STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this
“Agreement”) dated as of December 30, 2010, among NetFabric Holdings, Inc., a
Delaware corporation (the “Company”), the stockholders of the Company identified
on Schedule A
attached hereto (the “Sellers”), and the purchasers of such shares identified on
Schedule B
attached hereto (the “Purchasers”).
RECITALS
WHEREAS,
the Sellers are the owners of 61,320,658 shares of common stock of the Company
(the “Shares”), representing 63.2% of the issued and outstanding shares of the
Company on a fully-diluted basis; and
WHEREAS,
the Sellers desire to transfer and sell, and the Purchasers desires to purchase,
all of the Sellers’ rights, title, and interest in and to all of the Shares
pursuant to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the
covenants, promises and representations set forth herein, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and intending to be legally bound hereby, the parties agree as
follows:
1. Agreement to Purchase and
Sell at the Closing. Subject to the terms and conditions of
this Agreement, at the Closing (as defined below), the Sellers shall sell,
assign, transfer, convey, and deliver to the Purchasers, and the Purchasers
shall accept and purchase, the Shares and any and all rights in the Shares to
which Sellers are entitled, and by doing so Sellers shall be deemed to have
assigned all of their rights, title and interest in and to the Shares to the
Purchasers. Such sale of the Shares shall be evidenced by stock
certificates, duly endorsed in blank or accompanied by stock powers duly
executed in blank or other instruments of transfer in form and substance
satisfactory to the Purchasers.
2. Consideration. In
consideration for the sale of the Shares, the Purchasers shall deliver to the
Agent (as defined below) an aggregate of One hundred and ninety three thousand
five hundred and eighty nine Dollars ($193,589) (the “Purchase Price”) and the
Agent shall be responsible for remitting to Sellers pro rata in accordance with
the number of shares listed on Schedule
A.
3. Closing;
Delivery.
(a) The
purchase and sale of the Shares shall be held simultaneously with the execution
of this Agreement at such place as the parties hereto may agree (the
“Closing”). Such date shall be hereinafter referred to as the
“Closing Date.”
(b) At
the Closing:
(1) The
Agent shall deliver, on behalf of the Sellers, to the Purchasers the
following:
(A) stock
certificates evidencing the Shares, duly endorsed in blank or accompanied by
stock powers duly executed in blank, signature medallion guaranteed, with any
other instruments of transfer in form and substance reasonably satisfactory to
the Purchasers;
(B) any
documentary evidence of the due recordation in the Company’s share register of
each Purchaser’s full and unrestricted title to the number of Shares indicated
next to such Purchaser’s name on Schedule
B;
(C) a
shareholders’ list, dated not more then two (2) days before the Closing,
including names and addresses of each shareholder, certificate numbers and issue
dates, certified by the current transfer agent of the Company;
(D)
resignation letters dated the Closing Date from all the current officers and
directors of the Company, other than a resignation letter from Xxxxx Xxxxxxx who
is remaining as the Chief Financial Officer and a resignation letter from [Xxxxx
Xxxx] as a director of the Company, which shall be effective ten (10) days after
the mailing of an information statement pursuant to Rule 14f-1 (the “Information
Statement”);
(E)
resolutions duly authorized by the Board of Directors of the Company authorizing
the execution and delivery of this Agreement and the consummation of the
transactions contemplated herein;
(F)
resolutions duly authorized by the Board of Directors of the Company appointing
Xxxxxxxxx Xxxxxxxxxx as President and a director of the Company and appointing
Xxxxxxx X. Xxxx-Xxxxxxxx as a director effective ten (10) days after the
Information Statement is filed and mailed to the stockholders of the
Company;
(G) all
the books and records of the Company, including copies of all tax returns, board
and shareholder resolutions, SEC, XXXXX codes and FINRA correspondence and bank
accounts;
(H) a
good standing certificate issued by the Secretary of State of the State of
Delaware and the State of New Jersey dated not more than two (2) days before the
Closing; and
(I) such
other documents as may be required under applicable law or reasonably requested
by the Purchasers or their counsel.
(2) Purchaser
shall deliver to the Agent the Purchase Price by wire transfer of immediately
available funds to an account designated by the Agent.
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4.
Administrative
Agent. Each Seller hereby irrevocably constitutes and
appoints, effective as of the date hereof, Xxxxx Xxxxxxx (together with his
permitted successors, the “Agent”), as the true and lawful agent and
attorney-in-fact to: (a) enter into any agreement in connection with any
transactions contemplated by this Agreement, (b) exercise any or all of the
powers, authority and discretion conferred on him under this Agreement or any
such agreement, (c) sign any documents requested by the Purchasers to effectuate
the transactions contemplated by this Agreement; (d) accept delivery of and to
submit for exchange and cancellation any of the Shares, to waive any terms and
conditions of any such agreement, to give and receive notices on such Seller’s
behalf and to be his, her or its exclusive representative with respect to any
matter or proceeding arising with respect to any transaction contemplated by
this Agreement, including, without limitation, the defense, settlement or
compromise of any proceeding for which any Seller may be entitled to
indemnification, and (e) to act as the “purchaser representative” for any Seller
who is not an “accredited investor” as that term is defined in Rule 501 adopted
by the Securities and Exchange Commission (the "SEC") under the Securities Act
of 1933, as amended (the "Securities Act") in connection with evaluating the
merits and risks of selling the Shares as contemplated hereunder, and the Agent
agrees to act as, and to undertake the duties and responsibilities of, such
agent and attorney-in-fact. The Agent hereby represents and warrants
to the other Sellers that: (1) he has such knowledge and experience in financial
and business matters that he is capable of evaluating the merits and risks of
the transactions contemplated by this Agreement and (2) there is no material
relationship between himself and the Company other than the matters set forth in
this Agreement relating to the Shares that he will receive as a result of the
transactions contemplated by this Agreement, including compensation and other
benefits that he will receive after the Closing. The Purchasers shall
be entitled to deal exclusively with the Agent on all matters contemplated
herein and shall be entitled to rely exclusively (without further evidence of
any kind whatsoever) on any document executed or purported to be executed on
behalf of any Seller by the Agent, and on any other action taken or purported to
be taken on behalf of any Seller by the Agent, as fully binding upon such
Seller.
The Agent shall not be liable to anyone
for any action taken or not taken by him in good faith or for any mistake of
fact or law for anything that he may do or refrain from doing in connection with
his obligations under this Agreement (A) with the consent of Sellers who, as of
the date of this Agreement, owned a majority of the outstanding shares of the
Shares, or (B) in the absence of his own gross negligence or willful
misconduct. The Agent may rely and shall be protected in
relying or refraining from acting on any instrument reasonably believed to be
genuine and to have been signed or presented by the proper party or parties. The
Agent shall not be liable for any other parties’ forgeries, fraud or false
representations.
5.
Representations and
Warranties of Sellers. As an inducement to the Purchasers to
enter into this Agreement and to consummate the transactions contemplated
herein, (a) each Seller, severally and not jointly, hereby makes the
representations and warranties in Sections 5.1 through 5.7, as of the Closing,
to the Purchasers, and (b) Xxxxx Xxxx and the Company hereby makes the
representations and warranties in Sections 5.8 through 5.22, as of the Closing,
to the Purchasers as follows:
5.1 Seller
has the right, power, authority and capacity to execute and deliver this
Agreement, to consummate the transactions contemplated hereby and to perform his
obligations under this Agreement. This Agreement constitutes the
legal, valid and binding obligations of Seller, enforceable against Seller in
accordance with the terms hereof.
5.2 Seller
is the sole record and beneficial owner of the Shares indicated next to such
Seller’s name on Schedule A attached
hereto, has good and marketable title to the Shares, free and clear of all
Encumbrances (as defined below), other than applicable restrictions under
applicable securities laws, and has full legal right and power to sell, transfer
and deliver the Shares to the Purchasers in accordance with this
Agreement. “Encumbrances” means any liens, pledges, hypothecations,
charges, adverse claims, options, preferential arrangements or restrictions of
any kind, including, without limitation, any restriction of the use, voting,
transfer, receipt of income or other exercise of any attributes of
ownership. Upon the execution and delivery of this Agreement, the
Purchasers will receive good and marketable title to the Shares, free and clear
of all Encumbrances, other than restrictions imposed pursuant to any applicable
securities laws and regulations. There are no stockholders’
agreements, voting trust, proxies, options, rights of first refusal or any other
agreements or understandings with respect to the Shares.
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5.3 The
Shares are duly authorized, validly issued, fully paid and non-assessable, and
were not issued in violation of any preemptive or similar rights.
5.4 None
of the execution, delivery, or performance of this Agreement, and the
consummation of the transactions contemplated hereby, conflicts or will conflict
with, or (with or without notice or lapse of time, or both) result in a
termination, breach or violation of (a) any instrument, contract or agreement to
which the Seller is a party or by which he is bound, or to which the Shares are
subject; or (b) any federal, state, local or foreign law, ordinance, judgment,
decree, order, statute, or regulation, or that of any other governmental body or
authority, applicable to the Seller or the Shares.
5.5 No
consent, approval, authorization or order of, or any filing or declaration with
any governmental authority or any other person is required for the consummation
by the Seller of any of the transactions on its part contemplated under this
Agreement.
5.6 Neither
Seller nor any of his respective affiliates has any interest, direct or
indirect, in any shares of capital stock or other equity in the Company or has
any other direct or indirect interest in any tangible or intangible property
which the Company uses or has used in the business conducted by the Company, or
has any direct or indirect outstanding indebtedness to or from the Company, or
related, directly or indirectly, to its assets, other than the
Shares.
5.7 Neither
any Seller nor any of its affiliates nor any person acting on its or their
behalf (a) has conducted or will conduct any general solicitation (as that term
is used in Rule 502(c) of Regulation D) or general advertising with respect to
any of the Shares, or (b) made any offers or sales of any security or solicited
any offers to buy any security under any circumstances that would require
registration of the Shares under the Securities Act.
5.8 The
only bank account maintained by the Company is account #4354 00170 5 at Capital
One Bank, at their branch at 000 Xxxxx 00 Xxxxx, Xxxx Xxxxxxxxxx, XX
00000.
5.9 The
Company is duly organized, validly existing and in good standing under the laws
of the State of Delaware, with full power and authority to own, lease, use and
operate its properties and to carry on its business as and where now owned,
leased, used, operated and conducted. The Company does not own,
directly or indirectly, any capital stock of any corporation or any equity,
profit sharing, participation or other interest in any corporation, partnership,
limited liability company, joint venture or other entity, other than NetFabric
Corporation, a New Jersey corporation which is wholly-owned by the
Company.
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5.10 As
of the Closing, the Company’s authorized capital will consist of (a) 200,000,000
shares of common stock authorized (the “Common Stock”), of which 97,053,044
shares are issued and outstanding, 10,291,528 of
which are freely tradeable without any restrictions or Encumbrances and
86,761,516 of which are restricted under the Securities Act, (i) with each
holder thereof being entitled to cast one vote for each share held on all
matters properly submitted to the shareholders for their vote; and (ii)
there being no pre-preemptive rights and no cumulative voting; and (b) no shares
of preferred stock or any other class of security. Except as set forth on
Schedule 5.10, the Company has no shares reserved for issuance pursuant to a
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 are duly authorized, validly issued,
fully paid and nonassessable. No shares of capital stock of the Company are
subject to preemptive rights or any other similar rights. Except as set forth on
Schedule 5.10, there are (1) 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, (2) 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 (3) no
anti-dilution or price adjustment provisions contained in any security issued by
the Company (or in any agreement providing any such rights).
5.11 Upon
the consummation of the transactions contemplated herein, the Purchasers will
own 63.2% of the issued and outstanding share capital of the Company on a
fully-diluted basis, free and clear of any Encumbrances, other than those
created by applicable federal and state securities laws.
5.12 Except
as set forth on Schedule 5.12, the Company has timely filed all reports,
schedules, forms, statements and other documents required to be filed by it with
the SEC pursuant to the reporting requirements of the Securities Exchange Act of
1934, as amended (the “1934 Act”) (all of the foregoing filed prior to the date
hereof and all exhibits included therein and financial statements and schedules
thereto and documents (other than exhibits to such documents) incorporated by
reference therein, being hereinafter referred to herein as the “SEC
Documents”). As of their respective dates, the SEC Documents 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 Documents,
and none of the SEC Documents, 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 Documents 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). Since May 2010, the Company has not received any
communication from the SEC regarding any SEC Document or any disclosure
contained therein, and all correspondence from the SEC prior to such date have
previously been provided to the Purchasers. The Company has not received any
communication from FINRA or any other regulatory authority regarding any SEC
Document or any disclosure contained therein. As of their respective dates, the
financial statements of the Company included in the SEC Documents complied as to
form in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto. Such
financial statements have been prepared in accordance with United States
generally accepted accounting principles, consistently applied, during the
periods involved (except (a) as may be otherwise indicated in such financial
statements or the notes thereto, or (b) in the case of unaudited interim
statements, to the extent they may not include footnotes or may be condensed or
summary statements) and fairly present in all material respects the financial
position of the Company as of the dates thereof and the results of their
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments). As of
the Closing, the Company has no debts, liabilities, obligations, direct,
indirect, absolute or contingent, whether accrued, vested or otherwise, whether
known or unknown.
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5.13 Except
as set forth on Schedule 5.13, the Company does not (a) have any employees, (b)
owe any compensation of any kind, deferred or otherwise, to any person,
including without limitation, agents, representatives, consultants, accountants
and attorneys, (c) have any written or oral employment agreement with any
person, nor (d) is it a party to or bound by any collective bargaining
agreement. There are no loans or other obligations payable to or owing by the
Company to any stockholder, officer, director, agent, representative,
consultant, accountant, attorney or otherwise nor are there any loans or debts
payable or owing by any such persons to the Company or any guarantees by the
Company of any loan or obligation of any nature to which any such person is a
party.
5.14 The
Company does not own, use or possesses any licenses or rights to use any
patents, patent applications, patent rights, inventions, know-how, trade
secrets, trademarks, trademark applications, service marks, service names, trade
names and copyrights (“Intellectual Property”). There is no claim or action by
any person pertaining to, or proceeding pending or threatened in writing, which
challenges the right of the Company with respect to any Intellectual
Property.
5.15 The
Company is not a party to any contract, arrangement or agreement, whether oral
or in writing, including without limitation, loan agreements, credit lines,
promissory notes, mortgages, pledges, guarantees, security agreements, factoring
agreements, letters of credit, powers of attorney or other arrangements to loan
or borrow money or extend credit. Except as set forth on Schedule 5.15, as of
Closing, the Company does not owe any monies or obligations to any third
parties. Schedule 5.15 is a complete and accurate list of the only
monies or obligations owed by the Company or its wholly-owned subsidiary as of
the Closing.
5.16 The
Company has made or filed all federal, state and foreign income and all other
tax returns, reports and declarations required by any jurisdiction to which it
is subject and has paid all taxes and other governmental assessments and charges
that are material in amount, shown or determined to be due on such returns,
reports and declarations. There are no unpaid taxes in excess of two
thousand dollars ($2,000) claimed to be due by the taxing authority of any
jurisdiction, and Seller knows of no basis for any such claim. The
Company has not executed a waiver with respect to the statute of limitations
relating to the assessment or collection of any foreign, federal, state or local
tax. None of the Company’s tax returns is presently being audited by
any taxing authority. The Sellers expressly assume and shall pay any taxes due
by the Company up to the date of the Closing.
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5.17 The
Company is in possession of all franchises, grants, authorizations, licenses,
permits, easements, variances, exemptions, consents, certificates, approvals and
orders necessary to own, lease and operate its properties and to carry on its
business as it is now being conducted (collectively, the “Permits”), and there
is no action pending or threatened in writing regarding suspension or
cancellation of any of the Permits. The Company is not in conflict
with, or in default or violation of, any of the Permits to an extent that would
have a material adverse effect on the Company. The Company has not
received in writing any notification with respect to possible conflicts,
defaults or violations of applicable laws.
5.18 There
are, with respect to the Company or any predecessors thereof, no past or present
violations of Environmental Laws (as defined below), releases of any material
into the environment, actions, activities, circumstances, conditions, events,
incidents, or contractual obligations which may give rise to any common law
environmental liability or any liability under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 or similar federal, state,
local or foreign laws and the Company has not received any notice with respect
to any of the foregoing, nor is any action pending or threatened in writing in
connection with any of the foregoing. The term “Environmental Laws”
means all federal, state, local or foreign laws relating to pollution or
protection of human health or the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata),
including, without limitation, laws relating to emissions, discharges, releases
or threatened releases of chemicals, pollutants contaminants, or toxic or
hazardous substances or wastes (collectively, “Hazardous Materials”) into the
environment, or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous Materials,
as well as all authorizations, codes, decrees, demands or demand letters,
injunctions, judgments, licenses, notices or notice letters, orders, permits,
plans or regulations issued, entered, promulgated or approved thereunder. Other
than those that are or were stored, used or disposed of in compliance with
applicable law, no Hazardous Materials are contained on or about any real
property currently owned, leased or used by the Company, and no Hazardous
Materials were released on or about any real property previously owned, leased
or used by the Company. There are no underground storage tanks on or under any
real property owned, leased or used by the Company.
5.19 The
Company does not own any real or personal property.
5.20 Intentionally
Omitted.
5.21 All
information relating to or concerning the Company set forth in this Agreement
and otherwise in connection with the transactions contemplated hereby is true
and correct in all respects and neither the Company nor any Seller has omitted
to state any fact necessary in order to make the statements made herein or
therein, in light of the circumstances under which they were made, not
misleading. No event or circumstance has occurred or exists with
respect to the Company or its or their business, properties, prospects,
operations or financial conditions, which, under applicable law, rule or
regulation, requires public disclosure or announcement by the Company but which
has not been so publicly announced or disclosed.
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5.22 The
purchase of the Shares by Purchaser from Seller will not give rise to any
dissenting shareholders' rights under Delaware law, the Certificate of
Incorporation or By-Laws of the Company, or otherwise. All issuances by the
Company of shares of Common Stock in past transactions have been legally and
validly effected, and all of such shares of Common Stock are fully paid and
non-assessable. All of the offerings were conducted in strict
accordance with the requirements of Regulation D, Rules 504, 505 and 506, as
applicable, in full compliance with the requirements of the Securities Act and
the 1934 Act, as applicable, and in full compliance with and according to the
requirements of Delaware law and the Certificate of Incorporation and By-laws of
the Company. The Company does not have in effect any plan, scheme, device or
arrangement, commonly or colloquially known as a “poison pill” or
“anti-takeover” plan or similar plan, scheme, device or
arrangement. No other state takeover statute or similar statute or
regulation applies or purports to apply to this agreement or the transactions
contemplated hereby.
6.
Representations and
Warranties of the Purchasers. As an inducement to Sellers to
enter into this Agreement and to consummate the transactions contemplated
herein, each Purchaser, severally and not jointly, represent and warrant, as of
the Closing, to the Sellers as follows:
6.1 Authority. Purchaser
has the right, power, authority and capacity to execute and deliver this
Agreement, to consummate the transactions contemplated hereby and to perform its
obligations under this Agreement. This Agreement constitutes the
legal, valid and binding obligations of Purchaser, enforceable against Purchaser
in accordance with the terms hereof.
6.2 No Consent. No consent,
approval, authorization or order of, or any filing or declaration with any
governmental authority or any other person is required for the consummation by
the Purchaser of any of the transactions on its part contemplated under this
Agreement.
6.3 No
Conflict. None of the execution, delivery, or performance of
this Agreement, and the consummation of the transactions contemplated hereby,
conflicts or will conflict with, or (with or without notice or lapse of time, or
both) result in a termination, breach or violation of (a) any instrument,
contract or agreement to which Purchaser is a party or by which he is bound; or
(b) any federal, state, local or foreign law, ordinance, judgment, decree,
order, statute, or regulation, or that of any other governmental body or
authority, applicable to Purchaser.
6.4 Potential Loss of
Investment. Purchaser understands that an investment in the
Shares is a speculative investment which involves a high degree of risk and the
potential loss of its entire investment.
6.5 Receipt of
Information. Purchaser has received all documents, records,
books and other information pertaining to his investment that has been requested
by the Purchaser, including without limitation, the SEC filings made by the
Company.
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6.6 No
Advertising. At no time was the Purchaser presented with or
solicited by any leaflet, newspaper or magazine article, radio or television
advertisement, or any other form of general advertising or solicited or invited
to attend a promotional meeting otherwise than in connection and concurrently
with such communicated offer.
6.7 Investment
Experience. The Purchaser is (a) experienced in making
investments of the kind described in this Agreement, (b) able, by reason of his
business and financial experience to protect its own interests in connection
with the transactions described in this Agreement, and (c) able to afford the
entire loss of its investment in the Shares.
6.8 Restricted
Securities. Purchaser understands that the restricted Shares
have not been registered under the Securities Act or registered or qualified
under any the securities laws of any state or other jurisdiction, are
“restricted securities,” and cannot be resold or otherwise transferred unless
they are registered under the Securities Act, and registered or qualified under
any other applicable securities laws, or an exemption from such registration and
qualification is available. Each certificate for any of the
restricted Shares shall bear a legend to the foregoing effect.
6.9 Investment
Purposes. The Purchaser is acquiring the restricted Shares for
its own account as principal, not as a nominee or agent, for investment purposes
only, and not with a view to, or for, resale, distribution or fractionalization
thereof in whole or in part and no other person has a direct or indirect
beneficial interest in the amount of restricted Shares the Purchaser is
acquiring herein. Further, the Purchaser does not have any contract,
undertaking, agreement or arrangement with any person to sell, transfer or grant
participations to such person or to any third person, with respect to the
restricted Shares the Purchaser is acquiring.
6.10 No Obligation to Register
Shares. The Purchaser understands that the Company is under no
obligation to register the restricted Shares under the Securities Act, or to
assist the Purchasers in complying with the Securities Act or the securities
laws of any state of the United States or of any foreign
jurisdiction.
7.
Indemnification;
Survival.
7.1 Indemnification. Each
party hereto shall jointly and severally indemnify and hold harmless the other
party and such other party’s agents, beneficiaries, affiliates, representatives
and their respective successors and assigns (collectively, the “Indemnified
Persons”) from and against any and all damages, losses, liabilities, taxes and
costs and expenses (including, without limitation, attorneys’ fees and costs)
(collectively, “Losses”) resulting directly or indirectly from (a) any
inaccuracy, misrepresentation, breach of warranty or non-fulfillment of any of
the representations and warranties of such party in this Agreement, or any
actions, omissions or statements of fact inconsistent with in any material
respect any such representation or warranty, (b) any failure by such party to
perform or comply with any agreement, covenant or obligation in this Agreement.
Notwithstanding the foregoing, the amount of indemnity owed by each Seller for
Losses shall be limited to the amount of the Purchase Price received by such
Seller, provided, however, that the liability of Xxxxx Xxxx shall be limited to
$35,000.
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7.2 Limitations of
Liability. NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN,
THE AGGREGATE LIABILITY OF EACH SELLER (INCLUDING, WITHOUT LIMITATION, THEIR
RESPECTIVE AFFILIATES, AGENTS AND ESTATES) ARISING UNDER THIS AGREEMENT,
REGARDLESS OF THE FORM OF ACTION GIVING RISE TO SUCH LIABILITY (WHETHER IN
CONTRACT, TORT OR OTHERWISE), SHALL NOT EXCEED THE AMOUNT OF CONSIDERATION PAID
TO SUCH SELLER IN RESPECT OF THE SHARES SOLD BY SUCH SELLER PURSUANT TO THIS
AGREEMENT; PROVIDED, HOWEVER, THAT THE AGGREGATE LIABILITY OF XXXXX XXXX UNDER
THIS AGREEMENT SHALL NOT EXCEED THIRTY FIVE THOUSAND DOLLARS
($35,000).
7.3 Survival. All
representations, warranties, covenants and agreements of the parties contained
herein or in any other certificate or document delivered pursuant hereto shall
survive the Closing Date for twelve (12) months thereafter, provided that
Sections 5.2 and 5.16 shall survive until the expiration of the applicable
statute of limitations.
8.
Miscellaneous.
8.1 Further
Assurances. From time to time, whether at or following the
Closing, each party shall make reasonable commercial efforts to take, or cause
to be taken, all actions, and to do, or cause to be done, all things reasonably
necessary, proper or advisable, including as required by applicable laws, to
consummate and make effective as promptly as practicable the transactions
contemplated by this Agreement.
8.2 Notices. All
notices or other communications required or permitted hereunder shall be in
writing shall be deemed duly given (a) if by personal delivery, when so
delivered, (b) if mailed, three (3) business days after having been sent by
registered or certified mail, return receipt requested, postage prepaid and
addressed to the intended recipient as set forth below, or (c) if sent through
an overnight delivery service in circumstances to which such service guarantees
next day delivery, the day following being so sent to the addresses of the
parties as indicated on the signature page hereto. Any party may change the
address to which notices and other communications hereunder are to be delivered
by giving the other parties notice in the manner herein set forth.
If to any Seller, to the addresses set
forth on Schedule
A attached hereto.
If to the Company, to:
000 Xxxxxx Xxxx Xxxx
Xxxxxxxxxx, XX 00000
Attn:
Phone:
Fax:
10
with a copy to:
K&L Gates LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx,
Esq.
Phone: 000-000-0000
Fax: 000-000-0000
If to any Purchaser, to the addresses
set forth on Schedule
B attached hereto.
with a copy to:
Xxxxx Xxxxx & Associates,
PLLC
0 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx Xxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
8.3 Choice of
Law. This Agreement shall be governed, construed and enforced
in accordance with the laws of the State of New York, without giving effect to
principles of conflicts of law that would result in the application of the laws
of a jurisdiction other than the State of New York.
8.4 Jurisdiction. The
parties hereby irrevocably consent to the in personam jurisdiction of the state
or federal courts located in the County of New York, State of New York, in
connection with any action or proceeding arising out of or relating to this
Agreement or the transactions and the relationships established thereunder. The
parties hereby agree that such courts shall be the venue and exclusive and
proper forum in which to adjudicate such matters and that they will not contest
or challenge the jurisdiction or venue of these courts. The prevailing party in
any action or threatened action relating to this Agreement or the transactions
contemplated hereby shall be entitled to recover from the other party or parties
its reasonable attorney’s fees and costs. EACH PARTY HERETO WAIVES TRIAL BY
JURY IN ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF THIS AGREEMENT OR ANY
BREACH OR ALLEGED BREACH HEREOF.
8.5 Entire
Agreement. This Agreement sets forth the entire agreement and
understanding of the parties in respect of the transactions contemplated hereby
and supersedes all prior and contemporaneous agreements, arrangements
and understandings of the parties relating to the subject matter
hereof. No representation, promise, inducement, waiver of rights,
agreement or statement of intention has been made by any of the parties which is
not expressly embodied in this Agreement.
8.6 Assignment. Each
party's rights and obligations under this Agreement shall not be assigned or
delegated, by operation of law or otherwise, without the other party's prior
written consent, and any such assignment or attempted assignment shall be void,
of no force or effect, and shall constitute a material default by such
party.
11
8.7 Amendments. This
Agreement may be amended, modified, superseded or cancelled, and any of the
terms, covenants, representations, warranties or conditions hereof may be
waived, only by a written instrument executed by the Company, the Purchasers and
the Agent.
8.8 Waivers. The
failure of any party at any time or times to require performance of any
provision hereof shall in no manner affect the right at a later time to enforce
the same. No waiver by any party of any condition, or the breach of
any term, covenant, representation or warranty contained in this Agreement,
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
breach or a waiver of any other term, covenant, representation or warranty of
this Agreement.
8.9 Counterparts. This
Agreement may be executed simultaneously in two or more counterparts and by
facsimile or other electronic transmission, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
8.10 Severability. If
any term, provisions, covenant or restriction of this Agreement is held by a
court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination, the parties shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner in order
that the transactions contemplated hereby be consummated as originally
contemplated to the fullest extent possible.
8.11 Interpretation. The
parties agree that this Agreement shall be deemed to have been jointly and
equally drafted by them, and that the provisions of this Agreement therefore
shall not be construed against a party or parties on the ground that such party
or parties drafted or was more responsible for the drafting of any such
provision(s). The parties further agree that they have each carefully read the
terms and conditions of this Agreement, that they know and understand the
contents and effect of this Agreement and that the legal effect of this
Agreement has been fully explained to its satisfaction by counsel of its own
choosing or that such party has waived its right to independent
counsel.
8.11 No Seller
Group. The parties acknowledge and agree that the Sellers are
not acting as a group and that each Seller had independently based on its own
evaluation decided to enter into this Agreement and the transactions
contemplated herein.
[Remainder of Page Intentionally
Omitted; Signature Page to Follow]
12
IN WITNESS WHEREOF, the parties have
duly executed this Stock Purchase Agreement as of the date first above
written.
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By:
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/s/Xxxxx Xxxx
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Name:
Xxxxx Xxxx
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||
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Title:
CEO
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||
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SELLERS:
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||
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XXXX
XXXXX
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||
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/s/Xxxx Xxxxx
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||
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Name:
Xxxx Xxxxx
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||
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XXXX
X. XXXXX CHILDREN'S TRUST
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||
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By:
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/s/Xxxx Xxxxx
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Name:
Xxxx Xxxxx
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||
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Title:
Trustee
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XXXXXX
XXXX
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||
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s/ Xxxxxx Xxxx
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||
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Name:
Xxxxxx Xxxx
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||
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XXXXXXX
XXXX
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||
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/s/Xxxxxxx Xxxx
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||
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Name:
Xxxxxxx Xxxx
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||
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XXXXX
XXXX
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||
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/s/ Xxxxx Xxxx
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||
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Name:
Xxxxx Xxxx
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||
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XXXX
XXXXXXXX
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/s/Xxxx Xxxxxxxx
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Name:
Xxxx Xxxxxxxx
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13
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PURCHASERS:
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SCARBOROUGH
LTD.
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By:
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/s/ Xxxxx X. Xxxxx
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Name: Xxxxx
X. Xxxxx
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Title:
Director
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BEAUFORT
VENTURES PLC
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By:
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/s/Xxxxxxx Xxxxx
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Name: Xxxxxxx
Xxxxx
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Title: CEO
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Agua
Alta Ltd.
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By:
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/s/Xxxxxxx Xxxxxxxxx
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Name:
Xxxxxxx Xxxxxxxxx
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Title: Director
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Il
Brolo Ltd.
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||
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By:
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/s/ Xxxxx X. Xxxxx
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Name: Xxxxx
X. Xxxxx
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Title:
Director
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14
Schedule
A
List of
Sellers
|
Sellers
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Number of Shares
|
Applicable Purchase
Price
|
|||
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Xxxx
Xxxxx
00
Xxxx 00xx Xxxxxx
Xxx
Xxxx, XX 00000
|
16,687,315 | ||||
|
Xxxx
X. Xxxxx Children's Trust
00
Xxxx 00xx Xxxxxx
Xxx
Xxxx, XX 00000
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6,592,212 | ||||
|
Xxxxxx
Xxxx
00
Xxxxx Xxxxx Xxxxx
Xxxxxxx,
XX 00000
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13,238,462 | ||||
|
Xxxxxxx
Xxxx
00
Xxxxxx Xxxx Xxxx
Xxxxxxxxxx,
XX 00000
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13,238,462 | ||||
|
Xxxxx
Xxxx
000
Xxxxxx Xxxx Xxxx
Xxxxxxxxxx,
XX 00000
|
6,731,731 | ||||
|
Xxxx
Xxxxxxxx
Xxxx
Xxxxxxxxx Xxxxx
Xxxxxxxx
Xxx, XX 00000
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4,832,476 | ||||
15
Schedule
B
List of
Purchasers
|
Purchasers
|
Number of Shares
|
|||
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Scarborough
Ltd.
c/o
Euroba Management Limited
X.X.
Xxx XX 000
Xxxxxxxx,
Xxxxxxx XX XX
|
29,011,258 | |||
|
Beaufort
Ventures PLC
c/o
Beaufort International Associates Limited
00
Xxxxxxxxx Xxxxxx XX0X 0XX Xxxxxx Xxxxxxx
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26,476,924 | |||
|
Agua
Alta Ltd.
c/o
TMF (B.V.I.) Ltd.
Xxxx
Xxxx X.X. Xxx 000,
Xxxx
Xxxx, Xxxxxxx, Xxxxxxx Virgin Islands
|
4,832,476 | |||
|
Il
Brolo Ltd.
c/o
Euroba Management Limited
X.X.
Xxx XX 000
Xxxxxxxx,
Xxxxxxx XX XX
|
1,000,000 | |||
16
