EXHIBIT 2.1
COLDFAIR HOLDINGS LTD. SHARE PURCHASE AGREEMENT
SHARE PURCHASE AGREEMENT
between
Private Media Group, Inc.
and
Xxxxxxx Multi Finance N.V.
SHARE PURCHASE AGREEMENT
THIS AGREEMENT is made and entered into as of September 20, 2000
by and between
Private Media Group, Inc. a company duly incorporated and organized under the
laws of Nevada, U.S.A., hereinafter referred to as the "Purchaser",
and
Xxxxxxx Multi Finance N.V. a company duly incorporated and organized under the
laws of The Netherlands Antilles, having its registered office in Maduro Xxxxx
Xxxxxx 00, Xxxxxxx, Xxxxxxxxxxx Antilles, hereinafter referred to as the
"Seller".
WITNESSETH:
WHEREAS, the Seller is the holder of all of the issued and outstanding shares,
numbered from 1 to 1,000, each having a par value of CYP 1.00, in Coldfair
Holdings Limited Reg No HE 114109, a company duly incorporated and organized
under the laws of Cyprus, having its registered office in Nicolau Xxxxxxxxxxx
Xxx, 0xx xxxxx, Xxxxxx 000, X.X. 0000, Xxxxxxxx, Xxxxxx hereinafter referred to
as the "Company", and
WHEREAS, the Company in accordance with the provision regarding the object of
its activities as set out in its duly registered articles of association is
engaged, directly and indirectly in the business of Entertainment on the
Internet; and
WHEREAS, the Seller is desirous of selling to the Purchaser and the Purchaser is
desirous of purchasing from the Seller in exchange for restricted common shares
in the Seller, subject to the terms and conditions contained herein, all of the
Shares of the Company; and
WHEREAS, the Purchaser shall issue the number of new common shares as stipulated
in Section 3 below in favor of the Seller.
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NOW, THEREFORE, in consideration of the mutual covenants and undertakings set
forth herein and in the Schedules hereto, the parties agree as follows:
1. INTERPRETATION
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1.1 In this Agreement
"Business Day" means the day (other than a Saturday or Sunday)
on which banks are generally open in the States
of the Netherlands Antilles and Nevada for
normal business;
"Closing" means completion of the sale and purchase of the
Shares in accordance with Section 4 below;
"Confidential Information" means any and all information of any kind or
nature whatsoever, whether written or oral,
including, without limitation, financial
information, trade secrets, client lists and
other proprietary business information,
regarding the Company or the Seller, which
information is not known to the general public
or to persons unaffiliated with the Company or
the Seller, as the case may be;
"Insurance Policies" means the insurance policies shortly described
in Schedule 1;
"Intellectual Property" means any trademarks or domain names;
"Material Adverse Effect" means any effect which gives rise to or is
reasonably likely to give rise to a material
adverse effect on the assets or financial
condition of the Company;
"Material Agreement" means existing agreements of the Company, either
having an annual turnover exceeding USD 10,000
or which cannot be terminated at the Company's
discretion by applying a notice period shorter
than three (3) months;
"Shares" means all of the issued and outstanding shares,
numbered from 1 to 1,000, each having a par
value of CYP 1.00, in Coldfair Holdings Limited;
"USD" means the lawful currency of the United States
of America;
1.2 Any statement in this Agreement , including the Schedules, qualified by the
expression "to the best of the Seller's knowledge" or "so far as the Seller
is aware" or any similar expression shall mean that it is made after due and
careful enquiry of the board members of the Seller.
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1.3 The headings in this Agreement do not affect its interpretation.
1.4 The Schedules form part of this Agreement.
2. SALE OF THE SHARES
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The Seller shall sell and the Purchaser shall purchase the Shares and all
rights now and hereafter attaching or accruing thereto, free and clear of
any pledges, liens, security interests, claims, charges and encumbrances.
3. CONSIDERATION FOR SALE AND TRANSFER (EXCHANGE)
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3.1 At the Closing, subject to the terms and conditions of this Agreement, and
in full consideration for the aforesaid sale, conveyance and delivery of
Shares, the Purchaser shall deliver share certificates to the Seller for a
number of issued common shares in the Purchaser (the "New Shares"). The
total value and hence number of New Shares issued in favor of the Seller
shall equal the amount of USD 1,400,000. The share price for each New Share
shall be the fair market value on the day of Closing, hereinafter referred
to as the "Consideration".
3.2 Notwithstanding the above, endorsed in blank, share certificates
representing 35 percent of the New Shares shall be deposited with the
Purchaser's U.S. based attorney (the "Escrow Agent"), for a period of six
months following the closing for delivery to the Seller, in accordance with
an escrow agreement attached hereto as Schedule 3.2 (the "Escrow
Agreement"), upon satisfaction of all of the terms and conditions of this
Agreement.
4. CLOSING
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4.1 Closing shall take place on October 1, 2000 (the "Closing Date").
4.2 At Closing the Seller shall procure:
(a) the delivery to the Purchaser of
(i) the share certificates representing the Shares, free and clear of
all liens, security interests, claims charges and encumbrances,
duly endorsed for transfer
(ii) the written resignations of each of the board members of the
Company, effective as of the Closing Date, in each case
acknowledging that he has no claim against the Company whether for
loss of office or otherwise;
(iii) a certificate from the Company's Managing Director, President or
CEO, dated the Closing Date, listing any necessary consents,
waivers, approvals, authorizations, registrations, filings and
notifications, to which shall be attached evidence
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satisfactory to the Purchaser that the same have been obtained
or made and are in full force and effect, or stating that none
is necessary.
(iv) the Articles of Incorporation, and all amendments thereto,
certified by the appropriate Cyprus Authority;
(v) a certificate from the appropriate Netherlands Antilles
authority certifying the good standing of the Seller;
(vi) the by-laws, if any, of the Seller, certified by the Secretary
of the Seller;
(vii) the resolutions of the board of directors and stockholders of
the Seller taking appropriate action to authorize and approve
the execution, delivery and performance of this Agreement, the
offer, sale and delivery of the Shares and each other agreement
and document required to be executed and delivered pursuant
hereto and thereto, and approving and authorizing the other
transactions contemplated hereby and thereby;
(viii) the Escrow Agreement between the Escrow Agent, the Purchaser and
the Seller;
(ix) certification of recent date by the tax authorities of the
Republic of Cyprus, confirming that the Company has no due and
unpaid tax liabilities;
(x) copies of such other documents and papers as Purchaser or its
counsel may reasonably request in connection therewith, all in
form and substance reasonably satisfactory to Purchaser and its
counsel.
(b) that a general meeting and a board meeting of the Company is held at
which it is resolved that:
(i) such persons as the Purchaser nominates are appointed as directors
and deputy directors of the Company.
(c) that all indebtedness due from the Seller or any person connected with
the Seller to the Company is satisfied in full.
(d) that the Company is released from all guarantees and indemnities given
by it in respect of the Seller's liabilities or those of any person
connected with the Seller.
4.3 Upon completion of all matters referred to in Section 4.2 above the
Purchaser shall deliver 65 percent of the share certificates for the New
Shares to the Seller and deposit the remaining share certificates with the
Escrow Agent as set forth in Section 3.2 above.
5. REPRESENTATIONS AND WARRANTIES OF THE SELLER
-------------------------------------------------
The Seller hereby represents and warrants to the Purchaser as the date
hereof and as of the Closing Date that:
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5.1 Power and authority of the Seller
(a) The Seller is a company duly organized and validly existing under the
laws of The Netherlands Antilles.
(b) The Seller has full power and authority to execute and deliver this
Agreement and each other document or instrument delivered in connection
herewith and to consummate the transactions contemplated hereby.
5.2 Violation of Laws and Regulations
The execution and delivery of this Agreement by the Seller and the
completion of the transactions contemplated hereby:
(a) will not violate any provision of the articles of association of the
Seller;
(b) will not to any material extent violate any statute, rule, regulation,
order or decree of any public body or authority by which the Seller or
any of its properties or assets is bound; and
(c) will not to any material extent result in a violation or breach of, or
constitute a default under, any license, franchise, permit, agreement or
other instrument to which the Seller is a party, or by which the Seller
or any of its properties or assets is bound,
excluding from the foregoing Sections 5.2 (a) to (c) violations, breaches or
defaults which, either individually or in the aggregate, would not prevent
the Seller from performing its obligations under this Agreement or the
completion of the transactions contemplated by this Agreement.
5.3 Corporate records and documentation
Seller has furnished to Purchaser a complete and correct copy of the
Company's certificate of incorporation, articles of association and bylaws.
The Company's certificate of incorporation, articles of association and
bylaws are in full force and effect, and the Company is not in violation of
any of the provisions thereof.
5.4 Title to the Shares
The Seller owns the Shares free and clear of all liens, encumbrances,
claims, options and restrictions of every kind. The Seller has good and
marketable title to the Shares and has the right, power and authority to
exchange and deliver the Shares to the Purchaser in accordance with the
terms of this Agreement.
5.5 The Shares
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The Shares represent one hundred per cent (100 %) of all of the issued share
capital of the Company and one hundred per cent (100 %) of the voting power
of the Shares, and the Shares have been duly authorized, validly issued and
are fully paid. There are no outstanding obligations, warrants, debentures,
options, preemptive rights or other agreements to which the Seller or the
Company is a party or otherwise bound, providing for the issuance of any
additional shares or for the purchase, repurchase, redemption or other
acquisition of the Shares, except for this Agreement.
5.6 Financial
(a) The Company has neither an equity interest in, nor the right or option
to acquire an equity interest in, any other entity, and the Company is
not a participant, as a partner or otherwise, in any joint venture.
(b) The Company has delivered to the Purchaser the following financial
statements translated into English, attached hereto as Schedule 5.6 (b):
(i) unaudited balance sheet for the Company as of September 15, 2000;
and
(ii) unaudited profit and loss statements of the Company as of
September 15, 2000,
collectively referred to as the "Financial Statements".
(c) The foregoing Financial Statements:
(i) are complete and correct in all material respects and give a true
and fair view of the financial position and results of the
operations of the Company as of said dates and for said periods
and have been prepared from and in accordance with the books and
records of the Company;
(ii) have been prepared in accordance with Cyprus law and GAAP, applied
on a basis consistent with that of preceding periods; and
(iii) contain and reflect such reserves as were necessary and required
by the laws, principles and rules referred to under (ii) above to
be reflected in such statements as of said dates for all
liabilities, actual, contingent or accrued, and for all reasonably
anticipated losses and costs (in excess of expected receipts) and
for all warranty claims, discounts or refunds with respect to
services and/or products already rendered or sold, such reserves
being based upon events or circumstances in existence or likely to
occur in the future with respect to any contracts or commitments
of the Company.
(d) The Company has not received nor will receive any conditional or
unconditional shareholders' contributions, except as disclosed in
Schedule 5.6 (d).
(e) The Company has not pledged any assets, has no commitments or contingent
liabilities and the Company has full and exclusive title to all assets
in the balance sheets of
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the Financial Statements and the assets of the Company are not the
subject of any encumbrances or restrictions of whatever nature.
(f) The activities of the Company during the period from September 15, 2000
to the date hereof have been conducted in the ordinary course of
business with a view to maintaining its business as a going concern and
there has not occurred or arisen since September 15, 2000 with respect
to the Company:
(i) any material adverse change in its financial conditions or in the
operations of its business; or
(ii) any obligations, commitments or liabilities, liquidated or
unliquidated, contingent or otherwise, except obligations,
commitments and liabilities arising in the ordinary course of
business and which are not material in relation to its business;
or
(iii) any amendment or termination, or any agreement to amend or
terminate any Material Agreement, save in the ordinary course of
business; or
(iv) any extraordinary event or any extraordinary loss suffered or any
waiver of any debts, claims, rights under any Material Agreement,
or other rights representing a value in excess of USD 10,000; or
(v) any damage, destruction, or loss or any other event or condition,
whether covered by insurance or not, materially and adversely
affecting its properties and business representing loss to
property in the aggregate in excess of USD 10,000; or
(vi) any sale, assignment, transfer, pledge, lease or other disposal
of any individual asset with a value in excess of USD 10,000; or
(vii) any increase in the rates of compensation (including bonuses)
payable or to become payable to any officer, employee, agent,
independent contractor or consultant; or
(viii) any change of accounting methods, principles or practices; or
(ix) any investment in fixed assets that exceed individually USD
10,000 or in the aggregate USD 10,000; or
(x) any transaction other than in the ordinary course of business;
and the Company has not agreed or arranged to do any of the foregoing.
(g) Since September 15, 2000 no dividends or interim dividends have been
declared or paid by the Company.
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(h) All accounts receivable of whatever nature appearing in the accounts of
the Company are fully collectible and will be fully paid up to the book
value on the date each account's receivable falls due.
(i) The budgets and forecasted result for the Company for the year of 2000,
Schedule 5.6 (i), have been prepared with all reasonable care and there
is no reason to assume that the budgets and forecasted result of the
Company are not accurate.
5.7 Taxes
(a) All notices, computations and returns which ought to have been given or
made have been properly and duly submitted by the Company to the
relevant taxation or excise authority and all information, notices,
computations and returns submitted to such authorities are true and
accurate and are not subject of any material dispute nor are likely to
become the subject of any material dispute with such authorities.
(b) All taxes of any nature whatsoever for which the Company is liable have
been duly paid or reserved for in the accounts.
(c) The Company has never suffered any investigation, audit or visit by any
taxation or excise authority, and the Seller is not aware of any such
investigation, audit or visit planned for the next twelve months.
(d) All amounts required to be withheld or collected under applicable
foreign, federal, state, local or other tax laws and regulations by the
Company for income taxes, social security taxes, unemployment insurance
and other employee withholding taxes, or other taxes, have been so
withheld or collected, and such withholding or collection has either
been paid to the respective governmental agencies or set aside in
accounts for such purpose or accrued and reserved against and entered on
the Financial Statements.
(e) The Company is not primarily or jointly and severally liable for the
taxes of any other person as a result of having been an affiliate or
receiving substantially all of the assets of such person.
5.8 Assets and Properties
(a) The Company has exclusive title to all of the personal and real property
and other assets reflected in the accounts, and as further itemized in
Schedule 5.8 (a), except for such assets that are leased. The assets
will not be subject to encumbrances, mortgages, liens, charges or other
restrictions and the Company has not provided any guarantees.
(b) All personal property of the Company are usable to the benefit of the
Company's business and are in good physical repair and condition,
ordinary wear and tear excepted.
(c) All Assets whether or not recorded on the books of the Company that
heretofore have been used in the Company's business have been included
in the transfer to the Purchaser under the terms of this Agreement.
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5.9 Leasehold Properties
(a) The Company does not have any Leasehold Properties, or commitments
related to any Leasehold Properties whatsoever.
5.10 Compliance with statutes and licenses
The operations of the Company have been conducted in all respects in
accordance with and meet the applicable laws and regulations of all
governmental, municipal or other authorities having jurisdiction over the
Company. All governmental and other authority licenses and permits required
for the operation of the Company are, to a material extent, in full force
and effect and no violations are or have been recorded in respect of any
such existing licenses or permits and remain uncorrected and no proceeding
is pending which seeks the revocation or limitation of any such existing
licenses or permits.
5.11 Agreements
(a) There are no other Material Agreements than those listed in Schedule
5.11 (a), of which full copies (to the extent such agreements are in
writing or a summary thereof of any oral agreements) have been
disclosed to the Purchaser.
(b) The Company has neither received nor given notice of termination of any
Material Agreement.
(c) No party to any Material Agreement has the right to terminate or modify
its obligations as a result of the transactions contemplated herein.
(d) The Company is not in default under any Material Agreement, which
default will have a Material Adverse Effect.
5.12 Litigation
No actions, suits, proceedings or governmental investigation is pending or
to the best of the Seller's knowledge, threatened against the Seller or the
Company. To the best of the Seller's knowledge, neither the Seller nor the
Company is in default with respect to any order, injunction or decree by
any court or governmental department or agency.
5.13 Intellectual Property
The Company owns or has valid licenses, or other agreements to use, the
Intellectual Property, free and clear of all liens, pledges, or other
encumbrances. The use by the Company of the Intellectual Property does not
infringe the rights of any third parties.
5.14 Employees
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(a) The Company does not have any written or oral contracts of employment
with any employee of the Company, and the Company is not a party to or
subject to any collective bargaining agreements and has not been a
party to or subject to any collective bargaining agreement or plan
during the last 5 years
(b) There are no deferred compensation agreements, pensions, profit
sharing, severance pay, retirement plans or other agreement plans,
practices or programs providing any employee benefits. Full
reservations have been made in the Financial Statements for all present
and/or future liabilities in respect of pensions and other payments
related to compensations to be paid to employees.
a) Neither the Seller nor any director, officer or other Employee of the
Seller, the Company, or any relatives of any of the foregoing owns,
directly or indirectly, individually or collectively, any interest in
any corporation, company, partnership, entity or organization which is
in a business similar or competitive to the businesses of the Company
or which has any existing undisclosed contractual relationship with the
Company.
b) The Seller and the members of the board of directors of the Company
have no claims for compensation of any nature whatsoever relating to
the period before or after the Closing.
(e) The Company has complied in all material respect with all applicable
laws, ordinances, rules, regulations, agreement and requirements
relating to the employment of labor. The Company is not liable for any
arrears of wages or any taxes or penalties for failure to comply with
any of the foregoing.
(f) Annexed hereto as Schedule 5.14 (f) is a list of all employees,
together with a list of all other persons being authorized to sign for
the Company, including all persons authorized to operate any bank
accounts and safe deposits. Schedule 5.14 (f) also includes those
employees holding credit cards for the Company.
5.15 Environmental
(a) The Company has complied in all material respects with all relevant
environmental laws and environmental licenses and all environmental
licenses are valid and subsisting and the Company has not received any
written notice that any such environmental license is being revoked,
amended, varied, withdrawn or not renewed.
(b) No proceedings have been issued or are outstanding against the Company
in respect of any breach of any legislation concerning the environment.
5.16 Insurance
The are no Insurance Policies currently in effect.
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5.17 Conduct of Business
(a) The Company has conducted its business at all times in accordance with
and has complied with applicable national and local laws relating to
its operations and business, and is not a party to or subject to any
judgement, decree or order entered in any suit or proceeding brought by
any governmental or local agency or authority or any other person or
party enjoining or otherwise restraining or restricting the Company
with respect to any business activity or practice in the conduct of
business which is related to, necessary or incidental to the business
conducted by it and will not be, in respect of circumstances, existing
before or upon the Closing Date or related thereto; there is no
controversy or investigation pending or threatened with respect to the
Company's business by any governmental or local agency or authority or
any other person or party.
(b) The Company is not and shall not be liable, due to circumstances
existing before or upon Closing or related thereto, to compensate for
damages caused to the environment, or third parties by
products/services sold or otherwise in excess of what has been provided
for in the accounts.
5.18 Relationship to the Seller and related companies
There are no agreements between the Company and the Seller or any of its
affiliated companies officers, directors or stockholders other than in the
ordinary course of business.
5.19 There are no fee splitting, revenue or profit sharing agreements between
the Seller and/or Company and any third party, except as described in
schedule 5.11 (a).
5.20 Investment Representation
Seller represents to the Purchaser that it is acquiring the New Shares
(hereinafter, the "Securities") for investment and with no present
intention of distributing or reselling the Securities or any part thereof
in violation of any applicable law.
6. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
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The Purchaser hereby represents and warrants as of the Closing Date that:
6.1 Power and authority of the Purchaser
(a) The Purchaser is a company duly organized and validly existing under
the laws of Nevada.
(b) Upon approval of this Agreement by the board of directors and the
approval, if necessary, of the General Meeting of the Shareholders of
the Purchaser as contemplated by Section 9 below, the Purchaser has
full power and authority to purchase the Shares and to perform all
other undertakings hereunder and the execution, delivery and
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performance of this Agreement. Upon approval this Agreement is a valid
and binding obligation of the Purchaser enforceable against the
Purchaser in accordance with the terms herein.
6.2 Violation of Laws and Regulations
Assuming all filings, registrations, approvals, notifications etc required
by applicable laws are duly made, the execution and delivery of this
Agreement by the Purchaser and the completion of the transactions
contemplated hereby:
(a) will not violate any provision of the articles of association of the
Purchaser;
(b) will not violate any statute, rule, regulation, order or decree of any
public body or authority by which the Purchaser or any of its properties
or assets is bound; and
(c) will not result in a violation, breach of or constitute a default under
any license, franchise, permit, agreement or other instrument to which
the Purchaser is a party, or by which the Purchaser or any of its
properties or assets is bound,
excluding from the foregoing Sections 6.2 (a) to (c) violations, breaches or
defaults which, either individually or in the aggregate, would not prevent
the Purchaser from performing its obligations under this Agreement or the
completion of the transactions contemplated by this Agreement.
7. COVENANTS AND OTHER UNDERTAKINGS OF THE PARTIES
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7.1 The Seller shall afford to the officers, representatives and advisers of the
Purchaser access to the plants, properties, books and records of the Company
and will furnish to the Purchaser such additional financial and operation
data and other information as to the business and properties of the Company
("Due Diligence").
7.2 Notwithstanding the above, the Seller shall provide such other information,
and execute and deliver all such other and additional instruments, notices,
releases, undertakings, consents and other documents, and shall do all such
other acts and things, as may be reasonably requested by Purchaser as
necessary to assure to Purchaser all the rights and interests granted or
intended to be granted under this agreement.
7.3 After the Closing the Seller shall not sell, assign, transfer or otherwise
dispose of more than fifty percent (50%) of the New Shares for one year
hereafter.
7.4 Notwithstanding the provisions of Section 7.3 above, the Seller may transfer
any or all of the New Shares in the Purchaser upon approval from the
Purchaser, subject to U.S. Securities law restrictions.
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7.5 The Seller and/or any related parties to the Seller covenants with the
Purchaser (for itself and as agent for the Company) that it shall not:
a) for a period of two (2) years from the Closing Date be concerned in any
business carrying on businesses in the world which is competitive with
any subscription and/or membership businesses carried on by the Company
as of the Closing Date; or
b) make use of or (except as required by law or any competent regulatory
body) disclose or divulge to any third party any information of a secret
or confidential nature relating to the business or affairs of the
Company or its customers or suppliers; or
c) make any use of the Company's customer database as from the Closing
Date.
7.6 The Seller will provide such other information, and execute and deliver all
such other and additional instruments, notices, releases, undertakings,
consents and other documents, and will do all such other acts and things, as
may be reasonably requested by the Purchaser as necessary to assure to the
Purchaser all the rights and interest granted or intended to be granted
under this Agreement. The Seller shall take or shall cause to be taken such
other reasonable actions as the Purchaser may require to more effectively
transfer, convey and assign to, and vest in the Purchaser, and put the
Purchaser in possession of, the Shares as contemplated by this Agreement.
8. INDEMNIFICATION
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8.1 Breach of Warranties
Subject to Section 8.3, Seller shall indemnify and hold harmless Purchaser
and the Company against and in respect of any damages, losses, costs or
expenses that arise in connection with any breach by the Seller of the
representations, warranties or covenants given herein, ("Losses").
8.2 Set-Off
The Purchaser shall be entitled to a set-off against the New Shares
deposited with the Escrow Agent for any Losses which are incurred by the
Purchaser or the Company and for which the Seller shall indemnify the
Purchaser pursuant to the terms of this Agreement, a "Claimed Set-Off".
Buyer shall give the Seller written notice of any Claimed Set-Off. The
Seller shall have twenty (20) days from the date of the Purchaser's written
notice to object to the Claimed Set-Off. The Seller shall make any objection
to a Claimed Set-Off in writing and shall forward the same to both the
Purchaser and the Escrow Agent. If the Seller does not timely object, the
Purchaser may give unilateral written notice to the Escrow Agent to release
to the Purchaser an amount of New Shares necessary to satisfy the Claimed
Set-Off, which unilateral notice the Seller hereby acknowledges to be
sufficient to authorize the Escrow Agent to release the New Shares as
directed by the Purchaser. In determining the number of New Shares necessary
to be released in order to satisfy the Claimed Set-Off, the value of each
New Share shall be the fair market value at the Closing Date, as set forth
in
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3.1 above. If the Seller does object in a timely manner, the Escrow Agent
shall not release any New Shares to the Purchaser until the Escrow Agent
receives instructions which are signed by both the Seller and the Purchaser,
or until the dispute has been definitely resolved by arbitral proceedings.
If the Seller does timely object and the Seller and the Purchaser are unable
to agree to the amount of a Claimed Set-Off within thirty (30) days, either
the Seller or the Purchaser may institute arbitral proceedings for a
determination of the amount of the Claimed Set-Off.
8.3 Limitation of Liability
(a) The liability of the Seller shall be limited as follows:
(i) the Seller shall have no liability in respect of any breach or
breaches of the warranties or covenants unless the amount of the
liability in respect of such breach or breaches exceeds in
aggregate the sum of USD 10,000 in which case (subject to the
other provisions of this Section 8) the whole amount of the
liability shall be payable;
(ii) the maximum aggregate liability of the Seller in respect of all
and any claims in respect of the warranties and covenants shall
not exceed the Consideration;
(iii) liability in respect of the warranties and covenants shall
terminate on the second anniversary of the Closing, except in
respect of any claim of which notice in writing (specifying in
reasonable detail the event, matter or default which gives rise to
the claim and, if practicable, an estimate of the amount claimed)
is given to the Seller before that date;
(iv) Irrespective of the time limit above, the Purchaser may, after the
two (2) year period, claim compensation for:
(1) taxes relating to the provisions of Section 5.7; and
(2) claims from third parties against the Company.
8.4 Notification
(a) In case either the Purchaser or the Company becomes aware of any claim
for which the Seller may be liable, the Purchaser shall, in order to
maintain the right to bring a claim against the Seller:
(i) as soon as reasonably practicable, but in no event later than
twenty (20) days after the date the Purchaser or the Company
becomes aware of any circumstance giving rise to a claim, give
written notice thereof to the Seller;
(ii) not make any admission of liability, agreement or compromise with
any person, body or authority in relation thereto, without
obtaining the prior written consent of the Seller;
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(iii) take such action, as the Seller may reasonably request, to avoid
dispute, appeal, compromise or defend such claim, with the
proviso, however, that the Purchaser shall not (and shall procure
that the Company shall not) accept or pay or compromise or make
any submission in respect of such claim, without the Seller's
prior written consent thereto; and
(iv) give the Seller, or the Seller's duly authorized representatives,
reasonable access to relevant accounts, documents and records of
the Company to enable the Seller, or the Seller's duly authorized
representatives, to examine such accounts, documents and records
and to take photocopies thereof.
9. CONDITIONS PRECEDENT AND RIGHT OF TERMINATION
-------------------------------------------------
9.1 The obligation of the Purchaser to consummate this Agreement and the
transactions hereunder shall be conditioned upon any or each of the
following conditions precedent:
(a) the board of directors of Purchaser shall have approved this Agreement
and the transactions contemplated hereby.
(b) the General Meeting of the Shareholders of the Purchaser, if necessary,
shall have approved this Agreement and the transactions contemplated
including the issuance of New Shares to the Seller.
(c) compatibility and compliance with U.S. Federal and state securities
regulations, including, if necessary, registration of the New Shares
under the provisions of the Securities Act of 1933, unless an exemption
from such registration is available.
(d) The Seller shall have performed and complied in all material respects
with all obligations, covenants and conditions contained herein which
are required to be performed or complied with by the Seller prior to or
on the Closing Date.
(e) The representations and warranties of the Seller set forth in Section 5
of this Agreement shall be true and correct in all material respects on
and as of the Closing Date with the same effect as though such
representations and warranties had been made on and as of the Closing
Date.
(f) The Purchaser shall have been given the opportunity to complete a Due
Diligence in accordance with Section 7.1 above.
(g) No Material Adverse Effect shall have occurred since September 15, 2000,
as determined by Purchaser.
(h) No order of any court or governmental authority shall be in effect which
restrains or prohibits the transactions contemplated hereby and no suit,
action, investigation, inquiry or proceeding by any governmental
authority or any other person or legal or
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administrative proceeding shall be pending or threatened which
challenges the consummation of the transactions contemplated hereby or
which may have a Material Adverse Effect.
9.2 The Purchaser shall in its sole discretion have the right to terminate all
transactions contemplated by this Agreement at any time prior to Closing
without any obligations to reimburse the Seller for any costs, expenses,
damages or other compensations incurred or suffered due to the Purchaser's
termination.
10. ANNOUNCEMENTS
-----------------
No announcements concerning this transaction or any ancillary matter will be
made before, on or after Closing by any party to this agreement (or any
person connected with the party) except as required by law or the rules of
any stock exchange without the prior written approval of the Seller and
Purchaser.
11. NOTICES
-----------
(a) All notices, consents or other communications under or in connection
with this Agreement shall be given in writing or by facsimile. Any such
notice or consent will be deemed to be given as follows:
(i) if in writing, when delivered; and
(ii) if by facsimile, when received.
However, a notice given in accordance with the above but received on a
non-Business Day or after business hours in the place of receipt will
only be deemed to be given at the opening of business on the next
Business Day.
(b) The addresses and facsimile numbers of each party for all notices under
or in connection with this Agreement are:
(i) in the case of the Seller:
Xxxxxxx Multi Finance X.X.
Xxxxxx Xxxxx Xxxxxx 00
Xxxxxxx
Xxxxxxxxxxx Antilles
Att: Xxx Xxxxxxxx
Facsimile: x0000 000 00 00
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(ii) In the case of the Purchaser:
Law Offices of Xxxxx & Associates
0000 Xxxxxxx Xxxx Xxxx, 0xx xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx
X.X.X.
Att: Xxx Xxxxx
x0-000-000-0000
or such other as a party may notify to the other party by no less than
five (5) Business Days' notice.
12. CONFIDENTIALITY
-------------------
The parties undertake not to disclose any Confidential Information unless
(i) required to do so by law; (ii) required to do so by any applicable stock
exchange regulations; (iii) such disclosures are made in connection with the
ordinary course of business of the Company; or (iv) disclosure has been
consented to by the other party.
13. LANGUAGE
------------
The language of this Agreement is English and all documents and notices
hereunder shall be in English unless otherwise agreed by both parties.
14. WHOLE AGREEMENT
-------------------
This Agreement, including the Schedules hereto and other documents referred
to herein which form a part hereof, contain the entire understanding of the
parties hereto with respect to the subject matter contained herein and
therein. All prior negotiations and agreements between the parties hereto
with respect to the transactions provided for herein are superseded by this
Agreement.
15. WAIVER
----------
The failure of any party to insist upon strict adherence to any term of this
Agreement on any occasion shall not be considered a waiver of any right
hereunder, nor shall it deprive that party of the right thereafter to insist
upon the strict adherence to that term or any other terms of this Agreement.
16. AMENDMENTS
--------------
Page 18 of 21
No change, termination or attempted modification of any of the provisions
of this Agreement shall be binding on the Seller or on the Purchaser unless
agreed by both parties in writing. No modification, termination,
rescission, discharge or cancellation of this Agreement shall affect the
right of the Purchaser or the Seller to enforce any claim, whether or not
liquidated, that accrued prior to the date of such notification,
termination, rescission, discharge or cancellation of this Agreement.
17. INVALIDITY
---------------
If for any reason any term, warranty, representation, covenant or condition
herein shall be declared or deemed void, invalid or unenforceable, such
shall not render void, invalid or unenforceable this Agreement or any other
term, covenant or condition herein contained if in spite of the exclusion
of the invalid provision, the Agreement can be given effect in line with
the main purposes of the parties.
18. ASSIGNMENT
---------------
This Agreement may not be transferred, assigned, pledged or hypothecated by
any party hereto, other than by operation of law. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective heirs, executors, administrators, successors and permitted
assignees.
19. FEES AND EXPENSES
----------------------
Except as otherwise set forth in this Agreement, each party shall pay its
own and its advisers' fees and expenses (including financial and legal
advisors) whether relating to the preparation, the carrying out of this
Agreement, the Closing hereunder or the completion of the transactions
herein contemplated and no such fees or cost will be charged to the
Company.
20. GOVERNING LAW AND DISPUTES
-------------------------------
20.1 This Agreement shall be governed by the substantive laws of Nevada.
20.2 Any dispute, controversy or claim arising out of or in connection with this
Agreement, or the breach, termination or invalidity thereof shall be
settled by arbitration in accordance with Nevada Laws. The arbitration
tribunal shall be composed of three arbitrators. The place of arbitration
including the making of the award shall be Las Vegas. The language to be
used in the arbitration proceedings shall be English.
_____________________
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IN WITNESS WHEREOF, the parties have duly executed this Agreement in two (2)
original copies of which each party has retained one copy on the date first
written above.
Private Media Group, Inc. Xxxxxxx Multi Finance N.V.
/s/ /s/
--------------------------------- -------------------------------
Director Director
Page 20 of 21
List of Schedules for Acquisition Agreement
[All schedules have been omitted. Schedules will be furnished to the SEC upon
request.]
Schedule 1 Insurance Policies
Schedule 3.1 (b) Terms and Conditions for Stock Options
Schedule 3.2 Escrow Agreement
Schedule 5.6 (b) Financial Statements
Schedule 5.6 (d) Shareholder Contributions
Schedule 5.6 (i) Company Budget and Forecast
Schedule 5.8 (a) Company Assets
Schedule 5.11 (a) Material Agreements
Schedule 5.14 (g) Authorized Corporate Signatories
Schedule 7.4 Share and Stock Option Transfer Conditions
Page 21 of 21
