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EXHIBIT 10.30
AGREEMENT
THIS AGREEMENT ("Agreement"), made this 8th day of March, 2000 by and among
FOCUS AFFILIATES, INC. (formerly known as Intellicell Corp.), a Delaware
corporation ("Focus"), INTELLICELL MERGER SUB, INC., a Delaware corporation
("Merger Sub") (Focus and Merger Sub sometimes individually a "Focus Party" and
collectively referred to herein as the "Focus Parties"), XXXXXX XXXXXXXX
("Xxxxxxxx"), XXXXXX XXXXXXX ("Xxxxxxx"), XXXXXXX XXXXXXX ("Xxxxxxx"), XXXX
XXXXXX ("Xxxxxx") and XXXXXX XXXXX ("Xxxxx") (Goldberg, Leavitt, Xxxxxxx, Xxxxxx
and Xxxxx individually a "CWI Stockholder" and collectively referred to herein
as the "CWI Stockholders"):
WITNESSETH:
WHEREAS, Goldberg, Leavitt, Xxxxxxx and Maimon were the principal
shareholders of Cellular Wholesalers, Inc. ("CWI") and, along with CWI, entered
into that certain Amended and Restated Agreement and Plan of Merger dated as of
July 23, 1999 with Focus and Merger Sub (the "Merger Agreement")(capitalized
terms not otherwise defined herein shall have the same meaning as in the Merger
Agreement); and
WHEREAS, the parties to this Agreement desire to provide for the
contribution from Xxxxxxxx, Xxxxxxx and Xxxxxxx (collectively, the "Contributing
CWI Stockholders") of certain Base Shares to the capital of Focus and to provide
for the closing of the escrow that was established pursuant to Section 1.8 of
the Merger Agreement (the "Escrow").
NOW, THEREFORE, for good and valuable consideration as set forth herein,
the parties do hereby agree as follows:
1. ESCROW INSTRUCTIONS. No later than three (3) business days from the date
hereof, Goldberg, Leavitt, Xxxxxxx, Xxxxx and Focus shall (if they have not
already done so) jointly execute and deliver to the Escrow Agent a joint
direction authorizing the release by the Escrow Agent of the $500,000 in
escrowed funds to Focus together with any interest accrued thereon (the
"Escrowed Funds"). The Principal CWI Stockholders shall have no obligation to
pay Focus any other amounts based on the Closing Date Equity pursuant to Section
1.8 of the Merger Agreement, and the Principal CWI Stockholders shall not
receive any Additional Consideration pursuant to Section 1.7 of the Merger
Agreement, irrespective of the Closing Date Equity and the $500,000 reduction in
the Base Consideration effected by this paragraph.
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2. CONTRIBUTION OF BASE SHARES. At the Closing (as defined in Section 4 of
this Agreement), each of the Contributing CWI Stockholders shall deliver to
Focus as a contribution to the capital of Focus the number of shares of Focus
stock set forth next to his name (the "Contribution Shares") (to be canceled by
Focus or retained as treasury stock as Focus determines in its discretion):
Contributing
CWI Stockholder Number of Shares
-------------------------- ---------------------------
Xxxxxx Xxxxxxxx 500,000
Xxxxxx Xxxxxxx 300,000
Xxxxxxx Xxxxxxx 500,000
3. RIGHT OF TERMINATION. The Agreement may be terminated: (a) at any time
by the mutual written consent of the Focus Parties and the CWI Stockholders; or
(b) by either the Focus Parties upon written notice to the CWI Stockholders or
by the CWI Stockholders upon written notice to Focus, in the event that the
Closing has not occurred within forty-five (45) days from the date of this
Agreement.
4. EQUITY FINANCING. As a condition precedent to the obligations of the CWI
Stockholders and the Focus Parties under this Agreement, Focus shall have
obtained additional equity financing on terms reasonably acceptable to Focus for
at least $3,900,000 (net of costs and commissions) (the "Equity Financing").
Focus shall use its best efforts in obtaining the Equity Financing as soon as
possible subsequent to the date hereof. Concurrently with the completion of the
Equity Financing, the Contributing CWI Stockholders will contribute the
Contribution Shares to the capital of Focus as provided by Section 2 and the
release of claims, covenant not to xxx and indemnification provisions set forth
in Sections 5, 6 and 7 shall become effective (the "Closing"). The provisions of
Sections 5, 6 and 7 shall be void and of no effect in the event the Closing does
not occur.
5. RELEASE OF CLAIMS.
5.1 RELEASE BY THE FOCUS PARTIES OF THE CWI STOCKHOLDERS. Effective as
of the Closing, the Focus Parties hereby irrevocably and unconditionally
release, acquit, and forever discharge each of the CWI Stockholders and each of
their heirs, legatees, assigns, agents, representatives and attorneys
(collectively, the "CWI Releasees"), from any and all claims, liabilities,
obligations, promises, agreements, controversies, damages, costs, losses, debts
and expenses (including, but not necessarily limited to, reasonable attorney's
fees and costs actually incurred), of any nature
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whatsoever, known or unknown ("Focus Claim" or "Focus Claims"), which Focus or
Merger Sub now has, owns or holds, or may claim to have, own or hold, against
each or any of the CWI Releasees with respect to (i) the fairness of the
purchase price paid for CWI's assets under the Merger Agreement or this
Agreement and (ii) any of the representations or warranties made by CWI or any
of the CWI Stockholders in Sections 4.1(f) or 4.1(h) of the Merger Agreement or
any other provisions of the Merger Agreement that specifically relate to CWI's
stockholders equity, liquidity, profitability or financial condition or
prospects as of the Closing Date; provided, however, that such release shall not
extend to any other representations, warranties or covenants made by CWI or any
of the CWI Stockholders under the Merger Agreement (including, without
limitation, representations and warranties as to title to CWI's assets and the
absence of litigation and contingent liabilities).
5.2 RELEASE BY THE CWI STOCKHOLDERS OF THE FOCUS PARTIES. Effective as of
the Closing, each of the CWI Stockholders hereby irrevocably and unconditionally
releases, acquits, and forever discharges Focus and Merger Sub, and each of
their predecessors, successors, assigns, agents, directors, officers,
shareholders, employees, representatives, attorneys, subsidiaries and affiliates
(collectively, the "Focus Releasees"), and each of them, from any and all
claims, liabilities, obligations, promises, agreements, controversies, damages,
costs, losses, debts and expenses (including, but not necessarily limited to,
reasonable attorney's fees and costs actually incurred), of any nature
whatsoever, known or unknown ("CWI Claim" or "CWI Claims"), which any of the CWI
Stockholders now has, owns, or holds, or may claim to have, own or hold, against
each or any of the Focus Releasees with respect to (i) the value of the common
stock of Focus or (ii) any of the representations or warranties made by Focus
and Merger Sub in Sections 4.3(g) or 4.3(i) of the Merger Agreement or any other
provision of the Merger Agreement that relate specifically to the stockholders
equity, liquidity, profitability or financial condition or prospects of Focus as
of the Closing Date; provided, however, that such release shall not extend to
any other representations, warranties or covenants made by Focus or Merger Sub
under the Merger Agreement (including without limitation, representations and
warranties as to title to Focus' assets and the absence of litigation and
contingent liabilities).
5.3 EFFECT OF RELEASE. Each of the parties to this Agreement acknowledges
that such party may hereafter discover claims or facts in addition to or
different from those which such party now knows or believes to be true with
respect to the matters released herein, but that it is the intention of each of
the parties to this Agreement to fully, finally, and forever settle and release
all such matters and all claims relative thereto which do exist, may exist, or
have existed. In furtherance of such intention, the releases set forth in this
Agreement shall be and remain in effect as full and
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complete releases regardless of the existence or discovery of any such
additional or different claims or facts.
5.4 NO ASSIGNMENT OF CLAIMS. Each of the parties to this Agreement
represents that such party has not heretofore assigned or transferred, or
purported to assign or transfer, to any person or entity, any CWI Claim or Focus
Claim, as applicable, or any portion thereof or interest therein.
6. COVENANT NOT TO XXX BY THE FOCUS PARTIES. Each of the Focus Parties
hereby agrees not to xxx any CWI Releasee(s) relating to any causes of action
that might be alleged to exist at the present time under California Civil Code
Sections 3439 through 3439.12, inclusive, or any state laws similar thereto. All
parties to this Agreement agree that the following facts are true, and that the
provisions of this Section 6 shall permanently survive the Closing, and, to the
extent allowed by law, be binding upon all of the parties and their successors
in interest:
(a) No transfer at any time under the Merger Agreement or any other
agreement to any of the CWI Stockholders by any of the Focus Parties of any
assets, including, but without limitation, money or tangible or intangible
personal property, was made by the transferor without the transferor having
received full or reasonably equivalent value in exchange or in consideration for
said transfer.
(b) Any and all transfers to any of the CWI Stockholders by any of the
Focus Parties of any assets, including, but without limitation, money or
tangible or intangible personal property, were received by the transferees
thereof, including any of the CWI Releasees, in good faith and for a reasonably
equivalent value.
The covenant not to xxx and agreed statement of facts contained in this
Section 6 shall in no way limit the rights of the Focus Parties to seek or
obtain indemnification pursuant to Article VIII of the Merger Agreement for the
breach by CWI or any of the CWI Stockholders of any representation, warranty or
covenant contained in the Merger Agreement (except as otherwise specifically
limited by Section 5.1 of this Agreement).
7. INDEMNIFICATION OF THE CWI RELEASEES BY THE FOCUS PARTIES. The Focus
Parties hereby agree to indemnify, save, defend and hold harmless each of the
CWI Releasees from and against any cost or expense (including reasonable
attorneys fees and costs) in defending against any suit or other claim brought
by any creditor of Focus or Merger Sub that alleges that the transactions
consummated pursuant to the Merger Agreement and/or this Agreement constituted a
fraudulent conveyance as against such creditor; provided, however, that the
foregoing indemnification shall not extend to any settlements of the foregoing
claims or judgments entered against any of the CWI
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Releasees based on the foregoing claims, which shall be the sole responsibility
of the CWI Releasees. A claim for indemnification hereunder (an "Indemnification
Claim") shall be made by the CWI Releasees by delivery of a written notice to
the Focus Parties requesting indemnification and specifying the basis on which
indemnification is sought in reasonable detail (and shall include relevant
documentation related to the Indemnification Claim), and such other information
as the CWI Releasees shall have concerning such claim.
Should any claim be made or any suit or proceeding instituted by a third
party against any of the CWI Releasees which would be a matter for which the CWI
Releasees would be entitled to indemnification under this Section 7 (a "Third
Party Claim"), the obligations and liabilities of the parties hereunder with
respect to such Third Party Claim shall be subject to the following terms and
conditions:
7.1 The CWI Releasees shall give the Focus Parties written notice of
any Third Party Claim promptly (and in no event later than 10 days) after
receipt by the CWI Releasees of notice thereof, and the Focus Parties will
undertake control of the defense thereof at the Focus Parties' cost and expense
by counsel of their own choosing reasonably acceptable to the CWI Releasees. The
CWI Releasees may participate in the defense through their own counsel at their
own expense. If the Focus Parties fail or refuse to undertake the defense of
such Third Party Claim within 15 days after written notice of such claim has
been delivered to the Focus Parties by the CWI Releasees, the CWI Releasees
shall have the right to undertake the defense of such Third Party Claim with
counsel of their own choosing. Failure of the CWI Releasees to furnish written
notice to the Focus Parties of a Third Party Claim shall not release Focus
Parties from the Focus Parties's obligations hereunder, except to the extent the
Focus Parties are prejudiced by such failure.
7.2 The CWI Releasees and the Focus Parties shall cooperate with each
other in all reasonable respects in connection with the defense of any Third
Party Claim, including making available records relating to such claim and
furnishing employees of the CWI Releasees as may be reasonably necessary for the
preparation of the defense of any such Third Party Claim or for testimony as
witnesses in any proceeding relating to such claim. The CWI Releasees may settle
any Third Party Claim without the consent of Focus Parties, provided that such
settlement does not require any payment by or impose any obligation upon the
Focus Parties. The Focus Parties shall not settle any Third Party Claim without
the consent of the CWI Releasees unless they undertake payment responsibility
for such claim.
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8. REPRESENTATIONS AND WARRANTIES OF THE FOCUS PARTIES. Each Focus Party
hereby represents, warrants and covenants to each CWI Stockholder that:
8.1 Neither the execution nor the delivery of this Agreement, the
incurrence of the obligations herein set forth, the consummation of the
transactions herein contemplated, nor the compliance with the terms of this
Agreement will conflict with, or result in a breach of, any of the terms,
conditions, or provisions of, or constitute a default under, any bond, note, or
other evidence of indebtedness or any contract, indenture, mortgage, deed of
trust, loan agreement, lease, or other agreement or instrument to which Focus
and/or Merger Sub is a party or by which Focus and/or Merger Sub may be bound.
8.2 Each Focus Party has the full and complete right, power, legal
capacity, and authority to execute and enter into this Agreement and to execute
all other documents and perform all other acts as may be necessary in connection
with the performance of this Agreement. In particular, and not by way of
limitation, the Focus Parties represent and warrant that all necessary corporate
actions and proceedings of their respective Boards of Directors to approve and
adopt this Agreement and to authorize the execution and delivery of this
Agreement have been duly and validly taken and that Xxxxxxx Xxxxx is authorized
to execute this Agreement on behalf of Focus, as its Chief Executive Officer,
and on behalf of Merger Sub, as its Chief Executive Officer, and Xxxx Xxxxxxxxx
is authorized to execute this Agreement on behalf of Focus, as its Chairman of
the Board, and on behalf of Merger Sub, as its Chairman of the Board.
8.3 No approval or consent not heretofore obtained by any person or
entity is necessary in connection with the execution of this Agreement by either
Focus Party or the performance of such party's obligations under this Agreement.
8.4 Each Focus Party has received independent tax and legal advice
from accountants, attorneys or other advisors of its choice with respect to the
advisability of executing this Agreement.
8.5 Each Focus Party has made such investigation of the facts
pertaining to this Agreement, and all of the matters pertaining thereto, as it
deems necessary.
8.6 Except as expressly provided herein, no person has made any
statement or representation to a Focus Party regarding any fact relied upon by
such Focus Party in entering into this Agreement and each Focus Party
specifically does not rely upon any statement, representation, or promise of any
other person in executing this Agreement.
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8.7 Each Focus Party relies on the finality of this Agreement as a
material factor inducing its execution of this Agreement, and the obligations
under this Agreement.
8.8 Neither Focus Party will take any action which would interfere
with the performance of this Agreement by any other party or which would
adversely affect any of the rights provided for herein.
9. REPRESENTATIONS AND WARRANTIES OF THE CWI STOCKHOLDERS. Each CWI
Stockholder hereby represents, warrants and covenants to each Focus Party that:
9.1 Neither the execution nor the delivery of this Agreement, the
incurrence of the obligations herein set forth, the consummation of the
transactions herein contemplated, nor the compliance with the terms of this
Agreement will conflict with, or result in a breach of, any of the terms,
conditions, or provisions of, or constitute a default under, any bond, note, or
other evidence of indebtedness or any contract, indenture, mortgage, deed of
trust, loan agreement, lease, or other agreement or instrument to which such CWI
Stockholder is a party or by which such CWI Stockholder may be bound.
9.2 The CWI Stockholder has the full and complete right, power, legal
capacity, and authority to execute and enter into this Agreement and to execute
all other documents and perform all other acts as may be necessary in connection
with the performance of this Agreement.
9.3 No approval or consent not heretofore obtained by any person or
entity is necessary in connection with the execution of this Agreement by the
CWI Stockholder or the performance of such CWI Stockholder's obligations under
this Agreement.
9.4 The CWI Stockholder has received independent tax and legal advice
from accountants, attorneys or other advisors of his choice with respect to the
advisability of executing this Agreement.
9.5 The CWI Stockholder has made such investigation of the facts
pertaining to this Agreement, and all of the matters pertaining thereto, as he
deems necessary.
9.6 Except as expressly provided herein, no person has made any
statement or representation to the CWI Stockholder regarding any fact relied
upon by such CWI Stockholder in entering into this Agreement and such CWI
Stockholder
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specifically does not rely upon any statement, representation, or promise of any
other person in executing this Agreement.
9.7 The CWI Stockholder relies on the finality of this Agreement as a
material factor inducing its execution of this Agreement, and the obligations
under this Agreement.
9.8 The CWI Stockholder will not take any action which would interfere
with the performance of this Agreement by any other party or which would
adversely affect any of the rights provided for herein.
10. GENERAL.
10.1 CONTROLLING LAW. This Agreement and all questions relation to its
validity, interpretation, performance and enforcement, shall be governed by and
construed in accordance with the laws of the State of Delaware, notwithstanding
any Delaware or other conflict-of-law provisions to the contrary.
10.2 NOTICES. All notices, requests, demands and other communications
required or permitted under this Agreement shall be in writing and shall be
deemed to have been duly given, made an received when delivered against receipt,
upon receipt of a facsimile transmission or three days following deposit in the
United States mails, first class postage prepaid, addressed as set forth below:
If to Focus or Merger Sub:
XxxxxXxxxxxxx.xxx
000 Xxxx Xxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Chief Executive Officer
with a copy given in the manner prescribed above, to:
Xxxx & Xxxxx Professional Corporation
0000 Xxxxxxx Xxxx Xxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxxx, Esq.
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If to the CWI Stockholders:
Xxxxxx Xxxxxxxx
00 Xxxxxxxx
Xxxxxxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Xxxxxx Xxxxxxx
00 Xxxxx Xxxxx Xxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Xxxxxxx Xxxxxxx
0000 Xxxxx Xxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Xxxx Xxxxxx
0000 Xxxxxxxxx
Xxxxxxx Xxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Xxxxxx Xxxxx
0000 Xxxxxxxxx Xx.
Xxxxxxxxxx, Xxxxxxxx 00000
in every case, with a copy given in the manner prescribed above, to:
Xxxxxxxx & Xxxxxxxxxx
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxx 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx Xxxxxxxxxx, Esq. and
Xxxx X. Xxxxxx, Esq.
Any party may alter the address to which communications or copies are to be
sent by giving notice to the other parties of such change of address in
conformity with the provisions of this paragraph for the giving of notice.
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10.3 BINDING NATURE OF AGREEMENT; NO ASSIGNMENT. This Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that no party may assign or transfer
its rights or obligations under this Agreement without the prior written consent
of the other parties hereto.
10.4 ENTIRE AGREEMENT. This Agreement contains the entire
understanding between the parties hereto with respect to the subject matter
hereof, and supersedes all prior and contemporaneous agreements and
understandings, inducements or conditions, express or implied, oral or written,
except as herein contained. The express terms hereof control and supersede any
course of performance and/or usage of the trade inconsistent with any of the
terms hereof. Except as otherwise specifically modified by this Agreement, the
provisions of the Merger Agreement shall continue in full force and effect.
10.5 SECTION HEADINGS. The section headings in this Agreement are for
convenience only; they form no part of this Agreement and shall not affect its
interpretation.
10.6 PUBLIC ANNOUNCEMENTS. Except as contemplated by this Agreement or
as may be required, in the opinion of counsel for Focus, by applicable law or
the rules and regulations or the SEC or the National Association of Securities
Dealers, Inc., none of the parties hereto shall make any press release or other
public announcement or filings with respect to this Agreement or the
transactions contemplated hereby without the prior approval of all of the
parties, which approvals shall not be reasonably withheld or delayed.
10.7 CONSTRUCTION OF AGREEMENT. Each party and counsel for each party
has reviewed and cooperated in the drafting and preparation of this Agreement.
As a jointly produced document, this Agreement and its language shall in all
cases be simply construed according to its fair meaning and not strictly for or
against any party or the drafter hereof.
10.8 INDULGENCES NOT WAIVERS. Neither the failure nor any delay on the
part of a party to exercise any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege preclude any other or further
exercise of the same or any other right, remedy, power, or privilege with
respect to any occurrence be construed as a waiver of such right, remedy, power
or privilege with respect to any other occurrence. No waiver shall be effective
unless it is in writing and is signed by the party asserted to have granted such
waiver.
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10.9 EXECUTION IN COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original as
against any party whose signature appears thereon, and all of which shall
together constitute one and the same instrument. This Agreement shall become
binding when one or more counterparts hereof, individually or taken together,
shall bear the signatures of all of the parties reflected hereon as the
signatories. Any photographic or xerographic copy of this Agreement, with all
signatures reproduced on one or more sets of signature pages, shall be
considered for all purposes as if it were an executed counterpart of this
Agreement.
10.10 PROVISIONS SEPARABLE. The provisions of this Agreement are
independent and separable from each other, and no provision shall be affected or
rendered invalid or unenforceable by virtue of the fact that for any reason any
other or others of them may be invalid or unenforceable in whole or in part;
provided, however, that the provisions of this Agreement are not separable tot
he extent that doing so would materially deprive any part of the benefit of its
bargain as provided for by this Agreement.
10.11 DISPUTE RESOLUTION. In the event of any dispute under the terms
of this Agreement, such dispute shall be resolved by binding arbitration under
the rules of the American Arbitration Association in Los Angeles, California.
The prevailing party in any arbitration shall be entitled to recover its
reasonable attorneys fees and costs.
10.12 NO ADMISSION OF FAULT. This Agreement is entered into solely for
the purposes set forth herein, and in executing this Agreement none of the
parties to this Agreement admits any liability or fault with respect to any of
the matters which are the subject of any release or indemnification under this
Agreement.
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IN WITNESS WHEREOF, the parties have set their hands as of the date first
above written.
/s/ Xxxxxx Xxxxxxxx
--------------------------------
XXXXXX XXXXXXXX
/s/ Xxxxxx Xxxxxxx
--------------------------------
XXXXXX XXXXXXX
/s/ Xxxxxxx Xxxxxxx
--------------------------------
XXXXXXX XXXXXXX
/s/ Xxxx Xxxxxx
--------------------------------
XXXX XXXXXX
/s/ Xxxxxx Xxxxx
--------------------------------
XXXXXX XXXXX
FOCUS AFFILIATES, INC.
ATTEST:
By: /s/ Xxxxxxx Xxxxx
----------------------------
------------------------- Xxxxxxx Xxxxx, Chief Executive Officer,
President
and By: /s/ Xxxx Xxxxxxxxx
----------------------------
Xxxx Xxxxxxxxx, Chairman of the Board
INTELLICELL MERGER SUB, INC.
ATTEST:
By: /s/ Xxxxxxx Xxxxx
----------------------------
------------------------- Xxxxxxx Xxxxx, Chief Executive Officer,
President
and By: /s/ Xxxx Xxxxxxxxx
----------------------------
Xxxx Xxxxxxxxx, Chairman of the Board
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