EXHIBIT 10.25
AGREEMENT WITH SELLER STOCKHOLDERS
This Agreement with Seller Stockholders dated June 12, 1998 is by and
among EISI, INC., a California corporation (the "Buyer"), and XXXXXXX STAMMIRE,
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XXXXXXX XXXX XXXXX, and XXXXX X. XXXXXXX (collectively the "Seller Stockholders"
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and each individually referred to herein as a " Seller Stockholder") who each
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reside in the State of California and who are the stockholders of DIGITAL
NETWORKS CORPORATION, INC., a California corporation (the "Seller"). The Buyer
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and the Seller Stockholders are referred to collectively herein as the
"Parties." This Agreement shall be effective on and as of the Closing Date.
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RECITALS
A. The Buyer and the Seller are entering into an Asset Purchase
Agreement concurrently herewith (the "Asset Purchase Agreement"). Certain terms
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used herein without definition are used herein as defined in the Asset Purchase
Agreement.
B. The Asset Purchase Agreement contemplates a transaction in which
the Buyer will purchase the Acquired Assets (and accept responsibility for the
Assumed Liabilities) of the Seller in return for cash and other consideration.
C. The Buyer and the Seller make certain representations, warranties,
and covenants in the Asset Purchase Agreement which will survive the Closing for
purposes of potential indemnification. The Seller Stockholders, however, intend
to cause the Seller to liquidate and dissolve immediately after the Closing. The
Buyer and the Seller Stockholders therefore wish to provide for post-Closing
indemnification against breaches of these representations, warranties, and
covenants and to make certain other covenants among themselves.
AGREEMENT
Now, therefore, in consideration of the premises and the mutual
promises herein made, the Buyer and the Seller Stockholders agree as follows.
1. Definitions.
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"Adverse Consequences" means all actions, suits, proceedings,
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hearings, investigations, charges, complaints, claims, demands, injunctions,
judgments, orders, decrees, rulings, damages, dues, penalties, fines, costs,
amounts paid in settlement, Liabilities,
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obligations, Taxes, liens, losses, expenses, and fees, including court costs and
[reasonable] attorneys' fees and expenses.
"Asset Purchase Agreement" has the meaning set forth in the recitals
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above.
"Confidential Information" means any information concerning the
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businesses and affairs of the Seller that is not already generally available to
the public.
"Indemnified Party" has the meaning set forth in Section 4(d) below.
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"Indemnifying Party" has the meaning set forth in Section 4(d) below.
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"Party" has the meaning set forth in the preface above.
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"Requisite Seller Stockholders" means Seller Stockholders holding a
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majority in interest of the total number of Seller Shares that all of the Seller
Stockholders hold in the aggregate as set forth in the Annex.
"Third Party Claim" has the meaning set forth in Section 4(d) below.
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2. Representations and Warranties of the Seller Stockholders. Each of
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the Seller Stockholders represents and warrants, jointly and severally, to the
Buyer that the statements contained in this Section 2 are correct and complete
as of the date of this Agreement with respect to himself.
(a) Authorization. The Seller Stockholder has full power and authority
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(including, if the Seller Stockholder is a corporation, full corporate power and
authority) to execute and deliver this Agreement and to perform his obligations
hereunder. This Agreement constitutes the valid and legally binding obligation
of the Seller Stockholder, enforceable in accordance with its terms and
conditions.
(b) Noncontravention. Neither the execution and the delivery of this
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Agreement by the Seller Stockholder, nor the performance by the Seller
Stockholder of his obligations hereunder, will (i) violate any constitution,
statute, regulation, rule, injunction, judgment, order, decree, stipulation,
ruling, charge, or other restriction of any government, governmental agency, or
court to which the Seller Stockholder is subject or (ii) conflict with, result
in a breach of, constitute a default under, result in the acceleration of,
create in any party the right to accelerate, terminate, modify, or cancel, or
require any notice under any agreement, contract, lease, license, instrument, or
other arrangement to which the Seller Stockholder is a party or by which he or
it is bound or to which any of his assets is subject. Buyer acknowledges,
however, that Seller has not obtained consents to the assignment of those
contracts and
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agreements listed in the Disclosure Schedule, and Buyer has agreed to waive the
Seller's obligation to obtain such consents except as provided in
Section 2(h)(i)-(ii) in the Asset Purchase Agreement.
(c) Investment. The Seller Stockholder shall not acquire any of the
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Buyer Notes or the Convertible Notes (collectively, the "Notes") from the Seller
unless such Seller Stockholder provides a written acknowledgement to the Buyer
that the Seller Stockholder (i) understands the Notes have not been, and will
not be, registered under the Securities Act, or under any state securities laws,
and are being offered and sold in reliance upon federal and state exemptions for
transactions not involving any public offering, (ii) is acquiring the Notes
solely for his own account for investment purposes, and not with a view to the
distribution thereof, (iii) is a sophisticated investor with knowledge and
experience in business and financial matters, (iv) has received certain
information concerning the Buyer and has had the opportunity to obtain
additional information as desired in order to evaluate the merits and the risks
inherent in holding the Notes, (v) is relying solely on the basis of his own
independent investigation of the Buyer, (vi) is able to bear the economic risk
and lack of liquidity inherent in holding the Notes, and (vii) is an Accredited
Investor.
(d) Seller Shares. The entire authorized capital stock of the Seller
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consists of 200,000 shares of "Seller Stock," of which only 60,000 shares are
issued and outstanding and no Seller Stock is held in treasury. Each Seller
Stockholder holds of record 20,000 shares of Seller Stock.
(e) Seller Representations. All of the representations and warranties
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made by the Seller to the Buyer in the Asset Purchase Agreement are correct and
complete as of the Effective Date.
3. Post-Closing Covenants. The Parties agree as follows with respect
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to the period following the Closing.
(a) General. In case at any time after the Closing any further action
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is necessary or desirable to carry out the purposes of the Asset Purchase
Agreement, each of the Parties will take such further action (including the
execution and delivery of such further instruments and documents) as any other
Party reasonably may request, all the sole cost and expense of the requesting
Party (unless the requesting Party is entitled to indemnification therefor under
Section 4 below). The Seller Stockholders acknowledge and agree that from and
after the Closing the Buyer will be entitled to possession of all documents,
books, records (including Tax records), agreements, and financial data of any
sort relating to the Seller.
(b) Litigation Support. In the event and for so long as any Party
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actively is contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint,
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claim, or demand in connection with (i) any transaction contemplated under the
Asset Purchase Agreement or (ii) any fact, situation, circumstance, status,
condition, activity, practice, plan, occurrence, event, incident, action,
failure to act, or transaction on or prior to the Closing Date involving the
Seller, each of the other Parties will cooperate with the contesting or
defending Party and his counsel in the contest or defense, make available his
personnel, and provide such testimony and access to his books and records as
shall be necessary in connection with the contest or defense, all at the sole
cost and expense of the contesting or defending Party (unless the contesting or
defending Party is entitled to indemnification therefor under Section 4 below).
(c) Transition. None of the Seller Stockholders will take any action
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that is designed or intended to have the effect of discouraging any lessor,
licensor, customer, supplier, or other business associate of the Seller from
maintaining the same business relationships with the Buyer after the Closing as
it maintained with the Seller prior to the Closing. Each of the Seller
Stockholders will refer all customer inquiries relating to the businesses of the
Seller to the Buyer from and after the Closing.
(d) Confidentiality. Each of the Seller Stockholders will treat and
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hold as such all of the Confidential Information, refrain from using any of the
Confidential Information except in connection with this Agreement, and deliver
promptly to the Buyer or destroy, at the request and option of the Buyer, all
tangible embodiments (and all copies) of the Confidential Information which are
in his possession. In the event that any of the Seller Stockholders is requested
or required (by oral question or request for information or documents in any
legal proceeding, interrogatory, subpoena, civil investigative demand, or
similar process) to disclose any Confidential Information, that Seller
Stockholder will notify the Buyer promptly of the request or requirement so that
the Buyer may seek an appropriate protective order or waive compliance with the
provisions of this Section 3(d). If, in the absence of a protective order or the
receipt of a waiver hereunder, any of the Seller Stockholders is, on the advice
of counsel, compelled to disclose any Confidential Information to any tribunal
or else stand liable for contempt, that Seller Stockholder may disclose the
Confidential Information to the tribunal; provided, however, that the disclosing
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Seller Stockholder shall use his best efforts to obtain, at the reasonable
request of the Buyer, an order or other assurance that confidential treatment
will be accorded to such portion of the Confidential Information required to be
disclosed as the Buyer shall designate.
(e) Covenant Not to Compete. Seller Stockholders each acknowledge and
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agree that they have technical expertise associated with the business of the
Seller and are well known in the presentation/communications industry. In
addition, the Seller Stockholders have valuable business contacts with clients
and potential clients of the Seller and with professionals in the
presentation/communication industry. The Seller's reputation and good will are
an integral part of business success throughout the areas where it conducts its
business. If Seller
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Stockholders deprive Buyer of the Seller's goodwill or in any manner use their
reputation and goodwill in competition with the Seller, Buyer will be deprived
of the benefits it has bargained for pursuant to this Agreement. Since Seller
Stockholders have the ability to compete with the Seller in the operation of the
Seller's business, Buyer, therefore, desires that the Seller Stockholders enter
into this covenant not to compete. But for Seller Stockholders' entry into this
covenant not to compete, Buyer would not enter into the Asset Purchase
Agreement. It is, therefore, understood and agreed that by their authorization
of the Seller's entry into the Asset Purchase Agreement, the Seller Stockholders
have transferred to Buyer all of their business goodwill in the Seller as
contemplated by California Business and Professions Code Section 16601. Seller
Stockholders, therefore, agree that for a period of five (5) years from the
Closing (the "Term"), Seller Stockholders shall not, without Buyer's prior
written consent (which may be given or withheld in Buyer's sole and absolute
discretion), directly or indirectly,
(i) own, manage, join, operate or control, or participate in the
ownership, management, operation or control of, or be connected as a director,
officer, employee, partner, consultant or otherwise with, or permit their names
to be used by or in connection with, any profit or non-profit business or
organization which produces, designs, conducts research on, provides, sells,
distributes or markets products, goods, equipment or services which, directly or
indirectly compete with the Seller's and/or the Buyer's business, as conducted
by the Seller immediately prior to the Closing and as is proposed to be
conducted by the Buyer after the Closing, in the Counties specified in Exhibit I
attached hereto of the United States, or in any other countries in which the
Seller's and/or the Buyer's business is conducted;
(ii) call on or solicit or divert or take away from the Seller and/or
the Buyer (including without limitation by divulging to any competitor or
potential competitor of the Seller and/or the Buyer) any Person, firm or
corporation or other entity who is or which at the Closing was a customer of the
Seller and/or the Buyer or whose identity is known to the Seller Stockholders at
the Closing as one whom the Seller and/or the Buyer intends to solicit; or
(iii) hire or offer employment to or seek to hire or offer employment
to any employee of the Seller whose employment is continued by the Seller after
the Closing or any employee of any successor or affiliate of the Seller, unless
Buyer first terminates the employment of such employee or gives its written
consent to such employment or offer of employment.
Seller Stockholders acknowledge that the provisions of this Section 3(e) are
reasonable and necessary to protect legitimate interests of Buyer. Seller
Stockholders further acknowledge that any breach of this Section 3(e) by them
will cause irreparable injury to Buyer, for which the available remedies at law
will not be adequate. Accordingly, in the event of any such breach or threatened
breach of any provisions of this Section 3(e), in addition to any other remedy
provided by law or in equity, the Buyer shall be entitled to appropriate
injunctive relief and/or specific performance, in any court of competent
jurisdiction, restraining the Seller Stockholders from
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any such actual or threatened breach of this section without posting bond or
other security. Seller Stockholders stipulate to the entry against them of any
temporary, preliminary or permanent injunction and agree not to resist the
Buyer's application for such equitable relief, except on the grounds that the
acts or omissions alleged do not violate any of the provisions of this section.
Seller Stockholders shall, in the event that any injunctive relief or damages
shall be granted to the Buyer, pay all of the Buyer's reasonable costs and
expenses, including attorneys' fees, incurred in obtaining such relief. If the
final judgment of a court of competent jurisdiction declares that any term or
provision of this Section 3(e) is invalid or unenforceable, the Parties agree
that the court making the determination of invalidity or unenforceability shall
have the power to reduce the scope, duration, or area of the term or provision,
to delete specific words or phrases, or to replace any invalid or unenforceable
term or provision with a term or provision that is valid and enforceable and
that comes closest to expressing the intention of the invalid or unenforceable
term or provision, and this Agreement shall be enforceable as so modified after
the expiration of the time within which the judgment may be appealed.
(f) Personal Guarantees. The Buyer shall, within ninety (90) days
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after the date of this Agreement obtain the release of the Seller Stockholders
from any personal guarantees they have given for the indebtedness of the Seller.
The Seller Stockholders have set forth in Schedule 4(f) attached hereto a
complete list of all indebtedness for which they have given a personal guaranty
and have delivered to Buyer correct and complete copies of all documents
evidencing the indebtedness and their personal guarantees.
(g) Note Legend. Each Note will be imprinted with a legend
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substantially in the following form:
THE PAYMENT OF PRINCIPAL AND INTEREST ON THIS NOTE IS SUBJECT TO
CERTAIN RECOUPMENT AND OFFSET PROVISIONS SET FORTH IN AN AGREEMENT
WITH SELLER STOCKHOLDERS DATED AS OF JUNE 12, 1998 (THE "AGREEMENT")
AMONG THE ISSUER OF THIS NOTE AND CERTAIN OTHER PERSONS. THIS NOTE WAS
ORIGINALLY ISSUED ON ____, 19__, AND HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. THE TRANSFER OF THIS NOTE IS
SUBJECT TO CERTAIN RESTRICTIONS SET FORTH IN THE AGREEMENT. THE ISSUER
OF THIS NOTE WILL FURNISH A COPY OF THESE PROVISIONS TO THE HOLDER
HEREOF WITHOUT CHARGE UPON WRITTEN REQUEST.
Each holder desiring to transfer any Note first must furnish the Buyer with (i)
a written opinion satisfactory to the Buyer in form and substance from counsel
reasonably satisfactory to the Buyer by reason of experience to the effect that
the holder may transfer the Note as desired without registration under the
Securities Act and (ii) a written undertaking executed by the desired transferee
satisfactory to the Buyer in form and substance agreeing to be bound by the
offset and recoupment provisions and the restrictions on transfer contained
herein.
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4. Remedies for Breaches of this Agreement and the Asset Purchase
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Agreement.
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(a) Survival of Representations and Warranties. All of the
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representations and warranties of the Buyer, the Seller, and the Seller
Stockholders contained in the Asset Purchase Agreement and in this Agreement
shall survive the Closing (without regard to any investigation made by any of
the Parties and even if the damaged Party knew or had reason to know of any
misrepresentation or breach of warranty at the time of Closing) and continue in
full force and effect forever thereafter (subject to any applicable statutes of
limitations).
(b) Indemnification Provisions for Benefit of the Buyer.
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(i) Subject to the provisions of Section 4 (b)(iv) below, in
the event the Seller breaches (or in the event any third party alleges
facts that, if true, would mean the Seller has breached) any of its
representations, warranties, and covenants contained in the Asset
Purchase Agreement, and, if there is an applicable survival period
pursuant to Section 4(a) above, provided that the Buyer makes a
written claim for indemnification against any of the Seller
Stockholders pursuant to Section 5(h) below within such survival
period, then each of the Seller Stockholders agrees to indemnify the
Buyer from and against any Adverse Consequences the Buyer may suffer
through and after the date of the claim for indemnification (including
any Adverse Consequences the Buyer may suffer after the end of any
applicable survival period) resulting from, arising out of, relating
to, in the nature of, or caused by the breach (or the alleged breach).
(ii) Subject to the provisions of Section 4(b)(iv) below, in the
event any of the Seller Stockholders breaches (or in the event any
third party alleges facts that, if true, would mean any of the Seller
Stockholders has breached) any of his representations, warranties, and
covenants contained in this Agreement, and, if there is an applicable
survival period pursuant to Section 4(a) above, provided that the
Buyer makes a written claim for indemnification against the Seller
Stockholder pursuant to Section 5(h) below within such survival
period, then the Seller Stockholder agrees to indemnify the Buyer from
and against any Adverse Consequences the Buyer may suffer through and
after the date of the claim for indemnification (including any Adverse
Consequences the Buyer may suffer after the end of any applicable
survival period) resulting from, arising out of, relating to, in the
nature of, or caused by the breach (or the alleged breach).
(iii) Subject to the provisions of Section 4(b)(iv) below and in
addition to the foregoing, each of the Seller Stockholders agrees to
indemnify the Buyer from and against any Adverse Consequences the
Buyer may suffer resulting from, arising out of, relating to, in the
nature of, or caused by:
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(x) any Liability of the Seller which is not an Assumed
Liability (including any Liability of the Seller that becomes a
Liability of the Buyer under any bulk transfer law of any
jurisdiction, under any common law doctrine of de facto merger or
successor liability, or otherwise by operation of law);
(y) any Liability of any of the Seller for any unpaid Taxes
with respect to any Tax year or portion thereof ending on or before
the Closing Date or any Liability of any of the Seller's Subsidiaries
for the unpaid Taxes of any Person (other than any of the Seller and
its Subsidiaries) under Reg. Section 1.1502-6 (or any similar
provision of state, local, or foreign law), as a transferee or
successor, by contract, or otherwise.
(iv) The foregoing notwithstanding, the Seller Stockholders shall not
have any obligation to indemnify the Buyer from and against any Adverse
Consequences resulting from, arising out of, relating to, in the nature of,
or caused by the breach (or alleged breach) of any representation or
warranty of the Seller contained in Section 4(g)-(j) and Section 4(l)-(cc)
of the Asset Purchase Agreement until the Buyer has suffered Adverse
Consequences by reason of all such breaches (or alleged breaches) in excess
of a $20,000 aggregate threshold (at which point the Seller Stockholders
will be obligated to indemnify the Buyer from and against such further
Adverse Consequences) and there will be a $1,000,000 aggregate ceiling on
the obligation of the Seller Stockholders to indemnify the Buyer from and
against Adverse Consequences.
(c) Indemnification Provisions for Benefit of the Seller Stockholders. In
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the event the Buyer breaches (or in the event any third party alleges facts
that, if true, would mean the Buyer has breached) any of its representations,
warranties, and covenants contained in the Asset Purchase Agreement and in this
Agreement, and, if there is an applicable survival period pursuant to Section
4(a) above, provided that any of the Seller Stockholders makes a written claim
for indemnification against the Buyer pursuant to Section 5(h) below within such
survival period, then the Buyer agrees to indemnify each of the Seller
Stockholders from and against any Adverse Consequences the Seller Stockholder
may suffer through and after the date of the claim for indemnification
(including any Adverse Consequences the Seller Stockholder may suffer after the
end of any applicable survival period) resulting from, arising out of, relating
to, in the nature of, or caused by the breach (or the alleged breach).
The Buyer also agrees to indemnify each of the Seller Stockholders from and
against the entirety of any Adverse Consequences the Seller Stockholder may
suffer resulting from, arising out of, relating to, in the nature of, or caused
by any Assumed Liability.
(d) Matters Involving Third Parties.
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(i) If any third party shall notify any Party (the "Indemnified
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Party") with respect to any matter (a "Third Party Claim") which may give
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rise to a claim for indemnification against any other Party (the
"Indemnifying Party") under this Section 4, then the Indemnified Party
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shall promptly notify each Indemnifying Party thereof in writing; provided,
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however, that no delay on the part of the Indemnified Party in notifying
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any Indemnifying Party shall relieve the Indemnifying Party from any
obligation hereunder unless (and then solely to the extent) the
Indemnifying Party thereby is prejudiced.
(ii) Any Indemnifying Party will have the right to defend the
Indemnified Party against the Third Party Claim with counsel of its choice
reasonably satisfactory to the Indemnified Party so long as (A) the
Indemnifying Party notifies the Indemnified Party in writing within 30 days
after the Indemnified Party has given notice of the Third Party Claim that
the Indemnifying Party will indemnify the Indemnified Party from and
against the entirety of any Adverse Consequences the Indemnified Party may
suffer resulting from, arising out of, relating to, in the nature of, or
caused by the Third Party Claim, (B) the Indemnifying Party provides the
Indemnified Party with evidence reasonably acceptable to the Indemnified
Party that the Indemnifying Party will have the financial resources to
defend against the Third Party Claim and fulfill its indemnification
obligations hereunder, (C) the Third Party Claim involves only money
damages and does not seek an injunction or other equitable relief, (D)
settlement of, or an adverse judgment with respect to, the Third Party
Claim is not, in the good faith judgment of the Indemnified Party, likely
to establish a precedential custom or practice [materially] adverse to the
continuing business interests of the Indemnified Party, and (E) the
Indemnifying Party conducts the defense of the Third Party Claim actively
and diligently.
(iii) So long as the Indemnifying Party is conducting the defense of
the Third Party Claim in accordance with Section 4 (d)(ii) above, (A) the
Indemnified Party may retain separate co-counsel at its sole cost and
expense and participate in the defense of the Third Party Claim, (B) the
Indemnified Party will not consent to the entry of any judgment or enter
into any settlement with respect to the Third Party Claim without the prior
written consent of the Indemnifying Party, and (C) the Indemnifying Party
will not consent to the entry of any judgment or enter into any settlement
with respect to the Third Party Claim without the prior written consent of
the Indemnified Party (not to be withheld unreasonably). In the event any
of the conditions in Section 4(d)(ii) above is or becomes unsatisfied,
however, (A) the Indemnified Party may defend against, and consent to the
entry of any judgment or enter into any settlement with respect to, the
Third Party Claim in any manner it reasonably may deem appropriate (and the
Indemnified Party need not consult with, or obtain any consent from, any
Indemnifying Party in connection therewith), (B) the Indemnifying Parties
will reimburse the Indemnified Party promptly and periodically for the
costs of defending against the
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Third Party Claim (including reasonable attorneys' fees and expenses), and
(C) the Indemnifying Parties will remain responsible for any Adverse
Consequences the Indemnified Party may suffer resulting from, arising out
of, relating to, in the nature of, or caused by the Third Party Claim to
the fullest extent provided in this Section 4.
(e) Determination of Adverse Consequences. The Parties shall take into
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account the time cost of money (using the Applicable Rate as the discount rate)
in determining Adverse Consequences for purposes of this (S)4. All
indemnification payments under this Section 4 shall be deemed adjustments to the
Purchase Price.
(f) Recoupment Under The Notes. The Buyer shall have the option of
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recouping all or any part of any Adverse Consequences it may suffer (in lieu of
or in addition to seeking any indemnification to which it is entitled under this
Section 4) by notifying any Seller Stockholder that the Buyer is reducing the
principal amount outstanding under any of the Notes. This shall affect the
timing and amount of payments required under the Notes in the same manner as if
the Buyer had made a permitted prepayment (without premium or penalty)
thereunder.
(g) Other Indemnification Provisions. The foregoing indemnification
---------------------------------
provisions are in addition to, and not in derogation of, any statutory,
equitable, or common law remedy any Party may have for breach of representation,
warranty, or covenant. Each of the Seller Stockholders hereby agrees that he or
it will not make any claim for indemnification against any of the Buyer and its
Subsidiaries by reason of the fact that he or it was a director, officer,
employee, or agent of any of the Seller or was serving at the request of any
such entity as a partner, trustee, director, officer, employee, or agent of
another entity (whether such claim is for judgments, damages, penalties, fines,
costs, amounts paid in settlement, losses, expenses, or otherwise and whether
such claim is pursuant to any statute, charter document, bylaw, agreement, or
otherwise) with respect to any action, suit, proceeding, complaint, claim, or
demand brought by the Buyer against such Seller Stockholder (whether such
action, suit, proceeding, complaint, claim, or demand is pursuant to this
Agreement, applicable law, or otherwise).
(h) Buyer's Failure to Make Payments Under The Notes. In the event the
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Buyer fails to make any payment under any of the Notes described in the Section
2(b) of the Asset Purchase Agreement or required by the Earn Out and the failure
is not cured within 120 days after written notice to the Buyer pursuant to
Section 5(h) below, the Seller Stockholders shall be relieved of the
restrictions set forth in of Sections 3(d) and (e) of this Agreement.
5. Miscellaneous.
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(a) Press Releases and Public Announcements. None of the Seller
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Stockholders shall issue any press release or make any public announcement
relating to the subject matter of the Asset Purchase Agreement without the prior
written approval of the Buyer.
(b) No Third Party Beneficiaries. This Agreement shall not confer any
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rights or remedies upon any Person other than the Parties and their respective
successors and permitted assigns.
(c) Entire Agreement. This Agreement (including the documents referred to
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herein) constitutes the entire agreement among the Parties and supersedes any
prior understandings, agreements, or representations by or among the Parties,
written or oral, to the extent they related in any way to the subject matter
hereof.
(d) Succession and Assignment. This Agreement shall be binding upon and
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inure to the benefit of the Parties named herein and their respective successors
and permitted assigns. No Party may assign either this Agreement or any of his
rights, interests, or obligations hereunder without the prior written approval
of the Buyer and the Requisite Seller Stockholders; provided, however, that the
Buyer may (i) assign any or all of its rights and interests hereunder to one or
more of its Affiliates and (ii) designate one or more of its Affiliates to
perform its obligations hereunder (in any or all of which cases the Buyer
nonetheless shall remain liable and responsible for the performance of all of
its obligations hereunder).
(e) Counterparts. This Agreement may be executed in one or more
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counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(f) Headings. The section headings contained in this Agreement are inserted
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for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(g) Notices. All notices, requests, demands, claims, and other
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communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if (and then two
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:
If to the Seller Stockholders: Xxxxxxx Stammire
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00000 Xxxxxxx
Xxxxxx Xxxxx, Xxxxxxxxxx 00000
Xxxxxxx Xxxx Xxxxx
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00000 Xxxxx Xxxxxx
Xxx Xxxx Xxxxxxxxxx, Xxxxxxxxxx 00000
Xxxxx Xxxxxxx
30351 Xxx Xxxxxxx
Xxx Xxxx Xxxxxxxxxx, Xxxxxxxxxx 00000
with a copy to:
Xxxxx & Streza LLP
0000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
If to the Buyer: EISI, Inc.
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000 Xxxx Xxxx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Chairman of the Board
with a copy to:
Xxxxxx & Xxxxxxx
000 Xxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Xx.
If to the Buyer: EISI, Inc.
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000 Xxxx Xxxx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Chairman of the Board
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. Any
Party may change the address to which notices, requests, demands, claims, and
other
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communications hereunder are to be delivered by giving the other Parties
notice in the manner herein set forth.
(h) Governing Law. This Agreement shall be governed by and construed in
--------------
accordance with the domestic laws of the State of California without giving
effect to any choice or conflict of law provision or rule (whether of the State
of California or any other jurisdiction) that would cause the application of the
laws of any other jurisdiction.
(i) Amendments and Waivers. No amendment of any provision of this Agreement
-----------------------
shall be valid unless the same shall be in writing and signed by the Buyer and
the Requisite Seller Stockholders. No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
(j) Severability. Any term or provision of this Agreement that is invalid
-------------
or unenforceable in any situation in any jurisdiction shall not affect the
validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(k) Expenses. Each of the Parties will bear his own costs and expenses
---------
(including legal fees and expenses) incurred in connection with this Agreement
and the transactions contemplated hereby (except as otherwise provided herein).
(l) Construction. The Parties have participated jointly in the negotiation
-------------
and drafting of this Agreement. In the event an ambiguity or question of intent
or interpretation arises, this Agreement shall be construed as if drafted
jointly by the Parties and no presumption or burden of proof shall arise
favoring or disfavoring any Party by virtue of the authorship of any of the
provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation.
(m) Incorporation of Exhibits, Annexes and Schedules. The Exhibits, Annexes
-------------------------------------------------
and Schedules identified in this Agreement are incorporated herein by reference
and made a part hereof.
(n) Specific Performance. Each of the Parties acknowledges and agrees that
---------------------
the other Parties would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached. Accordingly, each of the Parties agrees that
the other Parties shall be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Agreement and to enforce specifically this
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Agreement and the terms and provisions hereof in any action instituted in any
court of the United States or any state thereof having jurisdiction over the
Parties and the matter (subject to the provisions set forth in Section 6(o)
below) in addition to any other remedy to which they may be entitled, at law or
in equity.
(o) Submission to Jurisdiction. Each of the Parties submits to the
---------------------------
jurisdiction of any state or federal court sitting in Orange County, California
in any action or proceeding arising out of or relating to this Agreement and
agrees that all claims in respect of the action or proceeding may be heard and
determined in any such court. Each Party also agrees not to bring any action or
proceeding arising out of or relating to this Agreement in any other court. Each
of the Parties waives any defense of inconvenient forum to the maintenance of
any action or proceeding so brought and waives any bond, surety, or other
security that might be required of any other Party with respect thereto. Each
Party appoints the Process Agent as his agent to receive on his behalf service
of copies of the summons and complaint and any other process that might be
served in the action or proceeding. Any Party may make service on any other
Party by sending or delivering a copy of the process (i) to the Party to be
served at the address and in the manner provided for the giving of notices in
Section 5(h) above or (ii) to the Party to be served in care of the Process
Agent at the address and in the manner provided for the giving of notices in
Section 5(h) above. Nothing in this Section 5(o), however, shall affect the
right of any Party to
[Remainder of this page intentionally left blank.]
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serve legal process in any other manner permitted by law or in equity. Each
Party agrees that a final judgment in any action or proceeding so brought shall
be conclusive and may be enforced by suit on the judgment or in any other manner
provided by law or in equity.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first above written.
EISI, INC.
By: /s/ XXXXXX X. XXXXXX
-----------------------------
Xxxxxx X. Xxxxxx
Chairman of the Board
SELLER STOCKHOLDERS
/s/ XXXXXXX STAMMIRE
--------------------------------
Xxxxxxx Stammire
/s/ XXXXXXX XXXX XXXXX
--------------------------------
Xxxxxxx Xxxx Xxxxx
/s/ XXXXX X. XXXXXXX
--------------------------------
Xxxxx X. Xxxxxxx
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