STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement") is made as of March 8th,
1999, by and between CIRCLE GROUP INTERNET, INC., an Illinois corporation
("Buyer"); INTERNET BROADCASTING COMPANY, INC., formerly known as the Capital
Internet Group, Inc., a Florida corporation (the "Company"); and CIG SECURITIES,
INC., a Florida corporation and wholly-owned subsidiary of the Company ("CIG").
RECITALS
WHEREAS, CIG is a securities broker-dealer, registered as such under
the Securities Exchange Act of 1934, and the rules and regulations promulgated
thereunder (the "1934 Act"), and is a member in good standing of the National
Association of Securities Dealers, Inc. ("NASD"); and
WHEREAS, the Company is the owner of 100% of the issued and outstanding
shares of Common Stock (the "Stock") of CIG; and
WHEREAS, Buyer desires to purchase and the Company desires to sell,
assign, transfer and convey the Stock to Buyer according to the terms and
conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and promises
hereinafter set forth, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by the parties, the
parties hereto, intending to be legally bound, agree as follows.
1. SALE AND TRANSFER OF THE STOCK
1.1 SALE AND TRANSFER
Subject to the terms and conditions of this Agreement, the Company
hereby sells, assigns, transfers and coveys to Buyer, all of the Company's
right, title and interest in and to the Stock, free and clear of all liens,
encumbrances, charges or security interests. The Company hereby agrees to
execute such other and further instruments of conveyance as may reasonably be
requested by Buyer in order to vest in Buyer sole and exclusive ownership of the
Stock. The Stock shall be delivered simultaneous herewith which shall be held in
an escrow account pending the Closing as defined herein, pursuant to Section
1.3, the receipt of which is hereby acknowledged by the Buyer.
1.2 PURCHASE PRICE
The purchase price (the "Purchase Price") for the Stock shall be
$35,000, which is being paid simultaneously herewith, the receipt of which is
hereby acknowledged by the Company, by delivery of (i) Buyer's certified or bank
check payable to the Company as a non-refundable deposit in the amount of
$5,000; and (ii) Buyer's certified or bank check payable to the Company in the
amount of $30,000, which shall be held in a non-interest bearing escrow account
pending the Closing, in accordance with the terms and conditions of an Escrow
Agreement which is attached hereto and shall be executed simultaneously with
this Agreement ("Escrow Agreement").
1.3 THE CLOSING
The closing of the transactions contemplated by this Agreement (the
"Closing") shall take place at the offices of Atlas, Xxxxxxxx, Trop & Borkson,
P.A. in Suite 1900, 000 Xxxx Xxx Xxxx Xxxxxxxxx, Xxxx Xxxxxxxxxx, XX 00000
commencing at 10:00 a.m. on the third business day following the satisfaction or
waiver of all conditions to the obligations of the parties to Closing, pursuant
to Sections 6 and 7, have been satisfied or such other date as the parties may
mutually determine (the "Closing Date"); provided, however, in the event all
conditions to the obligations of the parties are not satisfied or waived prior
to the forty-fifth (45th) day following the date hereof and such failure to
satisfy all conditions is a result of Buyer's failure to timely and diligently
prosecute the applications for necessary approvals or Buyer fails to obtain the
necessary approvals from the NASD, SEC and the State of Florida permitting the
Company to sell the Stock to Buyer, pursuant to Section 6.1, this Agreement
shall terminate and as liquidated damages the Company will be entitled to
receive the Purchase Price.
1.4 DELIVERIES AT THE CLOSING
At the Closing and for any reasonable period of time thereafter if
applicable, (i) the Company and CIG will execute, acknowledge (if appropriate)
and deliver to the Buyer such instruments of sale, transfer, conveyance and
assignment as the Buyer and its counsel reasonably may request; and (ii) the
Escrow Agent will deliver to the Company the Purchase Price specified in Section
1.2 herein and will deliver the Stock to the Buyer.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND CIG
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In order to induce Buyer to enter into this Agreement and pay the
Purchase Price for the Stock, the Company and CIG, jointly and severally, hereby
represent and warrant to Buyer as follows:
2.1 CIG is a Florida corporation, duly organized, validly existing,
and in good standing under the laws of its jurisdiction of organization, with
full power and authority to conduct its business as it is now being conducted,
to own or use the properties and assets that it purports to own or use, and to
perform all its obligations.
2.12 PRINCIPAL FOR TRANSITIONAL PERIOD
For a period up to Ninety (90) days following the date hereof, Xxxxxxx Xxxxxx,
the sole officer and director of CIG and the holder of the Series 24 and 27
licenses for CIG, agrees to assist the Buyer in obtaining all regulatory
approvals in connection with the transactions contemplated in this Agreement
necessary for Closing. The Buyer agrees to pay all reasonable out of pocket
expenses of Xx. Xxxxxx incurred in connection with his assistance in the
transfer of ownership the Shares. Thereafter, should the Buyer desire the
further assistance of Xx. Xxxxxx on a consulting basis, the Buyer shall
compensate Xx. Xxxxxx $2,000 a month on a month to month basis terminable at any
time at the sole discretion of Xx. Xxxxxx.
2.2 AUTHORITY; CONSENTS
This Agreement constitutes the legal, valid, and binding
obligation of the Company and CIG, enforceable against the Company and CIG in
accordance with its terms. The Company and CIG have the absolute and
unrestricted right, power, authority, and capacity to execute and deliver this
Agreement and to perform their respective obligations under this Agreement.
Except as provided for in this Agreement, neither the Company nor CIG is
required to obtain the approval or consent of any person in order for them to
execute this Agreement and to perform their respective obligations under this
Agreement.
2.3 OWNERSHIP OF STOCK
Immediately prior to the Closing Date, the Company will be the
sole and absolute owner of the Stock, free and clear of all liens, charges,
encumbrances and security interests.
2.4 NO VIOLATION
Neither the execution and delivery by the Company or CIG of
this Agreement, nor
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completion of the transactions herein contemplated, nor compliance with the
terms, conditions and provisions hereof, conflicts with or violates any
provision of law or regulation applicable to the Company or CIG or the Articles
of Incorporation of CIG, or results in a violation or default in any provision
of any law, regulation, order, writ, injunction or decree of any court or
governmental agency or authority or, of any agreement or instrument to which the
Company or CIG or any of their respective officers, directors, managers,
employees or representatives ("Representatives") is a party or by which the
Company or CIG or any of their respective Representatives is bound, or which the
Company or CIG or any of their respective Representatives is subject or
constitutes a default thereunder or results in the imposition of any lien,
mortgage, pledge, option, claim, security interest, title defect, encumbrance,
conditional sales contract, charge or other restriction of every kind, of any
nature whatsoever upon any of the Company's or CIG's property.
2.5 ABSENCE OF LIABILITIES AND NET CAPITAL
(a) CIG has no liabilities or obligations of any nature
(whether absolute, accrued, contingent, or otherwise). CIG has net capital of
$5,000 which will be withdrawn prior to Closing and at such time as the Buyer
replaces such amount.
(b) Neither the Company, nor any person or entity under its
control or at its direction, has incurred any liability or indebtedness that has
or will become an obligation of Buyer as a result of the transactions
contemplated hereby.
(c) As of the date hereof and to the extent applicable, CIG
maintained internal controls with respect to its books, records, finances and
other operations which are adequate under rules and regulations promulgated by
the Securities and Exchange Commission ("SEC"), NASD and self regulatory
organizations ("SAO"), and are in accordance with standard industry practices.
2.6 TAXES
(a) CIG has filed all federal, state, local and other tax
returns which are required to be filed by it and which have become due and has
paid all valid taxes shown thereon, including without limitation all taxes on
properties, income, business and occupation, licenses, sales and payrolls, and
none of the assets or properties of CIG are subject to any lien or charge for
taxes, except statutory liens for taxes not yet due. For purposes of this
Agreement, Taxes@ shall mean all taxes, charges, fees, levies and other
assessments however denominated, including any interest, penalties or additions
to tax that may become payable in respect thereof, imposed by any governmental
body, including, without limiting the generality of the foregoing, all net
income, gross income, payroll, withholding,
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unemployment insurance, social security, sales, use, excise, franchise, gross
receipts, occupation, real and personal property, stamp, transfer, workers'
compensation, ad valorem, profits, license, employment, estimated, severance and
other taxes, customs, duties, fees, assessments or charges of any kind whatever.
Tax" shall mean any one of the foregoing.
(b) No federal income, state excise or business or occupation
Tax returns of CIG have been audited by the IRS or other applicable authorities,
and CIG has not granted any power of attorney to any person to represent it
before the IRS or other applicable authorities. No valid federal or state Tax
liabilities have been assessed or proposed which remain unpaid. CIG is unaware
of any basis upon which any assessment for a material amount of additional Taxes
of CIG could be made.
2.7 GOVERNMENT REGULATION
(a) CIG is duly registered as a broker-dealer under the 1934
Act and CIG is a member in good standing of the NASD.
(b) CIG is in compliance with, or exempt from, all federal and
state laws and regulations relating or applicable to it and to its business,
including, without limitation, the 1934 Act, the Securities Act of 1933, as
amended (the 1933 Act@), the Investment Advisors Act of 1940, as amended (the
Advisors Act"), the Investment Conspiracy Act of 1940, as amended (the
Investment Conspiracy Act@), the Commodities Exchange Act, ERISA, all state Blue
Sky laws, and all rules, regulations, guidelines and policies promulgated under
the foregoing, or by any SAO or other regulatory authority having jurisdiction
over CIG ("Agency"). The Company's policies, procedures and practices were in
substantial compliance with each of the requirements of any Agency, SAO or the
NASD. Neither CIG nor any principal of CIG has been subject to sanctions, fines
or other similar action by any Agency, SAO or the NASD.
(c) CIG has filed with the SEC and all other appropriate
Agencies and NASD, when due, all forms, (including Form BD), financial and other
reports and all documents required to be filed pursuant to the foregoing laws
and other requirements and any other applicable laws, and the rules and
regulations thereunder. CIG has made available to Buyer, true and complete
copies of all such forms, notices, registrations and other filings, as amended
to date, and copies of all current reports and information required to be kept
by CIG pursuant to applicable federal and state statutes. The information
contained in such forms, registrations, filings and reports was true and
complete in all respects at the time of filing, and did not contain any untrue
statement of material fact
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or omit to state a material fact required to make the statements therein, in
light of the circumstances under which they were made, not misleading.
2.8 CONTRACTS
Other than this Agreement CIG is not a party to any contract,
agreement or understanding, including without limitation, leases for real or
personal property, that will continue in force or effect following the date
hereof.
2.9 LITIGATION
CIG is not a party to any legal proceeding, nor is CIG
obligated for the payment of any judgment arising out of any legal proceeding.
2.10 CLEARING ARRANGEMENTS
CIG is presently a party to a clearing agreement with U.S.
Clearing Corp., a copy of which is attached hereto. Buyer shall at Closing
replace the CIG deposit if it continues the clearing agreement with U.S.
Clearing Corp. If the clearing agreement is terminated the deposit shall be
delivered to CIG.
2.11 DISCLOSURE
No representation or warranty of CIG or the Company in this
Agreement omits to state a material fact necessary to make the statements herein
or therein, in light of the circumstances in which they were made, not
misleading.
2.12 BROKERS OR FINDERS
CIG and their agents have incurred no obligation or liability,
contingent or otherwise, for brokerage or finders' fees or agents' commissions
or other similar payment in connection with this Agreement.
3. REPRESENTATIONS AND WARRANTIES OF BUYER
In order to induce the Company to sell, assign and convey the Stock to
Buyer, Buyer hereby represents and warrants to the Company as follows:
3.1 ORGANIZATION AND GOOD STANDING
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Buyer is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Illinois.
3.2 AUTHORITY; CONSENT
This Agreement constitutes the legal, valid, and binding
obligations of Buyer, enforceable against Buyer in accordance with its terms.
Buyer has the absolute and unrestricted right, power, authority, and capacity to
execute and deliver this Agreement and to perform its obligations under this
Agreement. Buyer is not required to obtain the approval or consent of any person
in order for it to execute this Agreement and to perform its obligations under
this Agreement.
3.3 NO VIOLATION
Neither the execution and delivery by Buyer of this Agreement, nor
completion of the transactions herein contemplated, nor compliance with the
terms, conditions and provisions hereof, conflicts with or violates any
provision of law or regulation applicable to Buyer [or the Articles of
Incorporation or By-Laws of Buyer], or results in a violation or default in any
provision of any law, regulation, order, writ, injunction or decree of any court
or governmental agency or authority or, of any agreement or instrument to which
Buyer or any of its employees is a party or by which Buyer or any of its
employees is bound, or which Buyer or any of its employees is subject or
constitutes a default thereunder or results in the imposition of any lien,
mortgage, pledge, option, claim, security interest, title defect, encumbrance,
conditional sales contract, charge or other restriction of every kind, of any
nature whatsoever upon any of the Company's or CIG's property.
3.4 OBLIGATIONS INCURRED
Buyer has not incurred any liability for or on behalf of the
Company or CIG as to which the Company or CIG has any continuing obligation.
3.5 GOVERNMENT REGULATIONS
Buyer or Buyer's affiliates who will seek to become associated
persons have not been the subject of any 'reportable acts' as defined in Rule
3E-200.001(26) under Section 517.161(13) of the Florida Statutes, which provides
(a) as involvement in either state or federal bankruptcy proceedings either as
the bankrupt petitioner or as the subject of an involuntary petition; (b)
conviction of or entry of a plea of guilty or no contest to any criminal act,
excluding traffic violations or other minor offenses; (c) being the subject of
any order, judgment, or decree, not
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subsequently reversed, suspended, or vacated, of any court of competent
jurisdiction permanently or temporarily enjoining or otherwise limiting the
following activities: (1) acting as a futures commission merchant, introducing
broker, commodity trading advisor, commodity pool operator, floor broker,
leverage transaction merchant, any other person regulated by the Commodity
Futures Trading Commission, or an associated person of any of the foregoing; or
as an investment advisor, underwriter, broker, or dealer in securities or as an
affiliated person, director, or employee of any investment company, bank,
savings and loan association, or insurance company; or engaging in or continuing
any conduct or practice in connection with such activity; engaging in any type
of business practice; or (2) engaging in any activity in connection with the
purchase or sale of any security or commodity or in connection with any
violation of federal or state securities or commodities laws; (3) being the
subject of any order, judgment, or degree, not subsequently reversed, suspended,
or vacated, or of any authority barring, suspending, or otherwise limiting for
more than sixty (60) days the right of such person to engage in any activity
described in Subparagraph (c)(3) or being associated in a business relationship
with persons engaged in any such activity; or (d) having been found by a court
of competent jurisdiction, any state agency, any self regulatory organization,
the Securities Exchange Commission or the Futures Trading Commission to have
violated any federal or state securities or commodities law, if such judgment or
finding has not been subsequently reversed, suspended, or vacated.
3.6 BROKERS OR FINDERS
Buyer and its officers and agents have incurred no obligation or
liability, contingent or otherwise, for brokerage or finders' fees or agents'
commissions or other similar payment in connection with this Agreement and will
indemnify and hold the Company and CIG harmless from any such payment alleged to
be due by or through Buyer as a result of the action of Buyer or its officers or
agents.
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4. COVENANTS OF THE COMPANY AND CIG PRIOR TO CLOSING DATE
4.1 ACCESS AND INVESTIGATION
Between the date of this Agreement and the Closing Date, the
Company and CIG will, and will cause each of its representatives to, (a) afford
Buyer and its representatives (collectively, "Buyer's Advisors") full and free
access to CIG's contracts, books and records, and other documents and data, (b)
furnish Buyer and Buyer's Advisors with copies of all such contracts, books and
records, and other existing documents and data as Buyer may reasonably request,
and (c) furnish Buyer and Buyer's Advisors with such additional financial,
operating, and other data and information as Buyer may reasonably request.
4.2 OPERATION OF THE BUSINESS OF CIG
Between the date of this Agreement and the Closing Date, CIG will:
(a) not conduct any business of CIG; and
(b) use its Best Efforts to preserve intact the current business
organization of CIG.
4.3 NEGATIVE COVENANT
Except as otherwise expressly permitted by this Agreement, between
the date of this Agreement and the Closing Date, CIG will not, without the prior
consent of Buyer, take any affirmative action, or fail to take any reasonable
action within its control, as a result of which any of the changes or events
listed below is likely to occur.
(a) change CIG's authorized or issued capital stock; grant any
stock option or right to purchase shares of capital stock of CIG; issue any
security convertible into such capital stock; grant any registration rights;
purchase, redeem, retire, or acquire any shares of any such capital stock; or
declare or pay any dividend or other distribution or payment in respect of
shares of capital stock;
(b) amend the organizational documents of the Company;
(c) pay any bonuses, salaries, or other compensation to any
stockholder, director, officer, or employee or enter into any employment,
severance, or similar contract with any director, officer, or employee;
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(d) adopt any profit sharing, bonus, deferred compensation,
savings, insurance, pension, retirement, or other employee benefit plan;
(e) damage to or destruction or loss of any asset or property of
CIG, whether or not covered by insurance, materially and adversely affecting the
properties, assets, business, financial condition, or prospects of CIG, taken as
a whole;
(f) agreement, whether oral or written, by the Company to do any
business.
4.4 REQUIRED APPROVALS
As promptly as practicable after the date of this Agreement, CIG
will make all filings required by legal requirements to be made by it in order
to consummate the transactions described herein. Between the date of this
Agreement and the Closing Date, CIG will (a) cooperate with Buyer with respect
to all filings that Buyer elects to make or is required by legal requirements to
make in connection with the transactions described herein, and (b) cooperate
with Buyer in obtaining all approvals from the NASD, SEC and the State of
Florida.
4.5 NOTIFICATION
Between the date of this Agreement and the Closing Date, the
Company and CIG will promptly notify Buyer in writing if either of them becomes
aware of any fact or condition that causes or constitutes a Breach of any of
their respective representations and warranties as of the date of this
Agreement, or if either of them becomes aware of the occurrence after the date
of this Agreement of any fact or condition that would (except as expressly
contemplated by this Agreement) cause or constitute a Breach of any such
representation or warranty had such representation or warranty been made as of
the time of occurrence or discovery of such fact or condition. During the same
period, each of the Company and CIG will promptly notify Buyer of the occurrence
of any Breach of any covenant of the Company and CIG in this Section 4 or of the
occurrence of any event that may make the satisfaction of the conditions in
Section 6.1 impossible or unlikely.
4.6 NO NEGOTIATION
Until such time, if any, as this Agreement is terminated pursuant
to Section 8, the Company and CIG will not, and will cause each of their
representatives not to, directly or indirectly solicit, initiate, or encourage
any inquiries or proposals from, discuss or negotiate with, provide any
non-public information to, or consider the merits of any unsolicited inquiries
or proposals from,
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any person (other than Buyer) relating to any transaction involving the sale of
the business or assets of CIG, or any of the capital stock of CIG, or any
merger, consolidation, business combination, or similar transaction involving
CIG.
4.7 BEST EFFORTS
Between the date of this Agreement and the Closing Date, the
Company and CIG will use their Best Efforts to cause the conditions in Sections
6 and 7 to be satisfied. Best Efforts as used herein means the efforts that a
prudent person desirous of achieving a result would use in similar circumstances
to ensure that such result is achieved as expeditiously as possible [; provided,
however, that an obligation to use Best Efforts under this Agreement does not
require the person subject to that obligation to take actions that would result
in a materially adverse change in the benefits to such person of this Agreement
and the transactions contemplated hereby].
5. COVENANTS OF BUYER PRIOR TO CLOSING DATE
5.1 REQUIRED APPROVALS
Between the date of this Agreement and the Closing Date, Buyer
will, and will cause each of its related persons to, make all filings required
by legal requirements to be made by them to consummate the transactions
described herein, including but not limited to, the NASD, SEC and State of
Florida. Between the date of this Agreement and the Closing Date, Buyer will,
and will cause each related person to, cooperate with the Company and/or CIG
with respect to all filings that the Company and/or CIG are required by legal
requirements to make in connection with the transactions described herein, and
(ii) cooperate with the Company and/or CIG in obtaining all necessary consents,
if any.
5.2 CLEARING ARRANGEMENT
Between the date of this Agreement and the Closing Date, Buyer
shall consummate clearing arrangements and if Buyer continues the arrangements
under the clearing agreement with U.S. Clearing Corp., Buyer shall replace the
net capital of $5,000 and remit to CIG the $5,000 it currently has on deposit
with the clearing agent.
5.3 BEST EFFORTS
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Between the date of this Agreement and the Closing Date, Buyer
will use its Best Efforts to cause the conditions in Sections 6 and 7 to be
satisfied.
6. CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE
Buyer's obligation to purchase the Stock, and to take the other
actions required to be taken by Buyer prior to the Closing, is subject to the
satisfaction, at or prior to the Closing, of each of the following conditions
(any of which may be waived by Buyer, in whole or in part):
6.1 ACCURACY OF REPRESENTATIONS
All of the Company's and CIG's representations and warranties in
this Agreement (considered collectively), and each of these representations and
warranties (considered individually), must have been accurate in all material
respects as of the date of this Agreement, and must be accurate in all material
respects as of the Closing Date as if made on the Closing Date.
6.2 THE COMPANY'S AND CIG'S PERFORMANCE
All of the covenants and obligations that the Company and CIG
are required to perform or to comply with pursuant to this Agreement at or prior
to the Closing (considered collectively), and each of these covenants and
obligations (considered individually), must have been duly performed and
complied with in all material respects.
6.3 CONSENTS
The consent of the Board of Directors of the Company and CIG
must have been obtained and must be in full force and effect.
6.4 NO CLAIM REGARDING STOCK OWNERSHIP OR SALE PROCEEDS
There must not have been made or threatened by any person any
claim asserting that such person (a) is the holder or the beneficial owner of,
or has the right to acquire or to obtain beneficial ownership of, any stock of,
or any other voting, equity, or ownership interest in CIG, or (b) is entitled to
all or any portion of the Purchase Price payable for the Stock.
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7. CONDITIONS PRECEDENT TO THE COMPANY'S AND CIG'S OBLIGATION TO
CLOSE
The Company's and CIG's obligation to sell the Stock and to take
the other actions required to be taken by the Company and CIG at the Closing is
subject to the satisfaction, at or prior to the Closing, of each of the
following conditions (any of which may be waived by the Company and CIG, in
whole or in part):
7.1 ACCURACY OF REPRESENTATIONS
All of Buyer's representations and warranties in this Agreement
(considered collectively), and each of these representations and warranties
(considered individually), must have been accurate in all material respects as
of the date of this Agreement and must be accurate in all material respects as
of the Closing Date as if made on the Closing Date.
7.2 BUYER'S PERFORMANCE
(a) All of the covenants and obligations that Buyer is required
to perform or to comply with pursuant to this Agreement at or prior to the
Closing (considered collectively), and each of these covenants and obligations
(considered individually), must have been performed and complied with in all
material respects.
(b) Buyer must have delivered the applicable documents
evidencing the approval received pursuant to Section 5.1.
7.3 CONSENTS
The Consent of the Board of Directors of the Buyer must have
been obtained and must be in full force and effect.
8. TERMINATION
8.1 TERMINATION EVENTS
This Agreement may, by notice given prior to or at the
Closing, be terminated:
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(a) by either Buyer, CIG or the Company if a material Breach
of any provision of this Agreement has been committed by the other party and
such Breach has not been waived;
(b) by the Company and CIG if any of the conditions in
Section 7 has not been satisfied as of the Closing Date or if satisfaction of
such a condition is or becomes impossible (other than through the failure of the
Company and CIG to comply with its obligations under this Agreement) and the
Company and CIG have not waived such condition on or before the Closing Date;
(c) by mutual consent of Buyer, CIG and the Company; or
(d) by either Buyer or the Company if the Closing has not
occurred (other than through the failure of any party seeking to terminate this
Agreement to comply fully with its obligations under this Agreement) on or
before the forty-fifth (45th) day following the date of this Agreement, or such
later date as the parties may agree upon.
8.2 EFFECT OF TERMINATION
Each party's right of termination under Section 9.1 is in
addition to any other rights it may have under this Agreement or otherwise, and
the exercise of a right of termination will not be an election of remedies. If
this Agreement is terminated pursuant to Section 9.1, all further obligations of
the parties under this Agreement will terminate, except that the obligations in
Sections 11.1 and 11.3 will survive; provided, however, that if this Agreement
is terminated by a party because of the Breach of the Agreement by the other
party or because one or more of the conditions to the terminating party's
obligations under this Agreement is not satisfied as a result of the other
party's failure to comply with its obligations under this Agreement, the
terminating party's right to pursue all legal remedies will survive such
termination unimpaired.
9. INDEMNIFICATION; REMEDIES
9.1 SURVIVAL; RIGHT TO INDEMNIFICATION NOT AFFECTED BY
KNOWLEDGE
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All representations, warranties, covenants, and
obligations of any party in this Agreement and any other certificate or document
delivered pursuant to this Agreement will survive the Closing. The right to
indemnification, payment of damages or other remedy based on such
representations, warranties, covenants, and obligations will not be affected by
any investigation conducted with respect to, or any knowledge acquired (or
capable of being acquired) at any time, whether before or after the execution
and delivery of this Agreement or the Closing Date, with respect to the accuracy
or inaccuracy of or compliance with, any such representation, warranty,
covenant, or obligation. Each party has the right to rely on the representations
and warranties of the other party. The waiver of any condition based on the
accuracy of any representation or warranty, or on the performance of or
compliance with any covenant or obligation, will not affect the right to
indemnification based on such representations, warranties, covenants, and
obligations.
9.2 INDEMNIFICATION AND PAYMENT OF DAMAGES BY CIG and THE
COMPANY
Subject to the provisions of Section 5.4 hereof, CIG
and the Company, jointly and severally, hereby indemnify and hold harmless Buyer
and its officers, directors, employees, representatives, stockholders,
controlling persons, and affiliates (collectively, the "Indemnified Persons")
for, and will pay to the Indemnified Persons the amount of, any loss, liability,
claim, damage, expense (including costs of investigation and defense and
reasonable attorneys' fees) or diminution of value, whether or not involving a
third-party claim (collectively, "Damages"), arising, directly or indirectly,
from or in connection with: (a) any breach of any representation or warranty
made by the Company or CIG in this Agreement or any other certificate or
document delivered by the Company or CIG pursuant to this Agreement; (b) any
breach by the Company or CIG of any of their respective covenants or obligations
in this Agreement or in any of the documents or certificates contemplated by
this Agreement; or (c) any claim by any person for brokerage or finder's fees or
commissions or similar payments based upon any agreement or understanding
alleged to have been made by any such person with the Company (or any person
acting on its behalf) in connection with any of the transactions contemplated
hereby.
The remedies provided in this Section 5.2 will not be
exclusive of or limit any other remedies that may be available to Buyer or the
other Indemnified Persons.
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9.3 INDEMNIFICATION AND PAYMENT OF DAMAGES BY BUYER
(a) Buyer hereby indemnifies and holds harmless the
Company and CIG, and their respective officers, directors, employees,
representatives, stockholders, controlling persons, and affiliates
(collectively, the "Indemnified Persons") for, and will pay to the Indemnified
Persons the amount of, any Damages arising, directly or indirectly, from or in
connection with (a) any breach of any representation or warranty made by Buyer
in this Agreement or in any certificate delivered by Buyer pursuant to this
Agreement, (b) any breach by Buyer of any covenant or obligation of Buyer in
this Agreement or in any of the documents or certificates contemplated by this
Agreement, or (c) any claim by any person for brokerage or finder's fees or
commissions or similar payments based upon any agreement or understanding
alleged to have been made by such person with Buyer (or any person acting on its
behalf) in connection with any of the transactions contemplated hereby.
(b) The remedies provided in this Section 5.3 will not
be exclusive of or limit any other remedies that may be available to Buyer or
the other Indemnified Persons.
9.4 TIME LIMITATIONS
(a) No party to this Agreement shall have any
liability (for indemnification or otherwise) with respect to any representation
or warranty, or covenant or obligation to be performed and complied with prior
to the date hereof, other than those in Sections 2.6 and 2.7, unless notice of
any such liability is provided on or before 24 months from the date hereof.
(b) Notwithstanding any conflicting or inconsistent
provisions hereof, CIG and the Company shall not be liable in damages, indemnity
or otherwise to Buyer in respect of the inaccuracy or breach of any
representations, warranties, covenants or agreements herein, except to the
extent that the Damages to Buyer, singularly or in the aggregate, exceed the sum
of $5,000. Notwithstanding any conflicting or inconsistent provisions hereof,
Buyer shall not be liable in damages, indemnity or otherwise to CIG or the
Company in respect to the inaccuracy or breach of any representations,
warranties, covenants or agreements herein except to the extent that Damages to
CIG or the Company exceed, individually or in the aggregate, the sum of $5,000.
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9.5 PROCEDURE FOR INDEMNIFICATION--THIRD PARTY CLAIMS
(a) Promptly after receipt by an indemnified party
under Sections 5.2 and 5.3 of notice of the commencement of any proceeding
against it, such indemnified party will, if a claim is to be made against an
indemnifying party under such Section, give notice to the indemnifying party of
the commencement of such claim, but the failure to notify the indemnifying party
will not relieve the indemnifying party of any liability that it may have to any
indemnified party, except to the extent that the indemnifying party demonstrates
that the defense of such action is prejudiced by the indemnifying party's
failure to give such notice.
(b) If any proceeding referred to in Section 5.5(a) is
brought against an indemnified party and it gives notice to the indemnifying
party of the commencement of such proceeding, the indemnifying party will,
unless the claim involves Taxes, be entitled to participate in such proceeding
and, to the extent that it wishes (unless (i) the indemnifying party is also a
party to such proceeding and the indemnified party determines in good faith that
joint representation would be inappropriate, or (ii) the indemnifying party
fails to provide reasonable assurance to the indemnified party of its financial
capacity to defend such proceeding and provide indemnification with respect to
such proceeding), to assume the defense of such proceeding with counsel
reasonably satisfactory to the indemnified party and, after notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such proceeding, the indemnifying party will not, as long as it
diligently conducts such defense, be liable to the indemnified party under this
Section 5 for any fees of other counsel or any other expenses with respect to
the defense of such proceeding, in each case subsequently incurred by the
indemnified party in connection with the defense of such proceeding, other than
reasonable costs of investigation. If the indemnifying party assumes the defense
of a proceeding, (i) it will be conclusively established for purposes of this
Agreement that the claims made in that proceeding are within the scope of and
subject to indemnification unless indemnifying party expressly reserves the
right to contest such indemnification obligations for sixty (60) days, in which
event if at the end of that period the indemnifying party denies any
indemnification obligations, the indemnified party may assume defense of the
proceeding; (ii) no compromise or settlement of such claims may be effected by
the indemnifying party without the indemnified party's consent unless (A) there
is no finding or admission of any violation of legal requirements or any
violation of the rights of any person and no effect on any other claims that may
be made against the indemnified party, and (B) the sole relief provided is
monetary damages that are paid in full by the indemnifying party; and (iii) the
indemnified party will have no liability with respect to any compromise or
settlement of such claims effected without its consent. If notice is given to an
indemnifying party of the commencement of any proceeding
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and the indemnifying party does not, within ten days after the indemnified
party's notice is given, give notice to the indemnified party of its election to
assume the defense of such proceeding, the indemnifying party will be bound by
any determination made in such proceeding or any compromise or settlement
effected in good faith by the indemnified party.
(c) Notwithstanding the foregoing, if an indemnified
party determines in good faith that there is a reasonable probability that a
proceeding may adversely affect it or its affiliates other than as a result of
monetary damages for which it would be entitled to indemnification under this
Agreement, the indemnified party may, by notice to the indemnifying party,
assume the exclusive right to defend, compromise, or settle such proceeding, but
the indemnifying party will not be bound by any determination of a proceeding so
defended or any compromise or settlement effected without its consent (which may
not be unreasonably withheld).
9.6 PROCEDURE FOR INDEMNIFICATION--OTHER CLAIMS
A claim may be asserted by written notice to the party
from whom indemnification is sought.
10. GENERAL PROVISIONS
10.1 EXPENSES
Each party to this Agreement will bear its respective expenses
incurred in connection with the preparation, execution, and performance of this
Agreement and the transactions contemplated hereby, including all fees and
expenses of agents, representatives, counsel, and accountants, except that Buyer
has agreed to pay the Company upon execution of this Agreement [$3,500] to
defray the costs of counsel. In the event of termination of this Agreement, the
obligation of each party to pay its own expenses will be subject to any rights
of such party arising from a breach of this Agreement by another party.
10.2 NOTICES
All notices, consents, waivers, and other communications under
this Agreement must be in writing and will be deemed to have been duly given
when (a) delivered by hand (with written confirmation of receipt), (b) sent by
telecopier (with written confirmation of receipt), provided that a copy is
mailed by registered mail, return receipt requested, or (c) when received by the
addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and telecopier
numbers set forth below (or to such
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other addresses and telecopier numbers as a party may designate by notice to the
other parties):
The Company: Internet Broadcasting Company, Inc.
000 X. Xxxxxxx Xxxxxx, #000
Xxxxxxx Xxxxx, XX 00000
Attn: Xxxxxxx Xxxxxx
Facsimile No.: 954-788-0707
CIG: CIG Securities, Inc.
000 X. Xxxxxxx Xxxxxx, #000
Xxxxxxx Xxxxx, XX 00000
Attn: Xxxxxxx Xxxxxx
Facsimile No.: 954-788-0707
BUYER: Circle Group Internet, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xx 00000
Attn: Xxxxxxx Xxxxxxx
Facsimile No.: 000-000-0000
10.3 ARBITRATION
Any controversy or claim arising out of or relating
to this Agreement, or the breach thereof, shall, be resolved by binding
arbitration by a panel of three (3) arbitrators, one of whom shall be selected
by Buyer, one of whom shall be selected, jointly, by CIG and the Company, and
one of whom shall be selected by the arbitrators selected by Buyer, CIG and the
Company. The arbitration shall be conducted in accordance with the rules of the
American Arbitration Association (provided that the parties may conduct
discovery in accordance with the Federal Rules of Civil Procedure as then in
effect). Such arbitration shall be conducted in Broward County, Florida. The
decision of the arbitrators shall be in writing, dated and signed by a majority
of the arbitrators and shall be final and binding upon the parties hereto and
their respective shareholders, directors, successors and assigns. Judgment upon
the award granted by the arbitrators may be entered in any court having
jurisdiction thereof or application may be made to such court for judicial
acceptance of the award and an order of
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enforcement, as the case may be. This Section shall not prevent Buyer, CIG or
the Company from seeking or obtaining any temporary or permanent restraining
order or injunction or other equitable relief in the event of any breach or
threatened breach of any obligation of Buyer, CIG or the Company under this
Agreement or any related document which suit, action or proceeding shall be
instituted solely in the Circuit Court for the 17th Judicial Circuit in and for
Broward County, Florida, in the United States District Court for the Southern
District of Florida and each of the parties' consents to the jurisdiction of
such courts (and of the appropriate appellate courts).
10.4 FURTHER ASSURANCES
The parties agree (a) to furnish upon request to each
other such further information, (b) to execute and deliver to each other such
other documents, and (c) to do such other acts and things, all as the other
party may reasonably request for the purpose of carrying out the intent of this
Agreement and the documents referred to in this Agreement.
10.5 WAIVER
The rights and remedies of the parties to this
Agreement are cumulative and not alternative. Neither the failure nor any delay
by any party in exercising any right, power, or privilege under this Agreement
or the documents referred to in this Agreement will operate as a waiver of such
right, power, or privilege, and no single or partial exercise of any such right,
power, or privilege will preclude any other or further exercise of such right,
power, or privilege or the exercise of any other right, power, or privilege. To
the maximum extent permitted by applicable law, (a) no claim or right arising
out of this Agreement or the documents referred to in this Agreement can be
discharged by one party, in whole or in part, by a waiver or renunciation of the
claim or right unless in writing signed by the other party; (b) no waiver that
may be given by a party will be applicable except in the specific instance for
which it is given; and (c) no notice to or demand on one party will be deemed to
be a waiver of any obligation of such party or of the right of the party giving
such notice or demand to take further action without notice or demand as
provided in this Agreement or the documents referred to in this Agreement.
10.6 ENTIRE AGREEMENT AND MODIFICATION
This Agreement supersedes all prior agreements
between the parties with respect to its subject matter and constitutes (along
with the documents referred to in this Agreement) a complete and exclusive
statement of the terms of the agreement between the parties with respect to its
subject matter. This
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Agreement may not be amended except by a written agreement executed by the party
to be charged with the amendment.
10.7 ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS
No party may assign any of its rights under this
Agreement without the prior consent of the other party. This Agreement will
apply to, be binding in all respects upon, and inure to the benefit of the
successors of the parties. Nothing expressed or referred to in this Agreement
will be construed to give any person other than the parties to this Agreement
any legal or equitable right, remedy, or claim under or with respect to this
Agreement or any provision of this Agreement. This Agreement and all of its
provisions and conditions are for the sole and exclusive benefit of the parties
to this Agreement and their successors and assigns.
10.8 SEVERABILITY
If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.
10.9 SECTION HEADINGS, CONSTRUCTION
The headings of Sections in this Agreement are
provided for convenience only and will not affect its construction or
interpretation. All references to "Section" or "Sections" refer to the
corresponding Section or Sections of this Agreement. All words used in this
Agreement will be construed to be of such gender or number as the circumstances
require. Unless otherwise expressly provided, the word "including" does not
limit the preceding words or terms.
10.10 TIME OF ESSENCE
With regard to all dates and time periods set forth
or referred to in this Agreement, time is of the essence.
10.11 GOVERNING LAW
This Agreement will be governed by the laws of the
State of Florida without regard to conflicts of laws principles.
10.12 COUNTERPARTS
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This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.
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IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.
BUYER: THE COMPANY:
CIRCLE GROUP INTERNET, INC. INTERNET BROADCASTING COMPANY, INC.
By: /s/ Xxxxxxx Xxxxxxx, President By: /s/ Xxxxxxx Xxxxxx
--------------------------------- --------------------------------
Xxxxxxx Xxxxxxx, President Xxxxxxx Xxxxxx, Executive
Vice President
CIG:
CIG SECURITIES, INC.
By: /s/ Xxxxxxx Xxxxxx
--------------------------------
Xxxxxxx Xxxxxx, President
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