[EXHIBIT 10.1]
STOCK PURCHASE AGREEMENT
by and among
LOMOND INTERNATIONAL, INC., as Buyers' Agent for and on behalf of
FINK FAMILY TRUST, JOHN C. KLEINERT, HELEN KOHN, RONIT SUCOFF,
WINDMERE INSURANCE COMPANY, LARRY CHIMERINE, VISION OPPORTUNITY
MASTER FUND, SHELLEY WINE, SHADOW CAPITAL, LLC, STANLEY GOLDBERG
REVOCABLE TRUST, RALPH O. OLSON, JAYDEN J. OLSON, MARTIN A.
SUMICHRAST, CINDY R. SUMICHRAST, ISABELLE M. SUMICHRAST, MARTIN
S. SUMICHRAST, II, ANDREW T. SUMICHRAST, CARLONIE G. SUMICHRAST,
MENLO VENTURE PARTNERS, and CASTLE BISON,
and
MICHAEL D'ANGELO, LAURA PALISA MUJICA, and
LARA NICOLE SARAFIANOS, as Sellers, and C. LEO SMITH.
September 19, 2006
THIS STOCK PURCHASE AGREEMENT, ("Agreement"), dated as of
September 19, 2006, is entered into by and among Lomond
International, Inc., a North Carolina corporation, (hereinafter
"Buyers' Agent"), as Buyers' Agent for and on behalf of the
purchasers reflected in Exhibit "C" attached hereto and made a
part hereof (hereinafter "Buyers"), and MICHAEL D'ANGELO, LAURA
PALISA MUJICA and LARA NICOLE SARAFIANOS, hereinafter referred to
individually as a "Seller" and collectively as "Sellers" and C.
LEO SMITH ("Smith").
WHEREAS, Buyers desire to purchase through the Buyers'
Agent, duly authorized to enter into and complete the purchase
and sale transaction contemplated by this Agreement for and on
behalf of the Buyers and all of them, an aggregate of 4,500,000
shares (the "Shares") of the common stock, par value $.001 per
share (the "Common Stock"), of International Imaging Systems,
Inc., a Delaware corporation (the "Company"), from the Sellers,
and the Sellers severally desire to sell the Shares to the
Buyers; and
WHEREAS, Smith is the President and Chief Executive Officer
of the Company and is willing to enter into this Agreement in
order to effect the transaction contemplated hereunder which he
believes will be in the best interest of the Company and its
shareholders;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants, representations and warranties contained
herein, the parties hereto do hereby agree as follows:
1. TRANSFER OF SHARES, CONSIDERATION AND OTHER MATTERS
1.1 Transfer of Shares. Subject to the terms and conditions
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of this Agreement, Sellers hereby sell, assign, transfer, convey
and deliver to Buyers, and Buyers hereby purchase and acquire
from Sellers, good and marketable title to the Shares, free and
clear of all mortgages, liens, encumbrances, claims, equities and
obligations to other persons of every kind and character except
that the Shares are restricted securities as set forth in Section
4.4 hereof. The Shares constitute 56.4% of the total issued and
outstanding capital stock of the Company on the date hereof.
Simultaneously herewith, Sellers are delivering to Buyers cer
tificates duly endorsed for transfer or accompanied by duly
executed stock powers in blank, together with such other
documents or instruments, if any, as may be necessary to convey
the Shares to Buyers as provided herein.
1.2 Consideration. The purchase price for each of the
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Shares purchased by Buyers is nine cents ($.09) payable to
Sellers according to the amounts set forth on Schedule 1.2
annexed hereto on the date hereof by wire transfer, or attorney
trust account checks. Schedule 1.2 also contains the name of each
Seller, the number of each stock certificate to be transferred by
each Seller and the number of Shares represented thereby.
2. REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers severally represent, warrant and covenant to and
with Buyers as an inducement to Buyers to enter into this
Agreement and to consummate the transaction contemplated hereby
as follows:
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2.1 Authorization of Agreement. Each of the Sellers is
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fully able, authorized and empowered to execute and deliver this
Agreement and any other agreement or instrument contemplated by
this Agreement and to perform his, her or its covenants and
agreements hereunder and thereunder. This Agreement and any such
other agreement or instrument, upon execution and delivery by
each Seller (and assuming due execution and delivery hereof and
thereof by the other parties hereto and thereto), will constitute
a valid and legally binding obligation of such Seller, in each
case enforceable against him, her or it in accordance with its
terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, moratorium, reorganization or similar
laws from time to time in effect which affect creditors' rights
generally and by legal and equitable limitations on the
availability of specific performance and other equitable remedies
against such Seller under or by virtue of this Agreement or such
other agreement or instrument.
2.2 Ownership of the Shares. Each of the Sellers is the
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sole record and beneficial owner of that portion of the Shares
set forth opposite his, her or its name on Schedule 1.2 annexed
hereto. Each of the Sellers holds his, her or its respective
Shares free and clear of any lien, pledge, encumbrance, charge,
security interest, claim or right of another and has the absolute
right to sell and transfer such Shares to the Buyers without the
consent of any other person or entity. Upon transfer of such
Shares to Buyers hereunder, Buyers will acquire good and
marketable title to such Shares free and clear of any lien,
pledge, encumbrance, charge, security interest, claim or right of
another.
2.3 No Sellers' Defaults. Neither the execution and
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delivery of this Agreement, nor the consummation of the
transaction contemplated hereby, violates any statute, ordinance,
regulation, order, judgment or decree of any court or
governmental agency, or conflicts with, or will result in any
breach of, any of the terms of, or constitute a default under or
result in the termination of, or the creation of, any lien upon
the Shares to be sold by each Seller pursuant to the terms of any
contract or agreement to which such Seller is a party or by which
such Seller or any of his, her or its respective assets is bound.
2.4 Obligations; Authorizations. None of the Sellers is (i)
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in violation of any judgment, order, injunction, award or decree
which is binding on him, her or it, or any of his, her or its
assets, properties, operations or business which violation, by
itself or in conjunction with any other such violation, would
materially and adversely affect the consummation of the
transaction contemplated hereby; or (ii) in violation of any law
or regulation or any other requirement of any governmental body,
court or arbitrator relating to him, her or it, or to his, her or
its assets, operations or businesses which violation, by itself
or in conjunction with other violations of any other law,
regulation or other requirement, would materially adversely
affect the consummation of the transaction contemplated hereby.
2.5 Consents. All requisite consents of third parties,
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including, but not limited to, governmental or other regulatory
agencies, federal, state or municipal, required to be received by
or on the part of each of the Sellers for the execution and
delivery of this Agreement and the performance of their
respective obligations hereunder have been obtained and are in
full force and effect. Each of the Sellers has fully complied
with all conditions of such consents.
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2.6 No Shareholder Loans or Other Company Debt to Sellers.
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Each of the Sellers, if applicable, has cancelled any loans made
by such Seller to the Company otherwise unrepaid on the date of
this Agreement. In addition, each of the Sellers confirms hereby
that nothing is owed to such Seller by the Company on the date of
this Agreement for loans made or otherwise.
3. REPRESENTATIONS AND WARRANTIES OF SMITH
Smith represents, warrants and covenants to and with Buyers,
as an inducement to Buyers to enter into this Agreement and to
consummate the transaction contemplated hereby, as follows:
3.1 SEC Reports. Smith has caused the Company to deliver to
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Lomond International, Inc., a North Carolina corporation
("Lomond") as Buyer's representative, a true and correct copy of
each of the following documents (the "SEC Reports") relating to
the Company: (i) Annual Report on Form 10-KSB/A (Amendment No.1)
for the fiscal year ended December 31, 2005, (ii) Annual Report
on Form 10-KSB for the fiscal year ended December 31, 2004 and
(iii) Quarterly Reports on Form 10-QSB or 10-QSB/A for the
quarters ended June 30, 2006 and March 31, 2006. The Company has
been subject to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")
since at least February 19, 1999 and, except for Current Reports
on Form 8-K, the SEC Reports constitute all of the documents and
reports that the Company was required to file with the Securities
and Exchange Commission (the "SEC") during 2004, 2005 and 2006.
As of their respective dates, the SEC Reports comply in all
material respects with the requirements of the Exchange Act and
the rules and regulations promulgated thereunder and none of the
SEC Reports contained an untrue statement of a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were
made, not misleading.
3.2 Financial Statements. The financial statements of the
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Company included in the SEC Reports (including in each case the
related notes thereto) (i) are in accordance with the books and
records of the Company, (ii) are correct and complete in all
material respects, (iii) present fairly the financial position
and results of operations of the Company as of the respective
dates indicated (subject, in the case of unaudited statements, to
normal, recurring adjustments, none of which were material) and
(iv) have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis.
3.3 Organization. The Company is a corporation duly or
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ganized, validly existing and in good standing under the laws of
Delaware and has full power and authority to own, lease and
operate its properties and to carry on its business as now being
and as heretofore conducted. The Company is duly qualified as a
foreign corporation in the State of Florida. The Company is not
qualified or licensed to do business as a foreign corporation in
any other jurisdiction and neither the location of its assets nor
the nature of its business requires it to be so qualified.
3.4 Capitalization. The total authorized capital stock of
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the Company is 30,000,000 shares, of which 1,000,000 are
designated as preferred stock and none of which are issued or
outstanding, and 29,000,000 of which are designated common stock
of which 7,793,700 shares are issued and outstanding. There are
no subscriptions, options or other agreements or commitments
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obligating the Company to issue any shares of its capital stock
or securities convertible into its capital stock.
3.5 Certificate of Incorporation and By-laws. Annexed
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hereto as Schedule 3.5 is a true and complete copy of the
Certificate of Incorporation and By-laws of the Company as in
effect on the date hereof, certified by the Secretary of the
Company in the case of the By-laws and by the Secretary of State
of Delaware in the case of the Certificate of Incorporation.
3.6 Officers and Directors. Attached hereto as Schedule 3.6
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is a list of the names and titles of all officers and directors
of the Company, the resignations of such directors and the
appointment of John Vogel, Robert C. Scherne and Vincent Finnegan
to fill the resulting vacancies subject to the consummation of
the transaction contemplated hereby.
3.7 Liabilities, etc.
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(a) Since July 28, 2003, the Company has filed all Federal,
state and local tax returns which are required to be filed by it
and all taxes shown to be due thereon (together with any
applicable penalties and interest) have been paid. Since July 28,
2003, the Company has not incurred any liability for taxes except
in the ordinary course of business. The Company has paid or
provided adequate reserves for all taxes which have become due
for all periods prior to the date of this Agreement or pursuant
to any assessments received by it or which the Company is
obligated to withhold from amounts owing to any employee,
creditor or other third party as at, or with respect to, any
period prior to the date of this Agreement. To the best knowledge
of Smith, the Federal income tax returns of the Company have
never been audited by the Internal Revenue Service. Except as set
forth on Schedule 3.7(a) attached hereto, the Company has not
waived any statute of limitations in respect of taxes, nor agreed
to any extension of time with respect to a tax assessment or
deficiency.
(b) On the date hereof, there are no liabilities, debts or
obligations of the Company, whether accrued, absolute, contingent
or otherwise ("Liabilities").
3.8 Absence of Certain Events. Other than as disclosed in
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its SEC Reports and in Current Reports on Form 8-K, since July
28, 2003, the Company has been conducted solely in the usual and
ordinary course. Without limiting the generality of the
foregoing, the Company has not:
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(a) waived any right or rights of substantial value or
paid, directly or indirectly, any Liability before such Liability
became due in accordance with its terms; or
(b) other than in the ordinary and usual course of
business, created any Liability (whether absolute or contingent
and whether or not currently due and payable), or entered into or
assumed any contract, agreement, arrangement, lease (as lessor or
lessee), license or other commitment otherwise than in the
ordinary and usual course of business; or
(c) purchased, sold or transferred any assets other than in
the ordinary and usual course of the operations of the Company;
granted any security interest or other lien or encumbrance
affecting any of its assets or properties other than in the
ordinary and usual course of business and in amounts not
material; or amended any agreement or contract to which the
Company is a party or by which its assets and properties are
bound except as set forth in Schedule 3.10(c) annexed hereto.
3.9 Adverse Developments. Except as disclosed in its SEC
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Reports, and particularly, in its Current Reports on Form 8-K,
since July 28, 2003, there has been no material adverse change in
the business, operations or condition (financial or otherwise) of
the Company; nor has there been since such date, any damage,
destruction or loss, whether covered by insurance or not,
materially or adversely affecting the business, properties or
operations of the Company.
3.10 Actions and Proceedings. The Company is not subject to
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any outstanding orders, writs, injunctions or decrees of any
court or arbitration tribunal or any governmental department,
commission, board, agency or instrumentality, domestic or
foreign, against, involving or affecting the business, properties
or employees of the Company or Smith's right to enter into and
execute this Agreement. There are no actions, suits, claims or
legal, administrative or arbitration proceedings or
investigations, including any warranty or product liability
claims (whether or not the defense thereof or liabilities in
respect thereof are covered by policies of insurance) relating to
or arising out of the business, properties or employees of the
Company pending or, to the best knowledge of Smith, threatened
against or affecting the Company.
3.11. Compliance with Laws. Since July 28, 2003, the
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Company has complied in all material respects with all laws,
ordinances, regulations and orders applicable to the conduct of
its business, including all laws relating to environmental
matters, employees and working conditions.
3.12 Bank Accounts and Credit Cards. As of the date hereof,
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the Company does not have any bank account, safe deposit box or
credit or charge cards.
4. REPRESENTATIONS AND WARRANTIES OF BUYERS
Buyers represent and warrant to Sellers and Smith as
follows:
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4.1 Organization. Power and Authority. Each of the Buyers
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has authorized the Buyers' Agent to execute and deliver this
Agreement, and any other agreement or instrument contemplated by
this Agreement, and to consummate the transaction and to perform
such Buyer's obligations contemplated hereby and thereby. Buyers
confirm that they have also appointed Buyers' Agent as their
representative to receive the SEC Reports and the Company's Form
8-K reports and that copies thereof have been received by Buyers'
Agent.
4.2 Legal and Authorized Transaction; Authority: No Breach.
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The execution and delivery by each of the Buyers of this
Agreement and any other agreement or instrument contemplated by
this Agreement, and the consummation of the transaction
contemplated hereby and thereby, requires no specific consent or
authority conferred by any third party. This Agreement, and any
such other agreement or instrument, upon execution and delivery
by each Buyer (and assuming due execution and delivery hereof
and thereof by the other parties hereto and thereto), will
constitute the legal, valid and binding obligation of such Buyer,
in each case enforceable against such Buyer in accordance with
its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, moratorium, reorganization or
similar laws from time to time in effect which affect creditors'
rights generally and by legal and equitable limitations on the
availability of specific performance and other equitable remedies
against such Buyer under or by virtue of this Agreement or such
other agreement or instrument. Neither the execution and delivery
of this Agreement, or any such other agreement or instrument by
each such Buyer, nor the consummation of the transaction
contemplated hereby or thereby, will (i) violate, conflict with
or result in the breach or termination of, or otherwise give any
other contracting party the right to terminate, or constitute a
default under the terms of, any mortgage, bond, indenture or
material agreement to which such Buyer is a party or by which
such Buyer or any of his, her or its property or assets may be
bound or materially affected, (ii) violate any judgment, order,
injunction, decree or award of any court, administrative agency
or governmental body against, or binding upon, such Buyer or upon
the securities, property or business of such Buyer, or (iii)
constitute a violation by such Buyer of any applicable law or
regulation of any jurisdiction as such law or regulation relates
to such Buyer or to the property or business of Buyer.
4.3 No Litigation, Etc. There is no material suit, action,
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or legal, administrative, arbitration or other proceeding or
governmental investigation pending or, to each of the Buyers'
best knowledge, threatened against, materially affecting, or
which will materially affect, the property of such Buyers, or to
such Buyer's best knowledge does there exist any basis therefor.
4.4 Accredited Investors; Investment Intent. Each of the
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Buyers is an accredited investor as that term is defined in
applicable rules and regulations and is acquiring the Shares for
his, her or its own account for investment purposes and not with
a view to distribution or resale, nor with the intention of
selling, transferring or otherwise disposing of all or any part
of the Shares except in compliance with all applicable provisions
of the Securities Act of 1933, as amended (the "Act"), the rules
and regulations promulgated by the Securities and Exchange
Commission ("SEC") thereunder, and applicable state securities
laws. The Shares acquired by Buyers from Sellers are "restricted
securities" as that term is defined under Rule 144 of the Act,
and any sales of the Shares made in reliance upon Rule 144 can be
made, among other things, only in limited amounts in accordance
with the terms and conditions of that Rule and will require an
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opinion of counsel satisfactory to the Company and Company's
counsel that registration is not required under the Act or state
securities laws.
4.5 Restrictive Legend. Each Buyer understands that any and
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all certificates representing the Shares and any and all Shares
issued in replacement thereof or in exchange therefor shall bear
the following legend, or one substantially similar thereto;
"The shares represented by this certificate have
not been registered under the Securities Act of 1933.
The shares have been acquired for investment and may
not be sold, transferred or assigned in the absence
of an effective registration statement for these
shares under the Securities Act of 1933 or an opinion
satisfactory to the Company's counsel that registration
is not required under said Act."
4.6 During the past five years, none of the Buyers has
been:
(1) Subject of a petition under the Federal bankruptcy laws
or any state insolvency law filed by or against them, or by a
receiver, fiscal agent or similar officer appointed by a court
for their business or property, or any partnership in which any
of them was a general partner at or within two years before the
time of such filing or any corporation or business association of
which any of them was an executive officer at or within two years
before the time of such filing;
(2) Convicted in a criminal proceeding or a named subject
of a pending criminal proceeding (excluding traffic violations
and other minor offenses);
(3) The subject of any order, judgment, or decree not
subsequently reversed, suspended or vacated, of any court of
competent jurisdiction, permanently or temporarily enjoining any
of them for, or otherwise limiting, any of the following
activities:
(i) acting as a futures commission merchant, introducing
broker, commodity trading advisor, commodity pool operator, floor
broker, leverage transaction merchant, any other person regulated
by the Commodity Futures Trading Commission, or an associated
person of any of the foregoing, or as an investment adviser,
underwriter, broker or dealer in securities, or as an affiliated
person, director or employee of any investment company, bank,
savings and loan association or insurance company, or engaging in
or continuing any conduct or practice in connection with any such
activity;
(ii) engaging in any type of business practice; and
(iii) engaging in any activity in connection with the
purchase or sale of any security or commodity or in connection
with any violation of Federal or State securities law or Federal
Commodity laws.
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(4) The subject of any order, judgment or decree, not
subsequently reversed, suspended or vacated of any Federal or
State authority barring, suspending or otherwise limiting for
more than sixty (60) days either of their right to engage in any
activity described in paragraph (3) (i) above, or be associated
with persons engaged in any such activity.
(5) Found by any court of competent jurisdiction in a civil
action or by the Securities and Exchange Commission to have
violated any Federal or state securities law, and the judgment in
such civil action or finding by the Commission has not been
subsequently reversed, suspended or vacated; or
(6) Found by a court of competent jurisdiction in a civil
action or by the Commodity Futures Trading Commission to have
violated any Federal Commodities Law, and the judgment in such
civil action or finding by the Commodity Futures Trading
Commission has not been subsequently reversed, suspended or
vacated.
5. COVENANTS AND AGREEMENTS OF THE PARTIES.
5.1 No Brokers. Each of the Sellers on the one hand and
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each of the Buyers on the other hand represent and warrant to the
other that each has not employed any broker, finder or similar
agent and no person or entity with which each has had any
dealings or communications of any kind is entitled to any
brokerage, finder's or placement fee or any similar compensation
in connection with this Agreement or the transaction contemplated
hereby. None of the Sellers on the one hand nor the Buyers shall
have any liability or responsibility for any such or similar fee
claimed.
5.2 Expenses. Each of the parties hereto agrees to bear
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his, her or its own expenses in connection with the negotiation,
preparation, execution and delivery of this Agreement and the
consummation of the transaction contemplated hereby.
5.3 SEC Filings. Buyers agree (i) to exercise their best
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efforts (a) to cause the Company to remain a reporting company
under either Section 12(g) or 15(d) of the Securities Exchange
Act of 1934 (the "1934 Act") and (b) to file all necessary
reports with the SEC and any other regulatory body as required to
maintain the Company as a current reporting Company under the
1934 Act and any other applicable rules and regulations, (ii) to
cause the Company to file with the SEC a Report on Form 8-K
relating to the consummation of the transaction contemplated
hereunder and (iii) to provide the Sellers with one copy of such
Report on Form 8-K as filed pursuant to clause (ii) above.
5.4 Simultaneous with the execution of this Agreement, the
Company will enter into a consulting agreement with each of Smith
and Susan Archer substantially in the form of Exhibit "A" and "B"
respectively, attached hereto.
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6. NATURE AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
6.1 Nature of Statements. All statements contained in any
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Schedule, certificate or other instruments delivered by or on
behalf of any party hereto pursuant to this Agreement, shall be
deemed representations and warranties by such party.
6.2 Survival of Representations and Warranties. Regardless
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of any investigation at any time made by or on behalf of any
party hereto or of any information any party may have in respect
thereof, all covenants, agreements, representations and
warranties made hereunder or pursuant hereto or in connection
with the transaction contemplated hereby shall survive the
execution and delivery of this Agreement and continue in effect
through the first anniversary of this Agreement except that the
representations and warranties set forth in Sections 2.2 shall
continue in effect until the expiration of the applicable statute
of limitations, and the agreements of indemnity for claims set
forth in Sections 7, 8 and 9 shall survive the execution and
delivery of this Agreement and continue in effect for the period
during which such claims are enforceable.
7. INDEMNIFICATION BY SMITH.
7.1 Claims Against the Company. Smith shall indemnify and
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hold Buyers harmless from and against any loss, damage or expense
(including reasonable attorneys' fees) caused by or arising out
of any claim made against the Company:
(i) for any foreign, Federal, state or local tax of any
kind arising out of or by reason of the existence or operations
of the Company, since July 28, 2003 and prior to the date of this
Agreement, including, without limitation, any payroll taxes owed
by the Company on account of compensation paid to any employee of
the Company prior to such date;
(ii) since July 28, 2003, in respect of transactions
occurring prior to the date of this Agreement arising under the
Securities Act of 1933, as amended (the "33 Act"), the Exchange
Act, or any state blue sky or securities law;
(iii) in respect of any salary, bonus, wages or other
compensation of any kind owed by the Company to its employees for
services rendered on or prior to the date of this Agreement;
(iv) for any damages to the environment caused by or arising
out of any pollution resulting from or otherwise attributable to
the operation of the business of the Company prior to the date of
this Agreement;
(v) in respect of any payable of the Company to the Sellers
incurred prior to the date of this Agreement;
(vi) in respect of any liability or indebtedness for
borrowed money or otherwise incurred on or before the date of
this Agreement except as provided in Section 3.7 hereof.
7.2 Other Matters. Smith shall also indemnify and hold
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Buyers harmless from and against any loss, damage or expense
(including reasonable attorneys' fees) caused by or arising out
of (i) any breach or default in the performance by Smith of any
covenant or agreement of Smith contained in this Agreement, (ii)
any breach of warranty or inaccurate or erroneous representation
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made by Smith herein or in any Schedule, certificate or other
instrument delivered by or on behalf of Smith pursuant hereto,
and (iii) any and all actions, suits, proceedings, claims,
demands, judgments, costs and expenses (including reasonable
legal and accounting fees) incident to any of the foregoing.
8. INDEMNIFICATION BY SELLERS.
8.1 Claims Against Buyers. Each of the Sellers, severally,
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shall indemnify and hold Buyers harmless from and against any
loss, damage or expense (including reasonable attorneys' fees)
caused by or arising out of (i) any breach or default in
performance by such Seller of any covenant or agreement of him,
her or it contained in this agreement, (ii) any breach of
warranty or inaccurate or erroneous representation made by such
Seller herein or in any schedule, certificate or other instrument
delivered by or on behalf of him, her or it pursuant hereto, and
(iii) any and all actions, suits, proceedings, claims, demands,
judgments, costs and expenses (including reasonable legal and
accounting fees) incident to any of the foregoing.
9. INDEMNIFICATION BY BUYERS.
9.1 Claims Against Sellers. Each of the Buyers shall
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indemnify and hold harmless Sellers from and against all loss,
damage or expense (including reasonable attorneys' fees) caused
by or arising out of (i) any breach or default in the performance
by such Buyer of any covenant or agreement of Buyers contained in
this Agreement, (ii) any breach of warranty or inaccurate or
erroneous representation made by such Buyers herein or in any
certificate or other instrument delivered by or on behalf of such
Buyer pursuant hereto and (iii) any and all actions, suits,
proceedings, claims, demands, judgments, costs and expenses
(including reasonable legal and accounting fees) incident to the
foregoing.
10. NOTICE AND OPPORTUNITY TO DEFEND.
10.1 Participation. Promptly after the receipt by Buyers,
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Sellers or Smith of notice of any action, proceeding, claim or
potential claim (any of which is hereinafter individually
referred to as a ("Circumstance") which could give rise to a
right to indemnification under this Agreement, such party (the
"Indemnified Party") shall give prompt written notice to the
party or parties who may become obligated to provide
indemnification hereunder (the "Indemnifying Party"). Such notice
shall specify in reasonable detail the basis and amount, if
ascertainable, of any claim that would be based upon the
Circumstance. The failure to give such notice promptly shall
relieve the Indemnifying Party of its indemnification obligations
under this Agreement, unless the Indemnified Party establishes
that the Indemnifying Party either had knowledge of the
Circumstance or was not prejudiced by the failure to give notice
of the Circumstance. The Indemnifying Party shall have the right,
at its option, to compromise or defend the claim, at its own
expense and by its own counsel, and otherwise control any such
matter involving the asserted liability of the Indemnified Party,
provided that any such compromise or control shall be subject to
obtaining the prior written consent of the Indemnified Party
which consent shall not be unreasonably withheld. An Indemnifying
Party shall not be liable for any costs of settlement incurred
without the written consent of the Indemnifying Party. If any
Indemnifying Party undertakes to compromise or defend any
asserted liability, it shall promptly notify the Indemnified
Party of its intention to do so, and the Indemnified Party agrees
to cooperate fully with the Indemnifying Party and its counsel in
the compromise of or defense against any such asserted liability.
All costs and expenses incurred in connection with such
cooperation shall be borne by the Indemnifying Party, provided
such costs and expenses have been previously approved by the
Indemnifying Party. In any event, the Indemnified Party shall
have the right at its own expense to participate in the defense
of an asserted liability.
11. MISCELLANEOUS
11.1. Successors and Assigns. This Agreement shall be
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binding upon and shall inure to the benefit of the parties hereto
and their respective heirs, successors and assigns. No assignment
of this Agreement or of any rights hereunder shall relieve the
assigning party of any of its obligations or liabilities
hereunder.
11.2 Notices. All notices or other communications required
--------
or permitted to be given hereunder shall be in writing and shall
be deemed to have been duly given if delivered by hand, sent
prepaid overnight by Federal Express or the like, in writing, or
mailed first class, postage prepaid, by certified mail, return
receipt requested (mailed notices and notices sent by facsimile
shall be deemed to have been given on the date sent) as follows:
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(a) If to Sellers, as follows:
c/o Steven A. Saide, Esq.
158 W. 27th Street, 3rd Floor
New York, NY 10001
(b) If to Buyers c/o Buyer's Agent, as follows:
c/o Lomond International, Inc.
11125 Colonial County Lane
Charlotte, NC 28277
Attention: Martin A. Sumichrast, President
with a copy to:
Law Office of Eugene Michael Kennedy, P.A.
517 Southwest First Avenue
Fort Lauderdale, Florida 33301
Attention: Eugene Michael Kennedy, Esq.
or in any case to such other address or addresses as hereafter
shall be furnished as provided in this Section 10.2 by either of
the parties hereto to the other party hereto.
11.3 Waiver; Remedies. No delay on the part of Sellers or
-----------------
Buyers in exercising any right, power or privilege hereunder
shall operate as a waiver thereof, nor shall any waiver on the
part of Sellers or Buyers of any right, power or privilege
hereunder operate as a waiver of any other right, power or
privilege hereunder, nor shall any single or partial exercise of
any right, power or privilege hereunder preclude any other or
further exercise of any other right, power or privilege
hereunder. The rights and remedies herein provided are cumulative
and are not exclusive of any rights or remedies which the parties
hereto may otherwise have at law or in equity.
11.4 Entire Agreement. This Agreement constitutes the entire
-----------------
agreement between the parties with respect to the subject matter
hereof and supersedes all prior agreements or understandings of
the parties relating thereto.
11.5 Amendment. This Agreement may be modified or amended
----------
only by written agreement of the parties hereto.
11.6 Counterparts. This Agreement may be executed in any
-------------
number of counterparts, each of which shall be deemed an original
but all of which together shall constitute a single instrument.
11.7 Governing Law. This Agreement shall be governed and
---------------
construed in accordance with the laws of the State of Florida
applicable to contracts made and to be performed entirely within
the State of Florida.
11.8 Captions. All section titles or captions contained in
this Agreement, in any Schedule referred to herein or in any
Exhibit annexed hereto are for convenience only, shall not be
deemed a part of this Agreement and shall not affect the meaning
or interpretation of this Agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement
to be duly executed and delivered on the day and year first above
written.
SELLERS:
/s/ Michael D'Angelo
-----------------------------------
MICHAEL D'ANGELO
/s/Laura Palisa Mujica
-----------------------------------
LAURA PALISA MUJICA
Lara Nicole Sarafianos
-----------------------------------
LARA NICOLE SARAFIANOS
INTERNATIONAL IMAGING SYSTEMS, INC.
By: /s/ C. Leo Smith
-----------------------------------
C. LEO SMITH, PRESIDENT
SMITH:
Agreed to Section 3. only:
/s/ C. Leo Smith
-----------------------------------
C. LEO SMITH
BUYERS:
LOMOND INTERNATIONAL, INC.
By: Martin A. Sumichrast
-----------------------------------
Martin A. Sumichrast, President
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