ASSET PURCHASE AGREEMENT
This
Asset Purchase Agreement (“Agreement”), entered into on this 28th
day of
September 2007, is by and between Mac Filmworks, Inc., a Delaware corporation
(the “Company” or “Seller”), and Mr. Xxx XxXxxxxxxx (“Buyer”). The
Company and XxXxxxxxxx are collectively referred to as the “Parties,” and
individually a “Party”.
NOW,
THEREFORE, in
consideration of the mutual promises and covenants set forth herein, and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Parties hereby agree as follows:
ARTICLE
1.
Purchase
and Sale of Assets
1.01. Transfer. Pursuant
to the terms and conditions herein, Seller shall sell, transfer and assign
to
Buyer (i) substantially all of its assets as described in Exhibit A attached
hereto (“Assets”) and (ii) a total of 8,300,205 shares of the Company’s common
stock (“Shares”).
1.02. Consideration. As
consideration for receiving the Assets and the Shares, Buyer hereby forgives
accrued salary and other outstanding debts owed to him by Seller, which debts
total $429,608 (“Debts”).
1.03. Closing. The
sale and purchase described in this Agreement shall be consummated approximately
20 days after the date on which the information statement outlining this
Agreement and explaining that more than 50% of the shareholders have approved
this Agreement has been mailed to the Company’s shareholders (“Closing” or
“Closing Date”).
ARTICLE
2.
Representations
and Warranties by Seller
2.01. Authority. Seller
has the full power and authority (including full corporate power and authority)
to execute and deliver this Agreement and to perform its obligations
hereunder. This Agreement constitutes the valid and legally binding
obligation of Seller, enforceable in accordance with its terms and conditions,
except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium, or other similar laws affecting enforcement of
creditors’ rights generally and by general principles of equity (whether applied
in a proceeding at law or in equity).
2.02. Title. Seller
has good and marketable title to the Assets and the Shares.
2.03. Condition. Seller
represents and warrants that the transfer of the Assets is on an AS IS basis
and
the Shares are validly issued, fully paid and non-assessable, have not been
issued in violation of applicable securities laws or any pre-emptive right,
and
are free and clear of any interests, claims, liens and
encumbrances.
ARTICLE
3.
Representations
& Warranties of Buyer
3.01. Authority. Buyer
has the full power and authority (including full corporate power and authority)
to execute and deliver this Agreement and to perform his obligations
hereunder. This Agreement constitutes the valid and legally binding
obligation of Buyer, enforceable in accordance with its terms and conditions,
except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium, or other similar laws affecting enforcement of
creditors’ rights generally and by general principles of equity (whether applied
in a proceeding at law or in equity).
3.02. Other
Payables. Other than (i) the Debts and (ii) the other payables
owed by Seller to various vendors and other third parties, including Buyer,
which are set forth on Exhibit B attached
hereto (“Other Payables”), there are no other payments or liabilities owed to
any party.
3.03. Representation. Buyer
hereby acknowledges that, other than the Debts and the Other Payables, Seller
does not owe Buyer, any member of Buyer’s immediate family or any other
affiliate of Buyer any other monies, securities or obligations of any kind
whatsoever. Specifically, Buyer acknowledges that in consideration
for entering into this Agreement, he agrees that his employment agreement with
Seller has been terminated and that any and all other agreements by and between
Seller and him, his affiliates and his immediate family has been
terminated.
3.04. Release. Buyer
does hereby release, acquit and forever discharge Seller and its respective
directors, officers, managers, employees, executors, administrators, legal
representatives, successors and assigns from any and all claims, debts, demands,
obligations, liabilities, suits, liens, rights, offsets, and causes of action
of
whatsoever nature, known or unknown, arising out of or related to Seller’s
dealings with Buyer, or any obligation of Seller to Buyer, including any member
of Buyer’s immediate family or any other affiliate of Buyer.
3.05. Contracts. Other
than the contracts, whether verbal or written, entered into by Seller or its
representatives in the course of its business operations set forth in Exhibit C attached
hereto, Seller has no other agreements or contracts of any kind with any other
party.
3.06. Obligations. Buyer
agrees to assume any and all obligations with respect to the Assets being
acquired herein, including but not limited to any and all agreements of any
kind
entered into in connection with the Assets.
3.07. Indemnification. Buyer
agrees to indemnify Seller against any and all breaches of the representations
and warranties set forth in this Article 3 of the Agreement.
ARTICLE
4.
Miscellaneous
4.01. Expenses. The
Parties hereto shall pay all of their own expenses relating to the transactions
contemplated by this Agreement, including, without limitation, the fees and
expenses of their respective counsel and financial advisers.
4.02. Governing
Law. The interpretation and construction of this Agreement,
and all matters relating hereto, shall be governed by the laws of the State
of
Texas applicable to agreements executed and to be performed solely within
such State without regard to conflicts of laws.
4.03. Mediation. If
a dispute should arise out of this Agreement, the Parties should first submit
the dispute to mediation before a mediator of their common choice in Houston,
Xxxxxx County, Texas. In the unlikely event that the Parties cannot agree upon
a
mediator, they will engage the American Arbitration Association or similar
organization for the express purpose of selecting a neutral mediator.
Notwithstanding the foregoing, neither Party is required to first mediate a
dispute prior to arbitration if the Party reasonable believes that the nature
of
the dispute will not be resolved in mediation.
4.04. Arbitration. In
the event the Parties dispute is not resolved through mediation or if the Party
bringing the suit does not reasonably believe that mediation will resolve the
dispute, the dispute shall be settled finally, completely and conclusively
by
arbitration in Houston, Xxxxxx County, Texas, in accordance with the Commercial
Arbitration Rules of the American Arbitration Association (the “Rules”), by one
or more arbitrators chosen in accordance with the Rules. Arbitration shall
be
initiated by written demand by the Party seeking arbitration. This Agreement
to
arbitrate shall be specifically enforceable only in the District Court of Xxxxxx
County, Texas. A decision of the arbitrator or arbitrators shall be final,
conclusive and binding on the Parties to this Agreement, and judgment may be
entered thereon in the District Court of Xxxxxx County, Texas, to enforce such
decision and the benefits thereof. Upon appointment, the arbitrators shall
then
proceed to decide the arbitration subjects in accordance with the Rules. Any
arbitration held in accordance with this paragraph shall be private and
confidential and no person shall be entitled to attend the hearings except
the
arbitrator(s), the stenographer, if one is requested, the Parties to this
Agreement, and any designated representatives of the Parties. The matters
submitted for arbitration, the hearings and proceedings thereunder and the
arbitration award shall be kept and maintained in strictest confidence by the
Parties and shall not be discussed, disclosed or communicated to any persons.
On
request of either Party, the record of the proceeding shall be sealed and may
not be disclosed except insofar, and only insofar, as may be necessary to
enforce the award of the arbitrators and any judgment enforcing such award.
If
counsel is required to seek the enforcement of this agreement or this particular
section, counsel shall be entitled to recover its (his) reasonable and necessary
attorneys’ fees and costs from the opposing Party.
4.05. Parties
in
Interest. This Agreement may not be transferred, assigned,
pledged or hypothecated by any Party hereto, other than by operation of
law. This Agreement shall be binding upon and shall inure to the
benefit of the Parties hereto and their respective heirs, executors,
administrators, successors and assigns.
4.06. Entire
Agreement. This Agreement, including all Exhibits, contains
the entire understanding of the Parties hereto with respect to the subject
matter contained herein and therein. This Agreement supersedes all
prior agreements and understandings between the Parties with respect to such
subject matter.
4.07. Amendments. This
Agreement may not be changed orally, but only by an agreement in writing signed
by Seller and Buyer.
4.08. Severability. In
case any provision in this Agreement shall be held invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions hereof will not in any way be affected or impaired
thereby.
4.09. Cooperation
After
Closing. From and after the Closing Date, each of the Parties
hereto shall execute such documents and other papers and take such further
actions as may be reasonably required or desirable to carry out the provisions
hereof and the transactions contemplated hereby.
IN
WITNESS WHEREOF, the Parties have duly executed this Agreement effective as
of
the date written in the preamble of this Agreement.
BUYER:
XXX
XXXXXXXXXX
|
/s/
Xxx XxXxxxxxxx
|
SELLER:
MAC
FILMWORKS, INC.
A
Delaware Corporation
|
By:
|
/s/
Xxx XxXxxxxxxx
|
|
Xxx
XxXxxxxxxx, Chief Executive Officer
|
EXHIBIT
A
List
of Assets
|
·
|
All
film titles owned by the Company;
and
|
|
·
|
$325,000
of a Company receivable from Amity Entertainment, that has been fully
reserved against.
|
EXHIBIT
B
Other
Payables
|
MAC
FILMWORKS, INC PAYABLES
|
||||||||||
|
AS
OF 9-24-07
|
||||||||||
|
AMOUT
TO BE
|
||||||||||
|
VENDOR
|
AMOUNT
|
DUE
|
DESCRIPTION
|
REIMBURSED
|
||||||
|
DUE
|
DATE
|
X.XXXXXXXXXX
|
||||||||
|
Xxxx.Xxxxxxx
|
9,694.44
|
1-Sep
|
SCIA
Expenses
|
546.74
|
||||||
|
Amazing
Space
|
104.00
|
1-Sep
|
Storage
|
104
|
||||||
|
AT&T
|
901.44
|
6-Sep
|
Monthly
Telephone
|
429.43
|
||||||
|
AT&T-cell
|
196.46
|
16-Sep
|
Monthly
Telephone
|
196.46
|
||||||
|
Xxxxxx
& Xxxxxxxxx
|
22,920.92
|
NOW
|
Attorney
Fees
|
0
|
||||||
|
Capital
One
|
17,291.97
|
MONTHLY
|
Loan
|
17291.97
|
||||||
|
Comcast
|
285.58
|
5-Sep
|
Monthly
Internet
|
140.16
|
||||||
|
Colonial
Transfer
|
65.00
|
NOW
|
Stock
Transfer Services
|
0
|
||||||
|
GS1
US
|
475.00
|
1-Oct
|
Bar
codes
|
0
|
||||||
|
Xxxxxxx,
Xxxxxxx
|
3,750.00
|
On
Receipt
|
Attorney
Fees
|
0
|
||||||
|
Xxxxxx
& Xxxxxx
|
3,314.60
|
NOW
|
Audit
Preparation
|
3314.6
|
||||||
|
Odds
on Recording
|
9,497.43
|
NOW
|
Duplication
Services
|
0
|
||||||
|
Office
Depot
|
70.11
|
30-Sep
|
Office
Expenses/supplies
|
70.11
|
||||||
|
Sal's
Rental
|
200.00
|
1-Sep
|
Monthly
Storage/Warehouse
|
200
|
||||||
|
Schmuck,
L.
|
2,850.00
|
NOW
|
Audit
Preparation
|
1100
|
||||||
|
Shell
|
241.17
|
10-Sep
|
Fuel
Charges
|
241.17
|
||||||
|
Spring
Street Plaza
|
2,350.00
|
1-Sep
|
Monthly
rent
|
0000
|
||||||
|
Xxxxx
Xxxx
|
877.45
|
1-Sep
|
Auto
expenses
|
489.97
|
||||||
|
SWEPCO
|
115.45
|
10-Sep
|
Electric
xxxx
|
76.38
|
||||||
|
SureSav
|
127.00
|
1-Sep
|
Monthly
Storage Rent
|
127
|
||||||
|
UPS
|
1,118.89
|
On
Receipt
|
Postage
& Handling
|
770.47
|
||||||
|
Vintage
Filings
|
353.00
|
On
Receipt
|
Filing
Fees
|
0
|
||||||
|
76,799.91
|
27448.46
|
|||||||||
EXHIBIT
C
List
of Contracts
1. Xxxx
Xxxxxx – Private Placement Memorandum
2. Xxxx
Xxxxxxx – No longer representing Mac Filmworks, Inc.
3. Odds
on Recording – Open Account
4. Long
Island Disc – this contract is for purchasing with pricing good for 60
days
