REORGANIZATION AGREEMENT
This Reorganization Agreement ("Agreement") is made and entered into this
30th day of October 1997, by and among (i) Keystone Entertainment, Inc., a
Delaware corporation, which is referred to herein as the "Company," (ii) G/O
International, Inc., a Colorado corporation, which is referred to herein as "G/O
Colorado" (iii) Mac Filmworks, Inc., a Texas corporation, which is referred to
herein as "Macfilms" (iv) those persons identified in Schedule A-1 attached
hereto, who are the beneficial owners of 4,100,000 shares of common stock of
Macfilms, $0.001 par value per share, (the "Founding Shareholders"), (v) those
persons identified in Schedule A-2 hereto, who are the beneficial owners of
247,680 shares of common stock of Macfilms, (the "Library Owners"), and (vi)
those persons identified in Schedule A-3 hereto, who are the beneficial owners
of 400,000 shares of common stock of Macfilms (the "Share Subscribers"). The
Founding Shareholders, the Library Owners and the Share Subscribers shall
hereinafter be referred to collectively as the "Shareholders" or "Macfilms
Shareholders." Two of the Founding Shareholders, Xxx XxXxxxxxxx, Sr. and Xxx
XxXxxxxxxx, Jr., are referred to herein as the "Representing Shareholders".
WHEREAS, the Shareholders, own and have the right to sell, transfer, and
convey, 4,747,680 shares of Macfilms common stock, which constitutes one hundred
percent (100%) of the issued and outstanding capital stock of Macfilms; and
WHEREAS, 1,600,000 shares of the Company's common stock is issued and
outstanding and owned by G/O Colorado, which constitutes 100% of the issued and
outstanding capital stock of the Company; and
WHEREAS, the Company wishes to acquire one hundred percent (100%) of the
issued and outstanding capital stock of Macfilms through exchanging for the
4,747,680 shares of Macfilms' common stock held by the Shareholders, 4,747,680
shares of the Company's common stock; and
WHEREAS, the Shareholders have agreed to deliver 4,747,680 shares of
Macfilms' common stock to the Company in exchange for 4,747,680 shares newly
issued shares of the Company's common stock; and
WHEREAS, after the exchange, there will be 6,347,680 shares of Company
common stock outstanding, 4,747,680 held by the MacFilm Shareholders and
1,600,000 held by G/O Colorado, which will be subsequently distributed to the
G/O Colorado shareholders.
WHEREAS, the parties hereto wish to formalize the above mentioned
agreements and thereafter accomplish such exchange on the terms and conditions
set forth herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants hereinafter set forth, the parties hereto have agreed and by these
presents do hereby agree as follows:
1. REPRESENTATION, WARRANTIES AND COVENANTS BY MACFILMS AND THE
REPRESENTING SHAREHOLDERS. MacFilms and the Representing Shareholders, hereby
jointly and severally make the following express representations and warranties
to the Company:
A. MacFilms is a corporation duly organized, validly existing and in
good standing under the laws of Texas and has the corporate power
to own its property and carry on its business in Texas. Copies of
MacFilms' Articles of Incorporation and By-laws have heretofore
been furnished to the Company by MacFilms, and all such copies
are true, correct and complete copies of the original Articles of
Incorporation and By-laws including all amendments thereto.
B. MacFilms has the corporate authority to issue a total of
10,000,000 shares of $0.001 par value common stock, of which
4,747,680 shares have been issued and are outstanding. As of the
date of Closing, there are not any outstanding or authorized
options, warrants, rights, subscriptions, claims of any
character, agreements, obligations, convertible or exchangeable
securities, or other commitments, contingent or otherwise,
relating to the MacFilms' capital stock, pursuant to which the
MacFilms is or may become obligated to issue shares of the
MacFilms' common stock, any other shares of its capital stock or
any securities convertible into, exchangeable for, or evidencing
the right to subscribe for, any shares of the capital stock of
MacFilms.
C. The Shareholders have full power and authority to exchange the
4,747,680 shares of MacFilms' common stock which are held by them
upon the terms and conditions provided for in this Agreement, and
said shares of common stock have been duly and validly issued and
will be free and clear of any lien or other encumbrance on the
Closing Date specified herein.
D. Except as described in this Agreement or disclosed to the Company
in the schedule attached hereto as Schedule "B" (the "Disclosure
Schedule"), MacFilms has not:
(1) issued and committed to issue any additional shares of its
capital stock, or any options to acquire such stock;
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(2) paid or declared any dividends or distributions of capital,
surplus, or profits with respect to any of its issued and
outstanding shares of capital stock; or
(3) entered into any other transaction or agreement which would,
or might, materially impair the shareholder's equity of
MacFilms.
E. Except as provided herein or in the Disclosure Schedule, MacFilms
has not engaged in any material transactions other than
transactions in the normal course of the operation of its
business, which would, or might, materially impair the
shareholder's equity of MacFilms.
F. MacFilms is not involved in any pending or threatened litigation
which would, or might, materially affect its financial condition.
G. To the best of MacFilms knowledge, it has good and marketable
title to all of the property and assets free and clear of any and
all liens, encumbrances or restrictions, except for:
(1) taxes and assessments which may become due and payable in
the ordinary course of business;
(2) easements or other minor restrictions with respect to its
property which do not materially affect the present use of
such property; and
(3) those items disclosed on the Disclosure Schedule.
H. There are no unpaid assessments or proposed assessments of State
or Federal income taxes pending against MacFilms and all
liabilities for Federal and State income or franchise taxes, as
shown on the tax returns filed, or to be filed, by MacFilms, have
been paid or the liability therefor has been provided for and all
Federal and State income or franchise taxes for periods
subsequent to the periods covered by said returns likewise have
been paid or adequately accrued; except where the failure to pay
would not have a material adverse effect on the business of
MacFilms or as disclosed in the Disclosure Schedule.
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I. The execution and delivery of this Agreement, and the issuance of
the MacFilms' common stock required to be issued hereunder, will
have been duly authorized by all necessary corporate action and
neither the execution nor delivery of this Agreement nor the
issuance of the MacFilms' common stock, nor the performance,
observance or compliance with the terms and provisions of this
Agreement will violate any provision of law, any order of any
court or other governmental agency, the Articles of Incorporation
or By-Laws of the MacFilms or any indenture, agreement or other
instrument to which MacFilms is a party, or by which it is bound
or by which any of its property is bound.
J. There is no legal, administrative, arbitral or other proceedings
claim, action, cause of action or governmental investigation of
any nature seeking to impose, or that could result in the
imposition, on MacFilms of any liability easing under any local,
state or federal environmental statute, regulation or ordinance,
including, without limitation, the Comprehensive Environmental
Response Compensation and Liability Act of 1980, as amended,
pending or threatened against the Company, which would be
required to be disclosed pursuant to Item 103 or 303 of
Regulation SK (17 CFR 229). To the best knowledge of the MacFilms
there is no reasonable basis for any such proceeding, claim
action, or governmental investigation that would impose any such
liability; and MacFilms is subject to any agreement order,
judgment, decree or memorandum by or with any court, governmental
authority, regulatory agency third party imposing any such
liability.
K. MacFilms has not established, maintained or contributed to any
employee benefit plans. As used herein, the term "Employee
Benefit Plans" means all employee benefit plans within the
meaning of section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA").
L. Macfilms has agreed to engage Xxxxxx &Bailey, PLLC to prepare
audited financial statements from inception through September 30,
1997 which will be provided to the Company and G/O Colorado prior
to the Closing Date.
MacFilms and the Representing Shareholders further represent and warrant
that all of the representations and warranties set forth above are true as of
the date of this Agreement, shall be true at the Closing Day and shall survive
the Closing for a period of six months from the Closing Date.
2. REPRESENTATIONS AND WARRANTIES BY THE COMPANY AND G/O COLORADO. The
Company and G/O Colorado hereby make the following express representations
and warranties to MacFilms and the MacFilms Shareholders:
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A. The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware and G/O
Colorado is a corporation duly organized, validly existing and in
good standing under the laws of the State of Colorado and each
has the corporate power to own its properties and carry on its
business as now being conducted. Certified copies of the
Company's Certificate of Incorporation and By-Laws and G/O
Colorado's Articles of Incorporation and By-laws have heretofore
been furnished to MacFilms by the Company and by G/O Colorado,
and all such copies are true, correct and complete copies of the
original Certificate of Incorporation, Articles of Incorporation
and By-Laws including all amendments thereto.
B. The Company has the corporate authority to issue a total of
60,000,000 shares of capital stock consisting of 50,000,000
shares of $.001 par value preferred stock and 10,000,000 shares
of $.001 par value common stock of which 1,600,000 shares of
common stock and no shares of preferred stock are presently
issued and outstanding. As of the date of Closing, there are not
any outstanding or authorized options, warrants, rights,
subscriptions, claims of any character, agreements, obligations,
convertible or exchangeable securities, or other commitments,
contingent or otherwise, relating to the Company's capital stock,
pursuant to which the Company is or may become obligated to issue
shares of the Company's common stock, any other shares of its
capital stock or any securities convertible into, exchangeable
for, or evidencing the right to subscribe for, any shares of the
capital stock of the Company. All of the shares of the Company's
common stock have the same voting and other rights. G/O Colorado
has the corporate authority to issue a total of 20,000,000 shares
of $.01 par value per share common stock, of which 5,985,372
shares are presently issued and outstanding.
C. Since inception, the Company has had no operations, revenues from
operations, nominal assets and has incurred no liabilities.
D. The Company has no subsidiaries. G/O Colorado has those
subsidiaries set forth in Schedule C hereto.
E. The Company is not subject to the reporting obligations under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")
and has not filed a transitional report submitting it to the
reporting requirement of Section 12(g) under the Exchange Act.
The Company will file a Form 15c2-11 as soon as practicable.
F. Attached hereto as Schedule D is a list of all documents filed by
G/O Colorado with the United States Securities & Exchange
Commission for the past twelve months as of the date of this
Agreement (the "Filings"). The Company has provided or has
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offered to provide each of the Shareholders copies of each item
set forth in Schedule D.
G. As of their respective dates, the Filings did not contain any
untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which
they were made, not misleading. Each of the balance sheets,
statements of income, statements of stockholders' equity and
statements of cash flows included in the Filings, were prepared
in accordance with generally accepted accounting principles
consistently applied and fairly present the consolidated
financial position of the G/O Colorado as of the dates thereof
and the results of its operations, stockholders' equity and cash
flows for the periods then ended.
H. Subsequent to the Closing Date of this Reorganization Agreement,
Macfilms or the Company will file an amendment to its Certificate
of Incorporation and adopt such resolutions as necessary for the
purpose of changing the name of the Company to "Mac Filmworks,
Inc."
I. The unaudited Financial Statements of the Company which are
attached hereto as Schedule E (the "Financial Statements")
constitute substantially true and correct statements of the
financial condition of the Company and the Company's assets,
liabilities and income as of such date. Since the date of the
balance sheet contained in the Financial Statements, the Company
has not:
(1) issued any additional shares of its common stock to any
person;
(2) paid or declared any dividends or distributions of capital,
surplus, or profits with respect to any of its issued and
outstanding shares of common stock;
(3) paid or agreed to pay any consideration in redemption of any
of its issued and outstanding shares of common stock; or
(4) entered into any other transaction or agreement which would,
or might, materially impair the shareholder's equity of the
Company as reflected in such balance sheet.
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J. The Company, subject to obtaining shareholder approval of the
proposed amendments to its Certificate of Incorporation, as
contemplated hereby, which the Company hereby agrees to
faithfully undertake and complete, has the corporate power and
authority to execute and perform all of its duties and
obligations under the terms of this Agreement and to issue and
deliver to the MacFilms Shareholders, those shares of common
stock that are required to be issued and delivered under the
terms of this Agreement.
K. The execution and delivery of this Agreement, and the issuance of
the Company's common stock required to be issued hereunder, will
have been duly authorized by all necessary corporate action and
neither the execution nor delivery of this Agreement nor the
issuance of the Company's common stock, nor the performance,
observance or compliance with the terms and provisions of this
Agreement will violate any provision of law, any order of any
court or other governmental agency, the Certificate of
Incorporation or By-Laws of the Company or the Articles of
Incorporation or By-laws of G/O Colorado or any indenture,
agreement or other instrument to which the Company or G/O
Colorado is a party, or by which it is bound or by which any of
its property is bound.
L. Neither the Company nor G/O Colorado is involved in any pending
or threatened litigation which would, or might, materially affect
its financial condition and which has not been:
(1) provided for in the Financial Statements, or
(2) provided in the Filings.
M. There are no unpaid assessments or proposed assessments of income
taxes pending against the Company or G/O Colorado. All
liabilities for Federal and State income or franchise taxes, as
shown on the tax returns filed, or to be filed, by the Company
and G/O Colorado, have been paid or the liability therefor has
been provided for in the Balance Sheet contained in the Filings
and all Federal and State income or franchise taxes for periods
subsequent to the periods covered by said returns likewise have
been paid or adequately accrued.
N. The shares of the Company's common stock which will be delivered
to the MacFilms Shareholders pursuant to the terms of this
Agreement will, on delivery in accordance with the terms hereof,
be duly authorized, validly issued and fully paid and non
assessable.
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O. On the Closing Date, the Company will cause the following
individuals to be elected to the Company's Board of Directors:
Xxx XxXxxxxxxx, Sr., Xxx XxXxxxxxxx, Jr., Xxxxx X. Xxxxxxxx and
Xxxxxx X. Xxxxxxxx.
P. Except as set forth in the balance sheet of the Company attached
hereto as Schedule E, the Company has no material claims against
it, liabilities or indebtedness, contingent or otherwise. The
Company does not know or have reason to know of any basis for the
assertion against the Company of any liability of any material
nature or in any material amount not fully reflected or reserved
against in the Company's balance sheet.
Q. There is no legal, administrative, arbitral or other proceedings
claim, action, cause of action or governmental investigation of
any nature seeking to impose, or that could result in the
imposition, on the Company or G/O Colorado of any liability
easing under any local, state or federal environmental statute,
regulation or ordinance, including, without limitation, the
Comprehensive Environmental Response Compensation and Liability
Act of 1980, as amended, pending or threatened against the
Company, which would be required to be disclosed pursuant to Item
103 or 303 of Regulation SK (17 CFR 229). To the best knowledge
of the Company and G/O Colorado there is no reasonable basis for
any such proceeding, claim action, or governmental investigation
that would impose any such liability; and neither the Company nor
G/O Colorado is subject to any agreement order, judgment, decree
or memorandum by or with any court, governmental authority,
regulatory agency third party imposing any such liability.
R. Neither the Company nor G/O Colorado have established, maintained
or contributed to any employee benefit plans. As used herein, the
term "Employee Benefit Plans" means all employee benefit plans
within the meaning of section 3(3) of ERISA.
The Company and G/O Colorado further represent and warrant that all of
the representations and warranties set forth above are true as of the date of
this Agreement, shall be true at the Closing Date and shall survive the closing
for a period of six months from the Closing Date.
3. CONDITIONS TO THE OBLIGATIONS OF THE COMPANY AND G/O COLORADO. The
obligations of the Company hereunder shall be subject to the following
conditions:
A. The Company shall not have discovered any material error,
misstatement or omission in any of the representations and
warranties made by MacFilms, and/or the Representing Shareholders
herein and all the terms and conditions of this Agreement to be
performed and complied with have been performed and complied
with.
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B. There shall have been no substantial adverse changes in the
financial condition, business or operations of MacFilms from the
date of this Reorganization Agreement, until the Closing Date,
except for changes resulting from operations in the usual and
ordinary course of its business, and between such dates no
business and assets of MacFilms shall have been materially
adversely affected as the result of any fire, explosion,
earthquake, flood, accident, strike, lockout, combination of the
workmen, taking over of any such assets by any governmental
authorities, riot, activities of armed forces, or Acts of God or
of the public enemies.
4. CONDITIONS TO THE OBLIGATIONS OF THE REPRESENTING SHAREHOLDERS AND
MACFILMS. The obligations of the Representing Shareholders and MacFilms
hereunder are subject to the following conditions:
A. The Representing Shareholders and MacFilms shall not have
discovered any material error or misstatement in any of the
representations and warranties made by the Company and/or G/O
Colorado herein and all the terms and conditions of this
Agreement to be performed and complied with by the Company and/or
G/O Colorado have been performed and complied with.
B. There shall have been no substantial adverse changes in the
financial condition, business or operations of the Company and/or
G/O Colorado, except for changes resulting from those operations
in the usual ordinary course of the business, and no business and
assets of the Company and/or G/O Colorado shall have been
materially adversely affected as the result of any fire,
explosion, earthquake, flood, accident, strike, lockout,
combination of the workmen, taking over of any such assets by any
governmental authorities, riot, activities of armed forces, or
Acts of God or of the public enemies.
C. G/O Colorado's board of directors shall have:
(i) adopted a resolution approving the distribution of a total of
1,600,000 shares of the Company's common stock to its
shareholders.
(ii) distributed the Company's 1,600,000 shares of common stock
to an escrow agent to be held by such escrow agent for further
distribution to those G/O Colorado shareholders or their assigns
determined as of a dividend date selected by G/O Colorado, upon
registration of its common stock, either under the Securities Act
of 1933, as amended or under Section 12(g) of the Securities
Exchange Act of 1934, as amended. Of the 1,600,000 shares of
Company common stock, 1,040,000 shall be subject to a one year
contractual lock-up.
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5. CONDITIONS SUBSEQUENT. The following conditions shall occur within
a reasonable time after the Closing contemplated hereby:
(i) G/O Colorado shall distribute 1,600,000 shares of the Company
common stock to its shareholders. Of the 1,600,000 shares of
Company common stock, 1,040,000 shall be subject to a one year
contractual lock-up.
(ii) The Company shall prepare and file with the SEC a
registration statement, thereby registering its common stock,
either pursuant the Securities Act of 1933, as amended or
pursuant to Section 12(g) of the Securities Exchange Act of 1934,
as amended,
6. CLOSING DATE. The Closing of this Agreement ("Closing Date") shall
take place on or before November 7, 1997.
7. EXCHANGE OF SECURITIES. Subject to the terms and conditions set
forth herein,
A. At the time of the Closing referred to in Section 6 hereof the
Company will issue and deliver, or cause to be issued and
delivered to the MacFilms Shareholders identified in Schedules
X-0, X-0 xxx X-0 hereto certificates evidencing the ownership of
the securities as designated therein and concurrently therewith
the MacFilms Shareholders identified in Schedule X-0, X-0 and A-3
hereto shall directly or through their agent deliver or cause to
be delivered to the Company, certificates evidencing the
ownership of securities (or provide an Affidavit of Lost
Certificate with indemnity) as designated, all duly endorsed to
the Company, and
8. ACTIONS AT THE CLOSING. At the Closing of this Agreement, the
Company and the MacFilms Shareholders will each deliver, or cause to be
delivered to the other, the securities to be exchanged in accordance with
Section 6 of this Agreement and each party shall pay any and all Federal and
State taxes required to be paid in connection with the issuance and the delivery
of their own securities. All stock certificates shall be in the name of the
party to which the same are deliverable. In addition to the above mentioned
exchange of certificates, the following transactions will take place at the
Closing.
THE COMPANY AND G/O COLORADO WILL DELIVER TO THE SHAREHOLDERS AND
MACFILMS:
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A. Duly certified copies of corporate resolutions and other
corporate proceedings taken by the Company and G/O Colorado to
authorize the execution, delivery and performance of this
Agreement;
B. A certificate executed by a principal officer of the Company and
G/O Colorado attesting to the fact that all of the foregoing
representations and warranties of the Company and G/O Colorado
are true and correct as of the Closing Date and that all of the
conditions to the obligations of the MacFilms Shareholders which
are to be performed by the Company and G/O Colorado have been
performed as of the Closing Date; and
C. A certificate of corporate good standing for G/O Colorado from
the State of Colorado which shall be dated no more than 60 days
prior to the Closing Date.
THE REPRESENTING SHAREHOLDERS AND MACFILMS WILL DELIVER TO THE
COMPANY:
A. Duly certified copies of corporate resolutions and other
corporate proceedings taken by MacFilms to authorize the
execution, delivery and performance of this Agreement;
B. A certificate by a principal officer of MacFilms and the
Representing Shareholders that each of the representations and
warranties of the Representing Shareholders and MacFilms are true
and correct as of the Closing Date and that all of the conditions
to the obligations of the Company which are to be performed by
MacFilms and the MacFilms Shareholders have been performed as of
the Closing Date.
C. A certificate of corporate good standing for MacFilms from Texas
which shall be dated no more than 60 days prior to the Closing
Date; and
9. CONDUCT OF BUSINESS. Between the date hereof and the Closing Date,
MacFilms shall conduct its business in the same manner in which it has
heretofore been conducted and the Shareholders will not permit MacFilms to (1)
enter into any contract, other than in the ordinary course of business, or (2)
declare or make any distribution in the nature of a dividend or return of
capital to the MacFilms Shareholders, without first obtaining the written
consent of the Company.
10. BOARD OF DIRECTORS. Immediately after the Closing, the Board of
Directors of the Company shall have a meeting, at which all of the present
directors of the Company shall resign, and they shall fill the vacancies created
by their respective resignations, as members of the Company's Board of
Directors, in accordance with the By-Laws of the Company, with such individuals
as the Directors of MacFilms shall designate to the Company in writing.
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11. FUTURE REGISTRATION. The MacFilms Shareholders understand the
Company's common stock has not been registered under the Act or any State Act,
they must hold the Company's common stock indefinitely, and cannot dispose of
any or all of them unless such they are subsequently registered under the Act
and any applicable State Act, or exemptions from registration are available. The
MacFilms Shareholders acknowledge and understand that (unless they have received
an independent registration rights agreement executed by the Company pertaining
to the Company's securities they hold) they have no independent right to require
the Company to register the securities held by them. The MacFilms Shareholders
further understand that the Company may, as a condition to the transfer of any
of the shares of the Company's common stock or the Company's common stock,
require that the request for transfer be accompanied by an opinion of counsel,
in form and substance satisfactory to the Company, provided at such MacFilms
Shareholder's expense, to the effect that the proposed transfer does not result
in violation of the Act or any applicable State Act, unless such transfer is
covered by an effective registration statement under the Act and is in
compliance with all applicable State Acts.
12. TRANSFERABILITY. All shares of the Company's common stock which
are issued to the MacFilms Shareholders pursuant to the terms of this Agreement
shall be "restricted securities" within the meaning of Regulation D of the Act.
The Company shall issue stop transfer instructions to the transfer agent for its
common stock and shall place the following legend on the certificates
representing such stock:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
PURSUANT TO A TRANSACTION EFFECTED IN RELIANCE UPON AN EXEMPTION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND HAVE NOT BEEN
THE SUBJECT TO A REGISTRATION STATEMENT UNDER THE ACT OR ANY STATE
SECURITIES ACT. THE SECURITIES MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR APPLICABLE
EXEMPTION THEREFROM UNDER THE ACT OR ANY APPLICABLE STATE SECURITIES
ACT."
13. ACCESS TO INFORMATION. Concurrently herewith, the Company has
delivered to the MacFilms Shareholders correct and complete copies of all
documents and records requested by the Shareholders. In addition, the MacFilms
Shareholders have had the opportunity to ask questions of, and received answers
from, officers and directors of the Company, and persons acting on its behalf
concerning such information and the terms and conditions of the Agreement, and
have received sufficient information relating to the Company to enable them to
make an informed decision with respect to the acquisition of the common stock.
14. NO SOLICITATION. At no time were the MacFilms Shareholders
presented with or solicited by any leaflet, public promotion meeting, circular,
newspaper or magazine article, radio or television advertisement, or any other
form of general advertising in connection with their acquisition of the common
stock.
15. EXPENSES. The MacFilms Shareholders, MacFilms, the Company and
G/O Colorado shall each pay their respective expenses incident to this Agreement
and the transactions contemplated hereby, including all fees of their counsel
and accountants, whether or not such transactions shall be consummated.
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16. FINDERS. The MacFilms Shareholders and MacFilms shall indemnify
and hold G/O Colorado and the Company harmless against and with respect to all
claims or brokerage or other commissions relative to this Agreement or the
transactions contemplated hereby, based on any agreements, arrangements, or
understandings claimed to have been made by the MacFilms Shareholders and
MacFilms with any third party. The Company and G/O Colorado shall indemnify and
hold the MacFilms Shareholders and MacFilms harmless against and with respect to
all claims for brokerage or other commissions relative to this Agreement or the
transactions contemplated hereby, based in any agreements, arrangements, or
understandings claimed to have been made by the Company with any third party.
Except as provided in Exhibit B, each party to this Agreement represents and
warrants to each other party that it has not dealt with and does not know of any
person, firm or corporation asserting a brokerage, finder's or similar claim in
connection with the making or negotiation of this Agreement or the transactions
contemplated hereby.
17. ATTORNEY'S FEES. In the event of any litigation among the parties
related to this Agreement, the prevailing party shall be entitled to reasonable
attorney's fees and costs to be fixed by the court, said fees to include appeal
and collection of judgment.
18. MISCELLANEOUS.
A. This Agreement shall be controlled, construed and enforced in
accordance with the laws of the State of Texas, without reference
to the choice of law doctrine of such state. Any action or
proceeding against any of the parties hereto relating in any way
to this Agreement or the subject matter hereof shall be brought
and enforced exclusively in the United States District Court for
the Southern District of Texas or any Texas state court sitting
in Xxxxxx County, and the parties hereto consent to the exclusive
jurisdiction of such courts with respect to such action or
proceeding.
B. This Agreement shall not be assignable by any party without prior
written consent of the others.
C. All paragraph headings herein are inserted for reference purposes
only and shall not in any way affect the meaning or
interpretation of this Agreement.
D. This Agreement sets forth the entire understanding between the
parties, there being no terms, conditions, warranties or
representations other than those contained herein, and no
amendments hereto shall be valid unless made in writing and
signed by the parties hereto.
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E. This Agreement shall be binding upon and shall inure to the
benefit of the heirs, executors, administrators and assigns of
the MacFilms Shareholders, and MacFilms and upon the successors
and assigns of the Company and G/O Colorado.
F. All notices, requests, instructions, or other documents to be
given hereunder shall be in writing and sent by registered mail:
IF TO MACFILMS SHAREHOLDERS:
Mac Filmworks, Inc.
0000 Xxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
c/o Xxx XxXxxxxxxx
WITH COPIES TO:
Xxxxxx & Xxxxxxxxx P.C.
Attention: Xxxxxx Xxxxxxxxx, Esq.
0000 Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000
IF TO THE COMPANY:
Keystone Entertainment, Inc.
11849 Wink
Xxxxxxx, Xxxxx 00000
Attention: Xxxx Xxxxx
WITH COPIES TO:
Xx. Xxxxx Xxxxxx, Esq.
Suite 300
00000 X. Xxxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
IF TO G/O COLORADO:
G/O International, Inc.
11849 Wink
Xxxxxxx, Xxxxx 00000
Attention: Xxxx Xxxxx
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G. Any term or provision of this Agreement that is invalid or
unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and
provisions hereof or the validity or enforceability of the
offending term or provision in any other situation or in any
other jurisdiction.
H. This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which shall constitute
the same instrument.
[The Remainder of the page intentionally left blank]
15
REORGANIZATION AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
KEYSTONE ENTERTAINMENT, INC.,
A DELAWARE CORPORATION
By: /S/ X. X. XXXXX
----------------------
Name: X. X. Xxxxx
----------------------
Its: President
------------------
G/O COLORADO,
A COLORADO CORPORATION
By: /S/ X. X. XXXXX
----------------------
Name: X. X. Xxxxx
----------------------
Its: President
------------------
16
REORGANIZATION AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
MAC FILMWORKS, INC., A
TEXAS CORPORATION
By: /S/ XXX XXXXXXXXXX, SR.
--------------------------
Xxx XxXxxxxxxx, Sr., President
REPRESENTING SHAREHOLDERS
By: /S/ XXX XXXXXXXXXX, SR.
--------------------------
Xxx XxXxxxxxxx, Sr.
By: /S/ XXX XXXXXXXXXX, SR.
--------------------------
Xxx XxXxxxxxxx, Jr.
17
MACFILMS CORPORATION
COUNTERPART
REORGANIZATION AGREEMENT SIGNATURE PAGE
MACFILMS SHAREHOLDER
The undersigned, in his, her or its capacity as the beneficial owner of
_______________ shares of the $0.001 par value per share common stock of Mac
Filmworks, Inc. a Texas corporation (the "MacFilms"), hereby joins in and
executes the Reorganization between and among G/O Colorado, the Company and the
MacFilms Shareholders that shall execute and deliver this Counterpart Signature
Page to the Reorganization Agreement.
The undersigned hereby grants a Special Power of Attorney to the duly authorized
officers of MacFilms and constitutes and appoints such officers as his, her or
its true and lawful Attorney-In -Fact with full power and authority to act in
his, her or its name, place and stead to execute, acknowledge and swear to the
Reorganization Agreement on his, her or its behalf if, as and when such
Reorganization Agreement is execute by MacFilms.
Such officers and MacFilms are also specifically authorized and empowered to
attach this Signature Page to the executed Reorganization Agreement with the
same force and legal effect as would obtain if the undersigned had personally
performed such act. The Power of Attorney granted hereby shall be deemed to be a
power coupled with an interest, which is irrevocable and shall survive the
death, incompetency or incapacity of the undersigned.
IN WITNESS WHEREOF, the undersigned has executed this Counterpart Signature Page
in the City of ____________ State of _____________ this ________ day of
_________ 1997.
_________________________________
Signature
________________________________
Name Printed
________________________________
Street Address
_______________________________
City, State, Zip
18
SCHEDULE A-1 FOUNDING SHAREHOLDERS:
Name of MacFilms Shareholder No. of MacFilms Shares No. of Company Shares
-------------------------------- ----------------------- ---------------------
Xxxxxx X. XxXxxxxxxx, Xx.
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000 1,800,000 1,800,000
Lel X. XxXxxxxxxx
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000 200,000 200,000
Xxxxxx X. XxXxxxxxxx, Xx.
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000 1,800,000 1,800,000
Xxxx Xxxxxxxxx XxXxxxxxxx Xxxxxx
0000 Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000 200,000 200,000
Xxxxx X. Xxxxxxxx
Eurotrade
0000 Xxxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000 50,000 50,000
Xxxxxx X. Xxxxxxxx
Attorney at Law
0000 Xxxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000 50,000 50,000
TOTAL 4,100,000 4,100,000
SCHEDULE A-2 LIBRARY OWNERS:
Name of MacFilms Shareholder No. of MacFilms Shares No. of Company Shares
------------------------------ ----------------------- ---------------------
CINEVID
Xxx Xxxxxxxx
0000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxx Xxxxxxx, XX 00000 17,400 17,400
Delta Equities Corporation
Xxxxx Xxxxxxxxx
000 Xxxxx Xxx
Xxxxx Xxxx, XX 00000 5,280 5,280
Xxxxxx
Xxxxx Xxxxxx
0000 Xxxxxx Xxxxxx, #000
Xxxxxxx Xxxxx, XX 00000 24,000 24,000
Xxx XxXxxxxxxx Productions
0000 Xxxxxxxxx Xx., Xxxxx 0-X
Xxxxxxxxxx, XX 00000 70,000 70,000
XXXX
Xxxxx Hartford
0000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxx Xxxxxxx, XX 00000 52,000 52,000
Saturn Productions, Inc.
Xxx Xxxx
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000 29,000 29,000
Western International, Inc.
Xxx Xxxxxxxx
0000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxx Xxxxxxx, XX 00000 50,000 50,000
------------------------------ ----------------------- ---------------------
TOTAL SHARES: 247,680 247,680
SCHEDULE A-3 SHARE SUBSCRIBERS:
Name of MacFilms Shareholder No. of MacFilms Shares No. of Company Shares
------------------------------------- ----------------------- ---------------------
ATM USA Corp.
(by Wm. Miracle)
0000 Xxxx Xxxx Xxxx. Xxxxx 000
Xxxxxxx, XX 00000 2,500 2,500
Xxxxx, Xxxxx Xxxxxxxxx
0000 Xxxxx Xxxxx
Xx Xxxxx, XX 00000 2,500 2,500
Xxxxxx, Xxxxxxx X.
00000 Xxxxxx Xxxxx Xx.
Xxxxxxx, XX 00000 1,000 1,000
Xxxxxxxxx, Xxxxxx
0000 Xxxxx Xxxxx
Xx Xxxxx, XX 00000 1,500 1,500
Xxxxxx, Xxxxxxx
00000 Xxxxxxxxx Xx. #0 2,500 #1 2,500
Xxxxxxx, XX 00000 #2 4,700 #2 4,700
Xxxxxx, Xxxxx X.
00000 Xxxxxxxx
Xxxxxxx, XX 00000 1,600 1,600
Xxxxx, Xxx
00000 Xxxxx Xxxxx Xxxx
Xxxxxxxxx, XX 00000 2,500 2,500
Belhouchet, Hichem & Yasmina
0000 Xxxxxxx Xxxx, #0
Xxxxxxx, XX 00000 10,000 10,000
Xxxxx, Xxxxx XX
000 Xxxxxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000-0000 2,500 2,500
Xxxxxxxx, Xxxx X. & Xxxxxxx
000 X. 00xx Xxxxxx
Xxxxxx, XX 00000 2,500 2,500
Xxxxxxx, Xxxx X.
0000 Xxxx Xxxxx
Xxxxxx, XX 00000 1,500 1,500
-------------------------------------------------------------------------------------
Xxxxxx, Xxxxx X.
0000 Xxxx Xxxxx
Xxxxxx, XX 00000 1,500 1,500
Borders, Don
000 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000 5,000 5,000
Xxxxxx, Xxxxxxx & Joann
0000 Xxxx Xxxx
Xxxxxxxx, XX 00000 1,500 1,500
Xxxxxx, Xxxxxxx
0000 Xxxx Xxxx
Xxxxxxxx, XX 00000 1,500 1,500
CSL Stock Partnership
Xxxxx Xxxxx, Trustee
0000 Xx. Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000 10,000 10,000
Xxxxxxxx, Xxxxx X.
0000 X. Xxxxx Xxxxxxx
Xxxxxxx, XX 00000-0000 3,000 3,000
Xxxxx, X. Xxxxxxx
00000 Xxxx Xxxxx Xx.
Xxxxxxx, XX 00000 5,000 5,000
Xxxxxxx Management
(by X. Xxxxxxxx)
0000 Xxxxx
Xxxxxxxx, XX 00000 10,000 10,000
Xxxxxx, Xxxxx Xxxx
X.X. Xxx 000
Xxxxxxx Xxxxx, XX 00000 1,500 1,500
Damlouji, W.T. Mr. & Mrs.
00 Xxxxxxxxxx Xx.
Xxxxxx, XX 00000 5,000 5,000
Xxxxxxxxx, Xxxxxxx
X.X. Xxx 000
Xxxxxxx Xxxxx, XX 00000 1,500 1,500
-------------------------------------------------------------------------------------
Xxxxxxx, Xxxxxx
00000 XxXxxxxx Xx. #0 2,000 #1 2,000
Xxxxxxx, XX 00000 #2 2,000 #2 2,000
DUFO, Ltd.
X.X. Xxx 0000
Xxxxxxx Xxxxxxxx
Xxxxx Xxxxxx, Xxxxxx Xxxxxxx, B.W.I.
10,000 10,000
Xxxxxxx, Xxxx. M.
0000 Xxxxxxxxxx
Xx Xxxxx, XX 00000 1,500 1,500
Xxxxxxxxx, Xxxxxxxx
0000 Xxxxxxx Xxxx Xx.
Xxxxxxxxx, XX 00000 1,000 1,000
Fields, Xxxxx Xxx
(by X. Xxxxxx, Xx.)
00000 Xxxxxxxxx
Xxxxxxx, XX 00000 1,000 1,000
Xxxxxxxxx, Xxxxx X.
00000 Xxxxxxx Xxxx Xx.
Xxxxxxx, XX 00000 1,500 1,500
Xxxxxx, Xxxxx & Xxxxxx
0000 Xxxxxxxxxxxx
Xxxxxxxx, XX 00000 1,500 1,500
Xxxxxx, Xxxxxxxx
0000 X. Xxxxxx
Xxxxxxxx, XX 00000 2,000 2,000
Xxxx, Xxxxxx & Xxxxxxx
0000 Xxxx Xxxx
Xxxx Xxxx, XX 00000 2,000 2,000
Xxxxx, Xxxxxx X.
0000 Xxxxxxx Xx.
Xxxxxx Xxxx, XX 00000 2,500 2,500
Xxxxx, Xxxxxx X.
0000 Xxxxxxxx
Xxxxxxxx, XX 00000 20,000 20,000
-------------------------------------------------------------------------------------
Xxxxxxx, Xxxxxxxx X., Xx.
00 Xxxxxxxx Xxxxx, #0000 #1 1,000 #1 1,000
Xxxxxxx, XX 00000-0000 #2 5,000 #2 5,000
Xxxx, Xxxxxx
00000 Xxxx Xxxxxxx, #000
Xxxxxxx, XX 00000 1,500 1,500
Xxxx, Xxxxx
0000 Xxxxxxxxx
Xxxxxxx, XX 00000-0000 4,000 4,000
Xxxxxxxxx XxXxxxx
c/o Xxxx, Xxxxxxxx
0000 Xxxxxxxxxx
Xxxxxxxx, XX 00000 1,500 1,500
Xxxxxx, Dr. David or Xxxxxxxx
0000 Xxxxxxxxx Xx.
Xxxxxx, XX 00000 2,500 2,500
Janmark Ventures
(by X. Xxxxxxx Xx.)
00 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000-0000 5,000 5,000
Xxxxxx, Xxxx
0000 Xxxxxxx, #00
Xxxxxxx, XX 00000 1,000 1,000
Xxxxxx, Xxx
00000 Xxxxxxxxxxx Xx., #0000
Xxxxxxx, XX 00000 1,000 1,000
Xxxxxxxx, Xxxxxx & Xxxxxxx
000 X. Xxxxx Xx.
Xxxxxxxxx, XX 00000 1,500 1,500
Xxxxxxxx, Xxxxxx & Danae
33 Surrey Dr.
Xxxxxxx Xxxxxx, XX 00000 1,500 1,500
Xxxxxxxx, Xxxxxxx/Xxxxxxxxx X.
00000 Xxxxxxx Xxxxx Xx.
Xxxxxx, XX 00000 1,500 1,500
-------------------------------------------------------------------------------------
Xxxxxxxx, Xxxxxx X., Xx.
0000 X. Xxxxxx
Xxxxxxxx, XX 00000 6,000 6,000
Labello, Xxxx X. & Xxxxxxxxx
0000 Xxxxxx Xxxx #0 1,500 #1 1,500
Xxxxxxxx, XX 00000 #2 3,000 #2 3,000
Xxxxxxx, Xxxx Xxxxxxxxxxx
0000 Xxxx Xx.
Xxxxxxxx, XX 00000 1,500 1,500
Xxxxxxxx, Xxxxxxx
0000 Xxxxxxxx
Xxxx Xxxx, XX 00000 2,000 2,000
Xxxxxx, Xx. Xxxxxxx & Xxxxx X.
0000 Xxxxxxxx
Xxxxxxxx, XX 00000 1,500 1,500
Xxxxx, Xxxx X.
0000 Xxxxxxxx Xxxx
Xxxx, XX 00000 2,000 2,000
Xxxxxx, Xxxxx
0000 Xxxxx Xxxx Xx.
Xxxxxxx, XX 00000-0000 5,000 5,000
Xxxxxxx, Xxxxx
0000 Xxxxxxxxxx #1 15,000 #1 15,000
Xxxxxxxx, XX 00000 #2 3,000 #2 3,000
XxXxxxx, Ltd.
X.X. Xxx 0000
Xxxxxxxxxx, Xxxxx Xxxxxx #0 7,000 #1 7,000
Cayman Islands, B.W.I. #2 5,000 #2 5,000
Xxxxxxx, Xxxxxx X.
000 Xxxxx
Xxxxxxxx, XX 00000 1,500 1,500
Xxxxxx, Xxxxx XX.
0000 Xxxxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000 4,000 4,000
Xxxxxx, Xxxxx X. Xx.
X.X. Xxx 0000
Xxxxxxxxx, XX 00000 4,000 4,000
-------------------------------------------------------------------------------------
Xxxxxx, Xxxxx
0000 Xxxxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000 1,000 1,000
Xxxxx, Xxxxxxxx & Xxxx
0000 X. Xxxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000 2,000 2,000
Xxxxxx, Xxxxxx X. Trust
Xxxxxxx X. Xxxx Trustee
X.X. Xxx 000
Xxxxxxx, XX 00000 3,000 3,000
Xxx, Xxxxx X.
00000 Xxxxxxxxxxx Xxxx
Xxxxxxxxxxx, XX 00000-0000 1,500 1,500
Xxxxxx-Xxxx, Xxxx
000 Xxxxxxxx Xxxx
Xxxxxxx, XX 00000 1,600 1,600
Xxxxxxx, Xxxxxxx
712 N. 77 Sunshine Strip, #9
El Xxxxxxx Shopping Strip #1 5,000 #1 5,000
Xxxxxxxxx, XX 00000 #2 2,500 #2 2,500
Xxxxxxx, Xxxx X.
0000 Xxxxxxxxx, #000
Xxxxxxx, XX 00000 5,000 5,000
Xxxxxx, Xxxxxxxx X.
0000 Xxxxxxxxxx, #000
Xxxxxxx, XX 00000 1,500 1,500
Xxxxx, R. Xxxxx, M.D.
7710 Beechnut, Suite 100 #1 25,000 #1 25,000
Xxxxxxx, XX 00000 #2 10,000 #2 10,000
Xxxx, Xxxxx or Xxxxx
0000 Xxx
Xxxx Xxxx, XX 00000 3,600 3,600
-------------------------------------------------------------------------------------
Price, Xxxxxxx Xxx
0000 Xxxxx
Xxxx, XX 00000 2,000 2,000
Prosperity Trust #7448
(by Xxxxx Xxxxx)
0000 Xxxxxxxxx
Xxxxxxx, XX 00000 6,000 6,000
Xxxxxx, Xxxx X.
0000 Xxxxxxxxx Xxxx., #0000
Xxxxxxx, XX 00000 10,000 10,000
Xxxxxxx, Xxxxxxx X.
000 Xxxxx
Xxxxxxxxxx, XX 00000 12,000 12,000
Xxxxxx, Xxxx
00000 Xxxxx
Xxxxxxx, XX 00000 20,000 20,000
Xxxxxxxx, Xxxxx X.
00000 Xxxxxxxxx Xxxxx
Xxxxxxx, XX 00000 5,000 5,000
Song, Ming Hwa
0000 Xxxxxxx Xxxx Xx.
Xxxxxxxxx, XX 00000 5,000 5,000
Xxxxxxx, Xxxxxx
00000 Xxxxxxxx Xxxx
Xxxxxxxx, XX 00000-0000 20,000 20,000
Xxxxxxx, Xxxxxxxx
x/x Xxxxxx Xxxxxxx
00000 Xxxxxxxxxxx Xxxx 1,500 1,500
Xxxxxxxxxxx, XX 00000-0000
Xxxxxxx, Xxxxx /Xxxxxx Xxxxxxx c/f
00000 Xxxxxxxx Xxxx
Xxxxxxxx, XX 00000-0000 1,500 1,500
Xxxxxx, Xxxxxxx X.
000 Xxxxx Xxxx Xx.
Xxxxxxxxxx, XX 00000 5,000 5,000
-------------------------------------------------------------------------------------
Xxxxxxx, Xxxx Xxxx
c/o Xxxxx Xxxxxxx
0000 Xxxx Xxxxx
Xxxxxxxx, XX 00000 1,500 1,500
Xxxxxxx, Xxxxx X.
0000 Xxxx Xxxxx
Xxxxxxxx, XX 00000 1,500 1,500
Xxxxx, Xxxxxx X., Xx.
X.X. Xxx 0000
Xxxx Xxxx, XX 00000 2,000 2,000
Xxxxxxx, Xxxxxx
00000 Xxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000 #1 1,500 #1 1,500
000-000-0000 #2 2,500 #2 2,500
Xxxxxxx, Xxxxxx
00000 Xxxx Xxxxxxx, Xxxxx 000 #0 1,500 #1 1,500
Xxxxxxx, XX 00000 #2 2,500 #2 2,500
Xxxxxx Revocable Trust
X. Xxxxx & Xxxxxxx Xxxxxx
0000 Xxxxxxx
Xxxx Xxxx, XX 00000 5,000 5,000
Xxxx, Xxxxxxx X.
00000 Xxxxx Xxxx, Xxx. 000
Xxxxxxx, XX 00000 1,500 1,500
Xxxxxxx, Xxxxxx D.
X.X. Xxx 000
Xxxxxxxx, XX 00000-0000 2,000 2,000
Yoneoka, Harris & Xxxxx
00000 Xxxxxx Xx.
Xxxxxx, XX 00000 3,000 3,000
TOTAL 400,000 400,000
SCHEDULE B MACFILMS DISCLOSURE SCHEDULE
SINCE INCEPTION, MACFILMS HAS ISSUED THE FOLLOWING SHARES OF ITS COMMON STOCK:
1. 4,000,000 shares of Macfilms common stock were issued to its Founding
Shareholders for nominal consideration in connection with the inception of
the Macfilms.
2. 100,000 shares of Macfilms common stock were issued to outside directors
for services rendered.
3. 247,680 shares of Macfilms common stock were issued to the Library Owners
in connection with certain film acquisitions as described below.
4. 400,000 of Macfilms common stock were sold to qualified investors through a
private placement memorandum at a purchase price of $.50 per share.
ACQUISITION AGREEMENTS:
In July 1997, Macfilms and Cinevid, Inc. entered into an Asset Purchase
Agreement whereby Macfilms acquired ninety-two (92) English-language feature
film master recordings, all in 35 mm, 16mm, 1-inch and or BETA SP video masters,
color or black and white, and suitable for conversion to 1-inch video format
from Cinevid in exchange for $10,000 cash, an $87,000 note, and 17,400 shares of
Macfilms common stock.
In July 1997, Macfilms and Xxxxxx Entertainment, Inc. entered into an Asset
Purchase Agreement whereby Macfilms acquired eight hundred (800)
English-language feature film master recordings all in 35 mm, 16mm, 1-inch and
or BETA SP video masters, color or black and white, and suitable for conversion
to 1-inch video format from Xxxxxx Entertainment, Inc. in exchange for 24,000
shares of Macfilms common stock, $16,000 dollars cash, and a $104,000 note.
In August 1997, Macfilms and Xxx XXXxxxxxxx Productions entered into an Asset
Purchase Agreement whereby Macfilms acquired one (1) feature film production and
three (3) scripts in 35 mm, 16mm, 1-inch and or BETA SP video masters, color or
black and white, and suitable for conversion to 1-inch video format from Xxx
XxXxxxxxxx Productions in exchange for 70,000 shares of Macfilms common stock.
In July 1997, Macfilms and Saturn Productions, Inc. entered into an Asset
Purchase Agreement whereby Macfilms acquired three hundred (300) feature film
master recordings from Saturn Productions, Inc. in exchange for 29,000 shares of
restricted MFI common stock, $10,000 dollars cash, and a $145,000 note.
In August 1997, Macfilms and Western International, Inc. entered into an Asset
Purchase Agreement whereby Macfilms acquired one hundred (100) feature film
master recordings from Western International, Inc. in exchange for 50,000 shares
of restricted MFI common stock, $9,990 cash, and a $200,000 note.
In July 1997, Macfilms and XXXX Film Video, Inc. entered into an Asset Purchase
Agreement whereby Macfilms acquired one hundred seventy-five (175) feature film
master recordings, all in 35 mm, 16mm, 1-inch and or BETA SP video masters,
color or black and white, and suitable for conversion to 1-inch video format
from XXXX Film Video, Inc. in exchange for 50,000 shares of Macfilms common
stock, $5,000 dollars cash, and a $100,000 note.
In September 1997, Macfilms and XXXX Film Video, Inc. entered into an Asset
Purchase Agreement whereby Macfilms acquired ninety-one (91) cartoons and five
(5) animated productions from XXXX Film Video, Inc. in exchange for $6,000 cash,
2,000 shares of Macfilms common stock and an $8,000 note.
TITLE TO ASSETS:
Pursuant to the foregoing Asset Purchase Agreements, the Library Owners have
provided Macfilms with representations and warranties that they have good and
marketable title to the assets free and clear of all liens, claims and
encumbrances. To the best knowledge of Macfilms and the Representing
Shareholders, Macfilms has good and marketable title to the films acquired from
the Library Owners. Macfilms intends to conduct searches for UCC filings, tax
lien filings and judgment liens with respect to the films. In the event a lien
has been filed, Macfilms will use its best efforts to have the lien removed
within a reasonable time.
SCHEDULE C SUBSIDIARIES OF G/O COLORADO:
SCHEDULE D G/O 1934 ACT FILINGS:
SCHEDULE E COMPANY FINANCIAL STATEMENTS:
EXHIBIT 10.2(a)
AMENDMENT NO. 1 AND SETTLEMENT AND RELEASE AGREEMENT
----------------------------------------------------
1. Parties. This Amendment No. 1 and Settlement and Release Agreement
-------
("Amendment") to the Reorganization Agreement dated October 30, 1997 by and
between Mac Filmworks, Inc., f/k/a Keystone Entertainment, Inc., a Delaware
corporation (the "Company"), G/O International, Inc., a Colorado corporation
("G/O Colorado"), and various other Third parties ("1997 Agreement") is entered
into by and between the Company, G/O Colorado and Xxx XxXxxxxxxx, as
representative of the shareholders ("XxXxxxxxxx"). The Company, XxXxxxxxxx, and
G/O Colorado shall be referred to collectively as the "Parties."
2. Facts.
-----
2.1 In October 1997, the Company was incorporated as a subsidiary of
G/O Colorado, and G/O Colorado was issued 1,600,000 shares of
Company common stock, representing a hundred percent of the
issued and outstanding capital stock of the Company.
2.2 Pursuant to the October 1997 Agreement, the 1,600,000 shares of
Company common stock owned by G/O Colorado was transferred into
escrow, with 1,440,000 shares to be issued to various consultants
as directed by G/O Colorado and 160,000 shares to be distributed
of the shareholders of G/O Colorado.
2.3 Pursuant to the 1997 Agreement, the Company agreed to prepare and
file with the SEC a registration statement, registering the
distribution of the 160,000 shares of its common stock to the G/O
Coloardo shareholders.
2.4 The parties hereby agree to modify the 1997 Agreement and
acknowledge certain actions previously taken.
2.5 The Company desires to release G/O Colorado from distributing the
160,000 outstanding shares of the Company's common stock to its
shareholders.
2.6 G/O Colorado desires to release Company of its obligation
pursuant to Section 5(ii) of the 1997 Agreement.
2.7 The Parties are desiring to effect this Amendment in order to
facilitate the Company's ability to issue shares of common stock
by means of a Registration Statement to be filed with the
Securities and Exchange Commission in connection with obtaining
financing for the Company.
NOW THEREFORE, for good and valuable consideration, the receipt of which is
hereby acknowledged, the Parties agree to the following:
3. Acknowledgements
----------------
3.1 G/O Colorado and the Company hereby authorize, direct, and ratify
the escrow agent to distribute the 1,440,000 shares of Company
common stock, to various individuals and consultants as set forth
in schedules and exhibits attached to the 1997 Agreement and to
issue the balance of 160,000 shares of Company common stock to
G/O Colorado.
3.2 G/O Colorado and the Company hereby agree and acknowledge that
G/O Colorado is not obligated to distribute the 160,000 shares of
common stock to its shareholders.
3.3 G/O Colorado and the Company hereby acknowledge and agree that
the Company is not obligated to register any of its shares of
common stock, either under the Securities Act of 1933 or under
Section 12(g) of the Securities Exchange Act of 1934 as required
pursuant to the1997 Agreement.
4. Release
-------
4.1 In consideration for the release from obligations under the 1997
Agreement as described herein, the sufficiency of which is hereby
acknowledged and confessed, G/O Colorado, its officers,
directors, partners, attorneys, agents, servants,
representatives, successors, employees and assigns, to the extent
-------------
legally allowed, hereby covenant and agree as follows:
----------------
4.1.1 That they hereby release, acquit and forever discharge the
Company, its agents, servants and representatives, from any
and all rights, obligations, claims, demands and causes of
action, whether in contract or in tort, arising from or
relating to the Company's obligations under Section 5(ii) of
the 1997 Agreement.
4.2 In consideration of the for releasing the Company from its
obligation under Section 5 (ii) of the 1997 Agreement, and for
the agreements and covenants set forth herein, the sufficiency of
which the Company hereby acknowledges and confesses, the Company,
its representatives, successors and assigns, to the extent
---------------
legally allowed, hereby covenant and agree as follows:
----------------
4.2.1 That they hereby release, acquit, and forever discharge G/O
Colorado, its officers, directors, attorneys, agents,
servants, representatives, successors, employees and
assigns, from any and all rights, obligations, claims,
demands and causes of action, whether in contract or in
tort, arising from its obligations to distribute 160,000
shares of common stock to G/O Colorado shareholders.
2
5. Representations of the Parties:
---------------------------------
5.1 G/O Colorado represents that it:
5.1.1 has been fully informed of the terms, and effect of this
Amendment and has had the opportunity to consult counsel in
connection with its execution;
5.1.2 has neither made nor received (nor relied on) any promise or
representation of any kind by any other party or anyone acting
for them, except as expressly stated in this Amendment; and
5.1.3 owns outright and without any encumbrance the claims, rights
and/or interests that each purports to release herein.
5.2 The Company represents that it:
5.2.1 has been fully informed of the terms, and effect of this
Amendment and has had the opportunity to consult counsel in
connection with its execution;
5.2.2 has neither made nor received (nor relied on) any promise or
representation of any kind by any other Party or anyone acting
for them, except as expressly stated in this Amendment; and
6. Capacity. The Parties represent that they are lawfully authorized
--------
to execute this Amendment. The Parties to this Amendment further
represent that they have read it in full before its execution, and
that they fully understand the meaning, operation and effect of its
terms.
7. Binding Effect. This Amendment shall be binding on and inure to the
--------------
benefit of the Parties and their respective heirs, successors,
assigns, agents, employees, and personal representatives.
8. Modification. No modification or amendment of this Amendment shall
------------
be effective unless such modification or amendment shall be in writing
and signed by all Parties hereto.
9. Entire Agreement. This Amendment constitutes the entire agreement
-----------------
between the Parties pertaining to the subject matter hereof and
supersedes all prior and contemporaneous agreements, understandings,
negotiations, and discussions, whether oral or written, of the Parties
in connection with the subject matter hereof.
10. Interpretation. The laws of the State of Texas shall govern the
--------------
interpretation, construction, and performance of this Amendment.
Whenever used herein, the singular number shall include the plural,
the plural shall include the singular, and the use of any gender shall
be applicable to all genders.
3
11. Execution. This Amendment may be executed in several counterparts,
---------
each of which shall be deemed an original, and such counterparts,
taken together, shall constitute but one and the same Amendment. This
Amendment shall be effective on the day and year first above written.
12. Severability. Whenever possible, each provision of this Amendment
------------
shall be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Release is held to
be invalid, illegal, or unenforceable in any respect under any
applicable law or rule in any jurisdiction, such invalidity,
illegality, or unenforceability shall not affect any other provision;
rather, this Release shall be reformed, construed, and enforced in any
such jurisdiction as if such invalid, illegal, or unenforceable
provisions had never been contained herein, and a new, enforceable
provision shall be substituted which accomplishes the intent of the
invalid, illegal, or unenforceable provision as nearly as practicable.
13. Multiple Counterparts. This Release may be executed in multiple
-----------------------
counterparts, each of which shall serve as an original for all
purposes, but all copies shall constitute but one and the same
agreement.
14. Nonwaiver of Subsequent Breach. The waiver by any party hereto of
-------------------------------
a breach of any provision of this Release shall not operate or be
construed as a waiver of any subsequent breach by any party.
15. Electronically Transmitted Documents. If a copy or counterpart of
-------------------------------------
this Release is originally executed and such copy or counterpart is
thereafter transmitted electronically by facsimile or similar device,
such facsimile document shall for all purposes be treated as if
manually signed by the party whose facsimile signature appears.
16. Arbitration. Any controversy or claim arising out of or relating
-----------
to this Release, or the breach thereof, shall be settled by
arbitration administered by the American Arbitration Association in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association (the "Rules"), by one or more arbitrators
chosen in accordance with the Rules. Arbitration shall be initiated by
written demand by the party seeking arbitration. This agreement to
arbitrate shall be specifically enforceable only in the District Court
of Xxxxxx County, Texas. A decision of the arbitrator or arbitrators
shall be final, conclusive and binding on both parties, and judgment
may be entered thereon in the District Court of Xxxxxx County, Texas,
to enforce such decision and the benefits thereof. Upon appointment,
the arbitrators shall then proceed to decide the arbitration subjects
in accordance with the Rules. Any arbitration held in accordance with
this paragraph shall be private and confidential and no person shall
be entitled to attend the hearings except the arbitrator(s), the
stenographer, if one is requested, the parties, the parties'
attorneys, and any designated representatives of the Parties. The
matters submitted for arbitration, the hearings and proceedings
thereunder and the arbitration award shall be kept and maintained in
strictest confidence by both parties and shall not be discussed, by
any persons. On request of either party, the record of the proceeding
shall be sealed and may not be disclosed except insofar, and only
insofar, as may be necessary to enforce the award of the arbitrators
and any judgment enforcing such award.
4
17. Preparation of Release. Each party acknowledges that such party
------------------------
had separate and independent advice of counsel with respect to the
preparation of this Release. In light of those facts, it is
acknowledged that no party shall be construed to be solely responsible
for the drafting of this Release, and therefore any ambiguity shall
not be construed against any party as the alleged draftsman of this
Release.
IN WITNESS WHEREOF, intending to be legally bound, the parties hereto have
executed this Release as of November 21, 2000.
G/O INTERNATIONAL, INC., A COLORADO CORPORATION
/S/ X. X. XXXXX
---------------------------
By: X. X. Xxxxx
---------------------------
Title: President
---------------------------
Date: November 2000
/S/ ILLEGIBLE
---------------------------
By:
---------------------------
Title:
---------------------------
Date: , 2000
---------------------------
MACFILMWORKS, INC., A DELAWARE CORPORATION
F/K/A KEYSTONE ENTERTAINMENT, INC.
/S/ XXX XXXXXXXXXX, SR.
--------------------------------
By: Xxx XxXxxxxxxx Sr., President
Date: November , 2000
/S/ XXX XXXXXXXXXX, SR.
--------------------------------
Xxx XxXxxxxxxx Sr., Individual Representing
Shareholders
Date: November 2000
5
