STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement") is entered into effective as of
this 17th day of January, 2005, supercedes any and all other agreements whether
in writing or orally communicated, by and among Raymond Mallory and Will Stice
as individuals, (hereinafter referred to as the "SELLERS"), the owner of the
shares of common stock of Com Services, Inc., a California corporation
(hereinafter referred to as "CSI"), and Network Installation Corp, a Nevada
corporation (hereinafter referred to as the "PURCHASER");
WITNESSETH:
WHEREAS, the SELLERS are the sole record owners and holders of an aggregate
of one-hundred percent (100%) of the issued and outstanding common stock of CSI
("Shares").
WHEREAS, the PURCHASER desires to purchase the Shares, and the SELLERS
desire to sell or cause to be sold the Shares, upon the terms and subject to the
conditions herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement, and in order to consummate the purchase and the
sale of the Shares, it is hereby agreed as follows:
1. CLOSING.
A. PROCEDURE FOR CLOSING. The closing of the transaction contemplated by
this Agreement shall be held at the PURCHASER'S offices on or about January 17,
2005, at 5:00 pm PST ("Closing Date") or such other place, date and time as the
parties hereto may otherwise agree.
B. PURCHASE AND SALE OF CSI STOCK. Upon the date set forth in this
Agreement, and subject to the terms and conditions hereinafter set forth, the
SELLERS shall sell, convey and transfer, or cause to be sold, conveyed or
transferred, that number of the Shares of the Corporation's Stock corresponding
to 100% ownership of CSI on the Closing Date.
C. AMOUNT AND PAYMENT OF PURCHASE PRICE. The total consideration and method of
payment thereof shall be four-hundred and thirty-thousand dollars ($430,000)
paid pursuant to the following;
(i) PURCHASER shall pay a total of fifty-thousand ($50,000) dollars in cash
at Closing to the following individuals and in the amounts herein below;
1. Thirty-two thousand five-hundred dollars ($32,500) to Raymond Mallory
("Mallory")
2. Twelve thousand five-hundred dollars to ($12,500) to Will Stice ("Stice")
3. Five-thousand dollars ($5,000) to Richard Lewin
(ii) PURCHASER shall issue to SELLERS, two - 2 yr. promissory notes whose
aggregate value shall equal one-hundred and eighty-thousand dollar ($180,000)
(the "Notes"). The Notes shall pay interest of six percent (6%) per annum.
Pursuant to the terms and conditions of the Notes, PURCHASER shall pay to
SELLERS twenty-four (24) equal monthly cash "Installments". A Note for
one-hundred and twenty-six thousand dollars ($126,000) shall be issued to
Mallory and a Note for fifty-four thousand ($54,000) shall be issued to Stice.
The initial Installments are payable thirty (30) days after Closing and the
remaining Installments are payable every thirty (30) days thereafter. The
Installment for Mallory shall be equal to five-thousand five-hundred and
eighty-four dollars ($5,584) and the Installment for Stice shall be equal to
two-thousand three-hundred and ninety-three dollars ($2,393).
(iii) PURCHASER shall issue to Mallory two-hundred thousand dollars
($200,000) in value of shares of PURCHASER'S common stock ("Stock"). The value
and number of shares of Stock issued to PURCHASER shall be determined by using
the average of the closing bid price of the Stock over the five trading days
prior to the Closing Date. The Stock shall be paid to Mallory no later than
seven (7) days following the Closing Date.
The PURCHASER and Mallory shall also execute an Employment Agreement
whereby Mallory shall remain in the employ of the PURCHASER for a period of no
less than one year following the Closing Date.
2. REPRESENTATIONS AND WARRANTIES OF SELLERS. SELLERS hereby warrants and
represents:
A. AUTHORITY RELATIVE TO THIS AGREEMENT. Except as otherwise stated herein,
the SELLERS have full power and authority to execute this Agreement and carry
out the transactions contemplated by it and no further action is necessary by
the SELLERS to make this Agreement valid and binding upon SELLERS and
enforceable against them in accordance with the terms hereof, or to carry out
the actions contemplated hereby. The execution, delivery and performance of
this Agreement by the SELLERS will not:
(i) constitute a breach or a violation of CSI's Certificate of
Incorporation, By-Laws, or of any law, agreement, indenture, deed of trust,
mortgage, loan agreement or other instrument to which it is a party, or by which
it is bound;
(ii) constitute a violation of any order, judgment or decree to which it is
a party or by which its assets or properties are bound or affected; or
(iii) result in the creation of any lien, charge or encumbrance upon its
assets or properties, except as stated herein.
B. OWNERSHIP. All of such outstanding shares have been duly authorized,
validly issued and are fully paid and non-assessable, were not issued in
violation of the terms of any agreement or other understanding legally binding
upon the CSI and were issued in compliance with all applicable laws and
regulations.
C. REVENUES. SELLERS represent and warrant that CSI is reporting total net
revenues of nine-hundred and thirty-seven thousand dollars ($937,000) for the
first nine (9) months of the fiscal year ended March 2005.
D. PROJECT ORDERS. SELLERS represent and warrant that CSI has in its
possession, new unfulfilled customer project orders valued at one-million
five-hundred thousand ($1,500,000) dollars to which the PURCHASER is entitled.
E. ASSETS. SELLERS represent that the PURCHASER is entitled to all assets of
CSI as they appear on CSI "Financial Statements" with the exception of the
following assets listed herein below:
i. Due from stockholder-R.M $ 20,302.87
ii. Due from stockholder-W.S $ 21,182.79
iii. # 2 Ford E-150 $ 22,769.07
iv. # 3 Ford F-150 $ 18,882.63
v. Industrial Condominium $ 147,615.00
E. LAWSUITS, LIENS & TAXES. SELLERS represent that to the best of SELLERS's
knowledge, that neither the SELLERS nor CSI is currently the subject of any
lawsuit threatened or filed. SELLERS also represent that CSI is free from any
liens or encumbrances. SELLERS shall be solely responsible for all taxes which
may be incurred by SELLERS resulting from the receipt of consideration by
SELLERS pursuant to this Agreement.
F. BROKERAGE. SELLERS have not made any agreement or taken any other action
which might cause anyone to become entitled to a broker's fee or commission from
the as a result of the transactions contemplated hereunder.
G. PREFERRED STOCK. SELLERS represent that there are no outstanding shares
of any other class of CSI stock including but not limited to CSI preferred
stock, other than the Shares of common stock represented in this Agreement.
3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. PURCHASER hereby
warrants and represents:
A. AUTHORITY RELATIVE TO THIS AGREEMENT AND ANCILLARY DOCUMENTS. Except as
otherwise stated herein, the PURCHASER has full power and authority to execute
this Agreement, and carry out the transactions contemplated hereby and thereby
and no further action is necessary by the PURCHASER to make this Agreement valid
and binding upon PURCHASER and enforceable against it in accordance with the
terms hereof, or to carry out the actions contemplated hereby and thereby. The
execution, delivery and performance of this Agreement by the PURCHASER will not:
i. constitute a breach or a violation of any law, agreement, indenture, deed
of trust, mortgage, loan agreement or other instrument to which it is a party,
or by which it is bound;
ii. constitute a violation of any order, judgment or decree to which it is a
party or by which its assets or properties are bound or affected; or
iii. result in the creation of any lien, charge or encumbrance upon its
assets or properties except as stated herein.
B. BROKERAGE. The PURCHASER has not made any agreement or taken any other
action which might cause anyone to become entitled to a broker's fee or
commission from the as a result of the transactions contemplated hereunder.
C. TAXES. PURCHASER shall be solely responsible for all taxes which may be
incurred by
PURCHASER resulting from the receipt of consideration by PURCHASER pursuant to
this Agreement.
D. LIABILITIES. PURCHASER represents that it shall assume all liabilities
of CSI as listed in CSI's Financial Statements, with the exception of the
liabilities listed herein below:
vi. Chase-7043 $ 4,000.00
vii. Equity Line-Indy $ 127,513.97
viii. LOC-6016 $ 24,533.65
ix. MBNA-7753 $ 9,120.48
x. Director $ 5,000.00
xi. Pat Langston $ 6,536.25
xii. Shareholder Loan-Will Stice $ 789.68
xiii. Deferred Income Tax $ 46,044.00
xiv. Note Payables of Ford Vehicles #s 1-3 $ 13,631.08
xv. Splitter/Loverme Pension $ 125,000.00
xvi. Trust Deed-Union Bank (6018) $ 85,318.79
4. EXPENSES. Each of the parties hereto shall pay its own expense in
connection with this Agreement and the transactions contemplated hereby,
including the fees and expenses of its counsel and its certified public
accountants and other experts.
5. CLOSING DELIVERIES. At the Closing, the deliveries hereinafter specified
shall be made by the respective parties hereto, in order to consummate the
transactions contemplated hereby. A best effort shall be made by both parties
regarding deliveries by the Closing date or such reasonable time thereafter.
A. DELIVERIES BY SELLERS. SELLERS shall deliver or caused to be delivered
to PURCHASER:
i. Stock certificates, and any and all other instruments of conveyance and
transfer as required by Section 1(a) of this Agreement; and
ii. copies of all third party consents necessary to consummate the
transaction contemplated herein.
iii. copies of CSI's most recent financial statements.
B. DELIVERIES BY PURCHASER. PURCHASER shall deliver or caused to be
delivered to SELLERS:
i. the Purchase Price of this Agreement; and Stock certificates, and any and
all other instruments of conveyance and transfer as required by Section 1(b) of
this Agreement; and
ii. copies of all third party consents necessary to consummate the
transaction contemplated herein.
6. STOCK SALES. Mallory agrees that when he is permitted to sell pursuant to
Rule 144, on the one year anniversary of this Agreement, that he will sell no
more than one twelfth (1/12th) of his total holdings in any one (1) month and
additionally, that he will not at anytime sell shares representing more than
five percent (5%) of the daily trading volume in any one day unless agreed to in
writing by the PURCHASER'S board of directors. Further, Mallory may not
transfer, pledge, hypothecate or loan his shares at any time nor under any
circumstances unless agreed to in writing by the Purchaser's board of directors.
7. GENERAL.
A. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Each of the parties to this
Agreement covenants and agrees that its respective representations, warranties,
covenants and statements and agreements contained in this Agreement and the
exhibits hereto, and in any documents delivered in connection herewith, shall
survive the Closing Date indefinitely. Except agreements between the PURCHASER
and SELLERS, and as set forth in this Agreement, the exhibits hereto or in the
documents and papers delivered in connection herewith, there are no other
agreements, representations, warranties or covenants by or among the parties
hereto with respect to the subject matter hereof.
B. WAIVERS. No action taken pursuant to this Agreement, including any
investigation by or on behalf of any party shall be deemed to constitute a
waiver by the party taking such action or compliance with any representation,
warranty, covenant or agreement contained herein, therein and in any documents
delivered in connection herewith or therewith. The waiver by any party hereto
of a breach of any provision of this Agreement shall not operate or be construed
as a waiver of any subsequent breach.
C. NOTICES. All notices, requests, demands and other communications, which
are required or may be given under this Agreement shall be in writing and shall
be deemed to have been duly given if delivered or mailed, first class mail,
postage prepaid:
To SELLERS: COM Services, Inc.
ATT/Raymond Mallory, President
711 W. 17th Street G6,
Costa Mesa, CA 92627
COM Services, Inc.
ATT/Will Stice
711 W.17th Street G6
Costa Mesa, CA. 92627
To PURCHASER: Network Installation Corp.
ATT/Michael Cummings, CEO
15235 Alton Parkway, Suite 200
Irvine, CA 92618
or to such other address as such party shall have specified by notice in writing
through Certified Mail to the other party.
E. ENTIRE AGREEMENT. This Agreement (including all documents and papers
delivered pursuant hereto and any written amendments hereof executed by the
parties hereto) constitutes the entire agreement and supersedes all prior
agreements and understandings, oral and written, between the parties hereto with
respect to the subject matter hereof.
F. SECTIONS AND OTHER HEADINGS. The section and other headings contained
in this Agreement are for reference purposes only and shall not affect the
meaning or interpretation of this Agreement.
G. GOVERNING LAW. This Agreement and all transactions contemplated hereby,
shall be governed by, construed and enforced in accordance with the laws of the
State of California. The parties herein waive trial by jury and agree to submit
to the personal jurisdiction and venue of a court of subject matter jurisdiction
located in Orange County, State of California. In the event that litigation
results from or arises out of this Agreement or the performance thereof, the
parties agree to reimburse the prevailing party's reasonable attorney's fees,
court costs, and all other expenses, whether or not taxable by the court as
costs, in addition to any other relief to which, the prevailing party may be
entitled.
H. CONTRACTUAL PROCEDURES. Unless specifically disallowed by law, should
litigation arise hereunder, service of process therefore, may be obtained
through certified mail, return receipt requested; the parties hereto waiving any
and all rights they may have to object to the method by which service was
perfected.
I. CONFIDENTIALITY AND NON-DISCLOSURE: Except to the extent required by
law, without the prior written consent, the undersigned will not make, and will
each direct its representatives not to make, directly or indirectly, any public
comment, statement, or communication with respect to, or to disclose or permit
the disclosure of the existence of this transaction prior to closing.
J. AMENDMENT AND WAIVER. The parties may by mutual agreement amend this
Agreement in any respect, and any party, as to such party, may (a) extend the
time for the performance of any of the obligations of any other party, and (b)
waive (i) any inaccuracies in representations by any other party, (ii)
compliance by any other party with any of the agreements contained herein and
performance of any obligations by such other party, and (iii) the fulfillment of
any condition that is precedent to the performance by such party of any of its
obligations under this Agreement. To be effective, any such amendment or waiver
must be in writing and be signed by the party against whom enforcement of the
same is sought.
K. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of whom shall for all purposes are deemed to be an original
and all of which shall constitute one instrument.
IN WITNESS WHEREOF, this Agreement has been executed by each of the individual
parties hereto, all on the date first above written.
PURCHASER
NETWORK INSTALLATION CORP.
/s/ Michael Cummings
_____________________________________
Michael Cummings, President & CEO
SELLER
RAYMOND MALLORY
/s/ Raymond Mallory
______________________________________
SELLER
WILL STICE
/S/ WILL STICE
______________________________________________
CSI
/S/ RAYMOND MALLORY
_______________________________________
Raymond Mallory, President