STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is entered into this
11th day of November, 1999 by and among Shanecy, Inc., a Delaware corporation
with a place of business at 000 Xxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxx, Xxxxxxx
Xxxxxxxx X0X 0X0 (the "Company"), and X. Xxxxxxxxxx-Xxxxxxx Investments, LLC, a
Nevada limited liability company ("KWGI") acting as nominee on behalf of those
investors whose names and addresses are set forth on Schedule 1 attached hereto
(each, an "Investor" and, collectively, the "Investors").
RECITALS
WHEREAS, Shanecy is a public company that concentrates its business in
investing in companies that utilize the Internet to provide products and
services to middle income consumers; and
WHEREAS, on November 10, 1999, the Investors acquired the rights to own
100% of the issued and outstanding shares (the "CASA Shares") of common stock of
CASA@Home, Inc., a Nevada corporation to be formed, ("CASA") from CASA Internet
Services, Inc., a wholly-owned subsidiary of KWGI; and
WHEREAS, CASA is a company engaged in the business of providing an
Internet-based vertical portal to moderate income consumers, in order to provide
access to the financial and non-financial benefits of the Internet; and
WHEREAS, the Company desires to acquire the business of CASA in order
to facilitate its strategic focus and business plan; and
WHEREAS, the Company desires to acquire the CASA Shares from the
Investors in exchange for the issuance of restricted shares of its common stock
(the "Common Shares") to the Investors, and the Investors desire to transfer the
CASA Shares to the Company in exchange for the Common Shares, on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements set forth below, it is therefore agreed as follows:
ARTICLE I
DEFINITIONS
1. Currency; Certain Definitions. Unless otherwise indicated, all
currency figures in this Agreement are denominated in U.S. dollars. Capitalized
terms used, but not defined elsewhere, in this Agreement are defined as follows:
1.1 "Affiliate" of a Person means another Person (a) directly or
indirectly controlling, controlled by, or under common control with, such Person
(for this purpose, "control" of a Person means the power (whether or not
exercised) to direct the policies, operations or activities of such Person by or
through the ownership of, or right to vote, or direct the manner of voting of,
securities of such Person, or pursuant to agreement or Law or otherwise) or (b)
who is a director or officer of a corporation, general partner of a partnership,
manager of a limited liability company, trustee of a trust or other Person who
exercises managerial authority with respect to the subject Person; or (c) who
owns (or has the discretionary right to acquire) 10% or more of the equity
interests (including without limitation capital stock or partnership, membership
or beneficial interests) of the subject Person.
1.2 "CASA" means CASA@Home, Inc., a Nevada corporation to be formed,
and any permitted successor thereto.
1.3 "CASA Shares" means the 1,000,000 shares of common stock of
CASA, par value $0.001, held in the aggregate by the Investors and individually
in the amount set forth next to his or her name on Schedule 1 attached hereto.
1.4 "Common Shares" means the 2,000,000 restricted Common Shares of
the Company, par value $0.001, to be acquired in the aggregate by the Investors
and individually in the amount set forth next to his or her name on Schedule "1'
attached hereto.
1.5 "Company" means Shanecy, Inc., a Delaware corporation, and any
permitted successor thereto.
1.6 "Consent" means any approval, authorization, consent or
ratification by or on behalf of any Person that is not a party to this
Agreement, or any waiver of, or exemption or variance from, any License or
Order.
1.7 "Contract" means any written or oral contract, agreement,
arrangement or understanding, including without limitation any loan agreement or
indenture, purchase, sales, supply or service order or agreement, real property,
equipment or other lease, or license of trade rights, to which the Investors or
the Company is a party or by which the Investors, the Company or any of their
respective assets are bound.
1.8 "Governing Document" means (a) the articles of association or
certificate of incorporation (including any restatement, amendment or correction
thereof or any certificate of designation thereunder) and the by-laws of a
corporation, and any agreement between any shareholders thereof with respect to
the voting or disposition of, or right to receive dividends or other
distributions with respect to, the capital stock of such corporation; (b) the
articles or certificate and the partnership agreement of a partnership; (c) the
articles of organization and operating agreement of a limited liability company;
(d) the trust agreement of a trust; and (e) any similar agreement, certificate
or other document, whether or not filed or required to be filed with a
Governmental Authority, governing or relating to the organization, management or
ownership of any Person.
1.9 "Governmental Authority" means any federal, state, local or
foreign government or governmental authority, agency or instrumentality, or any
court of competent jurisdiction.
1.10 "Investor" or "Investors" means, as the context may require,
the individual(s) who are acquiring the Common Shares and whose name(s) are set
forth on Schedule "1' attached hereto.
1.11 "KWGI" means X. Xxxxxxxxxx-Xxxxxxx Investments, Inc., a Nevada
limited liability company.
1.12 "Law" means any statute, rule, regulation or ordinance of any
Governmental Authority.
1.13 "Lease" means a lease of real property.
1.14 "License" means any license, permit, certification,
qualification or franchise issued or granted by any Governmental Authority.
1.15 "Lien" means any security interest, conditional sale or other
title retention agreement, mortgage, pledge, lien, charge, encumbrance or other
adverse claim or interest.
1.16 "Order" means any judgment, order, writ, decree, award,
directive, ruling or decision of any Governmental Authority.
1.17 "Person" includes without limitation a natural person,
corporation, joint stock company, limited liability company, partnership, joint
venture, association, trust, Governmental Authority, or any group of the
foregoing acting in concert.
1.18 "Proceeding" means any action, suit, investigation, audit or
other proceeding, at law or in equity, before or by any Taxing Authority or
Governmental Authority.
1.19 "Tax" means any tax, fee, levy, assessment or other
governmental charge imposed by any Taxing Authority (including without
limitation any income, franchise, gross receipts, property, sales, use, excise,
services, value added, ad valorem, withholding, social security, estimated,
accumulated earnings, transfer, gains, license, privilege, payroll, profits,
capital stock, employment, unemployment, severance, stamp, occupancy, customs or
occupation tax), and any interest, additions to tax and penalties in connection
therewith.
1.20 "Taxing Authority" means the U.S. Internal Revenue Service and
any other domestic or foreign Governmental Authority responsible for the
administration of any Tax.
1.21 "Tax Return" means any return, amended return, declaration,
report, estimate, information return or statement regarding Taxes which is filed
or required to be filed under applicable Law, whether on a consolidated,
combined, unitary or separate basis or otherwise.
1.22 "Transaction Document" means this Agreement and each other
agreement, instrument or other document being entered into by the Company or the
Investors or any related party at or in connection with the Closing.
ARTICLE II
ACQUISITION OF CASA SHARES AND COMMON SHARES
2.1 Acquisition of CASA Shares. Upon the execution of this Agreement,
subject to the terms and conditions set forth herein, the Investors shall sell,
assign, transfer and deliver the CASA Shares to the Company, and the Company
shall acquire the CASA Shares from the Investors.
2.2 Acquisition of Common Shares. Upon the execution of this Agreement,
in consideration for the transfer of the CASA Shares to the Company, the Company
shall sell, assign, transfer and otherwise convey to the Investors, and the
Investors shall subscribe for, in the aggregate, two million (2,000,000) Common
Shares of the Company.
2.3. Acquisition Price. The Acquisition Price for the CASA Shares, and
for the Common Shares, shall be equal to the book value of the CASA Shares as of
the date of the execution of this Agreement, and shall in each case be satisfied
by delivery of the respective Shares to its transferee in accordance with the
terms of this Agreement.
2.4 Transactions. All of the transactions contemplated by this
Agreement are to take place upon the execution of this Agreement, with the
exception of those set forth in Article VI hereof, and are intended by the
parties to be consummated concurrently; and if any such transaction is not
consummated as provided herein, the parties shall take all actions necessary to
dissolve and invalidate all other such transactions as if none of such
transactions had been consummated.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Investors as follows:
3.1 Organization. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, and has
full power and authority to own its assets and carry on its business in the
manner and places where such assets are now owned and such business is now being
conducted.
3.2 Power and Authority. The Company has full legal capacity, power and
authority to execute and deliver this Agreement and each other Transaction
Document to which it is a party and to assume and perform its obligations
hereunder and thereunder. This Agreement and each other Transaction Document to
which the Company is a party has been duly executed and delivered, and this
Agreement and each other Transaction Document to which the Company is a party
is, a legally valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, subject to (a) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (b) equitable principles limiting
the availability of certain remedies.
3.3 Absence of Conflict. The execution and delivery of this Agreement
and each other Transaction Document to which it is a party do not, and the
performance by the Company of its obligations hereunder and thereunder will not,
violate any provision of the Governing Documents of the Company and do not and
will not conflict with or result in any breach of any condition or provision of,
or constitute a default under, or create or give rise to any adverse right of
termination or cancellation by, or excuse the performance of, any other Person,
or result in the creation or imposition of any Lien upon the Company or any of
its assets or the acceleration of the maturity or date of payment or other
performance of any obligation of the Company by reason of the terms of, any
agreement, indenture, instrument, license, lease, Lien or Order to which the
Company is a party or is subject or which is or purports to be binding upon it.
3.4 Consents. No Consent of, or notice to, any Person is required as to
the Company in connection with the execution and delivery by the Company of this
Agreement or any other Transaction Document or the performance of the
obligations of the Company hereunder or thereunder, where the failure to obtain
such Consent or give such notice would have an adverse effect upon the Company,
or its assets or business or prohibit, invalidate, or make unlawful, in whole or
in part, this Agreement or any other Transaction Document, or the carrying out
of the provisions hereof or thereof or the transactions contemplated hereby or
thereby.
3.5 Litigation. No Proceeding is pending or, to the best of the
Company's knowledge, threatened against or affecting the assets, operations or
financial or other condition of the Company in which an unfavorable Order would
prohibit, invalidate, or make unlawful, in whole or in part, this Agreement or
any other Transaction Document, or the carrying out of the provisions hereof or
thereof or the transactions contemplated hereby or thereby. The Company is not
in default in respect of any Order, nor is there any such Order enjoining the
Company in respect of, or the effect of which is to prohibit or curtail the
Company's performance of its obligations hereunder or under any other
Transaction Document.
3.6 Authorized Capital. The entire authorized capital of the Company
currently consists of the following: 20,000,000 shares of common stock, par
value $0.001, of which 17,990,000 Common Shares are issued and outstanding; and
no shares of preferred stock, provided, however, that Thesseus International
Asset Fund N.V. ("TIAF") is the holder of rights to acquired shares of preferred
stock that, upon due amendment of the articles of incorporation of the Company
and authorization of such shares, will entitle TIAF to receive 8,500,000 shares
of such preferred stock convertible into 8,500,000 shares of common stock. The
Common Shares are duly authorized, validly issued, fully paid and nonassessable.
Other than as will be reserved against the convertible preferred stock to be
issued to Thesseus, no shares of common stock of the Company are reserved for
issuance, and there are no agreements, commitments or arrangements providing for
the issuance or sale of any capital stock or other interest of the Company, or
any issued or outstanding options, warrants or rights to purchase, or any
security or instrument convertible into or exchangeable for, any capital stock
or other interest of the Company.
3.7 Financial Statements; No Undisclosed Liabilities; Books.
(a) The Company has delivered to the Investors a complete and
correct copy of its balance sheet and related statements of operations,
stockholders' deficit and cash flows for the year ending March 31, 1999, with
the accompanying auditor's report thereon (the "Company Financial Statements").
A true and correct copy of the Company Financial Statements is attached hereto
as Schedule 3.7(a). The Company Financial Statements present fairly in all
material respects the financial position of the Company as at the date thereof
without qualification.
(b) Except as set forth on the Company Financial Statements or on
Schedule 3.7(b) attached hereto, the Company does not have any material
liabilities or obligations of any kind, whether known or unknown, or whether
absolute, accrued, contingent, matured or otherwise, whether due or to become
due except liabilities or obligations that arose in the ordinary course of
business.
(c) The books and financial records of the Company made available
to the Investors constitute a complete record of its financial affairs and
accurately set forth all revenues, expenses, assets and liabilities.
3.8 No Adverse Change. Other than as set forth on Schedule 3.8 attached
hereto, since the date of the Company Financial Statements there has been no
material adverse change in the business, the assets or the financial or other
condition of the Company, and the Company has not: (a) incurred any damage,
destruction or similar loss, whether or not covered by insurance, materially
adversely affecting its business or its assets; (b) other than in the ordinary
course of business, sold, assigned or transferred any of its assets or any
interest therein; (c) incurred any material obligation or liability (including
any guaranty, indemnity, make-whole agreement for or with respect to any
obligation or liability of another Person), or paid, satisfied or discharged any
material obligation or liability prior to the due date or maturity thereof,
except current obligations and liabilities in the ordinary course of business;
(d) other than in the ordinary course of business, created, incurred, assumed,
granted or suffered to exist any Lien on any of its assets; (e) other than in
the ordinary course of business, waived any right of value or canceled, forgiven
or discharged any debt owed to it or any claim in its favor; (f) declared, set
aside or paid any dividend or made or committed to make any other distribution
in respect of any shares of common stock; or (g) effected any material change in
its business policies or practices, accounting methods, conventions, principles
or assumptions or any material change in the nature of the business
relationships with its clients; or effected any material transaction not in the
ordinary course of business.
3.9 Material Contracts. Set forth on Schedule 3.9 hereto is a list of
all contracts (including, without limitation, employment or other labor
agreements, benefits arrangements and policies of insurance) to which the
Company is a party or its business or affairs are subject, or the termination or
cancellation of which would have a material adverse effect upon its business or
prospects.
3.10 Compliance with Law. The Company has all Licenses and all Consents
of Governmental Authorities required by applicable Law for it to conduct its
business. All such Licenses and Consents are in full force and effect and the
Company has not received notice of any pending cancellation or suspension
thereof nor, to the best of the Company's knowledge, is any pending cancellation
or suspension thereof threatened. The Company is in compliance in all material
respects with each Law applicable to it. The Company has not received any notice
of violation of any Law or Order.
3.11 Tax. No Tax Returns of or relating to the Company have been filed.
No Taxing Authority has asserted any claim that could result in the imposition
of any Tax for which the Company is or may be liable or that could adversely
affect the Tax liability of the Company. There is no pending Proceeding relating
to any Tax for which the Company is or may be liable or that could adversely
affect any Tax liability of the Company and, to the best of the Company's
knowledge, no Taxing Authority is contemplating such a Proceeding or adjustment.
The Company is not a party to any Tax sharing or Tax allocation agreement,
arrangement or understanding.
3.12 Brokers or Finders. Neither the Company nor any Affiliate thereof
has employed or engaged any Person to act as a broker, finder or other
intermediary in connection with the transactions contemplated hereby, and no
Person is entitled to any fee, commission or other compensation from the
Investors relating to any such employment or engagement by the Company or any
Affiliate thereof.
3.13 Investment Intent. The Company is acquiring the CASA Shares for
investment, for its own account, and not with a view to, or for resale in
connection with, any distribution thereof, nor with any current intention of
distributing the Note, or any portion thereof, in violation of the securities
laws of the United States or any foreign jurisdiction.
3.14 No Misrepresentation by the Company. No representation, warranty
or statement by the Company in this Agreement or in any certificate, exhibit or
schedule furnished pursuant hereto or in connection with the transactions
contemplated hereby contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statements or facts contained herein
or therein not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE INVESTORS
Each Investor, individually and not jointly, hereby represents and warrants to
the Company as follows:
4.1 Power and Authority. The Investor has full legal capacity, power
and authority to execute and deliver this Agreement and each other Transaction
Document to which it is a party and to assume and perform its obligations
hereunder and thereunder. KWGI has been duly authorized by the Investor to enter
into this Agreement on its behalf, and to bind it thereby. This Agreement and
each other Transaction Document to which the Investor is a party has been duly
executed and delivered by it, and this Agreement and each other Transaction
Document to which it is a party is, its legally valid and binding obligation,
enforceable against it in accordance with its respective terms, subject to (a)
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and (b) equitable
principles limiting the availability of certain remedies.
4.2 Absence of Conflict. The execution and delivery of this Agreement
do not, and the execution and delivery of each other Transaction Document to
which the Investor is a party and the performance by it of its obligations
hereunder or thereunder, will not, conflict with (a) to the best of its
knowledge, any of the Governing Documents of CASA, or (b) result in any breach
of any condition or provision of, or constitute a default under, or create or
give rise to any adverse right of termination or cancellation by, or excuse the
performance of, any other Person under, or result in the creation or imposition
of any Lien upon the Investor or, to the best of its knowledge, the business or
assets of CASA.
4.3 Consents. No Consent of, or notice to, any Person is required as to
the Investor in connection with the execution and delivery of this Agreement or
any other Transaction Document by it or the performance of its obligations
hereunder or thereunder, where the failure to obtain such Consent or give such
notice would have an adverse effect upon it or, to the best of its knowledge,
the business or prospects of CASA, or prohibit, invalidate, or make unlawful, in
whole or in part, this Agreement or any other Transaction Document, or the
carrying out of the provisions hereof or thereof or the transactions
contemplated hereby or thereby.
4.4 Litigation. No Proceeding is pending or threatened against or
affecting the Investor or, to the best of its knowledge, against or affecting
CASA, in which an unfavorable outcome would have a material adverse effect upon
it or CASA, as the case may be, or prohibit, invalidate, or make unlawful, in
whole or in part, this Agreement or any other Transaction Document, or the
carrying out of the provisions hereof or thereof or the transactions
contemplated hereby or thereby. The Investor has not received any notice of or,
to its knowledge, is in default in respect of any Order, nor is there any such
Order enjoining it in respect of, or the effect of which is to prohibit or
curtail the performance of, its obligations hereunder or under any other
Transaction Document.
4.5 Title to CASA Shares; Rights and Preferences. The Investor is the
owner of the number of CASA Shares set forth next to its name on Schedule 1
attached hereto, and such Shares are duly authorized, validly issued, fully paid
and nonassessable and free and clear of any and all Liens whatsoever. Upon the
consummation of the transactions contemplated by this Agreement, the Company
will hold title to such Shares, free and clear of any and all Liens whatsoever.
4.6 Investment Intent. It is the intention of the Investor that its
acquisition of its portion of the Common Shares be a transaction exempt from the
securities laws of the United States, the State of Nevada and any other
applicable jurisdiction and, as such, the Investor specifically represents as
follows:
(a) The Investor (i) has its place of business at the address set
forth on Schedule 1 attached hereto and has no current intention of becoming
domiciled in any other state or jurisdiction prior to the Closing Date; (ii) has
adequate means of providing for its current needs and possible contingencies,
and has no need for liquidity of its investment; (iii) can bear the economic
risk of its investment herein, including the possibility of losing its entire
investment; (iv) has such knowledge and experience in business and financial
matters, alone or with its representatives, that it is capable of evaluating the
relative risks and merits of this investment; and (v) understands the
speculative nature and uncertainty of the investment contemplated hereby.
(b) That portion of the Common Shares being acquired by the
Investor (i) is being acquired for the Investor's own account, for investment
purposes only and not with a view to resale or other distribution thereof; and
(ii) may be sold in the United States only if it is subsequently registered
under the Act or an exemption from such registration is available.
(c) The Investor (i) has reviewed this Agreement and has been
afforded the opportunity to ask questions of and receive answers from the
Company concerning the terms and conditions of this Agreement and the businesses
of the Company and to obtain any additional information which the Company
possesses or could acquire without unreasonable effort or expense that is
necessary to verify the accuracy of information contained herein; (ii) desires
no additional information from the Company; and (iii) has had the opportunity to
consult with such legal, accounting and other professional advisors as it has
deemed appropriate, and all such advisors have been given access to information
to the satisfaction of the Investor.
(d) The Investor (i) through its representatives and advisers, is
familiar with the definition of "Accredited Investor" as that term is defined in
Rule 501(a) of the Commission and, in light of such definition, it is an
"Accredited Investor" and (ii) it has such knowledge and experience in financial
and business matters that it is capable of evaluating the risks and merits of
the purchase of EAL Stock.
(e) The Investor fully understands and agrees that (i) it must bear
the economic risk of its purchase for an indefinite period of time because,
among all other reasons, the Common Shares have not been registered under the
U.S. Securities Act of 1933 (the "Act"), or the securities laws of any state,
and therefore, cannot be sold, pledged, assigned or otherwise disposed of unless
subsequently registered under the Act and/or qualified under applicable state
securities laws or an exemption from such registration and/or qualification is
available, (ii) the information or conditions necessary to permit routine sales
of the Common Shares under Rule 144 promulgated under the Act may not now be
available and no assurance has been given that it or they will become available,
and (iii) each of the certificates representing the Common Shares to be acquired
by the Investor pursuant hereto will bear in substance the following legend:
"These securities have not been registered under the Securities Act
of 1933 or any other applicable law. They may not be sold or
transferred in the absence of an effective Registration Statement
under that Act without an opinion of counsel reasonably
satisfactory to the Company that such Registration is not
required."
4.7 Brokers or Finders. Neither the Investor nor any Affiliate has
employed or engaged any Person to act as a broker, finder or other intermediary
in connection with the transactions contemplated hereby, and no Person is
entitled to any fee, commission or other compensation from the Company relating
to any such employment or engagement by the Investor or any Affiliate of the
Investor.
4.8 No Misrepresentation by the Investor. No representation, warranty
or statement by the Investor in this Agreement or in any certificate, exhibit or
schedule furnished pursuant hereto or in connection with the transactions
contemplated hereby contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statements or facts contained herein
or therein not misleading.
ARTICLE V
DELIVERY OF DOCUMENTS
5.1 Deliveries by the Company. Upon execution of the Agreement, the
Company shall deliver to the Investors a certificate in the name of the Investor
representing the number of Common Shares set forth next to its name on Schedule
1 attached hereto.
5.2 Deliveries by the Investors. Upon execution of this Agreement, each
Investor shall deliver to the Company the certificates representing the number
of CASA Shares held by it as set forth on Schedule 1 attached hereto, duly
endorsed in favor of the Company or with a duly executed blank stock power in
its favor.
ARTICLE VI
POST-CLOSING COVENANTS
6.1 Confidentiality. From and after the execution of this Agreement,
the parties hereto shall keep absolutely confidential all information relating
to or concerned with the Company or the investment of the Investors therein. The
parties shall not, at any time after the date hereof, use or disclose to any
Person any such information without the written consent of all other parties,
except as may be required by Law (in which case the party shall promptly give
notice to the other parties of any demand, subpoena, order or other legal
process requiring disclosure, in order to permit such parties to seek an
appropriate protective order or other confidential treatment of such
information).
6.2 Cooperation in Regulatory Filings. The Investors shall provide all
reasonable cooperation to the Company and its authorized representatives in the
preparation and making of any necessary regulatory filings with any Governmental
Authority.
6.3 Public Announcements. Neither the Investors nor the Company shall
make or permit any Affiliate thereof to make, any press release or other public
announcement with respect to this Agreement or the transactions contemplated
hereby, without the prior written consent of the other party (which consent
shall not be unreasonably withheld), unless such announcement is required by
Law, in which case the other parties shall be given notice of such requirement
prior to such announcement and the parties shall consult with each other as to
the scope and substance of such disclosure.
ARTICLE VII
INDEMNIFICATION
7.1 Indemnification by the Company. From and after the execution of
this Agreement, the Company shall indemnify and defend the Investors against,
and hold the Investors harmless from, and will pay to the Investors the amount
of, any loss, claim, liability, obligation, damage or expense (including without
limitation attorneys' and consultants' fees and disbursements and expenses of
investigating, defending and prosecuting) which the Investors or any
shareholder, director, officer, member, manager, employee or agent of the
Investors may suffer or incur (including without limitation incidental to any
claim or any Proceeding against the Investors or any shareholder, director,
officer, member, manager, employee or agent of the Investors) based upon or
resulting from:
(a) the breach or inaccuracy of any representation or warranty made
by the Company herein or pursuant hereto; or
(b) the failure of the Company to perform or to comply with any
covenant or condition required of the Company to be performed or complied with
hereunder.
7.2 Indemnification by the Investors. From and after the execution of
this Agreement, each Investor shall indemnify and defend the Company against,
and hold the Company harmless from, and will pay to the Company the amount of,
any loss, claim, liability, obligation, damage or expense (including without
limitation attorneys' and consultants' fees and disbursements and expenses of
investigating, defending and prosecuting) which the Company may suffer or incur
(including without limitation incidental to any claim or any Proceeding against
the Company) based upon or resulting from:
(a) the breach or inaccuracy of any representation or warranty made
by such Investor herein or pursuant hereto; or
(b) such Investor's failure to perform or to comply with any
covenant or condition required of the Investor to be performed or complied with
hereunder.
7.3 Indemnification Procedures.
(a) Promptly after notice to an indemnified party of any claim or
the commencement of any Proceeding by a third party subject to Sections 7.1 or
7.2 above, such indemnified party shall, if a claim for indemnification in
respect thereof is to be made against an indemnifying party pursuant to this
Article VII, give written notice to the latter of the commencement of such claim
or Proceeding, setting forth in reasonable detail the nature thereof and the
basis upon which such party seeks indemnification hereunder, provided, however,
that the failure of any indemnified party to give such notice shall not relieve
the indemnifying party of its obligations hereunder, except to the extent that
the indemnifying party is actually prejudiced by the failure to give such
notice.
(b) In case any Proceeding is brought against an indemnified party,
and provided that proper notice is duly given, the indemnifying party shall
assume the defense thereof insofar as such Proceeding involves any loss,
liability, claim, obligation, damage or expense in respect of which
indemnification may be sought hereunder, with counsel reasonably satisfactory to
such indemnified party and, after notice from the indemnifying party to the
indemnified party of its assumption of the defense thereof, the indemnifying
party shall not be liable to the indemnified party for any legal or other
expenses subsequently incurred by the latter in connection with the defense
thereof (but the indemnified party shall have the right, but not the obligation,
to participate at its own expense in such defense by counsel of its own choice)
or for any amounts paid or foregone by the latter as a result of the settlement
or compromise thereof (without the written consent of the indemnifying party).
If the indemnifying party shall assume the defense of a Proceeding, the
indemnified party shall cooperate fully with the indemnifying party and shall
appear and give testimony, produce documents and other tangible evidence, allow
the indemnifying party access to the books and records of the indemnified party
and otherwise assist the indemnifying party in conducting such defense.
(c) If both the indemnifying party and the indemnified party are
named as parties in or are subject to a Proceeding and either such party
determines with advice of counsel that there may be one or more legal defenses
available to it that are different from or additional to those available to the
other party or that a material conflict of interest between such parties may
exist in respect of such Proceeding, the indemnifying party may decline to
assume the defense on behalf of the indemnified party or the indemnified party
may retain the defense on its own behalf and, in either such case, after notice
to such effect is duly given hereunder to the other party, the indemnifying
party shall be relieved of its obligation to assume the defense on behalf of the
indemnified party, but shall be required to pay any legal or other expenses,
including, without limitation, reasonable attorneys' fees and disbursements
incurred by the indemnified party in such defense; provided, however, that the
indemnifying party shall not be liable for such expense on account of more than
one separate firm of attorneys (and, if necessary, local counsel) at any time
representing such indemnified party in connection with any Proceeding or
separate Proceedings in the same jurisdiction arising out of or based upon
substantially the same allegations or circumstances.
(d) No indemnifying party shall, without the consent of the
indemnified party, consent to entry of any judgment or enter into any settlement
or compromise which does not include as an unconditional term thereof the giving
by the claimant or plaintiff to such indemnified party of a release from all
liability in respect of such Proceeding (but the indemnifying party shall have
the right to participate at its own cost and expense in such defense by counsel
of its own choice) and may make in good faith any compromise or settlement with
respect thereto, and recover the entire cost and expense thereof, including
without limitation reasonable attorneys' fees and disbursements and all amounts
paid and foregone as a result of such Proceeding, or the settlement or
compromise thereof, from the indemnifying party. The indemnification required
shall be made by periodic payments of the amount thereof during the course of
the investigation or defense, as and when bills or invoices are received or
loss, liability, obligation, damage or expense is actually suffered or incurred.
7.4 Survival of Representations and Warranties. The representations and
warranties of each party herein shall, notwithstanding any investigation or
inquiry made by the other party, continue until the later of three years after
the execution of this Agreement or until the expiration of the applicable
statute of limitations. Any claim for indemnification under Section 7.1 (a) or
Section 7.2 (a) shall be made within the applicable survival period set forth in
this Section 7.4.
ARTICLE VIII
MISCELLANEOUS
8.1 Limitation of Authority. No provision hereof shall be deemed to
create any partnership, joint venture or joint enterprise or association between
the parties hereto, or to authorize or to empower either party hereto to act on
behalf of, obligate or bind the other party hereto.
8.2 Fees and Expenses. Each party hereto shall bear such costs, fees
and expenses as may be incurred by it in connection with this Agreement and the
transactions contemplated hereby.
8.3 Notices. Any notice or demand required or permitted to be given or
made hereunder to or upon either party hereto shall be deemed to have been duly
given or made for all purposes if (a) in writing and sent by (i) messenger or an
overnight courier service against receipt, or (ii) certified or registered mail,
postage paid, return receipt requested, or (b) sent by telegram, facsimile
transmission, telex or similar electronic means, provided that a written copy
thereof is sent on the same day by postage paid first-class mail, to such party
at the its address first set forth above, or such other address as either party
hereto may at any time, or from time to time, direct by notice given to the
other party in accordance with this Section. The date of giving or making of any
such notice or demand shall be, in the case of clause (a)(i), the date of the
receipt; in the case of clause (a)(ii), five business days after such notice or
demand is sent; and, in the case of clause (b), the business day next following
the date such notice or demand is sent.
8.4 Amendment. Except as otherwise provided herein, no amendment of
this Agreement shall be valid or effective, unless in writing and signing by or
on behalf of the parties hereto.
8.5 Waiver. No course of dealing or omission or delay on the part of
either party hereto in asserting or exercising any right hereunder shall
constitute or operate as a waiver of any such right. No waiver of any provision
hereof shall be effective, unless in writing and signed by or on behalf of the
party to be charged therewith. No waiver shall be deemed a continuing waiver or
waiver in respect of any other or subsequent breach or default, unless expressly
so stated in writing.
8.6 Governing Law. This Agreement shall be governed by, and interpreted
and enforced in accordance with, the laws of the State of Delaware, without
regard to principles of choice of law or conflict of laws.
8.7 Remedies. In the event of any actual or prospective breach or
default by either party hereto, the other party shall be entitled to equitable
relief, including remedies in the nature of rescission, injunction and specific
performance. All remedies hereunder are cumulative and not exclusive, and
nothing herein shall be deemed to prohibit or limit either party from pursuing
any other remedy or relief available at law or in equity for such actual or
prospective breach or default, including the recovery of damages; provided,
however, that the indemnification provisions of Article 10 shall be the sole and
exclusive remedy with respect to claims for monetary damages.
8.8 Severability. The provisions hereof are severable and in the event
that any provision of this Agreement shall be determined to be invalid or
unenforceable in any respect by a court of competent jurisdiction, the remaining
provisions hereof shall not be affected, but shall, subject to the discretion of
such court, remain in full force and effect, and any invalid or unenforceable
provision shall be deemed, without further action on the part of the parties
hereto, amended and limited to the extent necessary to render the same valid and
enforceable.
8.9 Further Assurances. Each party hereto covenants and agrees promptly
to execute, deliver, file or record such agreements, instruments, certificates
and other documents and to perform such other and further acts as the other
party hereto may reasonably request or as may otherwise be necessary or proper
to consummate and perfect the transactions contemplated hereby.
8.10 Assignment. This Agreement, and each right, interest and
obligation hereunder, may not be assigned, whether by operation of law, merger,
consolidation or otherwise, by any party hereto without the prior written
consent of the other parties hereto, and any purported assignment without such
consent shall be void and without effect.
8.11 Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and permitted
assigns. This Agreement is not intended, and shall not be deemed, to create or
confer any right or interest for the benefit of any Person not a party hereto.
8.12 Incorporation by Reference. The Exhibits and Schedules hereto are
an integral part of this Agreement and are incorporated in their entirety herein
by this reference.
8.13 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which shall be deemed to be an original, but all of which taken together shall
constitute one and the same agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement by their
duly authorized representatives as of the date first above written.
SHANECY, INC. X. XXXXXXXXXX-XXXXXXX
INVESTMENTS, LLC
For the Investors
By:__________________ By:__________________
Xxxxx Xxxxxxx Xxxxx Xxxxxxxxxx
Its President Its President
SCHEDULE 1
List of Investors and Holdings
Number of CASA Number of Company
Name Address Shares Held Shares to Receive
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