Contract
STOCK PURCHASE AGREEMENT, dated as of June 2, 2011 by and between Xxxx Xxxxxxx and Xxx Xxxxxxx, jointly and severally (hereinafter collectively referred to as the “Buyer”), Benefit Solutions Outsourcing Corp., a Florida corporation (the “Company”), and Xxxxx Xxxxx (the “Seller”).
WHEREAS, as of the record date of May 31, 2011 the Company effectuated on 1 for 17 forward stock split;
WHEREAS, the Buyer has returned 115,000,000 shares of common stock to the treasury;
WHEREAS, Buyer desires to purchase (the “Purchase”) in the aggregate 38,000,000 shares (the “Shares”) of common stock, par value $.0001 per share of the Company (the “Common Stock”), from the Seller, for an aggregate purchase price of $352,941and the Seller desires to sell the Shares to the Buyer;
WHEREAS, the Company is a corporation subject to the reporting requirements of Section 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the shares of Common Stock are eligible for quotation on the OTC Bulletin Board (the “OTCBB”) under the symbol “BFSO”;
WHEREAS, immediately following the closing of the Purchase, the outstanding securities of the Company shall be 58,400,0000 shares of Common Stock consisting of (a) 38,000,000 shares of Common Stock owned by Buyer, and (b) 20,400,000 shares of Common Stock owned by the Company's other stockholders.
NOW, THEREFORE, in consideration of the promises and the mutual covenants, representations and warranties contained herein, the parties hereto do hereby agree as follows:
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2.3 Deliveries by the Company. At the Closing, the Company shall deliver to the Buyer the following:
(a) A certificate issued by the Florida Secretary of State as to the good standing of the Company as of the date of the Closing;
(b) Board Resolutions authorizing all transactions contemplated by this Agreement, including, without limitation with respect to the appointment of the officers and directors provided for in Section 7.7 below;
(c) The Company’s original minute books containing the resolutions and actions by written consent of the directors and stockholders of the Company and the Company’s other original books and records;
(d) The Company’s financial and accounting records (including the Company’s general ledger), all banking records and federal and state tax and other regulatory filings and filing codes (including SEC XXXXX filing codes) in whatever media they exist, including paper and electronic media;
(e) The legal opinion in the form attached as an exhibit hereto;
(f) Duly executed resignation from the Company’s sole officer and director; and
(g) All other documents, instruments and writings required by this Agreement to be delivered by the Company at the Closing, all of the Company’s original books of account and record, and any other documents or records relating to the Company’s business reasonably requested by Buyer in connection with this Agreement.
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The Seller represents, warrants and covenants to and with Buyer, both as of the date of this Agreement and as of the date of Closing, as an inducement to Buyer to enter into this Agreement and to consummate the transaction contemplated hereby as follows:
Neither Seller nor any of his 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.
(a) violate or conflict with any provision of the Articles of Incorporation or By-Laws of the Company;
(b) violate or, alone or with notice of the passage of time, result in the material breach or termination of, or otherwise give any contracting party the right to terminate, or declare a material default under, the terms of any agreement or other document or undertaking, oral or written to which the Seller and/or the Company is a party or by which any of them or any of their respective properties or assets may be bound;
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(c) result in the creation of any lien, security interest, charge or encumbrance upon any of the properties or assets of the Seller and/or the Company pursuant to the terms of any such agreement or instrument;
(d) violate any statute, ordinance, regulation judgment, order, injunction, decree or award of any court or governmental or quasi governmental agency against, or binding upon the Seller and/or the Company or upon any of their respective properties or assets; or
(e) violate any law or regulation of any jurisdiction relating to the Seller and/or the Company or any of their respective assets or properties.
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Upon the Closing, the Buyer will own 65.07% of the issued and outstanding share capital of the Company (each of Xxxx Xxxxxxx and Xxx Xxxxxxx will own 56.34% and 8.73%, respectively) on a fully-diluted basis, free and clear of any liens, encumbrances, objections, title defects, security interest, pledges, mortgages, charges, claims, options, preferential arrangements or restrictions of any kind, including but not limited to any restriction on the use, voting, transfer or other exercise of any attributes of ownership, other than those created by applicable federal and state securities laws.
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(a) The Company has filed all federal, state and local tax returns which are required to be filed by it, through and including the date hereof and as of the Closing date, including, but not limited to, its federal income tax returns and all taxes shown to be due thereon (together with any applicable penalties and interest) have been paid. The Company has not incurred any liability for taxes except in the ordinary course of business. The Company has paid or provided adequate reserves for all taxes which have become due for all periods prior to the date of this Agreement or pursuant to any assessments received by it or which the Company is obligated to withhold from amounts owing to any employee, creditor or other third party as at or with respect to any period prior to the date of this Agreement. The federal income tax returns of the Company have never been audited by the Internal Revenue Service. The Company has not waived any statute of limitations in respect of taxes, nor agreed to any extension of time with respect to a tax assessment or deficiency.
(b) On the date hereof and as of the Closing date, there are no liabilities, debts or obligations of the Company, whether accrued, absolute, contingent or otherwise (the “Liabilities”) that are not reflected in the Financial Statements. As of the Closing, the Company will have no Liabilities.
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(a) The Company (i) makes and keeps accurate books and records and (ii) maintain and has maintained effective internal control over financial reporting as defined in Rule 13a-15 under the Securities Exchange Act of 1934, as mended (the “Exchange Act”) and a system of internal accounting controls sufficient to provide reasonable assurance that (A) transactions are executed in accordance with management’s general or specific authorization, (B) transactions are recorded as necessary to permit preparation of the Company’s financial statements in conformity with accounting principles generally accepted in the United States and to maintain accountability for its assets, (C) access to the Company’s assets is permitted only in accordance with management’s general or specific authorization and (D) the recorded accountability for the Company’s assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
(b) The Company has established and maintains disclosure controls and procedures (as such term is defined in Rule 13a-15 under the Exchange Act), (ii) such disclosure controls and procedures are designed to ensure that the information required to be disclosed by the Company in the reports it will file or submit under the Exchange Act is accumulated and communicated to management of the Company, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure to be made and (iii) such disclosure controls and procedures are effective in all material respects to perform the functions for which they were established.
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(c) Since inception, (i) the Company has not been advised of (A) any significant deficiencies in the design or operation of internal controls that could adversely affect the ability of the Company and each of its subsidiaries to record, process, summarize and report financial data, or any material weaknesses in internal controls and (B) any fraud, whether or not material, that involves management or other employees who have a significant role in the internal controls of the Company and each of its subsidiaries, and (ii) since that date, there have been no significant changes in internal controls or in other factors that could significantly affect internal controls, including any corrective actions with regard to significant deficiencies and material weaknesses.
(d) There is and has been no failure on the part of the Company and any of the Company’s directors or officers, in their capacities as such, to comply with the provisions of the Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations promulgated in connection therewith.
Buyer jointly and severally represents and warrants to the Company and the Seller, both as of the date of this Agreement and as of the date of the Closing, as follows:
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“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THOSE SHARES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR AN OPINION SATISFACTORY TO THE COMPANY'S COUNSEL THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT.”
The Seller and the Company and the Buyer (as to covenants they expressly are providing below in this Section 5 hereby covenant and agree that, from the date hereof and until the Closing:
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The obligations of the Buyer to effectuate the Closing is subject to the fulfillment, prior to the date of Closing, of each of the following conditions (any one or more of which may be waived by the Buyer unless such condition is a requirement of law).
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The obligations of the Company and the Seller to effectuate the Closing is subject to the fulfillment, prior to the date of Closing, of each of the following conditions (any one or more of which may be waived by the Buyer unless such condition is a requirement of law).
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(a) The Company and the Seller, jointly and severally, shall indemnify and hold the Buyer harmless from and against any loss, damage or expense (including reasonable attorneys' fees) caused by or arising out of any claim made against the Company:
(i) for any broker's or finder's fee or any similar fee, charge or commission incurred by the Company and/or the Seller prior to or in connection with this Agreement or the transaction contemplated hereby;
(ii) for any foreign, Federal, state or local tax of any kind arising out of or by reason of the existence or operations of the Company and/or the Seller prior to the Closing, including, without limitation, any payroll taxes owed by the Company on account of compensation paid to any employee of the Company prior to such date;
(iii) in respect of any salary, bonus, wages or other compensation of any kind owed by the Company to its employees for services rendered on or prior to the Closing;
(iv) for any damages to the environment caused by or arising out of any pollution resulting from or otherwise attributable to the operation of the business of the Company prior to the Closing;
(v) in respect of any payable of the Company incurred prior to the Closing;
(vi) in respect of any liability or indebtedness for borrowed money or otherwise incurred on or before the Closing, including, without limitation, with respect to the execution and performance of this Agreement; and
(vii) for expenses required to be borne by the Company and/or the Seller under the provisions of this Agreement.
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The Buyer shall indemnify and hold harmless the Seller from and against all loss, damage or expense (including reasonable attorneys' fees) caused by or arising out of (i) any breach or default in the performance by the Buyer of any covenant or agreement of the Buyer contained in this Agreement, (ii) any breach of warranty or inaccurate or erroneous representation made by the Buyer herein or in any certificate or other instrument delivered by or on behalf of the Buyer pursuant hereto and (iii) any and all actions, suits, proceedings, claims, demands, judgments, costs and expenses (including reasonable legal and accounting fees) incident to the foregoing.
Promptly after the receipt by Buyer or the Company and/or the Seller of notice of any action, proceeding, claim or potential claim (any of which is hereinafter individually referred to as a “Circumstance”) which could give rise to a right to indemnification under this Agreement, such party (the “Indemnified Party”) shall give prompt written notice to the party or parties who may become obligated to provide indemnification hereunder (the “Indemnifying Party”). Such notice shall specify in reasonable detail the basis and amount, if ascertainable, of any claim that would be based upon the Circumstance. The failure to give such notice promptly shall relieve the Indemnifying Party of its indemnification obligations under this Agreement, unless the Indemnified Party establishes that the Indemnifying Party either had knowledge of the Circumstance or was not prejudiced by the failure to give notice of the Circumstance. The Indemnifying Party shall have the right, at its option, to compromise or defend the claim, at its own expense and by its own counsel, and otherwise control any such matter involving the asserted liability of the Indemnified Party, provided that any such compromise or control shall be subject to obtaining the prior written consent of the Indemnified Party which shall not be unreasonably withheld. An Indemnifying Party shall not be liable for any costs of settlement incurred without the written consent of the Indemnifying Party. If any Indemnifying Party undertakes to compromise or defend any asserted liability, it shall promptly notify the Indemnified Party of its intention to do so, and the Indemnified Party agrees to cooperate fully with the Indemnifying Party and its counsel in the compromise of or defense against any such asserted liability. All costs and expenses incurred in connection with such cooperation shall be borne by the Indemnifying Party, provided such costs and expenses have been previously approved by the Indemnifying Party. In any event, the Indemnified Party shall have the right at its own expense to participate in the defense of an asserted liability.
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12.7 Governing Law. This Agreement shall be governed by and construed exclusively in accordance with the internal laws of the State of New York without regard to the conflicts of laws principles thereof. The parties hereto hereby expressly and irrevocably agree that any suit or proceeding arising directly and/or indirectly pursuant to, arising out of or under this Agreement, shall be brought solely and exclusively in a federal or state court located in the City of New York. By its execution hereof, the parties hereby expressly covenant and irrevocably submit to the in personam jurisdiction of the federal and state courts located in the City of New York and agree that any process in any such action may be served upon any of them personally, or by certified mail or registered mail upon them or their agent, return receipt requested, with the same full force and effect as if personally served upon them in the City of New York. The parties hereto expressly and irrevocably waive any claim that any such jurisdiction is not a convenient forum for any such suit or proceeding and any defense or lack of in personam jurisdiction with respect thereto. In the event of any such action or proceeding, the party prevailing therein shall be entitled to payment from the other party hereto of its reasonable counsel fees and disbursements in an amount judicially determined.
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Signature pages to follow; remainder of page intentionally omitted
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BENEFIT SOLUTIONS OUTSOURCING CORP.
By: /s/ Xxxxx Xxxxx
Name: Xxxxx Xxxxx
Title: Sole Officer and Director
SELLER:
/s/ Xxxxx Xxxxx
Xxxxx Xxxxx
BUYER:
/s/ Xxxx Xxxxxxx
Xxxx Xxxxxxx
/s/ Xxx Xxxxxxx
Xxx Xxxxxxx