PURCHASE AGREEMENT Dated as of August __, 2006 Skreem Entertainment Corp Acquisition of Weaver Interactive, Inc.
PURCHASE
AGREEMENT
Dated
as
of August __, 2006
Acquisition
of
Xxxxxx
Interactive, Inc.
Purchase
Agreement, dated as of August __, 2006, between the shareholders (individually
“Seller” and collectively “Sellers”) of Xxxxxx Interactive, Inc. a company
formed and existing under the laws of South Korea (the “Company”) doing business
at 751 Bd, 000 Xxxxxxx-Xxxx Xxxxxxx-Xx Xxxxx Xxxxx, and Skreem Entertainment.
Corp, a company formed and existing under the laws of the State of Delaware
(the
“Purchaser” or “SKRM”), doing business at 00000 Xxxxxxxxx Xxxxxx Xxxxxxx XX
00000.
RECITALS
WHEREAS,
the shareholders of Xxxxxx Interactive, Inc., (the “Company”) desire to sell 51%
of their shares of the Company to the Purchaser, for shares of common stock
of
the Purchaser (Sellers’ shares of common stock of the Company are hereinafter
referred to as the “Shares”); and
WHEREAS,
Skreem Entertainment Corp., the Purchaser, has offered to purchase 51% of the
Shares.
NOW
THEREFORE, in consideration of the mutual covenants and undertakings and other
good and valuable consideration, the receipt of which is hereby acknowledged,
the parties, intending to be bound, agree as follows:
ARTICLE
I
PURCHASE,
SALE AND TERMS OF SHARES
|
1.1.
|
Purchase
and Sale.
The Sellers agree to sell and Purchaser agrees to purchase 51% of
the
Shares the Company on the terms and subject to the conditions hereinafter
set forth. Currently the Company has 1,170,000 shares issued and
outstanding.
|
|
1.2.
|
Terms.
The
purchase price to be paid by the Purchaser to the Sellers for 51%
of
shares of the Company, are as
follows:
|
|
A.
|
Purchaser
shall issue a total of 3,000,000 shares of common stock to the Sellers.
All shares shall be subject to the restrictions of Rule 144 of the
Securities and Exchange Commission;
|
|
B.
|
Purchaser
shall provide a loan to the Company in the total amount of FIVE HUNDRED
THOUSAND DOLLARS ($500,000) to the Company in cash, loan payback
will be
represented by a promissory note signed from the Company, the principle
plus 21% interest terms of two-year Note, with $100,000 to be loaned
at
the execution of this Agreement, as a good-faith deposit. Interest
accrues
for two years at 21% and is due and payable at the two-year anniversary
from signed date.
|
|
C.
|
The
Company will have 90 days to provide a US GAAP Audit. The Company
will pay
their own auditing costs, which will include the years 2004, 2005
and
through August 2006, AND will continue to provide and pay for, their
quarterly audits, delivered to Purchaser’s auditor’s within 15-20 days
after the end of each quarter. The Company will incur any penalties
or
late filing fees if not provided on a timely basis, and SKRM, will
have
the right to place a hold with the transfer agent on any shares of
SKRM
given to the Company as part of this transaction, until the audits
are
delivered. Within 5 days of receipt of accepted Xxxxxx US GAAP audit,
SKRM
will:
|
| a. |
Wire
to Xxxxxx $400,000
|
| b. |
Issue
to Xxxxxx’x list of shareholders 3 million SKRM shares for 51% of Xxxxxx
Interactive Inc.’s shares. Xxxxxx will provide the full name, address,
age, and copy of national identification card or driver’s license on each
shareholder/or if corporation, name and address of corporation, to
be
provided to the Transfer Agent.
|
|
D.
|
The
Company will become a subsidiary of SKRM, but will continue to operate
completely and fully independently.
|
|
E.
|
As
an incentive to The Company, if The Company is able to show $3 million
USD
in sales during their calendar year 2007, with $300,000 net as a
minimum,
SKRM will issue The Company an option for an additional 1 million
shares
of SKRM stock.
|
|
F.
|
SKRM
will appoint Xxxxxx Xxxxxx as SKRM’s representative in all dealings with
The Company and will be part of a to-be-formed Board of Advisors
brought
together by The Company to develop synergies between the companies,
international marketing opportunities and help prepare The Company
to be
spun-off.
|
|
G.
|
The
company will appoint Xxxx Xxxx / International Business & Marketing
Director as Xxxxxx interactive’s representative in all dealings with
SKRM.
|
2
|
1.3.
|
The
Closing.
The Closing shall take place at the offices of the Purchaser, 00000
Xxxxxxxxx Xxxxxx, Xxxxxxx, XX 00000 on _______, 2006, (the “Closing
Date”), or such other date and place as the parties shall agree to in
writing. The closing will be by fax with signed original sent to
Skreem at
the below address.
Date of closing is on or before 90 days from signing of document
when
US GAAP audit is due.)
|
|
1.4
|
Representations
by the Purchaser.
The Purchaser makes the following representations and warranties
to the
Company:
|
|
A.
|
Access
to Information
The Purchaser, in making the decision to purchase the Shares, has
relied
upon the representations and warranties contained in this Agreement
as
well as independent investigations made by it and/or its representatives,
if any.
|
|
B.
|
Sophistication
and Knowledge.
The Purchaser and/or its representatives has such knowledge and experience
in financial and business matters that it can represent itself and
is
capable of evaluating the merits and risks of the purchase of the
Shares.
|
|
C.
|
Authority.
The Purchaser has full right and power to enter into and perform
pursuant
to this Agreement and make an investment in the Company, and this
Agreement constitutes the Purchaser’s valid and legally binding
obligation, enforceable in accordance with its terms. The Purchaser
is
authorized and otherwise duly qualified to purchase and hold the
Shares
and to enter into this Agreement.
|
|
D.
|
Brokers
or Finders.
No person has or will have, as a result of the transactions contemplated
by this Agreement, any right, interest or valid claim against or
upon the
Company for any commission, fee or other compensation as a finder
or
broker because of any act or omission by such Purchaser or its respective
agents.
|
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES OF THE SELLERS
REGARDING
THE COMPANY
Each
Seller, severally, makes the following representations and warranties to
Purchaser as of the date hereof and as of the Closing Date, unless a different
date is specifically provided herein.
3
|
2.1.
|
Organization and Standing.
The Company has been duly incorporated and is validly existing and
in good
standing under the laws of South Korea and has the requisite corporate
power and authority necessary to own its properties and to conduct
its
business as presently conducted. The Company is duly qualified to
transact
business as a foreign corporation and is in good standing in every
jurisdiction in which the failure to so qualify would have a material
adverse effect on the operations or financial condition of the
Company.
|
|
2.2.
|
Subsidiaries.
The Company has no subsidiaries.
|
|
2.3.
|
Capitalization.
The total authorized capital of the Company consists of 6,000,000
shares
of Common Stock, par value 1,000 Korean won per share, of which 1,170,000
are issued and outstanding.
|
|
2.4.
|
Shareholders.
Exhibit A attached hereto accurately and fully reflects the name
and
number of shares owned by each shareholder of the Company (“Shareholders”)
as of the date hereof and whether said shares are subject to any
restriction on transferability. No individual or company identified
in
Exhibit A has any claim against the Company regarding the issuance
or
cancellation of shares of common stock of the
Company.
|
|
2.5.
|
Options
and Rights.
There are no outstanding subscriptions, options, warrants, rights,
securities, contracts, commitments, understandings or arrangements
under which the Company is bound or obligated to issue any additional
shares of its capital stock or rights to purchase shares of its capital
stock (collectively, “Options”).
|
|
2.6.
|
Financial
Statements.
The balance sheets as June 30, 2006 of the Company are
attached hereto as Exhibit B, and fairly present the financial position
of
the Company as at the dates and for the periods indicated.
|
|
2.7.
|
Absence
of Liabilities.
Except as set forth in the Financial Statements, the Company has
no
material liabilities, contingent or otherwise, other than (i) obligations
not required under generally accepted accounting principles to be
reflected in the Financial Statements and (ii) as disclosed on Schedule
2.7 hereto.
|
|
2.8.
|
Absence
of Changes.
Except as set forth on Schedule 2.8 hereto, the Company has conducted
its
business only in the ordinary course of business and there has not
been:
(a) any material adverse change; (b) any amendment or change in the
Company’s authorized or issued capital stock, or Articles of
Incorporation; (c) any declaration, setting aside or payment of any
dividend or distribution (whether in cash, stock or property) in
respect
of, the capital stock of the Company, any purchase, retirement, redemption
or other acquisition of, any grant of any stock option, warrant or
other
right to purchase shares of, or the grant of any registration rights
with
respect to, the capital stock of the Company; (d) any cancellation
of, or
agreement to cancel any indebtedness or obligation owing to the Company;
(e) any amendment, modification or termination of any existing permits
or
contracts, or entering into any new Contract or plan relating to
any
salary, bonus, insurance, pension, health or other employee welfare
or
benefit plan for or with any directors, officers, employees or consultants
of the Company; (f) any entry into any material Contract by the Company
not in the ordinary course of business, including, without limitation,
relating to any borrowing, capital expenditure or the sale or purchase
of
any property, rights, or assets or any options or similar agreements
with
respect to the foregoing; (g) any disposition by the Company of any
material asset; or (h) any change by the Company in accounting methods
or
principles.
|
4
|
2.9.
|
Litigation.
There is no action, suit, proceeding or investigation pending or,
to the
Sellers’ knowledge, is currently threatened, against the Company, except
as described on Schedule 2.9 to this Agreement. The Sellers are not
aware
of any basis for any of the foregoing or any intent on its part to
initiate any of the foregoing.
|
|
2.10.
|
Consents;
Contracts.
No consent of any party to any contract or from any authority is
required
in connection with the execution, delivery or performance
of this Agreement, or the consummation of the transactions contemplated
hereby, except for such consents that are obtained, in form and substance
reasonably acceptable to Purchaser, and delivered to Purchaser at
the
Closing. Each material Contract to which the Company is a party is
in full
force and effect and is valid and enforceable in accordance with
its
terms. The Company has performed in all material respects all obligations
required to be performed by it and (i) is not in default in any respect
under or in breach of, and (ii) is not in receipt of any claim of
default
or breach under any material Contract. No event has occurred which
with
the passage of time or the giving of notice or both would result
in a
default, breach
or event of non-compliance under any material Contract to which the
Company is subject (including without limitation all performance
bonds,
warranty obligations or otherwise).
|
5
|
2.12.
|
Compliance.
The Company has, in all material respects, complied with all laws,
regulations and orders applicable to their business and have all
material
permits and licenses required thereby. There is no term or provision
of
any material mortgage, indenture, contract, agreement or instrument
to
which the Company is a party or by which it is bound, or, to the
best of
the Sellers’ knowledge, of any state or Federal judgment, decree, order,
statute, rule or regulation applicable to or binding upon the Company
that
materially adversely affects the business, prospects, condition,
affairs
or operations of the Company or any of its properties or assets.
To the
Sellers’ knowledge, no employee of the Company is in violation of any
contract or covenant (either with the Company or with another entity)
relating to employment, patent, other proprietary information disclosure,
non-competition, or non-solicitation.
|
|
2.13.
|
Books
and Records.
The books of account, ledgers, order books, records and documents
of the
Company accurately and completely reflect all material information
relating to the business of the Company, the location and collection
of
its assets, and the nature of all transactions giving rise to the
obligations or accounts receivable of the
Company.
|
|
2.14.
|
Brokers
or Finders.
The Company has not agreed to incur, directly or indirectly, any
liability
for brokerage or finders’ fees, agents’ commissions or other similar
charges in connection with this Agreement or any of the transactions
contemplated hereby or thereby.
|
|
2.15.
|
Disclosures.
The Sellers and the Company have provided the Purchaser with all
information requested by the Purchaser in connection with their decision
to purchase the Shares. Neither this Agreement, any Exhibit hereto,
nor
any report, certificate or instrument furnished to the Purchaser
or its
agents in connection with the transactions contemplated by this Agreement,
when read together, contains or will contain any material misstatement
of
fact or omits to state a material fact necessary to make the statements
contained herein or therein not
misleading.
|
6
ARTICLE
III
Representations
and Warranties of the Sellers
Each
Seller, individually, and not jointly and severally, makes the following
representations and warranties to Purchaser as of the date hereof and as of
the
Closing Date, unless a different date is specifically provided
herein.
|
3.1
|
Authorization.
Each Seller has full legal right, power and capacity to enter into
this
Agreement and all other agreements, documents, instruments and
certificates contemplated herein or related hereto (collectively
the
“Transaction Documents”) and perform his or her obligations hereunder and
thereunder. Upon execution and delivery of this Agreement by the
parties
hereto and thereto, this Agreement shall constitute the legal, valid
and
binding obligation of each Seller, enforceable against him or her
in
accordance with their respective terms, except as enforceability
may be
limited by bankruptcy, insolvency, reorganization, moratorium or
other
similar laws affecting the enforcement of creditor rights generally
and by
general equitable principles.
|
|
3.2
|
Title.
Each Seller (a) is the sole record and beneficial owner of the Shares
set
forth it the above recitals, which recital is incorporated herein,
free
and clear of all liens or encumbrances, save as disclosed in this
Agreement and (b) has sole managerial and dispositive authority
with respect to such Shares. All proxies granted with respect to
such
Seller's Shares have been validly revoked. Upon delivery to Sellers
by
Purchaser of the Purchase Price at the Closing, each Seller will
convey
their respective Shares, and Purchaser will own and hold, good and
marketable title to the Shares,
free and clear of any and all liens or contractual restrictions or
limitations whatsoever.
|
|
3.3
|
Authorization.
Each Seller has complied with all applicable regulations and orders
in
connection with the execution, delivery and performance of this Agreement,
and the transactions contemplated hereby and thereby. Each Seller
is not
required to submit any notice, report, or other filing with any
governmental authority in connection with such Seller's execution
or
delivery of this Agreement, nor the consummation of the transactions
contemplated hereby. No authorization, consent, approval, exemption
or
notice is required to be obtained by such Seller in connection with
the
execution, delivery, and performance of this Agreement and the
transactions contemplated hereby.
|
7
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES OF BUYER
Buyer
hereby represents and warrants to Seller as follows, which representations
and
warranties are, and as of the Closing Date shall be, true and
correct:
|
4.1
|
Organization and Standing.
The Purchaser has been duly incorporated and is validly existing
and in
good standing under the laws of the State of Delaware and has the
requisite corporate power and authority necessary to own its properties
and to conduct its business as presently conducted. The Company is
duly
qualified to transact business as a foreign corporation and is in
good
standing in every jurisdiction in which the failure to so qualify
would
have a material adverse effect on the operations or financial condition
of
the Company.
|
|
4.2
|
Subsidiaries.
The Purchaser has no subsidiaries.
|
| 4.3 |
Capitalization.
The total authorized capital of the Purchaser consists of 75,000,000
shares of Common Stock, par value $0.001 per share, of which 24,758,950
are issued and outstanding, and 20,000,000 shares of preferred stock,
par
value $0.001 per share.
|
|
4.4
|
Options
and Rights.
There are no outstanding subscriptions, options, warrants, rights,
securities, contracts, commitments, understandings or arrangements
under which the Purchaser
is
bound or obligated to issue any additional shares of its capital
stock or
rights to purchase shares of its capital stock (collectively,
“Purchaser
Options”).
|
|
4.5
|
Financial
Statements.
The balance sheets as June 30, 2005, of the Purchaser are
attached hereto as Exhibit C, and fairly present the financial position
of
the Company as at the dates and for the periods indicated.
|
|
4.6
|
Absence
of Liabilities.
Except as set forth in the Financial Statements, the Purchaser has
no
material liabilities, contingent or otherwise, other than (i) obligations
not required under generally accepted accounting principles to be
reflected in the Financial Statements and (ii) as disclosed on Schedule
4.6 hereto.
|
| 4.7 |
Absence
of Changes.
Except as set forth on Schedule 4.7 hereto, the Purchaser there
has
not been: (a) any material adverse change; (b) any
amendment or change in the Purchaser’s
authorized or issued capital stock, or Articles of Incorporation;
(c) any
declaration, setting aside or payment of any dividend or distribution
(whether in cash, stock or property) in respect of, the capital stock
of
the Purchaser,
any purchase, retirement, redemption or other acquisition of, any
grant of
any stock option, warrant or other right to purchase shares of, or
the
grant of any registration rights with respect to, the capital stock
of the
Purchaser;
(d) any cancellation of, or agreement to cancel any indebtedness
or
obligation owing to the Purchaser;
(e) any amendment, modification or termination of any existing permits
or
contracts, or entering into any new Contract or plan relating to
any
salary, bonus, insurance, pension, health or other employee welfare
or
benefit plan for or with any directors, officers, employees or consultants
of the Purchaser;
(f) any entry into any material Contract by the Purchaser
not in the ordinary course of business, including, without limitation,
relating to any borrowing, capital expenditure or the sale or purchase
of
any property, rights, or assets or any options or similar agreements
with
respect to the foregoing; (g) any disposition by the Purchaser
of
any material asset; or (h) any change by the Purchaser
in
accounting methods or principles.
|
8
|
4.8
|
Litigation.
There is no action, suit, proceeding or investigation pending or,
to the
Sellers’ knowledge, is currently threatened, against the Purchaser, except
as described on Schedule 4.8 to this Agreement. The Purchaser is
not aware
of any basis for any of the foregoing or any intent on its part to
initiate any of the foregoing.
|
|
4.9
|
Consents;
Contracts.
No consent of any party to any contract or from any authority is
required
in connection with the execution, delivery or performance
of this Agreement, or the consummation of the transactions contemplated
hereby, except for such consents that are obtained, in form and substance
reasonably acceptable to Sellers, and delivered to Sellers at the
Closing.
Each material Contract to which the Purchaser
is
a party is in full force and effect and is valid and enforceable
in
accordance with its terms. The Purchaser
has performed in all material respects all obligations required to
be
performed by it and (i) is not in default in any respect under or
in
breach of, and (ii) is not in receipt of any claim of default or
breach
under any material Contract. No event has occurred which with the
passage
of time or the giving of notice or both would result in a default,
breach
or event of non-compliance under any material Contract to which the
Purchaser is subject (including without limitation all performance
bonds,
warranty obligations or otherwise).
|
|
4.10
|
Taxes.
The Purchaser has paid all taxes due as of the date hereof. The Purchaser
has timely filed or has obtained presently effective extensions with
respect to all Federal, state, county, local and foreign tax returns
(collectively, “Tax
Returns”)
that the Purchaser are required to file. The Tax Returns are true
and
correct and all taxes shown thereon to be due have been timely paid,
with
any exceptions permitted by any taxing authority not having a materially
adverse effect on the Purchaser. No penalties or other charges are
or will
become due with respect to any such Tax Returns as the result of
the late
filing thereof. The Purchaser has either paid or established in the
Financial Statements adequate reserves for the payment of all such
taxes
due or claimed to be due by any taxing authority in connection with
any
such Tax Returns. None of the Purchaser 's federal income tax returns
have
been audited by the Internal Revenue Service, and no controversy
with
respect to taxes of any type is pending or, to the knowledge of the
Purchaser, threatened. The Purchaser has withheld or collected from
each
payment made to its employees the amount of all taxes required to
be
withheld or collected therefrom and has paid all such amounts to
the
appropriate taxing authorities when due. Neither the Company nor
any of
its stockholders has ever filed (i) an election pursuant to Section
1362
of the Internal Revenue Code of 1986, as amended (the “Code”),
that the Company be taxed as an S Corporation, or (ii) a consent
pursuant
to Section 341(f) of the Code relating to collapsible corporations.
The
Company intends, pursuant to Section 368(a)1)(b) of the Internal
Revenue
Code that this AGREEMENT refers to a transaction that qualifies as
a tax
free event and is solely based on the reorganization and exchange
of the
voting stock of the acquiring
corporation.
|
9
|
4.11
|
Compliance.
The Purchaser has, in all material respects, complied with all laws,
regulations and orders applicable to their business and have all
material
permits and licenses required thereby. There is no term or provision
of
any material mortgage, indenture, contract, agreement or instrument
to
which the Purchaser is a party or by which it is bound, or, to the
best of
the Sellers’ knowledge, of any state or Federal judgment, decree, order,
statute, rule or regulation applicable to or binding upon the Purchaser
that materially adversely affects the business, prospects, condition,
affairs or operations of the Purchaser or any of its properties or
assets.
To the Sellers’ knowledge, no employee of the Purchaser is in violation of
any contract or covenant (either with the Purchaser or with another
entity) relating to employment, patent, other proprietary information
disclosure, non-competition, or
non-solicitation.
|
|
4.12
|
Books
and Records.
The books of account, ledgers, order books, records and documents
of the
Purchaser accurately and completely reflect all material information
relating to the business of the Purchaser, the location and collection
of
its assets, and the nature of all transactions giving rise to the
obligations or accounts receivable of the
Purchaser.
|
|
4.13
|
Brokers
or Finders.
The Purchaser has not agreed to incur, directly or indirectly, any
liability for brokerage or finders’ fees, agents’ commissions or other
similar charges in connection with this Agreement or any of the
transactions contemplated hereby or
thereby.
|
|
4.14
|
Disclosures.
The Sellers and the Company have provided the Purchaser with all
information requested by the Purchaser in connection with their decision
to purchase the Shares. Neither this Agreement, any Exhibit hereto,
nor
any report, certificate or instrument furnished to the Purchaser
or its
agents in connection with the transactions contemplated by this Agreement,
when read together, contains or will contain any material misstatement
of
fact or omits to state a material fact necessary to make the statements
contained herein or therein not misleading.
|
10
|
4.15
|
SKREEM
Shares.
The SKREEM ENTERTAINMENT CORP Shares to be issued pursuant to this
Agreement, when issued and delivered in accordance with the terms
of this
Agreement, will be duly authorized, validly issued, fully paid, and
nonassessable and free of preemptive
rights.
|
|
4.16
|
SEC
Information Furnished Concerning Buyer.
For the period from January 1, 2004 to the date hereof, Purchaser
has
filed with the Commission those filings and reports required pursuant
to
the Securities and Exchange Act of 1934 (the “SEC
Documents”).
The audited consolidated financial statements for the year ended
March 31,
2006, contained within the SEC Documents have been prepared in accordance
with generally accepted accounting principles consistently applied
(except
as may be otherwise noted therein) and fairly present the consolidated
financial position of Buyer and its subsidiaries as of such date
and the
consolidated results of operations of Buyer and its subsidiaries
for the
year then ended. To Buyer’s knowledge, as of their respective dates, the
SEC Documents, including, but not limited to, the financial statements
contained therein, did not contain any untrue statement of a material
fact
or omit to state a material fact necessary in order to make the statements
made therein, in the light of the circumstances under which they
were
made, not misleading.
|
ARTICLE
V
CLOSING
DELIVERIES
| 5.1 |
Deliveries
by Purchaser.
Purchaser shall deliver the Purchase Price by delivery of the Purchase
Shares as set forth herein.
|
| 5.2 |
Deliveries
by Sellers.
At the Closing, in addition to any other documents or agreements
required
under this Agreement, Sellers shall deliver to Purchaser the following:
|
|
a.
|
Certificates,
in genuine and unaltered form, representing all of the Shares owned
by
each Seller, free and clear of all Liens, duly endorsed in blank
or
accompanied by duly executed stock powers endorsed in blank, for
transfer
to Purchaser.
|
|
b.
|
An
Officer’s Certificate from the President confirming that the Articles of
Incorporation of the Company, as amended and restated are up-to-date
and
correct and that the Company is in good standing and delivery of
a
Certificate of Good Standing from the Delaware Secretary of State,
dated
within 30 days prior to the
closing.
|
11
|
c.
|
The
opinion of counsel for the Company in form and substance acceptable
to the
Sellers and Sellers Counsel as to the status of the Purchaser and
the
absence of any liabilities of the
Purchaser.
|
|
d.
|
Corporate
Minute Book containing all minutes of meetings of the Corporations
Shareholders and Board of Directors as well as any actions taken
by the
Shareholders of Board of Directors without a
meeting.
|
|
e.
|
Tax
and accounting records of the Corporation from
inception.
|
|
f.
|
The
original Articles of Incorporation and any amendments to the Articles
as
well as the corporation’s bylaws.
|
|
g.
|
Such
other agreements, documents and instruments reasonably requested
by
Purchaser to effectuate the transactions contemplated in this
Agreement.
|
ARTICLE
VI
SURVIVAL
OF TERMS; INDEMNIFICATION
| 6.1 |
Survival;
Knowledge.
All of the terms and conditions of this Agreement, together with
the
representations, warranties and covenants contained herein or
in any
instrument or document delivered or to be delivered pursuant
to this
Agreement, shall survive the execution of this Agreement and
the Closing
notwithstanding any investigation heretofore or hereafter made
by or on
behalf of any party hereto; provided, however, that (i) the agreements
and
covenants set forth in this Agreement shall survive and continue
until all
obligations set forth therein shall have been performed and satisfied;
and
(ii) all representations and warranties shall survive and continue
until
eighteen (18) months from the Closing Date (the “Anniversary Date”),
except for representations and warranties for which a claim for
indemnification hereunder (an “Indemnification Claim”) shall be pending as
of the Anniversary Date, in which event such representations
and
warranties shall survive with respect to such Indemnification
Claim until
the final disposition
thereof.
|
| 6.2 |
Indemnification
by Seller.
Each Seller shall, jointly and severally, indemnify, defend and
hold
harmless Purchaser and each of the officers, directors, employees,
shareholders, attorneys, accountants, partners, representatives,
agents,
successors and assigns of the foregoing (each an “Purchaser Indemnified
Party” and collectively, the “Purchaser Indemnified Parties”), at all
times after the date of this Agreement, from and against any liabilities,
damages, losses, claims, liens, costs, or expenses (including
reasonable
attorney’s fees) of any nature (any or all of the foregoing are
hereinafter referred to as a “Loss”) insofar as a Loss or any action in
respect thereof, whether now existing or accruing prior to or
subsequent
to the Closing, which arises out of or is based on any misrepresentation
(or alleged misrepresentation), breach (or alleged breach) of
any of the
warranties, representations or covenants made by Sellers or either
of
them, in this Agreement or in any certificate, schedule, document
attached
hereto or delivered pursuant to this
Agreement.
|
12
|
6.3
|
Indemnification
by Purchaser.
Purchaser shall indemnify, defend and hold harmless each Seller and
each
of the representatives, agents, successors and assigns of such Seller
(each a “Seller Indemnified Party” and collectively, the “Seller
Indemnified Parties”), at all times after the date of this agreement, from
and against any liabilities, damages, losses, claims, liens, costs,
or
expenses (including reasonable attorney’s fees) of any nature (any or all
of the foregoing are hereinafter referred to as a “Loss”) insofar as a
Loss or any action in respect thereof, whether now existing or accruing
prior to or subsequent to the Closing, which arises out of or is
based on
any misrepresentation (or alleged misrepresentation), breach (or
alleged
breach) of any of the warranties, representations or covenants made
by
Purchaser in this Agreement or in any certificate, schedule, document
attached hereto or delivered pursuant to this
Agreement.
|
| 6.4 |
Third
Party Claims.
Except as otherwise provided in this Agreement, the following procedures
shall be applicable with respect to indemnification for third party
claims
(“Claims”).
|
| 6.4.1 |
Promptly
after receipt by the party seeking indemnification hereunder
(hereinafter
referred to as the “Indemnitee”) of notice of the commencement of any (a)
tax audit or proceeding for the assessment of Tax by any taxing
authority
or any other proceeding likely to result in the imposition of
a Tax
liability or obligation, or (b) any action or the assertion of
any Claim,
liability or obligation by a third party (whether by legal process
or
otherwise), against which Claim, liability or obligation the
other party
to this Agreement (hereinafter the “Indemnitor”) is, or may be, required
under this Agreement to indemnify such Indemnitee, the Indemnitee
will, if
a Claim thereon is to be, or may be, made against the Indemnitor,
notify
the Indemnitor in writing of the commencement or assertion thereof
and
give the Indemnitor a copy of such Claim, process and all legal
pleadings.
The Indemnitor shall have the right to participate in the defense
of such
with counsel of reputable standing. The Indemnitor shall have
the right to
assume the defense of such action unless such action (i) may
result in
injunctions or other equitable remedies in respect of the Indemnitee
or
its business; (ii) may result in liabilities which, taken with
other then
existing Claims under this Article V, would not be fully indemnified
hereunder; or (iii) may have an adverse impact on the business
or
financial condition of the Indemnitee after the Closing Date
(including an
effect on the Tax liabilities, earnings or ongoing business relationships
of the Indemnitee). The Indemnitor and the Indemnitee shall cooperate
in
the defense of such Claims. In the case that the Indemnitor shall
assume
or participate in the defense of such audit, assessment or other
proceeding as provided herein, the Indemnitee shall make available
to the
Indemnitor all relevant records and take such other action and
sign such
documents as are necessary to defend such audit, assessment or
other
proceeding in a timely
manner.
|
13
| 6.4.2 |
Upon
judgment, determination, settlement or compromise of any third
party
Claim, the Indemnitor shall pay promptly on behalf of the Indemnitee,
and/or to the Indemnitee in reimbursement of any amount theretofore
required to be paid by it, the amount so determined by judgment,
determination, settlement or compromise, unless in the case of
a judgment
an appeal is made from the judgment, plus all other Claims of
the
Indemnitee with respect thereto (including legal fees and expenses).
If
the Indemnitor desires to appeal from an adverse judgment, then
the
Indemnitor shall post and pay the cost of the security or bond
to stay
execution of the judgment pending appeal. Upon the payment in
full by the
Indemnitor of such amounts, the Indemnitor shall succeed to the
rights of
such Indemnitee, to the extent not waived in settlement, against
the third
party who made such third party
Claim.
|
| 6.4.3 |
Prior
to paying or settling any Claim against which an Indemnitor is,
or may be,
obligated under this Agreement to indemnify an Indemnitee, the
Indemnitee
must first supply the Indemnitor with a copy of a final court
judgment or
decree holding the Indemnitee liable on such claim or failing
such
judgment or decree, and must first receive the written approval
of the
terms and conditions of such settlement from the Indemnitor.
An Indemnitor
shall have the right to settle any Claim against it or as to
which it has
assumed the defense, subject to the prior written approval of
the
Indemnitee, which approval shall not be unreasonably withheld
provided
that such settlement involves only the payment of a fixed sum
which the
Indemnitor is obligated to pay and does not include any admission
of
liability or other such similar admissions by or related to Indemnitee
with respect to such
Claim.
|
| 6.4.4 |
An
Indemnitee shall have the right to employ its own counsel in
any case, but
the fees and expenses of such counsel shall be at the expense
of the
Indemnitee unless: (i) the employment of such counsel shall have
been
authorized in writing by the Indemnitor in connection with the
defense of
such action or Claim; (ii) the Indemnitor shall not have employed,
or is
prohibited under this Section 5.4 from employing, counsel in
the defense
of such action or Claim; or (iii) such Indemnitee shall have
reasonably
concluded that there may be defenses available to it which are
contrary
to, or inconsistent with, those available to the Indemnitor,
in any of
which events such fees and expenses of not more than one additional
counsel for the indemnified parties shall be borne by the
Indemnitor.
|
14
ARTICLE
VII
MISCELLANEOUS
| 7.1 |
No
Waiver; Cumulative Remedies.
No failure or delay on the part of any party to this Agreement
in
exercising any right, power or remedy hereunder shall operate
as a waiver
thereof; nor shall any single or partial exercise of any such
right, power
or remedy preclude any other or further exercise thereof or the
exercise
of any other right, power or remedy hereunder. The remedies herein
provided are cumulative and not exclusive of any remedies provided
by
law.
|
| 7.2 |
Amendments,
Waivers and Consents.
Any provision in the Agreement to the contrary notwithstanding,
and except
as hereinafter provided, changes in, termination or amendments
of or
additions to this Agreement may be made, and compliance with
any covenant
or provision set forth herein may be omitted or waived, if the
Sellers
shall obtain consent thereto in writing from the Purchaser. Any
waiver or
consent may be given subject to satisfaction of conditions stated
therein
and any waiver or consent shall be effective only in the specific
instance
and for the specific purpose for which
given.
|
| 7.3 |
Addresses
for Notices.
All notices, requests, demands and other communications provided
for
hereunder shall be in writing (including telegraphic communication)
and
mailed, telegraphed or delivered to each applicable party at
the address
as set forth above, or at such other address as to which such
party may
inform the other parties in writing in compliance with the terms
of this
Article. All such notices, requests, demands and other communications
shall be considered to be effective when
delivered.
|
| 7.4 |
Costs,
Expenses and Taxes.
All parties to bear their own
expenses.
|
|
7.5
|
Effectiveness;
Binding Effect; Assignment.
This Agreement shall be binding upon and inure to the benefit of
the
Sellers and each of them, the Purchaser and their respective successors
and assigns; provided,
that, the Sellers may not assign any of its rights or obligations
under
this Agreement without the prior written consent of the
Purchaser.
|
15
|
7.6
|
Prior
Agreements.
The Transaction Documents executed and delivered in connection herewith
constitute the entire agreement between the parties and supersede
any
prior understandings or agreements concerning the subject matter
hereof.
|
|
7.7
|
Severability.
The provisions of the Transaction Documents are severable and, in
the
event that any court of competent jurisdiction shall determine that
any
one or more of the provisions or part of a provision contained therein
shall, for any reason, be held to be invalid, illegal or unenforceable
in
any respect, such invalidity, illegality or unenforceability shall
not
affect any other provision or part of a provision of such Transaction
Document and the terms thereof shall be reformed and construed as
if such
invalid or illegal or unenforceable provision, or part of a provision,
had
never been contained herein, and such provisions or part reformed
so that
it would be valid, legal and enforceable to the maximum extent
possible.
|
|
7.8
|
Governing
Law; Venue.
|
|
7.8.1
|
This
Agreement shall be enforced, governed and construed in accordance
with the
laws the State of Florida or federal securities law where applicable
without giving effect to choice of laws principles or conflict of
laws
provisions.
|
|
7.8.2
|
Sellers
and Purchaser hereby jointly waive one against the other, and agree
not to
assert against either of them, or any successor assignee thereof,
by way
of motion, as a defense, or otherwise, in any such suit, action or
proceeding, (i) any claim that any Seller or the Purchaser is not
personally subject to the jurisdiction of the arbitrator, and (ii)
to the
extent permitted by applicable law, any claim that such suit, action
or
proceeding is brought in an inconvenient forum or that the venue
of any
such suit, action or proceeding is improper or that this Agreement
may not
be enforced in or by such courts
|
| 7.8 |
Headings.
Article, section and subsection headings in this Agreement are included
herein for convenience of reference only and shall not constitute
a part
of this Agreement for any other
purpose.
|
| 7.9 |
Survival
of Representations and Warranties.
All representations and warranties made in the Transaction Documents
or
any other instrument or document delivered in connection therewith,
shall
survive the execution and delivery hereof or
thereof.
|
| 7.10 |
Counterparts.
This Agreement may be executed in any number of counterparts, all
of which
taken together shall constitute one and the same instrument, and
any of
the parties hereto may execute this Agreement by signing any such
counterpart.
|
| 7.11 |
Further
Assurances.
From and after the date of this Agreement, upon the request of the
Purchaser or the Company, the Company and the Purchaser shall execute
and
deliver such instruments, documents and other writings as may be
reasonably necessary or desirable to confirm and carry out and to
effectuate fully the intent and purposes of the Transaction Documents
and
the Shares.
|
16
IN
WITNESS WHEREOF, the parties hereto have caused this Stock Purchase Agreement
to
be executed as of the date first above written.
By:______________________________
Xxxxxx
Interactive, Inc.
By:______________________________
17
