{"id":43596,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/series-b-stock-purchase-agreement.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"series-b-stock-purchase-agreement","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/planning\/series-b-stock-purchase-agreement.html","title":{"rendered":"Series B Stock Purchase Agreement"},"content":{"rendered":"\n\n BAM! ENTERTAINMENT, INC.\n\n SERIES B STOCK PURCHASE AGREEMENT\n\n DECEMBER 28, 2000\n\n\n\n 2\n\n EXHIBITS\n\nExhibit A - Amended and Restated Certificate of Incorporation\nExhibit B - Registration Rights Agreement\nExhibit C - Proprietary Information and Inventions Agreement\nExhibit D - Bylaws of the Company\nExhibit E - Opinion of Counsel to the Company\nExhibit F - Co-Sale and Right of First Refusal Agreement\n\n\n\n SCHEDULES\n\nSchedule 1 - Schedule of Purchasers\nSchedule 2.2(a) - Contingent Reserved Common Shares\nSchedule 2.2(d) - Stockholders and Option Holders List\nSchedule 2.3 - Subsidiaries\nSchedule 2.7 - Litigation\nSchedule 2.8(a) - Material Intellectual Property\nSchedule 2.8(b) - Certain IP Agreements\nSchedule 2.10 - Agreements\nSchedule 2.10(b) - Nonbinding Contracts\nSchedule 2.11 - Liabilities\nSchedule 2.13 - Conflicts\nSchedule 2.17 - Employee Benefit Plans\nSchedule 2.24 - Financial Statements\nSchedule 2.25(d) - Changes; Contracts\/Agreements\nSchedule 2.25(e) - Changes; Compensation\/Agreements with employees,\n representatives, agents, officers, directors or \n stockholders\nSchedule 2.25(i) - Changes; Loans\/Guarantees\n\n\n 3\n\n SERIES B STOCK PURCHASE AGREEMENT\n\n THIS STOCK PURCHASE AGREEMENT (this \"Agreement\"), dated as of December\n28, 2000, is entered into by and among BAM! Entertainment, Inc., a Delaware\ncorporation (with its predecessors and successors, the \"Company\"), and the\nparties listed on Schedule 1 hereto (each, individually, a \"Purchaser\" and,\ncollectively, the \"Purchasers\").\n\n WITNESSETH:\n\n A. The Company, successor in interest to Bay Area Multimedia, Inc., a\nCalifornia corporation and formerly known as Bay Area Multimedia, Inc., a\nDelaware corporation.\n\n B. Subject to the terms and conditions set forth herein, the Company\ndesires to issue and sell to the Purchasers, and the Purchasers severally desire\nto purchase from the Company, shares of the Company's Series B Preferred Stock,\npar value $0.001 per share, for an aggregate purchase price of up to $5,648,000,\nas partially set forth on Schedule 1 attached hereto.\n\n C. The Purchasers and the Company desire to set forth their mutual\nagreements with respect to such purchase and sale and to establish various\nrights and obligations in connection therewith.\n\n NOW, THEREFORE, in consideration of the premises and the mutual\ncovenants contained herein and other good and valuable consideration, the\nreceipt and sufficiency of which are hereby acknowledged, the parties agree as\nfollows:\n\n 1. Purchase and Sale of Preferred Stock..\n\n 1.1 Sale and Issuance of Series B Preferred Stock.\n\n (a) The Company shall adopt and file with the Secretary of State\nof the State of Delaware on or before the Closing (as defined below) the Amended\nand Restated Certificate of Incorporation of the Company in the form attached\nhereto as Exhibit A (the \"Restated Certificate\").\n\n (b) Subject to the terms and conditions of this Agreement, each\nPurchaser severally (but not jointly) agrees to purchase at the Closing, and the\nCompany agrees to sell and issue to such Purchaser at the Closing, such number\nof shares of the Company's Series B Preferred Stock, par value $0.001 per share,\nas set forth opposite such Purchaser's name on Schedule 1 attached hereto, at a\npurchase price of $17.65 per share, and for the total purchase price indicated\nwith respect to such Purchaser on Schedule 1, representing an aggregate purchase\nprice of up to $5,648,000 for all Purchasers. The shares of Series B Preferred\nStock to be issued to the Purchasers pursuant to this Agreement shall\nhereinafter be referred to as the \"Series B Preferred Stock.\"\n\n 1.2 Closing; Delivery. The closing of the purchase and sale of the\nSeries B Preferred Stock (the \"Closing\") shall take place at one or more\nclosings. All Closings shall be held at the offices of Doty Sundheim & Gilmore,\n260 Sheridan Avenue, Suite 200, Palo Alto,\n\n\n 1\n 4\n\nCalifornia. The first Closing shall occur at 9:00 a.m. Pacific Standard Time on\nDecember 28, 2000 or at such other time and place as the Company and the\nPurchasers mutually agree upon, orally or in writing (the \"Initial Closing\", on\nsuch date, the \"Closing Date\"). The subsequent Closings shall occur at such\ntimes as approved of by the parties to such Closing. At each Closing, the\nCompany shall deliver to each Purchaser a certificate registered in the name of\nsuch Purchaser representing the Series B Preferred Stock being purchased thereby\nagainst payment of the purchase price therefor, which shall be payable by\ncertified check or by wire transfer of immediately available funds to an account\ndesignated by the Company, as specified in Schedule 1 hereto. The Company and\neach Purchaser shall take such additional actions and execute and deliver such\nadditional agreements and other instruments and documents as may be reasonably\nnecessary or appropriate to effect the transactions contemplated by this\nAgreement in accordance with its terms.\n\n 1.3 Use of Proceeds. The Company shall apply the proceeds received\nhereunder from the sale of the Series B Preferred Stock to pay for the\nreasonable expenses of the Company associated with the issuance of the Series B\nPreferred Stock, to fund continued product and service development, to fund a\nbroader market launch of the Company's services, to build corporate\ninfrastructure and for working capital purposes.\n\n 1.4 Reservation of Additional Shares of Series B Preferred Stock. As\nset forth in the Restated Certificate, the Company has reserved a total of\n320,000 shares of its Series B Preferred Stock, par value $0.001 per share, for\nissuance and sale pursuant to this Agreement.\n\n 2. Representations, Warranties and Covenants of the Company. The Company\nhereby represents and warrants to, and covenants with, each of the Purchasers,\nas follows:\n\n 2.1 Organization, Good Standing and Qualification. The Company is a\ncorporation duly organized, validly existing and in good standing under the laws\nof the State of Delaware and has all requisite corporate power and authority to\ncarry on its business as now conducted and to execute, deliver and perform this\nAgreement the \"Co-Sale and Right of First Refusal Agreement\" and the\n\"Registration Rights Agreement\" (as defined below) (collectively, the\n\"Transaction Agreements\"), and to carry out the transactions contemplated by\neach of the Transaction Agreements. The Company is duly qualified to transact\nbusiness and is in good standing in the State of California and in each other\njurisdiction in which the failure to be so qualified would have a material\nadverse effect on the business (as now conducted), financial or other condition,\noperating results, assets or properties of the Company (each such effect, a\n\"Material Adverse Effect\").\n\n 2.2 Capitalization. The authorized capital stock of the Company\nconsists, or will consist, immediately prior to the Closing, of:\n\n (a) 10,000,000 shares of common stock, par value $0.001 per share\n(the \"Common Stock\"), of which 312,760 shares are issued and outstanding. All of\nthe issued and outstanding shares of Common Stock have been duly authorized, are\nfully-paid and nonassessable and were issued in compliance with all applicable\nfederal and state securities laws. The Company has reserved 976,220 shares of\nCommon Stock for issuance upon conversion of the Series A Preferred Stock (as\ndefined below), 320,000 shares of Common Stock for issuance\n\n\n 2\n 5\n\nupon conversion of the Company's Series B Preferred Stock, par value $0.001 per\nshare, 150,000 shares of Common Stock for issuance pursuant to the exercise of\noptions issued or reserved for issuance under stock incentive plans currently\neffective (the \"Stock Plan\") and 30,000 shares of Common Stock for issuance upon\nexercise of warrants to purchase Common Stock issued to PAR Capital, (30,000\nshares) (the \"PAR Warrant\") and Morgan Keegan & Company, Inc. (the \"Placement\nAgent\") (0 shares) (the foregoing warrants including the PAR Warrant being\ncollectively called the \"Warrants\") and shares issuable upon exercise of the\nWarrants being collectively called the \"Warrant Shares\"). Except as set forth in\nSchedule 2.2(a), there are no other Common Shares to be issued (the \"Contingent\nReserved Common Shares\").\n\n (b) 3,000,000 shares of Preferred Stock with a par value of\n$0.001 per share (the \"Preferred Stock\"), of which 976,220 shares have been\ndesignated as Series A Convertible Preferred Stock (the \"Series A Preferred\nStock\"), all of which are issued and outstanding, and 320,000 shares have been\ndesignated as Series B Preferred Stock, all of which will be issued and\noutstanding upon the Closing.\n\n (c) Except for (A) the conversion privileges of the Series A\nPreferred Stock, (B) the conversion privileges of the Series B Preferred Stock,\n(C) currently authorized options to purchase 81,750 shares of Common Stock\ngranted to employees pursuant to the Stock Plan, (D) the Warrants and the (E)\nContingent Reserved Common Shares (collectively, the \"Common Stock\nEquivalents\"): (i) no subscription right, warrant, option, convertible security\nor other right or interest (contingent or otherwise) to purchase or acquire any\nshares of capital stock, of the Company is authorized, issued or outstanding;\n(ii) the Company does not have any obligation (contingent or otherwise) to issue\nany (a) subscription right, warrant, option, convertible security or other such\nright or interest or (b) to issue or distribute to holders of any shares of its\ncapital stock any evidences of indebtedness or assets of the Company; and (iii)\nthe Company does not have any obligation (contingent or otherwise) to purchase,\nredeem or otherwise acquire any shares of its capital stock or any interest\ntherein or to pay any dividend or make any other distribution in respect\nthereof.\n\n (d) Attached hereto as Schedule 2.2(d) is a true and complete\nlist of the stockholders of the Company and all holders of any options or\nwarrants of the Company, showing the number of shares of capital stock, options\nor warrants of the Company held by each such person as of the date hereof.\nExcept as provided in Schedule 2.2(a), Schedule 2.2(d), and identified in\nSection 2.2(a), there are no other holders of any subscription right, option,\nwarrant, convertible security or other right or interest that is convertible\ninto or exercisable for shares of capital stock of the Company, and there are no\nstatutory or, to the Company's knowledge, contractual stockholders preemptive\nrights, rights of first refusal or any similar rights relating to the\nacquisition of the capital stock of the Company.\n\n 2.3 Subsidiaries. Except as specified in Schedule 2.3, the Company\ndoes not have any subsidiaries or own or control, directly or indirectly, any\ninterest in any other corporation, partnership, limited liability company, joint\nventure, association, trust, estate, limited liability partnership, joint stock\ncompany, unincorporated organization or government or any agency or political\nsubdivision thereof, or other entity or organization (each of the foregoing,\ntogether with any individual, being sometimes referred to herein as a \"Person\").\nSchedule 2.3 sets forth, as of the Initial Closing and giving effect to the\ntransactions contemplated hereby, a\n\n\n 3\n 6\n\ncomplete and current list of the outstanding equity interests and the\nstockholders of the Company's subsidiaries.\n\n 2.4 Authorization. All corporate action on the part of the Company,\nits directors, officers and stockholders necessary for the authorization,\nexecution and delivery of this Agreement and the Registration Rights Agreement\nin the form attached hereto as Exhibit B (the \"Registration Rights Agreement\"),\nthe performance of all obligations of the Company hereunder and thereunder and\nthe authorization, issuance and delivery of shares of the Series B Preferred\nStock pursuant to the terms of this Agreement and the Common Stock issuable upon\nconversion of the Series B Preferred Stock has been taken or will be taken prior\nto the Closing, and the Transaction Agreements, when executed and delivered by\nthe Company, shall constitute valid and legally binding obligations of the\nCompany, enforceable against the Company in accordance with their terms except:\n(i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium,\nfraudulent conveyance, and other laws of general application affecting\nenforcement of creditors' rights generally; (ii) as limited by laws or equitable\nprinciples relating to the availability of specific performance, injunctive\nrelief, or other equitable remedies; or (iii) to the extent the indemnification\nprovisions contained in the Registration Rights Agreement may be limited by\napplicable federal or state securities laws.\n\n 2.5 Compliance with Securities Laws; Valid Issuance of Securities.\nThe Series B Preferred Stock being issued to the Purchasers hereunder, when\nissued, sold and delivered in accordance with the terms hereof for the\nconsideration expressed herein, will be duly and validly issued, fully-paid and\nnonassessable and free of restrictions on transfer other than restrictions on\ntransfer under this Agreement and applicable federal and state securities laws.\nShares of the Common Stock issuable upon conversion of the Series B Preferred\nStock purchased hereunder have been duly and validly reserved for issuance, and\nupon issuance in accordance with the terms of the Restated Certificate, shall be\nduly and validly issued, fully-paid and nonassessable and free of restrictions\non transfer other than restrictions on transfer under this Agreement, the\nRegistration Rights Agreement and applicable federal and state securities laws.\n\n 2.6 Governmental Consents. No consent, approval, order or\nauthorization of, or registration, qualification, designation, declaration or\nfiling with, any federal, foreign, state or local governmental authority on the\npart of the Company is required in connection with the consummation of the\ntransactions contemplated by the Transaction Agreements, except for filings\npursuant to applicable state securities laws and Regulation D of the Securities\nAct of 1933, as amended (the \"Securities Act\").\n\n 2.7 Litigation. Except as set forth on Schedule 2.7, there is no\naction, suit, proceeding or investigation pending or, to the best of the\nCompany's knowledge, currently overtly threatened against the Company or any of\nits subsidiaries, nor is the Company aware that there is any basis for the\nforegoing. The foregoing includes, without limitations, actions, suits,\nproceedings or investigations pending or threatened involving the prior\nemployment of any of the Company's employees, their use in connection with the\nCompany's business of any information or techniques allegedly proprietary to any\nof their former employers, or their obligations under any agreements with prior\nemployers. The Company is not a party or expressly subject to the provisions of\nany order, writ, injunction, judgment or decree of any\n\n\n 4\n 7\n\ncourt, administrative agency, government agency or instrumentality. There is no\naction, suit or proceeding by the Company currently pending or which the Company\nintends to initiate.\n\n 2.8 Intellectual Property.\n\n (a) To the best knowledge of the Company, the Company has\nsufficient title and ownership of, or rights by license or other agreement to,\nall patents, patent applications, trademarks, service marks, trade names, domain\nnames, URLs, copyrights, trade secrets, software, source codes, object codes and\nother intellectual property rights used by the Company in its business or\nnecessary to conduct its business as currently conducted (\"Intellectual\nProperty\"). The Company has not received any written communications alleging\nthat the Company has violated or, by conducting its business as now conducted,\nwould violate any of the rights in the Intellectual Property of any other\nPerson. The Company is not aware that any of its employees are obligated under\nany contract (including licenses, covenants or commitments of any nature) or\nother agreement, or subject to any judgment, decree or order of any court or\nadministrative agency, that would interfere with the use of his or her best\nefforts to promote the interests of the Company or that would conflict with the\nCompany's business as currently conducted. The Company has not licensed any of\nthe Intellectual Property to any other Person, nor does any other Person have an\noption or any other right to acquire any of the Intellectual Property other than\nin the ordinary course of business (except for the Intellectual Property that is\nin the public domain). Schedule 2.8(a) sets forth a list of the Company's\nintellectual property.\n\n (b) All licenses or agreements listed in Schedule 2.8(b) (the\n\"Certain IP Agreements\") are in full force and effect and to the best knowledge\nof the Company there is no default by any party thereto. True and complete\ncopies of all Certain IP Agreements, and any amendments thereto, have been made\navailable to the Purchasers, and to the best knowledge of the Company, the\nlicensors under the Certain IP Agreements which the Company is granted rights,\nto the best of the Company's knowledge, have all requisite power and authority\nto grant the rights purported to be conferred thereby. None of the products\nmanufactured and sold, nor any process or know-how used, by the Company under\nthe Certain IP Agreements infringes or is alleged to infringe any patent,\ntrademark, service mark, trade name, copyright or other proprietary right or is\na derivative work based on the work of any other person.\n\n 2.9 Compliance with Other Instruments. The Company is not in\nviolation or in default of any provisions of (i) its Certificate of\nIncorporation, as amended, or Bylaws or (ii) of any order, writ, injunction,\njudgment, instrument, decree or contract to which it is a party or by which it\nis bound or (iii) to the Company's knowledge of any provision of federal or\nstate statute, rule or regulation applicable to the Company which violations or\ndefaults would in the case of the items described in clauses (ii) and (iii),\neither individually or in the aggregate, have a Material Adverse Effect. The\nexecution, delivery and performance of the Transaction Agreements and the\nconsummation of the transactions contemplated hereby or thereby do not and will\nnot, with or without the passage of time and\/or the giving of notice: (a) result\nin any such violation or conflict with or constitute a default under any such\nprovision, order, writ, injunction, judgment, instrument, decree or contract or\nany such statute, rule or regulation; (b) result in the creation of any lien,\nsecurity interest, charge or encumbrance upon the capital stock or any assets of\nthe Company; or (c) give any third party the right to modify, terminate or\n\n\n 5\n 8\n\naccelerate any obligation under any such provision, order, writ, injunction,\njudgment, instrument, decree or contract.\n\n 2.10 Agreements. Schedule 2.10 sets forth a list of all material\nagreements, contracts, understandings or commitments, written or oral\n(collectively, \"Material Agreements\"), to which the Company is a party or by\nwhich it is bound. As used herein, Material Agreements shall mean:\n\n (a) Agreements, contracts, understandings or commitments between\nthe Company and any of its subsidiaries, officers, directors or affiliates or\nany of such officers', directors' or affiliates' immediate family members.\n\n (b) Agreements, contracts, understandings or commitments to which\nthe Company or any of its affiliates is a party or by which it is bound that\ninvolve obligations (contingent or otherwise) of, or payments to, the Company in\nexcess of, $250,000.\n\n All of such agreements, contracts understanding or commitments\nare valid, binding and in full force and effect with respect to the Company or\nany of its subsidiaries, except as set forth on Schedule 2.10(b), and there has\nbeen no material default by the Company under any of the foregoing nor to the\nCompany's knowledge has there been any material default by any other party\nthereto.\n\n 2.11 Absence of Undisclosed Liabilities. Except as set forth on\nSchedule 2.11, since the Statement Date (as hereafter defined) the Company and\nany of its subsidiaries has not: (i) declared or paid any dividends, or\nauthorized or made any distribution upon or with respect to any class or series\nof the Company's capital stock; (ii) incurred any indebtedness on behalf of the\nCompany for money borrowed or incurred any other liabilities in excess of\n$50,000 individually, or in excess of $100,000 in the aggregate to any one\ncreditor; (iii) made any loans or advances to any Person in the name of or with\nrespect to the Company, other than ordinary advances for expenses incurred in\nthe ordinary course of business consistent with past practices; or (iv) sold,\nexchanged or otherwise disposed of any of the Company's assets or rights, other\nthan in the ordinary course of business consistent with past practices.\n\n 2.12 Disclosure. None of the representations or warranties of the\nCompany contained in this Agreement, the schedules and exhibits attached hereto,\nnor any certificate furnished or to be furnished to the Purchasers at Closing\n(when read together) contains any untrue statement of a material fact or omits\nto state a material fact necessary to make the statements contained herein or\ntherein not misleading in light of the circumstances under which they were made.\n\n 2.13 No Conflict of Interest. The Company is not indebted, directly\nor indirectly, to any of its subsidiaries or officers or directors of the\nCompany or its subsidiaries, or to the knowledge of the Company or its\nsubsidiaries any member of such officers' or directors' respective spouses or\nimmediate family members, for any amount whatsoever. Except as set forth on\nSchedule 2.13 attached hereto, none of the Company's subsidiaries or officers or\ndirectors of the Company or its subsidiaries, or to the knowledge of the Company\nor its subsidiaries any member of such officers' or directors' immediate\nfamilies (x) are, directly or\n\n\n 6\n 9\n\nindirectly, indebted to the Company or, (y) have any direct or indirect\nownership interest in any Person (A) with which the Company is affiliated or (B)\nwith which the Company has a material business relationship, or (C) which\ncompetes with the Company; except that for purposes of this clause (y),\nofficers, directors and\/or stockholders of the Company may own stock in (but not\nexceeding five percent (5%) of the outstanding capital stock of) any publicly\ntraded companies that may compete with the Company. To the best of the Company's\nknowledge, none of the Company's officers or directors or any members of their\nimmediate families are, directly or indirectly, interested in any material\ncontract of the Company. The Company is not a guarantor or indemnitor of any\nindebtedness of any other Person.\n\n 2.14 Registration Rights and Voting Rights. Except as contemplated\nin the Registration Rights Agreement, there are no agreements, written or oral,\nbetween the Company and any Person relating to the registration of its capital\nstock under federal or state securities laws, including piggyback registration\nrights. To the knowledge of the Company, no stockholders of the Company have\nentered into any agreements with respect to the voting of shares of the capital\nstock of the Company.\n\n 2.15 Private Placement. Subject to and in reliance in part on the\ntruth and accuracy of the Purchasers' representations set forth in this\nAgreement, the offer, sale and issuance of the Series B Preferred Stock as\ncontemplated by this Agreement is exempt from the registration requirements of\nthe Securities Act and any applicable state securities laws, and neither the\nCompany nor any authorized agent acting on its behalf will take any action\nhereafter that would cause the loss of such exemption.\n\n 2.16 Title to Property and Assets. The Company owns its property and\nassets free and clear of all mortgages, liens, loans and encumbrances, except\nsuch encumbrances and liens which arise in the ordinary course of business and\nwhich do not materially impair the Company's ownership or use of such property\nor assets. With respect to the property and assets it leases, the Company is in\ncompliance with such leases and holds a valid leasehold interest free of any\nliens, claims or encumbrances.\n\n 2.17 Employee Benefit Plans. Except as specified in Schedule 2.17,\nthe Company does not have any employee benefit plan and is not a party to any\nmultiemployer plan as such terms are defined in the Employee Retirement Income\nSecurity Act of 1974, as amended.\n\n 2.18 Tax Returns and Audits. Each of the Company and, to the\nCompany's knowledge, any of its subsidiaries has accurately prepared and timely\nfiled all material federal, state, foreign, local and other tax returns required\nby law to be filed by each of them, has paid or made provision for the payment\nof all taxes shown to be due and all additional assessments, and adequate\nprovisions have been made and are reflected in the Company's financial\nstatements in all material respects to the extent required by generally accepted\naccounting principles applied on a consistent basis and as in effect in the\nUnited States (\"GAAP\") for all current taxes and other charges to which the\nCompany or its subsidiaries is subject and which are not currently due and\npayable. There are no additional assessments or adjustments pending or, to the\nknowledge of the Company, threatened against the Company or its subsidiaries for\nany period, and to the Company's knowledge, there is no basis for any such\nassessment or adjustment that would be material.\n\n\n 7\n 10\n\n 2.19 Labor Agreements and Actions. The Company is not bound by or\nsubject to (and none of its assets or properties is bound by or subject to) any\nwritten or oral, contract, commitment, agreement or arrangement with any labor\nunion, and no labor union has requested or, to the knowledge of the Company, has\nsought to represent any of the employees, representatives or agents of the\nCompany. There is no strike or other labor dispute involving the Company\npending, or to the knowledge of the Company, threatened, which could have a\nMaterial Adverse Effect, nor is the Company aware of any labor organization\nactivity involving the employees, representatives or agents of the Company. The\nCompany has complied in all material respects with all applicable federal and\nstate equal employment opportunity laws and regulations and with all other laws\nand regulations related to employment and labor issues. The Company has not\nreceived any notice of any plan of any key employee to terminate his or her\nemployment with the Company.\n\n 2.20 Proprietary Information and Inventions Agreements. Each current\nemployee, consultant and officer of the Company has executed an agreement with\nthe Company regarding confidentiality and proprietary information substantially\nin the form attached as Exhibit C. The Company, after reasonable investigation,\nis not aware that any of its current employees or consultants is in violation\nthereof, and the Company will use commercially reasonable efforts to prevent any\nsuch violation. To the Company's knowledge, no consultants to or vendors of the\nCompany have had any access to confidential information of the Company who are\nnot bound by non-disclosure agreements.\n\n 2.21 Permits. The Company has all franchises, permits, licenses and\nany other governmental authorizations necessary for the conduct of its business\nas now being conducted, the lack of which could have a Material Adverse Effect.\nThe Company is not in default in any material respect under any of such\nfranchises, permits, licenses or other authorizations.\n\n 2.22 Corporate Documents. The Restated Certificate and Bylaws of the\nCompany are in the form provided to each of the Purchasers. As of the Closing,\nthe Bylaws of the Company shall be in the form of the Bylaws attached hereto as\nExhibit D. The copy of the minute books of the Company provided to the\nPurchasers contains minutes of all meetings of directors and stockholders of the\nCompany and all actions by written consent without a meeting by the directors\nand stockholders of the Company since the date of the incorporation of the\nCompany, and reflects all actions by the directors (and any committee of\ndirectors) and stockholders of the Company with respect to all transactions\nreferred to in such minutes accurately in all material respects.\n\n 2.23 Real Property Holding Corporation. Neither the Company nor its\nsubsidiary is a United States real property holding corporation within the\nmeaning of Internal Revenue Code Section 897(c)(2) and Section 1.897-2(c) of the\nTreasury Regulations promulgated thereunder.\n\n 2.24 Financial Statements. The Company has made available to the\nPurchasers (i) an audited balance sheet as of June 30, 2000; (ii) an audited\nincome statement as of June 30, 2000; (iii) an unaudited balance sheet as of\nSeptember 30, 2000 (the \"Statement Date\"); and (iv) an unaudited income\nstatement for the three months ended September 30, 2000, copies of which are\nincluded as Schedule 2.24 (the \"Financial Statements\"). The Financial Statements\nhave been\n\n\n 8\n 11\n\nprepared from the books and records of the Company and are complete and correct\nin all material respects and fairly present the consolidated financial condition\nand operating results of the Company as of the Statement Date and for the period\npresented. Except as set forth in the Financial Statements, the Company does not\nhave any material liabilities, contingent or otherwise, other than (i)\nliabilities paid or incurred in the ordinary course of business subsequent to\nthe Statement Date, and (ii) obligations under contracts and commitments\nincurred in the ordinary course of business.\n\n 2.25 Changes. Since the Statement Date and except as contemplated by\nthis Agreement and the exhibits and schedules hereto, there has not been:\n\n (a) any change in the assets, liabilities, financial condition or\noperating results of the Company from that reflected in the Financial\nStatements, except for changes in the ordinary course of business or that have\nnot resulted in a Material Adverse Effect;\n\n (b) any damage, destruction or loss to property, whether or not\ncovered by insurance, resulting in a Material Adverse Effect;\n\n (c) any satisfaction or discharge of any lien, claim or\nencumbrance or payment of any obligation by the Company except in the ordinary\ncourse of business or that has not resulted in a Material Adverse Effect;\n\n (d) any material change to a material contract or agreement by\nwhich the Company or any of its assets are bound or subject, except as specified\nin Schedule 2.25(d);\n\n (e) any material change in any compensation arrangement or\nagreement with any employee, representative, agent, officer, director or\nstockholder of the Company, except as specified in Schedule 2.25(e);\n\n (f) any resignation or termination of employment of any officer,\ndirector or key employee of the Company and to the best of the Company's\nknowledge, the Company does not know of any impending resignation or termination\nof employment of any such officer, director or key employee;\n\n (g) receipt of notice that there has been a loss of, or material\norder cancellation by, any major advertiser or major customer of the Company\nother than in the ordinary course of business;\n\n (h) any mortgage, pledge, transfer of a security interest in,\nlien or encumbrance, created by the Company, with respect to any of its capital\nstock, properties or assets, except liens for taxes not yet due or payable;\n\n (i) any loans or guarantees made by the Company to or for the\nbenefit of its employees, representatives, agents, officers or directors, or any\nmembers of their immediate families, other than ordinary advances for expenses\nincurred in the ordinary course of business, except as specified in Schedule\n2.25(i);\n\n\n 9\n 12\n\n (j) any declaration, setting aside or payment or other\ndistribution in respect to any of the Company's capital stock, or any direct or\nindirect redemption, purchase, or other acquisition of any of such capital stock\nby the Company other than the purchase of capital stock of officers, directors\nor employees who have terminated their relationship with the Company; or\n\n (k) any arrangement or commitment by the Company to do anything\ndescribed in this Section 2.25.\n\n 2.26 Environmental and Safety Laws. The Company is not in violation\nof any applicable statute, law or regulation relating to the environment or\noccupational health and safety where such violation, is likely to result in a\nMaterial Adverse Effect, and no material expenditures are presently required by\nthe Company in order to comply with any such applicable statute, law or\nregulation.\n\n 2.27 FCPA. The Company has complied in all material respects with\nthe United States Foreign Corrupt Practices Act of 1977, as amended (the\n\"FCPA\"), in obtaining any consents, licenses, approvals, authorizations, rights,\nand privileges in connection with the conduct of its business, and has otherwise\nconducted its business with all material respects in compliance with the FCPA.\nThe Company's internal management and accounting practices and controls are\nadequate to ensure compliance in all material respects with the FCPA.\n\n 2.28 Projections. The projections provided to the Purchasers by the\nCompany were made in good faith and were based upon reasonable assumptions when\nmade.\n\n 3. Representations and Warranties of Purchasers. Each Purchaser hereby,\nseverally and not jointly, represents and warrants to the Company, with respect\nto itself only, that:\n\n 3.1 Accredited Investor; Authorization. Such Purchaser is an\n\"accredited investor\" within the meaning of Rule 501 promulgated under the\nSecurities Act and has the corporate, partnership or individual, as the case may\nbe, power and authority to enter into and perform this Agreement and the other\nTransaction Agreements to which it is a party and to consummate the transactions\ncontemplated hereby and thereby. This Agreement has been duly authorized,\nexecuted and delivered by such Purchaser and constitutes the legal, valid and\nbinding obligation of such Purchaser, enforceable in accordance with its terms\naccordance except: (i) as such enforceability may be limited by applicable\nbankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and\nother laws of general application affecting enforcement of creditors' rights\ngenerally; or (ii) as such enforceability may be limited by laws or equitable\nprinciples relating to the availability of specific performance, injunctive\nrelief, or other equitable remedies.\n\n 3.2 No Conflict With Other Agreements. The execution, delivery and\nperformance of the Transaction Agreements to which such Purchaser is a party and\nthe consummation of the transactions contemplated hereby or thereby will not,\nwith or without the passage of time and\/or the giving of notice, result in a\nviolation or default of any provisions of such Purchaser's charter, bylaws,\npartnership agreement, certificate of limited partnership, limited liability\ncompany agreement, certificate of formation or other organizational document or\n\n\n 10\n 13\n\nof any order, writ, injunction, judgment, instrument, decree or contract to\nwhich it is a party or by which it is bound or, to its knowledge, of any\nmaterial provision of federal or state statute, rule or regulation applicable to\nsuch Purchaser.\n\n 3.3 Investment Experience. Such Purchaser is a regular purchaser of\nsecurities and acknowledges that it is able to fend for itself, can bear the\neconomic risk of its investment, and has such knowledge and experience in\nfinancial or business matters that it is capable of evaluating the merits and\nrisks of the investment in the Company.\n\n 3.4 Distribution. The Series B Preferred Stock (and the Common Stock\nissuable upon conversion thereof) is being acquired for such Purchaser's own\naccount, and not as nominee or agent, for the present intention of holding such\nsecurities for purposes of investment and not with a view to or for resale in\nconnection with any distribution thereof. Such Purchaser further represents,\nseverally and not jointly, that it understand and agrees that, until registered\nunder the Securities Act or transferred pursuant to the provisions of Rule 144\nas promulgated by the Securities and Exchange Commission, all certificates\nevidencing any of the Series B Preferred Stock (and the Common Stock issuable\nupon conversion thereof), whether upon initial issuance or upon any transfer\nthereof, shall bear legends, prominently stamped or printed thereon, reading\nsubstantially as follows:\n\n (a) Federal Legend. THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE\n SECURITIES ACT OF 1933, AS AMENDED (THE \"ACT\"), OR UNDER ANY STATE\n SECURITIES LAWS. THESE SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE,\n PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN\n EFFECT WITH RESPECT TO THESE SECURITIES UNDER THE ACT OR APPLICABLE\n STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY\n TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD\n PURSUANT TO RULE 144 OF THE ACT.\n\n (b) any legend required by applicable state securities laws.\n\n The Company need not register a transfer of legended Series B Preferred\nStock, and may also instruct its transfer agent not to register the transfer of\nthe Series B Preferred Stock, unless the conditions specified in the foregoing\nlegends are satisfied.\n\n 3.5 Disclosure of Information. Such Purchaser has received all the\ninformation it considers necessary or appropriate for deciding whether to\npurchase the Series B Preferred Stock. Such Purchaser further represents that it\nhas had an opportunity to ask questions and receive answers from the Company\nregarding the terms and conditions of the offering of the Series B Preferred\nStock and the business, properties, prospects and financial condition of the\nCompany. The foregoing, however, does not limit or modify the representations\nand warranties of the Company in Section 2 of this Agreement or the right of the\nPurchasers to rely thereon.\n\n 3.6 Restricted Securities. Such Purchaser understands that the\nshares of Series B Preferred Stock it is purchasing are characterized as\n\"restricted securities\" under the federal\n\n\n 11\n 14\n\nsecurities laws inasmuch as they are being acquired from the Company in a\ntransaction not involving a public offering and that under such laws and\napplicable regulations such securities may be resold without registration under\nthe Act only in certain limited circumstances. In this connection, such\nPurchaser represents that it is familiar with SEC Rule 144, as presently in\neffect, and understands the resale limitations imposed thereby and by the\nSecurities Act of 1933, as amended.\n\n 3.7 Further Representations by Foreign Purchasers. If a Purchaser is\nnot a United States person, such Purchaser hereby represents that he or she has\nsatisfied himself or herself as to the full observance of the laws of his or her\njurisdiction in connection with any invitation to subscribe for shares of Series\nB Preferred Stock or any use of this Agreement, including (i) the legal\nrequirements within his jurisdiction for the purchase of shares of Series B\nPreferred Stock, (ii) any foreign exchange restrictions applicable to such\npurchase, (iii) any governmental or other consents that may need to be obtained,\nand (iv) the income tax and other tax consequences, if any, that may be relevant\nto the purchase, holding, redemption, sale, or transfer of shares of Series B\nPreferred Stock. Such Purchaser's subscription and payment for, and his or her\ncontinued beneficial ownership of shares of Series B Preferred Stock, will not\nviolate any applicable securities or other laws of his or her jurisdiction.\n\n\n 3.8 Not Formed for Investment. Such Purchaser was not formed for the\npurpose of making an investment in the Company.\n\n 4. Conditions of Purchasers' Obligations at the Closing. The obligations\nof each Purchaser to the Company under this Agreement are subject to the\nfulfillment, on or before the Closing of each of the following conditions,\nunless otherwise waived in writing by such Purchaser.\n\n 4.1 Representations and Warranties. The representations and\nwarranties of the Company contained in Section 2 shall be true and correct in\nall material respects on and as of the Initial Closing.\n\n 4.2 Performance. The Company shall have performed and complied in\nall material respects with all covenants, agreements, obligations and conditions\ncontained in this Agreement that are required to be performed or complied with\nby the Company on or before the Closing.\n\n 4.3 Compliance Certificate. The President of the Company shall\ndeliver to each Purchaser at the Closing a certificate certifying that the\nconditions specified in Sections 4.1 and 4.2 have been fulfilled.\n\n 4.4 Qualifications. All authorizations, approvals or permits, if\nany, of any governmental authority or regulatory body of the United States or of\nany state that are required in connection with the lawful issuance and sale of\nthe Series B Preferred Stock pursuant to this Agreement shall be obtained and\neffective as of the Closing.\n\n\n 12\n 15\n\n 4.5 Opinion of Company Counsel. The Purchasers shall have received\nfrom Doty Sundheim & Gilmore, counsel for the Company, an opinion, dated as of\nthe Closing, in substantially the form of Exhibit E attached hereto.\n\n 4.6 Supporting Documents. The Purchasers shall have received the\nfollowing:\n\n (a) A copy of resolutions of the Board of Directors of the\nCompany authorizing and approving the Transaction Agreements and copies of\nresolutions of the Board of Directors and stockholders of the Company\nauthorizing and approving the adoption of the Restated Certificate that is\ncontemplated by this Agreement, all such resolutions to be certified by the\nSecretary of the Company;\n\n (b) A Certificate of Incumbency executed by the Secretary of the\nCompany certifying the names, titles and signatures of the officers authorized\nto execute the Transaction Agreements and further certifying that the Restated\nCertificate and Bylaws of the Company delivered to the Purchasers at the time of\nthe execution of this Agreement have been validly adopted and have not been\namended or modified except as required by this Agreement; and\n\n (c) Such additional supporting documentation and other\ninformation with respect to the transactions contemplated hereby as any\nPurchaser or its legal counsel may reasonably request.\n\n 4.7 Board of Directors. As of the Initial Closing, the Company's\nBoard of Directors shall consist of no more than 8 members. Effective as of the\ntime of the Initial Closing, by appropriate action of the Board of Directors\nand\/or the Stockholders of the Company, one person designated by PAR Capital\nManagement, Inc. (\"PAR\" and such designee the \"PAR Designee\") shall be elected\nor appointed to the Company's Board of Directors. All other members of the\nCompany's Board of Directors (not to exceed 8 in number) shall remain as members\nof the Board of Directors, subject to the provisions of the Company's Restated\nCertificate and Bylaws as from time to time in effect.\n\n 4.8 Registration Rights Agreement. The Company, each Purchaser that\nis a party thereto and the other parties thereto shall have executed and\ndelivered the Registration Rights Agreement in substantially the form attached\nhereto as Exhibit B.\n\n 4.9 Restated Certificate. The Company shall have filed the Restated\nCertificate with the Secretary of State of Delaware on or prior to the date of\nthe Closing, which shall continue to be in full force and effect as of the date\nof the Closing.\n\n 4.10 Employment Agreements. The members of the Company's senior\nmanagement shall have entered into a Proprietary Information and Inventions\nAgreement in the form attached hereto as Exhibit C.\n\n 4.11 Co-Sale and Right of First Refusal Agreement. The Company,\nRaymond C. Musci, Anthony Williams and each Purchaser shall have executed and\ndelivered the Co-Sale and Right of First Refusal Agreement substantially in the\nform attached hereto as Exhibit F.\n\n\n 13\n 16\n\n 4.12 PAR Warrant. The Company shall have validly issued the PAR\nWarrant.\n\n 5. Conditions of the Company's Obligations at the Closing. The\nobligations of the Company to each Purchaser under this Agreement are subject to\nthe fulfillment, on or before the Closing, of each of the following conditions,\nunless otherwise waived by the Company in writing; provided, however, that the\nnon-fulfillment of a condition by a Purchaser will not relieve the Company of\nits obligation to each other fulfilling Purchaser.\n\n 5.1 Representations and Warranties. The representations and\nwarranties of such Purchaser contained in Section 3 shall be true and correct on\nand as of the date of the Closing with the same effect as though such\nrepresentations and warranties had been made on and as of the date of Closing.\n\n 5.2 Performance. All covenants, agreements and conditions contained\nin this Agreement to be performed by such Purchaser on or prior to the Closing\nshall have been performed or complied with.\n\n 5.3 Registration Rights Agreement. Such Purchaser shall have\nexecuted and delivered the Registration Rights Agreement in substantially the\nform attached hereto as Exhibit B.\n\n 5.4 Payment of Purchase Price. Each Purchaser shall have delivered\nthe purchase price specified in Section 1.1 of this Agreement.\n\n 5.5 Qualifications. All authorizations, approvals, or permits, if\nany, of any governmental authority or regulatory body of the United States or of\nany state that are required in connection with the lawful issuance and sale of\nthe Series B Preferred Stock pursuant to this Agreement shall be obtained and\neffective as of the Closing.\n\n 6. Post-Closing Covenants. The Company and Purchasers agree as follows\nwith respect to the period following the Closing.\n\n 6.1 Financial Reporting. The Company shall provide Purchasers with\nthe following periodic reports: (a) as soon as available, but in any event\nwithin forty five (45) days after the end of each quarter accounting period in\neach fiscal year, unaudited statements of income, operations and cash flows of\nthe Company for such quarterly period and unaudited balance sheets of the\nCompany as of the end of such quarter period and all such statements shall be\nprepared in accordance with generally accepted accounting principles (\"GAAP\")\n(provided, however, that such statements need not comply with the footnote\ndisclosure requirements of GAAP); (b) as soon as available, but in any event\nwithin forty-five (45) days after the end of each quarterly accounting period in\neach fiscal year, unaudited statements of income, operations and cash flows of\nthe Company for such quarterly period and unaudited balance sheets of the\nCompany as of the end of such quarterly period and all such statements shall be\nprepared in accordance with GAAP (provided, however, that such statements need\nnot comply with the footnote disclosure requirements of GAAP); and (c) as soon\nas available, but in any event within ninety (90) days after the end of each\nfiscal year, audited statements of income, operations, retained earnings and\ncash flows of the Company for such fiscal year and audited balance sheets of the\nCompany as of the end of such fiscal year, all prepared in accordance with GAAP,\nall in\n\n\n 14\n 17\n\nreasonable detail and duly certified by the accountants, who shall have given\nthe Company an opinion, unqualified as to the scope of the audit, regarding such\nstatements.\n\n 6.2 Participation Rights. Purchasers shall have the right, but not\nthe obligation, to participate pro rata (on the same terms and at the same\nprice) in any offering and sale of stock (common or preferred) made by the\nCompany to any person or entity after the date of this Agreement (the \"Purchaser\nParticipation Right\"); provided, however, that this Section 6.3 shall not apply\nin the case of the grant of options to officers, directors and employees\npursuant to the terms of the Stock Plan, the purchase of Common Stock upon the\nexercise of such options or the purchase of Warrant Shares upon the exercise of\nthe Warrants. The Purchaser Participation Right shall expire and terminate upon\nthe successful completion by the Company of a Qualified Public Offering and\nshall not apply in the event of a Qualified Public Offering.\n\n 6.3 Compensation Committee. PAR Designee shall be a member of the\nCompany's Compensation Committee (the \"Compensation Committee\"). All\ncompensation arrangement of the Company's key employees, officers and directors\nshall be approved by the Compensation Committee; provided, however, that so long\nas less than a majority of the Compensation Committee consists of outside\ndirectors such approval shall require an affirmative vote or consent of the PAR\nDesignee. For the purpose of this Section 6.3, \"outside directors\" shall not\ninclude any director employed by the Company or who hold (individually or\nthrough an entity or entities) at least 1% of the outstanding capital stock of\nthe Company.\n\n 7. Miscellaneous.\n\n 7.1 Survival of Warranties. The representations, warranties and\ncovenants of the Company and the Purchasers contained in or made pursuant to\nthis Agreement shall survive the execution and delivery of this Agreement and\neach Closing.\n\n 7.2 Transfer; Successors and Assigns. The terms and conditions of\nthis Agreement shall inure to the benefit of and be binding upon the respective\nsuccessors and assigns of the parties.\n\n 7.3 No Third Party Beneficiaries. Nothing express or implied in this\nAgreement is intended to confer, nor shall anything herein confer, upon any\nother than the parties hereto and the respective successors or assigns of such\nparties, any rights, remedies, obligations or liabilities whatsoever.\n\n 7.4 GOVERNING LAW. THE LAWS OF THE STATE OF CALIFORNIA SHALL GOVERN\nTHE INTERPRETATION, VALIDITY AND PERFORMANCE OF THE TERMS OF THIS AGREEMENT\nREGARDLESS OF THE LAW THAT MIGHT BE APPLIED UNDER PRINCIPLES OF CONFLICTS OF\nLAW.\n\n 7.5 Counterparts. This Agreement may be executed in one or more\ncounterparts, each of which shall be deemed an original and all of which\ntogether shall constitute one instrument.\n\n\n 15\n 18\n\n 7.6 Titles and Subtitles. The titles and subtitles used in this\nAgreement are used for convenience only and are not to be considered in\nconstruing or interpreting this Agreement.\n\n 7.7 Notices. Any notice required or permitted by this Agreement\nshall be in writing and shall be deemed given upon delivery, when delivered\npersonally or by overnight courier or sent by telegram or fax, or forty-eight\n(48) hours after being deposited in the U.S. mail, as certified or registered\nmail, with postage prepaid, addressed to the party to be notified at such\nparty's address as set forth below or on Schedule 1 hereto, or as subsequently\nmodified by written notice, and:\n\n (a) if to the Company:\n\n BAM! Entertainment, Inc.\n 333 West Santa Clara Street\n Suite 930\n San Jose, California 95113\n Attention: Raymond C. Musci\n Facsimile: (408) 298-9600\n\n with a copy to:\n\n Doty Sundheim & Gilmore\n 260 Sheridan Avenue\n Suite 200\n Palo Alto, California 94306\n Attention: George M. Sundheim III, Esq.\n Facsimile: (650) 327-0101\n\n (b) if to PAR:\n\n PAR Capital Management, Inc.\n One Financial Center, Suite 1600\n Boston, MA 02111\n Attention: David Tobin\n Facsimile: (617) 556-8875\n\n with a copy to:\n\n Goodwin, Proctor & Hoar, LLP\n Exchange Place\n Boston, MA 02109\n Attention: Jeffrey C. Hadden\n Facsimile: (617) 523-1231\n\n (c) To any other Purchaser: The address reflected on the\nsignature page to this Agreement or, in any such case, at such other address or\naddresses as shall have been furnished in writing by such party to the other\nparties to this Agreement.\n\n\n 16\n 19\n\n 7.8 Finder's Fee. Each party represents that it neither is nor will\nbe obligated for any finder's fee(s) or commission in connection with this\ntransaction for which any other party hereto could become liable. Each Purchaser\nagrees to indemnify and to hold harmless the Company from any liability for any\ncommission or compensation in the nature of any finder's fee(s) (and the costs\nand expenses of defending against such liability or asserted liability) for\nwhich such Purchaser or any of its officers, partners, employees, or\nrepresentatives is responsible. The Company has engaged Morgan Keegan as\nplacement agent for the shares of Series B Preferred Stock being sold hereunder\nand shall be responsible for the payment of all fees and other amounts payable\nto Morgan Keegan in connection therewith.\n\n The Company agrees to indemnify and hold harmless each Purchaser\nfrom any liability for any commission or compensation in the nature of a\nfinder's fee(s) (and the costs and expenses of defending against such liability\nor asserted liability) for which the Company or any of its officers, employees,\nor representatives is responsible.\n\n 7.9 Expenses. Each party shall bear its own cost and expenses\nincurred with respect to this Agreement and the documents referred to herein\nincluding attorney fees.\n\n 7.10 Amendments and Waivers. Any term of this Agreement may be\namended or waived, and this Agreement may be terminated, with the written\nconsent of the Company and Purchasers representing at least a majority of the\noutstanding Series B Preferred Stock (or the Common Stock issuable upon\nconversion thereof) purchased hereunder. Any amendment or waiver effected in\naccordance with this Section 7.10 shall be binding upon the Purchasers and each\nholder or transferee of the Series B Preferred Stock (or the Common Stock\nissuable upon conversion thereof), each future holder of all such securities,\nand the Company.\n\n 7.11 Severability. If any one or more of the provisions contained\nherein, or the application thereof in any circumstance, is held invalid or\nunenforceable in any respect for any reason, the validity, legality and\nenforceability of any such provision in every other respect and of the remaining\nprovisions hereof shall not be in any way impaired or affected, and all such\nremaining provisions hereof shall be enforceable in accordance with their terms.\n\n 7.12 Delays or Omissions. No delay or omission to exercise any\nright, power or remedy accruing to any holder of any of the Series B Preferred\nStock (or the Common Stock issuable upon conversion thereof) or to the Company,\nupon any breach or default of the Company or by any Purchaser under this\nAgreement, shall impair any such right, power or remedy of any Purchaser or the\nCompany, as the case may be, nor shall it be construed to be a waiver of any\nsuch breach or default, or an acquiescence therein, or of or in any similar\nbreach or default thereafter occurring; nor shall any waiver of any single\nbreach or default be deemed a waiver of any other breach or default theretofore\nor thereafter occurring. Any waiver, permit, consent or approval of any kind or\ncharacter on the part of any Purchaser or the Company, as the case may be, of\nany breach or default under this Agreement, or any waiver on the part of any\nPurchaser or the Company, as the case may be, of any provisions or conditions of\nthis Agreement, must be in writing and shall be effective only to the extent\nspecifically set forth in such writing. All remedies, either under this\nAgreement or by law or otherwise afforded to any holder, shall be cumulative and\nnot alternative.\n\n\n 17\n 20\n\n 7.13 Entire Agreement. This Agreement, the Registration Rights\nAgreement and the other documents referred to herein to which any Purchaser is a\nparty constitute the entire agreement among the parties hereto pertaining to the\nsubject matter hereof, and this Agreement supersedes all prior agreements and\nunderstanding among the parties with respect to the subject matter hereof.\n\n IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be\nexecuted and delivered by their respective duly authorized officers or\nrepresentatives as of the date first written above.\n\n COMPANY:\n\n BAM! ENTERTAINMENT, INC.\n\n\n By: \/s\/ RAYMOND C. MUSCI\n -------------------------------------\n Raymond C. Musci, President\n\n\n By: \/s\/ GEORGE M. SUNDHEIM, III\n -------------------------------------\n George M. Sundheim, III, Secretary\n\n\n PURCHASERS:\n\n PAR CAPITAL MANAGEMENT, INC.\n\n By: \/s\/ DAVID E. TOBIN\n -------------------------------------\n Name: David E. Tobin\n Title: Analyst\n\n MORGAN KEEGAN EARLY STAGE FUND, L.P.\n\n By: MERCHANT BANKERS, INC. as the general \n partner of Morgan Keegan Early Stage \n Fund, L.P.\n\n By: \/s\/ K. JENKINS\n ----------------------------------\n Name: K. Jenkins\n Title: M.D.\n\n\n \/s\/ RAYMOND C. MUSCI\n -------------------------------\n Raymond C. Musci\n\n \/s\/ ANTHONY WILLIAMS\n -------------------------------\n Anthony Williams\n\n \/s\/ ROBERT HOLMES\n -------------------------------\n Robert Holmes\n\n\n 18\n 21\n\n EXHIBIT A\n\n Form of Amended and Restated Certificate of Incorporation\n\n\n\n\n i\n 22\n\n EXHIBIT B\n\n Registration Rights Agreement\n\n\n\n ii\n 23\n\n EXHIBIT C\n\n Form of Proprietary Information and Inventions Agreement\n\n\n\n iii\n 24\n\n EXHIBIT D\n\n Bylaws of the Company\n\n\n\n iv\n 25\n\n EXHIBIT E\n\n Form of Opinion of Counsel to the Company\n\n\n\n v\n 26\n\n EXHIBIT F\n\n Co-Sale and Right of First Refusal Agreement\n\n\n\n vi\n 27\n\n SCHEDULE 1\n\n\n Schedule of Purchasers\n\n\n<\/pre>\n
\n\n—————————————————————————————————-
\n NUMBER OF SHARES OF PURCHASE
\n PURCHASER SERIES B PREFERRED STOCK PRICE
\n—————————————————————————————————-
\n
\nPAR Capital Management, Inc. 198,301 $3,500,012.70<\/p>\n—————————————————————————————————-
\nRaymond C. Musci 28,329 $500,006.85<\/p>\n
—————————————————————————————————-
\nAnthony Williams 28,329 $500,006.85<\/p>\n
—————————————————————————————————-
\nMorgan Keegan Early Stage Fund, L.P. 28,329 $500,006.85<\/p>\n
—————————————————————————————————-
\nRobert Holmes 11,332 $200,009.80<\/p>\n
—————————————————————————————————-<\/p>\n
TOTALS 294,620 5,200,043.05
\n<\/c><\/c><\/s><\/caption>\n<\/table>\n
vii
\n 28<\/p>\n
SCHEDULE 2.2(a)<\/p>\n
Contingent Reserved Common Shares<\/p>\n
\n
\nFranchise Films, Inc. 173,520
\nSpyglass Entertainment Group, L.P. 100,000
\n<\/c><\/s><\/table>\n viii
\n 29<\/p>\n
SCHEDULE 2.2(d)<\/p>\n
Stockholders and Option Holders List<\/p>\n
COMMON STOCKHOLDERS<\/p>\n
\n
\nRaymond C. Musci 123,609
\nRobert E. Lloyd 9,750
\nTracy Ann Sebastian 9,750
\nPhilip L. Rosenberg 9,750
\nRobert Holmes 32,224
\nGary Nemetz 9,750
\nD&S Partners, a California General Partnership 9,750
\nAnthony Williams 89,897
\nKevin Bermeister 3,656
\nMark Dyne 3,656
\nElie Samaha 7,312
\nFIMAS, L.P., a Partnership 3,656
\nSpyglass Entertainment Group, L.P. 50,000<\/p>\nPREFERRED SERIES A STOCKHOLDERS <\/p>\n
Raymond C. Musci 482,625
\nAnthony Williams 351,000
\nRobert Holmes 87,750
\nKevin Bermeister 10,969
\nMark Dyne 10,969
\nElie Samaha 21,938
\nFIMAS, L.P., a Partnership 10,969<\/p>\n
OPTION HOLDERS <\/p>\n
Robin Cairns 2,500
\nAaron Endo 7,500
\nLynnie Nojadera 3,500
\nJoe Morici 5,000
\nHideo Oishi 5,000
\nMark Dyne 4,000
\nRobert Holmes 4,000
\nRobert Lloyd 4,000
\nScott Smith 1,250
\nGeorge M. Sundheim, III 4,000
\nSherri Zook 2,500
\nJoe Booth 6,000
\nLisa Cheney Bolcato 4,500
\nPierson Lippard 4,000
\n<\/c><\/s><\/table>\n
ix
\n 30<\/p>\n
\n
\nMatt Wilkinson 4,000
\nSamuel Allen 2,500
\nPete Johnson 2,500
\nKevin Watts 2,500
\nRichard Coles 1,250
\nPaul Hodge 1,250
\nKarl D’Costa 1,250
\nMark Harris 1,250
\nMikel Barron Bilbao 1,250
\nRachel Segens 1,250
\nCharlie Hasdell 1,250
\nJake Noakes 1,250
\nThomas Woodley 1,250
\nDoug Day 1,250
\n<\/c><\/s><\/table>\n x
\n 31<\/p>\n
SCHEDULE 2.3<\/p>\n
Subsidiaries<\/p>\n
BAM Studios (Europe) Ltd.<\/p>\n
2 shares issued to BAM! Entertainment Limited (Pound Sterling1 per
\nshare)<\/p>\n
BAM Entertainment Ltd.<\/p>\n
2 shares issued to BAM! Entertainment, Inc. (Pound Sterling1 per share)<\/p>\n
xi
\n 32<\/p>\n
SCHEDULE 2.7<\/p>\n
Litigation<\/p>\n
None.<\/p>\n
xii
\n 33<\/p>\n
SCHEDULE 2.8(a)<\/p>\n
Material Intellectual Property<\/p>\n
Trademark application attached.
\nList of attached agreements.<\/p>\n
xiii
\n 34<\/p>\n
SCHEDULE 2.8(b)<\/p>\n
Certain IP Agreements<\/p>\n
PowerPuff Girls license with Warner Brothers (8\/16\/00 — 8\/16\/03)
\nSports Illustrated, Inc. for Kids with Time (7\/12\/00)
\nFranchise Films Output Agreement (4\/7\/00 — 4\/7\/03)
\nSpyglass Entertainment Group, L.P. Output Agreement (10\/1\/00 — 10\/1\/05)<\/p>\n
xiv
\n 35<\/p>\n
SCHEDULE 2.10<\/p>\n
Agreements<\/p>\n
List of agreements attached.<\/p>\n
xv
\n 36<\/p>\n
SCHEDULE 2.10(b)<\/p>\n
Non-binding Agreements<\/p>\n
See attached list.<\/p>\n
xvi
\n 37<\/p>\n
SCHEDULE 2.11<\/p>\n
Liabilities<\/p>\n
None.<\/p>\n
xvii
\n 38<\/p>\n
SCHEDULE 2.13<\/p>\n
Conflicts<\/p>\n
Directors:<\/p>\n
Mark Dynes: Chairman & CEO of Brilliant Digital Entertainment (BDE –
\nAMEX), beneficial owner of roughly 8% of the common stock outstanding, owns
\nand\/or controls roughly 40% of Infogrames\/OziSoft, a video game distributor in
\nAustralia; also holds approximately 2% of Titus.<\/p>\n
Robert Lloyd: Board member of Rare Co., Ltd (a UK software developer,
\nprincipally owned by Nintendo Co., Ltd.; Board member of Retro, Inc.(a developer
\nbased in Austin, Texas) working for Nintendo; and consults extensively for
\nNintendo of America, Inc.<\/p>\n
Robert Holmes: GBA, LLC – managing member of investment venture into
\nRipcord, some Southpeak; PCH, LLC – managing member investment venture;
\nEntertainment Brands, Inc. Director, shareholder; Ripcord Games – Director,
\nshareholder (1\/3); Northport Ventures venture company; Acclaim Entertainment –
\ncontractual representatives and stock; Take Two stock remaining from early
\nprivate placement; Business Incubation Group – no current conflict, (some
\nemulator proposals that involve Raymond C. Musci); iBuyline, Inc. – ESD company
\nsold to aggregator; NTN communications – shareholder – mini games and wireless.<\/p>\n
Raymond C. Musci: Director of Brilliant Digital Entertainment.<\/p>\n
Raymond C. Musci and Anthony Williams each have $500,000 in individual
\naccounts at Comerica Bank which funds are retained by Comerica Bank as security
\nfor a loan made by Comerica Bank to the Company. At the Closing, such funds will
\nbe irreversably transferred to a Company account at Comerica Bank. Such transfer
\nof funds will constitute the consideration for the shares purchased by Raymond
\nC. Musci and Anthony Williams.<\/p>\n
xviii
\n 39<\/p>\n
SCHEDULE 2.17<\/p>\n
Employee Benefit Plans<\/p>\n
BAM! 401(k) Plan Summary Plan Description attached.<\/p>\n
U.K. Employees are not entitled to participate in the BAM! 401(K) Plan, but an
\nequivalent European pension plan is planned.<\/p>\n
xix
\n 40<\/p>\n
SCHEDULE 2.24<\/p>\n
Financial Statements<\/p>\n
Financial Statements attached.<\/p>\n
xx
\n 41<\/p>\n
SCHEDULE 2.25(d)<\/p>\n
Changes; Contracts\/Agreements<\/p>\n
First Amendment to Master Purchase Order Assignment Agreement and Warner Bros.
\nLicense Agreement #12177-PPG (Powerpuff Girls)-Amendment #1 attached.<\/p>\n
xxi
\n 42<\/p>\n
SCHEDULE 2.25(e)<\/p>\n
Changes; Compensation\/Agreements with employees,
\n representatives, agents, officers, directors or stockholders<\/p>\n
Changes to compensation arrangement or agreement with any employee,
\nrepresentative, agents, officer, director or stockholder attached.<\/p>\n
xxii
\n 43<\/p>\n
SCHEDULE 2.25(i)<\/p>\n
Changes; Loans\/Guarantee<\/p>\n
Comerica loan documents attached.<\/p>\n
xxiii<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[6843],"corporate_contracts_industries":[9513],"corporate_contracts_types":[9622,9627],"class_list":["post-43596","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-bam-entertainment-inc","corporate_contracts_industries-technology__software","corporate_contracts_types-planning","corporate_contracts_types-planning__purchase"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43596","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43596"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43596"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43596"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43596"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}