COMMON STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (THIS "AGREEMENT") IS MADE AND
ENTERED INTO AS OF THE 6TH DAY OF NOVEMBER, 2007, BY AND BETWEEN FIRST
GROWTH INVESTORS, INC., A NEVADA CORPORATION (THE "COMPANY"), AND HALTER
FINANCIAL INVESTMENTS, L.P., A TEXAS LIMITED PARTNERSHIP ("PURCHASER"),
WITH RESPECT TO THE FOLLOWING:
PREMISES
Purchaser desires to acquire a controlling interest in the Company,
and the Company desires to sell such a controlling interest in the
Company to Purchaser, upon and subject to the terms and conditions of
this Agreement.
AGREEMENT
NOW, THEREFORE, on these premises and for and in consideration of
the mutual promises and covenants set forth herein, the Company and
Purchaser hereby agree as follows:
1. Purchase and Sale of Shares. Purchaser agrees to acquire
from the Company, and the Company agrees to sell and to deliver to
Purchaser, 14,000,000 restricted shares of the Company's Common Stock,
par value $0.001 (the "Shares"), in consideration of Purchaser's payment
to the Company of $425,000 in immediately available funds at Closing (as
defined herein). The Shares, after the issuance thereof, shall
constitute 87.5% of the issued and outstanding shares of common stock of
the Company then outstanding. The transactions contemplated hereby shall
be closed by the delivery of the documents and the completion of the
acts more particularly set forth herein. The issue and sale of the
Shares to Purchaser hereunder is an isolated offering of common stock
being conducted by the Company in reliance upon the exemption from
the registration requirements of the Securities Act of 1933, as
amended ("Securities Act" or the "Act"), afforded by Section 4(2)
and/or Section 4(6) thereunder.
2. Closing. The closing of the transactions contemplated
hereby shall take place at a mutually agreeable location in Salt Lake
City, Utah on a mutually convenient date and time as soon as
practicable after the execution of this Agreement (the "Closing").
(a) At the Closing, the Company shall deliver or cause to be
delivered:
(i) Stock certificates for the Shares, which shall be
registered in the names and denominations requested by
Purchaser or its designees, and the same will be registered on
the stock transfer books of the Company as the record owner
of the Shares;
(ii) The corporate minute book and all other corporate books
and records of the Company, including agreements, stockholder
records, financial records, and related supporting documents
and data under the care, custody, or control of the Company or
its officers and/or directors;
(iii) A duly executed officer's certificate pursuant to
Section 6(c);
(iv) A duly executed receipt for the payment for the Shares;
and
(v) All documents reasonably required and contemplated
herein, including, but not limited to various corporate resolutions
and governmental filings relating to the transactions described
herein.
(b) At the Closing, Purchaser shall deliver or cause to be
delivered:
(i) A bank wire transfer to Xxxxxx X. Xxxxxx & Associates
Trust Account for the benefit of the Company in the aggregate
amount of $425,000;
(ii) A duly executed officer's certificate pursuant to
Section 7(c); and
(iii) All documents reasonably required and contemplated
herein, including, but not limited to various corporate
resolutions authorizing the matters set forth herein.
3. Representations and Warranties of the Company. The Company
represents and warrants to Purchaser that, at the date of this
Agreement and on the date of the Closing:
(a) The Company has the full power and authority to execute
and deliver this Agreement and to perform its obligations
hereunder. This Agreement constitutes the valid and legally
binding obligation of the Company, enforceable in accordance with
its terms. The Company need not give any notice to, make any
filings with, or obtain any authorization, consent, or approval
of any government or governmental agency in order to consummate
the transactions contemplated by this Agreement, except filings
with the U.S. Securities and Exchange Commission ("SEC"), state
securities regulators and the State of Nevada as may be required
in connection with the transactions contemplated hereby.
(b) The Company and each of its subsidiaries, if any, are
corporations duly organized, validly existing and in good
standing under the laws of their states of incorporation, with
all requisite corporate power and authority to carry on the
business in which they are engaged and to own the properties they
own, and the Company has all requisite power and authority to
execute and deliver this Agreement and to consummate the
transactions contemplated hereby, with the written majority
consent of its shareholders. The Company and each of its
subsidiaries are duly qualified and licensed to do business and
are in good standing in all jurisdictions where the nature of
their business makes such qualification necessary, except where
the failure to be so qualified or licensed would not have a
material adverse effect on the business of the Company and its
subsidiaries, taken as a whole.
(c) There are no legal actions or administrative proceedings
or investigations instituted, or to the best knowledge of the
Company threatened, against the Company, that could reasonably be
expected to have a material adverse effect on the Company or any
subsidiary, the Shares, or the business of the Company and its
subsidiaries, if any, or which concerns the transactions
contemplated by this Agreement.
(d) The Company, by appropriate and required corporate action,
has duly authorized the execution of this Agreement and the
issuance and delivery of the Shares. The Shares are not subject
to preemptive or other rights of any shareholders of the Company
and when issued in accordance with the terms of this Agreement
and the Articles of Incorporation of the Company, as amended and
currently in effect, the Shares will be validly issued, fully
paid and nonassessable and free and clear of all pledges, liens
and encumbrances. The issuance of the Shares hereunder will not
trigger any outstanding anti-dilution rights.
(e) Performance of this Agreement and compliance with the
provisions hereof will not violate any provision of any
applicable law or of the Articles of Incorporation or Bylaws of
the Company, or of any of its subsidiaries, and, will not
conflict with or result in any breach of any of the terms,
conditions or provisions of, or constitute a default under, or
result in the creation or imposition of any lien, charge or
encumbrance upon, any of the properties or assets of the Company,
or of any of its subsidiaries, pursuant to the terms of any
indenture, mortgage, deed of trust or other agreement or
instrument binding upon the Company, or any of its subsidiaries,
other than such breaches, defaults or liens which would not have
a material adverse effect on the Company and its subsidiaries
taken as a whole. The Company is not in default under any
provision of its Articles of Incorporation or Bylaws or other
organizational documents or under any provision of any agreement
or other instrument to which it is a party or by which it is
bound or of any law, governmental order, rule or regulation so as
to affect adversely in any material manner its business or assets
or its condition, financial or otherwise.
(f) The Company has filed all periodic reports required to be
filed by it with the SEC (the "Disclosure Documents") from
January 1, 2003 through the date hereof. The Disclosure
Documents, taken together, do not contain any untrue statement of
a material fact or omit to state a material fact required to be
stated therein to make the statements contained therein not
misleading.
(g) The Company has provided Purchaser with all material
public information in connection with the business of the Company
and the transactions contemplated by this Agreement, and no
representation or warranty made, nor any document, statement, or
financial statement prepared or furnished by the Company in
connection herewith contains any untrue statement of material
fact, or omits to state a material fact necessary to make the
statements or facts contained herein or therein not misleading.
(h) This Agreement has been duly executed and delivered by the
Company and constitutes a valid and binding obligation of the
Company, enforceable against the Company in accordance with its
terms.
(i) No registration, authorization, approval, qualification or
consent of any court or governmental authority or agency is
necessary in connection with the execution and delivery of this
Agreement or the offering, issuance or sale of the Shares under
this Agreement except any filings with the SEC, state securities
regulators and the State of Nevada as may be required in
connection with the transactions contemplated hereby.
(j) The Company is not now, and after the sale of the Shares
under this Agreement and under all other agreements and the
application of the net proceeds from the sale of the Shares will
not be required to register as an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
(k) The Company has filed all material tax returns required to
be filed, which returns are true and correct in all material
respects, and the Company is not in default in the payment of any
taxes, including penalties and interest, assessments, fees and
other charges, shown thereon as due or otherwise assessed, other
than those being contested in good faith and for which adequate
reserves have been provided or those currently payable without
interest which were payable pursuant to said returns or any
assessments with respect thereto.
(l) The Company has not taken any action outside the ordinary
course of business designed to or that might reasonably be
expected to cause or result in stabilization or manipulation of
the price of the Company's common stock to facilitate the sale or
resale of the Company's common stock in any manner in
contravention of applicable securities laws;
(m) Subject to the accuracy of the Purchaser's representations
and warranties in Section 4 of this Agreement, the offer, sale,
and issuance of the Shares in conformity with the terms of this
Agreement constitute transactions that meet the requirements for
exemption from the registration requirements of Section 5 of the
Securities Act;
(n) Neither the Company, nor any of its affiliates, nor any
person acting on its or their behalf, has directly or indirectly
made any offers or sales of any security or solicited any offers
to buy any security under circumstances that would require
registration under the Securities Act of the issuance of said
securities to any purchaser. The Company has not issued or sold
any shares of its capital stock during the two years prior to the
date hereof and the issuance of the Shares to the Purchaser will
not be integrated with any other issuance of the Company's
securities (past, current or future) for purposes of the
Securities Act. The Company will not make any offers or sales of
any security (other than the Shares) that would cause the sale of
the Shares hereunder to be integrated with any other offering of
securities by the Company for purposes of any registration
requirement under the Securities Act.
(o) The Company will at the date of Closing be in material
compliance with all applicable securities (or "Blue Sky") laws of
the states of the United States in connection with the issuance
and sale of the Shares to Purchaser.
(p) The Company shall use all commercially reasonable efforts
to keep its common stock quoted on the OTC Bulletin board.
(q) The Company's board of directors has, by unanimous written
consent, and by written majority consent of its shareholders
determined that this Agreement and the transactions contemplated
by this Agreement, are advisable and in the best interests of the
Company's shareholders, and the President of the Company has been
authorized and directed to sign this Agreement. Subject to
meeting all conditions precedent to closing the transactions
contemplated by the terms hereof, the Company's President will
take all steps to complete the transactions contemplated and
described herein and to consummate the Closing as described
herein.
(r) As of the date hereof, the capitalization of the Company
consists of 24,000,000 shares of common stock, par value $0.001, of
which 2,000,000 shares are issued and outstanding, all of which are
legally issued, fully paid, and nonassessable and not issued in
violation of the pre-emptive rights of any person. The Company has
2,000,000 shares of preferred stock authorized which can be issued
with such rights and preferences as determined by the Company's
board of directors. No shares of preferred stock are currently, or
have ever been, issued and outstanding. The Company has no options,
warrants or rights issued or outstanding.
(s) Since June 30, 2007, there has not been:
(i) Any material change in the business, operations, or
financial condition or the manner of conducting the
business of the Company;
(ii) Any declaration, setting aside, or payment of any
dividend or other distribution in respect of the shares of the
Company of any class, or any direct or indirect
redemption, purchase, or other acquisition of any shares
of any class of the Company;
(iii) Any agreement or arrangement to pay or accrue
compensation to any of the Company's officers, directors,
employees, or agents;
(iv) Any option, warrant, or right to purchase, or any other
right to acquire shares of any class of the Company
granted to any person;
(v) Any employment, bonus, or deferred compensation agreement
entered into between the Company and any of its officers,
directors, or any other employees or consultants;
(vi) Any issuance of securities of the Company;
(vii) Any indebtedness incurred or guaranteed by the Company
for borrowed money or any commitment to borrow money
entered into by the Company or any indebtedness for
accounts payable for materials or goods purchased by or
for services rendered on behalf of the Company, except for
items incurred in the ordinary course of business or in
connection with this Agreement and the transactions
contemplated hereby; or
(viii) Any amendment of the Articles of Incorporation or
Bylaws of the Company.
(t) The Company will comply with all requirements imposed by the
NASD, the SEC and the State of Nevada to accomplish the proposals
described herein including, but not limited to, Section 4 of the
Securities Act and Section 13 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") and will give the Purchaser the reasonable
prior opportunity to comment on all filings made with these and any
other required governmental agencies.
4. Representations and Warranties of Purchaser. Purchaser
represents and warrants to the Company that, at the date of this
Agreement and on the date of Closing:
(a) Purchaser has been furnished with and has carefully read
the Disclosure Documents as set forth in Section 3(f) hereof.
With respect to individual or partnership tax and other economic
considerations involved in this investment, Purchaser is not
relying on the Company (or any agent or representative of the
Company). Purchaser has carefully considered and has, to the
extent Purchaser believes such discussion necessary, discussed
with Purchaser's legal, tax, accounting and financial advisers
the suitability of an investment in the Shares for Purchaser's
particular tax and financial situation.
(b) Purchaser has had an opportunity to inspect relevant
documents relating to the organization and operations of the
Company. Purchaser acknowledges that all documents, records and
books pertaining to this investment which Purchaser has
requested have been made available for inspection by Purchaser
and Purchaser's attorney, accountant or other adviser(s).
(c) Purchaser and/or Purchaser's advisor(s) has/have had a
reasonable opportunity to ask questions of and receive answers
and to request additional relevant information from a person or
persons acting on behalf of the Company concerning the
transactions contemplated by this Agreement.
(d) Purchaser is not purchasing the Shares as a result of or
subsequent to any advertisement, article, notice or other
communication published in any newspaper, magazine or similar
media or broadcast over television or radio or presented at any
seminar.
(e) Purchaser, by reason of Purchaser's business or financial
experience, has the capacity to protect Purchaser's own
interests in connection with the transactions contemplated by
this Agreement.
(f) Purchaser has adequate means of providing for Purchaser's
current financial needs and contingencies, is able to bear the
substantial economic risks of an investment in the Shares for an
indefinite period of time, has no need for liquidity in such
investment and, at the present time, could afford a complete
loss of such investment.
(g) Purchaser has such knowledge and experience in financial,
tax and business matters so as to enable Purchaser to use the
information made available to Purchaser in connection with the
transaction to evaluate the merits and risks of an investment in
the Shares and to make an informed investment decision with
respect thereto.
(h) Purchaser acknowledges that the Shares have not been
registered under the Act or under any the securities act of any
state. Purchaser understands further that in absence of an
effective registration statement, the Shares can only be sold
pursuant to some exemption from registration, such as Rule 144
of the Act, which requires, among other conditions, that the
Shares must be held for a minimum of one (1) year.
(i) Purchaser recognizes that investment in the Shares
involves substantial risks. Purchaser acknowledges that
Purchaser has reviewed the risk factors identified within the
Disclosure Documents. Purchaser further recognizes that no
Federal or state agencies have passed upon this transaction or
made any finding or determination as to the fairness of this
investment.
(j) Purchaser acknowledges that each certificate representing
the Shares shall contain a legend substantially in the following
form:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 (THE "SECURITIES ACT") OR
UNDER APPLICABLE STATE SECURITIES LAWS AND MAY
NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED
OF UNLESS REGISTERED UNDER THE SECURITIES ACT
AND ANY APPLICABLE STATE SECURITIES LAWS OR
PURSUANT TO AVAILABLE EXEMPTIONS FROM SUCH
REGISTRATION, PROVIDED THAT THE PURCHASER
DELIVERS TO THE COMPANY AN OPINION OF COUNSEL
(WHICH OPINION AND COUNSEL ARE REASONABLY
SATISFACTORY TO THE COMPANY) CONFIRMING THE
AVAILABILITY OF SUCH EXEMPTION.
(k) Purchaser has the full legal right and power and all
authority and approval required (i) to execute and deliver, or
authorize execution and delivery of, this Agreement and all
other instruments executed and delivered by or on behalf of
Purchaser in connection with the purchase of the Shares, and
(ii) to purchase and hold the Shares. The signature of the
party signing on behalf of Purchaser is binding upon Purchaser.
Purchaser has not been formed for the specific purpose of
acquiring the Shares.
(l) Purchaser understands, acknowledges and agrees with the
Company as follows:
(i) No federal or state agency has made any findings or
determination as to the fairness of the terms of this
transaction for investment or any recommendations or
endorsement of the Shares.
(ii) The transaction is intended to be exempt from
registration under the Securities Act by virtue of Section
4(2) of the Securities Act.
(iii) Purchaser acknowledges that the information furnished
pursuant to this Agreement by the Company to Purchaser or
its advisers in connection with the transaction, is
confidential and nonpublic and agrees that all such
written information which is material and not yet publicly
disseminated by the Company shall be kept in confidence by
Purchaser and neither used by Purchaser for Purchaser's
personal benefit (other than in connection with this
transaction), nor disclosed to any third party, except
Purchaser's legal and other advisers who shall be advised
of the confidential nature of such information, for any
reason; provided, however, that this obligation shall not
apply to any such information that (i) is part of the
public knowledge or literature and readily accessible at
the date hereof, (ii) becomes a part of the public
knowledge or literature and readily accessible by
publication (except as a result of a breach of this
provision) or (iii) is received from third parties (except
third parties who disclose such information in violation
of any confidentiality agreements or obligations,
including, without limitation, any subscription agreement
entered into with the Company).
(iv) IN MAKING AN INVESTMENT DECISION, PURCHASER HAS
RELIED ON ITS OWN EXAMINATION OF THE COMPANY AND THE TERMS
OF THE TRANSACTION, INCLUDING THE MERITS AND RISKS
INVOLVED. THE SHARES HAVE NOT BEEN RECOMMENDED BY ANY
FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY
AUTHORITY. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
(m) Purchaser will comply with all requirements imposed on it
by the Exchange Act in connection with the consummation of the
transactions contemplated herein.
5. Special Covenants. The parties make and agree to the following
special covenants which have served as material inducements for their
respective decisions to enter into this Agreement.
(a) Actions of the Company's board of directors. The Company's
board of directors has, by unanimous written consent, authorized and
approved the following: (i) this Stock Purchase Agreement and the
transactions contemplated hereby; (ii) the declaration of a special
cash dividend in the amount of $0.21 per share for an aggregate amount
of $420,000 to the common shareholders of the Company as of a record
date on or about, but no less than, ten days from the Closing Date (the
"Dividend Record Date"); and (iii) the resignation of Xxx Xxxxxx as
the sole director and officer of the Company and the appointment of
Xxxxxxx Xxxxxxxx and/or such other persons as designated by Purchaser as
the directors of the Company effective on the Closing Date. The
Company's board of directors, and its shareholders by written majority
consent, will authorize and approve these matters and such other actions
as may be reasonably requested by Purchaser as may be required to
consummate the transactions contemplated by this Agreement.
(b) Limitation on Reverse Stock Splits. Following Closing,
Purchaser, as the controlling shareholder of the Company, will not
permit the Company to effect any reverse stock split following Closing
unless Xxxxxx X. Xxxxxx, as representative of the Company's current
shareholders, consents to any such reverse stock split in writing in
advance; provided, that the Company shall be entitled to effect up to
but no more than a 10 to 1 reverse stock split on a basis of 1 post
split share for each 10 (or fewer) pre-split shares without such
approval. This provision shall be binding upon any permitted
successors or assigns of Purchaser and shall automatically terminate
at the time the Company enters into a Going Public Transaction in
accordance with the terms of this Agreement.
(c) Limitation on Future Share Issuances. Following Closing,
Purchaser, as the controlling stockholder of the Company, will not
permit the Company to authorize the issuance of any additional shares
of the Company's capital stock or securities convertible into the
Company's capital stock except in connection with a combination
transaction with a corporation or other business entity with current
business operations (a "Going Public Transaction"). This provision
shall be binding upon any permitted successors or assigns of
Purchaser and shall automatically terminate at the time the Company
enters into a Going Public Transaction in accordance with the terms
of this Agreement.
(d) Minimum Qualifications for Going Public Transaction.
Following Closing, Purchaser, as the controlling stockholder of the
Company, will not allow the Company to enter into a Going Public
Transaction unless the Company, on a combined basis with the
operating entity with which it completes a Going Public Transaction,
satisfies the financial conditions for listing on the NASDAQ Capital
Market immediately following the closing of the Going Public
Transaction. This provision shall be binding upon any permitted
successors or assigns of Purchaser and shall automatically terminate
at the time the Company enters into a Going Public Transaction in
accordance with the terms of this Agreement.
(e) Transfer and Registration Rights.
(i) MANDATORY REGISTRATION. Upon receipt of written demand by
Purchaser, the Company shall prepare, and, as soon as
practicable but in no event later than 60 calendar days after
the date of such notice, file with the SEC a Registration
Statement or Registration Statements (as is necessary) on Form
S-3 (or if such form is unavailable, such other form as is
available for registration) covering the resale of all of the
Shares. The Company shall use its best efforts to have the
Registration Statement declared effective by the SEC as soon as
practicable.
(ii) PIGGY BACK REGISTRATION RIGHTS.
(aa) If the Company decides, including as required under
any demand registration rights agreement, to register any
of its common stock or securities convertible into or
exchangeable for common stock under the Securities Act on
a form which is suitable for an offering for cash or
shares of the Company held by third parties and which is
not a registration solely to implement an employee benefit
plan, a registration statement on Form S-4 (or successor
form) or a transaction to which Rule 145 or any other
similar rule of the SEC is applicable, the Company will
promptly give written notice to the Purchaser of its
intention to effect such a registration. Subject to
Section 5(e)(ii)(bb) below, the Company shall include all
of the Shares that the Purchaser requests to be included
in such a registration by a written notice delivered to
the Company within fifteen (15) days after the notice
given by the Company.
(bb) If the registration, as described in Section
5(e)(ii)(aa) above, involves an underwritten offering, the
Company will not be required to register Shares in excess
of the amount that the principal underwriter reasonably
and in good faith recommends may be included in such
offering (a "Cutback"), which recommendation, and
supporting reasoning, shall be delivered to Purchaser. If
such a Cutback occurs, the number of shares that are
entitled to be included in the registration and
underwriting shall be allocated in the following manner:
(i) first, to the Company for any securities it proposes
to sell for its own account, (ii) second, to the Purchaser
requiring such registration, and (iii) third, to other
holders of stock of the Company requesting inclusion in
the registration, pro rata among the respective holders
thereof on the basis of the number of shares for which
each such requesting holder has requested registration.
(cc) All costs and expenses of any such registration
statement shall be paid by the Company, other than sales
commissions and the expenses of any separate legal counsel
engaged by Purchaser.
(dd) The Shares issued pursuant to this Agreement may not
be transferred except in a transaction which is in
compliance with the Act and applicable state laws and
regulations.
(f) Directors of Company at Closing. As provided in Section
5(a) above, Xxx Xxxxxx shall resign as a member of the board of
directors and as the sole executive officer of the Company at
Closing and all persons designated by Purchaser shall be elected
to the Company's board of directors and shall commence their
term on the Closing Date.
(g) Special Cash Dividend. The Company shall declare and pay
to the persons who are common shareholders of record on the
Dividend Record Date a special cash dividend of $ 0.21 per share
of common stock for an aggregate dividend of $420,000. Purchaser
expressly acknowledges that it will not be entitled to
participate in such dividend. Purchaser also expressly
acknowledges that virtually all of the purchase price for the
Shares will be used to pay the dividend, which will have the
effect of materially reducing the book value of the Company
immediately following Closing.
(h) Form S-8 Registration of Acquiror Company Common Stock.
From and after the date of Closing and until such time as the
Company completes a Going Public Transaction, the Company shall
not issue any shares of the Company's common stock pursuant to a
registration statement on Form S-8.
(i) Resales of Restricted Stock. In the event the Company
determines in good faith and upon the advice of its counsel that
it is unable to permit the resale under Rule 144(k) of any of
the shares (the "Subject Shares") of restricted stock presently
held by the Company's current officers, directors and principal
shareholders (the "Subject Shareholders"), namely, 1,705,000
shares, which determination shall be made within ten business
days of the written request therefor from the Subject
Shareholders, then the Subject Shareholders shall immediately be
entitled to the same demand and piggyback registration rights
with respect to the Subject Shares that are provided to
Purchaser pursuant to Section 5(e) hereof and, in the event of
any Cutback, an equal number of the Shares of Purchaser and the
Subject Shareholders shall be included in any registration
statement (unless all of the Subject Shares have been included,
in which event a greater number of the Shares of Purchaser may
also be included) with respect to which Purchaser and the
Subject Shareholders have requested registration. All costs and
expenses of registration shall be paid by the Company, other
than sales commissions and the expenses of any separate legal
counsel engaged by the Subject Shareholders.
6. Conditions to Purchaser's Obligations. The obligations of
Purchaser to close the transactions contemplated by this Agreement are
subject, at its discretion, to the following conditions:
(a) The representations and warranties made by the Company in
this Agreement were true when made and shall be true at the date of
Closing with the same force and effect as if such representations
and warranties were made at and as of the date of Closing (except
for changes permitted by this Agreement), and the Company shall
have performed and complied with all covenants and conditions
required by this Agreement to be performed or complied with by it
prior to or at the Closing.
(b) Prior to the date of closing, there shall not have occurred
any material adverse change in the financial condition, business,
or operations of the Company, nor shall any event have occurred
which, with the lapse of time or the giving of notice or both, may
cause or create any material adverse change in the financial
condition, business, or operations of the Company.
(c) Purchaser shall have been furnished with a certificate,
signed by the president of the Company and dated as of the date of
closing, certifying as to the matters set forth in (a) and (b)
above.
(d) Purchaser shall have received copies of all documents and
information which it may have reasonably requested in connection
with the transactions contemplated by this Agreement.
(e) No stop order or suspension of trading shall have been
imposed by the SEC, or any other governmental regulatory body
with respect to public trading in the Company's common stock.
7. Conditions to the Company's Obligations. The obligations of
the Company to close the transactions contemplated by this Agreement are
subject, at its discretion, to the following conditions:
(a) The representations and warranties made by Purchaser in this
Agreement were true when made and shall be true at the date of
closing with the same force and effect as if such representations
and warranties were made at and as of the date of closing (except
for changes permitted by this Agreement), and Purchaser shall have
performed and complied with all covenants and conditions required
by this Agreement to be performed or complied with by it prior to
or at the Closing.
(b) Prior to the date of closing, there shall not have occurred
any material adverse change in the financial condition, business,
or operations of Purchaser, nor shall any event have occurred
which, with the lapse of time or the giving of notice or both, may
cause or create any material adverse change in the financial
condition, business, or operations of Purchaser.
(c) The Company shall have been furnished with a certificate,
signed by a duly designated and authorized representative of
Purchaser and dated as of the date of closing, certifying as to the
matters set forth in (a) and (b) above.
(d) No stop order or suspension of trading shall have been
imposed by the SEC, or any other governmental regulatory body
with respect to public trading in the Company's common stock.
8. Termination.
(a) This Agreement may be terminated by the board of directors
of the Company or by the Purchaser's General Partner at any time
prior to the Closing if:
(i) There shall be any actual or threatened action or
proceeding before any court or any governmental body which
shall seek to restrain, prohibit, or invalidate the
transactions contemplated by this Agreement and which, in
the judgment of such board of directors, made in good
faith and based on the advice of its legal counsel, makes
it inadvisable to proceed with the transactions
contemplated by this Agreement;
(ii) Any of the transactions contemplated by this
Agreement are disapproved by any regulatory authority
whose approval is required to consummate such transactions
or in the judgment of such board of directors, made in
good faith and based on the advice of counsel, there is
substantial likelihood that any such approval will not be
obtained or will be obtained only on a condition or
conditions which would be unduly burdensome, making it
inadvisable to proceed with the exchange; or
(iii) There shall occur any material adverse change in the
assets, properties, business, or financial condition of
the party not seeking termination pursuant to this
provision, which material adverse change occurs subsequent
to the date of the information included in this Agreement.
In the event of termination pursuant to this Section 8(a), no
obligation, right, or liability shall arise hereunder, and each
party shall bear all of the expenses incurred by it in
connection with the negotiation, drafting, and execution of this
Agreement and the transactions herein contemplated.
(b) This Agreement may be terminated at any time prior to the
Closing by action of the board of directors of the Company if
Purchaser shall fail to comply in any material respect with any
of its covenants or agreements contained in this Agreement or if
any of the representations or warranties of Purchaser contained
herein shall be inaccurate in any material respect. If this
Agreement is terminated pursuant to this Section 8(b), this
Agreement shall be of no further force or effect, and no
obligation, right, or liability shall arise hereunder, except
that Purchaser shall reimburse the Company for all costs and
expenses actually and reasonably incurred by it in connection
with this Agreement, which were incurred from and after the date
hereof; provided, however, such termination shall not relieve
Purchaser from any liability for damages resulting from any
willful and intentional breach of this Agreement.
(c) This Agreement may be terminated at any time prior to the
Closing by action of the Purchaser's General Partner if the
Company shall fail to comply in any material respect with any of
its covenants or agreements contained in this Agreement or if any
of the representations or warranties of the Company contained
herein shall be inaccurate in any material respect. If this
Agreement is terminated pursuant to this Section 8(c), this
Agreement shall be of no further force or effect and no
obligation, right, or liability shall arise hereunder, except
that the Company shall reimburse Purchaser for all costs and
expenses actually and reasonably incurred in connection with
Agreement, which were incurred from and after the date hereof;
provided, however, no such termination shall relieve the Company
from any liability for damages resulting from any willful and
intentional breach of this Agreement.
(d) This Agreement may be terminated by either the board of
directors of the Company or the Purchaser's General Partner, if
Closing shall not have occurred by the close of business on
November 30, 2007 (the "Termination Date "); provided, however,
that the right to terminate this Agreement under this section
shall not be available to any party whose failure to fulfill any
obligation under this Agreement has been the cause of, or
resulted in, the failure of the Closing to occur on or before the
Termination Date. In the event of termination pursuant to this
Section 8(d), no obligation, right, or liability shall arise
hereunder, and each party shall bear all of the expenses incurred
by it in connection with the negotiation, drafting, and execution
of this Agreement and the transactions herein contemplated.
9. Finders. Each of the respective parties hereto represents
and warrants to the other that no third person is entitled to any
commission or other compensation for in any way bringing the parties
together or being instrumental in reaching this Agreement or otherwise
acting as a finder or broker in connection herewith other than as
disclosed in writing to the other party hereto.
10. Survival. Except as otherwise expressly provided herein, the
representations, warranties and covenants of the respective parties set
forth in Sections 3, 4, 5, 8, 9, 10, 11, 12, 13, 14, 15, 16, 18 and 19
shall survive the Closing and shall continue in full force and effect
for a period of three years.
11. Governing Law. This Agreement shall be governed by and
construed under and in accordance with the laws of the state of
Nevada.
12. Expenses of Legal Proceedings. In any action, proceeding
or counterclaim brought to enforce any of the provisions of this
Agreement or to recover damages, costs and expenses in connection
with any breach of the Agreement, the prevailing party shall be
entitled to be reimbursed by the opposing party for all of the
prevailing party's reasonable outside attorneys' fees, costs and
other out-of-pocket expenses incurred in connection with such action,
proceeding or counterclaim.
13. Expenses of Transaction. Except as otherwise expressly
provided in this Agreement, each party to this Agreement will bear
its respective expenses incurred in connection with the preparation,
execution, and performance of this Agreement and the transactions
contemplated by this Agreement, including all fees and expenses of
agents, representatives, counsel, and accountants.
14. Public Announcements. The Company and Purchaser shall
consult with one another in issuing any press releases or otherwise
making public statements or filings and other communications with the
Commission or any regulatory agency or stock market or trading
facility with respect to the transactions contemplated hereby and
neither party shall issue any such press release or otherwise make
any such public statement, filings or other communications without
the prior written consent of the other, which consent shall not be
unreasonably withheld or delayed. Notwithstanding the foregoing,
however, no prior consent shall be required if any such disclosure is
required by law, in which case the disclosing party shall use its
reasonable best efforts in good faith to provide the other party with
prior notice of such public statement, filing or other communication
and incorporate into such public statement, filing or other
communication the reasonable comments of the other party.
15. Entire Agreement. This Agreement represents the entire
agreement between the parties relating to the subject matter hereof, and
there are no other courses of dealing, understandings, agreements,
representations, or warranties, written or oral, except as set forth
herein. No amendment or modification hereof shall be effective until
and unless the same shall have been set forth in writing and signed by
the parties hereto.
16. Severability. If any provision of this Agreement or the
application of such provision to any person or circumstance shall be
held invalid or unenforceable, the remainder of this Agreement or the
application of such provisions to persons or circumstances other than
those as to which it is held invalid or unenforceable, shall not be
affected thereby and this Agreement shall be construed as if such
invalid or unenforceable provision were not contained herein.
17. Notices. Any notices or other communications required or
permitted hereunder shall be sufficiently given if sent by registered
mail or certified mail, postage prepaid, or by a commercially recognized
means of overnight delivery that requires confirmation of receipt,
addressed as follows:
If to the Company, to: First Growth Investors, Inc.
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
Attn: Xxxxxx X. Xxxxxx
If to Purchaser, to: Halter Financial Investments, L.P.
00000 Xxxxxxx Xxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Chairman
or such other addresses as shall be furnished in writing by either party
to the other in the manner for giving notices hereunder, and any such
notice shall be deemed to have been given as of the date so mailed.
18. Further Assurances. The parties agree (a) to furnish upon
request to each other such further information, (b) to execute and
deliver to each other such other documents, and (c) to do such other
acts and things, all as the other party may reasonably request for
the purpose of carrying out the intent of this Agreement and the
documents referred to in this Agreement.
19. Assignments, Successors, and No Third-Party Rights. No
party may assign any of its rights under this Agreement without the
prior consent of the other party. Nothing expressed or referred to
in this Agreement will be construed to give any Person other than the
parties to this Agreement and, for purposes of Section 5, the current
members of the Company's board of directors as representatives of the
Company's current shareholders, any legal or equitable right, remedy,
or claim under or with respect to this Agreement or any provision of
this Agreement. This Agreement and all of its provisions and
conditions are for the sole and exclusive benefit of the parties to
this Agreement and their successors and assigns.
20. Execution in Counterparts. This Agreement may be executed in
multiple counterparts, each of which shall be deemed an original and all
of which taken together shall be but a single instrument.
IN WITNESS WHEREOF, this Agreement has been executed as of the date
first above written.
The Company: First Growth Investors, Inc.
A Nevada corporation
/s/Xxx Xxxxxx
By_______________________________
Xxx Xxxxxx, President
Purchaser: Halter Financial Investments, L.P.
A Texas Limited Partnership
/s/Xxxxxxx X. Xxxxxx
By: _______________________________
Xxxxxxx X. Xxxxxx, Chairman
