STOCK PURCHASE AGREEMENT

 

 

                                                                      Exhibit 10

 

 

                            STOCK PURCHASE AGREEMENT

 

         This Stock Purchase Agreement (this "Agreement") is made and entered

into as of April 14, 2004 by and between Aladdin Systems Holdings, Inc., a

Nevada corporation ("Aladdin Holdings" or "Seller") and AES Management Buyout

Company, a Delaware corporation ("AMBO" or "Buyer").

 

                                    AGREEMENT

 

         In consideration of the terms hereof, the parties hereto agree as

follows:

 

                                    ARTICLE I

 

                           PURCHASE AND SALE OF STOCK

 

         SECTION 1.1 TRANSFER OF ALADDIN ENTERPRISE SOLUTIONS STOCK. Subject to

the terms and conditions hereof, on the Closing Date (as defined below):

 

         (a) Aladdin Holdings shall sell, convey, transfer, assign and deliver

to AMBO and AMBO shall purchase from Aladdin Holdings, all of the issued and

outstanding capital stock (the "AES Stock") of Aladdin Enterprise Solutions,

Inc., a Delaware corporation ("AES" or the "Company").

 

         (b) Aladdin Holdings shall waive, with respect to each person listed on

Schedule 1.4 from time to time, all rights under the Agreement and Plan of

Merger, dated October 17, 2002, by and among Seller, Erevu Acquisition

Corporation, and Erevu, Inc. (the "Erevu Merger Agreement"), with respect to:

(i) any reduction or forfeiture of stock previously issued pursuant to the terms

of the Erevu Merger Agreement, and (ii) any right to indemnification pursuant to

Section 9.3 of the Erevu Merger Agreement.

 

         SECTION 1.2 THE CLOSING. The closing of this Agreement (the "Closing")

shall occur on April 14, 2004 (the "Closing Date") at 10:00 a.m. local time at

the offices of Willkie Farr & Gallagher LLP, 787 Seventh Avenue, New York, NY

10019, or such other time or location as the parties hereto shall agree.

 

         SECTION 1.3 DELIVERIES AT THE CLOSING. On the Closing Date in order to

effectuate the purchase and sale of the AES Stock:

 

         (a) Aladdin Holdings shall deliver to AMBO certificates representing

all of the AES Stock, free and clear of any claim, lien, pledge, mortgage,

option, charge, easement, security interest, right-of-way, encumbrance,

restriction on sale, transfer, ownership, or voting, preemptive right or option

or any other right of any third party of any nature whatsoever ("Encumbrance"),

duly endorsed in blank for transfer or accompanied by stock powers duly executed

in blank.

 

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         (b) AMBO shall deliver the Purchase Price as set forth in Section 1.4

below.

 

         (c) AMBO and Aladdin Holdings shall each deliver all documents,

certificates, agreements and instruments required to be delivered pursuant to

Articles IV and V; and

 

         (d) All instruments and documents executed and delivered to any party

pursuant hereto shall be in a form and substance, and shall be executed in a

manner, reasonably satisfactory to the receiving party.

 

         SECTION 1.4 PURCHASE PRICE. Subject to the terms and conditions of this

Agreement, the total purchase price for the AES Stock (the "Purchase Price")

shall be as follows:

 

         (a) a six (6) month secured promissory note in the amount of

$550,000.00 bearing interest at the LIBOR rate, in the form attached hereto as

Exhibit A, secured by the Stock Pledge Agreement in the form of Exhibit E, and

guaranteed by the Company pursuant to a Non-Recourse Guaranty in the form of

Exhibit D hereto, which Guaranty will be secured by an Intellectual Property

Security Agreement in the form of Exhibit C hereto;

 

         (b) a thirty (30) month secured promissory note in the amount of

641,050 bearing interest at the LIBOR rate, in the form attached hereto as

Exhibit B, secured by the Stock Pledge Agreement in the form of Exhibit E, and

guaranteed by the Company pursuant to a Non-Recourse Guaranty in the form of

Exhibit D hereto, which Guaranty will be secured by an Intellectual Property

Security Agreement in the form of Exhibit C hereto;

 

         (c) 1,146,246 newly issued shares of AMBO common stock;

 

         (d) the surrender to Aladdin Holdings of 1,375,000 shares of Aladdin

Holdings common stock currently issued and outstanding; and

 

         (e) the waiver of all rights of the persons listed on Schedule 1.4 to

obtain additional shares of Aladdin Holdings pursuant to the Erevu Merger

Agreement, including Section 1.3 thereof; Buyer shall, from time to time, have

the right to add additional persons to Schedule 1.4 of this Agreement without

the consent of Seller, whereupon the waiver contained in Section 1.1 of this

Agreement, without any further action, shall be expanded to include such

persons.

 

         SECTION 1.5 ASSISTANCE IN CONSUMMATION OF THE PURCHASE AND SALE OF THE

AES STOCK. Aladdin Holdings and AMBO shall provide all reasonable assistance to,

and shall cooperate with, each other to bring about the consummation of the

purchase and sale of the AES Stock and the other transactions contemplated

herein as soon as possible in accordance with the terms and conditions of this

Agreement.

 

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                                   ARTICLE II

 

               REPRESENTATIONS AND WARRANTIES OF ALADDIN HOLDINGS

 

         Aladdin Holdings represents and warrants to AMBO, as of the date of

this Agreement and as of the Closing (which representations and warranties shall

survive the Closing Date to the extent provided in Section 9.5 hereof), all as

follows in this Article II:

 

         SECTION 2.1 GOOD TITLE. The AES Stock is owned by Aladdin Holdings with

good title thereto, free and clear of any Encumbrance.

 

         SECTION 2.2 ORGANIZATION, GOOD STANDING. AES is a corporation duly

incorporated, validly existing and in good standing under the laws of Delaware,

and has all requisite corporate power and authority to own, operate and lease

its properties and assets and to carry on its business as now conducted.

Schedule 2.2 includes true and correct copies of the Certificate of

Incorporation and Bylaws of AES. Aladdin Holdings is a corporation duly

incorporated, validly existing and in good standing under the laws of Nevada.

 

         SECTION 2.3 AUTHORIZATION. Aladdin Holdings has the full corporate

power and authority to enter into this Agreement and each of the documents to

which it is a party, and to carry out the transactions contemplated hereby and

thereby. This Agreement has been duly executed and delivered by Aladdin

Holdings, and this Agreement is, and will be, on the Closing Date, a legal,

valid and binding obligation of Aladdin Holdings, enforceable against Aladdin

Holdings in accordance with the terms of this Agreement.

 

         SECTION 2.4 NO APPROVALS OR NOTICES REQUIRED; NO CONFLICTS WITH

INSTRUMENTS. The execution, delivery and performance of this Agreement by

Aladdin Holdings and the consummation of the transactions contemplated hereby

will not (a) constitute a violation of any provision of Aladdin Holdings'

certificate or articles of incorporation, bylaws or other organizational or

charter documents, (b) constitute a violation (with or without the giving of

notice or lapse of time, or both) of any provision of law or any judgment,

decree, order, regulation or rule of any court or other governmental authority

applicable to Aladdin Holdings or contract to which Aladdin Holdings is part, or

subject, or (c) require any consent, approval or authorization of, or

declaration, filing or registration with, any person, corporation, partnership,

joint venture, association, organization, other entity or governmental or

regulatory authority (a "Person").

 

 

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         SECTION 2.5 AUTHORIZED CAPITALIZATION OF AES. AES's authorized capital

stock consists solely of common shares of which one (1) share is issued and

outstanding on the date of this Agreement and entirely held by Aladdin Holdings.

All issued and outstanding shares of AES Stock are validly issued, fully paid

and nonassessable. Aladdin Holdings is the sole owner of all issued and

outstanding shares of capital stock of AES. There are no outstanding or

authorized subscriptions, options, warrants, calls, rights, commitments or other

agreements of any character which obligate or may obligate Aladdin Holdings or

AES to issue any additional shares of any of its capital stock or any securities

convertible into or evidencing the right to subscribe for any shares of any such

capital stock. There are no voting trusts or other agreements or understandings

with respect to the capital stock of AES to which Aladdin Holdings or AES is a

party or by which Aladdin Holdings or AES is bound.

 

         SECTION 2.6. ASSETS OF AES.

 

          (a) AES, at the Closing will be, the true and lawful owner of the

assets set forth on the Disclosure Schedule, including but not limited to,

machinery, equipment, computers, telecommunication systems, office supplies,

fittings and other office equipment, furniture, prepaid expenses, mass market

and licensed computer software, trademarks, trade names, and computer software

products (the "Assets").

 

         (b) Except as set forth on the Disclosure Schedule, at the Closing, the

Assets will be free and clear of all Encumbrances.

 

         (c) The Assets: (i) are adequate to conduct the operations of the

Company in substantially the manner currently conducted, (ii) constitute all of

the assets of the Seller and its affiliates used principally in connection with

AES's business, and (iii) are in good condition, ordinary wear and tear

excepted.

 

         SECTION 2.7. CONTRACTS AND COMMITMENTS.

 

         (a) The Disclosure Schedule contains a true, complete and correct list

and description of the following contracts and agreements, whether written or

oral, which relate to AES (collectively, the "Material Contracts"):

 

                  (i) all contracts, agreements, commitments, purchase orders

         (other than merchandise deliveries to customers in the normal course of

         business upon standard terms) or other understandings or arrangements

         to which the AES is a party;

 

                  (ii) all agency, distributor, sales representative and similar

         agreements to which AES is a party;

 

                  (iii) all leases, whether operating, capital or otherwise,

         under which AES is lessor or lessee; and

 

                  (iv) any licensing agreements, franchise agreements and other

         material agreement or contract entered into by AES.

 

 

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         (b) Except as set forth on the Disclosure Schedule:

 

                  (i) each contract or agreement, whether written or oral, which

         relates to AES (collectively, the "Contracts") is a valid and binding

          agreement of AES, enforceable against AES in accordance with its terms,

         and the Seller has no knowledge that any Contract is not a valid and

         binding agreement of the other parties thereto:

 

                  (ii) AES has (and to Seller's knowledge the other party has)

         fulfilled all material obligations required pursuant to the Contracts

         to have been performed by it prior to the Closing Date;

 

                  (iii) AES is not in breach of or default under any Contract,

         and no event has occurred which with the passage of time or giving of

         notice or both would constitute such a default, result in a loss of

         rights or result in the creation of any lien, charge or encumbrance,

         thereunder or pursuant thereto (an "Inchoate Default");

 

                  (iv) to the best knowledge of AES, there is no existing breach

         or default by any other party to any Contract, and no Inchoate Default

         by any such other party;

 

                   (v) neither the execution and delivery of this Agreement nor

         the consummation or performance of any of the transactions contemplated

         hereby will, directly or indirectly (with or without notice or lapse of

         time) contravene, conflict with, or result in a violation or breach of

         any provision of, or give any Person the right to declare a default or

         exercise any remedy under, or to accelerate the maturity or performance

         of, or to cancel, terminate, or modify, any Contract;

 

                  (vi) there are no Contracts between the Company and Seller or

         any affiliate of Seller; and

 

                  (vii) Seller has not received written notice, nor does it have

         knowledge, that any party to a Contract intends to cancel, terminate or

         renew such Contract or to exercise or decline to exercise any option or

         right hereunder.

 

         SECTION 2.8. SUBSIDIARIES AND AFFILIATES OF AES. AES has no

Subsidiaries. As used in this Agreement, "Subsidiary," shall mean any

corporation of which outstanding securities having ordinary voting power to

elect a majority of the Board of Directors of such corporation are owned

directly or indirectly by such Person. AES does not own, directly or indirectly,

any ownership, equity, profits or voting interest in, or otherwise control, any

corporation, partnership, joint venture or other entity, and has no agreement or

commitment to purchase any such interest.

 

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         SECTION 2.9. UNDISCLOSED LIABILITIES. As of the Closing Date, the

Company will have no Liabilities, except for Liabilities: (a) under the accounts

payable to Linsang International LP and its affiliates, which as of March 31,

2004 were $494,570, (b) relating to performance obligations under Contracts in

accordance with the terms and conditions thereof which are not required by

generally accepted accounting principles to be reflected on a regularly prepared

balance sheet, or (c) as set forth on Schedule 2.9. "Liability" means any

liability or obligation (whether known or unknown, whether asserted or

unasserted, whether absolute or contingent, whether accrued or unaccrued,

whether liquidated or unliquidated and whether due or to become due) including,

without limitation, any liability for Taxes.

 

         SECTION 2.10. COMPLIANCE WITH LEGAL REQUIREMENTS. The Company is in

compliance with, and has not received any notice of violation of any federal,

state, local, municipal, foreign, international, multinational, or other

administrative order, constitution, law, rule, ordinance, permit, principle of

common law, regulation, statute, or treaty.

 

         SECTION 2.11. INTELLECTUAL PROPERTY.

 

         (a) Except as set forth on Schedule 2.11 the Company is the owner of

all right, title, and interest in the intellectual property used in connection

with, or which relates to, its business (the "Intellectual Property"), free and

clear of all Encumbrances, and has the right to use without payment to a third

party all of the Intellectual Property.

 

         (b) Schedule 2.11 contains a complete and accurate list and summary

description, including any royalties paid or received by the Company, of all

Contracts relating to the Intellectual Property to which the Company is a party

or by which the Company is bound, except for any license implied by the sale of

a product and perpetual, paid-up licenses for commonly available software

programs with a value of less than $500 under which the Company is the licensee.

There are no outstanding and, to Seller's knowledge, no threatened disputes or

disagreements with respect to any such agreement.

 

         (c) To the knowledge of the Seller, there are no conflicts with or

infringements of any Intellectual Property by any third party. The conduct of

the Company's business as currently conducted does not conflict with or infringe

in any way with any proprietary right of any third party, which conflict or

infringement would have a material adverse effect on the Company, the

Intellectual Property or the business of the Company. There is no claim, suit,

action or proceeding pending or threatened against the Company (i) alleging any

such conflict or infringement with any third party's proprietary rights or (ii)

challenging the ownership, use, validity or enforceability of the Intellectual

Property.

 

         (d) No former or present employees, officers or directors of the

Company hold any right, title or interest directly or indirectly, in whole or in

part, in or to any Intellectual Property.

 

         (e) The Intellectual Property is sufficient, adequate and all that is

necessary for the Company to carry on its business as presently conducted.

 

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         SECTION 2.12. EMPLOYEE BENEFITS. Schedule 2.12 sets forth a list of all

employees of the Company and all employee benefit arrangements or payroll

practices, including, without limitation, any such arrangements or payroll

practices providing severance pay, sick leave, vacation pay, salary continuation

for disability, retirement benefits, deferred compensation, bonus pay, incentive

pay, stock options, hospitalization insurance, medical insurance, life

insurance, scholarships or tuition reimbursements, maintained by the Company or

to which the Company is obligated to contribute for employees.

 

         SECTION 2.13. LITIGATION. Except as set forth in Schedule 2.13, there

are no claims, actions, suits, proceedings, labor disputes or investigations

pending or to Seller's knowledge by or against the Seller, the Company or any of

their respective officers, directors, employees, agents or affiliates involving,

affecting or relating to any Assets, properties or operations of the Company or

the transactions contemplated by this Agreement.

 

         SECTION 2.14. TAX MATTERS.

 

         (a) Except as otherwise disclosed in Schedule 2.14,

 

                  (i) the Company has filed (or joined in the filing of) when

         due all tax returns required by applicable law to be filed with respect

         to the Company and all taxes shown to be due on such tax returns have

         been paid;

 

                  (ii) all such tax returns were true, correct and complete as

         of the time of each such filing;

 

                  (iii) all taxes relating to periods ending on or before the

         Closing Date owed by the Company (whether or not shown on any tax

         return) at any time on or prior to the Closing Date, if required to

         have been paid, have been paid;

 

                  (iv) there is no action, suit, proceeding, investigation,

         audit or claim now pending against, or with respect to, the Company in

         respect of any tax or assessment, nor is any claim for additional tax

         or assessment asserted by any governmental agency;

 

                  (v) no claim has been made by any governmental agency in a

         jurisdiction where the Company does not currently file a tax return

         that it is or may be subject to tax by such jurisdiction, nor to

         Seller's knowledge is any such assertion threatened;

 

                  (vi) there is no outstanding request for any extension of time

         within which to pay any taxes or file any tax returns;

 

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                  (vii) the Company is not a party to any agreement, whether

         written or unwritten, providing for the payment of taxes, payment for

         tax losses, entitlements to refunds or similar tax matters;

 

                  (viii) no ruling with respect to taxes has been requested