AGREEMENT FOR THE PURCHASE OF COMMON STOCK
Exhibit
10.1
THIS
COMMON STOCK PURCHASE AGREEMENT, (this “Agreement”) made this 3rd day of
June, 2010, by and between Cardio Vascular Medical Device Corp., (“Company”) a Delaware
Corporation, (“Company”), and those entities
set forth on Schedule A annexed hereto, (collectively, the “Purchaser”) setting forth the
terms and conditions upon which the Company will sell an aggregate of
125,000,000 shares of CVSL common stock (the “Shares”) to the
Purchaser.
In consideration of the mutual
promises, covenants, and representations contained herein, the parties hereto
agree as follows:
WITNESSETH:
WHEREAS, the Company currently has issued and
outstanding a total of 71,900,000 shares of Common Stock;
WHEREAS, the Board of Directors of the Company has
approved the sale of the Shares and the terms of this
Agreement;
WHEREAS, Company desires to sell,
assign and transfer to Purchaser, and Purchaser desires to purchase and acquire
from Company the Shares, subject to the conditions and obligations hereinafter
stated;
WHEREAS,
the Company and Purchaser have appointed Berkman, Henoch, Xxxxxxxx, Xxxxx &
Xxxxxxx, P.C., and Xxxxxxx Xxxxx, Esq. to act as the Escrow Agents (“Escrow Agent”) for this
transaction.
NOW
THEREFORE, in consideration of the mutual promises, covenants and
representations contained herein, the parties herewith agree as
follows:
ARTICLE
I
SALE
OF SECURITIES
1.01 Subject
to the terms and conditions of this Agreement, the Company agrees to sell the
Shares for a total cash consideration of
Ninety Five Thousand Dollars (U.S.) ($95,000.00) (the “Purchase Price”).
1.02 It
is agreed that the Closing will take place on or before June 8, 2010 (“Closing”), unless an extension of time is agreed to in
writing by both parties.
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES
The Company hereby represents and
warrants to the Purchasers the following:
2.01 Organization;
The Company is a Delaware corporation duly organized, validly existing, and in
good standing under the laws of that state, and it
has all necessary corporate powers to own properties and carry on a
business. The Company is not in violation of any of the provisions of
its certificate or articles of incorporation, bylaws or other organizational or
charter documents. The Company is duly qualified to conduct its
business and is in good standing as a foreign corporation or other entity in
each jurisdiction in which the nature of the business conducted or property
owned by it makes such qualification necessary, except where the failure to be
so qualified or in good standing, as the case may be, could not, individually or
in the aggregate, have or reasonably be expected to result in a Material Adverse
Effect. For purposes of this Agreement, “Material Adverse Effect”
means a material adverse effect on the
financial condition, results of operations or business of the Company before the consummation of the
transactions contemplated in this
Agreement.
2.02 Capital. The
authorized capital stock of Company consists of 200,000,000 shares of Common
Stock, $0.0001 par value. There are
71,900,000 shares of Common Stock
issued and outstanding, and all such shares of
Common Stock were duly authorized and validly issued and are fully paid and non-assessable, and have not
been issued in violation of the preemptive rights of any other person to any
shares of common stock of the Company. There are no shares of Preferred Stock
issued and outstanding, and no shares of Preferred Stock of the Company were
ever issued and outstanding. At the Closing there will be no
outstanding subscriptions, options, rights, warrants, convertible securities, or
other agreements or commitments obligating the Company to issue or to transfer
from treasury any shares of its capital stock. None of the
outstanding shares of Company common stock are subject to any stock restriction
agreements. There are approximately 32 shareholders of record and over 40 shareholders in “street name” of the
Company. No person is entitled to preemptive or similar rights, and no person
has any right of first refusal, preemptive right, right of participation, or any
similar right to participate in the transactions contemplated by this Agreement.
The Company has no knowledge of any unresolved claim by any person to additional
shares of capital stock (or other securities) of the Company.
2.03 Financial
Statements. The Company is a reporting company under the SEC rules and regulations, which filings can be found on the SEC web site. The Company has filed all periodic reports required to be filed by it
under the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof,
since the effective date of its Form SB-2
registration statement of August 28, 2007 (the foregoing filed materials
and the Form 10-Q for the quarter ended
March 31, 2010, being collectively referred to herein as the “SEC Reports”) on a
timely basis or has timely filed a valid extension of such time of filing and
has filed any such SEC Reports prior to the expiration of any such
extension. The SEC Reports complied in all material respects with the
requirements of the Exchange Act and the rules and regulations of the Commission
promulgated thereunder, and none of the SEC Reports, when filed, 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. The financial statements of the Company included in the
SEC Reports (“Financial Statements”) comply in all material respects with
applicable accounting requirements and the rules and regulations of the
Commission with respect thereto as in effect at the time of
filing. Such financial statements have been prepared in accordance
with GAAP applied on a consistent basis during the periods involved, except as
may be otherwise specified in such financial statements or the notes thereto,
and fairly present in all material respects the financial position of the
Company as of and for the dates thereof and the results of operations and cash
flows for the periods then ended, subject, in the case of unaudited statements,
to normal, immaterial, year-end audit adjustments.
2.04 Filings
with Government Agencies. After the Closing, the Purchaser shall file
the appropriate filings, if so required, disclosing the acquisition of the
Shares by the Purchaser. The Company has made all required corporate filings with the state of Delaware
required to be filed before the date hereof and
will file all such required filings due before the
Closing. Upon the purchase of the Shares by the Purchaser, the
Purchaser will have the full responsibility for filing for itself and on behalf of the Company any and
all documents required by the SEC, OTCBB, FINRA,
State of Delaware and/or any other government agency that may be
required, including any change of control on
Schedule 14f. The Company is not required to obtain any consent, waiver,
authorization or order of, give any notice to, or make any filing or
registration with, any United States or other federal, state, local or other
governmental authority or other person in connection with the execution,
delivery and performance by the Company, other than the filing of a current report on Form 8-K
by the Company and the filing by the Company of a change of control on Schedule
14f, to report the transaction contemplated
by and/or effected by this Agreement.
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2.05 No
Liabilities. Except for the specified
liabilities on Schedule 2.05 (which may be amended at the Closing to reflect any
ordinary course liabilities arising after the date hereof, but shall not be
greater than Five Hundred ($500) Dollars), the Company shall not have any
liabilities or other monetary obligations
at Closing of any nature, whether accrued, absolute, contingent, or otherwise
that will not be paid or otherwise fully
discharged at Closing. Except as specified
on Schedule 2.05 (which may be amended at the Closing to reflect any ordinary
course liabilities arising after the date hereof), the Company has no liability or obligation whatsoever,
either direct or indirect, matured or un-matured, accrued, absolute, contingent
or otherwise, and the Company is not aware of any basis for any such liability
or obligation, including, without limitation, third party guaranties by the
Company or liabilities (collectively, “Undisclosed Liabilities”). The Company is not aware of any pending, or to the best knowledge of Company, threatened
or asserted claims, lawsuits or contingencies involving the Company or the Shares. The Company and its
officers and directors agrees to indemnify the Purchaser against any liabilities
pertaining to the conduct of business of the Company that arose at any time prior to
the Closing.
2.06 Tax
Returns. As of the Closing, there shall be no taxes of any kind due
or owing.
(a) The Company has duly filed all federal, state,
local and foreign tax returns required to be filed by or with respect to them
with the Internal Revenue Service or other applicable taxing authority, and no
extensions with respect to such tax returns have been requested or
granted;
(b) The
Company has paid, all material taxes due, or claimed by any taxing authority to
be due, from or with respect to them (if any);
(c) There
has been no issue raised in writing or
adjustment proposed in writing (and none is
pending) by the Internal Revenue Service or any other taxing authority in
connection with any of the Company’s tax returns;
(d) No
waiver or extension of any statute of limitations as to any material federal,
state, local or foreign tax matter has been given by or requested from the
Company.
2.07 Ability
to Carry Out Obligations. The Company has the right, power, and
authority to enter into, and perform its
obligations under this Agreement. The execution and delivery of this Agreement by
the Company and the performance by the Company of its obligations hereunder will
not cause, constitute, or conflict with or result in (a) any breach or violation
or any of the provisions of or constitute a default under any license,
indenture, mortgage, charter, instrument, articles of incorporation, bylaw, or
other agreement or instrument to which Company or
the Company is a party, or by which the
Company may be bound, nor will any consents or authorizations of any
party other than those otherwise set forth in this
Agreement be required, (b) an event that would cause Company (and/or
assigns) to be liable to any party, (c) the creation or imposition of any lien,
charge, or encumbrance on any asset of the Company or upon the Shares to be
acquired by the Purchaser, or (d) result in
a violation of any law, rule, regulation, order, judgment, injunction, decree or
other restriction of any United States or governmental authority to which the
Company is subject (including federal and state securities laws and
regulations), or by which any property or asset of the Company is bound or
affected
2.08 Contracts,
Leases and Assets. The Company
is not a party to any contract, agreement or lease. At Closing there
will be no operative powers of attorney or other authority granted by the
Company or, with respect to the Shares, by the Company.
2.09 Compliance
with Securities Laws. To the
best the knowledge of the Company, Company has complied with all federal and
state securities laws in connection with the offer, sale and distribution of its
securities. The Company is in
compliance with all effective requirements of the Xxxxxxxx-Xxxxx Act of 2002, as
amended, and the rules and regulations thereunder that are applicable to
it. The Shares being sold herein are being sold in a private
transaction between the Company and the Purchaser.
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2.10 Litigation. The
Company is not a party to any suit, action, arbitration, or legal,
administrative, or other proceeding, or any
pending governmental investigation. To the best knowledge of Company, there is
no basis for any such action or proceeding, and to
the best knowledge of Company, there no such action or proceeding is
threatened against the Company. The Company is not a party to or in default with
respect to any order, writ, injunction, or decree of any federal, state, local,
or foreign court, department, agency, or instrumentality. The Company is not,
nor is any director or officer of the Company, subject to any action involving a claim of violation of or
liability under federal or state securities laws or a claim of breach of
fiduciary duty. There has not been and
there are no pending investigations
by any regulatory body involving the Company or any of its respective current or
former directors or officers (in his or her capacity as such). The SEC has
not issued any stop order or other order suspending the effectiveness of
any registration statement filed by the Company under the Exchange Act or the
Securities Act.
2.11 Conduct
of Business. Prior to the Closing, the Company shall
conduct its business in the normal course, and shall not (without the prior
written approval of Purchaser) (i) sell, pledge, or assign any assets, (ii)
amend its Certificate of Incorporation or Bylaws, (iii) declare dividends,
redeem or sell stock or other securities, (iv) incur any liabilities, except in
the normal course of business, (v) acquire or dispose of any assets, enter into
any contract, guarantee obligations of any third party, or (vi) enter into any
other transaction.
2.12 Corporate
Documents. Copies of each of the
following documents will be delivered to the
Purchaser within 48 hours after the execution of this Agreement, and when
delivered, will be true, complete and correct in all material
respects:
(i)
Board consent approving all actions of the Company;
(ii) Certificate
of Good Standing from the Secretary of State of Delaware;
(iii) Full
response to due diligence questionnaire supplied by Purchaser.
2.13 Title. The Shares will be
free of liens, encumbrances, options, restrictions and legal or equitable rights
of others not a party to this Agreement, except for restrictions on transfer
imposed by federal and state securities laws (“Liens”). None of the Shares are or will be
subject to any voting trust or agreement. No person holds or has the
right to receive any proxy or similar instrument with respect to the Shares.
2.14 Assets. To the best knowledge of the Company, the Company is not a “shell company” as such term is defined by Rule 405 as promulgated
under the Securities Act and Rule 12b-2 as promulgated under the Exchange
Act.
2.15 Transfer
Agent. The Company’s current transfer agent of record is Island Stock
Transfer (“Transfer Agent”). Except for outstanding
liabilities set forth on Schedule 2.05, the Company is not involved in
any dispute with the Transfer Agent with respect to the Transfer Agent’s
services, including but not limited to amounts owed for services. The Company
has no knowledge of any disagreement between the Company and the Transfer Agent
with respect to the number of shares outstanding or record ownership of shares
of the Company’s capital stock.
2.16 Subsidiaries. The
Company does not have any direct or indirect subsidiaries.
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2.17 Press
Releases. The press releases disseminated by the Company since inception, either separately or taken as a
whole, do not contain any untrue statement of a material fact or omit 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 and
when made, not misleading. The Company and its securities has not
been the subject of any “spam” e-mail or fax campaign, conducted by its present
or former officers, directors, agents, representatives or any other person, to
promote an investment in the Company’s securities, and the Company has not
directly or indirectly sponsored, authorized or otherwise permitted any such
activity.
2.18 Material
Changes. Except as specifically disclosed in the SEC Reports, or on Schedule 2.05, since March 31, 2010 (i)
there has been no event, occurrence or development that has had or that could
reasonably be expected to result in a Material Adverse Effect, (ii) the Company
has not incurred any liabilities (contingent or otherwise) other than (A) trade
payables, accrued expenses and other liabilities incurred in the ordinary course
of business consistent with past practice and (B) liabilities not required to be
reflected in the Company’s financial statements pursuant to GAAP or required to
be disclosed in filings made with the Commission, (iii) the Company has not
altered its method of accounting or the identity of its past or present
auditors, (iv) the Company has not declared or made any dividend or distribution
of cash or other property to its shareholders or purchased, redeemed or made any
agreements to purchase or redeem any shares of its capital stock, and (v) the
Company has not issued any equity securities,
including to any officer, director or Affiliate. The Company
does not have pending before the SEC any request for confidential treatment of
information. The Company will provide full documentation and
disclosure of all changes to the Purchaser and their representatives prior to
the Closing. For purposes of this Agreement, “Affiliate” means any
person that, directly or indirectly through one or more intermediaries, controls
or is controlled by or is under common control with a person, as such terms are
used in and construed under Rule 144.
2.19 Labor
Relations. No material labor dispute has existed prior to the date of
this Agreement, with respect to any of the past employees of the
Company. The Company does not have any outstanding employment or
labor contracts, agreements, arrangements or other understandings with any
person.
2.20 Compliance with Agreements and Laws (other than
Securities Laws). The Company is not a party to any indenture,
debt, capital lease obligation, mortgage, loan or credit agreement by which it
or any of its properties is bound. To
the best knowledge of the Company, the Company is not (i) in default
under or in violation of (and no event has occurred that has not been waived
that, with notice or lapse of time or both, would result in a default), nor has
the Company received written notice of a
claim that it is in default under or that it is in violation of, any indenture,
loan or credit agreement or any other agreement or instrument to which it is a
party or by which it or any of its properties is bound (whether or not such
default or violation has been waived), (ii) in violation of any order of any
court, arbitrator or governmental body, or (iii) in violation (at any prior
time) of any statute, rule or regulation of any governmental authority,
including without limitation all foreign, federal, state and local laws relating
to taxes, environmental protection, occupational health and safety, product
quality and safety and employment and labor matters, except in each case as
could not, individually or in the aggregate, have or reasonably be expected to
result in a Material Adverse Effect.
2.21 Regulatory
Permits. The Company possesses all certificates, authorizations and
permits issued by the appropriate federal, state, local or foreign regulatory
authorities necessary to conduct its businesses as described in the SEC Reports,
except where the failure to possess such permits could not, individually or in
the aggregate, have or reasonably be expected to result in a Material Adverse
Effect, and the Company has not received any written notice of proceedings relating to the
revocation or modification of any such permits.
2.22 Title
to Assets. The Company does not own any interest in real property,
and the Company is not a party to any real property lease.
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2.23 Transactions
With Affiliates and Employees; Customers. Except as set forth in the
SEC Reports, none of the officers or directors of the Company, and to the best knowledge of the Company, none of the employees of the Company, is
presently a party to any transaction with the Company, including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
knowledge of the Company, any entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner. The Company does not owe any money or other compensation to
any of the respective officers or directors or shareholders of the
Company.
2.24 Internal
Accounting Controls. The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management’s general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in accordance
with management’s general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences. The Company has established disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for itself
and designed such disclosure controls and procedures to ensure that material
information relating to the Company is made known to the certifying officers by
others within those entities, particularly during the period in which the
Company’s Form 10-K or 10-Q, as the case may be, is being
prepared. The Company’s certifying officers have evaluated the
effectiveness of the Company’s controls and procedures in accordance with Item
307 of Regulation S-K under the Exchange Act for the Company’s most recently
ended fiscal quarter or fiscal year-end (such date, the “Evaluation
Date”). The Company presented in its most recently filed Form 10-K or
Form 10-Q the conclusions of the certifying officers about the effectiveness of
the disclosure controls and procedures based on their evaluations as of the
Evaluation Date. Since the Evaluation Date, there have been no
significant changes in the Company’s internal controls (as such term is defined
in Item 308(c) of Regulation S-K under the Exchange Act) or, to the Company’s
knowledge, in other factors that could significantly affect any of the Company’s
internal controls.
2.25 Certain
Registration Matters. The Company has not granted or agreed to grant
to any person any rights (including “piggy-back” registration rights) to have
any securities of the Company registered with the SEC or any other governmental
authority.
2.26 Listing
and Maintenance Requirements. The Company’s common stock is currently
traded on the OTC Bulletin Board under the
stock symbol “CVSL.OB.” Except as specified in the SEC Reports, the
Company has not received written notice
from any regulatory body to the effect that the Company is not in compliance
with the listing or maintenance requirements thereof. The sale of the Shares
does not contravene the rules and regulations of the OTC Bulletin Board, and no approval of the
shareholders of the Company thereunder is required for the Company to deliver
the Stock to the Purchaser under this Agreement. The Common Stock of the Company
is DTC eligible, and it is not DWAC eligible.
2.27 Investment
Company. The Company is not an “investment company” within the
meaning of the Investment Company Act of 1940, as amended.
2.29 Application
of Takeover Protections. The Company is not bound by any provision
which places any form of restriction on control share acquisition, business
combination, any “poison pill” provisions (including any distribution under a
rights agreement) or any other anti-takeover provision under the Company’s
Articles of Incorporation or Bylaws (or similar instruments) or the laws of its
state of incorporation that is or could become applicable to the Company, the
Purchaser or the Company as a result of the parties fulfilling their obligations
or exercising their rights under this Agreement.
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2.30 Money
Laundering Laws. The operations of the Company are and have been conducted at
all times in compliance with the money laundering statutes of applicable
jurisdictions, the rules and regulations thereunder and any related or similar
rules, regulations or guidelines, issued, administered or enforced by any
applicable governmental agency (collectively, the “Money Laundering Laws”) and
no action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company with respect to the
Money Laundering Laws is pending or, to the best knowledge of the Company,
threatened.
2.31 Other Agreements. Other than as set forth in
the SEC Reports, on a schedule hereto or otherwise set forth in this Agreement,
the Company is not a party to or bound by or affected by any contract,
lease, arrangement or commitment (whether oral or written) relating to: (a) the
employment of any person; (b) collective bargaining with, or any representation
of any employees by, any labor union or association; (c) the acquisition of
services, supplies, equipment or other personal property; (d) the purchase or
sale of real property; (e) distribution, agency or construction; (f) lease of
real or personal property as lessor or lessee or sublessor or sublessee; (g)
lending or advancing of funds; (h) borrowing of funds or receipt of credit; (i)
incurring any obligation or liability; or (j) the sale of personal
property.
2.33 No
SEC or FINRA Inquiries. Other than SEC review comments with respect
to filed reports and registration statements, under the Securities Act and
Exchange Act, there have been no formal or informal inquiry or investigation of
the Company or its officers or directors by the SEC or FINRA.
2.34 Disclosure. The
representations and warranties and statements of fact made by the Company in
this Agreement are, as applicable, accurate, correct and complete and do not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements and information contained herein
not false or misleading. All representations shall be true as of the
Closing and all such representations shall survive the Closing.
2.35 Patents
and Trademarks. The Company has, or has rights to use, all patents,
patent applications, trademarks, trademark applications, service marks, trade
names, trade secrets, inventions, copyrights, licenses and other intellectual
property rights and similar rights as described in the SEC Reports as necessary
or material for use in connection with their business and which the failure to
so have could have a Material Adverse Effect (collectively, the “Intellectual Property
Rights”). The Company has not received a notice (written or
otherwise) that any of the Intellectual Property Rights used by the Company
violates or infringes upon the rights of any Person. To the Knowledge
of the Company, all such Intellectual Property Rights are enforceable and there
is no existing infringement by another Person of any of the Intellectual
Property Rights. The Company has taken reasonable security measures
to protect the secrecy, confidentiality and value of all of their intellectual
properties, except where failure to do so could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect.
ARTICLE
III
CLOSING
3.01 Closing
for the Purchase of Common Stock. The Closing of this transaction for
the Shares being purchased will be
consummated when all of the documents and consideration described in
Paragraphs 2.12 above and in 3.02 below, have been delivered, or other
arrangements made and agreed to. If the Closing of this transaction has not taken place on or before the close of business on June 8, 2010, then
either party may terminate this Agreement by
written notice to the other.
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Prior to June 8, 2010, the Company shall have
made available to the Purchaser for inspection all corporate books, records and
assets, and shall have otherwise afforded 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. Such due diligence investigation shall be for the
purpose of satisfying the Purchaser as to the business, financial and legal
condition of the Company for purposes of determining and confirming the
desirability of consummating the proposed transaction.
Prior to
the Closing, this Agreement can be terminated in the event of any material
breach by either party.
3.02 Documents
and Payments to be Delivered at Closing of the Common Stock
Purchase. As part of the Closing of the Share purchase, those
documents listed in 2.12 of this Agreement, as well as the following documents,
in form reasonably acceptable to counsel to the parties, shall be delivered, if not previously delivered:
(a) By
the Company:
(i) original
stock certificates representing the Shares in the name of the Purchaser, as set forth in Schdule
A;
(ii) a
certified copy of a resolution of the directors of the Company dated as of the
date of Closing appointing a new President, Secretary and Treasurer of the
Company as designated by Purchaser, and the resignation of all officers of
Company.
(iii) a
certified copy of a resolution of the directors of the Company dated as of the
date of Closing appointing the designee(s) of the Purchaser to the board of
directors of the Company effective as of ten days after the delivery to the
shareholders of the Company of an Information Statement pursuant to Rule
14f, which will be the sole responsibility of the
Purchaser and shall not be filed with the SEC or distributed to the shareholders
before the Closing and the resignation of all its current
directors;
(iv) originals
of all of the business and corporate records of the Company, including but not
limited to correspondence files, bank statements, checkbooks, savings account
books, minutes of shareholder and directors meetings or consents, financial
statements, shareholder listings, stock transfer records, agreements and
contracts that exist;
(v) a
release agreement duly executed by each
current officer and director of the Company, which shall release all
claims of any nature, including any outstanding remuneration or fees of any
kind, in a form acceptable to the Purchaser and made effective upon
Closing;
(vi) the legal
opinion of Company counsel, opining as to the due
authorization and validity of the issuance
of the Shares and the due authorization of this Agreement by the Company,
subject to typical caveats found in counsel’s
opinions;
(vii) Certificate
of Good Standing from the State of Delaware, evidencing that the Company is in
good standing with the State of Delaware, as provided in Section
2.12;
(viii) Release and discharge agreement of the obligation, or
the payment out of the proceeds hereof, of those debts, set forth on Schedule
2.5 hereto along with discharge of debt to Xxxxxx Xxx;
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(ix) Such
other documents of Company as may be reasonably required by Purchaser, if
available.
ARTICLE
IV
INVESTMENT
INTENT
4.01 Transfer
Restrictions. Purchaser agrees that the securities being
acquired pursuant to this Agreement may be sold, pledged, assigned, hypothecated
or otherwise transferred, with or without consideration (“Transfer”) only
pursuant to an effective registration statement under the Securities Act of
1933, as amended (the “Act”), or pursuant to an exemption from registration
under the Act.
4.02
Investment Intent. The Purchaser
is acquiring the Shares for its own
account for investment, and not with a view toward distribution
thereof.
4.03
No Advertisement. The Purchaser acknowledges that the Shares
have been offered to it in direct
communication between Purchaser and
Company, and not through any advertisement of any kind.
4.04
Knowledge and Experience. (a) The Purchaser acknowledges that
it has sought and had its own legal and
financial counsel to assist it in
evaluating this purchase. The Purchaser acknowledges that it has sufficient business and financial
experience, so that it can make a reasoned
decision as to this purchase of the Shares and is capable of evaluating the
merits and risks of this purchase.
4.05
Restrictions on Transferability.
(a) The Purchaser is aware of the restrictions of transferability of the
Shares and further understands the certificates shall bear the following
legend.
THIS
SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), IN RELIANCE UPON THE
EXEMPTION FROM REGISTRATION PROVIDED IN SECTIONS 4(1) AND 4(2) AND REGULATION D
UNDER THE ACT. AS SUCH, THE PURCHASE OF THIS SECURITY WAS MADE WITH THE INTENT
OF INVESTMENT AND NOT WITH A VIEW FOR DISTRIBUTION. THEREFORE, ANY SUBSEQUENT
TRANSFER OF THIS SECURITY OR ANY INTEREST THEREIN WILL BE UNLAWFUL UNLESS IT IS
REGISTERED UNDER THE ACT OR UNLESS AN EXEMPTION FROM REGISTRATION IS
AVAILABLE.
(b) The
Purchaser understands that the Shares may only be disposed of pursuant to either
(i) an effective registration statement under the Act, or (ii) an exemption from
the registration requirements of the Act.
(c) The
Company has neither filed such a registration statement with the SEC or any
state authorities nor agreed to do so, nor contemplates doing so in the future
for the shares being purchased, and in the absence of such a registration
statement or exemption, the Purchasers may have to hold the Shares indefinitely
and may be unable to liquidate them in case of an emergency.
9
ARTICLE
V
REMEDIES
5.01 Governing
Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York applicable to agreements made and to be performed
entirely within such State. The parties agree to be subject to the
exclusive jurisdiction and venue of the state and federal courts located in
Nassau County, New York.
5.02 Termination. In
addition to any other remedies, the Purchaser may terminate this Agreement, if
at the Closing, the Company have failed to comply with all material terms of
this Agreement or has failed to supply any
documents required by this Agreement unless they do not exist, or has failed to
disclose any material facts which could have a substantial effect on any part of
this transaction.
5.03 Survival of Representations. The
representations, warranties and covenants
shall survive the Closing for a period of
18 months.
5.04 Indemnification. From
and after the Closing, the Parties, jointly and severally, agree to indemnify
the other against all actual losses, damages and expenses caused by (i) any
material breach of this Agreement by them or any material misrepresentation
contained herein, or (ii) any misstatement of a material fact or omission to
state a material fact required to be stated herein or necessary to make the
statements herein not misleading. Any
claim for indemnification shall be made before the first of the 18th month after the Closing, and only if the claims
aggregate $5,000 or more, in which event the full amount of any loss, damage and
expense may be recovered. Recovery for any legal fees and expenses
shall be limited only to reasonable fees and expenses.
5.05 Indemnification
Non-Exclusive. The foregoing indemnification provision is in addition
to, and not derogation of any statutory, equitable or common law remedy any
party may have for breach of representation, warranty, covenant or
agreement.
ARTICLE
VI
COVENANTS
6.01
Corporate Examinations and
Investigations. Until the Closing, the Purchaser shall be entitled,
through its employees and representatives, to make such investigations and
examinations of the books, records and financial condition of the Company and
the Company as each party may request. In order that the Purchaser
may have the full opportunity to do so, the Company and the Company shall
furnish the Purchaser and its representatives with all such information
concerning the affairs of the Company or the Company as the Purchaser or its
representatives may reasonably request. The Company and its officers,
employees, consultants, agents, accountants and attorneys shall cooperate fully with the Purchaser’s
representatives in connection with such review and examination and to make full
disclosure of all information and documents requested by each party and/or its
representatives.
6.02 Cooperation;
Consents. Prior to the Closing, except
as stated in this Agreement, each party shall cooperate with the other
parties to the end that the parties shall (i) in a timely manner make all
necessary filings with, and conduct negotiations with, all authorities and other
persons the consent or approval of which, or the license or permit from which is
required for the consummation of the transactions contemplated by this Agreement
and (ii) provide to each other party such information as the other party may
reasonably request in order to enable it to prepare such filings and to conduct
such negotiations.
10
6.03 Litigation;
SEC Correspondence. From the date hereof through the Closing,
the Company and the Company shall promptly notify the Purchaser of any lawsuits,
claims, proceedings or investigations which after the date hereof are threatened
or commenced against such party or any of its affiliates or any officer,
director, employee, consultant, agent or shareholder thereof, in their
capacities as such. The Company agrees to promptly and immediately
notify the Purchaser and their representatives upon receipt of any inquiry,
notice or other communication from the Securities and Exchange Commission
concerning the Company.
6.04 Post-Closing
Assistance. Upon the reasonable request of the Purchaser, after the
Closing, the Company shall use its commercially
reasonable efforts to provide such information available to it, including
information, filings, reports, financial statements or other circumstances of
the Company occurring, reported or filed prior to the Closing, as may be
necessary or required by the Company for the preparation of the post-Closing
Date reports that the Company is required to file with the SEC to remain in
compliance and current with its reporting requirements under the Securities and
Exchange Act, or filings required to address and resolve matters as may relate
to the period prior to the Closing and any SEC comments relating thereto or any
SEC inquiry thereof. Such efforts of the Company
shall be at the expense of the Purchaser.
ARTICLE
VII
MISCELLANEOUS
7.01 Captions
and Headings. The article and paragraph headings throughout this
Agreement are for convenience and reference only, and shall in no way be deemed
to define, limit, or add to the meaning of any provision of this
Agreement.
7.02 No
Oral Change. This Agreement and any provision hereof, may not be
waived, changed, modified, or discharged, orally, but only by an agreement in
writing signed by the party against whom enforcement of any waiver, change,
modification, or discharge is sought.
7.03 Non
Waiver. Except as otherwise expressly provided herein, no waiver of
any covenant, condition, or provision of this Agreement shall be deemed to have
been made unless expressly in writing and signed by the party against whom such
waiver is charged; and (i) the failure of any party to insist in any one or more
cases upon the performance of any of the provisions, covenants, or conditions of
this Agreement or to exercise any option herein contained shall not be construed
as a waiver or relinquishment for the future of any such provisions, covenants,
or conditions, (ii) the acceptance of performance of anything required by this
Agreement to be performed with knowledge of the breach or failure of a covenant,
condition, or provision hereof shall not be deemed a waiver of such breach or
failure, and (iii) no waiver by any party of one breach by another party shall
be construed as a waiver with respect to any other or subsequent
breach.
7.04
Time of Essence. Time is of the
essence of this Agreement and of each and every provision hereof.
7.05 Entire
Agreement. This Agreement, including any and all attachments hereto,
if any, contain the entire Agreement and understanding between the parties
hereto, and supersede all prior agreements and understandings.
7.06 Severability. In
the event that any condition, covenant or other provision of this Agreement is
held to be invalid or void by any court of competent jurisdiction, it shall be
deemed severable from the remainder of this Agreement and shall in no way affect
any other condition, covenant or other provision of this Agreement. If such
condition, covenant or other provision is held to be invalid due to its scope or
breadth, it is agreed that it shall be deemed to remain valid to the extent
permitted by law.
11
7.07 Counterparts. This
Agreement may be executed simultaneously in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument. Facsimile signatures will be acceptable
to all parties.
7.08 Notices. All
notices, requests, demands, and other communications under this Agreement shall
be in writing and shall be deemed to have been duly given on the date of service
if served personally on the party to whom notice is to be given, or on the third
day after mailing if mailed to the party to whom notice is to be given, by first
class mail, registered or certified, postage prepaid, or on the second day if
faxed, and properly addressed or faxed as follows:
If to the
Company:
C/o
Xxxxxxx X. Xxxxx, Esq.
8 Xxxx
Xxxxx
Xxxx
Xxxxx, XX 00000
If to the
Purchaser, to their respective addresses set forth on Schedule A.
7.09 Assignment. This Agreement will not be
assigned by either party hereto without the written consent of the other
party. It is agreed by Purchaser will not attempt to circumvent this
prohibition on assignment by any other agreement or action, including creating
direct or indirect rights in or to this Agreement or the Shares in any other
person or entity, prior to the Closing.
7.10 Binding
Effect. This Agreement shall inure to and be binding upon the heirs,
executors, personal representatives, successors and permitted assigns of each of the parties to this
Agreement.
7.11 Mutual
Cooperation. The parties hereto shall cooperate with each
other to achieve the purpose of this Agreement, and shall execute such other and
further documents and take such other and further actions as may be necessary or
convenient to effect the transaction described herein.
7.12 Prior
Agreement. The Company had entered into a letter of intent with
another party on or about May 21, 2010, relating to the issuance of certain
shares of the Company’s Common Stock. The Company represents that the
other party to that letter of intent, Xxxxxxx Solutions Group, Inc., has not
satisfied the terms set forth therein, and has notified such party that it
terminates such transaction. The Company and its directors and
officers hereby agree to indemnify the Purchaser against any and all claims
relating to such letter of intent and transactions contemplated
thereby.
12
In
witness whereof, this Agreement has been duly executed by the parties hereto as
of the date first above written.
|
By:
|
|||
|
|
|||
|
Officer,
Director Individually
|
|||
|
|
|||
|
Officer,
Director, Individually
|
|||
|
Purchaser
|
Purchaser
|
||
|
Olympus
Capital Group, LLC
|
Rada
Advisors, Inc.
|
||
|
|
|
||
13
Schedule
A
|
Name and Address
|
Dollar Amount
|
Number of Shares
|
||||||
|
Olympus
Capital Group, LLC
|
$ | 71,250 | 93,750,000 | |||||
|
Rada
Advisors, Inc.
|
$ | 23,750 | 31,250,000 | |||||
14
Schedule
2.05
Liabilities
|
Creditor
|
Amount
|
|||
|
Xxxxx
Accounting Group, P.C.
|
$ | 1,500 | (1) | |
|
Vintage
Filings LLC
|
$ | 10,150.50 | (1) | |
|
Island
Stock Transfer
|
$ | 200 | (1) | |
|
Related
Parties:
|
||||
|
Xxxxx
Xxxxx
|
$ | 32,228 | (1) | |
|
Xxxx
Xxxxxxxx
|
$ | 4,000 | (1) | |
|
Xxxxx
Xxxxxxx
|
$ | 47,826 | (2) | |
|
|
1
|
To
be paid out of proceeds
|
|
|
2
|
Partially
paid from proceeds and balance will be forgiven and covered by
release.
|
15
