Exhibit 1.1
SHARE EXCHANGE AGREEMENT
This Share Exchange Agreement ("Agreement") between Max Development,
Inc., a Colorado corporation ("MAXD"), Image World Media, Inc., a Delaware
corporation ("IMAGE") and Xxxx Xxxxxxxxx (the "Shareholders Representative"), as
representative of the persons listed in EXHIBIT A hereof (collectively the
"Shareholders"), being the owners of record of all of the issued and outstanding
stock of IMAGE, is entered into as of November 16, 2001.
RECITALS
A. The Shareholders own all of the issued and outstanding shares of
common stock of IMAGE (the "IMAGE Shares").
B. The Shareholders have authorized the Shareholders Representative,
pursuant to the Agreement Appointing Shareholders Representative annexed hereto
as EXHIBIT D, to sell to MAXD, and MAXD has agreed to purchase, the IMAGE Shares
from the Shareholders in exchange for shares of MAXD Series A Convertible
Preferred Stock and MAXD Common Stock, pursuant to the terms and conditions set
forth in this Agreement.
C. IMAGE will become a wholly-owned subsidiary of MAXD.
D. The parties to this Agreement intend that the share exchange
transaction contemplated by this Agreement qualify as a reorganization within
the meaning of Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as
amended
In consideration of the mutual representations, warranties, covenants
and agreements contained in this Agreement, the parties agree as follows:
1. EXCHANGE OF STOCK.
(a) The Shareholders agree to transfer to MAXD, and MAXD agrees to
purchase from the Shareholders, all of the Shareholders' right, title and
interest in their IMAGE Stock, representing 100% of the issued and outstanding
stock of IMAGE, free and clear of all mortgages, liens, pledges, security
interests, restrictions, encumbrances, or adverse claims of any nature.
(b) At the Closing (as defined in Section 2 below), upon surrender by
the Shareholders of the certificates evidencing the IMAGE Stock duly endorsed
for transfer to MAXD or accompanied by stock powers executed in blank by the
Shareholders, MAXD will cause 293,083 shares (subject to adjustment for
fractionalized shares as set forth below) of its Series A Convertible Preferred
Stock, par value $0.01 (the "Preferred Stock") and 8,190,850 shares (subject to
adjustment for fractionalized shares as set forth below) of its Common Stock,
par value $0.001 (the "Common Stock" and together with the Preferred Stock the
(the "MAXD Stock") to be issued to the Shareholders, in full satisfaction of any
right or interest which each Shareholder held in the IMAGE Stock or the assets
of IMAGE or any other securities of IMAGE (except for warrants and options of
IMAGE outstanding on the date of this Agreement as shown in EXHIBIT B. EXHIBIT A
lists every shareholder of IMAGE, and the total number of shares of MAXD Stock
to be issued to each IMAGE shareholder pursuant to this Agreement.
The MAXD Stock will be issued to the Shareholders on a pro rata basis,
in the same proportion as the percentage of their ownership interest in the
IMAGE Stock, as set forth on EXHIBIT A. Any fractional shares that will result
due to such pro rata distribution will be rounded up to the next highest whole
number. As a result of the exchange of the IMAGE Stock in exchange for the MAXD
Stock, IMAGE will become a wholly-owned subsidiary of MAXD.
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(c) Immediately following the Closing, holders of Options and/or
Warrants to purchase IMAGE common stock (collectively the "Option holders") will
be issued 5,582,500 options and/or warrants (as is appropriate) to purchase
MAXD's common stock, $.001 par value (the "MAXD Options") to be issued to the
Option holders, in full satisfaction of any right or interest which each Option
holder held to acquire IMAGE stock. The MAXD Options will contain provisions
substantially similar to the options and/or warrants originally held by each
Option holder and will be issued to the Option holders based on a pro rata
formulae with the numerator being the percentage interest that they had a right
to acquire in Image assuming exercise of all options (as set forth on EXHIBIT B)
and the denominator being the percentage of Preferred Stock to be held by IMAGE
shareholders immediately following the Closing. Any right to acquire fractional
shares that will result due to such pro rata formulae will be rounded up to the
next highest whole number. The exercise price per common share of MAXD under
these resulting options and warrants shall be not less than $.50, and cashless
exercise will not be permitted under any of such resulting options and warrants.
2. CLOSING.
(a) Time and Location. The parties to this Agreement will hold a
closing (the "Closing") for the purpose of executing and exchanging all of the
documents contemplated by this Agreement and otherwise effecting the
transactions contemplated by this Agreement. The Closing will be held as soon as
possible at IMAGE's Maryland office located at 00000 Xxxxx Xxxxx Xxxx,
Xxxxxxxxx, XX, and at MAXD's Englewood, Colorado office, on or before November
19, 2001 or at such other time and place as the parties shall mutually agree.
All proceedings to be taken and all documents to be executed and exchanged at
the Closing will be deemed to have been taken, delivered and executed
simultaneously, and no proceeding will be deemed taken nor documents deemed
executed or delivered until all have been taken, delivered and executed. If
agreed to by the parties, the Closing may take place through the exchange of
documents by fax and/or express courier.
(b) Mechanics of Closing. On the date of Closing, MAXD and IMAGE shall
deliver to each other documents as set forth below. This Agreement shall be
deemed closed when each party has received all the documents required to be
delivered.
(1) IMAGE shall deliver to MAXD (x) copies front and back of
all certificates for all issued and outstanding shares of IMAGE common
stock, and copies of each stock power accompanying any certificate, (y)
copy of Exhibit D (Agreement to Appoint Shareholders Representative)
signed by each Shareholder, and (z) copies of the documents required by
Section 7(d), including assurances regarding IMAGE representations and
warranties as required by Section 7(d)(v).
(2) MAXD shall deliver to IMAGE (x) copies of the documents
required by Section 6(d), (y) copy of letter from MAXD counsel
authorizing issuance of shares of MAXD Stock to the IMAGE Shareholders
as stated on EXHIBIT A, and (z) copy of Xxxxx Xxxxx'x resignation as an
officer and director of MAXD as of the date of Closing.
(c) With the exception of any stock certificates which must be in their
original form, any copy, fax, e-mail or other reliable reproduction of the
writing or transmission required by this Agreement or any signature required
thereon may be used in lieu of an original writing or transmission or signature
for any and all purposes for which the original could be used, provided that
such copy, fax, e-mail or other reproduction is a complete reproduction of the
entire original writing or transmission or original signature, and the originals
are promptly delivered thereafter. The IMAGE stock certificates and any stock
powers may be retained by IMAGE.
3. REPRESENTATIONS AND WARRANTIES OF MAXD.
MAXD represents and warrants as follows:
(a) MAXD is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Colorado and is licensed or qualified as
a foreign corporation in all states in which the nature of its business or the
character or ownership of its properties makes such licensing or qualification
necessary.
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(b) The authorized capital stock of MAXD consists of (i) 10,000,000
shares of common stock, $0.001 par value per share, of which 1,161,000 shares
are issued and outstanding and (ii) 1,000,000 shares of preferred stock, $.0.01
par value, of which 0 shares are issued and outstanding. To the knowledge of
MAXD, all issued and outstanding shares of MAXD's common stock are fully paid
and nonassessable.
(c) MAXD has no subsidiaries.
(d) Execution of this Agreement and performance by MAXD hereunder has
been duly authorized by all requisite corporate action on the part of MAXD, and
this Agreement constitutes a valid and binding obligation of MAXD, and MAXD's
performance hereunder will not violate any provision of any charter, bylaw,
indenture, mortgage, lease, or agreement, or any order, judgment, decree, or, to
MAXD's knowledge any law or regulation, to which any property of MAXD is subject
or by which MAXD is bound.
(e) MAXD has full corporate power and authority to enter into this
Agreement and to carry out its obligations hereunder, and will deliver at the
Closing a certified copy of resolutions of its board of directors authorizing
execution of this Agreement by its officers and performance hereunder.
(f) MAXD has provided all financial statements and financial
information in its possession as has been requested by the Shareholders.
(g) There is no litigation or proceeding pending, or to MAXD's
knowledge threatened, against or relating to MAXD, its properties or businesses.
(h) MAXD is not a party to any material contract other than those
listed in MAXD's Form 10-QSB periodic report for period ending September 30,
2001, as filed with the Securities Exchange Commission.
(i) MAXD has no material assets and no liabilities, except as listed in
MAXD's Form 10-QSB periodic report for period ending September 30, 2001, as
filed with the Securities Exchange Commission.
(j) Other than Xxxxx Xxxxx, MAXD has no employees.
(k) No current officer, director, affiliate or person known to MAXD to
be the record or beneficial owner of in excess of 5% of MAXD's common stock, or
any person known to be an associate of any of the foregoing is a party adverse
to MAXD or has a material interest adverse to MAXD in any material pending legal
proceeding.
(l) MAXD has filed in correct form all federal, state, and other tax
returns of every nature required to be filed by it and has paid all taxes as
shown on such returns and all assessments, fees and charges received by it to
the extent that such taxes, assessments, fees and charges have become due. MAXD
has also paid all taxes which do not require the filing of returns and which are
required to be paid by it. To the extent that tax liabilities have accrued, but
have not become payable, they have been adequately reflected as liabilities on
the books of MAXD.
(m) MAXD is a publicly reporting company pursuant to Section 12(g) of
the Securities Exchange Act of 1934, as amended (the "Act") and is in compliance
with all reporting requirements of the Act. MAXD's Form 10-KSB for the period
ending December 31, 2000, its Form 10-QSB for the period ending March 31, 2001,
its Form 10-QSB for the period ending June 30, 2001, its Form 10-QSB for the
period ending September 30, 2001 and any other periodic filings made by MAXD as
filed with the SEC, including all exhibits, documents and attachments thereto,
are true and correct in all material respects and do not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make any statement therein not materially
misleading.
(n) MAXD is acquiring the IMAGE shares to be transferred to it under
this Agreement for investment and not with a view to the sale or distribution
thereof.
4. REPRESENTATIONS AND WARRANTIES OF IMAGE AND THE SHAREHOLDERS.
IMAGE and the Shareholders, severally and not jointly, represent and
warrant as follows:
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(a) IMAGE (and its presently 100% owned subsidiary, Image World News,
Inc.) each is a corporation duly organized, validly existing, and in good
standing under the laws of the state of Delaware and is licensed or qualified as
a foreign corporation in all places in which the nature of its business or the
character or ownership of its properties makes such licensing or qualification
necessary. IMAGE's wholly owned subsidiary Interruption Television PTE, Ltd., is
a corporation duly organized, validly existing, and in good standing under the
laws of Singapore and is licensed or qualified as a foreign corporation in all
places in which the nature of its business or the character or ownership of its
properties makes such licensing or qualification necessary.
(b) There are no agreements purporting to restrict the transfer of the
IMAGE Shares, nor any voting agreements, voting trusts or other arrangements
restricting or affecting the voting of the IMAGE Shares. The IMAGE Shares held
by the Shareholders are duly and validly issued, fully paid and non-assessable,
and issued in full compliance with all federal, state, and local laws, rules and
regulations. Except as set forth on EXHIBIT B annexed hereto, there are no
subscription rights, options, warrants, convertible securities, or other rights
(contingent or otherwise) presently outstanding, for the purchase, acquisition,
or sale of the capital stock of IMAGE, or any securities convertible into or
exchangeable for capital stock of IMAGE or other securities of IMAGE, from or by
IMAGE.
(c) The Shareholders have full right, power and authority to sell,
transfer and deliver the IMAGE Shares, and upon delivery of the certificates
therefor as contemplated in this Agreement, the Shareholders will transfer to
MAXD valid and marketable title to the IMAGE Shares, including all voting and
other rights to the IMAGE Shares, free and clear of all pledges, liens, security
interests, adverse claims, options, rights of any third party, or other
encumbrances. Each of the Shareholders owns and holds that the number or
percentage of IMAGE Shares which are listed opposite their names on EXHIBIT A
attached hereto.
(d) The Shareholders Representative is the duly authorized agent of
each Shareholder listed on EXHIBIT A to execute and deliver this Agreement on
behalf of each Shareholder and such Agreement is enforceable against each
Shareholder in accordance with its terms. Each Shareholder is "accredited" as
that term is defined in the Securities Act of 1933 and the rules and regulations
of the Securities and Exchange Commission. The Shareholders Representative has
provided copies of MAXD's Form 10-KSB for year ended December 31, 2000 and Form
10-QSB for six months ended June 30, 2001, and a copy of this Agreement with
exhibits, to each Shareholder.
(e) There is no litigation or proceeding pending, or to any
Shareholders' knowledge, threatened, against or relating to IMAGE or to the
IMAGE Shares. Image has acquired all of the issued and outstanding shares of
Interruption Television PTE, Ltd. free and clear of any and all claims of
Interruption Television, Inc.
(f) IMAGE has filed in correct form all tax returns of every nature
required to be filed by it and has paid all taxes as shown on such returns and
all assessments, fees and charges received by it to the extent that such taxes,
assessments, fees and charges have become due. IMAGE has also paid all taxes
which do not require the filing of returns and which are required to be paid by
it. To the extent that tax liabilities have accrued, but have not become
payable, they have been adequately reflected as liabilities on the books of
IMAGE.
(g) The current residence address or principal place of business (for
any non-individual shareholder) of the IMAGE Shareholders is as listed on
EXHIBIT A attached hereto.
(h) IMAGE and the Shareholders have had the opportunity to perform all
due diligence investigations of MAXD as they have deemed necessary or
appropriate and to ask questions of MAXD's officers and directors and have
received satisfactory answers to all of their questions. IMAGE and the
Shareholders have had access to all documents and information about MAXD and
have reviewed sufficient information to allow them to evaluate the merits and
risks of the acquisition of the Preferred Stock. IMAGE and the Shareholders
acknowledge that MAXD does not have sufficient shares of authorized unissued
common stock to permit conversion of the Series A Convertible Preferred Stock of
MAXD to shares of common stock of MAXD. IMAGE and the Shareholders acknowledge
that in order to there to be sufficient common stock for that purpose, the MAXD
articles of incorporation will require amendment pursuant to post-Closing vote
of the MAXD shareholders, in accordance with Colorado law and Section 14 of the
Securities Exchange Act of 1934 and the rules and regulations of the Securities
and Exchange Commission.
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(i) The Shareholders are acquiring the Preferred Stock for their own
account (and not for the account of others) for investment and not with a view
to the distribution therefor. The Shareholders will not sell or otherwise
dispose of the Preferred Stock without registration under the Securities Act of
1933, as amended, or an exemption therefrom, and the certificate or certificates
representing the Preferred Stock will contain a legend to the foregoing effect.
5. CONDUCT PRIOR TO THE CLOSING.
MAXD agrees that between the date of this Agreement and the Closing it
will take the following actions:
(a) Approve in the form attached hereto as EXHIBIT C, the designation
of rights and preferences (the "Designation") setting forth the rights and
preferences of the Preferred Stock and such designation will, to the extent
required by Colorado law, be filed and approved by the appropriate regulatory
authorities necessary for it to be of full force and effect at the Closing.
MAXD, IMAGE and the Shareholders covenant that between the date of this
Agreement and the Closing as to each of them:
(b) MAXD and IMAGE Shareholders will cooperate with each other in the
preparation of an information statement prepared pursuant to Section 14 (f) of
the Securities Exchange Act of 1934 to be filed with the SEC describing the
agreed to change in control of MAXD contemplated herein, if on advice of counsel
to MAXD and IMAGE such filing is required.
(c) No change will be made in the charter documents, by-laws, or other
corporate documents of MAXD or IMAGE, except as provided in Sections 5(a) above.
(d) MAXD and IMAGE will each use its best efforts to maintain and
preserve its business organization, employee relationships, and goodwill intact,
and MAXD will not enter into any material commitment except in the ordinary
course of business.
(e) None of the Shareholders will sell, transfer, assign, hypothecate,
lien, or otherwise dispose or encumber the IMAGE Shares owned by them.
6. CONDITIONS TO OBLIGATIONS OF SHAREHOLDERS AND IMAGE.
IMAGE and the Shareholders' obligation to complete the transactions
contemplated herein is subject to fulfillment on or before the Closing of each
of the following conditions, unless waived in writing by IMAGE or the
Shareholders, as appropriate:
(a) The representations and warranties of MAXD set forth herein will be
true and correct at the Closing as though made at and as of that date, except as
affected by transactions contemplated hereby.
(b) MAXD will have performed all covenants required by this Agreement
to be performed by it on or before the Closing.
(c) This Agreement will have been approved by the Board of Directors of
MAXD.
(d) MAXD will have delivered to the Shareholders the documents set
forth below in form and substance reasonably satisfactory to counsel for the
Shareholders, to the effect that:
(i) MAXD is a corporation duly organized, validly existing,
and in good standing;
(ii) MAXD's authorized and issued capital stock is as set
forth herein;
(iii) Certified copies of the resolutions of the board of
directors of MAXD authorizing the execution of this Agreement and the
consummation hereof; and
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(iv) Any further document as may be reasonably requested by
counsel to the Shareholders in order to substantiate any of the
representations or warranties of MAXD set forth herein.
(e) There will have occurred no material adverse change in the
business, operations or prospects of MAXD.
(f) Xxxx Xxxxxxxxx will be appointed as President of MAXD and Xxxxx
Xxxxx will resign from the position of President of MAXD. Xxxxx XxXxxx will be
appointed as Chief Executive Officer of MAXD.
(g) The Board of Directors of MAXD will be increased to 7 persons and
the current director, Xxxxx Xxxxx, will appoint Xxxxxxxxxx Xxxxxxxx, Xxxxx
XxXxxx, Xxxx Xxxxxxxxx, Xxxxxxx Xxxxxx, Xxxxx Xxxxx, and Riz Khan, to serve on
the Board of Directors of MAXD and Xxxxx Xxxxx shall resign as a director and
officer of MAXD. The new directors, with the exception Xxxx Xxxxxxxxx who shall
take office effective at the Closing, shall take office and Xxxxx Xxxxx'x
resignation as a director shall become effective 10 days following the
transmission by MAXD of Form 14(f) to the Securities and Exchange Commission and
the mailing of such form to the current MAXD shareholders.
7. CONDITIONS TO OBLIGATIONS OF MAXD.
MAXD's obligation to complete the transaction contemplated herein will
be subject to fulfillment on or before the Closing of each of the following
conditions, unless waived in writing by MAXD, as appropriate:
(a) The representations and warranties of IMAGE and the Shareholders
set forth herein will be true and correct at the Closing as though made at and
as of that date, except as affected by transactions contemplated hereby.
(b) IMAGE and the Shareholders will have performed all covenants
required by this Agreement to be performed by them on or before the Closing.
(c) This Agreement will have been approved by the Board of Directors of
IMAGE.
(d) IMAGE and the Shareholders will have delivered to MAXD the
documents set forth below in form and substance reasonably satisfactory to
counsel for MAXD, to the effect that:
(i) IMAGE is a corporation duly organized, validly existing,
and in good standing;
(ii) IMAGE's issued and outstanding capital stock is owned as
set forth herein and EXHIBIT A hereto;
(iii) Certified copies of the resolutions of the board of
directors of IMAGE authorizing the execution of this Agreement and the
consummation hereof;
(iv) Copies of the Financial Statements (unaudited) of
Interruption Television PTE, Ltd. for the fiscal year ending June 30,
2001, and the interim period ending September 30, 2001.
(v) Any further document as may be reasonably requested by
counsel to MAXD in order to substantiate any of the representations or
warranties of IMAGE and the Shareholders set forth herein, including
without limitation evidence of RSC Energia and Rosaviakosmos approval
of the agreements with MirCorp. dated September 20, 2001 and October
26, 2001 and IMAGE's acquisition of 100% of Interruption Television
PTE, Ltd. dated November 15, 2001.
(e) There will have occurred no material adverse change in the
business, operations or prospects of IMAGE.
Further, IMAGE and the Shareholders agree with MAXD and Xxxxx Xxxxx
that the consummation of this Agreement is expressly conditioned upon IMAGE
filing with the Securities and Exchange Commission on Form 8-K/A, within 75 days
of Closing, audited financial statements of IMAGE reflecting the acquisition of
Interruption Television Inc., and all other financial information, as required
by the rules and regulations of the Securities and Exchange Commission.
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8. ADDITIONAL COVENANTS.
(a) Between the date of this Agreement and the Closing, the
Shareholders and IMAGE, with respect to IMAGE, and MAXD, with respect to itself,
will, and will cause their respective representatives to, (i) afford the other
party and its representatives access to their personnel, properties, contracts,
books and records, and other documents and data, as reasonably requested by the
other party; (ii) furnish the other party and its representatives with copies of
all such contracts, books and records, and other existing documents and data as
the other may reasonably request in connection with the transaction contemplated
by this Agreement; and (iii) furnish the other party and its representatives
with such additional financial, operating, and other data and information as the
other may reasonably request. The Shareholders and IMAGE will cause IMAGE to,
and MAXD will provide the Shareholders, with complete copies of all material
contracts and other relevant information on a timely basis in order to keep the
other party fully informed of the status of their respective business and
operations.
(b) MAXD, IMAGE and the Shareholders will cooperate with each other in
the preparation of a Form 8-K to be filed with the SEC describing the
transaction contemplated by this Agreement and such other items as are required
by the SEC rules and regulations.
(c) MAXD will deliver MAXD's corporate books and records, including all
records relating to MAXD's audited financial statements, to the IMAGE
Shareholders at Closing.
(d) The parties agree that they will not make, and the Shareholders
will not permit IMAGE to make, any public announcements relating to this
Agreement or the transactions contemplated herein without the prior written
consent of the other party, except as may be required upon the written advice of
counsel to comply with applicable laws or regulatory requirements after
consulting with the other party hereto and seeking their consent to such
announcement.
(e) IMAGE and the Shareholders agree that for a period of 90 days
following the Close of the transactions contemplated herein, they will not seek
to (i) reverse split or otherwise diminish the amount of capital stock of MAXD
which is issued and outstanding; (ii) increase the conversion ratio of the
Preferred Stock in order to dilute or diminish the voting rights of MAXD's
Common Stock; or (iii) otherwise take any action which would dilute or diminish
the voting rights of MAXD's Common Stock, without the express written consent of
Xxxxx Xxxxx. This Section 8(e) shall not, however, be construed so as to prevent
IMAGE, the Shareholders or MAXD from issuing stock (common or preferred) or
options, warrants or other rights to acquire such stock in the ordinary course
of business, which shall include but not be limited to issuing options to
employees, directors and consultants; issuing stock in connection with
acquisitions in order to further the business of IMAGE; and/or issuing stock in
connection with a legitimate financing transaction with a third party.
(f) IMAGE and the Shareholders agree that they will not issue shares of
common or preferred stock which on a fully diluted basis is equal to 5% or
greater of the issued and outstanding voting stock of MAXD in connection with
the acquisition of rights to use (whether as a licensee or otherwise) satellite
transponders for the broadcast of IMAGE or ITPL programming without the express
written consent of Xxxxx Xxxxx. For purposes of the preceding calculation, the
number of MAXD shares outstanding as of the closing of this Agreement shall be
used. If IMAGE issues shares in excess of the 5% fully diluted ceiling, and
Xxxxx Xxxxx does not consent to such excess issue, then IMAGE also will issue
shares in amount equal to such excess to the shareholders of MAXD as of the date
this Agreement is signed. The purpose of the preceding clause is to limit the
amount of dilution to the current shareholders of MAXD as regards acquisition of
rights to use the transponders.
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9. TERMINATION.
This Agreement may be terminated (1) by mutual consent in writing or
(2) by either the Shareholders or MAXD if there has been a material
misrepresentation or material breach of any warranty or covenant by any other
party that is not cured by the Closing.
10. EXPENSES.
Whether or not the Closing is consummated, each of the parties will pay
all of his, her, or its own legal and accounting fees and other expenses
incurred in the preparation of this Agreement and the performance of the terms
and provisions of this Agreement.
11. SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
The representations and warranties of Image, the Shareholders and MAXD
set out in this Agreement will survive the Closing for a period of one year,
except for the representations and warranties set forth in Sections 3(l) and
4(e) regarding tax liabilities with shall survive for seven years from the date
of this Agreement.
12. WAIVER.
Any failure on the part of either party hereto to comply with any of
its obligations, agreements, or conditions hereunder may be waived in writing by
the party to whom such compliance is owed.
13. BROKERS.
No finder or broker has been employed by the parties to this Agreement.
Each party agrees to indemnify and hold harmless the other party against any
fee, loss, or expense arising out of claims by brokers or finders employed or
alleged to have been employed by the indemnifying party.
14. NOTICES.
All notices and other communications under this Agreement must be in
writing and will be deemed to have been given if delivered in person or sent by
prepaid first-class certified mail, return receipt requested, or recognized
commercial courier service, as follows:
If to MAXD, to: Xxxxx Xxxxx, President
Max Development, Inc.
0000 X. Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
If to the Shareholders or
Image, to: Xxxx Xxxxxxxxx, President
Image World Media, Inc.
00000 Xxxxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
15. GENERAL PROVISIONS.
(a) This Agreement will be governed by and under the laws of the State
of Colorado, USA without giving effect to conflicts of law principles. If any
provision hereof is found invalid or unenforceable, that part will be amended to
achieve as nearly as possible the same effect as the original provision and the
remainder of this Agreement will remain in full force and effect.
(b) Any dispute arising under or in any way related to this Agreement
will be submitted to litigation in the courts of Colorado. The legal costs and
expenses, and all other costs related to such litigation, incurred by the
prevailing party shall be paid by the other party.
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(c) In any adverse action, the parties will restrict themselves to
claims for compensatory damages and/or securities issued or to be issued and no
claims will be made by any party or affiliate for lost profits, punitive or
multiple damages.
(d) This Agreement constitutes the entire agreement and final
understanding of the parties with respect to the subject matter hereof and
supersedes and terminates all prior and/or contemporaneous understandings and/or
discussions between the parties, whether written or verbal, express or implied,
relating in any way to the subject matter hereof. This agreement may not be
altered, amended, modified or otherwise changed in any way except by a written
agreement, signed by both parties.
(e) This Agreement will inure to the benefit of, and be binding upon,
the parties hereto and their successors and assigns; provided, however, that any
assignment by either party of IMAGE rights under this Agreement without the
written consent of the other party will be void.
(f) The parties agree to take any further actions and to execute any
further documents which may from time to time be necessary or appropriate to
carry out the purposes of this Agreement.
(g) The headings of the Sections, paragraphs and subparagraphs of this
Agreement are solely for convenience of reference and will not limit or
otherwise affect the meaning of any of the terms or provisions of this
Agreement. The references in this Agreement to Sections, unless otherwise
indicated, are references to sections of this Agreement.
(h) This Agreement may be executed in counterparts, each one of which
will constitute an original and all of which taken together will constitute one
document. This Agreement may be executed by delivery of a signed signature page
by fax to the other parties hereto and such fax execution and delivery will be
valid in all respects.
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EXECUTED:
MAX DEVELOPMENT, INC.
By: /S/ Xxxxx Xxxxx,
------------------------------
Xxxxx Xxxxx, President
IMAGE WORLD MEDIA, INC.
By: /S/ Xxxx Xxxxxxxxx
------------------------------
Xxxx Xxxxxxxxx, President
SHAREHOLDERS
By: /S/ Xxxx Xxxxxxxxx
------------------------------
Xxxx Xxxxxxxxx,
Shareholders Representative
By: /S/ Xxxxxxx Xxxxx
------------------------------
Xxxxxxx Xxxxx, Shareholder
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Exhibit A to Share Exchange Agreement
NUMBER OF MAXD SERIES A NUMBER OF MAXD COMMON
PREFERRED SHARES TO BE SHARES TO BE ISSUED TO
ISSUED TO SHAREHOLDER OR SHAREHOLDER OF IMAGE
NAME & ADDRESS TAX IDENTIFICATION # IMAGE DESIGNEE DESIGNEE PERCENT OWNERSHIP
-----------------------------------------------------------------------------------------------------------------------------
Xxxxx X. XxXxxx ###-##-#### 128,708 3,465,280 41.24%
00X Xxxxxxx Xxxxx Xx
Xxxxxxxxx 000000
Global Entertainment Holdings 00-0000000 32,500 875,000 10.41%
c/o Xx. Xxxxxxxxxx Xxxxxxxx
00 Xxxxx XxXxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Xxxxx Xxxxx n/a 31,238 841,020 10.01%
00X Xxxxxxx Xxxxx Xx
Xxxxxxxxx 000000
MHE, Inc. 00-0000000 15,600 420,000 5.00%
00000 Xxxxx Xxxxx Xx
Xxxxx 000
Xxxxxxxxx, XX 00000
Xxxxxxx Xxx n/a 13,527 364,170 4.33%
00X Xxxxxxx Xxxxx Xx
Xxxxxxxxx 000000
Xxxxxxx Xxxxxx Xxxxxx ###-##-#### 13,000 350,000 4.17%
00000 Xxxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Xxxxxxx X. XxXxxx ###-##-#### 13,000 350,000 4.17%
0000 Xxxxxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Xxxxxxx Xxxxxx ###-##-#### 7,137 192,150 2.29%
0000 Xxxxx Xxxx Xxxxx
Xxxx Xxxxx. XX 00000
Invision, LLC 00-0000000 7,137 192,150 2.29%
c/o Xxxxxxx Xxxxxxx
000 Xxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
11
NUMBER OF MAXD SERIES A NUMBER OF MAXD COMMON
PREFERRED SHARES TO BE SHARES TO BE ISSUED TO
ISSUED TO SHAREHOLDER OR SHAREHOLDER OF IMAGE
NAME & ADDRESS TAX IDENTIFICATION # IMAGE DESIGNEE DESIGNEE PERCENT OWNERSHIP
-----------------------------------------------------------------------------------------------------------------------------
Xxx Xxxxxx Xxxxx ###-##-#### 5,200 140,000 1.67%
000 Xxxxxx Xxxx
Xxxxxxxxx, XX 00000
Xxxxx Xxxxxxx ###-##-#### 4,303 115,850 1.38%
00 Xxxxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
SIS Netrepreneur Ventures
Corp. n/a 4,290 115,500 1.37%
XX Xxx 000
Offshore Incorporation Center
Road Town, Tortola
British Virgin Islands
Xxxxx Xxxxx ###-##-#### 0 300,000 1.25%
000 Xxxx 00xx Xxxxxx,
Xxxxx 0X
Xxx Xxxx, XX 00000
Xxxx Xxxxxxx Xxxxxx n/a 2,623 70,650 0.76%
00 Xxxxxxxx Xxxxxxxx
Xxxxxx, Xxxxxxx XX0X0XX
KT Ventures 00-0000000 2,600 70,000 0.76%
00 Xxxxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
Xxxxx Xxxxxx ###-##-#### 2,600 70,000 0.83%
00000 Xxxxxxx Xxxx Xxxxx
Xxxxxxxxx, XX 00000
Xxxxx XxXxxxx n/a 2,381 64,070 0.76%
00X Xxxxxxx Xxxxx Xx
Xxxxxxxxx 000000
TriPoint, Inc. n/a 1,179 31,770 0.38%
00000 Xxxxx Xxxxx Xxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Xxxxxxx Xxxxx ###-##-#### 943 25,350 0.30%
00000 Xxxxxxxxxxxx Xxxxx
Xxxxx Xxxxx, XX 00000
Global Securites Corp (ITF Midcourt) n/a 812 21,880 0.26%
BM Xxx 0000
00 Xxx Xxxxxxxxxxx Xxxxxx
Xxxxxx XXXX 0XX
Xxxxxx Xxxxxxxx ###-##-#### 812 21,880 0.26%
00000 Xxxxxx Xxxxx Xxxxx
Xxxxxx, XX 00000
12
NUMBER OF MAXD SERIES A NUMBER OF MAXD COMMON
PREFERRED SHARES TO BE SHARES TO BE ISSUED TO
ISSUED TO SHAREHOLDER OR SHAREHOLDER OF IMAGE
NAME & ADDRESS TAX IDENTIFICATION # IMAGE DESIGNEE DESIGNEE PERCENT OWNERSHIP
-----------------------------------------------------------------------------------------------------------------------------
Lindercrest Investments 00-0000000 572 15,400 0.18%
c/o Xxxxx Xxxxxxx
0000 Xxxxxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Human Service Group 00-0000000 487 13,150 0.16%
0000 Xxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Xxxxxxx X. La Puma ###-##-#### 325 8,750 0.10%
0000 X. Xxxxxxxx Xx
Xxxxxxx, XX 00000
Xxxxxxx X. Xxxx ###-##-#### 325 8,750 0.10%
000 X. Xxxxxx
Xxxxxx, XX 00000
Xxxxxxx Xxxxxxx, Jr ###-##-#### 325 8,750 0.10%
00000 Xxxxxx Xxxxxx Xxx
Xxxxxxxxxx, XX 00000
Xxxx Presburgar ###-##-#### 286 7,700 0.09%
0000 Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
Xxxxxx Xxxxxx n/a 203 5,490 0.07%
Xxxxxxxxxxxx 00
0000 Xxxxxx
Xxxxxxxxxxx
Xxxxxx X. Xxxxxx ###-##-#### 162 4,380 0.05%
00000 Xxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Xxxxx Xxxxxxx ###-##-#### 130 3,500 0.04%
0000 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Xxxxxxx Xxxxxxxxx ###-##-#### 130 3,500 0.04%
0000 Xxxxxxx Xxxx
Xxxxxxx, XX 00000
Xxxxxxx & Xxxxxxx Honing ###-##-#### 130 3,500 0.04%
00 Xxxxxx Xxxx
Xxxxxxxxx, XX 00000
Xx. Xxxxxx Xxxxx ###-##-#### 130 3,500 0.04%
0000 Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Xxxxxx Xxxxxx ###-##-#### 90 2,460 0.03%
000 Xxxxxxx Xxxx
XxXxxx, XX 00000
13
NUMBER OF MAXD SERIES A NUMBER OF MAXD COMMON
PREFERRED SHARES TO BE SHARES TO BE ISSUED TO
ISSUED TO SHAREHOLDER OR SHAREHOLDER OF IMAGE
NAME & ADDRESS TAX IDENTIFICATION # IMAGE DESIGNEE DESIGNEE PERCENT OWNERSHIP
-----------------------------------------------------------------------------------------------------------------------------
Xxxxx Xxxxx ###-##-#### 65 1,750 0.02%
0000 Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Xxxxxx Xxxxxxx ###-##-#### 65 1,750 0.02%
0000 Xxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Xxxxxxxxx O/Naghten ###-##-#### 41 1,070 0.01%
0000 X. Xxxxxxxx
Xxxxx Xxxxxx, XX 00000
Xxxxxx Xxxxx ###-##-#### 27 730 0.01%
0000 0xx Xxxxxx, Xxxxxxxxx 000
Xxxxx Xxxxxx, XX 00000
14
EXHIBIT B TO SHARE EXCHANGE AGREEMENT
Number of MAXD
Options to be issued
to Option holders
-----------------
Employees:
Xx. Xxxxxxxxxx Xxxxxxxx 2,500,000
Xxxxx XxXxxx 500,000
Xxxxx Xxxxx 500,000
Xxxx Xxxxxxxxx 420,000
Xxxxxxx Xxxxxx 300,000
Xxxxxxx Xxxxxxx 160,000
Xxxxxxx Xxxxxx 160,000
Xxxxx Xxxxxxx 100,000
Xxxxx Xxxxxx 50,000
Xxx Xxxxxx Xxxxx 50,000
Xxxxx Xxxxx 10,000
Xxxxxxx Xxx 10,000
Board (nonqualified):
Riz Khan 500,000
Others (nonqualified):
Xxxxx Xxxx 200,000
IC Capital, LLC 60,000
Xxxxx XxXxxxx 50,000
Warrants
Xxxxxxxx X. Xxxx 12,500
--------------
All options and Warrants 5,582,500
==============
15
EXHIBIT C TO SHARE EXCHANGE AGREEMENT
CERTIFICATE OF DESIGNATION OF
RIGHTS AND PREFERENCES OF
SERIES A PREFERRED STOCK OF
MAX DEVELOPMENT, INC.
Max Development, Inc., a corporation organized and existing under the laws of
the State of Colorado (the "Corporation"), hereby certifies as follows:
FIRST: That the name of the Corporation is Max Development, Inc.
SECOND: That the Certificate of Incorporation of the Corporation authorizes the
issuance of 1,000,000 shares of preferred stock, with the Board of Directors of
the Corporation authorized to establish the rights and preferences thereof in
accordance with Colorado Business Corporation Act.
THIRD: That, on November 15, 2001, the Board of Directors of the Corporation
duly adopted resolutions setting forth the rights and preferences of the Series
A Preferred Stock.
FOURTH: That the rights and preferences of the Series A Preferred Stock shall be
as follows:
1. DESIGNATION, AMOUNT, PAR VALUE, AND RANK. The Company hereby
designates the issuance of a series of Preferred Stock to be called the "Series
A Convertible Preferred Stock" (the "Series A Preferred Stock"). The total
number of shares of Series A Preferred Stock that the corporation shall have the
authority to issue is 900,000. Each share of Series A Preferred Stock shall have
a par value of $.01 per share.
2. VOTING RIGHTS. The holder of each share of the Series A Preferred
Stock shall be entitled to the number of votes equal to the number of shares of
Common Stock into which such share of Series A Preferred Stock could be
converted on the record date set for purposes of determining the shares entitled
to vote at any regular, annual, or special meeting of shareholders of the
Company, and shall have voting rights and powers equal to the voting rights and
powers of the Common Stock (except as otherwise expressly provided herein or as
required by law, voting together with the Common Stock as a single class) and
shall be entitled to notice of any shareholders' meeting in accordance with the
Bylaws of the Company. Fractional votes shall not, however, be permitted and any
fractional voting rights resulting from the above formula (after aggregating all
shares into which shares of Series A Preferred Stock held by each holder could
be converted) shall be rounded to the nearest whole number (with one-half being
rounded upward).
3. (a) VOLUNTARY CONVERSION. Each share of Series A Preferred Stock may
be, at the option of the holder, converted into fifty (50) shares of Common
Stock of the Company anytime after thirty (30) days of the issuance of the
Series A Preferred Stock, provided the Corporation has sufficient authorized
shares of Common Stock for conversion of all the then issued and outstanding
shares of Series A Preferred Stock.
(b) Before any holder of Series A Preferred Stock shall be entitled to
convert the same into shares of Common Stock, he or she shall surrender the
certificate or certificates thereof, duly endorsed, at the office of the Company
or of any transfer agent for such stock, and shall give written notice to the
Company at such office that he or she elects to convert the same and shall state
therein the name or names in which he or she wishes the certificate or
certificates for shares of Common Stock to be issued. Such conversion shall be
deemed to have been made immediately prior to the close of business on the date
of surrender of the shares of Series A Preferred Stock to be converted, and the
person or persons entitled to receive the shares of Common Stock issuable upon
such conversion shall be treated for all purposes as the record holder or
holders of such shares of Common Stock on such date. On the Conversion Date, all
rights with respect to the Series A Preferred Stock so converted shall
terminate, except any of the rights of the holders thereof upon surrender of
their certificate or certificates therefor to receive certificates for the
number of shares of Common Stock into which such Series A Preferred Stock has
been converted plus all declared but unpaid dividends. Upon surrender of such
certificates the Company shall issue and deliver to such holder, promptly at
such office and in its name as shown on such surrendered certificate or
16
certificates or as otherwise directed by the holder, a certificate or
certificates for the number of shares of common stock into which the shares of
the Series A Preferred Stock surrendered are convertible on the Conversion Date
and shall pay all declared but unpaid dividends in respect of the shares of
Series A Preferred Stock which are converted.
(c) CONVERSION BY THE COMPANY. The Company may at its discretion
convert all or part of the shares of Preferred Stock (at the conversion ratio
set forth above) into shares of Common Stock if the market value of the shares
of Common Stock exceeds $5.00 per share for ten (10) consecutive trading days,
provided the Corporation has sufficient authorized shares of Common Stock for
conversion of all the then issued and outstanding shares of Series A Preferred
Stock. Market value shall be the average of the bid and asked prices (or the
closing price if the stock is listed on the NASDAQ National Market System) on
any given date.
(d) Upon notice by the Company of Series A Preferred Stock conversion
into shares of Common Stock, shareholders of the Series A Preferred Stock shall
surrender the certificate or certificates thereof, duly endorsed, at the office
of the Company or of any transfer agent for such stock and shall state therein
the name or names in which he or she wishes the certificate or certificates for
shares of Common Stock to be issued. Such conversion shall be deemed to have
been made on the date of the notice by the Company to the shareholder. On the
Conversion Date, all rights with respect to the Series A Preferred Stock so
converted shall terminate, except any of the rights of the holders thereof upon
surrender of their certificate or certificates therefor to receive certificates
for the number of shares of Common Stock into which such Series A Preferred
Stock has been converted plus all declared but unpaid dividends. Upon surrender
of such certificates the Company shall issue and deliver to such holder,
promptly at such office and in its name as shown on such surrendered certificate
or certificates or in such other name as the holder shall designate in writing,
a certificate or certificates for the number of shares of common stock into
which the shares of the Series A Preferred Stock surrendered are convertible on
the Conversion Date and shall pay all declared but unpaid dividends in respect
of the shares of Series A Preferred Stock which are converted.
4. DIVIDENDS; RANKING. All of the preferential amounts to be paid to
the holders of the Series A Preferred Stock as provided in this Article Four
shall be paid or set apart for payment before the payment or setting apart for
payment of any amount for, or the distribution of, any property of the
Corporation to the holders of any other equity securities of the Corporation,
whether now or hereafter authorized.
5. PREFERENCE AS TO EARNINGS, ASSETS AND LIQUIDATION. The Series A
Preferred Stock shall be preferred as to both earnings and assets, and in the
event of liquidation, dissolution, or winding up of the Company, whether
voluntary or involuntary, the holders of the Series A Preferred Stock of the
Company shall be entitled, before any assets of the Company shall be distributed
among or paid over to the holders of the Common Stock, to be paid in full the
par value of $.01 per share of Series A Preferred Stock. After payment in full
of the above preferential rights of the holders of the Series A Preferred Stock,
the holders of the Series A Preferred Stock and Common Stock shall participate
ratably in the division of the remaining assets of the Company, so that from the
remaining assets the amount per share of Series A Preferred Stock distributed to
the holders of the Series A Preferred Stock shall equal the amount per share of
Common Stock distributed to the holders of the Common Stock.
6. AMENDMENT. Any term relating to the Series A Preferred Stock may be
amended and the observance of any term relating to the Series A Preferred Stock
may be waived (either generally or in a particular instance and either
retroactively or prospectively) only with the vote or written consent of holders
of at least fifty-one (51%) percent of all Series A Preferred Stock then
outstanding of the Company. Any amendment or waiver so effected shall be binding
upon the Company and all holders of Series A Preferred Stock.
7. ADJUSTMENTS FOR COMBINATIONS, SUBDIVISIONS RECLASSIFICATIONS AND
REORGANIZATIONS. (a) In the event that this Company at any time or from time to
time after the date hereof shall declare or pay any dividend on the Common Stock
payable in Common Stock or in any right to acquire Common Stock, or shall effect
a subdivision of the outstanding shares of Common Stock into a greater number of
shares of Common Stock (by stock split, reclassification or otherwise than by
payment of a dividend in Common Stock or in any right to acquire Common Stock),
or in the event the outstanding shares of Common Stock shall be combined or
consolidated, by reclassification or otherwise, into a lesser number of shares
of Common Stock, then the conversion ratio in effect immediately prior to such
event shall, concurrently with the effectiveness of such event, be
proportionately decreased or increased, as appropriate. In the event that this
Company shall declare or pay, without consideration, any dividend on the Common
Stock payable in any right to acquire Common Stock for no consideration then the
Company shall be deemed to have made a dividend payable in Common Stock in an
amount of shares equal to the maximum number of shares issuable upon exercises
of such rights to acquire Common Stock.
17
(b) If the Common Stock issuable upon conversion of the Series A
Preferred Stock shall be changed into the same or a different number of shares
of any other class or classes of stock, whether by capital reorganization,
reclassification or otherwise (other than a subdivision or combination of shares
provided for in 7(a) (above), the conversion ratio then in effect shall,
concurrently with the effectiveness of such reorganization or reclassification,
be proportionately adjusted so that the Series A Preferred Stock shall be
convertible into, in lieu of the number of shares of Common Stock which the
holders would otherwise have been entitled to receive, a number of shares of
such other class or classes of stock equivalent to the number of shares of
Common Stock that would have been subject to receipt by the holders upon
conversion of the Series A Preferred Stock immediately before that change.
8. NO RE-ISSUANCE OF SERIES A PREFERRED STOCK. No share or shares of
Series A Preferred Stock acquired by the Company by reason of conversion or
otherwise shall be reissued, and all such shares shall be canceled, retired and
eliminated from the shares which the Company shall be authorized to issue.
9. RESTRICTIONS AND LIMITATIONS. So long as any shares of Series A
Preferred Stock remain outstanding, the Company shall not, without the vote or
written consent by the holders of at least fifty-one (51%) percent of the then
outstanding shares of Series A Preferred Stock:
(a) Effect any reclassification, re-capitalization or other change with
respect to any outstanding shares of stock which results in the issuance of
shares of stock having any preference or priority as to dividend or redemption
rights, liquidation preferences, conversion rights or otherwise, superior to, or
on a parity with, any such preference or priority of the Series A Preferred
Stock, or
(b) Authorize or issue, or obligate itself to issue, any other equity
security senior to or on a parity with the Series A Preferred Stock as to
dividend or redemption rights, liquidation preferences, conversion rights or
otherwise, or create any obligation or security convertible into or exchangeable
for, or having any option rights to purchase, any such equity security which is
senior to or on a parity with the Series A Preferred Stock, or
(c) Amend, alter or repeal the preferences, special rights or other
powers of the Series A Preferred Stock, or otherwise amend the Company's
Certificate of Incorporation, so as to effect adversely the Series A Preferred
Stock.
10. MISCELLANEOUS PROVISIONS. (a) The Company shall not engage a
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, in order to avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Company, but will at all times in good faith assist in the
carrying out of all the provisions of and in the taking of all such action as
may be necessary or appropriate in order to protect the Conversion Rights of the
holders of the Series A Preferred Stock against impairment.
(b) The Company shall at all times reserve and keep available out of
its authorized but unissued shares of Common Stock, solely for the purpose of
effecting the conversion of the shares of the Series A Preferred Stock, such
number of its shares of Common Stock as shall from time to time be sufficient to
effect the conversion of all outstanding shares of the Series A Preferred Stock;
and if at any time the number of authorized but unissued shares of Common Stock
shall not be sufficient to effect the conversion of all then outstanding shares
of the Series A Preferred Stock, the Company will take such corporate action as
may, in the opinion of its counsel, be necessary to increase its authorized but
unissued shares of Common Stock to such number of shares as shall be sufficient
for such purpose, including, without limitation, engaging in best efforts to
obtain the requisite shareholder approval of any necessary amendment to its
Certificate of Incorporation.
(c) No fractional share shall be issued upon the conversion of any
share or shares of Series A Preferred Stock. All shares of Common Stock
(including fractions thereof) issuable upon conversion of more than one share of
Series A Preferred Stock by a holder thereof shall be aggregated for purposes of
determining whether the conversion would result in the issuance of any
fractional share. If, after the aforementioned aggregation, the conversion would
result in the issuance of a fraction of a share of Common Stock, the Company
shall, round the number of shares to be issued upon conversion up to the next
whole number.
18
(d) Any notice required by the provisions of this Designation to be
given to the holders of shares of Series A Preferred Stock shall be deemed given
if deposited in the United States mail, postage prepaid, and addressed to each
holder of record at his address appearing on the books of the Company.
IN WITNESS WHEREOF, the undersigned, being the Chief Executive Officer
and President of the Company, has executed these Articles this 15th day of
November, 2001.
/s/ Xxxxx Xxxxx
--------------------------------
Xxxxx Xxxxx,
Chief Executive Officer
19
EXHIBIT D TO SHARE EXCHANGE AGREEMENT
AGREEMENT TO APPOINT SHAREHOLDERS REPRESENTATIVE
AGREEMENT made this 15th day of November, 2001, by and between the
Shareholders of Image World Media, Inc. (the "Shareholders") and Xxxx Xxxxxxxxx
(the "Shareholders Representative").
RECITALS
A. The Shareholders currently own 22,845,000 shares of Image World
Media, Inc. common stock (the "Image Stock") and constitute all the shareholders
of Image World Media, Inc. (the "Company");
B. The Shareholders wish to enter into a Share Exchange Agreement (the
"Share Exchange Agreement") with Max Development, Inc. ("MAXD"), pursuant to
which MAXD will purchase all of the issued and outstanding shares of the
Company's common stock from the Shareholders in exchange for 293,083 shares of
MAXD Series A Convertible Preferred Stock (the "Preferred Stock") and 8,190,850
shares of Common Stock;
C. It is the desire of the Shareholders to provide for a representative
to negotiate and enter into the Share Exchange Agreement on their behalf.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants contained herein, the parties agree as follows:
1. APPOINTMENT OF SHAREHOLDERS REPRESENTATIVE.
------------------------------------------
The parties to this Agreement hereby agree to the appointment of Xxxx Xxxxxxxxx
(the "Shareholders Representative") as representative of the parties to this
Agreement, for the purpose of negotiating and entering into the Share Exchange
Agreement on their behalf.
2. ESCROW AND DISBURSEMENT OF SHARES BY REPRESENTATIVE.
---------------------------------------------------
(a) At the Closing of the Share Exchange Agreement, MAXD will provide or cause
to be provided the Preferred Stock to the Shareholders Representative.
(b) The Shareholders Representative shall, within a reasonable period of time
following the Closing, forward the shares of the Preferred Stock to the
Shareholders on a pro rata basis, in the same proportion as the percentage of
their ownership interest in the IMAGE Stock, as set forth on EXHIBIT A annexed
hereto. Any fractional shares that will result due to such pro rata distribution
will be rounded up to the next highest whole number.
20
3. REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS.
----------------------------------------------
(a) The Shareholders agree and understand that they are appointing the
Shareholders Representative to negotiate the Share Exchange Agreement on their
behalf and that, as a result, the Shareholders Representative may bind them to
the terms of such agreement in accordance with his reasonable judgement.
(b) The Shareholders agree and understand that the Shareholders Representative
may agree to representations, warranties and covenants on their behalf in
connection with the Share Exchange for which they may be subject to liability or
damages in the future should they breach such representations, warranties or
covenants. Each Shareholder hereby ratifies and affirms each representation and
warranty made by the Shareholders in the Share Exchange Agreement. Each
Shareholder acknowledges receipt of MAXD's Form 10-KSB for fiscal year ended
December 31, 2000, and MAXD's Form 10-QSB for the six months ended June 30,
2001.
(c) The Shareholders agree and understand that they will have no right to review
the final Share Exchange Agreement prior to its execution on their behalf by the
Shareholders Representative and hereby waive all right to such review.
(d) Each Shareholder represents that he or she, or if an entity, it, is
"accredited" as that term is defined in the Securities Act of 1933 and the rules
and regulations of the Securities and Exchange Commission.
4. INDEMNIFICATION.
---------------
The Shareholders and the Company shall, to the fullest extent legally
permissible, indemnify the Shareholders Representative against any and all
liabilities and expenses incurred in connection with the defense or disposition
of any action, suit, or other proceeding by reason of the Shareholders
Representative having served in his capacity with respect to this Agreement, the
Share Exchange Agreement and any ancillary agreements thereto; except with
respect to any matter as to which the Shareholders Representative shall have
been adjudicated in any proceeding not to have acted in good faith in the
reasonable belief that his action was in the best interest of the parties
hereto.
5. GENERAL PROVISIONS.
------------------
(a) This agreement shall be governed by and under the laws of the State of
Maryland, USA without giving effect to conflicts of law principles. If any
provision hereof is found invalid or unenforceable, that part shall be amended
to achieve as nearly as possible the same effect as the original provision and
the remainder of this agreement shall remain in full force and effect.
(b) Any dispute arising under or in any way related to this agreement shall be
submitted to binding arbitration by the American Arbitration Association in
accordance with the Association's commercial rules then in effect. The
arbitration shall be conducted in the state of Maryland. The arbitration shall
be binding on the parties and the arbitration award may be confirmed by any
court of competent jurisdiction. However, any dispute regarding the Share
Exchange Agreement shall be subject to Section 15(b) of the Share Exchange
Agreement.
(c) This agreement constitutes the entire agreement and final understanding of
the parties with respect to the subject matter hereof and supersedes and
terminates all prior and/or contemporaneous understandings and/or discussions
between the parties, whether written or verbal, express or implied, relating in
any way to the subject matter hereof. This agreement may not be altered,
amended, modified or otherwise changed in any way except by a written agreement,
signed by both parties.
(d) This agreement is entered into by the parties hereto for their exclusive
benefit.
(e) Any notice or other communication pursuant hereto shall be given to a party
at its address set forth in SCHEDULE A annexed hereto, by (i) personal delivery,
(ii) commercial overnight courier with written verification of receipt, or (iii)
registered or certified mail. If so mailed or delivered, a notice shall be
deemed given on the earlier of the date of actual receipt or three (3) days
after the date of authorized delivery.
21
(f) This agreement may be executed in counterparts, each one of which shall
constitute an original and all of which taken together shall constitute one
document.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
duly executed as of the date first written above.
Image World Media, Inc.
By: /s/ Xxxx Xxxxxxxxx
-------------------------
Xxxx Xxxxxxxxx,
President
Shareholders Representative
/s/ Xxxx Xxxxxxxxx
-----------------------------
Xxxx Xxxxxxxxx
THE SHAREHOLDERS:
/s/ Xxxxx XxXxxx
------------------------------
Xxxxx XxXxxx
/s/ Xxxxx Xxxxx
------------------------------
Xxxxx Xxxxx
/s/ Xxxxxxx Xxx
------------------------------
Xxxxxxx Xxx
/s/ Xxxxx XxXxxxx
------------------------------
Xxxxx XxXxxxx
/s/ Xxxx Xxxxxxx Xxxxxx
------------------------------
Xxxx Xxxxxxx Xxxxxx
/s/ SIS Netrepreneur Ventures Corp.
------------------------------
SIS Netrepreneur Ventures Corp.
/s/ Xxxxxxx XxXxxx
------------------------------
Xxxxxxx XxXxxx
/s/ Xxxxx Xxxxxxx for Lindercrest Investments
------------------------------
Lindacrest Investments C/o Xxxxx Xxxxxxx
/s/ Xxxx Xxxxxxxxxx
------------------------------
Xxxx Xxxxxxxxxx
22
/s/ Global Entertainment Holdings
------------------------------
Global Entertainment Holdings
/s/ TriPoint, Inc.
------------------------------
TriPoint, Inc.
/s/ KT Ventures
------------------------------
KT Ventures
/s/ MHE Inc.
------------------------------
MHE, Inc.
/s/ Invision, LLC
------------------------------
Invision, LLC
/s/ Xxxxxxx Xxxxxx
------------------------------
Xxxxxxx Xxxxxx
/s/ Xxxxx Xxxxxxx
------------------------------
Xxxxx Xxxxxxx
/s/ Xxxxx Xxxxx
------------------------------
Xxxxx Xxxxx
/s/ Xxxxx Xxxxxx
------------------------------
Xxxxx Xxxxxx
/s/ Xxx Xxxxxx Xxxxx
------------------------------
Xxx Xxxxxx Xxxxx
/s/ Xxxxxx Xxxxxxx
------------------------------
Xxxxxx Xxxxxxx
/s/ Xxxxxxx Xxxxxxx, Jr.
------------------------------
Xxxxxxx Xxxxxxx, Jr.
/s/ Xxxxxxx Xxxxx
------------------------------
Xxxxxxx Xxxxx
23
/s/ Xxxxxx Xxxxxxxx
------------------------------
Xxxxxx Xxxxxxxx
/s/ Xxxxxx Xxxxxx
------------------------------
Xxxxxx Xxxxxx
/s/ Xxxxxx Xxxxxx
------------------------------
Xxxxxx Xxxxxx
/s/ Xxxxxx Xxxxxx
------------------------------
Xxxxxx Xxxxxx
/s/ Xxxxxx Xxxxx
------------------------------
Xxxxxx Xxxxx
/s/ Xxxxx Xxxxx
------------------------------
Xxxxx Xxxxx
/s/ Xxxxxxxxx O'Naghten
------------------------------
Xxxxxxxxx O'Naghten
/s/ Human Services Group
------------------------------
Human Services Group
/s/ Global Securities Corp (ITF MidCourt)
------------------------------
Global Securities Corp (ITF MidCourt)
/s/ Xxxxxxx Xxxxxxxxx
------------------------------
Xxxxxxx Xxxxxxxxx
/s/ Xxxxxx Xxxxx
------------------------------
Xxxxxx Xxxxx
24
/s/ Xxxxxxx XxXxxx
------------------------------
Xxxxxxx XxXxxx
/s/ Xxxxxxx Xxxx
------------------------------
Xxxxxxx Xxxx
/s/ Xxxxxx Xxxxxx
------------------------------
Xxxxxx Xxxxxx
25
