STOCK PURCHASE AGREEMENT
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THIS STOCK PURCHASE AGREEMENT ("Agreement") is entered into this 23rd day
of January, 2006, by and among ISTORAGE NETWORKS, INC. (F/K/A CAMRYN INFORMATION
SERVICES, INC)., a Delaware corporation (hereinafter referred to as "Buyer");
the individuals set forth on Schedule A hereto, (hereinafter collectively
referred to as "Sellers"), being the sole members of LANDBANK, LLC, a California
limited liability company (hereafter referred to as "Company"), and the
individuals set forth on Schedule B hereto, being the holders of the majority of
the outstanding shares of Buyer (collectively, the "Transferring Shareholders").
WHEREAS, Seller is the owner of record and beneficially owns all of the
membership interests in the Company ("Interests"); and
WHEREAS, Sellers desires to sell all of the Interests to Buyer, and Buyer
desires to purchase the Interests, upon the terms and conditions set forth
herein;
WHEREAS, pursuant to a separate share purchase agreement entered into as of
eventdate herewith between Buyer and the Transferring Shareholders (the
"Subsidiary Transfer Agreement"), Buyer has agreed to transfer to Transferring
Shareholders, and Transferring Shareholders have agreed to acquire, all of the
issued and outstanding shares in Buyer's wholly-owned subsidiary, Istorage
Networks Group, Inc. ("Transferred Subsidiary"), in exchange for Transferring
Shareholders agreeing to transfer all of the shares of Buyer owned by
Transferring Shareholders pursuant to and in accordance with the terms and
provisions of this Agreement;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, and for other good and valuable consideration, the receipt,
adequacy and sufficiency of which are hereby acknowledged, and subject to the
accuracy of the representations and warranties of the parties, the parties
hereto agree as follows:
I.
SALE AND PURCHASE OF THE INTERESTS
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1.1 Sale and Purchase. Subject to the terms and conditions hereof, at the
Closing (as defined in paragraph 1.2 below), Seller agrees to sell, assign,
transfer, convey and deliver to Buyer, and Buyer agrees to purchase from Seller,
the Interests which together constitute 100% of the issued and outstanding
Interests of the Company.
1.2 Closing. The purchase shall be consummated at a closing ("Closing") to
take place at 11:00 a.m., at the offices of Buyer's counsel on January 25, 2006
("Closing Date").
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1.3 Consideration.
(a) The aggregate consideration for the Interests shall be Eighty-Two
Million (82,000,000) shares of Common Stock of Buyer ("Buyer Shares"), par
value $0.0001 per share, credited as fully paid (the "Consideration
Shares"). Each Seller shall be entitled to receive the amount of
Consideration Shares set out opposite each Seller's respective name in
Schedule A. The Consideration Shares are restricted securities as that term
is defined under Rule 144 promulgated under the Securities Act of 1933, as
amended (the Securities Act).
(b) The consideration shall be paid at Closing, by transfer and
delivery of the Consideration Shares to Seller against receipt of
certificates representing the Interests, duly endorsed for transfer to
Buyer. Each of the Transferring Shareholders hereby agrees, subject to the
terms and conditions of this Agreement, to transfer to Sellers, the
Consideration Shares held by each Transferring Shareholder as set forth
against each Transferring Shareholder's name on Schedule B. Each
Transferring Shareholder irrevocably waives any right of preemption or
other restriction on transfer in respect of the Consideration Shares
conferred on him under the organizational documents of Buyer, any
shareholders agreement or otherwise.
(c) The Consideration Shares shall rank pari passu with the existing
shares of common stock of Buyer including the right to receive all
dividends declared, made or paid after Closing.
1.4 Other Agreements; Deliverables. At the Closing, the indicated parties
shall execute and deliver the following additional agreements and/or documents
in substantially the form attached hereto:
(a) Sellers shall deliver to Buyer original certificates representing
all of the Interests, duly endorsed to Buyer and in blank or assignments
separate from the certificates, transferring the Interests from Seller to
Buyer (the "Membership Certificates");
(b) The Transferring Shareholders shall deliver to Xxxxx Stock
Transfer, Inc., as Buyer's authorized stock transfer agent ("Authorized
Transfer Agent") original certificates representing the Consideration
Shares, duly endorsed for transfer to Sellers in accordance with the
amounts set forth in Schedule A (the "Consideration Share Certificates");
(c) Buyer shall cause the Authorized Transfer Agent to register the
transfer of the Consideration Shares to Sellers in Buyer's stock transfer
records;
(d) Buyer shall deliver: (i) a copy of the resolutions passed by the
board of directors of Buyer (a) approving the terms of the Transaction and
the entering into and delivery of the Transaction Documents, (b)
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authorizing the directors to instruct the Authorized Transfer Agent to
effect the transfer on the stock transfer ledger of Buyer ("Buyer's
Resolutions") and (ii) a copy of the written consent delivered by the
holders of the requisite number of Buyer Shares, approving the terms of the
Transaction ("Shareholder Consent");
(e) Buyer shall deliver an opinion of its outside legal counsel in
accordance with Section 5.6 ("Opinion of Counsel");
(f) Buyer and the Transferring Shareholders shall execute and deliver
the Subsidiary Transfer Agreement in the form attached hereto as Exhibit B;
(g) Buyer shall deliver the letters of resignation in accordance with
Section 5.8.
1.5 Transaction Documents and Transactions Defined. This Agreement, the
Subsidiary Transfer Agreement and other documents listed in paragraph 1.4, are
sometimes referred to as the "Transaction Documents." The transactions
contemplated by the Transaction Documents are sometimes referred to as the
"Transactions."
II.
REPRESENTATIONS AND WARRANTIES
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2.1 Representations and Warranties of Sellers. Sellers represent and
warrant to Buyer as follows:
(a) Title to the Interests. As of the date hereof Sellers own, and at
Closing, Sellers shall own of record and beneficially the number of the
Interests listed on Schedule A, of the Company, free and clear of all
liens, encumbrances, pledges, claims, options, charges and assessments of
any nature whatsoever, with full right and lawful authority to transfer the
Interests to Buyer. The rights with respect to the Interests are governed
solely by the Company's operating agreement attached hereto as Exhibit C
(the "Operating Agreement"). There exists no voting agreement, voting
trust, or outstanding proxy with respect to any of the Interests. There are
no outstanding rights, options, warrants, calls, commitments, or any other
agreements of any character, whether oral or written, with respect to the
Interests.
(b) Organization. The Company is a limited liability company duly
formed, validly existing and in good standing under the laws of the state
of California. The Company has all requisite power and authority to own,
lease and operate its properties and to carry on its business.
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(c) Authority. Sellers have full power and lawful authority to execute
and deliver the applicable Transaction Documents and to consummate and
perform the relevant Transactions contemplated thereby. The applicable
Transaction Documents constitute (or shall, upon execution, constitute)
valid and legally binding obligations upon Sellers, enforceable in
accordance with their terms. Neither the execution and delivery of the
applicable Transaction Documents by Sellers, nor the consummation and
performance of the Transactions contemplated thereby, conflicts with,
requires the consent, waiver or approval of, results in a breach of or
default under, or gives to others any interest or right of termination,
cancellation or acceleration in or with respect to, any agreement by which
Sellers or the Company is a party or by which Sellers or the Company or any
of their respective properties or assets are bound or affected.
(d) Company Financial Statements. The Company financial statements
delivered to Buyer are complete, were prepared in accordance with generally
accepted accounting principles applied on a basis consistent with prior
periods and fairly present the financial position of the Company as of
December 31, 2005.
(e) Liabilities. Except as set forth in the financial statements,
Sellers are not aware of any liabilities for which the Company is liable or
will become liable in the future.
(f) Books and Records. The books and records of the Company are
complete and correct in all material respects, have been maintained in
accordance with good business practices and accurately reflect in all
material respects the business, financial condition and results of
operations of the Company as set forth in the Company financial statements.
(g) Validity. To Sellers' knowledge all material contracts,
agreements, leases and licenses to which the Company is a party or by which
it or any of its properties or assets are bound or affected, are valid and
in full force and effect; and no breach or default exists, or upon the
giving of notice or lapse of time, or both, would exist, on the part of the
Company or by any other party thereto.
(h) No Adverse Changes. Since December 31, 2005, there have been no
actual or threatened developments of a nature that is materially adverse to
or involves any materially adverse effect upon the business, financial
condition, results of operations, assets, liabilities, or prospects of the
Company.
(i) Investment Intent. Sellers are acquiring the Consideration Shares
for their own account, for investment purposes only, and not with a view to
the sale or distribution of any part thereof, and Sellers have no present
intention of selling, granting participation in, or otherwise distributing
the same. Sellers understand the specific risks related to an investment in
the Buyer Shares, especially as it relates to the financial performance of
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the Buyer. Each Seller is a sophisticated investor with such knowledge and
experience in business and financial matters as to be capable of evaluating
the risks and merits of an investment in the Consideration Shares, and has
had made its own independent investigation and evaluation of the
Consideration Shares and its own estimate of the value thereof.
(j) Full Disclosure. All statements of Sellers contained in this
Agreement and in any other written documents delivered by or on behalf of
the Company or Sellers to Buyer are true and correct in all material
respects and to Sellers' knowledge do not omit any material fact necessary
to make the statements contained therein not misleading in light of the
circumstances under which they were made. There are no facts known to
Sellers which could have a materially adversely affect upon the business,
financial condition, results of operations, assets, liabilities, or
prospects of the Company, which have not been disclosed to Buyer.
2.2 Representations and Warranties of Buyer and Transferring Shareholders.
Buyer and the Transferring Shareholders represent and warrant to Sellers as
follows:
(a) Title to the Consideration Shares. As of the date hereof and at
Closing, the Transferring Shareholders own and shall own of record and
beneficially the number of the Consideration Shares listed against each
Transferring Shareholder's name on Schedule B, free and clear of all liens,
encumbrances, pledges, claims, options, charges and assessments of any
nature whatsoever, with full right and lawful authority to transfer the
Consideration Shares to Sellers. No person has any preemptive rights or
rights of first refusal with respect to any of the Buyer Shares. There
exists no voting agreement, voting trust, or outstanding proxy with respect
to any of the Buyer Shares. There are no outstanding rights, options,
warrants, calls, commitments, or any other agreements of any character,
whether oral or written, with respect to the Buyer Shares.
(b) Organization. Buyer is a corporation duly incorporated, validly
existing and in good standing under the laws of the state of Delaware.
Buyer has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business. Buyer is duly
qualified and in good standing as a foreign corporation in each
jurisdiction where its ownership of property or operation of its business
requires qualification. There is no threatened or pending action (or basis
therefore) for the dissolution, liquidation or insolvency of Buyer.
(c) Subsidiaries. As of the date hereof, Buyer does not and, as of the
Closing Date, Buyer shall not own, in whole or in part, or have any
interest of any nature in any other entity or person.
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(d) Authority. Buyer has full power and lawful authority to execute
and deliver the Transaction Documents and to consummate and perform the
Transactions contemplated thereby. The Transaction Documents constitute (or
shall, upon execution, constitute) valid and legally binding obligations
upon Buyer, enforceable in accordance with their terms. Neither the
execution and delivery of the Transaction Documents by Buyer, nor the
consummation and performance of the Transactions contemplated thereby,
conflicts with, requires the consent, waiver or approval of, results in a
breach of or default under, or gives to others any interest or right of
termination, cancellation or acceleration in or with respect to, any
agreement by which Buyer is a party or by which Buyer or any of its
properties or assets are bound or affected. Buyer's board of directors has
conducted an independent review of the terms of the Transactions as a whole
and has determined that the Transactions contemplated hereunder are fair to
Buyer's stockholders (including minority stockholders), and has adopted a
resolution stating that the board of directors has determined that the
Transactions are fair to Buyer and in the best interests of Buyer and its
stockholders.
(e) Status of Transferring Shareholders. Each Transferring Shareholder
is an individual, with the requisite competence and authority to execute
and deliver this Agreement, the Subsidiary Transfer Agreement, and any
other applicable Transaction Documents, and to perform and consummate the
Transactions. This Agreement and the other applicable Transaction Documents
have been duly authorized, executed and delivered by, and constitute (or
shall, upon execution, constitute) valid and legally binding obligations
upon each Transferring Shareholder, enforceable in accordance with their
terms. Neither the execution and delivery of the Transaction Documents by
any of the Transferring Shareholders, nor the consummation and performance
of the Transactions contemplated thereby, conflicts with, requires the
consent, waiver or approval of, results in a breach of or default under, or
gives to others any interest or right of termination, cancellation or
acceleration in or with respect to, any agreement by which any of the
Transferring Shareholders is a party or by which any of the Transferring
Shareholders or any of its properties or assets are bound or affected.
(f) Authorized Capitalization. The authorized capitalization of Buyer
consists of One Billion (1,000,000,000) shares of Common Stock, par value
$.0001, of which Ninety-Two Million Seventy Two Thousand (92,072,000)
shares have been issued and are outstanding as of the date hereof and at
Closing (the "Buyer Shares"). Of the outstanding Buyer Shares, 82,070,000
are restricted securities. The outstanding Buyer Shares, including without
limitation the Consideration Shares have been duly authorized, validly
issued and are fully paid and non-assessable with no personal liability
attaching to the ownership thereof and were offered, issued, sold and
delivered by Buyer in compliance with all applicable state and federal
laws. There are no outstanding rights, SARs, options, warrants, calls,
commitments, pre-emptive rights, conversion or any other agreements of any
character, whether oral or written, obligating Buyer to issue or redeem any
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shares of its capital stock, whether authorized or not. Buyer is not party
to, and is not bound by any agreement, contract, arrangement or
understanding, whether oral or written, giving any person or entity any
interest in, or any right to share, participate in or receive any portion
of, Buyer's income, profits or assets, or obligating Buyer to distribute
any portion of its income, profits or assets.
(g) Capitalization of Transferred Subsidiary. The authorized
capitalization of Subsidiary consists of 100 shares of common stock, par
value ____, of which 100 shares have been issued and are outstanding as of
the date hereof and at Closing. There exists no voting agreement or
outstanding proxy with respect to any of the shares, which shares are free
and clear of all liens, encumbrances, pledges and claims of any nature.
There are no options, warrants, calls, commitments, conversions or any
other rights or agreements outstanding obligating the Transferred
Subsidiary to issue any shares of its capital stock.
(h) Consents and Approvals. No consent or approval of any third party
is necessary for the consummation by Buyer and the Transferring
Shareholders of the Transaction. Without limiting the foregoing, Buyer is
not required to provide notice to any of its stockholders, hold a meeting
of its stockholders or solicit any additional shareholder approval of the
Transactions or the execution and delivery of the Transaction Documents,
other than the Shareholder Consent.
(i) Buyer Financial Statements. The Buyer Financial Statements are
complete, were prepared in accordance with generally accepted accounting
principles applied on a basis consistent with prior periods and fairly
present the financial position of the Buyer as of September 30, 2005. Other
than the operations of the Transferred Subsidiary, Buyer has not engaged in
any business since 1999.
(j) Contingent Liabilities. There are no contracts or commitments or
other liabilities of any kind or nature under or for which Buyer is liable
as of the Closing other than its obligations under the Subsidiary Transfer
Agreement and none of the Transferring Shareholders are aware of any
liabilities for which Buyer is liable or will become liable in the future.
There are no actions or suits or regulatory or governmental proceedings
pending, or to Buyer's or any of the Transferring Shareholders' knowledge
threatened, against Buyer.
(k) Taxes. Buyer has filed all federal, state, local tax and other
returns and reports which were required to be filed with respect to all
taxes, levies, imposts, duties, licenses and registration fees, charges or
other withholdings of every nature whatsoever ("Taxes"), and there exists a
substantial basis in law and fact for all positions taken in such returns
and reports. Buyer has paid all taxes shown to be due on such returns and
reports. No waivers of periods of limitation are in effect with respect to
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any Taxes arising from or attributable to the ownership of properties or
operations of the business of Buyer or the Transferred Subsidiary.
(l) Compliance with Laws. The Buyer is not in violation of any
federal, state, local or other law, ordinance, rule or regulation
applicable to its business and has not received any actual or threatened
complaint, citation or notice of violation or investigation from any
governmental authority.
(m) No Adverse Change. Since September 30, 2005, there have been no
actual or threatened developments of a nature that is materially adverse to
or involves any materially adverse effect upon the business, financial
condition, results or operations, assets, liabilities or prospects of the
Buyer.
(n) Directors, Officers and Employees. The persons listed on Exhibit D
attached hereto and made a part hereof constitute all of the directors and
officers of Buyer. Neither Buyer nor Transferred Subsidiary has any other
employees. Buyer does not maintain any employee benefits plans.
(o) Full Disclosure. All statement of Buyer contained in the
Transaction Documents and in any other written documents delivered by or on
behalf of the Buyer to Sellers are true and correct in all material
respects and do not omit any material fact necessary to make the statements
contained therein not misleading in light of the circumstances under which
they were made. There are no facts known to Buyer or any of the
Transferring Shareholders which could have a materially adversely affect
upon the business, financial condition, results of operations, assets,
liabilities, or prospects of the Buyer, which have not been disclosed to
Sellers in the Transaction Documents.
(p) Assets and Liabilities. As of the date hereof Buyer does not, and
at Closing, Buyer will not, have any tangible assets nor will there be any
liabilities outstanding.
(q) Material Contracts. Neither Buyer nor Transferred Subsidiary is
party to any material contract nor any contract which will require Buyer or
Subsidiary to make payments, or under which Buyer expects it or Subsidiary
to receive revenues, of more than $100 after the Closing Date.
(r) Intellectual Property. Exhibit E is a complete list of all
patents, patent applications, patent licenses, trademarks, trademark
licenses, trade names and service marks which are material to the business
of Buyer and/or Subsidiary. No officer of Buyer or Subsidiary has been
informed of any claim, or is aware, that Buyer or Subsidiary is violating
any patent, trademark or service xxxx, or unlawfully using any trade secret
or other intellectual property or otherwise infringing the rights of any
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other person. The Transactions will not require the consent of any party to
any patent license, trademark license or other intellectual property rights
to which Buyer or Subsidiary is a party.
(s) Real Property. Buyer does not own or lease any real property. The
real property lease dated December 16, 2004 by and between J&C Realty
Trust, as Lessor, and Buyer, as Lessee, in the form provided to Sellers
(the "Lease"), constitutes the sole lease of real property to which Buyer
or Transferred Subsidiary was a party or is bound and has been duly
assigned to and assumed by OED Storage Inc. as of January 9, 2006. There
are no outstanding liabilities of Buyer or Transferred Subsidiary under the
Lease.
(t) No Litigation. There is no suit, action or other proceeding
pending or threatened against Seller or Transferred Subsidiary.
III.
COVENANTS
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3.1 Covenants of Sellers. Sellers covenant and agree that from the date
hereof to the Closing:
(a) Ordinary Course of Business. Sellers will operate the business of
the Company only in the ordinary course and will use their best efforts to
preserve the Company's business, organization, goodwill and relationships
with persons having business dealings with them.
(b) Maintain Properties. Sellers will maintain all of the Company's
properties in good working order, repair and condition (reasonable wear and
use excepted) and cause the Company to take all steps reasonably necessary
to maintain in full force and effect its patents, trademarks, servicemarks,
trade names, brand names, copyrights and other intangible assets.
(c) No Indebtedness. Sellers will not without the prior written
consent of Buyer, permit the Company to create, incur, assume, guarantee or
otherwise become liable with respect to any obligation for borrowed money,
indebtedness, capitalized lease or similar obligation, except in the
ordinary course of business consistent with past practices where the entire
net proceeds thereof are deposited with and used by and in connection with
the business of the Company.
(d) Maintain Books. Sellers will cause the Company to maintain its
books, accounts and records in the usual, regular ordinary and sound
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business manner and in accordance with generally accepted accounting
principles applied on a basis consistent with past practices.
(e) No Amendments. Sellers will not permit the Company to amend its
Operating Agreement (or similar documents) without prior consent of Buyer
and will cause the Company to maintain its existence, licenses, permits,
powers and rights in full force and effect.
(f) Taxes and Accounting Matters. Sellers will cause the Company to
file when due all federal, state and local tax returns and reports which
shall be accurate and complete, including but not limited to income,
franchise, excise, ad valorem, and other taxes with respect to its business
and properties, and to pay as they become due all taxes or assessments,
except for taxes for which adequate reserves are established and which are
being contested in good faith by appropriate proceedings. Sellers will not
permit the Company to materially change its accounting methods or practices
or any depreciation, amortization or inventory valuation policies or
practices.
(g) Due Compliance. Sellers will cause the Company to comply with all
material laws, regulations, rules and ordinances applicable to it and to
the conduct of its business.
(h) Notice of Change. Sellers will promptly advise Buyer in writing of
any material adverse change, or the occurrence of any event which involves
any substantial possibility of a material adverse change, in the business,
financial condition, results of operations, assets, liabilities or
prospects of the Company.
(i) Consents. Sellers will use their, and will cause the Company to
use its, best good faith efforts to obtain the consent or approval of each
person or entity whose consent or approval is required for the consummation
of the Transactions contemplated hereby and to do all things necessary to
consummate the Transactions contemplated by this Agreements.
3.2 Covenants of Transferring Shareholders. The Transferring Shareholders
covenant and agree that from the date hereof and until the Closing:
(a) Ordinary Course of Business. Transferring Shareholders will
operate or cause to be operated the business of the Company only in the
ordinary course and will use their best efforts to preserve the Company's
business, organization, goodwill and relationships with persons having
business dealings with them.
(b) Maintain Properties. Transferring Shareholders will maintain or
cause to be maintained all of the Company's properties in good working
order, repair and condition (reasonable wear and use excepted) and cause
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the Company to take all steps reasonably necessary to maintain in full
force and effect its patents, trademarks, servicemarks, trade names, brand
names, copyrights and other intangible assets.
(c) No Indebtedness. The Transferring Shareholders will not permit
Buyer to create, incur, assume, guarantee or otherwise become liable with
respect to any obligation for borrowed money, indebtedness, capitalized
lease or similar obligation, except in the ordinary course of business
consistent with past practices where the entire net proceeds thereof are
deposited with and used by and in connection with the business of the
Buyer. The Buyer shall not loan or advance any funds or credit to
Transferred Subsidiary or any third party.
(d) Maintain Books. The Transferring Shareholders will cause the Buyer
to maintain its books, accounts and records in the usual, regular ordinary
and sound business manner and in accordance with generally accepted
accounting principles applied on a basis consistent with past practices.
(e) No Amendments. The Transferring Shareholders will not permit Buyer
to amend its Certificate of Incorporation or by-laws (or similar documents)
without prior consent of Sellers and will cause the Buyer to maintain its
corporate existence, licenses, permits, powers and rights in full force and
effect.
(f) Taxes and Accounting Matters. The Transferring Shareholders will
cause Buyer to file when due all federal, state and local tax returns and
reports which shall be accurate and complete, including but not limited to
income, franchise, excise, ad valorem, and other taxes with respect to its
business and properties, and to pay as they become due all taxes or
assessments, except for taxes for which adequate reserves are established
and which are being contested in good faith by appropriate proceedings. The
Transferring Shareholders will not permit Buyer to materially change its
accounting methods or practices or any depreciation, amortization or
inventory valuation policies or practices.
(g) Due Compliance. The Transferring Shareholders will cause Buyer to
comply with all material laws, regulations, rules and ordinances applicable
to it and to the conduct of its business.
(h) Notice of Change. The Transferring Shareholders will promptly
advise Sellers in writing of any material adverse change, or the occurrence
of any event which involves any substantial possibility of a material
adverse change, in the business, financial condition, results of
operations, assets, liabilities or prospects of Buyer.
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(i) Approvals. Buyer shall prepare and circulate on or prior to
closing a notice to shareholders in respect of the Transactions, and shall
obtain the necessary shareholder approval of the Transactions.
(j) Assignment of Lease. Buyer shall cause the Lease to be duly
assigned and shall cause the Landlord thereunder to consent to release
Buyer and its successors from all obligations and liabilities thereunder.
(k) Consents. The Transferring Shareholders will use their, and will
cause Buyer to use its, best good faith efforts to obtain the consent and
approval of each person or entity whose consent or approval is required for
the consummation of the Transactions contemplated hereby and to do all
things necessary to consummate the Transactions contemplated by this
Agreement.
(l) Intercompany Debt. Buyer shall cause to be repaid on or prior to
the Closing Date all intercompany indebtedness outstanding as of the date
of such repayment, together with accrued and unpaid interest thereon.
3.3 Mutual Covenants; Confidentiality. Except as otherwise expressly
contemplated herein, no party or its representatives shall use any confidential
information of any disclosing party for any purpose other than evaluation of the
Transactions, nor disclose to any third party the existence of this Agreement,
the subject matter or terms thereof or any confidential information concerning
the business or affairs of any disclosing party without the prior written
consent of such disclosing party, except as may be required pursuant to
applicable stock exchange or similar rules. For purposes of this paragraph,
"confidential information" shall mean any information in whatever form
concerning the business and affairs of a disclosing party and any and all
analyses, compilations, studies or other documents which contain or reflect any
such information, including this Agreement and the existence thereof, other than
information which is or becomes publicly available other than as a result of
disclosure by a receiving party or its representatives or by any third party in
breach of an obligation to keep such information confidential.
IV.
CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF BUYER TO CLOSE
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The obligation of Buyer to close the Transactions contemplated hereby is
subject to the fulfillment by Sellers on or prior to Closing of each of the
following conditions, which may be waived in whole or in part by Buyer:
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4.1 Compliance with Representations, Warranties and Covenants. The
representations and warranties of Sellers contained in this Agreement shall have
been true and correct when made and shall be true and correct as of the Closing
with the same force and effect as if made at the Closing. Sellers shall have
performed all agreements, covenants and conditions required hereunder to be
performed by Sellers prior to the Closing.
4.2 No Adverse Change. There shall have been no event occurring subsequent
to the date hereof which has had or may have a material adverse effect upon the
business, financial condition, results of operation, assets, liabilities or
prospects of the Company.
4.3 No Legal Proceedings. No suit, action or other legal or administrative
proceeding before any court or other governmental agency shall be pending or
threatened seeking to enjoin the consummation of the Transactions contemplated
hereby.
4.4 Documents to be Delivered by Sellers. Sellers shall have delivered the
following documents:
(a) The Membership Certificates, copies of which are attached as
Exhibit F.
(b) A copy of (i) the Articles of Organization of the Company; and
(ii) the Operating Agreement of the Company;
(c) Such other documents or certificates as shall be reasonably
required by Buyer in order to consummate the Transactions contemplated
hereunder.
V.
CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF SELLERS TO CLOSE
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The obligation of Sellers to close the Transactions is subject to the
fulfillment on or prior to Closing of each of the following conditions, any of
which may be waived in whole or in part by Sellers:
5.1 Compliance with Representations, Warranties and Covenants. The
representations and warranties made by Buyer and the Transferring Shareholders
in this Agreement shall have been true and correct when made and shall be true
and correct in all material respects at the Closing with the same force and
effect as if made at the Closing, and Buyer and the Transferring Shareholders
shall have performed all agreements, covenants and conditions required hereunder
and under the Subsidiary Transfer Agreement to be performed by Buyer and the
Transferring Shareholders prior to the Closing.
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5.2 No Legal Proceedings. No suit, action or other legal or administrative
proceedings before any court or other governmental agency shall be pending or
threatened seeking to enjoin the consummation of the Transactions contemplated
hereby.
5.3 Other Agreements. All parties other than Sellers and the Company shall
have executed and delivered the Transaction Documents.
5.4 Payments. Sellers shall have received the Consideration Shares to be
transferred at the Closing by the Transferring Shareholders pursuant to this
Agreement and the Subsidiary Transfer Agreement.
5.5 Notice to Shareholders. Buyer shall have delivered or concurrent with
the Closing shall deliver the notice to shareholders required pursuant to
Section 3.2(i).
5.6 Opinion of Counsel. Buyer shall have delivered an Opinion of Counsel
satisfactory to Sellers to the effect that (i) Buyer has all corporate power and
authority necessary to enable it to enter into this Agreement and the other
Transaction Documents and to carry out the Transactions; (ii) all corporate
actions necessary to authorize Buyer to enter into this Agreement and the other
Transaction Documents and to carry out the Transactions have been taken; (iii)
this Agreement and the Subsidiary Transfer Agreement has been duly executed by
Buyer and are valid and binding agreements of Buyer, enforceable against Buyer
in accordance with their terms, and (iv) neither the execution and delivery of
this Agreement and the other Transaction Documents nor the consummation of the
Transactions will violate, result in a breach of, or constitute a default under
the certificate of incorporation or by-laws of Buyer or any applicable law.
5.7 Deliverables. Buyer shall have delivered to Sellers the deliverables
set forth in Section 1.4(b)(c)(d) and (e).
5.8 Resignations. Buyer shall deliver to Sellers written resignations from
all of the persons listed on Exhibit D, such resignations to be effective as of
the Closing Date.
5.9 Subsidiary Transfer Agreement. The Subsidiary Transfer Agreement shall
be executed, delivered and in full force and effect, and the transactions
contemplated thereunder shall have or concurrent with closing of this Agreement
shall close, in accordance with the terms thereof.
5.10 Approvals. This Agreement, the Transaction Documents and the
Transactions contemplated hereunder and thereunder shall have been approved and
adopted by the requisite affirmative vote of the board of directors of Buyer, at
a meeting duly noticed and convened, and of the shareholders of Buyer, pursuant
to written consent, each in accordance with the laws of Delaware.
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5.11 Consideration Shares. The Amount of Consideration Shares shall
represent not less than 89% of the total issued and outstanding Buyer Shares.
5.12 Release Under Prior Acquisition Agreement. The Transferring
Shareholders shall have released Buyer in writing from any liability under that
certain stock purchase agreement dated November 12, 2004 pursuant to which the
Transferring Shareholders acquired Buyer shares in exchange for shares of
Subsidiary.
5.13 Release Under Lease Landlord consent to the assignment of the Lease
and release of Buyer from liabilities thereunder, in form and substance
satisfactory to Sellers, shall have been executed and delivered by Landlord and
the proposed assignee.
VI.
MODIFICATION, WAIVERS, TERMINATION
----------------------------------
6.1 Modification. Buyer and Seller may amend, modify or supplement this
Agreement in any manner as they may mutually agree in writing.
6.2 Waivers. Buyer and Seller may in writing extend the time for or waive
compliance by the other with any of the covenants or conditions of the other
contained herein.
6.3 Termination and Abandonment. This Agreement may be terminated and the
purchase of the Interests may be abandoned before the Closing:
(a) By the mutual consent of Seller and Buyer;
(b) By Buyer, if the representations and warranties of Seller set
forth herein shall not be accurate;
(c) By Seller, if the representations and warranties of Buyer set
forth herein shall not be accurate; or
(d) In the event the conditions precedent are not satisfied on or
prior to January 31, 2006 (the "Expiration Date"), either Buyer or Sellers
may, upon written notice, terminate the Agreement, provided however that
the party seeking termination is not in material breach of any of its
representations, covenants, representations or warranties contained in this
Agreement.
Termination shall be effective on the date of receipt of written notice
specifying the reasons therefor.
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6.4 Effect of Termination. In the event any party elects to terminate this
Agreement pursuant to Section 6.3, this Agreement shall terminate and have no
further effect, and no party shall have any further obligation or liability
hereunder or arising herefrom, except with respect to Sections 3.3, 7.2, 7.11
and this Article 6, each of which shall survive termination of this Agreement.
Notwithstanding the foregoing, such termination shall not relieve any party of
liability for any willful breach of this Agreement which occurs prior to
termination.
VII.
MISCELLANEOUS
-------------
7.1 Representations and Warranties to Survive. Unless otherwise provided,
all of the representations and warranties contained in this Agreement and in any
certificate, exhibit or other document delivered pursuant to this Agreement
shall survive the Closing for a period of two (2) years. No investigation made
by any party hereto or their representatives shall constitute a waiver of any
representation or warranty, and no such representation or warranty shall be
merged into the Closing.
7.2 Indemnification. (a) Each Transferring Shareholder, on a joint and
several basis, will indemnify and hold Sellers and Company harmless from any
damages, losses, liabilities, payments, amounts paid in settlement, fines,
penalties, costs (including reasonable attorneys fees) of any kind ("Damages")
suffered or incurred by Sellers or Company resulting from, relating to, arising
out of or attributable to (i) any breach of any representation or warranty of
Buyer or such Transferring Shareholder, (ii) any breach by Buyer or such
Transferring Shareholder of any covenant or obligation of Buyer or the
Transferring Shareholders in this Agreement or of any fiduciary duty owned to
Buyer or any stockholders of Buyer, or (iii) operation and ownership of the
Company and its subsidiaries prior to 11:59 pm EST on the Closing Date provided
that, in the case of Damages attributable to all or more than one Transferring
Shareholder, each Transferring Shareholder's liability shall be proportionate to
the value of the consideration received by such Transferring Shareholder
relative to the total consideration received.
(b) Each Seller, on a joint and several basis, will indemnify and hold
Transferring Shareholders and Buyer harmless from any Damages suffered or
incurred by Transferring Shareholders or Buyer resulting from, relating to,
arising out of or attributable to (i) any breach of any representation or
warranty of such Sellers, (ii) any breach by such Seller of any covenant or
obligation of the Sellers in this Agreement, or (iii) operation and ownership of
the Company and its subsidiaries after 11:59 pm EST on the Closing Date provided
that, in the case of Damages attributable to all or more than one Seller, each
Seller's liability shall be proportionate to the value of the consideration
received by such Seller relative to the total consideration received.
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(c) In no event shall any party be entitled to consequential damages.
7.3 Binding Effect of the Basic Agreements. The Transaction Documents and
the certificates and other instruments delivered by or on behalf of the parties
pursuant hereto and thereto, constitute the entire agreement between the
parties. The terms and conditions of the Transaction Documents shall inure to
the benefit of and be binding upon the respective heirs, legal representatives,
successor and assigns of the parties hereto. Nothing in the Transaction
Documents, expressed or implied, confers any rights or remedies upon any party
other than the parties hereto and their respective heirs, legal representatives
and assigns.
7.4 Applicable Law. The Transaction Documents are made pursuant to, and
will be construed under, the laws of the State of Delaware.
7.5 Notices. All notices, requests, demands and other communications
hereunder shall be in writing and will be deemed to have been duly given when
delivered via courier service or on the date of transmission if via facsimile:
(a) If to Sellers, to:
Landbank, LLC
Attn: Xxxx Xxxxxx
0000 Xxxxxxxxxxx Xxxxxx
Xxx Xxxx, XX 000000
Telephone: (000) 000-0000
Fax: (000) 000-0000
With a copy to:
Xxxxx Xxxx, Esq.
Xxxx August & Xxxxx
00000 Xxxxxxxx Xxxxxxxxx
00xx xxxxx
Xxx Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
(b) If to Buyer prior to closing, to:
Istorage Networks Group, Inc.
Attn: M. Xxxxxx Xxxxxxx, Pres.
0000 Xxxxxxxxx Xxxx
-00-
Xxxxxxx Xxx #00
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
With a copy to:
Xxxxxxx Xxxxxx, Esq.
Xxxxxxx L. Associates, P.C.
--------------------------------------------
--------------------------------------------
--------------------------------------------
(c) If to Transferring Shareholders, to the address listed on Schedule
B.
These addresses may be changed from time to time by written notice to the
other parties.
7.6 Headings. The headings contained in this Agreement are for reference
only and will not affect in any way the meaning or interpretation of this
Agreement.
7.7 Counterparts. This Agreement may be executed in counterparts, each of
which will be deemed an original and all of which together will constitute one
instrument.
7.8 Severability. If any one or more of the provisions of this Agreement
shall, for any reason, be held to be invalid, illegal or unenforceable under
applicable law this Agreement shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein. The remaining
provisions of this Agreement shall be given effect to the maximum extent then
permitted by law.
7.9 Forbearance; Waiver. Failure to pursue any legal or equitable remedy or
right available to a party shall not constitute a waiver of such right, nor
shall any such forbearance, failure or actual waiver imply or constitute waiver
of any prior or subsequent default or breach.
7.10 Remedies Cumulative. The rights and remedies hereunder shall be
cumulative and in addition to any other rights or remedies otherwise available
at law or at equity.
7.11 Attorneys' Fees and Expenses. The prevailing party in any legal
proceeding based upon this Agreement shall be entitled to reasonable attorneys'
fees and expenses and court costs.
7.12 Expenses. Each party shall pay all fees and expenses incurred by it
incident to this Agreement and in connection with the consummation of all
transactions contemplated by this Agreement.
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7.13 Integration. This Agreement and all documents and instruments executed
pursuant hereto merge and integrate all prior agreements and representations
respecting the Transactions, whether written or oral, and constitute the sole
agreement of the parties in connection therewith. This Agreement has been
negotiated by and submitted to the scrutiny of both Seller and Buyer and their
counsel and shall be given a fair and reasonable interpretation in accordance
with the words hereof, without consideration or weight being given to its having
been drafted by either party hereto or its counsel.
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IN WITNESS WHEREOF, the undersigned parties hereto have duly executed this
Agreement on the date first written above.
"BUYER"
ISTORAGE NETWORKS,INC.
By: /s/ Xxxxxx Xxxxxxx
-------------------------
Xxxxxx Xxxxxxx, President
"TRANSFERRING SHAREHOLDERS"
BY:
BY:
BY:
"COMPANY"
LANDBANK, LLC
By:/s/ Xxxx Xxxxxx
-------------------------
Xxxx Xxxxxx, Member
"SELLERS"
Xxxx Xxxxxx
Xxxx Xxxxxxx
Xxxx Xxxx
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SCHEDULE A
Sellers
Name Interests Held Allotted Consideration Shares
---- -------------- -----------------------------
Xxxx Xxxxxx* 33 1/3 27,333,334
Xxxx Xxxxxxx* 33 1/3 27,333,333
Xxxx Xxxx* 33 1/3 27,333,333
*Names to appear on stock certificates as follows:
Schedule A
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SCHEDULE B
Transferring Shareholders
Name and Address Number of Buyer Shares Beneficially Owned
---------------- -----------------------------------------
Xxxxxxx Xxxxxxxx 12,000,000
000 Xxxxxxxxx Xxxx.
Xxxxxxxxx, XX 00000
Xxxxx X. Xxxxxxxx 12,000,000
The Lodge, Begbie
Humbie EH365PN, U.K.
M. Xxxxxx Xxxxxxx 46,000,000
0000 Xxxxxxxxx Xxxx
Xxxxxxx Xxx #00
Xxxxxxx, XX 00000
Xxxxxxx Xxxxxxxxx 12,000,000
00 Xxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
----------
Total 82,000,000
SCHEDULE B
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EXHIBIT A
[reserved]
EXHIBIT A
-23-
EXHIBIT B
Subsidiary Transfer Agreement
EXHIBIT B
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EXHIBIT C
Operating Agreement of Landbank, LLC
EXHIBIT C
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EXHIBIT D
List of Offices and Directors of Buyer
Xxx Xxxxxxx President & CEO
Xxxx Xxxxxxxxx VP & COO
Xxxxx X. Xxxxxxxx VP Sales & Marketing
Xxxx Xxxxxxxx VP Engineering & CTO
EXHIBIT D
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EXHIBIT E
Intellectual Property
None.
EXHIBIT E
-27-
EXHIBIT F
Membership Certificates
EXHIBIT F
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