SHARE PURCHASE AGREEMENT
This Share Purchase Agreement (the "Agreement") is made as of October 28th, 2005
by and between Roo Broadcasting Limited, an Australian non-listed public
corporation ("RBL") and a 100% owned subsidiary of ROO Group, Inc., a Delaware
corporation ("ROO"), and Xxx Investment Trust, Bollen Investment Trust, Xxxxxxx
Investment Trust (collectively, the "Sellers").
WITNESSETH:
WHEREAS, the Sellers own 100% of the outstanding shares of ordinary shares
(which have a fully paid up value of $100) Factory 212 Pty Ltd ("Factory212"), a
Victorian, Australian corporation; and
WHEREAS, RBL desires to purchase from the Sellers and the Sellers desire to sell
to RBL, 51 shares of ordinary shares of Factory212, which represents 51% of the
outstanding shares of ordinary shares of Factory212 (the "Factory212 Shares")
upon the terms and conditions hereinafter set forth.
NOW THEREFORE, in consideration of the mutual covenants and promises herein
contained and upon the terms and conditions hereinafter set forth, the parties
hereto, intending to be legally bound, agree as follows:
1. CONDITION PRECEDENT.
ALL TERMS OF THIS AGREEMENT ARE SUBJECT TO AND CONDITIONED UPON
EXECUTION BY ALL PARTIES HEREOF TO THAT CERTAIN AMENDMENT AGREEMENT TO THE STOCK
PURCHASE AGREEMENT DATED AS OF MARCH 11, 2004 (THE "PURCHASE AGREEMENT") AMONG
ROO GROUP, INC., A DELAWARE CORPORATION (THE "PURCHASER"), AND THE SHAREHOLDERS
OF REALITY GROUP PTY LTD., A CORPORATION EXISTING UNDER THE LAWS OF AUSTRALIA,
(COLLECTIVELY, THE "SELLERS"), DATED OCTOBER 28th 2005.
1. PURCHASE AND SALE OF THE FACTORY212 SHARES.
Subject to the Condition Precedent and upon the terms and conditions herein
contained, at the Closing (as defined in Section 3), the Sellers agree to sell
the Factory212 Shares to RBL and RBL agrees to purchase the Factory212 Shares
from the Sellers, free and clear of all liens, claims, pledges, mortgages,
restrictions, obligations, security interests and encumbrances of any kind,
nature and description.
2. CONSIDERATION.
2.1 The purchase price for the Factory212 Shares (the "Purchase Price")
shall be as follows:
(a) ten thousand shares (10,000) of ordinary shares of
ROO (the "Initial ROO Shares") issued on the Closing
Date; and
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(b) subject to Section 2.2 hereof, ROO may issue
additional shares of common stock of ROO (the
"Additional ROO Shares"), issuable after 31 December
2007, up to the maximum number calculated from the
following formula:
51% of (1 x Factory212 Revenue + 4 x Factory212 Earnings)
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Average ROO Share Price
"Factory212 Revenue" means the xxxxxxxx less all media and third party
supplier costs of Factory212 for the 12 month period ending 31 December
2007.
"Factory212 Earnings" means the earnings of Factory212 before tax and
after deduction of interest and all other expenses for the 12 month
period ending 31 December 2007.
"Average Share Price" means the average price of the ROO common
stock over the xxxxx 0 trading days of December 2007.
The Purchase Price shall be allocated to the Sellers in accordance with
Annex A.
2.2 If ROO does not issue the maximum number of Additional ROO Shares as
calculated in accordance with Section 2.1(b) above, its 51% ownership
of Factory212 will be reduced on a pro rata basis by the difference
between the maximum number of Additional ROO Shares and the actual
number of Additional ROO Shares issued. Solely for purposes of
clarification, if, for example, the maximum number of Additional ROO
Shares equals 100,000 and the actual number of Additional ROO Shares
issued by ROO equals 50,000, then the percentage ownership by ROO of
Factory212 shall be reduced by 50% [(100,000 - 50,000) / 100,000], and
shall equal 25.5%. If ROO does not issue any Additional ROO Shares, ROO
will relinquish all of its 51% ownership of Factory 212 and all rights
to any dividends declared or payable. In any event, the Sellers will be
entitled to retain ownership of the Initial ROO Shares. Notwithstanding
anything contained in this clause if the Factory212 Earnings are
greater than 15% of the Factory212 Revenue and the number of Additional
Shares to be issued are less than 4.9% of the then current outstanding
shares of ROO, ROO will proceed with the issuance of the maximum number
of Additional Shares.
2.3 If ROO fails to meet its material obligations under that certain
Amendment No. 1 to the Stock Purchase Agreement dated as of March 11,
2004 among ROO and the shareholders of Reality Group Pty Ltd., a
corporation existing under the laws of Australia, then ROO hereby
agrees that the Sellers may in their sole discretion require ROO to
relinquish all of its ownership of Factory212 and return ownership its
Factory212 Shares to the Sellers. In such event, ROO agrees that the
Sellers shall be entitled to retain ownership of their Initial ROO
Shares.
2.4 The Initial ROO Shares and Additional ROO Shares will not be registered
under the United States Securities Act of 1933, as amended (the
"Securities Act"), or the securities laws of any state, and absent an
exemption from registration contained in such laws, cannot be
transferred, hypothecated, sold or otherwise disposed of until (i) a
registration statement with respect to such securities is declared
effective under the Securities Act, or (ii) the Sellers receive an
opinion of counsel for ROO that an exemption from the registration
requirements of the Securities Act is available.
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2.5 After the issuance of the Additional ROO Shares the Sellers can request
Purchaser to prepare and file with the United States Securities and
Exchange Commission (the "Commission") a registration statement under
the United States Securities Act of 1933, as amended (the "Securities
Act"), providing for the resale of the Additional ROO Shares. The cost
of the registration statement including but not limited to Legal Fees
and Audit Fees shall be bourne by the Sellers an estimate amount of
which shall be paid in advance of the prearation of the registration
statement.
3. CLOSING.
3.1 The closing of the transactions contemplated by this Agreement (the
"Closing") shall take place within ten (10) business days of the
execution of this Agreement (hereinafter the "Closing Date").
3.2 At the Closing, the Sellers shall deliver to RBL certificates
representing the Factory212 Shares and executed stock power(s) or other
documents satisfactory to RBL permitting transfer to RBL of the
Factory212 Shares.
3.3 At Closing, the parties shall deliver all certificates representing the
Initial ROO Shares and the Factory212 Shares and shall deliver all
other executed documents and agreements contemplated by this Agreement.
4. REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Each Seller represents and warrants to RBL and ROO as follows:
4.1 Factory212 is a corporation duly organized, validly existing and in
good standing under the laws of the State of Victoria, Australia
4.2 This Agreement constitutes a valid and legally binding obligation of
each Seller, enforceable in accordance with its terms and conditions
except to the extent the same may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting the
enforcement of creditors' rights or by general equitable principles.
4.3 Upon the issuance and delivery of the Factory212 Shares in accordance
with the terms and conditions set forth herein, the Factory212 Shares
shall be validly issued, fully paid and non-assessable.
4.4 The Factory212 Shares represent 51% of the issued and outstanding
shares of capital stock of Factory212. There are no outstanding
obligations, options, warrants, convertible securities, subscriptions,
or other commitments or rights (matured or contingent) of any nature to
acquire or subscribe for any securities or other equity interests of or
in Factory212 (whether by law or by pre-emptive or contractual right).
There are no bonds, debentures, notes or other indebtedness of
Factory212 having the right to vote (or convertible into, or
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exchangeable for, securities having the right to vote) on any matter on
which any stockholder of Factory212 may vote. There are no preemptive
rights, rights of first refusal, voting rights, change of control or
similar rights, anti-dilution protections or other rights which any
stockholder, officer, employee or director of Factory212 would be
entitled to exercise or invoke as a result of the purchase by ROO of
the Factory212 Shares.
4.5 The Factory212 Shares are being transferred to RBL free and clear of
any liens, claims, charges, rights, restrictions, options, preemptive
rights, mortgages, deeds of trust, easements, leases, hypothecations,
assessments, pledges, encumbrances, claims of equitable interest or
security interests of any kind or nature whatsoever.
4.6 Each Seller acknowledges that the transactions contemplated by this
Agreement, including the offering of the Initial ROO Shares and the
Additional ROO Shares hereby, have not been reviewed by the United
States Securities and Exchange Commission (the "Commission") or any
state agency because it is intended to be a nonpublic offering exempt
from the registration requirements of the Securities Act and state
securities laws. Each Seller understands that RBL and ROO are relying
in part upon the truth and accuracy of, and each Seller's compliance
with the representations, warranties, agreements, acknowledgments and
understandings of each Seller set forth herein in order to determine
the availability of such exemptions and the eligibility of the Sellers
to acquire any the Initial ROO Shares and the Additional ROO Shares.
4.7 The Sellers are acquiring the Initial ROO Shares and the Additional ROO
Shares for their own account, for investment purposes only and not with
a view to resale or other distribution thereof, nor with the intention
of selling, transferring or otherwise disposing of all or any part of
such Initial ROO Shares and Additional ROO Shares, or any interest
therein, for any particular price, or at any particular time, or upon
the happening of any particular event or circumstances, except selling,
transferring, or disposing of such Initial ROO Shares and Additional
ROO Shares made in full compliance with all applicable provisions of
the Securities Act and the Securities Exchange Act of 1934 (the
"Exchange Act"), and the rules and regulations promulgated by the
Securities and Exchange Commission thereunder, all as amended; and the
Sellers acknowledge that the Initial ROO Shares and Additional ROO
Shares must be held indefinitely unless they are subsequently
registered under the Securities Act, or an exemption from such
registration is available.
4.8 Each Seller agrees that it is acquiring the Initial ROO Shares and the
Additional ROO Shares pursuant to this Agreement in an offshore
transaction pursuant to Regulation S, promulgated under the Securities
Act, and hereby represents to RBL and ROO as follows:
(a) Such Seller is outside the United States when receiving and
executing this Agreement;
(b) Seller was not induced to invest in the Initial ROO Shares and
the Additional ROO Shares offered hereby by any form of
general solicitation or general advertising including, but not
limited to, the following: (i) any advertisement, article,
notice or other communication published in any newspaper,
magazine or similar media or broadcast over the news or radio;
and (ii) any seminar or meeting whose attendees were invited
by any general solicitation or advertising; and
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(c) Seller has not acquired the Initial ROO Shares and the
Additional ROO Shares pursuant to this Agreement as a result
of, and will not itself engage in, any "directed selling
efforts" (as defined in Regulation S under the Securities Act)
in the United States in respect of any such securities which
would include any activities undertaken for the purpose of, or
that could reasonably be expected to have the effect of,
conditioning the market in the United States for the resale of
such securities; provided, however, that the Seller may sell
or otherwise dispose of such securities pursuant to
registration of the securities under the Securities Act and
any applicable state and provincial securities laws or under
an exemption from such registration requirements and as
otherwise provided herein.
4.9 Each Seller acknowledges and agrees that ROO will refuse to register
the transfer of the Initial ROO Shares and the Additional ROO Shares
acquired pursuant to this Agreement not made in accordance with the
provisions of Regulation S under the Securities Act, pursuant to an
effective registration statement under the Securities Act, or pursuant
to an available exemption from the registration requirements of the
Securities Act and in accordance with applicable state and provincial
securities laws.
4.10 Each Seller understands and agrees that offers and sales of the Initial
ROO Shares and the Additional ROO Shares acquired pursuant to this
Agreement prior to the expiration of a period of one year after the
date of transfer of such securities under this Agreement (the
"Distribution Compliance Period"), shall only be made in compliance
with the safe harbor provisions set forth in Regulation S under the
Securities Act, pursuant to the registration provisions of the
Securities Act or an exemption therefrom, and that all offers and sales
after the Distribution Compliance Period shall be made only in
compliance with the registration provisions of the Securities Act or an
exemption therefrom, and in each case only in accordance with all
applicable securities laws.
4.11 Each Seller understands and agrees not to engage in any hedging
transactions involving the Initial ROO Shares and the Additional ROO
Shares acquired pursuant to this Agreement prior to the end of the
Distribution Compliance Period unless such transactions are in
compliance with the Securities Act.
4.12 The Sellers have sufficient knowledge and experience of financial and
business matters, is able to evaluate the merits and risks of
purchasing the Initial ROO Shares and Additional ROO Shares.
4.13 The Sellers have not relied upon any representations or other
information (whether oral or written) from RBL or ROO, or any of their
respective officers, directors, employees or agents other than as
expressly set forth herein.
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4.14 The Sellers are the sole beneficial owner of the Factory212 Shares, and
own the Factory212 Shares free and clear of all mortgages, pledges,
restrictions, liens, charges, encumbrances, security interests,
obligations or other claims.
4.15 All intellectual property relating to all applications developed by
Factory212 or by the Sellers for Factory212, and all domain names,
business plans, equipment, and software used to operate and develop
Factory212's products and solutions, are owned by Factory212 free and
clear of all mortgages, pledges, restrictions, liens, charges,
encumbrances, security interests, obligations or other claims.
4.16 Factory212 is and has been in compliance in all material respects with
all federal, state, local and foreign laws, statutes, ordinances,
regulations, orders, judgments, injunctions, awards or decrees
(collectively, "Laws") applicable to it or any of its properties or
operations, including, without limitation, all environmental laws.
Factory212 has not received any notice of violation or alleged
violation of any Law by it. Factory212 has all licenses, permits,
orders and approvals of federal, state, local and foreign governmental
or regulatory bodies necessary for the conduct of its business and
operations, (collectively, the "Permits") free and clear of all liens,
the existence of which liens would have a material adverse effect on
Factory212. All material Permits of Factory212 are valid and in full
force and effect. No violations have occurred in respect of any such
Permit and no action or proceeding is pending or, to the knowledge of
Factory212, threatened to revoke or limit any such Permit. All material
Permits are renewable by their terms or in the ordinary course of
business without the need of Factory212 complying with any special
qualification or procedures or paying any amounts other than routine
filing fees. None of the Permits will be adversely affected by the
consummation of the transactions contemplated hereby.
4.17 There are no actions, suits, proceedings, or other litigation pending
or, to the knowledge of the Sellers, threatened against Factory212 , at
law or in equity, or before or by any federal, state, municipal, or
other governmental department, commission, board, bureau, agency, or
instrumentality that, if determined adversely to Factory212, would
individually or in the aggregate have an adverse effect on the
business, assets, properties, operating results, prospects, or
condition, financial or otherwise, of Fcatory212 and/or the Factory212
Shares.
4.18 The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby will not (i)
result in any lien upon any of the property of Factory212 or (ii)
violate, conflict with or otherwise result in the breach of any of the
terms and conditions of, result in a material modification of or
accelerate or trigger the rights of any person under, or constitute (or
with notice or lapse of time or both would constitute) a default under
(a) any provision or restriction of any charter, bylaw, loan,
indenture, or mortgage of Factory212; (b) any provision or restriction
of any lien, lease, agreement, contract, instrument, order, judgment,
award, decree, ordinance or regulation or any other restriction of any
kind or character to which any assets or properties of Factory212 are
bound or subject; or (c) any Permit. No consent, approval or
authorization of, or declaration or filing with, any governmental
authority or other person is required on the part of the Sellers or
Factory212 in connection with the execution, delivery or performance of
this Agreement or the consummation of the transactions contemplated
hereby, except such filings as may be required or advisable under
federal or state securities laws.
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4.19 There are no material suits or actions, administrative, arbitration or
other proceedings or governmental investigations pending or threatened
against or affecting Factory212 or any of its properties or assets and
Factory212 does not know of any valid basis for any such suits,
actions, proceeding or investigation. No person has made a claim
against Factory212 alleging any personal, property or economic injury,
loss or damage incurred as a result of or relating to the use or
consumption of any products sold or manufactured by or on behalf of, or
services rendered by Factory212. There are no material judgments,
orders, injunctions, decrees or awards against Factory212 that are not
satisfied and remain outstanding.
4.20 Factory212 has not at any time during the last three (3) years had, nor
is there now threatened, any walkout, strike, picketing, work stoppage,
planned work slowdown or any similar occurrence. There are no material
controversies or grievances pending or threatened between Factory212
and any of its employees. No union or other collective bargaining unit
has been certified or formally recognized by Factory212 and, to the
knowledge of Factory212, no efforts are pending regarding unionization
of Factory212's employees. Factory212 is not aware that any officer or
employee intends to terminate his/her employment with Factory212 nor
does Factory212 have any present intention to terminate the employment
of any of its officers or employees. Factory212 is not aware that any
of its officers, employees or consultants is obligated under any
contract (including licenses, covenants or commitments of any nature)
or other agreement, or subject to any judgment, decree or order of any
court or administrative agency, or any other restriction that would
interfere with his/her duties to Factory212 or to promote the interests
of Factory212 or that would conflict with Factory212's business as
presently conducted.
4.21 Factory212 does not own, in fee or otherwise, or have the right or
obligation to acquire any real property or buildings. All leases,
subleases or other agreements under which Factory212 has the right to
use or occupy any real property are valid agreements in full force and
effect, create a good and valid leasehold estate in the property leased
thereby, and Factory212 is in compliance with all the provisions of
each such agreement and no other party thereto is in default
thereunder.
4.22 Factory212 has good title to all of its properties and assets, free and
clear of any lien, except (i) liens for taxes not yet due and payable,
and (ii) liens of materialmen, mechanics, carriers, landlords and like
persons which are not due and payable or which are being contested in
good faith and which are not material in the aggregate. No third party
owns or has any rights to any assets, know-how or other properties
(tangible or intangible) presently used, or contemplated to be used, in
connection with or relating to Factory212's business. All of
Factory212's properties and assets, including the buildings, plants,
structures and equipment are structurally sound, in good operating
condition and repair and are adequate and useful for the uses for which
they are currently being used. Other than in the ordinary course of
business, no person has any written or oral agreement, option,
understanding, commitment or any right or privilege to purchase from
Factory212 any of Factory212's properties or assets.
4.23 Neither this Agreement nor any statement or other information furnished
by the Sellers to RBL or ROO in connection with this Agreement or any
of the transactions contemplated
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hereby contains an untrue statement of a material fact or omits to
state a material fact necessary to make the statements contained
herein or therein, in light of circumstances in which they are made,
not misleading. There is no fact known to Sellers which materially
adversely affects the business, operations, properties, prospects or
financial condition of Factory212 which has not been set forth in
this Agreement, in any related agreement or other documents
furnished to ROO by or on behalf of the Sellers.
4.24 None of the Sellers has employed or engaged any broker or finder in
connection with the transactions contemplated by this Agreement and no
fee or other compensation is or will be due and owing to any broker,
finder, underwriter, placement agent or similar person in connection
with the transactions contemplated by this Agreement.
4.25 The Sellers covenant and agree that between the date hereof and the
Closing Date the business of Factory212 shall be conducted only in the
ordinary course, and consistent with past practice. Without limiting
the generality of the foregoing, except as otherwise approved in
writing by ROO:
(a) Except for the transaction contemplated hereby, Factory212
shall not enter into any contract, agreement or other
arrangement which would constitute a material contract, except
for contracts to sell or supply goods or services to customers
in the ordinary course of business at prices and on terms
substantially consistent with the prior operating practices of
Factory212;
(b) Except for sales of personal property in the ordinary course
of its business, Factory212 shall not sell, assign, transfer,
mortgage, convey, encumber or otherwise dispose of, or cause
the sale, assignment, transfer, mortgage, conveyance,
encumbrance or other disposition of any of the assets or
properties of Factory212 or any interest therein;
(c) Factory 212 shall not acquire any material assets, except
expenditures made in the ordinary course of business as
reasonably necessary to enable Factory212 to conduct its
normal business operations and to maintain its normal
inventory of goods and materials, at prices and on terms
substantially consistent with current market conditions and
prior operating practices;
(d) the books, records and accounts of Factory212 shall be
maintained in the usual, regular and ordinary course of
business on a basis consistent with prior practicesand in
accordance with IAS.;
(e) Factory212 shall use its reasonable efforts to preserve its
business organization, to preserve the good will of its
suppliers, customers and others having business relations with
Factory212, and to retain the services of key employees and
agents of Factory212;
(f) except as it may terminate in accordance with the terms of
this Agreement, Factory212 shall keep in full force and
effect, and not cause a default of any of its obligations
under, each of their contracts and commitments;
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(g) Factory212 shall duly comply in all material respects with all
laws applicable to it and to the conduct of its business;
(h) Factory212 shall not create, incur or assume any liability or
indebtedness, except in the ordinary course of business
consistent with past practices;
(i) other than as contemplated in this Agreement, Factory212 shall
not apply any of its assets to the direct or indirect payment,
discharge, satisfaction or reduction of any amount payable
directly or indirectly to or for the benefit of any
shareholder or any related party; and
(j) Factory212 shall not take or omit to take any action which
would render any of the representations or warranties untrue
or misleading, or which would be a breach of any of the
covenants.
4.26 Except as contemplated in this Agreement, Factory212 shall not
materially alter its organization, capitalization, or financial
structure, practices or operations. Without limiting the generality of
the foregoing:
(a) no change shall be made in the certificate of incorporation
and bylaws of Factory212;
(b) no change shall be made in the authorized or issued capital
stock of Factory212;
(c) Factory212 shall not issue or grant any right or option to
purchase or otherwise acquire any of its capital stock or
other securities;
(d) no dividend or other distribution or payment shall be declared
or made with respect to any of the capital stock of
Factory212; and
(e) no change shall be made affecting the banking arrangements of
Factory212.
4.27 The Sellers shall promptly notify RBL and ROO in writing of the
occurrence, or threatened occurrence, of any event that would
constitute a breach or violation of this Agreement by any party or that
would cause any representation or warranty made by the notifying party
in this Agreement to be false or misleading in any respect. The Sellers
will promptly notify RBL and ROO of any event that could have a
material adverse effect on the business, assets, financial condition or
prospects of Factory212.
4.28 Each representation and warranty shall survive the consummation of
transactions contemplated by this Agreement irrespective of any
investigations or inquiries made by any party or any knowledge that any
party may possess, and RBL and ROO shall be entitled to rely upon such
representation or warranty irrespective of any investigations,
inquiries or knowledge.
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5 REPRESENTATIONS AND WARRANTIES OF RBL.
RBL hereby represents, warrants and acknowledges to the Sellers as follows:
5.1 RBL is a corporation duly organized, validly existing and in good
standing under the laws of the State of Victoria, Australia.
5.2 The execution, delivery and performance of this Agreement have been
duly authorized by RBL's Board of Directors. RBL has full corporate
power and authority to enter into this Agreement and to perform its
obligations hereunder. This Agreement constitutes a valid and legally
binding obligation of RBL, enforceable in accordance with its terms and
conditions except to the extent the same may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws relating to or
affecting the enforcement of creditors' rights or by general equitable
principles.
5.3 RBL has not employed or engaged any broker or finder in connection with
the transactions contemplated by this Agreement and no fee or other
compensation is or will be due and owing to any broker, finder,
underwriter, placement agent or similar person in connection with the
transactions contemplated by this Agreement.
5.4 RBL has not relied upon any representations or other information
(whether oral or written) from the Sellers or Factory212, or any of
their officers, directors, employees or agents other than as expressly
set forth herein.
6. REPRESENTATIONS AND WARRANTIES OF ROO
ROO hereby represents and warrants to the Sellers as follows:
6.1 ROO is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware.
6.2 The execution, delivery and performance of this Agreement have been
duly authorized by ROO's Board of Directors. ROO has full corporate
power and authority to enter into this Agreement and to perform its
obligations hereunder. This Agreement constitutes a valid and legally
binding obligation of ROO, enforceable in accordance with its terms and
conditions except to the extent the same may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws relating to or
affecting the enforcement of creditors' rights or by general equitable
principles.
6.3 Upon the issuance and delivery of the Initial ROO Shares and the
Additional ROO Shares in accordance with the terms and conditions set
forth herein, the Initial ROO Shares and the Additional ROO Shares
shall be validly issued, fully paid and non-assessable.
6.4 There is no material adverse information regarding ROO, its business,
operations financial status or prospects except as set forth in ROO's
publicly available filings with the Commission or press releases.
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6.5 ROO has not employed or engaged any broker or finder in connection with
the transactions contemplated by this Agreement and no fee or other
compensation is or will be due and owing to any broker, finder,
underwriter, placement agent or similar person in connection with the
transactions contemplated by this Agreement.
6.6 ROO has not relied upon any representations or other information
(whether oral or written) from the Sellers or Factory212, or any of
their officers, directors, employees or agents other than as expressly
set forth herein.
7. POST-CLOSING COVENANTS.
7.1 Immediately following Closing, the Sellers shall deliver to ROO the
resignations of all of the then serving members of the Board of
Directors of Factory212, except for two existing Board members who
shall remain. Upon receiving such resignations, ROO shall cause RBL to
appoint two directors to the Board of Directors of Factory212. This
will result in a total of four directors on the Board of Directors of
Factory212, two appointed by the Sellers and two appointed by RBL.
7.2 As soon as practicable after the Closing, but in no event later than
five business days after the Closing, the Sellers shall deliver to RBL
copies of the corporate minute books for Factory212 and original or
certified copies of such other Factory212 corporate documents and files
as RBL may reasonably request.
7.3 After the Closing, at the request of any party, the other parties shall
execute, acknowledge and deliver, without further consideration, all
such further assignments, conveyances, endorsements, deeds, powers of
attorney, consents and other documents and take such other action as
may be reasonably requested to consummate the transactions contemplated
by this Agreement.
8. INDEMNIFICATION
8.1 Subject to the limitations of this Section 8, each Seller shall jointly
and severally indemnify, defend and hold harmless RBL and ROO and their
respective directors, officers, equity holders, agents, affiliates,
successors and permitted assigns or each of them from and against, and
shall pay and/or reimburse the foregoing persons for, any and all
losses, liabilities, claims, obligations, damages and costs and
expenses (including reasonable attorneys' fees and disbursements and
other costs incurred or sustained by an Indemnitee (as defined below)
in connection with the investigation, defense or prosecution of any
such claim or any action or proceeding between the Indemnitee and the
Indemnifying Party (as defined below) or between the Indemnitee and any
third party or otherwise), whether or not involving a third-party claim
(collectively, "Losses"), relating to or arising out of the breach of
any representation, warranty, covenant or agreement of the Sellers
hereunder.
8.2 Subject to the limitations of this Section 8, RBL and ROO shall
indemnify, defend and hold harmless the Sellers and their, agents,
affiliates, successors and permitted assigns from and against, and
shall pay and/or reimburse the foregoing persons for, any and all
Losses relating to or arising out of the breach of any representation,
warranty, covenant or agreement of RBL contained in this Agreement.
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8.3 If any party (the "Indemnitee") receives notice of any claim or the
commencement of any action or proceeding with respect to which the
other party (or parties) is obligated to provide indemnification (the
"Indemnifying Party") pursuant to Sections 8.1 or 8.2 hereof, the
Indemnitee shall give the Indemnifying Party written notice thereof
within a reasonable period of time following the Indemnitee's receipt
of such notice. Such notice shall describe the claim in reasonable
detail and shall indicate the amount (estimated if necessary) of the
Losses that have been or may be sustained by the Indemnitee. The
Indemnifying Party may, subject to the other provisions of this Section
8.3, compromise or defend, at such Indemnifying Party's own expense and
by such Indemnifying Party's own counsel, any such matter involving the
asserted liability of the Indemnitee in respect of a third-party claim.
If the Indemnifying Party elects to compromise or defend such asserted
liability, it shall within 30 days (or sooner, if the nature of the
asserted liability so requires) notify the Indemnitee of its intent to
do so, and the Indemnitee, shall reasonably cooperate, at the request
and reasonable expense of the Indemnifying Party, in the compromise of,
or defense against, such asserted liability. The Indemnifying Party
will not be released from any obligation to indemnify the Indemnitee
hereunder with respect to a claim without the prior written consent of
the Indemnitee, unless the Indemnifying Party delivers to the
Indemnitee a duly executed agreement settling or compromising such
claim with no monetary liability to or injunctive relief against the
Indemnitee and a complete release of the Indemnitee with respect
thereto. The Indemnifying Party shall have the right to conduct and
control the defense of any third-party claim made for which it has been
provided notice hereunder. All costs and fees incurred with respect to
any such claim will be borne by the Indemnifying Party. The Indemnitee
will have the right to participate, but not control, at its own
expense, the defense or settlement of any such claim; provided, that if
the Indemnitee and the Indemnifying Party shall have conflicting claims
or defenses, the Indemnifying Party shall not have control of such
conflicting claims or defenses and the Indemnitee shall be entitled to
appoint a separate counsel for such claims and defenses at the cost and
expense of the Indemnifying Party. If the Indemnifying Party chooses to
defend any claim, the Indemnitee shall make available to the
Indemnifying Party any books, records or other documents within its
control that are reasonably required for such defense.
8.4 Notwithstanding anything contained in this Section 8 to the contrary,
no Indemnifying Party will be obligated to indemnify an Indemnitee and
hold them harmless from and against any punitive, consequential or
indirect damages, or any asserted or established claim for any damages
which provides for recovery based on any multiple of losses, multiple
of lost profits or multiple of lost anticipated profits and any losses
shall be strictly limited to the cash value of the Initial ROO Shares
and Additional ROO Shares based on the closing sale price ROO's common
stock on the U.S. OTC Bulletin Board on the date of issuance by ROO.
The determination of any loss for which indemnification may be claimed
under this Section 8 shall be net of any tax (or other) benefit
derived, insurance proceeds or third party reimbursement received or
recoverable (but adjusted for any tax incurred as a result of the
receipt of such amounts) by the party bearing such liability, claim,
lien, encumbrance, charge, fine or penalty as a result thereof. The
sole remedy of the parties hereto for any and all claims of the nature
described in this Section 8 hereof shall be the indemnity set forth in
such section.
12
9. MISCELLANEOUS
9.1 The Sellers acknowledge that on October 3, 2005, ROO caused a
one-for-50 reverse split of ROO's outstanding shares of ordinary
shares. ALL NUMERICAL REFERENCES TO SHARES OF ROO'S ORDINARY SHARES,
INCLUDING THE INITIAL ROO SHARES AND THE ADDITIONAL ROO SHARES, IN THIS
AMENDMENT ARE POST ONE-FOR-50 REVERSE STOCK SPLIT NUMBERS.
9.2 This Agreement shall inure to the benefit of, and shall be binding
upon, the parties hereto and their respective successors and permitted
assigns. Except as otherwise set forth herein, this Agreement may not
be assigned by any party hereto without the prior written consent of
the other parties hereto. Except as otherwise set forth herein, nothing
in this Agreement, expressed or implied, is intended to confer on any
person other than the parties hereto or their respective successors and
permitted assigns any rights, remedies, obligations or liabilities
under or by reason of this Agreement.
9.3 All notices, requests, demands and other communications which are
required to be or may be given under this Agreement shall be in writing
and shall be deemed to have been duly given when delivered in person,
or transmitted by telecopy or telex, or upon receipt after dispatch by
certified or registered first class mail, postage prepaid, return
receipt requested, to the party to whom the same is so given or made,
at the following addresses (or such others as shall be provided in
writing hereinafter):
(a) If to the Sellers, to:
Xxxxx Xxx
x/x 00 Xxxxxx Xx
Xx Xxxxx XXX 0000
XXXXXXXXX
(x) If to RBL or ROO,to:
Xxxxxx Xxxxx
c/o ROO Group, Inc.
000 Xxxx 00xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile:
with a copy to (which shall not constitute notice):
Attn: Xxxxxxx X. Xxxxxxxx, Esq.
Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP
1065 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
13
9.4 This Agreement constitutes the entire agreement among the parties
hereto with respect to the subject matter hereof and supersedes any and
all prior or contemporaneous representations, warranties, agreements
and understandings in connection therewith. Except as otherwise
provided in this Section 9.4, this Agreement may be amended only by a
writing executed by all parties hereto. No party shall be liable or
bound to the other in any manner by any warranties, representations or
covenant except as specifically set forth herein.
9.5 The section and other headings contained in this Agreement are for
reference purposes only and shall not be deemed to be a part of this
Agreement or to affect the meaning or interpretation of this Agreement.
9.6 This Agreement may be executed in any number of counterparts, each of
which, when executed, shall be deemed to be an original and all of
which together shall be deemed to be one and the same instrument.
9.7 This Agreement shall be construed as to both validity and performance
and enforced in accordance with and governed by the laws of the State
of New York in the United States, without giving effect to the
conflicts of law principles thereof, and shall be binding upon and
shall inure to the benefit of the parties and their respective heirs,
estate, legal representatives, successors and assigns.
9.8 In the event that any provision of this Agreement is invalid or
unenforceable under any applicable statute or rule of law, then such
provision shall be deemed inoperative to the extent that it may
conflict therewith and shall be deemed modified to conform with such
statute or rule of law. Any provision hereof which may prove invalid or
unenforceable under any law shall not affect the validity or
enforceability of any other provision hereof.
9.9 Any dispute, controversy or claim arising out of, relating to, or in
connection with, this Agreement, or the breach, termination or validity
thereof, except for claims for equitable, including injunctive, relief,
shall be finally settled by arbitration conducted in accordance with
this Section.
(a) The arbitration shall be conducted in accordance with the
rules of the American Arbitration Association (the "AAA") in
effect at the time of the arbitration, except as they may be
modified herein or by mutual agreement of the parties. The
seat of the arbitration shall be New York, NY. Each party
hereby irrevocably submits to the jurisdiction of the
arbitrator in New York, NY and waives any defense in an
arbitration based upon any claim that such party is not
subject personally to the jurisdiction of such arbitrator,
that such arbitration is brought in an inconvenient forum or
that such venue is improper.
(b) The arbitration shall be conducted by one arbitrator, who
shall be appointed by the AAA. The arbitrator shall have the
authority only to enforce the legal and contractual rights of
the parties and shall not add to, modify, disregard, or refuse
to enforce any contractual provision. There shall be no
pre-arbitration discovery. The parties acknowledge and agree
14
that by entering into this Agreement they are agreeing to this
arbitration provision and are waiving all rights to a trial by
jury. The arbitral award shall be in writing and shall be
final and binding on the parties. The award shall include an
award of costs, including the fees and costs of the
arbitrators and reasonable attorneys' fees and disbursements
in accordance with the arbitrator's view of the merits of the
parties' respective positions in the dispute. Except upon a
finding of actual fraud, intentional or knowing
misrepresentation, willful and knowing omissions of material
fact or willful misconduct, no such award shall include
punitive damages. Judgment upon the award may be entered by
any governmental authority having jurisdiction thereof or
having jurisdiction over the parties or their assets.
9.10 All representations and warranties of the parties contained in or made
pursuant to this Agreement shall survive the execution and delivery of
this Agreement and the Closing hereunder for a period of two years
after Closing.
9.11 This Agreement may not be modified or changed except by an instrument
or instruments in writing executed by the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.
ROO GROUP, INC. ROO BROADCASTING LIMITED
Signed: /s/ Xxxxx Xxxxx Signed: /s/ Xxxxx Xxxxx
------------------------------ --------------------------
Name: Xxxxx Xxxxx Name: Xxxxx Xxxxx
------------------------------ --------------------------
Title: Director Title: Director
------------------------------ --------------------------
Date: 28/10/05 Date: 28/10/05
------------------------------ --------------------------
TRUISTIC PTY LTD ATF XXX INVESTMENT TRUST
Signed: /s/ Xxxxx Xxx
------------------------------
Name: Xxxxx Xxx
------------------------------
Title: Director
------------------------------
Date: 28/10/05
------------------------------
15
XXXXXXX XXXXXX ATF THE BOLLEN INVESTMENT TRUST
Signed: /s/ Xxxxxxx Xxxxxx Xxxxxx
------------------------------
Name: Xxxxxxx Xxxxxx Xxxxxx
------------------------------
Title: Director
------------------------------
Date: 28-10-05
------------------------------
XXXXX XXXXXXX ATF THE CAMPIOIN INVESTMENT TRUST
Signed: /s/ Xxxxx Xxxxxxx
------------------------------
Name: Xxxxx Xxxxxxx
------------------------------
Title: Director
------------------------------
Date: 28-10-05
------------------------------
16
Annex A
Purchase Price Allocation
Seller: Initial ROO Shares:
------
Truistic Pty Ltd atf Xxx Investment Trust 4,300
Xxxxxxx Xxxxxx atf the Bollen Investment Trust 1,300
Xxxxx Xxxxxxx atf the Xxxxxxx Investment Trust 4,400
17
