STOCK PURCHASE AGREEMENT
Exhibit
99.1
THIS
STOCK PURCHASE AGREEMENT (this “Agreement”) dated as of April 30, 2009, among
Xxxxxxx Guttfreund and Xxxxxxxxx Xxxxx (each, a “Seller” and collectively, the
“Sellers”) of Watchtower Inc., a Nevada corporation (the “Company”) and Xxxxxx
Xxxxxx (the “Purchaser”).
RECITALS
A. Sellers
are the owners of an aggregate of 8,000,000 of the issued and outstanding shares
(the “Shares”) of the Company, representing 64.52% of the outstanding stock on a
fully-diluted basis.
B. Pursuant
to the terms and conditions of this Agreement, Sellers desire to sell, and
Purchaser desires to purchase, all of the Sellers’ rights, title, and interest
in and to all of the Shares as further described herein.
NOW,
THEREFORE, in consideration of the covenants, promises and representations set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and intending to be legally bound
hereby, the parties agree as follows:
1. Agreement to Purchase and
Sell at the Closing. Subject to the terms and conditions of
this Agreement, at the Closing (hereafter defined), Sellers shall sell, assign,
transfer, convey, and deliver to Purchaser, and Purchaser shall accept and
purchase, the Shares and any and all rights in the Shares to which Sellers are
entitled, and by doing so Sellers shall be deemed to have assigned all of their
rights, titles and interests in and to the Shares to Purchaser. Such
sale of the Shares shall be evidenced by stock certificates, duly endorsed in
blank or accompanied by stock powers duly executed in blank or other instruments
of transfer in form and substance reasonably satisfactory to
Purchaser.
2. Consideration. In
consideration for the sale of the Shares, Purchaser shall deliver to Sellers
(the “Purchase Price”) an aggregate of Fifty Thousand Dollars
($50,000.00).
3. Closing;
Deliveries.
(a) The
purchase and sale of the Shares shall be held simultaneously with the execution
of this Agreement at such place as the parties hereto may agree (the
“Closing”).
(b) At
the Closing:
(1) Sellers
shall deliver to Purchaser (A) stock certificates evidencing the Shares, duly
endorsed in blank or accompanied by stock powers duly executed in blank, or
other instruments of transfer in form and substance reasonably satisfactory to
Purchaser, (B) any documentary evidence of the due recordation in the Company’s
share register of Purchaser’s full and unrestricted title to the Shares, and (C)
such other documents as may be required under applicable law or reasonably
requested by Purchaser.
(2) The
Sellers shall deliver to Xxxxx Xxxxx & Associates, PLLC, as escrow agent for
the Purchaser, (A) resignation letter from Xxxxxxx Guttfruend from
all his positions with the Company; (B) resignation letter from Xxxxxxxxx Xxxxx
from all his positions with the Company which shall be effective 10 days after
the mailing of an information statement pursuant to Rule 14f-1); (C) a
shareholders’ list, including names and addresses of each shareholder,
certificate numbers and issue dates; (D) any documentary evidence of the due
recordation in the Company’s share register of Purchasers’ full and unrestricted
title to the Shares, (E) all the books and records of the Company and (F) such
other documents as may be required under applicable law or reasonably requested
by Purchaser.
(3) Purchaser
shall deliver to Sellers the Purchase Price by wire transfer of immediately
available funds to an account designated by the Sellers.
4. Representations and
Warranties of Sellers. As an inducement to Purchaser to enter
into this Agreement and to consummate the transactions contemplated herein, each
Seller, severally and jointly, represents and warrants, as of the date of this
Agreement and as of the Closing Date, to Purchaser as follows:
4.1 Authority. Seller has the
right, power, authority and capacity to execute and deliver this Agreement, to
consummate the transactions contemplated hereby and to perform his obligations
under this Agreement. This Agreement constitutes the legal, valid and
binding obligations of Seller, enforceable against Seller in accordance with the
terms hereof.
4.2 Ownership. Seller
is the sole record and beneficial owner of the Shares, has good and marketable
title to the Shares, free and clear of all Encumbrances (hereafter defined),
other than applicable restrictions under applicable securities laws, and has
full legal right and power to sell, transfer and deliver the Shares to Purchaser
in accordance with this Agreement. “Encumbrances” means any liens,
pledges, hypothecations, charges, adverse claims, options, preferential
arrangements or restrictions of any kind, including, without limitation, any
restriction of the use, voting, transfer, receipt of income or other exercise of
any attributes of ownership. Upon the execution and delivery of this
Agreement, Purchaser will receive good and marketable title to the Shares, free
and clear of all Encumbrances, other than restrictions imposed pursuant to any
applicable securities laws and regulations. There are no
stockholders’ agreements, voting trust, proxies, options, rights of first
refusal or any other agreements or understandings with respect to the
Shares.
4.3 Valid
Issuance. The Shares are duly authorized, validly issued,
fully paid and non-assessable, and were not issued in violation of any
preemptive or similar rights.
4.4 No
Conflict. None of the execution, delivery, or performance of
this Agreement, and the consummation of the transactions contemplated hereby,
conflicts or will conflict with, or (with or without notice or lapse of time, or
both) result in a termination, breach or violation of (i) any instrument,
contract or agreement to which the Seller is a party or by which he is bound, or
to which the Shares are subject; or (ii) any federal, state, local or foreign
law, ordinance, judgment, decree, order, statute, or regulation, or that of any
other governmental body or authority, applicable to the Seller or the
Shares.
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4.5 No Consent. No consent,
approval, authorization or order of, or any filing or declaration with any
governmental authority or any other person is required for the consummation by
the Seller of any of the transactions on its part contemplated under this
Agreement, other than the Current Report on Form 8-K disclosing the transaction
contemplated herein.
4.6 No Other
Interest. Neither Seller nor any of his respective affiliates
has any interest, direct or indirect, in any shares of capital stock or other
equity in the Company or has any other direct or indirect interest in any
tangible or intangible property which the Company uses or has used in the
business conducted by the Company, or has any direct or indirect outstanding
indebtedness to or from the Company, or related, directly or indirectly, to its
assets, other than the Shares.
4.7 No General Solicitation or
Advertising. Neither any Seller nor any of its affiliates nor any person
acting on its or their behalf (i) has conducted or will conduct any general
solicitation (as that term is used in Rule 502(c) of Regulation D) or general
advertising with respect to any of the Shares, or (ii) made any offers or sales
of any security or solicited any offers to buy any security under any
circumstances that would require registration of the Shares under the Securities
Act of 1933, as amended (the “Securities Act”).
4.8 Full Disclosure. No
representation or warranty of the Sellers to the Purchaser in this Agreement
omits to state a material fact necessary to make the statements herein, in light
of the circumstances in which they were made, not misleading. There is no fact
known to the Seller that has specific application to the Shares or the Company
that materially adversely affects or, as far as can be reasonably foreseen,
materially threatens the Shares or the Company that has not been set forth in
this Agreement.
4.9 Due
Organization. The Company is duly organized, validly existing
and in good standing under the laws of the State of Nevada, with full power and
authority to own, lease, use and operate its properties and to carry on its
business as and where now owned, leased, used, operated and
conducted. The Company does not own, directly or indirectly, any
capital stock of any corporation or any equity, profit sharing, participation or
other interest in any corporation, partnership, limited liability company, joint
venture or other entity.
4.10 Capitalization. The
Company’s authorized capital will consist of (a) 12,400,000
shares of common stock authorized (the “Common
Stock”), of which 12,400,000 shares are issued and outstanding, 4,400,000 of
which are freely tradeable without any restrictions or Encumbrances and
8,000,000 of which are restricted under the Securities Act, (i) with each holder
thereof being entitled to cast one vote
for each share held on all matters properly submitted to the
shareholders for their vote; and (ii) there being
no pre-preemptive rights and no cumulative voting; and (b)
no shares of preferred stock or any other class of security. The Company has no
shares reserved for issuance pursuant to a stock option plan or pursuant to
securities exercisable for, or convertible into or exchangeable for shares of
Common Stock. All of the issued and outstanding shares of capital
stock of the Company are duly authorized, validly issued, fully paid and
nonassessable. No shares of capital stock of the Company are subject
to preemptive rights or any other similar rights. There are (i) no
outstanding options, warrants, scrip, rights to subscribe for, puts, calls,
rights of first refusal, agreements, understandings, claims or other commitments
or rights of any character whatsoever relating to, or securities or rights
convertible into or exchangeable for any shares of capital stock of the Company
or arrangements by which the Company is or may become bound to issue additional
shares of capital stock of the Company, (ii) no agreements or arrangements under
which the Company is obligated to register the sale of any of its or their
securities under the Securities Act, and (iii) no anti-dilution or price
adjustment provisions contained in any security issued by the Company (or in any
agreement providing any such rights).
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4.11 The Shares. Upon the
consummation of the transactions contemplated herein, Purchaser will own 64.52%
of the issued and outstanding share capital of the Company on a fully-diluted
basis, free and clear of any Encumbrances, other than those created by
applicable federal and state securities laws.
4.12 SEC Documents. The
Company has timely filed all reports, schedules, forms, statements and other
documents required to be filed by it with the Securities and Exchange Commission
(the “SEC”) pursuant to the reporting requirements of the Securities Exchange
Act of 1934, as amended (the “1934 Act”) (all of the foregoing filed prior to
the date hereof and all exhibits included therein and financial statements and
schedules thereto and documents (other than exhibits to such documents)
incorporated by reference therein, being hereinafter referred to herein as the
“SEC Documents”). As of their respective dates, the SEC Documents
complied in all material respects with the requirements of the 1934 Act and the
rules and regulations of the SEC promulgated thereunder applicable to the SEC
Documents, and none of the SEC Documents, at the time they were filed with the
SEC, 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 light of the circumstances under which they were made,
not misleading. None of the statements made in any such SEC Documents
is, or has been, required to be amended or updated under applicable law (except
for such statements as have been amended or updated in subsequent filings prior
the date hereof). The Company has not received any communication from
the SEC, NASD or any other regulatory authority regarding any SEC Document or
any disclosure contained therein. As of their respective dates, the financial
statements of the Company included in the SEC Documents complied as to form in
all material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto. Such financial
statements have been prepared in accordance with United States generally
accepted accounting principles, consistently applied, during the periods
involved (except (i) as may be otherwise indicated in such financial statements
or the notes thereto, or (ii) in the case of unaudited interim statements, to
the extent they may not include footnotes or may be condensed or summary
statements) and fairly present in all material respects the financial position
of the Company as of the dates thereof and the results of their operations and
cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments). As of the Closing,
the Company has no debts, liabilities, obligations, direct, indirect, absolute
or contingent, whether accrued, vested or otherwise, whether known or
unknown.
4.13 Employees. The
Company does not (i) have any employees, (ii) owe any compensation of any kind,
deferred or otherwise, to any person, including without limitation, agents,
representatives, consultants, accountants and attorneys, (iii) have any written
or oral employment agreement with any person, nor (iv) is it a party to or bound
by any collective bargaining agreement. There are no loans or other obligations
payable to or owing by the Company to any stockholder, officer, director, agent,
representative, consultant, accountant, attorney or otherwise nor are there any
loans or debts payable or owing by any such persons to the Company or any
guarantees by the Company of any loan or obligation of any nature to which any
such person is a party.
4.14 Intellectual
Property. The Company does not own, use or possesses any licenses or
rights to use any patents, patent applications, patent rights, inventions,
know-how, trade secrets, trademarks, trademark applications, service marks,
service names, trade names and copyrights (“Intellectual Property”). There is no
claim or action by any person pertaining to, or proceeding pending or
threatened, which challenges the right of the Company with respect to any
Intellectual Property.
4.15 Contracts;
Liabilities. The Company is not a party to any contract, arrangement or
agreement, whether oral or in writing, including without limitation, loan
agreements, credit lines, promissory notes, mortgages, pledges, guarantees,
security agreements, factoring agreements, letters of credit, powers of attorney
or other arrangements to loan or borrow money or extend credit. As of the
Closing, the Company shall have no debts, liabilities or obligations of any
nature (whether absolute, accrued, contingent or otherwise).
4.16 Tax
Reports. The Company has made or filed all federal, state and
foreign income and all other tax returns, reports and declarations required by
any jurisdiction to which it is subject and has paid all taxes and other
governmental assessments and charges that are material in amount, shown or
determined to be due on such returns, reports and declarations. There
are no and will be no taxes due as a result of the transactions contemplated by
this Agreement. There are no unpaid taxes claimed to be due by the taxing
authority of any jurisdiction, and neither Seller knows of no basis for any such
claim. The Company has not executed a waiver with respect to the
statute of limitations relating to the assessment or collection of any foreign,
federal, state or local tax. None of the Company’s tax returns is
presently being audited by any taxing authority. The Sellers expressly assume
and shall pay any taxes due by the Company up to the date of the
Closing.
4.17 Real
Property. The Company does not own any real or personal
property.
4.18 Internal
Controls. The Company maintains a system of internal
accounting controls sufficient, in the judgment of the Company’s board of
directors, to provide reasonable assurance that (i) transactions are executed in
accordance with management’s general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain asset accountability, (iii) access to assets is permitted only in
accordance with management’s general or specific authorization, and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences. The books of account, corporate records and minute books of the
Company are complete and correct in all material respects.
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5. Representations and
Warranties of Purchaser. As an inducement to Sellers to enter
into this Agreement and to consummate the transactions contemplated herein,
Purchaser represents and warrants, to Sellers as follows:
5.1 Authority. Purchaser
has the right, power, authority and capacity to execute and deliver this
Agreement, to consummate the transactions contemplated hereby and to perform his
obligations under this Agreement. This Agreement constitutes the
legal, valid and binding obligations of Purchaser, enforceable against Purchaser
in accordance with the terms hereof.
5.2 No Consent. No consent,
approval, authorization or order of, or any filing or declaration with any
governmental authority or any other person is required for the consummation by
the Purchaser of any of the transactions on its part contemplated under this
Agreement.
5.3 No
Conflict. None of the execution, delivery, or performance of
this Agreement, and the consummation of the transactions contemplated hereby,
conflicts or will conflict with, or (with or without notice or lapse of time, or
both) result in a termination, breach or violation of (i) any instrument,
contract or agreement to which Purchaser is a party or by which he is bound; or
(ii) any federal, state, local or foreign law, ordinance, judgment, decree,
order, statute, or regulation, or that of any other governmental body or
authority, applicable to Purchaser.
5.4 Potential Loss of
Investment. Purchaser understands that an investment in the
Shares is a speculative investment which involves a high degree of risk and the
potential loss of his entire investment.
5.5 Receipt of
Information. Purchaser has received all documents, records,
books and other information pertaining to his investment that has been requested
by the Purchaser, including without limitation, the SEC filings made by the
Company.
5.6 No
Advertising. At
no time was the Purchaser presented with or solicited by any leaflet, newspaper
or magazine article, radio or television advertisement, or any other form of
general advertising or solicited or invited to attend a promotional meeting
otherwise than in connection and concurrently with such communicated
offer.
5.7 Investment
Experience. The Purchaser (either by himself or with his
advisors) is (i) experienced in making investments of the kind described in this
Agreement, (ii) able, by reason of his business and financial experience to
protect his own interests in connection with the transactions described in this
Agreement, and (iii) able to afford the entire loss of his investment in the
Shares.
5.8 Restricted
Securities. Purchaser understands that the Shares have not
been registered under the Securities Act or registered or qualified under any
the securities laws of any state or other jurisdiction, are “restricted
securities,” and cannot be resold or otherwise transferred unless they are
registered under the Securities Act, and registered or qualified under any other
applicable securities laws, or an exemption from such registration and
qualification is available. Each certificate for any of the
restricted Shares shall bear a legend to the foregoing effect.
5.9 Investment
Purposes. The Purchaser is acquiring the restricted Shares for
his own account as principal, not as a nominee or agent, for investment purposes
only, and not with a view to, or for, resale, distribution or fractionalization
thereof in whole or in part and no other person has a direct or indirect
beneficial interest in the amount of restricted Shares the Purchaser is
acquiring herein. Further, the Purchaser does not have any contract,
undertaking, agreement or arrangement with any person to sell, transfer or grant
participations to such person or to any third person, with respect to the
restricted Shares the Purchaser is acquiring.
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6. Indemnification;
Survival.
6.1 Indemnification. Each
party hereto shall jointly and severally indemnify and hold harmless the other
party and such other party’s agents, beneficiaries, affiliates, representatives
and their respective successors and assigns (collectively, the “Indemnified
Persons”) from and against any and all damages, losses, liabilities, taxes and
costs and expenses (including, without limitation, attorneys’ fees and costs)
(collectively, “Losses”) resulting directly or indirectly from (a) any
inaccuracy, misrepresentation, breach of warranty or non-fulfillment of any of
the representations and warranties of such party in this Agreement, or any
actions, omissions or statements of fact inconsistent with in any material
respect any such representation or warranty, (b) any failure by such party to
perform or comply with any agreement, covenant or obligation in this
Agreement.
6.2 Survival. All
representations, warranties, covenants and agreements of the parties contained
herein or in any other certificate or document delivered pursuant hereto shall
survive the date hereof until the expiration of the applicable statute of
limitations.
7. Miscellaneous.
7.1 Further
Assurances. From time to time, whether at or following the
Closing, each party shall make reasonable commercial efforts to take, or cause
to be taken, all actions, and to do, or cause to be done, all things reasonably
necessary, proper or advisable, including as required by applicable laws, to
consummate and make effective as promptly as practicable the transactions
contemplated by this Agreement.
7.2 Notices. All
notices or other communications required or permitted hereunder shall be in
writing shall be deemed duly given (a) if by personal delivery, when so
delivered, (b) if mailed, three (3) business days after having been sent by
registered or certified mail, return receipt requested, postage prepaid and
addressed to the intended recipient as set forth below, or (c) if sent through
an overnight delivery service in circumstances to which such service guarantees
next day delivery, the day following being so sent to the addresses of the
parties as indicated on the signature page hereto. Any party may change the
address to which notices and other communications hereunder are to be delivered
by giving the other parties notice in the manner herein set forth.
7.3 Choice of Law;
Jurisdiction. This Agreement shall be governed, construed and
enforced in accordance with the laws of the State of New York, without giving
effect to principles of conflicts of law. Each of the parties agree to submit to the jurisdiction of the
federal or state courts located in the City of New York in any actions or
proceedings arising out of or relating to this Agreement. Each of the parties, by execution and
delivery of this Agreement, expressly and irrevocably (i) consents and submits
to the personal jurisdiction of any of such courts in any such action or
proceeding; (ii) consents to the service of any complaint, summons, notice or
other process relating to any such action or proceeding by delivery thereof to
such party as set forth in Section 7.2 above and (iii) waives any claim or
defense in any such action or proceeding based on any alleged lack of personal
jurisdiction, improper venue or forum non conveniens or any similar
basis. EACH OF THE UNDERSIGNED HEREBY WAIVES FOR ITSELF AND ITS
PERMITTED SUCCESSORS AND ASSIGNS THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR
PROCEEDING INSTITUTED IN CONNECTION WITH THIS AGREEMENT.
7.4 Entire
Agreement. This Agreement sets forth the entire agreement and
understanding of the parties in respect of the transactions contemplated hereby
and supersedes all prior and contemporaneous agreements, arrangements
and understandings of the parties relating to the subject matter
hereof. No representation, promise, inducement, waiver of rights,
agreement or statement of intention has been made by any of the parties which is
not expressly embodied in this Agreement.
7.5 Assignment. Each
party's rights and obligations under this Agreement shall not be assigned or
delegated, by operation of law or otherwise, without the other party's prior
written consent, and any such assignment or attempted assignment shall be void,
of no force or effect, and shall constitute a material default by such
party.
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7.6 Amendments. This
Agreement may be amended, modified, superseded or cancelled, and any of the
terms, covenants, representations, warranties or conditions hereof may be
waived, only by a written instrument executed by the parties
hereto.
7.7 Waivers. The
failure of any party at any time or times to require performance of any
provision hereof shall in no manner affect the right at a later time to enforce
the same. No waiver by any party of any condition, or the breach of
any term, covenant, representation or warranty contained in this Agreement,
whether by conduct or otherwise, in any one or more instances shall be deemed to
be or construed as a further or continuing waiver of any such condition or
breach or a waiver of any other term, covenant, representation or warranty of
this Agreement.
7.8 Counterparts. This
Agreement may be executed simultaneously in two or more counterparts and by
facsimile, each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument.
7.9 Severability. If
any term, provisions, covenant or restriction of this Agreement is held by a
court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination, the parties shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner in order
that the transactions contemplated hereby be consummated as originally
contemplated to the fullest extent possible.
7.10 Interpretation. The
parties agree that this Agreement shall be deemed to have been jointly and
equally drafted by them, and that the provisions of this Agreement therefore
shall not be construed against a party or parties on the ground that such party
or parties drafted or was more responsible for the drafting of any such
provision(s). The parties further agree that they have each carefully read the
terms and conditions of this Agreement, that they know and understand the
contents and effect of this Agreement and that the legal effect of this
Agreement has been fully explained to its satisfaction by counsel of its own
choosing.
[Remainder of Page Intentionally
Omitted; Signature Page to Follow]
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IN
WITNESS WHEREOF, the parties have duly executed this Stock Purchase Agreement as
of the date first above written.
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/s/
Xxxxxxx Guttfreund
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Xxxxxxx
Guttfreund
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/s/
Xxxxxxxxx Xxxxx
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Xxxxxxxxx
Xxxxx
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PURCHASER:
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/s/
Xxxxxx Xxxxxx
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Xxxxxx
Xxxxxx
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