STOCK REDEMPTION AGREEMENT
THIS
STOCK REDEMPTION AGREEMENT is entered into as of November 13, 2007 (the
“Agreement”), by and between AFH Holding I, Inc., a Delaware
corporation (the “Company”) and Xxxxxx Xxxxx (the
“Seller”). Each party to this Agreement is referred to herein as a
“Party,” and they are all referred to collectively as “Parties.”
W
I T N E
S S E T H:
WHEREAS,
the Company has agreed to redeem 5,000,000 shares (the “Shares”) of the
Company’s common stock, $0.001 par value per share (the “Common Stock”),
currently held by the Seller, which shall constitute 100% of the total
outstanding shares of the Common Stock of the Company on a fully-diluted basis
immediately prior to the Closing (as defined below), and the Seller has agreed
to sell such Shares on the terms and conditions set forth
herein;
NOW,
THEREFORE, in consideration of the premises and of the mutual representations,
warranties and agreements set forth herein, the Parties hereto agree as
follows:
ARTICLE
I
SALE
AND
PURCHASE OF SHARES
1.1 Incorporation
of Recitals. The provisions and recitals set forth above are
hereby referred to and incorporated herein and made a part of this Agreement
by
reference.
1.2 Sale
and Purchase of Shares. Subject to the terms and conditions of
this Agreement, at the Closing, the Seller hereby agrees to sell to the Company
and the Company agrees to purchase from the Seller the Shares for an aggregate
purchase price of $12,500 (the “Purchase Price”). On the Closing Date
(as defined below), the Purchase Price shall be delivered to the
Seller.
1.3 Closing. Subject
to the terms and conditions of this Agreement, the closing of the transactions
contemplated by this Agreement (the “Closing”) shall take place on November 13,
2007 (the “Closing Date”). On the Closing Date, the Seller shall
deliver to the Company: (a) stock certificate evidencing the Shares in
negotiable form, duly endorsed in blank, or with stock transfer powers attached
thereto (the “Share Certificate”). On the Closing Date, the Company
shall deliver to the Seller the Purchase Price for the purchase of the
Shares.
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES OF THE SELLER
Except
as
set forth under the corresponding section of the disclosure schedules (the
“Disclosure Schedules”) attached hereto as Exhibit A, which Disclosure
Schedules shall be deemed a part hereof, the Seller hereby represents and
warrants to Company that now and as of the Closing:
(a) The
Seller is the lawful owner of the Shares and has full power and authority to
sell the Shares, free and clear of any liens or encumbrances
whatsoever;
(b) The
sale of the Shares contemplated by this Agreement do not conflict with, or
result in a breach of, or a default under, or give rise to a right of
acceleration under, any agreement or instrument to which the Seller is a
party;
(c) No
broker or finder has acted for the Seller in connection with this Agreement
or
the transactions contemplated hereby, and no broker or finder is entitled to
any
brokerage or finder’s fee or other commissions in respect of such transactions
based upon agreements, arrangements or understandings made by or on behalf
of
the Seller;
(d) The
Seller acknowledges that she (i) has had the opportunity to be advised by legal
counsel of her own choosing with respect to the transactions contemplated by
this Agreement and (ii) is aware the Company contemplates the sale of shares
of
common stock to an identified buyer at a price per share greater than she is
receiving hereunder; and
(e) The
representations and warranties of the Seller included in this Agreement and
any
list, statement, document or information set forth in, attached to any Schedule
provided pursuant to this Agreement or delivered hereunder, are true and
complete in all material respects and do not contain any untrue statement of
a
material fact or omit to state a material fact required to be stated herein
or
therein or necessary to make the statements contained herein or therein not
misleading, under the circumstance under which they were made and shall survive
after Closing as set forth herein.
.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
The
Company hereby represents and warrants to the Seller that now and as of the
Closing:
(a) The
Company has the full rights, power and authority to enter into and perform
its
obligations under this Agreement;
(b) This
Agreement has been duly authorized by all necessary corporate or other action
of
the Company and has been duly executed and delivered, and this Agreement is
the
valid, legal and binding obligation of the Company, enforceable in accordance
with its terms;
(c) The
Company is not in violation of its Articles of Incorporation or Bylaws as of
the
date hereof. The execution, delivery and performance of this
Agreement and the transactions contemplated hereby (i) do not require any
approval or consent of, or filing with, any governmental agency or authority
in
the United States of America or otherwise which has not been obtained and which
is not in full force and effect as of the date hereof, (ii) will not conflict
with or constitute a breach or violation of the Articles of Incorporation or
Bylaws of the Company, and (iii) will not result in a violation of any law
or
regulation to which the Company is subject;
(d) The
Company is not, and the performance of this Agreement by the Company will not
render the Company insolvent within the meaning of applicable law or bankrupt
under applicable bankruptcy laws;
(e) The
Company is not a party to, subject to or bound by any agreement or any
judgement, order, writ, prohibition, injunction or decree of any court or other
governmental body or any law or regulation which would prevent the execution
or
performance of this Agreement by the Company;
(f) No
broker or finder has acted for the Company in connection with this Agreement
or
the transactions contemplated hereby, and no broker or finder is entitled to
any
brokerage or finder’s fee or other commissions in respect of such transactions
based upon agreements, arrangements or understandings made by or on behalf
of
the Company;
(g) The
redemption of the Shares contemplated by this Agreement does not conflict with,
or result in a breach of or a default under, or give rise to a right of
acceleration under, any agreement or instrument to which the Company is a party
or by which it is bound; and
(h) The
representations and warranties of the Company included in this Agreement and
any
list, statement, document or information set forth in, attached to any Schedule
provided pursuant to this Agreement or delivered hereunder, are true and
complete in all material respects and do not contain any untrue statement of
a
material fact or omit to state a material fact required to be stated herein
or
therein or necessary to make the statements contained herein or therein not
misleading, under the circumstance under which they were made and shall survive
after Closing as set forth herein.
ARTICLE
IV
Reserved.
ARTICLE
V
DELIVERIES
& CONDITIONS
5.1 Items
to be delivered to the Company at the Closing by the
Seller. The Company’s obligation to purchase the
Shares hereunder is conditioned on the following closing conditions and
deliveries:
(a) Delivery
by the Seller of the following:
(i) All
applicable schedules hereto;
(ii) A
duly executed copy of this Agreement;
(iii) The
Share Certificate; and
(iv) Any
other document reasonably requested by the Company that the Company deems
necessary for the consummation of this transaction; and
(b) The
representations and warranties set forth in Article II of this Agreement shall
be true and correct in all material respects.
5.2 Items
to be delivered to the Seller at the Closing by the Company. The
Seller’s obligations to sell the Shares hereunder are conditioned on the
following closing conditions and deliveries by the Company:
(a) Delivery
by the Company of the following:
(i) All
applicable exhibits and schedules hereto;
(ii) A
duly executed copy of this Agreement;
(iii) The
Seller is satisfied with her due diligence investigation of the Company, in
her
sole discretion;
(iv) Any
other document reasonably requested by the Seller that she deems necessary
for
the consummation of this transaction; and
(v) The
Purchase Price.
(b) The
representations and warranties set forth in Article III of this Agreement shall
be true and correct in all material respects.
ARTICLE
VI
TERMINATION
6.1 Termination. This
Agreement may be terminated:
(a) at
any time before, or at, Closing by written notice of the Company;
and
(b) prior
to the Closing by any Party at any time if any provision (including, but not
limited to, the representations and warranties) of this Agreement that is
applicable to or required to be performed by the other Party shall be materially
untrue or shall become incapable of being accomplished or if any conditions
set
forth in Article V hereof have not been fully satisfied as of the Closing
Date.
Upon
termination of this Agreement for any reason, in accordance with the terms
and
conditions set forth in this paragraph, each Party shall bear its own costs
and
expenses.
ARTICLE
VII
INDEMNIFICATION
7.1 Indemnification.
(a) Obligation
of Seller to Indemnify. The Seller agrees to indemnify, defend
and hold harmless the Company (and its directors, officers, employees,
affiliates, stockholders, debenture holders, agents, attorneys, successors
and
assigns) from and against all losses, liabilities, damages, deficiencies, costs
or expenses (including interest, penalties and reasonable attorneys’ and
consultants’ fees and disbursements) (collectively, “Losses”) based upon,
arising out of or otherwise in respect of any (i) inaccuracy in any
representation or warranty of the Seller contained in this Agreement, or (ii)
breach by the Seller of any covenant or agreement contained in this
Agreement.
(b) Obligation
of Company to Indemnify. The Company agrees to indemnify, defend
and hold harmless the Seller from and against all Losses based upon, arising
out
of or otherwise in respect of any (i) inaccuracy in any representation or
warranty of the Company contained in this Agreement, or (ii) breach by the
Company of any covenant or agreement contained in this Agreement.
(c) Notice
and Opportunity to Defend. Promptly after receipt by any person
entitled to indemnity under this Agreement (an “Indemnitee”) of notice of any
demand, claim or circumstances which, with the lapse of time, would or might
give rise to a claim or the commencement (or threatened commencement) of any
action, proceeding or investigation (an “Asserted Liability”) that may result in
a Loss, the Indemnitee shall give notice thereof (the “Claims Notice”) to any
other party (or parties) who is or may be obligated to provide indemnification
pursuant to Section 7.1(a) (the “Indemnifying Party”). The Claims
Notice shall describe the Asserted Liability in reasonable detail and shall
indicate the amount (estimated, if necessary and to the extent feasible) of
the
Loss that has been or may be suffered by the Indemnitee.
(d) The
Indemnifying Party may elect to compromise or defend, at its own expense and
by
its own counsel, any Asserted Liability. If the Indemnifying Party
elects to compromise or defend such Asserted Liability, it shall within 30
days
after the date the Claims Notice is given (or sooner, if the nature of the
Asserted Liability so requires) notify the Indemnitee of its intent to do so,
and the Indemnitee shall cooperate, at the expense of the Indemnifying Party,
in
the compromise of, or defense against, such Asserted Liability. If
the Indemnifying Party elects not to compromise or defend the Asserted
Liability, fails to notify the Indemnitee of its election as herein provided
or
contests its obligation to indemnify under this Agreement, the Indemnitee may
pay, compromise or defend such Asserted Liability and all reasonable expenses
incurred by the Indemnitee in defending or compromising such Asserted Liability,
all amounts required to be paid in connection with any such Asserted Liability
pursuant to the determination of any court, governmental or regulatory body
or
arbitrator, and amounts required to be paid in connection with any compromise
or
settlement consented to by the Indemnitee, shall be borne by the Indemnifying
Party. Except as otherwise provided in the immediately preceding
sentence, the Indemnitee may not settle or compromise any claim over the
objection of the Indemnifying Party. In any event, the Indemnitee and
the Indemnifying Party may participate, at their own expense, in (but the
Indemnitee may not control) the defense of such Asserted
Liability. If the Indemnifying Party chooses to defend any claim, the
Indemnitee shall make available to the Indemnifying Party any books, records
or
other documents within its control that are necessary or appropriate for such
defense.
ARTICLE
VIII
MISCELLANEOUS
8.1 Survival
of Representations, Warranties and Agreements. All
representations, warranties and statements made by a Party in this Agreement
or
in any document or certificate delivered pursuant hereto shall survive the
Closing Date. Each of the Parties hereto is executing and carrying
out the provisions of this Agreement in reliance upon the representations,
warranties and covenants and agreements contained in this Agreement or at the
Closing of the transactions herein provided for and not upon any investigation
which it might have made or any representation, warranty, agreement, promise
or
information, written or oral, made by the other Party or any other person other
than as specifically set forth herein.
8.2 Access
to Books and Records. During the course of this transaction
through Closing, the Company agrees to make available for inspection all Company
corporate books, records and assets, and otherwise afford the Seller and its
representatives, reasonable access to all documentation and other information
concerning the business, financial and legal conditions of the Company for
the
purpose of conducting a due diligence investigation thereof. Such due
diligence investigation shall be for the purpose of satisfying each Party as
to
the business, financial and legal condition of the Company for the purpose
of determining the desirability of consummating the proposed
transaction. The Parties further agree to keep confidential and not
use for their own benefit, except in accordance with this Agreement any
information or documentation obtained in connection with any such
investigation.
8.3 Further
Assurances. If, at any time after the Closing, the Parties hereby
mutually agree that any further deeds, assignments or assurances in
law or any other things are necessary, desirable or proper to complete the
transactions contemplated hereby in accordance with the terms of this Agreement
or to vest, perfect or confirm, of record or otherwise, the title to any
property or rights of the Parties hereto, the Parties agree that their proper
officers and directors shall execute and deliver all such proper deeds,
assignments and assurances in law and do all things necessary, desirable or
proper to vest, perfect or confirm title to such property or rights and
otherwise to carry out the purpose of this Agreement, and that the proper
officers and directors the Parties are fully authorized to take any and all
such
action.
8.4 Notice. All
communications, notices, requests, consents or demands given or required under
this Agreement shall be in writing and shall be deemed to have been duly given
when delivered to, or received by prepaid registered or certified mail or
recognized overnight courier addressed to, or upon receipt of a facsimile sent
to, the Party for whom intended, as follows, or to such other address or
facsimile number as may be furnished by that Party by notice in the manner
provided herein:
If
to the
Company:
0000
Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx
Xxxxx, Xxxxxxxxxx 00000
Attn:
Xxxx X. Xxxxxxxxxxx, President
|
Tel: (000)
000-0000
|
|
Fax: (000)
000-0000
|
If
to the
Seller:
Xxxxxx
Xxxxx
X.X.
Xxx
000000
Xxx
Xxxxx, Xxxxxxxxxx 00000
Tel:
(000) 000-0000
Fax:
(000) 000-0000
8.5 Entire
Agreement. This Agreement, the Exhibits and Schedules hereto and
any instruments and agreements to be executed pursuant to this Agreement, set
forth the entire understanding of the Parties hereto with respect to its subject
matter, merges and supersedes all prior and contemporaneous understandings
with
respect to its subject matter and may not be waived or modified, in whole
or in part, except by a writing signed by each of the Parties
hereto. No waiver of any provision of this Agreement in any instance
shall be deemed to be a waiver of the same or any other provision in any other
instance. Failure of any Party to enforce any provision of this
Agreement shall not be construed as a waiver of its rights under such
provision.
8.6 Successors
and Assigns. This Agreement shall be binding upon, enforceable
against and inure to the benefit of, the Parties hereto and their respective
heirs, administrators, executors, personal representatives, successors and
assigns, and nothing herein is intended to confer any right, remedy or benefit
upon any other person. This Agreement may not be assigned by
the Seller except with the prior written consent of the
Company. This Agreement and all of the obligations of the Seller
may be assigned by the Company without the prior notice to the Seller or written
consent of the Seller and upon assignment, all of the rights and obligations
of
Company shall be the rights and obligations of the Company’s designated
assignee.
8.7 Governing
Law. This Agreement shall in all respects be governed by and
construed in accordance with the laws of the State of California, USA that
are
applicable to agreements made and fully to be performed in such state, without
giving effect to conflicts of law principles.
8.8 Counterparts. This
Agreement may be executed in multiple counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the
same
instrument.
8.9 Construction. Headings
contained in this Agreement are for convenience only and shall not be used
in
the interpretation of this Agreement. References herein to Articles,
Sections and Exhibits are to the articles, sections and exhibits, respectively,
of this Agreement. The Schedules hereto are hereby incorporated
herein by reference and made a part of this Agreement. As used
herein, the singular includes the plural, and the masculine, feminine and neuter
gender each includes the others where the context so indicates.
8.10 Severability. If
any provision of this Agreement is held to be invalid or unenforceable by a
court of competent jurisdiction, this Agreement shall be interpreted and
enforceable as if such provision were severed or limited, but only to the extent
necessary to render such provision and this Agreement enforceable.
8.11 Confidentiality;
Public Disclosure. Each of the parties hereto hereby agrees that
the information obtained pursuant to the negotiation and execution of this
Agreement shall be treated as confidential and not be disclosed to third parties
who are not agents of one of the Parties to this Agreement.
8.12 Notification
of Certain Matters. Each Party shall give prompt notice to the
other of (i) the occurrence or non-occurrence of any event, the occurrence
or
non-occurrence of which is likely to cause any representation or warranty of
such party contained in this Agreement to be untrue or inaccurate and (ii)
any
failure of such Party to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it hereunder; provided,
however, that the delivery of any notice pursuant to this
Section shall not limit or otherwise affect any remedies available to the
Party receiving such notice. Further, disclosure pursuant to this
Section shall not be deemed to amend or supplement the Schedules
hereto or prevent or cure any misrepresentations, breach of warranty or
breach of covenant.
8.13 Currency. The
parties hereto agree that all monetary amounts set forth herein are referenced
in United States dollars, unless otherwise stated.
8.14 Rules
of Construction. The parties hereto agree that they have been
represented by counsel during the negotiation and execution of this Agreement
and, therefore, waive the application of any law, regulation, holding or rule
of
construction providing that ambiguities in an agreement or other document will
be construed against the Party drafting such agreement or document.
8.15 Counterparts. This
Agreement may be executed in counterparts and by facsimile
signatures. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid and binding obligation of
the
Party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile signature page were an original
thereof. All such counterparts shall together constitute one and the
same instrument.
IN
WITNESS WHEREOF, each of the Parties hereto has executed this Agreement as
of
the date first set forth above.
COMPANY:
AFH
HOLDING I, INC,
a
Delaware corporation
By:
/s/ Xxxx
X. Xxxxxxxxxxx
Xxxx
X. Xxxxxxxxxxx, President
SELLER:
/s/
Xxxxxx Xxxxx
XXXXXX
XXXXX
Schedule
A
Schedule
of Liabilities
None.
Exhibit
A
Disclosure
Schedules
None.
