Exhibit 10.10
SALE AND PURCHASE OF SHARES
AGREEMENT made September 6, 2001, by and between IVIDEONOW, INC., a
Delaware corporation (the "Seller"), and XXXXXX XXXX XXXXXX, an individual (the
"Buyer").
RECITALS
The Seller is the owner of all of the Common Shares, par one cent
($0.01) per share (the "Shares"), of Digital Corporate Profiles, Inc.
("Digital").
The Seller desires to sell, and the Buyer desires to purchase, all of
such Shares at the price and subject to the terms and conditions set forth
herein;
Now, therefore, the parties agree as follows:
1. Sale of Stock. The Buyer shall purchase and the Seller shall sell an
aggregate of One Thousand (1,000) Common Shares of Digital,
constituting all of the issued and outstanding shares of Digital for
the total purchase price of Twenty-Five Thousand Dollars ($25,000).
2. Representations of Seller. The Seller represents, warrants and agrees
with the Buyer as follows:
(a) Corporate Status. Digital is a corporation duly organized and
existing in good standing under the laws of the State of
California and has the corporate power to own its properties
and carry on its business as now being owned and conducted.
(b) Shares of Stock. The 1,000 Common Shares being sold pursuant
to this Agreement constitute all of the issued and outstanding
shares of Digital. All of such shares have been validly issued
and are fully paid and nonassessable. There are no outstanding
subscriptions, options or other agreements obligating Digital
to issue additional shares or any other securities of any
class.
(c) Financial Statements. The balance sheet of Digital as at
September 30, 2001, covering the nine-month period ended
September 30, 2001, to be prepared by management, will be true
and correct and shall not contain any misstatement of a
material fact, or omit to state any fact required to make such
balance sheet not misleading.
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(d) Financial Status. Upon the Closing, there shall be no material
adverse change in the financial status of Digital since
September 30, 2001, and since that date, Digital has been
operated only in the normal course of business.
(e) Title to Shares. The Seller has good and marketable title of
the Common Shares of Digital, with the absolute right to sell,
assign and transfer the same to the Buyer free and clear of
all liens, pledges, security interests, or encumbrances and
without any breach of any agreement to which it is party or
parties.
(f) Liabilities of Digital. The Seller represents that, to the
best of its knowledge, there are no liabilities of Digital,
other than those liabilities set forth on the Digital
September 30, 2001, balance sheet.
3. Representations of Buyer. The Buyer represents, warrants, and agrees
with the Seller that:
(a) Status. The Buyer is an individual residing in the County of
Los Angeles, State of California. Prior to Closing, she shall
have reviewed the September 30, 2001, financial statements and
is aware of Digital's business activities.
(b) Seller to be Held Harmless. Buyer agrees to be responsible for
the payment of all Digital liabilities set forth on the
September 30, 2001, balance sheet and shall hold Seller
harmless from any obligations, claims, demands or actions in
law relating thereto.
4. Conditions to Buyer's Obligations. The obligations of the Buyer are
subject, at its option, to the fulfillment on or before the Closing of
each of the following conditions:
(a) Seller's Representations and Warranties. There shall be
furnished to the Buyer a certificate executed by the Seller to
the effect that the representations and warranties of the
Seller contained in this Agreement are true and correct at the
date hereof and will be true and correct on and as of the
Closing Date.
(b) Opinion of Counsel. The Buyer shall have received the written
opinion dated as of the Closing Date, from Xxxxxxx X. Xxxxxxx,
Esq., 00000 Xxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxx Xxxx,
Xxxxxxxxxx 00000, counsel for the Seller, to the effect that:
(i) Digital has been duly incorporated and is existing
as a corporation in good standing under the laws of
the State of California;
(ii) Digital is in good standing and legally authorized to
carry on its business under the laws of the State of
California; and
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(iii) the shares of Digital being acquired have been duly
issued and are fully paid and nonassessable.
5. Conditions to Seller's Obligations. The obligations of the Seller are
subject, at its option, to the fulfillment by the Buyer, on or before
the Closing Date, of each of the following conditions:
(a) Buyer's Representations and Warranties. The Buyer shall have
furnished to the Seller a certificate of a duly authorized
officer to the effect that the representations and warranties
of the Buyer contained in paragraph 3 of this Agreement are
true and correct at the date hereof, and will be true and
correct on and as of the Closing Date.
(b) Investment Intent. The Buyer shall have furnished to the
Seller a representation in form satisfactory to the Seller's
counsel that the Buyer is acquiring the shares of Digital for
its own account for investment and not with a view to the
resale or distribution thereof, that it understands the nature
and effect of such representation, and that it will not sell
or transfer any of the shares so acquired by it unless
(i) a registration statement under the Securities Act
of 1933 ("Act") shall be in effect with respect
thereto, or
(ii) it shall have received written notice from the
Securities and Exchange Commission ("SEC") that such
sale or transfer may be made without registration
under said Act, or
(iii) it has received an opinion of counsel satisfactory to
the Seller that registration under such Act is not
required.
6. Payment of Purchase Price. The purchase price for the stock of Digital
shall be paid at the Closing by the Buyer delivering to Seller a
non-recourse promissory note in the amount of Twenty-Five Thousand
Dollars ($25,000) payable with interest at eight percent (8%) per annum
on or before December 31, 2006.
7. Promissory Note. Buyer's obligation to pay the unpaid balance of the
purchase price shall be evidenced by the Buyer's promissory note
payable to the order of the Seller, substantially in the form of
Exhibit A attached hereto, dated as of the Closing Date and delivered
to the Seller at the Closing, bearing interest at the rate of eight
percent (8%) per annum, and payable with interest on or before December
31, 2006. The unpaid principal may be prepaid in whole or in part at
any time at the option of the Buyer, without penalty or payment of
interest beyond the date of any such prepayment.
8. Security.
(a) Escrow. As security for the payment of the purchase price as
evidenced by the promissory note, the Seller shall have a
security interest in common shares of Digital and at the
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Closing the Buyer shall deliver the certificates evidencing
such shares to Seller. All shares of Digital held in escrow by
Seller shall be endorsed in blank by the Buyer or accompanied
by duly executed stock powers. All rights in connection with
or incident to the ownership of such shares shall be vested
solely in the Buyer, subject to the provisions of the escrow
and the rights of the Seller as pledgee and secured party.
(b) Payment and Delivery of Shares. Upon payment by Buyer to
Seller of the purchase price, any and all shares held in
escrow shall be delivered to the Buyer.
(c) Default and Remedies. If at any time there occurs a default in
the payment by the Buyer of principal or interest of the
promissory note provided for in paragraph 7, which default
remains uncured for five (5) days after written notice
thereof, all payments of unpaid principal and interest shall
be accelerated and shall become due and payable immediately,
and the share certificates shall be long to the Seller, or to
its assigns, heirs, or personal representative, as the case
may be. The Seller shall have the right to sell such shares or
any part thereof, at public or private sale, at which the
Seller may bid and purchase, on thirty (30) days' notice in
writing to the Buyer; and the seller shall apply the proceeds
of such sale to the expenses incident thereto, including
counsel fees, and to the payment of the principal and interest
upon the promissory note to the date of payment. The Seller
shall have the right also to liquidate and dissolve Digital
and, discharging its lawful debts, apply the proceeds of
liquidation to the payment of principal and interest due on
the note. The surplus, if any, resulting from the sale of the
shares of Digital by the Seller, or its liquidation, shall be
paid over to the buyer.
(d) No Recourse Against Buyer. Liability of the Buyer to pay the
promissory note is limited to the shares held by the Seller
and in no event shall the Buyer be liable for any deficiency
resulting from such sale of shares or liquidation of Digital,
nor shall any action or proceeding be brought by the Seller
against the Buyer to recover judgment against it upon the
note.
(e) Restriction on Activities of Buyer. So long as there remains
an outstanding balance on the promissory note described in
paragraph 7, Buyer agrees not to do any of the following. A
failure to comply with such prohibitions shall constitute a
default under the terms of said promissory note:
(i) amend its Certificate of Incorporation of Bylaws;
(ii) issue or sell any shares, share-options, bonds,
notes, or other corporate securities or obligations
in excess of forty-nine percent (49%) of the issued
and outstanding common stock;
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(iii) sell, assign, or transfer any of its assets, tangible
or intangible, except in the ordinary course of
business;
(iv) mortgage, pledge, create a security interest in, or
otherwise encumber any of its assets, tangible or
intangible, except in the ordinary course of
business;
(v) declare or pay any dividends or other distributions
to shareholders, whether in cash, corporate shares,
or kind, or purchase or redeem any of its shares in
excess of Ten Thousand Dollars ($10,000) per annum;
(vi) purchase the shares or securities of any other
corporation;
(vii) merge or consolidate with or into any other
corporation, or liquidate or dissolve;
(viii) lend any of its funds or act as a guarantor or
surety;
(ix) borrow any funds other than in the ordinary course of
business for amounts in excess of Twenty-Five
Thousand Dollars ($25,000) from any source whatever,
whether secured or unsecured.
9. Closing. The Closing Date shall be October 5, 2001, and the Closing
shall take place at 10:00 A.M. at the offices of Xxxxxxx X. Xxxxxxx,
Esq., at 00000 Xxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxx Xxxx, Xxxxxxxxxx,
unless otherwise agreed to in writing by the Buyer and the Seller. The
effective date of the sale and purchase of Digital shall be September
30, 2001.
10. Indemnification. The Buyer shall indemnify and hold harmless the
Seller, its successors and assigns against any and all damages
resulting from any breach of any representation, warranty or agreement
set forth in this Agreement, or the untruth or inaccuracy thereof
including, but not limited to, all statements or figures contained in
any of the exhibits to this Agreement. The Buyer shall indemnify and
hold harmless the Seller against any and all debts, liabilities, choses
in action, or claims of any nature, absolute or contingent, together
with all expenses and legal fees resulting from any such breach,
untruth, or inaccuracy, or which may be incurred to compromise, or
defend such liabilities, choses in action or claims of any nature,
absolute or contingent, including, but not limited to, any and all
liabilities for federal income or excise taxes or state or municipal
taxes of any nature. This obligation to indemnify and hold harmless
shall survive the Closing but shall be limited to liabilities of which
the Buyer shall receive notice in writing from the Seller or its
successor or assigns within four (4) years from the date of the Closing
of this transaction. The Seller, its successors and assigns, shall
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notify the Buyer of any such liability, asserted liability, breach of
warranty, untruth or inaccuracy of representation, or any claim
thereof, with reasonable promptness, and the Buyer or his legal
representatives shall have, at his election, the right to compromise or
defend any such matter involving asserted liability of Digital through
counsel of his own choosing, at the expense of the Buyer. Such notice
and opportunity to compromise or defend, if applicable, shall be a
condition precedent to any liability of the Buyer under this Agreement.
The Buyer shall notify the Seller, or its successor or assigns, in
writing promptly of his intention to compromise or defend any claim and
the Seller, its successors or assigns, shall cooperate with the Buyer
and his counsel in compromising or defending against any such claim.
11. Arbitration. All disputes between Buyer and Seller which cannot be
resolved, shall be submitted to binding arbitration in accordance with
the rules of the American Arbitration Association, except that any
monetary claims for less than Five Thousand Dollars ($5,000) shall no
be so submitted. Notwithstanding the provisions of this paragraph,
either party shall have the right to seek injunctive relief in relation
to any threatened conduct, which is permitted by applicable law.
Expenses of arbitration shall be borne by the non-prevailing party in
the arbitration proceeding, unless the selected arbitrator shall
determine otherwise.
The procedure for arbitration shall be in accordance with the rules of
the American Arbitration Association, except that Buyer and Seller
shall each select one arbitrator, and the two selected arbitrators
shall choose a third arbitrator. Should either the Buyer or Seller fail
to select an arbitrator within ten (10) days after arbitration is
sought, or if the two arbitrators shall fail to select a third
arbitrator within fifteen (15) days after arbitration is sought, the
American Arbitration Association shall select the arbitrator.
12. "Due on Sale" Clause. If at any time prior to December 31 2004, the
Buyer sells, transfers or conveys more than seventy-five percent (75%)
of the shares received pursuant hereto, or causes substantially all of
the assets of Digital to be sold, the unpaid balance of the purchase
price together with interest thereon shall become immediately due and
payable by the Buyer. Notwithstanding the foregoing, however, this
paragraph shall not be applicable to any sale, transfer or conveyance
of stock to any subsidiary of Buyer in which Buyer has at least an
eighty percent (80) interest.
13. Expenses. Each party shall pay the expenses incurred by him or under or
in connection with this Agreement, including counsel fees and expenses
of his or its representatives, whether or not the transactions
contemplated by this Agreement are consummated.
14. Finder's Fees. The Seller and the Buyer represent that there is no
obligation to pay any commission finder's fee or similar charge in
connection with the transactions provided for in this Agreement. The
Seller and the Buyer will indemnify and hold each other harmless from
and against any loss, liability and damage, including expenses arising
out of any claim for any such commission, fee or charge, so far as any
arises by reason of services alleged to have been rendered to or at the
instance of such party.
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15. Survival of Representations. The representations, warranties and
agreements of Seller and Buyer contained in this Agreement shall
survive the Closing and shall be unaffected by any investigation made
by any party at any time.
16. Notices. All notices given under any of the provisions of this
Agreement shall be deemed to have been duly given by the Buyer if
mailed by registered or certified mail or sent by courier guaranteeing
overnight delivery to the Buyer addressed to:
iVideoNow, Inc.
00000 Xxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxx, XX 00000
and shall be deemed to have been duly given by the Seller if mailed by
registered or certified mail or sent by courier guaranteeing overnight
delivery to the Buyer addressed to:
Xxxxxx Xxxx Xxxxxx
0000 Xxxxxx Xxxxxxxxx, #00
Xxxxxxxxxx, XX 00000
or to such other address as each of the foregoing may designate in
writing by registered or certified mail or by courier guaranteeing
overnight delivery to each of the others.
17. Amendment. Neither this Agreement nor any term or provision hereof may
be changed, waived, discharged, or terminated orally, or in any manner
other than by an instrument in writing signed by the party against
which the enforcement of the change, waiver, discharge or termination
is sought.
18. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the respective parties and their successors and assigns,
heirs and personal representatives, except as otherwise expressly
provided herein.
19. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original.
20. Waiver. any waiver by either party of any breach or any term or
condition of this Agreement shall not be deemed a waiver of any other
breach, nor shall any failure to enforce any provision of this
Agreement operate as a waiver of such provision or of any other
provision, nor constitute nor be deemed a waiver or release of any
other party for anything arising out of, connected with or based upon
this Agreement.
[SIGNATURE PAGE FOLLOWS ON NEXT PAGE]
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[SIGNATURE PAGE TO SALE AND PURCHASE OF SHARES AGREEMENT]
In Witness Whereof the parties have duly executed this Agreement as of
the date first-above written.
BUYER:
Xxxxxx Xxxx Xxxxxx
By: /s/ Xxxxxx Xxxx Xxxxxx
-------------------------
Xxxxxx Xxxx Xxxxxx
SELLER:
iVideoNow, Inc.
By: /s/ Xxxxx X. Xxxx
-------------------------
Xxxxx X. Xxxx, President
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A-1
EXHIBIT A
$25,000.00 September 30, 2001
FOR VALUE RECEIVED, Xxxxxx Xxxx Xxxxxx, an individual ("Gerber"),
promises to pay to the order of iVideoNow, Inc. (the "Seller"), at 00000 Xxxxxxx
Xxxxxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxx 00000, or at such other place as the
Seller may from time to time designate in writing, the sum of Twenty-Five
Thousand Dollars ($25,000), payable on December 31, 2006, together with interest
from the date hereof at the rate of eight percent (8%) per annum on the unpaid
portion of this Note.
To secure the payment of this Note and the indebtedness evidenced
hereby, Gerber has pledged certificates representing One Thousand (1,000) shares
of the common stock of Digital, Corporate Profiles, Inc., a California
corporation ("Digital"), which shares are held as a security for this Note
pursuant to the terms of an Agreement of Sale by and between the parties hereto,
dated September 6, 2001 ("Agreement"), and pursuant to the terms of an escrow
agreement by and between the parties hereto.
The liability of Gerber to pay this Note is limited to the shares held
in escrow as security for payment of this Note, and in no event shall Gerber be
liable for any deficiency resulting from the sale of such shares or the
liquidation of Digital, nor shall any action or proceeding be brought against
Gerber to recover judgment against Gerber upon any unpaid balance of this Note.
Gerber shall have the right to prepay the unpaid principal in whole or
in part at any time at its option, without penalty or payment of interest beyond
the day of any such prepayment.
The Seller, its successors and assigns, may declare the entire unpaid
principal amount of this Note and accrued interest thereon immediately due and
payable in the event that Gerber defaults in the payment of principal or
interest under this Note, and such default remains uncured for five (5) days
after written notice thereof, to Gerber in accordance with the notice provisions
contained in paragraph 16 of the Agreement.
Xxxxxx Xxxx Xxxxxx
By: /s/ Xxxxxx Xxxx Xxxxxx
---------------------------
Xxxxxx Xxxx Xxxxxx
A-1
