EXHIBIT 10.4
STOCK TRANSFER AGREEMENT
THIS STOCK TRANSFER AGREEMENT ("Agreement") is entered into as of the 7th
day of December 1998, by and between WORLDQUEST COMMUNICATIONS, Inc., a Delaware
Corporation ("Purchaser" or "Communications"), ("WORLDQUEST NETWORKS, LLC
("LLC") and WORLDQUEST NETWORKS, INC., a Texas Corporation (the "Corporation").
WHEREAS, the Corporation has 10,000,000 shares of common stock authorized,
$.10 par value, and 5,000,000 shares of preferred stock authorized, $.10 par
value, and LLC owns 3,000,000 shares of common stock, and there are options and
warrants granted for an additional 357,341 shares of common stock;
WHEREAS, the parties hereto acknowledge that prior to the date hereof
Purchaser and/or Communications have funded approximately $100,000 for the
benefit of LLC and the Corporation and have granted an exclusive license to use
the name "WorldQuest" to both LLC and the Corporation which has not been
memorialized in writing and the parties desire to memorialize such license in
writing by virtue of this Agreement; and
WHEREAS, LLC and the Corporation acknowledge that in consideration of the
approximate $100,000 funded for the benefit of LLC and Corporation and in
exchange for the exclusive license of the name "WorldQuest" Purchaser was to
receive 360,000 shares of common stock in the Corporation and that LLC desires
to cause the transfer of such shares to be made to Purchaser so that Purchaser
will own of record a total of ten percent (12%) of the issued and outstanding
shares of common stock of the Corporation.
NOW THEREFORE, in consideration of the mutual covenants and conditions
herein contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto do hereby agree
as follows:
1. Transfer of Shares. LLC hereby agrees to transfer and assign record and
beneficial ownership of 360,000 shares of the issued and outstanding shares of
common stock of the Corporation to Purchaser representing twelve percent (12%)
of the issued and outstanding shares of common stock of the Corporation as of
the date of this Agreement (the "Acquired Shares") and the Corporation shall
cancel common stock certificate number 002, representing 2,990,000 shares of
common stock, upon receipt thereof from LLC and shall issue one (1) stock
certificate in Purchaser's name in the amount of 360,000 shares of common stock
of the Corporation which shall be delivered to Purchaser within ten (10)
business days following the execution of this Agreement and shall issue one (1)
stock certificate in LLC's name in the amount of 2,630,000 shares of common
stock which shall be delivered to LLC within ten (10) business days following
the execution of this Agreement.
2. License; No Repayment of $100,000. Each of Purchaser and Communications
confirm and agree that they have granted an exclusive (except for the retained
right hereinafter set forth), perpetual, world-wide license to both LLC and the
Corporation to use the name "WorldQuest", reserving only the right in the name
of Communications to use the name "WorldQuest" for use in connection with its
existing business. Purchaser and Communications also confirm and agree that
they do not expect to be repaid from
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any source the approximate amount of $100,000 previously funded by them to or
for the benefit of LLC and the Corporation.
3. Title to the Stock. LLC represents and warrants to the Purchaser that (i)
LLC has good, absolute and marketable title to the Acquired Shares, free and
clear of all liens, claims, encumbrances and restrictions of every kind; and
(ii) LLC has the complete and unrestricted right, power and authority to
transfer and assign the Acquired Shares hereunder. LLC makes no other warranty
or representation to Purchaser concerning or relating to the Acquired Shares,
other than as stated herein.
4. Representations of Purchaser, (and Communications). Each of Purchaser and
Communications represents and warrants to LLC and the Corporation as follows:
A. Each of Purchaser and Communications is a corporation duly organized,
validly existing and in good standing under the laws of Nevada. The Purchaser
has full corporate power and authority to enter into and to perform this
Agreement and to acquire the Acquired Shares from LLC and has received all
financial and other information which Purchaser has requested about LLC and the
Corporation and Purchaser understands that neither LLC nor the Corporation
guarantees or represents that there will ever be an appreciation in the price of
the Acquired Shares and that the price of the Acquired Shares may decline;
Communications has full corporate power and authority, to enter into and to
perform this Agreement; and this Agreement has been, or when executed will be,
duly executed and delivered by each of Purchaser, and Communications and is or
will be, upon execution, the legal and binding obligation of each of Purchaser
and Communications enforceable against each of them in accordance with its
terms, except as limited by bankruptcy, insolvency, reorganization, moratorium
and other similar laws affecting creditors' rights and principles of equity.
B. Purchaser acknowledges that the Acquired Shares have not been
registered under the Securities Act of 1993 (the "Act") or qualified under any
state securities act in reliance on certain exemptions, and Purchaser also
acknowledges that there are substantial restrictions of the transferability of
the Acquired Shares, that the shareholders have no right to require that the
Acquired Shares be registered under the Act and that there will be no public
market for the Acquired Shares unless they are registered under the Act.
5. Representation of the Corporation and LLC. The Corporation and LLC hereby
represent and warrant to Purchaser the following:
A. The Corporation is a corporation duly organized, validly existing and
in good standing under the laws of Texas. The Corporation has full corporate
power and authority to carry on its business as it is now being conducted and to
own and operate its assets, properties and business. Each of LLC and the
Corporation has full limited liability company or corporate power and authority
to enter into and to perform this Agreement and to consummate the transactions
contemplated hereby.
B. The authorized capital stock of the Corporation consists solely of
10,000,000 shares of common stock, 3,000,000 of which are issued and
outstanding, and 5,000,000 shares of preferred stock, no shares of which are
issued and outstanding. There are no other authorized classes or series of
capital stock of the Corporation, except that a series of 166,667 shares of
preferred stock have been designated as
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Series A Preferred Stock, but no shares of such series are issued and
outstanding. All outstanding shares of common stock of the Corporation are duly
authorized, validly issued, fully paid, and nonassessable and have been offered,
issued, sold and delivered by the Corporation in compliance with applicable
securities laws. There are no preemptive rights with respect to the common stock
or preferred stock of the Corporation. There are no outstanding subscriptions,
options, warrants, rights or other arrangements or commitments, whether express
or implied, obligating the Corporation to issue any shares of common stock or
preferred stock of the Corporation or securities exchangeable for or convertible
into the common stock or preferred stock of the Corporation except for a warrant
to purchase 159,474 shares of common stock at an exercise price of $3.33 per
share granted to InterVoice, Inc.; options to purchase 167,867 shares of common
stock at an exercise price of $3.33 per share granted to Xxxxxxx Xxxxxx; and
options exercisable at an exercise price of $1.00 per share granted to directors
of the Corporation (an aggregate of 20,000 shares) and employees of the
Corporation (an aggregate of 10,000 shares). The issuance and delivery at the
Closing of the certificates representing the Acquired Shares will provide
Purchaser record ownership to such Acquired Shares free and clear of all liens
assuming Purchaser has taken no action to create a lien on any of the Acquired
Shares. Except for the Articles of Incorporation and Bylaws of the Corporation,
and this Agreement, there are no outstanding agreements or documents binding on
the Corporation regarding the transfer, voting, pledge, optioning, or gifting of
any capital stock of the Corporation.
C. The Corporation does not own, directly or indirectly, any of the
capital stock of any other corporation or any entity, profit sharing
participation or other interest in any other entity.
D. The execution, delivery and performance by the Corporation of this
Agreement has been duly authorized and approved by the board of directors of the
Corporation, and no further corporate action on the part of the Corporation is
necessary to fully authorize such execution, delivery and performance. The
execution, delivery and performance by LLC of this Agreement has been duly
authorized and approved by the members of LLC, and no further limited liability
company action on the part of LLC is necessary to fully authorize such
execution, delivery and performance. This Agreement has been, or when executed
will be, duly executed and delivered by the Corporation and LLC and is or will
be, upon execution, the legal and binding obligation of the Corporation and LLC
enforceable against each of them in accordance with its terms, except as limited
by bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting creditors' rights and principles of equity.
E. The execution and delivery of this Agreement will not (a) result in a
breach or violation of, constitute a default under, or result in the creation of
any lien upon any of any assets owned by the Corporation; or (b) violate any
provision of any law applicable to the Corporation.
F. The Corporation has all licenses and permits necessary to conduct the
operation of the Corporation and all governmental regulatory forms have been
timely filed.
G. Schedule I sets forth a true, correct and complete copy of the
Financial Statements. Except for the absence of footnotes and subject to normal
year-end adjustments, the Financial Statements (a) fairly present the financial
position of the Corporation, and the consolidated results of operations of the
Corporation for the respective periods indicated therein; (b) have been prepared
on a consistent basis with prior periods; and (c) have not been rendered untrue,
incomplete, or unfair as representations of the financial condition or results
of operations of Corporation by the subsequent discovery of events or
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occurrences which should have been reflected in such financial statements.
H. Except as set forth on Schedule H, the Financial Statements reflect
all material liabilities of the Corporation which are required to be reflected
thereon. All reserves shown or incorporated in the Financial Statements are
reasonable to provide for losses thereby contemplated. Except as set forth in
the Financial Statements or on Schedule H, the corporation is not liable upon or
with respect to, subject to or obligated in any other way to provide funds in
respect of or to guarantee or assume in any manner, any debt, obligation or
dividend of any other Person and there is no basis for the assertion of any such
claims or liabilities.
6. Anti-Dilution Protection. Upon issuance by the Corporation of shares at a
price below $1.00 per share ("Dilution Price"), the Corporation shall issue
shares to Purchase equal to the product of the number of shares purchased by
Purchaser multiplied by the difference in the purchase price per share for such
shares divided by the Dilution Price.
Survival of Representations. All representations, warranties and agreements
made by any party to this Agreement shall survive the execution and
delivery hereof and the closing of the transaction contemplated hereby.
8. Indemnification of Purchaser. The Corporation shall defend, indemnify and
hold Purchaser harmless from, against and in respect of any and all claims,
demands, lawsuits, proceedings, losses, assessments, fines, penalties,
administrative orders, obligations, costs, expenses, liabilities and damages,
including interest, penalties and reasonable attorneys' fees and costs of
investigation (all of the foregoing are hereinafter collectively referred to as
the "Claims") which arise or result from or relate to:
A. The breach or failure of any representation or warranty made by the
Corporation under or contained in this Agreement;
B. The breach by the Corporation of, or failure by the Corporation to
perform any of its covenants, commitments, agreements or obligations under or
contained in this Agreement, or
C. Purchaser being required to defend against, assume or discharge any
debt, liability or obligation of the Corporation of any nature whatsoever.
9. Arbitration.
A. In the event of a dispute arising out of or relating to this
Agreement, then, upon notice by any party to the other parties (an "Arbitration
Notice") and to the American Arbitration Association (the "AAA"). 000 Xxxx 00xx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000 (telephone 000-000-0000; fax 000-0000000),
the dispute shall be submitted to a sole arbitrator who is independent and
impartial, for binding arbitration in Dallas, Texas, in accordance with the
AAA's Commercial Arbitration Rules (the "Rules") as modified or supplemented by
this Agreement. The parties agree that they will faithfully observe this
Agreement and the Rules and that they will abide by and perform any award
rendered by the arbitrator. The arbitration shall be governed by the Federal
Arbitration Act, 9 U.S.C. Section 1-16 (or by the same principles enunciated by
such Act in the event it may not be technically applicable). The award or
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judgment of the arbitrator shall be final and binding on all parties and the
judgment upon the award or judgment of the arbitrator may be entered and
enforced by any court having jurisdiction. If any party becomes the subject of
a bankruptcy, receivership or similar proceeding under the laws of the United
States of America, any state or commonwealth or any other nation or political
subdivision thereof, then, to the extent permitted or not prohibited by
applicable law, any factual or substantive legal issues arising in or during the
pendency of any such proceeding shall be subject to all of the foregoing
mandatory arbitration provisions and shall be resolved in accordance therewith.
The agreements contained herein have been given for valuable consideration, are
coupled with an interest and are not intended to be executory contracts. The
fees and expenses of the arbitrator will be shared equitably (as determined by
the arbitrator) by all parties engaged in the dispute.
B. Promptly after the Arbitration Notice is given, the AAA will select
five (5) possible arbitrators, to whom the AAA will give the identities of the
parties and the general nature of the controversy. If any of those arbitrators
disqualifies himself or declines to serve. The AAA shall continue to designate
potential arbitrators until the parties have a panel of five (5) arbitrators to
select from. After the panel of five (5) potential arbitrators has been
completed, a two page summary of the background of each potential arbitrator
will be given to each of the parties and the parties will have a period of ten
(10) days after receiving the summaries in which to attempt to agree upon the
arbitrator to conduct the arbitration. If the parties are unable to agree upon
an arbitrator, then one (1) of the parties shall notify the AAA and the other
party, and the AAA will notify each party that each such party has five (5) days
from the AAA's notice to strike two (2) names from this list and advise the AAA
of the two (2) names stricken. After expiration of the strike period, if all
but one (1) candidate of the panel has been stricken, the remaining one (I)
person will be the arbitrator. If two (2) or more have not been stricken, then
the AAA shall select the arbitrator from one of those not stricken. The
decision of the AAA with respect to the selection of the arbitrator will be
final and binding in such case. For purposes of this Section 9., Purchaser will
be one party and the Corporation will be one party.
C. No litigation or other proceeding may ever be instituted at any time
in any court or before an administrative agency or body for the Purpose of
adjudicating, interpreting, or enforcing any of the rights or obligations of the
parties hereto or any rights or obligations relating to the subject matter
hereof whether or not covered by the express terms of this Agreement, or for the
purpose of adjudicating a breach or determination of the validity of this
Agreement, or for the purpose of having the award or judgment of an arbitrator,
except a proceeding instituted (i) for the purpose of having the award or
judgment of an arbitrator entered and enforced or (ii) to seek an injunction or
restraining order (but not damages in connection therewith) in circumstances
where such relief is available.
D. Within ten (10) days after the selection of the arbitrator, the
parties and their counsel will appear before the arbitrator at a place in
Dallas, Texas at a time designated by the arbitrator for the purpose of each
party making a one (1) hour or less presentation and summary of the case.
Thereafter, the arbitrator will set dates and times for additional hearings in
accordance with the Rules until the proceeding is concluded. The desire and
goal of the parties is, and the arbitrator will be advised that his goal should
be, to conduct the arbitration proceeding as expeditiously as possible. If any
party or his counsel fails to appear at any hearing, the arbitrator shall be
entitled to reach a decision based on the evidence with has been presented to
him by the parties who did appear.
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10. Choice of Law. It is the intention of the parties that the laws of the
State of Texas should govern the validity of this Agreement, the construction of
its terms, and the interpretation of the right and benefit of the parties.
11. Benefits. Each party agrees to execute any additional instruments
necessary to effectuate the intent of this Agreement. This Agreement shall be
binding upon, and inure to the benefit of, the parties' personal
representatives, successors and/or assigns.
12. Notices. All notices. requests, consents and other communications under
this Agreement shall be in writing and shall be deemed to have been delivered on
the date personally delivered or deposited in the United States Postal Service,
postage prepaid, by certified mail, return receipt requested, or telegraphed and
confirmed, or faxed and confirmed, if addressed to the respective parties as
follows:
If to the Corporation or LLC:
c/o WorldQuest Networks, Inc.
00000 Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, XX 00000
If to the Purchaser or Communications:
c/o WORLDQUEST COMMUNICATIONS, Inc.
0000 Xxxxxxx Xxxxxxx
X.X. Xxx 00000
Xxxxxxxxx, XX 00000-0000
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13. Entire Agreement. This Agreement cancels and supersedes all prior
negotiations and understandings between the parties relating hereto, and
embodies the entire agreement and understanding between such parties with
respect to the matters covered hereby.
14. Attorney Fees. The Corporation agrees to pay reasonable attorney fees and
expenses of the Corporation' and Purchaser's counsel that have been incurred in
the preparation of this transaction.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
effective as of December 7, 1998.
THE CORPORATION:
----------------
WORLDQUEST NETWORKS, INC.
By: /S/ XXXXXXX XXXXXX
____________________________
Xxxxxxx Xxxxxx, President
LLC:
----
WORLDQUEST NETWORKS, LLC
By: /S/ XXXX XXXXX
___________________________________
Xxxx Xxxxx, Chief Executive Officer
PURCHASER (COMMUNICATIONS):
---------------------------
WORLDQUEST COMMUNICATIONS, INC.
By: /S/ E. XXXXXX XXXXX
____________________________
E. Xxxxxx Xxxxx, President
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