STOCK PURCHASE AGREEMENT
EXECUTION
COPY
THIS
STOCK PURCHASE AGREEMENT (this “Agreement”),
dated
as of July 13, 2007, is made by and between Southridge Technology Group,
Inc., a
Delaware corporation (“Seller”),
and
each of (i) Xxxxxx X. Xxxxx and (ii) Sunodia Partners LP (together,
“Buyers”).
RECITALS
A. Seller
owns one thousand (1,000) shares of common stock, $0.001 par value per share
(the “Shares”),
of
STG Holdings, Inc., a Delaware corporation (the “Company”),
which
shares constitute, as of the date hereof, all of the issued and outstanding
capital stock of the Company.
B. Buyers
hold 9,050,000 shares of common stock, $0.001 par value per share, of Seller
(the “Purchase
Price Shares”),
and
Buyers have agreed to transfer such interest back to Seller for immediate
cancellation (the “Redemption”).
C. In
connection with the Redemption, Buyers wish to acquire from Seller, and Seller
wishes to transfer to Buyers, the Shares, upon the terms and subject to the
conditions set forth herein.
Accordingly,
the parties hereto agree as follows:
1. Purchase
and Sale of Stock.
(a) Purchased
Shares.
Subject to the terms and conditions provided below, Seller shall sell and
transfer to Buyers and Buyers shall purchase from Seller, on the Closing
Date
(as defined in Section 1(c)), all of the Shares.
(b) Purchase
Price.
The purchase price for the Shares shall be the transfer and delivery by
Buyers to Seller of the Purchase Price Shares, deliverable as provided in
Section 2(b).
(c) Closing.
The closing of the transactions contemplated in this Agreement (the
“Closing”)
shall
take place as soon as practicable following the execution of this Agreement.
The
date on which the Closing occurs shall be referred to herein as the Closing
Date
(the “Closing
Date”).
2. Closing.
(a) Transfer
of Shares.
At the Closing, Seller shall deliver to Buyers certificates representing
the Shares, duly endorsed to Buyers or as directed by Buyers, which delivery
shall vest Buyers with good and marketable title to all of the issued and
outstanding shares of capital stock of the Company, free and clear of all
liens
and encumbrances.
(b) Payment
of Purchase Price.
At the Closing, Buyers shall deliver to Seller a certificate or
certificates representing the Purchase Price Shares duly endorsed to Seller,
which delivery shall vest Seller with good and marketable title to the Purchase
Price Shares, free and clear of all liens and encumbrances.
3. Representations
and Warranties of Seller.
Seller
represents and warrants to Buyers as of the date hereof as follows:
(a) Corporate
Authorization; Enforceability.
The execution, delivery and performance by Seller of this Agreement is
within the corporate powers and has been, duly authorized by all necessary
corporate action on the part of Seller. This Agreement has been duly executed
and delivered by Seller and constitutes the valid and binding agreement of
Seller, enforceable against Seller in accordance with its terms, except to
the
extent that its enforceability may be subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar Laws affecting the
enforcement of creditors’ rights generally and by general equitable
principles.
(b) Governmental
Authorization.
The execution, delivery and performance by Seller of this Agreement
requires no consent, approval, Order, authorization or action by or in respect
of, or filing with, any Governmental Authority.
(c) Non-Contravention;
Consents.
The execution, delivery and performance by Seller of this Agreement and
the consummation of the transactions contemplated hereby do not (i) violate
the
certificate of incorporation or bylaws of Seller or (ii) violate any applicable
Law or Order.
(d) Capitalization.
As of the date hereof, Seller owns the Shares, which shares represent 100%
of the authorized, issued and outstanding capital stock of the Company. The
Shares to be acquired by Buyers are duly authorized, validly issued, fully-paid,
non-assessable and free and clear of any Liens.
4. Representations
and Warranties of Buyers.
Buyers
represent and warrant to Seller as of the date hereof as follows:
(a) Enforceability.
The execution, delivery and performance by Buyers of this Agreement are
within Buyers’ powers. This Agreement has been duly executed and delivered by
Buyers and constitutes the valid and binding agreement of Buyers, enforceable
against Buyers in accordance with its terms, except to the extent that its
enforceability may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles.
(b) Governmental
Authorization.
The execution, delivery and performance by Buyers of this Agreement
require no consent, approval, Order, authorization or action by or in respect
of, or filing with, any Governmental Authority.
(c) Non-Contravention;
Consents.
The execution, delivery and performance by Buyers of this Agreement, and
the consummation of the transactions contemplated hereby do not violate any
applicable Law or Order.
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(d) Purchase
for Investment.
Buyers are financially able to bear the economic risks of acquiring an
interest in the Company and the other transactions contemplated hereby, and
has
no need for liquidity in this investment. Buyers have such knowledge and
experience in financial and business matters in general, and with respect
to
businesses of a nature similar to the business of the Company, so as to be
capable of evaluating the merits and risks of, and making an informed business
decision with regard to, the acquisition of the Shares. Buyers are acquiring
the
Shares solely for their own account and not with a view to or for resale
in
connection with any distribution or public offering thereof, within the meaning
of any applicable securities laws and regulations, unless such distribution
or
offering is registered under the Securities Act of 1933, as amended (the
“Securities
Act”),
or an
exemption from such registration is available. Buyers have (i) received all
the
information they have deemed necessary to make an informed investment decision
with respect to the acquisition of the Shares, (ii) had an opportunity to
make
such investigation as they have desired pertaining to the Company and the
acquisition of an interest therein, and to verify the information which is,
and
has been, made available to them and (iii) had the opportunity to ask questions
of Seller concerning the Company. Buyers have received no public solicitation
or
advertisement with respect to the offer or sale of the Shares. Buyers realize
that the Shares are “restricted securities” as that term is defined in Rule 144
promulgated by the Securities and Exchange Commission under the Securities
Act,
the resale of the Shares is restricted by federal and state securities laws
and,
accordingly, the Shares must be held indefinitely unless their resale is
subsequently registered under the Securities Act or an exemption from such
registration is available for their resale. Buyers understand that any resale
of
the Shares by them must be registered under the Securities Act (and any
applicable state securities law) or be effected in circumstances that, in
the
opinion of counsel for the Company at the time, create an exemption or otherwise
do not require registration under the Securities Act (or applicable state
securities laws). Buyers acknowledge and consent that certificates now or
hereafter issued for the Shares will bear a legend substantially as
follows:
THE
SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR QUALIFIED UNDER
ANY APPLICABLE STATE SECURITIES LAWS (THE “STATE ACTS”), HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED
EXCEPT PURSUANT TO A REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND
QUALIFICATION UNDER THE STATE ACTS OR PURSUANT TO EXEMPTIONS FROM SUCH
REGISTRATION OR QUALIFICATION REQUIREMENTS (INCLUDING, IN THE CASE OF THE
SECURITIES ACT, THE EXEMPTIONS AFFORDED BY SECTION 4(1) OF THE SECURITIES
ACT
AND RULE 144 THEREUNDER). AS A PRECONDITION TO ANY SUCH TRANSFER, THE ISSUER
OF
THESE SECURITIES SHALL BE FURNISHED WITH AN OPINION OF COUNSEL OPINING AS
TO THE
AVAILABILITY OF EXEMPTIONS FROM SUCH REGISTRATION AND QUALIFICATION AND/OR
SUCH
OTHER EVIDENCE AS MAY BE SATISFACTORY THERETO THAT ANY SUCH TRANSFER WILL
NOT
VIOLATE THE SECURITIES LAWS.
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Buyers
understand that the Shares are being sold to them pursuant to the exemption
from
registration contained in Section 4(1) of the Securities Act and that Seller
is
relying upon the representations made herein as one of the bases for claiming
the Section 4(1) exemption.
(e) Liabilities.
Following the Closing, Seller will have no debts, liabilities or
obligations relating to the Company or its business or activities, and there
are
no outstanding guaranties, performance or payment bonds, letters of credit
or
other contingent contractual obligations that have been undertaken by Seller
directly or indirectly in relation to the Company or its business and that
may
survive the Closing.
(f) Title
to Purchase Price Shares.
Buyers are the sole record and beneficial owner of the Purchase Price
Shares. At Closing, Buyers will have good and marketable title to the Purchase
Price Shares, which Purchase Price Shares are, and at the Closing will be,
free
and clear of all options, warrants, pledges, claims, liens and encumbrances,
and
any restrictions or limitations prohibiting or restricting transfer to Seller,
except for restrictions on transfer as contemplated by applicable securities
laws.
5. Indemnification
and Release.
(a) Indemnification.
Buyers covenant and agree to indemnify, defend, protect and hold harmless
Seller, and its officers, directors, employees, stockholders, agents,
representatives and affiliates (collectively, together with Seller, the
“Seller
Indemnified Parties”)
at all
times from and after the date of this Agreement from and against all losses,
liabilities, damages, claims, actions, suits, proceedings, demands, assessments,
adjustments, costs and expenses (including specifically, but without limitation,
reasonable attorneys’ fees and expenses of investigation), whether or not
involving a third party claim and regardless of any negligence of any Seller
Indemnified Party (collectively, “Losses”),
incurred by any Seller Indemnified Party as a result of or arising from (i)
any
breach of the representations and warranties of Buyers set forth herein or
in
certificates delivered in connection herewith, (ii) any breach or nonfulfillment
of any covenant or agreement on the part of Buyers under this Agreement,
(iii)
any debt, liability or obligation of the Company, (iv) any debt, liability
or
obligation of Seller for actions taken prior to that certain merger by and
between Seller and RxElite Holdings., a Delaware corporation (the “Merger”),
(v)
the conduct and operations of the business of the Company whether before
or
after Closing, (vi) claims asserted against the Company whether before or
after
Closing, or (vii) any federal or state income tax payable by Seller and
attributable to the transaction contemplated by this Agreement or activities
prior to the Merger.
(b) Third
Party Claims.
(i) If
any
claim or liability (a “Third-Party
Claim”)
should
be asserted against any of the Seller Indemnified Parties (the “Indemnitee”)
by a
third party after the Closing for which Buyers have an indemnification
obligation under the terms of Section 5(a), then the Indemnitee shall notify
Buyers (the “Indemnitor”)
within
20 days after the Third-Party Claim is asserted by a third party (said
notification being referred to as a “Claim
Notice”)
and
give the Indemnitor a reasonable opportunity to take part in any examination
of
the books and records of the Indemnitee relating to such Third-Party Claim
and
to assume the defense of such Third-Party Claim and in connection therewith
and
to conduct any proceedings or negotiations relating thereto and necessary
or
appropriate to defend the Indemnitee and/or settle the Third-Party Claim.
The
expenses (including reasonable attorneys’ fees) of all negotiations,
proceedings, contests, lawsuits or settlements with respect to any Third-Party
Claim shall be borne by the Indemnitor. If the Indemnitor agrees to assume
the
defense of any Third-Party Claim in writing within 20 days after the Claim
Notice of such Third-Party Claim has been delivered, through counsel reasonably
satisfactory to Indemnitee, then the Indemnitor shall be entitled to control
the
conduct of such defense, and any decision to settle such Third-Party Claim,
and
shall be responsible for any expenses of the Indemnitee in connection with
the
defense of such Third-Party Claim so long as the Indemnitor continues such
defense until the final resolution of such Third-Party Claim. The Indemnitor
shall be responsible for paying all settlements made or judgments entered
with
respect to any Third-Party Claim the defense of which has been assumed by
the
Indemnitor. Except as provided on subsection (b) below, both the Indemnitor
and
the Indemnitee must approve any settlement of a Third-Party Claim. A failure
by
the Indemnitee to timely give the Claim Notice shall not excuse Indemnitor
from
any indemnification liability except only to the extent that the Indemnitor
is
materially and adversely prejudiced by such failure.
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(ii) If
the
Indemnitor shall not agree to assume the defense of any Third-Party Claim
in
writing within 20 days after the Claim Notice of such Third-Party Claim has
been
delivered, or shall fail to continue such defense until the final resolution
of
such Third-Party Claim, then the Indemnitee may defend against such Third-Party
Claim in such manner as it may deem appropriate and the Indemnitee may settle
such Third-Party Claim, in its sole discretion, on such terms as it may deem
appropriate. The Indemnitor shall promptly reimburse the Indemnitee for the
amount of all settlement payments and expenses, legal and otherwise, incurred
by
the Indemnitee in connection with the defense or settlement of such Third-Party
Claim. If no settlement of such Third-Party Claim is made, then the Indemnitor
shall satisfy any judgment rendered with respect to such Third-Party Claim
before the Indemnitee is required to do so, and pay all expenses, legal or
otherwise, incurred by the Indemnitee in the defense against such Third-Party
Claim.
(c) Non-Third-Party
Claims.
Upon discovery of any claim for which Buyers have an indemnification
obligation under the terms of this Section 5 which does not involve a claim
by a
third party against the Indemnitee, the Indemnitee shall give prompt notice
to
Buyers of such claim and, in any case, shall give Buyers such notice within
30
days of such discovery. A failure by Indemnitee to timely give the foregoing
notice to Buyers shall not excuse Buyers from any indemnification liability
except to the extent that Buyers are materially and adversely prejudiced
by such
failure.
(d) Release.
Buyers, on behalf of themselves and their Related Parties, hereby release
and forever discharge Seller and its individual, joint or mutual, past and
present representatives, Affiliates, officers, directors, employees, agents,
attorneys, stockholders, controlling persons, subsidiaries, successors and
assigns (individually, a “Releasee”
and
collectively, “Releasees”)
from
any and all claims, demands, proceedings, causes of action, orders, obligations,
contracts, agreements, debts and liabilities whatsoever, whether known or
unknown, suspected or unsuspected, both at law and in equity, which Buyers
or
any of their Related Parties now have or have ever had against Releasees.
Buyers
hereby irrevocably covenant to refrain from, directly or indirectly, asserting
any claim or demand, or commencing, instituting or causing to be commenced,
any
proceeding of any kind against any Releasee, based upon any matter released
hereby. “Related
Parties”
shall
mean, with respect to Buyers, (i) any Person that directly or indirectly
controls, is directly or indirectly controlled by, or is directly or indirectly
under common control with Buyers, (ii) any Person in which Buyers hold a
Material Interest or (iii) any Person with respect to which any Buyer serves
as
a general partner or a trustee (or in a similar capacity). For purposes of
this
definition, “Material
Interest”
shall
mean direct or indirect beneficial ownership (as defined in Rule 13d-3 under
the
Securities Exchange Act of 1934, as amended) of voting securities or other
voting interests representing at least ten percent (10%) of the outstanding
voting power of a Person or equity securities or other equity interests
representing at least ten percent (10%) of the outstanding equity securities
or
equity interests in a Person.
-5-
6. Definitions.
As used
in this Agreement:
(a) “Affiliate”
means,
with respect to any Person, any other Person directly or indirectly controlling,
controlled by or under common control with the first Person. For the purposes
of
this definition, “Control,”
when
used with respect to any Person, means the possession, directly or indirectly,
of the power to (i) vote 10% or more of the securities having ordinary voting
power for the election of directors (or comparable positions) of such Person
or
(ii) direct or cause the direction of the management and policies of such
Person, whether through the ownership of voting securities, by contract or
otherwise, and the terms “Controlling”
and
“Controlled”
have
meanings correlative to the foregoing;
(b) “Governmental
Authority”
means
any domestic or foreign governmental or regulatory authority;
(c) “Law”
means
any federal, state or local statute, law, rule, regulation, ordinance, code,
Permit, license, policy or rule of common law;
(d) “Lien”
means,
with respect to any property or asset, any mortgage, lien, pledge, charge,
security interest, encumbrance or other adverse claim of any kind in respect
of
such property or asset. For purposes of this Agreement, a Person will be
deemed
to own, subject to a Lien, any property or asset which it has acquired or
holds
subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement relating to such
property or asset;
(e) “Order”
means
any judgment, injunction, judicial or administrative order or
decree;
(f) “Permit”
means
any government or regulatory license, authorization, permit, franchise, consent
or approval; and
(h) “Person”
means
an individual, corporation, partnership, limited liability company, association,
trust or other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.
7. Miscellaneous.
(a) Counterparts.
This Agreement may be signed in any number of counterparts, each of which
will
be deemed an original but all of which together shall constitute one and
the
same instrument.
-6-
(b) Amendments
and Waivers.
(i) Any
provision of this Agreement may be amended or waived if, but only if, such
amendment or waiver is in writing and is signed, in the case of an amendment,
by
each party to this Agreement, or in the case of a waiver, by the party against
whom the waiver is to be effective.
(ii) No
failure or delay by any party in exercising any right, power or privilege
hereunder will operate as a waiver thereof nor will any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein provided
will be cumulative and not exclusive of any rights or remedies provided by
Law.
(c) Successors
and Assigns.
The provisions of this Agreement will be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns;
provided
that no
party may assign, delegate or otherwise transfer (including by operation
of Law)
any of its rights or obligations under this Agreement without the consent
of
each other party hereto.
(d) No
Third Party Beneficiaries.
This Agreement is for the sole benefit of the parties hereto and their
permitted successors and assigns and nothing herein expressed or implied
will
give or be construed to give to any Person, other than the parties hereto,
those
referenced in Section 5 above, and such permitted successors and assigns,
any
legal or equitable rights hereunder.
(e) Governing
Law.
This Agreement will be governed by, and construed in accordance with, the
internal substantive law of the State of Delaware.
(f) Headings.
The headings in this Agreement are for convenience of reference only and
will not control or affect the meaning or construction of any provisions
hereof.
(g) Entire
Agreement.
This Agreement constitutes the entire agreement among the parties with
respect to the subject matter of this Agreement. This Agreement supersedes
all
prior agreements and understandings, both oral and written, between the parties
with respect to the subject matter hereof of this Agreement.
(h) Severability.
If any provision of this Agreement or the application of any such
provision to any Person or circumstance is held invalid, illegal or
unenforceable in any respect by a court of competent jurisdiction, the remainder
of the provisions of this Agreement (or the application of such provision
in
other jurisdictions or to Persons or circumstances other than those to which
it
was held invalid, illegal or unenforceable) will in no way be affected, impaired
or invalidated, and to the extent permitted by applicable Law, any such
provision will be restricted in applicability or reformed to the minimum
extent
required for such provision to be enforceable. This provision will be
interpreted and enforced to give effect to the original written intent of
the
parties prior to the determination of such invalidity or
unenforceability.
[Signature
Page Follows]
-7-
[SIGNATURE
PAGE TO STOCK PURCHASE AGREEMENT]
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered, effective as of the date first above
written.
| SOUTHRIDGE TECHNOLOGY GROUP, INC. | ||
| |
|
|
| By: | /s/ Xxxxxx Xxxx | |
|
Name:
Xxxxxx Xxxx
Title: Chief Executive
Officer
|
||
| /s/ Xxxxxx X. Xxxxx | ||
|
Xxxxxx X. Xxxxx |
||
| SUNODIA PARTNERS LP | ||
| |
|
|
| By: | Xxxxxx Xxxxx Capital, LLC, its General Partner | |
| By: | /s/ Xxxxxxx Xxxxx | |
|
Name:
Xxxxxxx Xxxxx
Title: Manager
|
||
