Exhibit 2.1
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SECURITIES EXCHANGE AGREEMENT
DATED EFFECTIVE AS OF JUNE 30, 2005
BY AND AMONG
DONAR ENTERPRISES, INC.
PLAYLOGIC INTERNATIONAL, N.V.
AND
THE SHAREHOLDERS OF PLAYLOGIC INTERNATIONAL, N.V.
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TABLE OF CONTENTS
Article I. ISSUANCE AND EXCHANGE OF SHARES....................................................................... 4
1.1 Issuance and Exchange................................................................................... 4
1.2 Exchange Ratio.......................................................................................... 5
Article II. CLOSING.............................................................................................. 5
2.1 Closing................................................................................................. 5
2.2 Deliveries by Public Company............................................................................ 5
2.3 Deliveries by Shareholders and Holding Co............................................................... 5
Article III. Representations and warranties of Shareholders...................................................... 5
3.1 Ownership of Stock...................................................................................... 6
3.2 Authority to Execute and Perform Agreement; No Breach................................................... 6
3.3 Securities Matters...................................................................................... 6
Article IV. REPRESENTATIONS AND WARRANTIES of Holding Co......................................................... 7
4.1 Organization, Standing and Corporate Power.............................................................. 7
4.2 Authority; Noncontravention............................................................................. 7
4.3 Financial Statements.................................................................................... 8
4.4 Capital Structure....................................................................................... 8
4.5 Subsidiaries............................................................................................ 8
4.6 Intellectual Property................................................................................... 9
4.7 Absence of Certain Changes or Events; No Undisclosed Material Liabilities............................... 9
4.8 Books and Records....................................................................................... 9
4.9 Employees............................................................................................... 9
4.10 Employee Benefit Plans.................................................................................. 10
4.11 Compliance with Applicable Laws......................................................................... 10
4.12 Insurance............................................................................................... 10
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4.13 Litigation, etc......................................................................................... 10
4.14 Contracts............................................................................................... 10
4.15 Real Property........................................................................................... 11
4.16 Environmental Matters................................................................................... 11
4.17 Solicitation............................................................................................ 11
4.18 Disclosure.............................................................................................. 11
Article V. REPRESENTATIONS AND WARRANTIES of Public Company...................................................... 11
5.1 Organization, Standing and Power........................................................................ 11
5.2 Capital Structure....................................................................................... 12
5.3 Authority: Noncontravention............................................................................. 12
5.4 Subsidiaries............................................................................................ 13
5.5 Intellectual Property................................................................................... 13
5.6 Absence of Certain Changes or Events; No Undisclosed Material Liabilities............................... 13
5.7 Books and Records....................................................................................... 14
5.8 Employees............................................................................................... 14
5.9 Employee Benefit Plans.................................................................................. 14
5.10 Compliance with Applicable Laws......................................................................... 14
5.11 Insurance............................................................................................... 14
5.12 Litigation, etc......................................................................................... 15
5.13 Contracts............................................................................................... 15
5.14 Real Property........................................................................................... 15
5.15 Quotation............................................................................................... 15
5.16 Filings................................................................................................. 15
5.17 Environmental Matters................................................................................... 15
5.18 Anti-takeover Plan: State Takeover Statutes............................................................. 16
5.19 Solicitation............................................................................................ 16
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5.20 Disclosure.............................................................................................. 16
Article VI. Indemnification...................................................................................... 16
6.1 Indemnification of Holding Co and Shareholders.......................................................... 17
6.2 Indemnification of Public Company....................................................................... 17
Article VII. CONDITIONS PRECEDENT................................................................................ 18
7.1 Conditions to Each Party's Obligation to Effect the Exchange............................................ 18
7.2 Conditions to Obligations of Holding Co and the Shareholders............................................ 18
7.3 Conditions to Obligations of Public Company............................................................. 18
7.4 Frustration of Closing Conditions....................................................................... 19
Article VIII. GENERAL PROVISIONS................................................................................. 19
8.1 Survival of Representations and Warranties.............................................................. 19
8.2 Fees and Expenses....................................................................................... 19
8.3 Definitions............................................................................................. 19
8.4 Usage................................................................................................... 20
8.5 Notices................................................................................................. 21
8.6 Counterparts............................................................................................ 21
8.7 Entire Agreement; Third-Party Beneficiaries............................................................. 22
8.8 Governing Law........................................................................................... 22
8.9 Assignment.............................................................................................. 22
8.10 Enforcement............................................................................................. 22
8.11 Severability............................................................................................ 22
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SECURITIES EXCHANGE AGREEMENT
THIS SECURITIES EXCHANGE AGREEMENT (the "AGREEMENT"), dated as of June 30,
2005 (the "EFFECTIVE DATE"), is entered into by and among PLAYLOGIC
INTERNATIONAL, N.V., a company organized under the laws of the Netherlands
("HOLDING CO"), DONAR ENTERPRISES, INC., a Delaware corporation (the "PUBLIC
COMPANY"), and the shareholders of Holding Co who have executed a power of
attorney in favor of Holding Co. (collectively, the "SHAREHOLDERS"). Certain
capitalized terms used in this Agreement are defined in Section 0 hereof.
W I T N E S S E T H:
WHEREAS, as of the Effective Date, there are 29,999,500 outstanding
ordinary shares and three priority shares of Holding Co (the "HOLDING CO
STOCK"), all of which shares of Holding Co Stock are beneficially owned and/or
controlled by the Shareholders.
WHEREAS, Public Company proposes to acquire all of the outstanding
shares of Holding Co in exchange for the issuance of an aggregate of 21,836,924
shares of common stock, par value $0.001, of Public Company (the "EXCHANGE");
WHEREAS, the Exchange shall constitute a reorganization within the
meaning of Section 368(a) (1)(B) of the Internal Revenue Code of 1986, as
amended, and/or any other "tax free" exemptions thereunder that may be available
for the Exchange; and
WHEREAS, the Boards of Directors of Public Company and Holding Co
have determined that it is desirable to effect such a plan of reorganization.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants, agreements, representations and warranties contained herein,
the parties hereto agree as follows:
ARTICLE I
ISSUANCE AND EXCHANGE OF SHARES
1.1 Issuance and Exchange.
At the Closing (as defined in Section 2.1 below), to be held in accordance
with the provisions of ARTICLE II below and subject to the terms and agreements
set forth herein, Public Company shall authorize Public Company's transfer agent
to issue to the Shareholders the number of duly authorized and newly issued
shares of common stock, par value $0.001, of Public Company (the "PUBLIC COMPANY
STOCK") set forth in Section 1.2 below for the outstanding priority and ordinary
shares of Holding Co Stock. In consideration for the shares of Public Company
Stock to be exchanged, the Shareholders shall deliver legal title to their
shares of Holding Co to Public Company by executing a notarial deed at Closing .
Counsel for Public Company shall release the Holding Co shares, over which he
has custody, to Public Company in accordance with the written instruction of
Public Company, assuming satisfaction by the Shareholders and Holding Co of all
applicable conditions set forth in this Agreement.
1.2 Exchange Ratio.
(a) At the Closing, Public Company shall exchange an aggregate of
21,836,924 shares of Public Company Stock for all issued and outstanding shares
of Holding Co Stock as full consideration for the Holding Co Stock; provided
that 1,028,965 of such shares shall be deposited in escrow pursuant to that
Escrow Agreement dated as of the date hereof attached hereto as Exhibit A.
(b) No fractional shares of Public Company Stock will be issued to any
Shareholder entitled to receive said shares. Accordingly, Shareholders who would
otherwise be entitled to receive fractional shares of Public Company Stock will
receive a full share if the fractional share exceeds fifty percent (50%) and if
the fractional share is less than fifty percent (50%) the fractional share shall
be cancelled.
ARTICLE II
CLOSING
2.1 Closing.
The consummation of the Exchange by Public Company, Holding Co and the
Shareholders (the "CLOSING") shall occur on the Effective Date, subject to the
satisfaction or waiver of all of the conditions to Closing.
2.2 Deliveries by Public Company.
Public Company shall deliver, or cause to be delivered, to the
Shareholders:
Certificates representing book entry for the shares of Public Company
Stock being exchanged for their respective accounts, in form and substance
reasonably satisfactory to the Shareholders and their counsel, it being
understood that the certificates will be prepared by Public Company's transfer
agent and delivered to the law firm of Xxxxxx Xxxxxx LLP, 0 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, attention Xxxx X. Xxxxxx, Esq. for the benefit of the
Shareholders;
(a) At the Closing, the items specified in ARTICLE VII below; and
(b) At the Closing, all of the books and records of Public Company.
2.3 Deliveries by Shareholders and Holding Co.
At the Closing, the Shareholders and Holding Co, as applicable, shall
deliver to Public Company the items specified in ARTICLE VII below.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS
Each Shareholder hereby represents and warrants to Public Company as
follows (it being acknowledged that Public Company is entering into this
Agreement in material reliance upon each of the following representations and
warranties, and that the truth and accuracy of each, as evidenced by their
signature set forth on the signature page, constitutes a condition precedent to
the obligations of Public Company hereunder):
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3.1 Ownership of Stock.
Each Shareholder is the lawful owner of his Holding Co Stock to be
transferred to Public Company free and clear of all preemptive or similar
rights, Liens, and the delivery to Public Company of the Holding Co Stock
pursuant to the provisions of this Agreement will transfer to Public Company
valid title thereto, free and clear of all Liens.
3.2 Authority to Execute and Perform Agreement; No Breach.
Each Shareholder has the full legal right and power and all authority and
approval required to enter into, execute and deliver this Agreement, and to
sell, assign, transfer and convey the Holding Co Stock and to perform fully his
respective obligations hereunder. This Agreement has been duly executed and
delivered by each Shareholder and, assuming this Agreement constitutes the valid
and binding agreement of Public Company, constitutes the valid and binding
obligation of each Shareholder enforceable in accordance with its terms, subject
to the qualifications that enforcement of the rights and remedies created hereby
is subject to (a) applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other laws of general application affecting the
rights and remedies of creditors, and (b) general principles of equity
(regardless of whether such enforcement is considered in a proceeding in equity
or at law). No approval or consent of, or filing with, any Governmental Entity,
and no approval or consent of, or filing, with any other Person is required to
be obtained by the Shareholders or in connection with the execution and delivery
by the Shareholders of this Agreement and consummation and performance by them
of the transactions contemplated hereby.
The execution, delivery and performance of this Agreement by each
Shareholder and the consummation of the transactions contemplated hereby in
accordance with the terms and conditions hereof by each Shareholder will not:
(a) violate, conflict with or result in the breach of any of the terms of,
or constitute (or with notice or lapse of time or both would constitute) a
default under, any contract, lease, agreement or other instrument or obligation
to which such Shareholder is a party or by or to which any of the properties and
assets of such Shareholder may be bound or subject;
(b) violate any order, judgment, injunction, award or decree of any court,
arbitrator, governmental or regulatory body, by which such Shareholder or the
securities, assets, properties or business of such Shareholder is bound; or
(c) violate any statute, law or regulation to which such Shareholder is
subject.
3.3 Securities Matters.
The Shareholders hereby represent, warrant and covenant to the Public
Company, as follows:
(a) The Shareholders have been advised that the Public Company Stock has
not been registered under the Securities Act, or any state securities act in
reliance on exemptions therefrom.
(b) The Public Company Stock is being acquired solely for each
Shareholder's own account, for investment and are not being acquired with a view
to or for the resale, distribution, subdivision or fractionalization thereof.
The Shareholders have no present plans to enter into any such contract,
undertaking, agreement or arrangement and the Shareholders further understand
that the Public Company
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Stock may only be resold pursuant to a registration statement under the
Securities Act, or pursuant to some other available exemption.
(c) The Shareholders agree that the certificate or certificates
representing the Public Company Stock will be inscribed with substantially the
following legend:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933. The securities have been
acquired for investment and may not be sold, transferred or assigned in
the absence of an effective registration statement for these securities
under the Securities Act of 1933 or an opinion of counsel that
registration is not required under said Act."
(d) The Shareholders acknowledge that an investment in Public Company is
subject to a high degree of risk and that, even though Public Company's common
stock is quoted on the NASD Over-the-Counter Bulletin Board, there exists no
established trading market for the Public Company Stock.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF HOLDING CO
Holding Co hereby represents and warrants to Public Company as follows (it
being acknowledged that Public Company is entering into this Agreement in
material reliance upon each of the following representations and warranties, and
that the truth and accuracy of each, as evidenced by the execution of this
Agreement by a duly authorized officer of Holding Co, constitutes a condition
precedent to the obligations of the Public Company hereunder):
4.1 Organization, Standing and Corporate Power.
Each of Holding Co and Playlogic Game Factory, B.V., Holding Co's
wholly-owned subsidiary ("PLAYLOGIC"), is a company with limited liability duly
organized, validly existing and in good standing under the laws of the
Netherlands and has all requisite corporate power and authority to own, lease
and operate its properties and to carry on its business substantially as now
conducted, except where the failure to do so would not have, individually or in
the aggregate, a Holding Co Material Adverse Effect. For purposes of this
Agreement, the term "HOLDING CO MATERIAL ADVERSE EFFECT" means any Material
Adverse Effect with respect to Holding Co and Playlogic, taken as a whole, or
any change of effect that adversely, or is reasonably expected to adversely,
affect the ability of Holding Co to consummate the transactions contemplated by
this Agreement in any material respect or materially impair or delay Holding
Co's ability to perform its obligations hereunder.
4.2 Authority; Noncontravention.
Holding Co has the requisite corporate power and authority to enter into
this Agreement and to consummate the transactions contemplated by this
Agreement. The execution, delivery and performance by Holding Co of this
Agreement and the consummation of the transactions contemplated hereby by
Holding Co have been duly authorized by all necessary corporate action on the
part of Holding Co. This Agreement has been duly executed and delivered by
Holding Co and, assuming this Agreement constitutes the valid and binding
agreement of Public Company, constitutes a valid and binding obligation of
Holding Co, enforceable against Holding Co in accordance with its terms, subject
to (a) applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other laws of general application affecting the rights and
remedies of creditors, and (b) general principles of equity (regardless of
whether such enforcement is considered in a proceeding in equity or at law). The
execution
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and delivery of this Agreement do not, and the consummation of the transactions
contemplated by this Agreement and compliance with the provisions of this
Agreement, will not (x) conflict with any provisions of the charter or other
organizational or governing documents of Holding Co, (y) subject to the
governmental filings and other matters referred to in the following sentence,
conflict with, result in a breach of or default (with or without notice or lapse
of time, or both) under, or give rise to a right of first refusal, termination,
cancellation or acceleration of any obligation (including to pay any sum of
money) or loss of a material benefit under, or require the consent of any Person
under, any indenture, or other material agreement, Permit, concession, ground
lease or similar instrument or undertaking to which Holding Co is a party or by
which Holding Co or any of its assets are bound or affected, result in the
creation or imposition of a Lien against any material asset of Holding Co, which
singly or in the aggregate would have a Holding Co Material Adverse Effect, or
(z) subject to the governmental filings and other matters referred to in the
following sentence, contravene any law, rule or regulation, or any order, writ,
judgment, injunction, decree, determination or award binding on or applicable to
Holding Co or Playlogic and currently in effect, which, in the case of clauses
(y) and (z) above, singly or in the aggregate, would have a Holding Co Material
Adverse Effect. No consent, approval or authorization of, or declaration or
filing with, or notice to, any Governmental Entity or any third party which has
not been received or made is required by or with respect to Holding Co in
connection with the execution and delivery of this Agreement by Holding Co or
the consummation by Holding Co of the transactions contemplated hereby, except
for consents, approvals, authorizations, declarations, filings and notices that,
if not obtained or made, will not, individually or in the aggregate, result in a
Holding Co Material Adverse Effect.
4.3 Financial Statements.
The financial statements of Holding Co for the period ending December 31,
2004 have been audited by the independent accounting firm of BDO CampersOberst
in the Netherlands and BDO Xxxxxxx LLP in the United States for the periods
indicated therein in conformity with IFRS Generally Accepted Accounting
Principles.
4.4 Capital Structure.
As of the Effective Date, there are 29,999,500 outstanding ordinary shares
and three priority shares of Holding Co and no shares of Holding Co Stock were
held by Holding Co in its treasury. All outstanding shares of capital stock of
Holding Co have been duly authorized and validly issued, and are fully paid and
nonassessable and not subject to preemptive or similar rights. No bonds,
debentures, notes or other indebtedness of Holding Co having the right to vote
(or convertible into, or exchangeable for, securities having the right to vote)
on any matters on which the Shareholders may vote are issued or outstanding.
Except for this Agreement, Holding Co does not have and, at or after Closing
will not have, any outstanding option, warrant, call, subscription or other
right, agreement or commitment which either (a) obligates Holding Co to issue,
sell or transfer, repurchase, redeem or otherwise acquire or vote any shares of
the capital stock of Holding Co, or (b) restricts the voting, disposition or
transfer of shares of capital stock of Holding Co. There are no outstanding
stock appreciation rights or similar derivative securities or rights of Holding
Co.
4.5 Subsidiaries.
Other than as provided on Schedule 4.5, neither Holding Co nor Playlogic
owns, directly or indirectly, any of the capital stock of any other corporation
or any equity, profit sharing, participation or other interest in any
corporation, partnership, joint venture or other entity.
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4.6 Intellectual Property.
Neither Holding Co nor Playlogic has any Knowledge of any claim that, or
inquiry as to whether, any product, activity or operation of Holding Co or
Playlogic infringes upon or involves, or has resulted in the infringement of,
any trademarks, trade names, service marks, patents, copyrights or other
proprietary rights of any other Person, corporation or other entity; and no
proceedings have been instituted, are pending or are threatened with respect
thereto.
4.7 Absence of Certain Changes or Events; No Undisclosed Material Liabilities.
(a) Since December 31, 2004, each of Holding Co and Playlogic has
conducted its business only in the ordinary course, and, except as set forth on
Schedule 4.7, there has not been (i) any change, destruction, damage, loss or
event which has had or could reasonably be expected to have, individually or in
the aggregate a Holding Co Material Adverse Effect; (ii) any declaration,
setting aside or payment of any dividend or other distribution in respect of
shares of Holding Co or Playlogic's capital stock, or any repurchase, redemption
or other acquisition by Holding Co or Playlogic of any shares of their
respective capital stock or equity interests, as applicable; (iii) any increase
in the rate or terms of compensation payable or to become payable by Holding Co
or Playlogic to its directors, officers or key employees; (iv) any entry into,
or increase in the rate or terms of, any bonus, insurance, severance, pension or
other employee or retiree benefit plan, payment or arrangement made to, for or
with any such directors, officers or employees; (v) any entry into any
agreement, commitment or transaction by Holding Co or Playlogic, or waiver,
termination, amendment or modification to any agreement, commitment or
transaction, which is material to Holding Co or Playlogic taken as a whole; (vi)
any material labor dispute involving the employees of Holding Co or Playlogic;
(vii) any change by Holding Co or Playlogic in accounting methods, principles or
practices except as required or permitted by GAAP; (viii) any write-off or
write-down of, or any determination to write-off or write-down, any asset of
Holding Co or Playlogic or any portion thereof; (ix) any split, combination or
reclassification of any of Holding Co or Playlogic's capital stock or issuance
or authorization relating to the issuance of any other securities in respect of,
in lieu of or in substitution for shares of Holding Co or Playlogic's capital
stock; (x) any amendment of any material term of any outstanding security of
Holding Co or Playlogic; (xi) any loans, advances or capital contributions to or
investments in, any other Person in existence on the Effective Date made by
Holding Co or Playlogic; (xii) any sale or transfer by Holding Co or Playlogic
of any of the assets of Holding Co or Playlogic, as applicable; (xiii)
cancellation of any material debts or claims or waiver of any material rights by
Holding Co or Playlogic; or (xiv) any agreements by Holding Co or Playlogic to
(a) do any of the things described in the preceding clauses (i) through (xiii)
other than as expressly contemplated or provided for herein or (b) take, whether
in writing or otherwise, any action which, if taken prior to the Effective Date,
would have made any representation or warranty of Holding Co in this Agreement
untrue or incorrect in any material respect.
(b) Except as set forth on Schedule 4.7(b), Holding Co has no liabilities,
except as set forth in its financial statements for the period ended December
31, 2004 or otherwise incurred in the ordinary course of business.
4.8 Books and Records.
The books of account and other financial Records of Holding Co and
Playlogic, all of which have been made available to Public Company, are complete
and correct, represent actual, bona fide transactions and have been maintained
in accordance with sound business practices.
4.9 Employees.
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Neither Holding Co nor Playlogic has any labor disputes with its
respective employees. Except as otherwise set forth on Schedule 4.9, there are
no loans or other obligations payable or owing by Holding Co or Playlogic to any
stockholder, officer, director or employee of Holding Co or Playlogic, as
applicable, nor are there any loans or debts payable or owing by any of such
persons to Holding Co or Playlogic or any guarantees by Holding Co or Playlogic
of any loan or obligation of any nature to which any such Person is a party. The
employment of Holding Co's and Playlogic's employees is subject to the law of
the Netherlands.
4.10 Employee Benefit Plans.
All employee benefits provided by Playlogic to its employees are in
accordance with applicable laws of the Netherlands.
4.11 Compliance with Applicable Laws.
Each of Holding Co and Playlogic has and after giving effect to the
transactions contemplated hereby will have in effect all Permits necessary for
it to own, lease or operate its properties and assets and to carry on its
business as now conducted, and to the Knowledge of Holding Co there has occurred
no default under any such Permit, except for the lack of Permits and for
defaults under Permits which individually or in the aggregate would not have a
Holding Co Material Adverse Effect. To Holding Co's Knowledge, each of Holding
Co and Playlogic is in compliance with, and has no liability or obligation
under, any applicable statute, law, ordinance, rule, order or regulation of any
Governmental Entity, including any liability or obligation to undertake any
remedial action under Hazardous Substances Laws (as hereinafter defined), except
for instances of non-compliance, liabilities or obligations, which individually
or in the aggregate would not have a Holding Co Material Adverse Effect.
4.12 Insurance.
Except as disclosed on Schedule 4.12, each of Holding Co and Playlogic
insurance policies are in full force and effect.
4.13 Litigation, etc.
Except as set forth on Schedule 4.13 and as of the Effective Date, (a)
there is no suit, claim, action or proceeding (at law or in equity) pending or,
to the Knowledge of Holding Co, threatened against Holding Co or Playlogic
(including, without limitation, any product liability claims) before any court
or governmental or regulatory authority or body, and (b) neither Holding Co nor
Playlogic is subject to any outstanding order, writ, judgment, injunction,
order, decree or arbitration order that, in any such case described in clauses
(a) and (b), (i) could reasonably be expected to have, individually or in the
aggregate, a Holding Co Material Adverse Effect or (ii) involves an allegation
of criminal misconduct or a violation of the Racketeer and Influenced Corrupt
Practices Act. As of the Closing, there are no suits, actions, claims or
proceedings pending or, to Holding Co's Knowledge, threatened, seeking to
prevent, hinder, modify or challenge the transactions contemplated by this
Agreement.
4.14 Contracts.
All material contracts, leases, arrangements or commitments (whether oral
or written) of either Holding Co or Playlogic relating to: (a) the employment of
any Person; (b) collective bargaining with, or any representation of any
employees by, any labor union or association; (c) the acquisition of services,
supplies, equipment or other personal property; (d) the purchase or sale of real
property; (e) distribution,
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agency or construction; (f) lease of real or personal property as lessor or
lessee or sublessor or sublessee; (g) lending or advancing of funds; (h)
borrowing of funds or receipt of credit; (i) incurring any obligation or
liability; or (j) the sale of personal property, are in full force and effect
and none of the parties thereto may be deemed in breach of same.
4.15 Real Property.
Holding Co and Playlogic have good and valid title to any owned real
property.
4.16 Environmental Matters.
The operations of each of Holding Co and Playlogic comply with all
applicable local and national environmental laws.
4.17 Solicitation.
None of Holding Co, Playlogic, or the officers, directors, Affiliates or
agents of Holding Co or Playlogic, or any other Person acting on behalf of
Holding Co or Playlogic has solicited, directly or indirectly, any Person to
enter into a merger or similar business combination transaction with Holding Co
or Playlogic by any form of general solicitation, including, without limitation,
any advertisement, article, notice or other communication published in any
newspaper, magazine or similar media or broadcast over television or radio or
any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising.
4.18 Disclosure.
The representations and warranties and statements of fact made by Holding
Co in this Agreement are, as applicable, accurate, correct and complete and do
not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements and information
contained herein not false or misleading.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PUBLIC COMPANY
Public Company hereby represents and warrants to Holding Co and the
Shareholders as follows (it being acknowledged that Holding Co and the
Shareholders are entering into this Agreement in material reliance upon each of
the following representations and warranties, and that the truth and accuracy of
each, as evidenced by the execution of this Agreement by a duly authorized
officer of Public Company, constitutes a condition precedent to the obligations
of Holding Co and the Shareholders hereunder):
5.1 Organization, Standing and Power.
Public Company is duly organized, validly existing and in good standing
under the laws of Delaware and has the requisite corporate power and authority
to carry on its business as now being conducted. Public Company is duly
qualified or licensed to do business and is in good standing in each
jurisdiction in which the nature of its business or the ownership or leasing of
its properties makes such qualification or licensing necessary, other than in
such jurisdictions where the failure to be so qualified or licensed
(individually or in the aggregate) would not have a Public Company Material
Adverse Effect. For purposes of this Agreement, the term "PUBLIC COMPANY
MATERIAL ADVERSE EFFECT" means any
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Material Adverse Effect with respect to Public Company, taken as a whole, or any
change or effect that adversely, or is reasonably expected to adversely, affect
the ability of Public Company to consummate the transactions contemplated by
this Agreement in any material respect or materially impairs or delays Public
Company's ability to perform its obligations hereunder. Public Company has made
available to Holding Co complete and correct copies of its charter documents and
bylaws.
5.2 Capital Structure.
As of the Effective Date, the authorized capital stock of Public Company
consists of 100,000,000 shares of Public Company Stock and 20,000,000 shares of
preferred stock, $0.001 par value. Immediately following the Closing, there will
be 23,027,989 shares of common stock of Public Company issued and outstanding
and no shares of preferred stock issued and outstanding. No shares of common
stock or preferred stock of Public Company will be held by Public Company in its
treasury. All outstanding shares of capital stock of Public Company will have
been duly authorized and validly issued, and will be fully paid and
nonassessable and not subject to preemptive or similar rights. No bonds,
debentures, notes or other indebtedness of Public Company having the right to
vote (or convertible into, or exchangeable for, securities having the right to
vote) on any matters on which the stockholders of Public Company may vote are
issued or outstanding. Except for this Agreement, Public Company does not have,
and at or after Closing will not have, any outstanding option, warrant, call,
subscription or other right, agreement or commitment which either (a) obligates
Public Company to issue, sell or transfer, repurchase, redeem or otherwise
acquire or vote any shares of the capital stock of Public Company, or (b)
restricts the voting, disposition or transfer of shares of capital stock of
Public Company. There are no outstanding stock appreciation rights or similar
derivative securities or rights of Public Company.
5.3 Authority: Noncontravention.
Public Company has the requisite corporate power and authority to enter
into this Agreement and to consummate the transactions contemplated by this
Agreement. The execution, delivery and performance of this Agreement by Public
Company and the consummation by Public Company of the transactions contemplated
hereby have been duly authorized by all necessary corporate action on the part
of Public Company. This Agreement has been duly executed and delivered by Public
Company and, assuming this Agreement constitutes the valid and binding agreement
of Holding Co and the Shareholders, constitutes a valid and binding obligation
of Public Company, enforceable against Public Company in accordance with its
terms, subject to (a) applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other laws of general application affecting the
rights and remedies of creditors, and (b) general principles of equity
(regardless of whether enforceability is considered in a proceeding at law or in
equity). The execution and delivery of this Agreement do not, and the
consummation of the transactions contemplated by this Agreement and compliance
with the provisions hereof, will not, (x) conflict with any of the provisions of
the charter documents or bylaws of Public Company, (y) subject to the
governmental filings and other matters referred to in the following sentence,
conflict with, result in a breach of or default (with or without notice or lapse
of time, or both) under, or give rise to a right of first refusal, termination,
cancellation or acceleration of any obligation (including to pay any sum of
money) or loss of a benefit under, or require the consent of any Person under,
any indenture or other agreement, Permit, concession, ground lease or similar
instrument or undertaking to which Public Company is a party or by which Public
Company or any of its assets are bound or affected, result in the creation or
imposition of a Lien against any material asset of Public Company, which, singly
or in the aggregate, would have a Public Company Material Adverse Effect, or (z)
subject to the governmental filings and other matters referred to in the
following sentence, contravene any law, rule or regulation, or any order, writ,
judgment, injunction, decree, determination or award binding on Public Company
currently in effect, which in the case of clauses (y) and (z) above, singly or
12
in the aggregate, would have a Public Company Material Adverse Effect. Except as
required by applicable federal securities law, no consent, approval or
authorization of, or declaration or filing with, or notice to, any Governmental
Entity or any third party which has not been received or made is required by or
with respect to Public Company in connection with the execution and delivery of
this Agreement by Public Company or the consummation by Public Company of the
transactions contemplated hereby, except for consents, approvals,
authorizations, declarations, filings and notices that, if not obtained or made,
will not, individually or in the aggregate, result in a Public Company Material
Adverse Effect.
5.4 Subsidiaries.
Except for Playlogic Entertainment, Inc., Public Company does not own,
directly or indirectly, any of the capital stock of any other corporation or any
equity, profit sharing, participation or other interest in any corporation,
partnership, joint venture or other entity.
5.5 Intellectual Property.
Public Company does not own or use any trademarks, trade names, service
marks, patents, copyrights or any applications with respect thereto. Public
Company has no Knowledge of any claim that, or inquiry as to whether, any
product, activity or operation of Public Company infringes upon or involves, or
has resulted in the infringement of, any trademarks, trade names, service marks,
patents, copyrights or other proprietary rights of any other Person, corporation
or other entity; and no proceedings have been instituted, are pending or are
threatened with respect thereto.
5.6 Absence of Certain Changes or Events; No Undisclosed Material Liabilities.
(a) The Shareholders have been provided with the audited financial
statements of Public Company as of December 31, 2004 ( the "FINANCIAL
STATEMENTS"). Except as otherwise disclosed in its filings or public record with
the Securities and Exchange Commission, Public Company has conducted its
business only in the ordinary course, and there has not been (i) any change,
destruction, damage, loss or event which has had or could reasonably be expected
to have, individually or in the aggregate a Public Company Material Adverse
Effect; (ii) any declaration, setting aside or payment of any dividend or other
distribution in respect of shares of Public Company's capital stock, or any
repurchase, redemption or other acquisition by Public Company of any shares of
their respective capital stock or equity interests, as applicable; (iii) any
increase in the rate or terms of compensation payable or to become payable by
Public Company to its directors, officers or key employees; (iv) any entry into,
or increase in the rate or terms of, any bonus, insurance, severance, pension or
other employee or retiree benefit plan, payment or arrangement made to, for or
with any such directors, officers or employees; (v) any entry into any
agreement, commitment or transaction by Public Company, or waiver, termination,
amendment or modification to any agreement, commitment or transaction, which is
material to Public Company taken as a whole; (vi) any material labor dispute
involving the employees of Public Company; (vii) any change by Public Company in
accounting methods, principles or practices except as required or permitted by
GAAP; (viii) any write-off or write-down of, or any determination to write-off
or write-down, any asset of Public Company or any portion thereof; (ix) any
split, combination or reclassification of any of Public Company's capital stock
or issuance or authorization relating to the issuance of any other securities in
respect of, in lieu of or in substitution for shares of Public Company's capital
stock; (x) any amendment of any material term of any outstanding security of
Public Company; (xi) any loans, advances or capital contributions to or
investments in, any other Person in existence on the Effective Date made by
Public Company; (xii) any sale or transfer by Public Company of any of the
assets of Public Company; (xiii) cancellation of any material debts or claims or
waiver of any material rights by Public Company; or (xiv) any agreements by
Public Company to (a) do any of the things described in the preceding clauses
(i)
13
through (xiii) other than as expressly contemplated or provided for herein or
(b) take, whether in writing or otherwise, any action which, if taken prior to
the Effective Date, would have made any representation or warranty of Public
Company in this Agreement untrue or incorrect in any material respect.
(b) Public Company has no Liabilities, except as set forth in the
Financial Statements or otherwise incurred in the ordinary course of business.
5.7 Books and Records.
The books of account and other financial Records of Public Company, all of
which have been made available to Holding Co, are complete and correct and
represent actual, bona fide transactions and have been maintained in accordance
with sound business practices and the requirements of Section 13(b)(2) of the
Exchange Act.
5.8 Employees.
Except with regard to Xxxxxxx X. Xxxxxx, Public Company's sole officer and
director, Public Company (a) has no employees, (b) does not owe any compensation
of any kind, deferred or otherwise, to any current or previous employees, (c)
has no written or oral employment agreements with any officer or director of
Public Company or (d) is not a party to or bound by any collective bargaining
agreement. There are no loans or other obligations payable or owing by Public
Company to any stockholder, officer, director or employee of Public Company, nor
are there any loans or debts payable or owing by any of such persons to Public
Company or any guarantees by Public Company of any loan or obligation of any
nature to which any such Person is a party.
5.9 Employee Benefit Plans.
Public Company has no (a) non-qualified deferred or incentive compensation
or retirement plans or arrangements, (b) qualified retirement plans or
arrangements, (c) other employee compensation, severance or termination pay or
welfare benefit plans, programs or arrangements or (d) any related trusts,
insurance contracts or other funding arrangements maintained, established or
contributed to by Public Company.
5.10 Compliance with Applicable Laws.
Public Company has and after giving effect to the transactions
contemplated hereby will have in effect all Permits necessary for it to own,
lease or operate its properties and assets and to carry on its business as now
conducted, and to the Knowledge of Public Company there has occurred no default
under any such Permit, except for the lack of Permits and for defaults under
Permits which individually or in the aggregate would not have a Public Company
Material Adverse Effect. To Public Company's Knowledge, Public Company is in
compliance with, and has no liability or obligation under, any applicable
statute, law, ordinance, rule, order or regulation of any Governmental Entity,
including any liability or obligation to undertake any remedial action under
Hazardous Substances Laws (as hereinafter defined), except for instances of
non-compliance, liabilities or obligations, which individually or in the
aggregate would not have a Public Company Material Adverse Effect.
5.11 Insurance.
Public Company has no insurance policies in effect.
14
5.12 Litigation, etc.
As of the Effective Date, (a) there is no suit, claim, action or
proceeding (at law or in equity) pending or, to the Knowledge of Public Company,
threatened against Public Company (including, without limitation, any product
liability claims) before any court or governmental or regulatory authority or
body, and (b) Public Company is not subject to any outstanding order, writ,
judgment, injunction, order, decree or arbitration order that, in any such case
described in clauses (a) and (b), (i) could reasonably be expected to have,
individually or in the aggregate, a Public Company Material Adverse Effect or
(ii) involves an allegation of criminal misconduct or a violation of the
Racketeer and Influenced Corrupt Practices Act. As of the Closing, there are no
suits, actions, claims or proceedings pending or, to Public Company's Knowledge,
threatened, seeking to prevent, hinder, modify or challenge the transactions
contemplated by this Agreement.
5.13 Contracts.
Except for its contract with Securities Transfer Corporation, a Texas
corporation ("STC"), pursuant to which STC acts as the Public Company's stock
transfer agent, Public Company has no material contracts, leases, arrangements
or commitments (whether oral or written) and is not a party to or bound by or
affected by any contract, lease, arrangement or commitment (whether oral or
written) relating to: (a) the employment of any Person; (b) collective
bargaining with, or any representation of any employees by, any labor union or
association; (c) the acquisition of services, supplies, equipment or other
personal property; (d) the purchase or sale of real property; (e) distribution,
agency or construction; (f) lease of real or personal property as lessor or
lessee or sublessor or sublessee; (g) lending or advancing of funds; (h)
borrowing of funds or receipt of credit; (i) incurring any obligation or
liability; or (j) the sale of personal property.
5.14 Real Property.
Public Company does not own or lease any real property.
5.15 Quotation.
As of the Effective Date, the Public Company Stock will remain eligible
for quotation on the NASD Over-the-Counter Bulletin-Board.
5.16 Filings.
Prior to the Effective Date, Public Company has filed all reports required
to be filed by it under the Securities Exchange Act. All such reports do not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements and information contained therein
not false or misleading
5.17 Environmental Matters.
Public Company has not received any written notice from any Governmental
Entity that there exists any violation of any Hazardous Substances Law (as
hereinafter defined). Public Company has no Knowledge (a) of any Hazardous
Substances (as hereinafter defined) present on, under or about any Public
Company asset, and to Public Company's Knowledge no discharge, spillage,
uncontrolled loss, seepage or filtration of Hazardous Substances has occurred
on, under or about any Public Company asset, (b) that any Public Company assets
violates, or has at any time violated, any Hazardous Substance Laws,
15
and (c) that there is a condition on any asset for which Public Company has an
obligation to undertake any remedial action pursuant to Hazardous Substance
Laws. For purposes hereof, "HAZARDOUS SUBSTANCES" means, without limitation (i)
those substances included within definitions of any one or more of the terms
"Hazardous Substance," and "Hazardous Waste," "Toxic Substance" and "Hazardous
Material" in the Comprehensive Environmental Response Compensation and Liability
Act, 42 U.S.C. Section 90,601, et seq., the Resource Conservation and Recovery
Act, 42 U.S.C. Section 6901, et seq., the Toxic Substances Control Act, 15
U.S.C. Section 2601, et seq., the Hazardous Materials Transportation Act, 49
U.S.C. Section 1801 et seq., the Occupational Safety and Health Act, 29 U.S.C.
Section 651, et seq., (insofar as it relates to employee health and safety in
relation to exposure to Hazardous Substances) and any other local, state,
federal or foreign laws or regulations related to the protection of public
health or the environment (collectively, "HAZARDOUS SUBSTANCES LAWS"); (ii) such
other substances, materials or wastes as are or become regulated under, or as
are classified as hazardous or toxic under Hazardous Substance Laws; and (iii)
any materials, wastes or substances that can be defined as (v) petroleum
products or wastes; (w) asbestos; (x) polychlorinated biphenyl; (y) flammable or
explosive; or (z) radioactive.
5.18 Anti-takeover Plan: State Takeover Statutes.
Public Company does not have in effect any plan, scheme, device or
arrangement, commonly or colloquially known as a "poison pill" or
"anti-takeover" plan or any similar plan, scheme, device or arrangement. The
Board of Directors of Public Company has approved this Agreement. No other state
takeover statute or similar statute or regulation applies or purports to apply
to the Exchange, this Agreement or any of the transactions contemplated by this
Agreement.
5.19 Taxes.
Public Company has filed all required material federal, state and foreign
income and franchise tax returns (or has duly filed extensions thereto) and has
paid or accrued all taxes shown as due thereon, and Public Company has no
knowledge of a tax deficiency which has been or might be asserted or threatened
against it which is reasonably likely to have a Public Company Material Adverse
Effect.
5.20 Solicitation.
None of Public Company, its officers, directors, Affiliates or agents, or
any other Person acting on its behalf has solicited, directly or indirectly, any
Person to enter into a merger or similar business combination transaction with
Public Company by any form of general solicitation, including, without
limitation, any advertisement, article, notice or other communication published
in any newspaper, magazine or similar media or broadcast over television or
radio or any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising.
5.21 Disclosure.
The representations and warranties and statements of fact made by Public
Company in this Agreement are, as applicable, accurate, correct and complete and
do not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements and information
contained herein not false or misleading.
ARTICLE VI
INDEMNIFICATION
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6.1 Indemnification of Holding Co and Shareholders.
(a) Public Company shall, from and after the Closing, indemnify, defend
and hold harmless the Shareholders, Holding Co, and Holding Co's officers,
directors, Affiliates or agents, and any other Person acting on its behalf (the
"HOLDING CO INDEMNIFIED PARTIES") against all losses, claims, damages, costs,
expenses (including reasonable attorneys' fees and expenses), liabilities or
judgments or amounts that are paid in settlement with the approval of the
indemnifying party (the "HOLDING CO INDEMNIFIED LIABILITIES") based on, or
arising out of, any breach of Public Company's representations, warranties,
covenants or other obligations contained in this Agreement by Public Company ,
in each case, to the fullest extent permitted under the laws of the State of
Delaware.
(b) The Holding Co Indemnified Parties shall have the right to conduct the
defense of any action giving rise to a claim for indemnity under this Agreement
with counsel of their own choosing. Holding Co, the Shareholders and Public
Company agree that all rights to indemnification, including provisions relating
to advances of expenses incurred in defense of any action or suit, existing in
favor of the Holding Co Indemnified Parties with respect to matters occurring
through the Closing, shall survive the Exchange and shall continue in full force
and effect for a period of not less than two years from the Closing; provided,
however, that all rights to indemnification in respect of any Holding Co
Indemnified Liabilities asserted or made within such period shall continue until
the disposition of such Holding Co Indemnified Liabilities.
(c) The provisions of this Section 6.1 are intended to be for the benefit
of, and shall be enforceable by, each Holding Co Indemnified Party, his or her
heirs and his or her personal representatives and shall be binding upon all
successors and assigns of Public Company and Holding Co.
6.2 Indemnification of Public Company.
(a) Holding Co shall, from and after the Closing, indemnify, defend and
hold harmless Public Company and Public Company's officers, directors,
Affiliates or agents, and any other Person acting on its behalf (the "PUBLIC
COMPANY INDEMNIFIED Parties") against all losses, claims, damages, costs,
expenses (including reasonable attorneys' fees and expenses), liabilities or
judgments or amounts that are paid in settlement with the approval of the
indemnifying party (the "PUBLIC COMPANY INDEMNIFIED LIABILITIES") based on, or
arising out of, or pertaining to any breach of Holding Co or Playlogic's
representations, warranties, covenants or other obligations contained in this
Agreement by Holding Co or Playlogic , in each case, to the fullest extent
permitted under the laws of the State of Delaware and the Netherlands.
(b) The Public Company Indemnified Parties shall have the right to conduct
the defense of any action giving rise to a claim for indemnity under this
Agreement with counsel of their own choosing. Holding Co, the Shareholders and
Public Company agree that all rights to indemnification, including provisions
relating to advances of expenses incurred in defense of any action or suit,
existing in favor of the Public Company Indemnified Parties with respect to
matters occurring through the Closing, shall survive the Exchange and shall
continue in full force and effect for a period of not less than two years from
the Closing; provided, however, that all rights to indemnification in respect of
any Public Company Indemnified Liabilities asserted or made within such period
shall continue until the disposition of such Public Company Indemnified
Liabilities.
(c) The provisions of this Section 6.2 are intended to be for the benefit
of, and shall be enforceable by, each Public Company Indemnified Party, his or
her heirs and his or her personal representatives and shall be binding upon all
successors and assigns of Public Company and Holding Co.
17
ARTICLE VII
CONDITIONS PRECEDENT
7.1 Conditions to Each Party's Obligation to Effect the Exchange.
The respective obligation of each party to effect the Exchange is subject
to the satisfaction or written waiver of the following conditions:
(a) No Injunctions or Restraints. No statute, rule, regulation, temporary
restraining order, preliminary or permanent injunction or other order issued by
any court of competent jurisdiction or other legal restraint or prohibition
preventing the consummation of the Exchange shall be in effect; provided,
however, that the party invoking this condition shall use its best efforts to
have any such temporary restraining order, injunction, order, restraint or
prohibition vacated.
(b) Governmental and Regulatory Consents. All material filings required to
be made prior to the Closing with, and all material consents, approvals, permits
and authorizations required to be obtained prior to the Closing from,
Governmental Entities, in connection with the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby by
Holding Co and Public Company will have been made or obtained (as the case may
be).
7.2 Conditions to Obligations of Holding Co and the Shareholders.
The obligations of Holding Co and the Shareholders to effect the Exchange
are further subject to the satisfaction or written waiver on or prior to the
Closing of the following conditions:
(a) Representations and Warranties. The representations and warranties of
Public Company set forth in ARTICLE V that are qualified as to materiality or
Material Adverse Effect shall be true and correct and the representations and
warranties of Public Company set forth in ARTICLE V that are not so qualified
shall be true and correct in all material respects, in each case as of the
Closing, except to the extent such representations and warranties speak as of an
earlier date. In addition, all such representations and warranties shall be true
and correct as of the Closing, except to the extent such representation or
warranty speaks of an earlier date (without regard to any qualifications for
materiality or Material Adverse Effect) except to the extent that any such
failure to be true and correct (other than any such failure the effect of which
is immaterial) individually and in the aggregate with all such other failures
would not have a Material Adverse Effect.
(b) Performance of Obligations of Public Company. Public Company shall
have performed in all material respects all obligations required to be performed
by it under this Agreement at or prior to the Closing.
(c) Board Representation and Officers. At the Closing and pursuant to a
written consent to action of the Board of Directors of Public Company, the Board
of Directors (a) shall appoint Xxxxxx Xxxx, X. X. Xxxxx and X. X. X. xxx Xxxxx
as members of the Board of Directors (effective upon the expiration of any time
periods required by applicable law), and (b) all existing officers and directors
shall resign as officers and directors of Public Company (effective upon the
expiration of any time periods required by applicable law), and the Board of
Directors of Public Company shall appoint Xxxxxx Xxxx as President and Chief
Executive Officer and Xxx van de Voort as Chief Financial Officer, Treasurer and
Secretary.
7.3 Conditions to Obligations of Public Company.
18
The obligation of Public Company to effect the Exchange is further subject
to the satisfaction or written waiver on or prior to Closing of the following
conditions:
(a) Representations and Warranties. The representations and warranties of
Holding Co set forth in ARTICLE IV and the Shareholders set forth in ARTICLE III
that are qualified as to materiality or Material Adverse Effect shall be true
and correct and the representations and warranties of Holding Co set forth in
ARTICLE IV and the Shareholders set forth in ARTICLE III that are not so
qualified shall be true and correct in all material respects, in each case as of
the Closing. In addition, all such representations and warranties shall be true
and correct as of the Closing, except to the extent such representation or
warranty speaks of an earlier date (without regard to any qualifications for
materiality or Material Adverse Effect) except to the extent that any such
failure to be true and correct (other than any such failure the effect of which
is immaterial) individually and in the aggregate with all such other failures
would not have a Material Adverse Effect.
(b) Performance of Obligations of Holding Co and the Shareholders. Holding
Co and the Shareholders shall have performed in all material respects all
obligations required to be performed by them under this Agreement at or prior to
the Closing.
(c) Current Report. Simultaneously with the Closing, Public Company shall
have been provided the information necessary for it to file with the Securities
and Exchange Commission a Current Report on Form 8-K to report the transactions
contemplated herein.
7.4 Frustration of Closing Conditions.
None of Public Company, the Shareholders or Holding Co may rely on the
failure of any condition set forth in Sections 7.1, 7.2 or 7.3, as the case may
be, to be satisfied if such failure was caused by such party's failure to use
reasonable efforts to commence or complete the Exchange and the other
transactions contemplated by this Agreement.
ARTICLE VIII
GENERAL PROVISIONS
8.1 Survival of Representations and Warranties.
Except as otherwise contemplated herein, the representations and
warranties in this Agreement and in any instrument delivered pursuant to this
Agreement shall survive the Closing for a period of two years.
8.2 Fees and Expenses.
Each party hereto shall pay its own expenses incident to preparing for,
entering into and carrying out this Agreement and the consummation of the
transactions contemplated hereby.
Definitions.
For purposes of this Agreement, and except as otherwise defined in this
Agreement:
(a) "AFFILIATE" of any person means another person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first person;
19
(b) "GOVERNMENTAL ENTITY" means any domestic or foreign governmental
agency or regulatory authority;
(c) "KNOWLEDGE" means actual knowledge. In order for an individual to have
Knowledge of a fact or matter, the individual must be actually aware of that
fact or matter. A Person (other than an individual) will be deemed to have
Knowledge of a particular fact or matter if any individual who is serving, or
who has at any time served, as a director, officer, partner, executor or trustee
of that Person (or in any similar capacity) has, or at any time had, Knowledge
of that fact or matter.
(d) "LIENS" means, collectively, all material pledges, claims, liens,
charges, mortgages, conditional sale or title retention agreements,
hypothecations, collateral assignments, security interests, easements and other
encumbrances of any kind or nature whatsoever;
(e) "MATERIAL ADVERSE EFFECT" with respect to any Person means an event
that has had or would reasonably be expected to have a material adverse effect
on the business, financial condition or results of operations of such Person and
its subsidiaries taken as a whole;
(f) "PERMITS" means federal, state, local and foreign governmental
approvals, authorizations, certificates, filings, franchises, licenses, notices,
permits an rights; and
(g) "PERSON" means an individual, corporation, partnership, joint venture,
association, trust, unincorporated organization or other entity.
(h) "RECORD" means information that is inscribed on a tangible medium or
that is stored in an electronic or other medium and is retrievable in
perceivable form.
(i) "SECURITIES ACT" means the Securities Act of 1933, as amended.
(j) "SECURITIES EXCHANGE ACT" means the Securities Exchange Act of 1934,
as amended.
8.3 Usage.
In this Agreement, unless a clear contrary intention appears:
(a) the singular number includes the plural number and vice versa;
(b) reference to any Person includes such Person's successors and assigns
but, if applicable, only if such successors and assigns are not prohibited by
this Agreement, and reference to a Person in a particular capacity excludes such
Person in any other capacity or individually;
(c) reference to any gender includes each other gender or, in the case of
an entity, the neuter;
(d) reference to any agreement, document or instrument means such
agreement, document or instrument as amended or modified and in effect from time
to time in accordance with the terms thereof, and shall be deemed to refer as
well to all addenda, exhibits and schedules;
(e) reference to a Section or Schedule, such reference shall be to a
Section of, or a Schedule to, this Agreement unless otherwise indicated
20
(f) reference to any law means such law as amended, modified, codified,
replaced or reenacted, in whole or in part, and in effect from time to time,
including rules and regulations promulgated thereunder and reference to any
section or other provision of any law means that provision of such law from time
to time in effect and constituting the substantive amendment, modification,
codification, replacement or reenactment of such section or other provision;
(g) the table of contents and headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(h) "hereunder", "hereof", "hereto" and words of similar import shall be
deemed references to this Agreement as a whole and not to any particular
Article, Section or other provision thereof;
(i) "including" (and with correlative meaning "include") means including
without limiting the generality of any description preceding such term;
(j) "or" is used in the inclusive sense of "and/or;" and
(k) with respect to the determination of any period of time, "from" means
"from and including" and "to" means "to but excluding."
8.4 Notices.
All notices, requests, claims, demands and other communications under this
Agreement shall be in writing and shall be deemed given if delivered personally
or sent by overnight courier (providing proof of delivery) to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
(a) if to Public Company prior to the Closing to:
Xxxxxxx X. Xxxxxx
00000 Xxxxxxx Xxxx
Xxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
(b) if to Holding Co and to Public Company after the Closing to
c/o 747 Capital LLC
000 Xxxxx Xxxxxx, Xxxxx 00-X
Xxx Xxxx, Xxx Xxxx
Attn: Xxxx xxx Xxxxx
Telephone: (000) 000-0000
with a copy to:
Xxxx Xxxxxx
Xxxxxx Xxxxxx LLP
0 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
8.5 Counterparts.
21
This Agreement may be executed in two or more counterparts.
8.6 Entire Agreement; Third-Party Beneficiaries.
This Agreement constitutes the entire agreement, and supersedes all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter of this Agreement. This Agreement is not intended
to confer upon any Person other than the parties hereto and the third party
beneficiaries referred to in the following sentence, any rights or remedies. The
parties hereto expressly intend the provisions of Sections 6.1 and 6.2 to confer
a benefit upon and be enforceable by, as third party beneficiaries of this
Agreement, the third Persons referred to in, or intended to be benefited by,
such provisions.
8.7 Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF DELAWARE REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN
UNDER APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
8.8 Assignment.
Neither this Agreement nor any of the rights, interests or obligations
under this Agreement shall be assigned, in whole or in part, by operation of law
or otherwise by any of the parties without the prior written consent of the
other parties, and any such assignment that is not consented to shall be null
and void. Subject to the preceding sentence, this Agreement will be binding
upon, inure to the benefit of, and be enforceable by, the parties and their
respective successors and assigns.
8.9 Enforcement.
The parties agree that irreparable damage would occur in the event that
any of the provisions of this Agreement were not performed in accordance with
their specific terms or were otherwise breached. It is accordingly agreed that
the parties shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
of this Agreement in any court of the United States located in the State of
Delaware, this being in addition to any other remedy to which they are entitled
at law or in equity.
8.10 Severability.
Whenever possible, each provision or portion of any provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law but if any provision or portion of any provision of this
Agreement is held to be invalid, illegal or unenforceable in any respect under
any applicable law or rule in any jurisdiction, so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party, such invalidity, illegality or unenforceability
will not affect any other provision or portion of any provision in such
jurisdiction, and this Agreement will be reformed, construed and enforced in
such jurisdiction as if such invalid, illegal or unenforceable provision or
portion of any provision had never been contained herein.
22
IN WITNESS WHEREOF, Public Company, Holding Co and the Shareholders have
executed this Agreement to be effective as of the Effective Date.
DONAR ENTERPRISES, INC.
By:__________________________
Xxxxxxx X. Xxxxxx, Chief Executive Officer
PLAYLOGIC INTERNATIONAL, N.V.
By:__________________________
Xxxxxx X. Xxxx, Chief Executive Officer
SHAREHOLDERS
BY: PLAYLOGIC INTERNATIONAL, N.V.
By: ________________________
Xxxxxx X. Xxxx, Chief Executive Officer
23
