STOCK PURCHASE AGREEMENT
EXHIBIT
10.2
THIS
STOCK PURCHASE AGREEMENT is entered into as of April 13, 2006
(the
“Agreement”), by and among the stockholders listed on Schedule
A
hereto
(collectively, the “Sellers”) who are all holders of common stock of Commerce
Development Corporation, Ltd., a Delaware corporation (the “Company”), on the
one hand, and each of the undersigned buyers identified on the signature
pages
hereto (each, and collectively, the “Buyer”). Each party to this Agreement who
is a Seller and each party to this Agreement who is a Buyer 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 Sellers collectively own, after giving effect to a 2,184-to-1 reverse
stock
split that occurred on April 7, 2006 (“Reverse Stock Split”), 40,506 shares of
common stock of the Company (the “Shares”), which constitutes approximately 90%
of the total outstanding shares of common stock of the Company par
value
$.001 (the “Company Common Stock”);
WHEREAS,
the Sellers wish to sell to the Shares to the Buyer, and the Buyer wishes
to
purchase the Shares from the Sellers, pursuant to this Agreement (the “Sale”);
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
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
Purchase
of Shares.
Subject
to satisfaction
or waiver of all the
terms
and conditions of this Agreement, on the Closing Date (as hereinafter defined)
the Sellers shall sell to the Buyer 40,506 shares of Company Common Stock
and
Buyer shall purchase such amount of the Shares, as set forth on Schedule
A
attached
hereto, from the Sellers.
1.3
Closing.
The
Closing shall take place on April 13, 2006 (the “Closing Date”), or at a time
and date mutually agreed by the parties. On the Closing Date, the Sellers
shall
deliver to the Company’s transfer agent: (a) stock certificate(s) evidencing the
Shares to be purchased in the name of the Buyer and/or its designees (the
“Share
Certificates”) free
and
clear of any Encumbrances (defined below);
(b) a
transfer instruction letter directing the transfer agent to record the sale
of
the Shares to the Buyer on the share ledger of the Company, cancel the Share
Certificates, and issue a new certificate representing post-Reverse-Split
Shares
to the Buyer (or Buyer’s designee) purchased by the Buyer hereunder; and (c) all
corporate documents (minutes, resolutions, agreements and contracts), bank
accounts, check books, common seals, memorandum and articles and amendments,
etc. On the Closing Date, the Buyer shall pay
(or
cause to be paid)
to the
Sellers an
aggregate sum
of
$701,396.63 (the
“Closing Payment”) for
the
purchase of a total of 40,506
Shares,
as
allocated and set forth on the Buyer signature page hereto. The Closing Payment
shall be paid at the Closing to Sellers by delivering to Sellers cash in
such
amount by cashier’s check or by wire transfer of immediately available funds to
such account as Sellers may specify in writing to Purchaser at least one
(1)
business day prior to the Closing.
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES OF THE SELLERS
Each
of
the Sellers represents and warrants to the Buyer that now and/or as of the
Closing (for purposes of this Article II:
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 respective business and
properties and to carry on its respective business in the places and in the
manner as presently conducted. The Company is 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, which when taken together with all other failures, is not
likely to have a “material adverse effect” on the business of the Company, taken
as a whole. For
purposes of this Agreement, a "material adverse effect" that is or would
be
materially adverse to the business, operations, assets, condition (financial
or
otherwise) or results of operations of the Company or the Shares or the
consummation of the transactions contemplated hereby.
(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) Each
of
the Sellers have all requisite power and authority to execute and deliver
this
Agreement, and to consummate the transactions contemplated hereby and thereby.
The consummation of the transactions contemplated hereby, and this Agreement
constitutes the legal, valid and binding obligation of the Sellers, enforceable
against the Sellers in accordance with its respective terms, except as may
be
affected by bankruptcy, insolvency, moratoria or other similar laws affecting
the enforcement of creditors’ rights generally and subject to the qualification
that the availability of equitable remedies is subject to the discretion
of the
court before which any proceeding therefore may be brought. This
Agreement and the transactions contemplated hereby have been approved by
each of
the Sellers and by the holders of a majority of the outstanding shares of
Common
Stock of the Company.
2.2
Ownership
and Title of Shares Sold.
Each of
the Sellers represents respectively that:
(a) Each
Seller owns the number of Shares listed opposite his/her name in Schedule
A
to be
sold to the Buyer.
(b) As
of the
Closing Date, each of the Sellers will own and will have good and marketable
title to, and sole record and legal ownership of, the Shares, free and clear
of
any and all liens, security interests, pledges, mortgages, charges, limitations,
claims, restrictions, rights of first refusal, rights of first offer, rights
of
first negotiation or other encumbrances of any kind or nature whatsoever
(collectively, “Encumbrances”).
(c)
Upon
consummation of the Closing, without exception, the Buyer will acquire from
the
Sellers legal and beneficial ownership of, and good and marketable title
to the
Shares to be sold to the Buyer by each of the Sellers, free and clear of
all
Encumbrances.
2
2.3
Articles
of Incorporation and By-laws; Minute Books.
Certified copies of the Company’s Articles of Incorporation and its by-laws have
been forwarded to the Buyer. Such copies of the Articles of Incorporation
and
By-laws (or similar governing documents) of the Company, and all amendments
to
each are true, correct and complete. The minute books of the Company as
forwarded to the Buyer contain true and complete records of all meetings
and
consents in lieu of meetings of their respective Board of Directors (and
any
committees thereof), or similar governing bodies, since the time of their
respective organization. The stock books of the Company as forwarded to the
Buyer are true, correct and complete.
2.4
Listing
and Maintenance Requirements.
The
Company is currently quoted
on the
OTC Bulletin Board (“OTCBB”).
The Company has not, in the twelve (12) months preceding the date hereof,
received any notice from the OTCBB or the National Association of Securities
Dealers (the “NASD”) or any trading market on which the Company’s Common Stock
is or has been listed or quoted to the effect that the Company is not in
compliance with the quoting, listing or maintenance requirements of the OTCBB
or
such other trading market. The Company is, and has no reason to believe that
it
will not, in the foreseeable future continue to be, in compliance with all
such
quoting, listing and maintenance requirements.
2.5
Consents.
No
consent or approval of any person, regulatory authority, governmental
organization or third party, and no approval, order, license, permit, franchise,
declaration or filing of any nature, is required as a result of or in connection
with the Seller’s execution, delivery and performance of its obligations under
this Agreement.
2.6
No
Undisclosed Liabilities.
Except
as other disclosed in the Company’s financial statements or otherwise set forth
on Schedule 2.6, the Company has no liability or obligation whatsoever, either
direct or indirect, matured or unmatured, 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”). In addition, the
Company and the Sellers represent that upon Closing, the Company will not
have
any liability or obligation whatsoever, either direct or indirect, matured
or
unmatured, accrued, absolute, contingent or otherwise.
2.7
Capitalization.
The
authorized capital stock of the Company as of the date hereof, immediately
prior
to giving effect to the transactions contemplated hereby, consists of 50,000,000
shares of the Company Common Stock, and 5,000,000 shares of Company Preferred
Stock. Immediately prior to the Reverse Stock Split on April 7, 2006, the
Company had a total of 98,285,596 shares of common stock are issued and
outstanding. As of the date hereof, no shares of Company preferred stock
are
issued and outstanding. All of the outstanding shares of Company Common Stock
are duly authorized, validly issued, fully paid and nonassessable, and have
not
been issued in violation of any preemptive right of stockholders. Except
for a
Securities Purchase Agreement dated an even date herewith, by and among the
Company and purchasers thereto (including the Buyer), there are no outstanding
subscriptions, 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 Company Common Stock. To the Company’s knowledge, no
stockholder currently holds registration rights.
2.8
Compliance
With Law.
The
Company and the Company’s officers and directors are in compliance with all
applicable federal, state, local and foreign laws and regulations which are
applicable to the operation of the Company’s business. The Company and the
Company’s officers and directors have not received any written notice to the
effect that, or otherwise have been advised that the Company or its officers
or
directors are not in compliance with any of such laws or orders. To the
Company’s knowledge, the Company and its officers and directors are not
currently, or have been, the subject of any inquiries, investigations, or
requests for documents or other information related to its compliance with
any
laws or orders. The Company is not, and to the Company’s knowledge has not been,
subject to any regulatory enforcement actions or consent decrees. None of
the
Company’s officers and directors have been convicted of a felony or
misdemeanor.
3
2.9
No
Conflicts.
The
execution and delivery of this Agreement does not, and the performance by
the
Sellers of their obligations under this Agreement and the consummation of
the
transactions contemplated hereby does not and will not conflict with or result
in a violation or breach of any term or provision of any law, order, permit,
statute, rule or regulation applicable the Sellers or the Company, any of
their
affiliates, or any of the businesses, or assets or properties of the
Company.
2.10
SEC
Documents.
As of
the Closing Date, except as set forth on Schedule 2.10, none of the Company’s
filings with the SEC are under review or are the subject of comment letters
which have not been resolved. As of their respective filing dates, the Company’s
Annual Report on Form 10-KSB for the year ended December 31, 2004, and all
reports filed with the SEC subsequent thereto (the “SEC Documents”), have
complied in all material respects with the requirements of the Exchange Act
and
the rules and regulations of the SEC promulgated thereunder applicable to
the
SEC Documents. As of their respective filing dates, to the Company’s knowledge
none of the SEC Documents contained an untrue statement of a material fact
or
omitted to state a material fact required to be stated therein or necessary
to
make the statements therein, in light of the circumstances under which they
were
made, not misleading.
2.11
Shell
Company; Not a Blank Check Company.
The
Company is 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.
The Company is not a “blank check company” as such term is defined by Rule 419
as promulgated under the Securities Act.
2.12
Material
Misstatements and Omissions.
As of
the Closing Date, the representations and warranties of the Company contained
in
this Agreement (including the exhibits and schedules hereto) do not contain
any
untrue statement of a material fact and do not omit to state a material fact
necessary to make the statements or facts contained herein or therein, in
light
of the circumstances made, not misleading.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF THE BUYER
3.1
Each
Buyer represents and warrants to the each of the Sellers:
(a)
Authority
Relative to this Agreement.
The
Buyer has the requisite power and/or authority to enter into this Agreement
and
carry out the Buyer’s obligations hereunder. This Agreement has been duly and
validly executed and delivered by each of the Buyer and constitutes a valid
and
binding obligation of each 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.
(b)
The
Buyer’s Representations Regarding the Shares.
Buyer
understands that the Securities are “restricted securities” and have not been
registered under the Securities Act or any applicable state securities law
and
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 such Buyer’s right to sell the
Shares pursuant to a registration statement or otherwise in compliance with
applicable federal and state securities laws. Buyer is acquiring the Shares
hereunder in the ordinary course of its business. Buyer does not have any
agreement or understanding, directly or indirectly, with any Person to
distribute any of the Shares.
(c)
The
Buyer’s Status.
At the
time the Buyer receives any of the Shares, the Buyer will be an “accredited
investor” as defined in Rule 501 under the Securities Act.
4
(d)
Experience
of the Buyer.
Buyer,
either alone or together with its representatives, has 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. 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.
(e)
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.
(f)
Material
Misstatements of Omissions.
As
of the
Closing Date, the representations and warranties of Buyer contained in this
Agreement (including the exhibits and schedules hereto) do not contain any
untrue statement of a material fact and do not omit to state a material fact
necessary to make the statements or facts contained herein or therein, in
light
of the circumstances made, not misleading.
ARTICLE
IV
DELIVERIES
& CONDITIONS
4.1
Items
to be delivered to the Buyer at the Closing by the Sellers.
The
Buyer’s obligation to purchase the Shares is conditioned on the following
closing conditions and deliveries:
(a)
Delivery
of the following:
(i)
copies
of
the Company’s Articles of Incorporation and amendments thereto, Bylaws and
amendments thereto;
(ii)
all
minutes and resolutions of the board of directors and of the shareholders
(and
meetings of shareholders) in possession of the Company;
(iii)
shareholder
list of the Company;
(iv)
all
financial statements and tax returns in possession of the Company;
and
(v)
all
applicable schedules hereto;
(b)
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;
(c)
A
copy of
this Agreement duly executed has been delivered to the Buyer;
(d)
Share
Certificate(s) issued in the name of the Buyer or its designee or
assignee;
(e)
Any
other
document reasonably requested by the Buyer that the Buyer deem necessary
for the
consummation of this transaction; and
5
(f)
the
representations and warranties set forth in Articles 2 and 3 of this Agreement
shall be true and correct in all material respects.
4.2
Items
to be delivered to the Sellers at Closing by the Buyer.
(a)
All
applicable exhibits and schedules hereto;
(b)
A
copy of
this Agreement duly executed;
(c)
any
other
document reasonably requested by the Sellers that it deems necessary for
the
consummation of this transaction; and
(d)
the
Closing Payment.
ARTICLE
V
COVENANTS
5.1
Seller
Covenants.
(a)
The
Sellers shall cooperate with the designees of the Buyer with: (i) filing
the
necessary documents with the SEC and the Maryland Secretary of State as
reasonably requested by the Buyer; (ii) appoint designees of the Buyer as
members of the board of directors or officers of the Company and to promptly
resign when requested by the Buyer as a member of the board of directors
or
officer of the Company as set forth in Schedule
B.
(b)
The
Sellers shall assist in any way to ensure that the shares of the Company’s
Common Stock shall continue to be quoted on the OTCBB, and to notify the
Buyer
if the Company receives any notification (either oral or written) materially
adversely effecting such status.
ARTICLE
VI
INDEMNIFICATION
6.1
By
Sellers.
Sellers
shall indemnify, defend and hold harmless the Buyer, its affiliates and their
respective officers, directors, members, shareholders, employees, agents,
successors, assigns and affiliates from and against any and all costs, damages,
lawsuits, deficiencies, claims and expenses, including without limitation,
interest, penalties, costs of mitigation, attorneys’ fees and all amounts paid
in investigation, defense or settlement of any of the foregoing (collectively,
the “Damages”), incurred in connection with, arising out of, resulting from or
incident to any breach of any covenant, representation, warranty or agreement
or
the inaccuracy of any representation, made by Sellers in or pursuant to this
Agreement; provided however that Damages under this Section 6.1 shall be
limited
to the amount of the Closing Payment.
6
6.2
By
Buyer.
Buyer
shall indemnify, reimburse, defend and hold harmless Sellers and their officers,
directors, employees, agents, successors and assigns from and against any
and
all Damages incurred in connection with, arising out of, resulting from or
incident to any breach of any covenant, representation, warranty or agreement
or
the inaccuracy of any representation, made by Buyer in or pursuant to this
Agreement; provided however that Damages under this Section 6.2 shall be
limited
to the amount of the Closing Payment.
6.3
Defense
of Claims.
If any
action or proceeding is filed or initiated against any party entitled to
the
benefit of indemnity hereunder, written notice thereof shall be given to
the
indemnifying party as promptly as practicable (and in any event within ten
(10)
days after the service of the citation or summons); provided, however, that
the
failure of any indemnified party to give timely notice shall not affect rights
to indemnification hereunder except to the extent that the indemnifying party
demonstrates actual damage caused by such failure. After such notice, if
the
indemnifying party shall acknowledge in writing to the indemnified party
that
the indemnifying party shall be obligated under the terms of its indemnity
hereunder in connection with such action or proceeding, then the indemnifying
party shall be entitled, if it so elects, to take control of the defense
and
investigation of such action or proceeding and to employ and engage attorneys
of
its own choice to handle and defend the same, such attorneys to be reasonably
satisfactory to the indemnified party, at the indemnifying party’s cost, risk
and expense (unless (i) the indemnifying party has failed to assume the defense
of such action or proceeding; or (ii) the named parties to such action or
proceeding include both of the indemnifying party and the indemnified party,
and
the indemnified party and its counsel determine in good faith that there
may be
one or more legal defenses available to such indemnified party that are
different from or additional to those available to the indemnifying party
and
that joint representation would be inappropriate), and to compromise or settle
such action or proceeding, which compromise or settlement shall be made only
with the written consent of the indemnified party, such consent not to be
unreasonably withheld. The indemnified party may withhold such consent if
such
compromise or settlement would adversely affect the conduct of its business
or
requires less than an unconditional release to be obtained. If (i) the
indemnifying party fails to assume the defense of such action or proceeding
within fifteen (15) days after receipt of notice thereof pursuant to this
Section 6.3; or (ii) the named parties to such action or proceeding include
both
the indemnifying party and the indemnified party and the indemnified party
and
its counsel determine in good faith that there may be one or more legal defenses
available to such indemnified party that are different from or additional
to
those available to the indemnifying party and that joint representation would
be
inappropriate, the indemnified party against which such action or proceeding
has
been filed or initiated will (upon delivering notice to such effect to the
indemnifying party) have the right to undertake, at the indemnifying party’s
cost and expense, the defense, compromise or settlement of such action or
proceeding on behalf of and for the account and risk of the indemnifying
party;
provided, however, that such action or proceeding shall not be compromised
or
settled without the written consent of the indemnifying party, which consent
shall not be unreasonably withheld. In the event the indemnified party assumes
defense of the action or proceeding, the indemnified party will keep the
indemnifying party reasonably informed of the progress of any such defense,
compromise or settlement and will consult with, when appropriate, and consider
any reasonable advice from, the indemnifying party regarding any such defense,
compromise or settlement. The indemnifying party shall be liable for any
settlement of any action effected pursuant to and in accordance with this
Section 6.3 and for any final judgment (subject to any right of
appeal).
Regardless
of whether the indemnifying party or the indemnified party takes up the defense,
the indemnifying party will pay reasonable costs and expenses in connection
with
the defense, compromise or settlement for any action or proceeding under
this
Section 6.3.
The
indemnified party shall cooperate in all reasonable respects with the
indemnifying party and such attorneys in the investigation, trial and defense
of
such action or proceeding and any appeal arising therefrom; provided, however,
that the indemnified party may, at its own cost, participate in the
investigation, trial and defense of such action or proceeding and any appeal
arising therefrom. The indemnifying party shall pay all expenses due under
this
Section 6.3 as such expenses become due. In the event such expenses are not
so
paid, the indemnified party shall be entitled to settle any action or proceeding
under this Section 6.3 without the consent of the indemnifying party and
without
waiving any rights the indemnified party may have against the indemnifying
party.
7
6.4
Other
Claims.
A claim
for indemnification for any matter not involving a third-party claim may
be
asserted by notice to the party from whom indemnification is
sought.
ARTICLE
VII
TERMINATION
7.1
Termination.
This
Agreement may be terminated:
(a)
at
any
time before, or at, Closing by the mutual written agreement of the Buyer
and the
Sellers;
(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 fail to be accomplished or if any conditions set forth in Article
5
hereof have not been fully satisfied;
(c)
Upon
termination of this Agreement for any reason, in accordance with the terms
and
conditions set forth in this paragraph, each Party shall bear all costs and
expenses as that Party has incurred.
ARTICLE
VIII
MISCELLANEOUS
8.1
Access
to Books and Records.
During
the course of this transaction through Closing, each Party agrees to make
available for inspection all corporate books, records and assets, and otherwise
afford to each other and their respective representatives, reasonable access
to
all documentation and other information concerning the business, financial
and
legal conditions of each other 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
each other 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.
8.2
Further
Assurances.
If, at
any time after the Closing, the Parties hereby mutually agree
that any further deeds, assignments or assurances in law or that 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.
8
8.3
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 Sellers:
c/o
Xxxxx
Xxxxx, Esq.
Xxxxxxxxxx
& Xxxxx LLP
00000
Xxxxxxxx Xxxx. Xxxxx 000
Xxx
Xxxxxxx, XX 00000
If
to
the Buyer:
c/o
ARC
Investment Partners, LLC
0000
Xxxxxx Xxxxx Xxxxxx Xxxx., Xxxxx 000
Xxxxxxx
Xxxxx, XX 00000
Attn:
Xxxx Xxxxxxx
with
copies (which shall not constitute notice) to:
Xxxxxx
Xxxxxx Rosenman LLP
0000
Xxxxxxx Xxxx Xxxx, Xxxxx 0000
Xxx
Xxxxxxx, XX 00000
| Facsimile: |
(000)
000-0000
(000)
000-0000
|
| Attention: |
Xxxx
X. Xxxxx, Esq.
Xxxx X. Xxxxxx III, Esq.
|
8.4
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.
8.5
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 any of the Sellers hereto except with the prior written
consent of the Buyer. This Agreement and all of the obligations of the Sellers
may be assigned by the Buyer without the prior notice to the Sellers or written
consent of any of the Sellers and upon assignment, all of the rights and
obligations of the Buyer shall be the rights and obligations of the Buyer’s
designated assignee.
8.6
Governing
Law.
This
Agreement shall in all respects be governed by and construed in accordance
with
the laws of the State of California, USA that are applicable to agreements
made
and fully to be performed in such state, without giving effect to conflicts
of
law principles.
9
8.7
Counterparts.
This
Agreement may be executed in multiple counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the
same
instrument.
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 be in Los Angeles,
California.
8.11
Confidentiality;
Public Disclosure.
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.
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.
10
IN
WITNESS WHEREOF, each of the Parties hereto has executed this Agreement as
of
the date first set forth above.
|
BUYER:
|
||
| /s/ Xxxxxx Xxxxxxxx | ||
|
Xxxxxx
Xxxxxxxx and Xxxxxx Xxxxxxxx, trustees of the
Younes
& Xxxxxx Xxxxxxxx Revocable Trust
|
||
|
Shares
purchased: 13,502
Purchase
Price: $233,798.87
|
||
| /s/ Xxxxx Xxxxxxxx | ||
|
Xxxxx
Xxxxxxxx and Xxxxxxx Xxxxxxxx, trustees of the
Xxxxx
& Xxxxxxx Xxxxxxxx Family Trust
|
||
|
Shares
purchased: 13,502
Purchase
Price: $233,798.87
|
||
| /s/ Xxx Xxxxxxxx | ||
| Xxx Xxxxxxxx | ||
|
Shares
purchased: 13,502
Purchase
Price: $233,798.87
|
11
| SELLERS: | |||
| /s/ Xxxx X. Xxxxx | |||
| Xxxx X. Xxxxx | |||
| /s/ Xxxxxxx Xxxxx | |||
| Xxxxxxx Xxxxx | |||
| CORPORATE CAPITAL PARTNERS | |||
| By: | /s/ Xxxxxxx Xxxxxxx | ||
| Name: Xxxxxxx Xxxxxxx | |||
| Title: General Partner | |||
|
/s/
Xxxx Xxxx
|
|||
|
Xxxx
Xxxx
|
|||
| /s/ Xxxx Xxxx | |||
| Xxxx Xxxx | |||
| RP CAPITAL, LLC | |||
| /s/ Xxxxxx Xxxxx | |||
|
Xxxxxx
Xxxxx
Manager
|
|||
|
/s/
Xxxxx Xxxxxxxx
|
|||
|
Xxxxx
Xxxxxxxx
|
|||
12
SCHEDULE
A
SELLERS
|
Stockholder
|
Certificate
Number*
|
Date
of Certificate
|
Shares
(pre-
Reverse-
Split)
|
Shares
(post-Reverse-
Split)
|
|||||||||
|
Xxxx
X. Xxxxx
|
190
|
|
|
11-Jan-06
|
|
10,289,048
|
4,712
|
||||||
|
Xxxx
X. Xxxxx
|
181
|
|
|
11-Jan-06
|
2,350,910
|
1,077
|
|||||||
|
Xxxxxxx
Xxxxx
|
191
|
|
|
11-Jan-06
|
5,140,924
|
2,354
|
|||||||
|
Xxxxxxx
Xxxxx
|
182
|
|
|
11-Jan-06
|
1,174,632
|
538
|
|||||||
|
Corporate
Capital Partners
|
192
|
|
|
11-Jan-06
|
2,059,250
|
943
|
|||||||
|
Corporate
Capital Partners
|
183
|
|
|
11-Jan-06
|
470,511
|
216
|
|||||||
|
Xxxx
Xxxx
|
193
|
|
|
11-Jan-06
|
3,088,874
|
1,415
|
|||||||
|
Xxxx
Xxxx
|
184
|
|
|
11-Jan-06
|
705,767
|
324
|
|||||||
|
RP
Capital, LLC
|
208
|
|
|
11-Jan-06
|
41,141,792
|
18,838
|
|||||||
|
RP
Capital, LLC
|
203
|
|
|
12-Jan-06
|
9,400,350
|
4,305
|
|||||||
|
Xxxx
X. Xxxx
|
195
|
|
|
11-Jan-06
|
5,140,924
|
2,354
|
|||||||
|
Xxxx
X. Xxxx
|
186
|
|
|
11-Jan-06
|
1,174,632
|
538
|
|||||||
|
Xxxxx
Xxxxxxxx
|
196
|
|
|
11-Jan-06
|
5,140,924
|
2,354
|
|||||||
|
Xxxxx
Xxxxxxxx
|
187
|
|
|
11-Jan-06
|
1,174,632
|
538
|
|||||||
|
TOTAL:
|
88,453,170
|
40,506
|
|||||||||||
|
*
Stock certificates represent the right to receive the “post-Reverse-Stock
Split” shares listed above and opposite the stockholders name, after
giving effect to a 2,184-to-1 Reverse Stock Split that occurred
on April
7, 2006.
|
|||||||||||||
SCHEDULE
B
OFFICER
AND DIRECTOR APPOINTMENTS
Xxxxx
Xxxxxxxx is the sole director, Chief Executive Officer, acting Chief Financial
Officer, and Secretary of the Company.
SCHEDULE
2.10
SEC
DOCUMENTS
The
Company received comments by telephone from the Securities and Exchange
Commission (“SEC”) staff regarding the Company’s Amended Form 10-KSB Annual
Report (the “Form 10-KSB/A”) that was filed with the SEC on January 4, 2006. The
Company is in the process of responding to these comments, which include
the
following:
(1)
the
Independent Auditors’ Report shall be revised to include time periods that were
in fact covered in the audit of the Company’s balance sheets and in the audit of
the Company’s related statements of operations, stockholders equity (deficit)
and cash flows but which were inadvertently left out in the description of
such
audit in the Independent Auditors’ Report;
(2)
the
opinion of the auditors regarding the financial statements in the Independent
Auditors’ Report shall be revised to include additional time periods that were
inadvertently omitted, such as (a) that the opinion covered the Company’s
financial statements for the periods ending December 31, 2003 in addition
to the
periods referenced; and (b) that the periods covered by the opinion regarding
the Company’s related statements of operations, stockholders equity (deficit)
and cash flows include the twelve months ended December 31, 2003, and the
period
from May 31, 1998 (Date of Inception) to December 31, 2004, in addition to
the
periods referenced; and
(3)
the
Company’s Condensed Consolidated Balance Sheet shall be revised to correct an
inadvertent calculation error as to the Company’s Total Liabilities and
(Deficiency in) Stockholders’ Equity (“Total Liabilities”) as of December 31,
2004 and 2003, such that it correctly reflects Total Liabilities and Total
Assets in the balance sheets dated as of December 31, 2004 and
2003.
The
Company’s auditors have furnished a revised Independent Auditors’ Report
reflecting the revisions described above. The Company intends to promptly
file
this revised report along with the revised Condensed Consolidated Balance
Sheet
referenced in (3) above, in an Amended Form 10-KSB/A, upon receipt of the
final
version of the Company’s revised balance sheet from the Company’s auditors.
