PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (the "Agreement") is made and entered into as of
the 25th day of May 2005, by and between the following:
XXXX XXXXXXX, XXXXXX XXXXX, XXXX XXXXXXX, AND XXXXXX XXXXX individuals,
(hereinafter, the "Sellers"); and
M POWER ENTERTAINMENT INC., a Delaware corporation (hereinafter "MPWE").
W I T N E S S E T H
WHEREAS, subject to the terms and conditions of this Agreement, MPWE and
Sellers desire for MPWE to purchase from Sellers, and for Sellers to sell to
MPWE, all of the outstanding common stock of M POWER FUTURES INC., a Delaware
corporation (the "MPF Stock" and "MPF Corp" respectively); and
WHEREAS, the Board of Directors of MPWE deems it desirable and in the
best interests of MPWE and its stockholders that MPWE purchase the MPF Corp
Stock in consideration of issuance by MPWE to Sellers an aggregate of eighteen
million five hundred thousand (18,500,000) shares of MPWE Common Stock (the
"MPWE Shares"); and
WHEREAS, Sellers deems it desirable and in the best interests of Sellers
that Sellers sell the MPF Corp Stock to MPWE; and
WHEREAS, MPWE and Sellers desire to provide for certain undertakings,
conditions, representations, warranties, and covenants in connection with the
transactions contemplated by this Agreement; and
WHEREAS, Sellers 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
-----------
1.1 "Agreement", "MPF Corp", "MPF Corp Stock", "MPWE", "MPWE Shares",
"Sellers", respectively, shall have the meanings defined in the foregoing
preamble and recitals to this Agreement.
-1-
1.2 "Closing Date" shall mean 4:00 pm, local time, May 25, 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 "1933 Act" shall mean the Securities Act of 1933, as amended.
1.4 "1934 Act" shall mean the Securities Exchange Act of 1934, as
amended.
1.5 "SEC Documents" shall have the meaning defined in Section 3.5
hereof.
1.6 "Confidential information" shall have the meaning defined in Section
11.1 hereof.
SECTION 2
AGREEMENT FOR PURCHASE AND SALE OF MPF CORP STOCK
--------------------------------------------------
2.1 Substantive Terms of the Purchase and Sale of MPF Corp Stock.
Sellers shall sell and deliver to MPWE one hundred percent (100%) of the
issued and outstanding capital stock of MPF Corp in a form enabling MPWE, then
and there, to become the record and beneficial owner of said common stock,
consisting of seventy four million (74,000,000) shares, which represent all of
the issued and outstanding capital stock of MPF Corp.
2.2 Consideration Paid by MPWE.
(a) MPWE shall deliver to Sellers the MPWE Shares, as follows: one
million two hundred fifty thousand (1,250,000) shares in the name of Xxxx
Xxxxxxx, three million two hundred fifty thousand (3,250,000) shares in the
name of Xxxxxx Xxxxx, thirteen million (13,000,000) shares in the name of Xxxx
Xxxxxxx, and one million (1,000,000) shares in the name of Xxxxxx Xxxxx. The
MPWE Shares shall be issued pursuant to an exemption from registration under
the 1933 Act and from registration under any and all applicable state
securities laws and the certificates representing the MPWE Shares shall bear
the restrictive legend set forth in Rule 144 of the Rules and Regulations of
the 1933 Act and any appropriate legend required under applicable state
securities laws. The MPWE Shares shall be subject to standard "piggy-back"
registration rights and shall also be validly issued and outstanding, fully
paid, and non-assessable.
(b) It is the present intention of MPWE that, following the Closing
Date, MPF Corp will operate as a wholly owned subsidiary ("MPF Corp-Sub") of
MPWE.
-2-
SECTION 3
REPRESENTATIONS AND WARRANTIES OF MPWE
---------------------------------------
MPWE, in order to induce the Sellers to execute this Agreement and to
consummate the transactions contemplated herein, represents and warrants to
Sellers, 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 Ownership of MPWE. MPWE is authorized to issue two classes of stock
of up to 275,000,000 common shares, $0.001 par value per share, of which
approximately 1,374,759 are currently issued and outstanding, and up to
10,000,000 preferred shares, $0.001 par value per share of which there are
1,232,276 shares outstanding.
3.3 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 Sellers, this Agreement is a valid and binding
agreement of MPWE.
3.4 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.
3.5 SEC Documents; Financial Statements. As of the Closing, MPWE has
filed all reports, schedules, forms, statements and other documents required
to be filed by it with the SEC pursuant to the reporting requirements of the
1934 Act (all of the foregoing filed prior to the date hereof and all exhibits
included therein and financial statements and schedules thereto and documents
incorporated by reference therein being hereinafter referred to as the "SEC
Documents"). As of
-3-
their respective dates, the SEC Documents substantially complied in all
material respects with the requirements of the 1934 Act and the rules and
regulations of the SEC promulgated thereunder applicable to the SEC Documents,
and none of the SEC Documents, at the time they were filed with the SEC,
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. As of their respective dates, the financial statements of
MPWE included in the SEC Documents substantially complied as to form in all
material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto. Such financial
statements have been prepared in substantial accordance with generally
accepted accounting principles, consistently applied, during the periods
involved (except (i) as may be otherwise indicated in such financial
statements or the notes thereto, or (ii) in the case of unaudited interim
statements, to the extent they may exclude footnotes or may be condensed or
summary statements) and fairly present in all material respects the financial
position of MPWE as of the dates thereof and the results of its operations and
cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments). No other information
provided by or on behalf of MPWE to the Sellers which is not included in the
SEC Documents, including, without limitation, contains any untrue statement of
a material fact or omits to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they are
or were made, not misleading. Neither the Company nor any of its officers,
directors, employees or agents has provided the Sellers with any material,
non-public information.
3.6 Absence of Certain Changes. Since the most recent filing by MPWE
with the SEC, there has been no material adverse change and no material
adverse development in the business, properties, operations, financial
condition, results of operations or prospects of MPWE. MPWE has not taken any
steps, and does not currently expect to take any steps, to seek protection
pursuant to any bankruptcy law nor does MPWE have any knowledge or reason to
believe that its creditors intend to initiate involuntary bankruptcy
proceedings.
3.7 Documents. The copies of all agreements and other instruments that
have been delivered by MPWE to Sellers are true, correct, and complete copies
of such agreements and instruments and include all amendments thereto.
3.8 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 Sellers 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.
-4-
SECTION 4
REPRESENTATIONS AND WARRANTIES OF SELLERS
------------------------------------------
Sellers, 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 Organization and Qualification. MPF Corp is a Delaware
corporation, duly organized, validly existing, and in good standing under the
laws of the state of Delaware with all requisite power and authority to own
its property and assets and to carry on its business as it is now being
conducted. MPF Corp is qualified as a foreign corporation and is in good
standing in each jurisdiction where the ownership, lease, or operation of
property or the conduct of its 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 and business of MPF Corp.
4.2 Ownership of MPF Corp Stock. MPF Corp is authorized to issue one
class of stock, of up to ninety million (90,000,000) shares of common stock, $
0.0001 par value per share. At the date hereof, of such authorized shares,
seventy four million (74,000,000) shares of common stock have been validly
issued and are outstanding, fully paid, and non-assessable. All of the shares
of common stock are owned of record and beneficially by the Sellers, who has
not granted any options, warrants, or other securities exercisable or
convertible into or any calls, commitments, or agreements of any kind relating
to any issued equity securities of MPF Corp. There are no options, warrants,
or other securities exercisable or convertible into or any calls, commitments,
or agreements of any kind relating to any unissued equity securities of MPF
Corp by or on behalf of MPF Corp.
4.3 Authorization and Validity. The Sellers has the requisite power
and are 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 Sellers.
4.4 MPF Corp Financial Statements.
(a) MPF Corp financial statements (as prepared by Sellers as the
management of MPF Corp) for fairly and accurately present the financial
condition and the results of operations, income, expenses, assets,
liabilities, changes in shareholders' equity, and cash flows of MPF Corp,
consistent with the past practices of MPF Corp (collectively, "MPF Corp
Financial Statements").
(b) MPF Corp Financial Statements are capable of being examined
and reported upon with an unqualified opinion expressed by an independent
public or certified public accountant and will comply with the requirements
and standards set forth in Regulation S-X, as promulgated and adopted by the
Securities and Exchange Commission.
4.5 Conduct and Transactions of MPF Corp. Since inception, MPF Corp
has conducted the operations of its business consistent with past practice and
used its best efforts to maintain and preserve its properties, key employees,
and relationships with customers and suppliers. Without limiting the
foregoing, during such period MPF Corp did not:
(a) Incur any liabilities except to maintain its facilities and
assets in the ordinary course of its business;
-5-
(b) Declare or pay any dividends on any shares of capital stock or
make any other distribution of assets to the holders thereof;
(c) Issue, reissue, or sell, or issue options or rights to
subscribe to, or enter into any contract or commitment to issue, reissue, or
sell, any shares of capital stock or acquire or agree to acquire any shares of
capital stock;
(d) Amend its Articles of Incorporation or Bylaws or merge or
consolidate with or into any other corporation or sell all or substantially
all of its assets or change in any manner the rights of its capital stock or
other securities;
(e) Pay or incur any obligation or liability, direct or contingent,
except in the ordinary course of its business;
(f) Incur any indebtedness for borrowed money, assume, guarantee,
endorse, or otherwise become responsible for obligations of any other party,
or make loans or advances to any other party except in the ordinary course of
its business;
(g) Increase in any manner the compensation, direct or indirect, of
any of its officers or executive employees, except as otherwise disclosed in
Exhibit 4.5(g), hereto; or
(h) Make any capital expenditures except in the ordinary course of
its business.
4.6 Compensation Due Employees. As of the Closing Date, MPF Corp will
not have any outstanding liability for payment of wages, payroll taxes,
vacation pay (whether accrued or otherwise), salaries, bonuses, pensions,
contributions under any employee benefit plans or other compensation, current
or deferred, under any labor or employment contracts, whether oral or written,
based upon or accruing in respect of those services of employees of MPF Corp
that have been performed prior to the Closing Date, except as specified on
Exhibit 4.6 hereto. As of the Closing Date, MPF Corp will not have any
unfunded, contingent or other liability under any defined benefits plan or any
other retirement or retirement-type plan, whether such plan(s) are to continue
or are thereupon terminated, except for the normal on-going obligations for
future contributions under such plan(s) not related, generally or
specifically, to the termination of such plan(s) or except as specified on
Exhibit 4.6 hereto.
4.7 Union Agreements and Employment Agreements. MPF Corp is not a party
to any union agreement or any organized labor dispute. MPF Corp has no
written or verbal employment agreements with any of its employees, except as
listed in Exhibit 4.7 hereto.
4.8 Contracts and Leases. Except as listed in Exhibit 4.8 hereto, MPF
Corp is not a party to any written or oral leases, commitments, or any other
agreements. On the Closing Date, MPF Corp has paid or performed in all
material respects all obligations required to be paid or performed by any of
them to such date and will not be in default under any document, contract,
agreement, lease, or other commitment to which any of them is a party.
4.9 Insurance. All insurance against losses or damages or other risks
which are in force for the benefit of any of MPF Corp are set forth in Exhibit
4.9 hereto.
-6-
4.10 Liabilities. MPF Corp has no liabilities, except as described in
Exhibit 4.10 hereto, which liabilities are also set forth in relevant detail
on MPF Corp Financial Statements.
4.11 Proprietary Rights. MPF Corp owns or is duly licensed to use such
trademarks and copyrights as are necessary to conduct its business as
presently conducted. The conduct of business by MPF Corp does not, to the
best knowledge of Sellers, infringe upon the trademarks or copyrights of any
third party.
4.12 Internal Controls. Since inception,
(a) There have been no transactions except in accordance with the
general or specific authorization of management of MPF Corp;
(b) MPF Corp has devised and maintained systems of internal
accounting controls and procedures (the "Internal Controls") that were
designed with the objective of providing reasonable assurance that (1) MPF
Corp transactions were properly authorized; (2) MPF Corp assets were
safeguarded against unauthorized or improper use; and (3) MPF Corp
transactions were properly recorded and reported, all (i) to permit the
preparation of MPF Corp financial statements in conformity with generally
accepted accounting principles and (ii) to maintain accountability for assets
and expenses.
(c) MPF Corp's chief executive officer has evaluated MPF Corp
Internal Controls, which evaluation included a review of the controls'
objectives and design and the controls' implementation by MPF Corp and its
management. In the course of the Internal Controls' evaluation, MPF Corp
management sought to identify data errors, controls problems, or acts of fraud
and to confirm that appropriate corrective action, including process
improvements, were being undertaken. The Internal Controls were also
evaluated on an ongoing basis by other personnel in MPF Corp organization.
Among other matters, MPF Corp has sought to determine whether there were any
"significant deficiencies" or "material weaknesses" in the Internal Controls,
or whether MPF Corp had identified any acts of fraud involving personnel who
had a significant role in the Internal Controls. For purposes of this
subsection, "significant deficiencies" means "reportable conditions" (control
issues that could have a significant adverse effect on the ability to record,
process, summarize and report financial data in the financial statements) and
"material weakness" means a particularly serious reportable condition where
the Internal Controls do not reduce to a relatively low level the risk that
misstatements caused by error or fraud may occur in amounts that would be
material in relation to MPF Corp Financial Statements and not be detected
within a timely period by employees in the normal course of performing their
assigned functions. MPF Corp has also sought to deal with other Internal
Controls matters in the evaluation thereof, and, in each case if a problem
were identified, MPF Corp considered what revision, improvement and/or
correction to make in accord with its on-going procedures.
4.13 Contracts and Agreements. MPF Corp is not a party to any material
contracts or agreements in respect of the operation of its business, except as
listed in Exhibit 4.13 hereto.
4.14 Minute Books. The minute books of MPF Corp contains true,
complete, and accurate records of all meetings and other corporate actions of
its shareholders and Board of Directors, and true and accurate copies thereof
have been delivered to counsel for MPWE prior to the Closing Date. The
signatures appearing on all documents contained therein are the true
signatures of the persons purporting to have signed the same.
-7-
4.15 Litigation. Except as set forth in Exhibit 4.15, there are no
actions, suits, proceedings, orders, investigations, or claims (whether or not
purportedly on behalf of MPF Corp) pending against or affecting MPF Corp at
law or in equity or before or by any federal, state, municipal, or other
governmental department, commission, board, agency, or instrumentality,
domestic or foreign, nor has any such action, suit, proceeding, or
investigation been pending or threatened in writing during the 12-month period
preceding the date hereof, which, if adversely determined, would materially
and adversely affect the financial condition of MPF Corp which seeks to
prohibit, restrict, or delay the consummation of the stock sale contemplated
hereby. MPF Corp is not operating under or subject to, or in default with
respect to, any order, writ, injunction, or decree of any court or federal,
state, municipal, or other governmental department, commission, board, agency,
or instrumentality.
4.16 Taxes. At the Closing Date, all tax returns required to be filed
with respect to the operations or assets of MPF Corp prior to Closing Date
have been correctly prepared in all material respects and timely filed, and
all taxes required to be paid in respect of the periods covered by such
returns have been paid in full or adequate reserves have been established for
the payment of such taxes. Except as set forth in Exhibit 4.16, as of the
Closing Date, MPF Corp has not requested any extension of time within which
to file any tax returns, and all known deficiencies for any tax, assessment,
or governmental charge or duty shall have been paid in full or adequate
reserves have been established for the payment of such taxes. MPF Corp tax
returns are true and complete in all material respects. No audits by federal
or state authorities are currently pending or threatened.
4.17 No Defaults. MPF Corp is not in default under or in violation of
any provision of its Articles of Incorporation or Bylaws. MPF Corp 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 assets are subject, if such default would have a material, adverse effect
on the financial condition or business of MPF Corp. MPF Corp 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 MPF Corp. 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 MPF Corp and no
consents or waivers thereunder are required to be obtained in connection
therewith in order to consummate the transactions contemplated by this
Agreement.
4.18 Documents. The copies of all agreements and other instruments that
have been delivered by Sellers to MPWE are true, correct, and complete copies
of such agreements and instruments and include all amendments thereto.
4.19 Disclosure. The representations and warranties made by Sellers
herein and in any schedule, statement, certificate, or document furnished or
to be furnished by MPF Corp and/or either of Sellers 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.
-8-
SECTION 5
INVESTIGATION; PRESS RELEASE
----------------------------
5.1 Investigation.
(a) MPWE acknowledges that it has made an investigation of MPF Corp
to confirm, among other things, the assets, liabilities, and status of
business of MPF Corp and the cash position, accounts receivable, liabilities,
and mortgages in process. In the event of termination of this Agreement, MPWE
will deliver to Sellers all documents, work papers, and other materials and
all copies thereof obtained by MPWE, or on its behalf, from MPF Corp or
Sellers, whether obtained before or after the execution hereof, will not use,
directly or indirectly, any confidential information obtained from MPF Corp
or Sellers hereunder or in connection herewith, and will keep all such
information confidential and not used in any way detrimental to MPF Corp or
Sellers except to the extent the same is publicly disclosed by MPF Corp or
Sellers.
(b) Sellers acknowledges that he has made an investigation of MPWE,
which has included, among other things, the opportunity of discussions with
executive officers of MPWE, and its accountants, investment bankers, and
counsel. In the event of termination of this Agreement, Sellers will deliver
to MPWE all documents, work papers, and other materials and all copies thereof
obtained by either of them, or on behalf of either of them, from MPWE, whether
obtained before or after the execution hereof and will not use, directly or
indirectly, any confidential information obtained from MPWE hereunder or in
connection herewith, and will keep all such information confidential and not
used in any way detrimental to MPWE, except to the extent the same is publicly
disclosed by MPWE.
(c) Except in the event that any party hereto discovers in the
course of its respective investigation any breach of a representation or
warranty by the other party hereto and does not disclose it to such other
party prior to the Closing Date, no investigation pursuant to this Section 5.1
shall affect or be deemed to modify any representation or warranty made by any
party hereto.
5.2 Press Release. MPWE and Sellers 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.
-9-
SECTION 6
BROKERAGE
----------
6.1 Brokers and Finders. Except for Stanton, Walker & Company, neither
MPWE nor Sellers, 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) Sellers shall have executed and delivered documents to MPWE
sufficient then and there to transfer record and beneficial ownership to MPWE
of the MPF Corp Stock, consisting of an aggregate of seventy four million
(74,000,000) shares of common stock of MPF Corp;
(b) MPWE shall have delivered to Sellers the MPWE Shares in the
names of Xxxx Xxxxxxx, Xxxxxx Xxxxx, Xxxx Xxxxxxx and Xxxxxx Testa_ as
follows: an aggregate of 1,250,000 shares of MPWE Common Stock to Xxxx
Xxxxxxx, an aggregate of 3,250,000 shares of MPWE Common Stock to Xxxxxx
Xxxxx, an aggregate of 13,000,000 shares of MPWE Common Stock to Xxxx Xxxxxxx
and an aggregate of 1,000,000 shares of MPWE Common Stock to Xxxxxx Xxxxx.
SECTION 8
CONDITIONS PRECEDENT TO MPWE'S OBLIGATIONS TO CLOSE
----------------------------------------------------
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 Sellers contained in this Agreement shall be true and correct in all
material respects on and as of the Closing Date, and Sellers shall have
performed in all material respects all of his obligations hereunder
theretofore to be performed.
-10-
8.2 Financial Statements. Sellers shall deliver to MPWE financial
statements for a period agreeable to MPWE.
8.3 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.
SECTION 9
CONDITIONS PRECEDENT TO SELLERS' OBLIGATIONS TO CLOSE
------------------------------------------------------
The obligation of Sellers 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
--------------------------
The obligations of MPWE and Sellers to consummate this Agreement shall be
subject to satisfaction or waiver in writing by all parties of each and all of
the following additional 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, and all acts
required to be performed thereunder 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 any of the parties
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 inhibiting the consummation of the
transactions contemplated herein.
-11-
SECTION 11
CONFIDENTIALITY
---------------
11.1 MPWE acknowledges that its principals have, and will, acquire
information and materials from Sellers and/or MPF Corp and knowledge about the
technology, business, products, strategies, customers, clients and suppliers
of MPF Corp and that all such information, materials and knowledge acquired,
are and will be trade secrets and confidential and proprietary information of
MPF Corp (collectively, such acquired information, materials, and knowledge
are the "Confidential Information"). MPWE, itself, and behalf of its
principals, 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.
11.2 The Confidential Information disclosed by the Sellers and/or MPF
Corp to MPWE shall remain the property of the disclosing party.
11.3 MPWE, and its principals, shall maintain in secrecy all
Confidential Information disclosed to them by Sellers and/or MPF Corp using
not less than reasonable care. MPWE, and its principals, shall not use or
disclose in any manner to any third party any Confidential Information without
the express written consent of the Sellers 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 Sellers and/or MPF Corp without restriction
pursuant to judicial action, or government regulations or other requirements.
11.4 The obligations of MPWE under Sections 11.1, 11.2, and 11.3 of this
Agreement shall expire upon the sooner of the Closing or 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) Sellers, if the conditions precedent in Sections 9 and 10 of
this Agreement have not been satisfied or waived by the Closing Date.
-12-
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.
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 Sellers 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 Sellers in this Agreement or
pursuant hereto shall survive the Closing Date hereunder until the expiration
of the 12th month following the Closing Date.
SECTION 14
MISCELLANEOUS
-------------
14.1 Time of the Essence. Time shall be of the essence of this
Agreement.
14.2 Costs. Each party will bear the costs and expenses incurred by it
in connection with this Agreement and the transactions contemplated hereby.
14.3 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 Sellers nor
MPWE shall be entitled to any damages, fees, costs, or other consideration.
14.4 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.
14.5 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.
14.6 Governing Law. This Agreement shall be governed by, and construed
and interpreted in accordance with, the laws of the State of California.
-13-
14.7 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.
14.8 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.
14.9 Access to Counsel. Each party hereto acknowledges that each has
had access to legal counsel of their 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.
14.10 Captions. The captions appearing in this Agreement are inserted
for convenience of reference only and shall not affect the interpretation of
this Agreement.
[SIGNATURE PAGE FOLLOWS]
-14-
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
SELLERS
/s/ Xxxx Xxxxxxx
___________________________________
XXXX XXXXXXX
/s/ Xxxxxx Xxxxx
____________________________________
XXXXXX XXXXX
/s/ Xxxx Xxxxxxx
____________________________________
XXXX XXXXXXX
/s/ Xxxxxx Xxxxx
____________________________________
XXXXXX XXXXX
-15-
