STOCK PURCHASE AGREEMENT
among
Xxxxxx Xxxxxxx
an individual
Buyer
and
Istorage Networks, Inc.
a Delaware corporation
Seller
January 23, 2006
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is made and entered
into as of the 23rd day of January, 2006 (the "Effective Date"), by and among
Xxxxxx Xxxxxxx, an individual ("Buyer") and Istorage Networks, Inc., a Delaware
corporation ("Seller").
WHEREAS, Seller is the owner of all of the outstanding shares (the
"Company Shares") of Istorage Networks Group, Inc. (the "Company");
WHEREAS, Buyer desires to purchase from Seller, and Seller desires to
sell to Buyer the Company Shares, in accordance with the terms and conditions
set forth herein;
WHEREAS, Seller has entered into a separate agreement (the "Landbank
Agreement") to simultaneously acquire all of the outstanding interests of
Landbank, LLC, the consummation of which is subject to the performance of the
obligations hereunder by each of Seller and Buyer; and
WHEREAS, the Buyer and certain other individuals currently own
approximately 90% of the outstanding shares of Seller (the "Seller Shares");
NOW THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
Article 1. Purchase and Sale of Shares
1.1 Purchase and Sale of Company Shares. On and subject to the terms and
conditions of this Agreement, Buyer agrees to purchase from Seller, and Seller
agrees to sell to Buyer, the Company Shares.
1.2 Consideration for Company Shares. The consideration for the purchase of
the Company Shares shall be satisfied by the delivery by the Buyer of the Seller
Shares as directed under and in accordance with the terms of the Landbank
Agreement.
Article 2. Assumption and Release
2.1 Assumption of Liabilities of Company. As of the Effective Date, Buyer
shall assume or shall cause to be assumed by QED Storage, Inc., ("Designee") all
liabilities and obligations of Company, whether now existing or hereafter
arising, known or unknown, fixed or contingent, xxxxxx or inchoate, matured or
not yet due, conditional or unconditional, asserted or unasserted, arising in
tort, under contract or otherwise, including, without limitation, any
liabilities arising out of or in connection with that certain lease dated
December 16, 2004 entered into by Seller on behalf of Company, and that certain
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software license agreement dated February 7, 2005 entered into by Seller with
Network Storage Corp. or the assignment of Seller's rights under these
agreements to Buyer or Designee.
2.2 Release of Seller.
(a) The Buyer acknowledge that he is not relying on any representations
or warranties of Seller, and has conducted his own due diligence in connection
with the transactions contemplated under this Agreement. Accordingly, the Buyer
and anyone claiming by, through or under the Buyer hereby waive their right to
recover from and fully and irrevocably release Seller from any and all claims,
responsibility and/or liability that they may now have or hereafter acquire
against Seller for any costs, loss, liability, damage, expenses, demand, action
or cause of action arising from or related to any claims in respect of Company,
regardless of the Buyer's knowledge of any such claims as of the Effective Date.
(b) In this connection and to the extent permitted by law, the Buyer
hereby agrees, represents and warrants that the Buyer realizes and acknowledges
that factual matters now unknown to it may have given or may hereafter give rise
to causes of action, claims, demands, debts, controversies, damages, costs,
losses and expenses which are presently unknown, unanticipated and unsuspected,
and the Buyer further agrees, represents and warrants that the waivers and
releases herein have been negotiated and agreed upon in light of that
realization and that the Buyer nevertheless hereby intends to release, discharge
and acquit Seller from any such unknown causes of action, claims, demands,
debts, controversies, damages, costs, losses and expenses. Except for the rights
and remedies of the Buyer expressly set forth in this Agreement, it is expressly
understood and agreed that notwithstanding any applicable law to the contrary,
Seller shall have no liability for any claim or cause of action. The foregoing
limitation on liability shall survive the termination of this Agreement and
shall not diminish or otherwise affect the Buyer's waivers and releases in this
Section 2.2. In no event shall any of the direct or indirect partners,
shareholders, owners, affiliates, officers, directors, employees or agents of
Seller, or any affiliate or controlling person thereof, have any liability for
any claim or cause of action or other liability arising out of or relating to
this Agreement or Company, whether based on contract, common law, statute,
equity or otherwise.
2.3 Consideration for Release and Delivery of Landbank Agreement. As
consideration for the release set forth in Section 2.2, the provision by the
Buyer of certain representations, covenants and indemnification under the
Landbank Agreement, Seller shall pay or caused to be paid to the Buyer at
Closing the sum of One Hundred Forty Thousand Dollars ($140,000) in cash.
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Article 3. Closing
The Closing of the purchase and sale of the Company Shares (the "Closing") will
occur simultaneously with the closing under the Landbank Agreement, as a
condition thereto.
Article 4. Representations and Warranties
4.1 Representations and Warranties of Seller. Seller represents and
warrants to Buyer as follows:
(a) Organization. Each of Seller and Company is a limited liability
company duly formed, validly existing and in good standing under the laws of the
State of Delaware. Company has all requisite power and authority to own, lease
and operate its properties and to carry on its business. Company is duly
qualified and in good standing as a foreign corporation in each jurisdiction
where its ownership of property or operation of its business requires
qualification.
(b) Power and Authority; Enforceability. Seller has full corporate
power and authority to execute and deliver this Agreement and to consummate and
perform the Transactions contemplated hereunder. Seller has taken all necessary
action to authorize the execution and delivery of this Agreement, and the
performance of its obligations hereunder. This Agreement constitutes (or shall,
upon execution, constitute) a valid and legally binding obligation upon Seller,
enforceable in accordance with its terms.
(c) No Violation. Neither the execution and delivery of this Agreement
by Seller, nor the consummation and performance of the Transactions contemplated
hereby, conflicts with, requires the consent, waiver or approval of, results in
a breach of or default under, or gives to others any interest or right of
termination, cancellation or acceleration in or with respect to, any agreement
by which Seller or Company is a party or by which Seller or Company or any of
their respective properties or assets are bound or affected, including any of
Seller's or Company's organizational documents.
(d) Capitalization of Company. The authorized capitalization of Company
consists of 100 shares of common stock, par value ____, of which 100 shares have
been issued and are outstanding as of the date hereof and at Closing. There
exists no voting agreement or outstanding proxy with respect to any of the
Company Shares. There are no options, warrants, calls, commitments, conversions
or any other rights or agreements outstanding obligating Company to issue any
shares of its capital stock. As of the date hereof and at Closing, Seller owns
and shall own of record and beneficially all of the issued and outstanding
Company Shares, free and clear of any and all liens, encumbrances, pledges and
claims of any nature, with full right and lawful authority to transfer the
Company Shares to Buyer.
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4.2 Representations and Warranties of Buyer. Buyer represents and warrants
to Seller as follows:
(a) Organization. Buyer is an individual.
(b) Power and Authority; Enforceability. Buyer has the requisite
competence and authority to execute and deliver this Agreement and to consummate
and perform the Transactions contemplated hereunder. Buyer has taken all
necessary action to authorize the execution and delivery of this Agreement, and
the performance of its obligations hereunder. This Agreement constitutes (or
shall, upon execution, constitute) a valid and legally binding obligation upon
the Buyer, enforceable in accordance with its terms.
(c) No Violation. Neither the execution and delivery of this Agreement
by the Buyer, nor the consummation and performance of the Transactions
contemplated hereby, conflicts with, requires the consent, waiver or approval
of, results in a breach of or default under, or gives to others any interest or
right of termination, cancellation or acceleration in or with respect to, any
agreement by which Buyer is a party or by which Buyer or any of his properties
or assets are bound or affected.
4.3 No Representations or Warranties Implied. The representations and
warranties contained in this Article 4 constitute the only representations and
warranties made by the parties with respect to this Agreement, and no other
representations or warranties shall be implied. Without limiting the foregoing,
Seller makes no representation or warranty concerning the business of Company or
any assets owned or used by Company and there are no implied warranties of any
kind, including warranties of merchantability, suitability or fitness for a
particular purpose.
Article 5. Covenants
5.1 General. Each party will use its best efforts to take all actions and
to do all things necessary, proper or advisable to consummate, make effective
and comply with all terms of this Agreement and the transactions contemplated
hereunder.
5.2 Operation of Business. Seller will not permit Company, between the date
of this Agreement and the Closing, to engage in any practice, take any action or
enter into any transaction outside the ordinary course of business, except as
otherwise contemplated herein or under the Landbank Agreement.
5.3 Confidentiality. Each of the parties hereto shall treat as confidential
the existence and terms of this Agreement. Neither party shall issue any public
announcements regarding this transactions contemplated hereunder without the
prior written consent of the other party except as required by law.
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5.4 Further Assurances. The parties hereby agree to execute and deliver all
other documents, and to take other action deemed necessary or advisable to
ensure the consummation of the contemplated transaction, including, without
limitation, obtaining any necessary third party consents, and entering into a
separate assignment agreement with respect to any real property lease,
proprietary rights, or insurance policy, and any notices required or recommended
in connection therewith.
Article 6. Miscellaneous
6.1. Governing Law.
This Agreement shall be construed in accordance with and governed by
the laws of the State of Delaware, excluding the application of any of its
choice of law rules that would result in the application of the laws of another
jurisdiction.
6.2 Counterparts.
This Agreement may be executed in counterparts, and each such
counterpart shall be considered an original document when all Parties have
executed their respective counterparts. Counterpart signature pages may be
collected and attached together to form a single document. One party may execute
one or more counterparts other than that or those executed by another party,
without thereby affecting the effectiveness of any such signatures.
6.3 Incorporation and Fair Construction.
Each of the Recitals set forth above as well as the Exhibits attached
to this Agreement is hereby incorporated in it and made a part of this Agreement
for all purposes. This Agreement has been negotiated and prepared jointly by all
parties and shall not be construed for or against either party but shall be
given a fair and reasonable construction in accordance with the intention of the
parties.
6.4 Severability.
If any provision of this Agreement shall be adjudged by an arbitrator
or court of competent jurisdiction to be void or unenforceable for any reason,
the same shall in no way affect (to the maximum extent permissible by law) any
other provision of this Agreement, the application of any such provision under
circumstances different from those adjudicated by the arbitrator or court, or
the validity or enforceability of this Agreement as a whole.
6.5 Entire Understanding.
This Agreement contains the entire understanding of the parties
relating to the subject matter hereof, and this Agreement cannot be changed
except by written agreement executed by the party to be bound.
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The Parties have executed this Agreement as of the Effective Date.
Seller: ISTORAGE NETWORKS, INC.
a Delaware corporation
By:_____________________________________________
Name:
Title:
Buyer: Xxxxxx Xxxxxxx
By:_____________________________________________
Name:
Title:
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