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EXHIBIT 10.18
STOCK PURCHASE AGREEMENT
This Agreement is dated as of October 1, 1999, among World Wide Net,
Inc., a Nevada corporation and/or American International Industries, Inc., a
Nevada corporation, whose address is 601 Cien Street, Suite 235, Kemah, Texas
77565 (collectively the "Stockholder"), and Cinema Investment Group, Inc., a
California corporation ("Purchaser").
The Purchaser desires to acquire all of the shares of capital stock of
Modern Film Effects, Inc., a California corporation (including Digital Research
Corp. "D-Rez") with its corporate address at 6860 Lexington Avenue, Hollywood,
California 90038 ("Acquired Corporation") from Stockholder in exchange for the
consideration set forth in this Agreement, as hereinafter provided and
Stockholder desires to effect such exchange.
1.
REPRESENTATIONS AND WARRANTIES OF
ACQUIRED CORPORATION AND STOCKHOLDER
Acquired Corporation and Stockholder represent and warrant to the
Purchaser as follows:
1.1 Organization. Acquired Corporation is a corporation duly organized
and validly existing under the laws of its jurisdiction of incorporation, with
all requisite power and authority to conduct its business. Acquired Corporation
and Stockholder make no representation as to the good standing of Acquired
Corporation.
1.2 Authority to Sell. Acquired Corporation and Stockholder have all
requisite power and authority to execute, deliver, and perform this Agreement.
All necessary corporate proceedings of Acquired Corporation and stockholder have
been duly taken to authorize the execution, delivery, and performance of this
Agreement by Acquired Corporation. Upon the Closing, Purchaser will have good
title to all of the capital stock of Acquired Corporation, free and clear of all
liens, security interests, pledges, charges, encumbrances, stockholders'
agreements, and voting trusts.
1.3 Capitalization. The authorized capital stock of Acquired
Corporation consists of 100,000,000 shares of Purchaser common stock, $0.001 par
value, of which 90,000,000 shares are issued and outstanding. Acquired
Corporation has no options, warrants, or other convertible securities
outstanding.
2.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
The Purchaser represents and warrants to Acquired Corporation and
Stockholder as follows:
2.1 Organization. Purchaser is a corporation duly organized, validly
existing, and in good standing under the laws of its jurisdiction of
incorporation, with all requisite power and authority to conduct its business.
2.2 Authority to Sell. Purchaser has all requisite power and authority
to execute, deliver, and perform this Agreement. All necessary corporate
proceedings of Purchaser have been duly taken to authorize the execution,
delivery, and performance of this Agreement by Purchaser.
2.3 Capitalization. The authorized capital stock of Purchaser consists
of 100,000 shares of common stock, no par value, of which shares are issued and
outstanding. Purchaser has no options, warrants, or other convertible securities
outstanding.
2.4 Business Knowledge. Purchaser acknowledges that it has full
knowledge of all aspects of Acquired Corporation's business and affairs and has
not relied upon any representations by Stockholder or its assigns, agents, or
representatives in entering this Agreement other than those specifically set
forth in this Agreement.
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Not withstanding the foregoing, Purchaser acknowledges that Acquired Corporation
has granted a perfected security interest to American International Industries,
Inc. under that certain security agreement in all the assets of Acquired
Corporation securing repayment of any monies paid by American International
Industries, Inc. to Southwest Bank of Texas and Sterling National Bank in the
event Acquired Corporation defaults on its indebtedness to such entities.
3.
EXCHANGE
3.1 Terms of Exchange. On the basis of the representations, warranties,
covenants, and agreements contained in this Agreement and subject to the terms
and conditions of this Agreement:
(a) At Closing, Stockholder shall deliver the following:
(1) Stockholder shall sell, assign, transfer and convey
to Purchaser at the Closing all of the outstanding
shares of capital stock of Acquired Corporation; plus
(2) Resignations of all officers and directors of
Acquired Corporation, except for the resignations of
David Miller; plus
(3) A Corporate resolution in the form attached as
Exhibit A authorizing the transaction; plus
(4) All material corporate books and records of Acquired
Corporation, including the corporate minute book, the
historical audit book, and all asset appraisals.
(b) In consideration for the shares referred to in Section 3.1(a),
Purchaser shall deliver at the Closing the following:
(1) Cash due at closing of $250,000; plus
(2) A Corporate resolution in the form attached as
Exhibit B authorizing the transaction.
3.2 Closing. The Closing of the transactions contemplated by Section
3.1 and shall take place at a mutually agreeable location on or before 30 days
from the date hereof. The Closing of the transactions contemplated by Section
3.1 is herein called the "Closing."
3.3 Indemnity Against Liabilities. The parties agree to indemnify each
other with respect to any and all claims, losses, liabilities, costs and
expenses (including attorney's fees and reimbursable expenses) which may be
reasonably incurred by such non-breaching party arising out of a breach by such
breaching party of any representations, warranties, covenants or agreements made
in this Agreement, the exhibits hereto or any document or instrument delivered
in connection with the transactions contemplated hereby.
4.
CONDITIONS TO OBLIGATIONS OF PURCHASER
The obligations of the Purchaser under this Agreement are subject, at
the option of the Purchaser, to the following conditions:
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4.1 Accuracy of Representations and Compliance With Conditions. All
representations and warranties of Acquired Corporation or Stockholder contained
in this Agreement shall be accurate when made and, in addition, shall be
accurate as of the Closing as though such representations and warranties were
then made in exactly the same language by Acquired Corporation or Stockholder
and regardless of knowledge or lack thereof on the part of Acquired Corporation
or Stockholder or changes beyond their control; as of the Closing, Acquired
Corporation and Stockholder shall have performed and complied with all covenants
and agreements and satisfied all conditions required to be performed and
complied with by any of them at or before such time by this Agreement.
5.
CONDITIONS TO OBLIGATIONS OF ACQUIRED CORPORATION
AND STOCKHOLDER
The obligations of Acquired Corporation and Stockholder under this
Agreement are subject, at the option of the Acquired Corporation and
Stockholder, to the following conditions:
5.1 Accuracy of Representations and Compliance With Conditions. All
representations and warranties of Purchaser contained in this Agreement shall be
accurate when made and, in addition, shall be accurate as of the Closing as
though such representations and warranties were then made in exactly the same
language by Purchaser and regardless of knowledge or lack thereof on the part of
Purchaser or changes beyond its control; as of the Closing, Purchaser shall have
performed and complied with all covenants and agreements and satisfied all
conditions required to be performed and complied with by any of them at or
before such time by this Agreement.
5.2 Operation of Business Pending Closing. Purchaser agrees from
execution of this Agreement until Closing to pay all payroll taxes incurred
during such period and to pay all operating expenses incurred during such
period.
6.
COVENANTS AND AGREEMENTS OF ACQUIRED CORPORATION
AND STOCKHOLDER
Acquired Corporation and Stockholder covenant and agree as follows:
6.1 Access. Acquired Corporation will afford, and Stockholder will
cause Acquired Corporation to afford, the agents, investment bankers,
accountants, and other representatives of the Purchaser free and full access to
the plans, properties, books, and records of Acquired Corporation, will permit
them to make extracts from and copies of such books and records.
6.2 Conduct of Business. Acquired Corporation will, and Stockholder
will cause Acquired Corporation to, conduct their affairs so that at the Closing
no representation or warranty of Acquired Corporation or Stockholder will be
inaccurate, no covenant or agreement of Acquired Corporation or Stockholder will
be breached, and no condition in this Agreement will remain unfulfilled by
reason of the actions or omissions of Acquired Corporation or Stockholder.
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7.
COVENANTS AND AGREEMENTS OF PURCHASER
The Purchaser covenants and agrees as follows:
7.1 Public Statements. Before Purchaser shall release any information
concerning this Agreement or the transactions contemplated by this Agreement
which is intended for or may result in public dissemination thereof, it shall
cooperate with the Acquired Corporation, shall furnish drafts of all documents
or proposed oral statements to the Acquired Corporation for comments, and shall
not release any such information without the written consent of the Acquired
Corporation. Nothing contained herein shall prevent Purchaser from furnishing
any information to any governmental authority if required to do so by law.
7.2 No Sell Provision. As long as any indebtedness of Acquired
Corporation that is currently secured by Stockholder is outstanding, Purchaser
agrees not to enter into any consolidation or merger of the Purchaser or
Acquired Corporation with or into another corporation, the transfer of 30% or
more, in the aggregate, of the voting power of the Purchaser or Acquired
Corporation, or the conveyance of all or substantially all of the assets of the
Purchaser or Acquired Corporation to another corporation.
8.
MISCELLANEOUS
8.1 Brokerage and Other Fees. The parties agree that there are no
brokerage arrangements or fee obligations, in writing or verbal, with respect to
the transaction set forth in this Agreement. Each party shall be responsible for
the fees of their respective professionals (including without limitation, legal
fees) engaged to assist in the preparation, negotiation and counseling with
respect, and relating, to this Agreement, as well as their respective
out-of-pocket expenses.
8.2 Further Actions. At any time and from time to time, each party
agrees, at its or his expense, to take such actions and to execute and deliver
such documents as may be reasonably necessary to effectuate the purposes of this
Agreement.
8.3 Modification. The Agreement and the Exhibits hereto set forth the
entire understanding of the parties with respect to the subject matter hereof
supersede all existing agreements among them concerning such subject matter, and
may be modified only by a written instrument duly executed by each party with
the approval of the Board of Directors of each corporate party.
8.4 Notices. Any notice or other communication required or permitted to
be given hereunder shall be in writing and shall be mailed by certified mail,
return receipt requested (or by the most nearly comparable method if mailed from
or to a location outside of the United States), or delivered against receipt to
the party to whom it is to be given at the address of such party set forth in
the preamble to this Agreement (or to such other address as the party shall have
furnished in writing in accordance with the provisions of this Section 8.4). Any
notice or other communication given by certified mail (or by such comparable
method) shall be deemed given at the time of certification thereof (or
comparable act), except for a notice changing a part, address which will be
deemed given at the time of receipt thereof.
8.5 Waiver. Any waiver by any party of a breach of any provision of
this Agreement shall not operate as or be construed to be a waiver of any other
breach of that provision or of any breach of any other provision of this
Agreement. The failure of a party to insist upon strict adherence to any term of
this Agreement on one or more occasions will not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement. Any waiver must be in writing
and, in the case of a corporate party, be authorized by a resolution of the
Board of Directors or by an officer of the waiving party.
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8.6 Binding Effect. The provisions of this Agreement shall be binding
upon and inure to the benefit of each party's respective successors, assigns,
heirs, and personal representatives.
8.7 No Third-Party Beneficiaries. This Agreement does not create, and
shall not be construed as creating, any rights enforceable by any person not a
party to this Agreement (except as provided in Section 8.6).
8.8 Separability. If any provision of this Agreement is invalid,
illegal, or unenforceable, the balance of this Agreement shall remain in effect,
and if any provision is inapplicable to any person or circumstance, it shall
nevertheless remain applicable to all other persons and circumstances.
8.9 Headings. The headings of this Agreement are solely for convenience
of reference and shall be given no effect in the construction or interpretation
of this Agreement.
8.10 Counterparts, Governing Law. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. It shall be
governed by and construed in accordance with the laws of the State of California
without giving effect to conflict of laws.
8.11 Execution By All Parties Required To Be Binding; Electronically
Transmitted Documents. This Agreement shall not be construed to be an offer and
shall have no force and effect until this Agreement is fully executed by all
parties hereto. If a copy or counterpart of this stipulation 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.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
first written above.
PURCHASER:
CINEMA INVESTMENT GROUP, INC.
By: Neil Kantor
President
STOCKHOLDER:
WORLD WIDE NET, INC.
By: Daniel Dror
President & C.E.O.
AMERICAN INTERNATIONAL INDUSTRIES, INC.
By: Daniel Dror
Chairman & C.E.O.
Date: As of October 1, 1999
AMENDMENT TO STOCK PURCHASE AGREEMENT
This Amendment is to the Stock Purchase Agreement ("Agreement") dated
as of October 1, 1999, among World Wide Net, Inc., a Nevada corporation and/or
American International Industries, Inc., a Nevada Corporation,
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whose address is 601 Cien Street, Suite 235, Kemah, Texas 77565 (collectively
the "Stockholders", and Cinema Investment Group, Inc., a California corporation
("Purchaser".)
The following shall replace section 3.1 of the Agreement in its
entirety:
3.1 Terms of Exchange. On the basis of the representations, warranties,
covenants, and agreements contained in this Agreement and subject to the terms
and conditions of this Agreement:
(a) At Closing, Stockholder shall deliver the following:
(1) Stockholder shall sell, assign, transfer and convey
to Purchaser at the Closing all of the outstanding
shares of capital stock of Acquired Corporation; plus
(2) Resignations of all officers and directors of
Acquired Corporation, except for the resignations of
David Miller and Jordan Friedberg; plus
(3) A Corporate resolution in the form attached as
Exhibit C authorizing the transaction; plus
(4) All material corporate books and records of Acquired
Corporation, including the corporate minute book, the
historical audit book, and all asset appraisals.
(b) In consideration for the shares referred to in Section 3.1(a),
Purchaser shall deliver at the Closing the following:
(1) Cash due at closing of $250,000; plus
(2) A Corporate resolution in the form attached as
Exhibit D authorizing the transaction.
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