This Agreement made as of this ___________________day of
June, 1998, by and among ASI ENTERTAINMENT INC. ("ASI"), a Delaware
corporation, and ASI ENTERTAINMENT PTY. LTD. (ACN 062 850 962)
("ASIE"), a closely held Australian corporation, and the
OPTIONHOLDERS of ASIE ("the Optionholders") who hold options over
shares in ASIE, the names and addresses of the Optionholders are set
out in Schedule 1 hereto.
WHEREAS, ASI desires to acquire One Hundred Percent (100%) of
the shares and options of ASIE and the Optionholders wish to
respectively exchange One Hundred Percent (100%) of their options in
ASIE to ASI;
NOW, THEREFORE, in consideration of the mutual promises,
covenants and representations contained herein, ASI and ASIE and the
Optionholders AGREE AS FOLLOWS:
ARTICLE I
1.1 EXCHANGE OF OPTIONS. Subject to all the terms and
conditions of this Agreement, the Optionholders agree to exchange
all of their collectively held options over shares of common stock
of ASIE, A$0.10 par value per share, (collectively, the "ASIE
Options") which represent 100% of the issued and outstanding options
over the capital of ASIE, in a tax-free exchange of options with ASI.
1.2 EXCHANGE RATIO. The shares of common stock of ASIE
underlying the ASIE Options shall be exchanged at a ratio of one
share of ASI for every eight shares of common stock of ASIE or such
other ratio as may be determined and authorized by the Boards of
Directors of ASIE and ASI. The exercise price for the purchase of
such shares shall be proportionately adjusted pursuant to the terms
contained in such option.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF ASIE
ASIE represents and warrants to ASI that:
2.1 ORGANIZATION. ASIE is a corporation duly organized,
validly existing and in good standing in the State of Victoria,
Australia, and warrants that ASIE has all necessary powers to carry
on its business as now owned and operated by it.
2.2 CAPITAL. The issued and outstanding capital stock of
ASIE consists of 42,331,920 shares of common stock of ASIE, A$0.10
par value per share, all of which are fully paid and non-assessable.
There currently are not, and at the Effective Date and time of this
Agreement there shall not be, any outstanding subscriptions,
options, rights, warrants, debentures, other instruments,
convertible securities or other agreements or commitments obligating
ASIE to issue or transfer from Treasury any additional shares of its
capital stock of any class, excepting the ASIE Options set out in
Schedule 1 hereto.
2.3 SUBSIDIARIES. ASIE has no subsidiaries, nor does it own
any interest in any other enterprise, excepting those as set out in
Schedule 2 hereto.
2.4 DIRECTORS AND OFFICERS. This Agreement is executed by
one officer, so authorized by the Board of Directors of ASIE. The
name and title of that person is reflected on the signature page
hereto.
2.5 FINANCIAL STATEMENTS. Schedule 3 hereto consists of
the audited financial statements of ASIE as of June 30, 1997 and
unaudited financial statements of ASIE at December 31, 1997. Since
preparation of the audited financial statements and unaudited
financial statements, there has not been any material change in the
financial condition or operation of ASIE.
2.6 ABSENCE OF UNDISCLOSED LIABILITIES. ASIE does not have
any debt, liabilities or obligations of any nature, whether accrued,
absolute, contingent or otherwise not disclosed on its financial
statements.
2.7 TAX RETURNS. It has not yet been necessary for ASIE to
file federal, state or local tax returns required by law and ASIE
has not been required by law to pay any taxes, assessments and
penalties and none are due and payable. There are no present
disputes as to taxes of any nature, payable by ASIE.
2.8 TRADE NAMES AND RIGHTS. ASIE owns and holds all
necessary service marks, trade names, copyrights, patents and
proprietary and other rights necessary to its business as now
conducted or be conducted.
2.9 COMPLIANCE WITH LAWS. ASIE has complied with, and is not
in violation of, applicable federal, state, or local statutes, laws
and regulations, affecting the operation of its business.
2.10 LITIGATION. ASIE is not involved as a defendant or
plaintiff in any suit, action, arbitration or legal, administrative
or other proceeding, which to the best knowledge of ASIE, would
affect ASIE or its business, assets or financial condition in a
negative manner; or governmental investigation which is pending or,
to the best knowledge of ASIE, threatened against or affecting ASIE
or its business, assets or financial condition. ASIE is not in
default with respect to any order, writ, injunction or decree of any
federal, state, local/foreign court, department, agency or
instrumentality applicable to it.
2.11 AUTHORITY. ASIE has authorized the execution of this
Agreement and the consummation of the transactions contemplated
herein, and ASIE has full power and authority to execute, deliver
and perform this Agreement, and is a legal, valid and binding
obligation of ASIE and is enforceable in accordance with its terms
and conditions.
2.12 ABILITY TO CARRY OUT OBLIGATIONS. The execution and
delivery of this Agreement by ASIE and the performance by ASIE of
its obligations hereunder in the time and manner contemplated will
not cause, constitute or conflict with or result in any of the
following: (a) a breach or violation of any provision of, or
constitute a default under any license, indenture, mortgage
instrument, article of incorporation, by-law, other agreement or
instrument to which ASIE is a xxxxx, or by which it may be bound,
nor will any consents or authorizations of any party other than
those hereto be required, (b) any event that would permit any party
to any agreement or instrument, to terminate it or to accelerate the
maturity of any indebtedness or other obligation of ASIE, or, (c) an
event that would result in the creation or imposition of any lien,
charge or encumbrance on any asset of ASIE.
2.13 FULL DISCLOSURE. None of the representations and
warranties made by ASIE herein or in any Schedule, certificate or
memorandum furnished or to be furnished by ASIE, contains or will
contain any untrue statement of material fact or omit any material
fact the omission of which would be misleading.
2.14 ASSETS. ASI has good marketable title to all of its
property, free and clear of all liens, claims and encumbrances.
2.15 MATERIAL CONTRACTS. ASIE has no material contracts to
which it is a party or, by which it is bound, other than those known
to the Directors of ASI.
3.16 OPERATIONS. The business of ASIE from the date of this
Agreement up to and including the Effective Date will be carried on
in a proper and business like manner and there shall be no
distribution of dividends or other moneys to any shareholders or to
any other person on behalf of any shareholder of ASIE or payment of
shareholder's loans between the date of this Agreement and the
Effective Date.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF ASI
ASI represents and warrants to ASIE that:
3.1 ORGANIZATION. ASI is a corporation duly organized,
validly existing and in good standing and has all necessary
corporate powers to carry on its business as now owned and operated
by it, is duly qualified to do business and is in good standing in
each of the States where its business requires qualification.
3.2 CAPITAL. ASI has or will have upon effectiveness of this
Agreement 416,992 shares (7.25% of the outstanding common shares
after effectiveness of the exchange of shares) of common stock,
$0.0001 par value per share, issued and outstanding, fully paid and
non assessable. There currently are not, and at the Effective Date
and time of this Agreement there shall not be, any outstanding
subscriptions, options, rights, warrants, debentures, other
instruments, convertible securities or other agreements or
commitments obligating ASI to issue or transfer from Treasury any
additional shares of its capital stock of any class, excepting those
contemplated to be issued pursuant to this Agreement.
3.3 SUBSIDIARIES. ASI has no subsidiaries, excepting those
as set out in Schedule 4 hereto.
3.4 DIRECTORS AND OFFICERS. This Agreement is executed by
one officer, so authorized by the Board of Directors of ASI. The
name and title of that person is reflected on the signature page
hereto.
3.5 UNAUDITED BALANCE SHEET. An unaudited balance sheet of
ASI is currently reflected in Schedule 5 hereto. Since preparation
of the attached unaudited statement, there has not been any change
in the financial condition or operations of ASI.
3.6 ABSENCE OF UNDISCLOSED LIABILITIES. ASI does not have
any debt, liabilities or obligations of any nature, whether accrued,
absolute, contingent or otherwise.
3.7 TAX RETURNS. It has not yet been necessary for ASI to
file federal. state or local tax returns required by law and ASI has
not been required by law to pay any taxes, assessments and penalties
and none are due and payable. There are no present disputes as to
taxes of any nature, payable by ASI.
3.8 TRADE NAMES AND RIGHTS. Other than registration of its
Company name, ASI does own nor use any patent, trademark, service
xxxx, trade name or copyright in its business.
3.9 COMPLIANCE WITH LAWS. ASI has complied with, and is not
in violation of, applicable federal, state or local statutes, laws
and regulations including state and federal securities laws and all
other laws affecting the operation of its business.
3.10 LITIGATION. ASI is not involved as a defendant or
plaintiff in any suit, action, arbitration or legal, administrative
or other proceeding which would affect ASI or its business, assets
or financial condition, or governmental investigation which is
pending or threatened against or affecting ASI or its business,
assets or financial condition. ASI is not in default with respect to
any order, writ, injunction or decree of any federal, state,
local/foreign court, department, agency or instrumentality
applicable to it.
3.11 AUTHORITY. The Board of Directors of ASI has authorized
the execution of this Agreement and the consummation of the
transactions contemplated herein, and ASI has full power and
authority to execute, deliver and perform this Agreement, and this
Agreement is a legal, valid and binding obligation of ASI and is
enforceable in accordance with its terms and conditions.
3.12 ABILITY TO CARRY OUT OBLIGATIONS. The execution and
delivery of this Agreement by ASI and the performance by ASI of its
obligations hereunder in the time and manner contemplated will not
cause, constitute or conflict with or result in any of the
following: (a) a breach or violation of any provision of, or
constitute a default under any license, indenture, mortgage
instrument, article of incorporation, by-law, other agreement or
instrument to which ASI is a party, or by which it may be bound, nor
will any consents or authorizations of any party other than those
hereto be required, (b) any event that would permit any party to any
agreement or instrument, to terminate it or to accelerate the
maturity of any indebtedness or other obligation of ASI, or, (c) an
event that would result in the creation or imposition of any lien,
charge or encumbrance on any asset of ASI.
3.13 FULL DISCLOSURE. None of the representations and
warranties made by ASI herein or in any Schedule, certificate or
memorandum furnished or to be furnished by ASI, or on its behalf,
contains or will contain any untrue statement of material fact or
omit any material fact the omission of which would be misleading.
3.14 ASSETS. ASI has good marketable title to all of its
property, free and clear of all liens, claims and encumbrances.
3.15 MATERIAL CONTRACTS. ASI has no material contracts to
which it is a party or by which it is bound which would affect this
transaction in a negative manner.
3.16 OPERATIONS. The business of ASI from the date of this
Agreement up to and including the Effective Date will be carried on
in a proper and business like manner and there shall be no
distribution of dividends or other moneys to any shareholders or to
any other person on behalf of any shareholder of ASI or payment of
shareholder's loans between the date of this Agreement and the
Effective Date.
ARTICLE IV
4.1 COVENANTS PRIOR TO AND SUBSEQUENT TO CLOSING. It is
agreed between the parties hereto that ASI may visit the offices of
ASIE to obtain copies of data contained in all currently active
files of current contracts and agreements of any and all categories
of business, with any company or person. Any and all such data and
documentation shall be delivered into the hands of an officer of ASI
or be delivered to an office of ASI and such data and documentation
shall include all copies of files, documents, shareholder's and
Director's minute books/records, etc. at the earliest possible time
on or after the Effective Date hereof.
ARTICLE V
CONDITIONS PRECEDENT TO ASI'S PERFORMANCE
5.1 CONDITIONS. ASI's obligations hereunder shall be subject
to the satisfaction at the Closing, of all the conditions set forth
in this Article V. ASI may waive any or all of these conditions in
whole or in part provided, however, that no such waiver of a
condition shall constitute a waiver by ASI of any other condition of
or any of ASI's other rights or remedies, at law or in equity, if
ASIE shall be in default of any of its representations, warranties
or covenants under this Agreement.
5.2 ACCURACY OF REPRESENTATIONS. Except as otherwise
permitted by this Agreement, all representations and warranties by
ASIE in this Agreement or in any written statement that shall be
delivered to ASI by ASIE under this Agreement shall be true and
accurate on and as of the Effective Date as though made at that time.
5.3 PERFORMANCE. ASIE shall have performed, satisfied and
complied with all covenants, agreements and conditions required by
this Agreement to be performed or complied with by it, on or before
the Effective Date.
5.4 ABSENCE OF LITIGATION. No action, suit, or proceeding
before any court or any governmental body or authority, pertaining
to the transaction contemplated by this Agreement or its
consummation, shall have been instituted or threatened against ASIE
on or before the Effective Date. No action, suit, or proceeding
before any court or any governmental body or authority that could
jeopardize or put at risk of loss, the current assets of ASIE, shall
have been instituted or threatened against ASIE on or before the
Effective Date of this Agreement. ASIE shall resolve in its favor,
any dispute, action or threat of legal action, from any court or any
governmental body, prior to the Effective Date of this Agreement, in
the event any such action or threat of action should currently
exist. Any dispute in which ASIE has a part, any action, suit, or
proceeding by any person, entity, court or governmental body or
authority against ASIE left unresolved on the Effective Date of this
Agreement, shall immediately render this Agreement, on that date,
forever null and void, without further notice from ASI.
ARTICLE VI
CONDITIONS PRECEDENT TO ASIE'S PERFORMANCE
6.1 CONDITIONS. ASIE's obligations hereunder shall be subject
to the satisfaction at the Closing, of all the conditions set forth
in this Article VI. ASIE may waive any or all of these conditions
in whole or in part provided, however, that no such waiver of a
condition shall constitute a waiver by ASIE of any other condition
of or any of ASIE's other rights or remedies, at law or in equity,
if ASI shall be in default of any of its representations, warranties
or covenants under this Agreement.
6.2 ACCURACY OF REPRESENTATIONS. Except as otherwise
permitted by this Agreement, all representations and warranties by
ASI in this Agreement or in any written statement that shall be
delivered to ASIE by ASI under this Agreement shall be true and
accurate on and as of the Effective Date as though made at that time.
6.3 PERFORMANCE. ASI shall have performed, satisfied and
complied with all covenants, agreements and conditions required by
this Agreement to be performed or complied with by it on or before
the Effective Date.
6.4 ABSENCE OF LITIGATION. No action. suit, or proceeding
before any court or any governmental body or authority, pertaining
to the transaction contemplated by this Agreement or its
consummation, shall have been instituted or threatened against ASI
on or before the Effective Date. No action, suit, or proceeding
before any court or any governmental body or authority that could
jeopardize or put at risk of loss, the current assets of ASI, shall
have been instituted or threatened against ASI on or before the
Effective Date of this Agreement. ASI shall resolve in its favor,
any dispute, action or threat of legal action, from any court or any
governmental body, prior to the Effective Date of this Agreement, in
the event any such action or threat of action should currently
exist. Any dispute in which ASI bas a part, any action, suit, or
proceeding by any person, entity, court or governmental body or
authority against ASI left unresolved on the Effective Date of this
Agreement, shall immediately render this Agreement, on that date,
forever null and void, without further notice from ASIE.
ARTICLE VII
EFFECTIVENESS
7.1 EFFECTIVE DATE. This Agreement shall become effective
for the parties hereto at 5:00 p.m. Australian Eastern Standard Time
on the ________ day of June, 1998 (the "Effective Date").
7.2 EFFECTIVE DATE OBLIGATIONS. On the Effective Date:
(a) the Optionholders shall deliver to ASI Certificates for
the ASIE Options over shares in ASIE of A$0.10 par value,
(representing 100% of the ASIE Options), all of which are currently
issued and outstanding, duly endorsed to ASI at the earliest
possible time, after the Effective Date and hour of this Agreement.
(b) ASI shall issue non assessable options (the "ASI
Options") over shares of $0.0001 par value Common Stock to the
Optionholders pursuant to the exchange ratio and exercise price
determined herein.
(c) the terms and conditions of the ASI Options shall be as
set out in Schedule 6 hereto.
(d) the ASI Options referred to in clause 7.2 shall be issued
in the numbers and to the persons and/or companies (and/or their
nominees) whose names and addresses are set out in the Option
Distribution Schedule which is Schedule 8 hereto.
7.3 FUTURE CONDUCT OF ASI. ASI and ASIE acknowledge that on
the Effective Date, ASI shall appoint such of ASIE's nominees to the
Board of Directors of ASI and such other officers of ASI as ASIE
shall require and the current Board of Directors of ASI shall
simultaneous submit their resignations as directors of the Board.
ARTICLE VIII
MISCELLANEOUS
8.1 CAPTIONS AND HEADINGS. The article and paragraph headings
throughout this Agreement are for convenience and reference only and
shall not define, limit or add to the meaning of any provision of
this Agreement.
8.2 NO ORAL CHANGE. This Agreement and any provision hereof
may not be waived, changed, modified or discharged orally, but only
by an agreement in writing signed by the party against whom
enforcement of any such waiver, change, modification or discharge is
sought.
8.3 NON-WAIVER. The failure of any party to insist in any one
or more cases upon the performance of any of the provisions,
covenants or conditions of this Agreement or to exercise any option
herein contained shall not be construed as a waiver or
relinquishment in the future of any such provisions, covenants or
conditions. No waiver by any party of one breach by another party
shall be construed as a waiver with respect to any other subsequent
breach.
8.4 TIME OF ESSENCE. Time is of the essence of this Agreement
and of each and every provision hereof.
8.5 CHOICE OF LAW. This Agreement and its application shall
be governed by the laws of the State of Delaware in the United
States of America. and construed solely by the appropriate courts
of the State of Delaware.
8.6 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
Facsimile transmission and execution of such document shall be
binding as though a hard copy.
8.7 NOTICES. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be
deemed to have been duly given on the date of service if served
personally on the party to whom notice is to be given, or on the
tenth day after mailing; if mailed to the party to whom notice is
being given, by first class mail, postage prepaid, and properly
addressed as follows:
ASI Entertainment Inc. at
0000 X Xxxxxx, XX
Xxxxxxxxxx, XX 00000
ASI Entertainment Pty. Ltd. at
Xxxxx 0
0000 Xxxx Xxxx
Xxxxxxxx, Xxxxxxxx, Xxxxxxxxx 0000;
The Shareholders at their respective addresses set out in
Schedule 1 hereto;
The Optionholders at their respective addresses set out in
Schedule 1 hereto.
8.8 BINDING EFFECT. This Agreement shall enure to and be
binding upon the heirs, executors, personal representatives,
successors and assigns of each of the parties to this Agreement.
8.9 MUTUAL CONSIDERATION. The parties hereto shall cooperate
with each other to achieve the purpose of this Agreement and shall
execute such other and further documents and take such other and
further actions as may be necessary or convenient to effect the
transaction described herein for the best interests of all of the
parties hereto.
8.10 ANNOUNCEMENTS. ASI and ASIE will consult and
co-operate with each other as to the timing and content of any
public announcements regarding this Agreement.
8.11 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations, warranties, covenants and agreements of the parties
set forth in this Agreement or in any instrument, certificate,
opinion or other writing providing for in it, shall survive the
Closing on the Effective Date.
8.12 ENTIRE AGREEMENT. This Agreement supersedes any and all
prior agreements and understandings, if any, between the parties
hereto, and expresses the entire Agreement between the parties
hereto, and cannot be modified by any oral promise or statement by
whomsoever made.
ARTICLE IX
ARBITRATION
Any disputes arising from this Agreement, except for requests
for injunctive or other equitable relief, shall be decided by the
American Arbitration Association according to its rules and
regulations then in effect. In any adverse action, the parties
shall restrict themselves to claims for compensatory damages and no
claims shall be made by any party or affiliate for lost profits,
punitive, multiple or other damages.
.
IN WITNESS WHEREOF, the Parties hereto have fully executed
this Agreement, having affixed their respective and witnessed
Authorized Signatures.
ASI ENTERTAINMENT INC.
ASI ENTERTAINMENT PTY. LTD.
AGREEMENT BY AND AMONG
ASI ENTERTAINMENT INC., ASI ENTERTAINMENT PTY. LTD. AND
THE OPTIONHOLDERS OF ASI ENTERTAINMENT PTY. LTD.
SCHEDULES
Schedule 1 Names and addresses of the Optionholders
Schedule 2 ASIE Subsidiaries
Schedule 3 Audited financial statements ASIE as of June 30, 1997
and unaudited financial statements of ASIE at December
31, 1997
Schedule 4 ASI Subsidiaries
Schedule 5 Unaudited balance sheet of ASI
Schedule 6 Terms and conditions of the ASI Options
