AGREEMENT
Exhibit
10.1
AGREEMENT,
dated as of October 20, 2008 (the “Agreement”), by and among., Mecanismo Corp ,
a Nevada Corporation (the “Purchaser”), and Domark International, Inc., a Nevada
corporation and R. Xxxxxx Xxxx, hereinafter collectively the (“Selling
Parties”.)
BACKGROUNDBACKGROUND
The
Selling Parties are the beneficial owners of an aggregate of One Hundred
Thousand Shares of preferred convertible stock of SportsQuest, Inc. (the
“Company”) (“Sellers Shares”), convertible into common shares of Company at the
rate of 500 shares of common stock for each preferred share and 9,973,397 shares
of common stock of Company. The Selling Parties own, in the aggregate,
approximately 94% of the issued and outstanding capital stock of the Company,
fully diluted, as of the date hereof.
At
the
Closing, as set forth in this Agreement:
(a) The
Selling Parties shall sell and the Purchaser shall acquire from the Selling
Parties, the Selling Parties Preferred Shares of Company in exchange for the
irrevocable Assignment of that certain Judgment arising from***CASE BC 359831
LOS ANGELES SUPERIOR COURT Veridigm Inc (f/k/a E-Notes Systems Inc (DE) (“the
Plaintiff”), against TotalMed Systems, Inc., (The “Defendant”) ****and a
Promissory Note in the amount of $100,000 to Domark International,
Inc.
NOW,
THEREFORE,
in
consideration of the foregoing and the mutual promises and covenants herein
contained, the adequacy and sufficiency of which are deemed appropriate by
the
Parties, the Company, the Selling Parties and the Purchaser hereby agree as
follows:
1. Purchase
of the Seller’s Shares:
(a) At
the
Closing, the Selling Parties shall sell, transfer, convey and deliver to the
Purchaser the Sellers Shares at the Purchase Price set forth in Section 1 (b),
below.
(b) The
Purchase Price for the Seller Shares being purchased by the Purchaser herein
shall be $208,368.49 which is the current unpaid balance including interest
and
attorney fees of the TotalMed Judgment (the “TotalMed Judgment”), to be
transferred to Domark International, Inc, and a Promissory Note for the sum
of
One Hundred Thousand Dollars due in one installment one year from the closing
of
this transaction. Said Promissory Note form is attached as Schedule
1(b).
2. Payment
of Legal and Other Fees:
Each
of
the parties hereto will pay their own legal and other fees associated with
the
execution of this transaction.
3. The
Closing.
(a)
General. The closing of the transactions contemplated in Sections 1 through
4 of
this Agreement, all of which transactions shall all occur contemporaneously
(the
“Closing”), shall take place at the offices of the Company, or at such other
place and at such other time as the Parties hereto shall mutually agree, or,
with the mutual agreement of all of the parties, by exchange of documents among
the Parties, following the satisfaction or waiver of all conditions to the
obligations of the Parties to consummate the transactions contemplated herein
(other than conditions with respect to actions the Parties will take at the
Closing itself), but not later than October 21, 2008, or such other date as
the
Purchaser and the Seller may mutually determine (the “Closing
Date”).
4. Representations
and Warranties of the Selling Parties.
The
Selling Parties individually represent and warrant to the Purchaser that the
statements contained in this Section 4 are correct and complete as of the date
of this Agreement and will be correct and complete as of the Closing Date (as
though made then and as though the Closing Date were substituted for the date
of
this Agreement throughout this Section 4).
(a)
The
Selling Parties have the power and authority to execute, deliver and perform
such Selling Parties obligations under this Agreement and to sell, assign,
transfer and deliver to the Purchaser their respective Sellers Shares, as
contemplated hereby. No permit, consent, approval or authorization of, or
declaration or registration with any governmental or regulatory authority or
consent of any third party is required in connection with the execution and
delivery by the Selling Parties to this Agreement and the consummation of the
transactions contemplated hereby.
(b)
Neither the execution and delivery of this Agreement, nor the consummation
of
the transactions
contemplated hereby or compliance with the terms and conditions hereof by the
Selling Parties will violate or result in a breach of any term or provision
of
any agreement to which the Selling Parties are bound or is a party, or be in
conflict with or constitute a default
under,
or
cause the acceleration of the maturity of any of the Seller obligations under
any existing agreement or violate any order, writ, injunction, decree, statute,
rule or regulation applicable to the Selling Parties or any of the Selling
Parties properties or assets.
(c)
This
Agreement has been duly and validly executed by the Selling Parties, and
constitutes the valid and binding obligation of Selling Parties, enforceable
against Selling Parties in accordance with its terms, except as enforceability
may be limited by bankruptcy, insolvency or other laws affecting creditors'
rights generally or by limitations, on the availability of equitable remedies.
(d)
The
Selling Party Shares are owned beneficially and of record by such Selling Party
in the amounts specified and are validly issued and outstanding, or will be
issued and outstanding, fully paid for and non-assessable with no personal
liability attaching to the ownership thereof, free and clear of all liens,
charges, security interests, encumbrances, claims of others, options, warrants,
purchase rights, contracts, commitments, equities or other claims or demands
of
any kind (collectively, “Liens”), and upon delivery of the Seller Shares and the
conversion Shares to the Purchaser, the Purchaser will acquire good, valid
and
marketable title thereto free and clear of all Liens. None of the Selling
Parties is a party to any option, warrant, purchase right, or other contract
or
commitment that could require that Selling Parties to sell, transfer, or
otherwise dispose of any of the preferred or common stock of the Company, other
than pursuant to this Agreement. Selling Parties are not a party to any voting
trust, proxy, or other agreement or understanding with respect to the voting
of
any preferred or common stock of the Company.
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5. Representations
and Warranties of the Purchaser.
(a) The
Purchaser is a corporation in good standing duly incorporated in the State
of
Nevada. The Purchaser is duly authorized to conduct business and is in good
standing under the laws of each jurisdiction where such qualification is
required. The Purchaser has full corporate power and authority and all licenses,
permits, and authorizations necessary to carry on its business. At the Closing,
the Purchaser shall have no subsidiaries and shall have no control of other
subsidiaries, directly or indirectly, or have a direct or indirect equity
participation in other entities.
(b) Neither
the execution and delivery of this Agreement, nor the consummation of the
transactions contemplated hereby or compliance with the terms and conditions
hereof by the Purchaser will violate or result in a breach of any term or
provision of any agreement to which the Purchaser is bound or is a party, or
the
Purchaser’s Certificate of Incorporation or By-Laws, or be in conflict with or
constitute a default under, or cause the acceleration of the maturity of any
obligation of the Purchaser under any existing agreement or violate any order,
writ, injunction, decree, statute, rule or regulation applicable to the
Purchaser or any of its properties or assets.
(c) This
Agreement has been duly and validly executed by the Purchaser and constitutes
the valid and binding obligation of the Purchaser, enforceable against it in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency or other laws affecting creditors' rights generally
or by
limitations, on the availability of equitable remedies.
(d) The
Purchaser’s authorized capital stock, as of the date of this Agreement and as of
the Closing, consists of 10,000 shares of Common Stock, $1.00 par value per
share, of which 10,000 shares are issued and outstanding. The Purchaser has
not
reserved any shares of its Common Stock for issuance upon the exercise of
options, warrants or any other securities that are exercisable or exchangeable
for, or convertible into, Common Stock.
All
of
the issued and outstanding shares of the Purchaser’s Common Stock are validly
issued, fully paid and non-assessable and have been issued in compliance with
applicable laws, including, without limitation, applicable federal and state
securities laws.
There
are
no outstanding options, warrants or other rights of any kind to acquire any
additional shares of capital stock of the Purchaser or securities exercisable
or
exchangeable for, or convertible into, capital stock of the Purchaser, nor
is
the Purchaser committed to issue any such option, warrant, right or security.
Except as otherwise provided for in this Agreement, there are no agreements
relating to the voting, purchase or sale of capital stock (i) between or among
the Purchaser and any of its stockholders, (ii) between or among any Selling
Party and any third party, or among the Selling Parties and any of the
Purchaser’s stockholders.
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(e) The
Purchaser‘s Certificate of Incorporation or By-Laws do not have any restrictions
in place relative to its ability to implement any reverse or forward split
of
its common stock.
(f) Purchaser
will not have any Liabilities whatsoever at the closing date except as disclosed
to Selling Parties at closing.
(g) There
is
no legal, administrative, investigatory, regulatory or similar action, suit,
claim or proceeding that is pending or threatened against the
Purchaser.
(h)
The
Purchaser has properly and timely filed all Federal, state and local tax returns
and has paid all taxes, assessments and penalties due and payable. All such
tax
returns were complete and correct in all respects as filed, and no claims have
been assessed with respect to such returns. There are no present, pending,
or
threatened audit, investigations, assessments or disputes as to taxes of any
nature payable by the Purchaser, nor any tax liens whether existing or inchoate
on any of the assets of the Purchaser. No IRS or foreign, state, county or
local
tax audit is currently in progress. The Purchaser has not waived the expiration
of the statute of limitations with respect to any taxes. There are no
outstanding requests by the Purchaser for any extension of time within which
to
file any tax return or to pay taxes shown to be due on any tax
return.
(i)
The
Purchaser does not employ any employees and does not maintain any employee
benefit or stock option plans, except as may be disclosed to Selling Parties
at
closing.
(j)
There
has
not been any event or condition of any character which has adversely affected,
or may be expected to adversely affect, the Purchaser’s business or prospects,
including, but not limited to any adverse change in the condition, assets,
liabilities or business of the Purchaser.
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(k)
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The
Purchaser has complied in all material respects with all applicable
laws
(including rules, regulations, codes, plans, injunctions, judgments,
orders, decrees, rulings, and charges thereunder) of all governmental
authorities, and no action, suit, proceeding, hearing, investigation,
charge, complaint, claim, demand, or notice has been filed or commenced
against the purchaser alleging any failure so to comply. The Purchaser,
nor any officer, director, employee, consultant or agent of the Purchaser
has made, directly or indirectly, any payment or promise to pay,
or gift
or promise to give or authorized such a promise or gift, of any money
or
anything of value, directly or indirectly, to any governmental official,
customer or supplier for the purpose of influencing any official
act or
decision of such official, customer or supplier or inducing him,
her or it
to use his, her or its influence to affect any act or decision of
a
governmental authority or customer, under circumstances which could
subject the Purchaser or any officers, directors, employees or consultants
of the Purchaser to administrative or criminal penalties or
sanctions.
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(l)
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The
Purchaser has the authority to transfer the TotalMed Judgment pursuant
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the terms and conditions herein.
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(m)
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The
Purchaser is acquiring the Selling Parties Shares for its own account
for
investment and not for the account of any other person and not with
a view
to or for distribution, assignment or resale in connection with any
distribution within the meaning of the Securities Act of 1933, as
amended
(the “Securities Act”). Purchaser agrees not to sell or otherwise transfer
the Seller Shares unless they are registered under the Securities
Act and
any applicable state securities laws, or an exemption or exemptions
from
such registration are available and shall promptly file or cause
to be
filed any and all filings, forms, documents and instruments necessary
for
the Purchaser to be in compliance with all Federal and state Securities
Acts, laws, rules and regulations. The Purchaser has knowledge and
experience in financial and business matters such that it is capable
of
evaluating the merits and risks of acquiring the Selling Parties
Shares.
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(n)
No
representation or warranty by the Purchaser in this Agreement, nor in any
certificate, schedule or exhibit delivered or to be delivered pursuant to this
Agreement contains or will contain any untrue statement of material fact, or
omits or will omit to state a material fact necessary to make the statements
herein or therein, in light of the circumstances under which they were made,
not
misleading.
6. Representations
and Warranties of the Selling Parties.
(a)
The
Selling parties have full power and authority to enter into this Agreement
and
to carry out the transactions contemplated hereby.
(b)
Neither the execution and delivery of this Agreement nor the consummation of
the
transactions contemplated hereby, compliance by the selling parties with any
of
the terms and conditions hereof will; violate, or conflict with, or result
in a
breach of any provision of, or constitute a default under or result in the
termination of, or accelerate the performance required by, or result in the
creation of any Lien upon any of the properties or assets of the selling parties
under any of the terms, conditions or provisions of any material note, bond,
indenture, mortgage, deed or trust, license, lease, agreement or other
instrument or obligation to which he is a party or by which he or any of his
properties or assets may be bound or affected or violate any material order,
writ, injunction, decree, statute, rule or regulation nor breach or violate
any
Laws, rules or regulations of the United States, and the rules and regulations
promulgated by the SEC, which may be applicable to selling parties or any of
its
properties or assets, except for such violations which, in the aggregate, are
immaterial and do not have any material adverse financial effect on selling
parties.
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(c) This
Agreement has been duly and validly executed by the selling parties and
constitutes a valid and binding obligation of the selling parties enforceable
in
accordance with its terms, except as the enforceability hereof may be limited
by
bankruptcy, insolvency or similar laws affecting the enforceability of
creditor's rights generally or by limitations, on the availability of equitable
remedies.
(d)
No
permit, consent, approval or authorization of, or declaration, filing or
registration with any governmental or regulatory authority or the consent of
any
third party is required in connection with the execution and delivery by the
selling parties of this Agreement and the consummation of the transactions
contemplated hereby.
(e) There
is
no legal, administrative, investigatory, regulatory or similar action, suit,
claim or proceeding that is pending or, to the selling parties knowledge,
threatened against the selling parties.
(f) No
representation or warranty by the selling parties in this Agreement, nor in
any
certificate, schedule or exhibit delivered or to be delivered pursuant to this
Agreement contains or will contain any untrue statement of material fact, or
omits or will omit to state a material fact necessary to make the statements
herein or therein, in light of the circumstances under which they were made,
not
misleading.
7. Due
Diligence.
The
selling parties have been furnished with documents and instruments and in
addition has conducted its own intensive due diligence investigation relative
to
the Purchaser and the representations, warranties and covenants of the
Purchaser. The Purchaser hereby acknowledges and agrees that it has received
all
requisite documents and instruments necessary for the Purchaser to have
completed its due diligence all of which has been furnished to Purchaser to
Purchaser’s complete satisfaction within the due diligence period. and all Due
Diligence has been complied with. Purchaser is acquiring the shares of the
Company from the Selling Parties, fully aware of the financial condition of
the
Company and its investment interest in Greens Worldwide Incorporated.
8. Payments
at Closing; Brokers; Finders.
There
are
no Brokers or Finders involved in this transaction and none of the Parties
shall
be responsible for the payment of any Brokers or finders’ fees other than as
specifically set forth herein. Other than the foregoing, none of the Selling
Parties nor the Company, nor any of their respective directors, officers or
agents on their behalf, have incurred any obligation or liability, contingent
or
otherwise, for brokerage or finders’ fees or agents’ commissions or financial
advisory services or other similar payment in connection with this Agreement.
The Purchaser has not engaged any Brokers or Finders in connection with this
transaction.
9. Pre-Closing
Covenants.
The
Parties agree as follows with respect to the period between the execution of
this Agreement and the Closing Date:
(a)
Each
of the Parties has used his or its best efforts to take all action and to do
all
things necessary, proper, or advisable in order to consummate and make effective
the transactions contemplated by this Agreement (including satisfaction, but
not
waiver, of the closing conditions set forth in Section 13 below).
(b
Form
8-K
Filing; Notices and Consents.
(i)
Concurrent
with the execution of this Agreement, Domark International, Inc. shall cause
a
Form 8-K to be filed with the U.S. Securities and Exchange Commission with
respect to its having entered into this material definitive agreement and to
disclose the material terms set forth in this Agreement. Each of the Parties
will (and the Selling Parties will cooperate with Domark International, Inc.
to)
give any notices to, make any filings with, and use its best efforts to obtain
any authorizations, consents, and approvals of governmental authorities
necessary in order to consummate the transactions contemplated
hereby.
(ii) The
Purchaser acknowledges that it may be required to file documents, instruments,
financial statements and other disclosure documents in compliance with the
Securities Act in order to effect the transaction contemplated by this
Agreement.
(c)
Operation of Business. The Selling Parties will not cause or permit the Company
to (i) declare, set aside, or pay any dividend or make any distribution with
respect to its capital stock or redeem, purchase, or otherwise acquire any
of
its capital stock except as otherwise expressly specified herein, (ii) issue,
sell, or otherwise dispose of any of its capital stock, or grant any options,
warrants, preemptive or other rights to purchase or obtain (including upon
conversion, exchange, or exercise) any of its capital stock.
(d) Exclusivity.
None of the Selling Parties or the Company shall, directly or indirectly, (i)
solicit, initiate, or encourage the submission of any proposal or offer from
any
person relating to the acquisition of any of the Selling Parties Shares or
any
capital stock or other voting securities, or any assets (including any
acquisition structured as a merger, consolidation, or share exchange) of the
Company or (ii) participate in any discussions or negotiations regarding,
furnish any information with respect to, assist or participate in, or facilitate
in any other manner any effort or attempt by any person to do or seek any of
the
foregoing. None of the Selling Parties will vote the shares of the Company’s
Preferred Stock held by them in favor of any such acquisition structured as
a
merger, consolidation, or share exchange.
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10 Documents
to be Delivered at the Closing:
(a) As
to the Selling Parties and the Company:
(i)
The
Selling Parties shall deliver to Purchaser, a share certificate representing
the
Selling Parties Preferred Shares of Company, duly endorsed with Medallion
Guarantee affixed, in the amount of 100,000 shares of preferred stock of
Company.
(ii)
The
Selling Parties shall deliver to Purchaser, share certificates representing
9,973,397 shares of common stock of Company, duly endorsed with Medallion
Guarantee affixed.
(iii) The
Company shall deliver the corporate Minute Books, and related corporate
documents and instruments contained in the minute books to the
Purchaser.
(b) As
to the Purchaser:
(i) The
Purchaser shall deliver a fully executed Promissory Note to Domark
International, Inc. or assigns in the amount of One Hundred Thousand Dollars
($100,000) due in one year.
(ii) The
Purchaser shall deliver to the Selling parties, a true and correct Resolution
of
the Board of Directors of the Purchaser authorizing this Agreement and the
transactions contemplated thereby.
(iii)
The
Purchaser shall deliver a fully executed Assignment of Judgment by Veridigm
against Totalmed Systems, in acceptable form to Domark International,
Inc.
11. Conditions
to Obligation to Close.
(a) Conditions
of Obligation of the Purchaser
The
obligation of the Purchaser to consummate the transactions to be performed
by
the Purchaser in connection with the Closing is subject to satisfaction of
the
following conditions:
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(i)
the
representations and warranties set forth above shall be true and correct in
all
material respects at and as of the Closing Date;
(ii) each
of
the Pre-Closing Covenants set forth above shall have been
satisfied;
(iii) the
Selling Parties shall have performed and complied with all of their covenants
hereunder in all material respects through the Closing;
(iv) no
action, suit, or proceeding shall be pending or threatened before any court
or
quasi-judicial or administrative agency of any federal, state, local, or foreign
jurisdiction or before any arbitrator wherein an unfavorable injunction,
judgment, order, decree, ruling, or charge would (A) prevent consummation of
the
transactions contemplated by this Agreement, (B) cause any of the transactions
contemplated by this Agreement to be rescinded following consummation, (C)
affect adversely the right of the Purchaser to own the Selling Parties Shares
and to control the Company, or (D) affect adversely the right of the Company
to
own its assets and to operate its businesses (and no such injunction, judgment,
order, decree, ruling, or charge shall be in effect);
(viii)
The Purchaser shall have received the resignations, effective as of the Closing
Date, of each officer and Director of the Company, currently R. Xxxxxx Xxxx
and
Xxxxxxx Xxxxxxx and the appointment of the designee(s) of the Purchaser. In
addition, each officer and director shall waive any accrued compensation if
any
due said officers and directors as of the closing date. Said resignations shall
be effective 10 days after the Purchaser files a Form 14f with the Securities
and Exchange Commission.
(ix)
Except as otherwise set forth in this Agreement, there shall not have been
any
occurrence, event, incident, action, failure to act, or transaction which has
had or is reasonably likely to cause a material adverse effect on the business,
assets, properties, financial condition, results of operations or prospects
of
the Purchaser;
(x) The
Purchaser has completed its business, accounting and legal Due Diligence review
of the Company, and the results thereof are completely satisfactory to the
Purchaser;
(xi) the
Purchaser shall deliver to selling parties a Certificate of Good Standing of
the
Purchaser issued by the Nevada Secretary of State dated no earlier than sixty
(60) days prior to the Closing.
(xii)
all
actions to be taken by the Selling Parties in connection with consummation
of
the transactions contemplated hereby and all certificates, opinions,
instruments, and other documents required to effect the transactions
contemplated hereby will be satisfactory in form and substance to the Purchaser;
and
The
Purchaser may waive any condition specified in this Section 13(a) at or prior
to
the Closing in writing executed by the Purchaser.
(b)
Conditions
to Obligation of the Selling Parties.
The
obligations of the Selling Parties to consummate the transactions to be
performed by them in connection with the Closing are subject to satisfaction
of
the following conditions:
(i) the
representations and warranties set forth above shall be true and correct in
all
material respects at and as of the Closing Date;
(ii) each
of
the Pre-Closing Covenants set forth above shall have been
satisfied;
(iii)
the
Purchaser shall have performed and complied with all of its covenants hereunder
in all material respects through the Closing;
(iv)
no
action, suit, or proceeding shall be pending or threatened before any court
or
quasi-judicial or administrative agency of any federal, state, local, or foreign
jurisdiction or before any arbitrator wherein an unfavorable injunction,
judgment, order, decree, ruling, or charge would (A) prevent consummation of
any
of the transactions contemplated by this Agreement or (B) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation (and no such injunction, judgment, order, decree, ruling, or charge
shall be in effect);
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(vi) all
actions to be taken by the Purchaser in connection with consummation of the
transactions contemplated hereby and all certificates, opinions, instruments,
and other documents required to effect the transactions contemplated hereby
will
be satisfactory in form and substance to the Selling Parties.
(vii) The
Purchaser shall have purchased from the Sellers (100,000) shares of the
Company’s Preferred Stock and 9,973,397 shares of the Company’s common stock for
which Purchaser shall have paid a promissory Note for $100,000 and an assignment
to Domark International, Inc. of a Judgment owned by Veridigm in the amount
of
$208,368.49 provided for herein.
(x) The
Purchaser shall have procured all of the third party consents required in order
to effect the Closing, if applicable.
(xi)
There shall not have been any occurrence, event, incident, action, failure
to
act, or transaction that has had or is reasonably likely to cause a material
adverse effect on the business, assets, properties, financial condition, results
of operations or prospects of the Purchaser;
(xii) The
Purchaser shall have delivered resolutions adopted by the Board of Directors
of
the Purchaser authorizing this Agreement;
(xiii) The
Purchaser shall deliver to the Selling Parties a Certificate of Good Standing
of
the Purchaser issued by the Nevada Secretary of State dated no earlier than
sixty (60) days prior to the Closing.
(xiv) all
actions to be taken by the Purchaser in connection with consummation of the
transactions contemplated hereby and all certificates, opinions, instruments,
and other documents required to effect the transactions contemplated hereby
will
be satisfactory in form and substance to the Company and the Selling
Parties.
The
Company and/or the Selling parties may waive, on behalf of each of the Selling
Parties any condition specified in this Section at or prior to the Closing
in
writing executed by the Company and/or the Selling Parties, as the case may
be.
12. Remedies
for Breaches of This Agreement.
(a) Survival
of Representations and Warranties.
All of
the representations and warranties of the Parties shall survive the Closing
hereunder and continue in full force and effect for a period of one (1) year
thereafter.
(b)
Indemnification
Provisions for Benefit of the Purchaser.
(i)
The
Selling Parties shall indemnify the Purchaser from and against any and all
claims, liabilities, actions or matters which shall result in monetary damages
to the Company for any Federal, state or local taxes of the Company with respect
to any tax year or portion thereof ending prior to the Closing Date; and any
monetary damages to the Company for any actions by the Selling Parties from
the
end of the Company’s most recent fiscal year to the Closing Date, provided that
the Purchaser does not change the fiscal year of the Company at any time, or
cause any event to occur which would result in a change of accounting practice
or other circumstances so that the liability for any such actions before or
on
the Closing Date or thereafter can not be readily determined in which event
Selling Parties shall not be liable for any damages whatsoever.
(ii) The
Selling Parties shall indemnify the Purchaser from and against any claims,
liabilities, actions or matters which result in monetary damages to the Company
for actions brought by the SEC against the Selling Parties or any of them in
violation of any laws, rules or regulation promulgated by the SEC which occurred
prior to the Closing Date.
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(iii) If
any
third party shall commence an action relating to a Company matter that occurred
prior to the Closing, the Purchaser shall notify the Seller Representative
on
behalf of each and all of the Selling Parties in writing, without delay, setting
forth the details of such claim and furnishing the Seller Representative with
a
copy of any complaint or other moving papers relating thereto, to enable the
Selling Parties to defend and respond to such claim or action. The Selling
Parties shall indemnify and hold harmless the Purchaser from and against any
such claims, liabilities, actions or matters which result in monetary damages
against the Company, provided that such action directly relates solely to
matters that occurred prior to the Closing and were not caused by the action
or
inaction of the Purchaser.
(c)
Indemnification
Provisions for Benefit of each and all of the Selling
Parties.
(i)
The
Purchaser shall indemnify the Selling Parties from and against any and all
claims, liabilities, actions or matters which shall result in monetary damages
to any or all of Selling Parties and/or the Company (whether or not accrued
or
otherwise disclosed) for any Federal, state or local taxes of the Purchaser
with
respect to any tax year or portion thereof ending subsequent to the Closing
Date; and any monetary damages to any or all of the Selling Parties, and/or
the
Company for any actions by the Purchaser subsequent to the Closing
Date.
(ii) The
Purchaser shall indemnify each and all of the Selling Parties from and against
any claims, liabilities, actions or matters which result in monetary damages
to
any or all of them or to the Company for actions brought by the SEC against
the
Purchaser or the Company in violation of any laws, rules or regulation
promulgated by the SEC that occur subsequent to the Closing Date or otherwise
relating to Purchaser’s actions or inactions or failures of
disclosure.
(iii) If
any
third party shall commence an action relating to a Company matter that occurs
subsequent to the Closing, the Purchaser shall notify the Seller Representative
for and on behalf of the Selling Parties in writing, without delay, setting
forth the details of such claim and furnishing the Seller Representative with
a
copy of any complaint or other moving papers relating thereto, to enable the
Sellers Representative to defend and respond to such claim or action if
necessary. The Purchaser shall indemnify and hold harmless each and all of
the
Selling Parties from and against any such claims, liabilities, actions or
matters which result in monetary damages to any or all of them, provided that
such action relates to matters that occur subsequent to the
Closing.
13. Post-Closing
Covenants.
The
Parties agree as follows with respect to the period following the
Closing.
(a) General.
In case at any time after the Closing any further action is necessary or
desirable to carry out the purposes of this Agreement, each of the Parties
will
take such further action (including the execution and delivery of such further
instruments and documents) as any of the other Parties may reasonably request,
all at the sole cost and expense of the requesting party. The Selling Parties
acknowledge and agree that from and after the Closing the Purchaser will be
entitled to possession of all reasonably available documents, books, records
(including tax records), agreements, and financial data of any sort relating
to
the Company.
9
(b) Litigation
Support. In the event and for so long as any Party actively is contesting or
defending against any action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand in connection with (i) any transaction contemplated
under this 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
Company, the other Party will cooperate with him or it and his or its counsel
in
the contest or defense, make available their personnel, and provide such
testimony and access to their 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 therefore under Section 14 herein).
(c) The
Purchaser covenants and agrees that as reasonably practicable, but no later
than
sixty (60) days after the Closing Date, to cause the Company to change its
name
to another unrelated name in the States of Delaware and Florida and not to
use
the name SportsQuest, Inc. in any entity in any form nor at any time hereafter,
hereby acknowledging that the name SportsQuest is owned by Domark.
(d)
Operation of Business. Commencing on the date of this Agreement and up to and
including the Closing Date, the Purchaser and the Selling Parties shall not
cause or permit the Company to take any action, or enter into any transaction
except for ministerial matters necessary to maintain the Company in good
standing and to arrange for the filing of all necessary reports required under
the Securities Act and the Securities Exchange Act. Without limiting the
generality of the foregoing, the Purchaser and/or the Seller will not cause
or
permit the Company to (i) declare, set aside, or pay any dividend or make any
distribution with respect to its capital stock or redeem, purchase, or otherwise
acquire any of its capital stock, (ii) issue, sell, or otherwise dispose of
any
of its capital stock, or grant any options, warrants, preemptive or other rights
to purchase or obtain (including upon conversion, exchange, or exercise) any
of
its capital stock, (iii) make any capital expenditures, loans, or incur any
other obligations or liabilities, (iv) enter into any agreements involving
expenditures individually, or in the aggregate, of more than $1,000 (v) enter
into any agreement or incur any other commitment (vi) otherwise engage in any
practice, take any action, or enter into any transaction that is inconsistent
with the transactions contemplated hereby, or (vii) assist any person, or agree
to assist any person, in taking the actions described in (i) through (vi) of
this Provision.
14. Termination.
Termination
of Agreement.
The
Parties may terminate this Agreement as provided below:
(a)
The
Purchaser, the Company and the Selling Parties may terminate this Agreement
by
mutual written agreement of all of the parties at any time prior to the Closing;
(b) The
Purchaser may terminate this Agreement by giving written notice to the Sellers
Representative at any time prior to the Closing if (A) in the event the Selling
Parties have breached any material representation, warranty, or covenant
contained in this Agreement in any material respect and the Purchaser has
notified the Sellers Representative of the breach, and the breach has continued
without cure for a period of five (5) days after the notice of breach; (C)
if
the Closing shall not have occurred by reason of the failure of any condition
precedent under Section 13 (a), hereof (unless the failure results primarily
from the Purchaser themselves breaching any representation, warranty, or
covenant contained in this Agreement).
(c) The
Company and/or the Selling Parties may terminate this Agreement by giving
written notice to the Purchaser at any time prior to the Closing (A) in the
event the Purchaser has breached any material representation, warranty, or
covenant contained in this Agreement in any material respect, and the Company,
the Selling Parties as the case may be, have notified the Purchaser of the
breach, and the breach has continued without cure for a period of five (5)
days
after the notice of breach or (B) if the Closing shall not have occurred by
reason of the failure of any condition precedent under Section 13 (b), hereof
(unless the failure results primarily from the Company, the Selling Parties
themselves breaching any representation, warranty, or covenant contained in
this
Agreement).
(d)
Except as aforesaid and subject to the provisions of Section 13 above, if this
Agreement terminates pursuant to this Section 16, all rights and obligations
of
the Parties hereunder shall terminate without any Liability of any Party to
any
other Party, except for any Liability of a Party that is then in
breach.
10
15. Miscellaneous.
(a)
Facsimile
Execution and Delivery. Facsimile execution and delivery of this Agreement
is
legal, valid and binding execution and delivery for all purposes.
(b) Confidentiality;
Press Releases and Public Announcements. Except as and to the extent required
by
law, no Party will disclose or use and will direct its representatives not
to
disclose or use any information with respect to the transaction that is the
subject of this Agreement, without the consent of the other Parties. No Party
shall issue any press release or make any public announcement relating to the
subject matter of this Agreement without the prior written approval of the
Purchaser and the Seller Representative; provided, however, that the Company
may
make any public disclosure it believes in good faith is required by applicable
law or any listing or trading agreement concerning its publicly-traded
securities (in which case the Seller Representative and the Company will use
their best efforts to advise the other Parties prior to making the
disclosure).
(c) No
Third-Party Beneficiaries. This Agreement shall not confer any rights or
remedies upon any person other than the Parties hereto and their respective
successors and permitted assigns.
(d)
Entire Agreement. This Agreement (including the documents referred to 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.
(e)
Succession and Assignment. This Agreement shall be binding upon and inure to
the
benefit of the Parties named herein and their respective successors and
permitted assigns. No Party may sell, assign or otherwise transfer or have
a
third party secure a present or future interest in either this Agreement or
any
of his or its rights, interests, or obligations hereunder without the prior
written approval of all of the Purchaser, the Company and the Selling
Parties.
(f)
Counterparts. This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original but all of which together will constitute
one and the same instrument effective as of the date first
above-written.
(g)
Headings. The Section headings contained in this Agreement are inserted for
convenience only and shall not affect in any way the meaning or interpretation
of this Agreement.
(h)
Notices. All notices, requests, demands, claims, and other 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 Selling Parties
|
R.
Xxxxxx Xxxx
|
|
0000
Xxxx Xxxxxxxx #000
|
|
|
If
to the Company
|
Xxxxxx,
Xxxxxxx 00000
|
|
If
to the Purchaser:
|
Mecanismo
Corp (Nevada)
|
|
0000
Xxxxxxx Xxxxx
|
|
|
Xxxxxx
Xxxxx XX 00000
|
11
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
communications hereunder are to be delivered by giving the other Parties written
or electronic notice in the manner herein above set forth.
(i) Governing
Law. This Agreement shall be governed by and construed in accordance with the
domestic laws of the State of Florida without giving effect to any choice or
conflict of law provision or rule (whether of the State of Florida or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Florida.
(j) 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 Purchaser, the Company,
the Selling Parties or the Seller Representative, acting on their behalf. No
waiver by any Party of any default, misrepresentation, or breach of warranty
or
covenant hereunder, whether intentional or not, shall be valid unless written,
and shall not constitute a waiver of any prior or subsequent default,
misrepresentation, or breach of the same or any other warranty or covenant
hereunder, or affect in any way any rights arising by virtue of any prior or
subsequent such occurrence.
(k)
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.
(l)
Expenses. Each of the Parties and the Company will bear his or its own costs
and
expenses (including legal fees and expenses) incurred in connection with this
Agreement and the transactions contemplated hereby.
(m)
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 or local 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. The Parties intend that each representation,
warranty, and covenant contained herein shall have independent significance.
If
any Party has breached any representation, warranty, or covenant contained
herein in any respect, the fact that there exists another representation,
warranty, or covenant relating to the same subject matter (regardless of the
relative levels of specificity) which the Party has not breached shall not
detract from or mitigate the fact that the Party is in breach of the first
representation, warranty, or covenant.
(n)
Incorporation of Exhibits and Schedules. The Exhibits and Schedules identified
in this Agreement are incorporated herein by reference and made a part
hereof.
(o) Submission
to Jurisdiction. Each of the Parties submits to the jurisdiction of
any
state
court sitting in Orange County, Florida or Federal court sitting in Orlando,
Florida 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 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. Any Party may make service on any other Party by
sending or delivering a copy of the process to the Party to be served at the
address and in the manner provided for the giving of notices in Section 17
(h)
above.
(This
is
the end of the Page)
12
IN
WITNESS WHEREOF, each of the undersigned have duly executed this Agreement
the
date first above written.
| Purchaser | Selling Parties: | |||
| Mecanismo Corp | ||||
| Domark International, Inc. | ||||
| By: | By: | |||
| Name: | Name: R. Xxxxxx Xxxx | |||
| Title: | Title: Chief Executive Officer | |||
| R. Xxxxxx Xxxx | ||||
13
SCHEDULE
A
|
|
Number
of Company
|
|||
|
Selling
Parties
|
Address
|
Shares
Owned
|
||
|
Domark
International, Inc.
|
0000
Xxxx Xxxxxxxx #000
|
100,000
Preferred Series A
|
||
|
Xxxxxx,
Xxxxxxx 00000
|
||||
|
R.
Xxxxxx Xxxx,
|
0000
Xxxx Xxxxxxxx #000
|
9,973,397
common shares
|
||
|
as
representative
|
Xxxxxx,
Xxxxxxx 00000
|
|||
|
Of
selling parties common
|
14
SCHEDULE
1(b) Promissory Note
FOR
VALUE
RECEIVED, $100,000.00 (ONE HUNDRED THOUSAND US DOLLARS) the undersigned,
Mecanismo Corp (“PAYEE”) Hereby promises to pay to the order of Domark
International, Inc (‘DOMK”) (“MAKER”), at Makers venue or at such other place or
places as Maker may from time to time designate in writing, the principal sum
of
$100,000 . Together with interest on the principal balance upon maturity
outstanding as hereinafter set forth.
|
A. Interest
Rate.
From the date of this Promissory Note (the “Note”)
until the occurrence of an event set forth in Section C below, the
principal balance from time to time unpaid shall bear interest, and
Maker
promises to pay such interest, at a rate of 1% percent per annum
upon
maturity.
After
the earliest of (i) the Maturity Date (as hereafter defined), whether
by
acceleration or otherwise, (ii) the occurrence of any default in
the
payment of any installment of interest on the date due and payable,
or
(iii) the occurrence of any other Event of Default (as hereafter
defined),
hereunder, the total unpaid indebtedness hereunder shall bear interest
at
a rate of one percent (1%) plus the rate of interest otherwise chargeable
hereunder (the “Default
Rate”).
Interest
shall be computed on the basis of a 360 day year and charged for
the
actual number of days elapsed. Interest accrued from the date of
this Note
shall be due and payable on the Maturity Date (as hereafter
defined).
B. Maturity
Date; Payment.
Unless the Principle and outstanding interest is previously forgiven
by
vote of the Board of Directors of the Payee in the course of the
Payee’s
business, the Maker shall repay the principal amount of this Note,
and any
interest accrued thereon then remaining unpaid, on the Maturity Date
(as
hereafter defined). Notwithstanding the foregoing, the entire principal
balance of this Note then outstanding, plus any accrued and unpaid
interest thereon shall be due and payable on the earliest of (a)
October
20th
2009 (365 days hence) or (b) such earlier date on which said amount
shall
become due and payable on account of acceleration by Payee (the
“Maturity
Date”).
Maker agrees that, on the Maturity Date, Maker will pay to Payee
the
entire principal balance of this Note then outstanding, together
with all
accrued and unpaid interest hereunder.
C. Default;
Remedies.
Any one of the following occurrences shall constitute an “Event
of Default”
under this Note: (i) failure by the Maker to make any payment of
principal
or interest when the same becomes due and payable, said failure continuing
for thirty (30) days or more; or (ii) if Maker shall fail to pay
its
debts, make an assignment for the benefit of its creditors, or shall
commit an act of bankruptcy, or shall admit in writing its inability
to
pay its debts as they become due, or shall seek a composition,
readjustment, arrangement, liquidation, dissolution or insolvency
proceeding under any present or future statute or law, or shall file
a
petition under any chapter of federal Bankruptcy Code or any similar
law,
state or federal, now or hereafter existing, or shall become “insolvent”
as that term is generally defined under the Federal Bankruptcy Code,
or
shall in any involuntary bankruptcy case commenced against it file
an
answer admitting insolvency or inability to pay its debts as they
become
due, or shall fail to obtain a dismissal of such case within sixty
(60)
days after its commencement or convert the case from one chapter
of the
Federal Bankruptcy Code to another chapter, or be the subject of
an order
for relief in such bankruptcy case, or to be adjudged a bankruptcy
or
insolvent, or shall have a custodian, trustee or receiver appointed
for,
or have any court take jurisdiction of its property, or any part
thereof,
in any proceeding for the purpose of reorganization, arrangement,
dissolution or liquidation, and such custodian, trustee, liquidator
or
receiver shall not be discharged, or such jurisdiction shall not
be
relinquished, vacated or stayed within sixty (60) days of the
appointment.
Upon
occurrence of an Event of Default hereunder, the entire outstanding
principal balance and any unpaid interest then accrued under this
Note,
shall at the option of the Payee hereof and without demand or notice
of
any kind to the undersigned or any other person (including, but not
limited to, any guarantor now or hereafter existing), immediately
become
and be due and payable in full. In such event, Payee shall have and
may
exercise any and all rights and remedies available at law or in
equity.
|
D. Assignment.
No
assignment of this Note in whole or in part, or of any interest hereunder,
shall be effective or binding upon the Maker until such transfer
or
assignment shall have been duly recorded on the books of the Maker
to be
maintained for such purpose, and any transfer or assignment hereof
shall
require surrender hereof to the Maker at its principal office accompanied
by an appropriate instrument of transfer or assignment in form
satisfactory to the Maker, provided that the Maker may not and cannot
be
compelled or required to act or effectuate any such assignment or
transfer
except after compliance by the Payee or holder hereof with securities
laws
or regulations deemed applicable by the Maker. Neither may this Note
or
any interest hereunder be pledged or hypothecated except upon compliance
with the foregoing.
E. Waiver
Amendment.
Maker, for itself and for its successors, transferees and assigns
hereby
irrevocably (i) waives diligence, presentment and demand for payment,
protest, notice, notice of protest and nonpayment, dishonor and notice
of
dishonor and all other demands or notices of any and every kind
whatsoever, and (ii) agrees that this Note and any or all payments
coming
due hereunder may be extended from time to time in the sole discretion
of
Payee hereof without in any way affecting or diminishing Maker’s liability
hereunder.
No
extension of the time for any payment due hereunder made by agreement
with
any person now or hereafter liable for payment of this Note shall
operate
to release, discharge, modify, change or affect the original liability
under this Note, either in whole or in part. No delay in the exercise
of
any right or remedy hereunder by Payee shall be deemed to be a waiver
of
such right or remedy, nor shall the exercise of any right or remedy
hereunder by Payee be deemed an election of remedies or a waiver
of any
other right or remedy. Without limiting the generality of the foregoing,
the failure of the Payee promptly after the occurrence of any default
hereunder to exercise its right to declare the indebtedness remaining
unmatured hereunder to be immediately due and payable shall not constitute
a waiver of such right while such default continues nor a waiver
of such
right in connection with any future default.
G. Governing
Law and Jurisdiction.
This Note has been executed and shall be governed by and construed
in
accordance with the internal laws of the State of Florida.
IN
WITNESS WHEREOF, Maker & Payee have caused this Note to be executed
and delivered as of the date and year first above written.
______________________
PAYEE
Mecanismo
Corp
By:
___________________________
MAKER
|
15
