EXHIBIT 10.11
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CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
BETWEEN
XXXX XXXXX PRODUCTIONS HOLDING, INC.
AND
THE PURCHASER(S) LISTED ON
SCHEDULE 1 HERETO
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MARCH 26, 2004
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TABLE OF CONTENTS
ARTICLE I CERTAIN DEFINITIONS........................................................... 1
1.1 Certain Definitions............................................................. 1
ARTICLE II PURCHASE AND SALE OF CONVERTIBLE PREFERRED 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................................................ 6
3.1 Representations, Warranties and Agreements of the Company....................... 6
3.2 Representations and Warranties of the Purchaser................................. 9
ARTICLE IV OTHER AGREEMENTS OF THE PARTIES............................................... 12
4.1 Manner of Offering.............................................................. 12
4.2 Notice of Certain Events........................................................ 12
4.3 Blue Sky Laws................................................................... 13
4.4 Integration..................................................................... 13
4.5 Furnishing of Rule 144(c) Materials............................................. 13
4.6 Solicitation Materials.......................................................... 13
4.7 Listing of Common Stock......................................................... 13
4.8 Attorney-in-Fact................................................................ 13
4.9 Indemnification................................................................. 14
4.10 Notice and Consultation Before Securities Issuances............................. 16
4.11 Purchaser's Ownership of Common Stock........................................... 16
4.12 No Violation of Applicable Law.................................................. 17
4.13 Redemption Restrictions......................................................... 17
4.14 Option for Additional Company Shares............................................ 17
ARTICLE V MISCELLANEOUS................................................................. 16
5.1 Fees and Expenses............................................................... 18
5.2 Entire Agreement................................................................ 18
5.3 Notices......................................................................... 18
5.4 Amendments; Waivers............................................................. 19
5.5 Headings........................................................................ 19
5.6 Successors and Assigns.......................................................... 19
5.7 No Third Party Beneficiaries.................................................... 19
5.8 Governing Law; Venue; Service of Process........................................ 19
5.9 Survival........................................................................ 20
5.10 Counterpart Signatures.......................................................... 20
5.11 Publicity....................................................................... 20
5.12 Severability.................................................................... 20
5.13 Limitation of Remedies.......................................................... 20
5.14 Successors and Assigns.......................................................... 20
5.15 Legal Fees and Interest Default Rate............................................ 209
LIST OF SCHEDULES:
Schedule 1 Purchaser(s)
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 Certificate of Designation
Exhibit G Power of Attorney
Exhibit I Officer's Certificate
Exhibit J Registration Rights Agreement
Exhibit K Opinion of Counsel
Exhibit M Escrow Agreement
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THIS CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT (this "Agreement") is
made and entered into as of March 26, 2004, between Xxxx Xxxxx Productions
Holding, Inc., a corporation organized and existing under the laws of the State
of Nevada (the "Company"), and the purchaser(s) listed on SCHEDULE 1 hereto (the
"Purchaser").
WHEREAS, subject to the terms and conditions set forth in this Agreement,
the Company desires to issue and sell to the Purchaser and the Purchaser desires
to acquire from the Company six hundred thousand (600,000) shares of the
Company's Series B 0 % Convertible Preferred Stock, $.001 par value per share
(the "Series B Preferred Stock"), with a Stated Value of ten dollars ($10) per
share, and an aggregate Stated Value of six million dollars ($6,000,000), for an
aggregate purchase price of six million dollars ($6,000,000).
IN CONSIDERATION of the mutual covenants contained in this Agreement, the
Company and each Purchaser 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.
"Armadillo Shares" means 3,191,489 of the Ordinary Shares of Armadillo
Investments, Plc.
"Attorney-in-Fact" means Gottbetter & Partners, LLP, 000 Xxxxxxx Xxxxxx,
00 Xxxxx, Xxx Xxxx, XX 00000; Tel: 000-000-0000; Fax: 000-000-0000.
"Business Day" means any day except Saturday, Sunday and pay 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.
"Certificate of Designation" means the Certificate of Designation of the
Series B Preferred Stock annexed as EXHIBIT A hereto.
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"Change of Control" means the acquisition, directly or indirectly, by any
Person of ownership of, or the power to direct the exercise of voting power with
respect to, a majority of the issued and outstanding voting shares of the
Company.
"Closing" shall have the meaning set forth in Section 2.2(a).
"Closing Date" shall have the meaning set forth in Section 2.2(a).
"Common Stock" means shares now or hereafter authorized of the class of
common stock, $0.0001 par value, of the Company and stock of any other class
into which such shares may hereafter have been reclassified or changed.
"Company" shall have the meaning set forth in the introductory paragraph.
"Control Person" shall have the meaning set forth in Section 4.11(a)
hereof.
"Conversion Date" shall have the meaning set forth in the Certificate of
Designation.
"Conversion Price" shall have the meaning set forth in the Certificate of
Designation.
"Default" means any event or condition which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"Disclosure Documents" means the Company's reports filed under the
Exchange Act with the SEC.
"Escrow Agent" means Gottbetter & Partners, LLP, 000 Xxxxxxx Xxxxxx, 00
Xxxxx, Xxx Xxxx, XX 00000; Tel: 000-000-0000; Fax: 000-000-0000.
"Event of Default" shall have the meaning set forth in Section 5.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Execution Date" means the date of this Agreement first written above.
"Indemnified Party" shall have the meaning set forth in Section 4.11(b)
hereof.
"Indemnifying Party" shall have the meaning set forth in Section 4.11(b)
hereof.
"G&P" means Gottbetter & Partners, LLP.
"Limitation on Conversion" shall have the meaning set forth in Section
4.13 hereof.
"Losses" shall have the meaning set forth in Section 4.11(a) hereof.
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"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).
"NASD" means the National Association of Securities Dealers, Inc.
"Nasdaq" shall mean the Nasdaq Stock Market, Inc.(R)
"Original Issue Date," shall have the meaning set forth in the Certificate
of Designation.
"OTCBB" shall mean the NASD over-the counter Bulletin Board(R).
"Per Share Market Value" of the Common Stock means on any particular date
(a) the last sale price of shares of Common Stock on such date or, if no such
sale takes place on such date, the last sale price on the most recent prior
date, in each case as officially reported on the principal national securities
exchange on which the Common Stock is then listed or admitted to trading, or (b)
if the Common Stock is not then listed or admitted to trading on any national
securities exchange, the closing bid price per share as reported by Nasdaq, or
(c) if the Common Stock is not then listed or admitted to trading on the Nasdaq,
the closing bid price per share of the Common Stock on such date as reported on
the OTCBB or if there is no such price on such date, then the last bid price on
the date nearest preceding such date, or (d) if the Common Stock is not quoted
on the OTCBB, the closing bid price for a share of Common Stock on such date in
the over-the-counter market as reported by the Pinksheets LLC (or similar
organization or agency succeeding to its functions of reporting prices) or if
there is no such price on such date, then the last bid price on the date nearest
preceding such date, or (e) if the Common Stock is no longer publicly traded,
the fair market value of a share of the Common Stock as determined by an
Appraiser (as defined in the Certificate of Designation) selected in good faith
by the holders of a majority of the Series B Preferred Stock; provided, however,
that the Company, after receipt of the determination by such Appraiser, shall
have the right to select an additional Appraiser, in which case, the fair market
value shall be equal to the average of the determinations by each such
Appraiser.
"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.
"Power of Attorney" means the power of attorney in the form of EXHIBIT G
annexed hereto.
"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.
"Purchase Price" shall have the meaning set forth in Section 2.1(b).
"Purchaser" shall have the meaning set forth in the introductory
paragraph.
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"Redemption Price" shall mean an amount equal to the Stated Value of the
Shares outstanding that are subject to redemption.
"Registration Rights Agreement" means the Registration Rights Agreement in
the form of EXHIBIT J annexed hereto.
"Reporting Issuer" means a company that is subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act.
"Required Approvals" shall have the meaning set forth in Section 3.1(f).
"Securities" means the Shares, the Underlying Shares and the Option
Shares.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Series B Preferred Stock" shall have the meaning set forth in the
recital.
"Shares" shall have the meaning set forth in Section 2.1(a).
"Stated Value" means the sum of ten dollars ($10) per Share or six million
dollars ($6,000,000) for all of the Shares.
"Subsidiaries" shall have the meaning set forth in Section 3.1(a).
"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.
"Underlying Shares" means the shares of the Company's Common Stock into
which the Shares are convertible as provided in the Certificate of Designation.
ARTICLE II
PURCHASE AND SALE OF CONVERTIBLE PREFERRED SHARES
2.1 Purchase and Sale; Purchase Price.
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(a) Subject to the terms and conditions set forth herein, the
Company shall issue and sell and the Purchaser shall purchase six hundred
thousand (600,000) shares of the Company's Series B 0 % Convertible Preferred
Stock, $ .001 par value per share (the "Shares"). The Series B Preferred Stock
shall have the respective rights, preferences and privileges as set forth in the
Certificate of Designation to be filed by the Company with the Secretary of
State of Nevada prior to the Execution Date.
(b) The purchase price for each Share shall be Ten Dollars ($10)
(the "Per Share Consideration"). The Per Share Consideration multiplied by the
number of Shares to be purchased by the Purchaser is referred to as the
"Purchase Price."
(c) The Purchase Price shall be paid by delivery to the Company of
Three Million One Hundred Ninety One Thousand Four Hundred Eighty Nine
(3,191,489) Ordinary Shares (the "Armadillo Shares") of Armadillo Investments,
Plc. The number of Ordinary Shares to be issued will be based on the conversion
rate in effect as of the close of business on the day preceding the closing of
the transaction. For example, if the effective conversion rate is $1.88/(pound)
1, then Armadillo will issue $6,000,000/$1.88, or 3,191,489 Ordinary Shares.
(d) Notwithstanding anything to the contrary contained in this
Agreement, the Company's obligations hereunder shall be expressly contingent
upon the Company selling the Armadillo Shares to a purchaser to be located by
Purchaser simultaneously with receipt of the Armadillo Shares for a price not
less than (pound) .50 per share.
2.2 Execution and Delivery of Documents; The Closing.
(a) The Closing of the purchase and sale of the Shares (the
"Closing") shall take place simultaneously with the execution and delivery of
this Agreement (the "Closing Date"). On the Closing Date,
(i) the Company shall execute and deliver to the Purchaser the
certificates representing the Shares, which Shares shall have the
respective rights, preferences and privileges as set forth in the
Certificate of Designation annexed as EXHIBIT A hereto and the Power of
Attorney;
(ii) the Company shall execute and deliver to the Purchaser a
certificate of its President, in the form of EXHIBIT I annexed hereto,
certifying that attached thereto is a copy of resolutions duly adopted by
the Board of Directors of the Company authorizing the Company to execute
and deliver the Transaction Documents and to enter into the transactions
contemplated thereby;
(iii) the Company shall execute and deliver to Purchaser an
executed Power of Attorney in the form annexed hereto as EXHIBIT G;
(iv) the Company and the Purchaser shall execute and deliver
to each other an executed Registration Rights Agreement in the form
annexed hereto as EXHIBIT J:
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(v) counsel for the Company shall execute and deliver to the
Purchaser an executed copy of the opinion of counsel annexed hereto as
EXHIBIT K;
(vi) the Company, the Escrow Agent and the Purchaser shall
execute and deliver to each other an executed Escrow Agreement in the form
annexed hereto as EXHIBIT M:
(vi) the Purchaser shall deliver to the Company the Armadillo
Shares.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 Representations, Warranties and Agreements of the Company. The Company
hereby makes the following representations and warranties to the Purchaser, all
of which shall survive the Closing:
(a) Organization and Qualification. The Company is a corporation,
duly incorporated, validly existing and in good standing under the laws of the
State of Nevada, 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 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 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 Company and the Subsidiaries,
taken as a whole (a "Material Adverse Effect").
(b) Authorization, Enforcement. The 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 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 Company. Each of
this Agreement and each of the other Transaction Documents has been or will be
duly executed by the Company and when delivered in accordance with the terms
hereof or thereof will constitute the valid and binding obligation of the
Company enforceable against the 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.
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(c) Capitalization. The authorized, issued and outstanding capital
stock of the Company is set forth on SCHEDULE 3.1(c). No shares of the Series B
Preferred Stock have been issued as of the date hereof. 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 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, or, except as a result of the purchase and
sale of the Series B Preferred Stock hereunder, securities, rights or
obligations convertible into or exchangeable for, or giving any person any right
to subscribe for or acquire, any shares of Common Stock, or contracts,
commitments, understandings, or arrangements by which the Company 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 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 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 Company
enforceable in accordance with their respective terms. The Company has and at
all times while the Shares are outstanding will continue to maintain an adequate
reserve of shares of Common Stock to enable it to perform its obligations under
this Agreement and the Certificate of Designation. When issued in accordance
with the terms hereof, the Underlying Shares and the Option Shares will be duly
authorized, validly issued, fully paid and non-assessable. Except as set forth
in SCHEDULE 3.1(d) hereto, there is no equity or equity equivalent security
outstanding that is substantially similar to the Shares, including any security
having a floating conversion price substantially similar to the Shares.
(e) No Conflicts. The execution, delivery and performance of this
Agreement and the other Transaction Documents by the Company and the
consummation by the 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 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
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 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 Company and its Subsidiaries is not being conducted in violation
of any law, ordinance or regulation of any governmental authority.
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(f) Consents and Approvals. Except as specifically set forth in
SCHEDULE 3.1(f), neither the 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 Company of this Agreement and each of the other
Transaction Documents, except for the filing of the Certificate of Designation
with respect to the Series B Preferred Stock with the Secretary of State of the
State of Nevada, which filing shall be effected prior to the Closing Date
(together with the consents, waivers, authorizations, orders, notices and
filings referred to in SCHEDULE 3.1(f), the "Required Approvals").
(g) Litigation; Proceedings. Except as specifically disclosed in
SCHEDULE 3.1(g), there is no action, suit, notice of violation, proceeding or
investigation pending or, to the best knowledge of the Company, threatened
against or affecting the 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, the Shares or the Underlying Shares, (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 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 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) (x)
adversely affect the legality, validity or enforceability of this Agreement, (y)
have a Material Adverse Effect or (z) adversely impair the Company's ability or
obligation to perform fully on a timely basis its obligations under this
Agreement.
(i) Intentionally omitted.
(j) 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.
(k) Non-Registered Offering. Neither the 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 Company under circumstances
which would require the integration of such offering with the offering of the
Securities under the Securities Act) which might subject the offering, issuance
or sale of the Securities to the registration requirements of Section 5 of the
Securities Act.
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(l) Placing Agent. The Company accepts and agrees that Dungarvon
Associates, Inc. ("Dungarvon") is acting for the Purchaser and does not regard
any person other than the Purchaser as its customer in relation to this
Agreement, and that it has not made any recommendation to the Company, in
relation to this Agreement and is not advising the Company, with regard to the
suitability or merits of the Armadillo Shares and in particular Dungarvon has no
duties or responsibilities to the Company for the best execution of the
transaction contemplated by this Agreement.
(m) Private Placement Representations. The Company (i) has received
and carefully reviewed such information and documentation relating to the
Purchaser that the Company has requested, including, without limitation, the
Purchaser's Confidential Private Offering Memorandum dated January 1, 2004 (the
"Private Placement Memorandum; (ii) has had a reasonable opportunity to ask
questions of and receive answers from the Purchaser concerning the Armadillo
Shares, and all such questions, if any, have been answered to the full
satisfaction of the 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 Armadillo Shares; (iii) understands that
Armadillo has determined that the exemption from the registration provisions of
the Securities Act of 1933, as amended (the "Securities Act"), provided by
Section 4(2) of the Securities Act and Rule 506 of Regulation D thereunder is
applicable to the offer and sale of the Armadillo Shares, based, in part, upon
the representations, warranties and agreements made by the Company herein; and
(iv) except as set forth herein, no representations or warranties have been made
to the Company by the Purchaser or any agent, employee or affiliate of the
Purchaser and in entering into this transaction the Company is not relying upon
any information, other than the results of independent investigation by the
Company.
The Purchaser acknowledges and agrees that the 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 the Purchaser. The Purchaser hereby
represents and warrants to the Company as follows:
(a) Organization; Authority. The Purchaser 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 to be purchased by the Purchaser
hereunder has been duly authorized by all necessary action on the part of the
Purchaser. This Agreement has been duly executed and delivered by the Purchaser
and constitutes the valid and legally binding obligation of the Purchaser,
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. The Purchaser is acquiring the Shares to be
purchased by it hereunder, and will acquire the Underlying Shares relating to
such Shares, and the Option
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Shares for its own account for investment purposes only and not with a view to
or for distributing or reselling such Shares, Underlying Shares or Option
Shares, or any part thereof or interest therein, without prejudice, however, to
such Purchaser's right, subject to the provisions of this Agreement, at all
times to sell or otherwise dispose of all or any part of such Shares, Underlying
Shares or Option Shares in compliance with applicable federal and state
securities laws.
(c) Experience of Purchaser. The Purchaser, 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 Securities to be acquired by it hereunder, and has
so evaluated the merits and risks of such investment.
(d) Ability of Purchaser to Bear Risk of Investment. The Purchaser
is able to bear the economic risk of an investment in the Securities 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. The Purchaser 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 Company
concerning the terms and conditions of the Securities offered hereunder and the
merits and risks of investing in such securities; (ii) access to information
about the Company and the Company's financial condition, results of operations,
business, properties, management and prospects sufficient to enable it to
evaluate its investment in the Securities; and (iii) the opportunity to obtain
such additional information which the 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 Company.
(f) Reliance. The Purchaser understands and acknowledges that (i)
the Shares, Underlying Shares and Option Shares 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 Company will
rely upon the accuracy and truthfulness of, the foregoing representations and
such Purchaser hereby consents to such reliance.
(g) Regulation S.
(i) The Purchaser understands and acknowledges that (A) the
Shares acquired pursuant to this Agreement have not been registered under the
Securites Act, are being sold in reliance upon an exemption from registration
afforded by Regulation S; and that such Shares have not been registered with any
state Securites commission or authority; (B) pursuant to the requirements of
Regulation S, the Shares 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
thereunder; and (C) other than as set forth in this Agreement between the
Company and the Purchaser, the Company is under no obligation to register the
Shares under the Securities Act or any state securities law, or to take any
action to make any exemption from any such registration provisions available.
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(ii) (A) The Purchaser is not a U.S. person and is not
acquiring the Shares for the account of any U.S. person; (B) if a corporation,
it is not organized or incorporated under the laws of the United States; (C) if
a corporation, no director or executive officer is a national or citizen of the
United States; and (D) it is not otherwise deemed to be a "U.S. Person" within
the meaning of Regulation S.
(iii) The Purchaser, was not formed specifically for the
purpose of acquiring the Shares purchased pursuant to this Agreement.
(iv) The Purchaser is purchasing the Shares 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 or any right, option, security interest, pledge or other interest in or
to the Shares. The Purchaser understands, acknowledges and agrees that it must
bear the economic risk of its investment in the Shares for an indefinite period
of time and that prior to any such offer or sale, the Company may require, as a
condition to effecting a transfer of the Shares, an opinion of counsel,
acceptable to the Company, as to the registration or exemption therefrom under
the Shares Act and any state Shares acts, if applicable.
(v) The Purchaser 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 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 Subscription Agreement have neither been pre-arranged with a purchaser
who is in the United States 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.
(vi) The offer leading to the sale evidenced hereby was made
in an "offshore transaction." For purposes of Regulation S, the Purchaser
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 United States.
(vii) Neither the Purchaser nor any affiliate of the Purchaser
or any person acting on its 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 being purchased hereby.
(viii) The Purchaser understands that the Company is the
seller of the Shares 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
11
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. The Purchaser agrees that it 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 other than to a non-U.S. Person.
(ix) The Purchaser acknowledges that the Shares will bear a
legend in substantially the following form:
THE SECURITIES 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 Company acknowledges and agrees that the Purchaser 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 Shares are being issued pursuant to section
4(2) of the Securities Act and Regulation S thereunder. The Armadillo shares are
being issued pursuant to section 4(2) of the Securities Act and Rule 506 of
Regulation D thereunder.
4.2 Notice of Certain Events. The Company shall, on a continuing basis,
(i) advise the Purchaser promptly after obtaining knowledge of, and, if
requested by the Purchaser, 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 or the Underlying
Shares, 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
12
makes any statement of a material fact made by the 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 Securities 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
Securities 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 Company shall cooperate with the Purchaser in
connection with the exemption from registration of the Securities under the
securities or Blue Sky laws of such jurisdictions as the Purchasers may request;
provided, however, that neither the Company nor its Subsidiaries shall be
required in connection therewith to qualify as a foreign corporation where they
are not now so qualified. The Company agrees that it will execute all necessary
documents and pay all necessary state filing or notice fees to enable the
Company to sell the Securities to the Purchasers.
4.4 Integration. The 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
Securities in a manner that would require the registration under the Securities
Act of the sale of the Securities to the Purchaser.
4.5 Furnishing of Rule 144(c) Materials. The Company shall, for so long as
any of the Securities remain outstanding and during any period in which the
Company is not subject to Section 13 or 15(d) of the Exchange Act, make
available to any registered holder of the Securities ("Holder" or "Holders") in
connection with any sale thereof and any prospective purchaser of such
Securities from such Person, such information in accordance with Rule 144(c)
promulgated under the Securities Act as is required to sell the Securities under
Rule 144 promulgated under the Securities Act.
4.6 Solicitation Materials. The Company shall not (i) distribute any
offering materials in connection with the offering and sale of the Shares or
Underlying Shares 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 or Underlying Shares 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 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 expiration of the periods during
which the Shares may be converted and (b) shall provide to the Purchaser
evidence of such listing.
4.8 Attorney-in-Fact. For the sole purpose of effectuating the terms and
provisions of this Agreement and the Certificate of Designation, the Company
hereby agrees to give a power of attorney to G&P as is evidenced by EXHIBIT G
annexed hereto. All acts done under such
13
power of attorney are hereby ratified and approved and neither the
Attorney-in-Fact nor any designee or agent thereof shall be liable for any acts
of commission or omission, for any error of judgment or for any mistake of fact
or law, as long as the Attorney-in-Fact is operating within the scope of the
power of attorney and this Agreement and its exhibits. The power of attorney,
being coupled with an interest, shall be irrevocable while any of the Shares
remain unconverted, or any portion of this Agreement remains unsatisfied. In
addition, the Company shall give the Attorney-in-Fact resolutions executed by
the Board of Directors of the Company which authorize transfers of the Shares
and future issuances of the Underlying Shares for the Shares, and which
resolutions state that they are irrevocable while any of the Shares remain
unconverted, or any portion of this Agreement remains unsatisfied.
4.9 Indemnification.
(a) Indemnification
(i) The Company shall, notwithstanding termination of this
Agreement and without limitation as to time, indemnify and hold harmless
the Purchaser and its officers, directors, agents, employees and
affiliates, each Person who controls or the Purchaser (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 Company under this Agreement or any other Transaction Document.
(ii) The Purchaser shall, notwithstanding termination of this
Agreement and without limitation as to time, indemnify and hold harmless
the 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 application 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 the Purchaser under this Agreement or the other Transaction Documents.
(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.
14
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 there is a non-appealable final judicial
determination that such Losses arise solely out of the negligence 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
15
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.
4.10 Notice and Consultation Before Securities Issuances.. Until such time
as Purchaser shall have sold all of the Shares and the Underlying Shares, the
Company shall not offer or issue any equity, equity equivalent security or debt
that with a floating conversion price, or any equity lines of credit (the "New
Securities"), without first giving thirty (30) days notice thereof to the
Purchaser and thereafter consulting in good faith with the Purchaser concerning
such issuance. After such consultation between the Company and the Purchaser,
the Company may offer or sell the New Securities on such terms and conditions as
the Company deems appropriate. Purchaser shall keep all information concerning
the New Securities confidential and shall not trade any of the Company's
securities until information about the New Securities is publicly disclosed or
the Company advises the Purchaser that it has determined not to issue the New
Securities.
4.11 Purchaser's Ownership of Common Stock. In addition to and not in lieu
of the limitations on conversion set forth in the Certificate of Designation,
the conversion and exercise rights of the Purchaser set forth in the Certificate
of Designation shall be limited, solely to the extent required, from time to
time, such that, unless the Purchaser gives written notice seventy five (75)
days in advance to the Company of the Purchaser's intention to exceed the
Limitation on Conversion as defined herein, with respect to all or a specified
amount of the Shares and the corresponding number of the Underlying Shares, in
no instance shall the maximum number of shares of Common Stock which the
Purchaser (singularly, together with any Persons who in the determination of the
Purchaser, together with the Purchaser, constitute a group as defined in Rule
13d-5 of the Exchange Act) may receive in respect of any conversion of the
Shares exceed, at any one time, an amount equal to four and ninety nine one
hundredths percent (4.99%) of the then issued and outstanding shares of Common
Stock of the Company following such conversion (the foregoing being herein
referred to as the "Limitation on Conversion"); provided, however, that the
Limitation on Conversion shall not apply to any forced or automatic conversion
pursuant to this agreement or the Certificate of Designation; and provided,
further that if the Purchaser shall have declared an Event of Default and, if a
cure period is provided, the Company shall not have properly and fully cured
such Event of Default within any such cure period, the provisions of this
Section 4.13 shall be null and void from and after such date. The Company shall,
promptly upon its receipt of a Notice of Conversion tendered by the Purchaser
(or its sole designee) for the Shares, as applicable, notify the Purchaser by
telephone and by facsimile of the number of shares of Common Stock outstanding
on such date and the number of Underlying Shares which would be issuable to the
Purchaser (or its sole designee, as the case may be) if the conversion requested
in such Notice of Conversion or exercise requested in such Notice of Exercise
were effected in full, whereupon, in accordance with the Certificate of
Designation and notwithstanding anything to the contrary set forth therein, the
Purchaser may within one (1) Business Day of its receipt of the Company notice
required by this Section 4.13 by facsimile
16
revoke such conversion or exercise to the extent (in whole or in part) that the
Purchaser determines that such conversion or exercise would result in the
ownership by the Purchaser of shares of Common Stock in excess of the Limitation
on Conversion.
4.12 No Violation of Applicable Law. Notwithstanding any provision of this
Agreement to the contrary, if the redemption of the Shares otherwise required
under this Agreement or the Certificate of Designation would be prohibited by
the relevant provisions of Nevada law, such redemption shall be effected as soon
as it is permitted under such law; provided, however, that interest payable by
the Company with respect to any such redemption shall accrue in accordance with
Section 4.14.
4.13 Redemption Restrictions. Notwithstanding any provision of this
Agreement to the contrary, if any redemption of the Shares otherwise required
under this Agreement or the Certificate of Designation would be prohibited in
the absence of consent from any lender to the Company or any of the
Subsidiaries, or by the holders of any class of securities of the Company, the
Company shall use its best efforts to obtain such consent as promptly as
practicable after any such redemption is required. Interest payable by the
Company with respect to any such redemption shall accrue in accordance with
Section 4.14 until such consent is obtained. Nothing contained in this Section
4.16 shall be construed as a waiver by the Purchaser of any rights they may have
by virtue of any breach of any representation or warranty of the Company herein
as to the absence of any requirement to obtain any such consent.
4.14 Option for Additional Company Shares. The Company hereby grants to
Purchaser an option to acquire that number of shares of the Company's Common
Stock (the "Option Shares"), such option to be exercisable during the thirty
(30) day period commencing on the date Purchaser completes the conversion of all
of the Series B Preferred Stock (the "Conversion Completion Date"), equal to the
difference, if a positive amount, between (a) the number of the Company's shares
of Common Stock into which the original amount of the Series B Preferred Stock
would have been convertible on the Closing Date at a conversion price equal to
fifty percent (50%) of the Fixed Conversion Price (as defined in the Certificate
of Designation) less (b) the aggregate number of the shares of Common Stock into
which the original amount of the Series B Preferred Stock has actually been
converted as of the Conversion Completion Date. The exercise price for the
Option Shares shall be the Fixed Conversion Price. In case of any stock split,
stock dividend, reclassification of the Common Stock, any consolidation or
merger of the Company with or into another person, the sale or transfer of all
or substantially all of the assets of the Company or any compulsory share
exchange pursuant to which the Common Stock is converted into other securities,
cash or property, then each Option Share then outstanding shall have the right
thereafter upon exercise to receive only such shares of stock and other
securities and property receivable upon or deemed to be held by holders of
Common Stock following such stock split, stock dividend, reclassification,
consolidation, merger, sale, transfer or share exchange (except in the event the
property is cash, then the Purchaser shall have the right to exercise the Option
Shares and receive cash in the same manner as other stockholders). In such
event, if appropriate, the exercise price for the Option Shares shall be
proportionately adjusted.
17
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 Company shall pay all stamp and other taxes and duties levied in connection
with the issuance of the Shares (and, upon conversion or exercise thereof, the
Underlying Shares) pursuant hereto. The Purchaser shall be responsible for any
taxes payable by the Purchaser that may arise as a result of the investment
hereunder or the transactions contemplated by this Agreement or any other
Transaction Document. The Company agrees to pay a total Purchaser's counsel
$5,000 for legal fees associated with the transactions contemplated by this
Agreement, and $5,000 for escrow services pursuant to the Escrow Agreement,
payable at or prior to Closing, and the reasonable disbursements of counsel in
connection with the transactions contemplated by this Agreement. The Company
shall pay all costs, expenses, fees and all taxes incident to and in connection
with: (A) the issuance and delivery of the Securities, (B) the exemption from
registration of the Securities for offer and sale to the Purchaser under the
securities or Blue Sky laws of the applicable jurisdictions, and (C) the
preparation of certificates for the Securities (including, without limitation,
printing and engraving thereof), and (D) all fees and expenses of counsel and
accountants of the 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 Company: Xxxx Xxxxx Productions Holding, Inc.
0000 Xxxxxx Xxxxxxxxx
Xxxx Xxxxxxxxx, XX 00000
Attn: _____________
Tel: (000) 000-0000
Fax: (000) 000-0000
With copies to: ____________________
18
Tel: (000) 000-0000
Fax: (000) 000-0000
If to the Purchaser: See SCHEDULE 1 attached hereto
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 Company and the Purchaser, 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 situate in the County and State of New York.
Service of process in any action by the Purchaser 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
Company at its principal address set forth in this Agreement.
19
5.9 Survival. The representations and warranties of the Company and the
Purchaser 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 Company and the Purchaser 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 Company will
not disclose to any third party (excluding its legal counsel, accountants and
representatives) the names of the Purchaser.
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 Company or any
person acting by or through the Company, or by the Purchaser or any person
acting through the Purchaser, 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.
5.14 Successors and Assigns. This Agreement shall become effective when it
is executed by the parties and shall thereafter be binding upon and enure to the
benefit of the parties hereto and their permitted successors and assigns. This
agreement and any of the rights, interests or obligations hereunder may be
assigned by the Purchaser without the consent of the Company.
5.15 Legal Fees and Interest Default Rate. In the event any party hereto
commences legal action to enforce its rights under this Agreement or any other
Transaction Document, the non-prevailing party shall pay all reasonable costs
and expenses (including but not limited to reasonable attorney's fees,
accountant's fees, appraiser's fees and investigative fees) incurred in
enforcing such rights. In the event of an uncured Event of Default by any party
hereunder, interest shall accrue on all unpaid amounts due the aggrieved party
at the rate of ten percent (10%) per annum, compounded annually.
20
[ SIGNATURE PAGE FOLLOWS ]
21
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first indicated above.
Company:
Xxxx Xxxxx Productions Holding, Inc.
By: /s/ Xxxxxx X. Xxxxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Chief Executive Officer
Purchaser:
Dungarvon Associates, Inc., on behalf of
Armadillo Investments, PLC
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Director
22
Schedule 1
Purchaser(s)
Name and Address of Purchase No. of
Purchaser Price Shares
-------------------------- ----------- -------
Armadillo Investments Plc. $ 4,000,000 400,000
00 Xxxxxxxxxx Xxxxxx
Xxxxxx
XX0X 0XX
Fax: 000.00.00.0000.0000
23
