Exhibit 10.31
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Stock Purchase Agreement") is made as of
October 18, 2000 by and between netcruise.com, inc., a New Jersey corporation
(the "Company"), and Active Media Services, Inc., a Delaware corporation
(the "Purchaser").
WHEREAS, the Company and Purchaser are entering into an Agreement of
even date herewith (the "Trade Agreement"), whereby the Purchaser will provide
and the Company will purchase, media, goods and/or services which shall be paid
for in part by a trade credit in the amount of $5,000,000 (the "Trade Credit")
issued by the Purchaser to the Company in exchange for 5,000,000 shares (the
"Shares") of the common stock, par value $.0001 per share, of the Company
("Common Stock") sold to the Purchaser pursuant to this Stock Purchase
Agreement; and
WHEREAS, the Company and Purchaser are also entering into a Purchaser
Rights Agreement in connection with the Shares, substantially in the form
attached hereto as Exhibit A and made a part hereto.
The parties hereto agree as follows:
SECTION 1
PURCHASE AND SALE OF STOCK
Purchase and Sale of Common Stock. Subject to the terms and conditions
of this Stock Purchase Agreement, the Trade Agreement the Purchaser Rights
Agreement and the Lockup Agreement, the Purchaser agrees to purchase, and the
Company agrees to sell and issue at the Closing 5,000,000 Shares of Common Stock
to the Purchaser in exchange for the Trade Credit in the amount of $5,000,000,
of which 250,000 Shares will, at the direction of Purchaser, be issued by the
Company directly to Amy Appell as compensation for brokerage services provided
by David Appell. The Company and the Purchaser agree that the Shares and the
Trade Credit represent full consideration for the other.
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SECTION 2
CLOSING
Closing. The purchase and sale of the Shares shall take place at the
offices of the Purchaser, One Blue Hill Plaza, Pearl River, New York 10965, on
October 25, 2000, or at such other time and place as the Company and the
Purchaser mutually agree upon (the "Closing"), it being agreed that the Closing
may take place by mail with proper escrow instructions. At the Closing, the
Company shall deliver to the Purchaser a certificate representing the Shares
that the Purchaser is purchasing at the Closing.
SECTION 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth on the Schedule of Exceptions attached hereto as
specifically identifying the subsection of this Section 3 to which each such
exception relates, the Company hereby represents and warrants to the Purchaser
as of the date hereof as follows:
3.1 Organization and Standing. The Company is a corporation duly
organized and validly existing under the laws of the State of New Jersey and is
in good standing under such laws. The Company has all requisite corporate power
and authority to own and operate its properties and assets, and to carry on its
business as presently conducted and as proposed to be conducted. The Company is
duly qualified and authorized to transact business and is in good standing as a
foreign corporation in each jurisdiction in which the failure so to qualify
would have a material adverse effect on its business, properties or financial
condition.
3.2 Corporate Power. The Company has all requisite legal and corporate
power and authority to execute and deliver this Stock Purchase Agreement, the
Trade Agreement, the Purchaser Rights Agreement and the Lockup Agreement
(collectively, the "Related Agreements"), to sell and issue the Shares to
Purchaser hereunder, and to carry out and perform its obligations under the
terms of this Stock Purchase Agreement and each of the Related Agreements and
the transactions contemplated hereby and thereby.
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3.3 Subsidiaries. The Company has no subsidiaries and does not otherwise own or
control, directly or indirectly, any equity interest in any corporation,
association or other business entity. The Company is not a participant in any
joint venture, partnership or similar arrangement.
3.4 Capitalization and Voting Rights. The authorized capital stock of
the Company consists, or will consist after the Closing, of (i) 75,000,000
shares of Common Stock, of which 28,472,304 shares will be issued and
outstanding, inclusive of the 5,000,000 shares of Common Stock issued pursuant
to this Stock Purchase Agreement, (ii) 25,000,000 shares of preferred stock,
$.0001 par value per share (the "Preferred Stock"), of which 0 shares are issued
and outstanding, (iii) warrants to purchase 4,040,605 shares of Common Stock and
(iv) options to purchase 6,500,000 shares of Common Stock under the Company's
Stock Incentive Plan of which 1,715,000 options have been granted pursuant to
that Plan. All issued and outstanding shares will have been duly authorized and
validly issued, fully paid and nonassessable and issued in compliance with
federal and state securities law. Except as listed in Section 3.4 of the
Schedule of Exceptions, there are no outstanding options, warrants, conversion
rights, preemptive rights, rights of first refusal, or similar rights presently
outstanding to purchase or otherwise acquire from the Company any securities of
the Company and no agreements or understandings with respect thereto.
3.5 Authorization. All corporate action on the part of the Company, its
officers, directors and stockholders necessary for the authorization, execution,
delivery and performance of this Stock Purchase Agreement and the Related
Agreements by the Company, the authorization, sale, issuance (or reservation for
issuance) and delivery of the Shares and the performance of all of the Company's
obligations hereunder and under the Related Agreements have been taken as of the
date of this Stock Purchase Agreement. This Stock Purchase Agreement and the
Related Agreements constitute valid and legally binding obligations of the
Company, enforceable in accordance with their respective terms, subject to laws
of general application relating to bankruptcy, insolvency and the relief of
debtors and rules of law governing specific performance, injunctive relief or
other equitable remedies.
3.6 Valid Issuance of Stock. The Shares have been duly authorized and,
when issued, sold and delivered in compliance with the provisions of this Stock
Purchase Agreement, will be duly and validly issued, fully paid and
nonassessable and issued in compliance with applicable federal and state
securities laws, and the Shares will be free and clear of any liens or
encumbrances; provided, however, that the Shares may be subject
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to restrictions on transfer under state and/or federal securities laws.
Except as set forth in the Related Agreements and subject to restrictions on
transfer under state and/or federal securities laws, the Shares are not subject
to any preemptive rights, rights of first refusal or restrictions on transfer.
3.7 Litigation. There are (i) no actions, suits, proceedings, or
investigations pending or threatened against the Company or its properties
before any court or governmental agency (and, there is no basis thereof), and
(ii) to the Company's knowledge, no actions, suits, proceedings or
investigations are pending or threatened against its employees that may relate
to their employment with, or conduct on behalf of, the Company, or that question
the validity of this Stock Purchase Agreement, the Related Agreements or any
action taken or to be taken in connection herewith or therewith. The Company is
not a party or subject to any writ, order, decree, injunction or judgment of any
court, governmental agency, or instrumentality (nor, to the best of the
Company's knowledge based upon reasonable investigation, is there any reasonable
basis therefor or threat thereof). There is no action, suit, proceeding or
investigation by the Company currently pending or that the Company currently
intends to initiate.
3.8 Registration Rights and Voting. Except as provided in this Stock
Purchase Agreement or the Related Agreements or Section 3.8 of the Schedule of
Exceptions, the Company is not under any obligation and has not granted any
rights to register under the Securities Act any of its presently outstanding
securities or any of its securities that may subsequently be issued. To the
Company's knowledge, no stockholder of the Company has entered into any
agreement with respect to the voting of the Company's securities.
3.9 Governmental Consents. No consent, approval, qualification or authorization
of registration, designation, declaration or filing with, any local, state or
federal governmental authority on the part of the Company is required in
connection with the valid execution, delivery or performance of this Stock
Purchase Agreement or the Related Agreements, or the offer, sale or issuance of
the Shares or the consummation of any transaction contemplated hereby, except
such additional filings as will be made by the Company to comply with applicable
state and federal securities laws, and with applicable general corporation laws
of the various states.
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3.10 Intellectual Property. Except as set forth on Section 3.10 of the
Schedule of Exceptions, the Company owns or possesses sufficient legal rights to
all patents, patent applications, trademarks, service marks, trade names,
copyrights, trade secrets, licenses, know-how, concepts, computer programs,
technical data, proprietary rights, proprietary processes and other information
necessary for its business as now conducted and as proposed to be conducted
(each such item, the "Company Intellectual Property") without, to the knowledge
of the Company, any conflict with or infringement of the rights of others.
Section 3.10 of the Schedule of Exceptions contains a complete list of patents,
trademarks and copyrights of the Company throughout the world and pending
applications therefor and registrations, renewals, extensions and the like
thereof. Except for proprietary information agreements with its own employees or
consultants and standard end-user license agreements and as listed in Section
3.10 of the Schedule of Exceptions, there are no outstanding options, licenses,
or agreements of any kind relating to any of the Company Intellectual Property,
nor is the Company bound by or a party to any options, licenses, or agreements
of any kind with respect to the patents, patent applications, trademarks,
service marks, trade names, copyrights, trade secrets, licenses, know-how,
concepts, computer programs, technical data, proprietary rights, proprietary
processes and information of any other person or entity. The Company has not
received any communications alleging, nor does the Company have reason to
believe, that the Company has violated or, by conducting its business as
proposed, would violate any of the patents, trademarks, service marks, trade
names, copyrights, trade secrets, or other proprietary rights or processes of
any other person or entity, and is not aware of any reasonable basis therefor or
threat thereof. The Company is not aware that any of its employees, agents or
contractors is obligated under any contract (including licenses, covenants, or
commitments of any nature) or other agreement, or subject to any judgment,
decree, or order of any court or administrative agency, that would interfere
with the use of such employee's efforts to promote the interests of the Company,
or that would conflict with the Company's business as it is presently proposed
to be conducted. The Company is not aware of any violation or infringement by a
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third party of any of the Company Intellectual Property. Neither the execution
nor delivery of this Stock Purchase Agreement or the Related Agreements, nor the
carrying on of the Company's business by the employees of the Company, nor the
conduct of the Company's business as proposed will, to the Company's knowledge
after reasonable investigation, conflict with or result in a breach of the
terms, conditions, or provisions of, or constitute a default under, any
contract, covenant, or instrument under which any of such employees is now
obligated. Except as set forth on Section 3.10 of the Schedule of Exceptions,
the Company has no plan to, and does not believe it is or will be necessary to
utilize any inventions of any of its employees (or individuals it currently
intends to hire) made prior to their employment by the Company that would
infringe the rights of others.
3.11 Employee Benefit Plans. The Company does not have any Employee Benefit Plan
as defined in the Employee Retirement Income Security Act of 1974.
3.12 Broker's and Finders' Fees. Other than the issuance of 250,000
Shares to Amy Appell and the issuance of $250,000 of Trade Credit to David
Appell, as compensation for the brokerage services provided by David Appell, the
Company has not incurred, and will not incur, directly or indirectly, any
liability for brokerage or finders' fees or agents' commissions or any similar
charges in connection with this Stock Purchase Agreement or any transaction
contemplated hereby.
3.13 Compliance with Other Instruments. The Company is not in violation
or default of any provisions of its Certificate of Incorporation or Bylaws or of
any mortgage, indenture, agreement, instrument, judgment, order, writ, decree or
contract to which it is a party or by which it is bound or any provision of any
federal or state statute, rule or regulation applicable to the Company. The
execution, delivery and performance of and compliance with this Stock Purchase
Agreement and the Related Agreements and the consummation of the transactions
contemplated hereby and thereby will not result in any such violation or be in
conflict with or constitute, with or without the passage of time and giving of
notice, either a default under any such provision, instrument, judgment, order,
writ, decree or contract or an event which results in the creation of any lien,
charge or encumbrance upon any of the properties or assets of the Company or the
suspension, revocation, impairment, forfeiture, or nonrenewal of any material
permit, license, authorization, or approval applicable to the Company, its
business or operations or any of its properties or assets.
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3.14 Corporate Documents. The Certificate of Incorporation and Bylaws
of the Company are in the forms provided to the Purchaser's counsel. Neither the
stockholders nor the board of directors of the Company have taken any action
relating to a merger, consolidation, sale of the Company's assets or business,
liquidation, dissolution or any other reorganization of the Company.
3.15 Disclosure. The Company has provided the Purchaser with all of the
information which the Purchaser has requested in connection with the execution
of this Stock Purchase Agreement and the purchase of the Shares. No
representation or warranty of the Company contained in this Stock Purchase
Agreement, the Related Agreements, or any certificate furnished or to be
furnished to the Purchaser at the Closing (when read together) contains any
untrue statement of a material fact or omits to state a material fact necessary
in order to make the statements contained herein or therein not misleading in
light of the circumstances under which they were made.
3.16 SEC Filings; Financial Statements.
(a) The Company has timely filed and made available to Purchaser all
documents filed or required to be filed by the Company pursuant to all
applicable federal and state securities laws (the "Company SEC Reports"). The
Company SEC Reports (i) at the time filed, complied in all material respects
with the applicable requirements of federal and state securities laws, rules and
regulations and other applicable laws, rules and regulations and (ii) did not,
at the time they were filed (or, if amended or superseded by a filing prior to
the date of this Stock Purchase Agreement, then on the date of such later
filing) contain any untrue statement of a material fact or omit to state a
material fact required to be stated in such Company SEC Reports or necessary in
order to make the statements in such Company SEC Reports, in light of the
circumstances under which they were made, not misleading. No subsidiary of the
Company is required to file any documents pursuant to any applicable federal or
state securities laws that have not already been filed.
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(b) As of their respective dates, each of the Company's financial
statements (including, in each case, any related notes) that are contained in
the Company SEC Reports complied in all material respects with applicable
accounting requirements and complied as to form in all material respects with
the applicable published rules and regulations of the SEC with respect thereto.
Each of the Company's financial statements was prepared in accordance with
generally accepted accounting principles ("GAAP") applied on a consistent basis
throughout the periods involved (except as may be indicated in the notes to such
financial statements or, in the case of unaudited interim statements, as
permitted by Form 10-Q), and fairly presented in all material respects the
consolidated financial position of the Company and its subsidiaries as at the
respective dates and the consolidated results of operations and cash flows for
the periods indicated, except that the unaudited interim financial statements
were or are subject to normal and recurring year-end adjustments which were not
or are not expected to be material in amount or effect.
(c) Neither the Company nor any subsidiary of the Company has incurred
or paid any liability since December 31, 1999, except for such liabilities that
were (i) incurred or paid in the ordinary course of business consistent with
current operating practice, (ii) not reasonably likely to have, individually or
in the aggregate, a material adverse effect on the business or operations of the
Company, (iii) incurred or paid in connection with the transactions contemplated
by this Stock Purchase Agreement, (iv) accrued or reserved against in the
Company's financial statements that were delivered prior to the date of this
Stock Purchase Agreement, or (v) accrued or reserved against in the Company's
financial statements contained or otherwise disclosed in the Company SEC
Reports.
3.17 5.88Absence of Certain Changes or Events. Since December 31, 1999,
except as disclosed in the Company's financial statements or in the Company SEC
Reports, there have been no events, changes, or occurrences (whether or not
covered by insurance) which have had, or are reasonably likely to have,
individually or in the aggregate, a material adverse effect on the business,
properties or financial condition of the Company.
3.18 Board Approval. The Board of Directors of the Company has, as of
the date of this Stock Purchase Agreement, (i) determined that the sale of
Shares is fair to, advisable and in the best interests of the Company and its
stockholders and (ii) duly approved this Stock Purchase Agreement, the Related
Agreements and the issuance and sale of the Shares to the Purchaser.
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3.19 Stockholder Approval. No consent or approval of the stockholders of the
Company is required or necessary for the Company to enter into this Stock
Purchase Agreement or any of the Related Agreements.
3.20 Private Placement. Subject to the truth and accuracy of the
Purchaser's representations set forth in this Stock Purchase Agreement, the
offer, sale and issuance of the Shares as contemplated in this Stock Purchase
Agreement is exempt from the registration requirements of the Securities Act.
SECTION 4
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Company as follows:
4.1 Organization; Corporate Power. Purchaser is a corporation duly organized and
validly existing under the laws of the State of Delaware and is in good standing
under such laws.
4.2 Investment Experience. The Purchaser has substantial experience in
evaluating and investing in private placement transactions of securities in
companies similar to the Company such that the Purchaser is capable of
evaluating the merits and risks of its investment in the Company and has the
capacity to protect its own interests. The Purchaser is an "accredited investor"
as defined in Rule 501 of Regulation D promulgated under the Securities Act.
4.3 Investment. The Purchaser is acquiring the Shares for investment
for the Purchaser's own account, not as a nominee or agent, and not with the
view to, or for resale in connection with, any distribution thereof. The
Purchaser understands that the Shares have not been, and will not be when
issued, registered under the Securities Act by reason of a specific exemption
from the registration provisions of the Securities Act, the availability of
which depends upon, among other things, the bona fide nature of the investment
intent and the accuracy of the representations as expressed herein.
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4.4 Rule 144. The Purchaser acknowledges that the Shares must be held
indefinitely unless subsequently registered under the Securities Act or unless
an exemption from such registration is available. The Purchaser is aware of the
provisions of Rule 144 promulgated under the Securities Act which permit limited
resale of shares purchased in a private placement subject to the satisfaction of
certain conditions, which may include, among other things, the existence of a
public market for the shares, the availability of certain current public
information about the Company, the resale occurring not less than one year after
a party has purchased and paid for the security to be sold, the sale being
effected through a "broker's transaction" or in transactions directly with a
"market maker" and the number of shares being sold during any three (3) month
period not exceeding specified limitations.
4.5 Access to Information. The Purchaser has had an opportunity to
discuss the Company's management, business plan and financial condition with the
Company's management. The Purchaser understands that a purchase of the Shares
involves a high degree of risk, and there can be no assurance the Company's
business objectives will be obtained.
4.6 Authorization; Corporate Power. The Purchaser has all requisite
legal power and authority to execute and deliver this Stock Purchase Agreement
and the Related Agreements and to carry out and perform its obligations under
the terms of this Stock Purchase Agreement and the Related Agreements and the
transactions contemplated hereby and thereby. This Stock Purchase Agreement and
each of the Related Agreements, when executed and delivered by the Purchaser,
will constitute a valid and legally binding obligation of such Purchaser,
enforceable in accordance with its terms, subject to laws of general application
relating to bankruptcy, insolvency and the relief of debtors and rules of law
governing specific performance, injunctive relief or other equitable remedies.
4.7 Non-Limitation. The foregoing representations and warranties,
however, do not limit or modify the representations and warranties of the
Company in Section 3 of this Stock Purchase Agreement or the right of the
Purchaser to rely thereon.
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4.8 Legends. It is understood that each certificate representing the Shares
shall bear a legend substantially as follows:
"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED UNLESS: (1) A
REGISTRATION STATEMENT WITH RESPECT TO SUCH SHARES SHALL BE EFFECTED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED OR (2) THE COMPANY HAS RECEIVED AN OPINION OF
COUNSEL SATISFACTORY TO IT THAT NO VIOLATION OF SAID ACT WILL BE INVOLVED IN
SUCH TRANSFER."
SECTION 5
CONDITIONS OF THE PURCHASER'S OBLIGATIONS AT THE CLOSING
The obligations of the Purchaser under this Stock Purchase Agreement
are subject to the fulfillment at or before the Closing of each of the following
conditions:
5.1 Representations and Warranties. The representations and warranties of the
Company contained in Section 3 of this Stock Purchase Agreement shall be true on
and as of the Closing.
5.2 Performance. The Company shall have performed or fulfilled all
agreements, obligations and conditions contained herein required to be performed
or fulfilled by the Company as of the Closing.
5.3 Blue Sky Compliance. The Company shall have complied with, and the
offer and sale of the Shares pursuant to this Stock Purchase Agreement shall be
effective under, all state securities or blue sky laws applicable thereto.
5.4 Proceedings Satisfactory; Compliance Certificate. All corporate and
legal proceedings taken by the Company in connection with the transactions
contemplated by this Stock Purchase Agreement and all documents and papers
relating to such transactions shall be satisfactory to the Purchaser, in the
reasonable exercise of the judgment of the Purchaser. The Company shall have
delivered to the Purchaser a certificate dated as of the Closing, signed by an
officer of the Company certifying that the conditions set forth in above
Sections 5.1 and 5.2 have been satisfied.
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5.5 Related Agreements. The Company shall have signed and delivered to the
Purchaser this Stock Purchase Agreement and the Related Agreements.
5.6 Opinion of Counsel. The Purchaser shall have received an opinion of
Scheichet & Davis, P.C., counsel to the Company, covering the matters listed on
Exhibit B to this Stock Purchase Agreement.
5.7 OTCBB Eligibility. The Shares shall be eligible for trading on the OTC
Bulletin Board.
5.8 Broker's Fee. The Company shall have issued 250,000 Shares of
Common Stock to Amy Appell as compensation for the brokerage services provided
by David Appell and such issuance shall be evidenced by the delivery of a stock
certificate.
5.9 Waiver. The Purchaser shall have received from the Company a
written waiver executed by Joseph Perri, the principal shareholder of the
Company ("Perri"), pursuant to which Perri waives his right under the
Anti-Dilution Option Agreement dated March 1, 2000 between Perri and the Company
to purchase additional shares of the Company's $.0001 par value common stock
which would otherwise arise as a result of the sale by the Company of the Shares
of Common Stock sold to Purchaser under this Stock Purchase Agreement.
SECTION 6
CONDITIONS OF THE COMPANY'S OBLIGATIONS AT THE CLOSING
The obligations of the Company under this Stock Purchase Agreement are
subject to the fulfillment at or before the Closing of each of the following
conditions:
6.1 Representations and Warranties. The representations and warranties of the
Purchaser contained in Section 4 of this Stock Purchase Agreement shall be true
on and as of the Closing.
6.2 Performance. The Purchaser shall have performed or fulfilled all
agreements, obligations and conditions contained herein and required to be
performed or fulfilled by the Purchaser as of the Closing.
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6.3 Blue Sky Compliance. The offer and sale of the Shares pursuant to
this Stock Purchase Agreement shall be effective under the securities laws of
any applicable states as necessary to offer and sell the Shares to the
Purchaser.
SECTION 7
POST-CLOSING COVENANTS OF THE COMPANY
7.1 Securities Laws Compliance. The Company shall make in a timely manner any
filings required by the securities and/or blue sky laws of any applicable
jurisdiction.
7.2 Books and Records. The Company shall maintain complete and accurate
records and books of account in which entries shall be made in accordance with
generally accepted accounting principles consistently applied, reflecting all
transactions of the Company.
7.3 Insurance. The Company shall use commercially reasonable efforts to
obtain, as soon as practicable after the Closing, insurance with recognized
insurers, sufficient in amount, subject to reasonable deductibles, to allow the
Company to replace any of the Company's material properties that may be damaged
or destroyed.
7.4 Shareholder Rights. The Company hereby covenants and agrees that if
the Company and/or any of the Company's successors or assigns ("Successors")
shall, at any time after the date of this Stock Purchase Agreement, grant any
rights to a holder of any class of securities of the Company or such Successors,
including, without limitation, any registration rights, repurchase rights,
preferential voting rights or dividend rights, the Company shall, or shall cause
such Successors to promptly give the Purchaser notice of such rights and shall,
simultaneously grant the Purchaser the same such right on at least as favorable
terms and conditions.
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SECTION 8
MISCELLANEOUS
8.1 Entire Agreement; Successors and Assigns. This Stock Purchase
Agreement and the exhibits hereto constitute the entire agreement between the
Company and the Purchaser relative to the subject matter hereof and supersede
any previous agreement between the Company and the Purchaser. Subject to the
exceptions specifically set forth in this Stock Purchase Agreement, the terms
and conditions of this Stock Purchase Agreement shall inure to the benefit of
and be binding upon the respective executors, administrators, heirs, successors
and assigns of the parties.
8.2 Governing Law. This Stock Purchase Agreement shall be governed by
and construed in accordance with the laws of the State of New York applicable to
contracts entered into and wholly to be performed within the State of New York
by New York residents.
8.3 Counterparts. This Stock Purchase Agreement may be executed in
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same instrument.
8.4 Headings. The section headings of this Stock Purchase Agreement are
for convenience and shall not by themselves determine the interpretation of this
Stock Purchase Agreement.
8.5 Notices. Any notice required or permitted hereunder shall be given
in writing and shall be conclusively deemed effectively given upon personal
delivery, or delivery by overnight courier, or five (5) days after deposit in
the United States mail, by registered or certified mail, postage prepaid,
addressed (i) if to the Company, as set forth below the Company's name on the
signature page of this Stock Purchase Agreement, and (ii) if to the Purchaser,
as set forth below the Purchaser's name on the signature page of this Stock
Purchase Agreement.
8.6 Survival of Warranties. The representations, warranties and
covenants of the parties contained in or made pursuant to this Stock Purchase
Agreement shall survive the execution and delivery of this Stock Purchase
Agreement and the Closing; provided, however, that, except as provided above,
the representations and warranties need only be accurate as of the date of such
execution and delivery and as of the Closing.
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8.7 Amendment of Agreement. Any provision of this Stock Purchase Agreement may
be amended by a written instrument signed by the Company and the Purchaser.
8.8 Finders' Fees. Each of the Company and the Purchaser will indemnify
the other against all liabilities incurred by the indemnifying party with
respect to claims related to investment banking or finders fees in connection
with the transactions contemplated by this Stock Purchase Agreement, arising out
of arrangements between the party asserting such claims and the indemnifying
party, and all costs and expenses (including reasonable fees of counsel) of
investigating and defending such claims.
8.9 Facsimile Signatures. It is agreed that telefax or facsimile copies
of this Stock Purchase Agreement and any related documents shall be fully
binding and effective for all purposes whether or not original documents are
ever received by the parties. However, each party agrees to promptly forward
originally executed documents to the other party.
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IN WITNESS WHEREOF, the parties hereto have executed this Stock
Purchase Agreement as of the date above set forth.
netcruise.com, inc., a New Jersey corporation
2401 Morris Avenue
Union, New Jersey 07083
By: /s/
Lawrence E. Burk
President
Active Media Services, Inc., a Delaware corporation
One Blue Hill Plaza
Pearl River, New York 10965
By: /s/
Arthur Wagner
President
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Schedule of Exceptions
Section 3.3 Netcruise Interactive, Inc., and Corporate Travel Link, Inc. are
wholly-owned subsidiaries of the Company, and Sammys Travel World, Inc. is an
80%-owned subsidiary of the Company. All of the subsidiaries are New Jersey
corporations.
Section 3.4 As described in the Company's Form 8-K Report with an event date of
February 17, 2000, the Company entered into an Anti-Dilution Option Agreement
dated March 1, 2000 with Joseph Perri, the principal shareholder of the Company,
which granted to Mr. Perri the right to maintain his percentage interest in the
issued and outstanding $.0001 par value common stock of the Company by
purchasing additional shares for a purchase price of $.20 per share in the event
the Company sells or issues to third parties additional shares of its $.0001 par
value common stock or other securities convertible into its $.0001 par value
common stock.
Section 3.7 As described in the Company's Form 8-K Report with an event date of
February 17, 2000, the Company entered into an agreement settling litigation
with a former officer, in which the Company agreed that if the former officer
sells up to 193,216 shares of the Company's $.0001 par value common stock owned
by him in the public securities markets in a reasonable manner relative to the
market conditions at the time of sale and does not obtain a net sale price
(after commission charges) of at least $2.25 per share, the Company will pay the
former officer the difference between the net sales price actually received by
him and the sum of $2.25 per share (the "Sale Price Difference") within 45 days
after submission to the Company of appropriate documentation. The former officer
agreed that if the Company provides notice to him of a bona fide opportunity to
sell all of his remaining shares of the common stock for not less than the net
sale price of $2.25 per share and he does not promptly accept that offer, then
the Company's obligation to pay him the Sale Price Difference will be canceled.
The Company's obligation to pay the Sale Price Difference is secured by
a $434,736 first lien security interest in the assets of the Company and
Corporate Travel Link, Inc., which will be canceled when the Company's
obligation to pay the Sale Price Difference is canceled or concluded.
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Section 3.8 The Company has a pending private placement of a minimum of
1,400,000 and a maximum of 4,000,000 shares of its $.0001 par value common stock
in which "piggy-back" registration rights are offered to subscribers. None of
the shares have been sold as of the date of this agreement.
Section 3.10 The Company owns the rights to the travel Web site named
"netcruise.com" and a license for proprietary "Parallel Addressing Video"
("PAV") technology for travel related applications, together with computer
software and other intellectual property related to the travel business,
pursuant to an April 24, 2000 Software License and Domain Name Assignment
agreement with United Internet Technologies, Inc.
<PAGE>
Schedule A
Purchaser Rights Agreement
<PAGE>
Schedule B
Matters as to which The Company's Counsel will Opine.
See Attachment to Schedule B.
