EXHIBIT A.5 - STOCK PURCHASE AGREEMENT BETWEEN INCOMNET, INC. AND XXXXX
XXXXXXXXX
THIS STOCK PURCHASE AGREEMENT ("Agreement") is entered into as of April
25, 1997, by and among Xxxxx Xxxxxxxxx, an individual ("Seller"), California
Interactive Computing, Inc., a California corporation (the "Company"), and
Incomnet, Inc., a California corporation ("Purchaser").
R E C I T A L S
A. The Seller is the record owner of 1,000 shares of the outstanding
shares of the capital stock, par value $0.10 per share, of the Company (the
"Stock").
B. The parties hereto wish to provide for the sale of the Stock by the
Seller to the Purchaser pursuant to the terms and subject to the conditions
of this Agreement.
SECTION 1. SALE AND PURCHASE
1.1 SALE AND PURCHASE OF STOCK. Subject to the terms and conditions of
this Agreement, the Seller shall sell, transfer, assign and deliver to
Purchaser, and Purchaser shall purchase from the Seller, One Thousand (1,000)
shares of Stock.
1.2 PURCHASE PRICE. As consideration for the sale by the Seller of its
shares of Stock to Purchaser on the Closing Date (as defined in Section 2.1
of this Agreement), Purchaser shall pay a total purchase price of $19,900.
SECTION 2. CLOSING
2.1 ESCROW. Prior to closing, all documents and Consideration related to
this transaction shall be deposited in an Escrow Account handled by Xxxx X.
Xxxxxxxxxx (the "Escrow Agent"), who will act as an escrow agent pursuant to
the terms of an Escrow Agreement with both the Purchaser and Seller.
2.2 TIME AND PLACE. The closing of the transactions contemplated by
this Agreement (the "Closing") shall be held at the offices of the Company in
Valencia, California, at 1:00 p.m on or before April 25, 1997, or at such
other place, time or date (the "Closing Date") as the parties hereto may
agree.
2.3 PROCEDURES AT CLOSING. The following shall take place at the
Closing:
(a) The Escrow Agent shall deliver to the Purchaser a notice that he
holds the certificates representing the shares of Stock being sold by the
Seller pursuant to this Agreement, with appropriate stock power(s) attached
and endorsed in blank.
(b) The Escrow Agent shall deliver to the Seller a check for $19,900.
SECTION 3. INDEMNIFICATION AND WARRANTIES OF THE SELLER ASSOCIATED WITH THE
COMPANY
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3.1 INTANGIBLE PROPERTY. The Seller warrants that he has (i) no
financial, business or contractual relationship or arrangement with the
Company nor (ii) any direct or indirect interest in any property, asset or
right which is owned or used by the Company, except as described in the
Employment Agreement Between California Interactive Computing, Inc. and Xxxxx
X. Xxxxxxx, attached as Exhibit D.
3.2 OBLIGATIONS. The Seller warrants that Company has no debt, liability
or other obligation (whether absolute, accrued, contingent or otherwise), to
the Seller, other than the debt that has been assumed by the Purchaser as
described in Section 1.2 (b).
3.3 CLAIMS TO TANGIBLE PERSONAL PROPERTY. The Seller warrants that he
has no claims to ownership of the tangible personal property of the Company,
including any computer hardware, software, accessories and any items of
furniture or fixtures or other materials that are created, used or owned by
the Company in the conduct of its business.
3.4 CLAIMS TO TRADEMARKS AND TRADENAMES. The Seller warrants that (i)
he has no claims to use any trademark, service xxxx, trade name or copyright
which is presently being used by the Company, and (ii) he will not use any
trademark, service xxxx, trade name, copyright or patent that is owned, used
or claimed by the Company without the express written permission of the
Company.
3.5 INDEMNIFICATION FROM LITIGATION. Upon the Closing of this
transaction, the Seller (i) agrees to indemnify and hold harmless the Company
and any of its former and present officers, other shareholders, directors and
employees for any actions, real or imagined, taken by these individuals prior
to the Close of this transaction that may have had, in the opinion of the
Seller, any adverse impact in any manner upon the Seller, whether real or
perceived, and (ii) willingly and knowingly agrees that the payment from the
Purchaser at the Closing of this transaction resolves any claim or potential
claim, action, suit, proceeding, dispute, litigation or complaint by the
Seller against the Company or any of the present or former directors,
officers, other shareholders and employees of the Company and (iii) gives up
the right to initiate any action, suit, proceeding, dispute, litigation,
claim or complaint before any court, tribunal, governmental body,
governmental agency or arbitrator against the Company or any of the present
or former directors, officers, other shareholders and employees of the
Company for actions taken by the Company or any of the present or former
directors, officers and employees of the Company prior to the Closing of this
transaction.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE SELLER ASSOCIATED WITH
THE SALE TO THE PURCHASER
4.1 OWNERSHIP OF SHARES. The Seller represents and warrants that (a)
she owns One Thousand (1,000) shares of Stock and does not own any other
securities or other assets of the Company, that (b) he has, and shall
transfer to the Purchaser at the Closing, good and valid title to all of such
shares free and clear of any liens, pledges, security interests, adverse
claims, equities, options, proxies, charges, encumbrances or restrictions
(other than the restrictions set forth in the Company's
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Articles of Incorporation).
4.2 POWER AND AUTHORITY; BINDING NATURE OF AGREEMENT.
(a) The Seller represents and warrants that he has full power and
authority to enter into this Agreement and to perform its obligations
hereunder, and that the execution, delivery and performance of this
Agreement by him has been duly authorized by all necessary action on its
part.
(b) The Seller represents and warrants that, assuming that this
Agreement is a valid and binding obligation of each of the other parties
hereto, this Agreement is a valid and binding obligation of the Seller.
4.3 LITIGATION. The Seller represents and warrants that there is no
action, suit, proceeding, dispute, litigation, claim, complaint or
investigation by or before any court, tribunal, governmental body,
governmental agency or arbitrator pending or, to the best of the knowledge of
the Seller, threatened against the Seller which challenges or would challenge
any of the actions required to be taken by the Seller under this Agreement.
4.4 NON-CONTRAVENTION. The Seller represents and warrants that neither
the execution and delivery of this Agreement nor the performance hereof
(including the sale of shares of Stock being sold by or on behalf of the
Seller pursuant hereto) (i) will result in any violation or breach of any
agreement or other instrument to which the Seller is a party or by which the
Seller is a party or by which the Seller or any of the shares of Stock owned
(beneficially or of record) by the Seller is bound, or (ii) will result in a
violation of any law, rule, regulation, treaty, ruling, directive, order,
arbitration award, judgment or decree to which the Seller or any of such
shares of Stock is subject.
4.5 APPROVALS. The Seller represents and warrants that no
authorization, consent or approval of, or registration or filing with, any
governmental authority or any other person is required to be obtained or made
by the Seller in connection with the execution and delivery of this Agreement
or the performance hereof (including the sale of the shares of Stock being
sold by or on behalf of the Seller pursuant hereto).
4.6 BROKERS. The Seller represents and warrants that he has not agreed
to pay any brokerage fees, finder's fees or other fees or commissions with
respect to the transactions contemplated by this Agreement, and, to the best
of the knowledge of the Seller, no person is entitled, or intends to claim
that it is entitled, to receive any such fees or commissions in connection
with such transactions.
4.7 REPRESENTATIONS TRUE ON CLOSING DATE. The Seller represents and
warrants that the representations and warranties of the Seller set forth in
this Agreement are true and correct on the date hereof, and will be true and
correct on the Closing Date as though such representations and warranties
were made as of the Closing Date.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF PURCHASER
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Purchaser represents and warrants to the Seller as follows:
5.1 NON-DISTRIBUTIVE INTENT. The shares of Stock being purchased by
Purchaser pursuant to this Agreement are not being acquired by Purchaser with
a view to the public distribution of them.
5.2 NON-CONTRAVENTION. Neither the execution and delivery of this
Agreement or the Promissory Note nor the performance hereof or thereof (i)
will result in any violation or breach of any agreement or other instrument
to which Purchaser is a party or by which Purchaser is bound, or (ii) will
result in a violation of any law, rule, regulation, treaty, ruling,
directive, order, arbitration award, judgment or decree to which Purchaser is
subject.
5.3 AUTHORIZATION; BINDING NATURE OF AGREEMENT. Purchaser has all
necessary power and authority to enter into and perform its obligations under
this Agreement and the Promissory Note. The execution, delivery and
performance of this Agreement and the Promissory Note on behalf of Purchaser
have been duly authorized by all necessary action on the part of Purchaser
and its officers, directors and shareholders. Assuming that this Agreement
is a valid and binding obligation of each of the other parties hereto, (i)
this Agreement is a valid and binding obligation of Purchaser, and (ii) the
Promissory Note will be a valid and binding obligation of Purchaser as of the
Closing Date.
5.4 APPROVALS. No authorization, consent or approval of, or
registration or filing with, any governmental authority or any other person
is required to be obtained or made by Purchaser in connection with the
execution, delivery or performance of this Agreement or the Promissory Note.
5.5 BROKERS. Purchaser has not agreed to pay any brokerage fees,
finder's fees or other fees or commissions with respect to the transactions
contemplated by this Agreement, and, to the best of Purchaser's knowledge, no
person is entitled, or intends to claim that it is entitled, to receive any
such fees or commissions in connection with such transactions.
5.6 REPRESENTATIONS TRUE ON CLOSING DATE. The representations and
warranties of Purchaser set forth in this Agreement are true and correct on
the date hereof, and will be true and correct on the Closing Date as though
such representations and warranties were made as of the Closing Date.
SECTION 6. PRE-CLOSING COVENANTS RELATING TO THE COMPANY
The Seller acknowledges that the Closing of this transaction is
dependent upon the Company continuing to operate in the manner described
below in Sections 6.1 through 6.9 and that the Purchaser has the full right
to void this transaction if the Company does not operate in the manner as set
forth below in Sections 6.1 through 6.9 of this Agreement. Accordingly, as a
condition to the Purchaser's obligation to close any of the transactions
contemplated by this Agreement, between the date of this Agreement and the
Closing Date:
6.1 CONDUCT OF BUSINESS. The Company shall carry on its business in the
same manner as such business has been conducted prior to the date of this
Agreement. Without limiting the generality of the foregoing, the Company
shall not do, and shall ensure that none of its subsidiaries is permitted to
do, any of the following
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without the prior written consent of Purchaser:
(a) declare, set aside or pay any dividend or make any other
distribution in respect of any shares of capital stock, or repurchase,
redeem or otherwise reacquire any shares of capital stock or other
securities;
(b) sell or otherwise issue any shares of capital stock or any other
securities;
(c) amend its articles of incorporation, bylaws or other charter or
organizational documents, or effect or become a party to any merger,
recapitalization, reclassification of shares, stock split, reverse stock
split, reorganization or similar transaction;
(d) form any new subsidiary or acquire any equity interest or other
interest in any other entity;
(e) purchase or otherwise acquire any assets, or lease any assets
from any other person, except in the ordinary course of business consistent
with past practice;
(f) make any capital expenditure (i) outside the ordinary course of
business, (ii) inconsistent with past practice, (iii) in an amount
exceeding three thousand dollars ($3,000), or (iv) in an amount which would
cause the total amount of the capital expenditures made by the Company
between the date of this Agreement and the Closing Date to exceed ten
thousand dollars ($10,000);
(g) sell or otherwise transfer any assets to any other person, except
in the ordinary course of business consistent with past practice and at a
price equal to the fair market value of the assets transferred;
(h) lease any assets to any other person, except in the ordinary
course of business consistent with past practice and at rental rate equal
to the fair value of the assets leased;
(i) mortgage, pledge, hypothecate or otherwise encumber any assets,
except in the ordinary course of business consistent with past practice;
(j) enter into any contract or incur any debt, liability or other
obligation (whether absolute, accrued, contingent or otherwise), except for
(i) contracts that are entered into in the ordinary course of business
consistent with past practice and that have terms of less than six months
and do not contemplate payments by or to the Company which will exceed,
over the term of the contract, three thousand dollars ($3,000) in the
aggregate, and (ii) current liabilities incurred in the ordinary course of
business consistent with past practice;
(k) make any loan or advance to any other person, except for advances
that are made to customers in the ordinary course of business consistent
with past practice and that are properly reflected as "accounts
receivables";
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(l) pay any bonus to, or increase the amount of the salary, fringe
benefits or other compensation or remuneration payable to, any of the
directors or officers of the Company;
(m) amend or terminate any contract or other instrument to which the
Company is a party or by which the Company or any of its assets is bound,
except in the ordinary course of business consistent with past practice;
(n) take any action that would result in a violation or breach of, or
a default under, any contract or other instrument to which the Company is a
party or by which the Company or any of its assets is bound;
(o) discharge any lien or discharge or pay any indebtedness,
liability or other obligation, except for current liabilities that (i) are
reflected on December 31, 1996 Balance Sheet or have been incurred since
December 31, 1996 in the ordinary course of business consistent with past
practice, and (ii) are to be discharged or paid in the ordinary course of
business consistent with past practice;
(p) forgive any debt or otherwise release or waive any right or
claim, except in the ordinary course of business consistent with past
practice;
(q) change its methods of accounting or accounting practices in any
respect;
(r) enter into any other transaction outside the ordinary course of
business or inconsistent with past practice;
(s) take any action that would cause any of the Company's
representations and warranties set forth in this Agreement to become untrue
or incorrect; or
(t) agree or commit (orally or in writing) to do any of the things
described in clauses (a) through (s) of this Section 6.1.
6.2 EMPLOYEES. The Company shall use its best efforts to keep available
to the Company all of its current employees.
6.3 BUSINESS RELATIONSHIPS. The Company shall use its best efforts to
preserve the current relationships of the Company with customers, carriers
and all other users and suppliers of goods or services and with all other
persons having business relationships with the Company.
6.4 INSURANCE. The Company shall keep in full force all of the
insurance policies referred in Section 3.12 of this Agreement.
6.5 ACCESS. The Company shall provide Purchaser and Purchaser's
employees, attorneys, accountants and other representatives full and complete
access to all properties and records of the Company, and shall arrange for
its certified public accountants to make available to Purchaser copies of all
working papers relating to the Existing Financial Statements and to the
financial statements referred to in Section 6.7 of this Agreement.
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6.6 OBLIGATION TO UPDATE DISCLOSURE. The Company shall promptly
disclose to Purchaser in writing any facts or circumstances arising after the
date hereof that would have been required to be disclosed to the Purchaser
pursuant to this Agreement if such facts or circumstances had existed as of
the date hereof.
6.7 AUDITED FINANCIAL STATEMENTS. On or before April 11, 1997, the
Company shall deliver to Purchaser the following financial statements: (i)
the unaudited balance sheet of the Company as of Xxxxx 00, 0000, (xx) the
unaudited statements of income and retained earnings, stockholders' equity
and changes in financial position of the Company for the six months ended
December 31, 1996; (iii) the audited balance sheet of the Company as of June
30, 1996; (iv) the audited statements of income and retained earnings,
stockholders' equity and changes in financial position of the Company for the
fiscal year ending June 30, 1996; and (v) supporting and supplemental
schedules. Said financial statements shall be accompanied by an unqualified
opinion of the Company's independent certified public accountants to the
effect that said financial statements: (i) present fairly in the opinion of
management the financial position of the Company as of June 30, 1996 and
December 31, 1996 and the results of operations and changes in financial
position of the Company for the fiscal year ended June 30, 1996 and the six
months ended December 31, 1996; and (ii) have been prepared in accordance
with generally accepted accounting principles applied on a consistent basis
throughout the period covered thereby.
6.8 COOPERATION. The Company shall cooperate fully with the Seller and
Purchaser for the purpose of attempting to ensure the consummation of the
transactions contemplated hereby.
6.9 CONDITIONS. In addition to its other obligations hereunder, the
Company shall use its best efforts to cause the conditions set forth in
Sections 9.1 through 9.8 to be satisfied on a timely basis. The Company
shall promptly inform Purchaser if the Company believes or has any reason to
believe that any of the conditions set forth in Section 9 might not be
satisfied in a timely manner on or before the Closing Date.
SECTION 7. PRE-CLOSING COVENANTS OF THE SELLER
Between the date hereof and the Closing Date:
7.1 COOPERATION. The Seller shall cooperate fully with the Company and
the Purchaser for the purpose of attempting to ensure the consummation of the
transactions contemplated hereby.
7.2 CONDITIONS. In addition to its other obligations hereunder, the
Seller shall use his best efforts to cause the conditions set forth in
Section 9 to be satisfied on a timely basis. The Seller shall promptly
inform Purchaser if it believes or has any reason to believe that any of the
conditions set forth in Section 9 might not be satisfied on a timely basis on
or before the Closing Date.
SECTION 8. PRE-CLOSING COVENANT OF PURCHASER
Between the date of this Agreement and the Closing Date: (a) Purchaser
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shall use its best efforts to cause the conditions set forth in Sections 10.1
and 10.3 to be satisfied on a timely basis, and (b) Purchaser shall promptly
inform the Seller if Purchaser believes or has any reason to believe that any of
the conditions set forth in Section 10 might not be satisfied on a timely basis
on or before the Closing Date.
SECTION 9. CONDITIONS TO OBLIGATION OF PURCHASER TO CLOSE
The obligation of Purchaser to consummate the transactions that are to
be consummated at the Closing is subject to the satisfaction, on or before the
Closing Date, of the following conditions (any of which may be waived by
Purchaser in whole or in part):
9.1 ACQUISITION OF OTHER SHARES. The Purchaser shall have acquired or
shall acquire on the Closing Date 100% of the issued and outstanding capital
stock of the Company, including the shares of Stock subject to this Agreement.
9.2 RESIGNATIONS OF CERTAIN DIRECTORS. Such directors of the Company as
Purchaser shall have specified in writing shall have submitted their
resignations (to be effective as of the Closing) from the Board of Directors of
the Company. The directors of the Company shall have duly appointed (effective
as of the Closing) such other persons as Purchaser shall have designated to fill
the vacancies on the Company's Board of Directors. The Seller shall be
appointed to be a member of the Company's Board of Directors on the Closing
Date.
9.3 REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties of the Company set forth in this Agreement, and each of the
representations and warranties of the Seller set forth in this Agreement, shall
have been true and correct in all material respects on the date of this
Agreement, and shall be true and correct in all material respects on the Closing
Date as though such representations and warranties were made as of the Closing
Date. In addition, the Purchaser shall have verified to its satisfaction that
(a) the Company's total revenues for the fiscal year ended June 30, 1996 were at
least $2.5 million, (b) the Company has no long term debts other than the loans
from the Seller and Xxxxx Xxxxxxx which aggregate approximately $450,000, (c)
the Company has no short term debts which are inconsistent with its earnings and
revenues, (d) the Company has good, valid and unencumbered title to all of the
software which it represents to own, (e) the Company has no pending or
threatened litigation or claims against it and no liabilities other than those
disclosed in its financial statements, (f) the Company has a stable base of
customers with a minimum of 80% having no plans to switch to a new software
provider, and (g) that the Company's software performs as it represents, and to
the satisfaction of its customers.
9.4 PERFORMANCE. The Seller shall have tendered to Purchaser all of its
shares of Stock, and the Company and the Seller shall have duly complied with
and performed, in all material respects, all other agreements, covenants and
obligations required by this Agreement to be complied with or performed by them
on or before the Closing Date.
9.5 PROCEEDINGS AND DOCUMENTS. All corporate and other proceedings of
the Company and the Seller relating to the transactions contemplated by this
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Agreement, and all instruments and other documents incident to such
transactions, shall be reasonably satisfactory in form and substance to
Purchaser, and Purchaser shall have received copies of such instruments and
other documents (including certified copies of corporate resolutions and
"good standing" certificates) as it may reasonably request.
9.6 RETENTION OF GENERAL MANAGER. Prior to the Closing Date, Xxxx
Xxxxxxxx agrees with the Company and the Purchaser to serve as the General
Manager of the Company for at least 12 months after the Closing Date.
9.7 VICE PRESIDENT OF SALES AND MARKETING. Prior to the Closing Date,
Xxxxxxx Xxxxx agrees to serve as the Company's Vice-President of Sales and
Marketing for at least 12 months after the Closing Date, reporting to Xx. Xxxx
Xxxxxxxx.
9.8 FINAL APPROVAL OF BOARD OF DIRECTORS. The Purchaser's Board of
Directors adopts a resolution giving final approval to this Agreement and the
transactions contemplated by this Agreement.
SECTION 10. CONDITIONS TO OBLIGATIONS OF SELLER TO CLOSE
The obligations of the Seller to consummate the transactions that are
to be consummated at the Closing are subject to the satisfaction, on or before
the Closing Date, of the following conditions (any of which may be waived by the
Seller in whole or in part):
10.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties of
Purchaser set forth in this Agreement shall have been true and correct in all
material respects on the date of this Agreement, and shall be true and correct
in all material respects on the Closing Date as though such representations and
warranties were made as of the Closing Date.
10.2 PERFORMANCE. Purchaser shall have duly complied with and performed,
in all material respects, all agreements and obligations required by this
Agreement to be complied with or performed by Purchaser on or before the Closing
Date.
10.3 PROCEEDINGS AND DOCUMENTS. All corporate and other proceedings of
Purchaser relating to the transactions contemplated by this Agreement and all
instruments and other documents incident to such transactions, shall be
reasonably satisfactory in form and substance to the Seller, and the Seller
shall have received copies of such instruments and other documents as it may
reasonably request.
SECTION 11. TERMINATION OF AGREEMENT
This Agreement and the transactions contemplated hereby may be
terminated and abandoned at any time before the Closing:
(a) by the unanimous consent of the parties hereto;
(b) by the Seller, if there has been a material breach by Purchaser
of any of the representations, warranties, covenants or
obligations of Purchaser set forth herein;
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(c) by Purchaser, if there has been a material breach by the Company,
or the Seller of any of the representations, warranties,
covenants or obligations of the Company or the Seller set forth
herein; or
(d) if the Closing shall not have taken place by 4:00 p.m. on June 1,
1997 (or such later time or date as the parties hereto may
agree), (i) by Purchaser for any reason, unless the failure of
the Closing to take place by such time is attributable to the
failure of Purchaser to perform its obligations hereunder, or
(ii) by the Seller for any reason, unless the failure of the
Closing to take place by such time is attributable to the failure
of the Seller to perform its obligations hereunder.
SECTION 12. SURVIVAL OF REPRESENTATIONS AND WARRANTIES
The representations and warranties of each party hereto,
(including the representations and warranties of such party set forth in this
Agreement and the representations and warranties of such party set forth in
the instruments and other documents delivered pursuant hereto or in
connection herewith prior to or at the Closing, (i) shall survive, and shall
not be affected by, the Closing (or the termination of this Agreement
pursuant to Section 11), and (ii) shall not be affected by any information
furnished to, or any investigation made by, any other party hereto or any of
such other party's employees, attorneys, accountants or other
representatives. For purposes of this Agreement, each statement or other
item of information in any disclosures by the Seller or the Company to the
Purchaser shall be deemed to be a representation and warranty of the Company
pursuant to this Agreement.
SECTION 13. INDEMNIFICATION
13.1 INDEMNIFICATION BY COMPANY. The Company shall hold harmless
and indemnify Purchaser and each of Purchaser's past, present and future
directors, officers, shareholders, employees, attorneys, agents and other
affiliates from and against any damage, cost or loss that is directly or
indirectly suffered or incurred at any time by Purchaser or any of such
directors, officers, shareholders, employees, attorneys, agents or other
affiliates and that arises directly or indirectly out of or by virtue of, or
is directly or indirectly connected with, the breach or inaccuracy of any of
the representations and warranties of the Company or the failure of the
Company to perform any of its covenants or obligations contained in this
Agreement (or in any instrument or other document delivered hereunder or in
connection herewith).
13.2 INDEMNIFICATION BY THE SELLER. The Seller shall hold harmless
and indemnify Purchaser and each of Purchaser's past, present and future
directors, officers, shareholders, employees, attorneys, agents and other
affiliates ("Purchaser's Affiliates") from and against any damage, loss or
cost that is directly or indirectly suffered or incurred at any time by
Purchaser or any of Purchaser's Affiliates and that arises directly or
indirectly out of or by virtue of, or is directly or indirectly connected
with, the breach or inaccuracy of any of the representations and warranties
of the Seller or the failure of the Seller to perform any of his covenants or
obligations contained in this Agreement or in any instrument or other
document
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delivered hereunder or in connection herewith.
13.3 RIGHT OF SETOFF. Purchaser and the Company shall have the
right to set off the amount of any damages, loss or cost with respect to
which the Purchaser may be indemnified by the Seller hereunder against the
amount of any obligation of Purchaser or the Company to the Seller or his
successors or assigns.
13.4 INDEMNIFICATION BY PURCHASER. Purchaser shall hold harmless
and indemnify the Seller and each of the past, present and future directors,
officers, shareholders, employees, attorneys, agents and other affiliates of
the Seller from and against any damage, loss, shareholder or derivative suits
or claims as a result of this stock purchase agreement or cost that is
directly or indirectly suffered or incurred at any time by the Seller or any
of such directors, officers, shareholders, employees, attorneys, agents or
other affiliates and that arises directly or indirectly out of or by virtue
of, or is directly or indirectly connected with, the breach or inaccuracy of
any of the representations and warranties of Purchaser or the failure of
Purchaser to perform any of its covenants or obligations contained in this
Agreement or in any instrument or other document delivered hereunder or in
connection herewith.
13.5 NOTICE AND OPPORTUNITY TO DEFEND. If any legal proceeding is
initiated, or any claim or demand is made, against any person with respect to
which such person (the "Indemnified Party") may make a claim against any
party hereto (the "Indemnifying Party") pursuant to this Section 13, then the
Indemnified Party shall give prompt written notice of such legal proceeding,
claim or demand to the Indemnifying Party. The Indemnifying Party shall, at
its own expense and with its own counsel, defend or settle such legal
proceedings, claim or demand; provided, however, that: (i) the Indemnifying
Party shall keep the Indemnified Party informed of all material developments
and events relating to such legal proceeding, claim or demand; (ii) the
Indemnified Party shall have the right to participate, at its own expense, in
the defense of such legal proceeding, claim or demand and shall cooperate as
reasonably requested by the Indemnifying Party in the defense thereof; and
(iii) the Indemnifying Party shall not settle such legal proceeding, claim or
demand without the prior written consent of the Indemnified Party, which
consent shall not be unreasonably withheld.
13.6 INDEMNIFICATION NOT A WAIVER. A person's right to
indemnification pursuant to this Section 13 shall not be deemed to be such
person's exclusive remedy in connection with or arising from the breach or
inaccuracy of any of the representations and warranties of the Indemnifying
Party or the failure of the Indemnifying Party to perform any of its
covenants or obligations contained in this Agreement or in any instrument or
other document delivered hereunder or in connection herewith. The exercise
by any person of his right to demand and receive such indemnification shall
not be deemed to prejudice, or to operate as a waiver of, any remedy to which
such person may be entitled at law or equity.
SECTION 14. MISCELLANEOUS
14.1 FURTHER ASSURANCES. Following the Closing, the Seller shall
furnish to Purchaser and the Company such instruments and other documents as
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Purchaser may reasonably request for the purpose of carrying out or
evidencing the transactions contemplated hereby.
14.2 FEES AND EXPENSES. Purchaser and Company shall pay all fees,
costs and expenses that it incurs in connection with the negotiation and
preparation of this Agreement and in carrying out the transactions
contemplated hereby (including, without limitation, all fees and expenses of
its counsel and accountant).
14.3 DEFAULT. In the event that Purchaser is found to be in default
of the Promissory Note described in Sections 1.2 (a), then the Seller has the
right to demand that the remaining payments for all stock be made in full
within 30 days or that all stock not paid for on a pro-rated basis based on
payments actually made be returned to the Seller by the Escrow Agent.
14.4 NOTICES. Each notice or other communication hereunder shall be
in writing and shall be deemed to have been duly given on the earlier of (i)
the date on which such notice or other communication is actually received by
the intended recipient thereof, or (ii) the date five (5) days after the date
such notice or other communication is mailed by registered or certified mail
(postage prepaid) to the intended recipient at the following address (or at
such other address as the intended recipient shall have specified in a
written notice given to the other parties hereto);
IF TO THE SELLER:
Xxxxx Xxxxxxxxx
0000 Xxxxx Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
IF TO THE COMPANY:
California Interactive Computing, Inc.
00000 Xxxxxx Xxxxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx, President
IF TO PURCHASER:
Incomnet, Inc.
00000 Xxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx, President
14.5 PUBLICITY. No press release, notice to any third party or
other publicity concerning the transactions contemplated by this Agreement
shall be issued, given or otherwise disseminated without the prior approval
of each of the parties hereto; provided, however, that such approval shall
not be unreasonably withheld.
14.6 TABLE OF CONTENTS AND HEADINGS. The table of contents of this
Agreement and the underlined headings contained herein are for convenience
only, shall not be deemed to be a part of this Agreement and shall not be
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referred to in connection with the interpretation hereof.
14.7 COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall constitute an original and all of which,
when taken together, shall constitute one agreement.
14.8 GOVERNING LAW. This Agreement shall be construed in accordance
with, and governed in all respects by, the laws of the State of California.
The venue for any legal action under this Agreement shall be in the
appropriate forum in the County of Los Angeles, State of California.
14.9 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
the parties hereto and their respective heirs, successors and assigns, if any,
and shall inure to the benefit of the parties hereto and their respective
heirs, successors and assigns, if any.
14.10 SEVERABILITY. In the event that any provision of this
Agreement, or the application of such provision to any person or set of
circumstances, shall be determined to be invalid, unlawful or unenforceable
to any extent at any time after the Closing Date, the remainder of this
Agreement, and the application of such provision to persons or circumstances
other than those as to which it is determined to be invalid, unlawful or
unenforceable, shall not be affected and shall continue to be enforceable to
the fullest extent permitted by law.
14.11 WAIVER. No failure or delay on the part of any party hereto
in the exercise of any power, right or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power,
right or privilege preclude any other or further exercise thereof or of any
other power, right or privilege.
14.12 ENTIRE AGREEMENT. This Agreement sets forth the entire
understanding of the parties hereto and supersedes all prior agreements and
understandings among the parties relating to the subject matter hereof.
14.13 PARTIES IN INTEREST. Except for the provisions of Section 14,
none of the provisions of this Agreement or of any other document relating
hereto is intended to provide any rights or remedies to any person
(including, without limitation, any employees or creditors of the Company)
other than the parties hereto and their respective heirs, successors and
assigns, if any.
14.14 VARIATIONS OF PRONOUNS. Whenever required by the context
hereof, the singular number shall include the plural, and vice versa; the
masculine gender shall include the feminine and neuter genders; and the
neuter gender shall include the masculine and feminine genders.
14.15 "PERSON". The term "person" as used herein shall include any
individual, corporation, general partnership, limited partnership, joint
venture, association, trust, organization, business entity, government (or
political subdivision thereof) or governmental agency.
14.16 APPLICABILITY OF CERTAIN TERMS TO NON-CORPORATE ENTITIES.
When used herein with respect to any non-corporate entity: the terms
"shares," "stock" and "capital stock" shall be deemed to refer to equity
interests of
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any nature in such entity; the term "shareholder" shall be
deemed to refer to any holder of any equity interest in such entity; and the
terms "director" and "officer" shall be deemed to refer to any person who is
involved in the management of such entity or who performs functions for such
entity that are similar to the functions performed by officers or directors
of a corporation.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
SELLER: /s/ Xxxxx Xxxxxxxxx
-------------------------
Xxxxx Xxxxxxxxx
PURCHASER: INCOMNET, INC.
By: /s/ Xxxxxx Xxxxxxx
-------------------------
Xxxxxx Xxxxxxx, President
Attested By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------
Xxxxxxx X. Xxxxxxx, Secretary
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