Exhibit 10.5
STOCK PURCHASE AGREEMENT
Between
iMedia International, Inc.
and
XXXXXXX PARK INVESTMENTS PLC
-------------------------------
July 14, 2004
--------------------------------
TABLE OF CONTENTS
ARTICLE I CERTAIN DEFINITIONS ...........................................1
1.1 Certain Definitions .......................................... 1
ARTICLE II PURCHASE AND SALE OF SHARES ...................................4
2.1 Purchase and Sale; Purchase Price..............................4
2.2 Execution and Delivery of Documents; The Closing...............5
ARTICLE III REPRESENTATIONS AND WARRANTIES ................................5
3.1 Representations, Warranties and Agreements
of the Target Company .......................................5
3.2 Representations and Warranties of Xxxxxxx......................8
ARTICLE IV OTHER AGREEMENTS OF THE PARTIES...............................11
4.1 Manner of Offering ...........................................11
4.2 Notice of Certain Events .....................................12
4.3 Blue Sky Laws.................................................12
4.4 Integration...................................................12
4.5 Furnishing of Rule 144(c) Materials...........................12
4.6 Solicitation Materials........................................12
4.7 Listing of Common Stock.......................................13
4.8 Indemnification ..............................................13
4.9 Sale of Xxxxxxx Shares........................................15
4.10 Lock Up by Xxxxxxx ...........................................15
4.11 London Stock Exchange.........................................15
ARTICLE V MISCELLANEOUS................................................15
5.1 Fees and Expenses............................................15
5.2 Entire Agreement.............................................15
5.3 Notices......................................................15
5.4 Amendments; Waivers..........................................16
5.5 Headings.....................................................16
5.6 Successors and Assigns.......................................16
5.7 No Third Party Beneficiaries.................................17
5.8 Governing Law; Venue; Service of Process.....................17
5.9 Survival.....................................................17
5.10 Counterpart Signatures.......................................17
5.11 Publicity....................................................17
5.12 Severability.................................................17
5.13 Limitation of Remedies.......................................17
LIST OF SCHEDULES:
Schedule 3.1(a) Subsidiaries
Schedule 3.1(c) Capitalization and Registration Rights
Schedule 3.1(d) Equity and Equity Equivalent Securities
Schedule 3.1(e) Conflicts
Schedule 3.1(f) Consents and Approvals
Schedule 3.1(g) Litigation
Schedule 3.1(h) Defaults and Violations
LIST OF EXHIBITS:
Exhibit A Escrow Agreement
Exhibit B Officer's Certificate
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made and entered into
as of July 14, 2004, between iMedia International, Inc., a corporation
organized and existing under the laws of the State of Delaware (the "Target
Company"), and Xxxxxxx Park Investments PLC, a corporation organized under the
laws of England and Wales with its offices at 00 Xxxxxxxxxx Xxxxxx, Xxxxxx
XX0X 0XX ( "Xxxxxxx").
WHEREAS, subject to the terms and conditions set forth in this Agreement,
the Target Company desires to issue and sell to Xxxxxxx and Xxxxxxx desires to
acquire from the Target Company the shares of the Target Company's common
stock, par value $0.001 (the "Common Stock") for the Total Purchase Price set
forth in Section 2.1(b) below. The consideration to be paid by Xxxxxxx for
the Common Stock shall be subject to certain downside price protection (the
"Downside Price Protection") provided in Section 2 of the Escrow Agreement.
IN CONSIDERATION of the mutual covenants contained in this Agreement, the
Target Company and Xxxxxxx agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.1 Certain Definitions. As used in this Agreement, and unless the
context requires a different meaning, the following terms have the meanings
indicated:
"Affiliate" means, with respect to any Person, any Person that, directly
or indirectly, controls, is controlled by or is under common control with such
Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlled by" and "under common control
with") shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities or by contract or
otherwise.
"Agreement" shall have the meaning set forth in the introductory
paragraph of this Agreement.
"Business Day" means any day except Saturday, Sunday, any day which shall
be a legal holiday or a day on which banking institutions in the State of New
York are authorized or required by law or other government actions to close.
"Closing" shall have the meaning set forth in Section 2.2(a) hereof.
"Closing Bid Price" shall mean the closing bid price for a share of Common
Stock on such date on the OTCBB (or such other exchange, market, or other
system that the Common Stock is then traded on), as reported on Bloomberg,
L.P. (or similar organization or agency succeeding to its functions of
reporting prices).
"Closing Date" shall have the meaning set forth in Section 2.2(a) hereof.
"Closing Price" shall be the Closing Bid Price of the Common Stock on the day
of Closing.
"Common Stock" shall have the meaning in the recital.
"Consideration Stock" shall have the meaning set forth in Section 2.1(a)
hereof.
"Control Person" shall have the meaning set forth in Section 4.8(a)
hereof.
"Disclosure Documents" means the Target Company's reports filed under the
Exchange Act with the SEC.
"Downside Price Protection" shall have the meaning in the recital.
"Escrow Agent" means Gottbetter & Partners, LLP, 000 Xxxxxxx Xxxxxx, 00
Xxxxx, Xxx Xxxx, XX 00000; Tel: 000-000-0000; Fax: 000-000-0000.
"Escrow Agreement" means the escrow agreement, dated the date hereof, by
and among the Target Company, Xxxxxxx and the Escrow Agent annexed hereto as
Exhibit A.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"G&P" means Gottbetter & Partners, LLP.
"Indemnified Party" shall have the meaning set forth in Section 4.8(b) hereof.
"Indemnifying Party" shall have the meaning set forth in Section 4.8(b)
hereof.
"Xxxxxxx" shall have the meaning in the introductory paragraph.
"Xxxxxxx Consideration Shares" shall have the meaning in Section 2.1(c)
hereof.
"Xxxxxxx Escrow Shares" means the Xxxxxxx Consideration Shares deposited
into escrow by the Target Company under the terms of the Escrow Agreement in
Exhibit A.
"Xxxxxxx Protection Shares" means the Xxxxxxx Escrow Shares that the
Target Company is required to sell to Xxxxxxx under the terms of the Escrow
Agreement in Exhibit A.
"Xxxxxxx Shares" shall mean ordinary shares of 1.0p each in Xxxxxxx.
"Losses" shall have the meaning set forth in Section 4.8(a) hereof.
"Material" shall mean having a financial consequence in excess of
$25,000.
"Material Adverse Effect" shall have the meaning set forth in Section
3.1(a) hereof.
"NASD" means the National Association of Securities Dealers, Inc.
"Nasdaq" shall mean the Nasdaq Stock Market, Inc.(r)
"OTCBB" shall mean the NASD over-the counter Bulletin Board(r).
"Person" means an individual or a corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or political
subdivision thereof) or other entity of any kind.
"Private Placement Memorandum" shall have the meaning set forth in
Section 3.1(l) hereof.
"Proceeding" means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such
as a deposition), whether commenced or threatened.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Subsidiaries" shall have the meaning set forth in Section 3.1(a) hereof.
"Target Company" shall have the meaning set forth in the introductory
paragraph.
"Total Purchase Price" shall have the meaning set forth in Section
2.1(b).
"Trading Day" means (a) a day on which the Common Stock is quoted on
Nasdaq, the OTCBB or the principal stock exchange on which the Common Stock
has been listed, or (b) if the Common Stock is not quoted on Nasdaq, the OTCBB
or any stock exchange, a day on which the Common Stock is quoted in the
over-the-counter market, as reported by the Pinksheets LLC (or any similar
organization or agency succeeding its functions of reporting prices).
"Transaction Documents" means this Agreement and all exhibits and
schedules hereto and all other documents, instruments and writings required
pursuant to this Agreement.
"U.S." means the United States.
ARTICLE II
PURCHASE AND SALE OF SHARES
2.1 Purchase and Sale; Purchase Price.
(a) Subject to the terms and conditions set forth herein, the
Target Company shall issue and sell and Xxxxxxx shall purchase 4,000,000 (four
million) shares of the Target Company's Common Stock (the "Consideration
Stock").
(b) The total purchase price (the "Total Purchase Price") shall
be the number of shares of Consideration Stock multiplied by the average of
the Closing Bid Price per share of Common Stock during the ten (10) Trading
Days immediately preceding July 30, 2004.
(c) The Total Purchase Price shall be paid by delivery to the
Target Company of the number of Xxxxxxx Shares (the "Xxxxxxx Consideration
Shares") equal to the Total Purchase Price divided by the conversion rate of
the British Pound Sterling to purchase US Dollars as determined below on the
July 30, 2004. The Xxxxxxx Shares shall have a value of 1 British Pound
Sterling per share The number of Xxxxxxx Shares to be issued will be based on
the conversion rate of the British Pound Sterling to the US Dollar in effect
as of the close of business on the day preceding the Closing Date, as quoted
by Xxxxxx & Co. as the commercial rate it gives to purchase US Dollars. For
example, if the effective conversion rate is $1.80/1 British Pound Sterling
and the Total Purchase Price is $8,000,000, then the number of Xxxxxxx Shares
the Target Company will receive shall equal the $8,000,000/$1.80, or 4,444,444
Xxxxxxx Shares. The Xxxxxxx Consideration Shares shall be subject to the
"Downside Price Protection" provided in Section 2 of the Escrow Agreement.
2.2 Execution and Delivery of Documents; The Closing.
(a) The Closing of the purchase and sale of the shares of
Consideration Stock (the "Closing") shall take place by August 20, 2004 (the
"Closing Date"). On the Closing Date,
(i) the Target Company shall execute and deliver to the
Escrow Agent certificates in the name of Xxxxxxx representing the shares of
Consideration Stock;
(ii) the Target Company shall execute and deliver to Xxxxxxx
a certificate of its President, in the form of Exhibit B annexed hereto,
certifying that attached thereto is a copy of resolutions duly adopted by the
Board of Directors of the Target Company authorizing the Target Company to
execute and deliver the Transaction Documents and to enter into the
transactions contemplated thereby;
(iii) the Target Company, Xxxxxxx and the Escrow Agent
shall execute and deliver to each other the Escrow Agreement;
(iv) Xxxxxxx shall execute and deliver to the Escrow Agent
certificates in the name of the Target Company representing the Xxxxxxx
Consideration Shares to the Escrow Agent; and
(v) the Target Company shall wire the monies owed to G&P
pursuant to Section 5.1 hereof for legal fees with the following wire
instructions:
Citibank, N.A.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX
ABA Routing No.: 000000000
Account Name: Gottbetter & Partners, LLP
Account No. xxxxxxxx
Reference: iMedia International, Inc.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 Representations, Warranties and Agreements of the Target
Company. The Target Company hereby makes the following representations and
warranties to Xxxxxxx, all of which shall survive the Closing:
(a) Organization and Qualification. The Target Company is
a corporation, duly incorporated, validly existing and in good standing under
the laws of the jurisdiction of its formation, with the requisite corporate
power and authority to own and use its properties and assets and to carry on
its business as currently conducted. The Target Company has no subsidiaries
other than as set forth on Schedule 3.1(a) attached hereto (collectively, the
"Subsidiaries"). Each of the Subsidiaries is a corporation, duly
incorporated, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, with the full corporate power and authority
to own and use its properties and assets and to carry on its business as
currently conducted. Each of the Target Company and the Subsidiaries is duly
qualified to do business and is in good standing as a foreign corporation in
each jurisdiction in which the nature of the business conducted or property
owned by it makes such qualification necessary, except where the failure to be
so qualified or in good standing, as the case may be, would not, individually
or in the aggregate, have a material adverse effect on the results of
operations, assets, prospects, or financial condition of the Target Company
and the Subsidiaries, taken as a whole (a "Material Adverse Effect").
(b) Authorization, Enforcement. The Target Company has the
requisite corporate power and authority to enter into and to consummate the
transactions contemplated hereby and by each other Transaction Document and to
otherwise to carry out its obligations hereunder and thereunder. The
execution and delivery of this Agreement and each of the other Transaction
Documents by the Target Company and the consummation by it of the transactions
contemplated hereby and thereby has been duly authorized by all necessary
action on the part of the Target Company. Each of this Agreement and each of
the other Transaction Documents has been or will be duly executed by the
Target Company and when delivered in accordance with the terms hereof or
thereof will constitute the valid and binding obligation of the Target Company
enforceable against the Target Company in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally the enforcement of, creditors' rights and remedies or by
other equitable principles of general application.
(c) Capitalization. The authorized, issued and outstanding
capital stock of the Company is set forth on Schedule 3.1(c). No shares of
Common Stock are entitled to preemptive or similar rights, nor is any holder
of the Common Stock entitled to preemptive or similar rights arising out of
any agreement or understanding with the Target Company by virtue of this
Agreement. Except as disclosed in Schedule 3.1(c), there are no outstanding
options, warrants, script, rights to subscribe to, registration rights, calls
or commitments of any character whatsoever relating to 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 Target Company or
any Subsidiary is or may become bound to issue additional shares of Common
Stock, or securities or rights convertible or exchangeable into shares of
Common Stock. Neither the Target Company nor any Subsidiary is in violation
of any of the provisions of its Certificate of Incorporation, bylaws or other
charter documents.
(d) Issuance of Securities. The shares of Consideration
Stock have been duly and validly authorized for issuance, offer and sale
pursuant to this Agreement and, when issued and delivered as provided
hereunder against payment in accordance with the terms hereof, shall be valid
and binding obligations of the Target Company enforceable in accordance with
their respective terms.
(e) No Conflicts. The execution, delivery and performance
of this Agreement and the other Transaction Documents by the Target Company
and the consummation by the Target Company of the transactions contemplated
hereby and thereby do not and will not (i) conflict with or violate any
provision of its Certificate of Incorporation or bylaws (each as amended
through the date hereof) or (ii) be subject to obtaining any consents except
those referred to in Section 3.1(f), conflict with, or constitute a default
(or an event which 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 of, any agreement, indenture or instrument to
which the Target Company is a party, 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 Target Company
or its Subsidiaries is subject (including, but not limited to, those of other
countries and the federal and state securities laws and regulations), or by
which any property or asset of the Target Company or its Subsidiaries is bound
or affected, except in the case of clause (ii), such conflicts, defaults,
terminations, amendments, accelerations, cancellations and violations as would
not, individually or in the aggregate, have a Material Adverse Effect. The
business of the Target Company and its Subsidiaries is not being conducted in
violation of any law, ordinance or regulation of any governmental authority.
(f) Consents and Approvals. Except as specifically set
forth in Schedule 3.1(f), neither the Target Company nor any Subsidiary is
required to obtain any consent, waiver, authorization or order of, 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 by the Target Company of this Agreement and each of
the other Transaction Documents.
(g) Litigation; Proceedings. Except as specifically
disclosed in Schedule 3.1(g), there is no Proceeding threatened against or
affecting the Target Company or any of its Subsidiaries or any of their
respective properties before or by any court, governmental or administrative
agency or regulatory authority (federal, state, county, local or foreign)
which (i) relates to or challenges the legality, validity or enforceability of
any of the Transaction Documents or the shares of Consideration Stock, (ii)
could, individually or in the aggregate, have a Material Adverse Effect or
(iii) could, individually or in the aggregate, materially impair the ability
of the Target Company to perform fully on a timely basis its obligations under
the Transaction Documents.
(h) No Default or Violation. Except as set forth in
Schedule 3.1(h) hereto, neither the Target Company nor any Subsidiary (i) is
in default under or 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, except such conflicts or defaults as do not have a
Material Adverse Effect, (ii) is in violation of any order of any court,
arbitrator or governmental body, except for such violations as do not have a
Material Adverse Effect, or (iii) is in violation of any statute, rule or
regulation of any governmental authority which could (individually or in the
aggregate) (a) adversely affect the legality, validity or enforceability of
this Agreement, (b) have a Material Adverse Effect or (c) adversely impair the
Target Company's ability or obligation to perform fully on a timely basis its
obligations under this Agreement.
(i) Disclosure Documents. The Disclosure Documents are
accurate in all material respects and do not contain any untrue statement of
material fact or omit to state any material fact necessary in order to make
the statements made therein, in light of the circumstances under which they
were made, not misleading.
(j) Non-Registered Offering. Neither the Target Company
nor any Person acting on its behalf has taken or will take any action
(including, without limitation, any offering of any securities of the Target
Company under circumstances which would require the integration of such
offering with the offering of the Consideration Stock under the Securities
Act) which might subject the offering, issuance or sale of the Consideration
Stock to the registration requirements of Section 5 of the Securities Act.
(k) Placing Agent. The Target Company accepts and agrees
that Dungarvon Associates, Inc. ("Dungarvon") is acting for Xxxxxxx and does
not regard any person other than Xxxxxxx as its customer in relation to this
Agreement, and that it has not made any recommendation to the Target Company,
in relation to this Agreement and is not advising the Target Company, with
regard to the suitability or merits of the Xxxxxxx Shares and in particular
Dungarvon has no duties or responsibilities to the Target Company for the best
execution of the transaction contemplated by this Agreement.
(l) Private Placement Representations. The Target Company
(i) has received and carefully reviewed such information and documentation
relating to Xxxxxxx that the Target Company has requested, including, without
limitation, Xxxxxxx'x Confidential Private Offering Memorandum, dated June 17,
2004 (the "Private Placement Memorandum"); (ii) has had a reasonable
opportunity to ask questions of and receive answers from Xxxxxxx concerning
the Xxxxxxx Shares, and all such questions, if any, have been answered to the
full satisfaction of the Target Company; (iii) has such knowledge and
expertise in financial and business matters that it is capable of evaluating
the merits and risks involved in an investment in the Xxxxxxx Shares; (iii)
understands that Xxxxxxx has determined that the exemption from the
registration provisions of the Securities Act, provided by Section 4(2) of
the Securities Act is applicable to the offer and sale of the Xxxxxxx Shares,
based, in part, upon the representations, warranties and agreements made by
the Target Company herein; and (iv) except as provided herein and in the
Private Placement Memorandum, no representations or warranties have been made
to the Target Company by Xxxxxxx or any agent, employee or affiliate of
Xxxxxxx and in entering into this transaction the Target Company is not
relying upon any information, other than the results of independent
investigation by the Target Company.
Xxxxxxx acknowledges and agrees that the Target Company makes no
representation or warranty with respect to the transactions contemplated
hereby other than those specifically set forth in Section 3.1 hereof.
3.2 Representations and Warranties of Xxxxxxx. Xxxxxxx hereby makes
the following representations and warranties to the Target Company, all of
which shall survive the Closing:
(a) Organization; Authority. Xxxxxxx is a corporation,
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its formation with the requisite power and authority to enter
into and to consummate the transactions contemplated hereby and by the other
Transaction Documents and otherwise to carry out its obligations hereunder and
thereunder. The acquisition of the shares of Consideration Stock to be
purchased by Xxxxxxx hereunder has been duly authorized by all necessary
action on the part of Xxxxxxx. This Agreement has been duly executed and
delivered by Xxxxxxx and constitutes the valid and legally binding obligation
of Xxxxxxx, enforceable against it in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to, or affecting generally
the enforcement of, creditors rights and remedies or by other general
principles of equity.
(b) Investment Intent. Xxxxxxx is acquiring the shares of
Consideration Stock to be purchased by it hereunder, for its own account for
investment purposes only and not with a view to or for distributing or
reselling such shares of Consideration Stock, or any part thereof or interest
therein, without prejudice, however, to Xxxxxxx'x right, subject to the
provisions of this Agreement, at all times to sell or otherwise dispose of all
or any part of such shares of Consideration Stock in compliance with
applicable federal and state securities laws.
(c) Experience of Xxxxxxx. Xxxxxxx, either alone or
together with its representatives, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating
the merits and risks of an investment in the shares of Consideration Stock to
be acquired by it hereunder, and has so evaluated the merits and risks of such
investment.
(d) Ability of Xxxxxxx to Bear Risk of Investment. Xxxxxxx
is able to bear the economic risk of an investment in the Consideration Stock
to be acquired by it hereunder and, at the present time, is able to afford a
complete loss of such investment.
(e) Access to Information. Xxxxxxx acknowledges that it
has been afforded (i) the opportunity to ask such questions as it has deemed
necessary of, and to receive answers from, representatives of the Target
Company concerning the terms and conditions of the Consideration Stock offered
hereunder and the merits and risks of investing in such securities; (ii)
access to information about the Target Company and the Target Company's
financial condition, results of operations, business, properties, management
and prospects sufficient to enable it to evaluate its investment in the
Consideration Stock; and (iii) the opportunity to obtain such additional
information which the Target Company possesses or can acquire without
unreasonable effort or expense that is necessary to make an informed
investment decision with respect to the investment and to verify the accuracy
and completeness of the information that it has received about the Target
Company.
(f) Reliance. Xxxxxxx understands and acknowledges that
(i) the shares of Consideration Stock being offered and sold to it hereunder
are being offered and sold without registration under the Securities Act in a
private placement that is exempt from the registration provisions of the
Securities Act under Section 4(2) of the Securities Act and (ii) the
availability of such exemption depends in part on, and that the Target Company
will rely upon the accuracy and truthfulness of, the foregoing representations
and Xxxxxxx hereby consents to such reliance.
(g) Regulation X. Xxxxxxx understands and acknowledges
that (A) the shares of Consideration Stock have not been registered under the
Securities Act, are being sold in reliance upon an exemption from registration
afforded by Regulation S; and that such shares of Consideration Stock have not
been registered with any state securities commission or authority; (B)
pursuant to the requirements of Regulation S, the shares of Consideration
Stock may not be transferred, sold or otherwise exchanged unless in compliance
with the provisions of Regulation S and/or pursuant to registration under the
Securities Act, or pursuant to an available exemption hereunder; and (C) the
Target Company is under no obligation to register the shares of Consideration
Stock under the Securities Act or any state securities law, or to take any
action to make any exemption from any such registration provisions available.
Xxxxxxx is not a U.S. Person and is not acquiring the shares of
Consideration Stock for the account of any U.S. Person; (B) no director or
executive officer of Xxxxxxx is a national or citizen of the United States;
and (C) it is not otherwise deemed to be a "U.S. Person" within the meaning of
Regulation X.
Xxxxxxx was not formed specifically for the purpose of acquiring the
shares of Consideration Stock purchased pursuant to this Agreement.
Xxxxxxx is purchasing the shares of Consideration Stock for its own
account and risk and not for the account or benefit of a U.S. Person as
defined in Regulation S and no other person has any interest in or
participation in the shares of Consideration Stock or any right, option,
security interest, pledge or other interest in or to the shares of
Consideration Stock. Xxxxxxx understands, acknowledges and agrees that it
must bear the economic risk of its investment in the shares of Consideration
Stock for an indefinite period of time and that prior to any such offer or
sale, the Target Company may require, as a condition to effecting a transfer
of the shares of Consideration Stock, an opinion of counsel, acceptable to the
Target Company, as to the registration or exemption therefrom under the
Securities Act and any state securities acts, if applicable.
Xxxxxxx will, after the expiration of the Restricted Period, as set forth
under Regulation S Rule 903(b)(3)(iii)(A), offer, sell, pledge or otherwise
transfer the shares of Consideration Stock only in accordance with Regulation
S, or pursuant to an available exemption under the Securities Act and, in any
case, in accordance with applicable state securities laws. The transactions
contemplated by this Agreement have neither been pre-arranged with a purchaser
who is in the U.S. or who is a U.S. Person, nor are they part of a plan or
scheme to evade the registration provisions of the United States federal
securities laws.
The offer leading to the sale evidenced hereby was made in an "offshore
transaction." For purposes of Regulation S, Xxxxxxx understands that an
"offshore transaction" as defined under Regulation S is any offer or sale not
made to a person in the United States and either (A) at the time the buy order
is originated, the purchaser is outside the United States, or the seller or
any person acting on his behalf reasonably believes that the purchaser is
outside the United States; or (B) for purposes of (1) Rule 903 of Regulation
S, the transaction is executed in, or on or through a physical trading floor
of an established foreign exchange that is located outside the United States
or (2) Rule 904 of Regulation S, the transaction is executed in, on or through
the facilities of a designated offshore securities market, and neither the
seller nor any person acting on its behalf knows that the transaction has been
prearranged with a buyer in the U.S.
Neither Xxxxxxx nor any affiliate or any Person acting on Xxxxxxx'x
behalf, has made or is aware of any "directed selling efforts" in the United
States, which is defined in Regulation S to be any activity undertaken for the
purpose of, or that could reasonably be expected to have the effect of,
conditioning the market in the United States for any of the shares of
Consideration Stock being purchased hereby.
Xxxxxxx understands that the Target Company is the seller of the shares
of Consideration Stock which are the subject of this Agreement, and that, for
purpose of Regulation S, a "distributor" is any underwriter, dealer or other
person who participates, pursuant to a contractual arrangement, in the
distribution of securities offered or sold in reliance on Regulation S and
that an "affiliate" is any partner, officer, director or any person directly
or indirectly controlling, controlled by or under common control with any
person in question. Xxxxxxx agrees that Xxxxxxx will not, during the
Restricted Period set forth under Rule 903(b)(iii)(A), act as a distributor,
either directly or though any affiliate, nor shall it sell, transfer,
hypothecate or otherwise convey the shares of Consideration Stock other than
to a non-U.S. Person.
Xxxxxxx acknowledges that the shares of Consideration Stock will bear a
legend in substantially the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN OFFERED AND SOLD IN AN
"OFFSHORE TRANSACTION" IN RELIANCE UPON REGULATION S AS PROMULGATED BY THE
SECURITIES AND EXCHANGE COMMISSION. ACCORDINGLY, THE SECURITIES REPRESENTED BY
THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
(THE "SECURITIES ACT") AND MAY NOT BE TRANSFERRED OTHER THAN IN ACCORDANCE
WITH REGULATION S, PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT, OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT,
THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE
COMPANY. THE SECURITIES REPRESENTED BY THIS CERTIFICATE CANNOT BE THE SUBJECT
OF HEDGING TRANSACTIONS UNLESS SUCH TRANSACTIONS ARE CONDUCTED IN COMPLIANCE
WITH THE SECURITIES ACT. THE SALE OF THE SHARES REPRESENTED BY THIS
CERTIFICATE IS RESTRICTED PURSUANT TO THE TERMS OF A STOCK PURCHASE AGREEMENT,
DATED JULY __, 2004, BETWEEN THE COMPANY AND XXXXXXX PARK INVESTMENTS PLC, A
COPY OF WHICH IS AVAILABLE UPON REQUEST.
The Target Company acknowledges and agrees that Xxxxxxx makes no
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in this Section 3.2.
ARTICLE IV
OTHER AGREEMENTS OF THE PARTIES
4.1 Manner of Offering. The Consideration Stock are being issued
pursuant to section 4(2) of the Securities Act and Regulation S thereunder.
The Xxxxxxx Consideration Shares are being issued pursuant to section 4(2) of
the Securities Act.
4.2 Notice of Certain Events. The Target Company shall, on a
continuing basis, (i) advise Xxxxxxx promptly after obtaining knowledge of,
and, if requested by Xxxxxxx, confirm such advice in writing, of (A) the
issuance by any state securities commission of any stop order suspending the
qualification or exemption from qualification of the shares of Consideration
Stock, for offering or sale in any jurisdiction, or the initiation of any
proceeding for such purpose by any state securities commission or other
regulatory authority, or (B) any event that makes any statement of a material
fact made by the Target Company in Section 3.1 or in the Disclosure Documents
untrue or that requires the making of any additions to or changes in Section
3.1 or in the Disclosure Documents in order to make the statements therein,
in the light of the circumstances under which they are made, not misleading,
(ii) use its best efforts to prevent the issuance of any stop order or order
suspending the qualification or exemption from qualification of the
Consideration Stock under any state securities or Blue Sky laws, and (iii) if
at any time any state securities commission or other regulatory authority
shall issue an order suspending the qualification or exemption from
qualification of the Consideration Stock under any such laws, and use its best
efforts to obtain the withdrawal or lifting of such order at the earliest
possible time.
4.3 Blue Sky Laws. The Target Company agrees that it will execute
all necessary documents and pay all necessary state filing or notice fees to
enable the Target Company to sell the Consideration Stock to Xxxxxxx.
4.4 Integration. The Target Company shall not and shall use its
best efforts to ensure that no Affiliate shall sell, offer for sale or solicit
offers to buy or otherwise negotiate in respect of any security (as defined in
Section 2 of the Securities Act) that would be integrated with the offer or
sale of the Consideration Stock in a manner that would require the
registration under the Securities Act of the sale of the Consideration Stock
to Xxxxxxx.
4.5 Furnishing of Rule 144(c) Materials. The Target Company shall,
for so long as any of the Consideration Stock remain outstanding and during
any period in which the Target Company is not subject to Section 13 or 15(d)
of the Exchange Act, make available to any registered holder of the
Consideration Stock in connection with any sale thereof and any prospective
purchaser of such Consideration Stock from such Person, such information in
accordance with Rule 144(c) promulgated under the Securities Act as is
required to sell the Consideration Stock under Rule 144 promulgated under the
Securities Act.
4.6 Solicitation Materials. The Target Company shall not (i)
distribute any offering materials in connection with the offering and sale of
the shares of Consideration Stock other than the Disclosure Documents and any
amendments and supplements thereto prepared in compliance herewith or (ii)
solicit any offer to buy or sell the shares of Consideration Stock by means of
any form of general solicitation or advertising.
4.7 Listing of Common Stock. If the Common Stock is or shall become
listed on the OTCBB or on another exchange, the Target Company shall (a) use
its best efforts to maintain the listing of its Common Stock on the OTCBB or
such other exchange on which the Common Stock is then listed until two years
from the date hereof, and (b) shall provide to Xxxxxxx evidence of such
listing.
4.8 Indemnification.
(a) Indemnification.
(i) The Target Company shall, notwithstanding termination
of this Agreement and for a period of six (6) years, indemnify and hold
harmless Xxxxxxx and its officers, directors, agents, employees and
Affiliates, each Person who controls or Xxxxxxx (within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act) (each such Person,
a "Control Person") and the officers, directors, agents, employees and
Affiliates of each such Control Person, to the fullest extent permitted by
applicable law, from and against any and all losses, claims, damages,
liabilities, costs (including, without limitation, costs of preparation and
attorneys' fees) and expenses (collectively, "Losses"), as incurred, arising
out of, or relating to, a breach or breaches of any representation, warranty,
covenant or agreement by the Target Company under this Agreement or any other
Transaction Document.
(ii) Xxxxxxx shall, notwithstanding termination of this
Agreement and for a period of six (6) years, indemnify and hold harmless the
Target Company, its officers, directors, agents and employees, each Control
Person and the officers, directors, agents and employees of each Control
Person, to the fullest extent permitted by applicable law, from and against
any and all Losses, as incurred, arising out of, or relating to, a breach or
breaches of any representation, warranty, covenant or agreement by Xxxxxxx
under this Agreement or the other Transaction Documents, except for Losses
solely arising out of negligence, bad faith or breach of this Agreement by the
Target Company.
(iii) The Target Company and Xxxxxxx acknowledge that in
the SEC's opinion, directors, officers and persons controlling a company
subject to the Securities Act can not be indemnified for liabilities arising
under the Securities Act by such company.
(b) Conduct of Indemnification Proceedings. If any
Proceeding shall be brought or asserted against any Person entitled to
indemnity hereunder (an "Indemnified Party"), such Indemnified Party promptly
shall notify the Person from whom indemnity is sought (the "Indemnifying
Party") in writing, and the Indemnifying Party shall assume the defense
thereof, including the employment of counsel reasonably satisfactory to the
Indemnified Party and the payment of all fees and expenses incurred in
connection with defense thereof; provided, that the failure of any Indemnified
Party to give such notice shall not relieve the Indemnifying Party of its
obligations or liabilities pursuant to this Agreement, except (and only) to
the extent that it shall be finally determined by a court of competent
jurisdiction (which determination is not subject to appeal or further review)
that such failure shall have proximately and materially adversely prejudiced
the Indemnifying Party.
An Indemnified Party shall have the right to employ separate counsel in
any such Proceeding and to participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Party
or Parties unless: (1) the Indemnifying Party has agreed to pay such fees and
expenses; or (2) the Indemnifying Party shall have failed promptly to assume
the defense of such Proceeding and to employ counsel reasonably satisfactory
to such Indemnified Party in any such Proceeding; or (3) the named parties to
any such Proceeding (including any impleaded parties) include both such
Indemnified Party and the Indemnifying Party, and such Indemnified Party shall
have been advised by counsel that a conflict of interest is likely to exist if
the same counsel were to represent such Indemnified Party and the Indemnifying
Party (in which case, if such Indemnified Party notifies the Indemnifying
Party in writing that it elects to employ separate counsel at the expense of
the Indemnifying Party, the Indemnifying Party shall not have the right to
assume the defense of the claim against the Indemnified Party but will retain
the right to control the overall Proceedings out of which the claim arose and
such counsel employed by the Indemnified Party shall be at the expense of the
Indemnifying Party). The Indemnifying Party shall not be liable for any
settlement of any such Proceeding effected without its written consent, which
consent shall not be unreasonably withheld. No Indemnifying Party shall,
without the prior written consent of the Indemnified Party, effect any
settlement of any pending Proceeding in respect of which any Indemnified Party
is a party, unless such settlement includes an unconditional release of such
Indemnified Party from all liability on claims that are the subject matter of
such Proceeding.
All fees and expenses of the Indemnified Party to which the Indemnified
Party is entitled hereunder (including reasonable fees and expenses to the
extent incurred in connection with investigating or preparing to defend such
Proceeding in a manner not inconsistent with this Section) shall be paid to
the Indemnified Party, as incurred, within ten (10) Business Days of written
notice thereof to the Indemnifying Party.
No right of indemnification under this Section shall be available as to a
particular Indemnified Party if the Indemnifying Party obtains a
non-appealable final judicial determination that such Losses arise solely out
of the negligence, breach of agreement or bad faith of such Indemnified Party
in performing the obligations of such Indemnified Party under this Agreement
or a breach by such Indemnified Party of its obligations under this Agreement.
(c) Contribution. If a claim for indemnification under
this Section is unavailable to an Indemnified Party or is insufficient to hold
such Indemnified Party harmless for any Losses in respect of which this
Section would apply by its terms (other than by reason of exceptions provided
in this Section), then each Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Losses in such proportion as is
appropriate to reflect the relative benefits received by the Indemnifying
Party on the one hand and the Indemnified Party on the other and the relative
fault of the Indemnifying Party and Indemnified Party in connection with the
actions or omissions that resulted in such Losses as well as any other
relevant equitable considerations. The relative fault of such Indemnifying
Party and Indemnified Party shall be determined by reference to, among other
things, whether there was a judicial determination that such Losses arise in
part out of the negligence or bad faith of the Indemnified Party in performing
the obligations of such Indemnified Party under this Agreement or the
Indemnified Party's breach of its obligations under this Agreement. The
amount paid or payable by a party as a result of any Losses shall be deemed to
include any attorneys' or other fees or expenses incurred by such party in
connection with any Proceeding to the extent such party would have been
indemnified for such fees or expenses if the indemnification provided for in
this Section was available to such party.
(d) Non-Exclusivity. The indemnity and contribution
agreements contained in this Section are in addition to any obligation or
liability that the Indemnifying Parties may have to the Indemnified Parties.
4.9 Sale of Xxxxxxx Consideration Shares. Xxxxxxx shall assist the
Target Company in setting up and maintaining a trading account at a registered
broker in the United Kingdom to facilitate the sale of the Xxxxxxx
Consideration Shares. Broker's commissions in the trading account shall not
exceed one half percent (0.5%).
4.10 Lock Up by Xxxxxxx. Xxxxxxx shall not sell, transfer or assign
all or any of the shares of Consideration Stock for a period of two (2) years
following the Closing, without the written consent of the Target Company,
which consent may be withheld in the Target Company's sole discretion.
ARTICLE V
MISCELLANEOUS
5.1 Fees and Expenses. Except as set forth in this Agreement, each
party shall pay the fees and expenses of its advisers, counsel, accountants
and other experts, if any, and all other expenses incurred by such party
incident to the negotiation, preparation, execution, delivery and performance
of this Agreement. The Target Company shall pay all stamp and other taxes and
duties levied in connection with the issuance of the shares of Consideration
Stock pursuant hereto. Xxxxxxx shall be responsible for any taxes payable by
Xxxxxxx that may arise as a result of the investment hereunder or the
transactions contemplated by this Agreement or any other Transaction Document.
The Target Company agrees to pay $7,500 to G&P for legal fees associated with
the transactions contemplated by this Agreement at Closing. The Target Company
shall pay all costs, expenses, fees and all taxes incident to and in
connection with: (A) the issuance and delivery of the Consideration Stock,
(B) the exemption from registration of the Consideration Stock for offer and
sale to Xxxxxxx under the securities or Blue Sky laws of the applicable
jurisdictions, and (C) the preparation of certificates for the Consideration
Stock (including, without limitation, printing and engraving thereof), and (D)
all fees and expenses of counsel and accountants of the Target Company.
5.2 Entire Agreement This Agreement, together with all of the
Exhibits and Schedules annexed hereto, and any other Transaction Document
contains the entire understanding of the parties with respect to the subject
matter hereof and supersede all prior agreements and understandings, oral or
written, with respect to such matters. This Agreement shall be deemed to have
been drafted and negotiated by both parties hereto and no presumptions as to
interpretation, construction or enforceability shall be made by or against
either party in such regard.
5.3 Notices. Any notice or other communication required or
permitted to be given hereunder shall be in writing and shall be deemed to
have been duly given upon facsimile transmission (with written transmission
confirmation report) at the number designated below (if delivered on a
Business Day during normal business hours where such notice is to be
received), or the first Business Day following such delivery (if delivered
other than on a Business Day during normal business hours where such notice is
to be received) whichever shall first occur. The addresses for such
communications shall be:
If to the Target Company: iMedia International, Inc.
Attn: President and CEO
Tel: (000) 000-0000
Fax: (000) 000-0000
With copies to: Law Offices of Xxxxxx Xxxxxxx
000 X. Xxxxx Xxxxx, #000
Xxxxxxx Xxxxx, XX 00000
Tel: (000) 000-0000
Fax: ( )
If to Xxxxxxx: Xxxxxxx Park Investments PLC
00 Xxxxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Attn: Xxxxx Xxxxx
Tel: 00.000.000.0000
Fax: 00.000.000.0000
With copies to: Gottbetter & Partners, LLP
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx X. Xxxxxxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
or such other address as may be designated hereafter by notice given pursuant
to the terms of this Section 5.3.
5.4 Amendments; Waivers. No provision of this Agreement may be
waived or amended except in a written instrument signed, in the case of an
amendment, by both the Target Company and Xxxxxxx, or, in the case of a
waiver, by the party against whom enforcement of any such waiver is sought.
No waiver of any default with respect to any provision, condition or
requirement of this Agreement shall be deemed to be a continuing waiver in the
future or a waiver of any other provision, condition or requirement hereof,
nor shall any delay or omission of either party to exercise any right
hereunder in any manner impair the exercise of any such right accruing to it
thereafter.
5.5 Headings. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.
5.6 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and
permitted assigns. The assignment by a party of this Agreement or any rights
hereunder shall not affect the obligations of such party under this Agreement.
5.7 No Third Party Beneficiaries. This Agreement is intended for
the benefit of the parties hereto and their respective permitted successors
and assigns and is not for the benefit of, nor may any provision hereof be
enforced by, any other person.
5.8 Governing Law; Venue; Service of Process. The parties hereto
acknowledge that the transactions contemplated by this Agreement and the
exhibits hereto bear a reasonable relation to the State of New York. The
parties hereto agree that the internal laws of the State of New York shall
govern this Agreement and the exhibits hereto, including, but not limited to,
all issues related to usury. Any action to enforce the terms of this
Agreement or any of its exhibits, or any other Transaction Document shall be
brought exclusively in the state and/or federal courts situated in the County
and State of New York. If and only if New York declines jurisdiction within
the State of New York, such action shall be brought in the State and County
where the Target Company's principle place of business is situated. Service
of process in any action by Xxxxxxx or the Target Company to enforce the terms
of this Agreement may be made by serving a copy of the summons and complaint,
in addition to any other relevant documents, by commercial overnight courier
to the other party at its principal address set forth in this Agreement.
5.9 Survival. The representations and warranties of the Target
Company and Xxxxxxx contained in Article III and the agreements and covenants
of the parties contained in Article IV and this Article V shall survive the
Closing.
5.10 Counterpart Signatures. This Agreement may be executed in two
or more counterparts, all of which when taken together shall be considered one
and the same agreement and shall become effective when counterparts have been
signed by each party and delivered to the other party, it being understood
that both parties need not sign the same counterpart. In the event that any
signature is delivered by facsimile transmission, such signature shall create
a valid and binding obligation of the party executing (or on whose behalf such
signature is executed) the same with the same force and effect as if such
facsimile signature page were an original thereof.
5.11 Publicity. The Target Company and Xxxxxxx shall consult with
each other in issuing any press releases or otherwise making public statements
with respect to the transactions contemplated hereby and neither party shall
issue any such press release or otherwise make any such public statement
without the prior written consent of the other, which consent shall not be
unreasonably withheld or delayed, unless counsel for the disclosing party
deems such public statement to be required by applicable federal and/or state
securities laws. Except as otherwise required by applicable law or
regulation, the Target Company will not disclose to any third party (excluding
its legal counsel, accountants and representatives) the name of Xxxxxxx.
5.12 Severability. In case any one or more of the provisions of
this Agreement shall be invalid or unenforceable in any respect, the validity
and enforceability of the remaining terms and provisions of this Agreement
shall not in any way be affected or impaired thereby and the parties will
attempt to agree upon a valid and enforceable provision which shall be a
reasonable substitute therefore, and upon so agreeing, shall incorporate such
substitute provision in this Agreement.
5.13 Limitation of Remedies. With respect to claims by the Target
Company or any person acting by or through the Target Company, or by Xxxxxxx
or any person acting through Xxxxxxx, for remedies at law or at equity
relating to or arising out of a breach of this Agreement, liability, if any,
shall, in no event, include loss of profits or incidental, indirect,
exemplary, punitive, special or consequential damages of any kind.
[ SIGNATURE PAGE FOLLOWS ]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first indicated above.
Target Company:
iMedia International, Inc.
By: _________________________
Name: Xxxxx Xxxx
Title: President
Xxxxxxx:
Dungarvon Associates, Inc. on behalf of
Xxxxxxx Park Investments Plc.
By: __________________________
Name: ________________________
Title: _________________________
EXHIBIT A
ESCROW AGREEMENT
ESCROW AGREEMENT (this "Agreement"), dated as of July 14, 2004, by and
between iMedia International, Inc., a Delaware corporation with its principal
place of business at 0000 00xx Xxxxxx, Xxxxx Xxxxxx, XX (the "Target
Company"); Gottbetter & Partners, LLP with its principal place of business at
000 Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000 (the "Escrow Agent"); and Xxxxxxx Park
Investments Plc, a corporation organized under the laws of England and Wales
with its offices at 00 Xxxxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX ("Xxxxxxx").
Recitals
A. Simultaneously with the execution of this Agreement, Xxxxxxx
and the Target Company entered into a Stock Purchase Agreement (the "Stock
Purchase Agreement"), dated as of the date hereof and incorporated herein by
reference, pursuant to which the Target Company has agreed to issue to Xxxxxxx
the Consideration Stock in exchange for the Xxxxxxx Consideration Shares.
B. The parties have agreed that the Consideration Stock and the
Xxxxxxx Consideration Shares shall be deposited into escrow pursuant to this
Agreement, including fifty percent (50%) of the Xxxxxxx Consideration Shares
to be deposited into escrow as Downside Price Protection (the "Xxxxxxx Escrow
Shares").
C. The Escrow Agent is willing to act as escrow agent pursuant
to the terms of this Agreement with respect to the purchase of the shares of
Consideration Stock.
D. All capitalized terms used but not defined herein shall have
the meanings ascribed thereto in the Stock Purchase Agreement.
NOW, THEREFORE, IT IS AGREED:
1. Deposit into Escrow. At Closing, the parties shall deposit
into escrow (i) the Xxxxxxx Consideration Shares and (ii) the Consideration
Stock. The Escrow Agent shall hold the Xxxxxxx Consideration Shares and the
Consideration Stock in escrow when delivered.
2. Terms of Escrow. (a) If the Market Value of the Common
Stock on the date occurring two years after Closing (the "Two Year
Anniversary") is less than the Closing Price, the Target Company shall sell to
Xxxxxxx and Xxxxxxx shall purchase the number of Xxxxxxx Escrow Shares (the
"Xxxxxxx Protection Shares") equal to (a) the Xxxxxxx Consideration Shares
multiplied by (b) the Percentage Decrease, at a purchase price of 1p per
Xxxxxxx Consideration Share (the "Escrow Purchase Price"). The "Percentage
Decrease" shall be equal to 1 - Market Value/the Closing Price. "Market Value"
shall be the average of the ten (10) closing bid prices per share of the
Common Stock during the ten (10) trading days immediately preceding the Two
Year Anniversary.
Within three (3) Business Days of the Two Year Anniversary of the
Closing, Xxxxxxx shall (i) send a notice ("Sale Notice") to the Target Company
and the Escrow Agent of the Xxxxxxx Protection Shares to be sold by the Target
Company to Xxxxxxx, if any, and (ii) deposit the Escrow Purchase Price with
the Escrow Agent, if necessary. Within fourteen (14) Business Days of the
Target Company's and the Escrow Agent's receipt of the Sale Notice and Escrow
Agent's receipt of the Escrow Purchase Price, the Escrow Agent is authorized
and directed simultaneously (i) to pay the Escrow Purchase Price to the Target
Company, if any, (ii) to deliver the Xxxxxxx Protection Shares, if any, to
Xxxxxxx and (iii) to deliver the remaining Xxxxxxx Escrow Shares, if any, to
the Target Company.
(b) If at any time before September 30, 2004, the Escrow Agent
receives written notice (the "LSE Notice") from Xxxxxxx that the Xxxxxxx
Consideration Shares are listed on the London Stock Exchange plc (the "London
Exchange"), the Escrow Agent is authorized and directed to distribute, within
fourteen (14) Business Days of receipt of such LSE Notice, (i) the
Consideration Stock to Xxxxxxx and (ii) fifty percent (50%) of the Xxxxxxx
Consideration Shares to the Target Company. If the Escrow Agent does not
receive such LSE Notice by September 30, 2004, the Escrow Agent is authorized
and directed to distribute, no later than October 5, 2004, (i) the
Consideration Stock to the Target Company and (ii) the Xxxxxxx Consideration
Shares to Xxxxxxx; provided, however, that the Target Company shall have the
option to extend the September 30, 2004 deadline by providing written notice
to the Escrow Agent with a written acknowledgement from Xxxxxxx.
3. Duties and Obligations of the Escrow Agent.
(a) The parties hereto agree that the duties and obligations of
the Escrow Agent shall be only those obligations herein specifically provided
and no other. The Escrow Agent's duties are those of a depositary only, and
the Escrow Agent shall incur no liability whatsoever, except as a direct
result of its willful misconduct or gross negligence in the performance of its
duties hereunder;
(b) The Escrow Agent may consult with counsel of its choice, and
shall not be liable for any action taken, suffered or omitted to be taken by
it in accordance with the advice of such counsel;
(c) The Escrow Agent shall not be bound in any way by the terms
of any other agreement to which Xxxxxxx and the Target Company are parties,
whether or not the Escrow Agent has knowledge thereof, and the Escrow Agent
shall not in any way be required to determine whether or not any other
agreement has been complied with by Xxxxxxx and the Target Company, or any
other party thereto. The Escrow Agent shall not be bound by any modification,
amendment, termination, cancellation, rescission or supersession of this
Agreement unless the same shall be in writing and signed jointly by Xxxxxxx
and the Target Company and agreed to in writing by the Escrow Agent;
(d) If the Escrow Agent shall be uncertain as to its duties or
rights hereunder or shall receive instructions, claims or demands which, in
its opinion, are in conflict with any of the provisions of this Agreement, the
Escrow Agent shall be entitled to refrain from taking any action other than
keeping safely the Consideration (as defined below) or taking certain action
until the Escrow Agent is directed otherwise in writing jointly by Xxxxxxx and
the Target Company or by a final judgment of a court of competent
jurisdiction;
(e) The Escrow Agent shall be fully protected in relying upon
any written notice, demand, certificate or document which the Escrow Agent, in
good faith, believes to be genuine. The Escrow Agent shall not be responsible
for the sufficiency or accuracy of the form, execution, validity or
genuineness of documents or securities now or hereafter deposited hereunder or
of any endorsement thereon, or for any lack of endorsement thereon, or for any
description therein; nor shall the Escrow Agent be responsible or liable in
any respect on account of the identity, authority or rights of the persons
executing or delivering or purporting to execute or deliver any such document,
security or endorsement;
(f) The Escrow Agent shall not be required to institute legal
proceedings of any kind and shall not be required to defend any legal
proceedings which may be instituted against it or in respect of the
Consideration;
(g) If the Escrow Agent at any time, in its sole discretion,
deems it necessary or advisable to relinquish custody of any of the securities
(to the extent delivered to the Escrow Agent pursuant hereto, the
"Consideration"), it may do so by delivering the same to another Person that
agrees to act as escrow agent hereunder and whose substitution for the Escrow
Agent is agreed upon in writing by Xxxxxxx and the Target Company; provided,
however, that such successor Escrow Agent must be resident in the United
States. If no such escrow agent is selected within three (3) days after the
Escrow Agent gives notice to Xxxxxxx and the Target Company of the Escrow
Agent's desire to so relinquish custody of the Consideration and resign as
Escrow Agent, then the Escrow Agent may do so by delivering the Consideration
to the clerk or other proper officer of a state or federal court of competent
jurisdiction situate in the state and county of New York. The fee of any
court officer shall be borne by the Target Company. Upon such delivery, the
Escrow Agent shall be discharged from any and all responsibility or liability
with respect to the Consideration and this Agreement and each of the Target
Company and Xxxxxxx shall promptly pay all monies it may owe to the Escrow
Agent for its services hereunder, including, but not limited to, reimbursement
of its out-of-pocket expenses pursuant to paragraph (i) below;
(h) This Agreement shall not create any fiduciary duty on the
Escrow Agent's part to Xxxxxxx or the Target Company, nor disqualify the
Escrow Agent from representing either party hereto in any dispute with the
other, including any dispute with respect to the Stock Purchase Agreement;
provided, however, that in the event of such dispute, the Escrow Agent shall
have the right to commence an interpleader action in any court of competent
jurisdiction of the state of New York or of the United States located in the
county and state of New York, deposit the Consideration with such court;
(i) The parties acknowledge and agree that the Escrow Agent is
counsel to Xxxxxxx. The parties agree to, and agree not to object to, the
Escrow Agent's engagement as Escrow Agent hereunder;
(j) Upon the full performance of this Agreement, the Escrow
Agent shall be deemed released and discharged of any further obligations
hereunder.
4. Indemnification.
(a) Xxxxxxx hereby indemnifies and holds free and harmless the
Escrow Agent from any and all losses, expenses, liabilities and damages
(including but not limited to reasonable attorney's fees, and amounts paid in
settlement) resulting from claims asserted by the Target Company against the
Escrow Agent with respect to the performance of any of the provisions of this
Agreement;
(b) The Target Company hereby indemnifies and holds free and
harmless the Escrow Agent from any and all losses, expenses, liabilities and
damages (including but not limited to reasonable attorney's fees, and amount
paid in settlement) resulting from claims asserted by Xxxxxxx against the
Escrow Agent with respect to the performance of any of the provisions of this
Agreement;
(c) Xxxxxxx and the Target Company, jointly and severally,
hereby indemnify and hold the Escrow Agent harmless from and against any and
all losses, damages, taxes, liabilities and expenses that may be incurred by
the Escrow Agent, arising out of or in connection with its acceptance of
appointment as the Escrow Agent hereunder and/or the performance of its duties
pursuant to this Agreement, the Purchase Agreement and the securities,
including, but not limited to, all legal costs and expenses of the Escrow
Agent incurred defending itself against any claim or liability in connection
with its performance hereunder, provided that the Escrow Agent shall not be
entitled to any indemnity for any losses, damages, taxes, liabilities or
expenses that directly result from its willful misconduct or gross negligence
in its performance as Escrow Agent hereunder
(d) In the event of any legal action or Proceeding involving any
of the parties to this Agreement which is brought to enforce or otherwise
adjudicate any of the rights or obligations of the parties hereunder, the
non-prevailing party or parties shall pay the legal fees of the prevailing
party or parties and the legal fees, if any, of the Escrow Agent.
5. Miscellaneous.
(a) All notices, including Notices of Conversion and Notices of
Exercise, objections, requests, demands and other communications sent to any
party hereunder shall be deemed duly given if (x) in writing and sent by
facsimile transmission to the Person for whom intended if addressed to such
Person at its facsimile number set forth below or such other facsimile number
as such Person may designate by notice given pursuant to the terms of this
Section 5 and (y) the sender has confirmation of transmission:
(i) If to the Target Company:
iMedia International, Inc.
Attn: CEO
Tel: (000) 000-0000
Fax: (000) 000-0000
(ii) If to Xxxxxxx:
Xxxxxxx Park Investments PLC
00 Xxxxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Attn: Xxxxx Xxxxx
Tel: 00.000.000.0000
Fax: 00.000.000.0000
(iii) If to the Escrow Agent:
Gottbetter & Partners, LLP
000 Xxxxxxx Xxx.
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxxxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
(b) This Agreement has been prepared, negotiated and delivered
in the state of New York and shall be governed by and construed and enforced
in accordance with the laws of the state of New York applicable to contracts
entered into and performed entirely within New York, without giving effect to
the principles of New York law relating to the conflict of laws.
(c) This Agreement may be executed in two or more counterparts,
all of which when taken together shall be considered one and the same
agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature
is delivered by facsimile transmission, such signature shall create a valid
and binding obligation of the party executing (or on whose behalf such
signature is executed) the same with the same force and effect as if such
facsimile signature page were an original thereof.
(d) This Agreement shall be binding upon and inure to the
benefit of the parties and their successors and permitted assigns. The
assignment by a party of this Agreement or any rights hereunder shall not
affect the obligations of such party under this Agreement.
6. Termination of Escrow. The term of this Escrow Agreement
shall begin upon the date hereof and shall continue until terminated upon the
earlier to occur of (i) the Xxxxxxx Escrow Shares are fully distributed or
(ii) the written agreement of the parties to terminate this Agreement. Upon
the termination of this Escrow Agreement pursuant to subsection (ii), the
Escrow Agent shall distribute any of the Xxxxxxx Escrow Shares then held by it
pursuant to the terms of the written agreement of the parties.
[ SIGNATURE PAGE FOLLOWS ]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed the day and year first above written.
The Target Company:
iMedia International, Inc.
By: ______________________________
Name: Xxxxx Xxxx
Title: President
Xxxxxxx:
Dungarvon Associates, Inc. on behalf of
Xxxxxxx Park Investments Plc.
By: ______________________________
Name:
Title:
Escrow Agent:
Gottbetter & Partners, LLP
By:______________________________
Name: Xxxx X Xxxxxxxxxx
Title: Managing Partner
EXHIBIT B
iMedia International, Inc.
OFFICER'S CERTIFICATE
I, Xxxxx Xxxx, being the President of iMedia International, Inc., a
Delaware corporation (the "Target Company"), pursuant to Section 2.2(a)(ii) of
that certain Stock Purchase Agreement (the "Purchase Agreement"), dated as of
July 14, 2004, by and between the Target Company and Xxxxxxx Park Investments
PLC, do hereby certify on behalf of the Target Company that attached hereto is
a copy of the resolutions duly adopted by the Board of Directors of the Target
Company authorizing the Target Company to execute and deliver the Transaction
Documents, as such term is defined in the Purchase Agreement and to enter into
the transactions contemplated thereby.
IN WITNESS WHEREOF, I have executed this Officer's Certificate on behalf
of the Target Company this 14th day of July, 2004.
iMedia International, Inc.
By: ______________________________
Xxxxx Xxxx, President
