STOCK PURCHASE AGREEMENT
Exhibit 10.1
This
Stock Purchase Agreement (the
“Agreement”) dated as of the 24th day of September 2007, is
made and entered into by and between MASTODON VENTURES, INC., a
Texas corporation with offices at 000 Xxxxxxxx Xxx., Xxxxx 0000, Xxxxxx, Xxxxx
00000 (“Purchaser”) and XXXXX BIRMINGHAM., an
individual, with an address at 00000 Xxxxx Xxxx, Xxx Xxxxxxx, Xxxxx 00000
(“Seller”).
W
I T N E S S E T H :
WHEREAS,
Seller is
personally the record and beneficial owner of Forty One Million Five Hundred
Eighty Nine Thousand Seven Hundred Eighty Three (41,589,783) pre split shares
of
the common stock of International Test Systems, Inc., a Delaware corporation
(the “Company”); and
WHEREAS,
Seller
desires to sell to Purchaser a portion of the shares of common stock of the
Company owned by him, and Purchaser is willing to purchase such shares of common
stock from Seller, all on and subject to the terms and conditions hereinafter
set forth.
NOW
THEREFORE, in
consideration of the foregoing premises, and of the mutual covenants and
undertakings contained herein, and for such other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged
by
the parties hereto, the parties to this Agreement hereby agree as
follows:
ARTICLE
1
PURCHASE
OF SHARES
1.01.
Purchase Terms.
(a) Seller
hereby agrees, subject to the terms hereof, to sell to Purchaser free and clear
of all liens, claims and encumbrances and Purchaser hereby agrees to purchase
from Seller, free and clear of all liens, claims and encumbrances and subject
to
the terms hereof, One Million Six Hundred Thousand post-Reverse Split (as
defined below) shares of the common stock of Seller (the
“Shares”) for an aggregate cash purchase price of One Hundred
and Ten Thousand Dollars ($110,000) (the “Purchase Price”), of
which Seventeen Thousand Five Hundred Dollars ($17,500) has previously been
paid
to Seller, leaving a remaining balance due to Seller of Ninety-Two Thousand
Five
Hundred Dollars ($92,500). Any transfer or similar taxes, if any, imposed upon
the sale and transfer of the Shares to Purchaser hereunder shall be borne by
Seller.
(b) Prior to the Closing, the Company will file a
Certificate of Amendment to its Certificate of Incorporation (the
“Amendment”) with the Secretary of State of Delaware (and
provide a certified copy thereof to Purchaser) to:
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(A)
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effect
a 1:25 reverse stock split of its issued and outstanding shares of
common
stock (the “Reverse Split”); and
to
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(B)
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authorize
100,000,000 shares of common stock and 10,000,000 shares of preferred
stock, $0.001 par value per share.
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(c) The
Company delivers to Purchaser a legal opinion of Xxxxx X. Xxxx, Esq. confirming
that the Reverse Split has been completed and is effective.
(d) Seller
will deliver to Purchaser, when requested, an original resignation as the sole
officer and director of the Company, together with an original Consent to Action
Without Meeting of the Board of Directors of the Company
approving the appointment of Purchaser’s nominee to the Company’s Board of
Directors (the “Corporate Documents”).
ARTICLE
2
THE
CLOSING
2.01. The
Closing.
(a) Provided
that the Reverse Split and the Amendment have been completed, the closing of
the
transaction contemplated hereby (the “Closing”) will take place
at the offices of the Purchaser thirty days after the Private Placement
Memorandum (“PPM”) documents are completed (the “Closing
Date”). ]
(b) Purchaser’s
obligation to close the transaction contemplated by this Agreement is subject
to
and conditioned upon the accuracy and completeness of Seller’s representations,
warranties, covenants and obligations under this Agreement.
2.02. Closing
Deliveries.
(a) Purchaser
shall pay Seller $16,250 upon execution of this Agreement, leaving $76,250
to be
paid by Purchaser to Seller pursuant to the terms of Section 2.03 below (the
“Purchase Price Balance”).
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(b)
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Seller
shall provide the Purchaser with certificates evidencing the
Shares.
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(c)
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A
condition to the Closing of this Agreement shall be the sale by the
Company of 2,000,000 newly issued post reverse stock split shares
of
common stock to MV Equity Partners, Inc. simultaneous with and/or
prior to
the Closing of this Agreement at a purchase price of
$2,000.
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2.03
Purchase Price Balance.
The
Purchase Price Balance shall be paid by Purchaser to Seller as
follows:
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a)
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$10,000
upon the completion by The Loev Law Firm, PC of a PPM for
the sale of up to $5,000,000 in bridge loans by the Company (the
“Bridge
Loans”);
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b)
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$16,250
upon the completion of the Reverse Split;
and
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c)
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$50,000
no later than 30 days from the date the PPM document is completed
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ARTICLE
3
REPRESENTATIONS
AND WARRANTIES OF THE PARTIES
3.01.
Representations and Warranties of Purchaser. To induce
Seller to enter into this Agreement and to consummate the transactions
contemplated hereby, Purchaser hereby makes the following representations and
warranties to Seller (which representations and warranties will be true and
correct as of the date hereof and as of the Closing Date):
(a) Organization;
Authority. Purchaser is a corporation entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization with full right, power and authority to enter
into this Agreement and to consummate the transactions contemplated
herein. The execution, delivery and performance by Purchaser of the
transactions contemplated by this Agreement have been duly authorized by all
necessary corporate action on the part of such Purchaser. This
Agreement has been duly and validly executed by Purchaser, and constitutes
the
valid and binding obligation of Purchaser, enforceable against it in accordance
with its terms, except (i) as limited by general equitable principles and
applicable bankruptcy, insolvency, reorganization, moratorium and other laws
of
general application affecting enforcement of creditors’ rights generally, and
(ii) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies.
(b) Investment
Representation. Purchaser understands that the Shares
are “restricted securities” and have not been registered under the Securities
Act of 1933, as amended, or any applicable state securities law and is acquiring
the Shares for its own account and not with a view to or for distributing or
reselling such Shares or any part thereof, has no present intention of
distributing any of such Shares and has no arrangement or understanding with
any
other persons regarding the distribution of such Shares (this representation
and
warranty shall not limit Purchaser’s right to sell the Shares in compliance with
applicable federal and state securities laws).
(c) Birmingham
Options. In connection with the Closing,
Purchaser shall grant the Seller an option to repurchase up to 100,000 of the
Shares from the Purchaser at $1.00 per share, for a period of two years from
the
date of the Closing.
3.02.
Representations and Warranties of Seller. To
induce Purchaser to enter into this Agreement and to consummate the transactions
contemplated hereby, Seller hereby makes the following
representations and warranties to Purchaser (which representations and
warranties will be true and correct as of the date hereof and as of the Closing
Date):
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(a) Capitalization; Organization;
Authority. The Company has 44,357,000 shares of common
stock issued and outstanding; no preferred stock outstanding; and 1,420,000
warrants with an exercise price of $0.05 per share outstanding as of the
parties’ entry into this Agreement. Following the Reverse Split, the Company
will have approximately 1,774,280 (not including any shares issued in connection
with rounding), and 56,800 warrants outstanding (not including any warrants
issued in connection with rounding) with an exercise price of $1.25 per
share. The execution, delivery and performance by Seller of the
transactions contemplated by this Agreement have been duly authorized by all
necessary action on the part of Seller. This Agreement has been duly
and validly executed and delivered by Seller, and constitutes the valid and
binding obligation of Seller, enforceable against Seller in accordance with
its
terms, except (i) as limited by general equitable principles and applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors’ rights generally, and (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies.
(b) No
Conflict With Other Instruments. The consummation of the
sale of the Shares to Purchaser in accordance with the terms of this Agreement
will not be in conflict with, or result in a breach of, any term, condition,
or
provision of, or constitute a default under, any agreement, indenture, mortgage,
deed of trust, or other instrument to which Seller is a party or otherwise
relating to the Shares, and will not constitute an event that with the lapse
of
time or action by a third party, could result in a default under any of the
foregoing, or result in the creation of any lien, charge, or encumbrance upon
the Shares purchased hereby.
(c) No
Conflict With Judgments or Decrees. The consummation of
the sale of the Shares in accordance with the terms of this Agreement will
not
conflict with, or result in a breach of, any term, condition, or provision
of
any judgment, order, injunction, decree, writ, or ruling of any court or
tribunal, to which Seller or the Shares are subject.
(d) No
Litigation. There are no material actions, suits,
proceedings or claims pending or threatened against Seller or the Company,
at
law or in equity, or before or by any foreign, federal, state, municipal, or
other governmental court, department, commission, board, bureau, agency,
arbitration tribunal, instrumentality, by or against any other person or entity
which in any way relate to Seller, its business, or the Shares, including any
such actions, suits, proceedings or claims with respect to, or any way relating
to, the transactions contemplated by this Agreement
(e) Title. The
Shares, when sold by Seller to Purchaser pursuant to the terms hereof, will
be
fully paid, non-assessable and free and clear of all liens, claims, security
interests or encumbrances of any kind.
(f) Shareholders. Seller
is the sole officer and director of the Company and has the full and sole right
and authority to elect and/or appoint Purchaser’s nominee to the Company’s Board
of Directors in accordance with the terms hereof. As of the date
hereof, there are approximately 51 shareholders of Seller. There are
no written or oral employment or independent contractor agreements between
Seller and any employee or third party.
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(g) Agreements. Seller
is not a party to any contract or agreement and is currently
inactive.
(h) Liabilities. As
of the date hereof, the Company’s liabilities do not exceed $80,000, and which
liabilities will not exceed $210,000 prior to the final payment of the Purchase
Price Balance. By Seller’s execution of this Agreement, Seller agrees that any
amounts due to Seller by the Company as of the Closing Date will be deemed
fully
paid and satisfied (and, if requested by Purchaser, after the Closing, Seller
will confirm same, in writing).
(i) Financial
Statements. The Company’s unaudited
financial statements as of June 30, 2007 are accurate and
complete. There have been no material changes in the Company’s
financial statements since June 30, 2007, and such financial statements are
filed with the Securities Exchange Commission.
4.03. Survival. Notwithstanding
any provision of this Agreement to the contrary, the representations and
warranties of Purchaser and Seller set forth in this Article shall survive
the
Closing of the transactions contemplated hereby.
ARTICLE
4
MISCELLANEOUS
4.01. Miscellaneous.
(a) This
Agreement constitutes the sole and entire agreement between the parties hereto
with respect to the subject matter hereof and supersedes all prior agreements,
representations, warranties, statements, promises, arrangements and
understandings, whether oral or written, express or implied, between the parties
hereto with respect to the subject matter hereof and may not be changed or
modified except by an instrument in writing signed by the party or parties
to be
bound thereby. This Agreement has been subject to the mutual consultation,
negotiation and agreement of the parties hereto and shall not be construed
for
or against any party hereto on the basis of such party having drafted this
Agreement.
(b) All
notices, consents, requests, and other communications required or permitted
to
be given under this Agreement (the “Notices”), shall be in
writing and delivered personally or by a nationally recognized overnight courier
service, receipt acknowledged, or mailed by registered or certified mail,
postage prepaid, return receipt requested, addressed to the parties hereto
as
follows (or to such other address as any of the parties hereto shall specify
by
notice given in accordance with this provision):
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(i)
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If
to the Seller:
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Attn:
Xxxx X. Birmingham
00000
Xxxxx Xxxx
Xxx
Xxxxxxx, Xxxxx 00000
(ii) If
to Purchaser:
Mastodon
Ventures, Inc.
000
Xxxxxxxx Xxxxxx
Xxxxxx,
Xxxxx 00000
With
a
copy to:
Xxxxx
X.
Xxxx, Esq.
The
Loev
Law Firm, PC
0000
Xxxx
Xxxx Xxxxx, Xxxxx 000
Xxxxxxxx,
Xxxxx 00000
All
such
Notices shall be deemed given when personally delivered as aforesaid, or, if
mailed as aforesaid, on the third business day after the mailing thereof or
on
the day actually received, if earlier, except for a notice of a change of
address which shall be effective and deemed to have been given only upon
receipt.
(c) Neither
Seller nor Purchaser may assign this Agreement or their respective rights,
benefits or obligations hereunder without the written consent of the
non-assigning party, except that Purchaser may assign, in whole or in part,
its
rights to purchase the Shares to any third party(ies) designated by
it.
(d) This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors, heirs, personal representatives,
administrators, executors and permitted assigns. Nothing contained in this
Agreement is intended to confer upon any person or entity, other than the
parties hereto, or their respective successors, heirs, personal representatives,
administrators, executors or permitted assigns, any rights, benefits,
obligations, remedies or liabilities under or in connection with this
Agreement.
(e)
No waiver of any provision of this Agreement or of any breach hereof shall
be
effective unless in writing and signed by the party to be bound thereby. The
waiver by any party hereto of a breach of any provision of this Agreement,
or of
any representation, warranty, obligation or covenant in this Agreement by the
other party hereto, shall not be construed as a waiver of any subsequent breach
of the same or of any other provision, representation, warranty, obligation
or
covenant of such other party under this Agreement, unless the instrument of
waiver expressly provides otherwise.
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(f)
This Agreement shall be governed by and construed in accordance withthe laws
of
Texas with respect to contracts made and to be fully performed therein without
regard to the conflicts of laws principles thereof. The parties
hereto hereby agree that any suit or proceeding arising under or as a result
of
this Agreement or the consummation of the transactions contemplated hereby,
shall be brought solely in a Federal or State court located in Xxxxxx County,
Texas except as otherwise provided below. By their execution hereof,
the parties hereto irrevocably consent and submit to the in personam
jurisdiction of the Federal and State courts located in Xxxxxx County, Texas
and
agree that any process in any suit or proceeding commenced in such courts under
this Agreement may be served upon them personally or by certified or registered
mail, return receipt requested, or by a nationally recognized overnight
courier service which provides evidence of delivery, with the same force and
effect as if personally served upon them in such City, County and
State. The parties hereto each waive any claim that any such
jurisdiction is not a convenient forum for any such suit or proceeding and
any
defense of lack of in personam jurisdiction with respect thereto.
(g) The
parties hereto
hereby agree that, at any time and from time to time after the date hereof
upon
the reasonable request of either of the parties hereto and at no cost to the
party to which any such request is made, they shall do, execute, acknowledge
and
deliver, or cause to be done, executed, acknowledged and delivered, such further
acts, deeds, assignments, transfers, conveyances, and assurances as may be
reasonably required to more effectively consummate this Agreement and the
transactions contemplated thereby or to confirm or otherwise effectuate the
provisions of this Agreement.
(h) Each
party hereto
represents and warrants to the other that he or it has been represented by
independent counsel of his or its own choosing in connection with the
negotiation, execution, delivery and consummation of this
Agreement.
(i) Except
as set
forth below, each of the parties hereto shall bear all of their respective
costs
and expenses incurred in connection with the negotiation, preparation,
execution, consummation, performance and/or enforcement of this
Agreement. Notwithstanding the foregoing, in the event of any action
or proceeding instituted by either party hereto to enforce the provisions of
this Agreement, the party prevailing therein shall be entitled to reimbursement
by the other breaching party of the legal costs and expenses incurred by the
prevailing party in connection therewith.
(j) This
Agreement may be executed in several counterparts, each of which is an
original. It shall not be necessary in making proof of this Agreement
or any counterpart hereof to produce or account for any of the other
counterparts. A copy of this Agreement signed by one party and faxed
to another party shall be deemed to have been executed and delivered by the
signing party as though an original. A photocopy of this Agreement
shall be effective as an original for all purposes.
(k) The
Article and
Section headings used in this Agreement have been used for convenience of
reference only and are not to be considered in construing or interpreting this
Agreement.
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(l)
If one or more provisions of this Agreement are held to be unenforceable under
applicable law, such provision(s) shall be excluded from this Agreement and
the
balance of this Agreement shall remain in full force and effect.
IN
WITNESS WHEREOF, the undersigned have set their hands effective as of
the date hereof.
SELLER:
/S/
Xxxxx X.
Birmingham
Xxxxx
X. Birmingham
PURCHASER:
MASTODON
VENTURES, INC.
By:
/S/
Xxxxxx
Xxxxxx
Xxxxxx
Xxxxxx, President
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