STOCK PURCHASE AGREEMENT
By and Among
PURPLE DEMON, INC.
Xxxxx Xxxxx
Xxxx Xxxxxxxxx
Xxxxxxx Xxx
and
Paradigm Music Entertainment Company, Inc.
------------------------------------------------------------------------------
Dated as of February 14, 1997
------------------------------------------------------------------------------
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (the "Agreement"), dated as of
December __, 1996, by and among, Xxxx Xxxxxxxxx, Xxxxx Xxxxx, and Xxxxxxx Xxx
(hereinafter individually referred to as, a "Seller" and collectively, the
"Sellers"), Paradigm Music Entertainment Company, Inc., a Delaware corporation
(hereinafter referred to as "Paradigm" and/or "Buyer").
W I T N E S S E T H:
WHEREAS, the Sellers own the number of shares of common stock
("Common Stock"), no par value, of Purple Demon set forth below, which
constitutes all of the outstanding capital stock of Purple Demon
Xxxx Xxxxxxxxx 90 shares
Xxxxx Xxxxx 90 shares
Xxxxxxx Xxx 20 shares; and
WHEREAS, the Buyer desires to purchase, and the Sellers desire
to sell, an aggregate of two hundred (200) shares of Common Stock (the
"Shares"), representing 100% of the issued and outstanding capital stock of
Purple Demon, inc., a New York Corporation (hereinafter referred to as "Purple
Demon") for consideration consisting solely of common shares, without par value
(hereinafter referred to as "Payment Shares"), of Paradigm; and
WHEREAS, the parties intend that this transaction qualify as a
tax-free reorganization under Section 368(a)(1)(B) of the Internal Revenue Code
of 1986, as amended (the "Code");
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, and mutual covenants and agreements herein
contained, the parties hereby agree as follows:
ARTICLE I
SALE OF SHARES
Section 1.1 Delivery of Shares. On the terms and subject to
the conditions of this Agreement, on the Closing Date (as hereinafter defined),
the Buyer shall purchase the Shares from the Sellers, and the Sellers shall sell
the Shares to the Buyer, for an aggregate amount equal to the Purchase Price (as
hereinafter defined). On the Closing Date, the Sellers will transfer, assign,
convey and deliver to the Buyer certificates representing all of the Shares.
Each of the certificates shall be duly endorsed for transfer or accompanied by
appropriate stock powers duly executed, in either case in favor of the Buyer,
and each certificate shall have any and all necessary stock transfer tax stamps
affixed thereto at the Sellers' expense.
Section 1.2 Purchase Consideration. The aggregate purchase
price for the Shares shall consist of the "Payment Shares" (Class A Common
Stock) having a par value of $.01. The Payment Shares shall be issued by
Paradigm and delivered by Paradigm pro rata to each of the Sellers based on his
ownership of the Shares in the following proportions:
Xxxx Xxxxxxxxx 45,000 shares
Xxxxx Xxxxx 45,000 shares
Xxxxxxx Xxx 10,000 shares
The Payment Shares shall be issued, as follows, pro rata to each of the Sellers,
each such installment with no par value, the first such installment of Payment
Shares, shall be equal to 33,333 Payment Shares, to be issued on the "Closing
Date" (as hereinafter defined) and the balance, 66,667 of Payment Shares to be
issued on the earlier of ninety (90) days after the date of the commencement of
Paradigm's initial public stock offering or December 31, 1997, (a "Deferred
Payment Date").
For purposes of this Section 1.2 and for determining the number
of Payment Shares issuable in payment of the Purchase Price on a Deferred
Payment Date, the value of each Payment Share shall be equal to the book value
of a Paradigm Common Share. No fractional Payment Shares shall be issued, but
any Seller entitled thereto shall receive a full Payment Share.
ARTICLE II
CLOSING
The closing (the "Closing") of the transactions contemplated
by this Agreement shall take place as soon as practicable after satisfaction or
waiver of all conditions set forth herein at the offices of Xxxxxx Xxxxxxxx
Frome & Xxxxxxxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such
other time and place as the Buyer and the Sellers shall mutually agree (the date
on which such closing occurs being herein referred to as the "Closing Date").
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURPLE DEMON AND THE SELLERS
The Sellers hereby jointly and severally represent and warrant
to the Buyer, as of the date of this Agreement, as follows:
Section 3.1 Corporate Organization; Requisite Authority to
Conduct Business; Articles of Incorporation and By-Laws. Purple Demon is a
corporation duly organized, validly existing and in good standing under the laws
of the State of New York. Purple Demon has provided the Buyer with true and
complete copies of its articles of incorporation (certified by the Secretary of
State of the State of New York) and By-laws (certified by the Secretary of
Purple Demon) as in effect on the date hereof. Prior to the Closing, the minute
books of Purple Demon will be made available to the Buyer for inspection, and
will contain true and complete records of all meetings and consents in lieu of
meeting of Purple Demon's Board of Directors and of Purple Demon's stockholders
since the incorporation of Purple Demon, which accurately reflect in all
material respects all transactions referred to in such minutes and consents in
lieu of meeting. Purple Demon has all corporate power and authority to own,
operate as a record company and to carry on its business as the same is now
being conducted. Purple Demon is duly qualified or licensed to do business and
is in good standing in the State of New York.
Section 3.2 Capitalization and Shareholdings. The authorized
capital stock of Purple Demon consists of two hundred (200) shares of Common
Stock without par value, two hundred (200) of which are issued and outstanding.
Except as set forth on Schedule 3.2 hereto, the Sellers own all of the Shares
free and clear of all liens, claims or encumbrances. The Sellers have full
right, power, legal capacity and authority to transfer and deliver the Shares
pursuant to this Agreement. The capital stock of Purple Demon is duly authorized
and all issued capital stock has been duly and validly issued and is fully paid
and non-assessable and free of preemptive rights. There is not outstanding, and
none of Purple Demon or the Sellers is bound by or subject to, any subscription,
option, warrant, call, right, contract, commitment, agreement, understanding or
arrangement to issue any additional shares of capital stock of Purple Demon,
including any right of conversion or exchange under any outstanding security or
other instrument, and no shares are reserved for issuance for any purpose.
Section 3.3 Subsidiaries, etc. Other then Green Demon, Inc.,
Purple Demon does not own (directly or indirectly) any equity interest in any
corporation, partnership, limited liability company, joint venture, association
or other entity. Notwithstanding anything contained herein to the contrary the
parties hereto acknowledge that Green Demon, Inc., is not subject to the terms
and conditions of this Agreement.
Section 3.4 Authority Relative to and Validity of Agreements.
The Sellers have the requisite corporate power and authority to execute and
deliver this Agreement and the Employment Agreements of Annex A and Annex B
-2-
hereto. The execution and delivery of this Agreement by the Sellers and the
performance by the Sellers of their obligations hereunder and have been duly
authorized by their Board of Directors and no further authorization on the part
of Purple Demon is necessary to authorize the execution and delivery by it of,
and the performance of its obligations under, this Agreement. To the best of
Seller's knowledge, there are no corporate, contractual, statutory or other
restrictions of any kind upon the power and authority of Purple Demon to execute
and deliver this Agreement and to consummate the transactions contemplated
hereunder and thereunder and no action, waiver or consent by any foreign,
Federal, state, municipal or other governmental department, commission or agency
("Governmental Authority") is necessary to make this Agreement a valid
instrument binding upon the Seller's in accordance with its terms. This
Agreement has been duly executed and delivered by the Seller's and constitutes,
as and when executed and delivered by the Seller's in accordance with their
terms will constitute, legal, valid and binding obligations of Purple Demon,
enforceable in accordance with their terms, except (i) as such enforceability
may be limited by or subject to any bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally, (ii) as
such obligations are subject to general principles of equity and (iii) as rights
to indemnity may be limited by federal or state securities laws or by public
policy.
Section 3.5 Required Filings and Consents; No Conflict. To the
best of Seller's knowledge, Purple Demon and/or the Sellers are not required to
submit any notice, report or other filing with any Governmental Authority in
connection with the execution, delivery or performance of this Agreement. The
execution, delivery and performance of this Agreement by the Seller's and the
consummation of the transactions contemplated hereby and thereby do not and will
not, to the best of Seller's knowledge (a) conflict with or violate any law,
regulation, judgment, order or decree binding upon Purple Demon, (b) conflict
with or violate any provision of its charter or Bylaws, or (c) conflict with or
result in a breach of any condition or provision of, or constitute a default (or
an event which with notice or lapse of time or both would become a default)
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any properties or assets of Purple Demon pursuant to, or cause
or permit the acceleration prior to maturity of any amounts owing under, any
indenture, loan agreement, mortgage, deed of trust, lease, contract, license,
franchise or other agreement or instrument to which Purple Demon is a party or
which is or purports to be binding upon Purple Demon or by which any of its
properties are bound. The execution, delivery and performance of this Agreement
by Purple Demon and the Seller's and the consummation of the transactions
contemplated hereby and thereby will not result in the loss of any license,
franchise, legal privilege or permit possessed by Purple Demon or give a right
of termination to any party to any agreement or other instrument to which Purple
Demon is a party or by which any of its properties are bound.
Section 3.6 Financial Statements. Purple Demon has heretofore
delivered to the Buyer true and complete copies of Purple Demon's compiled
balance sheets and income statements for the fiscal year ended December 31, 1995
and for the period ended September 30, 1996 (together with the related notes,
such year-end and interim financial statements are referred to in this Agreement
as the "Financial Statements"). The Financial Statements have in all material
respects been prepared in accordance with Statements and Standards for
accounting and review services being issued by the American Institute of
Certified Public Accountants.
Section 3.7 No Undisclosed Liabilities. Purple Demon has no
debts, liabilities or obligations of any kind, whether accrued, absolute,
contingent or other, whether due or to become due, except as (i) shown in the
Financial Statements, or (ii) incurred in the ordinary course of business since
the date of the Financial Statement mentioned in paragraph 3.6 hereinafter.
Section 3.8 Absence of Certain Changes and Events. Since
December 15, 1996, there has not been, with respect to Purple Demon, (i) any
material damage, destruction or loss (whether or not covered by insurance) with
respect to any assets or properties; (ii) any redemption or other acquisition by
it of Common Stock or any declaration or payment of any dividend or other
distribution in cash, stock or property with respect thereto; (iii) except in
connection with or as contemplated by this Agreement, any entry into any
material commitment or transaction (including, without limitation, any borrowing
or capital expenditure) other than in the ordinary course of business; (iv) any
transfer of, or rights granted under, any material leases, licenses, agreements,
patents, trademarks, trade names, or copyrights other than those transferred or
granted in the ordinary course of business and consistent with past practice;
(v) any mortgage, pledge, security interest or imposition of any other
encumbrance on any assets or properties except in the ordinary course of
business; any payment of any debts, liabilities or obligations ("Liabilities")
of any kind other than Liabilities currently due; any cancellation of
-3-
any debts or claims or forgiveness of amounts owed to Purple Demon; or (vii) any
change in accounting principles or methods (except insofar as may have been
required by a change in the Statements and Standards for accounting and review
services being issued by the American Institute of Certified Public
Accountants). Since September 30, 1996, Purple Demon has conducted its business
only in the ordinary course and in a manner consistent with past practice and
has not made any material change in the conduct of its business or operations.
Without limiting the generality of the foregoing, since September 30, 1996,
Purple Demon has not made any payments (except in the ordinary course of
business and in amounts and in a manner consistent with past practice) under any
Purple Demon Employee Plan (as hereinafter defined) or to any employee,
independent contractor or consultant, entered into any new Purple Demon Employee
Plan or any new consulting agreement, granted or established any awards under
any such Purple Demon Employee Plan or agreement, in any such case providing for
any payments or adopted or otherwise amended any of the foregoing.
Section 3.9 Taxes and Tax Returns. (a) For purposes of this
Agreement, (i) the term "Taxes" shall mean all taxes, charges, fees, levies or
other assessments, including, without limitation, income, gross receipts,
excise, property, sales, license, payroll and franchise taxes, imposed by the
United States, or any state, local or foreign government or subdivision or
agency thereof whether computed on a unitary, combined or any other basis; and
such term shall include any interest and penalties or additions to tax; and (ii)
the term "Tax Return" shall mean any report, return or other information
required to be filed with, supplied to or otherwise made available to a taxing
authority in connection with Taxes.
(b) Except as set forth on Schedule 3.9(b) hereto, Purple
Demon has (i) duly filed with the appropriate taxing authorities all Tax Returns
required to be filed by or with respect to Purple Demon, or are properly on
extension and all such duly filed Tax Returns are true, correct and complete in
all respects, and (ii) paid in full or made adequate provisions for on its
balance sheet (in accordance with the Statements and Standards for accounting
and review services being issued by the American Institute of Certified Public
Accountants) all Taxes shown to be due on such Tax Returns. There are no liens
for Taxes upon the assets of Purple Demon except for statutory liens for current
Taxes not yet due and payable or which may thereafter be paid without penalty or
are being contested in good faith. Purple Demon has not received any notice of
audit, is not undergoing any audit of its Tax Returns, and has not received any
notice of deficiency or assessment from any taxing authority with respect to
liability for Taxes of Purple Demon which has not been fully paid or finally
settled. There have been no waivers of statutes of limitations by Purple Demon
with respect to any Tax Returns which relate to Purple Demon. Purple Demon has
not filed a request with the Internal Revenue Service for changes in accounting
methods within the last two years which change would effect the accounting for
tax purposes, directly or indirectly, of Purple Demon.
Section 3.10 Employee Benefit Plans. Purple Demon hereby
represents and warrants that there are not in existence any employee benefit
plans (e.g. profit sharing, deferred compensation, savings, retirement, etc.)
and in the event any such plan does exist, it shall be set forth on Schedule
3.10 attached hereto and the terms of any such plan will expire on the Closing
Date.
Section 3.11 Title to Property. Purple Demon has good and
marketable title, to all the Master recordings which titles appear on Schedule
3.11, free and clear of all encumbrances, including liens for taxes, fees,
levies, imposts, duties or governmental charges of any kind which are not yet
delinquent or are being contested in good faith by appropriate proceedings which
suspend the collection thereof. Purple Demon hereby acknowledges a claim
hereunder against Fox Television Network, the particulars of which are set forth
on the above-mentioned schedule. The negotiation of a license to Fox Television
Network or any other third party in connection with the name "Purple Demon"
shall be within the sole dominion and control of Paradigm.
Section 3.12 Trademarks, Patents and Copyrights. (a) For
purposes of this Agreement, the term "Purple Demon Rights" shall mean all
worldwide industrial and intellectual property rights, including, without
limitation, each patent, patent rights, license, patent application, trade name,
trademark, trade name and trademark registration, copyright, copyright
registration, copyright application, service xxxx, brand xxxx and brand name,
trade secrets relating to or arising from Purple Demon's business endeavors.
Purple Demon owns or has the right to use, sell or license all Purple Demon
Rights and such Purple Demon Rights are sufficient for the conduct of Purple
Demon's businesses as being conducted as
-4-
of the date hereof. Schedule 3.12 hereto lists each patent, patent right, patent
application, tradename registration, trademark registration, copyright
registration and copyright application owned or possessed by Purple Demon.
Paradigm acknowledges that the names Big Deal and/or Purple Demon have neither
been registered for the purposes of trademark protection nor have the masters
been registered for copyright;
(b) The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby will not constitute
a breach of any instrument or agreement governing any Purple Demon Rights, will
not cause the forfeiture or termination or give rise to a right of forfeiture or
termination of any Purple Demon Rights or impair the right of Purple Demon to
use, sell or license any Purple Demon Rights or any portion thereof;
(c) Neither the manufacture, marketing, license, sale or
intended use of any product currently licensed or sold by Purple Demon or
currently under development by Purple Demon violates any license or agreement
between Purple Demon and any third party relating to such product or infringes
any intellectual property right of any other party, and there is no pending or,
to the best knowledge of Purple Demon, threatened claim or litigation contesting
the validity, ownership or right to use, sell, license or dispose of any Purple
Demon Right nor, to the best knowledge of Purple Demon is there any basis for
any such claim, nor has Purple Demon received any notice asserting that any
Purple Demon Right or the proposed use, sale, license or disposition thereof
conflicts or will conflict with the rights of any other party, nor, to the best
knowledge of Purple Demon, is there any basis for any such assertion; and
(d) No current or prior officers, employees or consultants of
Purple Demon claim an ownership interest in any Purple Demon Rights as a result
of having been involved in the development of such property while employed by or
consulting to Purple Demon or otherwise.
Section 3.13 Legal Proceedings, Claims, Investigations, etc.
Except as set forth on Schedule 3.13 hereto, there is no legal, administrative,
arbitration or other action or proceeding or governmental investigation pending,
or to the Sellers' Knowledge, threatened, against Purple Demon, any director,
officer or employee thereof relating to Purple Demon's business. Purple Demon
and the Sellers have not been informed of any violation of or default under, any
laws, ordinances, regulations, judgments, injunctions, orders or decrees
(including without limitation, any immigration laws or regulations) of any
court, governmental department, commission, agency, instrumentality or
arbitrator applicable to the business of Purple Demon. Purple Demon is not
currently subject to any judgment, order, injunction or decree of any court,
arbitral authority, administrative agency or other governmental authority.
Section 3.14 Insurance. Purple Demon hereby warrants and
represents that it maintains no insurance policies pertaining to its business
properties or assets. If any such insurance policies do exist, they shall be
listed on Schedule 3.14 attached hereto.
Section 3.15 Material Contracts. (a) Except as set forth on
Schedule 3.15 hereto, Purple Demon is not a party to and is not bound by any
contract or has any commitment, whether written or oral which has a term in
excess of one year and will result in payments in excess of $1,000.00 or require
material performance on the part of Purple Demon, other than (i) contracts,
commitments entered into in the ordinary course of business with vendors and
customers, recording artists, producers, record distributors and manufacturers
and/or similar persons and/or entities and (ii) contracts or commitments
cancelable upon not more than 30 days' notice. Each of the contracts and
commitments set forth on Schedule 3.15 hereto and each of the other contracts
and commitments to which Purple Demon is a party, is valid and existing, in full
force and effect and enforceable in accordance with its terms (subject to
equitable principles and limitations on indemnity) and to the Sellers' Knowledge
there is no material default or claim of default against Purple Demon or any
notice of termination with respect thereto. Purple Demon has complied in all
material respects with all requirements of, and performed all of its obligations
under, such contracts and commitments. In addition, no other party to any such
contract or commitment is, to the Sellers' Knowledge, in default under or in
breach of any material term or provision thereof, and to the Sellers' Knowledge
there exists no condition or event which, after notice or lapse of time or both,
would constitute a material default by any party to any such contract or
commitment. Copies of all the written documents and a synopsis of all oral
contracts and commitments described on Schedule 3.15 hereto have heretofore been
made available to the Buyer,
-5-
who has examined same, and are true and complete and include all amendments and
supplements thereto and modifications thereof to and including the date hereof.
(b) Except as set forth on Schedule 3.15 hereto, Purple Demon
is not a party to any oral or written (i) agreement with any consultant,
executive officer or other key employee the benefits of which are contingent, or
the terms of which are materially altered, upon the occurrence of the
transactions contemplated by this Agreement, or (ii) agreement or plan,
including any stock option plan and the like, any of the benefits of which will
be increased, or the vesting of the benefits of which will be accelerated, by
the occurrence of the transactions contemplated by this Agreement.
Section 3.16 Certain Transactions. No officer, director or, to
the Sellers' knowledge, any employee of Purple Demon, or any member of any such
person's immediate family is presently a party to any contract, arrangement or
understanding with Purple Demon (i) except as set forth on Schedule 3.16 hereto,
providing for the furnishing of services by, (ii) providing for the rental of
real or personal property from, or (ii) otherwise requiring payments to (other
than for services as officers, directors or employees of Purple Demon), any such
person or any corporation, partnership, trust or other entity in which any such
person has a substantial interest as a stockholder, officer, director, trustee
or partner. Buyer acknowledges that Xxxxxxx Xxx is a shareholder who provides
accounting and similar services to Purple Demon.
Section 3.17 Broker. No broker, finder or investment banker is
entitled to any brokerage or finder's fee or other commission in connection with
the transactions contemplated hereby based on the arrangements made by or on
behalf of Purple Demon or the Sellers.
Section 3.18 Compliance with Law. To the Sellers' Knowledge
and, except as set forth in Schedule 3.9(b) hereto, Purple Demon has complied in
all respects with all laws, rules, regulations, arbitral determinations, orders,
writs, decrees and injunctions which are applicable to or binding upon Purple
Demon, the non-compliance with which could reasonably be expected to constitute
a Purple Demon Material Adverse Effect.
Section 3.19 Receivables. Each account receivable reflected on
the balance sheet of Purple Demon as of December 1, 1996 constitutes a bona fide
receivable resulting from a bona fide sale to a customer in the ordinary course
of business, the account of which was actually due on the date hereof and has
been or will be collected in the ordinary course of business. The books and
records of Purple Demon state correctly the facts with respect to each account
receivable of Purple Demon and the balance due thereon. No payment reflected on
such books and records as having been made on any such account receivable was
made by any director, officer, employee or agent of Purple Demon unless such
person is shown on said books and records as such account debtor. Each document
and instrument evidencing, securing or relating to each account receivable,
including, without limitation, each insurance policy, certificate, xxxx or
statement, is correct and complete in all respects, is genuine and valid and is
enforceable in accordance with its terms. To the knowledge of Purple Demon,
there are no defenses, claims of disabilities, counterclaims, offsets, refusals
to pay or other rights of set-off against any accounts receivable and there is
no threatened, intended or proposed defense, claim or disability, counterclaim,
offset, refusal to pay or other right of set-off with respect thereto. At the
Closing all accounts receivable, shall be assigned to Paradigm and the Sellers
hereby agree not to forgive any such account receivables.
Section 3.20 Banks; Safe Deposit Boxes, Bank Accounts.
Schedule 3.20 hereto lists the names and locations of all banks at which Purple
Demon has an account and/or safe deposit box, the numbers of any such accounts
and the names of all persons authorized to draw thereon or to have access
thereto. All the assets of Purple Demon, including but not limited to cash in
banks, bank accounts, etc. shall all be assigned to Paradigm at the Closing. The
Sellers acknowledge that no monies have been withdrawn from any Purple Demon
account, at least sixty (60) days prior to Closing.
Section 3.21 Books of Account; Records. The general ledgers,
books of account and other records of Purple Demon are complete and correct,
have been maintained in accordance with good business practices and the matters
contained therein are appropriately and accurately reflected in the Financial
Statements.
-6-
ARTICLE IV
ADDITIONAL REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Each Seller hereby severally represents and warrants to the
Buyer and Paradigm, as of the date of this Agreement, as follows:
Section 4.1 Title to Shares; Authority. Except for the rights,
if any, of Seller's spouse, and as set forth on Schedule 3.2 hereto, such Seller
owns the shares of Common Stock set forth opposite his name in the Preambles
hereof, free and clear of all liens, claims or encumbrances. Such Seller has
full right, power, legal capacity and authority to transfer and deliver such
Shares pursuant to this Agreement.
Section 4.2 Authority Relative to and Validity of Agreements.
Such Seller has full power and authority to execute and deliver this Agreement
and the Employment Agreement to which such Seller is a party and to assume and
perform all of their obligations hereunder and thereunder. There are no
contractual, statutory or other restrictions of any kind upon the power and
authority of such Seller to execute and deliver this Agreement and the
Employment Agreement to which such Seller is a party and to consummate the
transactions contemplated hereunder and thereunder and no action, waiver or
consent by any Governmental Authority is necessary to make this Agreement or the
Employment Agreement to which such Seller is a party, a valid instrument binding
upon such Seller in accordance with its terms.
Section 4.3 Required Filings and Consents; No Conflict. Such
Seller is not required to submit any notice, report or other filing with any
Governmental Authority in connection with the execution, delivery or performance
of this Agreement or the Employment Agreement to which such Seller is a party.
The execution, delivery and performance of this Agreement, and the Employment
Agreement to which such Seller is a party and the consummation of the
transactions contemplated hereby and thereby do not and will not (a) conflict
with or violate any law, regulation, judgment, order or decree binding upon such
Seller, or (b) except as set forth on Schedule 3.2 hereto, conflict with or
result in a breach of any condition or provision of, or constitute a default (or
an event which with notice or lapse of time or both would become a default)
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any properties or assets of such Seller pursuant to, or cause
or permit the acceleration prior to maturity of any amounts owing under, any
indenture, loan agreement, mortgage, deed of trust, lease, contract, license,
franchise or other agreement or instrument to which such Seller is a party or
which is or purports to be binding upon such Seller or by which any of his
properties are bound. The execution, delivery and performance of this Agreement,
and the Employment Agreement to which such Seller is a party and the
consummation of the transactions contemplated hereby and thereby will not result
in the loss of any license, franchise, legal privilege or permit possessed by
such Seller or give a right of termination to any party to any agreement or
other instrument to which such Seller is a party or by which any of his
properties are bound.
Section 4.4 Investment. Such Seller is acquiring the Payment
Shares being acquired by him for his own account as principal, not as a nominee
or agent, and not with a view to, or for, resale, distribution or
fractionalization thereof in whole or in part and no other person or entity has
a direct or indirect beneficial interest in such Payment Shares. Such Seller
does not have any contract, undertaking, agreement or arrangement with any
person or entity to sell, transfer or grant participations to such person or
entity or to any third person or entity with respect to any of such Payment
Shares.
Section 4.5 Exemption from Registration. Such Seller
acknowledges that the issuance of the Payment Shares (the "Issuance") is
intended to be exempt from registration under the Securities Act of 1933, as
amended (the "Securities Act"), by virtue of Section 4(2) of the Securities Act
and the provisions of Regulation D promulgated thereunder ("Regulation D"). In
furtherance thereof, such Seller represents and warrants to Buyer and Paradigm
as follows:
(i) Such Seller has the financial ability to bear the economic
risk of his investment, has adequate means for providing for
his current needs
-7-
and personal contingencies and has no need for liquidity with
respect to the acquisition of the Payment Shares; and
(ii) Such Seller has such knowledge and experience in
financial, and business matters as to be capable of evaluating
the merits and risks of the acquisitions of the Payment
Shares.
Section 4.6 Available Information. Such Seller:
(i) Has been furnished with any and all documents that may
have been made available by Paradigm upon request of the
Seller for a reasonable time prior to the date hereof;
(ii) Has been provided an opportunity for a reasonable time
prior to the date hereof to obtain additional information
concerning the Issuance, Paradigm and all other information to
the extent Paradigm possesses such information or can acquire
it without unreasonable effort or expense;
(iii) Has been given the opportunity for a reasonable time
prior to the date hereof to ask questions of, and receive
answers from, Paradigm or its representatives concerning the
terms and conditions of the Issuance and other matters
pertaining to the acquisition of the Payment Shares, or that
which was otherwise provided in order for them to evaluate the
merits and risks of a purchase of the Payment Shares to the
extent Paradigm possesses such information or can acquire it
without unreasonable effort or expense;
Section 4.7 Seller Representative. Such Seller is not relying
on any statements or representations made by the Buyer or Paradigm or their
affiliates with respect to economic considerations involved in an investment in
the Payment Shares. Such Seller has relied on the advice of, or has consulted
with only those persons, if any, named as Seller Representative(s) herein. Each
Seller Representative is capable of evaluating the merits and risks of an
investment in the Payment Shares on the terms and conditions set forth herein
and each Seller Representative has disclosed to the Seller in writing (a copy of
which is annexed to this Agreement) the specific details of any and all past,
present or future relationships, actual or contemplated, between himself and the
Buyer or Paradigm or any affiliate or subsidiary thereof.
Section 4.8 Transfer Restrictions. Such Seller will not sell
or otherwise transfer the Payment Shares without registration under the
Securities Act or an exemption therefrom and such Seller fully understands and
agrees that such Seller must bear the economic risk of such Seller's purchase
because, among other reasons, the Payment Shares have not been registered under
the Securities Act or under the securities laws of any state and, therefore,
cannot be resold, pledged, assigned or otherwise disposed of unless they are
subsequently registered under the Securities Act and under the applicable
securities laws of such states, or unless exemptions from such registration
requirements are available.
Section 4.9 Entire Agreement. No representations or warranties
have been made to such Seller by the Buyer or Paradigm, or any officer,
employee, agent, affiliate or subsidiary of the Buyer or Paradigm, and in
subscribing for Payment Shares such Seller is not relying upon any
representations other than those contained herein.
Section 4.10 Seller Information. Any information that such
Seller has heretofore furnished or is simultaneously herewith furnishing to the
Buyer and Paradigm with respect to such Seller's financial position and business
experience is correct and complete as of the date of this Agreement and, if
there should be any material change in such information, such Seller will
immediately furnish revised or corrected information to the Buyer and Paradigm.
Section 4.11 Legend. The Seller understands and acknowledges
that the certificates for the Payment Shares shall bear a legend substantially
as follows until (i) such securities shall have been registered under the
Securities Act and effectively been disposed of in accordance with an effective
registration statement thereunder; or (ii) in the opinion of counsel for
Paradigm such securities may be sold without registration under the Securities
Act as well as any applicable "Blue Sky" or state securities laws:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND
THEY MAY NOT BE OFFERED, SOLD, PLEDGED, HYPOTHECATED, ASSIGNED
OR TRANSFERRED EXCEPT (i) PURSUANT TO A REGISTRATION STATEMENT
UNDER THE SECURITIES ACT WHICH
-8-
HAS BECOME EFFECTIVE AND IS CURRENT WITH RESPECT TO THESE
SECURITIES OR PURSUANT TO AN EXEMPTION THEREFROM."
Section 4.12 Citizenship; Age; Residence. The Seller is a
citizen of the United States and is at least 21 years of age. The address set
forth next to the Seller's name on the signature pages to this Agreement is the
Seller's correct home address.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE BUYER AND PARADIGM
The Buyer and Paradigm hereby jointly and severally represent
and warrant to the Sellers as follows:
Section 5.1 Corporate Organization; Requisite Authority to
Conduct Business. Each of the Buyer and Paradigm is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation. The Buyer and Paradigm have provided the Sellers
with true and complete copies of their respective certificates of incorporation
(certified by the Secretary of State of the State of New York, and By-laws
(certified by the Secretaries of the Buyer and Paradigm) as in effect on the
date hereof. Each of the Buyer and Paradigm has full corporate power and
authority to enter into this Agreement to perform its obligations hereunder and
thereunder and to consummate the transactions contemplated hereby and thereby;
there are no corporate, contractual, statutory or other restrictions of any kind
upon the power and authority of the Buyer or Paradigm to execute and deliver
this Agreement.
Section 5.2 Execution and Delivery. Neither the Buyer nor
Paradigm is required to submit any notice, report or other filing with any
Governmental Authority in connection with the execution, delivery or performance
of this Agreement (other than state "Blue Sky" laws relating to the issuance of
the Payment Shares). This Agreement has been duly executed and delivered by the
Buyer and Paradigm and will, when executed and delivered by Purple Demon and the
Sellers in accordance with their terms will constitute, legal, valid and binding
obligations of the Buyer and Paradigm, enforceable against the Buyer and
Paradigm in accordance with their terms (to the extent each is a party thereto),
except (i) as such enforceability may be limited by or subject to any
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally, (ii) as such obligations are subject to
general principles of equity and (iii) as rights to indemnity may be limited by
federal or state securities laws or by public policy.
Section 5.3 No Conflicts; Absence of Defaults. The execution,
delivery and performance or this Agreement by the Buyer and Paradigm (to the
extent each is a party thereto) and the consummation of the transactions
contemplated hereby and thereby does not and will not conflict with or violate
(a) the Buyer's or Paradigm's Certificate of Incorporation or By-laws or (b) any
agreement governing the organization, management, business or affairs of the
Buyer or Paradigm or, in any material respect, any agreement or instrument to
which the Buyer or Paradigm is bound, or (c) any material law, administrative
regulation or rule or court order, judgment or decree applicable to the Buyer or
Paradigm; nor will the execution and delivery of this Agreement or the
consummation of the transaction contemplated hereby constitute a material breach
of, or any event of default under, any material contract or agreement to which
the Buyer or Paradigm may be bound or affected.
Section 5.4 Investment. The Buyer is acquiring the Shares
solely for its own account as an investment and not with a view to any
distribution or resale thereof within the meanings of such terms under the
Securities Act.
Section 5.5 Capitalization. The Company's authorized capital
stock consists of (i) 31,999,900 shares of Class A Common Stock, $.01 par value
per share, (ii) 1,000,100 shares of Class B Common Stock, $.01 par value per
share, and (iii) 2,000,000 shares of Class E-1 Common Stock, $.01 par value per
share and 5,000,000 shares of Preferred Stock, $.01 par value per share, and
(iv) 2,000,000 shares of Class E-1 Common Stock, $.01 par value per share and
5,000,000 shares of Preferred Stock, $.01 par value per share.
-9-
Section 5.6 Broker. No broker, finder or investment banker is
entitled to any brokerage or finder's fee or other commission in connection with
the transactions contemplated hereby based upon the arrangements made by or on
behalf of the Buyer or Paradigm.
ARTICLE VI
COVENANTS OF PURPLE DEMON
Section 6.1 Covenants of Purple Demon Regarding Conduct of
Business Operations Pending the Closing. Purple Demon covenants and agrees that
between the date of this Agreement and the Closing Date, Purple Demon will carry
on its business in the ordinary course and consistent with past practice, will
use its best efforts to (i) preserve its business organization intact, (ii)
retain the services of its present employees, and (iii) preserve the good will
of its suppliers and customers, and will not, except in the ordinary course of
business, purchase, sell, lease or dispose of any property or assets or incur
any liability or enter into any other extraordinary transaction. By way of
amplification and not limitation, Purple Demon shall not, between the date of
this Agreement and the Closing Date, directly or indirectly, do any of the
following without the prior written consent of the Buyer:
(a) (i) issue, sell, pledge, dispose of, encumber, authorize,
or propose the issuance, sale, pledge, disposition, encumbrance or authorization
of any shares of capital stock of any class, or any options, warrants,
convertible securities or other rights of any kind to acquire any shares of
capital stock, or any other ownership interest, of Purple Demon; (ii) amend or
propose to amend its Articles of Incorporation; (iii) split, combine or
reclassify any of its outstanding shares, or declare, set aside or pay any
dividend or other distribution payable in cash, stock, property or otherwise
with respect thereto; or (iv) redeem, purchase or otherwise acquire any shares
of its capital stock;
(b) (i) make any acquisition (by merger, consolidation, or
acquisition of stock or assets) of any corporation, partnership or other
business organization or division thereof; (ii) except in the ordinary course of
business and in a manner consistent with past practice, sell, pledge, dispose
of, or encumber or authorize or propose the sale, pledge, disposition or
encumbrance of any of its assets; (iii) other than under any existing credit
facility, incur any indebtedness for borrowed money, assume, guarantee, endorse
or otherwise become responsible for the obligations of any other individual,
partnership, firm or corporation, or make any loans or advances to any
individual, partnership, firm, or corporation, or enter into any contract or
agreement to do so, except in the ordinary course of business and consistent
with past practice; (iv) authorize any single capital expenditure or series of
related capital expenditures; or (v) release or assign any indebtedness owed to
it or any claims held by it, except in the ordinary course of business and
consistent with past practice;
(c) take any action other than in the ordinary course of
business and in a manner consistent with past practice (none of which actions
shall be unreasonable or unusual);
(d) make any payments (except in the ordinary course of
business and in amounts and in a manner consistent with past practice) under any
Purple Demon employee plan to any employee, independent contractor or
consultant, enter into any new Purple Demon Employee Plan or any new consulting
agreement, grant or establish any awards under such Purple Demon employee plan
or agreement, or adopt or otherwise amend any of the foregoing Purple Demon does
not have any medical, dental or benefit plans established;
(e) take any action except in the ordinary course of business
and in a manner consistent with past practice (none of which actions shall be
unreasonable or unusual) with respect to accounting policies or procedures,
other than such actions deemed necessary to comply with U.S. GAAP (including
without limitation its procedures with respect to the payment of accounts
payable);
(f) enter into or terminate any material contract or agreement
or make any material change in any of its material contracts or agreements,
other than (i) in the ordinary course of business, (ii) relating to indebtedness
incurred in clause (b)(iii) above and (iii) agreements, if any, relating to the
transactions contemplated hereby; or
-10-
(g) take, or agree in writing or otherwise to take, any of the
foregoing actions or any action which would make any of its representations or
warranties contained in this Agreement untrue or incorrect in any material
respect as of the date when made or as of a future date.
Section 6.2 No Other Negotiations. Purple Demon agrees that,
between the date hereof and the earlier to occur of (i) November 15, 1996 and
(ii) the termination of this Agreement pursuant to the provisions of Article XII
hereof (the "Termination Date"), Purple Demon will not, nor will it permit any
of its affiliates (including any officers, directors, employees, financial
advisors, brokers, stockholders or any other person acting on its behalf) to,
(i) enter into any agreement with a third party with respect to the acquisition,
directly or indirectly, of shares or other securities of Purple Demon or a
material part of its assets or any merger, business combination, consolidation
or reorganization, (ii) enter into negotiations with a third party regarding
such an agreement, or (iii) provide a third party with general access to their
books, records or employees for the purpose of enabling such third party to
conduct a purchase investigation of the legal, financial or business condition
of them.
ARTICLE VII
ADDITIONAL COVENANTS
Each of the Sellers, the Buyer and Paradigm covenants and
agrees:
(a) Best Efforts. To proceed diligently and use its best
efforts to take or cause to be taken all actions and to do or cause to be done
all things necessary, proper and advisable to consummate the transactions
contemplated by this Agreement, including the execution and delivery of the
Employment Agreements.
(b) Compliance. To comply in all material respects with all
applicable rules and regulations of any Governmental Authority in connection
with the execution, delivery and performance of this Agreement and the
transactions contemplated hereby; to use all reasonable efforts to obtain in a
timely manner all necessary waivers, consents and approvals and to take, or
cause to be taken, all other actions and to do, or cause to be done, all other
things necessary, proper or advisable to consummate and make effective as
promptly as practicable the transactions contemplated by this Agreement.
(c) Notice. To give prompt notice to the other party of (i)
the occurrence, or failure to occur, of any event whose occurrence or failure to
occur, would be likely to cause any representation or warranty contained in this
Agreement to be untrue or incorrect in any material respect at any time from the
date hereof to the Closing Date and (ii) any material failure on its part, or on
the part of any of its officers, directors, employees or agents, to comply with
or satisfy any covenant, condition or agreement to be complied with or satisfied
by it hereunder; provided, however, that the delivery of any such notice shall
not limit or otherwise affect the remedies available hereunder to the party
receiving such notice.
(d) Access. To cause its affiliates, officers, directors,
employees, auditors and agents to afford the officers, employees and agents of
the other party hereto complete access at all reasonable times and upon
reasonable notice to its properties, offices and other facilities and to all
books and records, and shall furnish such other party with all financial,
operating and other data and information as the other party through its
officers, employees or agents, may reasonably request, provided that the party
providing such access and furnishing such data and information to the other
party incurs no cost in doing so.
(e) Confidentiality. To hold in strict confidence all data and
information obtained from the other party hereto or any subsidiary, division,
associate, representative, agent or affiliate of any such party (unless such
information is or becomes publicly available without the fault of any
representative of such party, or public disclosure of such information is
required by law in the opinion of counsel to such party) and shall insure that
such representatives do not disclose information to others without the prior
written consent of the other party hereto, and in the event of the termination
of this Agreement, to cause its representatives to return promptly every
document furnished by the other party hereto or any subsidiary, division,
associate, representative, agent or affiliate of any such party in connection
with the transactions
-11-
contemplated hereby and any copies thereof which may have been made, other than
documents which are publicly available. Notwithstanding anything contained in
this subparagraph (e) to the contrary, said subparagraph shall not preclude any
party hereto from (i) upon advice of counsel, making any disclosure required by
any applicable law, rule or regulation; (ii) using or disclosing information
known generally to the public or (other than information known generally to the
public as a result of any violation of this subparagraph (e) by or on behalf of
such party; or (iii) or using or disclosing information received from a third
party who is not bound by a confidentiality agreement.
(f) Announcements. That all public announcements, statements
and press releases concerning the transactions contemplated by this Agreement
shall be mutually agreed to by Sellers and the Buyer before the issuance or the
making thereof and, subject to the advice of counsel, no party shall issue any
such press releases or make any such public statement prior to such mutual
agreement, except as may be required by law.
(g) Further Assurances. Buyer and the Sellers shall each
promptly take such actions and execute, acknowledge and deliver to the other(s)
and cause to be executed and delivered to the other(s) such further instructions
and documents as may be reasonably requested by the other and will otherwise
cooperate with the other as reasonably requested at anytime hereafter for the
purposes of establishing and/or evidencing the rights granted to such party
hereunder, or otherwise implement the intent hereof.
ARTICLE VIII
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLERS
The obligations of the Sellers under this Agreement are
subject to the satisfaction, on or prior to the Closing Date, unless waived in
writing, of each of the following conditions:
Section 8.1 Representations and Warranties True. The
representations and warranties of the Buyer and Paradigm contained in this
Agreement shall be true and correct in all material respects as of the date when
made and at and as of the Closing Date, except as and to the extent that the
facts and conditions upon which such representations and warranties are based
are expressly required or permitted to be changed by the terms hereof, with the
same force and effect as if made on and as of the Closing Date, and the Sellers
shall have received a certificate to that effect and as to the matters set forth
in Section 8.2 hereof, dated the Closing Date, from the President or Chief
Executive Officer of the Buyer and Paradigm.
Section 8.2 Performance of Covenants. The Buyer and Paradigm
shall have performed or complied in all material respects with all agreements,
conditions and covenants required by this Agreement to be performed or complied
with by them on or before the Closing Date.
Section 8.3 No Proceedings. No preliminary or permanent
injunction or other order (including a temporary restraining order) of any
Federal, state or local court or other governmental agency or of any foreign
jurisdiction which prohibits the consummation of the transactions which are the
subject of this Agreement or prohibits the Buyer's ownership of the Shares shall
have been issued or entered and remain in effect.
Section 8.4 Agreements. The Employment Agreement has been
executed by the parties thereto.
Section 8.5 Material Changes. Since the date hereof, there
shall not have been any material adverse change in the business, operations,
financial condition, assets, liabilities, prospects or regulatory status of the
Buyer or Paradigm.
-12-
ARTICLE IX
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE BUYER AND PARADIGM
The obligations of the Buyer and Paradigm under this Agreement
are subject to the satisfaction, on or prior to the Closing Date, unless waived
in writing, of each of the following conditions:
Section 9.1 Representation and Warranties True. The
representations and warranties of Purple Demon and the Sellers contained in this
Agreement shall be true and correct in all material respects as of the date when
made and at and as of the Closing Date, except as and to the extent that the
facts and conditions upon which such representations and warranties are based
are expressly required or permitted to be changed by the terms hereof with the
same force and effect as if made on and as of the Closing Date.
Section 9.2 Performance of Covenants. Purple Demon and the
Sellers shall have performed or complied in all material respects with all
agreements, conditions and covenants required by this Agreement to be performed
or complied with by them on or before the Closing Date.
Section 9.3 No Proceedings. No preliminary or permanent
injunction or other order (including a temporary restraining order) of any
Federal, state or local court or other governmental agency or of any foreign
jurisdiction which prohibits the consummation of the transactions which are the
subject of this Agreement or prohibits the Buyer's ownership of the Shares or
operation of Purple Demon's business shall have been issued or entered and
remain in effect.
Section 9.4 Agreements. The Employment Agreements and
Assignment Certificates shall have been executed by the parties thereto.
Section 9.5 Consents and Approvals. All filings and
registrations with, and notifications to, all Federal, state, local and foreign
authorities required for consummation of the transactions contemplated by this
Agreement shall have been made, and all consents, approvals and authorizations
of all Federal, state, local and foreign authorities and parties to material
contracts, licenses, agreements or instruments required for consummation of the
transactions contemplated by this Agreement shall have been received and shall
be in full force and effect.
ARTICLE X
CLOSING DOCUMENTS
Section 10.1 Documents to be delivered by Purple Demon and the
Sellers. At the Closing, Purple Demon and the Sellers shall deliver or cause to
be delivered to the Buyer and Paradigm:
(i) stock certificates representing the Shares,
either duly endorsed for transfer or accompanied by
appropriate stock powers duly executed by the Sellers;
(ii) resignations, effective as of the Closing Date,
of all directors and officers of Purple Demon requested by the
Buyer;
(iii) Purple Demon's minute book and stock transfer
ledger;
(iv) two originals of each of the Employment
Agreements executed by Purple Demon and the named employees
which have heretofore been received by Purchaser; and
(v) any and all other documents, book of accounts,
agreements or certificates the Buyer may reasonably request in
order to effectuate the Closing and any other items,
documents, agreements, statements, etc. which relate to the
business of Purple Demon.
-13-
Section 10.2 Documents to be delivered by the Buyer and
Paradigm. At the Closing, the Buyer and Paradigm shall deliver or cause to be
delivered to the Sellers:
(i) the initial grant of the 33,333 Payment Shares;
and
(ii) any other documents, agreements or certificates
the Sellers may reasonably request in order to effectuate the
Closing.
ARTICLE XI
INDEMNIFICATION
Section 11.1 Indemnification by the Sellers. Subject to the
limitations set forth in this Article XI, each of the Sellers hereby jointly and
severally agrees to defend, indemnify and hold harmless the Buyer and Paradigm
from and after the Closing Date against and with respect to the following
(together referred to as "Buyer Losses"), provided any such claim arises within
twenty-four (24) months after the execution hereof:
(a) any and all loss, injury, damage or deficiency resulting
from any misrepresentation or breach of warranty on the part of Purple Demon or
the Sellers under this Agreement;
(b) any and all loss, injury, damage or deficiency resulting
from any non-fulfillment of any covenant or agreement on the part of Purple
Demon or the Sellers under this Agreement; and
(c) any and all demands, claims, actions, suits or
proceedings, assessments, judgments, costs and legal and other expenses incident
to any of the foregoing.
Section 11.2 Indemnification by the Buyer and Paradigm.
Subject to the limitations set forth in this Article XI, each of the Buyer and
Paradigm hereby jointly and severally agrees to defend, indemnify and hold
harmless each of the Sellers at all times from and after the Closing Date
against and with respect to the following (together referred to as "Sellers'
Losses"):
(a) any and all loss, injury, damage or deficiency resulting
from any misrepresentation or breach of warranty on the part of the Buyer or
Paradigm under this Agreement;
(b) any and all loss, injury, damage or deficiency resulting
from any non-fulfillment of any covenant or agreement on the part of the Buyer
or Paradigm under this Agreement; and
(c) any and all demands, claims, actions, suits or
proceedings, assessments, judgments, costs and legal and other expenses incident
to any of the foregoing.
Section 11.3 Procedures for Indemnification. Promptly after
receipt by an indemnified party pursuant to the provisions of Section 11.1 or
Section 11.2 of notice of the commencement of any action involving the subject
matter of such indemnity provisions, such indemnified party shall, if a claim is
to be made against an indemnifying party pursuant to the provisions of Section
11.1 or Section 11.2, promptly notify such indemnifying party of the
commencement of such action; but the omission so to notify such indemnifying
party shall not relieve the indemnifying party from any liability which it may
have to the indemnified party. In case such action is brought against an
indemnified party and it notifies the indemnifying party of the commencement of
such action, the indemnifying party shall have the right to participate in and,
to the extent that it may wish, to assume the defense of such action, with
counsel satisfactory to such indemnified party; provided, however, that if the
defendants in such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it which are different from or
additional to those available to the indemnifying party, or if there is a
conflict of interest which would prevent
-14-
counsel for the indemnifying party from also representing the indemnified party,
the indemnified party shall have the right to select separate counsel to
participate in the defense of such action on behalf of such indemnified party,
at the expense of the indemnifying party. After notice from the indemnifying
party to the indemnified party of the indemnifying party's election so to assume
the defense of such action, the indemnifying party shall not be liable to the
indemnified party pursuant to the provisions of Sections 11.1 or 11.2 for any
legal or other expense subsequently incurred by such indemnified party in
connection with the defense of such action other than reasonable costs of
investigation, unless (a) the indemnified party shall have employed counsel in
accordance with the proviso of the preceding sentence, (b) the indemnifying
party shall not have employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after the notice of the
commencement of the action, or (c) the indemnifying party has authorized the
employment of counsel for the indemnified party at the expense of the
indemnifying party. No indemnifying party shall, except with the consent of each
indemnified party, consent to entry of any judgment or enter into any settlement
which does not include as an unconditional term of such settlement the release
of all indemnified parties from all liability in respect of such claim.
Notwithstanding anything contained in this paragraph 11.3 to the contrary, the
forgoing indemnity shall only apply upon the issuance of a final adverse
judgement in a court of competent jurisdiction or settled with the Buyer's
consent, such consent not to be unreasonably withheld.
Section 11.4 Cooperation in Defense. In case of any claim,
arbitration or legal proceeding, the defense of which is assumed by any or all
of the Sellers in accordance with this Article XI, Purple Demon and the Buyer,
upon request of such Seller(s), shall provide reasonable cooperation (at the
expense of such Seller(s) in accordance with this Article XI) in such defense,
including affording to such Seller(s) the right of access, during normal
business hours, upon reasonable notice and without disturbing the business of
Purple Demon or the Buyer, to pertinent books and records for purposes of
inspection and making copies.
ARTICLE XII
TERMINATION, AMENDMENT AND WAIVER
Section 12.1 Termination. This Agreement may be terminated and
the transactions contemplated by this Agreement abandoned at any time prior to
the Closing:
(a) By mutual written consent of the Buyer and the Sellers;
(b) By either the Buyer or any Seller if the transactions
contemplated by this Agreement shall not have been consummated on or before
January 31, 1996;
(c) By any Seller if any condition specified in Article VIII
hereto has not been met or waived at such time as such condition can no longer
be satisfied; or
(d) By the Buyer if any condition specified in Article IX
hereto has not been met or waived at such time as such condition can no longer
be satisfied; or
(e) By either the Buyer or any Seller if a court of competent
jurisdiction or Governmental Authority shall have issued a final, non-appealable
order, decree or ruling or taken any other action (which order, decree or ruling
the parties hereto shall use their best efforts to lift), in each case
permanently restraining, enjoining or otherwise prohibiting the transactions
contemplated by this Agreement.
Section 12.2 Effect of Termination. Except as provided in
Section 13.1 hereof, in the event of any termination of this Agreement in
accordance with Section 12.1 hereof, this Agreement shall forthwith become void
and, except for the parties' obligations under Section 7.1(e) hereof which shall
remain in full force and effect, there shall be no liability under this
Agreement on the part of any party hereto or their respective affiliates,
officers, directors, employees or agents by virtue of such termination.
-15-
Section 12.3 Amendment. This Agreement may only be amended by
the written agreement signed by the Buyer, Paradigm and the Sellers.
ARTICLE XIII
MISCELLANEOUS
Section 13.1 Expenses. Except as otherwise provided in Section
8.8 hereof, all costs and expenses incurred in connection with this Agreement
and the transactions contemplated hereby shall be paid by the party incurring
such costs and expenses regardless of the termination of this Agreement or the
failure to consummate the transactions contemplated hereby.
Section 13.2 Notices. All notices, requests, demands and other
communications which are required or may be given under this Agreement shall be
in writing and shall be deemed to have been duly given when delivered personally
or by facsimile transmission, in either case with receipt acknowledged, or five
days after being sent by registered or certified mail, return receipt requested,
postage prepaid:
(a) If to the Buyer or Paradigm to:
Paradigm Music Entertainment Company, Inc.
00 Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
with a copy to:
Xxxxxx Xxxxxxxx Frome & Xxxxxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx H, Xxxxxxxx, Esq.
(b) If to the Sellers or Purple Demon to:
Purple Demon
00 Xxxx 00xx Xxxxxx, Xxxxx 0X
Xxx Xxxx, Xxx Xxxx 00000
with a copy to:
Selverne Flam & Xxxxxxxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx, Esq.
or to such other address as any party shall have specified by notice in writing
to the other in compliance with this Section 13.2.
Section 13.3 Entire Agreement. This Agreement constitutes the
entire agreement among the parties hereto with respect to the subject matter
hereof and thereof and supersedes all prior agreements, representations and
understandings among the parties hereto.
-16-
Section 13.4 Binding Effect, Benefits, Assignments. This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective successors and assigns; nothing in this Agreement,
expressed or implied, is intended to confer on any other person, other than the
parties hereto or their respective successors and assigns, any rights, remedies,
obligations or liabilities under or by reason of this Agreement. This Agreement
may not be assigned without the prior written consent of the other parties
hereto.
Section 13.5 Applicable Law. This Agreement and the legal
relations between the parties hereto shall be governed by and construed in
accordance with the laws of the State of New York, without regard to principles
of conflicts of law.
Section 13.6 Jurisdiction. The parties hereto shall submit to
the jurisdiction of any Federal or state court located in the State of New York
for the purpose of resolving any action or claim arising out of the performance
of the provisions of this Agreement.
Section 13.7 Headings. The headings and captions in this
Agreement are included for purposes of convenience only and shall not affect the
construction or interpretation of any of its provisions.
Section 13.8 Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
Section 13.9 Survival of Representations, Warranties,
Covenants and Agreements. The representations, warranties, covenants and
agreements of the parties contained in this Agreement shall survive the Closing
Date.
Section 13.10 Costs and Fees of Dispute. In the event any
proceeding is commenced by a party under this Agreement to enforce any of its
terms or to recover damages in connection with a breach of this Agreement, the
prevailing party or parties shall be entitled to recover attorneys' fees and
costs (including, without limitation, such fees and costs as may be incurred in
any bankruptcy or appellate proceeding) in an amount to be fixed by the court.
Section 13.11 Definition of Purple Demon Material Adverse
Effect. A "Purple Demon Material Adverse Effect" shall mean an individual or
cumulative adverse change in or effect on the business, customers, customer
relations, operations, properties, working capital condition (financial or
otherwise), assets, properties or liabilities of Purple Demon taken as a whole
which is reasonably expected to be materially adverse to the business,
properties, working capital condition (financial or otherwise), assets, or
liabilities of Purple Demon taken as a whole or would prevent Purple Demon or
the Sellers from consummating the transactions contemplated by this Agreement.
Section 13.12 Definition of Sellers' Knowledge. As used in
this Agreement, the phrase "to Sellers' Knowledge" means solely knowledge
actually and currently possessed by the Sellers, or any one of them, and, except
as set forth in the succeeding sentence, there shall be no imputation of
constructive knowledge, nor any inference that a Seller has undertaken any
inquiry or investigation with respect to the matter so qualified. Knowledge of
any one of the Sellers shall be imputed to all other Sellers.
Section 13.13 Spouses' Powers of Attorney. By their signatures
appearing on Schedule 13.13, each spouse of a named Seller consents to the
consummation of the transactions contemplated by this Agreement and grants to
her husband the right, power and authority, as such spouse's attorney-in-fact,
to execute any and all documents and instruments arising in connection with the
transactions contemplated by this Agreement (including, without limitation, with
respect to her interests in the Shares owned by her marital community), and to
bind her marital community, but not to bind her individually or separate
property, now owned or hereafter acquired.
Section 13.14 Set-Offs. Except as provided herein with respect
to the Payment Shares not delivered at the Closing, no party may set off against
consideration owed to another party under this Agreement any amount to which
such party claims it may be entitled, either under Article XI or otherwise
pursuant to this Agreement.
-17-
Section 13.15 Piggy-Back Registration
(a) Right to Piggy-Back. If at any time Paradigm proposes to
file a registration statement under the Securities Act with respect to any of
its Common Stock or any securities convertible or exchangeable into its Common
Stock other than (i) a registration statement (A) on Form S-8 or any successor
form to such Form, (B) on Form S-4 or any successor form to such Form, or (C)
filed in connection with an exchange offer or an offering of its Common Stock or
of securities convertible or exchangeable into its Common Stock made solely to
its existing stockholders in connection with a rights offering or solely to
employees of Paradigm, then Paradigm shall give written notice of such proposed
filing to the holders of Registrable Securities at least 30 days before the
anticipated filing date. Such notice shall offer such holders the opportunity to
register such amount of Registrable Securities as each such holder may request
(a "Piggy-Back Registration"). Subject to Section 13.15(b) hereof, Paradigm
shall include in each such Piggy-Back Registration all Registrable Securities
with respect to which Paradigm has received written requests for inclusion
therein within 15 days after notice has been duly given the applicable holder.
The holders of Registrable Securities shall be permitted to withdraw all or any
part of the Registrable Securities from a Piggy-Back Registration at any time
prior to the effective date of such Piggy-Back Registration.
(b) Priority on Piggy-Back Registrations. Paradigm shall cause
the managing underwriter or underwriters of a proposed underwritten offering to
permit holders of Registrable Securities requested to be included in the
registration for such offering to include all such Registrable Securities in
such offering on the same terms and conditions as any similar securities, if
any, of Paradigm included therein. Notwithstanding the foregoing, if the
managing underwriter or underwriters of such offering deliver(s) a written
opinion to such holders that the total amount of securities that such holders,
Paradigm, and any other persons or entities having registration rights intend to
include in such offering is such as to materially and adversely affect the
success of such offering (including, without limitation, the price or quantity
of the securities to be sold), then the amount of securities to be offered for
the account of the holders of Registrable Securities shall be reduced or limited
pro rata in proportion to the respective dollar amounts of securities to be
registered to the extent necessary to reduce the total amount of securities to
be included in such offering to the amount recommended by such managing
underwriter or underwriters.
Section 13.16 Holdback Agreements. Restrictions on Public Sale
by Holders of Registrable Securities. Each holder of Registrable Securities
whose Registrable Securities are covered by a Registration Statement filed
pursuant to this Agreement, if requested by the managing underwriter or
underwriters in an underwritten offering (to the extent timely notified in
writing by Paradigm or the managing underwriter or underwriters), not to effect
any public sale or distribution of securities of Paradigm of any class included
in such Registration Statement, including a sale pursuant to Rule 144 under the
Securities Act (except as part of such underwritten registration), during the
10-day period prior to, and the 90-day period beginning on, the effective date
of any underwritten offering made pursuant to such Registration Statement.
Section 13.17 Registration Procedures
(a) The Sellers shall pay the underwriting discount and
commissions attributable to such Seller's Shares, any transfer tax payable with
respect thereto and the fees and expenses of such Seller's counsel. All other
expenses of registration under this Section 13.17 shall be borne by Paradigm.
(b) Paradigm will use its best efforts to permit any
prospectus used pursuant to the Registration Statement contemplated by this
Section 13.17 to remain effective for a period of not less than one hundred and
eighty (180) days from the effective date of the Registration Statement or
amendment thereto in which such prospectus is contained. If the offering
pursuant to any registration statement provided for herein is made through
underwriters, Paradigm will enter into an underwriting agreement in customary
form and indemnify, in customary form, such underwriters and each person who
controls any such underwriter within the meaning of the Securities Act. Such
underwriting agreement shall also contain provisions for the indemnification of
Paradigm in customary form.
-18-
(c) Paradigm may require each Seller of Shares as a condition
to registration to furnish Paradigm such information regarding such Seller and
the distribution of such securities as may be required to be included in any
registration statement or amendment thereto that Paradigm may request in
writing.
Section 13.18 Indemnification
(a) Indemnification by Company. Paradigm shall indemnify and
hold harmless, to the full extent permitted by law, each holder of Registrable
Securities, its officers, directors, agents and employees, each person who
controls such holder (within the meaning of Section 15 of the Securities Act or
Section 20 the Exchange Act), and the officers, directors, agents or employees
of any such controlling person, from and against all losses, claims, damages,
liabilities, costs (including, without limitation, costs of preparation and
attorney's fees) and expenses (collectively, "Losses"), arising out of or based
upon any untrue statement or alleged untrue statement of a material fact
contained in any Registra tion Statement, Prospectus or preliminary prospectus,
or arising out of or based upon any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements therein
not misleading, except insofar as the same are based solely upon information
furnished in writing to Paradigm by such holder expressly for use therein.
Paradigm shall also indemnify underwriters, selling brokers, dealer managers and
similar securities industry professionals participating in the distribution,
their officers, directors, agents and employees and each person who controls
such persons (within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act) to the same extent as provided above with respect to the
indemnification of the holders of Registrable Securities.
(b) Indemnification by Holders of Registered Registrable
Securities. In connection with any Registration Statement in which a holder of
Registrable Securities is participating, such holder of Registrable Securities
shall furnish to Paradigm in writing such information as Paradigm reasonably
requests for use in connection with any Registration Statement or Prospectus and
agrees to indemnify and hold harmless, to the full extent permitted by law,
Paradigm, its directors, officers, agents and employees, each person who
controls Paradigm (within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act) and the directors, officers, agents or employees
of such controlling persons, from and against all Losses arising out of or based
upon any untrue statement of a material fact contained in any Registration
Statement, Prospectus or preliminary prospectus, or arising out of or based upon
any omission of a material fact required to be stated therein or necessary to
make the statement therein not misleading, to the extent, but only to the
extent, that such untrue statement or omission is contained in any information
furnished by such holder to Paradigm. Paradigm shall be entitled to receive
indemnities from underwriters, selling brokers, dealer managers
and similar securities industry professionals participating in the distribution
to the same extent as provided above with respect to information so furnished in
writing by such persons expressly for use in any Prospectus or Registration
Statement.
(c) Conduct of Indemnification Proceedings. If any action or
proceeding (including any governmental investigation or inquiry) shall be
brought or any claim shall be asserted against any person entitled to indemnity
hereunder (an "indemnified party"), such indemnified party shall promptly notify
the party from which such indemnity is sought (the "indemnifying party") in
writing, and the indemnifying party shall assume the defense thereof, including
the employment of counsel and the payment of all fees and expenses incurred in
connection with the defense thereof. Any such indemnified party shall have the
right to employ separate counsel in any such action, claim or proceeding and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be the expenses of such indemnified party unless (i) the indemnifying
party has agreed to pay such fees and expenses or (ii) the indemnifying party
shall have failed to promptly assume the defense of such action, claim or
proceeding and to employ counsel for the indemnified party in any such action,
claim or proceeding, it being understood, however, that the indemnifying party
shall not, in connection with any one such action, claim or proceeding or
separate but substantially similar or related actions, claims or proceedings in
the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one separate
firm of attorneys at any time for all such indemnified parties.
(d) Contribution. If the indemnification provided for in this
Section 13.18 is unavailable to an indemnified party under Section 13.18(a) or
13.18(b) hereof (other than by reason of exceptions provided in those Sections)
in respect of any Losses, then each applicable indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable
-19-
by such indemnified party as a result of such Losses, in such proportion
as is appropriate to reflect the relative fault of the indemnifying party and
indemnified party in connection with the actions, statements or omissions which
resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such indemnifying party and such indemnified party shall
be determined by reference to, among other things, whether any action in
question, including any untrue statement or alleged untrue statement of a
material fact or omission or alleged omission of a material fact, has been taken
or made by, or relates to information supplied by, such indemnifying party or
indemnified party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action, statement or
omission. The amount paid or payable to a party as a result of any Losses shall
be deemed to include, subject to the limitations set forth in this Agreement,
any legal or other fees or expenses reasonably incurred by such party in
connection with any investigation or proceeding.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 13.18(d) were determined by
pro rata allocation or by any other method of allocation which does not take
into account the equitable considerations referred to in the immediately
preceding paragraph. No person guilty of fraudulent misrepresentation (within
the meaning of Section 12(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
Section 13.19 Registrable Securities: All of the Payment
Shares issued and/or issuable pursuant to this Agreement and any and all Common
Shares issued as a dividend or distribution thereon or in connection with a
split thereof or as a result of the recapitalization of Paradigm, until such
time as such Common Shares cease to be Registrable Securities as provided in the
next sentence. Any Registrable Security will cease to be a Registrable Security
when (i) a Registration Statement covering such Registrable Security has been
declared effective by the SEC and such Registrable Security has been disposed of
pursuant to such effective Registration Statement or (ii) such Registrable
Security is distributed to the public pursuant to Rule 144 (or any similar rule
then in force) under the Securities Act.
Section 13.20 Registration Statement: Any registration
statement of Paradigm that covers any of the Registrable Securities pursuant to
the provisions of this Agreement, including the prospectus, amendments and
supplements to such registration statement or the prospectus, as the case may
be, including post-effective amendments, all exhibits, and all material
incorporated or deemed to be incorporated by reference in such registration
statement.
Section 13.21 Entire Agreement. This Agreement is intended by
the parties as a final expression of their agreement, and is intended to be a
complete and exclusive statement of the agreement and understanding of the
parties hereto, in respect of the subject matter contained herein. There are no
restrictions, promises, warranties nor undertakings, other than those set forth
or referred to herein, with respect to the registration rights granted by
Paradigm with respect to the Payment Shares. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
-20-
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year hereinabove first set forth.
SELLERS: PARADIGM MUSIC ENTERTAINMENT
COMPANY, INC.
__________________________ By:____________________________________
XXXX XXXXXXXXX Name:
Title:
--------------------------
XXXXX XXXXX
--------------------------
XXXXXXX XXX
Confirmed with Respect to Sellers Only
Purple Demon, Inc.
By: ___________________________________
Name:
Title:
-21-
Schedule 3.2
Capitalization and Shareholdings
Capitalization of Purple Demon, Inc. 0
Shareholders:
Xxxx Xxxxxxxxx 90 shares
Xxxxx Xxxxx 90 shares
Xxxxxxx Xxx 20 shares
Schedule 3.9(b)
Taxes and Tax Returns
NONE
Schedule 3.10
Employee Benefit Plans
NONE
Schedule 3.11
Title to Property
To be provided at closing
Schedule 3.12
Trademarks, Patents and Copyrights
NONE
Schedule 3.13
Legal Proceedings, Claims, Investigations, etc.
NONE
Schedule 3.14
Insurance
SCHEDULE OF POLICIES
Type of Policy
Coverage Company Policy Number Period Premium
-------------------- -------------------- -------------------- ----------------- ------------------------
NONE
Schedule 3.16
Certain Transactions
NONE
Schedule 3.20
Banks; Safe Deposit Boxes
To be provided at Closing
Schedule 13.13
Spouses' Powers of Attorney
By your signatures below, each spouse of a named Seller
consents to the consummation of the transactions contemplated by the Stock
Purchase Agreement dated February 14, 1997 among Xxxx Xxxxxxxxx, Xxxxx Xxxxx,
Xxxxxxx Xxx and Paradigm Music Entertainment Company, Inc. and grants to her
respective husband the right, power and authority, as such spouses' attorney in
fact, to execute any and all documents and instruments arising in connection
with the transactions, contemplated by this Agreement (including, without
limitation, with respect to her interests in the capital Shares owned by her
marital community), and to bind her marital community, but not to bind her
individually or separate property, now owned or hereinafter required.
--------------------------------------
Xxxxx Xxxxxxx (Spouse of Xxxxx Xxxxx)
--------------------------------------
Xxxxx Xxxx Xxx (Spouse of Xxxxxxx Xxx)
Schedule 13.15
Material Contracts
Exclusive Recording Artist Agreements
1. Purple Demon, Inc. with Xxxxxx Deal, Xxxxxx Xxxxxxxx p/k/a
"CHOPPER" dated June 1, 1993.
2. Purple Demon, Inc. with Xxxxxxxxx Xxxxxxx p/k/a
"Boo Trundle" dated July 26, 1993.
3. Purple Demon, Inc. with Xxxxxx Xxxxxxx, Xxxxx
Xxxxxx and Xxxx Xxxxxx p/k/a "MILF" dated September 2, 1993.
4. Purple Demon, Inc. with Will Xxxxxxx, Xxxxx Xxxxx,
Xxxxx Xxxxxxxx, Xxxxx Xxxxxx p/k/a "IDLE" dated September 25,
1993.
5. Purple Demon, Inc. with Xxx Xxxxx and Xxxxx Xxxxxxx
p/k/a "THE VANDALIAS" d/b/a Ten Pop Works dated February 5, 1994.
6. Big Deal, Inc. with W. Xxxxx Xxxx dated February
15, 1994.
7. Purple Demon, Inc. with Xxxx Xxxxxxx, Xxxx Xxxxxxx,
Xxx XxXxxx p/k/a "GLAD HANDS" dated November 15, 1994.
8. Purple Demon, Inc. with Xxx Xxxxxxxx, Xxxxx
Xxxxxxxx, Xxxx Xxxxxxxxx, Xxxxx Xxxxxxxxxxxxx p/k/a "XXXXX
XXXXXX" dated November 30, 1994.
9. Purple Demon, Inc. with Xxx Xxxxxx dated December
1, 1995.
10. Purple Demon, Inc. with Xxxx Xxxxxxxx and Xxxxxx
Xxxxxxx p/k/a "COCKEYED GHOST" dated June 1, 1996.
11. Purple Demon, Inc. with Xxxxx Xxxxxx, Xxxxx Xxxxxx
and Xxxxxx Xxxxxxx p/k/a "THE VERGE" dated November 15, 1996.
12. Purple Demon, Inc. with Xxxx Xxxxxxx, Xxxxxx
Xxxxxxx and Xxxx Xxxxxxx p/k/a "SPLITSVILLE" dated January 15,
1997.
Schedule 13.15 Continued
Exclusive Licensing Agreements
1. Purple Demon, Inc. with Tite Wad, Inc. dated February 15,
1994/Artist "Enuff ZNuff", Licensed album entitled "1985".
2. Purple Demon, Inc. with Xxxx Xxxxx dated May 15,
0000/Xxxxxx "Xxx Xxxxxxxx", Licensed album entitled "Garage
Sale".
3. Purple Demon, Inc. with Xxxxxx Xxxxxxxx dated July
15, 1994/Various Artists. Licensed album entitled "Relationships
From Hell".
4. Purple Demon, Inc. with Xxxxxxxx Xxxxx dated March
15, 1995/Artist Xxxxxxxx Xxxxx. Licensed album embodying the
performances of Xxxxxxxx Xxxxx.
5. Purple Demon, Inc. with OMAD Productions dated May
15, 1995/Artists and Masters to be mutually designated.
6. Purple Demon, Inc. with Roving Gypsies, Inc. dated
August 25, 1995/Artist "Enuff ZNuff". Licensed album entitled
"Peach Fuzz".
7. Purple Demon, Inc. with Xxxx Xxxxxxx and Xxxxx
Xxxxxxxxx dated October 29, 1995/Artists Xxxx Xxxxxxx and Xxxxx
Xxxxxxxxx p/k/a "You And What Army", Licensed album entitled
"Kinda Wanna".
8. Purple Demon, Inc. with Xxxx Xxxxxxx, Xxxxxx
Xxxxxxx and Xxxx Xxxxxxx dated February 1, 1996/Artists Xxxx
Xxxxxxx, Xxxxxx Xxxxxxx and Xxxx Xxxxxxx p/k/a "SPLITSVILLE".
Licensed Albums and Masters involving the performances of
"SPLITSVILLE" and contained on recordings collectively entitled
"SPLITSVILLE USA".
9. Purple Demon, Inc. with Toys Factory Music
Publishing dated August 21, 1996/Artist/"Wundermints" Masters and
Licensed recordings embodied on the Album entitled "WUNDERMINTS".
10. Purple Demon, Inc. with MCA Xxxxxx, Inc. dated
October 15, 1996/Artist "Shonen Knife". Licensed album entitled
"BRAND NEW KNIFE".
11. "YELLOW PILLS" compilation recording agreements Yellow
Pills One recorded 1993, Yellow Pills Two recorded 1994, three Yellow Pills
Three recorded 1996.
Schedule 13.15 Continued
Exclusive P & D Agreement
1. Purple Demon, Inc. with Xxxxxxx Records, Inc. dated
August 5, 1993.
