STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this
“Agreement”) is entered into as of March 23 2009
(the “Effective
Date”), by and between YA
Global Investments, L.P. (the “Seller”), and Encompass Group Affiliates, Inc., a
Florida corporation (the “Purchaser”).
W I T N E S S E T H:
WHEREAS, pursuant to the terms of this
Agreement, Seller wishes to sell, assign and transfer to Purchaser, and
Purchaser wishes to purchase and accept the assignment and transfer of shares of
common stock, no par value (the “Common
Stock”), of the
Purchaser.
NOW,
THEREFORE, in consideration
of the agreements, covenants, representations and warranties contained in this
Agreement, Seller and Purchaser agree as follows:
1. Transfer of
the Shares. Subject to the terms and
conditions of this Agreement, upon the payment of the Purchase Price (as defined
below) by the Purchaser to the Seller in accordance with Section 2 below, the
Seller hereby sells, assigns and transfers to the Purchaser, and the Purchaser
hereby purchases and accepts assignment and delivery from the Seller such number
of shares of Common Stock as set forth next to the Purchaser’s name on the
signature page attached hereto (the “Transferred
Shares”).
2. Purchase
Price. In full
consideration for the purchase and sale of the Transferred Shares, Purchaser
shall pay to Seller on the date hereof a purchase price equal to $0.0001 per
share (the “Per Share
Price”) for a total
purchase price equal to the Per Share Price multiplied by the number of
Transferred Shares as set forth next to the Purchaser’s name on the signature
page attached hereto (the “Purchase
Price”) by wire transfer of
immediately available funds to the Seller’s account set forth on Schedule I
attached hereto.
3. Representations
and Warranties.
(a) The Seller hereby represents and
warrants to the Purchaser that (i) the Seller is an exempt limited partnership
duly organized, validly existing and in good standing under the laws of the
Cayman Islands, (ii) the execution and delivery by the Seller of this Agreement,
and the performance of its covenants and obligations herein, are within Seller’s
partnership powers, have been duly authorized by all necessary partnership
action of the Seller, and do not contravene the Seller’s partnership agreement
or other governing documents, (iii) this Agreement constitutes the legal, valid
and binding obligation of the Seller enforceable against the Seller in
accordance with its terms, (iv) no consent, approval or authorization from any
third party or, to the knowledge of the Seller, any governmental authority, is
required for the execution and delivery of this Agreement by the Seller or the
sale of the Transferred Shares to the Purchaser hereunder, (v) as of immediately
prior to the consummation of the purchase and sale of the Transferred Shares
pursuant to Section 1 above, the Seller is the sole record and beneficial owner
of the Transferred Shares free and clear of any and all liens,
claims,
taxes, security interests, options, warrants, purchase rights, contracts,
commitments, equities, agreements
and demands other than as
created or imposed by applicable securities laws, (vi) the Transferred Shares
have not been offered by the Seller or any agent of the Seller by means of any
form of general solicitation or general advertising (as defined in Rule 501 of
Regulation D of the Securities Act of 1933, as amended (the “Securities
Act”)), (vii) the Seller is
not and
for the past 90 days has not been, an “affiliate” of the Purchaser, as that term
is defined in Rule 144 under the Securities Act, and (viii) Seller has not taken any action
which might create a liability or obligation to pay any finders, agent or
brokers’ fees or commissions in connection with the transactions contemplated by
this Agreement for which Purchaser may become liable.
(b) The Purchaser hereby
represents and warrants to the Seller that (i) the Purchaser is a corporation
organized under the laws of the State of Florida, (ii) this Agreement
constitutes the legal, valid and binding obligation of the Purchaser enforceable
against the Purchaser in accordance with its terms (iii) no consent, approval or
authorization from any third party or, to the knowledge of the Purchaser, any
governmental authority, is required for the execution and delivery of this
Agreement by the Purchaser or the purchase of the Transferred Shares
hereunder; and (iv) the
purchase of the Transferred Shares will not result in the Purchaser making an
unlawful distribution under the Florida Business Corporation Act, following the
purchase the Purchaser will be able to pay its debts as they become due in the
usual course of business and the Purchaser’s total assets would be
greater than the sum of its total liabilities plus the amount that would be
needed, if the corporation were to be dissolved at the time of the purchase, to
satisfy the preferential rights upon dissolution of shareholders whose
preferential rights are superior to those receiving the
distribution.
4. Further
Assurances. The
parties agree to take such reasonable steps and execute such other and further
documents as may be necessary or appropriate to cause the terms and conditions
contained herein to be carried into effect.
5. Miscellaneous. This Agreement contains the
entire understanding of the parties, supersedes all prior agreements and
understandings relating to the subject matter hereof and shall not be amended
except by a written instrument hereafter signed by all of the parties
hereto. This Agreement may be executed in two or more counterparts
(including by facsimile or pdf), each of which shall be an original, but all of
which together shall constitute one and the same instrument. Except
as otherwise expressly provided herein, nothing herein expressed or implied is
intended or shall be construed to confer upon or to give any individual or
entity, other than the Purchaser and the Seller, any rights or remedies under or
by reason of this Agreement. In the event that any covenant, condition, or other
provision herein contained is held to be invalid, void, or illegal by any court
of competent jurisdiction, the same shall be deemed to be severable from the
remainder of this Agreement and shall in no way affect, impair, or invalidate
any other covenant, condition, or other provision contained
herein. The validity and construction of this Agreement shall be
governed and construed and enforced in accordance with the internal laws (other
than the choice-of-law rules that may require the application of the laws of
another jurisdiction) of the State of New York. Each of the Seller
and the Purchaser hereby (i) waive their respective rights to a jury trial of
any claim or cause of action arising out of this Agreement and (ii) acknowledge
that such waiver is a material inducement to enter into this Agreement and that
each party has relied on such waiver in entering into this
Agreement. No party to this Agreement shall issue any press release
or make any public announcement relating to the subject matter of this Agreement
without the consent of the other party.
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6. Non-Reliance
by Seller. Seller acknowledges that
Purchaser may possess and have access to material non-public information
regarding Purchaser. Seller acknowledges that Purchaser is not
obligated to disclose, and will not disclose, such information to Seller, and
that such information may have a bearing on the valuation of the Transferred
Shares. Seller is an institutional investor, experienced,
sophisticated and knowledgeable in the valuation and trading of the securities
of public and private companies, and understands the
disadvantage to which Seller is subject by reason of the disparity of
information regarding the Purchaser between Seller and
Purchaser. Seller has reached its own investment decision and is
primarily relying on the current market factors in determining the Per Share
Price. Seller acknowledges that Purchaser is relying on the
provisions of this Section 6 in engaging in the transactions contemplated by
this Agreement, and would not purchase the Transferred Shares in the absence of
this Section 6. Seller represents that it will not pursue and hereby
waives any claim against Purchaser (i) based on or relating to Purchaser’s
having access to or being in possession of material non-public information
regarding itself and/or Purchaser’s non-disclosure of such information and/or
(ii) related in any way to the purchase and sale of the Transferred
Shares.
7. Release of
Purchaser
(a) As
further consideration for payment of the Purchase Price, Seller does hereby, on
behalf of Seller and its agents, representatives, attorneys, assigns, heirs,
executors and administrators (collectively, the “Seller Parties”)
RELEASE AND FOREVER DISCHARGE the Purchaser and its subsidiaries and their
respective Affiliates, parents, joint ventures, officers, directors,
shareholders, interest holders, members, managers, employees, consultants,
representatives, successors and assigns, heirs, executors and administrators
(collectively, the “Purchaser Parties”) from all
causes of action, suits, debts, claims and demands whatsoever known or unknown,
at law, in equity or otherwise, which Seller or any of the Seller Parties ever
had, now has, or hereafter may have, arising from or relating in any way to
Seller’s status as a stockholder, investor, lender or debtor of the Purchaser on
or prior to the date hereof, any agreement between Seller and the Purchaser or
any Affiliate of the Purchaser entered into prior to the date hereof, the
Seller’s purchase of any portion of the Purchaser’s capital stock prior to the
date hereof, any claims for reasonable attorneys’ fees and costs, and including,
without limitation, any claims relating to fees, penalties, liquidated damages,
and indemnification for losses, liabilities and expenses, but not including (i)
claims arising from the 200,000,000 shares of the Purchaser’s Common Stock owned
by Seller on the date hereof and (ii) claims to payments and other rights
provided to such Seller Party under this Agreement. The release
contained in this Section 7 is effective without regard to the legal nature of
the claims raised and without regard to whether any such claims are based upon
tort, equity, or implied or express contract. Except as specifically
provided herein, it is expressly understood and agreed that this release shall
operate as a clear and unequivocal waiver by Seller, on behalf of itself and the
Seller Parties, of any such claim whatsoever.
(b) The
Seller, on behalf of itself and the Seller Parties, agrees never to bring (or
cause or permit to be brought) any action or proceeding against the Purchaser or
any other Purchaser Party regarding the Seller’s status as stockholder,
investor, lender or debtor of the Purchaser on or prior to the date hereof,
agreements with the Purchaser or any Affiliate of the Purchaser that are
released pursuant to Section 7(a) above. The Seller agrees that in
the event that any claim, suit or action released pursuant to paragraph 7(a)
shall be commenced by it or any of the Seller Parties against the Purchaser or
any other Purchaser Party, the release contained in Section 7(a) shall
constitute a complete defense to any such claim, suit or action so
instituted.
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(c) Seller
hereby covenants and agrees, on behalf of itself and the Seller Parties, that
neither Seller nor any of the Seller Parties will encourage any Person to file a
lawsuit, claim or complaint against the Purchaser or any other Purchaser Party
relating to the claims released pursuant to Section 7(a). Seller
hereby covenants and agrees, on behalf of Seller and the Seller Parties, that
neither Seller nor any of the Seller Parties will assist any Person who files or
has filed a lawsuit, claim, or complaint against the Purchaser or any other
Purchaser Party relating to the claims released pursuant to paragraph 7(a)
unless Seller or any of the Seller Parties is required to render such assistance
pursuant to a lawful subpoena or other legal obligation. If Seller or
any of the Seller Parties is served with any such legal subpoena or becomes
subject to any such legal obligation, Seller shall provide prompt written notice
to the Purchaser thereof and enclose a copy of the subpoena and any other
documents describing the legal obligation with such written notice.
(d) The
parties to this Agreement agree and acknowledge that the release of any asserted
or unasserted claims against the Purchaser and the other Purchaser Parties
pursuant to Section 7(a) are not and shall not be construed to be an admission
of any violation of any Federal, state or local statute or regulation, or of any
duty owed by the Purchaser or any of the other Purchaser Parties to the
Seller.
(e) Seller
acknowledges that there is a risk that after signing this Agreement it may
discover losses or claims that are released under this Agreement, but that are
presently unknown to it. Seller assumes this risk and understands
that this release shall apply to any such losses and claims. Seller
understands that this Agreement includes a full and final release covering all
known and unknown, suspected or unsuspected injuries, debts, claims or damages
which have arisen or may have arisen from any matters, acts, omissions or
dealings released in Section 7(a) above. Seller acknowledges that by
accepting the Purchase Price and other benefits set forth in this Agreement, it
assumes and waives the risk that the facts and the law may be other than as
Seller understands them to be.
(f) Seller
certifies and acknowledges that it:
(i) has
read the terms of this Agreement and the release provided hereunder, and that
Seller understands its terms and effects, including the fact that Seller has
agreed to RELEASE AND FOREVER DISCHARGE the Purchaser and all other Purchaser
Parties from any legal action or other liability of any type related in any way
to the matters released pursuant to Section 7(a);
(ii) has
signed this Agreement voluntarily and knowingly in exchange for the
consideration described herein, which Seller acknowledges is adequate and
satisfactory to Seller; and
(iii) has
been and is hereby advised in writing to consult with an attorney prior to
signing this Agreement.
(g) As used in this Agreement,
“Affiliate” shall mean, with respect to any
Person, any Person directly or indirectly controlling, controlled by or under
direct or indirect common control with such Person and shall include (a) any
Person who is a director or beneficial holder of at least 10% of the then
outstanding capital stock (or partnership interests or other shares of
beneficial interest) of such Person and Family Members of any such Person, (b)
any Person of which such Person or an Affiliate (as defined in clause (a) above)
of such Person directly or indirectly, either beneficially owns at least 10% of
the then outstanding capital stock (or partnership interests or other shares of
beneficial interest) or constitutes at least a 10% equity participant, (c) any
Person of which an Affiliate (as defined in clause (a) above) of such Person is
a partner, director, officer or executive employee, and (d) in the case of a
specified Person who is an individual, Family Members of such
Person. “Family Members” shall
mean, with respect to any individual, any Related Person or Family Trust of such
individual. “Family Trust” shall
mean, with respect to any individual, any trust created for the benefit of one
or more of such individual’s Related Persons and controlled by such
individual. “Related Persons”
shall mean, with respect to any individual, such individual’s parents, spouse,
children and grandchildren. ”Person” shall mean an
individual, partnership, corporation, association, limited liability company,
trust, joint venture, unincorporated organization, and any government,
governmental department or agency or political subdivision thereof.
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8. Release of
Seller
As further consideration for payment of
the Purchase Price, Purchaser does hereby, on behalf of Purchaser and
Purchaser’s agents, representatives, attorneys, assigns, heirs, executors and
administrators (“Purchaser Releasors”) RELEASE AND FOREVER DISCHARGE the Seller
and the Seller Parties from all causes of action, suits, debts, claims and
demands whatsoever known or unknown, at law, in equity or otherwise, which
Purchaser or any of the Purchaser Releasors ever had, now has, or hereafter may
have, arising from or relating in any way to Seller’s status as a stockholder,
investor, lender or debtor of the Purchaser on or prior to the date hereof, any
agreement between Seller and the Purchaser or any Purchaser Releasor entered
into prior to the date hereof, the Seller’s purchase of any portion of the
Purchaser’s capital stock prior to the date hereof, any claims for reasonable
attorneys’ fees and costs, and including, without limitation, any claims
relating to fees, penalties, liquidated damages, and indemnification for losses,
liabilities and expenses, but not including (i) claims arising from the
200,000,000 shares of the Purchaser’s Common Stock owned by Seller on the date
hereof and (ii) any rights provided to such Purchaser Releasor under this
Agreement. The release contained in this Section 8 is effective
without regard to the legal nature of the claims raised and without regard to
whether any such claims are based upon tort, equity, or implied or express
contract. Except as specifically provided herein, it is expressly
understood and agreed that this release shall operate as a clear and unequivocal
waiver by Purchaser, on behalf of itself and the Purchaser Releasors, of any
such claim whatsoever.
[REMAINDER OF PAGE INTENTIONALLY LEFT
BLANK.]
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IN WITNESS WHEREOF, the parties hereto
have executed this Agreement as of the date set forth above.
SELLER:
YA
Global Investments, L.P.
By: Yorkville
Advisors, LLC
Its: Investment
Manager
By: Xxxx
Xxxxx
Xxxx
Xxxxx, Senior Managing Director
PURCHASER:
By: Xxxxx X.
Xxxxxx
Name: Xxxxx
X. Xxxxxx
Title: President
and Chief Executive Officer
|
Number
of Transferred Shares:
|
3,000,000,000
|
|
|
Per
Share Price:
|
$0.0001
|
|
|
Purchase
Price:
|
$300,000
|
Purchaser’s
Address:
000 Xxxxxxxxx Xxxxxx, Xxxxx
0000
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
Facsimile: 000.000.0000
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SCHEDULE I
YA Global Investments,
L.P.-Wiring Instructions-
|
Bank Name:
|
Wachovia
Bank
Downtown
Financial Center
000
Xxxxxx Xxxxxx, XX0000
Xxxxxx
Xxxx XX 00000
Telephone#
000-000-0000
|
ABA/Routing# 031 201
467
Account#
2000031475547
Account Name: YA Global
Investments, L.P.
Swift code: XXXXXX00 - for
international wires
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STOCK POWER
FOR VALUE RECEIVED, YA Global
Investments, L.P., formerly known as Cornell Capital Partners, L.P., an exempt
limited partnership organized under the laws of the Cayman Islands, hereby sells, assigns and transfers
unto:
Three Billion (3,000,000,000) shares of
Common Stock, , no par value per share, of Encompass Group Affiliates, Inc., a
Florida corporation (the “Company”), standing
in its name on the books of the Company , and does hereby irrevocably constitute
and appoint _________________________________________ attorney to transfer the
said stock on the books of the Corporation with full power of substitution in
the premises.
|
Dated:
|
||||
|
YA GLOBAL INVESTMENTS,
L.P.
|
||||
|
By:
|
Yorkville Advisors,
LLC,
|
|||
|
its Investment
Manager
|
||||
|
By:
|
||||
|
Name:
|
Xxxx X.
Xxxxx
|
|||
|
Title:
|
Senior Managing
Director
|
|||
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