Contract
STOCK
PURCHASE AGREEMENT, dated as of February 25, 2010 by and between Xxxxxxxx Xxxxxx (hereinafter
referred to as the “Buyer”), Xtrasafe, Inc., a
Florida corporation (the “Company”), and Xxxxxx Xxxxx
(the “Seller”).
WITNESSETH:
WHEREAS, Buyer desires to
purchase (the “Purchase”)
in the aggregate 9,000,000 shares (the “Shares”) of common stock, par
value $.001 per share of the Company (the “Common Stock”), from the
Seller, for an aggregate purchase price of $178,500 and the Seller desires to
sell the Shares to the Buyer;
WHEREAS, the Company is a
corporation subject to the reporting requirements of Section 15(d) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the shares
of Common Stock are eligible for quotation on the OTC Bulletin Board (the “OTCBB”) under the symbol
“XSAF”;
WHEREAS, immediately following
the closing of the Purchase, the outstanding securities of the Company shall be
10,950,000 shares of Common Stock consisting of (a) 9,000,000 shares of Common
Stock owned by Buyer, and (b) 1,950,000 shares of Common Stock owned by the
Company's other stockholders.
NOW, THEREFORE, in
consideration of the promises and the mutual covenants, representations and
warranties contained herein, the parties hereto do hereby agree as
follows:
1. SALE OF SECURITIES,
ETC.
1.1 Share
Purchase. Subject to the terms and conditions of this
Agreement, at the Closing (as defined in Section 2.1 below) to be held pursuant
to Section 2 below, the Seller shall sell, assign, transfer, convey and deliver
to Buyer, and Buyer shall purchase and acquire from the Seller, good and
marketable title to the Shares, free and clear of all mortgages, liens,
encumbrances, claims, equities and obligations to other persons of every kind
and character, except that the Shares will be “restricted securities” as defined
in the Securities Act of 1933, as amended (the “Securities
Act”). The purchase price for the Shares shall be $178,500,
payable to the Seller (the “Purchase Price”).
1.2 Post-Closing
Capital Structure. Immediately following the Closing there
shall be no outstanding securities of the Company except 10,950,000 shares of
Common Stock consisting of (a) 9,000,000 owned by Buyer; and (b) 1,950,000
shares of Common Stock owned by at least 25 other stockholders of the
Company.
2. THE
CLOSING
2.1 Place and
Time. The closing of the sale and purchase of the Shares (the
“Closing”) shall take
place at the offices of Xxxxx Xxxxx & Associates, PLLC, 0 Xxxxx Xxxxxxx
Xxxxxx, Xxxxxxxxx Xxxxxx, X.X. 00000 on such date (the “Closing Date”) and time as the
parties shall so agree. Except as agreed to by the parties, the
Closing shall occur simultaneous with the execution and delivery of this
Agreement.
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2.2 Deliveries
by the Seller. At the Closing, the Seller shall deliver to
Buyer certificate(s) representing the 9,000,000 Shares, duly registered in the
name of the Buyer, signature medallion guaranteed, and all other documents,
instruments and writings required (or reasonably requested by the Buyer and/or
its counsel), by this Agreement to be delivered by the Seller at the
Closing.
2.3 Deliveries
by the Company. At the Closing, the Company shall deliver to
the Buyer the following:
(a) A
certificate issued by the Florida Secretary of State as to the good standing of
the Company as of the date of the Closing;
(b) A true
and complete copy of the Articles of Incorporation of the Company as in effect
as of the date of the Closing, certified by the Secretary of State of
Nevada;
(c) A true
and correct copy of the By-Laws of the Company as in effect as of the date of
the Closing, certified by the Secretary of the Company;
(d) Board
Resolutions authorizing all transactions contemplated by this Agreement,
including, without limitation with respect to the appointment of the officers
and directors provided for in Section 7.7 below;
(e) The
Company’s original minute books containing the resolutions and actions by
written consent of the directors and stockholders of the Company and the
Company’s other original books and records;
(f) The
Company’s financial and accounting records (including the Company’s general
ledger), all banking records and federal and state tax and other regulatory
filings and filing codes (including SEC XXXXX filing codes) in whatever media
they exist, including paper and electronic media;
(g) Duly
executed resignation from the Company’s sole officer and director, with the
resignation of the Seller as a director being effective only after the filing
and distribution of a Schedule 14f-1 Information Statement; and
(h) All other
documents, instruments and writings required by this Agreement to be delivered
by the Company at the Closing, all of the Company’s original books of account
and record, and any other documents or records relating to the Company’s
business reasonably requested by Buyer in connection with this
Agreement.
2.4 Deliveries
by Buyer. At the Closing, the Buyer shall deliver the
following to the Seller and the Company the Purchase Price, payable by wire
transfer to the account designed prior to Closing by Seller.
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3.
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REPRESENTATIONS
AND WARRANTIES OF THE SELLER
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The
Seller represents, warrants and covenants to and with Buyer, both as of the date
of this Agreement and as of the date of Closing, as an inducement to Buyer to
enter into this Agreement and to consummate the transaction contemplated hereby
as follows:
3.1 Authorization
of Agreement. The Company and the Seller are fully able,
authorized and empowered to execute and deliver this Agreement and any other
agreement or instrument contemplated by this Agreement and to perform their
respective covenants and agreements hereunder and thereunder. This
Agreement and any such other agreement or instrument, upon execution and
delivery by the Seller and the Company (and assuming due execution and delivery
hereof and thereof by the other parties hereto and thereto), will constitute a
valid and legally binding obligation of the Seller and the Company, in each case
enforceable against each of them in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, moratorium,
reorganization or similar laws from time to time in effect which affect
creditors' rights generally and by legal and equitable limitations on the
availability of specific performance and other equitable remedies against the
Company and the Seller under or by virtue of this Agreement or such other
agreement or instrument.
3.2 Ownership
of the Shares. The Seller is the record and beneficial owner
of the Shares. The Seller holds the Shares free and clear of any
lien, pledge, encumbrance, charge, security interest, claim or right of another
and has the absolute right to sell and transfer the Shares to the Buyer as
provided in this Agreement without the consent of any other person or
entity. Upon transfer of the Shares to Buyer hereunder, Buyer will
acquire good and marketable title to the Shares free and clear of any lien,
pledge, encumbrance, charge, security interest, claim or right of another, other
than applicable securities laws.
3.3 No
Breach. Neither the execution and delivery of this Agreement
nor compliance by the Company and/or the Seller with any of the provisions
hereof nor the consummation of the transactions and actions contemplated hereby
will:
(a) violate
or conflict with any provision of the Articles of Incorporation or By-Laws of
the Company;
(b) violate
or, alone or with notice of the passage of time, result in the material breach
or termination of, or otherwise give any contracting party the right to
terminate, or declare a material default under, the terms of any agreement or
other document or undertaking, oral or written to which the Seller and/or the
Company is a party or by which any of them or any of their respective properties
or assets may be bound;
(c) result in
the creation of any lien, security interest, charge or encumbrance upon any of
the properties or assets of the Seller and/or the Company pursuant to the terms
of any such agreement or instrument;
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(d) violate
any statute, ordinance, regulation judgment, order, injunction, decree or award
of any court or governmental or quasi governmental agency against, or binding
upon the Seller and/or the Company or upon any of their respective properties or
assets; or
(e) violate
any law or regulation of any jurisdiction relating to the Seller and/or the
Company or any of their respective assets or properties.
3.4 Obligations;
Authorizations. Neither the Company nor the Seller are (i) in
violation of any judgment, order, injunction, award or decree which is binding
on any of them or any of their assets, properties, operations or business which
violation, by itself or in conjunction with any other such violation, would
materially and adversely affect the consummation of the transaction
contemplated hereby; or (ii) in violation of any law or regulation or any other
requirement of any governmental body, court or arbitrator relating to him or it,
or to his or its assets, operations or businesses which violation, by itself or
in conjunction with other violations of any other law, regulation or other
requirement, would materially adversely affect the consummation of the
transaction contemplated hereby.
3.5 Consents. All
requisite consents of third parties, including, but not limited to, governmental
or other regulatory agencies, federal, state or municipal, required to be
received by or on the part of the Company and the Seller for the execution and
delivery of this Agreement and the performance of their respective obligations
hereunder have been obtained and are in full force and effect. The Company and
the Seller have fully complied with all conditions of such
consents.
3.6 SEC
Reports. The Company has filed in a timely manner with the
Securities and Exchange Commission (the “SEC”) all reports required to
be filed and is “current” in its reporting obligations (collectively, the “SEC Reports”). As
of their respective dates, the SEC Reports comply in all material respects with
the requirements of the Exchange Act and the rules and regulations promulgated
thereunder and none of the SEC Reports contained an untrue statement of 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. As of their respective dates, the SEC Reports complied in all
material respects with the requirements of the 1934 Act and the rules and
regulations of the SEC promulgated thereunder applicable to the SEC Reports, and
none of the SEC Reports, at the time they were filed with the SEC, contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not
misleading. None of the statements made in any such SEC Reports is,
or has been, required to be amended or updated under applicable law (except for
such statements as have been amended or updated in subsequent filings prior the
date hereof). Other than the letters from the SEC filed on Xxxxx, the
Company has not received any other communication from the SEC, FINRA or any
other regulatory authority regarding any SEC Report or any disclosure contained
therein.
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3.7 Financial
Statements. The financial statements (the “Financial
Statements”) of the Company included in the SEC Reports (including in
each case the related notes thereto) (i) are in accordance with the books and
records of the Company, (ii) are correct and complete in all material respects,
(iii) present fairly the financial position and results of operations of the
Company as of the respective dates indicated (subject, in the case of unaudited
statements, to normal, recurring adjustments, none of which were material) and
(iv) have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis (“GAAP”). As of their respective
dates, the Financial Statements complied as to form in all material respects
with applicable accounting requirements and the published rules and regulations
of the SEC with respect thereto.
3.8 Organization. The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Florida and has full power and authority to own,
lease and operate its properties and to carry on its business as now being and
as heretofore conducted. The Company is not qualified or licensed to
do business as a foreign corporation in any other jurisdiction and neither the
location of its assets nor the nature of its business requires it to be so
qualified.
3.9 Capitalization. The total
authorized and issued capital stock of the Company as of the date of this
Agreement is 100,000,000 authorized and 10,950,000 outstanding shares of Common
Stock. Each
holder of Common Stock issued by the Company is entitled to
cast one vote
for each share held on all matters properly submitted
to the shareholders for their vote; and there are
no pre-preemptive rights and no cumulative
voting. There are no shares of preferred stock or any other class of security.
The Company has no shares reserved for issuance pursuant to any stock option
plan or pursuant to securities exercisable for, or convertible into or
exchangeable for shares of Common Stock. All of the issued and
outstanding shares of capital stock of the Company (i) are duly authorized,
validly issued, fully paid and nonassessable and (ii) were issued in compliance
with all applicable securities laws. No shares of capital stock of
Company are subject to preemptive rights or any other similar
rights. There are (i) no outstanding options, warrants, scrip, rights
to subscribe for, puts, calls, rights of first refusal, agreements,
understandings, claims or other commitments or rights of any character
whatsoever relating to, or securities or rights convertible into or exchangeable
for any shares of capital stock of the Company or arrangements by which the
Company is or may become bound to issue additional shares of capital stock of
the Company, (ii) no agreements or arrangements under which the Company is
obligated to register the sale of any of its or their securities under the
Securities Act and (iii) no anti-dilution or price adjustment provisions
contained in any security issued by the Company (or in any agreement providing
any such rights). The Shares are free and clear of all liens, encumbrances,
objections, title defects, security interest, pledges, mortgages, charges,
claims, options, preferential arrangements or restrictions of any kind,
including but not limited to any restriction on the use, voting, transfer or
other exercise of any attributes of ownership, other than those created by
applicable federal and state securities laws. Neither the Company nor any of its
shareholders is a party to any agreement, voting trust, proxy, option, right of
first refusal or any other agreement or understanding with respect to the Common
Stock or its respective equity interests.
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Upon the
Closing, the Buyer will own 82% of the issued and outstanding share capital of
the Company on a fully-diluted basis, free and clear of any liens, encumbrances,
objections, title defects, security interest, pledges, mortgages, charges,
claims, options, preferential arrangements or restrictions of any kind,
including but not limited to any restriction on the use, voting, transfer or
other exercise of any attributes of ownership, other than those created by
applicable federal and state securities laws.
3.10 Liabilities
Etc.
(a) The
Company has filed all federal, state and local tax returns which are required to
be filed by it, through and including the date hereof and as of the Closing
date, including, but not limited to, its federal income tax returns and all
taxes shown to be due thereon (together with any applicable penalties and
interest) have been paid. The Company has not incurred any liability
for taxes except in the ordinary course of business. The Company has
paid or provided adequate reserves for all taxes which have become due for all
periods prior to the date of this Agreement or pursuant to any assessments
received by it or which the Company is obligated to withhold from amounts owing
to any employee, creditor or other third party as at or with respect to any
period prior to the date of this Agreement. The federal income tax
returns of the Company have never been audited by the Internal Revenue
Service. The Company has not waived any statute of limitations in
respect of taxes, nor agreed to any extension of time with respect to a tax
assessment or deficiency.
(b) On the
date hereof and as of the Closing date, there are no liabilities, debts or
obligations of the Company, whether accrued, absolute, contingent or otherwise
(the “Liabilities”) that
are not reflected in the Financial Statements. As of the Closing, the Company
will have no Liabilities.
3.11 Adverse
Developments. Since June 30, 2009, there has been no material
adverse change in the business, operations or condition (financial or otherwise)
of the Company; nor has there been since such date, any damage, destruction or
loss, whether covered by insurance or not, materially or adversely affecting the
business, properties or operations of the Company.
3.12 Actions
and Proceedings. Neither the Seller nor the Company is a
subject to any outstanding orders, writs, injunctions or decrees of any court or
arbitration tribunal or any governmental department, commission, board, agency
or instrumentality, domestic or foreign, against, involving or affecting the
business, properties or employees of the Company or the Seller’s right to enter
into, execute and perform this Agreement (or any of the transactions
contemplated hereby). There are no actions, suits, claims or legal,
administrative or arbitration proceedings or investigations, including any
warranty or product liability claims (whether or not the defense thereof or
liabilities in respect thereof are covered by policies of insurance) relating to
or arising out of the business, properties or employees of the Company pending
or, to the best knowledge of the Company and the Seller, threatened against or
affecting the Company.
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3.13 Compliance
with Laws. The Company has complied in all material respects with all
laws, ordinances, regulations and orders applicable to the conduct of its
business, including all laws relating to environmental matters, employees and
working conditions.
3.14 Bank
Accounts and Credit Cards. At Closing, the Company will not
have any bank account, safe deposit box or credit or charge
cards. All bank statements have or will be provided to Buyer on or
prior to the Closing.
3.15 Stockholders. Attached
hereto as Exhibit 3.15 is a current stockholder list as provided by the
Company’s transfer agent.
3.16 Subsidiaries. There
are no corporations, partnerships or other business entities controlled by the
Company. As used herein, “controlled by” means (i) the ownership of
not less than fifty (50%) percent of the voting securities or other interests of
a corporation, partnership or other business entity, or (ii) the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a corporation, partnership or other business entity,
whether through the ownership of voting shares, by contract or
otherwise. The Company has not made any investments in, nor does it
own, any of the capital stock of, or any other proprietary interest in, any
other corporation, partnership or other business entity.
3.17 Litigation,
Compliance with Law. There are no actions, suits, proceedings,
or governmental investigations (or any investigation of any self-regulatory
organization) relating to the Company or to any of its properties, assets or
businesses pending or, to the best of its knowledge, threatened, or any order,
injunction, award or decree outstanding against the
Company or against or relating to any of its properties, assets or
businesses. The Company is not in violation of any law, regulation,
ordinance, order, injunction, decree, award or other requirements of any
governmental body, court or arbitrator relating to its properties, assets or
business.
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3.18 Agreements
and Obligations; Performance. The Company is not a party to,
or bound by any: (i) contract, arrangements, commitment or understanding; (ii)
contractual obligation or contractual liability of any kind to any Company
stockholder; (iii) contract, arrangement, commitment or understanding with its
customers or any officer, employee, stockholder, director, representative or
agent thereof for the repurchase of products, sharing of fees, the rebating of
charges to such customers, bribes, kickbacks from such customers or other
similar arrangements; (iv) contract for the purchase or sale of any materials,
products or supplies which contain, or which commits or will commit it for a
fixed term; (v) contract of employment with any officer or employee not
terminable at will without penalty or premium or any continuing obligation of
liability; (vi) deferred compensation, bonus or incentive plan or agreement not
cancelable at will without penalty or premium or any continuing obligation or
liability: (vii) management or consulting agreement not terminable at will
without penalty or premium or any continuing obligation or liability; (viii)
lease for real or personal property (including borrowings thereon), license or
royalty agreement; (ix) union or other collective bargaining agreement; (x)
agreement, commitment or understanding relating to the indebtedness for borrowed
money; (xi) contract involving aggregate payments or receipts of $1,000 or more
which, by its terms, requires the consent of any party thereto to the
consummation of the transactions contemplated hereby; (xii) contract containing
covenants limiting the freedom of the Company to engage or compete in any line
of business or with any person in any geographic area; (xiii) contract or
opinion relating to the acquisition or sale of any business; (xiv) voting trust
agreement or similar stockholders' agreement; and/or (xiv) other contract,
agreement, commitment or understanding which materially affects any of its
properties, assets or business, whether directly or indirectly, or which was
entered into other than in the ordinary course of business.
3.19 Permits
and Licenses. The Company is in compliance in all material
respects with all requirements, standards and procedures of the federal, state,
local and foreign governmental bodies which issued such permits, licenses,
orders, franchises and approvals.
3.20 Employee
Benefit Plans. The Company does not maintain and is not
required to make contributions to any “pension” and “welfare” benefit plans
(within the respective meanings of Sections 4(2) and 4(1) of the Employee
Retirement Income Security Act of 1974, as amended).
3.21 Trading. The
shares of Common Stock are quoted on the OTCBB under the symbol “XSAF” and the
shares of Common Stock are eligible for deposit with the DTC. Actual
sales of shares of Common Stock have taken place in the over-the-counter market
and have been reported on the OTCBB. The Company has not received any
correspondence and/or notice (nor has any reason to believe it will in the
future receive) regarding the continued eligibility of the Common Stock to be
quoted on the OTCBB or deposited with the DTC.
3.22 Insurance. The
Company has no insurance policies. The Company does not provide any
insurance.
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3.23 Xxxxxxxx-Xxxxx
(a) The
Company (i) makes and keeps accurate books and records and (ii) maintain and has
maintained effective internal control over financial reporting as defined in
Rule 13a-15 under the Securities Exchange Act of 1934, as mended (the “Exchange Act”) and a system of
internal accounting controls sufficient to provide reasonable assurance that (A)
transactions are executed in accordance with management’s general or specific
authorization, (B) transactions are recorded as necessary to permit preparation
of the Company’s financial statements in conformity with accounting principles
generally accepted in the United States and to maintain accountability for its
assets, (C) access to the Company’s assets is permitted only in accordance with
management’s general or specific authorization and (D) the recorded
accountability for the Company’s assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(b) The
Company has established and maintains disclosure controls and procedures (as
such term is defined in Rule 13a-15 under the Exchange Act), (ii) such
disclosure controls and procedures are designed to ensure that the information
required to be disclosed by the Company in the reports it will file or submit
under the Exchange Act is accumulated and communicated to management of the
Company, including its principal executive officer and principal financial
officer, as appropriate, to allow timely decisions regarding required disclosure
to be made and (iii) such disclosure controls and procedures are effective in
all material respects to perform the functions for which they were
established.
(c) Since
June 30, 2009, (i) the Company has not been advised of (A) any significant
deficiencies in the design or operation of internal controls that could
adversely affect the ability of the Company and each of its subsidiaries to
record, process, summarize and report financial data, or any material weaknesses
in internal controls and (B) any fraud, whether or not material, that involves
management or other employees who have a significant role in the internal
controls of the Company and each of its subsidiaries, and (ii) since that date,
there have been no significant changes in internal controls or in other factors
that could significantly affect internal controls, including any corrective
actions with regard to significant deficiencies and material
weaknesses.
(d) There is
and has been no failure on the part of the Company and any of the Company’s
directors or officers, in their capacities as such, to comply with the
provisions of the Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations
promulgated in connection therewith.
3.24 Internal
Accounting Controls. The Company maintains a system of
internal accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management’s general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability, and (iii) the
recorded amounts for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences.
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3.5 Disclosure.
Neither this Agreement, nor any certificate, exhibit, or other written document
or statement, furnished to the Buyer by the Seller and/or the Company in
connection with the transactions contemplated by this Agreement contains or will
contain any untrue statement of a material fact or omits or will omit to state a
material fact necessary to be stated in order to make the statements contained
herein or therein not misleading.
4. REPRESENTATIONS
AND WARRANTIES OF BUYER
Buyer
represents and warrants to the Company and the Seller, both as of the date of
this Agreement and as of the date of the Closing, as follows:
4.1 Authorization
of Agreement. The Buyer is fully able, authorized and
empowered to execute and deliver this Agreement, and any other agreement or
instrument contemplated by this Agreement, and to perform his, her or its
obligations contemplated hereby and thereby. This Agreement, and any such other
agreement or instrument, upon execution and delivery by Buyer (and assuming due
execution and delivery hereof and thereof by the other parties hereto and
thereto), will constitute the legal, valid and binding obligation of each of the
Buyer, in each case enforceable against each of them in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, moratorium, reorganization or similar laws from time to time in
effect which affect creditors' rights generally and by legal and equitable
limitations on the availability of specific performance and other equitable
remedies against the Buyer under or by virtue of this Agreement or such other
agreement or instrument.
4.2 No Buyer
Defaults. Neither the execution and delivery of this
Agreement, nor the consummation of the transaction contemplated hereby, will (i)
violate, conflict with or result in the breach or termination of, or otherwise
give any other contracting party the right to terminate, or constitute a default
under the terms of, any mortgage, bond, indenture or material agreement to which
the Buyer is a party or by which the Buyer or any of their property or assets
may be bound or materially affected, (ii) violate any judgment, order,
injunction, decree or award of any court, administrative agency or governmental
body against, or binding upon, the Buyer or upon the property of the Buyer, or
(iii) constitute a violation by the Buyer of any applicable law or regulation of
any jurisdiction as such law or regulation relates to Buyer or to the property
of the Buyer.
4.3 No
Litigation, Etc. There is no material suit, action, or legal,
administrative, arbitration or other proceeding or governmental investigation
pending or, to Buyer's best knowledge, threatened against, materially affecting
or which will materially affect, the property of the Buyer.
4.4 Investment
Intent. The Buyer is acquiring the securities being purchased
pursuant to this Agreement for its own account and for investment purposes and
not with a view to distribution or resale, nor with the intention of selling,
transferring or otherwise disposing of all or any part of the Shares except in
compliance with all applicable provisions of the Securities Act, the rules and
regulations promulgated by the SEC thereunder, and applicable state securities
laws.
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4.5 Disclosure
of Information. The Buyer has
access to review all the SEC Reports and Buyer has had an opportunity to discuss
the business, management, financial affairs and the terms and conditions of the
offering of the Shares with Seller. The Buyer understands that the
Company is a shell, as defined in Rule 12b-2 of the Exchange Act.
4.6 Restricted
Stock. The Buyer
understands that the Shares have not been, and will not be, registered under the
Securities Act, by reason of a specific exemption from the registration
provisions of the Securities Act which depends upon, among other things, the
bona fide nature of the investment intent and the accuracy of the Buyer’s
representations as expressed herein. The Buyer understands that the Shares
constitute “restricted securities” under applicable U.S. federal and state
securities laws and that, pursuant to these laws, the Buyer must hold the Shares indefinitely
unless they are registered with the Securities and Exchange Commission and
qualified by state authorities, or an exemption from such registration and
qualification requirements is available.
4.7 Legend. The
Buyer understands that all certificates representing securities of the Company
received by it pursuant to this Agreement shall bear the following legend, or
one substantially similar thereto:
“The
securities represented by this certificate have not been registered under the
Securities Act of 1933. The shares have been acquired for investment
and may not be sold, transferred or assigned in the absence of an effective
registration statement for those shares under the Securities Act of 1933, as
amended, or an opinion satisfactory to the Company's counsel that registration
is not required under said Act.”
5. PRE-CLOSING
COVENANTS AND AGREEMENTS OF THE PARTIES
The
Seller and the Company and the Buyer (as to covenants they expressly are
providing below in this Section 5 hereby covenant and agree that, from the date
hereof and until the Closing:
5.1 Access. The
Company (and its subsidiaries) shall afford to the officers, attorneys,
accountants and other authorized representatives of the Buyer free and full
access, during regular business hours and upon reasonable notice, to the
Company's books, records, personnel and properties (including, without
limitation, the work papers prepared by its auditors) so that the Buyer may have
full opportunity to make such review, examination and investigation as it may
desire of the Company's business and affairs. The Company will cause
its employees, accountants and attorneys to cooperate fully with said review,
examination and investigation and to make full disclosure to the Buyer of all
material facts affecting the Company's financial conditions and business
operations.
5.2 Conduct
of Business. The Company shall each conduct its business only
in the ordinary and usual course and make no material change
thereto.
5.3 Liabilities. The
Company shall not incur any obligation or liability, absolute and continent, and
on the Closing have no obligations or liabilities.
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5.4 No
Breach. Each of the parties hereto will (i) use its best
efforts to assure that all of its respective representations and warrants
contained herein are true in all material respects at and as of the date hereof,
and as of the Closing no breach shall occur with respect to any of the parties'
covenants, representations or warranties contained herein that has not been
cured by the Closing; (ii) not voluntarily take any action or do anything which
will cause a material breach of or default respecting such covenants,
representations or warranties; and (iii) promptly notify the other of any event
or fact which represents a breach or default.
5.5 Other
SEC/FINRA Filings. The Company shall file with the SEC and the
FINRA (if required) all required forms and disclosure items in a timely manner
(which forms and disclosure items must be approved by legal counsel to the
Company and the Buyer prior to filing and/or disclosure) required and/or
relating to this Agreement or otherwise.
5.6 Public
Announcements. No party hereunder shall, without the express
prior written consent of the Company and the Buyer make any announcement or
otherwise disclose any information regarding this Agreement and/or the
transactions contemplated hereby other than as required by law or otherwise
deemed advisable in counsel's opinion to ensure compliance with public
disclosure requirements under the federal securities laws; provided, however,
that the parties hereto agree that the Company, following the closing of the
Purchase, shall file a Current Report on Form 8-K with the SEC in the period
proscribed by applicable law.
5.7 Brokers. Each
of the Company and the Seller on the one hand, and the Buyer on the other hand
represent and warrant to the other that neither has employed any broker, finder
or similar agent and no person or entity with which each has had any dealings or
communications of any kind is entitled to any brokerage, finder's or placement
fee or any similar compensation in connection with this Agreement or the
transaction contemplated hereby.
5.8 Expenses. Each
of the parties hereto agrees to bear its own expenses in connection with the
negotiation, preparation, execution and delivery of this Agreement and the
consummation of the transaction contemplated hereby.
5.9 Further
Assurances. Each of the parties shall execute such documents
or other papers and take such further actions as may be reasonably required or
desirable to carry out the provisions hereof and the transactions contemplated
in this Agreement.
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6.
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NATURE
AND SURVIVAL OF REPRESENTATIONS AND
WARRANTIES
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6.1 Nature of
Statements. All statements contained in any Exhibit,
certificate or other instruments delivered by or on behalf of any party hereto
pursuant to this Agreement, shall be deemed representations and warranties by
such party.
6.2 Survival
of Representations and Warranties. Regardless of any
investigation at any time made by or on behalf of any party hereto or of any
information any party may have in respect thereof, all covenants, agreements,
representations and warranties made hereunder or pursuant hereto or in
connection with the transaction contemplated hereby shall survive the Closing
and continue in effect through the first anniversary of the
Closing.
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7. CONDITIONS
PRECEDENT TO THE OBLIGATIONS OF THE BUYER
The
obligations of the Buyer to effectuate the Closing is subject to the
fulfillment, prior to the date of Closing, of each of the following conditions
(any one or more of which may be waived by the Buyer unless such condition is a
requirement of law).
7.1 Representations
and Warranties. All representations and warranties of the
Company and the Seller contained in this Agreement and in any written statement,
Exhibit or other documents delivered pursuant hereto or in connection with the
transactions contemplated hereby shall be true and correct in all material
respects as of the date hereof and as of the Closing Date.
7.2 Covenants. The
Company and the Seller shall have performed and complied in all material
respects with all covenants and other agreements required by (or contained in)
this Agreement to be performed or complied with or by them prior to or at the
Closing Date.
7.3 No
Actions. No action, suit, proceeding or investigation shall
have been instituted against the Seller or the Company, and be continuing before
a court or before or by a governmental body or agency, and be unresolved, to
restrain or to prevent or to obtain damages in respect of, the carrying out of
the transactions contemplated hereby or which might materially and adversely
affect the rights of the Buyer to consummate the transactions contemplated
hereby.
7.4 Approvals. The
Seller and the Company shall have obtained all approvals and consents to
consummate this Agreement and the transactions to be consummated at or
immediately following the Closing, in accordance with all applicable laws, rules
and regulations.
7.5 Due
Diligence. The Buyer shall have completed to its sole
satisfaction its due diligence of the Company, the Seller and all other items it
deems necessary and/or advisable, and shall be satisfied with the results
thereof.
7.6 Closing
Documents. The Buyer shall receive all of the documents
(executed where applicable) set forth in Section 2.2 and Section 2.3 of this
Agreement, which documents shall be in form and substance reasonably
satisfactory to Buyer and its legal counsel.
7.7 Resignation
of Officers. Effective on the Closing Date, all officers of the Company
shall have resigned as officers of the Company and they shall have appointed the
Buyer as the President, Chief Executive Officer and a director of the
Company.
7.8 Form
10-Q. The Company shall have filed its quarterly report on
Form 10-Q for the quarter ended November 30, 2009 with the Securities and
Exchange Commission (“SEC”).
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8.
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CONDITIONS
PRECEDENT TO THE OBLIGATION TO THE COMPANY AND THE SELLER TO
CLOSE
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The
obligations of the Company and the Seller to effectuate the Closing is subject
to the fulfillment, prior to the date of Closing, of each of the following
conditions (any one or more of which may be waived by the Buyer unless such
condition is a requirement of law).
8.1 Representations
and Warranties. All representations and warranties of the
Buyer contained in this Agreement and in any written statement, Exhibit or other
documents delivered pursuant hereto or in connection with the transactions
contemplated hereby shall be true and correct in all material respects as of the
date hereof and as of the Closing Date.
8.2 Covenants. The
Buyer shall have performed and complied in all material respects with all
covenants and other agreements required by (or contained in) this Agreement to
be performed or complied with by it prior to or at the Closing.
8.3 No
Actions. No action, suit, proceeding or investigation shall
have been instituted against the Buyer, and be continuing before a court or
before or by a governmental body or agency, and be unresolved, to restrain or to
prevent or to obtain damages in respect of, the carrying out of the transactions
contemplated hereby, or which might materially and adversely affect the rights
of the Seller and the Company to consummate the transactions contemplated
hereby.
8.4 Approvals. The
Buyer shall have obtained all required consents and approvals to this Agreement
and the transactions to be consummated at or immediately following the Closing,
in accordance with all applicable laws, rules and regulations.
8.5 Closing
Documents. The Seller and/or the Company shall receive all of
the documents set forth in Section 2.4 of this Agreement, which documents shall
be in form and substance reasonably satisfactory to such parties and their legal
counsel.
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9.
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INDEMNIFICATION
BY THE COMPANY AND THE SELLER
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9.1 Claims
Against the Company and the Seller.
(a) The
Company and the Seller, jointly and severally, shall indemnify and hold the
Buyer harmless from and against any loss, damage or expense (including
reasonable attorneys' fees) caused by or arising out of any claim made against
the Company:
(i) for any
broker's or finder's fee or any similar fee, charge or commission incurred by
the Company and/or the Seller prior to or in connection with this Agreement or
the transaction contemplated hereby;
(ii) for any
foreign, Federal, state or local tax of any kind arising out of or by reason of
the existence or operations of the Company and/or the Seller prior to the
Closing, including, without limitation, any payroll taxes owed by the Company on
account of compensation paid to any employee of the Company prior to such
date;
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(iii) in
respect of any salary, bonus, wages or other compensation of any kind owed by
the Company to its employees for services rendered on or prior to the
Closing;
(iv) for any
damages to the environment caused by or arising out of any pollution resulting
from or otherwise attributable to the operation of the business of the Company
prior to the Closing;
(v) in
respect of any payable of the Company incurred prior to the
Closing;
(vi) in
respect of any liability or indebtedness for borrowed money or otherwise
incurred on or before the Closing, including, without limitation, with respect
to the execution and performance of this Agreement; and
(vii) for
expenses required to be borne by the Company and/or the Seller under the
provisions of this Agreement.
(b) Other
Matters. The Company and the Seller, jointly and severally,
shall also indemnify and hold the Buyer harmless from and against any loss,
damage or expense (including reasonable attorneys' fees) caused by or arising
out of (i) any breach or default in the performance by the Company and the
Seller of any covenant or agreement of the Company and the Seller contained in
this Agreement, (ii) any breach of warranty or inaccurate or erroneous
representation made by the Company and the Seller herein or in any Exhibit,
certificate or other instrument delivered by or on behalf of the Company and the
Seller pursuant hereto, and (iii) any and all actions, suits, proceedings,
claims, demands, judgments, costs and expenses (including reasonable legal and
accounting fees) incident to any of the foregoing.
10. INDEMNIFICATION
BY BUYER
The Buyer
shall indemnify and hold harmless the Seller from and against all loss, damage
or expense (including reasonable attorneys' fees) caused by or arising out of
(i) any breach or default in the performance by the Buyer of any covenant or
agreement of the Buyer contained in this Agreement, (ii) any breach of warranty
or inaccurate or erroneous representation made by the Buyer herein or in any
certificate or other instrument delivered by or on behalf of the Buyer pursuant
hereto and (iii) any and all actions, suits, proceedings, claims, demands,
judgments, costs and expenses (including reasonable legal and accounting fees)
incident to the foregoing.
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11. NOTICE
AND OPPORTUNITY TO DEFEND
Promptly
after the receipt by Buyer or the Company and/or the Seller of notice of any
action, proceeding, claim or potential claim (any of which is hereinafter
individually referred to as a “Circumstance”) which could
give rise to a right to indemnification under this Agreement, such party (the
“Indemnified Party”)
shall give prompt written notice to the party or parties who may become
obligated to provide indemnification hereunder (the “Indemnifying
Party”). Such notice shall specify in reasonable detail the
basis and amount, if ascertainable, of any claim that would be based upon the
Circumstance. The failure to give such notice promptly shall relieve
the Indemnifying Party of its indemnification obligations under this Agreement,
unless the Indemnified Party establishes that the Indemnifying Party either had
knowledge of the Circumstance or was not prejudiced by the failure to give
notice of the Circumstance. The Indemnifying Party shall have the
right, at its option, to compromise or defend the claim, at its own expense and
by its own counsel, and otherwise control any such matter involving the asserted
liability of the Indemnified Party, provided that any such compromise or control
shall be subject to obtaining the prior written consent of the Indemnified Party
which shall not be unreasonably withheld. An Indemnifying Party shall not be
liable for any costs of settlement incurred without the written consent of the
Indemnifying Party. If any Indemnifying Party undertakes to
compromise or defend any asserted liability, it shall promptly notify the
Indemnified Party of its intention to do so, and the Indemnified Party agrees to
cooperate fully with the Indemnifying Party and its counsel in the compromise of
or defense against any such asserted liability. All costs and
expenses incurred in connection with such cooperation shall be borne by the
Indemnifying Party, provided such costs and expenses have been previously
approved by the Indemnifying Party. In any event, the Indemnified Party shall
have the right at its own expense to participate in the defense of an asserted
liability.
12. MISCELLANEOUS
12.1 Successors
and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective heirs,
successors and assigns. No assignment of this Agreement or of any
rights hereunder shall relieve the assigning party of any of its obligations or
liabilities hereunder.
12.2 Notices.
All notices or other communications required or permitted to be given
hereunder shall be in writing and shall be deemed to have been duly given if
delivered by hand, overnight courier, facsimile transmission or prepaid cable or
telegram and confirmed in writing, or mailed first class, postage prepaid, by
registered or certified mail, return receipt requested (mailed notices and
notices sent by facsimile transmission, cable or telegram shall be deemed to
have been given on the date sent) to the address of the parties provided to each
other or in any case to such other address or addresses as hereafter shall be
furnished as provided in this Section 12.2 by either of the parties hereto to
the other party hereto.
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12.3 Waiver;
Remedies. No delay on the part of any of the Seller, the
Company or Buyer in exercising any right, power or privilege hereunder shall
operate as a waiver thereof, nor shall any waiver on the part of the Seller, the
Company or Buyer of any right, power or privilege hereunder operate as a waiver
of any other right, power or privilege hereunder, nor shall any single or
partial exercise of any right, power or privilege hereunder preclude any other
or further exercise of any other right, power or privilege
hereunder. The rights and remedies herein provided are cumulative and
are not exclusive of any rights or remedies which the parties hereto may
otherwise have at law or in equity.
12.4 Entire
Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
prior agreements or understandings (in writing, oral or otherwise) of the
parties relating thereto.
12.5 Amendment. This
Agreement may be modified or amended only by written agreement of the parties
hereto.
12.6 Counterparts. This
Agreement may be executed in any number of counterparts and by facsimile, each
of which shall be deemed an original but all of which together shall constitute
a single instrument.
12.7
Governing
Law. This Agreement shall be governed by and construed
exclusively in accordance with the internal laws of the State of New York
without regard to the conflicts of laws principles thereof. The
parties hereto hereby expressly and irrevocably agree that any suit or
proceeding arising directly and/or indirectly pursuant to, arising out of or
under this Agreement, shall be brought solely and exclusively in a federal or
state court located in the City of New York. By its execution hereof,
the parties hereby expressly covenant and irrevocably submit to the in personam jurisdiction
of the federal and state courts located in the City of New York and agree that
any process in any such action may be served upon any of them personally, or by
certified mail or registered mail upon them or their agent, return receipt
requested, with the same full force and effect as if personally served upon them
in the City of New York. The parties hereto expressly and irrevocably
waive any claim that any such jurisdiction is not a convenient forum for any
such suit or proceeding and any defense or lack of in personam jurisdiction
with respect thereto. In the event of any such action or proceeding,
the party prevailing therein shall be entitled to payment from the other party
hereto of its reasonable counsel fees and disbursements in an amount judicially
determined.
12.8 Captions. All
Section titles or captions contained in this Agreement, in any Exhibit referred
to herein or in any Exhibit annexed hereto are for convenience only, shall not
be deemed a part of this Agreement and shall not affect the meaning or
interpretation of this Agreement.
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12.9 Confidential
Information. Each party agrees that such party and its
representatives will hold in strict confidence all information and documents
received from the other parties and, if the transactions herein contemplated
shall not be consummated, each party will continue to hold such information and
documents in strict confidence and will return to such other party all such
documents (including the documents annexed to this Agreement) then in such
receiving party's possession without retaining copies thereof, provided, however,
that each party's obligations under this Section 12.9 to maintain such
confidentiality shall not apply to any information or documents that are in the
public domain at the time furnished by the others or that become in the public
domain thereafter through any means other than as a result of any act of the
receiving party or of its agents, officers, directors or stockholders which
constitutes a breach of this Agreement, or that are required by applicable law
to be disclosed.
13. TERMINATION
AND WAIVER
13.1 Termination. Notwithstanding
anything herein or elsewhere to the contrary; this Agreement may be terminated
and the transactions provided for herein abandoned at any time prior to the
Closing as follows:
(a) By
mutual written consent of the Buyer, Company and the Seller; or
(b) By
the Buyer on or any time after January 31, 2010, if the Closing does not occur
prior to such date (unless extended by the parties or unless the failure to
close is the result of the actions of the Buyer).
13.2 Waiver. Any
condition to the performance of any party hereto which legally may be waived on
or prior to the Closing may be waived at any time by the party entitled to the
benefit thereof by action taken or authorized by an instrument in writing
executed by the relevant party or parties. The failure of any party
at any time or times to require performance of any provision hereof shall in no
manner affect the right of such party at a later time to enforce the
same. No waiver by any party of the breach of any term, covenant,
representation or warranty contained in this Agreement as a condition to such
party's obligations hereunder shall release or affect any liability resulting
from such breach, and no waiver of any nature, whether by conduct or otherwise,
in any one or more instances, shall be deemed to be or construed as a further or
continuing waiver of any such condition or of any breach of any other term,
covenant, representation or warranty of this Agreement.
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IN
WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and
delivered on the day and year first above written.
By: /s/ Xxxxxx
Baker______
Name: Xxxxxx Xxxxx
Title: Sole Officer
and Director
SELLER:
/s/ Xxxxxx
Xxxxx
Xxxxxx Xxxxx
BUYER:
/s/
Xxxxxxxx Xxxxxx
Xxxxxxxx
Xxxxxx
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