PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (the "Agreement") is made and entered into as of
the 31st day of May 2005, by and between the following:
Xxxxx Xxxxxxx, an individual, (hereinafter, "Xxxxxxx") and
M POWER ENTERTAINMENT INC. a Delaware corporation (hereinafter "MPWE").
W I T N E S S E T H
WHEREAS the parties entered into a Purchase Agreement on June 16, 2004; and
WHEREAS on July 16, 2004, pursuant to that agreement, MPWE acquired from
Xxxxxxx all the outstanding stock of Stellar Software Network, Inc. and MPWE
issued to Xxxxxxx shares of GKIG stock valued by the parties at $191,000; and
WHEREAS 8,025,211 shares were issued to Xxxxxxx at such time as the GKIG
stock; and
WHEREAS the parties entered into a First Amendment to the Purchase Agreement
on June 18, 2004, where MPWE agreed to issue, if necessary, additional shares
to Xxxxxxx at a point in time in the future which the parties agree would be
July 15, 2005; and
WHEREAS the parties agree that under the terms of paragraph 7.1 (b) of the
Purchase Agreement, as amended, MPWE would be obligated to issue such
additional numbers of shares to Xxxxxxx as would cause for GKIG stock to have
a value of $191,000; and
WHEREAS, in lieu thereof, subject to the terms and conditions of this
Agreement , MPWE and Xxxxxxx desire for MPWE to purchase from Xxxxxxx, and for
Xxxxxxx to sell to MPWE, all of the GKIG common stock (8,025,211 shares, the
"GKIG Stock") Xxxxxxx received for his sale of all of his stock of STELLAR
SOFTWARE NETWORK, INC., a Texas corporation, to GK Intelligent Systems, Inc.
("GKIG") in July 2004 togeher with Nariani's rights to have additional shares
issued under the Purchase Agreement. In payment for this purchase, MPWE
desires to pay to Xxxxxxx all of the Stellar Software Network Inc. stock
("Stellar Software Network Stock") it received, as a successor corporation to
GKIG, for the July 2004 purchase by GKIG of Stellar Software Network Inc from
Xxxxxxx and Xxxxxxx desires to receive same as payment; and
WHEREAS, the Board of Directors of MPWE deems it desirable and in the best
interests of MPWE and its stockholders that MPWE sell the Stellar Software
Network Stock in consideration of payment by Xxxxxxx of the GKIG Stock and
said contract right; and
WHEREAS, Xxxxxxx xxxxx it desirable and in the best interests of Xxxxxxx that
Xxxxxxx sell the GKIG Stock and said contract right to MPWE in exchange for
the Stellar Software Network Stock; and
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WHEREAS, MPWE and Xxxxxxx desire to provide for certain undertakings,
conditions, representations, warranties, and covenants in connection with the
transactions contemplated by this Agreement; and
WHEREAS, Xxxxxxx and the Board of Directors of MPWE have approved and adopted
this Agreement, subject to the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, the parties hereto do hereby agree
as follows:
SECTION 1
DEFINITIONS
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1.1 "Agreement", "GKIG", "GKIG Stock", "Stellar Software Network, Inc",
"Stellar Software Network Stock", "MPWE", "Xxxxxxx", respectively, shall have
the meanings defined in the foregoing preamble and recitals to this Agreement.
1.2 "Closing Date" shall mean 10:00 a.m., local time, June 10, 2005, at
Houston, Texas, the date on which the parties hereto shall close the
transactions contemplated herein; provided that the parties can change the
Closing Date and place of Closing to such other time and place as the parties
shall mutually agree, in writing. As of the Closing Date, all Exhibits to
this Agreement shall be complete and attached to this Agreement.
1.3 "Confidential information" shall have the meaning defined in
Section 11.1 hereof.
SECTION 2
AGREEMENT FOR PURCHASE AND SALE OF GK INTELLIGENT STOCK
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2.1 Substantive Terms of the Purchase and Sale of GK Intelligent Stock
and the Related Contract Right.
Xxxxxxx shall sell and deliver to MPWE all of the GKIG Stock in a form
enabling MPWE, then and there, to become the record and beneficial owner of
said common stock, consisting of eight million twenty-five thousand two
hundred eleven (8,025,211) shares of GKIG common stock.
Xxxxxxx assigns and transfers to MPWE all of his rights under the
Purchase Agreement as amended including his right to receive additional shares
under paragraph 7.1(b) thereof.
2.2 Consideration Paid by MPWE.
(a) MPWE shall deliver to Xxxxxxx the Stellar Software Network
Stock, consisting of one thousand (1,000) shares of Stellar Software Network,
Inc.
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SECTION 3
REPRESENTATIONS AND WARRANTIES OF MPWE
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MPWE, in order to induce the Xxxxxxx to execute this Agreement and to
consummate the transactions contemplated herein, represents and warrants to
Xxxxxxx, as follows:
3.1 Organization and Qualification. MPWE is a corporation duly
organized, validly existing, and in good standing under the laws of Delaware,
with all requisite power and authority to own its property and to carry on its
business as it is now being conducted. MPWE is duly qualified as a foreign
corporation and in good standing in each jurisdiction where the ownership,
lease, or operation of property or the conduct of business requires such
qualification, except where the failure to be in good standing or so qualified
would not have a material, adverse effect on the financial condition or
business of MPWE.
3.2 Authorization and Validity. MPWE has the requisite power and is
duly authorized to execute and deliver and to carry out the terms of this
Agreement. The board of directors and stockholders of MPWE have taken all
action required by law, its Articles of Incorporation and Bylaws, both as
amended, or otherwise to authorize the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby,
subject to the satisfaction or waiver of the conditions precedent set forth in
Section 8 of this Agreement. Assuming this Agreement has been approved by all
action necessary on the part of Xxxxxxx, this Agreement is a valid and binding
agreement of MPWE. Approval by the shareholders of MPWE is not required in
order for it to consummate the transaction provided for in this Agreement.
3.3 No Defaults. MPWE is not in default under or in violation of any
provision of its Articles of Incorporation or Bylaws, both as amended. MPWE
is not in default under or in violation of any material provision of any
indenture, mortgage, deed of trust, lease, loan agreement, or other agreement
or instrument to which it is a party or by which it is bound or to which any
of its is subject, if such default would have a material, adverse effect on
the financial condition or business of MPWE. MPWE is not in violation of any
statute, law, ordinance, order, judgment, rule, regulation, permit, franchise,
or other approval or authorization of any court or governmental agency or body
having jurisdiction over it or any of its properties which, if enforced, would
have a material, adverse effect on the financial condition or business of
MPWE. Neither the execution and delivery of this Agreement, nor the
consummation of the transactions contemplated herein, will conflict with or
result in a breach of or constitute a default under any of the foregoing or
result in the creation of any lien, mortgage, pledge, charge, or encumbrance
upon any asset of MPWE and no consents or waivers thereunder are required to
be obtained in connection therewith in order to consummate the transactions
contemplated by this Agreement.
3.4 Documents. The copies of all agreements and other instruments that
have been delivered by MPWE to Xxxxxxx are true, correct, and complete copies
of such agreements and instruments and include all amendments thereto.
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3.5 Disclosure. The representations and warranties made by MPWE herein
and in any schedule, statement, certificate, or document furnished or to be
furnished by MPWE to Xxxxxxx pursuant to the provisions hereof or in
connection with the transactions contemplated hereby, taken as a whole, do not
and will not as of their respective dates contain any untrue statements of a
material fact, or omit to state a material fact necessary to make the
statements made not misleading.
SECTION 4
REPRESENTATIONS AND WARRANTIES OF XXXXXXX
Xxxxxxx, in order to induce MPWE to execute this Agreement and to
consummate the transactions contemplated herein, represents and warrants to
MPWE as follows:
4.1 Authorization and Validity. Xxxxxxx has the requisite power and is
duly authorized to execute and deliver and to carry out the terms of this
Agreement. Assuming this Agreement has been approved by all action necessary
on the part of MPWE, this Agreement is a valid and binding agreement of
Xxxxxxx.
4.2 Disclosure. The representations and warranties made by Nariani
herein and in any schedule, statement, certificate, or document furnished or
to be furnished by Nariani to MPWE pursuant to the provisions hereof or in
connection with the transactions contemplated hereby taken as a whole do not
and will not as of their respective dates contain any untrue statements of a
material fact, or omit to state a material fact necessary to make the
statements made not misleading.
SECTION 5
PRESS RELEASE
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5.1 Press Release. MPWE and Xxxxxxx shall agree with each other as to
the form and substance of any press releases and the filing of any documents
with any federal or state agency related to this Agreement and the
transactions contemplated hereby and shall consult with each other as to the
form and substance of other public disclosures related thereto; provided,
however, that nothing contained herein shall prohibit either party from making
any disclosure that its counsel deems necessary.
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SECTION 6
BROKERAGE
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6.1 Brokers and Finders. Except for Stanton, Walker & Company, neither
MPWE nor Xxxxxxx, or any of their respective officers, directors, employees,
or agents, has employed any broker, finder, or financial advisor or incurred
any liability for any fee or commissions in connection with initiating the
transactions contemplated herein. Stanton, Walker & Company has been engaged
by MPWE and MPWE is solely liable for any fee or commission earned by Stanton,
Walker & Company. Each party hereto agrees to indemnify and hold the other
party harmless against or in respect of any other commissions, finder's fees,
or brokerage fees incurred or alleged to have been incurred with respect to
initiating the transactions contemplated herein as a result of any action of
the indemnifying party.
SECTION 7
CLOSING AGREEMENTS AND POST-CLOSING
7.1 Closing Agreements. On the Closing Date, the following activities
shall occur, the following agreements shall be executed and delivered, and the
respective parties thereto shall have performed all acts that are required by
the terms of such activities and agreements to have been performed
simultaneously with the execution and delivery thereof as of the Closing Date:
(a) Xxxxxxx shall have executed and delivered documents to MPWE
sufficient then and there to transfer record and beneficial ownership to MPWE
of the GKIG Stock, consisting of an aggregate of eight million twenty-five
thousand two hundred eleven (8,025,211) shares of common stock of GKIG. Such
shares shall be not pledged, and totally unencumbered.
(b) MPWE shall have delivered to Xxxxxxx the Stellar Software
Network Stock consisting of one thousand (1,000) shares of Stellar Software
Network, Inc.
SECTION 8
CONDITIONS PRECEDENT TO MPWE'S OBLIGATIONS TO CLOSE
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The obligations of MPWE to consummate this Agreement are subject to
satisfaction on or prior to the Closing Date of the following conditions:
8.1 Representations and Warranties. The representations and warranties
of Xxxxxxx contained in this Agreement shall be true and correct in all
material respects on and as of the Closing Date, and Xxxxxxx shall have
performed in all material respects all of his obligations hereunder
theretofore to be performed.
8.2 Other. The joint conditions precedent in Section 10 hereof shall
have been satisfied and all documents required for Closing shall be acceptable
to Counsel for MPWE.
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SECTION 9
CONDITIONS PRECEDENT TO XXXXXXX' OBLIGATIONS TO CLOSE
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The obligation of Nariani to consummate this Agreement is subject to the
satisfaction on or prior to the Closing Date of the following conditions:
9.1 Representations and Warranties. The representations and warranties
of MPWE contained in this Agreement shall be true and correct in all material
respects on and as of the Closing Date, and MPWE shall have performed in all
material respects all of its obligations hereunder theretofore to be
performed.
9.2 Other. The joint conditions precedent in Section 10 hereof shall
have been satisfied.
SECTION 10
JOINT CONDITIONS PRECEDENT
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The obligations of each MPWE and Xxxxxxx to consummate this agreement
shall be subject to satisfaction by the other party ("Other Party") or waiver
in writing by the party entitled to have the Other Party perform each and all
of the following conditions precedent at or prior to the Closing Date:"
10.1 Other Agreements. All of the agreements contemplated by Section
7.1 of this Agreement shall have been executed and delivered by the Other
Party, and all acts required to be performed thereunder by the Other Party as
of the Closing Date shall have been duly performed, including, without
limitation, completion of all exhibits to this Agreement.
10.2 Absence of Litigation. At the Closing Date, there shall be no
action, suit, or proceeding pending or threatened against Other Party hereto
by any person, governmental agency, or subdivision thereof, nor shall there be
pending or threatened any action in any court or administrative tribunal,
which would have the effect of prohibiting the consummation of the
transactions contemplated herein.
SECTION 11
CONFIDENTIALITY
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11.1 Xxxxxxx acknowledges that he has acquired confidential information
and materials from GKIG and MPWE about the technology, business, products,
strategies, customers, clients and suppliers of MPWE and that all such
information, materials and knowledge acquired, are and will be trade secrets
and confidential and proprietary information of MPWE (collectively, such
acquired information, materials, and knowledge are the "Confidential
Information"). Xxxxxxx covenants to hold such Confidential Information in
strict confidence, not to disclose it to others or use it in any way,
commercially or otherwise, except in connection with the transactions
contemplated by this Agreement and not to allow any unauthorized person access
to such Confidential Information.
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11.2 The Confidential Information disclosed by MPWE to Xxxxxxx shall
remain the property of the disclosing party.
11.3 Xxxxxxx shall maintain in secrecy all Confidential Information
disclosed to him by MPWE using not less than reasonable care. Xxxxxxx shall
not use or disclose in any manner to any third party any Confidential
Information without the express written consent of MPWE unless or until the
Confidential Information is:
(a) publicly available or otherwise in the public domain; or
(b) rightfully obtained by any third party without restriction; or
(c) disclosed by MPWE without restriction pursuant to judicial
action, or government regulations or other requirements.
11.4 The obligations of Xxxxxxx under Sections 11.1, 11.2, and 11.3 of
this Agreement shall expire one year from the date hereof as to Confidential
Information consisting of commercial and financial information and two years
from the date hereof as to Confidential Information consisting of technical
information. For this purpose, technical information shall include without
limitation all developments, inventions, innovations, designs, discoveries,
trade secrets and know-how, whether or not patentable or copyrightable.
SECTION 12
TERMINATION AND WAIVER
12.1 Termination. This Agreement may be terminated and abandoned on
the Closing Date by:
(a) the mutual consent in writing of the parties hereto;
(b) MPWE, if the conditions precedent in Sections 8 and 10 of this
Agreement have not been satisfied or waived by the Closing Date; and
(c) Xxxxxxx, if the conditions precedent in Sections 9 and 10 of
this Agreement have not been satisfied or waived by the Closing Date.
If this Agreement is terminated pursuant to Section 12.1, the parties
hereto shall not have any further obligations under this Agreement, and each
party shall bear all costs and expenses incurred by it.
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SECTION 13
NATURE AND SURVIVAL OF REPRESENTATIONS, ETC.
13.1 All statements contained in any certificate or other instrument
delivered by or on behalf of MPWE or Xxxxxxx pursuant to this Agreement or in
connection with the transactions contemplated hereby shall be deemed
representations and warranties by such party. All representations and
warranties and agreements made by MPWE or Xxxxxxx in this Agreement or
pursuant hereto shall survive the Closing Date hereunder until the expiration
of the 12th month following the Closing Date.
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SECTION 14
MISCELLANEOUS
14.1 Notices. Any notices or other communications required or
permitted hereunder shall be sufficiently given if written and delivered in
person or sent by registered mail, postage prepaid, addressed as follows:
to Xxxxxxx: Xxxxx Xxxxxxx
0000 Xxxxxxxx Xxxx
Xxxxx, XX 00000
to MPWE: M POWER ENTERTAINMENT INC
Attn: Xxxx Xxxxxxx
0000 Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
or such other address as shall be furnished in writing by the appropriate
person, and any such notice or communication shall be deemed to have been
given as of the date so mailed.
14.2 Time of the Essence. Time shall be of the essence of this
Agreement.
14.3 Costs. Each party will bear the costs and expenses incurred by it
in connection with this Agreement and the transactions contemplated hereby.
14.4 Cancellation of Agreement. In the event that this Agreement is
canceled by mutual agreement of the parties or by failures of any of the
conditions precedent set forth in Paragraphs 8, 9, and 10, neither Nariani nor
MPWE shall be entitled to any damages, fees, costs, or other consideration.
14.5 Entire Agreement and Amendment. This Agreement and documents
delivered at the Closing Date hereunder contain the entire agreement between
the parties hereto with respect to the transactions contemplated by this
Agreement and supersedes all other agreements, written or oral, with respect
thereto. This Agreement may be amended or modified in whole or in part, and
any rights hereunder may be waived, only by an agreement in writing, duly and
validly executed in the same manner as this Agreement or by the party against
whom the waiver would be asserted. The waiver of any right hereunder shall be
effective only with respect to the matter specifically waived and shall not
act as a continuing waiver unless it so states by its terms.
14.6 Counterparts. This Agreement may be executed in one or more
counterparts each of which shall be deemed to constitute an original and shall
become effective when one or more counterparts have been signed by each party
hereto and delivered to the other party.
14.7 Governing Law. This Agreement shall be governed by, and construed
and interpreted in accordance with, the laws of the State of Texas.
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14.8 Attorneys' Fees and Costs. In the event any party to this
Agreement shall be required to initiate legal proceedings to enforce
performance of any term or condition of this Agreement, including, but not
limited to, the interpretation of any term or provision hereof, the payment of
moneys or the enjoining of any action prohibited hereunder, the prevailing
party shall be entitled to recover such sums, in addition to any other damages
or compensation received, as will reimburse the prevailing party for
reasonable attorneys' fees and court costs incurred on account thereof
(including, without limitation, the costs of any appeal) notwithstanding the
nature of the claim or cause of action asserted by the prevailing party.
14.9 Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective heirs,
executors, personal representatives, successors, and assigns, as the case may
be.
14.10 Access to Counsel. Each party hereto acknowledges that each has
had access to legal counsel of her or its own choice and has obtained such
advice therefrom, if any, as such party has deemed necessary and sufficient
prior to the execution hereof. Each party hereto acknowledges that the
drafting of this Agreement has been a joint effort and any ambiguities or
interpretative issues that may arise from and after the execution hereof shall
not be decided in favor or, or against, any party hereto because the language
reflecting any such ambiguities or issues may have been drafted by any
specific party or her or its counsel.
14.11 Captions. The captions appearing in this Agreement are inserted
for convenience of reference only and shall not affect the interpretation of
this Agreement.
14.12 Access To Information. To the extent reasonably required for
MPWE's current and future audit requirements, Xxxxxxx shall cause MPWE, its
counsel, accountants, certain insurance brokers, lenders, and all other
reasonable representatives of MPWE ("Representatives") to have access, during
normal business hours, to all of the properties, books, contracts, and records
of the Stellar Software Network, Inc., relating to the period of July 16, 2004
through May 31, 2005. Xxxxxxx will cause to be furnished to MPWE and its
Representatives all such information concerning the affairs of the Company as
MPWE or such Representatives may reasonably request.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
M POWER ENTERTAINMENT, INC.
/s/ Xxxx Xxxxxxx
By:___________________________
Xxxx Xxxxxxx
President & CEO
XXXXXXX
/s/ Xxxxx Xxxxxxx
_______________________________
XXXXX XXXXXXX
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