STOCK PURCHASE AGREEMENT
Exhibit
99.1
STOCK
PURCHASE AGREEMENT, dated as of _________, 2008 (the "Agreement"), by and
between Xxxxxxxx Xxxxx (“White”),
residing at 0000 Xxx Xxxxx Xxxx, Xxxxxxxxx, Xxxxxxxx 00000, and Vision
Opportunity China LP (“Vision”),
a
Guernsey registered limited partnership with its principal office located at
Sarnia House, Suites 13 and 15, Xx Xxxxxxx, Xx Xxxxx Xxxx, Xxxxxxxx XX0
0XX.
WITNESSETH:
WHEREAS,
White is the owner of 7,000,000 shares of common stock, par value $.000001
per
share (the “Shares”),
of
City Language Exchange, Inc. (“CLE”),
a
Delaware corporation with an office located at 2114 Xxxxx Street, Unit 1,
Halifax, Nova Scotia X0X 0X0, Xxxxxx; and
WHEREAS,
White desires to sell, and Vision desires to purchase, all of the Shares on
the
terms and conditions set forth herein;
NOW,
THEREFORE, in consideration of the mutual representations, warranties,
agreements and indemnities herein contained and other good and valuable
consideration, the receipt and sufficiency of which is hereby mutually
acknowledged, the parties agree as follows:
1. Purchased
Shares
Subject
to the terms and conditions herein stated, White hereby sells, assigns,
transfers and delivers to Vision, and Vision hereby purchases from White, all
right, title and interest of White in and to the Shares for a total purchase
price of $345,000 (inclusive of $20,000 in expenses, disbursements and legal
fees incurred in connection herewith).
2. Payment
of Consideration
In
furtherance of the consummation of the transactions contemplated hereby,
simultaneously with the execution and delivery of this Agreement, Vision is
(a)
paying the purchase price by delivering to Xxxxxxxxx Xxxxxxx, LLP, with offices
at The MetLife Building, 000 Xxxx Xxxxxx, 00xx
Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000, as escrow agent (the “Escrow
Agent”),
(i)
Vision's check in the amount of $25,000 payable to the order of White, or by
wire transferring such amount in immediately available funds to the Escrow
Agent’s designated account, as an initial deposit, and (ii) the balance of the
purchase price in the amount of $320,000 by check or wire transfer, at the
Closing, and (b) White is delivering to the Escrow Agent (i) the stock
certificate(s) representing the Shares, properly endorsed and/or accompanied
by
instruments of transfer duly executed in blank, medallion guaranteed, and (ii)
the opinion of counsel for White, dated on the Closing Date, in substantially
the form provided in Exhibit
A
hereto.
3. Closing
Date
The
consummation of the transactions contemplated by this Agreement (the
“Closing”)
is
taking place simultaneously with the execution and delivery of this Agreement
on
__________, 2008 (the “Closing
Date”),
at
the offices of the Escrow Agent in New York, New York.
4. Representations
and Warranties
4.1 By
White.
White
represents and warrants as follows and acknowledges that Vision is relying
upon
such representations and warranties in connection with the purchase by Vision
of
the Shares:
|
(a)
|
CLE
is a corporation duly incorporated, validly existing and in good
standing
under the laws of the State of
Delaware;
|
|
(b)
|
The
authorized capital stock of CLE consists of 1,000,000,000 shares
of common
stock and 20,000,000 shares of preferred stock; and of such authorized
capital, only 7,189,000 shares of common stock (inclusive of the
Shares)
have been duly issued and are outstanding and are fully paid and
non-assessable;
|
|
(c)
|
No
person, corporation or other entity has any agreement, option or
warrant,
or any right or privilege (whether by law, pre-emptive or contractual,
or
whether by means of any exercise, conversion or other right or action)
which has the effect of or is capable of becoming an agreement, option
or
warrant, for the purchase from CLE of any securities (including
convertible securities) of CLE;
|
|
(d)
|
All
of the Shares are owned by White as the registered and beneficial
owner of
record, with good and marketable title thereto, free and clear of
all
mortgages, liens, charges, security interests, adverse claims, pledges,
encumbrances, restrictions and demands whatsoever (other than restrictions
imposed by federal or state securities
laws);
|
|
(e)
|
No
person, corporation or other entity (other than Vision pursuant to
this
Agreement) has any agreement, option or warrant, or any right or
privilege
(whether by law, pre-emptive or contractual, or whether by means
of any
exercise, conversion or other right or action) which has the effect
of or
is capable of becoming an agreement, option or warrant, for the purchase
of any of the Shares;
|
|
(f)
|
Neither
White nor CLE is party to, bound or affected by or subject to any
indenture, mortgage, lease, agreement, instrument, charter or by-law
provision, statute, regulation, order, judgment, decree or law which
would
be violated, contravened or breached by, or under which any default
would
occur as a result of, the consummation of the transactions provided
for
herein;
|
|
(g)
|
White
has all requisite power and authority to execute, deliver and perform
his
obligations under this Agreement; the execution, delivery and performance
of this Agreement by White has been duly authorized by all necessary
action on the part of White; and this Agreement constitutes the legal,
valid and binding obligation of White, enforceable against him in
accordance with its terms;
|
|
(h)
|
None
of the reports, notices, statements and other filings made by CLE
with the
SEC (the “SEC
Documents”)
since March 22, 2007, as of their respective dates, contained any
untrue
statement of a material fact or omitted to state a material fact
necessary
in order to make the statements contained therein not misleading.
Nothing
has occurred with respect to which the Company would be required
to file
any current report on Form 8-K since March 22, 2007. The balance
sheets
and statements of income, changes in financial position and stockholders’
equity contained in any of the SEC Documents have been prepared in
accordance with generally accepted accounting principles applied
on a
basis consistent with prior periods (and, in the case of unaudited
financial information, on a basis consistent with year-end audits);
and
without limitation of the foregoing, CLE has no material liabilities,
fixed or contingent, known or unknown, except to the extent reflected
in
such financial statements or thereafter incurred in the ordinary
course of
business.
|
|
(i)
|
CLE
has not been informed that its shares of common stock fail to qualify
or
will be delisted from the OTC Bulletin
Board.
|
|
(j)
|
Since
January 1, 2007, (i) the business of CLE has been operated in the
ordinary
course, (ii) there has been no material adverse change in the financial
condition, operations or business of CLE from that reflected in the
aforesaid financial statements, and CLE has not incurred any material
obligation or liability except in the ordinary course of business,
and
(iii) there has not been any (A) declaration, setting aside the payment
of
any dividend or other distribution with respect to the capital stock
of
CLE, (B) direct or indirect redemption, purchase or other acquisition
by
CLE of any of its capital stock, or (C) increase in the rate of salary
or
compensation paid or payable by CLE to White or any other officer,
director or employee of CLE;
|
|
(k)
|
CLE
is not in material default of any of its obligations (including but
not
limited to all leases to which CLE is a party or by which CLE is
bound,
whether for realty or personalty);
|
|
(l)
|
CLE
has, to the date hereof, filed all tax returns and paid or made adequate
reserve on its books for all taxes, assessments and other impositions
as
and to the extent required by law;
|
|
(m)
|
CLE
is in compliance in all material respects with all laws, statutes,
regulations, rules and ordinances applicable to the conduct of its
business, and has in full force and effect all licenses, permits
and other
authorizations required for the conduct of its business as presently
constituted;
|
|
(n)
|
CLE
does not own any real estate or any interest therein, and White has
previously delivered to Vision true and complete copies of all leases
respecting real estate to which CLE is a party or by which CLE may
be
bound;
|
|
(o)
|
CLE
maintains, has in full force and effect, and has paid all premiums
in
respect of insurance covering its business and assets against such
hazards
and in such amounts as are normal and customary for similar businesses
of
similar size in the locality;
|
|
(p)
|
CLE
is not a party to or bound by any collective bargaining agreement,
employment agreement, consulting agreement or other commitment for
the
employment or retention of any
person;
|
|
(q)
|
CLE
does not maintain and is not required to make any contributions to
any
pension, profit-sharing, retirement, deferred compensation or other
such
plan or arrangement for the benefit of any employee, former employee
or
other person;
|
|
(r)
|
there
is no pending or, to White’s knowledge, threatened litigation,
arbitration, administrative proceeding or other legal action or proceeding
against or relating to CLE’s
business;
|
|
(s)
|
CLE
has the valid right to utilize all trade names and other intellectual
property utilized in its business, and has not received notice of
any
claimed infringement of such intellectual property with the rights
or
property of any other person; and
|
|
(t)
|
neither
White nor CLE has any knowledge of any fact, event, circumstance
or
condition that would materially impair CLE’s ability to continue its
normal operations as heretofore conducted (other than general,
industry-wide conditions).
|
4.2 By
Vision.
Vision
represents and warrants as follows and acknowledges that White is relying upon
such representations and warranties in connection with the sale by White of
the
Shares:
|
(a)
|
Vision
is a registered limited partnership validly existing and in good
standing
under the laws of Guernsey;
|
|
(b)
|
Vision
has all requisite power and authority to execute, deliver and perform
its
obligations under this Agreement; the execution, delivery and performance
of this Agreement by Vision has been duly authorized by all necessary
action on the part of Vision; and this Agreement constitute the legal,
valid and binding obligation of Vision, enforceable against Vision
in
accordance with its terms;
|
|
(c)
|
Vision
is not a party to, bound or affected by or subject to any indenture,
mortgage, lease, agreement, instrument or charter provision, statute,
regulation, order, judgment, decree or law which would be violated,
contravened or breached by, or under which any default would occur
as a
result of, the consummation of the transactions provided for herein;
and
|
|
(d)
|
Vision
is purchasing the Shares for its own account for investment purposes,
and
not with a view to the distribution thereof in violation of any applicable
securities laws.
|
5. Survival
of Representations and Warranties
5.1 White.
The
representations and warranties of White contained in this Agreement, or any
agreement, certificate or other document delivered or given pursuant to this
Agreement, shall survive the consummation of the transactions contemplated
by
this Agreement and, notwithstanding such completion or any investigation made
by
or on behalf of Vision, shall continue in full force and effect for the benefit
of Vision and any claim in respect thereof shall be made in
writing:
|
(a)
|
with
respect to representations and warranties of White, relating to matters
other than tax matters, for a period of 18 months after the Closing
Date;
and
|
|
(b)
|
with
respect to representations and warranties of White, relating to tax
liability or other tax matters, within the period commencing on the
Closing Date and expiring on the date on which the last applicable
limitation period (without giving effect to any voluntary extension(s)
hereafter granted by or on behalf of CLE) under any applicable taxation
legislation expires with respect to any fiscal year of CLE which
is
relevant in determining any relevant tax liability of
CLE.
|
5.2 Vision.
The
representations and warranties of Vision contained in this Agreement, or any
agreement, certificate or other document delivered or given pursuant to this
Agreement, shall survive the completion of the transactions contemplated by
this
Agreement and, notwithstanding such completion or any investigation made by
or
on behalf of White, shall continue in full force and effect for the benefit
of
White and any claim in respect thereof shall be made in writing for a period
of
18 months after the Closing Date.
5.3 General.
The
provisions of this Section 5 respecting the expiration of claims periods is
expressly subject to Section 8.3 hereof.
6. Transfer
and Escrow
6.1 Transfer.
This
Agreement shall operate as an immediate and effective transfer and assignment
of
the Shares by White to Vision as at the date hereof. The parties agree to do
all
such other acts and things as may be necessary to give effect to the provisions
hereof, and without limiting the generality of the foregoing, to validly and
effectively transfer the Shares from White to Vision as at the Closing Date,
and
to disclose the resulting change in control of CLE in a current report on Form
8-K to be filed with the U.S. Securities and Exchange Commission (“SEC”)
following the Closing. This Agreement will constitute, and may be presented
to
CLE and its transfer agent and registrar as, White’s irrevocable authorization
to transfer the record ownership of the Shares to Vision on the stock transfer
ledger of CLE.
6.2 Escrow.
The
Escrow Agent shall not be obligated to see to the proper application of the
escrow funds and stock certificate(s), but shall merely be obligated to disburse
and deliver same to White and Vision at their request, as more fully set forth
in the Escrow Agreement attached as Exhibit
B
hereto.
The Escrow Agent shall not be liable for its actions as such except for gross
negligence or willful misconduct.
7. Additional
Agreements
7.1 White
shall remain the President, Chief Executive Officer, Chief Financial Officer
and
a member of the Board of Directors of CLE following the Closing. As such, White
shall cause CLE to prepare and file with the SEC its Annual Report on Form
10-KSB for the year ended December 31, 2007, together with audited financial
statements as of and for the year then ended, and any related management reports
and certifications, as soon as practicable after the date hereof, but in no
event later than March 31, 2008; and to prepare and file any quarterly reports
on Form 10-Q for the quarters ended thereafter and any current reports on Form
8-K, as required, so long as he remains an executive officer of
CLE.
7.2 Each
of
White and Vision shall take or cause to be taken all necessary or desirable
actions, steps and corporate proceedings to approve or authorize the
transactions contemplated by this Agreement and the execution and delivery
of
this Agreement and other agreements, understandings and documents contemplated
hereby, and shall cause all necessary meetings of directors and stockholders
to
be held for such purpose.
8. Indemnification
8.1 Each
party hereto agrees to indemnify and hold harmless the other party from and
in
respect of any cost, claim, loss, damage, liability or expense which such other
party may suffer or incur, whether at law or in equity, arising out, resulting
from or in connection with the inaccuracy of any representation or warranty
contained herein, for the time periods provided in Section 4.1
hereof.
8.2 No
claim
for indemnification will arise until written notice thereof is given to the
party from whom indemnification is sought or claimed (the “Indemnitor”).
Such
notice shall be sent within a reasonable time following the determination by
the
party seeking indemnification (the "Indemnitee")
that a
claim for indemnity may exist. In the event that any legal proceedings shall
be
instituted or any claim or demand is asserted by any third person in respect
of
which either party may seek any indemnification from the other party, the
Indemnitee shall give or cause to be given to the Indemnitor written notice
thereof and the Indemnitor shall have the right, at its option and expense,
to
be present at the defense of such proceedings, claim or demand, but not to
control the defense, negotiation or settlement thereof, which control shall
at
all times remain with the Indemnitee, unless the Indemnitor irrevocably
acknowledges full and complete responsibility for indemnification of the
Indemnitee in respect of the subject claim, in which case the Indemnitor may
assume such control through counsel of its choice; provided however,
that no
settlement shall be entered into without the Indemnitee's prior written consent
(which shall not be unreasonably withheld). The parties agree to cooperate
fully
with each other in connection with the defense, negotiation or settlement of
any
such third party legal proceeding, claim or demand.
8.3 Notwithstanding
anything in this Agreement to the contrary, the indemnity provided for in this
Section 8 shall apply to any loss, claim, cost, damage, expense or liability,
whether or not the actual amount thereof shall have been ascertained prior
to
the final day upon which a claim for indemnity with respect thereto may be
made
hereunder in accordance with Section 5 hereof, so long as written notice thereof
shall have been given to the party from whom indemnification is sought prior
to
said date, setting forth specifically and in reasonable detail, so far as is
known, the matter as to which indemnification is being sought, but nothing
herein shall be construed to require payment of any claim for indemnity until
the actual amount payable shall have been finally ascertained.
9. Notices
Notices
required or permitted to be given under this Agreement shall be in writing
and
shall be deemed to be sufficiently given when sent by certified or registered
mail or by hand, addressed to the addresses set forth on the first page of
this
Agreement or to such other address furnished by notice given in accordance
with
this Section 9. A copy of any notice sent to Vision shall also be sent to Vision
Capital Advisors LLC, 00 Xxxx 00xx
Xxxxxx,
0xx
Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxx Xxxxxxx, Esq., Legal and
Operations.
10. Governing
Law
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York. In the event there is any dispute between the parties as
to
their rights and obligations under this Agreement, the parties submit to the
jurisdiction of any state or federal court sitting in the State and City of
New
York, and waive any defense of inconvenient forum to the maintenance of any
action so brought.
11. Entire
Agreement
This
Agreement constitutes the entire agreement between the parties relating to
the
subject matter hereof. There are no verbal statements, representations,
warranties, undertakings or agreements between the parties. This agreement
may
be amended only by an instrument in writing signed by both parties.
12. Time
of the Essence
Time
shall be of the essence of this Agreement.
13. Assignment
Neither
this Agreement nor any rights or obligations hereunder may be assigned by either
party without the prior written consent of the other party, which consent may
be
withheld in either party's sole and absolute discretion, except that Vision
may
assign its rights hereunder to CLE without White’s consent.
14. Binding
Effect
This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns. This Agreement may be
executed in counterparts.
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
above written.
|
Xxxxxxxx
Xxxxx
|
||
| VISION OPPORTUNITY CHINA LP | ||
| |
|
|
| By: | ||
|
Name:
Title
|
||
