COMMON STOCK PURCHASE AGREEMENT
This AGREEMENT, entered into as of the 24th day of October, 2006 (the
"Agreement"), by and among Xxxxxx Capital Master Fund, Ltd. (the "Purchaser"),
MPLC, Inc., a Delaware corporation, (the "Seller" or the "Company") and the
stockholders of the Company listed on Exhibit A attached hereto (collectively
the "Stockholders" and individually, each a "Stockholder").
WHEREAS, the Seller has authorized the sale and issuance of an aggregate
of 69,750,000 shares (the "Shares") of the Seller's common stock, $0.01 par
value, ("Common Stock") to the Purchaser representing 93% of the issued and
outstanding Common Stock as of the Closing (as defined below), such sale and
issuance to be consummated simultaneously with the redemption of 23,448,870
shares of Common Stock from the Stockholders (the "Redemption Shares"); and
WHEREAS, the Company desires to redeem the Redemption Shares and the
Stockholders desire to have the Redemption Shares owned by such Stockholder as
set forth on Exhibit A, as applicable, redeemed by the Company on the terms and
conditions set forth herein; and.
WHEREAS, Purchaser desires to purchase the Shares on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the premises, and the mutual covenants
and agreements herein contained, the Purchaser, the Seller and the Stockholders
hereby agree as follows:
ARTICLE 1
SALE AND PURCHASE OF THE SHARES
Section 1.1 Sale and Purchase. Subject to the terms and conditions hereof,
at the Closing (as hereinafter defined) the Seller hereby agrees to issue and
sell to Purchaser and Purchaser agrees to purchase from the Seller the Shares
for an aggregate purchase price of seven hundred fifty thousand ($750,000)
dollars (the "Purchase Price"). The Company hereby directs that the Purchase
Price be paid for the Company's account as follows: (a) $547,719.75 to the
Stockholders pro rata in proportion to the number of shares listed opposite each
Stockholder's name on Exhibit A, and (b) $202,280.25 to Xxxxx Xxxx in payment of
any and all liabilities of the Company owned to Xxxxx Xxxx.
Section 1.3 Redemption. Subject to the terms and conditions hereof, at the
Closing the Company hereby agrees to redeem the Redemption Shares and the
Stockholders agree to sell to the Company the Redemption Shares for an aggregate
purchase price of $547,719.75 (the "Redemption Price") payable to the
Stockholders pro rata in proportion to the number of shares listed opposite each
Stockholder's name on Exhibit A.
ARTICLE 2
CLOSING AND DELIVERY
Section 2.1 Closing Date. Upon the terms and subject to the conditions set
forth herein, the consummation of the (a) the redemption of the Redemption
Shares and (b) the issuance of the Shares to the Purchaser (the "Closing") shall
be held (the "Closing Date") at such time as may be determined in the mutual
discretion of the parties. The Closing shall take place at the offices of
Seller's Counsel, Xxxxxx Xxxxxx Xxxxxxxx XXX, Xxx Xxxx, Xxx Xxxx 00000, or by
the exchange of documents and instruments by mail, courier, telecopy and wire
transfer to the extent mutually acceptable to the parties hereto.
Section 2.2 Deliveries at Closing. At the Closing, subject to the terms
and conditions hereof, (a) the Seller will deliver to Purchaser certificates
representing the Shares to be purchased at the Closing by Purchaser, against
payment of the Purchase Price by wire transfer at the time of Closing, (b) the
Stockholders will deliver to the Company certificates representing the
Redemption Shares to be redeemed at the Closing by the Company in negotiable
form, duly endorsed in blank, or with stock transfer powers attached thereto,
against payment of the Redemption Price by wire transfer at the time of Closing,
(c) the Seller will deliver to Purchaser (i) the resignations of the officers of
the Company, (ii) the resignation of Xxx Xxxxx as a director of the Company and
(iii) the written appointment of one or more persons designated by Purchaser as
successor officers and directors, and (d) the Stockholders will deliver to
Purchaser the books and records of the Company.
Section 2.3 Company Liabilities. On or before the Closing Date (i) Xxxxx
Xxxx shall assume, and thereafter timely pay and discharge, each liability of
the Company denoted on the Disclosure Schedule (hereinafter defined) as an
"Assumed Liability," such assumption to be effected with such forms of
assumption reasonably acceptable to the Purchaser, and the liability to Xxxxx
Xxxx to be increased by a corresponding amount in consideration for such
assumption, and (ii) the Company shall pay and discharge the outstanding loan to
Xxxxx Xxxx listed on the Disclosure Schedule, such payment to be made through
application of the Purchase Price as described in Section 1.1(b) above. Those
liabilities denoted on the Disclosure Schedule as "Retained Liabilities" shall
be retained by the Company and thereafter timely paid and discharged. Giving
effect to the foregoing, it is the parties intent that the Company shall, on the
Closing Date, (i) have no assets other than the cash and pre-paid expenses
listed on the Disclosure Schedule and (ii) have no liabilities other than the
Retained Liabilities.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER AND STOCKHOLDERS
Except as set forth under the corresponding section of the disclosure
schedules (the "Disclosure Schedules") attached hereto as Exhibit B, which
Disclosure Schedules shall be deemed a part hereof, the Seller and the
Stockholders hereby, jointly and severally, represent and warrant to the
Purchaser (and to the Company with respect to the representations and warranties
by the Stockholders set forth in Section 3.2(b)) as of the Closing Date that:
Section 3.1 Existence and Power. The Seller is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware and has all corporate powers and all governmental licenses,
authorizations, permits, consents and approvals required to carry on its
business as now conducted, except where a failure to so possess would not result
in a Material Adverse Effect upon the Seller. The Seller has heretofore
delivered to the Purchaser true and complete copies of its Certificate of
Incorporation, as amended, and By-laws, each as currently in effect.
Section 3.2 Authorization; No Agreements. (a) Subject to the satisfaction
of the terms and conditions set forth herein, the execution, delivery and
performance by the Seller of this Agreement, the performance of its obligations
hereunder, and the consummation of the transactions contemplated hereby are
within the Seller's powers. This Agreement has been duly and validly executed
and delivered by the Seller and is a legal, valid and binding obligation of the
Seller, enforceable against it in accordance with its terms. The execution,
delivery and performance by the Seller of this Agreement does not violate any
contractual restriction contained in any agreement which binds or affects or
purports to bind or affect the Seller. The Seller is not a party to any
agreement, written or oral, creating rights in respect of any of such Shares in
any third party or relating to the voting of its Common Stock. Seller is not a
party to any outstanding or authorized options, warrants, rights, calls,
commitments, conversion rights, rights of exchange or other agreements of any
character, contingent or otherwise, providing for the purchase, issuance or sale
of any of the Shares, and there are no restrictions of any kind on the transfer
of any of the Shares other than (a) restrictions on transfer imposed by the
Securities Act of 1933, as amended (the "Securities Act") and (b) restrictions
on transfer imposed by applicable state securities or "blue sky" laws. Those
creditors listed in the Disclosure Schedules are the only individuals or
entities with any claims against the Company. Other than as set forth on the
Disclosure Schedules, the Company does not have any obligations or liabilities
of any nature (matured or unmatured, fixed or contingent).
2
(b) Stockholders are the record and beneficial owner of their respective
Redemption Shares and have sole power and authority over the disposition of
their respective Redemption Shares. The Redemption Shares are free and clear of
any liens, claims, encumbrances, and charges. The Redemption Shares have not
been sold, conveyed, encumbered, hypothecated or otherwise transferred by
Stockholders except pursuant to this Agreement. Stockholders have the legal
right to enter into and to consummate the transactions contemplated hereby and
otherwise to carry out their obligations hereunder. This Agreement constitutes
the valid and binding obligation of Stockholders. The execution, delivery and
performance by the Stockholders of this Agreement does not violate any
contractual restriction contained in any agreement which binds or affects or
purports to bind or affect the Stockholders. No Stockholder is a party to any
agreement, written or oral, creating rights in respect of any of such Redemption
Shares in any third party or relating to the voting of its Common Stock. No
Stockholder is a party to any outstanding or authorized options, warrants,
rights, calls, commitments, conversion rights, rights of exchange or other
agreements of any character, contingent or otherwise, providing for the
purchase, issuance or sale of any of the Redemption Shares, and there are no
restrictions of any kind on the transfer of any of the Redemption Shares other
than (a) restrictions on transfer imposed by the Securities Act and (b)
restrictions on transfer imposed by applicable state securities or "blue sky"
laws.
Section 3.3 Capitalization.
(a) The Company is authorized by its Certificate of Incorporation to issue
an aggregate of 76,000,000 shares of capital stock, of which 75,000,000 are
shares of common stock, par value $.01 per share (the "Common Stock") and
1,000,000 are shares of preferred stock, par value $.10 per share (the
"Preferred Stock"). As of the date hereof, and as of the Closing Date,
28,698,870 shares of Common Stock and no shares of Preferred Stock are, and will
be, issued and outstanding. All of the issued and outstanding shares of capital
stock of the Company have been duly authorized and validly issued and are fully
paid and nonassessable. All of the issued and outstanding shares of capital
stock of the Company have been offered, issued and sold by the Company in
compliance with all applicable federal and state securities laws. No securities
of the Company are entitled to preemptive or similar rights, and no Person has
any right of first refusal, preemptive right, right of participation, or any
similar right to participate in the transactions contemplated hereby. Except as
a result of the purchase and sale of the Shares, there are no outstanding
options, warrants, script rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities, rights or obligations
convertible into or exchangeable for, or giving any Person any right to
subscribe for or acquire, any shares of Common Stock, or contracts, commitments,
understandings or arrangements by which the Company is or may become bound to
issue additional shares of Common Stock, or securities or rights convertible or
exchangeable into shares of Common Stock. The issuance and sale of the Shares
will not obligate the Company to issue shares of Common Stock or other
securities to any Person (other than the Purchaser) and shall not result in a
right of any holder of securities of the Company to adjust the exercise,
conversion, exchange or reset price under such securities.
(b) Subject to the satisfaction of the terms and conditions set forth
herein, the Shares shall be duly authorized for issuance, when delivered in
accordance with the terms of this Agreement, and shall be validly issued, fully
paid and non-assessable and the sale thereof shall not be subject to any
preemptive or other similar right.
3
Section 3.4 SEC Reports; Financial Statements. Since January 25, 2005, the
Seller has filed all reports required to be filed by it under the Securities Act
and the Securities Exchange Act of 1934, as amended (the "Exchange Act") (the
foregoing materials being collectively referred to herein as the "SEC Reports"),
on a timely basis or has received a valid extension of such time of filing and
has filed any such SEC Reports prior to the expiration of any such extension.
The Seller has identified and made available to the Purchaser a copy of all
filed SEC Reports. As of their respective dates, the SEC Reports complied in all
material respects with the requirements of the Securities Act and the Exchange
Act and the rules and regulations of the Securities and Exchange Commission (the
"Commission") promulgated thereunder, and none of the SEC Reports, when filed,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The financial statements of the Seller included in the SEC Reports
comply in all material respects with applicable accounting requirements and the
rules and regulations of the Commission with respect thereto as in effect at the
time of filing. Such financial statements have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis during
the periods involved ("GAAP"), except as may be otherwise specified in such
financial statements or the notes thereto, and fairly present in all material
respects the financial position of the Seller and its consolidated subsidiaries
as of and for the dates thereof and the results of operations and cash flows for
the periods then ended, subject, in the case of unaudited statements, to normal,
year-end audit adjustments.
Section 3.5 No Conflicts. Subject to the satisfaction of the terms and
conditions set forth herein, the execution, delivery and performance of this
Agreement and the transactions contemplated hereby do not and will not: (i)
conflict with or violate any provision of the Company's Certificate of
Incorporation, By-laws or other organizational or charter documents, or (ii)
conflict with, or constitute a default (or an event that with notice or lapse of
time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation (with or without notice,
lapse of time or both) of any agreement, credit facility, debt or other
instrument (evidencing a Company debt or otherwise) or other understanding to
which the Company is a party or by which any property or asset of the Company is
bound or affected or (iii) result in a violation of any law, rule, regulation,
order, judgment, injunction, decree or other restriction of any court or
governmental authority to which the Company is subject (including federal and
state securities laws and regulations), or by which any property or asset of the
Company is bound or affected.
Section 3.6 Filings, Consents and Approvals. Other than any applicable
Current Report on Form 8-K under the Exchange Act of 1934, as amended, any
Section 13 or 16 filings required by the Stockholders and the Information
Statement contemplated by Section 5.1(b) hereof, neither the Company nor any
Stockholder is required to obtain any consent, waiver, authorization or order
of, give any notice to, or make any filing or registration with, any court or
other federal, state, local or other governmental authority or other Person in
connection with the execution, delivery and performance of this Agreement. The
Company has timely filed all tax returns required to be filed and has paid all
taxes shown thereon to be due.
Section 3.7 Compliance; No Actions. To the knowledge of the Stockholders,
neither the Seller nor the Stockholders: (i) is in default under or in violation
of (and no event has occurred that has not been waived that, with notice or
lapse of time or both, would result in a default by the Seller or the
Stockholders under), nor has the Seller or the Stockholders received notice of a
claim that any is in default under or that it is in violation of, any indenture,
loan or credit agreement or any other agreement or instrument to which it is a
party or by which it or any of its properties is bound (whether or not such
default or violation has been waived), (ii) is not in violation of any order of
any court, arbitrator or governmental body and (iii) is not and has not been in
violation of any statute, rule or regulation of any governmental authority.
There is no private or governmental action, suit, proceeding, claim, arbitration
or investigation pending before any agency, court or tribunal, foreign or
domestic, or, to the knowledge of the Stockholders, threatened against the
Company or any Stockholder or any of its or their properties or any of its or
their officers or directors (in their capacities as such). There is no judgment,
decree or order against the Company or any Stockholder to the knowledge of the
Stockholders, that could prevent, enjoin, alter or delay any of the transactions
contemplated by this Agreement.
4
ARTICLE 4
REPRESENTATIONS OF THE PURCHASER
The Purchaser represents and warrants to the Seller and Stockholders, as
follows:
Section 4.1 Execution and Delivery. The execution, delivery and
performance by the Purchaser of this Agreement is within the Purchaser's powers
and does not violate any contractual restriction contained in any agreement
which binds or affects or purports to bind or affect the Purchaser. The
Purchaser's financial resources are sufficient to enable it to purchase the
Shares upon the satisfaction of the terms and conditions set forth herein.
Section 4.2 Binding Effect. This Agreement, when executed and delivered by
the Purchaser shall be irrevocable and will constitute the legal, valid and
binding obligation of the Purchaser enforceable against the Purchaser in
accordance with its terms, except as may be limited by applicable bankruptcy,
insolvency, moratorium and other laws of general application affecting
enforcement of creditors' rights generally or general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
Section 4.3 Investment Purpose. The Purchaser hereby represents that it is
purchasing the Shares for its own account, with the intention of holding the
Shares, with no present intention of dividing or allowing others to participate
in this investment or of reselling or otherwise participating, directly or
indirectly, in a distribution of the Shares, and shall not make any sale,
transfer, or pledge thereof without registration under the Securities Act and
any applicable securities laws of any state unless an exemption from
registration is available under those laws. The Shares delivered to the
Purchaser shall bear a restrictive legend indicating that they have not been
registered under the Securities Act of 1933 and are "restricted securities" as
that term is defined in Rule 144 under the Act.
Section 4.4 Investment Representation. The Purchaser represents that it
has adequate means of providing for its current needs and has no need for
liquidity in this investment in the Shares. The Purchaser represents that it is
an "accredited investor" as defined in Rule 501(a) of Regulation D promulgated
under the Securities Act. The Purchaser has no reason to anticipate any material
change in its financial condition for the foreseeable future. The Purchaser is
financially able to bear the economic risk of this investment, including the
ability to hold the Shares indefinitely or to afford a complete loss of its
investment in the Shares.
Section 4.5 Investment Experience. The Purchaser has such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of an investment in the Shares.
Section 4.6 Opportunity to Ask Questions. The Purchaser has had a full and
fair opportunity to make inquiries about the terms and conditions of this
Agreement, to discuss the same and all related matters with its own independent
counsel, accountants and tax advisers. The Purchaser has been given the
opportunity to ask questions of, and receive answers from the Seller concerning
the terms and conditions of this Agreement and to obtain such additional written
information about the Seller to the extent the Seller possesses such information
or can acquire it without unreasonable effort or expense. Notwithstanding the
foregoing, the Purchaser has had the opportunity to conduct its own independent
investigation.
5
ARTICLE 5
COVENANTS
Section 5.1 Resignation and Appointment of the Company's Officers and
Directors.
Effective as of the Closing Date (i) the Stockholders will cause the
Company's officers to resign and be duly replaced by the Purchaser's designees;
and (ii) the Stockholders will cause the Purchaser's director designees to be
duly appointed.
Section 5.2 Exchange Act Filings. The Stockholders shall cause the Company
to file, in a timely manner, all SEC Reports required to be filed by the Company
prior to the Closing.
Section 5.3 Registration Rights. If at any time following the Closing
Date, the Company shall determine to prepare and file with the Commission a
registration statement relating to an offering for its own account or the
account of others under the Securities Act of any of its equity securities (a
"Registration Statement"), other than on Form S-4 or Form S-8 (each as
promulgated under the Securities Act), then the Company shall include in such
Registration Statement the shares of the Stockholders (i) if in a Registration
Statement in which shares of the Purchaser are included, then on a pro rata
basis along with such shares of Purchaser and (ii) if in a Registration
Statement in which shares of the Purchaser are not included, then to the
greatest extent reasonably practicable.
Section 5.4 Change of Office Address; Termination of Funding Arrangement.
The Purchaser acknowledges that, following the Closing, Xxxxx Xxxx shall not,
and shall not be obligated to, provide office space or services, or funds in the
form of loans or otherwise, to the Company.
ARTICLE 6
CONDITIONS PRECEDENT
Section 6.1 Conditions of Obligations of the Purchaser. The obligations of
the Purchaser are subject to the satisfaction of the following conditions, any
or all of which may be waived in whole or in part by the Purchaser:
(a) Representations and Warranties. Each of the representations and
warranties of the Company and the Stockholders set forth in this Agreement shall
be true and correct as of the Closing Date, as though made on and as of such
date.
(b) Compliance Certificate. Each of the Stockholders and the President of
the Seller shall deliver to the Purchaser at the Closing a certificate
certifying: (i) that there has been no material adverse change in the business,
affairs, prospects, operations, properties, assets or conditions of the Seller
since the date of this Agreement; (ii) that attached thereto is a true and
complete copy of the Seller's Certificate of Incorporation, as amended, as in
effect at the Closing; (iii) that attached thereto is a true and complete copy
of its By-laws as in effect at the Closing; and (iv) each of the representations
and warranties of such party set forth in this Agreement are true and correct as
of the Closing Date as though made on and as of the Closing Date; (v) that the
Company has no liabilities as of the Closing Date.
(c) Good Standing Certificate. The Seller shall have furnished the
Purchaser with good standing and existence certificates for the Seller from the
State of Delaware.
6
(d) Board of Directors Resolutions. The Purchaser shall have received
executed resolutions of the Board of Directors of the Seller approving this
Agreement and the transactions contemplated herein.
(e) Performance. Each of the Stockholders and the Seller shall have
performed and complied with all agreements, obligations and conditions contained
in this Agreement that are required to be performed or complied with by it on or
before the Closing.
(f) Resignation of Officers and Directors. The resignations contemplated
by Section 2.2(c) shall have become effective;
(g) Appointment of the Purchaser's Designees. The Purchaser's designees
for the officer and director positions of the Company shall have been duly
appointed.
(h) No Injunction. There shall not be in effect, at the Closing Date, any
injunction or other binding order of any court or other tribunal having
jurisdiction over the Stockholders or the Seller that prohibits the sale of the
Shares to the Purchaser.
(i) Deliveries. The Seller or the Stockholders, as applicable, shall have
delivered to Purchaser or the Company, as applicable, the items identified in
Section 2.2 hereof.
(j) Redemption. The redemption of the Redemption Shares shall have
occurred simultaneously with the Closing hereunder.
Section 6.2 Conditions of Obligations of the Seller and Stockholders. The
obligations of the Seller and Stockholders to effect the sale of the Shares or
Redemption Shares, as applicable, are subject to the following conditions, any
or all of which may be waived in whole or in part by the Seller or Stockholders,
as applicable:
(a) Representations and Warranties. Each of the representations and
warranties of the Purchaser set forth in this Agreement shall be true and
correct as of the Closing Date.
(b) Compliance Certificate. An authorized officer of the Purchaser shall
deliver to the Seller at the Closing a certificate certifying each of the
representations and warranties of such the Purchaser set forth in this Agreement
are true and correct as of the Closing Date as though made on and as of the
Closing Date.
(c) Performance. The Purchaser shall have performed and complied with all
agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by it or him on or before the Closing.
(d) No Injunction. There shall not be in effect, at the Closing Date, any
injunction or other binding order of any court or other tribunal having
jurisdiction over the Seller that prohibits the sale of the Shares to the
Purchaser.
ARTICLE 7
TERMINATION
Section 8.1 Termination. This Agreement may be terminated and the purchase
and sale of the Shares may be abandoned at any time prior to the Closing:
7
(a) by mutual written consent of the parties hereto;
(b) by either the Seller or the Purchaser if the Closing shall not have
occurred on or before October 31, 2006 (unless the failure to consummate the
transactions by such date shall be due to the action or failure to act of the
party seeking to terminate this Agreement);
(c) by the Purchaser if (i) the Seller or the Stockholders shall have
failed to timely comply in any material respect with any of the covenants,
conditions, terms or agreements contained in this Agreement to be complied with
or performed by it prior to the Closing Date, which breach is not cured within
ten (10) days if capable of cure; or (ii) any representations and warranties of
the Seller or Stockholders contained in this Agreement shall have been
materially false when made or on and as of the Closing Date as if made on and as
of Closing Date (except to the extent it relates to a particular date); or
(d) by the Seller if (i) the Purchaser shall have failed to timely comply
in any material respect with any of the covenants, conditions, terms or
agreements contained in this Agreement to be complied with or performed by it
prior to the Closing Date, which breach is not cured within ten (10) days if
capable of cure; or (ii) any representations and warranties of the Purchaser
contained in this Agreement shall have been materially false when made or on and
as of the Closing Date.
Section 7.2 Effect of Termination. In the event of the termination of this
Agreement pursuant to this Article 7, all further obligations of the parties
under this Agreement shall forthwith be terminated without any further liability
of any party to the other parties; provided, however, that nothing contained in
this Section 7.2 shall relieve any party from liability for any breach of this
Agreement. Upon termination of this Agreement for any reason, the Purchaser
shall promptly cause to be returned to Seller all documents and information
obtained in connection with this Agreement and the transactions contemplated by
this Agreement and all documents and information obtained in connection with the
Purchaser's investigation of the Seller's business, operations and legal
affairs, including any copies made by the Purchaser of any such documents or
information.
ARTICLE 8
INDEMNIFICATION
Section 8.1 Indemnification.
(a) Obligation of Stockholders to Indemnify. Stockholders agree to
indemnify, defend and hold harmless Purchaser (and its directors, officers,
employees, affiliates, stockholders, debenture holders, agents, attorneys,
successors and assigns) and, with respect to Losses (hereinafter defined) based
upon, arising out of or otherwise in respect of the representations and
warranties contained in Section 3.2(a), the Company, from and against all
losses, liabilities, damages, deficiencies, costs or expenses (including
interest, penalties and reasonable attorneys' and consultants' fees and
disbursements) (collectively, "Losses") based upon, arising out of or otherwise
in respect of any (i) inaccuracy in any representation or warranty of the
Stockholders contained in this Agreement or (ii) breach by the Stockholders of
any covenant or agreement contained in this Agreement; provided, however, that,
notwithstanding anything set forth herein, no Stockholder shall be obligated to
indemnify the Purchaser for Losses in excess of that portion of the Redemption
Price paid to such Stockholder, except that this limitation shall not apply in
the case of fraud or for breaches of the representations and warranties set
forth in Section 3.2(b).
(b) Obligation of Purchaser to Indemnify. Purchaser agrees to indemnify,
defend and hold harmless (x) the Stockholders from and against all Losses based
upon, arising out of or otherwise in respect of any (i) inaccuracy in any
representation or warranty of the Purchaser contained in this Agreement or (ii)
breach by the Purchaser of any covenant or agreement contained in this Agreement
and (y) the directors of the Company approving the transactions contemplated by
this Agreement from and against any Losses based upon, arising out of or
otherwise in respect of such approval by such directors.
8
(c) Notice and Opportunity to Defend. (a) Promptly after receipt by any
Person entitled to indemnity under this Agreement (an "Indemnitee") of notice of
any demand, claim or circumstances which, with the lapse of time, would or might
give rise to a claim or the commencement (or threatened commencement) of any
action, proceeding or investigation (an "Asserted Liability") that may result in
a Loss, the Indemnitee shall give notice thereof (the "Claims Notice") to any
other party (or parties) who is or may be obligated to provide indemnification
pursuant to Section 8.1(a) (the "Indemnifying Party"). The Claims Notice shall
describe the Asserted Liability in reasonable detail and shall indicate the
amount (estimated, if necessary and to the extent feasible) of the Loss that has
been or may be suffered by the Indemnitee.
(d) The Indemnifying Party may elect to compromise or defend, at its own
expense and by its own counsel, any Asserted Liability. If the Indemnifying
Party elects to compromise or defend such Asserted Liability, it shall within 30
days after the date the Claims Notice is given (or sooner, if the nature of the
Asserted Liability so requires) notify the Indemnitee of its intent to do so,
and the Indemnitee shall cooperate, at the expense of the Indemnifying Party, in
the compromise of, or defense against, such Asserted Liability. If the
Indemnifying Party elects not to compromise or defend the Asserted Liability,
fails to notify the Indemnitee of its election as herein provided or contests
its obligation to indemnify under this Agreement, the Indemnitee may pay,
compromise or defend such Asserted Liability and all reasonable expenses
incurred by the Indemnitee in defending or compromising such Asserted Liability,
all amounts required to be paid in connection with any such Asserted Liability
pursuant to the determination of any court, governmental or regulatory body or
arbitrator, and amounts required to be paid in connection with any compromise or
settlement consented to by the Indemnitee, shall be borne by the Indemnifying
Party. Except as otherwise provided in the immediately preceding sentence, the
Indemnitee may not settle or compromise any claim over the objection of the
Indemnifying Party. In any event, the Indemnitee and the Indemnifying Party may
participate, at their own expense, in (but the Indemnitee may not control) the
defense of such Asserted Liability. If the Indemnifying Party chooses to defend
any claim, the Indemnitee shall make available to the Indemnifying Party any
books, records or other documents within its control that are necessary or
appropriate for such defense.
(e) The parties hereto acknowledge and agree that, from and after the
Closing, the indemnification provided under this Article 8 shall be the sole and
exclusive remedy available to such parties for Losses arising out of or caused
by the breach of any of the representations, warranties, covenants or agreements
of the parties set forth in this Agreement or in any certificate delivered in
connection herewith.
ARTICLE 9
MISCELLANEOUS
Section 9.1 Notices. All notices, requests and other communications
hereunder shall be in writing and either delivered personally, telecopied or
sent by certified or registered mail, postage prepaid,
9
If to Purchaser:
Xxxxxx Management, LLC
0000 Xxxxxx xx xxx Xxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attn.: Xxx Xxxx
Fax: (000) 000-0000
with a copy to:
Xxxxx Xxxxx Xxxx Xxxxxx Xxxxxxx & Xxxxx, LLC
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn.: Xxxxxxx Xxxx, Esq.
Fax: 000-000-0000
If to any Stockholder:
c/o Xxxxx Xxxx
Xxxx Global LLC
0000 Xxxxxxxx, Xxxxx 000
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxx Rosenman LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxxxxx, Esq.
Fax: 000 000-0000
If to the Company:
To each of the Purchaser and the Stockholder in accordance with the above.
or such other address or fax number as any of the foregoing Persons may
hereafter specify for the purpose by notice to the parties hereto. All such
notices, requests and other communications shall be deemed received on the date
delivered personally or by overnight delivery service or telecopied or, if
mailed, five business days after the date of mailing if received prior to 5 p.m.
in the place of receipt and such day is a business day in the place of receipt.
Otherwise, any such notice, request or communication shall be deemed not to have
been received until the next succeeding business day in the place of receipt.
Section 9.2 Amendments; No Waivers.
(a) Any provision of this Agreement with respect to transactions
contemplated hereby may be amended or waived if, but only if, such amendment or
waiver is in writing and is signed, in the case of an amendment, by the
Stockholders, Seller and the Purchaser; or in the case of a waiver, by the party
against whom the waiver is to be effective.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
10
Section 9.3 Fees and Expenses. All costs and expenses incurred in
connection with this Agreement shall be paid by the party incurring such cost or
expense.
Section 9.4 Successors and Assigns. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided that the Purchaser shall have the
right to assign this Agreement to an affiliate or assignee of the Purchaser and
no other party hereto may assign, delegate or otherwise transfer any of its
rights or obligations under this Agreement without the consent of each other
party hereto, but any such transfer or assignment will not relieve the
appropriate party of its obligations hereunder.
Section 9.5 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to the principles of conflicts of law thereof.
Section 9.6 Jurisdiction. Any suit, action or proceeding seeking to
enforce any provision of, or based on any matter arising out of or in connection
with, this Agreement or the transactions contemplated hereby may be brought in
any federal or state court located in New York, New York, and each of the
parties hereby consents to the jurisdiction of such courts (and of the
appropriate appellate courts therefrom) in any such suit, action or proceeding
and irrevocably waives, to the fullest extent permitted by law, any objection
which it may now or hereafter have to the laying of the venue of any such suit,
action or proceeding in any such court or that any such suit, action or
proceeding which is brought in any such court has been brought in an
inconvenient forum. Process in any such suit, action or proceeding may be served
on any party anywhere in the world, whether within or without the jurisdiction
of any such court. Without limiting the foregoing, each party agrees that
service of process on such party as provided in Section 9.1 shall be deemed
effective service of process on such party. Each party hereto (including its
affiliates, agents, officers, directors and employees) hereby irrevocably
waives, to the fullest extent permitted by applicable law, any and all right to
trial by jury in any legal proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby.
Section 9.7 Counterparts; Effectiveness. This Agreement may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when each party hereto shall have received
counterparts hereof signed by all of the other parties hereto. No provision of
this Agreement is intended to confer upon any Person other than the parties
hereto any rights or remedies hereunder.
Section 9.8 Entire Agreement. This Agreement and the Exhibits and
Schedules hereto constitute the entire agreement between the parties with
respect to the subject matter of this Agreement and supersedes all prior
agreements and understandings, both oral and written, between the parties with
respect to the subject matter hereof.
Section 9.9 Captions. The captions herein are included for convenience of
reference only and shall be ignored in the construction or interpretation
hereof.
Section 9.10 Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated so
long as the economic or legal substance of the transactions contemplated hereby
is not affected in any manner materially adverse to any parties. Upon such a
determination, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner in order that the transactions contemplated
hereby be consummated as originally contemplated to the fullest extent possible.
11
Section 9.11 Definition and Usage.
For purposes of this Agreement:
"Material Adverse Effect" means any effect or change that is or
would be materially adverse to the business, operations, assets, prospects,
condition (financial or otherwise) or results of operations of the Company and
any of its subsidiaries, taken as a whole.
"Person" means an individual, corporation, partnership, limited
liability company, association, trust or other entity or organization, including
a government or political subdivision or an agency or instrumentality thereof.
Section 9.12 Representative. Each Stockholder hereby appoints Xxxxx Xxxx
as its duly appointed representative to act on behalf of such Stockholder in the
manner contemplated by this Agreement when any action herein calls for the
approval or other action of the Stockholders, and any act, approval or consent
of Xxxxx Xxxx in such capacity shall be deemed to be the act, approval or
consent of such Stockholder and no Person, including, without limitation, the
Purchaser, or any other person dealing with Xxxxx Xxxx in such capacity in the
manner contemplated by this Agreement, shall be required to enquire into the
authority of Xxxxx Xxxx as to such act, approval or consent, or otherwise deal
with an individual Stockholder with respect to any such matter. Xxxxx Xxxx may
be replaced by a successor representative only by notice to the Purchaser signed
by all of the Stockholders other than Xxxxx Xxxx.
[REMAINDER OF THE PAGE INTENTIONALLY LEFT BLANK]
12
IN WITNESS WHEREOF, the Purchaser, Stockholders and the Seller have caused
this Common Stock Purchase Agreement to be executed as of as of the day and year
first above written.
SELLER:
MPLC, INC.
By: /s/ Xxxxx Xxxx
---------------------------------
Name: Xxxxx Xxxx
-------------------------------
Title: President
------------------------------
STOCKHOLDERS:
/s/ Xxxxx Xxxx
-------------------------------------
Xxxxx Xxxx
/s/ Xxxxxx X. Xxxxxx
-------------------------------------
Xxxxxx X. Xxxxxx
/s/ Xxx Xxxxx
-------------------------------------
Xxx Xxxxx
/s/ Xxxxxxxx X. Xxxxx
-------------------------------------
Xxxxxxxx X. Xxxxx
/s/ Xxxxx Xxxx
-------------------------------------
Xxxxx Xxxx
PURCHASER:
XXXXXX CAPITAL MASTER FUND, LTD.,
By: Xxxxxx Management, LLC
/s/ Xxx Xxxx
-------------------------------------
Name: Xxx Xxxx
-------------------------------
Title: Director
------------------------------
13
EXHIBIT A
NUMBER OF SHARES TO
NAME OF STOCKHOLDER BE REDEEMED
------------------- -------------------
Xxxxx Xxxx 17,586,652
Xxxxxx X. Xxxxxx 2,344,887
Xxx Xxxxx 586,222
Xxxxxxxx X. Xxxxx 1,758,666
Xxxxx Xxxx 1,172,443
----------
TOTAL 23,448,870
==========
14
EXHIBIT B
Disclosure Schedules
Liabilities
Creditor Amount Comment
--------------------------------------- ----------- ------------------
Xxxxxx Xxxxxx Rosenman LLP $20,000.00 Assumed Liability
Xxxxx Xxxxx (for services through $ 850.00 Retained Liability
10/31/06)
Xxxxxx, Xxxxxxx & Xxxxx LLP $ 2,500.00 Retained Liability
Continental Stock Transfer and Trust $ 404.00 Retained Liability
Company (Sept. and Oct. charges not yet
invoiced)
Xxxxx Xxxx (includes interest through $202,280.25 Paid at Closing
10/23/06 and assumption of KMR
obligation)
Assets
Asset Amount Comment
---------------------- --------- --------------------
Cash $ 893.00 XX Xxxxxx Xxxxx Acct.
Pre-paid Franchise Tax $2,583.00 DE Sec'y of State
15
