DATED 29 OCTOBER 2008 STOCK SALE AGREEMENT
EXHIBIT
10.24
DATED 29 OCTOBER
2008
(2) XXXXX
& XXXXXXXXXX TRUSTEES (JERSEY) LIMITED
(3) ARMADILLO
INVESTMENTS LIMITED (in liquidation)
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1
THIS
AGREEMENT is made
on 29 October
2008 ((ü
BETWEEN
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(1)
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SEVEN
ARTS PICTURES plc a company incorporated in England & Wales
under company number 4276617 and whose registered office is at Xxx Xxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxx XX0X 0XX ("Company");
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(2)
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XXXXX
& XXXXXXXXXX TRUSTEES (JERSEY) LIMITED, whose registered office
is at IFG House, 00 Xxxxx Xxxxxx, Xx. Xxxxxx, Xxxxxx XX0 0XX ("Buyer")
as trustee of the Seven Arts Pictures Employee Benefit Trust
established by a deed of trust dated 21 October 2008 and made between the
Company and the Buyer;
and
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(3)
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ARMADILLO
INVESTMENTS LTD. (in members voluntary liquidation), a company
incorporated in England and Wales under Company Number 4977138 whose
registered office is at 00 Xxxxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX acting by
its liquidator, Xxxxxxx Xxxxx Xxxxxx Xxxx of Xxxxxx Xxxx & Co.,
of 00 Xxxxxx Xxxxx, Xxxxxxxx XX00 0XX ("Seller")
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RECITALS
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(A)
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The
Company, then known as Cabouchon plc, and Seller entered into that certain
Subscription Agreement dated August, 2004 ("Subscription Agreement"), a
copy of which is attached hereto as Exhibit "A," under which Company
issued to Seller and Seller acquired from Company 3,000,000 convertible
redeemable preference shares with a par value of £1.00 each (the
"Preference Shares"). As consideration for the issue of the Preference
Shares pursuant to the Subscription Agreement, the Company received
3,000,000 ordinary shares of £0.10 in the capital of the Seller of which
it now holds 1,600,000 such Ordinary
Shares.
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(B)
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Buyer
has agreed to acquire from Seller and Seller has agreed to sell to Buyer
the Preference Shares for the
Consideration.
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(C)
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The
Company has agreed to deliver to Seller the Armadillo Shares and the Stock
Option Agreement.
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(D)
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Buyer
has agreed to convert certain of the Preference Shares into Ordinary
Shares of the Company in accordance with the terms of the Subscription
Agreement. The Company has agreed to transfer the Armadillo Shares to
Seller and to issue to Seller an option to acquire five hundred thousand
Ordinary Shares of Company at a price of £0.20 per Ordinary Share pursuant
to the terms of the Stock Option Agreement attached hereto as Exhibit
"B."
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(E)
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Company
and Seller have agreed that this Agreement is in full and final settlement
and release of any claims, demands or causes of action of any nature or
kind whatsoever based upon or arising out of the Subscription Agreement or
the Preference Shares that either of Company, Seller or their respective
directors, shareholders, associated companies, officers, directors, or
agents ("Parties") may have against any other
Party.
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IT IS AGREED as follows: 1.INTERPRETATION
1.1 In this Agreement:
'Act'
means the Companies Xxx 0000 together with such provisions of the
Companies Xxx 0000 as are in force at the date of this Agreement;
'Armadillo
Shares' means 1,600,000 ordinary shares of £0.10 each in the capital of
Seller now owned by Company together with all rights accrued
thereon;
`Articles'
means the articles of association for the time being of the
Company;
2
`Business
Day' means any day (other than a Saturday) when banks in London are open
for the transaction of normal banking business;
'Charge'
means the charge over shares to be issued by the Buyer to the Seller in
terms of Clause 3.4.2 and in the form attached hereto as Exhibit
'C';
`Completion
Date' means49 October 2008;
'Consideration'
shall have by the meaning set forth in clause 2.2 below;
'Conversion'
shall mean the conversion of certain of the Preference Shares by Buyer
into Ordinary Shares pursuant to the terms hereof;
`Encumbrance'
means any mortgage, pledge, lien, charge, assignment, hypothecation or
other agreement or arrangement which has the same or a similar effect to the
granting of security;
`Liquidator'
means Xxxxxxx Xxxxx Xxxxxx Xxxx in his capacity as liquidator of the
Seller;
`Ordinary
Shares' means ordinary shares of £0.05 each in the share capital of the
Company;
'Preference
Shares' shall mean 3,000,000 convertible redeemable preference shares of
£1.00 each in the capital of the Company issued to Seller pursuant to the
Subscription Agreement;
'Stock
Option Agreement' means that certain stock option agreement between
Company and Seller dated as of the Completion Date under which Company grants to
Seller the right and option to acquire Ordinary Shares for £0.20 per Ordinary
Share;
'Subscription
Agreement' means that certain subscription agreement between Company and
Seller dated August, 2004 attached hereto as Exhibit "A".
1.2 In this Agreement, a reference
to:
1.2.1 a 'subsidiary'
or 'holding
company' shall be construed in accordance with section
1159 of the Companies Xxx 0000;
1.2.2 an `associated
company' and `control'
shall be construed in accordance with
section 416 of the Income and Corporation Taxes Xxx 0000;
1.2.3 a statutory provision includes a
reference to:
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(a)
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the
statutory provision as modified or re-enacted or both from time
to
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time
(whether before or after the date of this Agreement);
and
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(b)
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any
subordinate legislation made under the statutory
provision
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(whether
before or after the date of this
Agreement);
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1.2.4 persons includes a reference to any body
corporate, unincorporated association
or partnership;
1.2.5 a person includes a reference to that
person's legal personal representatives
or successors.
1.3 The headings
in this Agreement shall not affect the interpretation of this Agreement.
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2. ACQUISITION
AND CONSIDERATION
2.1 On the
Completion Date Seller shall sell to Buyer and Buyer shall acquire from
Seller
the Preference Shares for the Consideration. The Preference Shares shall be sold
with the full title and interest held by the Liquidator and with all rights
attaching to them and available to the Liquidator at the Completion Date and
subsequently.
2.2 The
consideration payable for the Preference Shares shall be the payment to
Seller by
Buyer of £1,500,000 in cash ("Consideration")
payable as to:
2.2.1 £500,000 on
the Completion Date;
2.2.2 £500,000 six
(6) months after the Completion Date ("First
Deferred Payment"); and
2.2.3 £500,000
twelve (12) months after the Completion Date ("Second
Deferred
Payment").
Any
Deferred Payments not paid when due shall bear interest at the rate of 10% per
annum.
3. COMPLETION
3.1 Subject
always to the provisions of this clause, Completion shall take place at 0
Xxxxxxxx
Xxxx, Xxxxxxxx'x Xxx, Xxxxxx XX0X 1 BL on the Completion Date at such time as
the Buyer and Seller agree.
3.2 The Company
shall procure that a board meeting of the Company is held at Completion
at which:
3.2.1 the transfer
referred to in clause 3.3.1 is (subject only to it being duly stamped)
approved for registration;
3.2.2 the Stock
Option Agreement is approved and executed by the Company;
3.2.3 issue to the
Buyer 10,000,000 Ordinary Shares pursuant to the Conversion.
3.3 At
Completion, the Seller shall deliver or procure delivery to the Buyer
of:
3.3.1 a transfer of
the Preference Shares in favour of the Buyer or its nominee duly
executed by the Seller;
3.3.2 the share
certificate representing the Preference Shares in the name of the Seller
(or an indemnity for a lost certificate in usual terms);
3.3.3 the Stock
Option Agreement duly signed by the Seller; and
3.3.4 the Charge
over Shares duly executed by the Seller.
3.4 At
Completion, the Buyer shall deliver:
3.4.1 a duly signed
conversion notice on the Company in respect of the Preference
Shares in accordance with the terms of the Subscription Agreement;
and
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3.4.2 to the Seller
the Charge over Shares duly executed by the Buyer and shall pay the
cash sum of £500,000 to the Seller in respect of the first tranche of
Consideration.
3.5 At
Completion, the Company shall deliver or procure delivery to the Seller
of:
3.5.1 a transfer or
transfers of the Armadillo Shares in favour of such persons as the
Seller shall direct duly executed by the Company (or an indemnity for a lost
certificate in usual terms);
3.5.2 the share
certificate representing the Armadillo Shares in the name of the Company;
and
3.5.3 the Stock
Option Agreement duly signed by the Company.
3.6 For the
avoidance of doubt the Armadillo Shares will be transferred with the
benefit
of all accrued rights including any outstanding dividends or
distributions.
4. WAIVER
AND RELEASE
4.1 Each of
Company and Seller agree that on Completion the Subscription Agreement
shall terminate, the parties shall be fully released from all obligations under
the Subscription Agreement and that neither the Company nor the Seller shall
have any claims, demands or causes of actions of any nature or kind whatsoever
based upon or arising out of the Subscription Agreement and that each of them
shall release all claims, rights or remedies they may have against the other
(including their respective directors, officers and employees) arising from or
in connection with the Subscription Agreement.
5. WARRANTIES
5.1 Company
hereby warrants in this capacity ("Warrantor") for the benefit of Seller
and Buyer
("Beneficiary") with respect to itself and its actions:
5.1.1 Warrantor is
properly established and validly existing under the laws of England
with all necessary corporate power and authority to own and use its properties
and assets and carry on its business as currently conducted.
5.1.2 Warrantor has
all necessary corporate power and authority to enter into and
undertake the transaction contemplated hereby and to otherwise carry out its
obligations hereunder. The execution and delivery of the Agreement by Warrantor
and the undertaking of the transactions contemplated hereby has been duly
authorized by all necessary actions by Warrantor. This Agreement is or will be a
valid and binding obligation of Warrantor enforceable against it in accordance
with its terms.
5.1.3 The execution
and performance of the Agreement by Warrantor does not and will
not (i) conflict with or violate any provisions of the Warrantor's Articles of
Association; (ii) constitute a default under, or give to others any rights of
termination of, any agreement to which Warrantor is a party, including any
indenture, loan or credit agreement; or (iii) result in a breach of any law,
regulation, or other restriction of any kind. The business of the Warrantor is
not being conducted in violation of any law, ordinance or regulation of any
governmental authority.
5.1.4 Warrantor is
not required to obtain any consent or approval from any person in
connection with the execution and performance by Warrantor of this
Agreement.
5.1.5 Warrantor is
not involved in any proceedings and no proceedings or investigations
are pending or, to the best knowledge of Warrantor, threatened which could
materially affect the ability of Warrantor to perform its obligations hereunder
on a timely basis.
5.2 By its
signature hereto, the Company agrees and warrants that the Form 20-F
filed by
the Company with the Securities and Exchange Commission ("SEC") and provided to
Seller and Buyer is true and correct in all material respects and includes all
the facts and information required by the SEC's rules and regulations and all
applicable laws.
5.3 It is an
essential condition of this agreement:
5.3.1 that the
Liquidator contracts solely as agent of the Seller and shall incur no
personal
liability of whatsoever nature (whether directly or indirectly, express or
implied) and howsoever arising including without prejudice to the foregoing
generality, personal liability in respect of any action or actions of whatsoever
nature and howsoever arising in pursuance of the Seller's rights and/or
obligations under this agreement and whether such claim is formulated in
contract and/or delict and/or tort and/or restitution or by reference to any
other remedy or right, and in whatever jurisdiction or forum;
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5.3.2 that no claim
which may be or become competent to the Buyer or the Company
arising directly or indirectly from this agreement (or under any deed or other
document executed in consequence hereof or on or under any associated or
collateral agreement or arrangement) will lie against the Liquidator personally
and the Liquidator shall be entitled at any time to have any such deeds,
documents or others amended to include an exclusion of personal liability in
terms of this clause 5.3; and
5.3.3 that any
personal liability of the Liquidator which would in terms of the Insolvency
Xxx 0000 arise but for the provisions of this clause 5.3 is hereby expressly
excluded.
5.4 The
Liquidator has joined in as a party to this agreement solely for the purpose of
obtaining
the benefit of the provisions of this clause 5.3 and any other provisions of
this agreement in his favour.
5.5 Nothing in
this agreement shall constitute a waiver of any right of the Liquidator to
be
indemnified, or to exercise a lien, whether under the provisions of the
Insolvency Xxx 0000 or otherwise howsoever.
5.6 For the
purpose of this clause 5.3 references to "the Liquidator" where the context
so permits shall mean and include his present and future firm or firms, partners
and employees and any legal entity or partnership using in its name the words
"Xxxxxx Xxxx", and the partners, members, officers, employees, advisers,
representatives and agents of any such entity or partnership.
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6. DEALING
IN SHARES
6.1 Seller and
Buyer each hereby undertake that it shall not (save in the event of an
intervening
court order, or an offer for the entire share capital of the Company becoming or
being declared unconditional):
6.1.1 dispose of
any interest in any Ordinary Shares before 30 June 2009; and
6.1.2 save as set
out in this Agreement, acquire any interest in any or charge Ordinary
Shares before 30 June 2009
save, in
either case, for any Ordinary Shares acquired pursuant to the exercise of the
Charge or the Share Option Agreement.
6.2 For these
purposes, the expression 'dispose'
shall extend to any sale, transfer, charge,
pledge, encumbrance or grant of any option over or in respect of or an agreement
to do any of these things (whether oral or in writing).
6.3 Seller and
Buyer each further undertake that:
6.3.1 it will
procure that no associated company of Seller or Buyer shall deal in Ordinary
Shares in breach of clause 3.1; and
6.3.2 it shall not
directly or indirectly either on its own account or through the agency of
another seek to manipulate the market in Ordinary Shares.
6.4 Upon the
issue and allotment of all of the Ordinary Shares pursuant to the Conversion,
Buyer shall not own 30% or more of the issued share capital of the
Company.
7. GUARANTEE
7.1 In
consideration of the Seller entering into this Agreement the Company, at the
request
of the Seller, hereby unconditionally guarantees to the Seller and its
successors, transferees and assigns the payment by the Buyer of the First
Deferred Payment and the Second Deferred Payment (together, the "Deferred
Payments").
7.2 If the Buyer
shall make default in the payment when due of the Deferred Payments,
the Company shall, forthwith on demand by the Seller, unconditionally pay to the
Seller in the manner prescribed in this Agreement an amount equal to
the amount payable by the Buyer.
7.3 The guarantee
contained in this Clause 7 shall be a continuing guarantee and shall
continue in full force and effect until the Deferred Payments have been paid in
full.
7.4 The Company
shall not be exonerated or discharged nor shall its liability be affected
by any forbearance, whether as to payment, time, performance or otherwise, or by
any other indulgence being given to the Buyer or by any variation of the terms
of this Agreement or by any act, thing, omission or means whatever which, but
for this provision, might operate to exonerate or discharge the Company from its
obligations under the guarantee contained in this Clause 7.
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8. NOTICES
8.1 Any notice or
other communication to be given by one party to another under, or in
connection with the matters contemplated by this Agreement shall be addressed to
the recipient and sent to the address or facsimile number of such other party
given in this clause 5.1; and marked for the attention of the person so given or
sent to such other address or facsimile number and/or marker for such other
attention as such other party may from time to time specify by notice given in
accordance with this clause to the party giving the relevant notice or
communication to it. As at the date of this Agreement such details
are:
For
the Company:
Address:38
Xxxxxxxx Xxxxxx, Xxxxxx X0X 0XX, XX
Facsimile
number:323-372-3790
For the
attention of: Xxxxxx New
For
Buyer:
Address:38
Hertford Street
Facsimile
number:323-372-3790
For the
attention of: Xxxxxx New
For
Seller:
Address:12
Xxxxxx Xxxxx, Xxxxxxxx XX00 0XX
Facsimile
number:01224 626 089
For the
attention of: Xxxxxxx Xxxx
8.2 Any notice or
other communication to be given by any party to any other party under or
in connection with the matters contemplated by this Agreement shall be in
writing and shall be given by letter delivered by hand and by facsimile, and
shall be deemed to have been received:
8.2.1 in the case
of delivery by hand, when delivered; or
8.2.2 in the case
of a facsimile, on acknowledgement of the addressee's facsimile
receiving equipment (where such acknowledgement occurs before 17:00 on the day
of acknowledgement) and in any other case on the day following the day of
acknowledgement.
Any
notice or other communication not received on a Business Day or received after
17:00 local time on any Business Day in the place of receipt shall be deemed to
be received on the next following Business Day.
9. GENERAL
9.1 In entering
into this Agreement and in any subsequent dealing with the Preference
Shares, Buyer undertakes to the Company that it shall comply in all respects
with all applicable laws, rules and regulations to which it is subject in its
jurisdiction
of incorporation and in any jurisdiction in which the Ordinary Shares are
traded.
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9.2 Nothing in
this Agreement or in any document referred to in it shall constitute any
of the
parties a partner of any other, nor shall the execution, completion and
implementation of this Agreement confer on any party any power to bind or impose
any obligations to any third parties on any other party or to pledge the credit
of any other party.
9.3 None of the
parties may assign any of their respective rights or obligations under
this
Agreement in whole or in part.
9.4 This
Agreement represents the entire understanding, and constitutes the whole
agreement,
in relation to its subject matter and supersedes any previous agreement between
the parties with respect thereto and, without prejudice to the generality of the
foregoing, excludes any warranty, condition or other undertaking implied at law
or by custom.
9.5 No variation
of this Agreement shall be effective unless made in writing and signed by
or on behalf of the parties.
9.6 Nothing in
this Agreement is intended to confer on any person any right to enforce
any term of this Agreement which that person would not have had but for the
Contract (Rights of Third Parties) Xxx 0000.
10. COUNTERPARTS
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10.1 This
Agreement may be executed in any number of counterparts and by the
different parties on separate counterparts, each of which when executed
and delivered shall constitute an original but all the counterparts shall
together constitute but one and the same
instrument.
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11. GOVERNING
LAW AND JURISDICTION
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11.1 This
Agreement shall be governed by, and construed in accordance with, English
Law.
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11.2 Each
party irrevocably agrees that the Courts of England shall have exclusive
jurisdiction in relation to any claim, dispute or difference concerning
this Agreement and any matter arising
therefrom.
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IN
WITNESS whereof the parties have executed this Agreement on the day and
year first above written.
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SIGNED
on behalf
of SEVEN ARTS PICTURES plc
/s/ Xxxxxx New
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Director
SIGNED on behalf
of XXXXX &
XXXXXXXXXX TRUSTEES
(JERSEY) LIMITED
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Director
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EXECUTED for
and on behalf of ARMADILLO INVESTMENTS LIMITED
(in liquidation)
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Authorized Signatory
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)
)
)
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at
on the
day of Two thousand and eight
by
the
Liquidator (without incurring personal liability on the part of the Liquidator)
in the presence of this witness:
.......................Witness
.......................Full
Name
......................Address
.......................
.......................
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IN
WITNESS whereof the parties have
executed this Agreement on the day and year first above
written.
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SIGNED
on behalf of SEVEN ARTS PICTURES plc
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Director
SIGNED
on behalf of XXXXX & XXXXXXXXXX TRUSTEES (JERSEY)
LIMITED
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Director
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EXECUTED for
and on behalf of ARMADILLO INVESTMENTS LIMITED
(in liquidation)
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Authorized Signatory
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)
)
)
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at
on
the day of Two thousand and eight
by
the
Liquidator (without incurring personal liability on the part of the Liquidator)
in the presence of this witness:
.......................Witness
.......................Full
Name
......................Address
.......................
.......................
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IN
WITNESS whereof the parties have executed this Agreement on the day and
year first above written.
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SIGNED
on behalf
of SEVEN ARTS PICTURES plc
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Director
SIGNED on behalf
of XXXXX &
XXXXXXXXXX TRUSTEES
(JERSEY) LIMITED
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Director
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EXECUTED for
and on behalf of ARMADILLO INVESTMENTS LIMITED
(in liquidation)
/s/ Xxxxxxx XX Xxxx
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Authorized Signatory
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)
)
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at
Aberdeen
on the
23
day of
October
by
Xxxxxxx XX Xxxx
the
Liquidator (without incurring personal liability on the part of the Liquidator)
in the presence of this witness:
X.
Xxxxxx Witness
Xxxxxxxxx
Xxxxxx Full Name
00 Xxxxxx
Xxxxxx
Xxxxxxx
Xxxxxxxx
XX00 0XX
Typist Occupation
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