EXECUTION COPY
Exhibit 10.1
MERGER AGREEMENT (this "Agreement"), dated as of February
28, 2002 among Curious Holdings LLC (the "Purchaser"),
Curious Pictures Corporation, a New York corporation
("Curious"), DCODE, Inc., a Minnesota corporation ("DCODE"
and, together with Curious, the "Targets" and each
individually a "Target"), and each of iNTELEFILM
Corporation, f/k/a Children's Broadcasting Corporation, a
Minnesota corporation ("Intelefilm"), and its subsidiary,
Harmony Holdings, Inc. ("Harmony" and, together with
Intelefilm, the "Sellers" and, each individually, a
"Seller").
WHEREAS, the Purchaser desires to purchase from the Sellers,
and the Sellers desire, jointly and severally, to sell to the Purchaser, the
Targets pursuant to the Merger of Curious and DCODE (each as defined herein)
into the Purchaser on the following terms and conditions.
NOW, THEREFORE, in consideration of the premises and the
respective agreements hereinafter set forth, the parties hereto agree as
follows:
ARTICLE i
DEFINED TERMS
Section 1.01 Defined Terms. The following terms, not defined elsewhere in
this Agreement, shall have the following meanings:
"Act" shall mean the Delaware Limited Liability Company Act.
"BCL" shall mean the New York Business Corporation Law.
"Closing" shall have the meaning set forth in Section 2.05 hereof.
"Closing Date" shall have the meaning set forth in Section 2.05 hereof.
"Consideration" shall mean the Curious Purchase Price and the DCODE
Purchase Price.
"Curious" shall mean Curious Pictures Corporation, a New York corporation.
"Curious Shares" shall mean all of the issued and outstanding shares of
common stock, no par value per share, of Curious, including without
limitation all such shares owned by the Sellers.
"DCODE" shall mean DCODE, Inc., a Minnesota corporation.
"DCODE Shares" shall mean all of the issued and outstanding shares of
common stock, no par value per share, of DCODE, including without
limitation all such shares owned by the Sellers.
"Effective Time" shall have the meaning set forth in Section 2.05 hereof.
"Encumbrances" shall mean, to the extent applicable, all liens (including
liens for Taxes), mortgages, security interests, charges, claims, leases,
survey exceptions, options, rights of first refusal or first offer,
easements, restrictions, rights-of-way or other similar encumbrances of any
nature whatsoever.
"Furious" shall mean Furious Pictures Corporation, a New York corporation
and a wholly-owned subsidiary of Curious.
"Furious Shares" shall mean all issued and outstanding shares of common
stock, $0.01 par value per share, of Furious, including without limitation
all such shares owned by Curious and, indirectly, the Sellers.
"Merger" shall mean the merger of each of Curious and DCODE into the
Purchaser.
"Shares" shall mean the Curious Shares, the Furious Shares and the DCODE
Shares.
"Targets" shall mean Curious and DCODE, and "Target" shall mean any of the
foregoing.
"Taxes" shall mean all taxes on or measured by net income, gross profits or
net profits, together with any interest and any penalties, additions to tax
or additional amounts imposed by any taxing authority, domestic or foreign.
ARTICLE II
MERGER AND STOCK PURCHASE
Section 2.01 Consent; Place of Formation and Principal Offices. (a) Each of
the Sellers, the Targets and the Purchaser hereby agrees to the Merger of
Curious and DCODE into the Purchaser, subject to the terms and conditions set
forth herein. At the Effective Time (as hereinafter defined) of the Merger, each
of Curious and DCODE will be merged with and into the Purchaser in accordance
with the provisions of the Act, the BCL and, with respect to DCODE, the laws of
the State of Minnesota. Pursuant to the Merger the Furious Shares will be
transferred to the Purchaser and Furious shall become a wholly-owned subsidiary
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of the Purchaser. The Purchaser shall be the surviving company of the Merger,
and the separate existence of Curious and DCODE shall cease. The terms and
conditions of the Merger hereby agreed upon and the manner of carrying the same
into effect shall be as hereinafter set forth.
(b) The name and place of formation of each party is as follows:
Name Place
Curious Holdings LLC Delaware
Curious Pictures Corporation New York
DCODE, Inc. Minnesota
(c) The principal office of the Targets and Furious in the State of New
York are located at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000.
(d) The principal offices of the Purchaser is as follows: the principal
office of the Purchaser in the State of Delaware is located at Corporation Trust
Center, 0000 Xxxxxx Xxxxxx, xx xxx Xxxx xx Xxxxxxxxxx, Xxxxxx of New Castle and
the principal office of Furious in the State of New York is located at 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000.
(e) The limited liability company agreement of the Purchaser, as in
effect immediately prior to the Effective Time, shall be the limited liability
company agreement. The charter documents of Furious, as in effect immediately
prior to the Effective Time, shall continue to be the charter documents of
Furious.
Section 2.02 Approvals. The terms and conditions of the
transaction set forth herein have been authorized and approved by each company
party to this Agreement, and, with respect to each Target and Furious, its
respective shareholders.
Section 2.03 Capitalization. (a) All units issued and
outstanding in the Purchaser are held by the Purchaser, and there is no other
equity issued and outstanding.
(b) All Shares of the Targets and Furious are held by the following
persons as follows:
Intelefilm 51%
Harmony 49%
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TOTAL 100%
There is no other equity of the Targets or Furious issued and outstanding.
Section 2.04 Consideration. (a) The consideration (the
"Curious Purchase Price") to be paid for Curious shall be:
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(i) $1,000,000 (less the $200,000 deposit previously made by
the Purchaser to the Sellers) in cash payable on the Closing Date by check or
wire transfer to an account designated by the Sellers to the Purchaser at least
five days prior to the Closing Date upon evidence of the Effective Time (the
"Seller Account");
(ii) a $500,000 Promissory Note in the form attached hereto as
Exhibit A (the "Note") bearing interest at 5% per annum and payable upon the
sooner of (A) such time as the aggregate net working capital of the Purchaser is
positive and then at a rate equivalent to 25% of the aggregate after-tax net
income (including without limitation taxes allocable to members, in the case of
entities treated as partnerships for tax purposes) of the Purchaser, payable
within 45 days of each quarter's end or (B) the first and second anniversary of
the Closing Date in equal installments of $250,000 in principal plus interest
(less, on each such date, any amounts previously paid pursuant to the previous
clause (A)); and
(iii) the forgiveness of all of the intercompany debt between
Curious and Intelefilm, Harmony and their affiliated companies, excluding the
intercompany debt between Curious and DCODE (which intercompany debt is hereby
forgiven by the Sellers).
(b) The consideration (the "DCODE Purchase Price") to be paid for
DCODE shall be:
(i) $1,000,000 in cash payable by check or wire transfer to
the Seller Account on the Closing Date upon evidence of the Effective Time; and
(ii) the forgiveness of all of the intercompany debt between
DCODE and Intelefilm, Harmony and their affiliated companies, excluding the
intercompany debt between Curious and DCODE (which intercompany debt is hereby
forgiven by the Sellers).
(c) The Purchaser shall assume no responsibility to allocate the
Purchase Price among the Sellers, and the Sellers shall be solely responsible
for such allocation.
Section 2.05 The Closing; Manner of Effectuating the Merger
and the Purchase; Effective Time. (a) The closing (the "Closing") shall take
place at the offices of Xxxxxxxx Xxxxx & Deutsch LLP, 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx, xx the date hereof (the "Closing Date"). At the Closing,
simultaneous with the filing of the Certificate of Merger in the forms of
Exhibit B-1 and Exhibit B-2 attached hereto (the "Merger Certificates"), each
Seller shall surrender its certificate or certificates representing the Shares
of each Target, with such stock powers executed in blank or otherwise in proper
form for transfer to the Purchaser as the Purchaser may reasonably request in
exchange for the portion of the Consideration into which the Shares represented
by such certificate or certificates shall have been converted or exchanged
pursuant to this Agreement. Upon such surrender, the Sellers shall be entitled
to receive in exchange therefor a portion of the Consideration to which the
Sellers shall have become entitled pursuant to the provisions of this Agreement
and the certificates so surrendered (other than the Furious Shares, which shall
remain outstanding and held by the Purchaser) shall forthwith be canceled. No
interest will be paid or accrued on any cash constituting Consideration. Until
surrendered in accordance with the provisions of this Agreement, each
certificate representing Shares shall represent for all purposes only the right
to receive the Consideration provided for by this Agreement, without interest.
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(b) At the Effective Time, each of Curious and DCODE shall be merged
with and into the Purchaser; and thereupon, all issued and outstanding Curious
Shares and DCODE Shares (and any and all options and convertible securities
therefore) shall be canceled and cease to exist except with respect to the right
to receive a proportionate share of the Consideration as set forth below, and
the Purchaser shall possess any and all purposes and powers of the relevant
Targets; and all leases, licenses, property, rights, privileges and powers of
whatever nature and description of each Target shall be transferred to, vested
in and devolved upon the Purchaser, without further act or deed, subject to all
of the debts and obligations of any of the Targets.
(c) The Merger shall become effective upon acceptance of the Merger
Certificates, together with any necessary fees, by the Secretary of State of the
State of Delaware (the "Effective Time").
Section 2.06 Further Assurances. From and after the Closing,
upon written request from the Purchaser, each Seller shall execute, acknowledge
and deliver all such further acts, assurances, deeds, assignments, transfers,
conveyances and other instruments and papers as may be reasonably required to
effectuate the Merger and the transactions contemplated hereby and release any
and all liens in respect of or relating to the Targets and Furious.
ARTICLE III
Representations and Warranties
of THE SELLERS
Each of the Sellers, jointly and severally, represents and
warrants to the Purchaser as of the date hereof, as of the Closing Date and as
of the Effective Time as follows (such representations and warranties being to
the best knowledge of the Sellers after due inquiry and in reliance on the
representations of Purchaser set forth in Section 4.06, except with respect to
the representations and warranties contained in Sections 3.01, 3.02, 3.03, 3.04,
3.05, 3.06, 3.11, 3.12, 3.13, 3.14 and 3.15 which shall not be qualified by such
knowledge or reliance except as otherwise expressly stated therein):
Section 3.01 Corporate Existence and Power. Each Seller, each
Target and Furious is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of formation. Each Seller, each
Target and Furious has all requisite corporate power and authority to own and
lease its properties, to carry on its business as presently conducted and to
carry out the transactions contemplated hereby. Each Seller, each Target and
Furious is duly qualified to do business and is in good standing in each
jurisdiction in which such qualification is necessary because of the property
owned, leased or operated by it or because of the nature of its businesses as
now being conducted.
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Section 3.02 Authorization; Non-Contravention. The execution,
delivery and performance by each Seller, each Target and Furious of this
Agreement and the consummation of the transactions contemplated hereby have been
duly authorized by all requisite corporate action on the part of each Seller,
each Target and Furious and its respective stockholders and this Agreement has
been duly executed and delivered by each Seller, each Target and Furious and is
in full force and effect. This Agreement constitutes the valid and binding
obligations of each Seller, each Target and Furious, enforceable in accordance
with its terms. The execution, delivery and performance of this Agreement, and
compliance with the provisions hereof by each Seller, each Target and Furious
will not (a) violate any law or statute or order, judgment or decree of any
court, administrative agency or other governmental body applicable to the
Sellers, the Targets or Furious, (b) conflict in any respect with or result in
any breach of any of the terms or provisions or constitute (with due notice or
lapse of time, or both) a default under the Certificate of Incorporation or
By-laws of the Sellers, the Targets or Furious, (c) result in a breach or
violation of, or a default under, or acceleration of any obligations pursuant to
any note, indenture, mortgage, lease, agreement, contract, understanding,
arrangement or instrument to which any Seller, or the Sellers' knowledge, any
Target or Furious, is a party, or (d) result in the creation or imposition of
any Encumbrance of any nature whatsoever upon any of the properties or assets of
any Seller, any Target or Furious.
Section 3.03 No Consents. No notices, reports or other filings
are required to be made by any Seller or Target with, nor are any consents,
registrations, approvals, permits or authorizations required to be obtained by
any Seller, any Target or Furious from, any governmental authority or third
party for the valid authorization, execution and delivery by the Sellers, the
Targets and Furious of this Agreement or for the performance by each Seller,
each Target and Furious of its obligations hereunder.
Section 3.04 Valid Title and No Encumbrances. The Sellers
have, and will have immediately prior to both the Effective Time and the Closing
Date, good and valid title to all Shares free and clear of all Encumbrances.
Except as set forth on Schedule 3.04 attached hereto, there are no Encumbrances
on the assets or properties of any of the Targets.
Section 3.05 Taxes. The Sellers have filed all Tax Returns and
paid all Taxes shown thereon to be due, if any, that are required to have been
filed on or before the date hereof with appropriate Federal, state, foreign,
county and local governmental agencies or instrumentalities, in each case with
respect to the Targets and Furious. As of the date hereof, there are not pending
or, to the best knowledge of the Sellers, threatened, any audits, examinations,
investigations or other proceedings in respect of Taxes or Tax matters with
respect to the Targets or Furious. There are not, to the best knowledge of the
Sellers, any unresolved questions or claims concerning the Targets' or Furious'
Tax liability. None of the Targets or Furious has any liability with respect to
any income, payroll (as it relates to staff payroll administered by the Sellers'
Minneapolis office), withholding, franchise or similar Taxes. As used in this
Agreement, the term "Tax Return" includes all returns and reports (including
elections, declarations, disclosures, schedules, estimates and information
returns) required to be supplied to a Tax authority relating to Taxes. The
Sellers shall be responsible for the payment of all Taxes and the filing of all
Tax Returns with respect to the Targets and Furious through the Effective Time.
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Section 3.06 Capitalization. (a) As of the date hereof:
(i) all of the issued and outstanding shares of
capital stock of each Target and Furious were duly authorized for issuance and
are validly issued, fully paid and non-assessable;
(ii) Schedule 3.06 attached hereto fully and
accurately describes the capital structure of each Target and Furious and,
except as set forth on Schedule 3.06, there are no outstanding securities of any
Target or Furious convertible into or evidencing the right to purchase or
subscribe for any shares of capital stock of any Target or Furious, there are no
outstanding or authorized options, warrants, calls, subscription rights,
commitments or other agreements of any character requiring, and there are no
securities outstanding which upon conversion or exchange would require, the
issuance, sale or transfer of any additional shares of capital stock of any
Target or Furious or other equity securities of any Target or Furious or other
securities convertible into, exchangeable for or evidencing the right to
subscribe for or purchase shares of capital stock of any Target or Furious or
other equity securities of any Target or Furious, or any stock appreciation
rights, phantom stock or similar equity equivalent rights issued by or binding
upon any Target or Furious;
(iii) there are no voting trusts or other voting
agreements with respect to the capital stock of any Target or Furious or other
ownership interests of any Target or Furious or any agreement relating to the
issuance, sale, redemption, transfer or other disposition of any such interests
of any Target or Furious to which any Target or Furious is a party, or of which
the Sellers have knowledge; and
(iv) no Target or Furious has any subsidiaries except
that Furious is a wholly-owned subsidiary of Curious.
Section 3.07. Conduct of Business and Financial Statements.
(a) The Sellers and each Target and Furious have been and are in compliance with
all federal, state and local laws, statutes, ordinances, rules and regulations
as of the date hereof and as of the Effective Time and the Closing Date, the
failure to comply with which could materially adversely affect the business,
assets, operations, earnings, prospects or condition (financial or otherwise) of
the Targets, Furious or the Purchaser. Each of the Sellers, the Targets and
Furious has materially complied with the rules and regulations of all
governmental agencies having authority over its business or its operations,
including without limitation, agencies concerned with intra-state and interstate
commerce, occupational safety, environmental protection and employment
practices, except where the failure to comply would not have a material adverse
effect on the business, operations, earnings, assets or condition (financial or
otherwise) of the Targets, Furious or the Purchaser. The Sellers have no
knowledge of and have not received any notice of violation of any such rule or
regulation during the two years prior to the date hereof which could result in
any liability of any Target, Furious or the Purchaser for penalties of damages
or which could subject any Target, Furious or the Purchaser to any injunction or
government writ, order or decree. There are no facts, events or conditions that
could interfere with, prevent continued compliance with or give rise to any
material liability under any federal, state or local governmental laws,
statutes, ordinances or regulations applicable to the business, operations,
earnings, assets or condition (financial or otherwise) of any of the Targets or
Furious.
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(b) The consolidated balance sheet and related statements of
income and loss of the Sellers (including information therein with respect to
the Targets and Furious) for the years ended December 31, 2001 and December 31,
2000, and unaudited financial statements with respect to interim periods
(collectively, the "Financial Statements") have been prepared in accordance with
the United States generally accepted accounting principles ("GAAP") applied on a
basis consistent with prior periods and fairly present the consolidated
financial position of the Sellers, the Targets and Furious as of the dates
thereof (subject, in the case of unaudited interim statements to normal year-end
adjustments and the absence of certain footnote disclosures).
(c) None of the Targets or Furious is a party to any
non-competition agreement or any other agreement or arrangement that materially
limits the Targets, Furious or any of their respective affiliates, or that
would, after the date hereof similarly limit the Purchaser, Furious or any
successor thereto, from engaging or competing in any line of business or in any
geographic area after giving effect to the transactions contemplated hereby.
(d) None of the Targets or Furious has made any distribution
or other payments to the Sellers since January 31, 2002.
Section 3.08. Absence of Undisclosed Liabilities; Affiliate
Transactions. (a) Except for matters reflected or reserved against in the
unaudited balance sheet as of December 31, 2001 and included in the Financial
Statements specifically with respect to the Targets and Furious, none of the
Targets or Furious had at such date or has incurred since that date any
liabilities, obligations (whether absolute, accrued, contingent or otherwise) or
contingencies of any nature due to actions of the Sellers, except (i)
liabilities, obligations or contingencies (A) which are accrued or reserved
against in the Financial Statements or reflected in the notes thereto or (B)
which were incurred after December 31, 2001 in the ordinary course of business
and consistent with past practices; or (ii) liabilities, obligations or
contingencies which are of a nature not required to be reflected in the
consolidated financial statements of the Sellers, the Targets and Furious
prepared in accordance with GAAP consistently applied and which were incurred in
the ordinary course of business.
(b) Except as set forth in Schedule 3.08 attached hereto,
there are no transactions, agreements, arrangements or understandings between
the Sellers and their shareholders and affiliates, on the one hand, and the
Targets or Furious and their affiliates.
Section 3.09 Properties; Agreements. None of the Targets or
Furious owns, and since its inception has not owned, any real property. Each
Target and Furious has good and marketable title to (or valid leasehold or
contractual interests in) all personal property used in its business, free and
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clear of any Encumbrances. All machinery, equipment, furniture, fixtures and
other personal property of each Target and Furious is in good operating
condition and fit for operation in the ordinary course of business (subject to
normal wear and tear) with no defects that could reasonably be expected to
interfere with the conduct of normal operations of such equipment, furniture,
fixtures and other personal property and are suitable for the purposes for which
they are currently being used. All agreements and contracts to which the Targets
and Furious are a party are in full force and effect.
Section 3.10 Intellectual Property. Each Target and Furious
owns, or has the right to use, all patents, patent applications, trademarks,
service names, trade names, copyrights, licenses, trade secrets or other
proprietary rights necessary to conduct its business as now being conducted and
as proposed to be conducted by the Purchaser without any conflict or
infringement of the rights of others and, except as set forth on Schedule 3.10,
the Sellers have not received a notice that it is infringing upon or otherwise
acting adversely to the right or claimed right of any person under or with
respect to any of the foregoing, and to the Sellers' knowledge there is no basis
for any such claim. The Sellers are not aware of any violation by a third party
of any of any Target's or Furious' patents, trademarks, service marks, trade
names, copyrights, trade secrets or other proprietary rights.
Section 3.11 Employee Benefit Plans. Except as set forth on
Schedule 3.11, the Sellers do not maintain on behalf of either Targets or
Furious, and to the knowledge of Sellers neither Targets nor Furious maintain,
any bonus, deferred compensation, pension, retirement, profit-sharing, thrift,
savings, employee stock ownership, stock bonus, stock purchase, restricted stock
and stock option plans, any employment or severance contracts, health and
medical insurance plans, life insurance and disability insurance plans, or other
material employee benefit plans, contracts or arrangements which cover employees
or former employees of the Targets or Furious including, but not limited to,
"employee benefit plans" within the meaning of Section 3(3) of ERISA.
Section 3.12 Litigation. Except as set forth on Schedule 3.12,
there are no actions, suits, proceedings or investigations pending nor, to the
best knowledge of the Sellers, threatened against any of the Sellers, the
Targets or Furious by or before any court or governmental agency, which would
adversely affect the Purchaser's operation of the Targets as merged into the
Purchaser, the operation of Furious as a subsidiary of the Purchaser, or the
consummation of the transactions contemplated hereby.
Section 3.13 Brokers. No Person engaged by the Sellers is or
will be entitled to a broker's, finder's, investment banker's, financial
adviser's or similar fee from the Purchaser or Furious in connection with this
Agreement or any of the transactions contemplated hereby (provided that the
Sellers have agreed to pay Xxxxxxx Xxxx Incorporated ("RAI") the amount of
Thirty Seven Thousand Five Hundred Dollars ($37,500.00), payable (i) $25,000.00
at the Closing and (ii) payment of $12,500.00 upon receipt of such payment of
the Note that represents the principal payment of the Note between $237,500.00
and $250,000.00; and provided further that the Purchaser is hereby directed and
authorized by the Sellers to make said payments to RAI directly out of the
proceeds due to the Sellers).
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Section 3.14 SEC Filings. As of the filing dates (or to the
extent amended or superseded by a subsequent filing, with respect to the
information in such subsequent filing, or as of the date of the subsequent
filing) thereof, the Sellers' filings and reports filed with the Securities and
Exchange Commission did not or will not (as the case may be) contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
Section 3.15 No Misrepresentation. The representations and
warranties of the Sellers in this Agreement (including the Schedules and
Exhibits hereto and as qualified by knowledge or reliance as set forth therein)
as of the date hereof contain no untrue statement of a material fact nor omit a
material fact necessary in order to make the statements contained herein not
misleading.
ARTICLE IV
Representations and Warranties
of THE PURCHASER
The Purchaser represents and warrants to the Sellers as of the
date hereof and as of the Closing Date and the Effective Time as follows:
Section 4.01 Corporate Existence and Power. The Purchaser is a
limited liability company duly organized, validly existing and in good standing
under the laws of its jurisdiction of formation. The Purchaser has all requisite
corporate power and authority to own and lease its properties, to carry on its
business as presently conducted and to carry out the transactions contemplated
hereby. The Purchaser is duly qualified to do business and is in good standing
in each jurisdiction in which such qualification is necessary because of the
property owned, leased or operated by it or because of the nature of its
businesses as now being conducted.
Section 4.02 Authorization; Non-Contravention. The execution,
delivery and performance by the Purchaser of this Agreement and the consummation
of the transactions contemplated hereby have been duly authorized by all
requisite corporate action on the part of the Purchaser and this Agreement has
been duly executed and delivered by the Purchaser and is in full force and
effect. This Agreement constitutes the valid and binding obligations of the
Purchaser, enforceable in accordance with its terms. The execution, delivery and
performance of this Agreement, and compliance with the provisions hereof by the
Purchaser will not (a) violate any law or statute or order, judgment or decree
of any court, administrative agency or other governmental body applicable to the
Purchaser, (b) conflict in any respect with or result in any breach of any of
the terms or provisions or constitute (with due notice or lapse of time, or
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both) a default under the constitutive documents of the Purchaser, (c) result in
a breach or violation of, or a default under, or acceleration of any obligations
pursuant to any note, indenture, mortgage, lease, agreement, contract,
understanding, arrangement or instrument to which the Purchaser is a party, or
(d) result in the creation or imposition of any Encumbrance of any nature
whatsoever upon any of the properties or assets of the Purchaser.
Section 4.03 No Consents. No notices, reports or other filings
are required to be made by the Purchaser with, nor are any consents,
registrations, approvals, permits or authorizations required to be obtained by
the Purchaser from, any governmental authority or third party for the valid
authorization, execution and delivery by the Purchaser of this Agreement or for
the performance by the Purchaser of its obligations hereunder.
Section 4.04 Litigation. There are no actions, suits,
proceedings or investigations pending nor, to the best knowledge of the
Purchaser, threatened against the Purchaser by or before any court or
governmental agency, which would adversely affect the consummation of the
transactions contemplated hereby.
Section 4.05 Brokers. No Person engaged by the Purchaser is or
will be entitled to a broker's, finder's, investment banker's, financial
adviser's or similar fee from the Sellers in connection with this Agreement or
any of the transactions contemplated hereby.
Section 4.06 Disclosure. Each of Xxxxx Xxxxxx, Xxxxxxx Xxxxx,
Xxxxxxx Xxxxxxx and Xxxxx Xxxxx, members of Purchaser, is familiar with the
affairs and financial condition of the Targets and/or Furious, and has no
knowledge of any material event or condition affecting the business, assets or
prospects of the Targets and/or Furious, the existence or occurrence of which
would result in a breach of the Sellers' representations and warranties
contained herein, including but not limited to any liability relating to real
property, personal property, environmental matters, ERISA Plans and other
employee benefit plans, financial matters, tax matters (other than income taxes
in the control of the Sellers) and intellectual property. In entering into this
Agreement and consummating the transactions contemplated hereby, the Purchaser
is not relying on any representation or warranty of Sellers or any other person,
except as otherwise expressly provided in this Agreement.
ARTICLE V
CONDITIONS TO CLOSING
Section 5.01 Closing Conditions of all Parties. The obligation
of all parties hereto to effect the Merger, the Purchase and the other
transactions contemplated by this Agreement is subject to there being no
provision of any applicable law or regulation and no judgment, injunction, order
or decree prohibiting the consummation of the Merger or the Purchase.
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Section 5.02 Closing Conditions of the Purchaser. The
obligation of the Purchaser to effect the Merger, the Purchase and the other
transactions contemplated by this Agreement is subject to the fulfillment on or
prior to the Closing Date and the Effective Time of each of the following
conditions (all or any of which may be waived by the Purchaser in its sole
discretion):
(a) Performance of Obligations; Representations and Warranties. The
Sellers, the Targets and Furious shall have performed and complied in all
material respects with all covenants and agreements contained in this Agreement
that are required to be performed or complied with by the relevant party prior
to or at the Closing or the Effective Time. The Sellers' representations and
warranties contained in this Agreement shall be true and correct in all material
respects as of the Closing Date and the Effective Time, as applicable, or in the
case of representations and warranties made as of a specified date earlier than
the Closing Date, shall have been true and correct in all material respects on
and as of such date.
(b) Employment Agreements. The Purchaser shall have entered into
employment agreements with each of Xxxxx Xxxxxx, Xxxxxxx Xxxxx, Xxxxxxx Xxxxxxx
and Xxxxx Xxxxx (collectively, the "Curious Management") in form and substance
satisfactory to such parties.
(c) Financing. The Purchaser shall have obtained financing in respect
of the payment of the Consideration on terms satisfactory to the Curious
Management.
(d) Delivery of Shares. The Sellers shall deliver to the Purchaser all
Shares of Furious and the Targets as well as the complete and correct minute
books, stock ledgers, and stock transfer records of Furious and the Targets.
(e) Security Releases and UCC Termination Statements. With respect to
any outstanding liens, Sellers shall deliver to the Purchaser evidence of the
termination of security interests with respect to such liens and the Purchaser's
and Sellers' ability and authority to file UCC termination statements
terminating all security interests in the Shares or assets of Furious and the
Targets.
(f) The Purchaser shall have received an opinion of counsel to the
Sellers in form and substance satisfactory to the Purchaser.
(g) Ancillary Documents. The Purchaser shall have received such other
documentation with respect to the Sellers, the Targets and Furious reasonably
satisfactory to the Purchaser and evidencing the existence of such entities and
their authority to enter into this Agreement and consummate the transactions
contemplated hereby.
Section 5.03 Closing Conditions of the Sellers. The obligation
of the Sellers to effect the Merger, the Purchase and the other transactions
contemplated by this Agreement is subject to the fulfillment on or prior to the
Closing Date and the Effective Time of each of the following conditions (all or
any of which may be waived by the Sellers in their sole discretion):
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(a) Performance of Obligations; Representations and Warranties. The
Purchaser shall have performed and complied in all material respects with all
covenants and agreements contained in this Agreement that are required to be
performed or complied with by the Purchaser prior to or at the Closing or the
Effective Time. The Purchaser's representations and warranties contained in this
Agreement shall be true and correct in all material respects as of the Closing
Date and the Effective Time, as applicable, or in the case of representations
and warranties made as of a specified date earlier than the Closing Date, shall
have been true and correct in all material respects on and as of such date.
(b) Waiver of Option Rights. Curious Management shall have surrendered
their right, pursuant to Section 1.2 of the Curious Stock Agreement dated as of
July 27, 1999 among the Seller, Curious and Curious Management, to require
Intelefilm to purchase shares of Curious capital stock held by Curious
Management as evidenced by the concurrent execution of the Waiver of Option
Rights Agreement.
(c) Ancillary Documents. The Sellers shall have received such other
documentation with respect to the Purchaser reasonably satisfactory to the
Sellers and evidencing the existence of the Purchaser and its authority to enter
into this Agreement and consummate the transactions contemplated hereby.
ARTICLE VI
Miscellaneous
Section 6.01 Notices. Any notice, request or other document to
be given hereunder to a party hereto shall be effective when received and shall
be given in writing and delivered in person or sent by overnight courier,
registered or certified mail, postage prepaid, or by telecopy (receipt
confirmed) as follows:
If to the Purchaser, addressed to it at:
---------------------------------------
Curious Holdings LLC
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Xxxxxxxx Xxxxx & Deutsch LLP
000 Xxxxx Xxxxxx, 00xx xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
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and
If to the Sellers, addressed to them at:
---------------------------------------
the addresses and to the attention of the persons
listed on the signature page hereto.
Any party hereto may change its address for receiving notices, requests and
other documents by giving written notice of such change to the other parties
hereto.
Section 6.02 Indemnification. (a) Each Seller hereby agrees,
jointly and severally, to indemnify and hold harmless the Purchaser and its
members, affiliates (including the lenders to the Purchaser related to this
transaction), directors, officers, employees and other agents and
representatives (collectively, the "Purchaser Indemnified Parties") from and
against any and all liabilities, judgments, claims, settlements, losses,
damages, reasonable fees (including attorneys' and other experts' fees and
disbursements), Encumbrances, taxes, penalties, obligations and expenses
(collectively, "Losses") incurred or suffered by any such person or entity
arising from, by reason of or in connection with any misrepresentation or breach
of any representation, warranty (subject, for the avoidance of doubt, to any
knowledge qualifiers or reliance set forth in such representations and
warranties) or covenant of such Seller pursuant to this Agreement or any
certificate or other document delivered by such Seller under this Agreement.
(b) The Purchaser hereby agrees to indemnify and hold harmless
the Sellers and their respective affiliates, directors, officers, employees and
other agents and representatives (collectively, the "Seller Indemnified
Parties") from and against any and all Losses incurred or suffered by any such
person or entity arising from, by reason of or in connection with any
misrepresentation or breach of any representation, warranty (subject, for the
avoidance of doubt, to any knowledge qualifiers or reliance set forth in such
representations and warranties) or covenant of the Purchaser pursuant to this
Agreement or any certificate or other document delivered by the Purchaser under
this Agreement.
Section 6.03 Survival. Except with respect to the
representations and warranties of the Sellers set forth in Sections 3.02, 3.04,
3.05 and 3.06 which shall continue to remain in effect indefinitely, the
representations and warranties of the parties contained in this Agreement shall
survive the Closing and remain in full force and effect for three (3) years from
the Effective Date; provided that such period shall be extended with respect to
any claim for indemnification brought prior to the expiration of such three-year
survival period.
Section 6.04 Expenses. The Purchaser, on the one hand, and
the Sellers, on the other hand, shall bear their own expenses in connection with
the preparation of and consummation of the transactions contemplated by this
Agreement
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Section 6.05 Governing Law; Choice of Forum. This Agreement
shall be governed by and construed in accordance with the laws of the State of
New York (without regard to conflict of laws doctrines). The parties agree that
the exclusive place of jurisdiction for any action, suit or proceeding relating
to this Agreement shall be in the courts of the United States of America sitting
in the Borough of Manhattan in the City of New York or, if such courts shall not
have jurisdiction over the subject matter thereof, in the courts of the State of
New York sitting therein, and each such party hereby irrevocably and
unconditionally agrees to submit to the jurisdiction of such courts for purposes
of any such action, suit or proceeding. If such state court also does not have
jurisdiction over the subject matter thereof, then such an action, suit or
proceeding may be brought in the federal or state courts located in the states
of the principal place of business of any party hereto. Each party irrevocably
waives any objection it may have to the venue of any action, suit or proceeding
brought in such courts or to the convenience of the forum. Final judgment in any
such action, suit or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment, a certified or true copy of which shall
be conclusive evidence of the fact and the amount of any indebtedness or
liability of any party therein described.
Section 6.06 Assignment. Except as otherwise provided herein,
this Agreement may not be assigned by operation of law or otherwise, and any
attempted assignment shall be null and void. The Purchaser may assign all of its
rights under this Agreement to any Affiliate; provided such Affiliate assumes
all of the obligations of the Purchaser hereunder; and provided further that the
Purchaser shall remain liable for such Affiliate's failure to meet any of the
obligations of Purchaser hereunder. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs,
successors, assigns and legal representatives. This Agreement shall be for the
sole benefit of the parties to this Agreement and their respective heirs,
successors, assigns and legal representatives and is not intended, nor shall be
construed, to give any Person, other than the parties hereto and their
respective heirs, successors, assigns and legal representatives, any legal or
equitable right, remedy or claim hereunder.
Section 6.07 Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed to be an original, but
both of which together shall constitute one and the same instrument.
Section 6.08 Entire Agreement; Amendments. This Agreement,
together with the schedules and exhibits and the agreements, certificates and
instruments delivered pursuant hereto, contain the entire agreement among the
parties hereto, and supersede all prior agreements and undertakings (written and
oral) between the parties hereto, relating to the subject matter hereof,
including without limitation existing employment agreements. This Agreement, and
any provision hereof, may only be amended, modified or waived in writing signed
by the party against whom enforcement of such amendment, modification or waiver
is sought.
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Section 6.09 Press Releases. The parties hereto shall not make
any public announcement or press release regarding the transactions contemplated
hereby until mutually agreed as to substance and timing.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
Curious Holdings LLC
By: /s/ Xxxxx Xxxxxx
-----------------------------------
Name: Xxxxx Xxxxxx
Title: CFO
iNTELEFILM Corporation
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: CFO
Address: 0000 Xxx Xxxxx Xxx Xx.
Xxxx Xxxxxxx, XX 00000
Harmony Holdings, Inc.
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: CFO
Address: Same as Intelefilm
Curious Pictures Corporation
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: VP Finance
Address: Same as Intelefilm
DCODE, Inc.
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: CFO
Address: Same as Intelefilm
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