Exhibit 2.10
STOCK PURCHASE AGREEMENT (I)
This Stock Purchase Agreement ("Agreement") is made as of the 17th day
of August 2000, by and between Internet Law Library, Inc., a Delaware
corporation ("Buyer"), and Xxxxxxxx Xxxx ("Seller"). This Agreement is
contingent upon Buyer being able to purchase an aggregate of 68 percent of the
outstanding stock of Compass Data Systems (a Nevada corporation)
W I T N E S S E T H:
WHEREAS, Seller owns 2,500,000 shares of the issued and outstanding
shares of capital stock of Compass Data Systems, a Nevada corporation (the
"Company");
WHEREAS, Seller desires to sell and convey to Buyer, and Buyer desires
to purchase from Seller, all of the capital stock of the Company owned by
Seller.
NOW, THEREFORE, for and in consideration of the premises and of the
mutual representations, warranties, covenants and agreements contained herein,
and of other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, and upon the terms and subject to the conditions
hereinafter set forth, the parties do hereby agree as follows:
1. PURCHASE AND SALE
Purchase of Stock. On the Closing Date (as defined below), Buyer
agrees to purchase from Seller, and Seller agrees to sell to Buyer, all of the
issued and outstanding shares of common stock of the Company owned by Seller for
a total consideration of $760,651 (the "Total Consideration"), the determination
of which is defined below. If the total shares of Compass Data Systems purchased
by Internet Law Library, Inc., does not equal or exceed 68 percent, in the
aggregate, of the outstanding stock of Compass Data Systems, then this Agreement
is void, at the option of Buyer.
Purchase from Individual Selling Shareholder: This document
conveys 2,500,000 shares of Compass Data Systems common stock from Xxxxxxxx
Xxxx, Seller, to Buyer.
Type of Consideration. The Total Consideration is to be paid in
shares of common stock of the Buyer, par value, $0.001 per share (the "Buyer
Shares"), restricted under Section 144 of the Rules of the Securities and
Exchange Commission. The number of shares to be delivered by Buyer will be
determined as the percentage derived from dividing the total number of shares of
Compass Data Systems purchased by Buyer, divided by the total number of shares
of Compass Data Systems, issued and outstanding, which percentage is then
multiplied by $3.6 million, the total of which become the numerator, to be
divided by the average closing price of Buyer's stock during the 20 trading days
immediately preceding the Closing, the denominator.
Example follows:
Example
Shares purchased by Internet LL = % ($3.6 million) = Total $ Value of CompassData Shares
-------------------------------
outstanding CompassData Shares
Purchased
(Total $ Value of
CompassData Shares / Average closing price = # of shares to be delivered by Buyer
Purchased)
The average closing price will be determined by adding the closing price of the
stock on each of the 20 days immediately preceding Closing and dividing by 20.
However, in no event will the denominator be less than $1 or more than $4. In no
event will the number of shares delivered by Buyer be greater than 3.6 million
shares or less than 900,000 shares.
2. Representations and Warranties of Seller with Respect to the
Company
Seller individually represents and warrants to Buyer, to the best of his
knowledge, as follows:
(A) Representations and Warranties of Seller
Authorization. This Agreement has been signed and delivered by the
Seller and constitutes the valid and binding obligation of Seller, enforceable
in accordance with its terms, except that
(i) such enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium, or similar laws affecting creditors'
rights generally;
(ii) the remedies of specific performance and injunctive relief are
subject to certain equitable defenses and to the discretion of the
court before which any proceedings may be brought; and
(iii) rights to indemnification hereunder may be limited under
applicable securities laws (the "Equitable Exceptions"). The Seller
has full corporate power, capacity, and authority to sign this
Agreement and any other necessary agreements and documents.
(B) Capital Stock of the Company
Company's authorized capital stock consists of 50,000,000 shares of Common
Stock, $.001 par value, of which 11,831,967 shares are issued and outstanding.
All of Company's Shares have been validly issued and are fully paid and
nonassessable and no holder thereof is entitled to any preemptive rights (except
any statutory preemptive rights, which Sellers hereby waive).
Seller (i) owns of record and beneficially (subject to the community
property interest of any Seller's spouse) and has good and marketable title to
the issued and outstanding Company shares owned by Seller, free and clear of any
and all liens, mortgages, security interests, encumbrances, pledges, charges,
adverse claims, options, buy-sell agreements, rights of first refusal
agreements, property settlement or marital dissolution agreements, rights, or
restrictions of any character whatsoever other than standard state and federal
securities law private offering legends and restrictions (collectively,
"Liens"), and (ii) has the right to vote the Company Stock on any matters as to
which any shares of the Company Common Stock are entitled to be voted under the
laws of the state of incorporation of the Company and the Company's Articles of
Incorporation and Bylaws, free of any right of any other person.
(C) Subsidiaries. The Company does not presently own, of record or
beneficially, or control directly or indirectly, any capital stock, securities
convertible into capital stock or any other equity interest in any corporation,
association or business entity nor is the Company, directly or indirectly, a
participant in any joint venture, partnership, or other non-corporate entity.
(D) Financial Statements. The Company has previously furnished to Buyer
the audited balance sheet of the Company as of December 31, 1999, and the
related statements of operations, shareholders' equity, and cash flows for the
two (2) fiscal years then ended, each as reviewed by Xxxxxx & Co., certified
public accountants, (the "Financial Statements"). The Financial Statements
present fairly the financial position and results of operations of the Company
as of the indicated dates and for the indicated periods and have been prepared
in accordance with
GAAP. The Company has previously permitted Buyer full access to papers
pertaining to the Financial Statements, including those work papers in the
possession of or prepared by Xxxxxx & Co.
Except to the extent (and not in excess of the amounts) reflected in the
December 31, 1999, balance sheet included in the Financial Statements, the
Company has no liabilities or obligations (including, without limitation, Taxes
payable and deferred Taxes and interest accrued since December 31, 1999)
required to be reflected in the Financial Statements (or the notes thereto) in
accordance with GAAP other than current liabilities incurred in the ordinary
course of business, consistent with past practice, subsequent to December 31,
1999. Seller has also delivered to Buyer, in the case of those liabilities that
are contingent, a reasonable estimate of the maximum amount that may be payable.
For each such contingent liability, the Company has provided to Buyer the
following information:
A summary description of the liability together with the following:
(1) Copies of all relevant documentation relating thereto;
(2) Amounts claimed and any other action or relief sought; and
(3) Name of claimant and all other parties to the claim, suit or
proceeding.
The name of each court or agency before which such claim, suit, or
proceeding is pending;
The date such claim, suit, or proceeding was instituted; and
A reasonable best estimate by the Company of the maximum amount, if any,
that is likely to become payable with respect to each such liability. If no
estimate is provided, the Company's best estimate shall for purposes of this
Agreement be deemed to be zero.
(E) Accounts and Notes Receivable. Seller has provided Buyer with an
accurate list of the accounts and notes receivable of the Company, as of
December 31, 1999, included within the Financial Statements, and including
receivables from and advances to employees and the Seller. Seller will provide
Buyer with an aging of all accounts and notes receivable of Company showing
amounts due in 30-day aging categories. All such accounts and notes are legal,
valid, and binding obligations of the obligors' collectible net of reserves
reflected in such balance sheet. The Company's invoices to customers are
accurate in respect to services provided, except for matters that are immaterial
as to each customer and in the aggregate.
(F) Permits and Intangibles. The Company holds all licenses, franchises,
permits, and other governmental authorizations, including permits, titles
(including motor vehicle titles and current registrations), fuel permits,
licenses, franchises, certificates, trademarks, trade names, patents, patent
applications, and copyrights owned or held by the Company, the absence of any of
which would have a Material Adverse Effect (the "Material Permits"). The
Material Permits are valid, and the Company has not received any notice that any
governmental authority intends to cancel, terminate or not renew any such
Material Permit. The Company has conducted and is conducting its business in
compliance with the requirements, standards, criteria and conditions set forth
in applicable permits, licenses, orders, approvals, variances, rules and
regulations and is not in violation of any of the foregoing except where such
noncompliance or violation would not have a Material Adverse Effect. The
transactions contemplated by this Agreement will not result in a default under
or a breach or violation of, or adversely affect the rights and benefits
afforded to the Company by, any such Material Permits.
(G) Tax Matters
The Company has filed all income tax returns required to be filed by the
Company and all returns of other Taxes (as defined below) required to be filed
by the Company and has paid or provided for all Taxes shown to be due on such
returns and all such returns are accurate and correct in all respects.
Currently, (i) no action or proceeding for the assessment or collection of any
Taxes is pending against the Company; (ii) no deficiency, assessment or other
formal claim for any Taxes has been asserted or made against the Company that
has not been fully paid or finally settled; and (iii) no issue has been formally
raised by any taxing authority in connection with an audit or examination of any
return of Taxes. No federal, state, or foreign income tax returns of the Company
have been examined, and there are no outstanding agreements or waivers extending
the applicable statutory periods of limitation for such Taxes for any period.
All Taxes that the Company has been required to collect or withhold have been
duly withheld or collected and, to the extent required, have been paid to the
proper taxing authority. No Taxes will be assessed on or after the Closing Date
against the Company for any tax period ending on or prior to the Closing Date.
For purposes of this Agreement, "Taxes" shall mean all taxes, charges, fees,
levies, or other
assessments including, without limitation, income, excise, property,
withholding, sales, and franchise taxes, imposed by the United States, or any
state, county, local, or foreign government or subdivision or agency thereof,
and including any interest, penalties, or additions attributable thereto.
The Company is not a party to any Tax allocation or sharing agreement.
The Company has substantial authority for the treatment of, or has
disclosed (in accordance with Section 6662(d)(2)(B)(ii) of the Code) on its
Federal income returns, all positions taken therein that could give rise to a
substantial understatement of Federal income tax within the meaning of Section
6662(d) of the Code.
The Company has not been a member of an affiliated group filing a
consolidated federal income tax return and does not have any liability for Taxes
for any Person other than the Company (i) under Section 1.1502-6 of the Treasury
regulations (or any similar provision of state, local, or foreign law), (ii) as
a transferee or successor, (iii) by contract or (iv) otherwise.
The Company's Tax basis in its assets for purposes of determining its
future amortization, depreciation and other federal income Tax deductions is
accurately reflected on the Company's Tax books and records.
(H) No Violations. The execution, delivery, and performance of this
Agreement and the other agreements and documents contemplated hereby by the
Company and the Seller and the consummation of the transactions contemplated
hereby will not (i) violate any provision of any Charter Document, (ii) violate
any statute, rule, regulation, order or decree of any public body or authority
by which the Company or the Seller or its, his, or their properties or assets
are bound, or (iii) result in a violation or breach of, or constitute a default
under, or result in the creation of any encumbrance upon, or create any rights
of termination, cancellation, or acceleration in any person with respect to any
Contract or any material license, franchise or permit of the Company or any
other agreement, contract, indenture, mortgage or instrument to which the
Company is a party or by which any of its properties or assets is bound.
(I) Consents. No consent, approval, notice to, registration or filing
with, authorization or order, of any governmental authority or under any
Contract or other agreement or commitment to which the Company or Seller are
parties or by which its, his, or their respective assets are bound is required
as a result of or in connection with the execution or delivery of this Agreement
and the other agreements and documents to be executed by the Company and Seller
or the consummation by the Company and Seller of the transactions contemplated
hereby.
(J) Litigation and Related Matters. Attached is a list of all actions,
suits, proceedings, investigations or grievances pending against the Company or,
to the best knowledge of the Company and Seller, threatened against the Company,
the business or any property or rights of the Company, at law or in equity,
before or by any arbitration board or panel, court or federal, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign ("Agencies"). None of the actions, suits,
proceedings or investigations either (i) results in or would, if adversely
determined, have a Material Adverse Effect or (ii) affects or would, if
adversely determined, affect the right or ability of the Company to carry on its
business substantially as now conducted. The Company is not subject to any
continuing court or Agency order, writ, injunction or decree applicable
specifically to its business, operations or assets or its employees, nor in
default with respect to any order, writ, injunction or decree of any court or
Agency with respect to its assets, business, operations or employees. The
schedule lists all worker's compensation claims outstanding against the Company
as of the date hereof and all actions, suits or proceedings filed by or against
the Company since December 31, 1999. The Company has not during the last two
years been required to make any indemnification payment as a result of any
actual or alleged act or omission of the Company or any person under its
control.
(K) Compliance with Laws. The Company (a) is in compliance with all
applicable laws, regulations (including federal, state and local procurement
regulations), orders, judgments, and decrees, and (b) possesses all Material
Permits.
(L) Intellectual Property Rights. An attached schedule lists the
domestic and foreign trade names, trademarks, service marks, trademark
registrations and applications, service xxxx registrations and applications,
patents, patent applications, patent licenses, software licenses and copyright
registrations and applications owned by the Company or used thereby in the
operation of its business (collectively, the "Intellectual Property"), which
Schedule indicates (i) the term and exclusivity of its rights with respect to
the Intellectual Property and (ii) whether each item of Intellectual Property is
owned or licensed by the Company, and if licensed, the licensor and the license
fees therefor. The Company has the right to use and license the Intellectual
Property, and the consummation of the
transactions contemplated hereby will not result in the loss or material
impairment of any rights of the Company in the Intellectual Property. Each item
constituting part of the Intellectual Property has been, to the extent
indicated, registered with, filed in or issued by, as the case may be, the
United States Patent and Trademark Office or such other government entity; all
such registrations, filings, and issuances remain in full force and effect; and
all fees and other charges with respect thereto are current. There are no
pending proceedings or adverse claims made or, to the best knowledge of the
Company and Sellers, threatened against the Company with respect to the
Intellectual Property; there has been no litigation commenced or threatened in
writing within the past five years with respect to the Intellectual Property or
the rights of the Company therein; the Intellectual Property performs in all
respects in the manner described or represented by the Company in all proposals,
bids, specifications, documentation, promotional materials and sales literature
prepared thereby or delivered on behalf of it and performs in all respects the
functions necessary for the conduct of the Company's business and operations,
free of any deficiency, imperfection or insufficiency that would be reasonably
likely to have a Material Adverse Effect; and the Company and Sellers have no
knowledge that (i) the Intellectual Property or the use thereof by the Company
conflicts with any trade names, trademarks, service marks, trademark or service
xxxx registrations or applications, patents, patent applications, patent
licenses or copyright registrations or applications of others ("Third Party
Intellectual Property"), or (ii) such Third Party Intellectual Property or its
use by others or any other conduct of a third party conflicts with or infringes
upon the Intellectual Property or its use by the Company.
(M) The Company is in compliance in all material respects with the
provisions of the Americans with Disabilities Act.
(N) Employees; Employee Relations
The Company is not a party to, or bound by, the terms of any collective
bargaining agreement, and the Company has not experienced any material labor
difficulties during the last five (5) years and, during the last five (5) years,
none of the employees of the Company has been represented by any labor union or
other employee collective bargaining organization, was a party to, or bound by,
any labor or other collective bargaining agreement or has been subject to or
involved in or, to the knowledge of the Company and Seller, threatened with, any
union elections, petitions or other organizational or recruiting activities.
There are no labor disputes existing, or to the best knowledge of the Company
and Seller, threatened involving, by way of example, strikes, work stoppages,
slowdowns, picketing, or any other interference with work or production, or any
other concerted action by employees. No charges or proceedings before the
National Labor Relations Board, or similar agency, exist, or to the best
knowledge of the Company and Sellers, are threatened.
The relationships enjoyed by the Company with its employees are good and
the Company and Seller has no knowledge of any facts that would indicate that
the employees of the Company will not continue in the employ thereof following
the Closing on a basis similar to that existing on the date of this Agreement.
Since December 31, 1999, the Company has not experienced any difficulties in
obtaining any qualified personnel necessary for the operations of its business
and, to the best knowledge of the Company and Seller, no such shortage of
qualified personnel is threatened or pending. No legal proceedings, charges,
complaints or similar actions exist under any federal, state, or local laws
affecting the employment relationship including, but not limited to: (i) anti-
discrimination statutes such as Title VII of the Civil Rights Act of 1964, as
amended (or similar state or local laws prohibiting discrimination because of
race, sex, religion, national origin, age, and the like); (ii) the Fair Labor
Standards Act or other federal, state, or local laws regulating hours of work,
wages, overtime and other working conditions; (iii) requirements imposed by
federal, state or local governmental contracts such as those imposed by
Executive Order 11246; (iv) state laws with respect to tortious employment
conduct, such as slander, harassment, false light, invasion of privacy,
negligent hiring or retention, intentional infliction of emotional distress,
assault and battery, or loss of consortium; or (v) the Occupational Safety and
Health Act, as amended, as well as any similar state laws, or other regulations
respecting safety in the workplace; and to the best knowledge of the Company and
Seller, no proceedings, charges, or complaints are threatened under any such
laws or regulations and no facts or circumstances exist that would give rise to
any such proceedings, charges, complaints, or claims, whether valid or not. The
Company is not subject to any settlement or consent decree with any present or
former employee, employee representative or any government or Agency relating to
claims of discrimination or other claims in respect to employment practices and
policies; and no government or Agency has issued a judgment, order, decree or
finding with respect to the labor and employment practices (including practices
relating to discrimination) of the Company. Since December 31, 1999, the Company
has not incurred any liability or obligation under the Worker Adjustment and
Retraining Notification Act or similar state laws; and the Company has not laid
off more than ten percent of its employees at any single site of employment in
any 90-day period during the 12-month period ending at the Closing Date.
(O) Absence of Certain Changes or Events
Since December 31, 1999, there has not been (a) any damage,
destruction, or casualty loss to the physical properties of the Company or to
the physical properties of any third parties that are located on the Company's
premises or within the Company's control (whether or not covered by insurance),
(b) any event or circumstance that would have a Material Adverse Effect, (c) any
entry into any transaction, commitment, or agreement (including, without
limitation, any borrowing) material to the Company, except transactions,
commitments, or agreements in the ordinary course of business consistent with
past practice, (d) any declaration, setting aside, or payment of any dividend or
other distribution in cash, stock, or property with respect to the capital stock
or other securities of the Company, any repurchase, redemption, or other
acquisition by the Company of any capital stock or other securities, or any
agreement, arrangement, or commitment by the Company to do so, (e) any increase
that is material in the compensation payable or to become payable by the Company
to its directors, officers, employees, or agents or any increase in the rate or
terms of any bonus, pension, or other employee benefit plan, payment or
arrangement made to, for or with any such directors, officers, employees, or
agents, (f) any sale, transfer, or other disposition of, or the creation of any
Lien upon, any part of the assets of the Company, tangible or intangible, except
for sales of inventory and use of supplies and collections of accounts
receivables in the ordinary course of business consistent with past practice, or
any cancellation or forgiveness of any debts or claims by the Company, (g) any
change in the relations of the Company with or loss of its customers or
suppliers, or any loss of business or increase in the cost of inventory items or
change in the terms offered to customers, which would have a Material Adverse
Effect, or (h) any capital expenditure (including any capital leases) or
commitment therefor by the Company in excess of $10,000.
(P) Disclosure. All written agreements, lists, schedules,
instruments, exhibits, documents, certificates, reports, statements, and other
writings furnished to Buyer pursuant hereto or in connection with this Agreement
or the transactions contemplated hereby are and will be complete and accurate in
all material respects. No representation or warranty by Seller and the Company
contained in this Agreement, contains any untrue statement of a material fact or
omits to state any material fact necessary in order to make any statement
contained herein or therein not misleading. There is no fact known to Seller
that has specific application to the Company (other than general economic or
industry conditions) that materially adversely affects or, as far as Seller can
reasonably foresee, materially threatens the assets, business, prospects,
financial condition, or results of operations of the Company that has not been
set forth in this Agreement.
3. Representations and Warranties of the Seller
Seller represents and warrants as more specifically set forth
hereafter that the representations and warranties in this section as they apply
to him are true and correct as of the date of this Agreement and at the time of
the Closing.
(A) Authority; Ownership. Seller has the full legal right, power, and
authority to enter into this Agreement. Seller owns beneficially (subject to any
community property interest of his or her spouse) and of record the Company
Shares as described in this Agreement and the Company Shares owned by Seller are
owned free and clear of all Liens other than standard state and federal
securities laws private offering restrictions.
(B) Preemptive Rights. Seller does not have, or hereby waives, any
preemptive or other right to acquire Company Shares that Seller have or may have
had.
(C) Validity of Obligations. This Agreement has been signed and
delivered and constitutes the legal, valid, and binding obligations of Seller
that is a party thereto in accordance with their respective terms.
(D) Absence of Claims Against the Company. Seller does not have any
claims against the Company other than as disclosed herein.
(E) Accredited Investor. Seller is an "accredited investor," as that
term is defined by Rule 501 of Regulation D, promulgated under the Securities
Act of 1933, as amended (the "Securities Act").
(F) Investment Intent. Seller is acquiring the Buyer's Shares in his
own name and account and not with a view to, or for resale in connection with,
any distribution thereof in violation of applicable securities laws.
(G) Buyer Shares Not Registered. Seller acknowledges that the Buyer
Shares have not been registered under the Securities Act or applicable state
securities laws, and that they must be held in accordance with Rule 144 of the
Securities and Exchange Commission.
(H) Risk of Investment. Seller recognizes, acknowledges, and warrants
that he has such knowledge and experience as to be capable of evaluating the
merits and risks of the investment in Buyer and is aware of the speculative
nature of and risks of loss associated with such investment.
4. Representations and Warranties of Buyer
Buyer represents and warrants to Seller as follows:
(A) Organization and Authorization. Buyer is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Delaware with all requisite corporate power and authority to own, lease, and
operate its properties and to carry on its business as now being conducted.
Buyer has all requisite corporate power, capacity, and authority to sign and
deliver this Agreement and all other necessary agreements and documents. The
execution and delivery of this Agreement and such other agreements and documents
by Buyer and the consummation by Buyer of the transactions contemplated hereby
have been duly authorized by Buyer and no other corporate action on the part of
Buyer is necessary to authorize the transactions contemplated hereby. This
Agreement has been duly signed and delivered by Buyer and constitutes the valid
and binding obligation of Buyer, enforceable in accordance with its terms,
subject to the Equitable Exceptions.
(B) No Violations. The execution and delivery of this Agreement and
the other agreements and documents contemplated hereby by Buyer and the
consummation of the transactions contemplated hereby will not (a) violate any
provision of the certificate of incorporation or bylaws of Buyer, (b) violate
any statute, rule, regulation, order or decree of any public body or authority
by which Buyer or its properties or assets are bound, or (c) result in a
violation or breach of, or constitute a default under or result in the creation
of any encumbrance upon, or create any rights of termination, cancellation or
acceleration in any person with respect to any agreement, contract, indenture,
mortgage, or instrument to which Buyer is a party or any of its properties or
assets is bound.
(C) Consents. No consent, approval, or other authorization of any
governmental authority or third party is required as a result of or in
connection with the execution and delivery of this Agreement and the other
agreements and documents to be executed by Buyer or the consummation by Buyer of
the transactions contemplated hereby.
(D) Investment Intent. Buyer is acquiring the Seller's Shares for its
own account and not with a view to their distribution within the meaning of
Section 2(11) of the Securities Act.
(E) Limitation of Warranties. Except as expressly set forth in any
agreement, document, or instrument executed in connection with this Agreement,
Buyer does not make any express or implied representation or warranty of any
kind.
(F) The Buyer Shares. The Buyer Shares when delivered hereunder will
be duly authorized, validly issued, and fully paid and nonassessable. The Buyer
Shares will be issued pursuant to Section 4(2) of the Securities Act. Any
certificates representing Buyer Shares issued to any Seller will contain a
restrictive legend.
(G) Remaining Compass Data Systems (a Nevada corporation Stock Shares.
Buyer covenants with Sellers that, within 14 months of the effective date of
this Agreement, Buyer will use commercially reasonable efforts to purchase the
remaining approximate 30 percent of Compass Data Systems' outstanding shares.
5. Covenants of the Parties
(A) Approvals and Consents. Seller will use his best efforts (i) to
cause all conditions to the obligations of Buyer under this Agreement over which
he is are able to exercise influence or control to be satisfied prior to the
Closing Date and (ii) to obtain promptly and to comply with all requisite
statutory, regulatory, or court approvals, third party releases and consents,
and other requirements necessary for the valid and legal consummation of the
transactions contemplated hereby.
(B) Investigations. Seller will provide Buyer and its representatives
and agents such access to the books and records of the Company and furnish to
Buyer such financial and operating data and other information
with respect to the businesses and property of the Company as it may reasonably
request from time to time, and permit Buyer and its representatives and agents
to make such inspections of the Company's real and personal properties as they
may reasonably request. Seller shall promptly arrange for Buyer and its
representatives and agents to meet with such directors, officers, employees, and
agents of the Company as requested.
(C) No Solicitation. Except with respect to Buyer and its Affiliates, after
the date hereof, Seller shall not, and Seller shall cause the Company and the
respective officers, directors, employees, agents, and representatives of Seller
and the Company (including, without limitation, any investment banker, attorney,
or accountant retained by any of them) not to (i) initiate or solicit, directly
or indirectly, any inquiries or the making of any proposal with respect to a
merger, consolidation, sale of shares of capital stock or similar transaction
involving, or any purchase of all or any significant portion of the assets
(other than in the ordinary course of business) of, or any equity interest in,
the Company (an "Acquisition Transaction"), or (ii) engage in any negotiations
concerning, or provide to any other person any information or data relating to
the Company for the purposes of or have any discussions with any person relating
to, or otherwise cooperate in any way with, or assist or participate in,
facilitate or encourage any effort or attempt by any other person to seek or
effect, an Acquisition Transaction. Seller shall promptly advise Buyer of, and
communicate to Buyer the terms of, any such inquiry or proposal the Company or
Seller may receive.
6. Conditions to Obligations of Buyer
The obligation of Buyer to purchase Seller's Shares at the Closing, shall
be subject to the satisfaction of each of the following conditions at or prior
to the Closing:
(A) Representations and Warranties. Each representation and warranty of
Seller contained in this Agreement and in any Schedule or other disclosure in
writing from Sellers shall be true and correct when made, and shall be true and
correct on and as of the Closing Date with the same effect as though such
representation and warranty had been made on and as of the Closing Date.
(B) Covenants of Seller. All of the terms, covenants, conditions, and
agreements herein on the part of Seller to be complied with or performed on or
before the Closing Date shall have been fully complied with and performed.
(C) Absence of Litigation. No inquiry, action, suit, or proceeding shall
have been asserted, threatened, or instituted (i) in which it is sought to
restrain or prohibit the carrying out of the transactions contemplated by this
Agreement or to challenge the validity of such transactions or any part thereof,
(ii) which could, if adversely determined, result in any Material Adverse Effect
or (iii) as a result of which, in the reasonable judgment of Buyer, Buyer would
be deprived of the material benefits of the ownership of the Seller's Shares.
(D) Consents and Approvals. All material authorizations, consents,
approvals, waivers and releases, if any, necessary for Seller to consummate the
transactions contemplated hereby shall have been obtained and copies thereof
shall be delivered to Buyer.
(E) Certificates. Seller shall have delivered to Buyer (i) certificates of
the appropriate governmental authorities, dated as of a date not more than
twenty (20) days prior to the Closing Date, attesting to the existence and good
standing of the Company in the States of Nevada and Utah; (ii) a copy, certified
by the Secretary of State of Nevada as of a date not more than twenty (20) days
prior to the Closing Date, of the charter and all amendments thereto of the
Company; (iii) a copy certified by the Secretary of the Company, dated the
Closing Date, of the bylaws of the Company; and (iv) certificates, dated the
Closing Date, of the Secretary of the Company, relating to the incumbency and
corporate proceedings in connection with the consummation of the transactions
contemplated hereby.
(F) Shareholder Release. Seller shall have executed and delivered to Buyer
immediately prior to the Closing Date an instrument dated the Closing Date
releasing the Company from any and all claims of the Seller against the Company
and obligations of the Company to the Seller, except for items specifically
identified thereon as being claims of or obligations to the Seller and
continuing obligations to Seller relating to his employment by the Company.
(G) Opinion of Counsel. Seller acknowledges that he understands his right
to seek an opinion of counsel of his choosing and that he has had an opportunity
to do so before signing this Agreement.
(H) No Material Adverse Effect. There shall not have been any Material
Adverse Effect.
(I) No Transfers to Affiliates. Except as otherwise expressly contemplated
by this Agreement, the Company shall not have distributed or transferred any of
its assets or properties, or made any payments, to or for the benefit of any of
its Affiliates.
(J) Due Diligence Review
The due diligence review of the Company (including, without limitation,
legal, financial, operational and environmental matters) to be conducted by or
on behalf of Buyer shall have been completed in a manner satisfactory to Buyer
and shall not reveal or produce adverse facts with respect to the Company, its
premises, business, operations, financial condition or prospects which are not
otherwise disclosed in this Agreement or any Schedule attached.
No condition shall exist that was not disclosed in writing to Buyer prior
to the date hereof that would have a Material Adverse Effect.
(K) Stock Certificates. Seller shall have tendered certificates
representing the Company Shares owned by him, duly endorsed in blank or
accompanied by appropriate stock powers, in proper form for transfer, with all
transfer taxes paid.
7. Conditions to Obligations of Seller
The obligations of Seller to sell his Shares and to cause the other
transactions contemplated hereby to occur at the Closing shall be subject,
except as Seller may waive in writing, to the satisfaction of each of the
following conditions at or prior to the Closing:
(A) Representations and Warranties. Each representation and warranty of
Buyer contained in this Agreement and in any Schedule or other disclosure in
writing from Buyer shall be true and correct when made, and shall be true and
correct on and as of the Closing Date with the same effect as though such
representation and warranty had been made on and as of the Closing Date.
(B) Covenants of Buyer. All of the terms, covenants, conditions, and
agreements herein on the part of Buyer to be complied with or performed on or
before the Closing Date shall have been fully complied with and performed.
(C) Absence of Litigation. No inquiry, action, suit or proceeding shall
have been asserted, threatened or instituted in which it is sought to restrain
or prohibit the carrying out of the transactions contemplated by this Agreement
or to challenge the validity of such transactions or any part thereof.
(D) Consents and Approvals. All material authorizations, consents,
approvals, waivers and releases, if any, necessary for Buyer to consummate the
transactions contemplated hereby shall have been obtained and delivered to
Seller.
(E) Stock Certificates. Buyer shall have delivered or cause to be delivered
to Seller stock certificates representing the Buyer Shares in the amounts
specified in this Agreement.
8. Closing
(A) Closing. The closing of the transactions contemplated hereby (the
"Closing") shall take place at the offices of Compass Data Systems, or such
other place as is agreed to by Buyer and Seller, on August 17, 2000, or such
other date as the parties may agree upon in writing (the "Closing Date").
(B) Delivery of the Company Shares. At the Closing, Seller shall deliver or
cause to be delivered to Buyer the stock certificate(s) evidencing all of the
Company Shares owned by them, duly endorsed or accompanied by duly executed
stock powers assigning the Company Shares to Buyer and otherwise in good form
for transfer.
(C) Delivery of the Buyer Shares. At the Closing, Buyer shall deliver or
cause to be delivered to Seller the stock certificates evidencing the Buyer
Shares to be transferred hereunder.
9. Termination Prior to Closing
(A) Termination. This Agreement may be terminated and abandoned at any time
prior to the Closing:
By the written mutual consent of Buyer and Seller;
By Buyer on the Closing Date if any of the conditions to obligations of
Buyer shall not have been fulfilled on or prior to the Closing Date;
By Sellers on the Closing Date if any of the conditions to obligations of
Seller shall not have been fulfilled on or prior to the Closing Date;
By either Buyer or Seller if the Closing shall not have occurred on or
before October 1, 2000; and
By Buyer, upon written notice to Seller, if the examination of the Company,
including its assets, liabilities, operations, business and prospects, by Buyer,
or its representatives or agents, discloses the existence or nonexistence of any
matters or things that, in the sole judgment of Buyer, would be reasonably
likely to result in a material loss or damage to Buyer or the Company or a
material diminution in value of the Company.
In the event of a termination pursuant to this article, each party will
bear its own costs and expenses incurred with respect to the transactions
contemplated hereby.
10. Indemnification
(A) Buyer's Losses
Seller agrees to indemnify and hold harmless Buyer and its directors,
officers, employees, representatives, agents, and attorneys from, against and in
respect of any and all Buyer's Losses (as defined below) suffered, sustained,
incurred or required to be paid by any of them by reason of (i) any
representation or warranty made by the Company or Seller in or pursuant to this
Agreement (including, without limitation, the representations and warranties
contained in any schedule or certificate delivered pursuant hereto) being untrue
or incorrect in any respect and without regard to any "materiality," "material
adverse effect," or "substantial compliance" or similar exception or qualifier;
(ii) any liability arising from or based upon the operation of the Company
through the Closing Date; or (vi) any liability arising from or based upon
required consents not obtained prior to the Closing.
"Buyer's Losses" shall mean all damages (including, without limitation,
amounts paid in settlement with the Seller's consent, which consent may not be
unreasonably withheld), losses, obligations, liabilities, claims, deficiencies,
costs and expenses (including, without limitation, reasonable attorneys' fees),
penalties, fines, interest and monetary sanctions, including, without
limitation, reasonable attorneys' fees and costs incurred to comply with
injunctions and other court and Agency orders, and other costs and expenses
incident to any suit, action, investigation, claim or proceeding or to establish
or enforce the rights of Buyer or such other persons to indemnification
hereunder.
Employee Compensation and Benefits. Seller agrees to indemnify and hold
----------------------------------
Buyer and its directors, officers, employees, representatives, agents, and
attorneys harmless from and against any and all claims made by employees of the
Company, regardless of when made, for wages, salaries, bonuses, pension,
workmen's compensation, medical insurance, disability, vacation, severance, pay
in lieu of notice, sick benefits or other compensation or benefit arrangements
to the extent the same are based on employment service rendered to the Company
prior to the Closing Date or injury or sickness occurring prior to the Closing
Date and are not reserved for on the Financial Statements (collectively,
"Employee Claims").
(B) Seller Losses
Buyer agrees to indemnify and hold harmless Seller and his agents and
attorneys, for and in respect of any and all Seller Losses (as defined below)
suffered, sustained, incurred or required to be paid by any of the Seller by
reason of (i) any representation or warranty made by Buyer in this Agreement
being untrue or incorrect in any respect and without regard to any
"materiality," "material adverse effect," "material adverse effect" or
"substantial compliance" or similar exception or qualifier; (ii) any failure by
Buyer to observe or perform its covenants and agreements set forth in this
Agreement or any other agreement or document executed by it in connection with
the transactions contemplated hereby; or (iii) any liability for claims arising
from or based upon the operation of the
Company subsequent to the Closing Date, except in any instance and to the extent
Seller Losses result from the negligence or misconduct of Seller.
"Seller Losses" shall mean all damages (including, without limitation,
amounts paid in settlement with the consent of Buyer, which consent may not be
reasonably withheld), losses, obligations, liabilities, claims, deficiencies,
costs, and expenses (including, without limitation, reasonable attorneys' fees),
penalties, fines, interest and monetary sanctions, including, without
limitation, reasonable attorneys' fees and costs incurred to comply with
injunctions and other court and Agency orders, and other costs and expenses
incident to any suit, action, investigation, claim or proceeding or to establish
or enforce the right of Seller or such other persons to indemnification
hereunder.
(C) Notice of Loss
Except to the extent set forth in the next sentence, a party to the
Agreement will not have any liability under the indemnity provisions of this
Agreement with respect to a particular matter unless a notice setting forth in
reasonable detail the breach or other matter which is asserted has been given to
the Indemnifying Party (as defined below) and, in addition, if such matter
arises out of a suit, action, investigation, proceeding or claim, such notice is
given promptly, but in any event within thirty (30) days after the Indemnified
Party (as defined below) is given notice of the claim or the commencement of the
suit, action, investigation or proceeding. Notwithstanding the preceding
sentence, failure of the Indemnified Party to give notice hereunder shall not
release the Indemnifying Party from its obligations under this article, except
to the extent the Indemnifying Party is actually prejudiced by such failure to
give notice. With respect to Buyer's Losses, Environmental Costs and Employee
Claims, Sellers shall be the Indemnifying Party and Buyer and its directors,
officers, employees, representatives, agents and attorneys shall be the
Indemnified Party. With respect to Seller Losses, Buyer shall be the
Indemnifying Party and Seller and his agents and attorneys shall be the
Indemnified Party.
(D) Right to Defend. Upon receipt of notice of any suit, action,
investigation, claim, or proceeding for which indemnification might be claimed
by an Indemnified Party, the Indemnified Party shall have the option of electing
to defend, contest or otherwise protect against such suit, action,
investigation, claim or proceeding, with the costs and expenses of such defense
to be borne by the Indemnifying Party, and the Indemnifying Party must cooperate
in any such defense or other action. The Indemnifying Party shall have the
right, but not the obligation, to participate at its own expense in a defense
thereof by counsel of its own choosing, but the Indemnified Party shall be
entitled to control the defense unless otherwise determined by the Indemnified
Party or if the Indemnified Party fails to assume defense of the matter. In the
event the Indemnified Party shall fail to defend, contest or otherwise protect
in a timely manner against any such suit, action, investigation, claim or
proceeding, the Indemnifying Party shall defend, contest or otherwise protect
against the same and make any compromise or settlement thereof, and shall pay
all costs thereof, including, without limitation, reasonable attorneys' fees,
disbursements and all amounts paid as a result of such suit, action,
investigation, claim or proceeding or the compromise or settlement thereof;
provided, however, that the Indemnifying Party must send a written notice to the
Indemnified Party of any such proposed settlement or compromise, which
settlement or compromise the Indemnified Party may reject, in its reasonable
judgment, within 30 days of receipt of such notice. Failure to reject such
notice within such 30-day period shall be deemed an acceptance of such
settlement or compromise. The Indemnified Party shall have the right to effect a
settlement or compromise over the objection of the Indemnifying Party; provided,
that if the Indemnifying Party has assumed the defense from the Indemnified
Party upon the election of the Indemnified Party, the Indemnified Party waives
any right to indemnity therefor. If the Indemnifying Party undertakes the
defense of such matters upon the election of the Indemnified Party, the
Indemnified Party shall not, so long as the Indemnifying Party does not abandon
the defense thereof, be entitled to recover from the Indemnifying Party any
legal or other expenses subsequently incurred by the Indemnified Party in
connection with the defense thereof other than the reasonable costs of
investigation undertaken by the Indemnified Party with the prior written consent
of the Indemnifying Party.
(E) Cooperation. Buyer and Seller, and Seller's affiliates, successors,
and assigns, shall cooperate with each other in the defense of any suit, action,
investigation, proceeding, or claim by a third party and, during normal business
hours, shall afford each other access to their books and records and employees
relating to such suit, action, investigation, proceeding or claim and shall
furnish each other all such further information that they have the right and
power to furnish as may reasonably be necessary to defend such suit, action,
investigation, proceeding or claim, including, without limitation, reports,
studies, correspondence and other documentation relating to Environmental
Protection Agency, Occupational Safety and Health Administration, and Equal
Employment Opportunity Commission matters.
11. Miscellaneous
(A) Entire Agreement. This Agreement (including the exhibits and schedules
hereto) constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, between the parties hereto with respect
to the subject matter hereof, and no party shall be liable or bound to the other
in any manner by any representations or warranties not set forth herein.
(B) Successors and Assigns. The terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the parties hereto and their
respective successors and permitted assigns. Neither this Agreement nor any
rights, interests, or obligations hereunder may be assigned by any party hereto
without the prior written consent of all other parties hereto, and any purported
assignment in violation of this section shall be null and void.
(C) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original
and all of which shall constitute the same instrument.
(D) Headings. The headings of the articles and sections of this Agreement
are inserted for convenience only and shall not be deemed to constitute part of
this Agreement or to affect the construction hereof.
(E) Construction. As used in this Agreement, the words "herein," "hereof"
and "hereunder" and other words of similar import refer to this Agreement as a
whole and not to any particular article, section, paragraph or other
subdivision.
(F) Modification and Waiver. Any of the terms or conditions of this
Agreement may be waived in writing at any time by the party which is entitled to
the benefits thereof, and this Agreement may be modified or amended by a written
instrument executed by Buyer, the Company and each Seller. No supplement,
modification or amendment of this Agreement shall be binding unless executed in
writing by all of the parties hereto. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provision
hereof (whether or not similar) nor shall such waiver constitute a continuing
waiver.
(G) Schedules, Etc. All attachments are expressly made a part of this
Agreement as though fully set forth herein.
(H) Notices. All notices of communication required or permitted hereunder
shall be in writing and may be given by (a) depositing the same in United States
mail, addressed to the party to be notified, postage prepaid and registered or
certified with return receipt request, (b) delivering the same in person to an
officer or agent of such party, (c) telecopying the same with electronic
confirmation of receipt.
(i) If to Buyer, addressed to it at:
c/o Hunter M. A. Xxxx, CEO
Internet Law Library, Inc.
0000 Xxxxxxxx Xxxx
Xxxxxxx, Xxxxx 00000-0000
(ii) If to the Seller, addressed to him at:
c/o Xxxxxxxx Xxxx
Compass Data Systems
0000 Xxxx 0000 Xxxxx, Xxxxx X
Xxxx Xxxx Xxxx, Xxxx 00000
or to such other address or counsel as any party hereto shall specify pursuant
to this section from time to time.
12. Governing Law; Consent to Jurisdiction
This Agreement shall be construed in accordance with laws of the state of
Texas. The parties hereto expressly consent and agree that any dispute,
controversy, legal action, or other proceeding that arises under, results from,
concerns, or relates to this Agreement may be brought in the federal and state
courts in and of the state of Texas and acknowledge that they will accept
service of process by registered or certified mail or the equivalent directed to
their last known address as determined by the other party in accordance with
this agreement or by whatever other means are permitted by such courts. The
parties hereto hereby acknowledge that said courts have
jurisdiction over any such dispute or controversy, and that they hereby waive
any objection to personal jurisdiction or venue in these courts or that such
courts are an inconvenient forum. All remedies at law, in equity, by statute, or
otherwise shall be cumulative and may be enforced concurrently or from time to
time and, subject to the express terms of this agreement, the election of any
remedy or remedies shall not constitute a waiver of the right to pursue any
other available remedies.
13. Survival of Covenants, Agreements, Representations, and Warranties
(A) Covenants and Agreements. All covenants and agreements made hereunder
or pursuant hereto or in connection with the transactions contemplated hereby
shall survive the Closing and shall continue in full force and effect thereafter
according to their terms without limit as to duration.
(B) Representations and Warranties. All representations and warranties
contained herein shall survive the Closing and shall continue in full force and
effect thereafter for a period of three (3) years following the Closing.
(C) Claims Made Prior to Expiration. The termination of a survival period
shall not affect the rights of an Indemnified Party in respect of any claim made
by such party with specificity, in good faith and in writing to the Indemnifying
Party prior to expiration of the applicable survival period.
(D) Publicity. Except as required by law, no party hereto shall issue any
press release or make any public statement, in either case relating to or in
connection with or arising out of this Agreement or the matters contained herein
without obtaining the prior written approval of the other parties to the content
and manner of presentation and publication thereof, which consent shall not be
unreasonably withheld or delayed.
(E) Expenses. Seller, on the one hand, and Buyer, on the other hand, shall
be solely responsible for their respective costs and expenses incurred in
connection with the transactions contemplated hereby.
(F) Third-Party Beneficiaries. No individual or firm, corporation,
partnership, or other entity shall be a third-party beneficiary of the
representations, warranties, covenants, and agreements made by any party hereto.
(G) Number and Gender of Words. Whenever the singular number is used, the
same shall include the plural where appropriate, and words of any gender shall
include each other gender where appropriate.
(H) Specific Performance; Other Rights and Remedies. Each party recognizes
and agrees that in the event the other party or parties should refuse to perform
any of its or their obligations under this Agreement, the remedy at law would be
inadequate and agrees that for breach of such provisions each party shall, in
addition to such other remedies as may be available to it at law or in equity,
be entitled to injunctive relief and to enforce its rights by an action for
specific performance to the extent permitted by applicable law. Each party
hereby waives any requirement for security or the posting of any bond or other
surety in connection with any temporary or permanent award of injunctive,
mandatory, or other equitable relief.
(I) Further Assurances. From time to time after the Closing, at the
request of any other party but at the expense of the requesting party, Buyer, or
Seller, as the case may be, will execute and deliver any such other instruments
of conveyance, assignment and transfer, and take such other action as the other
party may reasonably request in order to consummate or evidence the transactions
contemplated hereby.
(J) Brokers and Agents. Each party represents and warrants that it has
employed no broker or agent in connection with this transaction and agrees to
indemnify and hold harmless the other parties against all loss, cost, damages or
expense arising out of claims for fees or commissions of brokers employed or
alleged to have been employed by such indemnifying party.
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the date first above written.
BUYER:
Internet Law Library, Inc. Date: 8/31/00
By: /s/ Hunter M. A. Xxxx
Name: Xxxxxx M. A. Xxxx
Title: CEO
SELLER: Date: 8/17/00
/s/ Xxxxxxxx Xxxx
AMENDMENT TO
STOCK PURCHASE AGREEMENT
Between
Internet Law Library, Inc. (Buyer) and Xxxxxxxx Xxxx (Seller)
Internet Law Library, Inc. (Buyer) and Xxxxxxxx Xxxx (Seller) agree that
the Stock Purchase Agreement dated August 17, 2000, is amended to reflect an
effective date of October 1, 2000. The Closing Date defined in the Agreement for
purposes of calculating the number of shares to be paid by Buyer to Seller
remains August 17, 2000.
Signatures of the parties:
Internet Law Library, Inc., Buyer
By: /s/ Hunter M. A. Xxxx
Xxxxxx M. A. Xxxx
/s/ Xxxxxxxx Xxxx
Xxxxxxxx Xxxx, Seller
