Exhibit 10.9
Barrington Capital Corporation Stock Purchase and Subscription Agreement
STOCK PURCHASE AND SUBSCRIPTION AGREEMENT
THIS STOCK PURCHASE AND SUBSCRIPTION AGREEMENT (the "Agreement") is
made and entered into by and between Cormax Business Solutions Inc. (the
"Seller") and __Barrington Capital Corp._. (the "Purchaser"); the Seller and the
Purchaser being collectively referred to as the "Parties."
PREAMBLE:
WHEREAS, the Parties desire that, upon the terms and subject to the
conditions contained herein, the Seller shall issue and sell to the Purchaser,
from time to time as provided herein, and the Purchaser shall purchase, up to
$5,000,000 shares of the Common Stock (as defined below) for $______(As set
forth below)_; and
WHEREAS, such investments will be made in reliance upon the provisions
of Section 4(2) ("Section 4(2)") and Regulation D ("Regulation D") of the United
State Securities Act of 1933, as amended and the rules and regulations
promulgated thereunder (the "Securities Act"), and/or upon such other exemption
from the registration requirements of the Securities Act as may be available
with respect to any or all of the investments in Common Stock to be made
hereunder from time to time.
NOW THEREFORE, the Parties agree as follows:
WITNESSETH
CERTAIN DEFINITIONS
-------------------
"Closing" shall mean one of the closings of a purchase and sale of the
Common Stock pursuant to Section 2.1.
"Closing Date" shall mean, with respect to a Closing, the fifth
Trading Day following the Put Date related to such Closing, provided all
conditions to such Closing have been satisfied on or before such Trading Day.
"Commitment Period" shall mean the period commencing on the earlier to
occur of (i) the Effective Date or (ii) such earlier date as the Seller and the
Purchaser may mutually agree in writing, and expiring on the earlier to occur of
(x) the date on which the Purchaser shall have purchased Put Shares pursuant to
this Agreement for an aggregate Purchase Price equal to $________________, or
(y) the date occurring twenty four (24) months from the date of commencement of
the Commitment Period.
"Common Stock" shall mean the Company's common stock.
"Damages" shall mean any loss, claim, damage, liability, costs and
expenses (including, without limitation, reasonable attorneys' fees and
disbursement and costs and expenses of expert witnesses and investigation.)
"Effective Date" shall mean the date upon which the SEC first declares
a registration registering for resale the shares of Common Stock effective.
"Person" shall mean an individual, a corporation, a partnership, an
association, a trust or other entity or organization, including a government or
political subdivision or an agency or instrumentality thereof.
"Put" shall mean each occasion the Seller elects to exercise its right
to tender a Put Notice requiring the Purchaser to purchase a specified amount of
the Seller's Common Stock, subject to the terms and conditions of this
Agreement.
"Put Date" shall mean the Trading Day during the Commitment Period
that a Put Notice to sell Common Stock to the Purchaser is deemed delivered
pursuant to the terms hereof.
"Put Notice" shall mean a written notice to the Purchaser setting
forth that the Seller intends to require the Purchaser to purchase pursuant to
the terms of this Agreement.
"Put Shares" shall mean all shares of Common Stock issued or issuable
pursuant to a Put that has been exercised or may be exercised in accordance with
the terms and conditions of this Agreement.
ARTICLE ONE
PURCHASE PROVISIONS
1.1 Investments.
(a) Puts. Upon the terms and conditions set forth herein (including,
without limitation, the provisions of Section 1.1(c)), on the Trading Day
commencing 5 days from the Effective Date and the third month, six month and
nine month anniversary of the initial Put Date during the Commitment Period the
Seller may exercise a Put by the delivery of a Put Notice.
(b) Amount of Puts. The Seller shall, in accordance with Section
1.2(a), issue and sell Put Shares to the Purchaser and the Purchaser shall
purchase Put Shares form the Seller totaling _up to 5,000,000_ shares for the
aggregate Purchase Price of $________________. Each purchase and sale shall
consist of __up to 5,000,000__ shares of Common Stock for $_0.35 per share__.
If, at any time during the Commitment period the condition set forth in Section
1.1(c) is not fulfilled, the Company may thereafter give a Put Notice to
Purchaser upon the fulfillment of such conditions any time thereafter during the
Commitment Period.
(c) Maker Condition. The average bid price of the Seller's common
stock shall not be less than $.425 per share during the 20 trading days prior to
the giving of a Put Notice and the average weekly trading volume for the same
period is not less than 100,000 shares. In addition, the Seller's financial
statements must be current at the time of the Put. Notice must support the
average bid price of $0.425 per share and purchaser shall receive such financial
statement upon request to the seller.
1.2 Mechanics.
(a) Put Notice. At any time during the Commitment Period, the Seller
may deliver a Put Notice to the Purchaser, subject to the conditions set forth
in Section 1.1(c); provided, however, the Investment Amount for each Put as
designated by the Seller in the applicable Put Notice shall not be higher than
$350,000.
(b) Date of Delivery of Put Notice. A Put Notice shall be deemed
delivered on (i) the Trading Day it is received by facsimile or otherwise by the
Purchaser if such notice is received prior to 12:00 noon New York time, or (ii)
the immediately succeeding Trading Day if it is received by facsimile or
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otherwise after 12:00 noon New York time on a Trading Day or at any time on a
day which is not a Trading Day.
1.3 Closings.
On each Closing Date for a Put, (i) the Seller shall deliver into
escrow one or more certificates, at the Purchaser's option, representing the Put
Shares to be purchased by the Purchaser pursuant to Section 1.1 herein,
registered in the name of the Purchaser and (ii) the Purchaser shall deliver
into escrow the Investment Amount specified in the Put Notice by wire transfer
of immediately available funds to the account provided for in the Escrow
Agreement. In addition, on or prior to such Closing Date, each of the Seller and
the Purchaser shall deliver to the other all documents, instruments and writings
required to be delivered or reasonably requested by either of them pursuant to
this Agreement in order to implement and effect the transaction contemplated
herein. Payment of the Investment Amount to the Seller and delivery of such
certificate(s) to the Purchaser shall occur out of escrow without any deduction
prior to the delivery of shares by the escrow agent.
1.4 Termination.
The Purchaser may, at its sole discretion, terminate this Agreement
and its obligation to purchase shares of Common Stock hereunder (including with
respect to any Put, notice of which has been given but the applicable Closing
Date has not yet occurred) in the event that (i) the Registration Statement is
not declared effective by November 30, 2001; (ii) there shall occur any stop
order or suspension of the effectiveness of the Registration Statement for an
aggregate of thirty (3) Trading Days during the Commitment Period, for any
reason other than as a result of corporate developments subsequent to the
Subscription Date that would require such Registration Statement to be amended
to reflect such event in order to maintain its compliance with the disclosure
requirements of the Securities Act. The Seller may, in its sole discretion,
terminate this Agreement and its rights and obligations hereunder in the event
that the Seller shall have made Puts to the Purchaser and the Purchaser shall
have failed to pay the required funds by the Closing Date or the Purchaser is in
material breach of any of its representations or warranties set forth in this
Agreement.
ARTICLE TWO
REPRESENTATIONS AND WARRANTIES
2.1 The Seller
The Seller hereby represents and warrants to the Purchaser, as a
material inducement to their entry into this Agreement, that:
(a) Upon issuance of the Stock, the Purchaser will become the owner of
up to 5,000,000 shares of the Corporation's authorized, issued and outstanding
Common Stock;
(b) The execution and delivery of this Agreement, the consummation of
the transaction herein contemplated and compliance with the terms of this
Agreement will not result in a breach of any the terms or provisions of, or
constitute a default of any indenture, other agreement or instrument to which
the Seller is a party or by which the Seller is bound; or any applicable
regulation, judgment, order or decree of any governmental instrumentality or
court, domestic or foreign, having jurisdiction over the Seller;
(c) With the exception of its contemplated offering through its
Registration Statement on Form SB-2 and the disclosures contained therein, the
Seller is not a party to any written or oral agreement with grants an option or
right of first refusal or other arrangement to acquire any of the Stock or to
any agreement that affects voting rights of any of the Stock, nor has the Seller
made any commitment of any kind relating to the issuance of shares of any of its
Stock, whether by subscription, right of conversion, option or otherwise, except
as reflected in this agreement.
(d) The execution, delivery and performance of this Agreement and the
transactions contemplated hereby do not require the consent, authority or
approval of any other person or entity except such as have been obtained;
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(e) The Seller has authorized but unissued shares available to sell.
(f) The Sellers undertakes to register the Shares purchased hereby for
and on behalf of the Purchaser as a selling shareholder. The Shares will be
registered for resale on Form SB-2 filed with the Securities and Exchange
Commission. The obligation of Purchaser to fund commences during the first
quarter in which the Registration Statement on Form SB-2 is declared effective.
2.2 The Purchaser
The Purchaser hereby represents, warrants and acknowledges that:
(a) Intent. The Purchaser is entering into this Agreement for its own
account and the Purchaser has no present arrangement (whether or not legally
binding) or intent at any time to sell the Common Stock to or through any person
or entity; provided, however, that by making the representations herein, the
Purchaser does not agree to hold the Common Stock for any minimum or other
specific term and reserves the right to dispose of the Common Stock at any time
in accordance with federal and state securities laws applicable to such
disposition.
(b) Sophisticated Purchaser. The Purchaser is a sophisticated
Purchaser (as described in Rule 506(b)(2)(ii) of Regulation D) and an accredited
Purchaser (as defined in Rule 501 of Regulation D), and Purchaser has such
experience in business and financial matters that it is capable of evaluating
the merits and risks of an investment in Common Stock. The Purchaser
acknowledges that an investment in the Common Stock is speculative and involves
a high degree of risk.
(c) Authority. This Agreement has been duly authorized by all
necessary corporate action and no further consent or authorization of the
Purchaser, or its Board of Directors or stockholders is required. This Agreement
was validly executed and delivered by the Purchaser and each is a valid and
binding agreement of the Purchaser enforceable against it in accordance with its
terms, subject to applicable bankruptcy, insolvency, or similar laws relating
to, or affecting generally the enforcement of, creditors' rights and remedies or
by other equitable principles of general application.
(d) Not an Affiliate. The Purchaser is not an officer, director or
"affiliate" (as that term is defined in Rule 405 of the Securities Act) of the
Seller.
(e) Organization and Standing. Purchaser is duly organized, validly
existing, and in good standing under the laws of Florida.
(f) Absence of Conflicts. The execution and delivery of this Agreement
and any other document or instrument contemplated hereby, and the consummation
of the transactions contemplated thereby, and compliance with the requirements
thereof, will not (a) violate any law, rule, regulation, order, writ, judgment,
injunction, decree or award binding on Purchaser, or, to the Purchaser's
knowledge, (b) violate any provision of any indenture, instrument or agreement
to which Purchaser is a party or is subject, or by which Purchaser or any of its
assets is bound, (c) conflict with or constitute a material default thereunder,
(d) result in the creation or imposition of any lien pursuant to the terms of
any such indenture, instrument or agreement, or constitute a breach of any
fiduciary duty owed by Purchaser to any third party, or (e) require the approval
of any third-party (that has not been obtained) pursuant to any material
contract to which Purchaser is subject or to which any of its assets, operations
or management may be subject.
(g) Disclosure; Access to Information. Purchaser has received all
documents, records, books and other information pertaining to Purchaser's
investment in the Seller that has been requested by Purchaser.
(h) Manner of Sale. At no time was Purchaser presented with or
solicited by or through any leaflet, public promotional meeting, television
advertisement or any other form of general solicitation or advertising.
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ARTICLE THREE
COVENANTS OF THE PURCHASER
3.1 Compliance with Law
The Purchaser's trading activities with respect to shares of the
Seller's Common Stock will be in compliance with all applicable state and
federal securities laws, rules and regulations and the rule and regulations of
the principal market on which the Seller's Common Stock is presently or
hereafter traded.
3.2 Limitation on Short Sales
The Purchaser and its affiliates shall not engage in short sales of
the Seller's Common Stock.
ARTICLE FOUR
MISCELLANEOUS
4.1 Amendment
No modification, waiver, amendment, discharge or change of this
Agreement shall be valid unless the same is evidenced by a written instrument,
subscribed by the Party against which such modifications, waiver, amendment,
discharge or change is sought.
4.2 Notice
All notices, demands or other communications given hereunder shall be
in writing and shall be deemed to have been duly given on the first business day
after mailing by United States registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:
TO SELLER: Cormax Business Solutions Inc.
--------------------------------
(Name )
#000, 000-0xx Xxxxxx X.X.
--------------------------------
Xxxxxxx, Xxxxxxx, Xxxxxx X0X 0X0
--------------------------------
TO PURCHASER: Barrington Capital Corp.
--------------------------------
(Name)
00 X. 00xx Xxxxxx
--------------------------------
Xxx Xxxx, XX 00000
--------------------------------
or such other address or to such other person as any party shall
designate to the other for such purpose.
4.3 Merger
This instrument, together with the instruments referred to herein,
contains all of the understandings and agreements of the Parties with respect to
the subject matter discussed herein. All prior agreements whether written or
oral are merged herein and shall be of no force or effect.
4.4 Survival
The several representations, warranties and covenants of the Parties
contained herein shall survive the execution hereof and shall be effective
regardless of any investigation that may have been made or may be made by or on
behalf of any party. In addition, the provisions of Article V of this Agreement
shall survive the termination or performance of this Agreement for a period of
five years after the later of the Effective Date or the last Closing.
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4.5 Severability
If any provision or any portion of any provision of this Agreement,
other than one of the conditions precedent, or the application of such provision
or any portion thereof to any person or circumstance shall be held invalid or
unenforceable, the remaining portions of such provision and the remaining
provisions of this Agreement or the applications of such provision or portion of
such provision as is held invalid or unenforceable to persons or circumstances
other than those to which it is held invalid or unenforceable, shall not be
affected thereby.
4.6 Governing Law and Venue
This Agreement shall be construed in accordance with the laws of the
State of ___New York__ and any proceeding arising between the Parties in any
matter pertaining or related to this Agreement shall, to the extent permitted by
law, be held in __New York__.
4.7 Litigation
In any action between the Parties to enforce any of this Agreement or
any other matter arising from this Agreement, the prevailing Party shall be
entitled to recover its costs and expenses, including reasonable attorneys' fees
up to and including all negotiations, trials and appeals, whether or not
litigation is initiated.
4.8 Benefit of Agreement
The terms and provisions of this Agreement shall be binding upon and
inure to the benefit of the Parties, their successors, assigns, personal
representatives, estate, heirs and legatees.
4.9 Captions
The captions in this Agreement are for convenience and reference only
and in no way define, describe, extend or limit the scope of the Agreement or
the intent of any provisions hereof.
4.10 Number and Gender
All pronouns and any variations thereof shall be deemed to refer to
the masculine, feminine, neuter, singular or plural, as the identity of the
party or parties, or their personal representatives, successors and assigns may
require.
4.11 Further Assurances
The Parties agree to do, execute, acknowledge and deliver or cause to
be done, executed, acknowledged or delivered and to perform all such acts and
deliver all such debts, assignments, transfers, conveyances, powers of attorney,
assurances, stock certificates and other documents, as may, from time to time,
be required herein to effect the intent and purpose of this Agreement.
4.12 Status
Nothing in this Agreement shall be construed a partnership, joint
venture, employer- employee relationship, lessor-lessee relationship, or
principal-agent relationship; but, rather, the relationship established pursuant
hereto is that of Purchaser and Seller.
4.13 Counterparts
This Agreement may be executed in any number of counterparts. All
executed counterparts shall constitute one Agreement notwithstanding that all
signatories are not signatories to the original or the same counterpart.
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4.14 Due Diligence Review; Non-Disclosure of Non-Public Information
(a) The Seller shall make available for inspection and review by the
Purchaser, advisors to and representatives of the Purchaser (who may or may not
be affiliated with the Purchaser and who are reasonably acceptable to the
Seller), any Underwriter, any Registration Statement or amendment or supplement
thereto or any blue sky, NASD or other filing, all financial and other records,
all SEC Documents and other filings with the SEC, and all other corporate
documents and properties of the Seller as may be reasonably necessary for the
purpose of such review, and cause the Seller's officers, directors and employees
to supply all such information reasonably requested by the Purchaser or any such
representative, advisor or Underwriter in connection with such Registration
Statement (including, without limitation, in response to all questions and other
inquiries reasonably made or submitted by any of them), prior to and from time
to time after the filing and effectiveness of the Registration Statement for the
sole purpose of enabling the Purchaser and such representatives, advisors and
Underwriters and their respective accountants and attorneys to conduct initial
and ongoing due diligence with respect to the Seller and the accuracy of the
Registration Statement.
(b) Each of the Seller, its officers, directors, employees and agents
shall in no event disclosure non-public information to the Purchaser, advisors
to or representatives of the Purchaser unless prior to disclosure of such
information the Seller identifies such information as being non-public
information and provides the Purchaser, such advisors and representatives with
the opportunity to accept or refuse to accept such non-public information for
review. The Seller may, as a condition to disclosing any non-public information
hereunder, require the Purchaser's advisors and representatives to enter into a
confidentiality agreement in form reasonably satisfactory to the Seller and the
Purchaser.
(c) Nothing herein shall require the Seller to disclose non-public
information to the Purchaser or its advisors or representatives, and the Seller
represents that it does not disseminate non-public information to any Purchasers
who purchase stock in the Seller in a public offering, to money managers or to
securities analysts; provided, however, that notwithstanding anything herein to
the contrary, the Seller shall, as hereinabove provided, immediately notify the
advisors and representatives of the Purchaser and any Underwriters of any event
or the existence of any circumstance (without any obligation to disclose the
specific event or circumstance) of which it becomes aware, constituting
non-public information (whether or not requested of the Seller specifically or
generally during the course of due diligence by such persons or entities),
which, if not disclosed in the prospectus included in the Registration Statement
would cause such prospectus to include a material misstatement or to omit a
material fact required to be stated therein in order to make the statements,
therein, in light of the circumstances in which they were made, not misleading.
Nothing contained in this Section 4.14 shall be construed to mean that such
persons or entities other than the Purchaser (without the written consent of the
Purchaser prior to disclosure of such information) may not obtain non-public
information in the course of conducting due diligence in accordance with the
terms and conditions of this Agreement and nothing herein shall prevent any such
persons or entities from notifying the Seller of their opinion that based on
such due diligence by such persons or entities, that the Registration Statement
contains an untrue statement of a material fact or omits a material fact
required to be stated in the Registration Statement or necessary to make the
statements contained therein, in light of the circumstances in which they were
made, not misleading.
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ARTICLE FIVE
INDEMNIFICATION
5.1 Indemnification
(i) The Seller agrees to indemnify and hold harmless the Purchaser,
its partners, affiliates, officers, directors, employees, and duly authorized
agents, and each Person or entity, if any, who controls the Purchaser within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
together with the controlling Persons from and against any Damages, joint or
several, and any action in respect thereof to which the Purchaser, its partners,
affiliates, officers, directors, employees, and duly authorized agents, and any
such controlling Person becomes subject to, resulting from, arising out of or
relating to any misrepresentation, breach of warranty or non-fulfillment of or
failure to perform any covenant or agreement on the part of the Seller contained
in this Agreement, as such Damages are incurred, except to the extent that such
damages result solely from the Purchaser's failure to perform any covenant or
agreement contained in this Agreement, provided, however, that the Seller shall
not be liable in any such case to the extent that any such Damages arise out of
or are based upon information furnished to the Seller by or on behalf of the
Purchaser in writing and (ii) the Purchaser agrees to indemnify and hold
harmless the Seller, its partners, affiliates, officers, directors, employees
and duly authorized agents and its Controlling Persons (as defined in the
Registration Rights Agreement) from and against any Damages, joint or several,
and any action in respect thereof to which the Seller, its partners, affiliates,
officers, directors, employees and duly authorized agents, and any such
Controlling Person becomes subject to, resulting from, arising out of or
relating to any misrepresentation, breach of warranty or non-fulfillment of or
failure to perform any covenant or agreement on the part of Purchaser contained
in this Agreement; provided, however, that the indemnification obligation of the
Purchaser under this Section 5.1 shall not exceed an aggregate maximum amount of
$500,000.
5.2 Method of Asserting Indemnification Claims
All claims for indemnification by any Indemnified Party (as defined
below) under Section 5.1 shall be asserted and resolved as follows:
(a) In the event any claim or demand in respect of which any person
claiming indemnification under any provision of Section 5.1 (an "Indemnified
Party") might seek indemnity under Section 5.1 is asserted against or sought to
be collected from such Indemnified Party by a person other than the Seller, the
Purchaser or any affiliate of the Seller or (a "Third Party Claim"), the
Indemnified Party shall deliver a written notification, enclosing a copy of all
papers served, if any, and specifying the nature of and basis for such Third
Party Claim and for the Indemnified Party's claim for indemnification that is
being asserted under any provision of Section 5.2 against any person (the
"Indemnifying Party"), together with the amount or, if not then reasonably
ascertainable, the estimated amount, determined in good faith, of such Third
Party Claim (a "Claim Notice") with reasonable promptness to the Indemnifying
Party. If the Indemnified Party fails to provide the Claim Notice with
reasonable promptness after the Indemnified Party receives notice of such Third
Party Claim, the Indemnifying Party shall not be obligated to indemnify the
Indemnified Party with respect to such Third Party Claim to the extent that the
Indemnifying Party's ability to defend has been irreparably prejudiced by such
failure of the Indemnified Party. The Indemnifying Party shall notify the
Indemnified Party as soon as practicable within the period ending thirty (30)
calendar days following receipt by the Indemnifying Party of either a Claim
Notice or an Indemnity Notice (as defined below) (the "Dispute Period") whether
the Indemnifying Party disputes its liability or the amount of its liability to
the Indemnified Party under Section 5.1 and whether the Indemnifying Party
desires, at its sole cost and expense, to defend the Indemnified Party against
such Third Party Claim.
(i) If the Indemnifying Party notifies the Indemnified Party within
the Dispute Period that the Indemnifying Party desires to defend the Indemnified
Party with respect to the Third Party Claim pursuant to this Section 5.2(a),
then the Indemnifying Party shall have the right to defend, with counsel
reasonably satisfactory to the Indemnified Party, at the sole cost and expense
of the Indemnifying Party, such Third Party Claim by all appropriate
proceedings, which proceedings shall be vigorously and diligently prosecuted by
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the Indemnifying Party to a final conclusion or will be settled at the
discretion of the Indemnifying Party (but only with the consent of the
Indemnified Party in the case of any settlement that provides for any relief
other than the payment of monetary damages or that provides for the payment of
monetary damages as to which the Indemnified Party shall not be indemnified in
full pursuant to Section 5.1). The Indemnifying Party shall have full control of
such defense and proceedings, including any compromise or settlement thereof;
provided, however, that the Indemnified Party may, at the sole cost and expense
of the Indemnified Party, at any time prior to the Indemnifying Party's delivery
of the notice referred to in the first sentence of this clause (i), file any
motion, answer or other pleadings or take any other action that the Indemnified
Party reasonably believes to be necessary or appropriate to protect its
interests; and provided further, that if requested by the Indemnifying Party,
the Indemnified Party will, at the sole cost and expense of the Indemnifying
Party, provide reasonable cooperation to the Indemnifying Party in contesting
any Third Party Claim that the Indemnifying Party elects to contest. The
Indemnified Party may participate in, but not control, any defense or settlement
of any Third Party Claim controlled by the Indemnifying Party pursuant to this
clause (i), and except as provided in the preceding sentence, the Indemnified
Party shall bear its own costs and expenses with respect to such participation.
Notwithstanding the foregoing, the Indemnified Party may take over the control
of the defense or settlement of a Third Party Claim at any time if it
irrevocably waives its right to indemnity under Section 5.1 with respect to such
Third Party Claim.
(ii) If the Indemnifying Party fails to notify the Indemnified Party
within the Dispute Period that the Indemnifying Party desires to defend the
Third Party Claim pursuant to Section 5.2(a), or if the Indemnifying Party gives
such notice but fails to prosecute vigorously and diligently or settle the Third
Party Claim, or if the Indemnifying Party fails to give any notice whatsoever
within the Dispute Period, then the Indemnified Party shall have the right to
defend, at the sole cost and expense of the Indemnifying Party, the Third Party
Claim by all appropriate proceedings, which proceedings shall be prosecuted by
the Indemnified Party in reasonable manner and in good faith or will be settled
at the discretion of the Indemnified Party (with the consent of the Indemnifying
Party, which consent will not be unreasonably withheld). The Indemnified Party
will have full control of such defense and proceedings, including any compromise
or settlement thereof; provided, however, that if requested by the Indemnified
Party, the Indemnifying Party will, at the sole cost and expense of the
Indemnifying Party, provide reasonable cooperation to the Indemnified Party and
its counsel in contesting any Third Party Claim which the Indemnified Party is
contesting. Notwithstanding the foregoing provisions of this clause (ii), if the
Indemnifying Party has notified the Indemnified Party within the Dispute Period
that the Indemnifying Party disputes its liability or the amount of its
liability hereunder to the Indemnified Party with respect to such Third Party
Claim and if such dispute is resolved in favor of the Indemnifying Party in the
manner provided in clause (iii) below, the Indemnifying Party will not be
required to bear the costs and expenses of the Indemnified Party's defense
pursuant to this clause (ii) or of the Indemnifying Party's participation
therein at the Indemnified Party's request, and the Indemnified Party shall
reimburse the Indemnifying Party in full for all reasonable costs and expenses
incurred by the Indemnifying Party in connection with such litigation.
The Indemnifying Party may participate in, but not control, any
defense or settlement controlled by the Indemnified Party pursuant to this
clause (ii), and the Indemnifying Party shall bear its own costs and expenses
with respect to such participation.
(iii) If the Indemnifying Party notifies the Indemnified Party that it
does not dispute its liability or the amount of its liability to the Indemnified
Party with respect to the Third Party Claim under Section 5.1 or fails to notify
the Indemnified Party within the Dispute Period whether the Indemnifying Party
disputes its liability or the amount of its liability to the Indemnified Party
with respect to such Third Party Claim, the Loss in the amount specified in the
Claim Notice shall be conclusively deemed a liability of the Indemnifying Party
under Section 5.1 and the Indemnifying Party shall pay the amount of such Loss
to the Indemnified Party on demand. If the Indemnifying Party has timely
disputed its liability or the amount of its liability with respect to such
claim, the Indemnifying Party and the Indemnified Party shall proceed in good
faith to negotiate a resolution of such dispute, and if not resolved through
negotiations within the Resolution Period, such dispute shall be resolved by
litigation in accordance with paragraph (c) of this Section 5.2.
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(b) In the event any Indemnified Party should have a claim under
Section 5.1 against the Indemnifying Party that does not involve a Third Party
Claim, the Indemnified Party shall deliver to the Indemnifying Party a written
notification of a claim for indemnity under Section 5.1 specifying the nature of
and basis for such claim, together with the amount or, if not then reasonably
ascertainable, the estimated amount, determined in good faith, of such claim (an
"Indemnity Notice") with reasonable promptness to the Indemnifying Party. The
failure by any Indemnified Party to give the Indemnity Notice shall not impair
such party's rights hereunder except to the extent that the Indemnifying Party
demonstrates that it has been irreparably prejudiced thereby. If the
Indemnifying Party notifies the Indemnified Party that it does not dispute the
claim or the amount of the claim described in such Indemnity Notice or fails to
notify the Indemnified Party within the Dispute Period whether the Indemnifying
Party disputes the claim or the amount of the claim described in such Indemnity
Notice, the Loss in the amount specified in the Indemnity Notice will be
conclusively deemed a liability of the Indemnifying Party under Section 5.1 and
the Indemnifying Party shall pay the amount of such Loss to the Indemnified
Party on demand. If the Indemnifying Party has timely disputed its liability or
the amount of its liability with respect to such claim, the Indemnifying Party
and the Indemnified Party shall proceed in good faith to negotiate a resolution
of such dispute, and if not resolved through negotiations within the Resolution
Period, such dispute shall be resolved by litigation in accordance with
paragraph (c) of this Section 5.2.
(c) Any dispute under this Agreement shall be subject to litigation
and shall be finally and conclusively determined in a Court of law in the State
of __New York__.
IN WITNESS WHEREOF, the Parties have executed this Agreement,
effective as of this _24th_ day of __May__ 2001.
Signed, sealed and delivered
in the presence of:
SELLER:
__________________ By: /s/ Xxxx Xxxxxxxx, President
----------------------------
Cormax Business Solutions
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PURCHASER:
__________________ By: /s/ Xxxxxxx XxXxxxxxx,President
-------------------------------
Barrington Capital Corp.
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