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EX-10.(b)
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement") is entered into this 22nd
of September, 1995, by and among AP OFFICE EQUIPMENT, INC., a Colorado
corporation (hereinafter referred to as "Buyer"); and ENTERTAINMENT DIGITAL
NETWORK, INC., a California corporation (hereinafter referred to as the
"Company"), Xxx Xxxxxxxxx, Xxxxx Xxxxxxxxx, Xxx Xxxxx, Xxxxxxx Xxxxx, Xxxx
Xxxxxx, Xxxxxx Xxxxx and Xxxx Xxxxx (hereinafter collectively referred to as
"Seller"), being the primary shareholders of the Company.
WHEREAS, Seller is the owner of record and beneficially owns One
Million Sixty-Four Thousand Four Hundred Eleven (1,064,411) shares of the issued
and outstanding shares of Common Stock of the Company and Three Hundred
Ninety-Three Thousand Seven Hundred Fifty (393,750) shares of Series A Preferred
Stock of the Company (the "Shares"); and
WHEREAS, Seller desires to sell all of the Shares to Buyer, and Buyer
desires to purchase the Shares, upon the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, and for other good and valuable consideration, the receipt,
adequacy and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
I.
SALE AND PURCHASE OF THE SHARES
1.1 SALE AND PURCHASE. Subject to the terms and conditions hereof, at
the Closing (as defined in paragraph 1.2 below), Seller agrees to sell, assign,
transfer, convey and deliver to Buyer, and Buyer agrees to purchase from Seller,
the Shares listed in Exhibit "A", attached hereto.
1.2 CLOSING. The purchase shall be consummated at a closing ("Closing")
to take place at 11:00 o'clock a.m., at the offices of Buyer's counsel on
September __, 1995 ("Closing Date").
1.3 PURCHASE PRICE. The aggregate purchase price ("Purchase Price") for
the Shares shall be 1,275,818 shares of Common Stock of the Buyer ("Buyer's
Shares"). This portion of the Purchase Price shall be paid at Closing, by
issuance and delivery of Buyer's Shares to Seller against receipt of
certificates representing the Shares, duty endorsed for transfer to Buyer.
1.4 ALLOCATION OF SHARES. All shares of stock of Buyer to be issued to
Seller pursuant to this Agreement shall be issued to the respective Sellers in
proportion to their respective ownership of stock of the Company as described in
Exhibit "A" hereto.
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1.5 OTHER AGREEMENTS. At the Closing, the indicated parties shall
execute and deliver the following additional agreements in substantially the
form attached hereto:
(a) Employment Agreements between Buyer and Xxx Xxxxxxxxx
and Xxxxx Xxxxxxxxx attached hereto as Exhibits "B" and "C".
(B) Stock certificates representing all of the Shares,
duly endorsed to Buyer and in blank or assignments separate from the
certificates, transferring the Shares from Seller to Buyer, copies of which are
attached hereto as Exhibit "P".
(c) Stock option agreement between Xxx Xxxxxxxxx and
Xxxxx Xxxxxxxxx and Buyer attached hereto as Exhibit "D".
1.6 BASIC AGREEMENTS AND TRANSACTIONS DEFINED. This Agreement and other
agreements listed in paragraph 1.5, are sometimes referred to as the "Basic
Agreements". The transactions contemplated by the Basic Agreements are sometimes
referred to as the "Transactions".
II.
REPRESENTATIONS AND WARRANTIES
2.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to Buyer as follows:
(a) ORGANIZATION. The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of the state
of California. The Company has all requisite corporate power and authority to
own, lease and operate its properties and to carry on its business. The Company
is duly qualified and in good standing as a foreign corporation in each
jurisdiction where its ownership of property or operation of its business
requires qualification, except where the failure to be qualified would not have
a material adverse effect on the Company.
(b) AUTHORIZED CAPITALIZATION. The authorized
capitalization of the Company consists of Five Million (5,000,000) shares of
Common Stock, of which One Million Two Hundred Eleven Thousand Seven Hundred
Fifteen (1,211,715) shares have been issued and are outstanding and Two Million
(2,000,000) shares of Preferred Stock, 545,000 shares of which have been
designated Series A Preferred Stock, of which Five Hundred Twenty-Five Thousand
(525,000) shares are outstanding. The Shares have been duly authorized, validly
issued, are fully paid and nonassessable with no personal liability attaching to
the ownership thereof and were offered, issued, sold and delivered by the
Company in compliance with all applicable state and federal laws. Except as set
forth in Exhibit "F" attached hereto, the Company does not have any outstanding
fights, options, warrants, calls, commitments, conversion or any other
agreements of any character, whether oral or written, obligating it to issue any
shares of its
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capital stock, whether authorized or not. Except as set forth in Exhibit "E"
attached hereto, the Company is not a party to and is not bound by any
agreement, contract, arrangement or understanding, whether oral or written,
giving any person or entity any interest in, or any right to share, participate
in or receive any portion of, the Company's income, profits or assets, or
obligating the Company to distribute any portion of its income, profits or
assets.
(c) AUTHORITY. The Company has full power and lawful
authority to execute and deliver the Basic Agreements and to consummate and
perform the Transactions contemplated thereby. The Basic Agreements constitute
(or shall, upon execution, constitute) valid and legally binding obligations
upon the Company, enforceable in accordance with their terms. Neither the
execution and delivery of the Basic Agreements by the Company, nor the
consummation and performance of the Transactions contemplated thereby, conflicts
with, requires the consent, waiver or approval of, results in a breach of or
default under, or gives to others any interest or right of termination,
cancellation or acceleration in or with respect to, any material agreement by
which the Company is a party or by which the Company or any of its material
properties or assets are bound or affected.
(d) COMPANY FINANCIAL STATEMENTS. The Company's Financial
Statements are complete, were prepared in accordance with generally accepted
accounting principles applied on a basis consistent with prior periods and
fairly present the financial position of the Company as of June 30, 1995.
(e) NO UNDISCLOSED LIABILITIES. Except as set forth in
the Company Financial Statements previously delivered to Buyer and as set forth
on Exhibit "G", the Company is not aware of any material liabilities for which
the Company is liable or will become liable in the future.
(f) TAXES. The Company has filed all federal, state,
local tax and other returns and reports which were required to be filed with
respect to all taxes, levies, imposts, duties, licenses and registration fees,
charges or withholdings of every nature whatsoever ("Taxes"), and their exists a
substantial basis in law and fact for all positions taken in such reports. No
waivers of periods of limitation are in effect with respect to any taxes arising
from and attributable to the ownership of properties or operations of the
business of the Company.
(g) PROPERTIES. The Company has good and marketable title
to all its material personal property, equipment, processes, patents,
copyrights, trademarks, franchises, licenses and other material properties and
assets (except for items leased or licensed to the Company), including all
property reflected in the Company Financial Statements (except for assets
reflected therein which have been sold in the normal course of its business
where the proceeds from such sale or other disposition have been properly
accounted for in the financial statements of the Company), in each case free and
clear of all material liens, claims and encumbrances of every kind and
character, except as set forth in Exhibit "H". The Company has no ownership
interest in any real property. The assets and properties owned, operated or
leased by the Company and used in its business are in good operating condition,
reasonable wear and tear excepted, and suitable for the uses for which intended.
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(h) BOOKS AND RECORDS. The books and records of the
Company are complete and correct in all material respects, have been maintained
in accordance with good business practices and accurately reflect in all
material respects the business, financial condition and results of operations of
the Company as set forth in the Company Financial Statements.
(i) INSURANCE. Exhibit "I" contains an accurate and
complete list and brief description of all performance bonds and policies of
insurance, including fire and extended coverage, general liability, workers
compensation, products liability, property, and other forms of insurance or
indemnity bonds held by the Company. The Company is not in default with respect
to any provisions of any such policy or indemnity bond and has not failed to
give any notice or present any claim thereunder in due and timely fashion. All
policies of insurance and bonds are: (1) in full force and effect: (2) are
sufficient for compliance by the Company with all requirements of law and of all
agreements and instruments to which the Company is a party; (3) are valid,
outstanding and enforceable: (4) provide adequate insurance coverage for the
assets, business and operations of the Company in amounts at least equal to
customary coverage in the Company's industry: (5) will remain in full force and
effect through the Closing; and (6) will not be affected by, and will not
terminate or lapse by reason of, the transactions contemplated by this
Agreement.
(j) TRANSACTIONS WITH CERTAIN PERSONS. Except as
disclosed in Exhibit "J", the Company has no outstanding material agreement,
understanding, contract, lease, commitment, loan or other material arrangement
with any officer, director or shareholder of the Company or any relative of any
such person, or any corporation or other entity in which such person owns a
beneficial interest.
(k) MATERIAL CONTRACTS. Except as set forth in Exhibit
"K", the Company has no purchase, sale, commitment, or other contract, the
breach or termination of which would have a materially adverse effect on the
business, financial condition, results of operations, assets, liabilities, or
prospects of the Company.
(l) EMPLOYMENT MATTERS. Exhibit "L" contains a list of
all officers, their base salaries, accrued vacation pay, sick pay, and severance
pay through August 31, 1995. Except as set forth in Exhibit "K", the Company is
not a party to any employment agreement, or any pension, profit sharing,
retirement or other deferred compensation plan or agreement. The Company has not
incurred any unfunded deficiency or liability within the meaning of the Employee
Retirement Income Security Act of 1974 ("ERISA"), has not incurred any liability
to the Pension Benefit Guaranty Corporation established under ERISA in
connection with any employee benefit plan and has no outstanding obligations or
liabilities under any employee benefit plan. The Company has not been a party to
a "prohibited transaction," which would subject the Company to any tax or
penalty. There is no collective bargaining agreement or negotiations therefor,
labor grievance or arbitration proceeding against the Company pending or
threatened, and to the knowledge of the Company, there are no union organizing
activities currently pending or threatened against or involving the Company.
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(m) AUTHORIZATIONS. The Company has no licenses, permits,
approvals and other authorizations from any governmental agencies and any other
entities that are materially necessary for the conduct of its business, except
as set forth in Exhibit "M" which contains a list of all material licenses,
permits, approvals, and other material authorizations, as well as a list of all
material copyrights, patents, trademarks, trade names, service marks,
franchises, licenses and other material permits, each of which is valid and in
full force and effect.
(n) NO POWERS OF ATTORNEY. The Company has no powers of
attorney or similar authorizations outstanding.
(o) COMPLIANCE WITH LAWS. The Company is not in violation
of any federal, state, local or other law, ordinance, role or regulation
applicable to its business, and has not received any actual or threatened
complaint, citation or notice of violation or investigation from any
governmental authority, in each case where such violation would have a material
adverse effect on the Company.
(p) COMPLIANCE WITH ENVIRONMENTAL LAWS. The Company is in
compliance with all applicable pollution control and environmental laws, rules
and regulations in all material respects. The Company has no environmental
licenses, permits and other authorizations held by the Company relative to
compliance with environmental laws, rules and regulations.
(q) NO LITIGATION. There are no actions, suits, claims,
complaints or proceedings pending or threatened against the Company, at law or
in equity, or before or by any governmental department, commission, court,
board, bureau, agency or instrumentality; and there are no facts which would
provide a valid basis for any such action, suit or proceeding, which, if
determined adversely to the Company, would have a material adverse effect on the
Company. There are no orders, judgments or decrees of any governmental authority
outstanding which specifically apply to the Company or any of its assets.
(r) VALIDITY. All material contracts, agreements, leases
and licenses to which the Company is a party or by which it or any of its
material properties or assets are bound or affected, are valid and in full force
and effect; and no breach or default exists, or upon the giving of notice or
lapse of time, or both, would exist, on the part of the Company or by any other
party thereto.
(s) NO ADVERSE CHANGES. Since August 1, 1995, there have
been no actual or threatened developments of a nature that is materially adverse
to or involves any materially adverse effect upon the business, financial
condition, results of operations, assets, liabilities, or prospects of the
Company.
(t) FEES. All negotiations relating to the Basic
Agreements and the Transactions have been conducted by the Company in such a
manner as not to give rise to any valid claim for any finder's fees, brokerage
commission, financial advisory fee or related expense or other like payment for
which the Company or Buyer are or may be liable.
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(u) FULL DISCLOSURE. All statements of the Company
contained in the Basic Agreements and in any other written documents delivered
by or on behalf of the Company or Seller to Buyer are true and correct in all
material respects and do not omit any material fact necessary to make the
statements contained therein not misleading in light of the circumstances under
which they were made. There are no facts known to the Company which could have a
materially adversely affect upon the business, financial condition, results of
operations, assets, liabilities, or prospects of the Company, which have not
been disclosed to Buyer in the Basic Agreements.
2.2 REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represents and
warrants to Buyer, with respect to the Shares owned by Seller, as follows:
(a) TITLE TO THE SHARES. At Closing, Seller shall own of
record and beneficially the number of the Shares listed in Exhibit "A", of the
Company, free and clear of all liens, encumbrances, pledges, claims, options,
charges and assessments of any nature whatsoever, with full fight and lawful
authority to transfer the Shares to Buyer. No person has any preemptive rights
or rights of first refusal with respect to any of the Shares. There exists no
voting agreement, voting trust, or outstanding proxy with respect to any of the
Shares. There are no outstanding rights, options, warrants, calls, commitments,
or any other agreements of any character, whether oral or written, with respect
to the Shares.
(b) INVESTMENT INTENT. Seller is acquiring the shares of
Buyer for his or her own account, for investment purposes only, and not with a
view to the sale or distribution of any part thereof, and Seller has no present
intention of selling, granting participation in, or otherwise distributing the
same. Seller understands the specific risks related to an investment in the
shares of Buyer, especially as it relates to the financial performance of Buyer.
2.3 REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and
warrants to Seller as follows:
(a) ORGANIZATION. Buyer is a corporation duly
incorporated, validly existing and in good standing under the laws of the state
of Colorado. Buyer has all requisite corporate power and authority to own, lease
and operate its properties and to carry on its business. Buyer is duly qualified
and in good standing as a foreign corporation in each jurisdiction where its
ownership of property or operation of its business requires qualification,
except where the failure to be qualified would not have a material adverse
effect on the Company. The Certificate of Incorporation and the Bylaws of Buyer
presently provide that the number of members of the Board of Directors shall be
five (5).
(b) AUTHORIZED CAPITALIZATION. The authorized
capitalization of Buyer consists of 25,000,000 shares of .001 par value Common
Stock, of which Seven Hundred Forty Seven Thousand Five Hundred (747,500) shares
have been issued and are outstanding (after giving effect to a one for three
reverse stock split). Buyer's Shares have been duly authorized, validly issued,
are fully paid and nonassessable with no personal liability attaching to the
ownership thereof and were offered, issued, sold and delivered by Buyer in
compliance with all
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applicable state and federal laws. Except as set forth in Exhibit "N" attached
hereto, Buyer does not have any outstanding fights, options, warrants, calls,
commitments, conversion or any other agreements of any character, whether oral
or written, obligating it to issue any shares of its capital stock, whether
authorized or not. Except as set forth in Exhibit "O" attached hereto, Buyer is
not a party to and is not bound by any agreement, contract, arrangement or
understanding, whether oral or written, giving any person or entity any interest
in, or any right to share, participate in or receive any portion of, Buyer's
income, profits or assets, or obligating Buyer to distribute any portion of its
income, profits or assets.
(c) AUTHORITY. Buyer has full power and lawful authority
to execute and deliver the Basic Agreements and to consummate and perform the
Transactions contemplated thereby. The Basic Agreements constitute (or shall,
upon execution, constitute) valid and legally binding obligations upon Buyer,
enforceable in accordance with their terms. Neither the execution and delivery
of the Basic Agreements by Buyer, nor the consummation and performance of the
Transactions contemplated thereby, conflicts with, requires the consent, waiver
or approval of, results in a breach of or default under, or gives to others any
interest or right of termination, cancellation or acceleration in or with
respect to, any material agreement by which Buyer is a party or by which Buyer
or any of its material properties or assets are bound or affected.
(d) INVESTMENT INTENT. Buyer is acquiring the Shares for
its own account, for investment purposes only, and not with a view to the sale
or distribution of any part thereof, and Buyer has no present intention of
selling, granting participation in, or otherwise distributing the same. Buyer
understands the specific risks related to an investment in the Shares,
especially as it relates to the financial performance of the Company.
(e) BUYER'S FINANCIAL STATEMENTS. Buyer's Financial
Statements are complete, were prepared in accordance with generally accepted
accounting principles applied on a basis consistent with prior periods and
fairly present the financial position of Buyer as of June 30, 1995.
(f) NO UNDISCLOSED LIABILITIES. Except as set forth in
Buyer's Financial Statements previously delivered to the Company, Buyer is not
aware of any material liabilities for which it is liable or will become liable
in the future.
(g) MATERIAL CONTRACTS. Buyer has no purchase, sale,
commitment, or other contract, the breach or termination of which would have a
materially adverse effect on the business, financial condition, results of
operations, assets, liabilities, or prospects of Buyer.
(h) NO LITIGATION. There are no actions, suits, claims,
complaints or proceedings pending or threatened against Buyer, at law or in
equity, or before or by any governmental department, commission, court, board,
bureau, agency or instrumentality; and there are no facts which would provide a
valid basis for any such action, suit or proceeding, which, if determined
adversely to the Company, would have a material adverse effect on the
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Company. There are no orders, judgments or decrees of any governmental authority
outstanding which specifically apply to Buyer or any of its assets.
(i) DISCLOSURE STATEMENT. The information in the
Disclosure Statement being provided to the current shareholders of Buyer and to
the members of Seller is true and correct in all material respects and contains
no misstatements or omissions of material fact.
(j) NO OPERATIONS. Buyer does not currently have any
business operations or material assets.
III.
COVENANTS
3.1 COVENANTS OF THE COMPANY. The Company covenants and agrees that
from the date hereof to the Closing without the prior written consent of Buyer:
(a) ORDINARY COURSE OF BUSINESS. The Company will operate
its business only in the ordinary course and will use its best efforts to
preserve the Company's business, organization, goodwill and relationships with
persons having business dealings with the Company.
(b) MAINTAIN PROPERTIES. The Company will maintain all of
its properties in good working order, repair and condition (reasonable wear and
use excepted) and will take all steps reasonably necessary to maintain in full
force and effect its patents, trademarks, service marks, trade names, brand
names, copyrights and other intangible assets.
(c) COMPENSATION. The Company will not (1) enter into or
alter any employment agreements: (2) grant any increase in compensation other
than normal merit increases consistent with the Company's general prevailing
practices to any officer or employee: or (3) enter into or alter any labor or
collective bargaining agreement or any bonus or other employee fringe benefit.
(d) NO INDEBTEDNESS. The Company will not create, incur,
assume, guarantee or otherwise become liable with respect to any obligation for
borrowed money, indebtedness, capitalized lease or similar obligation, except in
the ordinary course of business consistent with past practices, where the entire
net proceeds thereof are deposited with and used by and in connection with the
business of the Company.
(e) MAINTAIN BOOKS. The Company will maintain its books,
accounts and records in the usual, regular ordinary and sound business manner
and in accordance with generally accepted accounting principles applied on a
basis consistent with past practices.
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(f) NO AMENDMENTS. The Company will not amend its
corporate charter or bylaws (or similar documents) without prior consent of
Buyer and the Company will maintain its corporate existence, licenses, permits,
powers and rights in full force and effect.
(g) TAXES AND ACCOUNTING MATTERS. The Company will file
when due all federal, state and local tax returns and reports which shall be
accurate and complete, including but not limited to income, franchise, excise,
ad valorem, and other taxes with respect to its business and properties, and to
pay as they become due all taxes or assessments, except for taxes for which
adequate reserves are established and which are being contested in good faith by
appropriate proceedings. The Company will not change its accounting methods or
practices or any depreciation, amortization or inventory valuation policies or
practices.
(h) NO DISPOSITION OR ENCUMBRANCE. Except in the ordinary
course of business consistent with past practice, the Company will not (1)
dispose of or encumber any of its properties and assets, (2) discharge or
satisfy any lien or encumbrance or pay any obligation or liability (fixed or
contingent) except for previously scheduled repayment of debt, (3) cancel or
compromise any debt or claim, (4) transfer or grant any rights under any
concessions, leases, licenses, agreements, patents, inventions, proprietary
technology or process, trademarks, service marks or copyrights, or with respect
to any know-how, or (5) enter into or modify in any material respect or
terminate any existing license, lease, or contract.
(i) INSURANCE. The Company will maintain in effect all
its current insurance policies.
(j) NO SECURITIES ISSUANCES. The Company will not issue
any shares of any class of capital stock, or enter into any contract, option,
warrant or right calling for the issuance of any such shares of capital stock,
or create or issue any securities convertible into any securities of the Company
except for (1) the transactions contemplated herein: (2) issuances of Common
Stock upon the cancellation of salary accruals as previously disclosed to Buyer;
and (3) issuances of options and warrants to purchase Common Stock as previously
disclosed to Buyer.
(k) DIVIDENDS. The Company will not declare, set aside or
pay any dividends or other distributions of any nature whatsoever.
(l) CONTRACTS. The Company will not enter into or assume
any contract, agreement, obligation, lease, license, or commitment except in the
ordinary course of business consistent with past practice or as contemplated by
this Agreement.
(m) NO BREACH. The Company will not do any act or omit to
do any act which would cause a breach of any of its material contracts,
commitments or obligations.
(n) DUE COMPLIANCE. The Company will comply with all
laws, regulations, rules and ordinances applicable to it and to the conduct or
its business, the violation of which would have a material adverse effect on
the Company.
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(o) NO WAIVERS OF RIGHTS. The Company will not amend,
terminate or waive any material right whether or not in the ordinary course of
business.
(p) CAPITAL COMMITMENTS. The Company will not make or
commit to make any material capital expenditure, capital addition or capital
improvement.
(q) NO RELATED PARTY TRANSACTIONS. The Company will not
make any loans to, or enter into any transaction, agreement, arrangement or
understanding of any material nature with any of its officers, directors or
employees.
(r) NOTICE OF CHANGE. The Company will promptly advise
Buyer in writing of any material adverse change, or the occurrence of any event
which involves any substantial possibility of a material adverse change, in its
business, financial condition, results of operations, assets, liabilities or
prospects.
(s) CONSENTS. The Company will use its best good faith
efforts to obtain the consent or approval of each person or entity whose consent
or approval is required for the consummation of the Transactions contemplated
hereby and to do all things necessary to consummate the Transactions
contemplated by the Basic Agreements.
3.2 COVENANTS OF BUYER. Buyer covenants and agrees to perform the
following acts:
(a) OFFER TO PURCHASE. Within 60 days of the Closing,
Buyer will make an offer to purchase all remaining outstanding shares of Common
Stock of the Company from all remaining holders of such shares on substantially
the same terms and conditions as are contained in this Agreement.
(b) NO INDEBTEDNESS. Buyer will not create, incur,
assume, guarantee or otherwise become liable with respect to any obligation for
borrowed money, indebtedness, capitalized lease or similar obligation, except in
the ordinary course of business consistent with past practices, where the entire
net proceeds thereof are deposited with and used by and in connection with the
business of Buyer.
(c) NO AMENDMENTS. Buyer will not amend its corporate
charter or bylaws (or similar documents) without prior consent of the Company
and Buyer will maintain its corporate existence, licenses, permits, powers and
rights in full force and effect.
(d) NO SECURITIES ISSUANCES. Buyer will not issue any
shares of any class of capital stock, or enter into any contract, option,
warrant or right calling for the issuance of any such shares of capital stock,
or create or issue any securities convertible into any securities of Buyer
except for the transactions contemplated herein.
(e) NO DIVIDENDS. Buyer will not declare, set aside or
pay any dividends or other distributions of any nature whatsoever.
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(f) CONTRACTS. Buyer will not enter into or assume any
contract, agreement, obligation, lease, license, or commitment except in the
ordinary, course of business consistent with past practice or as contemplated by
this Agreement.
(g) CAPITAL COMMITMENTS. Buyer will not make or commit to
make any material capital expenditure, capital addition or capital improvement.
(h) NOTICE OF CHANGE. Buyer will promptly advise the
Company in writing of any material adverse change, or the occurrence of any
event which involves any substantial possibility of a material adverse change,
in its business, financial condition, results of operations, assets, liabilities
or prospects.
(i) CONSENTS. Buyer will use its best good faith efforts
to obtain the consent or approval of each person or entity whose consent or
approval is required for the consummation of the Transactions contemplated
hereby and to do all things necessary to consummate the Transactions
contemplated by the Basic Agreements.
IV.
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER TO CLOSE
The obligation of Buyer to close the Transactions contemplated hereby
is subject to the fulfillment by the Company and Seller prior to Closing of each
of the following conditions, which may be waived in whole or in part by Buyer:
4.1 COMPLIANCE WITH REPRESENTATIONS, WARRANTIES AND COVENANTS. The
representations and warranties of the Company and Seller contained in this
Agreement shall have been true and correct when made and shall be true and
correct as of the Closing with the same force and effect as if made at the
Closing. The Company and Seller shall have performed all agreements, covenants
and conditions required to be performed by the Company and Seller prior to the
Closing.
4.2 NO ADVERSE CHANGE. Subsequent to the date hereof and prior to the
Closing, there shall have been no event which has had or may have a material
adverse effect upon the business, financial condition, results of operation,
assets, liabilities or prospects of the Company.
4.3 NO LEGAL PROCEEDINGS. No suit, action or other legal or
administrative proceeding before any court or other governmental agency shall be
pending or threatened seeking to enjoin the consummation of the Transactions
contemplated hereby.
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4.4 DOCUMENTS TO BE DELIVERED BY THE COMPANY AND SELLER. The Company
and Seller shall have delivered the following documents:
(a) Stock certificates representing all of the Shares,
duly endorsed to Buyer and in blank or accompanied by duly executed stock
powers, copies of which are attached as Exhibit "P".
(b) A copy of (i) the Restated Articles of Incorporation
of the Company, as amended to date, certified as correct by the Company; and
(ii) the Bylaws of the Company certified as correct by the Company; and (iii) a
certificate from the California Franchise Tax Board (Certificate No. 1850604),
to the effect that the Company is in good standing and has paid all franchise
taxes in such state, all as attached hereto as Exhibit "Q";
(c) All agreements referred to in paragraph 1.5 above,
executed by all parties thereto other than Buyer.
(d) All corporate and other records of or applicable to
the Company included but not limited to, current and up-to-date minute books,
stock transfer books and registers, books of accounts, leases and material
contracts.
(e) Such other documents or certificates as shall be
reasonably required by Buyer or its counsel in order to close and consummate
this Agreement.
V.
CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF THE COMPANY AND SELLER TO CLOSE
The obligation of the Company and Seller to close the Transactions is
subject to the fulfillment prior to Closing of each of the following conditions,
any of which may be waived in whole or in part by the Company and Seller:
5.1 COMPLIANCE WITH REPRESENTATIONS, WARRANTIES AND COVENANTS. The
representations and warranties made by Buyer in this Agreement shall have been
true and correct when made and shall be true and correct in all material
respects at the Closing with the same force and effect as if made at the
Closing, and Buyer shall have performed all agreements, covenants and conditions
required to be performed by Buyer prior to the Closing.
5.2 NO LEGAL PROCEEDINGS. No suit, action or other legal or
administrative proceedings before any court or other governmental agency shall
be pending or threatened seeking to enjoin the consummation of the Transactions
contemplated hereby.
5.3 OTHER AGREEMENTS. All parties other than Seller and the Company
shall have executed and delivered the Basic Agreements.
12.
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5.4 PAYMENTS. Seller shall have received from Buyer all Common Stock to
be issued at the Closing by Buyer pursuant to all the Basic Agreements.
5.5 OUTSIDE FINANCING. The Company shall have received all proceeds
from the issuance of its Common Stock under a one million dollar ($1,000,000)
exempt offering pursuant to Regulation D.
5.6 GOOD STANDING. Buyer shall have delivered certificates of the
Secretary of State of the State of Colorado as to its corporate existence and
good standing including the payment of all corporate franchise taxes.
VI.
MODIFICATION, WAIVERS, TERMINATION
AND EXPENSES
6.1 MODIFICATION. Buyer, the Company and Seller may amend, modify or
supplement this Agreement in any manner as they may mutually agree in writing.
6.2 WAIVERS. Buyer, the Company and Seller may in writing extend the
time for or waive compliance by the other with any of the covenants or
conditions of the other contained herein.
6.3 TERMINATION AND ABANDONMENT. This Agreement may be terminated and
the purchase of the Shares may be abandoned before the Closing:
(a) By the mutual consent of Seller, the Company and
Buyer:
(b) By Buyer, if the representations and warranties of
the Company or Seller set forth herein shall not be accurate, or the conditions
precedent set forth in Article V shall have not have been satisfied, in all
material respects; or
(c) By the Company or Seller, if the representations and
warranties of Buyer set forth herein shall not be accurate, or the conditions
precedent set forth in Article V shall not have been satisfied in all material
respects.
Termination shall be effective on the date of receipt of written notice
specifying the reasons therefor.
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VII.
MISCELLANEOUS
7.1 REPRESENTATIONS AND WARRANTIES TO SURVIVE. Unless otherwise
provided, all of the representations and warranties contained in this Agreement
and in any certificate, exhibit or other document delivered pursuant to this
Agreement shall survive the Closing for a period of two (2) years. No
investigation made by any party hereto or their representatives shall constitute
a waiver of any representation or warranty, and no such representation or
warranty shall be merged into the Closing.
7.2 BINDING EFFECT OF THE BASIC AGREEMENTS. The Basic Agreements and
the certificates and other instruments delivered by or on behalf of the parties
pursuant thereto, constitute the entire agreement between the parties. The terms
and conditions of the Basic Agreements shall inure to the benefit of and be
binding upon the respective heirs, legal representatives, successor and assigns
of the parties hereto. Nothing in the Basic Agreements, expressed or implied,
coffers any rights or remedies upon any party other than the parties hereto and
their respective heirs, legal representatives and assigns. Whenever Seller is
authorized to act hereunder, any action authorized by members of Seller holding
a majority of the Shares shall be deemed the act of and binding on all members
of Seller.
7.3 APPLICABLE LAW. The Basic Agreements are made pursuant to, and will
be construed under, the laws of the State of Oklahoma.
7.4 NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and will be deemed to have been duly given when
delivered or mailed, first class postage prepaid:
(a) If to Seller, to:
Entertainment Digital Network, Inc.
ATTN: Xxx Xxxxxxxxx, President & CEO
Xxx Xxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
14.
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(b) If to Buyer, to:
Xxxxxx, Xxxxxx & Xxxxxxxx, P.C.
ATTN: Xxxxx Xxxxxx
000 Xxxxx Xxxxx
000 Xxxx Xxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
These addresses may be changed from time to time by written notice to
the other parties.
7.5 HEADINGS. The headings contained in this Agreement are for
reference only and will not affect in any way the meaning or interpretation of
this Agreement.
7.6 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which will be deemed an original and all of which together will constitute
one instrument.
7.7 SEVERABILITY. If any one or more of the provisions of this
Agreement shall, for any reason, be held to be invalid, illegal or unenforceable
under applicable law this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein. The
remaining provisions of this Agreement shall be given effect to the maximum
extent then permitted by law.
7.8 FORBEARANCE; WAIVER. Failure to pursue any legal or equitable
remedy or right available to a party shall not constitute a waiver of such
right, nor shall any such forbearance, failure or actual waiver imply or
constitute waiver of subsequent default or breach.
7.9 ATTORNEYS' FEES AND EXPENSES. The prevailing party in any legal
proceeding based upon this Agreement shall be entitled to reasonable attorneys'
fees and expenses and court costs.
7.10 EXPENSES. Each party shall pay all fees and expenses incurred by
it incident to this Agreement and in connection with the consummation of all
transactions contemplated by this Agreement.
7.11 EXHIBITS. All of the following Exhibits to this Agreement are
incorporated herein in the places referenced in this Agreement as if fully set
forth herein:
EXHIBIT REFERENCE ITEM
A 1.1 Shares of Common Stock of the Company
B 1.5(a) Employment Agreement between Buyer and Xxx Xxxxxxxxx
C 1.5(a) Employment Agreement between Buyer and Xxxxx Xxxxxxxxx
D 1.5(c) Stock Option Agreement
15.
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E 2.1(b) List of Existing Agreements Obligating the Company to Distribute
Assets, Income or Profits
F 2.1(b) List of Existing Agreements Obligating the Company to Issue
Common Stock
G 2.1(e) Undisclosed Liabilities of Company
H 2.1(g) Liens, Claims and Encumbrances on Property of Company
I 2.1(i) Insurance of Company
J 2.1(j) Transactions of Company with Officers
K 2.1(k) Material Contracts of Company
L 2.1(1) Employees, Salaries and Benefits of Company
M 2.1(m) Licenses, Permits, etc. of Company
N 2.3(b) List of Existing Agreements Obligating Buyer to Distribute Assets,
Income or Profits
O 2.3(b) List of Existing Agreements Obligating Buyer to Issue Common
Stock
P 4.4(a) Stock Certificates and Stock Powers
Q 4.4(b) Certificate of Company and Bylaws: California Franchise Tax
Certificate
7.12 INTEGRATION. This Agreement and all documents and instruments
executed pursuant hereto merge and integrate all prior agreements and
representations respecting the Transactions, whether written or oral, and
constitute the sole agreement of the parties in connection therewith. This
Agreement has been negotiated by and submitted to the scrutiny of both Seller
and Buyer and their counsel and shall be given a fair and reasonable
interpretation in accordance with the words hereof, without consideration or
weight being given to its having been drafted by either party hereto or its
counsel.
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IN WITNESS WHEREOF, the undersigned parties hereto have duly executed
this Agreement on the date first written above.
"BUYER"
AP OFFICE EQUIPMENT, INC.
By: /s/ Xxxxx Xxxxxxx
-------------------------------
Xxxxx Xxxxxxx, President
"THE COMPANY"
ENTERTAINMENT DIGITAL NETWORK, INC.
By: /s/ Xxx Xxxxxxxxx
-------------------------------
Xxx Xxxxxxxxx, President
"SELLER"
/s/Xxx Xxxxxxxxx /s/Xxxx Xxxxx
---------------------------------- -----------------------------------
Xxx Xxxxxxxxx Xxxx Xxxxx
/s/Xxx Xxxxx /s/Xxxxx Xxxxxxxxx
---------------------------------- -----------------------------------
Xxx Xxxxx Xxxxx Xxxxxxxxx
/s/Xxxxxxx Xxxxx /s/Xxxx Xxxxxx
---------------------------------- -----------------------------------
Xxxxxxx Xxxxx Xxxx Xxxxxx
/s/Xxxxxx Xxxxx
----------------------------------
Xxxxxx Xxxxx
17.
