SECURITIES PURCHASE AGREEMENT
THIS
SECURITIES PURCHASE AGREEMENT is entered into as of February 6, 2009 (this “Agreement”), by and between Xxxxxxx Xxxxxxxx (the
“Seller”) and Xxxxxx Capital Master Fund, Ltd.
(the “Buyer”). Each party to this
Agreement is referred to
herein as a “Party,” and they are all referred to
collectively as “Parties.”
W I T N E S S E T H:
WHEREAS, the Seller is the owner of
3,485,100 shares (the “Shares”) of the common stock, par value $0.0001
per share (the “Common
Stock”), of Noble Medical Technologies, Inc., a
Delaware corporation (the “Company”), which, constitutes approximately
83.22% of the total outstanding shares of the Common Stock of the Company on a
fully-diluted basis immediately prior to the Closing (as defined
below); and
WHEREAS, the Seller desires to sell and
the Buyer desires to purchase from the Seller the Shares on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the
premises and of the mutual representations, warranties and agreements set forth herein, the Parties hereto
agree as follows:
ARTICLE
I
SALE AND PURCHASE OF
SHARES
1.1 Incorporation
of Recitals. The
provisions and recitals set forth above are hereby referred to and incorporated
herein and made a part of this Agreement by reference.
1.2 Sale and Purchase of
Shares. Subject to the terms and conditions of this Agreement,
at the Closing, the Seller hereby agrees to sell to Buyer and Buyer agrees to
purchase from the Seller the Shares for an aggregate purchase price of sixty
five thousand one hundred eighteen dollars and sixty nine cents ($65,118.69)
(the “Purchase Price”). On the Closing Date (as defined below), the Purchase
Price shall be delivered to the client trust account of the Xxxxx X. Xxxxxxx,
Esq. (“Seller’s Counsel”), for receipt of the Purchase Price for and on behalf
of the Seller, per the Wire Transfer Instructions set forth in Exhibit B hereto and
the balance of any remaining portion of the Purchase Price shall be disbursed to
Seller after payment of the Company Liabilities (as defined below) and as
authorized by Seller under Section 1.4 hereof.
1.3 Closing. Subject
to the terms and conditions of this Agreement, the closing of the transactions
contemplated by this Agreement (the “Closing”) shall take place on February 6,
2009 (the “Closing Date”). On the Closing Date, the Seller shall
deliver to the Buyer: (a) stock certificate(s) evidencing the Shares in
negotiable form, duly endorsed in blank, or with stock transfer powers attached
thereto (the “Share Certificates”); (b) resignations of the officers and
directors of the Company and their written appointment of one or more persons
designated by Buyer as successor officers and directors; and (c) all corporate
documents (minutes, resolutions, agreements and contracts), bank accounts, check
books, common seals, memorandum and articles and amendments, etc. of the
Company. On the Closing Date, the Buyer shall deliver to Seller’s
Counsel the Purchase Price for the purchase of the Shares.
1.4 Payments at
Closing. On or
before the Closing Date,
the Company shall pay and discharge all outstanding liabilities (collectively,
“Company
Liabilities”). Such payments shall be
made as soon as possible, but in no event later than two days from receipt of
the Purchase Price, by Seller’s Counsel utilizing cash on hand on the Closing Date and the
Purchase Price. Notwithstanding anything to the contrary set forth herein,
Seller hereby authorizes Seller’s Counsel to pay and discharge (and
Seller’s Counsel hereby agrees to make such
payments in the time period set forth above) the Company Liabilities
prior to distributing any portion of the Purchase Price to
Seller. Giving effect to these payments, it is the
Parties’ intent that the Company shall, on the
Closing Date and as of the Closing, have no liabilities and no assets.
ARTICLE
II
REPRESENTATIONS AND WARRANTIES OF THE
SELLER
Except as set forth under the
corresponding section of the disclosure schedules (the “Disclosure Schedules”) attached hereto as Exhibit
A, which Disclosure
Schedules shall be deemed a part hereof, the Seller hereby represents and
warrants to Buyer that now and as of the Closing:
2.1 Due
Organization and Qualification; Subsidiaries; Due
Authorization.
(a) The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of its jurisdiction of formation,
with full corporate power and authority to own, lease and operate its business
and properties and to carry on its business in the places and in the manner as
presently conducted. The Company is duly qualified and in
good standing as a foreign corporation in
each jurisdiction in which the properties owned, leased or operated, or the
business conducted, by it requires such qualification except for any failure to
qualify, which when taken together with all other failures to qualify, is not likely to have a
material adverse effect on the business of the Company.
(b) The Company does not have, and has never
had, any subsidiaries and does not own, directly or indirectly, any capital
stock, equity or interest in any corporation, firm, partnership, joint venture or other
entity.
(c) Seller
is the record and beneficial owner of the Shares and has sole power and
authority over the disposition of the Shares. The Shares are free and
clear of any liens, claims, encumbrances, and charges. The Shares
have not been sold, conveyed, encumbered, hypothecated or otherwise transferred
by Seller except pursuant to this Agreement. Seller has the legal
right to enter into and to consummate the transactions contemplated hereby and
otherwise to carry out his obligations hereunder. This Agreement
constitutes the valid and binding obligation of Seller. The
execution, delivery and performance by the Seller of this Agreement does not
violate any contractual restriction contained in any agreement which binds or
affects or purports to bind or affect the Seller. Seller is not a
party to any agreement, written or oral, creating rights in respect of any of
such Shares in any third party or relating to the voting of its
Shares. Seller is not a party to any outstanding or authorized
options, warrants, rights, calls, commitments, conversion rights, rights of
exchange or other agreements of any character, contingent or otherwise,
providing for the purchase, issuance or sale of any of the Shares, and there are
no restrictions of any kind on the transfer of any of the Shares other than (a)
restrictions on transfer imposed by the Securities Act of 1933, as amended (the
“Securities Act”) and (b) restrictions on transfer imposed by applicable state
securities or “blue sky” laws. Seller acknowledges that Seller has
been advised that Buyer or others may take various actions including
actions which result in the Shares greatly increasing in value and that by
executing this agreement, Seller expressly waives any and all right to
participate in any way in any such increase in value of the shares of the
Company. Those creditors listed in the Disclosure Schedules are the
only individuals or entities with any claims against the
Company. Other than as set forth on the Disclosure Schedules, the
Company does not have any obligations or liabilities of any nature (matured or
unmatured, fixed or contingent).
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2.2 No Conflicts or
Defaults. The execution and delivery of this Agreement by the
Seller and the consummation of the transactions contemplated hereby do not and
shall not (a) contravene the Certificate of Incorporation or By-laws of the
Company or (b) with or without the giving of notice or the passage of
time (i) violate, conflict with, or result in a breach of, or a
default or loss of rights under, any material covenant, agreement, mortgage,
indenture, lease, instrument, commitment, arrangement, permit or license to
which the Seller or the Company is a party or by which the Seller or the Company
is bound (each a “Contract”), or any judgment, order or decree, or any federal,
state or other statute, law, ordinance, rule or regulation to which the Seller
or the Company is subject, (ii) result in the creation of, or give any party the
right to create, any mortgage, security interest, lien, charge, easement, lease,
sublease, covenant, option, claim, restriction or encumbrance or any other right
or adverse interest (“Liens”) upon any of the properties or assets of the
Company, (iii) terminate or give any party the right to terminate, amend,
abandon or refuse to perform, any Contract to which the Seller or the Company is
a party or by which the Company’s assets are bound, or (iv) accelerate or
modify, or give any party the right to accelerate or modify, the time within
which, or the terms under which, the Seller or the Company is to perform any
duties or obligations or receive any rights or benefits under any material
agreement, arrangement or commitment to which it is a party.
2.3 Capitalization. On
the Closing Date, the authorized capital stock of the Company consists of
21,000,000 shares of Common Stock, par value $0.0001 per share, of which
4,188,000 shares are, as of the date hereof, issued and outstanding (“Company
Shares”) and 1,000,000 shares of preferred stock, par value $0.0001 per share,
of which no shares are, as of the date hereof, issued and
outstanding. All of the Company Shares are duly authorized, validly
issued, fully paid and nonassessable, and have not been issued in violation of
any purchase option, call option, right of first refusal, preemptive right,
subscription right, or any similar right of stockholders. The Company
Shares are not, and the Shares are not and will not be as of the Closing,
subject to any preemptive or subscription right. There is no
outstanding voting trust agreement or other Contract, agreement, arrangement,
option, warrant, call, commitment or other right of any character obligating or
entitling the Company to issue, sell, redeem or repurchase any of its
securities, and there is no outstanding security of any kind convertible into or
exchangeable for the Common Stock of the Company, nor has the Company, or any of
its agents orally agreed to issue any of the foregoing. There are no
declared or accrued unpaid dividends with respect to any shares of the Company’s
Common Stock. There are no agreements, written or oral, between the
Company and any of its stockholders or among any stockholders relating to the
acquisition (including without limitation rights of first refusal or preemptive
rights), or disposition, or registration under the Securities Act or voting of
the capital stock of the Company. There are no outstanding shares of Common
Stock that are subject to vesting. The Company has no capital stock other than
the Common Stock authorized, issued or outstanding.
2.4 Financial
Statements.
(a) SEC Documents. The
Seller hereby makes reference to the following documents filed by the Company
with the United States Securities and Exchange Commission (the “SEC”), as posted
on the SEC’s website, xxx.xxx.xxx: (collectively, the “SEC
Documents”): (a) Registration Statement Under the Securities Act of 1933 on Form
S-1 as filed on April 28, 2008 and all amendments thereto; (b) Quarterly Reports
on Form 10-Q for the periods ended March 31, 2008, June 30, 2008 and September
30, 2008 and all amendments thereto; and (c) Annual Report on Form 10-K for the
period ended December 31, 2008. The SEC Documents constitute all of
the documents and reports that the Company was required to file with the SEC
pursuant to the Securities Act of 1933, as amended (“Securities Act”), and the
Securities Exchange Act of 1934, as amended (“Exchange Act”), and the rules and
regulations promulgated thereunder by the SEC. The financial statements included in the
SEC Documents include a copy of the balance sheet of the Company at
December 31, 2008 and at December 31, 2007, and the related statements of
operations and stockholders’ cash flows for the fiscal year
ended December 31, 2008 and the period from July 25, 2007 (inception) through
December 31, 2007, including the
notes thereto, as audited by Li & Company, PC, certified, independent
accountants, and the balance sheet of the Company at March 31, 2008, June 30,
2008 and September 30, 2008 and the related statements of operations and
stockholders’ cash flows for the three-, six- and
nine-month periods, respectively, then ended prepared by the Company’s management (all such statements being
referred to collectively as the “Company Existing Financial
Statements”). All the Company Existing
Financial Statements, together with the notes
thereto, have been prepared in accordance with U.S. generally accepted accounting
principles applied on a basis consistent throughout all periods
presented. These Company Existing Financial Statements present
fairly the financial position of the Company
as of the dates and for the periods indicated. The books of account
and other financial records of the Company have been maintained in accordance
with U.S. GAAP.
3
(b) Since
the date of the latest Company Existing Financial Statements (the “Most Recent
Date”), there has been no material adverse change in the condition, financial or
otherwise, net worth, prospects or results of operations of the
Company. Without limiting the foregoing, since the Most Recent
Date:
(i) the
Company has not sold, leased, transferred or assigned any of its assets,
tangible or intangible, other than in the ordinary course of
business;
(ii) the
Company has not entered into any agreement, Contract, commitment, lease or
license (or series of related agreements, Contracts, commitments, leases and
licenses);
(iii) no
party (including the Company) has accelerated, terminated, modified or canceled
any agreement, Contract, lease or license (or series of related agreements,
Contracts, leases and licenses) to which the Company is a party or by which the
Company or its assets are bound;
(iv) the
Company has not made any capital expenditure (or series of related capital
expenditures) of whatever nature;
(v) the
Company has not made any capital investments in, any loans to, or any
acquisitions of the securities or assets of any other person (or a series of
related capital investments, loans and acquisitions);
(vi) declared
or paid any dividends or made any other distribution to its stockholders whether
or not upon or in respect of any shares of its capital stock;
(vii) redeemed
or otherwise acquired any shares of its capital stock (except upon the exercise
of outstanding options) or any option, warrant or right relating
thereto;
(viii) the
Company has not issued any notes, bonds or other debt securities, or created,
incurred, assumed or guaranteed any liabilities, obligations or indebtedness for
borrowed money or capitalized lease obligation;
(ix) the
Company has not canceled, compromised, waived or released any right or claim (or
series of related rights and claims) or material indebtedness;
(x) the
Company has not made any loans to, or entered into any other transactions with,
any of its directors, officers, or employees; and
(xi) the
Company has not committed to do any of the foregoing.
2.5 Further Financial
Matters. The Company does not have any (a) assets of any kind
or (b) liabilities or obligations, whether secured or unsecured, accrued,
determined, absolute or contingent, asserted or unasserted or otherwise, which
are required to be reflected or reserved in a balance sheet or the notes thereto
under generally accepted accounting principles, and which are not reflected in
the Company Existing Financial Statements.
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2.6 Taxes. The
Company has filed all United States federal, state, county, local and foreign,
national, provincial and local returns and reports which were required to be
filed on or prior to the Closing Date hereof in respect of all income,
withholding, franchise, payroll, excise, property, sales, use, value-added or
other taxes or levies, imposts, duties, license and registration fees, charges,
assessments or withholdings of any nature whatsoever (together, “Taxes”), and
has paid all Taxes (and any related penalties, fines and interest) which have
become due pursuant to such returns or reports or pursuant to any assessment
which has become payable, or, to the extent its liability for any Taxes (and any
related penalties, fines and interest) has not been fully discharged, the same
have been properly reflected as a liability on the books and records of the
Company and adequate reserves therefor have been established. All
such returns and reports filed on or prior to the date hereof have been properly
prepared and are true, correct (and to the extent such returns reflect judgments
made by the Company, as the case may be, such judgments were reasonable under
the circumstances) and complete in all material respects. The amount
shown on the Company’s most recent balance sheet in the Company Existing
Financial Statements as provision for taxes is sufficient in all material
respects to pay all accrued and unpaid federal, state, local and foreign taxes
for the period then ended and all prior periods. No tax return or tax
return liability of the Company has been audited or, is presently under
audit. The Company has not given or been requested to give waivers of
any statute of limitations relating to the payment of any Taxes (or any related
penalties, fines and interest). There are no claims pending or, to
the knowledge of the Seller, threatened, against the Company for past due
Taxes. All payments for withholding taxes, unemployment insurance and
other amounts required to be paid for periods prior to the date hereof to any
governmental authority in respect of employment obligations of the Company,
including, without limitation, amounts payable pursuant to the Federal Insurance
Contributions Act, have been paid or shall be paid prior to the Closing and have
been duly provided for on the books and records of the Company and in the
Company Existing Financial Statements. All such amounts and penalties
are set forth in the Company’s most recent balance sheet in the Company Existing
Financial Statements.
2.7 Indebtedness; Contracts; No
Defaults; Liabilities.
(a) The
Company has no instruments, agreements, indentures, mortgages, guarantees,
notes, commitments, accommodations, letters of credit or other arrangements or
understandings, whether written or oral, to which the Company is a
party.
(b) Neither the Company, nor, to the Seller’s knowledge, any other person or entity,
is in breach of, or in default under any Contract, agreement, arrangement,
commitment or plan to which the Company is a party, and no event or action has
occurred, is pending or is threatened, which, after the giving of notice,
passage of time or otherwise, would constitute or result in such a breach or
default by the Company or, to the knowledge of the Seller, any other person or
entity. The Company has not received any notice of default
under any Contract, agreement,
arrangement, commitment or plan to which it is a party, which default has not
been cured to the satisfaction of, or duly waived by, the party claiming such
default on or before the date hereof.
(c) Other
than the Company Liabilities set forth on Schedule C, which
shall be paid off immediately upon the closing, the Company has no
liabilities.
2.8 Real
Property. The Company does not own or lease any real
property.
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2.9 Compliance.
(a) The
Company is not conducting its respective business or affairs in violation of any
applicable federal, state or local law, ordinance, rule, regulation, court or
administrative order, decree or process, or any requirement of insurance
carriers. The Company has not received any notice of violation or
claimed violation of any such law, ordinance, rule, regulation, order, decree,
process or requirement.
(b) The
Company is in compliance with all applicable federal, state, local and foreign
laws, rules and regulations. There are no claims, notices, actions,
suits, hearings, investigations, inquiries or proceedings pending or, to the
knowledge of the Sellers, threatened against the Company, and there are no past
or present conditions that the Company has reason to believe are likely to give
rise to any liability or other obligations of the Company under any
circumstances.
2.10 Permits and
Licenses. The Company has all certificates of occupancy,
rights, permits, certificates, licenses, franchises, approvals and other
authorizations as are reasonably necessary to conduct its business and to own,
lease, use, operate and occupy its assets, at the places and in the manner now
conducted and operated. The Company has not received any written or
oral notice or claim pertaining to the failure to obtain any material permit,
certificate, license, approval or other authorization required by any federal,
state or local agency or other regulatory body, the failure of which to obtain
would materially and adversely affect its business.
2.11 Litigation.
(a) There is no claim, dispute,
action, suit, inquiry,
proceeding or investigation pending or, to the knowledge of the Seller,
threatened, against or affecting the business of the Company, or challenging the
validity or propriety of the transactions contemplated by this Agreement, at law
or in equity or admiralty or before any
federal, state, local, foreign or other governmental authority, board, agency,
commission or instrumentality, nor has any such claim, dispute, action, suit,
proceeding or investigation been pending or threatened during the 12 month period preceding the date
hereof;
(b) There is no outstanding judgment, order,
writ, ruling, injunction, stipulation or decree of any court, arbitrator or
federal, state, local, foreign or other governmental authority, board, agency,
commission or
instrumentality, against or affecting the business of the Company;
and
(c) The Company has not received any written
or verbal inquiry from any federal, state, local, foreign or other governmental
authority, board, agency, commission or instrumentality concerning the possible violation of any law,
rule or regulation or any matter disclosed in respect of its
business.
2.12 Insurance. The Company does not
currently maintain any form of insurance.
2.13 Certificate
of Incorporation and By-laws; Minute Books. Copies of the Company’s Certificate of Incorporation and its
By-laws have been provided to the Buyer. Such copies of the
Certificate of Incorporation and By-laws (or similar governing documents) of the
Company, and all amendments to each as provided are true,
correct and complete. The minute
books of the Company as forwarded to the Buyer contain true, correct and
complete records of all meetings and consents in lieu of meetings of its Board
of Directors (and any committees thereof), or similar governing bodies,
since the time of its
organization. The stock books of the Company as forwarded to the
Buyer are true, correct and complete.
2.14 Employee
Benefit Plans. The Company does not
maintain, nor has the Company maintained in the past, any employee benefit plans
(“as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”)), or any plans, programs, policies,
practices, arrangements or contracts (whether group or individual) providing for
payments, benefits or reimbursements to employees, officers or consultants of
the Company, former employees, officers or consultants of the Company, their
beneficiaries and dependents under which such employees, officers or
consultants, former employees, officers or consultants, their beneficiaries and dependents are covered
through an employment relationship with the Company, any entity required to be
aggregated in a controlled group or affiliated service group with the Company
for purposes of ERISA or the Internal Revenue Code of 1986 (the “Code”) (including, without limitation, under
Section 414(b), (c), (m) or (o) of the Code or Section 4001 of ERISA, at any
relevant time (“Benefit
Plans”).
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2.15 Patents;
Trademarks and Intellectual Property Rights. Except as set forth on
Schedule
2.15 (such items set forth on Schedule
2.15 referred to herein as
the “Intellectual
Property”), the Company
does not own or possess any patents, trademarks, service marks, trade names,
copyrights, trade secrets, licenses, information, Internet web site(s) or
proprietary rights of any
nature. The business conducted by the Company has not and will not
cause the Company to infringe or violate any of the patents, trademarks, service
marks, trade names, copyrights, mask-works, licenses, trade secrets, processes,
data, know-how or other intellectual property rights
of any other person or entity. The Company owns the entire
right, title and interest in and to, and has the exclusive perpetual
royalty-free right to use, the Intellectual Property, free and clear of all
liens and encumbrances. There are no pending or, to the knowledge of
Seller, threatened claims against the Company by any person or entity with
respect to any of the items, or their use, listed on Schedule
2.15.
2.16 Brokers. The Company or the Seller
has not agreed to or
incurred any obligation or other liability that could be claimed against the
Company, Seller or Buyers or any other person for any finder’s fee, brokerage commission or similar
payment, other than as set forth in a Financial Services Agreement
between Buyers and RP Capital,
LLC.
2.17 Affiliate
Transactions. No
officer, director, employee or other affiliate of the Company (or any of the
relatives or affiliates of any of the aforementioned persons) is a party to any
agreement, Contract, commitment or transaction with the Company or affecting the
business of the Company, or has any interest in any property, whether real,
personal or mixed, or tangible or intangible, used in or necessary to the
Company which will subject the Company to any liability or obligation from and after the Closing
Date.
2.18 Quotation on
OTCBB. The
Company’s Common Stock is currently eligible for
quotation on the OTC Bulletin Board (the “Bulletin Board”), and the Company has not received any
notices that its Common Stock will not be eligible for quotation on the Bulletin
Board.
2.19 Compliance. The Company has complied
with the requirements of the Exchange Act and the Securities Act, and is current
in its filings under the Exchange Act and the Securities
Act.
2.20 Filings. None of the filings made
by the Company under the
Exchange Act or the Securities Act contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
made, in light of the circumstances under which they were made, not
misleading.
2.21 Consents. Other than any applicable
Current Report on Form 8-K under the Exchange Act, and any Section 13(a) or
15(d) filings, no consent, waiver, approval, order or authorization of, or
registration, declaration or filing with, any court, administrative agency or commission or other
federal, state, county, local or other foreign governmental authority,
instrumentality, agency or commission (“Governmental Entity”) is required by or with respect to the
Sellers in connection with the execution and delivery of this Agreement and any related
agreements to which the Seller is a party or the consummation of the
transactions contemplated hereby and thereby, except for such consents, waivers,
approvals, orders, authorizations, registrations, declarations and filings as may be required under
applicable securities laws.
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2.22 Schedules
and Exhibits. All lists or other
statements, information or documents set forth in, or attached to any Disclosure
Schedules, Schedules and Exhibits provided pursuant to this Agreement
or delivered hereunder
shall be deemed to be representations and warranties by the Company with the
same force and effect as if such lists, statements, information and documents
were set forth herein. Any list, statement, document or any
information set forth in, or attached to any Disclosure
Schedules, Schedules or Exhibits provided pursuant to this Agreement or
delivered hereunder shall not be deemed to constitute disclosure for the
purposes of any other Disclosure Schedules, Schedules or Exhibits
provided pursuant to this Agreement unless
specific cross reference is made and shall survive after
closing.
2.23 Environmental
Matters. The
Company has never: (i) operated any underground storage tanks at any
property that the Company has at any time owned, operated, occupied or leased; or
(ii) illegally released any material amount of any substance that has been
designated by any Governmental Entity or by applicable foreign, federal, state,
or local law to be radioactive, toxic, hazardous or otherwise a danger to
health or the environment, including,
without limitation, PCBs, asbestos, petroleum, and urea-formaldehyde and all
substances listed as hazardous substances pursuant to the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as
amended, or defined as a hazardous waste
pursuant to the United States Resource Conservation and Recovery Act of 1976, as
amended, and the regulations promulgated pursuant to said laws), but excluding
office and janitorial supplies properly and safely maintained.
2.24 Representations
and Warranties. The representations and
warranties of the Seller included in this Agreement and any list, statement,
document or information set forth in, attached to any Disclosure Schedules,
Schedules and Exhibits provided pursuant to this Agreement or delivered
hereunder, are true and complete in all material respects and do not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated herein or therein or necessary to make the statements contained herein or therein not
misleading, under the circumstance under which they were made and shall survive
after Closing as set forth herein.
ARTICLE
III
REPRESENTATIONS AND WARRANTIES OF THE
BUYER
The Buyer hereby represents and warrants
to the Company that now and
as of the Closing:
3.1 Authority
Relative to this Agreement. Buyer has the requisite
power and/or authority to enter into this Agreement and carry out its
obligations hereunder. This Agreement has been duly and validly
executed and delivered by the Buyer and constitutes a valid and binding
obligation of the Buyer, enforceable in accordance with its terms, except as
such enforcement may be limited by bankruptcy, insolvency or other similar laws
affecting the enforcement of creditors' rights generally or by general principles of
equity.
3.2 Buyer Representation
Regarding the Securities. Buyer understands that the Shares
are “restricted securities” and have not been registered under the Securities
Act or any applicable state securities law and Buyer is acquiring the Shares as
principal for its own account and not with a view to or for distributing or
reselling such Shares or any part thereof, has no present intention of
distributing any of such Shares and has no arrangement or understanding with any
other persons regarding the distribution of such Shares (this representation and
warranty not limiting Buyer’s right to sell the Shares pursuant to the
Registration Statement or otherwise in compliance with applicable federal and
state securities laws). The Buyer is acquiring the Shares hereunder
in the ordinary course of its business. The Buyer does not have any
agreement or understanding, directly or indirectly, with any person to
distribute any of the Shares.
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3.3 Buyer
Status. At the time the Buyer receives any of the Shares, the
Buyer will be an “accredited investor” as defined in Rule 501(a) under the
Securities Act.
3.4 Experience of the
Buyer. Buyer, either alone or together with its
representatives, have such knowledge, sophistication and experience in business
and financial matters so as to be capable of evaluating the merits and risks of
the prospective investment in the Shares, and has so evaluated the merits and
risks of such investment. The Buyer is able to bear the economic risk
of an investment in the Shares and, at the present time, is able to afford a
complete loss of such investment.
3.5 General
Solicitation. The Buyer is not receiving the Shares as a
result of any advertisement, article, notice or other communication regarding
the Shares published in any newspaper, magazine or similar media or broadcast
over television or radio or presented at any seminar or any other general
solicitation or general advertisement.
ARTICLE
IV
COVENANTS OF THE
SELLER
4.1 Resignation and Appointment
of the Company’s Officers and Directors.
(a) Effective
as of the Closing Date, or such later date as agreed to between the Buyer and
Seller, (i) the Seller will cause the Company’s officers to resign and be duly
replaced by the Buyer’s designees; and (ii) the Seller will cause the Company to
cause the Buyer’s director designees to be duly appointed.
ARTICLE
V
DELIVERIES &
CONDITIONS
5.1 Items to be
delivered to the Buyer at the Closing by the Seller. The Buyer’s obligation to purchase the Shares
hereunder is conditioned on the following closing conditions and
deliveries:
(a) Delivery
by the Seller of the following:
(i) copies of the Company’s Certificate of Incorporation and
amendments thereto, By-laws and amendments thereto;
(ii) all minutes and resolutions of the board
of directors and of the
stockholders (and meetings of stockholders) in possession of the
Company;
(iii) stockholder list of the
Company;
(iv) all financial statements and tax returns
in possession of the Company;
(v) all applicable schedules
hereto;
(vi) Letters of resignation from the
Company’s current officers and directors to be
effective upon Closing and confirming that they have no claim against the
Company in respect of any outstanding remuneration or fees of whatever nature to
be effective upon closing and after the appointments, with the resignation of the directors to take
effect on the Closing Date;
9
(vii) Executed board resolutions authorizing
and approving the actions to be performed by the Company hereunder and
appointing designees of the Buyer as members of the board of directors or
officers of the Company as
set forth in Schedule
D;
(viii) A
certificate of the Secretary or Assistant Secretary of the Company, dated as of
the Closing Date, certifying as to (i) the incumbency of officers of the Company
executing this Agreement and all exhibits and schedules hereto and all other
documents, instruments and writings required pursuant to this Agreement (the
“Transaction Documents”), (ii) a copy of the Certificate of Incorporation and
By-Laws of the Company, as in effect on and as of the Closing Date, and (iii) a
copy of the resolutions of the Board of Directors of the Company authorizing and
approving the Company’s execution, delivery and performance of the Transaction
Documents, all matters in connection with the Transaction Documents, and the
transactions contemplated thereby;
(ix) A certificate, executed by the President
of the Company as of the Closing Date, certifying to the fulfillment of all of
the conditions to the Buyer’s obligations under this Agreement and
certifying that each of the representations and warranties of the Seller as set
forth in Section 2 of this Agreement are true and correct in all material
respects as of the Closing Date as though made on and as of the Closing
Date;
(x) A
duly executed copy of this Agreement;
(xi) The
Share Certificates;
(xii) Good
standing and existence certificates for the Company from the State of
Delaware;
(xiii) An instruction letter issued by the
Company to the Company’s transfer agent authorizing and
instructing the transfer of the Shares from the Seller to the Buyer pursuant
to this Agreement and the
signed instruments of transfer for the Share Certificates;
and
(xiv) Any other document reasonably requested
by the Buyer that the Buyer deems necessary for the consummation of this
transaction.
(b) The
Buyer is satisfied with its due diligence investigation of the Company, in its
sole discretion;
(c) The
Buyer’s designees for the officer and director positions of the Company shall
have been duly appointed; and
(d) The
representations and warranties set forth in Article 2 of this Agreement shall be
true and correct in all material respects.
5.2 Items to be delivered at
Closing by Buyer. The Seller’s obligations to sell the Shares
hereunder are conditioned on the following closing conditions and deliveries by
the Buyer:
(a) All applicable exhibits and schedules
hereto;
(b) A duly executed copy of this
Agreement;
(c) An authorized officer of the Buyer shall
deliver to the Seller at the Closing a certificate certifying that each of the
representations and warranties of the Buyer as set forth in Section 3
of this Agreement are true
and correct in all material respects as of the Closing Date as though made on
and as of the Closing Date;
10
(d) Any
other document reasonably requested by the Seller that he deems necessary for
the consummation of this transaction; and
(e) The
Purchase Price.
ARTICLE
VI
TERMINATION
6.1 Termination. This Agreement may be
terminated:
(a) at any time before, or at, Closing by
written notice of the Buyer;
(b) prior
to the Closing by any Party at any time if any provision (including, but not
limited to, the representations and warranties) of this Agreement that is
applicable to or required to be performed by the other Party shall be materially
untrue or shall become incapable of being accomplished or if any conditions set
forth in Article 5 hereof have not been fully satisfied as of the Closing
Date;
Upon termination of this Agreement for
any reason, in accordance with the terms and conditions set forth in this
paragraph, each Party shall bear its own costs and expenses.
ARTICLE
VII
INDEMNIFICATION
7.1 Indemnification.
(a) Obligation of Seller to
Indemnify. Seller agrees to indemnify, defend and hold
harmless Buyer (and its directors, officers, employees, affiliates,
stockholders, debenture holders, agents, attorneys, successors and assigns) from
and against all losses, liabilities, damages, deficiencies, costs or expenses
(including interest, penalties and reasonable attorneys’ and consultants’ fees
and disbursements) (collectively, “Losses”) based upon, arising out of or
otherwise in respect of any (i) inaccuracy in any representation or warranty of
the Seller contained in this Agreement or (ii) breach by the Seller of any
covenant or agreement contained in this Agreement.
(b) Obligation of Buyer to
Indemnify. Buyer agrees to indemnify, defend and hold harmless
Seller from and against all Losses based upon, arising out of or otherwise in
respect of any (i) inaccuracy in any representation or warranty of the Buyer
contained in this Agreement or (ii) breach by the Buyer of any covenant or
agreement contained in this Agreement.
(c) Notice and Opportunity to
Defend. Promptly after receipt by any person entitled to
indemnity under this Agreement (an “Indemnitee”) of notice of any demand, claim
or circumstances which, with the lapse of time, would or might give rise to a
claim or the commencement (or threatened commencement) of any action, proceeding
or investigation (an “Asserted Liability”) that may result in a Loss, the
Indemnitee shall give notice thereof (the “Claims Notice”) to any other party
(or parties) who is or may be obligated to provide indemnification pursuant to
Section 7.1(a) (the “Indemnifying Party”). The Claims Notice shall
describe the Asserted Liability in reasonable detail and shall indicate the
amount (estimated, if necessary and to the extent feasible) of the Loss that has
been or may be suffered by the Indemnitee.
11
(d) The
Indemnifying Party may elect to compromise or defend, at its own expense and by
its own counsel, any Asserted Liability. If the Indemnifying Party
elects to compromise or defend such Asserted Liability, it shall within 30 days
after the date the Claims Notice is given (or sooner, if the nature of the
Asserted Liability so requires) notify the Indemnitee of its intent to do so,
and the Indemnitee shall cooperate, at the expense of the Indemnifying Party, in
the compromise of, or defense against, such Asserted Liability. If
the Indemnifying Party elects not to compromise or defend the Asserted
Liability, fails to notify the Indemnitee of its election as herein provided or
contests its obligation to indemnify under this Agreement, the Indemnitee may
pay, compromise or defend such Asserted Liability and all reasonable expenses
incurred by the Indemnitee in defending or compromising such Asserted Liability,
all amounts required to be paid in connection with any such Asserted Liability
pursuant to the determination of any court, governmental or regulatory body or
arbitrator, and amounts required to be paid in connection with any compromise or
settlement consented to by the Indemnitee, shall be borne by the Indemnifying
Party. Except as otherwise provided in the immediately preceding
sentence, the Indemnitee may not settle or compromise any claim over the
objection of the Indemnifying Party. In any event, the Indemnitee and
the Indemnifying Party may participate, at their own expense, in (but the
Indemnitee may not control) the defense of such Asserted
Liability. If the Indemnifying Party chooses to defend any claim, the
Indemnitee shall make available to the Indemnifying Party any books, records or
other documents within its control that are necessary or appropriate for such
defense.
ARTICLE
VIII
MISCELLANEOUS
8.1 Survival of
Representations, Warranties and Agreements. All representations,
warranties and statements made by a Party in this Agreement or in any document
or certificate delivered
pursuant hereto shall survive the Closing Date. Each of the Parties
hereto is executing and carrying out the provisions of this Agreement in
reliance upon the representations, warranties and covenants and agreements
contained in this Agreement or at the Closing of the transactions
herein provided for and not upon any investigation which it might have made or
any representation, warranty, agreement, promise or information, written or
oral, made by the other Party or any other person other than as specifically set forth
herein.
8.2 Access to
Books and Records. During the course of this
transaction through Closing, the Seller agrees to make available for inspection
all Company corporate books, records and assets, and otherwise afford the Buyer
and its respective
representatives, reasonable access to all documentation and other information
concerning the business, financial and legal conditions of the Company for the
purpose of conducting a due diligence investigation thereof. Such due
diligence investigation shall be for the purpose of
satisfying each Party as to the business, financial and legal condition of the
Company for the purpose of determining the desirability of consummating the
proposed transaction. The Parties further agree to keep
confidential and not use for their own
benefit, except in accordance with this Agreement any information or
documentation obtained in connection with any such
investigation.
8.3 Further
Assurances. If,
at any time after the Closing, the Parties hereby mutually agree that any further deeds, assignments
or assurances in law or any other things are necessary, desirable or proper to
complete the transactions contemplated hereby in accordance with the terms of
this Agreement or to vest, perfect or confirm, of record or otherwise, the title to any property or
rights of the Parties hereto, the Parties agree that their proper officers and
directors shall execute and deliver all such proper deeds, assignments and
assurances in law and do all things necessary, desirable or proper to vest, perfect or confirm title
to such property or rights and otherwise to carry out the purpose of this
Agreement, and that the proper officers and directors the Parties are fully
authorized to take any and all such action.
12
8.4 Notice. All communications, notices, requests, consents or
demands given or required under this Agreement shall be in writing and shall be
deemed to have been duly given when delivered to, or received by prepaid
registered or certified mail or recognized overnight courier addressed to, or upon receipt of a facsimile
sent to, the Party for whom intended, as follows, or to such other address or
facsimile number as may be furnished by that Party by notice in the manner
provided herein:
If to the
Seller:
c/o Xxxxx
X. Xxxxxxx, Esq.
0000
Xxxxx Xxxxx Xxxx
Xxxxx
Xxxxxx, Xxx Xxxx 00000
Tel:(000)
000-0000
Fax:
(000) 000-0000
If to
Buyer:
Xxxxxx
Capital Master Fund, Ltd.
0000
Xxxxxx xx xxx Xxxxx
Xxxxx
0000
Xxx
Xxxxxxx, XX 00000
Attn: Xxx
Xxxx
Tel:
000-000-0000
Fax: 000-000-0000
With a copy to:
Mintz, Levin, Cohn, Ferris, Glovsky and
Popeo, P.C.
Chrysler Center
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx X. Xxxxxxxxxx,
Esq.
Fax: 000-000-0000
8.5 Entire
Agreement. This
Agreement, the Exhibits and Schedules hereto and any instruments and agreements to be executed pursuant to
this Agreement, set forth the entire understanding of the Parties hereto with
respect to its subject matter, merges and supersedes all prior and
contemporaneous understandings with respect to its subject matter and
may not be waived or modified, in whole or
in part, except by a writing signed by each of the Parties hereto. No
waiver of any provision of this Agreement in any instance shall be deemed to be
a waiver of the same or any other provision in any other instance. Failure of any Party to
enforce any provision of this Agreement shall not be construed as a waiver of
its rights under such provision.
8.6 Successors
and Assigns. This Agreement shall be
binding upon, enforceable against and inure to the benefit of, the Parties hereto and their respective
heirs, administrators, executors, personal representatives, successors and
assigns, and nothing herein is intended to confer any right, remedy or benefit
upon any other person. This Agreement may not be assigned by the
Seller except with the prior written
consent of the Buyer. This Agreement and all of the obligations of
the Seller may be assigned by the Buyer without the prior notice to the Seller
or written consent of the Seller and upon assignment, all of the rights
and obligations of Buyer shall be the
rights and obligations of the Buyer’s designated
assignee.
13
8.7 Governing
Law. This
Agreement shall in all respects be governed by and construed in accordance with
the laws of the State of California, U.S.A. that are applicable to agreements made and fully to be
performed in such state, without giving effect to conflicts of law
principles.
8.8 Construction. Headings contained in this
Agreement are for convenience only and shall not be used in the interpretation
of this Agreement. References herein to
Articles, Sections and Exhibits are to the articles, sections and exhibits,
respectively, of this Agreement. The Schedules hereto are hereby
incorporated herein by reference and made a part of this
Agreement. As used herein, the singular includes the plural, and the
masculine, feminine and neuter gender each includes the others where the context
so indicates.
8.9 Severability. If any provision of this
Agreement is held to be invalid or unenforceable by a court of competent
jurisdiction, this
Agreement shall be interpreted and enforceable as if such provision were severed
or limited, but only to the extent necessary to render such provision and this
Agreement enforceable.
8.10 Arbitration. Any controversy arising out
of, connected to, or relating to any matters herein of the
transactions with the Parties hereto on behalf of the undersigned, or this
Agreement, or the breach thereof, including, but not limited to any claims of
violations of federal and/or state securities laws, banking statutes, consumer protection statutes,
federal and/or state anti-racketeering (e.g. RICO) claims as well as any common
law claims and any state law claims of fraud, negligence, negligent
misrepresentations, and/or conversion, or the laws of any territory,
country or jurisdiction, shall be settled by
arbitration; and in accordance with this paragraph any judgment on the
arbitrator’s award may be entered in any court
having jurisdiction thereof. In the event of such a dispute, each
Party agrees to arbitration conducted through the auspices of American
Arbitration Association. Venue for any action shall lie in the State
of California, U.S.A.
8.11 Confidentiality; Public
Disclosure. Except as otherwise required by law, stock
exchange, listing agency or similar body, each of the Parties hereto hereby
agrees that the information obtained pursuant to the negotiation and execution
of this Agreement shall be treated as confidential and not be disclosed to third
parties who are not agents of one of the Parties to this Agreement.
8.12 Notification of Certain
Matters. Each Party shall give prompt notice to the other of
(i) the occurrence or non-occurrence of any event, the occurrence or
non-occurrence of which is likely to cause any representation or warranty of
such party contained in this Agreement to be untrue or inaccurate and (ii) any
failure of such Party to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it hereunder; provided, however, that the
delivery of any notice pursuant to this Section shall not limit or
otherwise affect any remedies available to the Party receiving such
notice. Further, disclosure pursuant to this Section shall not
be deemed to amend or supplement the Schedules hereto or prevent or cure
any misrepresentations, breach of warranty or breach of covenant.
8.13 Currency. The
parties hereto agree that all monetary amounts set forth herein are referenced
in United States dollars, unless otherwise stated.
8.14 Rules of
Construction. The parties hereto agree that they have been
represented by counsel during the negotiation and execution of this Agreement
and, therefore, waive the application of any law, regulation, holding or rule of
construction providing that ambiguities in an agreement or other document will
be construed against the Party drafting such agreement or document.
14
8.15 Counterparts. This
Agreement may be executed in counterparts and by facsimile
signatures. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid and binding obligation of the
Party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile signature page were an original
thereof. All such counterparts shall together constitute one and the
same instrument.
[Remainder
of page left blank intentionally.]
15
IN WITNESS WHEREOF, each of the Parties
hereto has executed this Agreement as of the date first set forth
above.
| SELLER: | |||
|
|
|
/s/ Xxxxxxx Xxxxxxxx | |
| XXXXXXX XXXXXXXX | |||
| BUYER: | |||
| XXXXXX CAPITAL MASTER FUND, LTD. | |||
|
|
By:
|
/s/ Xxx X. Xxxx | |
| Xxx X. Xxxx | |||
| SELLER’S COUNSEL: | |||
|
|
By:
|
/s/ Xxxxx X. Xxxxxxx | |
| Xxxxx X. Xxxxxxx, Esq. | |||
Schedule
C
Schedule
of Liabilities
Xxxxxxx
Xxxxxxxx has authorized the payment of all liabilities of the Company from the
proceeds:
These
consist of the following:
|
Colonial
Stock Transfer, Inc.
|
$ | 2,691.08 | ||
|
Li
& Company, PC
|
$ | 16,250.00 | ||
|
Xxxxx
X. Xxxxxxx, Esq.
|
$ | 23,728.33 |
The
Company will be free and clear of all liabilities at closing.
Schedule
D
Officer and Director
Appointments
Officers and
Directors:
|
Name:
|
Position:
|
|
|
Xxx
Xxxx
|
Chairman
and Chief Executive Officer
|
|
|
Xxxxxx
Xxxxx
|
President
and director
|
|
|
Xxxxxxx
Xxxxx
|
Chief
Financial Officer, Secretary and
director
|
