STOCK PURCHASE AGREEMENT
EXHIBIT
10.1
THIS
STOCK PURCHASE AGREEMENT (the “Agreement”) is made and entered into in duplicate
this 27th day of September, 2007, by and among Xxxxxxxxx Xxxxxx (the “Seller”);
and Fountainhead Capital Management Limited, a
Jersey,
Channel Islands corporation (the
“Purchaser”); Laurier International Inc., a Delaware corporation (the
“Corporation”).
RECITALS
A.
The
Seller is the owner of two million (2,000,000) shares of common stock issued
by
the Corporation (the “Shares”). Xxxx Xxxxxx, husband of the Seller, is the owner
of three million (3,000,000) shares of common stock issued by the
Corporation.
B.
The
Purchaser desires to purchase the Shares from the Seller, on the terms and
subject to the conditions specified in this Agreement.
C.
The
Seller desires to sell, assign, transfer, convey, surrender, deliver, and set
over the Shares to the Purchaser, on the terms and subject to the conditions
specified in this Agreement.
D.
In
addition to the Purchase Price (as that term is defined by the provisions of
Section 2 of this Agreement), to induce the Seller to sell the Shares to the
Purchaser, the parties desire that the Corporation (i) transfer, assign, convey,
deliver, and set over to Xxxx Xxxxxx all of the Corporation’s right, title, and
interest in and to those shares of capital stock issued by Geotheatre
Productions, Inc., a Delaware corporation (“Geotheatre”), and held by the
Corporation (the “Geotheatre Shares”) and (ii) deliver to Xxxx Xxxxxx all of the
books and records of Geotheatre.
NOW,
THEREFORE, IN CONSIDERATION OF THE RECITALS SPECIFIED ABOVE THAT SHALL BE DEEMED
TO BE A SUBSTANTIVE PART OF THIS AGREEMENT, AND THE MUTUAL COVENANTS, PROMISES,
UNDERTAKINGS, AGREEMENTS, REPRESENTATIONS AND WARRANTIES SPECIFIED IN THIS
AGREEMENT AND OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY
OF WHICH ARE HEREBY ACKNOWLEDGED, WITH THE INTENT TO BE OBLIGATED LEGALLY AND
EQUITABLY, THE PARTIES DO HEREBY COVENANT, PROMISE, AGREE, REPRESENT AND WARRANT
AS FOLLOWS:
1.
Purchase of Shares.
On the
terms and subject to all of the conditions specified by the provisions of this
Agreement and upon the performance by each of the parties of their respective
obligations created by the provisions of this Agreement, the Seller hereby
forever and irrevocably sells, assigns, transfers, surrenders, conveys,
delivers, and sets over the Shares to the Purchaser, and the Purchaser hereby
purchases the Shares from the Seller.
2.
The Purchase Price.
The
Purchaser shall deposit or cause to be deposited with Sichenzia Xxxx Xxxxxxxx
Xxxxxxx LLP, counsel for the Purchaser (the “Escrow Agent”), the principal
amount of $70,000.00 (the “Purchase Price”), which shall be held and distributed
by the Escrow Agent for distribution to the Seller in accordance with the
provisions set forth in the Escrow Agreement.
3.
Representations
and Warranties of the Seller and the Corporation. The
Seller and the Corporation hereby jointly and severally represent and warrant
to
the Purchaser that:
3.1. Organization
and Good Standing.
The
Corporation is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation. The
Corporation is not required to be qualified to transact business in any other
jurisdiction where the failure to do so would reasonably be expected to result
in (i) a material adverse effect on the legality, validity or enforceability
of
this Agreement, (ii) a material adverse effect on the results of operations,
assets, business or financial condition of the Corporation , taken as a whole,
or (iii) a material adverse effect on the Corporation’s ability to perform in
any material respect on a timely basis its obligations under this Agreement
(any
of (i), (ii) or (iii), a “Material
Adverse Effect”).
3.2. Authority.
(a) The
Corporation has full power and authority (corporate and otherwise) to carry
on
its business and has all permits and licenses that are necessary to the conduct
of its business or to the ownership, lease or operation of its properties and
assets.
(b) The
execution of this Agreement and the delivery hereof to the Purchaser and the
sale contemplated herein have been, or will be prior to Closing, duly authorized
by the Board of Directors of the Corporation, having full power and authority
to
authorize such actions.
(c) Subject
to any consents required under Section 3.7 below, the Seller and the Corporation
have the full legal right, power and authority to execute, deliver and carry
out
the terms and provisions of this Agreement; and this Agreement has been duly
and
validly executed and delivered on behalf of the Seller and the Corporation
and
constitutes a valid and binding obligation of the Seller and the Corporation,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general application
affecting enforcement of creditors' rights and subject to general principles
of
equity that restrict the availability of equitable remedies.
(d) Except
as
set forth in Schedule
3.2,
neither
the execution and delivery of this Agreement, the consummation of the
transactions herein contemplated, nor compliance with the terms of this
Agreement will violate, conflict with, result in a breach of, or constitute
a
default under any statute, regulation, indenture, mortgage, loan agreement,
or
other agreement or instrument to which the Seller or the Corporation is a party
or by which it or any of them is bound, any charter, regulation, or bylaw
provision of the Corporation, or any decree, order, or rule of any court or
governmental authority or arbitrator that is binding on the Seller or the
Corporation in any way.
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3.3. Shares.
(a) The
authorized capital stock of the Corporation consists of 80,000,000 shares of
common stock, par value $0.001 per share, of which 5,501,000 shares are issued
and outstanding as of the Closing Date. All of the Corporation’s Shares are duly
authorized, validly issued, fully paid and non-assessable.
(b) Seller
is
the lawful record and beneficial owner of 2,000,000 Shares, free and clear
of
any liens, pledges, encumbrances, charges, claims or restrictions of any kind,
except as set forth in Schedule
3.3,
and
have, or will have on the Closing Date, the absolute, unilateral right, power,
authority and capacity to enter into and perform this Agreement without any
other or further authorization, action or proceeding, except as specified
herein.
(c) There
are
no authorized or outstanding subscriptions, options, warrants, calls, contracts,
demands, commitments, convertible securities or other agreements or arrangements
of any character or nature whatever under which the Corporation is or may become
obligated to issue, assign or transfer any shares of capital stock of the
Corporation. Upon the delivery to Purchaser on the Closing Date of the
certificates representing the Shares, Purchaser will have good, legal, valid,
marketable and indefeasible title to 36.36 % the then issued and outstanding
shares of capital stock of the Corporation, free and clear of any liens,
pledges, encumbrances, charges, agreements, options, claims or other
arrangements or restrictions of any kind.
3.4. Basic
Corporate Records.
The
copies of the Certificate of Incorporation of the Corporation (certified by
the
Secretary of State or other authorized official of the jurisdiction of
incorporation), and the Bylaws of the Corporation, as the case may be (certified
as of the date of this Agreement as true, correct and complete by the
Corporation secretary or assistant secretary), all of which have been delivered
to the Purchaser, are true, correct and complete as of the date of this
Agreement.
3.5. Minute
Books.
The
minute book of the Corporation, which has been exhibited to the Purchaser,
contain true, correct and complete minutes and records of all meetings,
proceedings and other actions of the shareholders, Board of Directors and
committees of such Board of Directors of the Corporation, if any, and, on the
Closing Date, will contain true, correct and complete minutes and records of
any
meetings, proceedings and other actions of the shareholders, Board of Directors
and committees of such Board of Directors of the Corporation.
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3.6. Subsidiaries
and Affiliates.
The
Corporation wholly owns Geotheatre Productions, Inc., a Delaware corporation,
that was incorporated on March 12, 2001.
3.7. Consents.
Except
as set forth in Schedule
3.7,
no
consents or approvals of any public body or authority and no consents or waivers
from other parties to leases, licenses, franchises, permits, indentures,
agreements or other instruments are (i) required for the lawful consummation
of
the transactions contemplated hereby, or (ii) necessary in order that the
Business can be conducted by the Purchaser in the same manner after the Closing
as heretofore conducted by the Corporation nor will the consummation of the
transactions contemplated hereby result in creating, accelerating or increasing
any liability of the Corporation.
3.8. SEC
Reports; Financial Statements.
The
Corporation has filed all reports, schedules, forms, statements and other
documents required to be filed by the Corporation under the Securities Act
and
the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for
the
two years preceding the date hereof (or such shorter period as the Corporation
was required by law or regulation to file such material) (the foregoing
materials, including the exhibits thereto and documents incorporated by
reference therein, being collectively referred to herein as the “SEC
Reports”)
on a
timely basis or has received a valid extension of such time of filing and has
filed any such SEC Reports prior to the expiration of any such extension. As
of
their respective dates, the SEC Reports complied in all material respects with
the requirements of the Securities Act and the Exchange Act, as applicable,
and
none of the SEC Reports, when filed, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The audited financial
statements of the Corporation and its Subsidiaries for the past two fiscal
years
and unaudited financial statement for the most recent fiscal quarter, to the
extent not included in the SEC Reports, are attached hereto as Schedule
3.8.
Such
financial statements comply in all material respects with applicable accounting
requirements and the rules and regulations of the Commission with respect
thereto as in effect at the time of filing. Such financial statements have
been
prepared in accordance with United States generally accepted accounting
principles applied on a consistent basis during the periods involved
(“GAAP”),
except as may be otherwise specified in such financial statements or the notes
thereto and except that unaudited financial statements may not contain all
footnotes required by GAAP, and fairly present in all material respects the
financial position of the Corporation and its consolidated Subsidiaries as
of
and for the dates thereof and the results of operations and cash flows for
the
periods then ended, subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments. For the purposes hereof, the balance
sheet of the Corporation as of June 30, 2007 is referred to as the “Balance
Sheet” and June 30, 2007 is referred to as the “Balance Sheet
Date”.
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3.9. Records
and Books of Account.
The
records and books of account of the Corporation reflect all material items
of
income and expense and all material assets, liabilities and accruals, and have
been, and to the Closing Date will be, regularly kept and maintained in
conformity with GAAP applied on a consistent basis and delivered to the
Purchaser on the Closing Date. Subsequent to the Closing Date, the Corporation
will assist the Purchaser in filing the Corporation’s Form 10-QSB on September
30, 2007.
3.10. Absence
of Undisclosed Liabilities.
There
are no liabilities or obligations of the Corporation of any kind whatsoever,
whether accrued, fixed, absolute, contingent, determined or determinable, and
including without limitation (i) liabilities to former, retired or active
employees of the Corporation under any pension, health and welfare benefit
plan,
vacation plan or other plan of the Corporation, (ii) tax liabilities incurred
in
respect of or measured by income for any period prior to the close of business
on the Balance Sheet Date, or arising out of transactions entered into, or
any
state of facts existing, on or prior to said date, and (iii) contingent
liabilities in the nature of an endorsement, guarantee, indemnity or warranty,
and there is no condition, situation or circumstance existing or which has
existed that would reasonably be expected to result in any material liability
of
the Corporation, other than liabilities and contingent liabilities incurred
in
the ordinary course of business since the Balance Sheet Date consistent with
the
Corporation recent customary business practice, none of which would reasonably
be expected to have a Material Adverse Effect.
3.11. Taxes.
(a) For
purposes of this Agreement, “Tax” or “Taxes” refers to: (i) any and all federal,
state, local and foreign taxes, assessments and other governmental charges,
duties, impositions and liabilities relating to taxes, including taxes based
upon or measured by gross receipts, income, profits, sales, use and occupation,
and value added, ad valorem, transfer, franchise, withholding, payroll,
recapture, employment, excise and property taxes and escheatment payments,
together with all interest, penalties and additions imposed with respect to
such
amounts and any obligations under any agreements or arrangements with any other
person with respect to such amounts and including any liability for taxes of
a
predecessor entity; (ii) any liability for the payment of any amounts of the
type described in clause (i) as a result of being or ceasing to be a member
of
an affiliated, consolidated, combined or unitary group for any period
(including, without limitation, any liability under Treas. Reg. Section 1.1502-6
or any comparable provision of foreign, state or local law); and (iii) any
liability for the payment of any amounts of the type described in clause (i)
or
(ii) as a result of any express or implied obligation to indemnify any other
person or as a result of any obligations under any agreements or arrangements
with any other person with respect to such amounts and including any liability
for taxes of a predecessor entity.
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(b) (i) The
Corporation has timely filed all federal, state, local and foreign returns,
estimates, information statements and reports (“Returns”) relating to Taxes
required to be filed by the Corporation with any Tax authority. All such Returns
are true, correct and complete in all material respects. The Corporation has
paid all Taxes shown to be due on such Returns. Except as listed on Schedule
3.11
hereto,
the Corporation is currently the beneficiary of any extensions of time within
which to file any Returns. The Seller and the Corporation have furnished and
made available to the Purchaser complete and accurate copies of all income
and
other Tax Returns and any amendments thereto filed by the Corporation in the
last three (3) years.
(ii) The
Corporation, as of the Closing Date, will have withheld and accrued or paid
to
the proper authority all Taxes required to have been withheld and accrued or
paid.
(iii) The
Corporation has not been delinquent in the payment of any Tax nor is there
any
Tax deficiency outstanding or assessed against the Corporation. The Corporation
has not executed any unexpired waiver of any statute of limitations on or
extending the period for the assessment or collection of any Tax.
(iv) There
is
no dispute, claim, or proposed adjustment concerning any Tax liability of the
Corporation either (A) claimed or raised by any Tax authority in writing or
(B)
based upon personal contact with any agent of such Tax authority, and there
is
no claim for assessment, deficiency, or collection of Taxes, or proposed
assessment, deficiency or collection from the Internal Revenue Service or any
other governmental authority against the Corporation which has not been
satisfied. The Corporation is not a party to nor has the Corporation been
notified in writing that it is the subject of any pending, proposed, or
threatened action, investigation, proceeding, audit, claim or assessment by
or
before the Internal Revenue Service or any other governmental authority, nor
does the Corporation have any reason to believe that any such notice will be
received in the future. Neither the Internal Revenue Service nor any state
or
local taxation authority has ever audited any income tax return of the
Corporation. The Corporation has not filed any requests for rulings with the
Internal Revenue Service. No power of attorney has been granted by the
Corporation or its Affiliates with respect to any matter relating to Taxes
of
the Corporation. There are no Tax liens of any kind upon any property or assets
of the Corporation, except for inchoate liens for Taxes not yet due and
payable.
(v) The
Corporation has no liability for any unpaid Taxes which has not been paid or
accrued for or reserved on the Financial Statements in accordance with GAAP,
whether asserted or unasserted, contingent or otherwise.
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(vi) There
is
no contract, agreement, plan or arrangement to which the Corporation is a party
as of the date of this Agreement, including but not limited to the provisions
of
this Agreement, covering any employee or former employee of the Corporation
that, individually or collectively, would reasonably be expected to give rise
to
the payment of any amount that would not be deductible pursuant to Sections
280G, 404 or 162(m) of the Internal Revenue Code of 1986, as amended (the
“Code”). There is no contract, agreement, plan or arrangement to which the
Corporation is a party or by which it is bound to compensate any individual
for
excise taxes paid pursuant to Section 4999 of the Code.
(vii) The
Corporation has not filed any consent agreement under Section 341(f) of the
Code
or agreed to have Section 341(f)(2) of the Code apply to any disposition of
a
subsection (f) asset (as defined in Section 341(f)(4) of the Code) owned by
the
Corporation.
(viii) The
Corporation is not a party to, nor does it have any obligation under, any
tax-sharing, tax indemnity or tax allocation agreement or
arrangement.
(ix) None
of
the Corporation assets are tax exempt use property within the meaning of Section
168(h) of the Code.
3.12. Reserved.
3.13. Reserved.
3.14. Reserved.
3.15. Real
Property Matters.
The
Corporation does not owns any real property as of the date hereof and has not
owned any real property during the three years preceding the date
hereof.
3.16. Reserved.
3.17. Reserved.
3.18. Reserved.
3.19. Banking
and Personnel Lists.
The
Seller and the Corporation will deliver to the Purchaser prior to the Closing
Date the following accurate lists and summary descriptions relating to the
Corporation:
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(i) The
name
of each bank in which the Corporation has an account or safe deposit box and
the
names of all persons authorized to draw thereon or have access
thereto.
(ii) The
names, current annual salary rates and total compensation for the preceding
fiscal year of all of the present directors and officers of the Corporation,
and
any other employees whose current base accrual salary or annualized hourly
rate
equivalent is $20,000 or more, together with a summary of the bonuses,
percentage compensation and other like benefits, if any, paid or payable to
such
persons for the last full fiscal year completed, together with a schedule of
changes since that date, if any.
(iii) A
schedule of workers’ compensation payments of the Corporation over the past five
full fiscal years and the fiscal year to date, a schedule of claims by employees
the Corporation against the workers’ compensation fund for any reason over such
period, identification of all compensation and medical benefits paid to date
on
each such claim and the estimated amount of compensation and medical benefits
to
be paid in the future on each such claim.
(iv) The
name
of all pensioned employees of the Corporation whose pensions are unfunded and
are not paid or payable pursuant to any formalized pension arrangements, their
agent and annual unfunded pension rates.
(v) The
name,
address, telephone number, facsimile number, email address, the name of the
principal contact and all other relevant contact information of all clients
and
customers of the Corporation.
3.20. Contracts.
Except
as would not have a material adverse effect on the Corporation or its
obligations, (i) all contracts, agreements and commitments of the Corporation
are valid, binding and in full force and effect, and (ii) neither the
Corporation nor, to the Seller’s knowledge, any other party to any such
contract, agreement, or commitment has materially breached any provision thereof
or is in default thereunder. The sale of the Shares by the Seller in accordance
with this Agreement will not result in the termination of any contract,
agreement or commitment of the Corporation, and immediately after the Closing,
each such contract, agreement or commitment will continue in full force and
effect without the imposition or acceleration of any burdensome condition or
other obligation on the Corporation resulting from the sale of the Shares by
the
Seller. True and complete copies of all contracts of the Corporation will be
delivered to Purchaser at Closing.
3.21. Compliance
With the Law.
The
Corporation is not in material violation of any applicable federal, state,
local
or foreign law, regulation or order or any other, decree or requirement of
any
governmental, regulatory or administrative agency or authority or court or
other
tribunal (including, but not limited to, any law, regulation order or
requirement relating to securities, properties, business, products,
manufacturing processes, advertising, sales or employment practices, terms
and
conditions of employment, occupational safety, health and welfare, conditions
of
occupied premises, product safety and liability, civil rights, or environmental
protection, including, but not limited to, those related to waste management,
air pollution control, waste water treatment or noise abatement). Except as
set
forth in Schedule
3.21,
the
Corporation has not been and is not now charged with, or to the knowledge of
the
Seller or the Corporation under investigation with respect to, any violation
of
any applicable law, regulation, order or requirement relating to any of the
foregoing, nor, to the knowledge of Seller or the Corporation, are there any
circumstances that would reasonably be expected to give rise to any such
violation. The Corporation has filed all reports required to be filed with
any
governmental, regulatory or administrative agency or authority.
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3.22. Litigation;
Pending Labor Disputes.
(i) There
are
no legal, administrative, arbitration or other proceedings or governmental
investigations pending or, to the knowledge of Seller or the Corporation,
threatened, against the Seller or the Corporation, relating to the Business
or
the Corporation or its properties (including leased property), or the
transactions contemplated by this Agreement, nor is there any basis known to
the
Seller or the Corporation for any such action.
(ii) There
are
no judgments, decrees or orders of any court, or any governmental department,
commission, board, agency or instrumentality binding upon Seller or the
Corporation relating to the Business or the Corporation the effect of which
is
to prohibit any business practice or the acquisition of any property or the
conduct of any business by the Corporation or which limit or control or
otherwise adversely affect its method or manner of doing business.
(iii) No
work
stoppage has occurred and is continuing or, to the knowledge of Seller or the
Corporation, is threatened affecting the Business, and no representation
question involving recognition of a collective bargaining agent exists in
respect of any employees of the Corporation.
(iv) There
are
no charges of discrimination (relating to sex, age, race, national origin,
handicap or veteran status) or unfair labor practices pending or, to the
knowledge of the Seller or the Corporation, threatened before any governmental
or regulatory agency or authority or any court relating to employees of the
Corporation.
3.23. Absence
of Certain Changes or Events.
The
Corporation has not, since the Balance Sheet Date, except as described on
Schedule
3.23:
(i) Incurred
any material obligation or liability (absolute, accrued, contingent or
otherwise) except for obligations or liabilities incurred in the ordinary
course, and any such obligation or liability incurred in the ordinary course
would not have a Material Adverse Effect, except for claims, if any, that are
adequately covered by insurance;
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(ii) Discharged
or satisfied any lien or encumbrance, or paid or satisfied any obligations
or
liability (absolute, accrued, contingent or otherwise) other than (a)
liabilities shown or reflected on the Balance Sheet, and (b) liabilities
incurred since the Balance Sheet Date in the ordinary course of business that
would not have a Material Adverse Effect;
(iii) Increased
or established any reserve or accrual for taxes or other liability on its books
or otherwise provided therefor, except (a) as disclosed on the Balance Sheet,
or
(b) as may have been required under generally accepted accounting principles
due
to income earned or expense accrued since the Balance Sheet Date and as
disclosed to the Purchaser in writing;
(iv) Mortgaged,
pledged or subjected to any lien, charge or other encumbrance any of its assets,
tangible or intangible;
(v) Sold
or
transferred any of its assets or cancelled any debts or claims or waived any
rights, except in the ordinary course of business and which would not have
a
Material Adverse Effect;
(vi) Disposed
of or permitted to lapse any patents or trademarks or any patent or trademark
applications material to the operation of its business;
(vii) Incurred
any significant labor trouble or granted any general or uniform increase in
salary or wages payable or to become payable by it to any director, officer,
employee or agent, or by means of any bonus or pension plan, contract or other
commitment increased the compensation of any director, officer, employee or
agent, other than regularly scheduled increases that are consistent with past
practices;
(viii) Authorized
any capital expenditure for real estate or leasehold improvements, machinery,
or
equipment in excess of $10,000.00 in the aggregate;
(ix) Except
for this Agreement, entered into any material transaction;
(x) Issued
any stocks, bonds, or other corporate securities, or made any declaration or
payment of any dividend or any distribution in respect of its capital stock;
or
(xi) Experienced
damage, destruction or loss (whether or not covered by insurance) that would
individually or in the aggregate have a Material Adverse Effect or experienced
any other material adverse change or changes individually or in the aggregate
that would have a Material Adverse Effect.
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3.24. Employee
Benefit Plans.
(a) Schedule
3.24
lists a
description of the only Employee Programs (as defined below) that have been
maintained (as such term is further defined below) the Corporation at any time
during the five (5) years prior to the date hereof.
(b) Except
as
would not be expected to have a Material Adverse Effect, there has not been
any
failure of any party to comply with any laws applicable with respect to any
Employee Program that has been maintained by the Corporation. With respect
to
any Employee Programs now or heretofore maintained by the Corporation, there
has
occurred no breach of any duty under the Employee Retirement Income Security
Act
of 1974, as amended (“ERISA”) or other applicable law which could result,
directly or indirectly in any taxes, penalties or other liability to the
Purchaser, the Corporation or any affiliate (as defined below) and that would
not have a Material Adverse Effect. No litigation, arbitration, or governmental
administrative proceeding (or investigation) or other proceeding (other than
those relating to routine claims for benefits) that would not have a Material
Adverse Effect is pending or, to the knowledge of the Corporation or Seller,
threatened with respect to any such Employee Program.
(c) Except
as
set forth in Schedule
3.24
attached
hereto, the Corporation nor any affiliate has ever (i) provided health care
or
any other non-pension benefits to any employees after their employment was
terminated (other than as required by Part 6 of Subtitle B of Title I of ERISA)
or has ever promised to provide such post-termination benefits or (ii)
maintained an Employee Program provided to such employees subject to Title
IV of
ERISA, Section 401(a) or Section 412 of Code, including, without limitation,
any
Multiemployer Plan.
(d) For
purposes of this Section
3.24:
(i) “Employee
Program” means (A) all employee benefit plans within the meaning of ERISA
Section 3(3), including, but not limited to, multiple employer welfare
arrangements (within the meaning of ERISA Section 3(40)), plans to which more
than one unaffiliated employer contributes and employee benefit plans (such
as
foreign or excess benefit plans) which are not subject to ERISA; and (B) all
stock option plans, bonus or incentive award plans, severance pay policies
or
agreements, deferred compensation agreements, supplemental income arrangements,
vacation plans, and all other employee benefit plans, agreements, and
arrangements not described in (A) above. In the case of an Employee Program
funded through an organization described in Code Section 501(c)(9), each
reference to such Employee Program shall include a reference to such
organization;
(ii) An
entity
“maintains” an Employee Program if such entity sponsors, contributes to, or
provides (or has promised to provide) benefits under such Employee Program,
or
has any obligation (by agreement or under applicable law) to contribute to
or
provide benefits under such Employee Program, or if such Employee Program
provides benefits to or otherwise covers employees of such entity (or their
spouses, dependents, or beneficiaries);
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(iii) An
entity
is an “affiliate” of the Corporation for purposes of this Section
3.24
if it
would have ever been considered a single employer with the Corporation under
ERISA Section 4001(b) or part of the same “controlled group” as the Corporation
for purposes of ERISA Section 302(d)(8)(C); and
(iv) “Multiemployer
Plan” means a (pension or non-pension) employee benefit plan to which more than
one employer contributes and which is maintained pursuant to one or more
collective bargaining agreements.
3.25. Reserved.
3.26. Reserved.
3.27. Absence
of Certain Commercial Practices.
Except
as described on Schedule
3.27,
neither
the Corporation nor the Seller has made any payment (directly or by secret
commissions, discounts, compensation or other payments) or given any gifts
to
another business concern, to an agent or employee of another business concern
or
of any governmental entity (domestic or foreign) or to a political party or
candidate for political office (domestic or foreign), to obtain or retain
business for the Corporation or to receive favorable or preferential treatment,
except for gifts and entertainment given to representatives of customers or
potential customers of sufficiently limited value and in a form (other than
cash) that would not be construed as a bribe or payoff.
3.28. Licenses,
Permits, Consents and Approvals.
The
Corporation has, and at the Closing Date will have, all licenses, permits or
other authorizations of governmental, regulatory or administrative agencies
or
authorities (collectively, “Licenses”) required to conduct the Business and the
absence of any of which would have a Material Adverse Effect. All Licenses
of
the Corporation are listed on Schedule
3.28
hereto.
At the Closing, the Corporation will have all such Licenses which are material
to the conduct of the Business and the absence of any of which would have a
Material Adverse Effect, and will have renewed all Licenses which would have
expired in the interim. Except as listed in Schedule
3.28,
no
registration, filing, application, notice, transfer, consent, approval, order,
qualification, waiver or other action of any kind (collectively, a “Filing”)
will be required as a result of the sale of the Shares by Seller in accordance
with this Agreement (a) to avoid the loss of any License or the violation,
breach or termination of, or any default under, or the creation of any lien
on
any asset of the Corporation pursuant to the terms of, any law, regulation,
order or other requirement or any contract binding upon the Corporation or
to
which any such asset may be subject, or (b) to enable Purchaser (directly or
through any designee) to continue the operation of the Corporation and the
Business substantially as conducted prior to the Closing Date. All such Filings
will be duly filed, given, obtained or taken on or prior to the Closing Date
and
will be in full force and effect on the Closing Date.
12
3.29. Environmental
Matters.
Except
as set forth on Schedule
3.29
hereto:
(a) To
the
Seller’s knowledge, the operations of the Corporation are in compliance with all
applicable Laws promulgated by any governmental entity which prohibit, regulate
or control any hazardous material or any hazardous material activity
(“Environmental Laws”) and all permits issued pursuant to Environmental Laws or
otherwise except for where noncompliance or the absence of such permits would
not, individually or in the aggregate, have a Material Adverse
Effect;
(b) To
the
Seller’s knowledge, the Corporation has obtained all permits required under all
applicable Environmental Laws necessary to operate the Business;
and
(c) The
Corporation has not the subject of any outstanding written order or Contract
with any governmental authority or person respecting Environmental Laws or
any
violation or potential violations thereof.
3.30. Broker.
Except
as specified in Schedule
3.30,
neither
the Corporation nor the Seller has retained any broker in connection with any
transaction contemplated by this Agreement. Purchaser and the Corporation shall
not be obligated to pay any fee or commission associated with the retention
or
engagement by the Corporation or Seller of any broker in connection with any
transaction contemplated by this Agreement.
3.31. Related
Party Transactions.
Except
as described in Schedule
3.31,
all
transactions during the past five years between the Corporation and any current
or former shareholder or any entity in which the Corporation or any current
or
former shareholder had or has a direct or indirect interest have been fair
to
the Corporation as determined by the Board of Directors of each Corporation.
No
portion of the sales or other on going business relationship of the Corporation
is exclusively dependent upon the friendship or the personal relationships
(other than those customary within business generally) of the Seller, except
as
described in Schedule
3.31.
During
the past five (5) years, the Corporation has not forgiven or cancelled, without
receiving full consideration, any indebtedness owing to it by the Seller.
3.32. Patriot
Act.
The
Corporation and the Seller certify that the Corporation has not been designated,
and is not owned or controlled, by a “suspected terrorist” as defined in
Executive Order 13224. The Corporation and the Seller hereby acknowledge that
the Purchaser seeks to comply with all applicable laws concerning money
laundering and related activities. In furtherance of those efforts, the
Corporation and the Seller hereby represent, warrant and agree that: (i) none
of
the cash or property that the Seller has contributed or paid or will contribute
or will contribute and pay to the Corporation has been or shall be derived
from,
or related to, any activity that is deemed criminal under United States law;
and
(ii) the business of the Corporation has been conducted in material compliance
with the United States Bank Secrecy Act, the United States International Money
Laundering Control Act of 1986 and the United States International Money
Laundering Abatement and Anti-Terrorist Financing Act of 2001. The Seller shall
promptly notify the Purchaser if any of these representations ceases to be
true
and accurate regarding the Seller or the Corporation. The Seller agrees to
provide the Purchaser any additional information regarding the Corporation
that
the Purchaser reasonably requests to ensure compliance with all applicable
laws
concerning money laundering and similar activities.
13
3.33. Disclosure.
All
statements contained in any contract, schedule, closing certificate, opinion,
or
other closing document delivered by or on behalf of the Seller or the
Corporation pursuant hereto or in connection with the transactions contemplated
hereby shall be deemed representations and warranties by the Seller and the
Corporation herein. No statement, representation or warranty by the Seller
or
the Corporation in this Agreement or in any contract, schedule, closing
certificate, opinion, or other closing document furnished or to be furnished
to
the Purchaser pursuant hereto or in connection with the transactions
contemplated hereby contains or will contain any untrue statement of a material
fact or omits or will omit to state a material fact required to be stated
therein or necessary to make the statements contained therein not misleading
or
necessary in order to provide a prospective purchaser of the business the
Corporation with full and fair disclosure concerning the Corporation, the
Business and the Corporation’s affairs.
3.34.
Voluntary
Nature of Transaction. The
sale
by the Seller to the Purchaser of the Shares is made freely and voluntarily
by
the Seller. The Seller, in selling the Shares to the Purchaser, is not acting
under fraud, duress, menace, or undue influence.
4.
Purchaser’s Representations, Warranties, and Covenants.
The
Purchaser represents and warrants to the Seller and covenants with the Seller
the following, the truth and accuracy of each of which shall constitute a
condition precedent to the obligations of the Seller pursuant
hereto:
4.1
Validity
of Agreement.
This
Agreement is valid and obligates the Purchaser. The Purchaser has full and
complete power and authority to purchase the Shares, as contemplated by the
provisions of this Agreement. The person signing and delivering this Agreement
for and on behalf of the Purchaser has the capacity, and has been authorized,
empowered, and instructed, to sign and deliver this Agreement. The execution
and
delivery of this Agreement by the Purchaser and the consummation of the
transaction contemplated by this Agreement has been duly authorized and approved
by the requisite authority of the Purchaser, and no other action by the
Purchaser is necessary to approve this Agreement or approve the consummation
of
that transaction.
4.2
Brokerage
and Finder's Fees.
The
Purchaser has not incurred any liability to any broker, finder, or agent for
any
brokerage fees, finder's fees, or commissions with respect to the transaction
contemplated by the provisions of this Agreement.
14
4.3
Voluntary
Nature of Transaction. The
Purchaser’s purchase of the Shares is made freely and voluntarily by the
Purchaser. The Purchaser, in purchasing the Shares, is not acting under fraud,
duress, menace, or undue influence.
4.4
Restricted
Securities.
The
Purchaser is aware that the Seller acquired the Shares in a transaction which
was exempt from the registration and prospectus delivery requirements of the
Securities Act of 1933 (the “Act”); and, therefore, the Shares are “restricted
securities” (as that term is contemplated by the provisions of Rule 144
promulgated pursuant to the Act). Additionally, the Purchaser understands that
the Shares cannot be sold, assigned, transferred, or conveyed (a) without
registration pursuant to (i) the Act and (ii) relevant state securities acts
or,
alternatively, (b) in a transaction exempt from such registration.
4.5
Organization
and Qualification of the Purchaser.
The
Purchaser is a corporation duly organized, validly existing, and in good
standing pursuant to the laws of its jurisdiction of incorporation.
4.6
Reserved.
4.7
Return
of Books and Records of Geotheatre.
As a
condition precedent to the sale by the Seller of the Shares to the Purchaser,
the Purchaser shall cause the Corporation to deliver to Xxxxx Law Group, for
the
benefit of Xxxx Xxxxxx, at the expense of the Corporation, all of the books,
records, and other “writings” (as that term is defined by the provisions of
Section 250 of the California Evidence Code) in the possession of the
Corporation in any way relating to Geotheatre or its business (the “Geotheatre
Records”).
5.
Closing Procedures
5.1 Resignation
as Director of the Corporation.
The
Seller shall deliver or cause to be delivered to the Purchaser that letter
of
resignation of the Seller, subject to Section 14(f) of the Exchange Act, as
which the Seller resigns as a member of the Board of Directors of the
Corporation. An Information Statement in connection with the intended
appointment of one new member of the Corporation’s Board of Directors shall
thereafter be mailed to stockholders of the Company pursuant to Section 14(f)
of
the Exchange Act and Rule 14(f)(1) thereunder.
5.2
Delivery
of Stock Certificate.
The
Escrow Agent shall deliver the stock certificate and the Purchase Price in
accordance with the terms and provisions of the Escrow Agreement.
6.
Sale of Common Stock by Xxxx Xxxxxx.
The
Purchaser’s obligations to purchase the Shares shall be, and hereby is,
conditioned completely on the sale by Xxxx Xxxxxx of those three million
(3,000,000) shares of common stock issued by the Corporation and held by him
on
the date and at the time the Seller sells the Shares to the
Purchaser.
15
7.
Indemnification.
7.1
Provisions
for Benefit of the Purchaser.
(i)
In
the event Seller breaches (or in the event any third party alleges facts that,
if true, would mean Seller has breached) any of its representations, warranties,
and covenants contained herein, for a period of 18 months following the Closing
Date (the “Survival Period”), provided that the Purchaser makes a written claim
for indemnification against the Seller within such Survival Period, then the
Seller shall indemnify the Purchaser from and against the entirety of any
Adverse Consequences the Purchaser may suffer through and after the date of
the
claim for indemnification (including any Adverse Consequences the Purchaser
may
suffer after the end of the Survival Period) resulting from, arising out of,
relating to, in the nature of, or caused by the breach (or the alleged breach).
For purposes of this Agreement, “Adverse Consequences” means all actions, suits,
proceedings, hearings, investigations, charges, complaints, claims, demands,
injunctions, judgments, orders, decrees, rulings, damages, dues, penalties,
fines, costs, amounts paid in settlement, liabilities, obligations, taxes,
liens, losses, lost value, expenses, and fees, including court costs and
attorneys' fees and expenses.
(ii)
The
Seller shall indemnify the Purchaser from and against the entirety of any
Adverse Consequences the Purchaser or the Corporation may suffer resulting
from,
arising out of, relating to, in the nature of, or caused by any liability of
the
Corporation (whether or not accrued or otherwise disclosed) (x) for any taxes
of
the Corporation with respect to any tax year or portion thereof ending on or
before the Closing Date (or for any Tax year beginning before and ending after
the Closing Date to the extent allocable to the portion of such period beginning
before and ending on the Closing Date) and (y) for the unpaid taxes of any
person (other than the Corporation) under Section 1.1502-6 of the Regulations
adopted under the Code (or any similar provision of state, local, or foreign
law), as a transferee or successor, by contract, or otherwise.
(iii)
The
Seller shall indemnify the Purchaser from and against the entirety of any
liabilities arising out of the ownership of the Shares or operation of the
Corporation prior to the Closing.
(iv)
The
Seller shall indemnify the Purchaser from and against the entirety of any
Adverse Consequences the Purchaser or the Corporation may suffer resulting
from,
arising out of, relating to, in the nature of, or caused by any indebtedness
or
other liabilities of the Corporation existing as of the Closing Date.
7.2
Indemnification
Provisions for Benefit of the Seller.
In the
event the Purchaser breaches (or in the event any third party alleges facts
that, if true, would mean the Purchaser has breached) any of its
representations, warranties, and covenants contained herein, during the Survival
Period above, provided that the Seller makes a written claim for indemnification
against the Purchaser within the Survival Period, then the Purchaser shall
indemnify the Seller from and against the entirety of any Adverse Consequences
the Seller may suffer through and after the date of the claim for
indemnification (including any Adverse Consequences the Seller may suffer after
the end of any applicable Survival Period) resulting from, arising out of,
relating to, in the nature of, or caused by the breach (or the alleged
breach).
16
7.3
Matters
Involving Third Parties.
(i)
If
any third party shall notify any Party (the “Indemnified Party“) with respect to
any matter (a “Third Party Claim”) which may give rise to a claim for
indemnification against any other Party (the “Indemnifying Party”) under this
Section 7, then the Indemnified Party shall promptly notify each Indemnifying
Party thereof in writing; provided, however, that no delay on the part of the
Indemnified Party in notifying any Indemnifying Party shall relieve the
Indemnifying Party from any obligation hereunder unless (and then solely to
the
extent) the Indemnifying Party thereby is prejudiced.
(ii)
Any
Indemnifying Party will have the right to defend the Indemnified Party against
the Third Party Claim with counsel of its choice reasonably satisfactory to
the
Indemnified Party so long as (A) the Indemnifying Party notifies the Indemnified
Party in writing within 10 days after the Indemnified Party has given notice
of
the Third Party Claim that the Indemnifying Party will indemnify the Indemnified
Party from and against the entirety of any Adverse Consequences the Indemnified
Party may suffer resulting from, arising out of, relating to, in the nature
of,
or caused by the Third Party Claim, (B) the Indemnifying Party provides the
Indemnified Party with evidence reasonably acceptable to the Indemnified Party
that the Indemnifying Party will have the financial resources to defend against
the Third Party Claim and fulfill its indemnification obligations hereunder,
(C)
the Third Party Claim involves only money damages and does not seek an
injunction or other equitable relief, (D) settlement of, or an adverse judgment
with respect to, the Third Party Claim is not, in the good faith judgment of
the
Indemnified Party, likely to establish a precedential custom or practice adverse
to the continuing business interests of the Indemnified Party, and (E) the
Indemnifying Party conducts the defense of the Third Party Claim actively and
diligently.
(iii)
So
long as the Indemnifying Party is conducting the defense of the Third Party
Claim in accordance with Section 7.3(ii) above, (A) the Indemnified Party may
retain separate co-counsel at its sole cost and expense and participate in
the
defense of the Third Party Claim, (B) the Indemnified Party will not consent
to
the entry of any judgment or enter into any settlement with respect to the
Third
Party Claim without the prior written consent of the Indemnifying Party (not
to
be withheld unreasonably), and (C) the Indemnifying Party will not consent
to
the entry of any judgment or enter into any settlement with respect to the
Third
Party Claim without the prior written consent of the Indemnified Party (not
to
be withheld unreasonably).
17
(iv)
In
the event any of the conditions in Section 7.3(ii) above is or becomes
unsatisfied, however, (A) the Indemnified Party may defend against, and consent
to the entry of any judgment or enter into any settlement with respect to,
the
Third Party Claim in any manner it reasonably may deem appropriate (and the
Indemnified Party need not consult with, or obtain any consent from, any
Indemnifying Party in connection therewith), (B) the Indemnifying Parties will
reimburse the Indemnified Party promptly and periodically for the costs of
defending against the Third Party Claim (including attorneys' fees and
expenses), and (C) the Indemnifying Parties will remain responsible for any
Adverse Consequences the Indemnified Party may suffer resulting from, arising
out of, relating to, in the nature of, or caused by the Third Party Claim to
the
fullest extent provided in this Section 7.
7.4 Other
Indemnification Provisions.
The
Seller hereby indemnifies the Corporation against any and all claims that may
be
filed by a current or former officer, director or employee of the Seller by
reason of the fact that such person was a director, officer, employee, or agent
of the Corporation or was serving the Corporation at the request of the Seller
or the Corporation as a partner, trustee, director, officer, employee, or agent
of another entity, whether such claim is for accrued salary, compensation,
indemnification, judgments, damages, penalties, fines, costs, amounts paid
in
settlement, losses, expenses, or otherwise and whether such claim is pursuant
to
any statute, charter document, bylaw, agreement, or otherwise) with respect
to
any action, suit, proceeding, complaint, claim, or demand brought against the
Corporation (whether such action, suit, proceeding, complaint, claim, or demand
is pursuant to an agreement, applicable law, or otherwise).
8.
Amendment. This
Agreement may be amended by the Purchaser and the Seller by action taken at
any
time. This Agreement may not be amended, except by an instrument in writing
signed for and on behalf of the Purchaser and the Seller.
9.
Further Assurances. Each
party, at any time and from time to time, at another party’s request, shall
execute, acknowledge, and deliver any and all instruments and take any and
all
action that may be necessary or appropriate to carry out, perform, and
effectuate the intents and purposes of this Agreement.
10.
Captions and Interpretations.
Captions
of the sections and paragraphs of this Agreement are for convenience
and
reference only, and the words specified therein shall in no way be held to
explain, modify, or aid in the interpretation, construction, or meaning of
the
provisions of this Agreement. The language of this Agreement, in all cases,
shall be construed in accordance of the fair meaning of that language, as if
prepared by both parties and not strictly for or against either party. The
rule
of construction which requires a court to resolve any ambiguities against the
drafting party shall not apply to interpreting the provisions of this
Agreement.
11.
Governmental Rules and Regulations. The
transaction contemplated by the provisions of this Agreement is, and shall
remain, subject to any and all present and future orders, rules, and regulations
of any duly constituted authority having jurisdiction of that
transaction.
18
12.
Severability.
In the
event any part of this Agreement, for any reason, is determined by a court
of
competent jurisdiction to be invalid, such determination shall not affect the
validity of any remaining parts of this Agreement, which remaining parts shall
remain in full force and effect as if this Agreement has been executed with
the
invalid parts eliminated. It is hereby declared the intention of the parties
that they would have executed the remaining parts of this Agreement without
including any such part which, for any reason, may be hereinafter determined
to
be invalid.
13.
Execution in Counterparts.
This
Agreement may be prepared in multiple copies and forwarded to each of the
parties for signature. All of the signatures of the parties may be affixed
to
one copy or to separate copies of this Agreement, and when all such copies
are
received and signed by both parties, those copies shall constitute one agreement
which is not otherwise separable or divisible.
[SIGNATURE
PAGE TO FOLLOW]
19
IN
WITNESS WHEREOF, the parties to this Stock Purchase Agreement have executed
and
delivered this Stock Purchase Agreement of the date specified in the preamble
of
this Agreement.
|
Fountainhead
Capital Management Limited,
|
||||
|
a
Jersey, Channel Islands corporation
|
||||
|
|
By:
|
|
||
|
Xxxxxxxxx
Xxxxxx
|
||||
|
Its:
|
President
|
|||
|
By:
|
|
|||
|
Its:
|
Secretary
|
|||
|
a
Delaware corporation
|
||||
|
By:
|
||||
|
Its:
|
President | |||
|
By:
|
|
|||
|
Its:
|
Secretary
|
|||
Schedule
3.2
-
None
Schedule
3.3
-
None
Schedule
3.7
-
None
Schedule
3.8
-
None
Schedule
3.11
-
None
Schedule
3.21
-
None
Schedule
3.23
-
None
Schedule
3.24
-
None
Schedule
3.27
-
None
Schedule
3.28
-
None
Schedule
3.29
-
None
Schedule
3.30
-
None
Schedule
3.31
-
None
