STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is made as of November 1,
2004, by and between Bickhams Media, Inc., a Delaware corporation ("BMI") and a
100% owned subsidiary of ROO Group, Inc., a Delaware corporation ("ROO"), ROO,
and Xxxxxx and Xxxxxx Xxxxxxxxx ("DVA").
W I T N E S S E T H:
WHEREAS, DVA is the owner of 50% of the shares (the "VideoDome Shares") of
the common stock, par value $.0001, of XxxxxXxxx.xxx Networks Inc.
("VideoDome"), a Delaware corporation, which VideoDome Shares consist of all of
the outstanding capital stock of VideoDome not owned by BMI; and
WHEREAS, BMI desires to purchase from DVA and DVA desires to sell to BMI,
the VideoDome 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. PURCHASE AND SALE OF THE VIDEODOME SHARES.
Purchase and Sale. Upon the terms and conditions herein contained, at the
Closing (as hereinafter defined), DVA agrees to sell the VideoDome Shares to BMI
and BMI agrees to purchase the VideoDome Shares from DVA, free and clear of all
liens, claims, pledges, mortgages, restrictions, obligations, security interests
and encumbrances of any kind, nature and description.
2. CONSIDERATION.
Purchase Price. The purchase price for the VideoDome Shares (the "Purchase
Price") shall be as follows:
(a) Five Million (5,000,000) shares of common stock of ROO (the "Initial
ROO Shares") issued on the Closing Date;
(b) $220,000 in cash payable upon meeting jointly agreed milestones as
described in Exhibit A attached hereto; and
(c) Three Million (3,000,000) shares of common stock of ROO (the
"Additional ROO Shares") issued upon reaching agreed milestones as
described in Exhibit A attached hereto.
3. CLOSING.
3.1 Time and Place of Closing. 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, at the offices of Sichenzia
Xxxx Xxxxxxxx Xxxxxxx LLP, 1065 Avenue of the Americs, Xxx Xxxx, Xxx Xxxx 00000
(hereinafter the "Closing Date").
3.2 Deliveries by DVA. (a) At the Closing, DVA shall deliver to BMI,
certificates representing the VideoDome Shares and executed stock power(s) or
other documents satisfactory to BMI permitting transfer to BMI of the VideoDome
Shares.
(b) At the Closing, DVA shall also deliver to BMI executed Lock Up
Agreements substantially in the form attached hereto as Exhibit B, signed
separately by Xxxxxx Xxxxxxxxx and Xxxxxx Xxxxxxxxx.
3.3 Delivery by ROO. At the Closing, ROO shall deliver to DVA the Initial
ROO Shares.
4. REPRESENTATIONS AND WARRANTIES OF DVA. DVA hereby represents and
warrants to BMI and ROO as follows:
4.1 Organization. VideoDome is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
4.2 Authorization; Performance. The execution, delivery and performance of
this Agreement have been duly authorized by VideoDome's Board of Directors.
VideoDome 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 VideoDome, 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 Shares Validly Issued. Upon the issuance and delivery of the VideoDome
Shares in accordance with the terms and conditions set forth herein, the
VideoDome Shares shall be validly issued, fully paid and non-assessable.
4.4 Capitalization. The VideoDome Shares represent all of the issued and
outstanding shares of capital stock of VideoDome no currently owned by BMI.
There are no outstanding rights, options or warrants to purchase any shares of
capital stock of VideoDome.
4.5 Liens. The VideoDome Shares are being transferred to BMI 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 excluding the Avenue Group Inc
promissory note.
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4.6 Investment Intent. DVA is 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 of 1993 (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 DVA 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.
4.7 Investment Experience. DVA has 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 and has had
substantial experience in previous private and public purchases of securities.
4.8 Reliance on Representations. DVA has not relied upon any
representations or other information (whether oral or written) from BMI or ROO,
or any of their respective officers, directors, employees or agents other than
as expressly set forth herein.
4.9 Ownership of VideoDome Shares. DVA is the sole beneficial owner of the
VideoDome Shares, and owns the VideoDome Shares free and clear of all mortgages,
pledges, restrictions, liens, charges, encumbrances, security interests,
obligations or other claims.
4.10 Ownership of Properties. All intellectual property relating to all
applications developed by VideoDome or by DVA for VideoDome, and all domain
names, business plans, equipment, and software used to operate and develop
VideoDome's products and solutions, are owned by VideoDome free and clear of all
mortgages, pledges, restrictions, liens, charges, encumbrances, security
interests, obligations or other claims.
5. REPRESENTATIONS AND WARRANTIES OF BMI. BMI hereby represents, warrants
and acknowledges to DVA as follows:
5.1 Organization. BMI is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware.
5.2 Authorization; Performance. The execution, delivery and performance of
this Agreement have been duly authorized by BMI's Board of Directors. BMI has
full corporate power and authority to enter into this Agreement and to perform
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its obligations hereunder. This Agreement constitutes a valid and legally
binding obligation of BMI, 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 Investment Intent. BMI is acquiring the VideoDome Shares for its 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 VideoDome 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 VideoDome Shares made in full compliance with
all applicable provisions of the Securities Act and the Exchange Act, and the
Rules and Regulations promulgated by the Securities and Exchange Commission
thereunder, all as amended; and BMI acknowledges that the VideoDome Shares must
be held indefinitely unless they are subsequently registered under the
Securities Act, or an exemption from such registration is available.
5.4 Reliance on Representations. BMI has not relied upon any
representations or other information (whether oral or written) from DVA or
VideoDome, 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 DVA as follows:
6.1 Organization. ROO is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware.
6.2 Authorization; Performance. 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 Shares Validly Issued. 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 Reliance on Representations. ROO has not relied upon any
representations or other information (whether oral or written) from DVA or
VideoDome, or any of their officers, directors, employees or agents other than
as expressly set forth herein.
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7. POST-CLOSING COVENANTS.
7.1 Employment Agreements. Upon signing this Agreement, DVA shall sign
employment agreements with ROO or a designated subsidiary of ROO.
7.2 Resignations; Appointment of Directors. Immediately following Closing,
DVA shall deliver to ROO the resignations of all of the then serving members of
the Board of Directors and officers of VideoDome. Upon receiving such
resignations, ROO shall cause BMI to appoint Xxxxxx Xxxxx and Xxxxx Xxxxx to the
Board of Directors of VideoDome.
7.3 Corporate Records. As soon as practicable after the Closing, but in no
event later than five business days after the Closing, DVA shall deliver to BMI
the corporate minute books for VideoDome and original or certified copies of
such other VideoDome corporate documents and files as BMI may reasonably
request.
7.4 Further Assurances. 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 Obligation of DVA to Indemnify. Subject to the limitations of this
Section 8, DVA shall indemnify, defend and hold harmless BMI and its directors,
officers, equity holders, agents, affiliates, successors and permitted assigns
(collectively, "BMI's Related Indemnitees") 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 DVA
hereunder.
8.2 Obligation of BMI to Indemnify. Subject to the limitations of this
Section 8, BMI shall indemnify, defend and hold harmless DVA 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 BMI contained in this Agreement.
8.3 Notice to Indemnifying Party. 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.
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8.4 Adjustment to Indemnification. Notwithstanding anything contained in
this Section 8 to the contrary, no Indemnifying Party will be obligated to
indemnify an indemnified person 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. 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.
9. Miscellaneous
9.1 Binding Effect; Benefits. 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.
9.2 Notices. 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 DVA, to:
Xxxxxx Xxxxxxxxx
00000 Xxxxx Xx.
Xxxxxx, XX 00000
Facsimile: 000-000-0000
(b) If to BMI or ROO,to:
Xxxxxx Xxxxx
c/o ROO Group, Inc.
00 Xxxxx Xx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: 000 000 0000
with a copy to:
Xxxxxxx X. Xxxxxxxx, Esq.
Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: 000 000 0000
9.3 Entire Agreement. This Agreement along with the Exhibits hereto
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 9.3, 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.
9.4 Headings. 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.
9.5 Counterparts. 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.
9.6 Governing Law. 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, 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.
9.7 Severability. 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.
9.8 Arbitration. (a) 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. 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.
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(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 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.
9.9 Survival. 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.
9.10 Amendments. 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.
/s/ Xxxxxx Xxxxx
---------------------------
By: Xxxxxx Xxxxx
Its: CEO
Bickhams Media, Inc.
/s/ Xxxxxx Xxxxx
---------------------------
By: Xxxxxx Xxxxx
Its: CEO
/s/ Xxxxxx Xxxxxxxxx
---------------------------
By: Xxxxxx Xxxxxxxxx
/s/ Xxxxxx Xxxxxxxxx
---------------------------
By: Xxxxxx Xxxxxxxxx
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Exhibit A
Milestone Cash Payment Shares
----------------------------------------------------------------------------- -------------- ----------
1 Commercial Launch Embedded player & Music Player $ 100,000 1,000,000
2 Commercial Launch of combined platform ROO Media and VideoDome Media Manager
platform $ 100,000 2,000,000
3 Platform Delivering 50,000,000 video views for 2 consecutive months
excluding Mini player views $ 20,000
Total $ 220,000 3,000,000
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Exhibit B
Lock Up Agreement
The undersigned hereby agrees that he, she or it will not, directly or
indirectly, agree or offer to sell, sell, grant an option for the purchase or
sale of, transfer, pledge, assign, hypothecate, distribute or otherwise encumber
or dispose of the Initial ROO Shares (as defined in the Stock Purchase Agreement
made as of October __, 2004, by and between Bickhams Media, Inc., ROO Group,
Inc., and Xxxxxx and Xxxxxx Xxxxxxxxx) or the Additional ROO Shares (as defined
in the Stock Purchase Agreement made as of October __, 2004, by and between
Bickhams Media, Inc., ROO Group, Inc., and Xxxxxx and Xxxxxx Xxxxxxxxx) until
the earlier of: (a) two years from the respective issuance(s) of the Initial ROO
Shares and the Additional ROO Shares; or (b) the date that holders of certain
Callable Secured Convertible Notes (the "Notes") and Stock Purchase Warrants
(the "Warrants"), issued by ROO Group, Inc. on September 10, 2004, no longer
hold the Notes and the Warrants and no longer beneficially own any shares of
common stock of ROO Group, Inc. issuable upon conversion or exercise of the
Notes or the Warrants, without the prior written consent of such holders of the
Notes and the Warrants.
In order to enable the aforesaid covenants to be enforced, the
undersigned hereby consents to the placing of legends and/or stop-transfer
orders with the transfer agent of the securities of ROO Group, Inc. with respect
to any of the Initial ROO Shares and Additional ROO Shares registered in the
name of the undersigned or beneficially owned by the undersigned.
Dated: November 1, 2004
Signature
/s/ Xxxxxx Aharanoff
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Address:
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City, State, Zip Code:
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Print Social Security Number
or Taxpayer I.D. Number
