EXHIBIT 10.1
MEDIATECH STOCK PURCHASE AGREEMENT
INDEPENDENT TELEMEDIA GROUP, INC.
AND
THE STOCKHOLDERS OF
MEDIATECH, INC.
STOCK PURCHASE AGREEMENT
INDEPENDENT TELEMEDIA GROUP, INC.
AND
THE STOCKHOLDERS OF
MEDIATECH, INC.
STOCK PURCHASE AGREEMENT
AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 1 - PLAN OF STOCK PURCHASE . . . . . . . . . . . . . 1
Section 1.1 Share Exchange. . . . . . . . . . . . . . 1
ARTICLE 2 - CLOSING. . . . . . . . . . . . . . . . . . . . . 2
Section 2.1 The Closing and the Closing Date. . . . . 2
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES . . . . . . . . . 2
Section 3.1 Representations and Warranties by
Mediatech . . . . . . . . . . . . . . . . . . . . . 2
Section 3.2 Representations and Warranties by the
Acquiror. . . . . . . . . . . . . . . . . . . . . . . . .9
ARTICLE 4 - ACTIONS AND OBLIGATIONS OF THE ACQUIROR, MEDIATECH
AND THE STOCKHOLDERS BEFORE AND AFTER THE CLOSING AND
SECURITIES ACT MATTERS. . . . . . . . . . . . . . . . 16
Section 4.1 Actions of Mediatech Pending Closing. . . 16
Section 4.2 Actions of Acquiror Pending Closing . . . 18
Section 4.3 Undertakings of Acquiror, Mediatech
and the Stockholders . . . . . . . . . . . . . . . 20
ARTICLE 5 - CONDITIONS PRECEDENT . . . . . . . . . . . . . . 21
Section 5.1 Conditions Precedent to Obligations of Xxxx
and the Stockholders. . . . . . . . . . . . . . . . 21
Section 5.2 Conditions Precedent to Obligations of
Acquiror . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE 6 - POST CLOSING COVENANTS . . . . . . . . . . . . . 26
Section 6.1 Unregistered Securities/Exemption from
Registration . . . . . . . . . . . . . . . . . . . . . . 26
Section 6.2 Lock-Up . . . . . . . . . . . . . . . . . 27
Section 6.3 Reports Under Securities Exchange Act
of 1934 . . . . . . . . . . . . . . . . . . . . . . 27
Section 6.4 Registration Rights . . . . . . . . . . . 28
ARTICLE 7 - NATURE AND SURVIVAL OF REPRESENTATIONS AND
WARRANTIES. . . . . . . . . . . . . . . . . . . . . . 28
Section 7.1 Nature and Survival of Representations and
Warranties . . . . . . . . . . . . . . . . . . . . 28
ARTICLE 8 - MISCELLANEOUS. . . . . . . . . . . . . . . . . . 29
Section 8.1 Amendment and Waiver. . . . . . . . . . . 29
Section 8.2 Board of Directors. . . . . . . . . . . . 29
Section 8.3 Covenants Not to Compete. . . . . . . . . 29
Section 8.4 Assignment. . . . . . . . . . . . . . . . 29
Section 8.5 Notices . . . . . . . . . . . . . . . . . 30
Section 8.6 Paragraph and Other Headings. . . . . . . 31
Section 8.7 Severability. . . . . . . . . . . . . . . 31
Section 8.8 Colorado Law to Apply . . . . . . . . . . 31
Section 8.9 Parties in Interest . . . . . . . . . . . 31
Section 8.10Attorneys' Fees . . . . . . . . . . . . . 31
Section 8.11Counterparts. . . . . . . . . . . . . . . 32
Section 8.12Integrated Agreement. . . . . . . . . . . 32
MEDIATECH, INC.
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement is entered into in Chicago,
Illinois this 27th day of January, 1995, by and among Independent
TeleMedia Group, Inc., a Colorado corporation (hereinafter
referred to as the "Acquiror"), Xxxxxx X. Xxxx (hereinafter
referred to as "Xxxx"), Xxxxxxx Xxxxxx (hereinafter referred to
as "Xxxxxx") and Xxxxx Xxxxxxx (hereinafter referred to as
"Wouters") (each of Xxxx, Xxxxxx and Xxxxxxx are sometimes
hereinafter referred to individually as "Stockholder" and
collectively as "Stockholders"), owners of all of the shares of
Common Stock of Mediatech, Inc. (hereinafter "Mediatech"), and
with respect to Sections 3.1, 4.1, 7.1 and 8.3, Mediatech.
Acquiror intends to acquire from the Stockholders all or
substantially all of the issued and outstanding Common Stock of
Mediatech, whereby Mediatech becomes a substantially owned or
wholly owned subsidiary of Acquiror.
AGREEMENT
In order to consummate such stock purchase, the parties
hereto, in consideration of the mutual agreements and on the
basis of the representations and warranties hereinafter set
forth, do hereby agree as follows:
ARTICLE 1
PLAN OF STOCK PURCHASE
Section 1.1 Share Exchange. Subject to the terms of this
Stock Purchase Agreement (the "Agreement") at the Closing on the
Closing Date, and in full consideration for the assignment,
transfer, and delivery to the Acquiror by the Stockholders of all
or substantially all of the issued and outstanding shares of
Common Stock of Mediatech ("Mediatech's Common Stock"), the
Stockholders shall receive an aggregate of 900,000 shares of the
$.001 par value per share Common Stock of the Acquiror
("Acquiror's Common Stock"), promissory notes (the "Promissory
Notes") in the aggregate of $6,200,000 less sums attributable to
a calculation (the "Loan Adjustment Calculation") hereinafter
described, and an aggregate of $3,000,000 cash. The cash,
Acquiror's Common Stock, and the Promissory Notes shall be
shared, on a pro rata basis, among the Stockholders of Mediatech
in accordance with their percentage ownership of Mediatech on the
Closing Date. The amount of consideration paid for 100% of the
issued and outstanding shares shall be reduced, on a pro rata
basis, by the number of shares of Mediatech owned by Stockholders
who refuse to participate in this Stock Purchase Agreement (the
"Declining Stockholders"). The Declining Stockholders shall
remain minority stockholders of Mediatech. The number of shares
to be issued to the Stockholders shall be adjusted, as necessary,
to account for any forward or reverse stock splits, stock
dividends, or any other increases or reductions of the number of
Acquiror's shares outstanding without receiving compensation
therefor in money, property, or services. The Promissory Note,
attached hereto as Schedule 1.1, shall require Acquiror,
commencing twelve (12) months from the closing date, to make
payments in quarterly installments of $125,000 per quarter,
including accrued interest at the rate of eight percent (8%) per
annum until the ten year anniversary of the Closing Date at which
time any unpaid principal sum balance and any accrued and unpaid
interest shall be paid in full. The shares of Acquiror's Common
Stock to be issued to the Stockholders shall bear a restrictive
legend, and shall be subject to the lock-up provisions provided
in Section 6.2 hereinafter. The aggregate principal amount of
the Promissory Notes shall be reduced by the Loan Adjustment
Calculation, which is equal to the product of nine hundred
thousand (900,000) times the average closing bid price on Nasdaq
(market price) of the Acquiror's Common Stock for a period of 60
trading days commencing the day following closing. Payments on
the Note(s) may be offset to the extent of liabilities of
Mediatech not disclosed in Mediatech's Financial Statements or in
Schedule 3.1(2)(b).
ARTICLE 2
CLOSING
Section 2.1 The Closing and the Closing Date. The closing
(the "Closing") shall be held at the offices of Wildman, Harrold,
Xxxxx & Xxxxx at 10:00 a.m., within five (5) days following the
execution of this Agreement (the "Closing Date"). At the Closing
and on the Closing Date, the Stockholders executing the Agreement
shall deliver all of their common shares of Mediatech owned by
them. At the Closing and on the Closing Date, the Stockholders
shall receive in exchange for their shares of Mediatech, their
pro rata portion of the consideration as described in Section
1.1, including the cash, Promissory Note, and shares of
Acquiror's Common Stock. Mediatech shall become a substantially
owned subsidiary of Acquiror.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
Section 3.1 Representations and Warranties by Mediatech.
As a material inducement to the Acquiror to execute and perform
its obligations under this Agreement, Mediatech represents and
warrants to the Acquiror as follows:
(1) Organization and Standing of Mediatech. Mediatech
is a corporation duly organized and validly existing and in
good standing under the laws of the State of Illinois. It
has all requisite corporate power and authority to carry on
its business as now being conducted, to enter into this
Agreement and to carry out and perform the terms and
provisions of this Agreement. Mediatech has no subsidiaries
and, further, has no direct or indirect interest, either by
way of stock ownership or otherwise, in any other firm,
corporation, association, or business other than as
disclosed in Schedule 3.1(1) attached hereto.
(2)(a)Capitalization and Indebtedness for Borrowed
Moneys. Mediatech is duly and lawfully authorized by its
Articles of Incorporation, as amended, to issue 1,000 shares
of Common Stock, no par value per share, of which 197 shares
are validly issued and outstanding on the date of this
Agreement. Mediatech has no treasury stock. Further,
Mediatech has no other authorized series or class of stock.
All the outstanding shares of Mediatech's Common Stock have
been duly authorized and validly issued and are fully paid
and nonassessable.
(b) Mediatech is not presently liable on account of
any indebtedness for borrowed moneys, except as reflected in
the financial statements described in subparagraph (5) ,
below. The borrowed indebtedness as of the Closing Date
will be set forth in Schedule 3.1(2)(b) to be attached
hereto.
(c) There are no outstanding subscriptions, options,
warrants, calls, contracts, demands, commitments,
convertible securities, or other agreements or arrangements
of any character or nature whatever under which Mediatech is
or may be obligated to issue or purchase shares of its
capital stock.
(3) Ownership of Mediatech's Common Stock. To the
best of Mediatech's knowledge , (i) the shares of Common
Stock of Mediatech are held by the persons set forth in
Schedule 3.1(3) of this Agreement, free and clear of all
liens, claims, encumbrances, and restrictions of every kind;
(ii) Schedule 3.1(3) of this Agreement contains a complete
and accurate list of all of the Stockholders of Mediatech
and the shares of its Common Stock held by each; (iii) each
Stockholder has full legal right, power, and authority to
sell, assign, and transfer his shares of Common Stock of
Mediatech; and (iv) the delivery of such shares to the
Acquiror pursuant to the provisions of this Agreement will
transfer valid title thereto, free and clear of all liens,
encumbrances, claims, and restrictions of every kind.
(4) Stockholders' Authority. To the best of
Mediatech's knowledge, this Agreement constitutes a valid
and binding obligation of the Stockholders enforceable in
accordance with its terms (except as limited by bankruptcy,
insolvency, or other laws affecting the enforcement of
creditors' rights). To the best of Mediatech's knowledge,
no provision of any contract to which any of the
stockholders is a party or otherwise bound, prevents any of
the Stockholders from delivering good title to their shares
of such capital stock in the manner contemplated hereunder.
(5) Financial Statements. Mediatech has furnished
the Acquiror with unaudited financial statements of
Mediatech as of December 31, 1994, and audited financial
statements as of December 31, 1991, 1992 and 1993
(hereinafter referred to as "Mediatech's Financial
Statements"). All such financial statements present fairly
the financial condition of Mediatech at such date, and the
results of its operations for the period therein specified,
and the audited Financial Statements were prepared in
accordance with generally accepted accounting principles
applied upon a basis consistent with prior accounting
periods.
Specifically, but not by way of limitation, Mediatech's
Financial Statements disclose all of the debts, liabilities,
and obligations of any nature (whether absolute, accrued,
contingent, or otherwise and whether due or to become due)
of Mediatech at the date thereof and include appropriate
reserves for all taxes and other liabilities accrued
or due at such date, but not yet payable.
(6) Present Status. Other than as described herein
or in the Schedules attached hereto, Mediatech has not,
since December 31, 1994:
(a) Incurred any material obligations or liabilities,
absolute, accrued, contingent, or otherwise and whether due
or to become due, except current liabilities incurred in the
ordinary course of business, none of which materially
adversely affects the business or prospects of Mediatech;
(b) Discharged or satisfied any material liens or
encumbrances, or paid any material obligation or liability,
absolute, accrued, contingent, or otherwise and whether due
or to become due, other than (i) current liabilities shown
on Mediatech's Financial Statements (exclusive of the
borrowed indebtedness specified in Section 3.1(2)(b)) and
current liabilities incurred since the close of business on
the date of Mediatech's Financial Statements, in each case,
in the ordinary course of business and (ii) expenses
incurred in connection with the transactions contemplated by
this Agreement (including, without limitation, reasonable
attorneys' fees and costs);
(c) Declared or made any payment or distribution to
its stockholders or purchased or redeemed, or obligated
itself to purchase or redeem, any of its shares of
Common Stock or other securities;
(d) Mortgaged, pledged, or subjected to lien, or any
other encumbrances or charges, any of its assets, tangible
or intangible;
(e) Sold or transferred any of its assets except for
inventory sold in the ordinary course of business or
canceled any debt or claim;
(f) Suffered any damage, destruction, or loss
(whether or not covered by insurance) affecting the
properties, business, or prospects of Mediatech, or waived
any rights of material value;
(g) Except with respect to this Agreement, entered
into any material transaction other than in the ordinary
course of business;
(h) Encountered any labor difficulties or labor union
organizing activity or loss of key people which will
materially adversely affect the business or prospects of
Mediatech.
(7) Litigation. Except as disclosed in Mediatech's
Financial Statements or Schedule 3.1(7), there are no legal
actions, suits, arbitrations, or other legal or
administrative proceedings pending or threatened against
Mediatech which would materially affect it, its properties,
assets, or business; and Mediatech is not aware of an facts
which to its knowledge might result in any action, suit,
arbitration, or other proceeding which in turn might result
in any material adverse change in the business or condition
(financial or otherwise) of Mediatech or its properties or
assets other than as disclosed in Schedule 3.1(7) attached
hereto. Mediatech is not in default with respect to
any judgment, order, or decree of any court or any
government agency or instrumentality.
(8) Compliance With the Law and other Instruments. To
the best of Mediatech's knowledge, the business operation of
Mediatech has been and is being conducted in material
compliance with all applicable laws, rules, and regulations
of all authorities. Except as otherwise disclosed in
Schedule 3.1(8), Mediatech is not in violation of, or in
default under, any term or provision of its Articles of
Incorporation, as amended, or its Bylaws, as amended, or of
any lien, mortgage, lease, agreement, instrument, order,
judgment, or decree, or subject to any restriction,
contained in any of the foregoing, of any kind or character
which materially adversely affects in any way the business,
properties, assets, or prospects of Mediatech, or which
would prohibit the Stockholders from entering into this
Agreement or prevent consummation of the exchange of
securities contemplated by this Agreement.
(9) Title to Properties and Assets. Mediatech has
good and marketable title to all its properties and assets,
including without limitation those reflected in Mediatech's
Financial Statements and those used or located on property
controlled by Mediatech in its business on December 31, 1994
and acquired thereafter (except assets sold in the ordinary
course of business), subject to no mortgage, pledge, lien,
charge, security interest, encumbrance, or restriction
except those which (a) are disclosed in Mediatech's
Financial Statements as securing specified liabilities; or
(b) do not materially adversely affect the use thereof.
The buildings and equipment of Mediatech are in good
condition and repair, reasonable wear and tear excepted.
Mediatech has not been, to the knowledge of any officer of
Mediatech, threatened with any action or proceeding under
any building or zoning ordinance, regulation, or law.
Except as otherwise provided in Section 8.3 of this
Agreement, Mediatech owns, free and clear of any liens,
claims, encumbrances, royalty interests, or other
restrictions or limitations of any nature whatsoever, any
and all patents, trade secrets, copyrights, procedures,
techniques, business plans, methods of management, or other
information utilized in connection with Mediatech's
business. To the best of Mediatech's knowledge, the
products Mediatech manufactures and/or markets and its plan
of operation do not infringe on the patents, copyrights,
trade secrets, or other proprietary rights of any third
person.
(10) Mediatech Leases. All leases between Xxxx
(including his affiliates) and Mediatech are at approximate
"market" or below. Any leases which do not so qualify will
be renegotiated by Mediatech to base rates that are so
qualified as may be set by consultation with a mutually
agreed to commercial real estate expert.
(11) Schedules of Leases, Insurance and Assets. Prior
to the Closing Date, Mediatech will have delivered to the
Acquiror, to be attached as Schedule 3.1(11)(a) hereto, a
separate Schedule of Leases, specifically referring to this
paragraph, containing a true and complete description of
each indenture, lease, sublease, or any instrument under
which Mediatech claims or holds a leasehold interest; and a
complete schedule of all fire and other casualty and ability
policies of Mediatech in effect at the time of delivery of
said schedule. Mediatech has good and valid leasehold
interests in such properties and all such instruments are in
effect and enforceable according to their respective terms.
Prior the Closing Date, Mediatech will have delivered to
Acquiror, to be attached as Schedule 3.1(11)(b) hereto, a
copy of an Asset Value Appraisal dated July, 1994, which
appraisal shall contain a description of all machinery and
equipment, shop and material handling facilities, office
furniture and business machines and other items related
thereto at Mediatech's Chicago, Illinois, Niles, Illinois
and New York, New York facilities.
(12) Creditor's Arrangements. Mediatech has not made
any assignment for the benefit of creditors, nor has any
involuntary or voluntary petition in bankruptcy been filed
by or against Mediatech.
(13) Contracts and Other Obligations. Except with
respect to this transaction, Mediatech is not a party to, or
otherwise bound by, any written or oral:
(a) Contract or agreement not made in the ordinary
course of business, except as disclosed on Schedule
3.1(13)(a) hereto;
(b) Employment or consultant contract which is not
terminable at will without cost or other liability to
Mediatech or any successor, except as disclosed on Schedule
3.1(13)(b) hereto;
(c) Contract with any labor union, except as disclosed
on Schedule 3.1(13)(c) hereto;
(d) Bonus, pension, profit-sharing, retirement, share
purchase, stock option, hospitalization, group insurance, or
similar plan providing employee benefits except as disclosed
on Schedule 3.1(13)(d) hereto;
(e) Lease with respect to any property, real or
personal, whether as lessor or lessee, except as disclosed
on Schedule 3.1(13)(e) hereto;
(f) Advertising contract or contract for public
relations services, except as disclosed on Schedule
3.1(13)(f) hereto;
(g) Purchase, supply, or service contracts in excess
of $10,000 each, or in the aggregate of $100,000 for all
such contracts whether below or above $10,000, except as
disclosed on Schedule 3.1(13)(g) hereto;
(h) Deed of trust, mortgage, conditional sales
contract, security agreement, pledge agreement, trust
receipt, or any other agreement or arrangement whereby any
of the assets or properties of Mediatech are subjected to a
lien, encumbrance, charge, or other restriction, except as
disclosed on Schedule 3.1(13)(h) hereto;
(i) Contract or other commitment continuing for a
period of more than thirty days and which is not terminable
without cost or other liability to Mediatech or its
successor, except as disclosed on Schedule 3.1(13)(i) or
other schedules hereto; or
(j) Contract which (i) contains a redetermination of
price or similar type of provision; or (ii) provides for a
fixed price for goods or services sold, except as disclosed
on Schedule 3.1(13)(j) hereto.
Mediatech has in all material respects performed all
obligations required to be performed by it to date and is
not in material default under any of the contracts,
agreements, leases, documents, or other arrangements to
which it is a party or by which it is otherwise bound. To
the best of Mediatech's knowledge, all parties with whom
Mediatech has contractual arrangements are in material
compliance therewith and are not in default thereunder.
(14) Changes in Compensation. Since December 31, 1994,
there has not been any general pay increase to employees or
any change in the rate of compensation, commission, bonus,
or other remuneration payable to any officer, employee,
director, agent, or stockholder of Mediatech other than in
the ordinary course of business.
(15) Inventories. Since December 31, 1994, Mediatech
has continued to replenish its inventories in a normal and
customary manner consistent with prior practice and prudent
practice prevailing in the businesses of Mediatech, and will
continue to do so until the Closing Date.
(16) Records. The books of account, minute books,
stock certificate books, and stock transfer ledgers of
Mediatech are complete and correct, and there have been no
transactions involving the business of Mediatech which
properly should have been set forth in said respective
books, other than those set forth herein.
(17) Brokers or Finders. All negotiations on the part
of Mediatech relative to this Agreement and the transactions
contemplated hereby have been carried on by Mediatech
without the intervention of any person or as the result of
any act of Mediatech in such manner as to give rise to any
valid claim against Mediatech or the Acquiror for a
brokerage commission, finder's fee, or other like payment,
and any such claim shall be a liability of Mediatech and not
the Acquiror or the Stockholders.
(18) Absence of Certain Changes or Events. Since
December 31, 1994, there has not been any material adverse
change in, or event or condition materially and adversely
affecting, the condition (financial or otherwise),
properties, assets, liabilities, or the business of
Mediatech.
(19) Taxes. Mediatech has duly filed all federal,
state, county and local income, franchise, excise, real and
personal property and other tax returns and reports
(including, but not limited to, those relating to social
security, withholding, unemployment insurance, and
occupation (sales) and use taxes) required to have been
filed by Mediatech up to the date hereof. All of the
foregoing returns are true and correct in all material
respects and Mediatech has paid all taxes, interest and
penalties shown on such returns or reports as being due.
Mediatech has paid or made adequate provision in Mediatech's
Financial Statements or its books and records for all taxes
payable in respect of all periods ending on or before the
date hereof. Mediatech has no material liability for any
taxes, interest or penalties of any nature whatsoever,
except for those taxes which may have arisen up to the
Closing Date in the ordinary course of business and are
properly accrued on the books of Mediatech as of the Closing
Date.
(20) Environmental Matters. There are no actions,
proceedings or investigations pending or, to the actual
knowledge of Xxxx, threatened before any federal or state
environmental regulatory body, or before any federal or
state court, alleging noncompliance by Mediatech with the
Comprehensive Environmental Response, Compensation and
Liability Act of 1990 ("CERCLA") or any other Environmental
Laws. To the actual knowledge of Mediatech: (i) there is
no reasonable basis for the institution of any action,
proceeding or investigation against Mediatech under any
Environmental Law; (ii) Mediatech is not responsible under
any Environmental Law for any release by any person at or in
the vicinity of real property of any hazardous substance (as
defined by CERCLA), caused by the spilling, leaking,
pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, dumping or disposing of any
such hazardous substance into the environment; (iii)
Mediatech is not responsible for any costs of any remedial
action required by virtue of any release of any toxic or
hazardous substance, pollutant or contaminant into the
environment including, without limitation, costs arising
from security fencing, alternative water supplies, temporary
evacuation and housing and other emergency assistance
undertaken by any environmental regulatory body; (iv)
Mediatech is in compliance with all applicable Environmental
Laws; and (v) except as disclosed in Schedule 3.1(20), no
real property used, owned, managed or controlled by
Mediatech contains any toxic or hazardous substance
including, without limitation, any asbestos, PCBs or
petroleum products or byproducts in any form, the presence,
location or condition of which (a) violates any
Environmental Law, or (b) otherwise would pose any
significant health or safety risk unless remedial measures
were taken. For purposes of this Agreement, "Environmental
Laws" shall mean any federal, state, local or municipal
statute, ordinance or regulation, or order, ruling or other
decision of any court, administrative agency, or other
governmental authority pertaining to the release of
hazardous substances (as defined in CERCLA) into the
environment.
Section 3.2 Representations and Warranties by the
Acquiror. The Acquiror represents and warrants to Mediatech and
the Stockholders as follows:
(1) Organization and Standing of Acquiror. The
Acquiror is a corporation duly organized and validly
existing and in good standing under the laws of the State of
Colorado. It has all requisite corporate power and
authority to carry on its business as now being conducted,
to enter into this Agreement and to carry out and perform
the terms and provisions of this Agreement. The Acquiror
has no subsidiaries and, further, has no direct or indirect
interest, either by way of stock ownership or otherwise, in
any other firm, corporation, association, or business other
than as disclosed in Schedule 3.2(1) attached hereto.
(2)(a) Capitalization and Indebtedness for Borrowed
Moneys. The Acquiror is duly and lawfully authorized by its
Articles of Incorporation, as amended, to issue 100,000,000
shares of Common Stock, $0.001 par value per share, of which
4,504,823 million shares are issued and outstanding as of
the date hereof and 40,000,000 shares of Preferred Stock,
$0.0001 par value per share, of which no shares are issued
and outstanding. All shares of capital stock of the
Acquiror were issued in compliance with state or federal
securities laws. The Acquiror has no treasury stock and no
other authorized series or class of stock. All the
outstanding shares of the Acquiror's Common Stock have been
duly authorized and validly issued and are fully paid and
nonassessable and free of preemptive rights. All of the
Acquiror's Common Stock to be issued to the Stockholders in
exchange for their shares of Mediatech's Common Stock shall
be duly authorized, validly issued, fully paid,
nonassessable, issued in compliance with state and federal
securities laws and freely tradeable subject to the resale
limitations of Rules 144 and 145 under the Securities Act of
1933, as amended, and the provisions of Section 6.1 of this
Agreement.
(b) The Acquiror is not presently liable on account
of any indebtedness for borrowed moneys, except as reflected
in the financial statements described in subparagraph (4),
below.
(c) There are no outstanding subscriptions, options,
warrants, calls, contracts, demands, commitments,
convertible securities, or other agreements or arrangements
of any character or nature whatever under which the Acquiror
is or may be obligated to issue or purchase shares of its
capital stock other than as disclosed in Schedule 3.2
(2)(c).
(3) Acquiror's Authority. The execution, delivery,
and performance of this Agreement shall have been duly
authorized by all requisite corporate action. This
Agreement constitutes a valid and binding obligation of the
Acquiror enforceable in accordance with its terms (except as
limited by bankruptcy, insolvency, or other laws affecting
the enforcement of creditors' rights). No provision of the
Articles of Incorporation and any amendments thereto, Bylaws
and any amendments thereto, minutes or share certificates of
the Acquiror, or of any contract to which the Acquiror is a
party or otherwise bound, prevents the Acquiror from
delivering good title to its shares of such capital stock in
the manner contemplated hereunder.
(4) Financial Statements. The Acquiror has furnished
Mediatech and the Shareholders with unaudited financial
statements of the Acquiror as of December 31, 1994, and
audited Financial Statements as of December 31, 1993, 1992
and 1991 (hereinafter referred to as the "Acquiror's
Financial Statements"). All such financial statements
present fairly the financial condition of the Acquiror at
such date, and the results of its operations for the period
therein specified, and were prepared in accordance with
generally accepted accounting principles applied upon a
basis consistent with prior accounting periods.
Specifically, but not by way of limitation, the
Acquiror's Financial Statements disclose all of the debts,
liabilities, and obligations of any nature (whether
absolute, accrued, contingent, or otherwise and whether due
or to become due) of the Acquiror at the date thereof and
include appropriate reserves for all taxes and other
liabilities accrued or due at such date, but not yet
payable. The Acquiror owes no taxes based upon income of
all taxable years and the Acquiror's Financial Statements
reflect liability for taxes based upon income for the
current year. All existing accounts and notes receivable on
Acquiror's Financial Statements represent valid obligations
of parties obligated to Acquiror arising from bona fide
transactions, are current and there is no reason to believe
that they will not be collected in full (without any
counterclaim or set off) on or before the date such
receivables are due.
(5) Present Status. The Acquiror has not, since
December 31, 1994:
(a) Incurred any obligations or liabilities,
absolute, accrued, contingent, or otherwise and whether due
or to become due, except current liabilities incurred in the
ordinary course of business, none of which adversely affects
the business or prospects of the Acquiror;
(b) Discharged or satisfied any liens or
encumbrances, or paid any obligation or liability, absolute,
accrued, contingent, or otherwise and whether due or to
become due, other than current liabilities shown on the
Acquiror's Financial Statements and current liabilities
incurred since the close of business on the date of the
Acquiror's Financial Statements, in each case, in the
ordinary course of business;
(c) Declared or made any payment or distribution to
its stockholders or purchased or redeemed, or obligated
itself to purchase or redeem, any of its shares of Common
Stock or other securities;
(d) Mortgaged, pledged, or subjected to lien, or any
other encumbrances or charges, any of its assets, tangible
or intangible;
(e) Sold or transferred any of its assets except for
inventory sold in the ordinary course of business or
canceled any debt or claim;
(f) Suffered any damage, destruction, or loss
(whether or not covered by insurance) affecting the
properties, business, or prospects of the Acquiror, or
waived any rights of substantial value;
(g) Except with respect to this Agreement, entered
into any transaction other than in the ordinary course of
business;
(h) Encountered any labor difficulties or labor union
organizing activity or loss of key people which will
adversely affect the business or prospects of the Acquiror.
(6) Litigation. Except as disclosed in the
Acquiror's Financial Statements or Schedule 3.2(6), there
are no legal actions, suits, arbitrations, or other legal or
administrative proceedings pending or threatened against the
Acquiror which would affect it, its properties, assets, or
business; and the Acquiror is not aware of any facts which
to its knowledge might result in any action, suit,
arbitration, or other proceeding which in turn might result
in any material adverse change in the business or condition
(financial or otherwise) of the Acquiror or its properties
or assets other than as disclosed in Schedule 3.2(6)
attached hereto. Any description of any such litigation in
the Acquiror's Financial Statements is true and accurate in
all material respects and discloses all material facts
necessary in order to make the statements therein not
misleading. The Acquiror is not in default with respect to
any judgment, order, or decree, of any court or any
government agency or instrumentality.
(7) Compliance With the Law and Other Instruments.
To the best of Acquiror's knowledge, the business operation
of the Acquiror has been and is being conducted in
accordance with all applicable laws, rules, and regulations
of all authorities. The Acquiror is not in violation of, or
in default under, any term or provision of its Articles of
Incorporation, as amended, or its Bylaws, as amended, or of
any lien, mortgage, lease, agreement, instrument, order,
judgment, or decree, or subject to any restriction,
contained in any of the foregoing, of any kind or character
which materially adversely affects in any way the business,
properties, assets, or prospects of the Acquiror, or which
would prohibit the Acquiror from entering into this
Agreement or prevent consummation of the exchange of
securities contemplated by this Agreement.
(8) Title to Properties and Assets. The Acquiror has
good and marketable title to all its properties and assets,
including without limitation those reflected in the
Acquiror's Financial Statements and those used or located
on property controlled by the Acquiror in its business on
December 31, 1994 and acquired thereafter (except assets
sold in the ordinary course of business), subject to no
mortgage, pledge, lien, charge, security interest,
encumbrance, or restriction except those which (a) are
disclosed in the Acquiror's Financial Statements as securing
specified liabilities; or (b) do not materially adversely
affect the use thereof. The buildings and equipment of the
Acquiror are in good condition and repair, reasonable wear
and tear excepted. The Acquiror has not been, to the
knowledge of any officer of Acquiror, threatened with any
action or proceeding under any building or zoning ordinance,
regulation, or law. The Acquiror does not currently, nor
has it in the past, owned fee simple title to any real
property. The Acquiror owns, free and clear of any liens,
claims, encumbrances, royalty interests, or other
restrictions or limitations of any nature whatsoever, any
and all patents, trade secrets, copyrights, procedures,
techniques, business plans, methods of management, or other
information utilized in connection with Acquiror's business.
To the best knowledge of Acquiror, the products it
manufactures and/or markets and its plan of operation do not
infringe on the patents, copyrights, trade secrets, or other
proprietary rights of any third person.
(9) Schedule of Leases . Prior to the Closing Date,
the Acquiror will have delivered to Mediatech, to be
attached as Schedule 3.2(9) hereto, a separate Schedule of
Leases , specifically referring to this paragraph,
containing a true and complete description of each
indenture, lease, sublease, or any instrument under which
the Acquiror claims or holds such leasehold interest. The
Acquiror has good and valid leasehold interests in such
properties and all such instruments are in effect and
enforceable according to their respective terms.
(10) Creditor's Arrangements. The Acquiror has not
made any assignment for the benefit of creditors, nor has
any involuntary or voluntary petition in bankruptcy been
filed by or against the Acquiror.
(11) Contracts and Other Obligations. The Acquiror is
not a party to or otherwise bound by, any written or oral:
(a) Contract or agreement not made in the ordinary
course of business;
(b) Employment or consultant contract which is not
terminable at will without cost or other liability to
the Acquiror or any successor, except as disclosed on
Schedule 3.2(11)(b) hereto;
(c) Contract with any labor union;
(d) Bonus, pension, profit-sharing, retirement, share
purchase, stock option, hospitalization, group insurance, or
similar plan providing employee benefits, except as
disclosed in its filings with the Securities and Exchange
Commission;
(e) Lease with respect to any property, real or
personal, whether as lessor or lessee;
(f) Advertising contract or contract for public
relations services;
(g) Purchase, supply, or service contracts in excess
of $1,000 each, or in the aggregate of $10,000 for all such
contracts whether below or above $1,000;
(h) Deed of trust, mortgage, conditional sales
contract, security agreement, pledge agreement, trust
receipt, or any other agreement or arrangement whereby any
of the assets or properties of the Acquiror are subjected to
a lien, encumbrance, charge, or other restriction, except as
disclosed on Schedule 3.2(11)(h) thereto;
(i) Contract or other commitment continuing for a
period of more then thirty days and which is not terminable
without cost or other liability to the Acquiror or its
successor; or
(j) Contract which (i) contains a redetermination of
price or similar type of provision; or (ii) provides for a
fixed price for goods or services sold.
(k) Contract or arrangement which will result in an
excess parachute payment under Code Section 280G.
The Acquiror has in all material respects performed all
obligations required to be performed by it to date and is
not in material default under any of the contracts,
agreements, leases, documents, or other arrangements to
which it is a party or by which it is otherwise bound. To
the best of Acquiror's knowledge, all parties with whom the
Acquiror has contractual arrangements are in compliance
therewith and are not in default thereunder.
(12) Changes in Compensation. Since December 31,
1994, there has not been any general pay increase to
employees or any change in the rate of compensation,
commission, bonus, or other remuneration payable to any
officer, employee, director, agent, or stockholder of the
Acquiror.
(13) Inventories. Since December 31, 1994, the
Acquiror has continued to replenish its inventories in a
normal and customary manner consistent with prior practice
and prudent practice prevailing in the businesses of the
Acquiror, and will continue to do so until the Closing Date.
(14) Records. The books of account, minute books,
stock certificate books, and stock transfer ledgers of the
Acquiror are complete and correct, and there have been no
transactions involving the business of the Acquiror which
properly should have been set forth in said respective
books, other than those set forth therein.
(15) Brokers or Finders. All negotiations on the part
of the Acquiror relative to this Agreement and the
transactions contemplated hereby have been carried on by
Acquiror without the intervention of any person or as the
result of any act of the Acquiror in such manner as to give
rise to any valid claim against the Stockholders or
Mediatech for a brokerage commission, finder's fee, or other
like payment, and any such claim shall be a liability of the
Acquiror and not the Stockholders or Mediatech.
(16) Absence of Certain Changes or Events. Since
December 31, 1994, there has not been any material adverse
change in, or event or condition materially and adversely
affecting, the condition (financial or otherwise),
properties, assets, liabilities or, to the knowledge of
Acquiror, the business or prospects of the Acquiror.
(17) Taxes. The Acquiror has duly filed all federal,
state, county and local income, franchise, excise, real and
personal property and other tax returns and reports
(including, but not limited to, those relating to social
security, withholding, unemployment insurance, and
occupation (sales) and use taxes) required to have been
filed by the Acquiror up to the date hereof. All of the
foregoing returns are true and correct in all material
respects and the Acquiror has paid all taxes, interest and
penalties shown on such returns or reports as being due.
The Acquiror has paid or made adequate provision in the
Acquiror's Financial Statements or its books and records for
all taxes payable in respect of all periods ending on or
before the date hereof. Except for the Los Angeles business
license sales tax for the period 1992-1993 for which the
Acquiror has accrued the estimated liability, the Acquiror
has no material liability for any taxes, interest or
penalties of any nature whatsoever, except for those taxes
which may have arisen up to the Closing Date in the ordinary
course of business and are properly accrued on the books of
the Acquiror as of the Closing Date.
(18) Environmental Matters. There are no actions,
proceedings or investigations pending or, to the actual
knowledge of the Acquiror, threatened before any federal or
state environmental regulatory body, or before any federal
or state court, alleging noncompliance by the Acquiror with
CERCLA or any other Environmental Laws. To the actual
knowledge of the Acquiror: (i) there is no reasonable basis
for the institution of any action, proceeding or
investigation against the Acquiror under any Environmental
Law; (ii) the Acquiror is not responsible under any
Environmental Law for any release by any person at or in the
vicinity of real property of any hazardous substance (as
defined by CERCLA), caused by the spilling, leaking,
pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, dumping or disposing of any
such hazardous substance into the environment; (iii) the
Acquiror is not responsible for any costs of any remedial
action required by virtue of any release of any toxic or
hazardous substance, pollutant or contaminant into the
environment including, without limitation, costs arising
from security fencing, alternative water supplies, temporary
evacuation and housing and other emergency assistance
undertaken by any environmental regulatory body; (iv) the
Acquiror is in compliance with all applicable Environmental
Laws; and (v) no real property used, owned, managed or
controlled by the Acquiror contains any toxic or hazardous
substance including, without limitation, any asbestos, PCBs
or petroleum products or byproducts in any form, the
presence, location or condition of which (a) violates any
Environmental Law, or (b) otherwise would pose any
significant health or safety risk unless remedial measures
were taken.
(19) SEC Filings. The Acquiror has filed with the SEC
all reports and other documents required to be filed by the
Acquiror pursuant to the Securities Act of 1933, as amended
(the "Act"), the Securities Exchange Act of 1934, as amended
(the "34 Act"), and the applicable rules and regulations
thereunder. As of their respective dates, each of such
reports and other documents (including, without limitation
proxy statements) complied in all material respects with the
requirements of the Act and the 1934 Act and the applicable
rules and regulations thereunder, and such reports and other
documents contained, as of their respective dates, no untrue
statements of any material facts nor omitted to state any
material fact required to be stated therein or necessary in
order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(20) NASD Filings. The Acquiror has filed with the
National Association of Securities Dealers ("NASD") all
reports and other documents required to be filed by the
Acquiror pursuant to applicable NASD rules and regulations
governing corporate financings and the designation of
securities for trading on the Nasdaq National Market System.
(21) Indemnification Liabilities. Other than claims
by Xxxxxx Xxxxx, Xx., a current officer and director, and
Xxxxxxx Avatar, a former officer and director, relating to
the litigation described in the Acquiror's Financial
Statements, there are no existing liabilities or facts known
to Acquiror which would require Acquiror to indemnify its
officers or directors for acts or omissions by such persons
acting on behalf of Acquiror.
ARTICLE 4
ACTIONS AND OBLIGATIONS OF THE ACQUIROR,
MEDIATECH AND THE STOCKHOLDERS BEFORE AND
AFTER THE CLOSING AND SECURITIES ACT MATTERS
Section 4.1 Actions of Mediatech Pending Closing.
Mediatech and the Stockholders covenant with the Acquiror that
from the date hereof to and including the Closing Date:
(1) Correct as of Closing. Each representation and
warranty of Xxxx and Mediatech set forth in Paragraph 3.1 of
this Agreement shall be true and correct on and as of the
Closing Date.
(2) Operations. Except with the prior written
consent of the Acquiror to the contrary, which consent shall
not be unreasonably withheld or delayed, Mediatech will:
(a) Conduct its affairs and business only in the
ordinary course of business;
(b) Not create or incur any material liabilities
other than current liabilities incurred in the ordinary
course of business;
(c) Not create or incur, or suffer to exist, any
mortgage, lien, pledge, hypothecation, charge, encumbrance,
or restriction of any kind which is not otherwise disclosed
in this Agreement;
(d) Not make any capital expenditures, or capital
additions or betterment, except as many be involved in
ordinary repairs, maintenance, and replacement;
(e) Not enter into any contract or commitment, except
in the ordinary course of business, pursuant to which it
will be obligated to expend, or entitled to receive, in
excess of $100,000 annually;
(f) Maintain its assets and properties in good
condition and repair, and not sell, or otherwise dispose of,
any of its material assets or properties, except sales out
of inventory in the ordinary course of business;
(g) Not declare or pay any dividend on, or make any
other distribution upon, or purchase, retire, or redeem, any
shares of its Common Stock, or set aside any funds for any
such purpose;
(h) Not issue or sell, or obligate itself to issue or
sell any additional shares of its Common Stock, whether or
not such shares have been previously authorized or issued,
or issue or sell any warrants, rights, or options to acquire
any such shares, or acquire any stock of any corporation, or
any interest in any business enterprise; provided, however,
that Mediatech may, without the prior written consent of
Acquiror, issue additional shares of its Common Stock to
Xxxx in satisfaction of its indebtedness to Xxxx;
(i) Not amend its Articles of Incorporation or
Bylaws;
(j) Except for payments made pursuant to Mediatech's
Profit Participation and Executive Bonus Programs and
contributions to Mediatech's 401(k) plan, not pay, or agree
to pay, conditionally or otherwise, any bonus, extra
compensation, pension, or severance pay to any director,
stockholder, officer, consultant, agent, or employee under
any pension plan or otherwise, or increase the compensation
paid by it at December 31, 1994 to any officer, director,
agent, consultant, or employee (except normal and customary
increases);
(k) Not discharge or satisfy any material lien,
charge, or encumbrance, nor pay any obligation or liability,
absolute or contingent, except (i) current liabilities shown
on Mediatech's Financial Statements dated December 31, 1994
(exclusive of the borrowed indebtedness specified in Section
3.1(2)(b)), or current liabilities incurred since said date
in the ordinary course of business, and (ii) expenses
incurred in connection with the transactions contemplated by
this Agreement (including, without limitation, reasonable
attorneys' fees and costs);
(l) Except with respect to this transaction, not
merge or consolidate, or obligate itself to do so, with, or
into any other entity;
(m) Not enter into any transactions, or take any acts
which if effected or performed prior to the date of this
Agreement, would constitute a breach of the representations,
warranties, and agreements contained herein; and
(n) Not institute, settle, or agree to settle any
action or proceeding before any court or governmental body.
(3) Access to Records. Xxxx and Mediatech will
afford the Acquiror, its representatives, counsel, agents,
and employees, at all reasonable times, and in a manner and
under circumstances which will not cause unreasonable
interference with the operation of Mediatech's business,
access to all of the properties of Mediatech, and its books,
files, records, insurance policies, and other corporate
books and records, for the purpose of audit, inspection, and
examination thereof, and will do, and cause Mediatech to do,
everything reasonably necessary to enable the Acquiror to
make a complete examination of the assets and properties of
Mediatech, and the condition thereof. No such examination,
however, shall constitute a waiver or relinquishment, on the
part of the Acquiror, of its right to rely upon the
covenants, representations, and warranties made by Mediatech
and the Stockholders in the provisions of this Agreement.
(4) Consultation. Xxxx and Mediatech will endeavor
to keep the Acquiror apprised with respect to the operation
and conduct of Mediatech's business prior to the Closing
Date.
Section 4.2 Actions of Acquiror Pending Closing. The
Acquiror covenants with Mediatech that from the date hereof to and
including the Closing Date:
(1) Correct as of Closing. Each representation and
warranty of the Acquiror set forth in Paragraph 3.2 of this
Agreement shall be true and correct on and as of the Closing
Date.
(2) Operations. Except with the prior written
consent of the Stockholders to the contrary, the Acquiror
will:
(a) Conduct its affairs and business only in the
ordinary course of business;
(b) Not create or incur any liabilities other than
current liabilities incurred in the ordinary course of
business;
(c) Not create or incur, or suffer to exist, any
mortgage, lien, pledge, hypothecation, charge, encumbrance,
or restriction of any kind;
(d) Not make or become a party to any contract or
commitment, or renew, extend, amend, or modify any contract
or commitment, except in the ordinary course of business, or
with the express written consent of the Stockholders;
(e) Not make any capital expenditures or capital
additions or betterment except as many be involved in
ordinary repairs, maintenance, and replacement;
(f) Not enter into any contract or commitment, except
in the ordinary course of business, pursuant to which it
will be obligated to expend, or entitled to receive, in
excess of $25,000 in amount;
(g) Maintain its assets and properties in good
condition and repair, and not sell or otherwise dispose of
any of its assets or properties, except sales out of
inventory in the ordinary course of business;
(h) Not declare or pay any dividend on or make any
other distribution upon, or purchase, retire or redeem, any
shares of its Common Stock, or set aside any funds for any
such purpose;
(i) Not issue or sell or obligate itself to issue or
sell any additional shares of its Common Stock (other than
as identified on Schedule 3.2(2)), whether or not such
shares have been previously authorized or issued, or, except
as otherwise provided in Section 5.2(11), issue or sell any
warrants, rights, or options to acquire any such shares, or
acquire any stock of any corporation or any interest in any
business enterprise;
(j) Not amend its Articles of Incorporation or
Bylaws;
(k) Not pay or agree to pay, conditionally or
otherwise, any bonus, extra compensation, pension, or
severance pay to any director, stockholder, offer,
consultant, agent, or employee under any pension plan or
otherwise, or increase the compensation paid by it at
December 31, 1994 (other than as identified on Schedule
3.2(2)) to any officer, director, agent, consultant, or
employee;
(l) Not discharge or satisfy any lien, charge or
encumbrance, nor pay any obligation or liability, absolute
or contingent, except (i) current liabilities shown on the
Financial Statements dated December 31, 1994 (exclusive of
the borrowed indebtedness specified in Section 3.2(2)(b)) or
current liabilities incurred since said date in the ordinary
course of business and (ii) expenses incurred in connection
with the transactions contemplated by this Agreement
(including, without limitation, reasonable attorneys' fees
and costs);
(m) Use reasonable commercial efforts to preserve its
business organization intact;
(n) Use reasonable commercial efforts to preserve the
goodwill of its suppliers, customers, and those having
business relations with it;
(o) Keep its insurable properties and assets insured
in accordance with present practice;
(p) Maintain, keep, and preserve all of its
properties and assets in a good condition and state of
repair;
(q) Not merge or consolidate, or obligate itself to
do so, with or into any other entity;
(r) Not enter into any transactions or take any acts
which if effected or performed prior to the date of this
Agreement, would constitute a breach of the representations,
warranties, and agreements contained herein; and
(s) Not institute, settle, or agree to settle any
action or proceeding before any court or governmental body
for money damages requiring payment by Acquiror in excess of
$200,000.
(3) Access to Records. The Acquiror will afford the
Stockholders , their representatives, counsel, agents, and
employees, at all reasonable times and in a manner and under
circumstances which will not cause unreasonable interference
with the operation of the Acquiror's business, access to all
of the properties of the Acquiror and its books, files,
records, insurance policies, and other corporate books and
records, for the purpose of audit, inspection, and
examination thereof, and will do, and cause the Acquiror to
do, everything reasonable necessary to enable the Acquiror
to make a complete examination of the assets and properties
of the Acquiror and the condition thereof. No such
examination, however, shall constitute a waiver or
relinquishment on the part of the Acquiror of its right to
rely upon the covenants, representations, and warranties
made by the Acquiror in the provisions of this Agreement.
(4) Consultation. The Acquiror will endeavor to
keep Mediatech apprised with respect to the operation and
conduct of the Acquiror's business prior to the Closing
Date.
Section 4.3 Undertakings of Acquiror, Mediatech and the
Stockholders.
(1) The Acquiror, Mediatech and the Stockholders each
will hold, and will cause its respective officers,
directors, employees, consultants, advisors and agents to
hold, in confidence, unless compelled to disclose by
judicial or administrative process or by other requirements
of law, all confidential documents and information
concerning the parties furnished to any other party in
connection with the transactions contemplated by this
Agreement, except to the extent that such information can be
shown to have been (i) previously known on a
non-confidential basis by the disclosing party; (ii) in the
public domain; or (iii) later lawfully acquired by the
closing party from sources other than as a result of the
transactions contemplated herein; provided that each party
may disclose such information to its officers, directors,
employees, consultants, advisors and agents in connection
with the transactions contemplated by this Agreement, so
long as such persons are informed of the confidential nature
of such information and are directed to treat such
information confidentially in accordance herewith. Each
party's obligation to hold any such information in
confidence shall be satisfied if it exercises the same care
with respect to such information as it would take to
preserve the confidentiality of its own similar information.
Subject to the foregoing and Section 4.3(2) below, each
party shall keep confidential the terms of this Agreement
and of the transactions contemplated hereby except to the
extent such information is legally required to be disclosed.
If this Agreement is terminated, such confidence shall be
maintained and each party will, and will use its best
efforts to cause its officers, directors, employees,
consultants, advisors and agents to, destroy or deliver to
each other party, upon request, all documents and other
materials, and all copies thereof, obtained by such party in
connection with this Agreement, that are subject to such
confidence. The parties obligations under this Section
4.3(1) shall terminate on the Closing Date.
(2) No press release or other public disclosure of
matters related to this Agreement or any of the transactions
contemplated hereby shall be made by the Acquiror, or the
Stockholders unless the other parties shall have provided
their consent to the form and substance thereof; provided,
however, that nothing herein shall be deemed to prohibit any
party hereto from making any disclosure which its counsel
deems necessary or advisable in order to fulfill such
party's disclosure obligations imposed by law.
(3) Each party shall provide the others with adequate
opportunity to conduct such reviews and examinations of the
business, properties and conditions (financial and
otherwise) of the others as each party shall deem prudent,
provided that such investigations shall not interfere
unreasonably with the normal operations of the party being
reviewed.
ARTICLE 5
CONDITIONS PRECEDENT
Section 5.1 Conditions Precedent to Obligations of Xxxx and
the Stockholders. Except as may be waived in writing by Xxxx and
the Stockholders, the obligations of the Stockholders are
subject to the fulfillment, prior to or at the Closing on the
Closing Date, of each of the following conditions:
(1) No Material Errors. The representations and
warranties of the Acquiror in Paragraph 3.2 hereof shall be
true and correct in all material respects as of the Closing
Date, subject to any changes contemplated by this Agreement.
(2) Opinion of Acquiror's Counsel. The Acquiror
shall have delivered to the Stockholders or representative
of the Stockholders the opinion, dated the Closing Date, of
Acquiror's counsel, Davidson & Associates, P.C., in form
attached hereto as Schedule 5.1(2).
(3) Directors' Approval. Consummation of the
transactions contemplated herein shall have been approved by
the Board of Directors of Acquiror at special meetings of
the Board of Directors to be held for the purpose of
obtaining such approvals.
(4) Third-Party Consents. On or before the Closing
Date, all material consents or approvals by any third party,
including, without limitation, the consent of American
National Bank and Trust Company of Chicago, Mediatech's
lender, which are required to be obtained by Acquiror in
connection with the execution, delivery or performance of
this Agreement or the consummation of the transactions
contemplated herein shall have been obtained.
(5) Release of Xxxx Guarantees. On or before the
Closing Date, Xxxx shall be released from all liability,
whether direct or indirect, primary or secondary, as a
guarantor of any indebtedness of Mediatech specified in
Schedule 5.1(5)(A) attached hereto (the "Xxxx Guarantees"),
or other acceptable arrangements shall have been agreed to.
Should the creditors listed in Schedule 5.1(5)(A)
refuse to release the Xxxx Guarantees then the Acquiror
shall seek alternative sources of financing which shall be
in place on or before Closing Date. Should alternative
sources of financing be unavailable, and assuming the
creditors do not otherwise accelerate the indebtedness, then
Xxxx agrees to remain liable on the Xxxx Guarantees and
continue the financing in place as listed on Schedule
5.1(5)(A) for up to one (1) year after Closing except that
the Acquiror shall indemnify and hold Xxxx harmless from and
against any liability, loss, or damage suffered as a result
of action pursuant to the Xxxx Guarantees and shall secure
said indemnification agreement with the escrow of shares of
Acquiror's Common Stock equal to 150% of the indebtedness
listed on Schedule 5.1(5)(A) based on the average closing
market price of the Acquiror's Common Stock for the 60
trading days subsequent to the Closing Date. These
additional shares of Acquiror's Common Stock shall have
demand registration rights. The shares of Acquiror's Common
Stock to be deposited in escrow shall be issued in the name
of Acquiror and shall be treasury shares until and unless
such escrowed shares are sold as hereinafter set forth. The
Acquiror shall also deposit into escrow duly executed stock
powers as necessary to assign such shares out of escrow if
necessary to release the Xxxx Guarantees.
The number of shares to be set aside in escrow as
security for the indemnification pursuant to this Section
5.1(5) shall initially be the number of shares as calculated
in the preceding paragraph. Should Xxxx so demand, at the
end of any month when the number of shares set aside in
escrow does not to meet or exceed total market value of 150%
of the balance of the debt listed on said Schedule 5.1(5)(A)
then the Acquiror shall deposit a number of additional
shares of Acquiror's Common Stock as necessary to satisfy
the minimum coverage requirement.
At the end of any month when the number of shares set
aside as back-up exceeds the minimum coverage requirement
for the indemnification rights by ten percent (10%) or more
either as a result of the reduction of the amount of debt
remaining from said Schedule 5.1(5)(A) or as a result of an
increase in the market value of the Acquiror's Common Stock,
then the number of shares in escrow shall be reduced by a
number equal to the number of shares necessary to reduce the
coverage to a total of 150% of the then outstanding debt.
Acquiror and Xxxx shall execute joint instructions to the
escrow holder as set forth in Schedule 5.1(5)(C) to deposit
additional shares and remove from escrow shares in excess of
the minimum coverage in accordance with this Section 5.1(5).
Not later than one (1) year after closing, Acquiror
must unconditionally release the Xxxx Guarantees by
providing a substitute guarantor, by refinancing the
indebtedness listed in Schedule 5.1(5)(A) without the Xxxx
Guarantees or by paying off all indebtedness listed on
Schedule 5.1(5)(A). Should the Xxxx Guarantees not be
released within one (1) year after Closing, the Acquiror
shall, within ninety (90) days of the expiration of such one
(1) year period, arrange for the sale of an adequate number
of escrowed shares to pay off the Xxxx Guarantees. If at
the end of said period, the Xxxx Guarantees have not been
paid off and the failure did not result from mismanagement
of Mediatech thereby causing the market conditions for
Acquiror's Common Stock to deteriorate, then the escrow
holder shall deliver out of escrow to Xxxx the number of
shares of Acquiror's Common Stock necessary to increase
Xxxx'x ownership in Acquiror to fifty-one percent (51%).
Upon delivery of such shares to Xxxx, the escrow shall
terminate and the balance of the escrowed shares, if any,
shall be returned to INDE. If there are insufficient shares
of Acquiror's Common Stock in escrow to provide Xxxx with a
fifty-one percent (51%) ownership interest, Acquiror shall
issue to Xxxx such additional shares of Acquiror's Common
Stock to raise Xxxx'x ownership of Acquiror's Common Stock
to fifty-one percent (51%).
The obligation of the Acquiror pursuant to this Section
5.1(5) shall be evidenced by separate indemnification and
escrow agreements in the forms attached as Schedules
5.1(5)(B) and 5.1(5)(C). The provisions of this Section
5.1(5) shall survive the Closing Date until such time as the
Xxxx Guarantees are fully released.
(6) Cancellation of Xxxx Loans. Prior to the Closing
Date, Xxxx and Mediatech will cancel all debt and loans due
to Xxxx from Mediatech as further specified in Mediatech's
Financial Statements, except for accrued rental payments
owed by Mediatech to Xxxx and/or the development companies
which own the real estate which Mediatech is presently
leasing, and will issue additional shares of Mediatech
Common Stock to Xxxx in full satisfaction of such
indebtedness due Xxxx.
(7) Compliance with Agreements. The Acquiror shall
have performed and complied with all agreements or
conditions required by this Agreement to be performed and
complied with by it prior to or on the Closing Date.
(8) Certificate of Officers. The Acquiror shall have
delivered to the Stockholders a certificate dated the
Closing Date, executed in its corporate name by, and
verified by, the oath of its President or any Vice President
and its Secretary or an Assistant Secretary, certifying to
the fulfillment of the conditions specified in this Section
5.1.
(9) No Restraining Action. No action or proceeding
by any governmental body or agency shall have been
threatened, asserted, or instituted to restrain or prohibit
the carrying out of the transactions contemplated by this
Agreement.
(10) No Contracts Terminated. The Acquiror shall not
have had any contract or contracts, which in the aggregate
would materially affect their respective businesses,
terminated prior to the Closing Date.
(11) No Damage to Assets. At the Closing Date, the
machinery, equipment, inventory, or other tangible property
of the Acquiror shall not have suffered loss or damage on
account of fire, flood, accident, act of war, civil
commotion, or any other cause or event beyond the reasonable
power and control of the Acquiror (whether or not similar to
the foregoing), to an extent which substantially affects the
value of the properties and assets of the Acquiror. Loss or
damage shall be considered to affect substantially the value
of said properties and assets within the meaning of this
paragraph if the book value of such properties and assets so
lost or damaged exceeds five percent (5%) in book value of
all such tangible properties and assets.
(12) Amendments to the Acquiror's 1992 Stock Option
Plan. Subsequent to the Closing, Acquiror shall take
whatever action is necessary to amend its 1992 Stock Option
Plan to provide (i) for the issuance of the stock options to
Xxxxxx X. Xxxx and Xxxxxx X. Xxxxxx as provided in Section
5.2(11) and (ii) that employees of the Acquiror's wholly
owned subsidiaries are eligible participants under the plan.
(13) Schedules Delivered. All schedules and exhibits
to this Agreement and all outstanding due diligence
documents to be delivered by each party shall have been
delivered in a form and substance reasonably satisfactory to
each party and such schedules shall not disclose a material
adverse change from the Acquiror's most recent Annual Report
of Form 10-KSB and Quarterly Report on Form 10-QSB or
Mediatech's Financial Statements.
Section 5.2 Conditions Precedent to Obligations of Acquiror.
Except as may be waived in writing by the Acquiror, all of the
obligations of the Acquiror under this Agreement are subject to
fulfillment, prior to or at the Closing on the Closing Date, of
each of the following conditions:
(1) No Material Errors. The representations and
warranties of Mediatech in Paragraph 3.1 hereof shall be
true and correct as of the Closing Date, subject to any
changes contemplated by this Agreement.
(2) Third-Party Consents. On or before the Closing
Date, all material consents or approvals by any third party,
if any, which are required to be obtained by the
Stockholders or Mediatech in connection with the execution,
delivery or performance of this Agreement or the
consummation of the transactions contemplated herein shall
have been obtained.
(3) Dissenter's Rights. Declining Stockholders shall
not have dissenter's rights.
(4) Compliance With Agreement. Each Stockholder
shall have performed and complied with all agreements or
conditions required by this Agreement to be performed and
complied with by them prior to or on the Closing Date.
(5) Stockholders' Common Stock. No Stockholder will
create or incur, or suffer to exist, any mortgage, lien,
pledge, hypothecation, charge, encumbrance, or restriction
of any kind on the shares of Mediatech's Common Stock which
will be assigned, transferred, and delivered to the Acquiror
at the Closing on the Closing Date.
(6) Certificate of Xxxx . Xxxx shall have delivered
to the Acquiror a certificate, dated the Closing Date,
certifying to the fulfillment of the conditions specified in
this Section 5.2.
(7) Stockholders' Certificate. At Closing, each
non-Declining Stockholder shall deliver a certificate to the
Acquiror substantially in the form of Schedule 5.2(7).
(8) Opinion of Xxxx'x and Mediatech's Counsel. Xxxx
shall have delivered to the Acquiror an opinion of Wildman,
Harrold, Xxxxx & Xxxxx, counsel for Xxxx and Mediatech dated
the Closing Date, in the form attached hereto as Schedule
5.2(8).
(9) All of Mediatech's Common Stock. The aggregate
number of shares of Mediatech's Common Stock held by the
non-Declining Stockholders at the Closing on the Closing
Date shall constitute at least 93% of all of the issued and
outstanding Common Stock of Mediatech, and, except as
provided in Sections 4.1(2)(h) and 5.1(6), no additional
shares will be issued before the Closing Date.
(10) No Restraining Action. No action or proceeding
by any governmental body or agency shall have been
threatened, asserted, or instituted to restrain or prohibit
the carrying out of the transactions contemplated by this
Agreement.
(11) No Contracts Terminated. Mediatech shall not
have had any contract or contracts, which in the aggregate
would materially affect its business, terminated prior to
the Closing Date.
(12) No Damage to Assets. At the Closing Date the
machinery, equipment, inventory, or other tangible property
of Mediatech shall not have suffered loss or damage on
account of fire, flood, accident, act of war, civil
commotion, or any other cause or event beyond the reasonable
power and control of Mediatech or the Stockholders (whether
or not similar to the foregoing), to an extent which
substantially affects the value of the properties and assets
of Mediatech. Loss or damage shall be considered to affect
substantially the value of said properties and assets within
the meaning of this paragraph if the book value of such
properties and assets so lost or damaged exceeds five
percent (5%) in book value of all such tangible properties
and assets.
(13) Employment Agreements. Xxxxxx X. Xxxx and Xxxxxx
X. Xxxxxx shall both be living on the Closing Date, shall
not be incapacitated so as to render them unavailable for
employment by the Acquiror and shall execute or assign to
the Acquiror on the Closing Date, Employment Agreements in
the form mutually acceptable to the Acquiror, Xxxx and
Derham.
ARTICLE 6
POST CLOSING COVENANTS
Section 6.1 Unregistered Securities/Exemption from
Registration: In order to induce the Acquiror to issue
Acquiror's Common Stock to the Stockholders:
(1) Each Stockholder acknowledges that the shares of
the Acquiror's capital stock to be delivered to it pursuant
to this Agreement have not and are not being registered
under the Securities Act of 1933, hereinafter referred to as
the 1933 Act, as amended, and that accordingly such stock is
not fully transferable except as permitted under various
exemptions contained in the 1933 Act and the rules of the
Securities and Exchange Commission interpreting said Act.
The provisions contained in this Section 6.1 are intended to
ensure compliance with the 1933 Act.
(2) Each Stockholder covenants, warrants, and
represents that the shares of the Acquiror's capital stock
that will be issued to him pursuant to this Agreement, will
not be offered, sold, assigned, pledged, hypothecated,
transferred, or otherwise disposed of except after full
compliance with all of the applicable provisions of the 1933
Act and the rules and regulations of the Securities and
Exchange Commission thereunder.
(3) Each Stockholder represents and warrants to the
Acquiror that he is acquiring the shares of the Acquiror's
capital stock to be issued to him under this Agreement for
his own account, for investment, and not with a view to the
resale or other distribution thereof; that he presently has
no intention of selling, transferring, hypothecating, or
otherwise disposing of all or any part of such shares at any
particular time, for any particular price, or upon the
happening of any particular event or circumstance; and that
the Acquiror is relying upon the truth and accuracy of these
covenants, warranties, and representations in issuing said
shares without first registering the same under the 0000
Xxx.
(4) Each Stockholder agrees not to sell, transfer,
hypothecate, or otherwise dispose of any of the shares of
the Acquiror's capital stock he receives pursuant to this
Agreement unless and until he (a) shall have presented the
Acquiror with a written legal opinion in form and substance
satisfactory to counsel for the Acquiror to the effect that
said disposition is permissible under the terms of the 1933
Act and regulations interpreting said Act; (b) shall have
complied with the registration and prospectus requirements
of the 1933 Act relating to such disposition; or (c) shall
have presented the Acquiror satisfactory evidence that such
transfer will comply with Rule 144 under the Securities Act
of 1933 and therefore will be exempt from registration under
Section 4(1) of such Act. Each Stockholder further agrees
that the certificates evidencing the shares he will receive
shall contain the following legend:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, HAVE
BEEN TAKEN FOR INVESTMENT, AND MAY NOT BE SOLD OR
OFFERED FOR SALE UNLESS A REGISTRATION STATEMENT UNDER
THE FEDERAL SECURITIES ACT OF 1933, AS AMENDED WITH
RESPECT TO SUCH SHARES, IS THEN IN EFFECT OR ANY
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH
ACT IS THEN IN FACT APPLICABLE TO SUCH OFFER OR SALE.
The Acquiror shall also place a "stop transfer" order
against transfer of the shares until one of the conditions set
forth above has been met.
(5) If at any time in the future any of the
Stockholders should offer, sell, assign, pledge,
hypothecate, transfer, or otherwise dispose of any of such
shares of capital stock without registration under the 1933
Act, as amended, or such similar federal statute as may then
be in effect, such Stockholder does hereby agree to
indemnify and hold harmless the Acquiror against and from
any and all claims, liabilities, penalties, costs, and
expenses that may be asserted against or suffered by the
Acquiror as a result of such disposition.
Section 6.2 Lock-Up. The Stockholders agree that they will
not sell, directly or indirectly, any Common Stock received
pursuant to Section 1.1 for a period of one (1) year from the
Closing Date. After the expiration of the one (1) year lock-up
period, the Stockholders agree that they will jointly limit any
sales of Common Stock to $183,000 per calendar month until the
date which is three years after the Closing Date. The
Stockholders shall determine by mutual agreement what proportion
of each Stockholder's shares of Common Stock shall be included in
sales permitted by this Section 6.1. In the event the
Stockholders cannot agree, the number of shares of Common Stock
permitted to be sold by the Stockholders hereunder shall be based
upon their proportionate interests in Acquiror on the Closing
Date. The Stockholders may jointly elect to defer sales in any
given calendar month for up to a maximum of three calendar
months. During subsequent months, deferred sales may be added to
current sales, but not in excess of an amount equal to the
equivalent of an additional $183,000 each month until the
deferrals have been caught up. After the date which is three (3)
years after the Closing Date, the Stockholders are free to sell
any number of the remaining shares of Common Stock without
restriction. The provisions of this Section 6.1 are exclusive of
any sales of Common Stock by the Stockholders made pursuant to
the piggyback registration rights which are granted as part of
Section 6.4 of this Agreement. This lock-up provision will
automatically terminate for any Stockholder whose employment with
Mediatech or Acquiror is terminated without cause (as defined in
such Stockholder's employment agreement) after the Closing Date.
Section 6.3 Reports Under Securities Exchange Act of 1934.
With a view to making available to the Stockholders the benefits
of Rule 144 and 145 promulgated under the Act and any other rule
or regulation of the SEC that may at any time permit a
Stockholder to sell securities of the Acquiror to the public
without registration or pursuant to a registration on Form S-3,
the Acquiror agrees to:
(1) make and keep public information available, as
those terms are understood and defined in Rule 144;
(2) file with the SEC in a timely manner all reports
and other documents required of the Acquiror under the Act
and the 1934 Act; and
(3) furnish to any Stockholder, so long as the
Stockholder owns any Common Stock, forthwith upon request
(i) a written statement by the Acquiror that it has complied
with the reporting requirements of Rule 144, the Act and the
1934 Act, or that it qualifies as a registrant whose
securities may be resold pursuant to Form S-3 (at any time
after it so qualifies), (ii) a copy of the most recent
annual or quarterly report of the Acquiror and such other
reports and documents so filed by the Acquiror, and (iii)
such other information as may be reasonably requested in
availing any Stockholder of any rule or regulation of the
SEC which permits the selling of any such securities without
registration or pursuant to such form.
Section 6.4 Registration Rights. The Company shall have
entered into the registration rights agreement substantially in
the form attached hereto as Schedule 6.4(1).
ARTICLE 7
NATURE AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES
Section 7.1 Nature and Survival of Representations and
Warranties. All statements of fact contained herein, any
certificate or schedule delivered by or on behalf of Mediatech or
Acquiror pursuant to the terms hereof, shall be deemed
representations and warranties made by Mediatech and the
Acquiror, respectively, to each other under this Agreement. For
purposes of this Paragraph 7.1 only, any party or other person
seeking to enforce, or claiming the benefit of, any
representation and warranty hereunder is called a Claimant, and
any party or other person against which right is claimed is
called a Defendant. All representations and warranties of the
parties shall survive the Closing and all inspections,
examinations, or audits on behalf of the parties; provided,
however, that all representations and warranties shall terminate
and expire, and be without further force and effect whatever from
and after two years from the date of closing, hereinafter
referred to as the Expiration Date, and neither party hereto
shall have liability whatsoever on account of any inaccurate
representation or warranty or for any breach of warranty, unless
Claimant shall on or prior to said date, serve written notice on
Defendant, with a copy to Defendant's counsel herein, setting
forth in reasonable detail any claims (and to the extent possible
an estimate of the damages) which Claimant may have under this
Agreement.
ARTICLE 8
MISCELLANEOUS
Section 8.1 Amendment and Waiver. This Agreement may be
amended or modified at any time and in all respects by an
instrument in writing executed by Xxxx and the Presidents of
Acquiror and Mediatech and the Stockholders as follows:
(1) Extension of Time. To extend the time for the
performance of any of the obligations of the Acquiror, Xxxx,
or the Stockholders.
(2) Waiving Inaccuracies. To waive any inaccuracies
and representations by the Acquiror, Xxxx, or the
Stockholders contained in this Agreement or any document
delivered pursuant hereto.
(3) Waiving Compliance With Covenants. To waive the
fulfillment of any condition that is precedent to the
performance by the Acquiror, Xxxx, or the Stockholders so
waiving of any of its obligations under this Agreement.
Section 8.2 Board of Directors. At the Closing Date the
Board of Directors of the Acquiror ("Directors") will appoint one
(1) person to its Board as directed by Xxxx until the next
meeting of shareholders. The Directors agree to nominate the
appointee on their proposed slate of directors, for shareholder
approval, for a period of three (3) years. The Acquiror shall
procure on or before the Closing Date, a directors' or officers'
liability insurance policy in the amount of not less than
$1,000,000, if such insurance can be obtained at a reasonable
cost as determined by the Acquiror, and shall maintain the same
for as long as Mediatech's designees remain on the Board of
Directors.
Section 8.3 Covenants Not to Compete. Except for the
research and development activities related to a venture known as
Advanced Media Technologies, which activities have been and are
continued to be funded by Xxxx, Mediatech and Xxxx represent and
warrant that all research and business development activities
related to Mediatech's business have been conducted by Mediatech,
are currently owned by Mediatech, have been disclosed to the
Acquiror and are listed on Schedule 8.3 or specified elsewhere in
this Agreement. Furthermore, upon termination of their
employment pursuant to the Employment Agreements specified in
Section 5.2(11), Xx. Xxxx and Xx. Xxxxxx agree to a two (2) year
covenant not to compete pursuant to the terms set forth in their
Employment Agreements.
Section 8.4 Assignment. Neither this Agreement nor any
right created hereby shall be assignable by Xxxx, Mediatech, or
the Stockholders (or their successors in interest) or the
Acquiror without the prior written consent of the others, except
by the laws of succession. Nothing in this Agreement, express or
implied, is intended to confer upon any person, other than the
parties hereto and their respective successors, assigns, heirs,
executors, administrators, or personal representations, any
rights or remedies under or by reason of this Agreement.
Section 8.5 Notices. Any notice, communication, request,
reply, or advice, hereinafter severally and collectively called
"notice," in this Agreement provided or permitted to be given,
made, or accepted by either party to the other must be in writing
and may be given or be served by depositing the same in the
United States mail, addressed to the party to be notified,
postage prepaid and registered or certified with return receipt
requested, or by delivering the same in person to an officer of
such party. Notice deposited in the mail in the manner
hereinabove described shall be effective only if an when received
by the parties to be notified. For purposes of notice the
addresses of the parties shall, until changed as hereinafter
provided, be as follows:
(1) If to Acquiror:
Attn: Xxxxx X. Xxxxxxxxxx
Independent TeleMedia Group, Inc.
00000 Xxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxxxx Xxxx, XX 00000
with a copy to:
Davidson & Associates, P.C.
Attn: Xxxxx X. Xxxxxxxx
0000 Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
(2) If to Xxxx or Mediatech:
Mediatech, Inc.
000 Xxxx Xxxxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxx and Xxxxxx X. Xxxxxx
with a copy to:
Xxxx X. Xxxxxx
Wildman, Harrold, Xxxxx & Xxxxx
000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000-0000
(3) If to Xxxxxx:
Xxxxxxx Xxxxxx
0000 X. Xxxxxxxxx
Xxxxxxx, XX 00000
with a copy to:
Xxxxxxx X. Xxxxxxx
Xxxxxxx & Wolf
Suite 1800
000 X. XxXxxxx Xxxxxx
Xxxxxxx, XX 00000
(4) If to Wouters:
Xxxxx Xxxxxxx
Mediatech, Inc.
0000 Xxxxx Xxxxx Xxxx
Xxxxx, XX 00000
with a copy to:
__________________
__________________
__________________
or at such other addresses as any party may have advised the
others in writing.
Section 8.6 Paragraph and Other Headings. Paragraph and
other headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
Section 8.7 Severability. In the event that any one or more
of the provisions contained in this Agreement shall for any
reason be held to be invalid, illegal, or unenforceable in any
respect, such invalidity, illegality, or unenforceability shall
not affect other provisions of this Agreement, but this Agreement
shall be constructed as if such invalid, illegal, or
unenforceable provisions had never been contained therein.
Section 8.8 Colorado Law to Apply. This Agreement shall be
construed under and in accordance with the laws of the State of
Colorado.
Section 8.9 Parties in Interest. This Agreement shall be
binding on and inure to the benefit of and be enforceable by the
stockholders and the Acquiror, their respective heirs,
executors, administrators, legal representatives, successors, and
assigns except as otherwise expressly provided herein.
Section 8.10 Attorneys' Fees. If any action at law or
inequity, including an action declaratory relief, is brought to
enforce or interpret the provisions of this Agreement, the
prevailing party shall be entitled to recover reasonable
attorney's fees from the other party, which fees may be set by
the court in the trial of such on or may be enforced in a
separate action brought for that purpose, and which fees shall be
in addition to any other relief which may be awarded.
Section 8.11 Counterparts. This Agreement and all other
copies of this Agreement insofar as they relate to the rights,
duties, and remedies of parties, shall be deemed to be one
agreement. This Agreement may be executed concurrently in one or
more counterparts, each which shall be deemed an original, but
all which together shall constitute one and the same instrument.
Facsimile signatures shall be treated as original until replaced
by the original copy which shall then be substituted.
Section 8.12 Integrated Agreement. This Agreement
constitutes the entire agreement between the parties hereto, and
there are no agreements, understandings, restrictions,
warranties, or representations between the parties other than
those set forth herein or herein provided for.
IN WITNESS WHEREOF, this Stock Purchase Agreement has been
executed the day and year set forth above.
ACQUIROR:
INDEPENDENT TELEMEDIA GROUP, INC.
By:
Its:
Attest:
____________________________________
Its:
THE STOCKHOLDERS:
Xxxxxx X. Xxxx
Xxxxxxx Xxxxxx
Xxxxx Xxxxxxx
For purposes of Sections 3.1, 4.1,
7.1 and 8.3 only:
MEDIATECH, INC.
By:
Xxxxxx X. Xxxxxx, Managing
Director
SCHEDULE 3.1(3)
TO
INDEPENDENT TELEMEDIA GROUP, INC.
&
MEDIATECH, INC.
PLAN AND AGREEMENT OF REORGANIZATION
MEDIATECH, INC. STOCKHOLDERS LIST
NAME, ADDRESS AND SOCIAL NUMBER OF SHARES
SECURITY NO. OF SHAREHOLDER OF MEDIATECH, INC.
Xxxxxx X. Xxxx 183*
Mediatech, Inc.
000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Xxxxx Xxxxxxx 10
Mediatech, Inc.
0000 Xxxxx Xxxxx Xxxx
Xxxxx, Xxxxxxxx 00000
Xxxxxxx Xxxxxx 4
0000 X. Xxxxxxxxx
Xxxxxxx, Xxxxxxxx 00000
*Additional shares to be issued to Xx. Xxxx in satisfaction of
his outstanding loans to the company.
