Exhibit 10.40
PATICK STOCK PURCHASE AGREEMENT
This PATICK STOCK PURCHASE AGREEMENT dated effective June 30,
2000 (the "Agreement") is made and entered into by, between and among
Dataquad, Inc., a Nevada corporation ("Dataquad"), The LibraryCard, Inc.,
a Nevada corporation ("LibraryCard"), and Corey M. Patick in his
individual capacity ("Patick"). Dataquad and LibraryCard are
collectively sometimes referred to herein as the "Corporations".
R E C I T A L S
WHEREAS, Dataquad and LibraryCard each desires to sell and
issue shares of its Common Stock to Patick to be used by Patick for the
express purpose of reselling such shares of stock to employees, agents
and representatives of such Corporation and for no other purpose (the
"Trust Shares");
WHEREAS, Patick has agreed to purchase, acquire, hold and use
such Trust Shares for such stated purpose and no other;
WHEREAS, Patick has further agreed to purchase, acquire, hold
and use such Trust Shares of stock for such purposes as a "Trustee" of
such Shares to be held by Patick in "Trust" for the benefit of the
intended beneficiaries of such Shares, namely employees, agents and
representatives of the Corporations to whom Patick subsequently
determines in his sole discretion and election to sell and issue such
Trust Shares in a way and manner which Patick believes in his sole
election and discretion will provide motivation and incentive to such
recipients to advance the respective business endeavors and interests of
the Corporations as Patick reasonably understands such matters;
WHEREAS, during the period of time that Patick owns the Trust
Shares he shall be deemed for all purposes to be the registered and
beneficial owner of the Trust Shares and he shall be entitled to exercise
all incidents of such ownership including without limitation the voting
of such shares;
WHEREAS, Patick understands and agrees that if he retains
any of the Trust Shares sold and issued to him under this Agreement on
December 31, 2002 (the "Possible Further Transfer Date"), he will then
resell and transfer such remaining Shares to the respective Corporations
which issued the shares to Patick under
this Agreement unless either or both of such Corporations notifies Patick
that it does not desire to purchase any such remaining Trust Shares; and
WHEREAS, the undersigned parties desire to memorialize their
understandings and agreements in respect of the Trust Shares and matters
related thereto in this Agreement;
A G R E E M E N T
NOW, THEREFORE, the undersigned parties in consideration of
the premises and the covenants contained herein hereby agree, subject to
the within terms and conditions, as follows:
1. Trust Shares.
1.1 Dataquad agrees and hereby does sell and issue to
Patick Seven Hundred Thousand (700,000) shares of its Common Stock,
$0.001 par value (the "Dataquad Trust Shares"), for consideration in the
amount of One Hundred Eighty Thousand Two Hundred Fifty Dollars
($180,250); and
1.2 LibraryCard agrees and hereby does sell and issue
to Patick Seven Hundred Thousand (700,000) shares of its Common Stock,
$0.001 par value (the "LibraryCard Trust Shares"), for consideration in
the amount of One Hundred Thousand Two Hundred Fifty Dollars ($100,250).
The Dataquad Trust Shares and the LibraryCard Trust Shares are herein
collectively referred to for convenience sake as the "Trust Shares".
1.3 The Trust Shares sold and issued to Patick under
Sections 1.1 and 1.2 shall be registered in the name of and be owned of
record and beneficially by Patick.
1.4 Patick is not obligated to sell and issue any or
all of the Trust Shares to any recipients; however, if Patick does elect
to sell and transfer any of such Trust Shares from time to time prior to
the Possible Retransfer Date, Patick shall only sell, transfer such Trust
Shares to recipients thereof pursuant to and in accordance with
applicable Federal and state securities laws including as provided for in
Section 5 of this Agreement.
2. Payment By Patick.
2.1 Patick shall pay for the Trust Shares, in his
election, in cash, by check and/or by a full recourse promissory note
payable to the respective issuer Corporation of each of such Dataquad
Trust Shares and LibraryCard Trust Shares.
3. Purchase By The Corporations.
3.1 If the Corporations, or either of them, determine
at the Possible Retransfer Date (December 31, 2002) that they want to
purchase and acquire the remaining Trust Shares issued by each of such
respective Corporations which Patick still owns, then such Corporation
shall purchase from and pay Patick for such remaining shares of Dataquad
Trust Shares and LibraryCard Trust Shares effective as of the Possible
Retransfer Date in the same manner as Patick purchased and paid for such
Shares as provided for in Section 2; and, upon receipt of such
consideration by Patick, Patick shall sell, transfer and deliver any and
all such remaining Trust Shares effective as of such Date.
3.2 If any of the remaining Trust Shares are not
purchased by the respective issuer Corporations of such Trust Shares as
provided for herein, then Patick shall thereafter remain the registered
and beneficial owner of such Trust Shares without any further obligation
to such issuer Corporations in respect thereof; and, if not already paid
for in cash or by check, Patick shall complete payment for any and all
such remaining Trust Shares which Patick shall continue owning on and
after the Possible Retransfer Date in accordance with the provisions of
this Agreement.
3.3 Notwithstanding any contrary provision contained
herein, Patick shall have the right, but not the obligation, in his sole
election and judgment at any time prior to the Possible Retransfer Date
to tender the Trust Shares then owned by him to the respective issuer
Corporations thereof for purchase and payment by such Corporations for
the price, in the manner and with the consequences provided for in
Section 3.1 hereof; and, if Patick makes such election, then the
respective Corporations shall purchase and pay for any and all of such
remaining Trust Shares which are the subject of Patick's tender in
accordance with the provisions of Section 3.1 hereof.
4. Sales/Transfer By Patick.
4.1 When Patick sells and transfers any of the Trust
Shares to recipients thereof as contemplated by and under this Agreement,
Patick shall immediately report such sale/transfer transaction to the
respective issuer Corporations, including the consideration paid to and
received by Patick for or otherwise in connection with such
sold/transferred Trust Shares; and Patick shall simultaneously cause to
be registered for transfer all such sold/transferred Trust Shares on the
stock transfer books and records of the respective Corporation(s) as
maintained by such Corporation(s) or its (their) independent stock
register and/or transfer agent(s). Following the sale/transfer of Trust
Shares by Patick pursuant to and in accordance with this Agreement,
Patick shall have no further interest in, to or otherwise in respect of
any of such sold/transferred Trust Shares; and, accordingly, Patick shall
have no further to the issuer Corporation of such Trust Shares in respect
thereof under this Agreement or otherwise.
5. Certain Securities Matters.
5.1 The Trust Shares sold and issued to Patick by the
issuing Corporations shall not be registered and/or qualified under
Federal or state securities laws and shall be sold and issued pursuant to
applicable exemptions from such registration or qualification including
under the "private placement" exemption from such
registration/qualifications; and, as such, the Trust Shares are
understood and shall be treated for all purposes as "restricted
securities" as that term is generally understood under applicable
securities laws. The certificates representing the Trust Shares shall
contain a customary legend restricting the sale and transfer thereof
except under applicable securities laws (see Exhibit A hereto); and the
Corporations shall place or cause to be placed and implemented customary
"stop transfer" instructions in respect of such Trust Shares and the
certificates therefor.
5.2 Patick shall provide the respective Corporations
with such further written assurances as such Corporations or their
counsel shall request in connection with the sale/issuance of the Trust
Shares to Patick, and by Patick to recipients thereof, in respect of such
securities exemption and related matters.
5.3 Patick shall exercise reasonable judgment in
determining if and when to sell and transfer any of the Trust Shares to
any recipients thereof so as not to violate any securities laws
pertaining to the registration and/or qualification of any such Trust
Shares applicable to the sale and transfer of such Shares by Patick to
any recipient thereof.
6. Spousal Consent.
5.1 Patick shall obtain the consent of his spouse in
respect of the subject matter of this Agreement and Patick's individual
and separate ownership of the Trust Shares in the form attached hereto
and incorporated herein as Exhibit B.
7. Mutual Indemnities.
7.1 Patick and the respective Corporations each hereby
agree and promise to indemnify and hold harmless the other(s) for all
costs and expenses including reasonable attorneys and other
professionals' fees and costs paid or incurred, claims, debts, causes of
action, judgments and liabilities actual and contingent which may result
from, arise or otherwise be asserted or imposed on or against any of the
undersigned parties as a result of any of the undersigned party(ies)
failure or refusal to perform this Agreement or any agreement, covenant,
promise and/or provision hereof.
8. Events of Default/Notice and Cure.
8.1 Before declaring any default of this Agreement,
the undersigned parties shall first provide the party(ies) alleged to
have committed a material breach of this Agreement with written notice
including details of any such alleged material breach and opportunity to
cure any such breach with the thirty (30) day period following the date
of any such notice of alleged default; and, thereafter, the party
receiving any such notice of alleged breach having failed to timely cure
any such alleged breach, the party(ies) providing any such notice and
request for cure shall be entitled to declare an event of default under
this agreement and seek relief against any such defaulting party(ies)
consistent with Section 9 hereof.
9. Arbitration.
9.1 In the event of any disagreement and/or dispute
under or otherwise in respect of this Agreement, the undersigned parties
hereby agree to resolve any such disagreement and/or dispute, and all
related matters, by binding arbitration. All arbitration proceedings
shall be conducted in accordance with the then prevailing rules of the
American Arbitration Association ("AAA") at a city in Los Angeles County,
California selected pursuant to such rules. The arbitration shall be
conducted by a single arbitrator selected jointly by the parties or, in
the event that the parties are enable to mutually agree upon the person
to act as such arbitrator with thirty (30) days following the first
providing of a notice to arbitrate by any of the parties, then the
arbitrator shall be selected by the AAA. For purposes of such
arbitration, the parties shall be entitled to avail themselves of all
discovery permitted under California Code of Civil Procedure Section 2017
et seq. The arbitrator shall be empowered to provide any relief and make
any award that could be provided or made by a court of competent
jurisdiction. Judgment upon the award rendered by the arbitrator may be
entered in any court having jurisdiction or application may be made to
such court for a judicial acceptance of the award and an order of
enforcement, as the case may be.
10. Attorneys/Professionals' Fees/Costs.
10.1 In addition to whatever other relief any of the
party(ies) may be entitled to under or otherwise in respect of this
Agreement, in the event of any disagreement and/or dispute under or
otherwise in respect of this Agreement, the part(ies) prevailing in any
such disagreement and/or dispute shall recover the costs of the
arbitration proceeding and the acceptance and enforcement of any such
arbitration award in any judicial proceeding initiated for such purpose
by the prevailing party(ies), and such prevailing party(ies) reasonable
attorneys and other professionals' fees and costs paid or incurred in
asserting, maintaining and prosecuting any such disagreement/dispute and
arbitration proceeding and decision in respect thereof.
11. Choice of Law.
11.1 This Agreement has been made, executed and
delivered within the State of California, and the rights and obligations
of the parties hereto shall be construed, interpreted and enforced in
accordance with and governed by the law of said State.
12. Time Is Of The Essence.
12.1 For purpose of this Agreement, including the
performance of the parties' responsibilities, duties and obligations
hereunder, time shall be deemed to be of the essence.
13. Assignment and Other Matters
13.1 The parties to this Agreement shall not have the
right, absent the prior written approval and consent of all of the other
parties to this Agreement, to assign or otherwise transfer this Agreement
including any of their rights, duties, responsibilities and/or
obligations hereunder to any person or entity.
14. Severability.
14.1 If any provision of this Agreement is hereafter
finally determined to be unenforceable for any reason, then such
provision shall be deemed and treated for all purposes as severed from
this Agreement; and the balance of this Agreement shall remain in full
force and effect as between the parties notwithstanding any such
unenforceable and severed provision.
15. Notices.
15.1 Notices to be given under or in respect of this
Agreement shall be provided in writing and shall be deemed effective upon
receipt if personally delivered or on the third (3rd) day following
mailing in the United States Mail by certified mail - return receipt
requested, addressed as follows:
If To Dataquad, Inc.
Dataquad, Inc.
3201 Temple Avenue
Pomona, CA 91768-3200
With a copy to -
Robert H. Bretz, Esq.
520 Washington Blvd, PMB #428
Marina del Rey, CA 90292
If To The LibraryCard, Inc.
The LibraryCard, Inc.
3201 Temple Avenue
Pomona, CA 91768-3200
With a copy to -
Robert H. Bretz, Esq.
520 Washington Blvd, PMB #428
Marina del Rey, CA 90292
If To Patick
Corey M. Patick
3201 Temple Avenue
Pomona, CA ###-##-####
With a copy to -
Bill D. Ringer, Esq.
1401 N. Hunter Street
San Joaquin, CA 95202
Any party may, from time to time, update or otherwise change its address
for purposes of notice under this Agreement by providing such notice in
accordance with the provisions of this paragraph.
16. Headings.
16.1 The headings of the paragraphs (and any
subparagraphs) of this Agreement are included for the convenience of
reference only and are not intended to affect the meaning or
interpretation of this Agreement.
17. Complete Agreement/Amendment.
17.1 This Agreement constitutes the entire
understanding and agreement between the parties with respect to the
subject matter hereof and is intended to supersede all prior and
contemporaneous written or oral agreements and discussions regarding the
matters which are the subject of this Agreement. This Agreement may be
amended or otherwise changed only by an agreement in writing so stating
and signed by the party(ies) against which any such amendment or other
change is sought to be enforced. Each of the parties represents and
warrants to, and agrees with, the other that in entering into and
performing this Agreement, they have not received and are not otherwise
relying upon any statement, fact, circumstance, representation,
understanding, agreement, covenant, promise, guaranty, warranty,
assurance and/or any other matter which is/are not expressly set forth in
this Agreement; and that they will not at any time assert otherwise
(whether by way of any claims in contract, tort, or otherwise), in any
action, proceeding or otherwise against or in respect of any of such
parties to this Agreement. In entering into this Agreement, each of the
parties hereby further represents and warrants to, and agrees with, the
other that such party had the opportunity to consult with independent
counsel of its own choosing regarding this Agreement and the subject
matter thereof. The parties acknowledge and agree that this Agreement
was negotiated, drafted and otherwise prepared jointly by all of the
parties and that no party shall suffer any detriment or prejudice as a
result of any determination that any of the language of this Agreement is
ambiguous or otherwise unclear in any manner. The "Recitals" set forth
at the outset of this Agreement are hereby incorporated by this reference
into and made part of the "Agreement" portion of this Agreement.
IN WITNESS WHEREOF, the undersigned parties thereunto duly
authorized have executed and delivered this Agreement in Pomona,
California effective as of the date of this Agreement.
DATAQUAD, INC.
By ss/William B. Ting
William B. Ting, President
THE LIBRARYCARD, INC.
By ss/Michael K. Skiles
Michael K. Skiles, Acting
President
By ss/Corey M. Patick
Corey M. Patick, an individual
SHAREHOLDER ACKNOWLEDGMENT/APPROVAL
AUTO-GRAPHICS, INC.
By ss/Michael M. Skiles
Michael M. Skiles, President
By ss/Robert S. Cope
Robert S. Cope, Chairman
of the Board
ss/Stephen White
Stephen White
Corey M. Patick
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT
WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS
NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OF SUCH ACT
EXHIBIT A
SPOUSAL CONSENT
The undersigned Marsha M. Patick ("Spouse"), the wife of
Corey M. Patick, having had the opportunity to consult with her own
independent attorney or other professional advisor in respect of such
matters and the within Spousal Consent, acknowledges the attached Patick
Stock Purchase Agreement and the provisions thereof (the "Agreement"),
and hereby acknowledges, agrees and consents to the provisions of the
Agreement stating and otherwise providing that the Trust Shares to be
sold and issued to Corey M. Patick by the Corporations are and shall be
for al purposes the separate property of Corey M. Patick as provided for
therein; and such undersigned Spouse further hereby irrevocably waives
and disclaims any interest of any kind or nature in and to the Trust
Shares (the "Spousal Consent").
The undersigned Spouse also acknowledges and agrees that, in
entering into and performing this Agreement, the Corporations and Corey
M. Patick, in his individual capacity as a signatory to the Agreement,
are relying on the within Spousal Consent; and that, in the event that
such Spouse subsequently asserts any right, title and/or interest in
and/or to the Trust Shares for any reason whatsoever, the prevailing
party in any such proceeding or action shall be entitled to recover such
person(s)/entity(ies) reasonable attorneys and other professionals' fees
and costs paid or incurred in respect of any such proceeding/action.
Marsha M. Patick
EXHIBIT B