Stock Purchase Agreement Dated as of October 14, 2009 By and Among Richard Granville and Belmont Partners, LLC and Cinnabar Ventures, Inc.
Exhibit 10.1
Dated as
of October 14, 2009
By and
Among
Xxxxxxx
Xxxxxxxxx
and
Belmont
Partners, LLC
and
Cinnabar
Ventures, Inc.
1
TABLE OF
CONTENTS
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Section 1. Construction and Interpretation
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3
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1.1. Principles of Construction.
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3
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Section 2. The Transaction
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4
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2.1. Purchase Price:
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4
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2.2. Transfer of Shares and Terms of Payment:
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4
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2.3. Closing.
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4
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2.4. Escrow Shares
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5
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2.5 Additional Consideration
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5
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Section 3. Representations and Warranties
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5
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3.1. Representations and Warranties of the Seller and the
Company.
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5
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3.2. Covenants of the Seller and the Company.
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7
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3.3. Representations and Warranties of the Purchaser
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8
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Section 4. Miscellaneous
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9
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4.1. Expenses.
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10
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4.2. Governing Law.
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10
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4.3. Resignation of Old and Appointment of New Board of
Directors.
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10
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4.4. Indemnification.
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10
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4.5. Disclosure.
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11
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4.6. Notices.
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11
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4.7. Parties in Interest.
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11
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4.8. Entire Agreement.
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11
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4.9. Amendments.
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12
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4.10. Severability.
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12
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4.11. Counterparts
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12
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4.12. Spin Out
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12
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4.13. Asset Acquisition
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12
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2
This stock purchase agreement (“Agreement”), dated as
of October 14, 2009, is entered into by and among Cinnabar Ventures, Inc.
(“Cinnabar” or
the “Company”)
and Belmont Partners, LLC (the “Seller”), and Xxxxxxx
Xxxxxxxxx (“Purchaser” and
together with the Company and the Seller, the “Parties”).
W i t n e s s e t
h:
Whereas,
the Seller, is a shareholder of Cinnabar, a corporation organized and existing
under the laws of the State of Nevada, and owns and/or controls five million
(5,000,000) shares of the Company, which represents approximately 78.86% of the
issued and outstanding common stock of the Company, (the “Stock”);
and
Whereas,
the Purchaser desires to acquire the Stock from Seller.
Now,
Therefore, in consideration of the foregoing recitals and the mutual
promises, representations and covenants hereinafter set forth and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
Section
1. Construction and Interpretation
1.1. Principles of
Construction.
(a) All references to Articles,
Sections, subsections and Appendixes are to Articles, Sections, subsections and
Appendixes in or to this Agreement unless otherwise specified. The
words “hereof,” “herein” and “hereunder” and words of similar import when used
in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement. The term “including” is not
limiting and means “including without limitations.”
(b) In the computation of periods of
time from a specified date to a later specified date, the word “from” means
“from and including;” the words “to” and “until” each mean “to but excluding;”
and the word “through” means “to and including.”
(c) The Table of Contents hereto and
the Section headings herein are for convenience only and shall not affect the
construction hereof.
(d) This Agreement is the result of
negotiations among “the Parties” and has
been reviewed by each Party’s counsel. Accordingly, this Agreement
shall not be construed against any Party merely because of such Party’s
involvement in its preparation.
(e) Wherever in this Agreement the
intent so requires, reference to the neuter, masculine or feminine shall be
deemed to include each of the other, and reference to either the singular or the
plural shall be deemed to include the other.
3
Section
2. The Transaction
2.1.
Purchase Price:
The Seller hereby agrees to sell to the
Purchaser, and the Purchaser, in reliance on the representations and warranties
contained herein, and subject to the terms and conditions of this Agreement,
agrees to purchase from Seller the Stock for a total purchase price of one
hundred and ninety five thousand dollars ($195,000.00) (the “Purchase
Price”). The Purchase Price is payable in the following
manner:
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1.
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Purchaser
shall place a seventy thousand dollar ($70,000.00) deposit (the “Deposit”) with
Xxxxxx & Xxxxxx LLP (the “Escrow Agent”)
to be held in escrow and released to Seller on the Closing Date (defined
herein);
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2.
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The
balance of the Purchase Price of one hundred and twenty five thousand
dollars ($125,000.00) (the “Balance”) shall
be due and payable within ninety (90) days from the date of this
Agreement. The Balance shall be secured in the form of a
promissory note (the “Note”) from the
Purchaser to the Seller in accordance with Exhibit A attached
hereto.
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2.2. Transfer of Shares and Terms of
Payment:
In consideration for the transfer of
the Stock by the Seller to the Purchaser, the Purchaser shall pay the Purchase
Price in accordance with the terms of this Agreement. Transfer of the
shares and payment thereof shall be in the following manner:
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i)
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The
Purchaser has placed the Deposit into an escrow account (the “Escrow
Account”) with the Escrow Agent on behalf of the Seller to be
released to Seller on the Closing Date (defined
herein).
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ii)
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The
Purchaser shall issue the Note to the Seller on Wednesday, October 14,
2009.
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iii)
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Simultaneously
with the issuance of the Note and delivery of the Deposit, the Seller
shall deliver to the Purchaser, the certificates for the Stock duly
endorsed for transfer to be held in escrow in accordance with the terms of
this Agreement. (collectively, the “Closing”).
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2.3.
Closing.
Subject to the terms and conditions of
this Agreement, the Closing shall take place by wire transfer and overnight mail
on or before 5:00 P.M. EST on October 14, 2009 (the “Closing
Date”). In the event that the Closing does not occur on or
before such date, other than due to a breach of this Agreement by either Party,
a Party may terminate this Agreement and shall have no further obligations to
the other Party. Breach of this Agreement shall include any
non-payment or late payment of the Purchase Price or failure to deliver any
stock as specified in this Agreement.
4
2.4. Escrow
of Shares.
The Purchaser acknowledges that the
Stock with a medallion guaranteed stock power shall be held in the Escrow
Account by the Escrow Agent until such time as the Note has been paid in full.
In addition, it is agreed that any other shares issued by the Company from the
date of this Agreement through the satisfaction of the Note in full shall be
held in escrow with medallion guaranteed stock powers (collectively all of these
shares shall be referred to as “Escrow Shares”). In
the event of a default by the Purchaser under the Note then the Escrow Shares
shall be immediately delivered to the Seller. At such time as the
Note is paid in full the Escrow Shares shall be released to the respective owner
of the Escrow Shares.
2.5. Additional
Consideration.
2.5.1 In consideration of the benefits
provided to the Company hereby, the Company shall issue and deliver to Seller,
such fully paid, non-assessable restricted shares of the Company’s common stock
equal to two hundred seventy five thousand (275,000) newly issued common stock
shares of the Company (the “Additional Common
Stock”).
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2.5.2.
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In
consideration for serving as a director of Company, the Company shall
issue an “Option” to Seller for twenty five thousand (25,000) shares of
the Company’s common stock, at $.01 cent. Option is good for one year from
date of this Agreement without regard to length of service to Company’s
board. (the “Option”).
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2.5.3.
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The Seller acknowledges that the Additional Common Stock referenced
in 2.5.1 shall remain non-dilutable for the term of the promissory note
(the “Note”),
attached hereto as Exhibit A. On the Payment Date (as defined
in the Note), or on prepayment, the Additional Common Stock shall lose any
and all non-dilution rights previously
assigned.
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Section
3. Representations and Warranties
3.1.
Representations and Warranties of the Seller and the Company.
3.1.1 The
Company is a corporation duly organized and validly existing under the laws of
the State of Nevada and has all corporate power necessary to engage in all
transactions in which it has been involved in as well as any general business
transactions in the future that may be desired by its directors.
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3.1.2
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The
Company is in good standing with the Secretary of State of
Nevada.
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3.1.3 The
Company has, or will have at Closing, no outstanding debt or obligations
whatsoever. Should the Purchaser discover any obligation of the
Company that was not paid prior to the Closing Date, the Seller undertakes to
indemnify the Purchaser for a period of one hundred and twenty (120) days and
for a maximum of forty five thousand dollars ($45,000.00), for any and all such
liabilities, whether outstanding or contingent or otherwise at the time of
Closing.
3.1.4 The
Company will have no assets or liabilities at the Closing Date.
5
3.1.5 To
the best knowledge of Seller after due inquiry, the Company is not subject to
any pending or threatened litigation, claims or lawsuits from any party, and
there are no pending or threatened proceedings against the Company by any
federal, state or local government, or any department, board, agency or other
body thereof.
3.1.6 To
the best knowledge of Seller after due inquiry, the Company is not a party to
any contract, lease or agreement which would subject it to any performance or
business obligations in the future after the Closing.
3.1.7 To
the best knowledge of Seller after due inquiry, the Company does not own any
real estate or any interests in real estate.
3.1.8 To
the best knowledge of Seller after due inquiry, the Company is not liable for
any income, real or personal property taxes to any governmental or state
agencies whatsoever.
3.1.9 To
the best knowledge of Seller after due inquiry, the Company is not in violation
of any provision of laws or regulations of federal, state or local government
authorities and agencies.
3.1.10 The
Seller, either directly or by representation, is the lawful owners of record of
the Stock, and the Seller presently has, and will have at the Closing Date, the
power to transfer and deliver the Stock to the Purchaser in accordance with the
terms of this Agreement. The delivery to the Purchaser of
certificates evidencing the transfer of the Stock pursuant to the provisions of
this Agreement will transfer to the Purchaser good and marketable title thereto,
free and clear of all liens, encumbrances, restrictions and claims of any
kind.
3.1.11 There
are no authorized shares of the Company other than the amount disclosed as being
seventy five million (75,000,000) common shares, and there are no issued and
outstanding shares of the Company other than the amount disclosed as being six
million three hundred and forty thousand (6,340,000) common
shares. Seller at the Closing Date will have full and valid title to
the Stock, and there will be no existing impediment or encumbrance to the sale
and transfer of the Stock to the Purchaser; and on delivery to the Purchaser of
the Stock being sold hereby, all of such shares shall be free and clear of all
liens, encumbrances, charges or assessments of any kind; such shares will be
legally and validly issued and fully paid and non-assessable shares of the
Company’s common stock; and all such common stock has been issued under duly
authorized resolutions of the Board of Directors of the Company.
3.1.12 To
the best knowledge of Seller after due inquiry, all issuances of the Company of
the shares in their common stock in past transactions have been legally and
validly effected, and all of such shares in the common stock are fully paid and
non-assessable.
3.1.13 To
the best knowledge of Seller after due inquiry, there are no outstanding
subscriptions, options, warrants, convertible securities or rights or
commitments of any nature in regard to the Company’s authorized but unissued
common stock.
3.1.14 To
the best knowledge of Seller after due inquiry, there are no outstanding
judgments, liens or any other security interests filed against the Company or
any of its properties.
6
3.1.15 To
the best knowledge of Seller after due inquiry, the Company has no
subsidiaries.
3.1.16 To
the best knowledge of Seller after due inquiry, the Company has no employment
contracts or agreements with any of its officers, directors, or with any
consultants, employees or other such parties.
3.1.17 To
the best knowledge of Seller after due inquiry, the Company has no insurance or
employee benefit plans whatsoever.
3.1.18 To
the best knowledge of Seller after due inquiry, the Company is not in default
under any contract, or any other document.
3.1.19 To
the best knowledge of Seller after due inquiry, the Company has no outstanding
powers of attorney and no obligations concerning the performance of the Seller
concerning this Agreement.
3.1.20 The
execution and delivery of this Agreement, and the subsequent closing thereof,
will not result in the breach by the Company or the Seller of any agreement or
other instrument to which they are or have been a party.
3.1.21 All
financial and other information which the Company and/or the Seller furnished or
will furnish to the Purchaser, including information with regard to the Company
and/or the Seller contained in the SEC filings filed by the Company since its
inception (i) is true, accurate and complete as of its date and in all material
respects except to the extent such information is superseded by information
marked as such, (ii) does not omit any material fact, not misleading and (iii)
presents fairly the financial condition of the organization as of the date and
for the period covered thereby.
3.1.22 The
Seller has filed with the SEC the Company’s Quarterly Report on Form 10-Q for
period ended August 31, 2009 and the Purchaser agrees to cover the expenses
occurred in connection with this filing, not to exceed five thousand dollars
($5,000.00).
The
representations and warranties herein by the Seller shall be true and correct in
all material respects on and as of the Closing Date hereof with the same force
and effect as though said representations and warranties had been made on and as
of the Closing Date.
The
representations and warranties made above shall survive the Closing Date and
shall expire for all purposes in the date numerically corresponding to the
Closing Date in the twelfth month after the Closing Date.
3.2.
Covenants of the Seller and the Company.
From the
date of this Agreement and until the Closing Date, the Seller and the Company
covenant the following:
3.2.1 The
Seller will, to the best of his ability, preserve intact the current status of
the Company as an OTC Bulletin Board quoted company.
7
3.2.2 To
the extent reasonably available, the Seller will furnish the Purchaser with all
corporate records and documents, such as the Articles of Incorporation and
Bylaws, or any other corporate document or record requested by the
Purchaser.
3.2.3 The
Company will not enter into any contract or business transaction, merger or
business combination, or incur any further debts or obligations without the
express written consent of the Purchaser.
3.2.4 The
Company will not amend or change its Articles of Incorporation or Bylaws, or
issue any further shares or create any other class of shares in the Company
without the express written consent of the Purchaser.
3.2.5 The
Company will not issue any stock options, warrants or other rights or interests
in or to its shares without the express written consent of the
Purchaser.
3.2.6 The
Seller will not encumber or mortgage any right or interest in their shares of
the common stock being sold to the Purchaser hereunder, and also they will not
transfer any rights to such shares of the common stock to any third party
whatsoever.
3.2.7 The
Company will not declare any dividend in cash or stock, or any other
benefit.
3.2.8 The
Company will not institute any bonus, benefit, profit sharing, stock option,
pension retirement plan or similar arrangement.
3.2.9 At
Closing, the Company and the Seller will obtain and submit to the Purchaser
resignations of current officers and directors.
3.3 Representations
and Warranties of the Purchaser.
3.3.1 The Purchaser has the requisite power and authority to
enter into and perform this Agreement and to purchase the shares being sold to
it hereunder. The execution, delivery and performance of this
Agreement by the Purchaser and the consummation by it of the transactions
contemplated hereby and thereby have been duly authorized, and no further
consent or authorization is required. This Agreement has been duly
authorized, executed and delivered by the Purchaser and constitutes, or shall
constitute when executed and delivered, a valid and binding obligation of the
Purchaser enforceable against the Purchaser in accordance with the terms
thereof.
3.3.2 The
Purchaser is, and will be at the time of the execution of this Agreement, an
“accredited investor,”
as such term is defined in Regulation D promulgated by the Commission under the
1933 Act, is experienced in investments and business matters, has made
investments of a speculative nature and has purchased securities of United
States publicly-owned companies in the past and, with its representatives, has
such knowledge and experience in financial, tax and other business matters as to
enable such Purchaser to utilize the
information made available by the Company to evaluate the merits and risks of
and to make an informed investment decision with respect to the proposed
purchase, which represents a speculative investment. The Purchaser
has the authority and is duly and legally qualified to purchase and own shares
of the Company. The Purchaser is able to bear the risk of such
investment for an indefinite period and to afford a complete loss
thereof. The information set forth on the signature page hereto
regarding the Purchaser is
accurate.
8
3.3.3 On
the Closing Date, the Purchaser will
purchase the Stock pursuant to the terms of this Agreement for its own account
for investment only and not with a view toward, or for resale in connection
with, the public sale or any distribution thereof.
3.3.4 The
Purchaser understands and agrees that the Stock have not been registered under
the 1933 Act or any applicable state securities laws, by reason of their
issuance in a transaction that does not require registration under the 1933 Act
(based in part on the accuracy of the representations and warranties of the
Purchaser contained herein), and that
such Stock must be held indefinitely unless a subsequent disposition is
registered under the 1933 Act or any applicable state securities laws or is
exempt from such registration. In any event, and subject to
compliance with applicable securities laws, the Purchaser may enter into lawful
hedging transactions in the course of hedging the position they assume and the
Purchaser may also enter into lawful short positions or other derivative
transactions relating to the Stock, or interests in the Stock, and deliver the
Stock, or interests in the Stock, to close out their short or other positions or
otherwise settle other transactions, or loan or pledge the Stock, or interests
in the Stock, to third parties who in turn may dispose of these
Stock.
3.3.5 The
Stock shall bear the following or similar legend:
“THE ISSUANCE AND SALE OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, NOR APPLICABLE STATE SECURITIES
LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY
ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS
SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID
ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
ARRANGEMENT SECURED BY THE SECURITIES.”
3.3.6 The
offer to sell the Stock was directly communicated to the Purchaser by the
Company. At no time was any 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.
3.3.7 The
Purchaser represents that the foregoing representations and warranties are true
and correct as of the date hereof and, unless such Purchaser otherwise notifies
the Company prior to the Closing Date shall be true and correct as of the
Closing Date.
9
3.3.8 The
foregoing representations and warranties shall survive the Closing Date and for
a period of one year thereafter.
Section
4. Miscellaneous
4.1. Expenses.
Each of the Parties shall bear its/his
own expenses in connection with the transactions contemplated by this
Agreement.
4.2. Governing Law.
The interpretation and construction of
this Agreement, and all matters relating hereto, shall be governed by the laws
of the Commonwealth of Virginia applicable to agreements executed and to be
wholly performed solely within such state.
4.3. Resignation of Old and Appointment
of New Board of Directors and Officers.
The Company and the Seller shall take
such corporate action(s) required by Cinnabar's Articles of Incorporation and/or
Bylaws to (a) appoint the below named persons to their respective positions,
to be effective on the Closing
Date, and (b) obtain and submit to the Purchaser, together with all required
corporate action(s) the resignation of the current board of directors, and any
and all corporate officers as of the Closing Date.
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Name
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Position
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Xxxxxxx
Xxxxxxxxx
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President
and Director
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4.4 Indemnification.
The Purchaser shall indemnify and
hold harmless the Seller from and against any and all losses, damages, expenses
and liabilities (collectively “Liabilities”) or actions, investigations,
inquiries, arbitrations, claims or other proceedings in respect thereof,
including enforcement of this Agreement (collectively “Actions”)
(Liabilities and Actions are herein collectively referred to as “Losses”). Losses
include, but are not limited to all reasonable legal fees, court costs and other
expenses incurred in connection with investigating, preparing, defending,
paying, settling or compromising any suit in law or equity arising out of this
Agreement or for any breach of this Agreement notwithstanding the absence of a
final determination as to a Purchaser’s obligation to reimburse the Seller for
such Losses and the possibility that such payments might later be held to have
been improper. Notwithstanding the above, it is understood that such
indemnification should be limited to eighty thousand dollars
($80,000).
The
Seller shall indemnify and hold harmless the Purchaser from and against any and
all losses, damages, expenses and liabilities (collectively “Liabilities”) or
actions, investigations, inquiries, arbitrations, claims or other proceedings in
respect thereof, including enforcement of this Agreement (collectively “Actions”)
(Liabilities and Actions are herein collectively referred to as “Losses”). Losses
include, but are not limited to all reasonable legal fees, court costs and other
expenses incurred in connection with investigating, preparing, defending,
paying, settling or compromising any suit in law or equity arising out of this
Agreement or for any breach of this Agreement notwithstanding the absence of a
final determination as to Seller’s obligation to reimburse the Purchaser for
such Losses and the possibility that such payments might later be held to have
been improper. Notwithstanding the above it is understood that such
indemnification should be limited to eighty thousand dollars
($80,000).
10
4.5. Disclosure.
The Parties agree that they will not
make any public comments, statements, or communications with respect to, or
otherwise disclose the execution of this Agreement or the terms and conditions
of the transactions contemplated by this Agreement without the prior written
consent of the Parties, which consent shall not be unreasonably
withheld.
4.6.
Notices.
Any notice or other communication
required or permitted under this Agreement shall be sufficiently given if
delivered in person or sent by facsimile or by overnight registered mail,
postage prepaid, addressed as follows:
If to
Seller, to:
Belmont Partners, LLC
000 Xxxx Xxxxxx
XX Xxx
000
Xxxxxxxxxx,
Xxxxxxxx 00000
000-000-0000
(office)
000-000-0000
(fax)
If to the
Purchaser, to:
Xxxxxxx Xxxxxxxxx
000 Xxxxxx Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
Facsimile: (404)
Or such other address or number as
shall be furnished in writing by any such Party, and such notice or
communication shall, if properly addressed, be deemed to have been given as of
the date so delivered or sent by facsimile.
4.7.
Parties in Interest.
This Agreement may not be transferred,
assigned or pledged by any Party hereto, other than by operation of
law. This Agreement shall be binding upon and shall inure to the
benefit of the Parties hereto and their respective heirs, executors,
administrators, successors and permitted assigns.
4.8. Entire Agreement.
This Agreement and the other documents
referred to herein contain the entire understanding of the Parties hereto with
respect to the subject matter contained herein. This Agreement shall supersede
all prior agreements and understandings between the Parties with respect to the
transactions contemplated herein.
11
4.9. Amendments.
This Agreement may not be amended or
modified orally, but only by an agreement in writing signed by the
Parties.
4.10. Severability.
In case any provision in this Agreement
shall be held invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions hereof will not in any way be
affected or impaired thereby.
4.11. Counterparts.
This Agreement may be executed in any
number of counterparts, including counterparts transmitted by telecopier, PDF or
facsimile transmission, any one of which shall constitute an original of this
Agreement. When counterparts of copies have been executed by all
parties, they shall have the same effect as if the signatures to each
counterpart or copy were upon the same document and copies of such documents
shall be deemed valid as originals. The Parties agree that all such
signatures may be transferred to a single document upon the request of any
Party.
4.12. Spin out.
At or prior to the Closing Date, the
Company’s business will be spun out from the Company.
4.13. Asset
Acquisition.
Purchaser shall, as soon as
practicable, and in no case later than ninety (90) days from the Closing,
acquire all of the assets of Yippy, Inc., a corporation organized in the State
of Delaware (the “Asset Acquisition”)
to be assumed by Company. The Company shall be the surviving
corporation and shall continue unimpaired by the Asset
Acquisition. Upon the Asset Acquisition, the Company shall succeed to
and shall possess all the assets, properties, rights, privileges, powers,
franchises, immunities and purposes, and be subject to all the debts,
liabilities, obligations, restrictions and duties of Yippy, Inc.
[REMAINDER
OF PAGE LEFT BLANK]
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In Witness
Whereof, each of the Parties hereto has caused its/his name to be
hereunto subscribed as of the day and year first above written.
Company:
Cinnabar
Ventures, Inc.
By: ____________________
Name: Xxxxxx
Xxxxx
Title: Director and
President
Date: _________________
Seller:
Belmont Partners, LLC
By: ____________________
Name: Xxxxxx Xxxxx
Title: Managing
Member
Date: ___________________
Purchaser:
By:
____________________
Name:
Xxxxxxx Xxxxxxxxx, Individually
Date:
___________________
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EXHIBIT
A
PROMISSORY
NOTE
|
$125,000.00
|
October 14,
2009
|
FOR VALUE
RECEIVED, Xxxxxxx Xxxxxxxxx (the “Maker”) promises to
pay Belmont Partners, LLC or assigns (the “Holder”) in lawful
money of the United States of America, the aggregate sum of One Hundred and
Twenty-Five Thousand Dollars ($125,000.00) with no interest.
1. Principal. The
principal amount of this Note shall be due and payable ninety (90) days from the
date hereof (the “Payment
Date”). Notwithstanding anything herein to the contrary, the
Note may be prepaid by Maker without penalty, in whole or in part.
2. Manner of
Payment. The payment of principal on this Note shall be paid
by Maker to Holder by wire transfer of immediately available funds to an account
or accounts designated by Holder in writing. If any payment of principal on this
Note is due on a day which is not a Business Day, such payment shall be due on
the next succeeding Business Day. “Business Day” means
any day other than a Saturday, Sunday or legal holiday in the Commonwealth of
Virginia.
3. Security. Maker’s
performance under this Note is secured to the extent and in the manner set forth
in that certain stock purchase agreement of even date herewith, by and among
Holder, Maker and Cinnabar Ventures, Inc. (the “Stock Purchase
Agreement”). Holder rights are set forth in the Stock Purchase
Agreement, including Non-Diluted provision under reference 2.5.3.
4. Prepayment. Maker
may, without premium or penalty, at any time and from time to time, prepay all
or any portion of the outstanding principal balance due under this
Note.
5. Severability. If
any provision in this Note is held invalid or unenforceable by any court of
competent jurisdiction, the other provisions of this Note will remain in full
force and effect. Any provision of this Note held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.
6. Governing
Law. This Note will be governed by the laws of the
Commonwealth of Virginia without regard to principles of conflicts of
laws.
7. Parties in
Interest. This Note may be assigned or transferred by
Holder. Subject to the preceding sentence, the rights and obligations
of Maker and Holder shall be binding upon and benefit their successors, assigns,
heirs, administrators and transferees.
8. Section Headings;
Construction. The headings of Sections in this Note are
provided for convenience only and will not affect its construction or
interpretation. All references to “Section” or “Sections” refer to the
corresponding Section or Sections of this Note unless otherwise specified. All
words used in this Note will be construed to be of such gender or number as the
circumstances require. Unless otherwise expressly provided, the words
“hereof” and “hereunder” and similar references refer to this Note in its
entirety and not to any specific section or subsection hereof.
IN
WITNESS WHEREOF, Maker has executed and delivered this Note as of the date first
written above.
/s/ Xxxxxxx Xxxxxxxxx
Name:
Xxxxxxx Xxxxxxxxx
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