AGREEMENT AND PLAN OF REORGANIZATION AND ASSET PURCHASE AGREEMENT
AGREEMENT
AND PLAN OF REORGANIZATION AND
This
AGREEMENT AND PLAN OF REORGANIZATION AND ASSET PURCHASE
AGREEMENT
dated as of November 1, 2006 (the "Agreement") is entered into by and between
PRIMEDGE,
INC., a Nevada corporation, ("Buyer") and ROYAL PALM CAPITAL
GROUP, INC., a Florida
corporation (“Seller”).
PREAMBLE
WHEREAS,
the strategic intent of the Buyer and Seller pursuant to this Agreement is
to
reorganize the
ownership and control of the Buyer, the Seller and certain subsidiaries of
the
Seller as follows:
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Seller
will receive a principal equity interest in the Buyer with the intent
that
the shareholders
of the Seller will ultimately receive the distribution of the stock
representing this principal equity
interest,
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|
·
|
Seller
will receive the controlling voting interest in the
Buyer,
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|
·
|
Seller
intends to use a portion of the principal equity interest in the
Buyer to
satisfy a significant
portion of its debt and the debt of a wholly-owned
subsidiary,
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·
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Buyer
will receive the equity ownership interest in certain of Seller’s
wholly-owned and minority
owned subsidiaries, which subsidiaries will become subsidiaries of
the
Buyer; and
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WHEREAS,
Seller desires to convey, sell and assign to Buyer all of Seller’ right, title
and interest in and to the Assets (as more fully described below, the “Assets”),
upon the terms and conditions contained in
this
Agreement; and
WHEREAS,
Buyer desires to purchase the Assets upon the terms and conditions contained
in
this Agreement.
NOW
THEREFORE, in consideration of the mutual promises and other good and
valuable consideration,
the sufficiency of which is hereby acknowledged, the parties agree as
follows:
1. Sale
and Purchase of Assets.
1.1
Sale
and Purchase of Assets. Subject
to the terms and conditions of this Agreement,
Seller shall sell to Buyer, and Buyer shall purchase from Seller, the following
assets of Seller (the
“Assets”).
(1) 25,498,335
shares of common stock in Media Magic, Inc., a Florida corporation (“MMI”),
representing
approximately 49%
of
the
issued and outstanding shares of MMI (“MMI Shares”),
(2)
6,676,249
shares of common stock in Cirilium Holdings, Inc., a Delaware corporation
(CRLU”), representing approximately 12%
of
the
issued and outstanding shares of CRLU (“CRLU
Shares”),
2.
Purchase
Price; Payment; Allocation.
(3)
limited
liability membership interest in STS Technologies, LLC, a Florida limited
liability company (“STS”),
representing
approximately 51% of the issued and outstanding limited liability interest
in STS (STS Membership Interest”),
(4) 17,186,050
shares of common stock in the Buyer (“PrimEdge Shares”), representing
approximately 12.55% of the issued and outstanding shares of the
Buyer,
(5) Notes
receivable in the amount of $295,429 (“Notes Receivable”) owed to the Seller by
parties not affiliated with the Seller, and
(6) cancellation
of $260,819 in debt (“DigiKidz Debt”) owed to the Seller by DigiKidz,
Inc., a Delaware corporation and 95.1% owned subsidiary of the Buyer
(“DigiKidz”).
1.2
Liabilities
Excluded. In
connection with Buyer’s purchase of the Assets, Buyer shall
not
assume or become responsible for any of the indebtedness, liabilities or
obligations of Seller (the “Liabilities”).
2.1 Purchase
Price. The
purchase price for the Assets shall be paid by delivery to Seller
at
the Closing, of the following:
(1) a
certificate evidencing an aggregate of one shares (1) of Series A Preferred
Stock of
the
Buyer (the “Series A Shares”), the designation of which is attached hereto as
Exhibit I,
and
(2)
a
certificate evidencing an aggregate of thirty million shares (30,000,000) of
Series B Preferred Stock of the Buyer (the “Closing Series B Shares”), the
designation of which is attached hereto as Exhibit II.
2.2
Additional
Consideration. Seller
is
indebted to 101 persons (“Seller’s Note Holders”) in the amount of $6,287,075
including accrued interest (“Seller’s Notes”), and ACC is indebted to 94 persons
(“ACC Note Holders”) in the amount of $4,588,400, including accrued interest
(“ACC Notes”).
Buyer and Seller have agreed that Seller shall offer the Seller’s Note Holders
and the ACC Note Holder’s,
within 30 days following the Closing Date, the right to convert the Seller’s
Notes and the ACC Notes
into shares of common stock of the Seller. As additional consideration for
the
Assets, Buyer shall pay Seller
up
to an additional eleven million shares (11,000,000) of Series B Preferred Stock
of Buyer (“Additional
Series B Preferred Stock” and together with the Closing Series B Preferred
Stock, the “Series B Preferred Stock”) as follows:
(1) for
every
$1.00 of the Seller’s Note converted into shares of common stock of the
Seller,
Buyer shall issue one (1) share of Additional Series B Preferred Stock,
and
(2) for
every
$1.00 of the ACC Notes converted into shares of common stock of the Seller,
Buyer shall issue one (1) share of Additional Series B Preferred
Stock.
2.3
Federal
and State Filings. Buyer
is
currently delinquent in its reporting requirements
with the Securities and Exchange Commission (“SEC”) and,
as
of the date hereof, needs to filing
its annual report on Form 10-KSB for the year end December 31, 2005 and the
quarterly reports on Form
10-QSB for the quarters ended March 31, 2006 and June 30, 2006 (“Delinquent
Reports”). In addition, Buyer
does not have a sufficient amount of common stock authorized to permit
conversion of the Series B Preferred
Stock. Subsequent to the Closing Date, but no later than nine (9) months from
the Closing Date, Buyer
will file (1) the Delinquent Reports and any and all other reports then due,
under the Securities Exchange
Act of 1934, as amended, (“1934 Act”) and (2) the appropriate filings under the
1934 Act and with
the
State of Nevada in order to increase its authorized common stock from
200,000,000 shares into an adequate
quantity of shares of common stock in order to provide for the automatic
conversion of all the issued
shares of Series B Preferred Stock into shares of common stock of the Buyer
(the
“Conversion Common
Stock”). Such filings will also provide for a reverse stock split of all the
outstanding shares of common
stock of the Buyer.
2.4
Registration
and Spin-Off. Subsequent
to the Closing Date, but no later than one (1) year from the Closing Date,
provided the conditions set forth in Section 2.3 are satisfied, Buyer will
prepare and
file
an appropriate registration statement with the SEC for the distribution of
the
Conversion Common Stock
to
the stockholders of Seller of record on the 31st day following the Closing
Date,
including the dissemination of appropriate information concerning the
distribution of the Conversion Common Stock to the stockholders of Seller upon
effectiveness of the registration statement, per the terms and conditions of
the
separate Registration Rights Agreement, a copy of which is attached hereto
as
Exhibit III.
2.5
The
Series A Preferred Stock and Series B Preferred Stock. The
Series
A
Preferred
Stock, Series B Preferred Stock and the Conversion Common Stock, have not been
registered under
the
Securities Act of 1933, as amended (the “Act”), and such securities may not be
sold, assigned, pledged,
hypothecated, transferred or otherwise disposed of absent registration under
the
Act or the availability
of an applicable exemption therefrom. Each certificate evidencing any of the
Series A Preferred Stock,
Series B Preferred Stock and Buyer’s Common Stock shall bear the following or
substantially legend:
These
securities have not been registered under the Securities Act of 1933,
as
amended, or any state securities laws and may not be sold or otherwise
transferred
or disposed of except pursuant to an effective registration statement under
any
applicable federal and state securities laws, or an opinion
of counsel satisfactory to the Company that an exemption from registration
is available.
3.
Representations
and Warranties of Seller. Except
as
otherwise set forth in a schedule delivered
by the Seller at the time this Agreement is executed and delivered (the
“Seller’s Schedule”), Seller hereby makes the following representations and
warranties to Buyer, as of the date hereof and as of the Closing
Date. Nothing in the Seller’s Schedule shall be deemed adequate to disclose an
exception to a representation or warranty made herein, however, unless the
Seller’s Schedule identifies the exception with reasonable
particularity and describes the relevant facts in reasonable detail. The
Seller’s Schedule will be arranged
in paragraphs corresponding to the lettered and numbered paragraphs contained
in
this Agreement.
3.1
Organization
and Good Standing. Seller
is
a Florida corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of formation,
with full power and authority
to own, lease and operate its business and properties and to carry on its
business in the places and in
the
manner as presently conducted or proposed to be conducted. Seller is in good
standing as a foreign corporation
in each jurisdiction in which the properties owned, leased or operated, or
the
business conducted,
by it requires such qualification, except where the failure to so qualify would
not have a material adverse
effect on the business of Seller, taken as a whole, or consummation of the
transactions contemplated hereby
(a
“Seller Material Adverse Effect”).
3.2
Authority
and Enforcement. Seller
has all requisite power and authority to execute and
deliver this Agreement, and to consummate the transactions contemplated hereby,
including stockholder
approval. Seller has taken all action necessary for the execution and delivery
of this Agreement and
the
consummation of the transactions contemplated hereby, and this Agreement
constitutes the valid and
binding obligation of Seller, enforceable against Seller in accordance with
its
terms, except as may be affected
by bankruptcy, insolvency, moratoria or other similar laws affecting the
enforcement of creditors’ rights
generally and subject to the qualification that the availability of equitable
remedies is subject to the discretion
of the court before which any proceeding therefore may be brought.
3.3
No
Conflicts or Defaults. Except
as
set forth on the Seller’s Schedule, the execution
and delivery of this Agreement by Seller and the consummation of the
transactions contemplated
hereby do not and shall not (a) with or without the giving of notice or the
passage of time (i) violate, conflict with, or result in a material breach
of,
or a material default or loss of rights under, any covenant, agreement,
mortgage, indenture, lease, instrument, permit or license to which either
Seller is a party or by which either Seller is bound, or any judgment, order
or
decree, or any law,
rule
or regulation to which Seller are subject, (ii) result in the creation of,
or
give any party the right
to
create, any lien, charge, encumbrance, security interest or any other right
or
adverse interest (“Liens”)
upon any of the Assets, (iii) terminate or give any party the right to
terminate, amend, abandon or refuse to perform, any material agreement,
arrangement or commitment relating to the Assets,
or (iv) result in a Seller Material Adverse Effect.
3.4
Consents
of Third Parties. Except
as
set forth on the Seller’s Schedule, the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated
hereby by Seller does not require the consent of any person, or such consent
has
or will
be
obtained, in writing, prior to the Closing.
3.5
No
Litigation. Except
as
set forth on the Seller’s Schedule there are no legal, equitable,
administrative, arbitration, governmental, regulatory or other proceedings
pending against
Seller, or, to the best knowledge of Seller, threatened against it, an adverse
determination to which
would result in a Seller Material Adverse Effect.
3.6
No
Options or Other Agreements. There
are
no options or agreements of any character to which Seller is a party, or by
which Seller is bound that, if exercised or consummated,
would result in a Seller Material Adverse Effect.
3.7
Title
to Assets. Seller
is
the owner of the Assets, free and clear of all liens. Upon
consummation of the transactions contemplated hereby, Buyer will acquire good
and marketable
title to the Assets, free and clear of all Liens.
3.8 Absence
of Liabilities. Except
as
set forth on the Seller’s Schedule, Seller has
no
liabilities, contingent or otherwise, that would result in a Seller Material
Adverse Effect.
3.9
Contract
Rights. Each
of
the agreements, contracts or contract rights included
in the Assets is in full force and effect, and no party to any such agreement,
contract or right
is
in material breach of any provision thereof. Each agreement, contract or
contract right included
in the Assets may be assigned to Buyer without the consent or approval of any
third party, or,
if
such consent or approval is required, it has or will be obtained at or prior
to
the Closing.
3.10
Intellectual
Property. To
the
extent that the Assets include any trademarks, copyrights,
trade names, service marks, trade secrets, license agreements, proprietary
processes, business
methods or similar tangible or intangible property (“Intellectual Property”),
such Intellectual
Property is owned by Seller, free and clear of all Liens. To the best of
Seller’s knowledge,
such Intellectual Property does not infringe upon or otherwise violate the
rights of any third
person, and Seller have received no notice of any such infringement or
violation. To the extent
that any such Intellectual Property is licensed by Seller to any third party,
the license is in full force
and
effect, the licensee is not in breach or violation of the license agreement
and
Seller have no
knowledge that any such Intellectual Property is being used in violation of
Seller’ proprietary rights.
3.11
Compliance
with Laws. Seller
is
in compliance with all laws, rules, regulations,
codes, orders, rulings and judgments of federal, state, local and foreign
governments and
regulatory bodies, except where the failure to comply would not result in a
Seller Material Adverse
Effect.
3.12
Tax
Matters. Seller
has filed all federal, state, local and foreign tax returns required
to be filed by it, and has paid all taxes shown to be due thereon. All such
tax
returns are true,
complete and accurate. No tax return of Seller has been audited or is currently
under audit, nor has
Seller been notified that any such audit is to take place.
3.13
Securities
Representations; Acknowledgment of Risks. Seller
is
acquiring the
Series A Preferred Stock and Series B Preferred Stock for its own account,
for
investment purposes
only and not with a view towards the distribution or resale of the Series A
Preferred Stock, Series
B
Preferred Stock or Conversion Common Stock except in compliance with applicable
law. Seller
has such experience in financial and business matters that it is able to
evaluate the risks and merits of an investment in Buyer. Seller acknowledges
that it has received all information, and has conducted
its owned due diligence on Buyer, that is necessary to make an investment
decision to receive
the securities of Buyer. Seller recognizes and acknowledges that the
transactions contemplated
by this Agreement, including Seller’s receipt of the Series A Preferred Stock
and Series
B
Preferred Stock as consideration for the Assets, are speculative and involve
a
high degree of
risk.
Such risks include, but are not limited to, the following:
(1) the
business of the Buyer consists of the operation of DigiKidz, and is subject
to
all of the risks inherent of a developmental stage business;
(2)
DigiKidz
has generated only a limited amount of revenues and at June 30, 2006,
had
year-to-date net losses of $643,785, an accumulate deficit of $1,092,490, and
total liabilities of $475,099 and there is no assurance that Buyer or DigiKidz
will operate profitably;
(3)
Buyer’s
common stock is quoted on the Pink Sheets and there is currently only a limited
market for the Buyer’s securities and, Seller, or Seller’s stockholders, may
have difficulty reselling the Conversion Common Stock, at a profit or at
all;
(4)
Buyer,
and DigiKidz will require additional financing in order to continue its
business plans and there is no assurance that required financing will be
available to
Buyer
or DigiKidz
on acceptable terms, or at all;
(5)
future
equity financings will dilute the relative ownership of Buyer by its
existing
shareholders, and depending on the price at which additional shares are issued,
may dilute the
book
value per share of Buyer’s common stock;
(6)
Buyer
and
DigiKidz will have to overcome the challenges of marketing, on-line commerce
and
introduction of a new product in order to succeed, and there is no assurance
that
it
will be able to do so;
(7) Buyer
and
DigiKidz will face competition from many entities, most of whom have greater
financial and physical resources than does Buyer and DigiKidz; and
(8) as
its
business develops, Buyer may have difficulty attracting
and retaining qualified personnel.
3.14
Disclosure. The
representations, warranties and acknowledgments of
Seller
set forth herein are true, complete and accurate in all material respects,
do
not
omit to state any
material fact, or omit any fact necessary to make such
representations, warranties and acknowledgments, in light of the circumstances
under which they are made, not misleading.
4.
Representations
and Warranties of Buyer. Except
as
otherwise set forth in a schedule
delivered by Buyer not later than three business days prior to the Closing
(the
“Buyer’s Schedule”),
Buyer hereby makes the following representations and warranties to
Seller, as of the date
hereof and as of the Closing Date. Nothing in the Buyer’s Schedule shall be
deemed adequate to disclose an exception to a representation or warranty made
herein, however, unless the
Buyer’s Schedule
identifies the exception with reasonable particularity and describes
the
relevant facts in reasonable detail. The Buyer’s Schedule will be arranged in
paragraphs corresponding to
the
lettered
and numbered paragraphs contained in this Agreement.
4.1
Organization and
Good Standing. Buyer
is
a corporation duly incorporated,
validly existing and in good standing under the laws of its jurisdiction
of
formation, with
full
corporate power and authority to own, lease and operate its business and
properties and
to
carry
on
its business in the places and in the manner as presently conducted or proposed
to
be
conducted.
Buyer is in good standing as a foreign corporation in each jurisdiction
in
which
the properties
owned, leased or operated, or the business conducted, by it requires
such
qualification, except
where the failure to so qualify would not have a material adverse effect on
the
business of Buyer,
taken as a whole, or consummation of the transactions contemplated hereby
(a
“Buyer Material
Adverse Effect”).
4.2
Authority
and Enforcement. Buyer
has
all requisite corporate power and authority
to execute and deliver this Agreement, and to consummate the transactions
contemplated hereby.
Buyer has taken all corporate action necessary for the execution and
delivery of this Agreement
and the consummation of the transactions contemplated hereby, and
this
Agreement constitutes
the valid and binding obligation of Buyer, enforceable against each in
accordance with
its
terms, except as may be affected by bankruptcy, insolvency, moratoria or other
similar
laws affecting
the enforcement of creditors’ rights generally and subject to the
qualification that the availability
of equitable remedies is subject to the discretion of the court before which
any
proceeding
therefore may be brought.
4.3
No
Conflicts or Defaults. Except
as
set forth on the Buyer’s Schedule, the execution
and delivery of this Agreement by Buyer and the consummation of the transactions
contemplated
hereby do not and shall not (a) contravene the Certificate of Incorporation
or
Bylaws of Buyer or (b) with or without the giving of notice or the passage
of
time (i) violate, conflict with, or
result
in a material breach of, or a material default or loss of rights under, any
covenant, agreement,
mortgage, indenture, lease, instrument, permit or license to which Buyer is
a
party or by which
Buyer is bound, or any judgment, order or decree, or any law, rule or regulation
to which Buyer
is
subject, (ii) result in the creation of, or give any party the right to create,
any Lien upon any assets
or
properties of Buyer, (iii) terminate or give any party the right to terminate,
amend, abandon
or refuse to perform, any material agreement, arrangement or commitment relating
to which Buyer a party, or (iv) result in a Buyer Material Adverse
Effect.
4.4
Consents
of Third Parties. Except
as
set forth on the Buyer’s Schedule, the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated
hereby by Buyer does not require the consent of any person, or such consent
has
been or
will
be obtained, in writing, prior to the Closing.
4.5
Buyer
Capitalization. Buyer
is
authorized to issue (a) 200,000,000 shares of common stock, $.001 par value
per
share, of which 136,908,136 shares are issued and outstanding and (b) 50,000,000
shares of preferred stock, $.001 par value per share, of which one (1)
share
has been designated as Series A Preferred Stock, none of which are issued and
outstanding, and
forty
million (40,000,000) shares have been designated as Series B Preferred Stock,
none of which
are
issued or outstanding. Except as set forth on the Buyer’s Disclosure Schedules,
there are no
options, warrants or other securities convertible into common stock of Buyer.
The issued and outstanding
capital stock of Buyer has been duly authorized and validly issued, and is
fully-paid and
non-assessable and not subject to the preemptive or similar rights of any
person.
4.6
Securities. The
Series A Preferred Stock and Series B Preferred Stock have
been
duly authorized, and upon issuance pursuant to the provisions hereof, will
be
validly issued,
fully paid and non-assessable.
4.7
No
Litigation. Except
as
set forth on the Buyer’s Schedule, there are no legal,
equitable, administrative, arbitration, governmental, regulatory or other
proceedings pending against Buyer, or, to the best knowledge of Buyer,
threatened against it, an adverse determination to
which
would result in a Buyer Material Adverse Effect.
4.8
Financial
Statements. Buyer
has
delivered to Seller (a) the unaudited consolidated
balance sheet of Buyer as of June 30, 2006 and the related statements of
operations, stockholders’
equity and cash flows for the quarter then ended, including the notes thereto
(the “Buyer’s
Financial Statements”). The
Buyer’s Financial Statements have been prepared in accordance
with U.S. generally accepted accounting principles (“GAAP”) applied on a basis
consistent
throughout all periods presented, subject to normal recurring adjustments upon
audit, and
present fairly the financial position of Buyer as of the dates and for the
periods indicated.
4.9 No
Undisclosed Liabilities. Buyer
has
engaged in no material transactions other
than negotiations relating to this Agreement and the transactions contemplated
hereby. Buyer has
no
liabilities, obligations, claims or losses (whether liquidated or unliquidated,
secured or unsecured,
absolute, accrued, contingent or otherwise) that would be required to be
disclosed on a balance sheet of Buyer in conformity with GAAP which are not
disclosed in the Buyer’s Financial Statements,
other than those disclosed elsewhere herein or incurred in the ordinary course
of Buyer’s business since the date of the Buyer’s Financial Statements, which,
individually or in the aggregate, do not or would not have a Buyer Material
Adverse Effect.
4.10
Compliance
with Laws. Buyer
is
in compliance with all laws, rules, regulations,
codes, orders, rulings and judgments of federal, state, local and foreign
governments and
regulatory bodies, except where the failure to comply would not result in a
Buyer Material Adverse
Effect.
4.11
Tax
Matters. Buyer
has
filed all federal, state, local and foreign tax returns required
to be filed by it, and has paid all taxes shown to be due thereon. All such
tax
returns are true,
complete and accurate. No tax return of Buyer has been audited or is currently
under audit, nor
has
Buyer been notified that any such audit is to take place.
4.12
Absence
of Certain Business Practices. Neither
Buyer nor any director, officer,
employer, or agent of the foregoing, nor any person acting on its behalf,
directly or indirectly
has to Buyer’s knowledge given or agree to give any gift or similar benefit to
any customer, supplier, governmental employee or other person which (a) might
subject Buyer to any damage or penalty in any civil, criminal, or governmental
litigation or proceeding, (b) if not given in
the
past, might have had a Material Adverse Effect on Buyer, or (c) if not continued
in the future, might
have a Material Adverse Effect on Buyer or which might subject Buyer to suit
or
penalty in any private or governmental litigation or proceeding.
4.13
SEC
Reports. Buyer
has
filed with the Commission all forms, reports, schedules,
statements and other documents required to be filed by it pursuant to Section
13
or 15 of
the
Exchange Act through September 30, 2005 (as such documents have been amended
since the time
of
their filing, collectively, the "Buyer’s Reports"), and has not filed its annual
report on Form 10-KSB
for the fiscal year ended December 31, 2005 or the quarterly report on Form
10-QSB for the
quarter ended March 31, 2006 and June 30, 2006. As of their respective dates
or,
if amended, as of the date of the last such amendment, the Buyer’s Reports,
including, without limitation, any financial
statements or schedules included therein, to the best of Buyer’s knowledge,
complied in all
material respects with the Securities Act or the Exchange Act, as the case
may
be, and the rules and
regulations of the Commission promulgated thereunder applicable to such Buyer’s
Reports, and did not contain any untrue statement of a material fact or omit
to
state a material fact required to
be
stated therein or necessary in order to make the statements therein, in light
of
the circumstances under which they were made, not misleading. No Subsidiary
of
Buyer is required to file
any
forms, reports or other documents with the Commission pursuant to Sections
13 or
15 of the Exchange
Act.
4.14
Internal
Accounting Controls. Buyer
maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management’s general or specific authorizations,
(ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting
principles and to maintain asset accountability, (iii) access to assets is
permitted only in accordance
with management’s general or specific authorization and (iv) the recorded
accountability
for assets is compared with the existing assets at reasonable intervals and
appropriate action
is
taken with respect to any differences.
4.15
Disclosure. The
representations, warranties and acknowledgments of Buyer
set
forth herein are true, complete and accurate in all material respects and
do not
omit any fact
necessary to make such representations, warranties and acknowledgments not
misleading.
5.
Conditions
to Closing.
5.1
Conditions
Precedent to Buyer’s Obligation to Close. The
obligation of Buyer to consummate the transactions contemplated by this
Agreement is subject to satisfaction of the
following conditions on or prior to the Closing Date:
(1) The
representations and warranties of Seller set forth in Section 3 above
shall
be
true and correct in all material respects at and as of the Closing
Date.
(2) Seller
shall have performed and complied with all of its covenants hereunder
in all material respects through the Closing Date.
(3)
No
action, suit, or proceeding shall be pending or threatened before any
court
or
quasi-judicial or administrative agency of any federal, state, local, or foreign
jurisdiction or
before
any arbitrator wherein an unfavorable injunction, judgment, order, decree,
ruling, or charge would (i) prevent or adversely affect Buyer’s consummation of
any of the transactions contemplated
by this Agreement or (ii) cause any of the transactions contemplated by this
Agreement
to be rescinded following consummation (and no such injunction, judgment, order,
decree,
ruling, or charge shall be in effect).
(4) No
material adverse change shall have taken place with respect to the Assets,
and no event shall have occurred, that could result in a Seller Material Adverse
Effect.
(5) Buyer
shall be reasonably satisfied with the results of its due diligence review
of
Seller and the Assets;
(6) Seller
shall have delivered to Buyer the Seller Disclosure Schedule in form and
substance reasonably satisfactory to Buyer; and
(7)
All
actions to be taken by Seller in connection with consummation of the
transactions contemplated hereby and all certificates, opinions, instruments,
and other documents required
to effect the transactions contemplated hereby will be reasonably satisfactory
in form and substance to the Buyers.
5.2
Conditions
Precedent to Seller’s Obligation to Close. The
obligation of Seller to consummate the transactions contemplated by this
Agreement is subject to satisfaction of the
following conditions on or prior to the Closing Date:
(1) The
representations and warranties of Buyer set forth in Section 4 above
shall
be
true and correct in all material respects at and as of the Closing
Date.
(2) Buyer
shall have performed and complied with all of their respective covenants
hereunder in all material respects through the Closing Date.
(3)
No
action, suit, or proceeding shall be pending or threatened before any
court
or
quasi-judicial or administrative agency of any federal, state, local,
or
foreign jurisdiction or before any arbitrator wherein an unfavorable injunction,
judgment, order, decree, ruling, or charge would (i) prevent or adversely affect
Seller’s consummation of
any of
the transactions contemplated
by this Agreement or (ii) cause any of the transactions
contemplated by this Agreement
to be rescinded following consummation (and no such injunction, judgment,
order,
decree, ruling, or charge shall be in effect);
(4) No
material adverse change shall have taken place with respect to Buyer,
and
no
event shall have occurred, that could result in a Buyer Material Adverse
Effect.
(5) Buyer
shall have delivered to Seller the Buyer Disclosure Schedule in form and
substance reasonably satisfactory to Seller;
(6) Seller
shall be reasonably satisfied with the results of its due diligence review
of
Buyer; and
(7)
All
actions to be taken by Buyer in connection with consummation of the transactions
contemplated hereby and all certificates, opinions, instruments, and
other
documents required
to effect the transactions contemplated hereby will be reasonably satisfactory
in form and substance to the Seller.
6.
Closing;
Closing Date. A
closing
of the transactions contemplated hereby (the “Closing”)
will take place upon the execution of this Agreement, at the offices of Buyer,
or
at
such other
place, date and time that is agreed upon by Seller and Buyer. The
date
on which the Closing is
held
is referred to in this Agreement as the "Closing Date."
7.
Documents
to be Delivered at the Closing.
7.1 Documents
to be Delivered by Seller. At
the
Closing, Seller shall deliver, or
cause
to be delivered, to Buyer the following:
(1) a
duly
executed ▇▇▇▇ of sale, dated the Closing Date, transferring to Buyer
all
of
Seller's right, title and interest in and to the Assets together with possession
of the Assets;
(2)
a
duly
executed assignment, transferring to Buyer all of Seller’s right, title
and
interest in and to the contracts, agreements and contract rights included in
the
Assets, including
the
Note
Receivable, accompanied by any third party consents, if any, contemplated by
Section 3.9;
(3) Satisfaction
of indebtedness for the DigiKidz Debt;
(4) a
certificate evidencing the MMI Shares, duly endorsed for transfer (or
with
executed stock powers) so as to convey good and marketable title to the MMI
Shares to Buyer;
Asset
Purchase Agreement
10
(5)
a
certificate evidencing the CRLU Shares, duly endorsed for transfer (or
with
executed stock powers) so as to convey good and marketable title to the
CRLU
Shares to Buyer;
(6)
a
certificate evidencing the STS Membership Interest, duly endorsed for
transfer
(or with executed stock powers) so as to convey good and marketable title
to
the STS Membership
Interest to Buyer;
(7)
a
certificate evidencing the PrimEdge Shares, duly endorsed for transfer
(or
with
executed stock powers) so as to convey good and marketable title to the PrimEdge
Shares
to
Buyer;
(8) a
copy of
resolutions of the board of directors and shareholders of Seller authorizing
the execution, delivery and performance of this Agreement by Seller;
and
(9) such
other certificates, documents and instruments as Buyer may have reasonably
requested in connection with the transaction contemplated hereby.
7.2 Documents
to be Delivered by Buyer. At
the
Closing, Buyer shall deliver to
Seller
the following:
(1) a
copy of
resolutions of the board of directors of Buyer authorizing the execution,
delivery and performance of this Agreement by Buyer;
(2)
a
certificate evidencing the Series A Preferred Stock
and
Series B Preferred Stock, or irrevocable instructions to Buyer’s transfer agent
to issue the Series A
Preferred Stock
and
Series B Preferred Stock to Seller;
(3) executed
Registration Rights Agreement, attached as Exhibit C hereto;
and
(4) such
other certificates, documents and instruments as Seller may have reasonably
requested in connection with the transaction contemplated hereby.
8. Additional
Covenants.
8.1
Further
Assurances. If,
at
any time after the Closing, the parties shall consider
or be advised that any further deeds, assignments or assurances in law or
that
any
other things
are necessary, desirable or proper to complete the transactions contemplated
hereby in accordance with the terms of this agreement or to vest, perfect or
confirm, of record or otherwise, the
title
to any property or rights of the parties hereto, the parties agree that their
proper officers and directors
shall execute and deliver all such proper deeds, assignments and assurances
in
law and
do
all
things necessary, desirable or proper to vest, perfect or confirm title to
such
property or rights and
otherwise to carry out the purpose of this Agreement, and that the proper
officers and directors the parties are fully authorized to take any and all
such
action.
8.2
No
Public Disclosure. Without
the prior written consent of the other, which
written consent will not be unreasonably withheld, no party to this Agreement
will, and will each cause their respective representatives not to, make any
release to the
press
or other public disclosure
with
respect to either the fact that discussions or negotiations have
taken place concerning
the transactions contemplated by this Agreement, the
existence or contents of this Agreement or any prior correspondence relating
to
this transactions contemplated by this Agreement,
except for such public disclosure as may be necessary, in the written opinion
of
outside counsel
(reasonably satisfactory to the other parties) for the party proposing to make
the disclosure not
to be
in violation of or default under any applicable law, regulation or governmental
order.
If
either
party proposes to make any disclosure based upon such an opinion, that party
will deliver
a
copy
of
such opinion to the other party, together with the text of the proposed
disclosure, as
far in
advance
of its disclosure as is practicable, and will in good faith consult with
and
consider the suggestions
of the other party concerning the nature and scope of the information
it
proposes to disclose.
Asset
Purchase Agreement
11
8.3
Confidentiality. Each
Party will, and will cause its Affiliates, employees, agents
and representatives to, treat and hold as such all of the Confidential
Information,
refrain from
using any of the Confidential Information except in connection with this
Agreement, and deliver promptly to the receiving Party or destroy, at the
request and option of the disclosing Party,
all
tangible embodiments (and all copies) of the Confidential Information which
are
in the receiving Party’s
possession in each case, forever. If any Party is ever requested or required
(by
oral question or request for information or documents in any Action) to disclose
any Confidential Information of
the
other
Party, such Party will notify the other Party promptly of the request or
requirement so
that
the
other
Party may seek an appropriate protective Order or waive compliance with this
Section
8.4 .
If,
in
the absence of a protective Order or the receipt of a waiver hereunder,
either
Party, on the written
advice of counsel, is compelled to disclose
any Confidential Information to
any
Governmental
Body, arbitrator, or mediator or else stand Liable for contempt, then such
Party
may
disclose
the Confidential Information to the Governmental Body, arbitrator, or mediator;
provided,
however;
that such Party will use its Best Efforts to obtain, at the request of the
other
Party, an Order
or
other assurance that confidential treatment will be accorded
to such portion of the Confidential
Information required to be disclosed as the other Party may
designate.
8.4
Taxes. Seller
will be Liable for and will pay all Taxes (whether assessed or
unassessed) applicable to the Assets, in each case attributable to periods
(or
portions thereof) ending
on
or prior to the Closing Date, including, without limitation, any Taxes
arising
out of the consummation
of the transactions contemplated hereby. Buyer will be Liable for and
will
pay
all Taxes
(whether assessed or unassessed) applicable to the Assets, in each case
attributable to
periods (or
portions thereof) beginning after the Closing Date. For purposes of this
Section
8.4, any
period beginning
before and ending after the Closing Date will be treated as two
partial periods, one ending on the Closing Date and the other beginning after
the Closing Date, except that Taxes (such
as
property Taxes) imposed on a periodic basis will be allocated on a daily
basis.
8.5
Payment
of Non-Assumed Liabilities. In
addition to payment of Taxes pursuant
to Section
8.4, Seller
will timely pay, or make adequate provision for the timely payment, in
full
of all Seller’s Liabilities. If any such Seller’s Liabilities are not so paid or
provided for,
or
if Buyer
reasonably determines that failure to make any payments will
impair Buyer’s use or enjoyment
of the Assets, Buyer may, at any time after the Closing, elect to pay any or
all
of
such
Seller’s
Liabilities directly (but will have no obligation to do so) and treat such
payment as damages
under
this Agreement so that Buyer will be entitled to exercise the remedies available
to
it
under ARTICLE
9
of
this
Agreement.
Asset
Purchase Agreement
12
8.6
Approval. Seller
will, as soon as reasonably practicable but no later than 5
days
following the Closing Date, solicit the adoption and approval of this Agreement
by all its stockholders,
either through a stockholders meeting or by written consent. Seller will,
through its Board
of
Directors, recommend to its stockholders adoption of this Agreement, and shall
not withdraw,
amend or modify in a manner adverse to Buyer its recommendation. Seller shall
ensure that
such
stockholders’ meeting or written consent is called, noticed, convened, held and
conducted, and
that
all proxies solicited in connection therewith, in compliance with applicable
Law. Seller shall
properly provide each stockholder appraisal and dissenter’s rights pursuant to
Florida Statutes.
8.7
Registration
Rights. As
more
fully set forth in the Registration Rights Agreement attached hereto as Exhibit
C, on or prior to the one (1) year anniversary of the Closing Date,
the
Buyer shall prepare and file with the Commission a Registration Statement
covering the Conversion
Common Stock issuable upon conversion of the Series B Preferred Stock for an
offering to be made on a continuous basis pursuant to Rule 415. The Registration
Statement shall be
on
Form SB-2 (except if the Buyer is not then eligible to register for resale
the
Buyer’s Common Stock
on
Form SB-2, in which case such registration shall be on another appropriate
form
in accordance
herewith). The Buyer shall cause the Registration Statement to become effective
and remain
effective as provided in Exhibit C. The Buyer shall use its reasonable
commercial efforts to cause
the
Registration Statement to be declared effective under the Securities Act as
promptly as possible
after the filing thereof. The Company shall use its reasonable commercial
efforts to keep the
Registration Statement continuously effective under the Securities Act until
the
date which is the
earlier date of when (i) all Registrable Securities have been sold or (ii)
all
Conversion Common Stock
issuable upon conversion of the Series B Preferred Stock may be sold immediately
without registration
under the Securities Act and without volume restrictions pursuant to Rule
144(k), as determined
by the counsel to the Buyer pursuant to a written opinion letter to such effect,
addressed and
acceptable to the Buyer's transfer agent and the affected Holders (the
"Effectiveness Period").
9. Indemnification
and Related Matters.
9.1
Indemnification
by the Seller. Seller
hereby indemnifies and holds Buyer harmless
from and against any and all damages, losses, liabilities, obligations, costs
or
expenses incurred
by Buyer arising out of the breach of any representation or warranty of Seller
hereunder, and/or
Seller’s failure to perform any covenant or obligation required to be performed
by it hereunder.
9.2
Indemnification
by Buyer. Buyer
hereby indemnifies and holds Seller harmless
from and against any and all damages, losses, liabilities, obligations, costs
or
expenses incurred
by Seller and arising out of the breach of any representation or warranty of
Buyer hereunder,
or Buyer's failure to perform any covenant or obligation required to be
performed by it hereunder.
Asset
Purchase Agreement
13
9.3
Procedure
for Indemnification. Any
party
entitled to indemnification under
this Article IX (an "Indemnified Party") will give written notice to the
indemnifying party of any
matters giving rise to a claim for indemnification; provided, that the failure
of any party entitled to
indemnification hereunder to give notice as provided herein shall not relieve
the indemnifying party
of
its obligations under this Article IX except to the extent that the indemnifying
party is actually
prejudiced by such failure to give notice. In case any action, proceeding or
claim is brought
against an Indemnified Party in respect of which indemnification is sought
hereunder, the indemnifying
party shall be entitled to participate in and, unless in the
reasonable judgment of counsel
to the Indemnified Party a conflict of interest between it and the indemnifying
party
may
exist
with respect of such action, proceeding or claim, to assume the defense thereof
with counsel
reasonably
satisfactory to the Indemnified Party. In
the
event that the indemnifying party advises an Indemnified Party that it will
contest such a claim for indemnification hereunder, or fails, within
30
days
of receipt of any indemnification notice to notify, in writing, such person
of
its election to defend,
settle or compromise, at its sole cost and expense, any action, proceeding
or claim (or discontinues
its defense at any time after it commences such defense), then the Indemnified
Party
may,
at
its option, defend, settle or otherwise compromise or pay such action or claim.
In
any
event, unless
and until the indemnifying party elects in writing to assume and does so assume
the defense
of any such claim, proceeding or action, the Indemnified Party's costs and
expenses arising
out of the
defense, settlement or compromise of any such action, claim or proceeding
shall
be
losses subject
to indemnification hereunder. The
Indemnified Party shall cooperate fully with the indemnifying
party in connection with any settlement negotiations or defense of any such
action or
claim
by
the indemnifying party and shall furnish to the indemnifying party
all
information reasonably available to the Indemnified Party, which relates
to
such
action or claim. The
indemnifying
party shall keep the Indemnified Party fully apprised at all times as to the
status of the defense
or any settlement negotiations with respect thereto. If
the
indemnifying party elects to defend
any such action or claim, then the Indemnified Party shall be entitled to
participate in
such
defense
with counsel of its choice at its sole cost and expense. The
indemnifying party shall not be liable for any settlement of any action, claim
or proceeding effected without its prior written consent.
Notwithstanding anything in this Article IX to the contrary, the indemnifying
party shall
not,
without the Indemnified Party’s prior written consent, settle
or
compromise any claim or consent
to entry of any judgment in respect thereof which imposes any future
obligation
on the Indemnified
Party or which does not include, as an unconditional term thereof, the
giving by the claimant
or the plaintiff to the Indemnified Party of a release from all liability
in
respect of such claim.
The indemnity agreements contained herein shall be in addition to (a) any cause
of
action
or
similar rights of the Indemnified Party against the indemnifying party or
others, and
(b)
any liabilities
the indemnifying party may be subject to.
9.4
Time
for Assertion. No
party
to this Agreement shall have any liability (for
indemnification or otherwise) with respect to any representation, warranty
or
covenant or obligation
to be performed and complied hereunder, unless notice of any such liability
is
provided on
or
before 12 months from the date hereof.
9.5
Basket.
Notwithstanding any conflicting or inconsistent provisions hereof, Seller shall
not be liable in damages, indemnity or otherwise to Buyer in respect of the
inaccuracy
or
breach
of any representations, warranties, covenants or agreements herein, except
to
the extent that
the
damages to Buyer, singularly or in the aggregate, exceed the sum of $100,000.
Notwithstanding
any conflicting or inconsistent provisions hereof, Buyer
shall not be liable in damages,
indemnity or otherwise to Seller in respect to
the
inaccuracy or breach of any representations,
warranties, covenants or agreements herein except to the
extent that damages to Seller
exceed, individually or in the aggregate, the sum of $100,000.
10. Miscellaneous.
10.1
Finders. Buyer
on
the one hand, and Seller, on the other hand, represent and
warrant that they have not employed or utilized the services of
any
broker or finder in connection
with this Agreement or the transactions contemplated by it. Seller
shall indemnify and hold
Buyer harmless from and against any and all claims for brokers' commissions
made
by
any party as a result of this Agreement and the transaction contemplated
hereunder to the extent that any such
commission was incurred, or alleged to have been incurred, by, through
or under Seller. Buyer,
jointly and severally, shall indemnify and hold Seller harmless from and against
any and all claims
for brokers' commissions made by any party as a result of this Agreement and
transaction
contemplated
hereunder to the extent that any such commission was incurred, or
alleged to have been
incurred, by, through or under Buyer.
Asset
Purchase Agreement
14
10.2
Expenses. Except
as
otherwise specifically provided in this Agreement, Buyer
and
Seller shall bear their own respective expenses incurred
in connection with this Agreement
and in connection with all obligations required to be performed by each of
them
under this Agreement.
10.3
Entire
Agreement; No Waiver.
This
Agreement, the Schedules and any instruments
and agreements to be executed pursuant to this Agreement, sets
forth the entire understanding
of the parties hereto with respect to its subject matter, merges and supersedes
all prior
and
contemporaneous understandings with respect to its subject matter and may not
be
waived or modified, in whole or in part, except by a writing signed by each
of
the parties hereto. No
waiver
of
any
provision of this Agreement in any instance shall be deemed to be a waiver
of
the same
or
any other provision in any other instance. Failure
of any party to enforce any provision of this Agreement
shall not be construed as a waiver of its rights under such
provision.
10.4
Jurisdiction
and Governing Law.
This
Agreement shall in all respects be governed by and construed in accordance
with
the laws of the State of Florida are applicable to agreements
made and fully to be performed in such state, without giving effect to conflicts
of
law
principles.
The parties further: (a) agree that any legal suit, action or proceeding arising
out
of or
relating
to this Agreement shall be instituted exclusively in any Federal or State court
of competent jurisdiction
within the County of Broward, State of Florida, (b) waive any objection that
they
may
have
now
or hereafter to the venue of any such suit, action or proceeding, and
(c)
irrevocably consent
to the in personam jurisdiction of any Federal or State court of competent
jurisdiction within
the County of Broward, State of Florida in any such suit, action or proceeding.
The parties each
further agree to accept and acknowledge service of any and all process which
may
be served
in
any
such suit, action or proceeding in a Federal or State court of competent
jurisdiction within the
County
of
Broward, State of Florida, and that service of process upon the parties mailed
by certified mail to their respective addresses shall be deemed in every respect
effective service of process upon the
parties, in any action or proceeding.
10.5
Construction.
Headings
contained in this Agreement are for convenience only
and
shall not be used in the interpretation of this Agreement. References herein
to
Articles, Sections
and Exhibits are to the articles, sections and exhibits, respectively, of this
Agreement. The
Seller
Disclosure Schedule is hereby incorporated herein by reference and
made
a part of this Agreement.
As used herein, the singular includes the plural, and the masculine,
feminine
and neuter
gender each includes the others where the context so indicates.
10.6
Notices. All
notices and other communications under this Agreement shall
be
in writing and shall be deemed given when delivered personally (including by
confirmed
legible
telecopier transmission) or mailed by certified mail, return receipt requested,
to
the
parties at
the
following addresses (or to such address as a party may have specified by notice
given to
the
other
party pursuant to this provision):
Asset
Purchase Agreement
15
If
to
Seller, to:
Royal
Palm Capital Group, Inc.
▇▇▇
▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President
Telecopy
No.: (▇▇▇) ▇▇▇-▇▇▇▇
If
to
Buyer, to:
PrimEdge,
Inc.
▇▇▇
▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President
Telecopy
No.: (▇▇▇) ▇▇▇-▇▇▇▇
10.7
Separability. In
the
event that any provision hereof would, under applicable
law, be invalid or enforceable in any respect, such provision shall be construed
by modifying
or limiting it so as to be valid and enforceable to the maximum extent
compatible with, and
permissible under, applicable law. The invalidity or unenforceability of any
provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement which
shall remain in full force and effect.
10.8
Binding
Effect; Assignment. This
Agreement shall be binding upon and inure
to
the benefit of the parties and their respective successors and permitted
assigns. Nothing in this Agreement shall create or be deemed to create any
third
party beneficiary rights in any person or
entity
not a party to this Agreement. No assignment of this Agreement or of any rights
or obligation
hereunder may be made by either party (by operation of law or otherwise) without
the prior
written consent of the other and any attempted assignment without the required
consent shall be
void;
provided, however, that no such consent shall be required of Buyer to assign
part or all of its
rights under this Agreement to one or more of its subsidiaries or
affiliates.
10.9
Best
Knowledge. As
used
in this Agreement "to the best of Seller's knowledge"
or words of similar import shall mean actual or constructive knowledge possessed
by an
executive officer of Seller, including such actual or constructive knowledge
that would be expected to be known upon the exercise of reasonable business
judgment, and "to the best of Buyer's knowledge" or words of similar import
shall mean actual or constructive knowledge possessed
by an executive officer of Buyer, including such actual or constructive
knowledge that would
be
expected to be known upon the exercise of reasonable business
judgment.
10.10
Counterparts. This
Agreement may be executed in counterparts, each of which
shall be an original, but which together shall constitute one and the same
Agreement.
IN
WITNESS WHEREOF, we have executed this Agreement as of the date and
year first above written.
| PRIMEDGE, INC. | ROYAL PALM CAPITAL GROUP, INC. |
| By _________________________ | By _________________________ |
|
▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇, President
|
▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇, President
|
Asset
Purchase Agreement
16
EXHIBIT
I
CERTIFICATE
OF DESIGNATION, PREFERENCE AND RIGHTS OF SERIES A
PREFERRED
STOCK OF PRIMEDGE, INC.
Pursuant
to the General Corporation Law of the State of Nevada
PrimEdge,
Inc., a corporation organized and existing under the laws of the State of Nevada
(the
"Corporation"), hereby
certifies that the following resolutions were duly adopted by the Board of
Directors of the Corporation by unanimous written consent on October 30, 2006,
pursuant to the authority
vested in the Board of Directors by Article VI of the Certificate of
Incorporation of the Corporation, as amended on July 23, 2001, which creates
and
authorizes 50,000,000 shares of Preferred
Stock of the Corporation, par value of $0.001 per share (the "
Preferred
Stock"):
Resolved,
that pursuant to the authority vested in the Board of Directors by Article
VI of
the Certificate of Incorporation of the Corporation as amended on July 23,
2001,
a series of Preferred
Stock is hereby established, the distinctive designation of which shall be
“Series A Preferred Stock” (such series being hereinafter called “Series A
Preferred Stock”), and the preferences and relative, participating, optional or
other special rights of the Series A Preferred Stock, and the qualifications,
limitations or restrictions thereof (in addition to the relative powers,
preferences and rights, and qualifications, limitations or restrictions thereof,
set forth in the Corporation’s Certificate of Incorporation which are applicable
to shares of Preferred Stock of all series) shall be as follows:
1.
Number
of Shares; Stated Value and Dividends. The Corporation hereby
designates one
(1)
share of the authorized shares of preferred stock as Series A Preferred Stock.
The stated value of the Series A Preferred Stock shall be $0.001. The holder
of
share of Series A Preferred Stock
shall not be entitled to receive dividends.
2. Liquidation
Preference. In the event of any liquidation, dissolution or winding up
of this Corporation,
either voluntary or involuntary, the holder of Series A Preferred Stock may
at
his sole option
elect to receive, prior and in preference to any distribution of any of the
assets of this Corporation
to the holders of common stock by reason of their ownership thereof, an amount
per share
equal to $0.001 for the outstanding share of Series A Preferred Stock. Upon
the
completion of
this
distribution and any other distribution that may be required with respect to
series of preferred stock
of
this Corporation that may from time to time come into existence, if assets
remain in this Corporation
the holders of the common stock of this Corporation shall receive all of the
remaining assets
of
this Corporation. For purposes of this Section 2, a liquidation, dissolution
or
winding up of
this
Corporation shall be deemed to be occasioned by, or to include, (i) the
acquisition of the Corporation
by another entity by means of any transaction or series of related transactions
including,
without limitation, any reorganization, merger or consolidation but, excluding
any merger
effected exclusively for the purpose of changing the domicile of the Corporation
or any transaction
in which the Corporation is the surviving entity or (ii) a sale of all or
substantially all of
the
assets of the Corporation unless the Corporation's shareholders of record as
constituted immediately
prior to such transaction will, immediately after such transaction (by virtue
of
securities issued as consideration in the transaction) hold at least
50%
of
the
voting power of the surviving
or acquiring entity. Whenever a distribution provided for in this Section 2
shall be payable
in securities or property other than cash, the value of such distribution shall
be the fair market value of such securities or other property as determined
and
agreed to by the Board of Directors of this Corporation.
Asset
Purchase Agreement
17
3. Redemption.
The Series A Preferred Stock is not redeemable without the prior written
consent
of the holder of such Series A Preferred Stock.
4. Conversion.
The share of Series A Preferred Stock shall be convertible, at the sole option
of
the
Corporation, at any time after the date of issuance of such share at the office
of this Corporation into such number of fully paid and non-assessable shares
of
common stock of the Corporation as is determined by mutual agreement of the
Corporation and the holder of the Series A Preferred Stock at the time of
conversion.
5. Voting
Rights. The holder of the share of Series A Preferred Stock shall have
the following
voting rights:
(a)
The
holder of the share of Series A Preferred Stock shall be entitled to vote on
all
matters submitted to a vote of the shareholders of the Corporation, voting
together with the holders of the common stock and of any other shares of capital
stock of the Corporation entitled to vote at a
meeting
of shareholders as one class, except in cases where a separate or additional
vote or consent
of the holders of any class or series of capital stock or other equity
securities of the Corporation
shall be required by these Articles or applicable law, in which case the
requirement for any
such
separate or additional vote or consent shall apply in addition to the single
class vote or consent
otherwise required by this paragraph.
(b)
As of
each record date for the determination of the Corporation's shareholders
entitled to vote on any matter (a "Record Date"), the share of Series A
Preferred Stock shall have voting rights and powers equal to the number of
votes
that entitle the holder of the share of Series A Preferred Stock to exercise
one
vote more than one-half of all votes entitled to be cast as of such Record
Date
by all holders of capital stock of the Corporation so as to ensure that the
votes entitled to be cast by the holder of the share of Series A Preferred
Stock
shall be equal to at least fifty-one percent (51%) of all votes entitled to
be
cast.
(c)
Without the written consent of the holder of the share of Series A Preferred
Stock at a meeting of the shareholders of this Corporation called for such
purpose, the Corporation will not amend,
alter or repeal any provision of the Articles of Incorporation (by merger or
otherwise) so as to adversely affect the preferences, rights or powers of the
Series A Preferred Stock.
6.
Status
of Redeemed Stock. In the event the share of Series A Preferred Stock
shall be redeemed
pursuant to Section 3 hereof, or converted pursuant to Section 4 hereof, the
share shall be
cancelled and returned to the status of authorized but unissued shares of
preferred stock.
7. Taxes.
This Corporation will pay all taxes (other than taxes based upon income) and
other governmental charges that may be imposed with respect to the issue or
delivery of the share of Series
A
Preferred Stock.
Asset
Purchase Agreement
18
The
foregoing amendment was duly adopted by the unanimous written consent of the
Board of Directors
as of October 30, 2006.
IN
WITNESS WHEREOF, the undersigned, being the President of this Corporation,
has
executed these Articles of Amendment as of October 30, 2006
PRIMEDGE,
INC.
By:
______________________________
▇▇▇▇▇
▇.
▇▇▇▇▇▇▇▇, President
Asset
Purchase Agreement
19
EXHIBIT II
CERTIFICATE
OF DESIGNATION, PREFERENCE AND RIGHTS OF SERIES B
PREFERRED
STOCK OF PRIMEDGE, INC.
Pursuant
to the General Corporation Law of the State of Nevada
PrimEdge,
Inc., a corporation organized and existing under the laws of the State of Nevada
(the "Corporation"), hereby
certifies that the following resolutions were duly adopted by the Board of
Directors of the Corporation by unanimous written consent on October 30, 2006,
pursuant to the authority vested in the Board of Directors by Article VI of
the
Certificate of Incorporation of the Corporation,
as amended on July 23, 2005, which creates and authorizes 50,000,000 shares
of
Preferred
Stock of the Corporation, par value of $0.001 per share (the "
Preferred
Stock"):
Resolved,
that pursuant to the authority vested in the Board of Directors by Article
VI of
the Certificate of Incorporation of the Corporation, as amended on July 23,
2005, a series of Preferred Stock is hereby established, the distinctive
designation of which shall be “Series B Preferred
Stock” (such series being hereinafter called “Series B Preferred Stock”), and
the preferences and relative, participating, optional or other special rights
of
the Series B Preferred Stock, and the qualifications, limitations or
restrictions thereof (in addition to the relative powers, preferences and
rights, and qualifications, limitations or restrictions thereof, set forth
in
the Corporation’s Certificate of Incorporation which are applicable to shares of
Preferred Stock of all series) shall be as follows:
1. Designation.
The series of preferred stock authorized hereunder shall be designated as the
“Series B Preferred Stock.” The number of shares constituting such series shall
initially be forty-five
million (45,000,000) which number may from time to time be changed by the Board
of Directors.
The par value of the Series B Preferred Stock shall be $0.001 per share. All
shares of Series
B
Preferred Stock shall be identical with each other in all respects.
2.
Rank.
The Series B Preferred Stock shall rank, with respect to dividend rights and
rights on
liquidation, dissolution and winding-up of the affairs of the Corporation equal
to the Common Stock
and
junior to each class or series of capital stock (except any other class of
Series B Preferred Stock)
which expressly provides that it ranks senior to the Series B Preferred Stock
as
to dividends or
upon
liquidation, dissolution and winding-up, or as to any other right or
preference.
3. Conversion.
The holders of Series B Preferred Stock shall have conversion rights
as
follows
(“Conversion Rights”):
|
(a)
|
Automatic
Conversion. Each
shares of Series B Preferred Stock shall not be convertible
unless and until the Corporation amends its Certificate of Incorporation
to increases the authorized number of shares of Common Stock available
for
issuance in an amount sufficient to permit the conversion of all
the
shares
of Series B Preferred Stock, and all other convertible securities
and
instruments
of the Corporation. The Corporation will use its best effort to cause
such
amendment to the Certificate of Incorporation to be filed within
9 months
from
the date of this Certificate of Designation. Conditioned upon the
foregoing, at
such time as the Corporation effectuates the action described above
in
this Section 3(a),
each
share of Series B Preferred Stock shall automatically convert into
twenty (20) fully paid and nonassessable share of Common Stock of
the
Corporation.
|
Asset
Purchase Agreement
20
|
(b)
|
Mechanics
of Conversion. At
such time as the conditions described in Section 3(a) shall
have occurred, holders of the Series B Preferred Stock shall surrender
the
certificates
therefor, duly endorsed, at the office of the Corporation or of any
transfer agent for the Series B Preferred Stock. The Corporation
shall, as
soon as practicable
thereafter, issue and deliver at such office to such holder of Series
B
Preferred
Stock, a certificate or certificates for the number of shares of
Common
Stock
of the Corporation to which such holder shall be entitled as aforesaid.
Such conversion shall be deemed to have been made immediately prior
to the
close of business
on the date the conditions set forth in Section 3(a) herein have
been
satisfied
and the person or persons entitled to receive the shares of Common
Stock
issuable upon such conversion shall be treated for all purposes as
the
record holder or holders of such shares of Common Stock as of such
date.
|
|
(c)
|
No
Impairment. This
Corporation will not, by amendment of its Certificate of Incorporation
or
through any reorganization, recapitalization, transfer of assets,
consolidation,
merger, dissolution, issue or sale of securities or any other voluntary
action, avoid or seek to avoid the observance or performance of any
of the
terms to be
observed or performed hereunder by this Corporation, but will at
all times
in good
faith assist in the carrying out of all the provisions of this Section
3
and in the taking
of all such action as may be necessary or appropriate in order to
protect
the Conversion Rights of the holders of the Series B Preferred Stock
against impairment.
|
|
(d)
|
No
Fractional Shares.
No
fractional shares shall be issued upon the conversion of any share
or
shares of the Series B Preferred Stock and the number of shares of
Common
Stock to be issued shall be rounded to the nearest whole share. Whether
or
not fractional shares are issuable upon such conversion shall be
determined on the
basis of the total number of shares of Series B Preferred Stock the
holder
is at the
time converting into Common Stock and the number of shares of Common
Stock
issuable upon such aggregate
conversion.
|
|
(e)
|
Notices
of Record Date. In
the event the Corporation takes record of the holders of any
class of securities for the purpose of determining which holders
are
entitled to receive any dividend (other than a cash dividend) or
other
distribution, any right to subscribe
for, purchase or otherwise acquire any shares of stock of any class
or any
other
securities, property or other right, the Corporation shall mail to
each
holder of Series B Preferred Stock, at least 20 days prior to the
date
specified therein, a notice
specifying the date on which any such record is to be taken for the
purpose of
such dividend, distribution or right, and the amount and character
of such
dividend, distribution or right.
|
|
(f)
|
Reservation
of Stock Issuable Upon Conversion. Solely
for the purpose of effecting
the conversion of the shares of the Series B Preferred Stock, the
Corporation
shall at all times, subject to the conditions described in Section
3(a),
reserve and keep available out of its authorized but unissued shares
of
Common Stock, such number of shares of its Common Stock as shall
from time
to time be sufficient
to effect the conversion of all outstanding shares of the Series
B
Preferred
Stock; and if at any time the number of authorized but unissued shares
of
Common Stock shall not be sufficient to effect the conversion of
all then
outstanding
shares of the Series B Preferred Stock, the Corporation will take
such
corporate action as, in the opinion of counsel to the Corporation,
may be
necessary and authorized to increase its authorized but unissued
shares of
Common Stock to such
number of shares of Common Stock to such number of shares as shall
be
sufficient
for such purposes.
|
Asset
Purchase Agreement
21
| (g) |
Notices. Any
notice required by the provisions of this Section 3 to be given to
the
holders of shares of Series B Preferred Stock shall be deemed given
if
deposited in the
United States mail, postage prepaid, and addressed to each holder
of
record at his or her address appearing on the books of this
Corporation.
|
4. Redemption.
| (a) |
Exercise
of Redemption Right.
Subject to the rights of series of Preferred Stock which
may from time to time come into existence, at the option of the
Corporation, the
Corporation shall have the right to redeem that number of shares
of Series
B Preferred Stock held by any holder and specified in a written notice
of
redemption (“Redemption Notice”) sent or delivered to the holder, by
paying to the holder, in cash,
an amount per share of Series B Preferred Stock identified in the
Redemption Request, equal to $1.00 plus any declared but unpaid dividends
on each such share. The
total sum payable per share pursuant to a Redemption Request is
hereinafter referred to as the “Series B Preferred Stock Redemption
Price”.
|
|
(b)
|
Mechanics
of Redemption.
Redemption Notices shall be sent or delivered to the holder
at such holder's address as set forth in the books of the Corporation.
Such
Redemption
Notice shall be sent at least twenty (20) days prior to the redemption
date
specified in the Redemption Notice. Each Redemption Notice shall
state:
(i)
the redemption date; (ii) the number of shares to be redeemed; (iii)
the
redemption price
per share; (iv) the place where certificates may be surrendered for
payment of the redemption price; and (v) that the holder's right
to
convert pursuant to subsection
5 above shall terminate upon the expiration of ten (10) days after
receipt
of
the Redemption Notice. The Corporation shall, as soon as practicable
after
the redemption
date, pay to the holder the Series B Preferred Stock the redemption
price
upon delivery to the Corporation of the certificates of Series B
Preferred
Stock to be redeemed. Upon payment by the Corporation of the Series
B
Preferred Stock
Redemption Price, all rights in respect of the shares of Series B
Preferred Stock redeemed shall
cease.
|
5.
Voting Rights. The holders of shares of Series B Preferred
Stock shall have the right to one
vote
for each share of Common Stock into which such Series B Preferred Stock could
then be converted
(notwithstanding the conditions described in Section 3(a) herein), and with
respect to
such
vote, such holder shall have full voting rights and powers equal to the voting
rights and powers of
the
holders of Common Stock, and shall be entitled, notwithstanding any provision
hereof, to
notice
of
any stockholders meeting in accordance with the bylaws of this Corporation,
and
shall be entitled
to vote, together with holders of Common Stock, with respect to any question
upon which
holders
of Common Stock have the right to vote. Fractional votes shall not, however,
be
permitted and any fractional voting rights available on an as-converted basis
(after aggregating all shares into which
shares of Series B Preferred Stock held by each holder could be converted)
shall
be rounded to the nearest whole number (with one-half being rounded
upward).
Asset
Purchase Agreement
22
6. Common
Stock Dividends, Subdivisions, Combinations, etc. In case the Company
shall
hereafter (i) declare a dividend or make a distribution on its outstanding
shares of Common Stock in shares of Common Stock, (ii) subdivide or reclassify
its outstanding shares of Common Stock into a greater number of shares, or
(iii)
combine or reclassify its outstanding shares of Common
Stock into a smaller number of shares, the number of outstanding shares of
Series B Preferred Stock in effect at the time of the record date for such
dividend or distribution or of the effective
date of such subdivision, combination or reclassification shall be adjusted
so
that it shall equal
the
same percentage of shares outstanding determined by multiplying the number
of
shares of Series B Preferred Stock by a fraction, the denominator of which
shall
be the number of shares of Common Stock outstanding after giving effect to
such
action, and the numerator of which shall be
the
number of shares of Common Stock outstanding immediately prior to such action.
Such adjustment
shall be made successively whenever any event listed above shall
occur.
7. Status
of Converted or Redeemed Stock. In the event any shares of Series B
Preferred Stock
shall be converted or redeemed pursuant to Section 3 or Section 4 hereof, the
shares so converted
or redeemed shall be canceled and shall be available for issuance by the
Corporation in accordance with the Corporation’s Certificate of
Incorporation.
*******************
IN
WITNESS WHEREOF, Bidville, Inc. has caused this Certificate of Designation
to be
signed by ▇▇▇▇▇
▇.
▇▇▇▇▇▇▇▇, its President, this 30th day
of
October 2006.
PRIMEDGE,
INC.
By:
___________________________
▇▇▇▇▇
▇.
▇▇▇▇▇▇▇▇, President
Asset
Purchase Agreement
23
EXHIBIT III
REGISTRATION
RIGHTS AGREEMENT
This
Registration Rights Agreement (this "Agreement") is made and entered into as
of
November
1, 2006, by and between PrimEdge, Inc., a Nevada corporation (the "Company"),
and Royal
Palm Capital Group, Inc., a Florida corporation (the "Seller").
This
Agreement is made pursuant to the Asset Purchase Agreement, dated as of the
date
hereof,
by and between the Seller and the Company (the "Asset Purchase
Agreement").
The
Company and the Seller hereby agree as follows:
Definitions. Capitalized
terms used and not otherwise defined herein that are defined in the Asset
Purchase Agreement shall have the meanings given such terms in the Asset
Purchase Agreement.
As used in this Agreement, the following terms shall have the following
meanings:
"Asset
Purchase Agreement" means
the
agreement between the parties hereto for the
purchase and sale of substantial all of Seller’s assets and the issuance by the
Company of shares of
Series
B Preferred Stock.
"Commission"
means
the
Securities and Exchange Commission.
"Common
Stock" means
shares of the Company's common stock, par value $0.001 per
share.
"Effectiveness
Period" shall
have the meaning set forth in Section 2(a).
"Exchange
Act" means
the
Securities Exchange Act of 1934, as amended, and any successor
statute.
"Holder"
or
"Holders"
means
the
Seller or any of its affiliates or transferees to the extent any of them hold
Registrable Securities.
"Indemnified
Party" shall
have the meaning set forth in Section 5(c).
"Indemnifying
Party" shall
have the meaning set forth in Section 5(c).
"Proceeding"
means
an
action, claim, suit, investigation or proceeding (including, without limitation,
an investigation or partial proceeding, such as a deposition), whether commenced
or threatened.
"Prospectus"
means
the
prospectus included in the Registration Statement (including,
without limitation, a prospectus that includes any information previously
omitted from a
prospectus filed as part of an effective registration statement in reliance
upon
Rule 430A promulgated
under the Securities Act), as amended or supplemented by any prospectus
supplement, with respect to the terms of the offering of any portion of the
Registrable Securities covered by the Registration
Statement, and all other amendments and supplements to the Prospectus, including
post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated
by reference in such Prospectus.
Asset
Purchase Agreement
24
"Registrable
Securities" means
the
shares of Common Stock issued upon the conversion of the Series B Preferred
Stock.
"Registration
Statement" means
each registration statement required to be filed hereunder,
including the Prospectus, amendments and supplements to such registration
statement
or Prospectus, including pre- and post-effective amendments, all exhibits
thereto, and
all
material incorporated by reference or deemed to be incorporated by reference
in
such registration statement,
for the distribution of the Registrable Securities to the Seller’s shareholders
and an offering by
the
Seller’s
shareholders on a continuous basis pursuant to Rule 415.
"Rule
144"
means
Rule 144 promulgated by the Commission pursuant to the Securities
Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter
adopted by the Commission having substantially the same effect as such
Rule.
"Rule
415"
means
Rule 415 promulgated by the Commission pursuant to the Securities
Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter
adopted by the Commission having substantially the same effect as such
Rule.
"Rule
424"
means
Rule 424 promulgated by the Commission pursuant to the Securities
Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter
adopted by the Commission having substantially the same effect as such
Rule.
"Securities
Act" means
the
Securities Act of 1933, as amended, and any successor
statute.
"Trading
Market" means
any
of the Pink Sheets, NASD OTCBB, NASDAQ SmallCap
Market, the Nasdaq National Market, the American Stock Exchange or the
New
York
Stock Exchange.
Registration.
On
or
prior to the one year anniversary of the Closing Date, the Company shall
prepare
and file with the Commission a Registration Statement covering the distribution
of
the
Registrable Securities to Seller’s shareholders and for an offering to be
made
by
the Seller’s
shareholders on a continuous basis pursuant to Rule
415.
The
Registration Statement shall be on Form SB-2 (except if the Company is not
then
eligible to register for resale the Registrable Securities on Form SB-2, in
which case such registration shall be on another
appropriate form in accordance herewith). The
Company shall cause the Registration
Statement to become effective and remain effective as provided herein.
The
Company
shall use its reasonable commercial efforts to cause the Registration Statement
to be
declared effective under the Securities Act as promptly as possible after
the
filing thereof. The Company shall use its reasonable commercial efforts to
keep
the Registration Statement
continuously effective under the Securities Act until the date which is the
earlier date
of
when (i) all Registrable Securities have been sold or (ii) all Registrable
Securities
may
be
sold immediately without registration under the Securities Act and without
volume restrictions
pursuant to Rule 144(k), as determined by the counsel to the Company pursuant
to
a
written opinion letter to such effect, addressed and acceptable to
the
Company's transfer
agent and the affected Holders (the "Effectiveness Period").
Asset
Purchase Agreement
25
(b)
Within
three business days of the Effectiveness Date, the Company shall cause its
counsel to issue a blanket opinion in the form attached hereto as Exhibit A,
to the
transfer
agent stating that the shares are subject to an effective registration statement
and can be reissued by the Seller’s shareholders free of restrictive legend upon
notice of a sale by
a
Seller’s shareholder and confirmation by that Seller’s shareholder that it has
complied with the prospectus delivery requirements, provided that the Company
has not advised the transfer agent orally or in writing that the opinion has
been withdrawn.
Registration
Procedures. If
and
whenever the Company is required by the provisions hereof
to
effect the registration of any Registrable Securities under the Securities
Act,
the Company will,
as
expeditiously as possible:
prepare
and file with the Commission the Registration Statement with respect
to
such
Registrable Securities, respond as promptly as possible to any comments
received
from
the
Commission, and use its best efforts to cause the Registration Statement
to become
and remain effective for the Effectiveness Period with
respect thereto, and promptly
provide to the Seller copies of all filings and Commission letters of comment
relating
thereto;
prepare
and file with the Commission such amendments and supplements to the
Registration
Statement and the Prospectus used in connection therewith as may be necessary
to comply with the provisions of the Securities Act with respect to the
disposition
of all Registrable Securities covered by the Registration Statement and to
keep
such
Registration Statement effective until the expiration of the Effectiveness
Period;
furnish
to the Seller such number of copies of the Registration Statement and the
Prospectus
included therein (including each preliminary Prospectus) as the
Seller reasonably
may request to facilitate the public sale or disposition of
the
Registrable Securities
covered by the Registration Statement;
use
its
commercially reasonable efforts to register or qualify the
Registrable Securities
covered by the Registration Statement under the securities or "blue sky"
laws
of
such
jurisdictions within the United States as the Seller may reasonably request,
provided, however, that the Company shall not for any such purpose be required
to qualify generally to transact business as a foreign corporation in any
jurisdiction where it is not so qualified or to consent to general service
of
process in any such jurisdiction;
list
the
Registrable Securities covered by the Registration Statement with
any
securities
exchange on which the Common Stock of the Company is then listed;
immediately
notify the Seller at any time when a Prospectus relating thereto is
required
to be delivered under the Securities Act, of the happening of any event of
which
the
Company has knowledge as a result of which the Prospectus contained
in such Registration
Statement, as then in effect, includes an untrue statement of a material
fact
or
omits
to
state a material fact required to be stated therein or necessary to
make
the statements
therein not misleading in light of the circumstances then existing;
and
make
available for inspection by the Seller and any attorney, accountant or other
agent
retained by the Seller, all publicly available, non-confidential financial
and
other records,
pertinent corporate documents and properties of the Company, and
cause
the Company's
officers, directors and employees to
supply
all publicly available,
non-confidential information reasonably requested by the attorney, accountant
or
agent of
the
Seller.
Asset
Purchase Agreement
26
Registration
Expenses.
All
expenses relating to the Company's compliance with Sections 2 and 3 hereof,
including, without limitation, all registration and filing fees, printing
expenses, fees
and
disbursements of counsel and independent public accountants for
the
Company, fees and expenses
(including reasonable counsel fees) incurred in connection with complying
with state securities
or "blue sky" laws, fees of the NASD, transfer taxes, fees of transfer agents
and registrars, fees
of,
and disbursements incurred by, one counsel for the Holders (to the extent such
counsel
is required
due to Company's failure to meet any of its obligations hereunder), are called
"Registration Expenses".
All selling commissions applicable to the sale of Registrable Securities,
including any fees
and
disbursements of any special counsel to the Holders beyond those included in
Registration Expenses,
are called "Selling Expenses." The
Company shall only be responsible for all Registration
Expenses but not Selling Expenses.
Indemnification.
In
the
event of a registration of any Registrable Securities under the Securities
Act
pursuant to this Agreement, the Company will indemnify and hold harmless the
Seller, and its
officers, directors and each other person, if any, who controls the
Seller within the meaning
of the Securities Act, against any losses, claims, damages or liabilities,
joint
or
several,
to which the Seller, or such persons may become subject under the Securities
Act
or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any Registration Statement
under which such Registrable Securities were registered under the Securities
Act
pursuant to
this
Agreement, any preliminary
Prospectus or final Prospectus contained therein,
or any amendment or supplement thereof, or arise out of or are based upon the
omission or alleged omission to
state
therein a material fact required to be stated therein or necessary to make
the
statements therein
not misleading, and will reimburse the Seller, and
each
such person for any reasonable
legal or other expenses incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided,
however,
that the Company
will not be liable in any such case if and to the extent that any such loss,
claim, damage
or
liability arises out of or is based upon an untrue statement or alleged untrue
statement
or omission or alleged omission so made in conformity with
information furnished
by or on behalf of the Seller or any such person in writing specifically for
use
in
any
such
document.
In
the
event of a registration of the Registrable Securities under the Securities
Act
pursuant to this Agreement, the Seller will indemnify and hold harmless the
Company, and its
officers, directors and each other person, if any, who controls the Company
within the
meaning
of the Securities Act, against all losses, claims, damages or liabilities,
joint
or
several,
to which the Company or such persons may become subject under the Securities
Act
or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
in
respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any
material fact which was furnished in writing by the Seller to the Company
expressly for use
in
(and such information is contained in) the Registration Statement under which
such Registrable
Securities were registered under the Securities Act pursuant to this Agreement,
any
preliminary Prospectus or final Prospectus contained therein, or any
amendment
or supplement
thereof, or arise out of or are based upon the omission or alleged omission
to
state
therein a material fact required to be stated therein or necessary to make
the
statements therein
not misleading, and will reimburse the Company and each such person for
any
reasonable
legal or other expenses incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action, provided,
however,
that the Seller
will be liable in any such case if and only to the extent that any such loss,
claim,
damage
or
liability arises out of or is based upon an untrue statement or alleged untrue
statement
or omission or alleged omission so made in conformity with
information furnished
in writing to the Company by or on behalf of the Seller specifically for use
in
any such
document. Notwithstanding the provisions of this paragraph, the Seller shall
not
be required
to indemnify any person or entity in excess of the amount of the aggregate
net
proceeds received by the Seller in respect of Registrable Securities in
connection with any such
registration under the Securities Act.
Asset
Purchase Agreement
27
Promptly
after receipt by a party entitled to claim indemnification hereunder (an
"Indemnified
Party") of notice of the commencement of any action, such Indemnified Party
shall,
if
a claim for indemnification in respect thereof is to be made against a party
hereto obligated
to indemnify such Indemnified Party (an "Indemnifying Party"), notify the
Indemnifying
Party in writing thereof, but the omission so to notify the Indemnifying Party
shall
not
relieve it from any liability which it may have to such Indemnified Party
other
than
under this Section 5(c) and shall only relieve it from any liability which
it
may have to
such
Indemnified Party under this Section 5(c) if and to the extent the Indemnifying
Party is
prejudiced by such omission. In case any such action shall be brought
against
any Indemnified
Party and it shall notify the Indemnifying Party of the commencement thereof,
the
Indemnifying Party shall be entitled to participate in and, to the extent it
shall wish, to
assume
and undertake the defense thereof with counsel satisfactory to such Indemnified
Party,
and, after notice from the Indemnifying Party to such Indemnified Party
of
its election
so to assume and undertake the defense thereof, the Indemnifying Party shall
not
be
liable
to such Indemnified Party under this Section 5(c) for any legal expenses
subsequently
incurred by such Indemnified Party in connection with the defense thereof;
if
the
Indemnified Party retains its own counsel, then the Indemnified Party shall
pay
all fees, costs
and
expenses of such counsel, provided, however, that, if the defendants in any
such
action
include both the indemnified party and the Indemnifying Party and the
Indemnified Party
shall have reasonably concluded that there may be reasonable defenses available
to
it
which
are different from or additional to those available to the Indemnifying Party
or
if
the
interests of the Indemnified Party reasonably may be deemed to conflict with
the
interests of the Indemnifying Party, the Indemnified Party shall have the right
to select one separate
counsel and to assume such legal defenses and otherwise to participate
in
the
defense
of such action, with the reasonable expenses and fees of such separate counsel
and other
expenses related to such participation to be reimbursed by the Indemnifying
Party as incurred.
In
order
to provide for just and equitable contribution in the event of joint liability
under
the
Securities Act in any case in which either (i) the Seller, or any officer,
director or
controlling person of the Seller, makes a claim for indemnification pursuant
to
this
Section
5
but it is judicially determined (by the entry of a final judgment or decree
by
a
court
of
competent jurisdiction and the expiration of time to appeal or the denial of
the
last right
of
appeal) that such indemnification
may not be enforced in such case notwithstanding
the fact that this Section 5 provides for indemnification in such case, or
(ii)
contribution
under the Securities Act may be required on the part of the Seller
or
such officer, director or controlling person
of
the Seller in circumstances for
which
indemnification
is provided under this Section 5; then, and in each such case, the Company
and
the Seller will contribute to the aggregate losses, claims, damages or
liabilities to which they
may
be subject (after contribution from others) in such proportion so that the
Seller is responsible only for the portion represented by the percentage that
the public offering price of
its
securities offered by the Registration Statement bears to the public offering
price of
all
securities offered by such Registration Statement, provided, however, that,
in
any such
case,
(A)
the Seller will not be required to contribute any amount in excess of the
public
offering
price of all such securities offered by it pursuant to such Registration
Statement;
and
(B)
no person or entity guilty of fraudulent misrepresentation (within the meaning
of
Section
10(f) of the Act) will be entitled to contribution from any person or entity
who
was not
guilty of such fraudulent misrepresentation.
Asset
Purchase Agreement
28
Miscellaneous.
Remedies. In
the
event of a breach by the Company or by the Seller, of any of their respective
obligations under this Agreement, the Seller or the Company, as the
case
may be,
in
addition to being entitled to exercise all rights granted by law and under
this
Agreement,
including recovery of damages, will be entitled to specific performance
of
its
rights
under this Agreement.
Piggy-Back
Registrations.
If at
any time following the one year anniversary of the Closing
Date there is not an effective Registration Statement covering all of the
Registrable Securities
and the Company shall determine to prepare and file with the Commission
a
registration
statement relating to an offering for its own account or the account of others
under
the
Securities Act of any of its equity securities, other than on Form S-4 or Form
S-8 (each
as
promulgated under the Securities Act) or their then equivalents relating to
equity
securities to be issued solely in connection with any acquisition of any entity
or business or
equity
securities issuable in connection with stock option or other employee
benefit
plans,
then the Company shall send to the Holder written notice of such determination
and, if within fifteen days after receipt of such notice, the Holder shall
so
request in writing, the
Company
shall include in such registration statement all or any part of such Registrable
Securities
such holder requests to be registered to the extent the Company may
do so
without
violating registration rights of others which exist as of the date of this
Agreement, subject
to customary underwriter cutbacks applicable to all holders of registration
rights
and
subject to obtaining any required the consent of any selling stockholder(s)
to
such
inclusion
under such registration statement.
Amendments
and Waivers. The
provisions of this Agreement, including the provisions
of this sentence, may not be amended, modified or supplemented, and waivers
or
consents to departures from the provisions hereof may not be given, unless
the
same
shall
be
in writing and signed by the Company and the Holders of the then outstanding
Registrable
Securities. Notwithstanding the foregoing, a waiver or consent to depart from
the
provisions hereof with respect to a matter that relates exclusively to the
rights of certain Holders
and that does not directly or indirectly affect the rights of other Holders
may
be
given
by
Holders of at least a majority of the Registrable Securities to which such
waiver or
consent relates; provided, however, that the provisions of this sentence
may not be amended,
modified, or supplemented except in accordance with the
provisions of the immediately
preceding sentence.
Asset
Purchase Agreement
29
Notices.
Any
notice or request hereunder may be given to the Company or the Seller
respective addresses set forth below or as may hereafter be specified
in
a
notice designated
as a change of address under this Section 6(g).
Any
notice or request hereunder shall
be
given by registered or certified mail, return receipt requested, hand
delivery, overnight mail, Federal Express or other national overnight next
day
carrier (collectively, "Courier")
or telecopy (confirmed by mail). Notices
and requests shall be, in the case of those
by
hand delivery, deemed to have been given when delivered to any party to whom
it
is
addressed, in the case of those by mail or overnight mail, deemed to have been
given three (3) business days after the date when deposited in the mail or
with
the overnight mail carrier, in the case of a Courier, the next business day
following timely delivery of the package with the Courier, and, in the case
of a
telecopy, when confirmed. The address for such
notices and communications shall be as follows:
|
If
to the Company:
|
PrimEdge,
Inc.
▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President
Telecopy
No.: (▇▇▇) ▇▇▇-▇▇▇▇
|
|
If
to a Seller:
|
Royal
Palm Capital Group, Inc.
▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President
Telecopy
No.: (▇▇▇) ▇▇▇-▇▇▇▇
|
|
If
to any other Person who is
then
the registered Holder:
|
To
the address of such Holder as it appears in the stock transfer books
of
the Company
|
or
such
other address as may be designated in writing hereafter in accordance
with
this
Section
6(g) by such Person.
Successors
and Assigns.
This
Agreement shall inure to the benefit of and be binding
upon the successors and permitted assigns of each of the parties and shall
inure
to
the
benefit of each Holder. The Company may not assign its rights or obligations
hereunder without
the prior written consent of each Holder. Each Holder may assign their
respective rights
hereunder in the manner and to the Persons as permitted under the Notes
and
the
Security
Agreement with the prior written consent of the Company, which consent
shall
not
be unreasonably withheld.
Execution
and Counterparts.
This
Agreement may be executed in any number of counterparts, each of which when
so
executed shall be deemed to be an original and, all of which
taken together shall constitute one and the same Agreement. In the event that
any signature
is delivered by facsimile transmission, such signature shall create a valid
binding obligation of the party executing (or on whose behalf such signature
is
executed) the same with
the
same force and effect as if such facsimile signature were the original
thereof.
Asset
Purchase Agreement
30
Governing
Law. All
questions concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by and construed and enforced
in accordance
with the internal laws of the State of Florida, without regard to the principles
of
conflicts of law thereof. Each party agrees that all Proceedings concerning
the
interpretations,
enforcement and defense of the transactions contemplated by this Agreement
shall
be commenced exclusively in the state and federal courts sitting in Broward
County, Florida. Each party hereto hereby irrevocably submits to the exclusive
jurisdiction
of the state and federal courts sitting in Broward County, Florida for the
adjudication
of any dispute hereunder or in connection herewith or with any transaction
contemplated
hereby or discussed herein, and hereby irrevocably waives, and agrees not to
assert
in
any Proceeding, any claim that it is not personally subject to the jurisdiction
of any such
court, that such Proceeding is improper. Each party hereto hereby irrevocably
waives personal
service of process and consents to process being served in any such Proceeding
by mailing
a
copy thereof via registered or certified mail or overnight delivery (with
evidence of delivery) to such party at the address in effect for notices to
it
under this Agreement and agrees
that such service shall constitute good and sufficient service of process and
notice thereof.
Nothing contained herein shall be deemed to limit in any way any right to serve
process
in any manner permitted by law. Each party hereto hereby irrevocably waives,
to
the
fullest extent permitted by applicable law, any and all right to trial by jury
in any legal proceeding
arising out of or relating to this Agreement or the transactions contemplated
hereby.
If either party shall commence a Proceeding to enforce any provisions of a
Transaction
Document, then the prevailing party in such Proceeding shall be reimbursed
by
the
other party for its reasonable attorneys’ fees and other costs and expenses
incurred with
the
investigation, preparation and prosecution of such Proceeding.
Cumulative
Remedies. The
remedies provided herein are cumulative and not exclusive
of any remedies provided by law.
Severability.
If any
term, provision, covenant or restriction of this Agreement is held
by a
court of competent jurisdiction to be invalid, illegal, void or unenforceable,
the remainder
of the terms, provisions, covenants and restrictions set forth herein shall
remain in
full
force and effect and shall in no way be affected, impaired or invalidated,
and
the parties
hereto shall use their reasonable efforts to find and employ an alternative
means to achieve
the same or substantially the same result as that contemplated by such term,
provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the
parties that they would have executed the remaining terms, provisions, covenants
and restrictions
without including any of such that may be hereafter declared invalid, illegal,
void
or
unenforceable.
Headings. The
headings in this Agreement are for convenience of reference only and
shall
not limit or otherwise affect the meaning hereof.
Asset
Purchase Agreement
31
IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as
of the
date first written above.
PRIMEDGE,
INC. ROYAL
PALM CAPITAL GROUP, INC.
|
PRIMEDGE,
INC.
|
ROYAL
PALM CAPITAL GROUP, INC.
|
|
By:
________________________
|
By:
________________________
|
|
Name:
▇▇▇▇▇
▇▇▇▇▇▇▇▇
|
Name:
▇▇▇▇▇
▇▇▇▇▇▇▇▇
|
|
Title:
President
|
Title:
President
|
|
Address
for Notices:
|
Address
for Notices:
|
|
▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
|
▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
|
|
▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
|
▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
|
|
Attention:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President
|
Attention:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President
|
|
Telecopy
No.: (▇▇▇) ▇▇▇-▇▇▇▇
|
Telecopy
No.: (▇▇▇) ▇▇▇-▇▇▇▇
|
Asset
Purchase Agreement
32
EXHIBIT III-1
[Date]
| Re: |
PrimEdge,
Inc., Registration Statement on Form
[SB-2]
|
Ladies
and Gentlemen:
As
counsel to PrimEdge, Inc., a Nevada corporation (the “Company”), we
have
been requested
to render our opinion to you in connection with the resale by the individuals
or
entitles listed on Schedule III-1
attached hereto (the “Selling Stockholders”), of an aggregate of [amount]
shares
(the “Shares”) of the Company’s Common Stock.
A
Registration Statement on Form SB-2 under the Securities Act of 1933, as amended
(the “Act”), with
respect to the resale of the Shares was declared effective by the
Securities and Exchange Commission on [date]. Enclosed is the Prospectus dated
[date]. We
understand that the Shares are to be offered and sold in the manner described
in
the Prospectus.
Based
upon the foregoing, upon request by the Selling Stockholders at any time while
the
registration
statement remains effective, it is our opinion that the Shares have been
registered
for resale
under the Act and new certificates evidencing the Shares upon their transfer
or
re-registration by
the
Selling Stockholders may be issued without restrictive legend. We
will
advise you if the registration
statement is not available or effective at any point in the future.
|
Very
truly yours,
[Company
counsel]
|
Asset
Purchase Agreement
33
Schedule
III-1
| Selling Stockholder |
Shares
Being
Offered
|
Asset
Purchase Agreement
34