STOCK EXCHANGE AGREEMENT
This
Agreement dated as of the 22nd day of November 2006, by and among Willowtree
Advisor, Inc., a Nevada corporation having its offices at 0000 Xxxxxxxxx Xxx,
Xxxxxxx, XX 00000 (the “Issuer”), and
the
individuals named on the signature page of this Agreement (collectively, the
“Shareholders” and each, individually, a “Shareholder”).
WITNESSETH:
WHEREAS,
the Shareholders are the holders of all of the issued and outstanding capital
stock (the “Acquisition Shares”) of OmniReliant Corporation, a Florida
corporation (“Acquisition Company”); and
WHEREAS,
the Shareholders are acquiring a controlling interest in the
Issuer;
WHEREAS,
pursuant to a separate securities purchase agreement between the Issuer and
a
group of investors, the investors are acquiring the Company’s shares of series A
convertible preferred stock and warrants to purchase common stock, par value
$.00001 per share (“Common Stock”); and
WHEREAS,
the Issuer is willing to issue shares of Common Stock to the Shareholders in
consideration for all of the issued and outstanding capital stock of Acquisition
Corp.
NOW,
THEREFORE, for the mutual consideration set out herein, the parties agree as
follows:
1. Exchange
of Shares.
(a) Issuance
of Shares by Issuer.
On and
subject to the conditions set forth in this Agreement, the Issuer will issue
to
Shareholders, in exchange for all of the Acquisition Shares, which represents
all of the issued and outstanding capital stock of Acquisition Company, an
aggregate of 12,300,000 shares (the “Shares”) of Common Stock. The Shares will
be issued to the Shareholders on a one for one basis in the amounts set forth
after their respective names in Schedule I to this Agreement.
(b) Transfer
of Acquisition Shares by the Shareholders.
On and
subject to the conditions set forth in this Agreement, the Shareholders will
transfer to the Issuer all of the Acquisition Shares in exchange for the Shares.
Each Shareholder holds the number of Acquisition Shares set forth after his
or
her name in Schedule I to this Agreement.
(c) Closing.
The
issuance of the Shares to the Shareholders and the transfer of the Acquisition
Shares to the Issuer will take place at a closing (the “Closing”) to be held at
the office of Sichenzia Xxxx Xxxxxxxx Xxxxxxx, LLP, 1065 Avenue of the Xxxxxxxx,
00xx
Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000 as soon as possible after or contemporaneously with
the
satisfaction or waiver of all of the conditions to closing set forth in Section
4 of this Agreement.
2. Representations
and Warranties of the Issuer.
The
Issuer hereby represents and warrants to the Shareholders as
follows:
(a) General.
(i)
The
Issuer is a corporation duly organized, validly existing and in good standing
under the laws of the State of Nevada. The Issuer does not have any equity
investment or other interest, direct or indirect, in, or any outstanding loans,
advances or guarantees to or on behalf of, any domestic or foreign corporation,
limited liability company, association, partnership, joint venture or other
entity.
(ii)
Complete
and correct copies of the Issuer’s certificate of incorporation and by-laws are
available for review on the XXXXX system maintained by the U.S. Securities
and
Exchange Commission (the “Commission”).
(iii)
The
Issuer has full power and authority to carry out the transactions provided
for
in this Agreement, and this Agreement constitutes the legal, valid and binding
obligations of the Issuer, enforceable in accordance with its terms, except
as
enforceability may be limited by bankruptcy, insolvency and other laws of
general application affecting the enforcement of creditor’s rights and except
that any remedies in the nature of equitable relief are in the discretion of
the
court. All necessary action required to be taken by the Issuer for the
consummation of the transactions contemplated by this Agreement has been
taken.
(iv)
The
Shares, when issued pursuant to this Agreement, will be duly and validly
authorized and issued, fully paid and non-assessable. The issuance of the Shares
to Shareholders is exempt from the registration requirements of the Securities
Act of 1933, as amended (the “Securities Act”), pursuant to an exemption
provided by Section 4(2) and Rule 506 promulgated thereunder.
(b) SEC
Documents.
The
Issuer is registered pursuant to Section 12 of the Exchange Act and it current
with its reporting obligations under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”). None of the Issuer’s filings made pursuant to the
Exchange Act (collectively, the “Issuer SEC Documents”) contains any untrue
statement of a material fact or omitted to state a material fact required to
be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The Issuer SEC
Documents, as of their respective dates, complied in all material respects
with
the requirements of the Exchange Act, and the rules and regulations of the
Commission thereunder, and are available on the Commission’s XXXXX system.
3. Representations
and Warranties of Shareholders.
Each
Shareholder hereby severally represents, warrants, covenants and agrees as
follows:
(a) Such
Shareholder understands that the offer and sale of the Shares is being made
only
by means of this Agreement and understands that the Company has not authorized
the use of, and the Shareholder confirms that he or she is not relying upon,
any
other information, written or oral, other than material contained in this
Agreement. Such
Shareholder is aware that the purchase of the Shares involves a high degree
of
risk and that such Shareholder may sustain, and has the financial ability to
sustain, the loss of his or her entire investment, understands that no assurance
can be given that the Company will be profitable in the future, that there
is no
public market for the Common Stock, and the Issuer can give no assurance that
there will ever be a public market for the Common Stock. Furthermore,
in subscribing for the Shares, such Shareholder acknowledges it is not relying
upon any projections or any statements of any kind relating to future revenue,
earnings, operations or cash flow in making an investment in the
Shares.
(b) Such
Shareholder severally represents to the Company that he or she is an accredited
investor within the meaning of Rule 501 of the Commission under the Securities
Act of 1933, as amended (the “Securities Act”) and it understands the meaning of
the term “accredited investor.” The requirements for an accredited investor as
set forth in Exhibit B. Such Shareholder further represents that he or she
has
such knowledge and experience in financial and business matters as to enable
the
Shareholder to understand the nature and extent of the risks involved in
purchasing the Shares. Such Shareholder is fully aware that such investments
can
and sometimes do result in the loss of the entire investment. Such Shareholder
has engaged his or her own counsel and accountants to the extent that the
Shareholder deems it necessary.
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(c) All
of
the information provided by such Shareholder in his or her Confidential
Questionnaire is true and correct in all material respects.
(d) Such
Shareholder is acquiring the Shares pursuant to this Agreement for his or her
own account, for investment and not with a view to the sale or distribution
thereof, for the Shareholder’s own account and not on behalf of others; has not
granted any other person any interest or participation in or right or option
to
purchase all or any portion of the Shares; is aware that the Shares are
restricted securities within the meaning of Rule 144 of the Commission under
the
Securities Act, and may not be sold or otherwise transferred other than pursuant
to an effective registration statement or an exemption from registration; and
understands and agrees that the certificates for the Shares shall bear the
Company’s standard investment legend. The Shareholder understands the meaning of
these restrictions.
(e) The
Shareholder will not transfer any Shares except in compliance with all
applicable federal and state securities laws and regulations, and, in such
connection, the Company may request an opinion of counsel reasonably acceptable
to the Company as to the availability of any exemption.
(f) Such
Shareholder represents and warrants that no broker or finder was involved
directly or indirectly in connection with his or her purchase of the Shares
pursuant to this Agreement. Such Shareholder shall indemnify the Company and
hold it harmless from and against any manner of loss, liability, damage or
expense, including fees and expenses of counsel, resulting from a breach of
the
Shareholder’s warranty contained in this Paragraph 3(f).
(g) Such
Shareholder understands that he or she has no registration rights with respect
to the Shares.
(h) Such
Shareholder represents and warrants that the address set forth on Schedule
I to
this Agreement is its true and correct address, and understands that the Company
will rely on this representation in making filings under state securities or
blue sky laws.
4. Conditions
to the Obligation of Shareholders and the Issuer.
The
obligations of Shareholders and the Issuer under this Agreement are subject
to
the completion of the sale of preferred stock and warrants to certain investors
pursuant to an agreement between the Issuer and such investors prior to or
contemporaneously with the exchange contemplated by this Agreement.
5. Miscellaneous.
(a) This
Agreement constitutes the entire agreement between the parties relating to
the
subject matter hereof, superseding any and all prior or contemporaneous oral
and
prior written agreements, understandings and letters of intent. This Agreement
may not be modified or amended nor may any right be waived except by a writing
which expressly refers to this Agreement, states that it is a modification,
amendment or waiver and is signed by all parties with respect to a modification
or amendment or the party granting the waiver with respect to a waiver. No
course of conduct or dealing and no trade custom or usage shall modify any
provisions of this Agreement.
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(b) This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York applicable to contracts made and to be performed entirely
within such State.
(c) This
Agreement shall be binding upon and inure to the benefit of the parties hereto,
and their respective successors and permitted assigns.
(d) This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original but all of which together shall constitute one and the same
document.
(e) The
various representations, warranties, and covenants set forth in this Agreement
or in any other writing delivered in connection therewith shall survive the
issuance of the Shares.
(f) If
the
Shareholder is a resident of a state set forth in Exhibit C to this Agreement
or
if the Shareholder negotiates the purchase of the Shares from or receives this
Agreement while in Florida, the provisions of such Exhibit C relating to the
Shareholder’s purchase of the Shares are incorporated as if set forth in full in
this Agreement.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
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Please
confirm your agreement with the foregoing by signing this Agreement where
indicated.
Very
truly yours,
APOGEE
FINANCIAL INVESTMENTS, INC.
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By: | ||
By: |
Xxxxx X. Xxxxxxxx
President
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ZTZ
TRUST, INC.
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By: | ||
Xxxxxx
Xxxxxxx
President
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Xxxxx
Xxxxxxxxxx
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KRH
LICENSING COMPANY, LLC
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By: | ||
Xxxxxxx
Xxxxxx
President
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Xxx Xxxxxxxxxx |
Xxxx Xxxxxxxx |
Accepted
this ____ day of November 2006
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Schedule
I
Name
|
Number
of Shares
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Apogee
Financial Investments, Inc.
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3,000,000
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ZTZ
Trust Inc.
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3,000,000
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Xxxxx
Xxxxxxxxxx
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1,500,000
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Xxx
Xxxxxxxxxx
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1,500,000
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KRH
Licensing Company, LLC
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3,000,000
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Xxxx
Xxxxxxxx
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300,000
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Total
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12,300,000
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Exhibit
A
Accredited
investors
A
Shareholder who meets any one of the following tests is an accredited
investor:
(a) The
Shareholder is an individual who has a net worth, or joint net worth with the
Shareholder’s spouse, of at least $1,000,000.
(b) The
Shareholder is an individual who had individual income of more than $200,000
(or
$300,000 jointly with the Shareholder’s spouse) for the past two years, and the
Shareholder has a reasonable expectation of having income of at least $200,000
(or $300,000 jointly with the Shareholder’s spouse) for the current
year.
(c) The
Shareholder is an officer or director of the Company.
(d) The
Shareholder is a bank as defined in section 3(a)(2) of the Securities Act or
any
savings and loan association or other institution as defined in section
3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary
capacity.
(e) The
Shareholder is a broker or dealer registered pursuant to section 15 of the
Securities Exchange Act of 1934.
(f) The
Shareholder is an insurance company as defined in section 2(13) of the
Securities
Act.
(g) The
Shareholder is an investment company registered under the Investment Company
Act
of 1940 or a business development company as defined in section 2(a)(48) of
that
Act.
(h) The
Shareholder is a small Business Investment Company licensed by the U.S. Small
Business Administration under section 301(c) or (d) of the Small Business
Investment Act of 1958.
(i) The
Shareholder is an employee benefit plan within the meaning of Title I of the
Employee Retirement Income Security Act of 1974, if the investment decision
is
made by a plan fiduciary, as defined in section 3(21) of such Act, which is
either a bank, savings and loan association, insurance company, or registered
investment adviser, or if the employee benefit plan has total assets in excess
of $5,000,000 or, if a self-directed plan, with investment decisions made solely
by persons that are accredited investors.
(j) The
Shareholder is a private business development company as defined in section
202(a)(22) of the Investment Advisers Act of 1940.
(k) The
Shareholder is an organization described in Section 501(c)(3) of the Internal
Revenue Code, corporation, Massachusetts or similar business trust, or
partnership, not formed for the specific purpose of acquiring the securities
offered, with total assets in excess of $5,000,000.
(l) The
Shareholder is a trust, with total assets in excess of $5,000,000, not formed
for the specific purpose of acquiring the securities offered, whose purchase
is
directed by a sophisticated person as described in Rule 506(b)(2)(ii) of the
Commission under the Securities Act.
(m) The
Shareholder is an entity in which all of the equity owners are accredited
investors (i.e., all of the equity owners meet one of the tests for an
accredited investor).
If
an
individual Shareholder qualifies as an accredited investor, such individual
may
purchase the Shares in the name of his or her individual retirement account
(“XXX”).