Regulation S, nor has the Company conducted any general
solicitation relating to the offer and sale of the within securities to persons
resident within the United States or elsewhere.
4. CERTAIN COVENANTS AND ACKNOWLEDGMENTS.
a. Transfer Restrictions. The Buyer acknowledges that (1) the
Preferred Stock has not been and is not being registered under the provisions of
the 1933 Act and, except as provided in the Registration Rights Agreement, the
Shares have not been and are not being registered under the 1933 Act, and may
not be transferred unless (A) subsequently registered thereunder or (B) the
Buyer shall have delivered to the Company an opinion of counsel,
reasonably satisfactory in form, scope and substance to the Company, to the
effect that the Securities to be sold or transferred may be sold or transferred
pursuant to an exemption from such registration; (2) any sale of the Securities
made in reliance on Rule 144 promulgated under the 1933 Act may be made only in
accordance with the terms of said Rule and further, if said Rule is not
applicable, any resale of such Securities under circumstances in which the
seller, or the person through whom the sale is made, may be deemed to be an
underwriter, as that term is used in the 1933 Act, may require compliance with
some other exemption under the 1933 Act or the rules and regulations of the SEC
thereunder; and (3) neither the Company nor any other person is under any
obligation to register the Securities (other than pursuant to the Registration
Rights Agreement) under the 1933 Act or to comply with the terms and conditions
of any exemption thereunder.
b. Restrictive Legend. The Buyer acknowledges and agrees that
the Preferred Stocks, and, until such time as the Common Stock has been
registered under the 1933 Act as contemplated by the Registration Rights
Agreement and sold in accordance with such Registration Statement, the shares of
Common Stock issued to the Buyer upon conversion of the Preferred Stock shall
bear a restrictive legend in substantially the following form (and a
stop-transfer order may be placed against transfer of the Preferred Stock and
such shares of Common Stock):
THESE SECURITIES (THE "SECURITIES") HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD
OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES OR AN OPINION OF
COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE CORPORATION THAT
SUCH REGISTRATION IS NOT REQUIRED.
c. Registration Rights Agreement. The parties hereto agree to
enter into the Registration Rights Agreement, in substantially the form attached
hereto as Annex IV, on or before the Closing Date (as defined in Section 7).
d. Filings. The Company undertakes and agrees to make all
necessary filings in connection with the sale of the Preferred Stock to the
Buyer under any United States laws and regulations, or by any domestic
securities exchange or trading market, and to provide a copy thereof to the
Buyer promptly after such filing.
e. Reporting Status. So long as the Buyer beneficially owns
any of the Preferred Stock, the Company shall file all reports required to be
filed with the SEC pursuant to Section 13 or 15(d)
of the Exchange Act, and the Company shall not terminate its status as an issuer
required to file reports under the Exchange Act even if the Exchange Act or the
rules and regulations thereunder would permit such termination.
f. Use of Proceeds. The Company will use the proceeds from the
sale of the Preferred Stock (excluding amounts paid by the Company for legal
fees and finder's fees in connection with the sale of the Preferred Stock) for
internal working capital purposes , and shall not, directly or indirectly, use
such proceeds for any loan to or investment in any other corporation,
partnership enterprise or other person.
g. Certain Agreements. The Company covenants and agrees that
it will not, without the prior written consent of the Buyer, enter into any
subsequent or further offer or sale of Common Stock or securities convertible in
to Common Stock with any third party until the expiration of one hundred fifty
(150) days after the effective date of the Registration Statement (the
"Effective Date"). However, the preceding sentence will not apply to (x) the
issuance of securities (other than for cash) 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, securities issued at the then current
market price (as determined in good faith by the Board of Directors), or the
exercise of options, (y) the exchange of the capital stock for assets, stock or
other joint venture interests, or (z) the sale of Common Stock, at a sales price
in excess of the then current market price of the Common Stock (as determined in
good faith by the Board of Directors), and further provided, that any
registration rights in connection therewith, shall not require the filing of a
Registration Statement in respect of such stock prior to the effective date of
the Registration Statement under the Registration Rights Agreement between the
Buyer and Seller. However, nothing contained herein shall be deemed to preclude
the Company from taking such action as may be reasonably required to cure any
alleged default under agreements to which the Company is or may become a party.
h. Future Purchases. Notwithstanding Section 4(g), the Buyer
unconditionally and irrevocably agrees to purchase up to an additional
$1,250,000 principal amount of Preferred Stock (the "Additional Preferred
Stock") in three tranches of $500,000, $500,000 and $250,000 respectively,
commencing thirty days after the Effective Date, upon the same terms and
conditions as those applicable to the Preferred Stock issued pursuant to this
Agreement, (the "Additional Closing Date"). Buyer's obligation to purchase the
Additional Preferred Stock on each Additional Closing Date (which shall occur
not less than thirty (30) days apart) shall be contingent only upon the
satisfaction of the following conditions: On each Additional Closing Date (i)
the Registration
Statement required to be filed under the Registration Rights Agreement is
effective, and (ii) the representations and warranties of the Company contained
in Section 3 are true and correct in all material respects, and (iii) the Market
Price of the Stock (as defined in Annex I) exceed $2.00 per share.
i. Available Shares. The Company shall have at all times
authorized and reserved for issuance, free from preemptive rights, shares of
Common Stock sufficient to yield the number of Common Stock issuable at
conversion as may be required to satisfy the conversion rights of the Buyer
pursuant to the terms and conditions of the Preferred Stock.
5. TRANSFER AGENT INSTRUCTIONS.
a. Promptly following the delivery by the Buyer of the
aggregate purchase price for the Preferred Stock in accordance with Section 1(c)
hereof, the Company will irrevocably instruct its transfer agent to issue Common
Stock from time to time upon conversion of the Preferred Stock in such amounts
as specified from time to time by the Company to the transfer agent, bearing the
restrictive legend specified in Section 4(b) of this Agreement prior to
registration of the Shares under the 1933 Act, registered in the name of the
Buyer or its nominee and in such denominations to be specified by the Buyer in
connection with each conversion of the Preferred Stock. The Company warrants
that no instruction other than such instructions referred to in this Section 5,
the Registration Rights Agreement, and stop transfer instructions to give effect
to Section 4(a) hereof prior to registration and sale of the Shares under the
1933 Act will be given by the Company to the transfer agent and that the Shares
shall otherwise be freely transferable on the books and records of the Company
as and to the extent provided in this Agreement, the Registration Rights
Agreement, and applicable law. Nothing in this Section shall affect in any way
the Buyer's obligations and agreement to comply with all applicable securities
laws upon resale of the Securities. If the Buyer provides the Company with an
opinion of counsel reasonably satisfactory to the Company that registration of a
resale by the Buyer of any of the Securities in accordance with clause (1)(B) of
Section 4(a) of this Agreement is not required under the 1933 Act, the Company
shall (except as provided in clause (2) of Section 4(a) of this Agreement)
permit the transfer of the Securities and, in the case of the Shares, promptly
instruct the Company's transfer agent to issue one or more certificates for
Common Stock in such name and in such denominations as specified by the Buyer.
b. The Company will permit the Buyer to exercise its right to
convert the Preferred Stock by telecopying an executed and completed Notice of
Conversion to the Company and delivering within three business days thereafter,
the original Notice of Conversion and the certificate for the Preferred Stock
representing the Shares to the Company by express courier. Each date on which a
Notice of Conversion is telecopied to and received by the Company (and confirmed
via telephonic notice) in accordance with the provisions hereof shall be deemed
a Conversion Date. The Company will
transmit the certificates representing the Shares of Common Stock issuable upon
conversion of any Preferred Stock (together with the Preferred Stock
representing the Shares not so converted) to the Buyer via express courier,
within five business days after receipt by the Company of the original Notice of
Conversion and the certificate for the Preferred Stock representing the Shares
to be converted (the "Delivery Date").
c. The Company understands that a delay in the issuance of the
Shares of Common Stock beyond the Delivery Date could result in economic loss to
the Buyer. As compensation to the Buyer for such loss, the Company agrees to pay
late payments, not exceeding $500,000 in the aggregate, to the Buyer for late
issuance of Shares upon Conversion in accordance with the following schedule
(where "No. Business Days Late" is defined as the number of business days beyond
three (3) business days from Delivery Date:
Late Payment For Each
$10,000 of Preferred Stock
No. Business Days Late Principal Amount Being Converted
---------------------- --------------------------------
1 $100
2 $200
3 $300
4 $400
5 $500
6 $600
7 $700
8 $800
9 $900
10 $1,000
>10 $1,000+$200 for each
Business Day Late beyond
10 days
The Company shall pay any payments incurred under this Section in immediately
available funds upon demand. Nothing herein shall limit a Buyer's right to
pursue actual damages for the Company's failure to issue and delivery Common
Stock to the Buyer. Furthermore, in addition to any other remedies which may be
available to the Buyer, in the event that the Company fails for any reason to
effect delivery of such shares of Common Stock within five business days after
the Delivery Date, the Buyer will be entitled to revoke the relevant Notice of
Conversion by delivering a notice to such effect to the Company whereupon the
Company and the Buyer shall each be restored to their respective positions
immediately prior to delivery of such Notice of Conversion (and in such event,
the late payments described above shall not be due and payable).
6. DELIVERY INSTRUCTIONS.
The Preferred Stock shall be delivered by the Company to the
Escrow Agent pursuant to Section 1(b) hereof on a delivery against payment basis
at the closing.
7. CLOSING DATE.
The date and time of the issuance and sale of the Preferred Stock (the
"Closing Date") and the date and time of the issuance and sale of the Additional
Preferred Stock (an "Additional Closing Date") shall occur no later than 12:00
Noon, New York time on the second NYSE trading day after the fulfillment or
waiver of all Closing conditions pursuant to Sections 8 and 9, or such other
mutually agreed to time. The closing shall occur on such date at the offices of
the Escrow Agent. Notwithstanding anything to the contrary contained herein, the
Escrow Agent will be authorized to release the funds representing the Purchase
Price for the Preferred Stock or Additional Preferred Stock (as the case may
be), and to release the Preferred Stock or Additional Preferred Stock (as the
case may be) only upon satisfaction of the conditions set forth in Section 8
hereof.
8. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
The Buyer understands that the Company's obligation to sell
the Preferred Stock on the Closing Date and any Additional Preferred Stock on an
Additional Closing Date pursuant to this Agreement is conditioned upon:
a. The receipt and acceptance by the Company of Buyer's
agreement, as evidenced by its execution of this Agreement, to purchase at least
Two Million ($2,000,000.00) Dollars in liquidation value Preferred Stock and
Additional Preferred Stock (or such lesser amount as the Company, in its sole
discretion, shall determine);
b. Delivery by the Buyer to the Escrow Agent of good funds as
payment in full of an amount equal to the purchase price for the Preferred Stock
or Additional Preferred Stock (as the case may be) in accordance with Section
1(c) hereof;
c. The accuracy on the Closing Date or Additional Closing Date
(as the case may be) of the representations and warranties of the Buyer
contained in this Agreement as if made on such date, and the performance by the
Buyer on or before such date of all covenants and agreements of the Buyer
required to be performed on or before such date;
d. There shall not be in effect any law, rule or regulation
prohibiting or restricting the transactions contemplated hereby, or requiring
any consent or approval which shall not have been obtained.
9. CONDITIONS TO THE BUYER'S OBLIGATION TO PURCHASE.
The Company understands that the Buyer's obligation to
purchase the Preferred Stock on the Closing Date and any Additional Preferred
Stock on an Additional Closing Date is conditioned upon:
a. Acceptance by Buyer of an Agreement for the sale of
Preferred Stock, as indicated by execution of this Agreement, and Buyer's and
Company's execution of the Registration Rights Agreement;
b. Delivery by the Company to the Escrow Agent of the
Preferred Stock or Additional Preferred Stock (as the case may be) in accordance
with this Agreement;
c. The accuracy in all material respects on the Closing Date
or Additional Closing Date (as the case may be) of the representations and
warranties of the Company contained in this Agreement as if made on such date,
and the performance by the Company on or before such date (as the case may be)
of all covenants and agreements of the Company required to be performed on or
before such date; and
d. On the Closing Date or Additional Closing Date, the Buyer
having received an opinion of counsel for the Company, dated such date, in form,
scope and substance reasonably satisfactory to the Buyer, to the effect set
forth in Annex III attached hereto.
10. GOVERNING LAW; MISCELLANEOUS.
This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Delaware. Each of the parties consents
to the jurisdiction of the federal courts whose districts encompass any part of
the City of New York or the state courts of the State of New York sitting in the
City of New York in connection with any dispute arising under this Agreement and
hereby waives, to the maximum extent permitted by law, any objection, including
any objection based on forum non conveniens, to the bringing of any such
proceeding in such jurisdictions. A facsimile transmission of this signed
Agreement shall be legal and binding on all parties hereto. This Agreement may
be signed in one or more counterparts, each of which shall be deemed an
original. The headings of this Ag any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement or the validity or enforceability of this Agreement
in any other jurisdiction. This Agreement may be amended only by an instrument
in writing signed by the party to be charged with enforcement. This Agreement
supersedes all prior agreements and understandings among the parties hereto with
respect to the subject matter hereof.
11. NOTICES. Any notice required or permitted hereunder shall
be given in writing (unless otherwise specified herein) and shall be deemed
effectively given upon, (a) personal delivery, or (b) if advance copy is given
by fax, upon (i) seven business days after deposit in the United States Postal
Service by regular or certified mail, or (ii) three business days mailing by
international express courier, with postage and fees prepaid, addressed to each
of the other parties thereunto entitled at the following addresses, or at such
other addresses as a party may designate by ten days advance written notice to
each of the other parties hereto.
COMPANY: Kideo Productions, Inc.
000 Xxxxxxxx, Xxxxx 000
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No. (000) 000-0000
with a copy to:
Xxxxxxx Xxxxxxxx & Xxxxx, Esqs.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No. (000) 000-0000
PURCHASER: At the address set forth on the signature page of this
Agreement.
ESCROW AGENT: Xxxxxxx & Prager, Esqs.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
12. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Purchaser's
representations and warranties shall survive the execution and delivery hereof
of this Agreement and the delivery of the Preferred Stock.
IN WITNESS WHEREOF, this Agreement has been duly executed by
the Buyer or one of its officers thereunto duly authorized as of the date set
forth below.
NUMBER OF SHARES OF PREFERRED STOCK TO BE PURCHASED: 750
AGGREGATE PURCHASE PRICE OF SUCH PREFERRED STOCK: $750,000
SIGNATURE(S) FOR INDIVIDUAL SUBSCRIBER(S)
IN WITNESS WHEREOF, the undersigned represents that the foregoing
statements are true and correct and that he, she or they have executed this
Stock Purchase Agreement this _____ day of May, 1997.
----------------------------------
Signature
__________________________________
Printed Name
__________________________________
Address
Telecopier No. ___________________
SIGNATURES FOR ENTITIES
IN WITNESS WHEREOF, the undersigned represents that the foregoing
statements are true and correct and that it has caused this Stock Purchase
Agreement to be duly executed on its behalf this 13th day of May, 1997.
__________________________________ XXXXXX MARKETING CORP.
Address -------------------------------------
__________________________________ Printed Name of Subscriber
By:
----------------------------------
Telecopier No. ___________________ (Signature of Authorized Person)
_____________________________________
British Virgin Islands Printed Name and Title
----------------------------------
Jurisdiction of Incorporation
or Organization
This Agreement has been accepted as of the date set forth below.
KIDEO PRODUCTIONS, INC.
By:
-------------------------------
Xxxxxx X. Xxxxxxx
Title: ____________________________
Date: _____________________________
