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EXHIBIT 10.1 (a)
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is entered into as of June
18, 1999, by and between I.T. Technology, Inc., a Delaware corporation, or its
designee ("Purchaser") and Xxxxxxxxxx.Xxx, Inc., a New York corporation (the
"Company").
RECITALS
A. WHEREAS, the Company is a newly formed corporation which has been
incorporated to engage in the business of selling collectible stamps and other
memorabilia on a wholesale basis to large chain stores and small businesses,
and on a retail basis to the general public and collectors;
B. WHEREAS, in addition, as an integral part of its business, the
Company shall establish an Internet web site to promote and sell its
collectible stamps and other memorabilia in the United States and international
markets;
C. WHEREAS, the Inter-Governmental Philatelic Corporation ("IGPC") has
agreed to make available to the Company, for a period of up to two (2) years,
approximately one million (1,000,000) stamps, invoiced at the best possible
prices, of which up to fifty percent (50%) of the unsold portion of which
shall, at the option of the Company, be subject to return to IGPC;
D. WHEREAS, the Purchaser has been incorporated to raise capital for the
acquisition of equity in Internet related and other technology companies;
E. WHEREAS, the Company desires to acquire funding to utilize for the
establishment of a warehouse facility and the development of a web site to
commence its Internet operations and to fund marketing and advertising of its
services and products;
F. WHEREAS, the Purchaser desires to invest funds in the Company in
exchange for equity in the Company; and
G. NOW, THEREFORE, in consideration of the promises and the terms,
provisions, covenants and conditions hereinafter set forth, and for other
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereby agree as follows:
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AGREEMENT
1. Definitions. As used in this Agreement, the following terms shall have
the respective meanings set forth below. All capitalized terms used herein and
not defined in this Section 1 shall have the meanings ascribed to such terms
elsewhere in this Agreement.
AAA: as defined in Section 11.13.
Adjusted Common Series Stock Purchase Price: Shall mean the actual
purchase price paid by the Purchaser at the applicable Closing for each share
of Common Series Stock.
Adjusted Operating Profits: shall mean the Operating Profits through the
end of the last completed fiscal period less the aggregate amount of such
operating profits that have been utilized to reduce the purchase price of any
shares of the Series C Common Stock purchased by the Purchaser pursuant to
Section 2.22 below.
Affiliate: of a Person means a Person that directly or indirectly,
through one or more intermediaries, Controls, is Controlled by, or is under
common Control with, the first Person, including, but not limited to, a
subsidiary of the first Person, a Person of which the first Person is a
subsidiary, or another subsidiary of a Person of which the first Person is also
a subsidiary.
Agreement: this Agreement, including the Schedules attached hereto.
Business Day: any day other than a Saturday or Sunday on which banks in
the State of New York are generally open for business.
Capital Stock: shall mean all issued, outstanding or authorized and not
yet issued Common Stock, Common Stock or any other capital stock of the Company.
Company: as defined in the Preamble.
Common Series Stock: shall mean the Series A Common Stock, the Series B
Common Stock and the Series C Common Stock.
Common Stock: shall mean the no par value, common stock of the Company
other than the Common Series Stock.
Contracts: shall mean, collectively, all written contracts, agreements,
instruments, documents, leases, indentures, undertakings or other commercial
obligations.
Disclosure Schedule: shall mean the disclosure schedule and any
amendments thereto to be attached hereto and incorporated herein, delivered by
the Company to the Purchaser in the manner described in Section 4.
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Distribution: shall mean any distribution of Capital Stock, cash or
property to holders of Capital Stock for any reason, including but not limited
to as a result of a dividend, recapitalization, sale of assets or liquidation.
Environmental Laws: shall mean, collectively, the Federal Clean Air Act,
the Federal Clean Water Act, the Federal Resource Conservation and Recovery
Act, the Federal Comprehensive Environmental Response, Compensation and
Liability Act, the Federal Toxic Substances Control Act, and any other Laws
otherwise affecting or relating to human health or the environment.
Environmental Materials: shall mean, collectively, any material,
substance, chemical, waste, contaminant or pollutant which is regulated,
listed, defined as or determined to be hazardous, extremely hazardous, toxic,
dangerous, restricted or a nuisance, or otherwise harmful to human health or
the environment, under any Environmental Laws.
Financial Statements: shall mean, collectively, the audited or unaudited
financial statements (including balance sheets and statement of earnings,
stockholder's equity and cash flow) of the Company delivered to the Purchaser
pursuant to the terms of this Agreement.
Fiscal Year: The financial reporting year for the Company, currently
January 1 through December 31.
GAAP: generally accepted accounting principles, consistently applied.
Governmental Approval: any action, consent, approval, authorization,
permit, license, exemption, order or waiver of, registration or filing with, or
report or notice to, any Governmental Authority.
Governmental Authority: shall mean any foreign, federal, state, municipal
or other court, tribunal, department, commission, board or other government
authority or agency or any self-regulatory organization, quasi-governmental
unit, board, bureau, instrumentality, department or commission (including any
court or other tribunal) of any of the foregoing and any arbitrator or other
private tribunal.
Initial Closing Date: shall mean the date upon which the Purchaser makes
the initial purchase of Common Stock pursuant to Section 2.1.1(a) below.
Initial Stage Two Closing Date: shall mean the date upon which the
Purchaser makes the initial Stage Two Consideration payments of Common Stock
pursuant to Section 2.1.2(a) below.
Initial Stage Three Closing Date: shall mean the date upon which the
Purchaser makes the initial Stage three Consideration payments pursuant to
Section 2.1.3(a) below.
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IGPC: shall have the meaning set forth in Recital C.
Laws: shall mean, collectively, all statutes, laws, rules, regulations,
requirements, ordinances, injunctions, writs, decrees and orders of any
Governmental Authority.
Licenses: shall mean, collectively, any licenses, permits, approvals,
certifications, accreditations, notices and other authorizations issued or
promulgated by a Governmental Authority or otherwise.
Lien: shall mean any condition, restriction, assessment, mortgage, pledge,
hypothecation, security interest, title defect, claim, option, lien, charge or
other encumbrance or adverse claim, but excluding any restriction or limitation
on transferability imposed by Law.
Litigation: shall mean all litigation or legal proceedings before any
court or governmental tribunal, or (with respect to any Governmental Authority)
any investigation pending.
Management Group: C. Xxxxxxxx Malumud, Xxx Xxxxxx and Xxxxxx Xxxxxxx (or
such other person as may be specified by Purchaser).
Operating Profits: shall mean the amount, if any, by which the cumulative
amount of revenues or other income received by the Company exceeds cumulative
amount of the costs of goods sold from the incorporation of the Company through
the end of the last completed fiscal period, calculated in accordance with
GAAP, provided, however, cost of goods sold shall exclude all indirect costs
including but not limited to any overhead, selling, general and administrative
charges, taxes, depreciation and interest charges. Costs of goods shall include
the cost of the completed product along with related shipping and handling
costs, to the extent collected by the Company.
Orders: shall mean all decisions, injunctions, writs, guidelines, orders,
arbitrations, awards, judgments, subpoenas, verdicts or decrees entered,
issued, made or rendered by any Governmental Authority.
Ordinary Course: shall mean the ordinary course of the Company's business,
consistent with the past practices of the Company.
Party: any of the parties to this Agreement.
Person: shall mean any natural person, individual, firm, sole
proprietorship, partnership, unincorporated organization, association,
corporation, company, trust association, trust, business trust, joint venture,
Governmental Authority or other entity or group comprised of one or more of the
foregoing.
Proprietary Rights: shall have the meaning set forth in Section 4.20.
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Pro Rata Share: pro rata share shall mean the amount of any Series of
Common Series Stock issued divided by the total amount of all Common Series
Stock issued.
Purchaser: shall have the meaning set forth in the Preamble.
Series A Common Stock: shall mean the twenty (20) shares of Series A
Convertible and Redeemable Common Stock, no stated value of the Company
issuable to the Purchaser pursuant to Section 2.1.1 below. The Series A Common
Stock shall have one vote per share and shall vote along with the Common Stock
on all matters, except (i) any matter which adversely affects the rights of the
any of the holders of Common Series Stock and (ii) for the election of one
director, where the approval of a majority of the outstanding shares of Common
Series Stock. It shall have a liquidation preference of Twenty Five Thousand
Dollars ($25,000) per share out of its pro rata share of twenty percent (20%)
of any Distribution to holders of Capital Stock. The Series A Common Stock
shall automatically be redeemed in the event of any Distribution to holders of
Capital Stock for the following: (i) one share of Common Stock for each share
of Series A Stock redeemed; and (ii) cash in the amount of Twenty Five Thousand
Dollars ($25,000) per share. The cash portion of the Redemption Price shall be
allocated from the Pro Rata Share of (a) twenty percent (20%) of all
Distribution to holders of Capital Stock, plus (b) the Series A Stock's pro
rata interest in the Distributions, which shall be calculated as a fraction,
the numerator of which shall be the number of shares of Series A Stock
outstanding and the denominator shall be the sum of all shares of Common
Stock, Series A Stock, Series B Stock and Series C Stock outstanding.
Notwithstanding the foregoing, if the Purchaser shall have failed to make any
payment described in Section 2.1 of this Agreement, the cash portion of the
Redemption Price shall be allocated from that portion of the Distribution which
is the result of the product of multiplying the total amount of the
Distribution by a fraction, the numerator of which shall be twice the number of
shares of Series A Stock outstanding and the denominator shall be the sum of
all shares of Common Stock, Series A Stock, Series B Stock and Series C Stock
outstanding.
Series B Common Stock: shall mean the twenty (20) shares of Series B
Convertible and Redeemable Common Stock, no stated value of the Company issuable
to the Purchaser pursuant to Section 2.1.2 below. The Series B Common Stock
shall have one vote per share and shall vote along with the Common Stock on all
manners, except any matter which adversely affects the rights of the any of the
holders of Common Series Stock where the approval of a majority of the
outstanding shares of Common Series Stock. It shall have a liquidation
preference of One Hundred and Twelve Thousand Five Hundred Dollars ($112,500)
per share payable out of its Pro Rata Share of twenty percent (20%) of any
Distribution to holders of Capital Stock. The Series B Common Stock shall
automatically be redeemed in the event of any Distribution to holders of Capital
Stock for the following: (i) one share of Common Stock for each share of Series
B Common Stock redeemed; and (ii) cash in the amount of One Hundred and Twelve
Thousand Five Hundred Dollars ($112,500) per share. The cash portion of the
Redemption Price shall be allocated from the Pro Rata Share of (a) twenty
percent (20%) of all Distributions to holders of Capital Stock, plus (b) the
Series B Stock's pro rata interest in the Distributions, which shall be
calculated as a fraction, the numerator of which shall be the number of shares
of Series B Stock outstanding and the denominator shall be the sum of all shares
of Common Stock, Series A Stock,
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Series B Stock and Series C Stock outstanding. Notwithstanding the foregoing,
if the Purchaser shall have failed to make any payment described in Section 2.1
of this Agreement, the cash portion of the Redemption Price shall be allocated
from that portion of the Distribution which is the result of the product of
multiplying the total amount of the Distribution by a fraction, the numerator
of which shall be twice the number of shares of Series B Stock outstanding and
the denominator shall be the sum of all shares of Common Stock, Series A Stock,
Series B Stock and Series C Stock outstanding.
Series C Common Stock: shall mean the ten (10) shares of Series C
Convertible and Redeemable Common Stock, no stated value of the Company issuable
to the Purchaser pursuant to Section 2.1.3 below. The Series C Common Stock
shall have one vote per share and shall vote along with the Common Stock on all
matters, except any matter which adversely affects the rights of any of the
holders of Common Series Stock where the approval of a majority of the
outstanding shares of Common Series Stock. It shall have a liquidation
preference equal to the Adjusted Common Series Stock Purchase Price for the
Series C Common Stock per share payable out of its Pro Rata Share of twenty
percent (20%) of any Distribution to holders of Capital Stock. To the extent
that any shares of Series C Common Stock have not been redeemed in accordance
with the provisions of Section 2.3 below, they shall automatically be redeemed
in the event of any Distribution to holders of Capital Stock for the following:
(i) one share of Common Stock for each share of Series C Common Stock redeemed;
and (ii) cash in the amount of the Adjusted Common Series Stock Purchase Price
per share. The cash portion of the Redemption Price shall be allocated from the
Pro Rata Share of (a) twenty percent (20%) of all Distribution to holders of
Common Stock, plus (b) the Series C Stock's pro rata interest in the
Distributions, which shall be calculated as a fraction, the numerator of which
shall be the number of shares of Series C Stock outstanding and the denominator
shall be the sum of all shares of Common Stock, Series A Stock, Series B Stock
and Series C Stock outstanding. Notwithstanding the foregoing, if the purchaser
shall have failed to make any payment described in Section 2.1 of this
Agreement, the cash portion of the Redemption Price shall be allocated from that
portion of the Distribution which is the result of the product of multiplying
the total amount of the Distribution by a fraction, the numerator of which shall
be twice the number of shares of Series C Stock outstanding and the denominator
shall be the sum of all shares of Common Stock, Series A Stock, Series B Stock
and Series C Stock outstanding.
Software: shall have the meaning set forth in Section 4.21.
Stage One: shall mean a time period commencing on the Initial Closing Date
and terminating eight (8) months thereafter.
Stage One Consideration: shall mean the aggregate sum of Five Hundred
Thousand Dollars ($500,000) payable as set forth in Section 2.1.1 herein.
Stage Two: shall mean a time period commencing upon the last to occur of
both (i) the termination of Stage One and (ii) the completion of a fully
operational Internet web site for the Company and terminating on the expiration
of one year thereafter.
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Stage Two Consideration: shall mean the aggregate sum of Two Million Two
Hundred and Fifty Thousand Dollars ($2,250,000) payable as set forth in section
2.1.2 herein.
Stage Three: shall mean a time period commencing upon the termination of
Stage Two and terminating on the expiration of one year thereafter.
Stage Three Consideration: shall, subject to adjustment as provided in
Section 2.1.4 below, mean the aggregate sum of Two Million Two Hundred Fifty
Thousand Dollars $2,250,000 payable as set forth in Section 2.1.3 herein.
Subsidiaries or, individually, a Subsidiary: shall mean any Person(s) in
which the Company owns stock, other securities or any other ownership interest
(other than ownership of less than five percent (5%) of the stock or securities
of a Person whose shares are listed on a nationally recognized securities
exchange or are traded over-the-counter, and which stock or securities are held
by the Company solely as an investment) and any other investment by the Company
in any Person.
Tax or Taxes: means all net income, gross income, gross receipts, sales,
use, ad valorem, transfer, franchise, profits, license, lease, service, service
use, withholding, payroll, employment, excise, severance, stamp, occupation,
premium, property, windfall profits, customs, duties or other taxes, fees,
assessments or charges of any kind whatever, together with any interest and any
penalties, additions to tax or additional amounts with respect thereto imposed
by any Governmental Authority.
Term: shall mean the term of this Agreement, commencing on the Initial
Closing Date and terminating three (3) years thereafter, unless sooner
terminated by the Company pursuant to Section 8 below.
2. Purchase of the Common Series Stock.
2.1 In exchange for payment by Purchaser of Five Million Dollars
($5,000,000), as provided herein, the Company shall issue to the Purchaser up
to twenty (20) shares of Series A Common Stock, twenty (20) shares of Series B
Common Stock and ten (10) shares of Series C Common Stock which in the
aggregate shall equal to twenty five percent (25%) of the Capital Stock on a
fully diluted basis as follows:
2.1.1 Up to twenty (20 shares of Series A Common stock which shall
when issued represent ten percent (10%) of the Capital Stock on a fully-diluted
basis upon payment by Purchaser of the Stage One Consideration, on or before
five (5) months from the Initial Closing Date, as follows:
(a) One Hundred Thousand Dollars ($100,000) on the Initial
Closing Date in exchange for four (4) shares, which shall when issued represent
two percent (2%) of the Capital Stock on a fully-diluted basis;
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(b) Seventy-Five Thousand Dollars ($75,000) thirty
(30) days after the Initial Closing Date in exchange for three (3) shares,
which shall when issued represent one and one-half (1.5%) of the Capital Stock
on a full-diluted basis (the "Second Stage One Closing");
(c) Seventy-Five Thousand Dollars ($75,000) sixty (60)
days after the Initial Closing Date in exchange for three (3) shares,
which shall when issued represent one and one-half (1.5%) of the Capital Stock
on a full-diluted basis (the "Third Stage One Closing");
(d) Seventy-Five Thousand Dollars ($75,000) no later
than ninety (90) days after the Initial Closing Date in exchange for three (3)
shares, which shall when issued represent one and one-half (1.5%) of the Capital
Stock on a full-diluted basis (the "Fourth Stage One Closing");
(e) Seventy-Five Thousand Dollars ($75,000) no later
than one hundred twenty (120) days after the Initial Closing Date in exchange
for three (3) shares, which shall when issued represent one and one-half (1.5%)
of the Capital Stock on a full-diluted basis (the "Fifth Stage One Closing");
(f) One Hundred Thousand Dollars ($100,000) no later
than one hundred fifty (150) days after the Initial Closing Date in exchange for
four (4) shares, which shall when issued represent two percent (2%) of the
Capital Stock on a full-diluted basis (the "Final Stage One Closing");
2.1.2 Subject to and conditioned upon the occurrence of the
Final Stage One Closing, up to twenty (20) shares of Series B Common Stock,
which shall when issued represent ten percent (10%) of the Capital Stock on a
fully-diluted basis so that upon payment by Purchaser of the Stage Two
Consideration, on or before the completion of Stage Two, Purchaser shall hold
twenty percent (20%) of the Capital Stock on a fully-diluted basis, as follows:
(a) Five Hundred Sixty-Two Thousand Five Hundred
Dollars ($562,500) on or before the commencement of Stage Two, in exchange for
five (5) shares, which shall when issued represent one-half percent (2.5%) of
the Capital Stock on a fully-diluted basis (the "Initial Stage Two Closing");
(b) Five Hundred Sixty-Two Thousand Five Hundred
Dollars ($562,500) no later than ninety (90) days after the commencement of
Stage Two, in exchange for five (5) shares, which shall when issued represent
two and one-half percent (2.5%) of the Capital Stock on a fully-diluted basis
(the "Second Stage Two Closing");
(c) Five Hundred Sixty-Two Thousand Five Hundred
Dollars ($562,500) no later than one hundred and eighty (180) days after the
commencement of
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Stage Two, in exchange for five(5) shares, which shall when issued represent
two and one-half percent (2.5%) of the Capital Stock on a fully-diluted basis
(the "Third Stage Two Closing"); and
(d) Five Hundred Sixty-Two Thousand Five Hundred
Dollars ($562,500) no later than two hundred seventy (270) days after the
commencement of Stage Two, in exchange for five(5) shares, which shall when
issued represent two and one-half percent (2.5%) of the Capital Stock on a
fully-diluted basis (the "Final Stage Two Closing").
2.13. Subject to and conditioned upon the occurrence of the
Final Stage Two Closing, up to ten (10) shares of Series C Common Stock, which
shall when issued represent five percent (5%) of the Capital Stock on a
fully-diluted basis, so that upon payment by Purchaser of the Stage Three
Consideration, subject to adjustment as provided in Section 2.2 below, on or
before the completion of Stage Three, Purchaser shall hold twenty-five percent
(25%) of the Capital Stock on a fully-diluted basis as follows:
(a) Five Hundred Sixty-Two Thousand Five Hundred
Dollars ($562,500) on or before the commencement of Stage Three, in exchange
for two and one-half (2.5) shares, which shall when issued represent one and
one-quarter percent (1.25%) of the Capital Stock on a fully-diluted basis (the
"Initial Stage Three Closing");
(b) Five Hundred Sixty-Two Thousand Five Hundred
Dollars ($562,500) no later than ninety (90) days after the commencement of
Stage Three, in exchange for two and one half (2.5) shares, which shall when
issued represent one and one-quarter percent (1.25%) of the Capital Stock on a
fully-diluted basis (the "Second Stage Three Closing");
(c) Five Hundred Sixty-Two Thousand Five Hundred
Dollars ($562,500) no later than one hundred and eighty (180) days after the
commencement of Stage Three, in exchange for two and one-half (2.5) shares,
which shall when issued represent one and one quarter percent (1.25%) of the
Capital Stock on a fully-diluted basis (the "Third Stage Three Closing"); and
(d) Five Hundred Sixty-Two Thousand Five Hundred
Dollars ($562,500) no later than two hundred and seventy (270) days after the
commencement of Stage Three, in exchange for two and one-half (2.5) shares,
which shall when issued represent one and one-quarter percent (1.25%) of the
Capital Stock on a fully-diluted basis (the "Final Stage Three Closing").
2.2 Adjustment to Stage Three Consideration. The parties hereby
agree that the Stage Three Consideration payable by the Purchaser shall be
reduced on a pro rata basis the Stage Three Consideration payments due in
connection with the Initial Stage Three Closing on a dollar for dollar basis,
up to the full amount of the Stage Three Consideration, based upon the
aggregate amount of Operating Profits, through the last completed fiscal
quarter prior to the Initial Stage Three Closing. The Stage Three Consideration
payable by the Purchaser at any subsequent Stage Three Closing shall be further
reduced by any additional Operating Profits
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earned by the Company through the last completed fiscal quarter prior to the
applicable Stage Three Closing.
2.3 Redemption of Common Series Stock. The Common Series Stock shall
be subject to automatic redemption by the Company upon the occurrence of the
following events, each of which shall be reflected in a Certificate of
Designation or amendment to the Charter of the Company:
2.3.1 Upon the sale of part, but not all, of the Company or
its assets, whether by sale of stock or assets, merger, reorganization or
otherwise, where the transaction would ascribe a value of less than Seventy
Million Dollars ($70,000,000) on the Company as a whole, each share of Common
Series Stock shall be automatically redeemed by the Company in exchange for (a)
one share of Common Stock, the Pro Rata Share of (a) twenty percent (20%) of all
Distributions to holders of Capital Stock, plus (b) the Common Series Stock's
pro rata interest in the Distributions, which shall be calculated as a fraction,
the numerator of which shall be the number of shares of Common Series Stock
outstanding and the denominator shall be the sum of all shares of Common Stock
and Common Series Stock. Notwithstanding the foregoing, if the Purchaser shall
have failed to make any payment described in Section 2.1 of this Agreement, the
cash portion of the Redemption Price shall be allocated from that portion of the
Distribution which is the result of the product of multiplying the total amount
of the Distribution by a fraction, the numerator of which shall be twice the
number of shares of Series A Stock outstanding and the denominator shall be the
sum of all shares of Common Stock, Series A Stock, Series B Stock and Series C
Stock outstanding, such redemption to be effective following the distribution of
the proceeds of the transaction to all of the shareholders of the Company.
2.3.2 Upon the sale of all or substantially all of the
Company or its assets, whether by sale of stock or assets, merger,
reorganization or otherwise, where the transaction would ascribe a value of
Seventy Million Dollar ($70,000,000) or more on the Company as a whole, each
issued and outstanding share of Common Series Stock shall be automatically
redeemed by the Company in exchange for: (a) the Adjusted Common Series Stock
Purchase Price of each such share, and (b) one share of Common Stock; provided,
that each such newly issued shares of Common Stock shall participate in any
dividend, distribution or other payment following such transaction.
2.3.3 At such time as the distributions paid on the Common
Series Stock total one hundred percent of the aggregate Adjusted Common Series
Stock Purchase Price of all the shares of Common Series Stock, each issued and
outstanding share of Common Series Stock shall be automatically redeemed by the
Company in exchange for one share of Common Stock.
2.4 Purchaser's Obligations: Notwithstanding anything to the
contrary contained elsewhere herein, Purchaser's obligations to purchase the
Common Series Stock pursuant to Sections 2.1.1 through 2.1.3 above shall be
limited to four (4) shares of Series A Common Stock on the Initial Closing Date;
provided, however, in the event Purchaser fails to
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purchase in a timely manner of the entire amount of the shares of Common Series
Stock set forth in Sections 2.1.1(b)-2.1.1(f)-2.1.2(d) and 2.1.3(a)-2.1.3(d),
the Company may in its sole discretion, upon thirty (30) days prior written
notice (during which period the Purchaser shall have the right to cure through
the purchase of any delinquent tranche of Common Series Stock), terminate
Purchaser's right to purchase any other shares of Common Series Stock in
accordance with the terms hereof, unless such failure by Purchaser to purchase
any such shares is as a result of the Company's breach of its obligations or
conditions precedent hereunder or any of its representations, warranties or
covenants contained herein.
2.5 Anti-Dilution: The Company's Amended Certificate of Incorporation
shall provide that without the approval of the majority of the outstanding
shares of Common Series Stock, voting separately as a class, the Company shall
not issue or agree to issue any Capital Stock or note or instrument convertible
into or exchangeable for Capital Stock unless the Company adjusts the rights and
privileges of the Common Series Stock so that when issued the Common Series
Stock and/or the Common Stock issuable upon the redemption of the Common Series
Stock will hold no lesser of a percentage of the voting rights, Distributions
and liquidation preference in the Company as set forth in Sections 2.1.1 through
2.3 above. A copy of the form of Amended Certificate in form and substance
acceptable to the Purchaser shall be filed with the office of the Secretary of
State of the State of New York prior to the Initial Closing Date.
3. Use of Proceeds, Budgets and Financial Reports. The Company agrees
that, unless otherwise agreed to in writing by the Purchaser, all proceed paid
to the Company by Purchaser for the purchase of the Common Series Stock pursuant
to section 2 above, shall be used solely for the establishment and business
operations of the Company in accordance with the terms of this Agreement and the
Company's budget as submitted to the Purchaser. The Company agrees to submit its
initial budget for the Company's first fiscal year to the Purchaser's for its
approval prior to the initial Closing Date. The Company shall, no later than
thirty (30) days prior to the announcement of each of the next two years
thereafter, deliver to the Purchaser, budgets for such fiscal years
(collectively, the "Budgets"). The Company agrees to provide the Purchaser with
Financial Statements which have been audited by an independent certified public
accountant acceptable to the Purchaser within ninety (90) days after the end of
each fiscal year for a period commencing with the end of the Purchaser's first
fiscal year terminating upon the occurrence of both the termination of the Term
of this Agreement and Purchaser no longer holding ten percent (10%) of the
Capital Stock of the Company (unless said failure is by reason of the Company's
breach). In addition, the Company agrees to provide the Purchaser with balance
sheets, income statements and cash flow reports on a monthly basis no later than
thirty (30) days after the end of each calendar month for a period of three
years from the Initial Closing Date (the "Monthly Reports").
4. Representations and Warranties of the Company.
4.1 Organization, Qualification and Corporate Power of the Company.
The Company is a corporation duly organized, validly existing and in good
standing under the
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laws of the State of New York, has all requisite corporate power and authority
to own or lease and operate its properties and to carry on its business as
presently conducted, has not filed articles of dissolution and has a perpetual
period of existence. The Company is not qualified, nor required to be
qualified, to transact business, as it is currently being conducted, as a
foreign corporation or organization in any jurisdiction outside of New York.
4.2 Capitalization. The authorized capital stock of the Company consists
of two hundred (200) shares of Capital Stock as follows: one hundred fifty
(150) shares of common stock, no par value per share, all of which shares are
issued and outstanding, and fifty (50) shares of Common Series Stock in three
series, Series A Common Stock, Series B Common Stock and Series C Common Stock,
of which no shares are issued and outstanding. All of the issued and
outstanding shares of capital stock of the Company have been duly authorized,
validly issued and are fully paid and non-assessable. There are no outstanding
options, warrants, convertible securities or other rights to subscribe for or
acquire any capital stock or securities convertible into capital stock of the
Company. All such capital stock has been issued in compliance with applicable
federal and state securities Laws and all pre-emptive rights applicable
thereto, whether by Law or Contract.
4.3 Authorization of Transaction. The Company has full power and
authority to, and has taken all actions necessary to authorize it to, execute
and deliver the Agreement and each of the agreements or documents related
thereto, and to perform its obligations thereunder. This Agreement constitutes
a valid and legally binding obligation of the Company, enforceable in
accordance with the terms and conditions set forth herein, except as limited by
bankruptcy, insolvency and general principles of equity.
4.4 Noncontravention. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby, will
(i) violate any provision of the articles of incorporation or bylaws of the
Company, (ii) conflict with or violate any provisions of, or result in the
maturation or acceleration of, any obligations under any Contract, Order,
License or Law to which the Company is subject or to which the Company is a
party; (iii) violate any restriction or limitation, or result in the
termination, or loss of any right (or give any third party the right to cause
such termination or loss), of any kind to which the Company is bound; or (iv)
subject to obtaining the consents contemplated hereby, violate any term or
provision of any statute, law, regulation or rule or any writ, judgment, decree,
injunction, or similar order, or any agreement with any governmental or
regulatory authority applicable to the Company; (v) result in the creation or
imposition of any lien upon any assets or properties of Seller or the Company;
or (vi) require Seller or the Company to obtain any consent, approval, or
action of, or make any filing with or give any notice to, any Person except as
identified on the Disclosure Schedule.
4.5 No Outstanding or Undisclosed Liabilities. The Company has no
outstanding indebtedness or other liabilities (whether known or unknown,
asserted or unasserted, absolute or contingent, accrued or unaccrued or due or
to become due), except operating expenses
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or liabilities incurred in the Ordinary Course as set forth in Schedule 4.5
attached hereto and made a part hereof.
4.6 Corporate Records. The Company has provided the Purchaser with
access to full and complete copies of the Company's certificate of
incorporation, bylaws, stock record book and the corporate minutes and all
amendments thereto which are correct and complete in all material respects and
accurately reflect all proceedings of the shareholders and directors of the
Company (and all committees thereof). The stock record book of the Company
contains complete and accurate records of the stock ownership of the Company and
the transfer of shares of its capital stock.
4.7 Organizational Documents. Attached to the Disclosure Schedule
shall be true, correct and complete copies of the articles of incorporation and
bylaws and other organizational documents, as amended, of the Company.
4.8 Financial Statements. Attached to the Disclosure Schedule shall
be complete copies of the Financial Statements. Except as set forth in the
Disclosure Schedule: (a) the Company's books and records of accounts are
complete and correct in all material respects and accurately reflect all of the
assets, liabilities, transactions and results of operations of the Company as of
the dates of such records and (b) the Financial Statements have been prepared in
accordance with GAAP or statutory accounting principles, as applicable.
Notwithstanding the foregoing, the Buyer recognizes that the accruals for the
incurred but not yet reported claims set forth in the Financial Statements are
estimates and actual experience may vary from such estimates.
4.9 Subsidiaries. The Company has no Subsidiaries.
4.10 Third Party Consents. No third-party consents, approvals or
authorizations are necessary for the execution and consummation of the
transactions contemplated hereby, nor are any such consents, approvals or
authorizations required in order to enable the Buyer to continue to enjoy the
benefits of any Contract, License or other rights of the Company in accordance
with their existing terms.
4.11 Employment Relationships. The Company currently employs __
employees as set forth in Disclosure Schedule 4.11. With respect to such
employees:
4.11.1 Employment Contracts. The Company has no employment
contracts.
4.11.2 Employee Benefit Plans. All Plans maintained by the
Company on behalf of the Company's employees which are subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") comply with ERISA.
4.11.3 Labor Contracts. The Company is not a party to any
collective bargaining agreement or bound to any other Contract with a labor
union. The Company
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has not received written notice of any proceeding regarding the Company with
respect to certification or representation before the National Labor Relations
Board. There is no citation, complaint or charge issued, pending or threatened
in writing by any agency responsible for administering or enforcing Laws
relating to labor relations, employee safety or health, fair labor standards
and equal employment opportunity.
4.12 Licenses. The Company possesses all Licenses as are necessary
for the conduct of its business or operations.
4.13 Material Contracts and Other Descriptions and Lists.
Disclosure Schedule 4.13 shall identify and briefly describe the following:
4.13.1 Contracts. All Contracts to which the Company is a
party.
4.13.2 Non-Compete Covenants. A list of any written
covenants not to compete, and non-solicitation covenants in favor of the
Company, or binding upon or against the Company;
4.13.3 Powers of Attorney. The names of all persons holding
powers of attorney from the Company and a summary statement of the terms
thereof; and
4.13.4 Bonds. A list of performance, bid or completion
bonds, or letters of credit in favor of the Company or binding upon or against
the Company and which will survive the Closing.
Accurate and complete copies of each Contract or document described in
this Section shall be furnished to the Purchaser upon request.
4.14 Real Property. The Company does not now nor has it ever owned
has never owned any real property. Set forth in Disclosure Schedule 4.14 is a
description of all real property leases to which the Company is a party.
4.15 Insurance. The Disclosure Schedule shall list all insurance
policies and the coverages with respect thereto currently in effect for the
Company. The Company is covered by policies of insurance that are commercially
reasonable and sufficient for the conduct of the intended business of the
Company (the "Insurance"). The Insurance is in full force and effect, all
premiums with respect thereto covering all periods up to and including the date
hereof have been paid, and no notice of cancellation or termination has been
received by the Company with respect to any such policy.
4.16 Litigation. Except as shall be set forth on the Disclosure
Schedule, there is no Litigation relating to the Company, its assets,
properties or business, or the transaction contemplated hereby pending or
threatened writing. The Disclosure Schedule shall disclose, with
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respect to each item described thereon, the name or title of the Litigation
(and parties or potential parties thereto), a description of the nature of the
action or claim.
4.17 Taxes. All Tax returns required to be filed with respect to
the Company with any Governmental Authority have been duly and timely filed,
and all such Tax returns are true, correct and complete in all material
respects. The Company (a) has duly and timely paid (or has caused payment to be
made on its behalf pursuant to a consolidated return) all Taxes that are due,
or claimed or asserted by any Governmental Authority to be due, from the
Company for the periods covered by such returns or (b) has duly and fully
provided for such Taxes, in accordance with GAAP, in the books and records of
the Company, including without limitation, in each of the Financial Statements.
There are no waivers or agreements by the Company for the extension of time for
the assessment of Taxes. Except as set forth in the Disclosure Schedule,
neither the Company nor the Shareholder have been advised in writing by any
Governmental Authority that any Tax returns or Tax reports filed by the Company
with any Governmental Authority are currently being audited by the Internal
Revenue Service or other appropriate governmental agency. With respect to any
taxable year for which a waiver or agreement for the extension of time for the
assessment of Taxes has been affected, no issues have been raised affecting
either the Company's liability for Taxes or any item of income, deduction,
credit, basis, gain or loss which could affect the Company's liability for
Taxes directly or indirectly or the present practices of the Company in
reporting and paying Taxes, and no such issues are pending. There are no Liens
with respect to Taxes upon any of the assets or properties of the Company other
than statutory tax Liens for Taxes not yet due. No election under Sections 108,
168, 441, 1017, 1033 or 4977 of the code is in effect with respect to the
Company. The Company is not required to make any adjustment pursuant to Section
481 of the Code by reason of a change in accounting method, and there are no
applications for changes in accounting method pending with any Tax authority.
The Company is not jointly or severally liable for taxes as a result of being a
member of a consolidated group, other than the consolidated group of which
Shareholder or its affiliates are members.
4.18 Compliance with Laws. The Company has not been and is not in
material violation (or with or without notice or lapse of time or both, would
be in material violation) of any term or provision of any law or laws or any
writ, judgment, decree, injunction, or similar order applicable to the Company
or any of its assets or properties which violation would have a material adverse
effect on the Company taken as a whole.
4.19 Environmental Protection. The Company has never utilized,
stored or disposed of any Environmental Materials in any real property leased
or occupied by the Company.
4.20 Proprietary Rights. The Disclosure Schedule contains a true,
accurate and complete list of all of the (a) registrations of trademarks,
service marks or trade names, and all pending applications for any such
registrations, (b) registration of patents and copyrights and all pending
applications therefor, (c) other trademarks, service marks or trade names,
whether or not registered, including, but not limited to, all Software (the
matters in
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clauses (a), (b) and (c) are collectively referred to herein as "Proprietary
Rights"), which are owned or used by the Company. Except as set forth on the
Disclosure Schedule, the use of the Proprietary Rights listed on the Disclosure
Schedule by the Company has not infringed, is not infringing upon and is not
otherwise violating the rights of any Person in or to such Proprietary Rights
or the asserted Proprietary Rights of others, nor has the Company received any
notices or claims that the use of the Proprietary Rights by the Company
infringes upon or otherwise violates any rights of a Person in or to such
Proprietary Rights or the proprietary rights of others. Except as set forth on
the Disclosure Schedule, to the Knowledge of the Company, no Person is
infringing on the Proprietary Rights owned by the Company.
4.21 Year 2000. Except as set forth in the Disclosure Schedule
with respect to non-customized "off the shelf" Software utilized by the
Company, all computer hardware, software, and firmware (collectively,
"Software") utilized by the Company, whether directly or through outsourcing or
other agreements, accurately processes date data (including, but not limited
to, calculating, comparing, and sequencing) from, into, and between the
twentieth and twenty-first centuries, including leap year calculation. Without
limiting the generality of the foregoing:
4.21.1 The Software will not abnormally end or provide
invalid or incorrect results as a result of date data, specifically including
date data which represents or references different centuries or more than one
century;
4.21.2 The Software has been designed to ensure year 2000
compatibility, including, but not limited to, date data century recognition,
calculations which accommodate same century and multi-century formulas and date
values, and date data interface values that reflect the century;
4.21.3 The Software includes "year 2000 capabilities." For
purposes of this Agreement, "year 2000 capabilities" means the Software:
(a) will manage and manipulate data involving dates,
including single century formulas and multi-century formulas, and will not
cause an abnormally ending scenario within the application or generate
incorrect values or invalid results involving such dates; and
(b) provides that all date-related user interface
functionalities and data fields include the indication of century; and
(c) provides that all date-related interface
functionalities include the indication of century.
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5. Representations and Warranties of the Purchaser.
In order to induce the Company to enter into this Agreement, the
Purchaser makes the following representations and warranties to the Company:
5.1 Organization. The Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
5.2 Authorization of Transaction. The Purchaser has full power and
authority to, and has taken all actions necessary to authorize it to, execute
and deliver the Agreement and each of the agreements or documents related
thereto, and to perform its obligations thereunder. This Agreement constitutes
a valid and legally binding obligation of the Purchaser, enforceable in
accordance with the terms and conditions set forth herein, except as limited by
bankruptcy, insolvency and general principles of equity.
5.3 Enforceability; Conflicting Obligations. This Agreement and
all other agreements of the Purchaser contemplated hereby are or, upon the
execution thereof, will be the valid and binding obligations of the Purchaser
enforceable against it in accordance with their terms. The execution and
delivery of this Agreement do not, and the consummation of the purchase of the
Common Series Stock will not, conflict with or violate any provision of the
articles of incorporation or bylaws of the Purchaser, nor any provisions of, or
result in the acceleration of, any obligation of the Purchaser which would have
a material adverse effect on the transactions contemplated hereunder.
5.4 Authorization. The Purchaser has all necessary corporate
power and authority to enter into and perform the transactions contemplated
hereby in accordance with the terms and conditions hereof.
5.5 Litigation. There is no litigation, proceeding or any
investigation by any Governmental Authority against the Purchaser or relating
to the transactions contemplated hereby. There is no outstanding Order,
litigation or proceeding to which the Purchaser is a party or subject and which
materially adversely affects Purchaser's business or assets or its ability to
consummate this Agreement or fulfill obligations under this Agreement.
5.6 Third Party Consents. No third-party consents, approvals, or
authorizations are necessary for the execution of and consummation of the
transactions contemplated hereby the lack of which would have a material
adverse effect on the transactions hereby contemplated.
6. Conditions Precedent to the Obligations of Purchaser. Anything to
the contrary contained elsewhere herein notwithstanding.
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6.1 Purchaser's obligations to purchase Series A Common Stock on the
Initial Closing Date shall be subject to and conditioned upon the Company's
satisfaction of the following conditions precedent:
6.1.1 The Company shall have delivered to the Purchaser a
fully-executed Shareholders' Agreement;
6.1.2 The Company shall have delivered to Purchaser a Good Standing
Certificate for the Company certified by the Secretary of State for the State
of New York dated within thirty (30) days of the Initial Closing Date;
6.1.3 The Company shall have delivered to Purchaser a certified copy
of the Amended Certificate as filed with the office of the Secretary of 'State
for the State of New York;
6.1.4 The Company shall have delivered to Purchaser a Certificate
executed by C. Xxxxxxxx Malumud certifying that as of the Initial Closing Date,
all of the representations and warranties of the Company contained in the
Agreement are true and correct and that the Company is not in violation of any
of its obligations or covenants contained in this Agreement (the "Officer's
Certificate");
6.1.5 The Company shall have delivered to Purchaser the Initial
Budget pursuant to Section 3 above in form and substance acceptable to the
Purchaser;
6.1.6 The Company shall have delivered to Purchaser within
forty-five (45) days of the date of execution of this Agreement a complete and
extensive business plan prepared by a professional agency reasonably acceptable
to the Purchaser; and
6.1.7 The Company shall not be in violation of any of its
obligations, representations, warranties or covenants under the Agreement.
6.2 The purchase of any of the shares of Series A Common Stock, Series B
Common Stock or Series C Common Stock in any of the Closings set forth in
Sections 2.1.1, 2.1.2 or 2.1.3 above, after the Initial Closing Date, shall be
subject to and conditioned upon satisfaction of the following conditions
precedent, unless waived in writing by Purchaser:
6.2.1 The Company shall have delivered to Purchaser an Officer's
Certificate dated as of the applicable Closing Date;
6.2.2 The Company shall deliver to the Purchaser all Budgets and
monthly Reports required pursuant to Section 3 above; and
6.2.3 The Company shall not be in violation of any of its
obligations, representations, warranties or covenants under the Agreement.
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7. Closing: All Closings with respect to the purchases of Common Series
Stock pursuant to Section 2 above shall be held at the offices of Jeffer,
Mangels, Xxxxxx & Marmaro, LLP, 2121 Avenue of the Stars, 00xx Xxxxx, Xxx
Xxxxxxx, XX, 00000, at ten o'clock a.m., on the applicable Closing Date or at
such other time and place as the Company and the Purchaser mutually may agree.
If the Initial Closing has not occurred by June 30, 1999, then the Purchaser,
if not then in breach of the Agreement, may upon prior written notice to the
Company terminate this Agreement. If the Closing has not occurred by July 31,
1999, then either the Company or the Purchaser, if not then in breach of the
Agreement, may upon prior written notice to the other party terminate this
Agreement. In the event the Agreement is terminated pursuant to this Section 7,
the Agreement shall be of no further force or effect, except that such
termination pursuant to this Section 7, the Agreement shall be of no further
force or effect, except that such termination shall not relieve any party from
liability for any breach of this Agreement prior to such termination. The
Purchaser shall notify the Company in writing no later than five (5) business
days prior to the proposed Closing of any purchaser of Common Series Stock (the
"Purchase Notice"). In addition to the proposed date of the Closing, the
Purchaser Notice shall advise the Company of the amount of shares of Common
Series Stock that Purchaser intends to purchase at such Closing. The delivery of
documentions for each Closing may be made by mail, overnight courier or such
other means as may be deemed acceptable by the Parties. Delivery of funds at
each Closing may be made by check or wire transfer to an account directed by
the Company.
8. Termination.
8.1 In the event of a breach of any of the terms or conditions of
this Agreement, the non-breaching party may provide notice of such breach to
the breaching party, in accordance with the notice provisions of Section _
herein. If the breaching party fails to remedy the breach within thirty (30)
days after having received notice, the non-breaching party may in its sole
discretion elect to terminate this Agreement at any time thereafter.
8.2 Termination of this Agreement shall not affect any rights or
remedies of either party accrued hereunder including, without limitation,
Purchaser's right to retain all Capital Stock in the Company issued to it prior
to termination.
9. Confidential Information.
9.1 "Confidential Information" shall mean, without limitation, the
following, whether in existence now or arising in the future:
9.1.1 such confidential business information relating to the
business of either party as any of such party's directors, officers or
employees may from time to time designate to the other party in writing as
being included in the expression "Confidential Information";
9.1.2 confidential business information related to the
business of either party encompossed in all drawings, designs, plans,
proposals, marketing plans and sales plans of either party;
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9.1.3 all confidential proprietary information,
financial information, profit information, cost information, client information,
strategies, plans, proposals, economic policies and any confidential technique,
process, formula, development, experimental work, idea, secret, trade secret,
know-how or other confidential matter related to either party or any of their
activities, processes and operations and the proposed activities, process and
operations of any party; and
9.1.4 all computer programs existing or under
development and all information related thereto including algorithms,
specifications, flow charts, listings, source codes and object codes owned by
any party or to which any party has access.
9.2 Notwithstanding the provisions of Section 9.1 above,
Confidential Information shall not include:
9.2.1 information which is in the public domain at the
date of disclosure to a party or which thereafter enters the public domain
through no fault of that party (but only after it enters the public domain); or
9.2.2 information which is known by a party prior to
such disclosure; or
9.2.3 information which is learned by a party from a
third party who that party does not have reason to believe is under an
obligation to keep such information confidential;
9.3 Purchaser covenants and agrees that Purchaser shall:
9.3.1 use its best reasonable efforts to regard and
preserve as confidential all Confidential Information regarding the Company;
9.3.2 refrain from, directly or indirectly, utilizing,
disclosing, divulging or disseminating to any Person any Confidential
Information, except as required by law or any judicial or administrative
process; and
9.3.3 not, without prior written authorization from the
Company, use for its own benefit or purpose (other than in connection with this
Agreement or in connection with any financing undertaken by the Purchaser), or
for the benefit or purposes of any third party, any Confidential Information.
10. Non-Competition. Except with respect to any ownership interests
in the Company, so long as the Purchaser owns at least ten percent (10%) of the
Capital Stock of the Company, Purchaser shall not, without the Company's prior
consent, directly or indirectly own any legal or beneficial interest in, or
render services or give advice to, any business located anywhere or any entity
located anywhere which grants franchises, licenses or other interests to
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others to operate any business which sells or distributes commemorative stamps
pursuant to the plan of operation currently contemplated by the Company.
11. Assignment. The Company may not transfer or assign any of its
rights, responsibilities or duties under this Agreement to any entity. I.T. may
transfer any or all of its rights, responsibilities or duties under this
Agreement to any corporation or other business entity, all of the voting equity
of which is owned or controlled by I.T.
12. Miscellaneous.
12.1 Expenses. Each party shall bear all of its own costs
and expenses incurred in connection with the transactions contemplated hereby.
12.2 Modification or Amendments. This Agreement may not be
modified or amended except pursuant to an instrument in writing signed by both
parties.
12.3 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective heirs, legal representatives, successors and
assigns.
12.4 Captions. The captions appearing at the commencement
of the sections hereof are descriptive only and for convenience in reference.
Should there be any conflict between any such caption and the section at the
head of which it appears, the section and not such caption shall control and
govern in the construction of this Agreement.
12.5 Severability. Nothing contained herein shall be
construed so as to require the commission of any act contrary to law, and
wherever there is any conflict between any provisions contained herein and any
present or future stature, law, ordinance or regulation, the latter shall
prevail; but the provision of this Agreement which is affected shall be
curtailed and limited only to the extent necessary to bring it within the
requirements of the law.
12.6 Representation by Counsel. The Company acknowledges
that Jeffer, Mangels, Xxxxxx & Xxxxxxx LLP has represented only the Purchaser
and not any other party in the negotiation, drafting of this Agreement and the
transactions contemplated hereby and the Company has consulted with his own
legal counsel in connection with negotiation and drafting of this Agreement and
the transactions contemplated hereby and its rights with respect hereto prior
to the execution hereof.
12.7 Survival of Representations and Warranties. The
representations and warranties of the parties hereto as set forth herein shall
survive the consummation of the transactions contemplated hereby and for a
period of three years following last Closing Date with respect to any purchase
of Common Series Stock by the Purchaser hereunder.
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12.8 No Finders or Brokers. Except with respect to Xxxxxx Xxxxxxx whose
fees shall be the sole responsibility of the Purchaser, the parties hereto
represent and warrant that they have not engaged or have been represented by
any broker or finder in connection with this Agreement or the transactions
contemplated hereby and each party fully indemnifies and holds harmless the
other party from any losses, damages or expenses incurred by the other party in
connection their breach of this Section.
12.9 Attorneys' Fees. Should any party hereto institute any action or
proceeding at law or in equity, or in connection with an arbitration, to
enforce any provision of this Agreement, including an action for declaratory
relief, or for damages by reason of an alleged breach of any provision of this
Agreement, or otherwise in connection with this Agreement, or any provision
thereof, the judge or the arbitrator, as the case may be, shall allocate the
costs and expenses (including attorney's fees and expenses) of such proceeding
between the parties based on such judge's or arbitrator's determination of the
merits of the parties respective positions in the proceedings.
12.10 Notices. Unless applicable law requires a different method of giving
notice, any and all notices, demands or other communications required or
desired to be given hereunder by any party shall be in writing. Assuming that
the contents of a notice meet the requirements of the specific paragraph of
this Agreement which mandates the giving of that notice, a notice shall be
validly given or made to another party if served either personally or if
deposited in the United States mail, certified or registered, return receipt
requested, postage prepaid, or if transmitted by telegraph, telecopy or other
electronic written transmission device. If such notice, demand or other
communication is served personally, service shall be conclusively deemed made
at the time of such personal service. If such notice, demand or other
communication is given by mail, such receipt shall be conclusive evidence of
delivery, or if by telegraph or if by other carrier service, upon confirmation
of delivery by the carrier, addressed to the party to whom such notice, demand
or other communication is to be given as set forth below. Any party hereto may
change its address for the purpose of receiving notices, demands and other
communications as herein provided, by a written notice given in the manner
aforesaid to the other party or parties hereto.
The Company: 000 Xxxxx Xxxxxx
Xxxxx 000
Xxx Xxxx, XX 00000
Attn: C. Xxxxxxxx Malumud
Fax: 000-000-0000
With a copy to: Xxxx Xxxxxxx, Esq.
00 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxx Xxxx 00000
Fax: 000-000-0000
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The Purchaser: A.C.N. 085 839 738
00 Xxxxxx Xxxxxx
Xxxx Xx. Xxxxx, Xxxxxxxx 0000
Melbourne, Australia
Attn: Xxxxxxxx Xxxxxx
Fax: 000-000-0000-0000
With a copy to: Xxxxx X. Xxxxxx, P.C.
Jeffer, Mangels, Xxxxxx & Xxxxxxx LLP
2121 Avenue of the Stars
00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Fax: (000) 000-0000
12.11 Entire Agreement. This Agreement along with the Exhibits and
Schedules attached hereto constitutes the entire agreement of the Company and
Purchaser with respect to this subject matter and any and all prior agreements,
understandings or representations with respect to its subject matter are hereby
terminated and canceled in their entirety and are of no further force or effect.
12.12 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without
reference to its rules regarding conflicts of laws.
12.13 Arbitration. Each party hereto agrees to submit any claim or
dispute arising out of, or related to this Agreement, to private and
confidential arbitration before a single arbitrator. The arbitrator selected
shall be a person experienced in negotiating, making and consummating agreements
of the type of this agreement. The arbitrator shall be selected by mutual
agreement or, if no agreement can be reached within sixty (60) days after the
initial notice requesting arbitration is delivered by one of the parties, by the
American Arbitration Association pursuant to its rules. Subject to the terms of
this section 12.13, the arbitration proceedings shall be governed by the
Commercial Rules of Arbitration of the American Arbitration Association and
shall take place in New York, New York. There shall be no punitive damages may
be awarded. The decision of the arbitrator shall be final and binding on each of
the parties and judgment thereon may be entered in any court having
jurisdiction. This arbitration procedure is intended to be the exclusive method
of resolving any claim arising out of or related to this Agreement. The only
exception to this arbitration provision shall be an action by either party
seeking equitable, including injunctive, relief in a court of competent
jurisdiction. Each party agrees to the personal and subject matter jurisdiction
of the Supreme Court for the State of new York located in New York County for
the resolution of any dispute, including related to this arbitration provision
or enforcement of any award upon any judgment rendered in arbitration.
12.14 Counterparts. This Agreement may be executed in counterparts,
each of which shall constitute an original, but all of which, when taken
together, shall constitute
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one and the same instrument, and shall become effective when the counterparts
have been signed by each party hereto and delivered to the other parties.
12.15 Further Assurances. Each of the parties hereto shall execute
and delivery any and all additional papers, documents and other assurances, and
shall do any and all acts and things reasonably necessary in connection with
the performance of their obligations hereunder to carry out the intent of the
parties hereto.
12.16 Non-Waiver. No waiver by any party hereto of a breach of any
provision of this Agreement shall constitute a waiver of any preceding or
succeeding breach of the same or any other provision hereof.
12.17 Number and Gender. In this Agreement, the masculine, feminine
or neuter gender, and the singular or plural number, shall each be deemed to
include the others whenever the context so requires.
12.18 Cross-References. All cross-references in this Agreement,
unless specifically directed to another agreement or document, refer to
provisions in this Agreement and shall not be deemed to be reference to the
overall transaction or to any other agreements or documents.
12.19 Exhibits. All exhibits and schedules, as the case may be,
attached hereto are hereby incorporated by reference.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
XXXXXXXXXX.XXX INC. I.T. TECHNOLOGY, INC.
By: /s/ C. XXXXXXXX XXXXXXX By: /s/ XXXX XXXXXXX
------------------------------- -------------------------------
Name: C. Xxxxxxxx Xxxxxxx Name: Xxxx Xxxxxxx
------------------------------- -------------------------------
Title: Chief Executive Officer Title: Chief Executive Officer
------------------------------- -------------------------------
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