SHARE EXCHANGE AGREEMENT BY AND BETWEEN FUTURE NOW GROUP, INC. AND EISENBERG HOLDINGS, LLC, JOHN QUARTO-vonTIVADAR, ROY & PENNIE WILLIAMS, LISA T. DAVIS, WILLIAM E. SCHLOTH, PETER KEENOY, WILLIAM P. SCHLOTH, JAMES CAVALLO AND AND FUTURE NOW, INC....
SHARE
EXCHANGE
AGREEMENT
BY
AND BETWEEN
FUTURE
NOW GROUP, INC.
AND
XXXXXXXXX
HOLDINGS, LLC,
XXXX
XXXXXX-vonTIVADAR,
XXX
& XXXXXX XXXXXXXX,
XXXX
X. XXXXX,
XXXXXXX
X. XXXXXXX,
XXXXX
XXXXXX,
XXXXXXX
X. XXXXXXX,
XXXXX
XXXXXXX AND
L.
XXXXXX XXXXX
AND
FUTURE
NOW, INC.
DATED
AS OF OCTOBER 30, 2007
THIS
SHARE EXCHANGE AGREEMENT (this “Agreement) is entered into on October 30,
2007.
BETWEEN:
XXXXXXXXX
HOLDINGS, LLC.
XXXX
XXXXXX-vonTIVADAR
XXX
& XXXXX XXXXXXXX
XXXX
X. XXXXX
XXXXXXX
X XXXXXXX
L.
XXXXXX XXXXX
XXXXXXX
X XXXXXXX
XXXXX
XXXXXX
XXXXX
XXXXXXX
(individually
a “Stockholder” and collectively the “Stockholders”)
AND:
FUTURE
NOW, INC.
a
company duly incorporated under the laws of the State of Delaware and having
its
registered and records office at 00 Xxxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxx,
XX
00000 (hereinafter called the “Company”)
AND:
FUTURE
NOW GROUP INC.,
a
company duly incorporated under the laws of the State of Nevada having its
head
office at 000 - 0000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, X.X., X0X 0X0 (hereinafter
called the “Purchaser”)
SECTION
1
BACKGROUND
A. |
The
Stockholders are the legal and beneficial owners of all of the
issued and
outstanding shares in the capital stock of the Company (“Future Now
Stock”);
|
B. |
The
Purchaser is a shell corporation with no active business that desires
to
acquire all of the issued and outstanding Future Now
Stock;
|
C. |
The
Stockholders have agreed to sell to the Purchaser, and the Purchaser
has
agreed to purchase, the Future Now Stock from the Stockholders
in exchange
for shares of the Purchaser’s common (the “Purchaser Stock”), pursuant to
the terms and conditions set forth in this Agreement (the “Transaction”);
and
|
1
D. |
The
Company joins in the execution of this Agreement in consideration
of the
anticipated benefit to be provided by its affiliation with the
Purchaser.
|
NOW
THEREFORE, in consideration of the mutual covenants and agreements hereinafter
set forth and other good and valuable consideration (the receipt and sufficiency
of which is hereby acknowledged by the parties), the parties covenant and agree
as follows:
SECTION
2
SALE
AND PURCHASE OF STOCK
2.1 |
Sale
and Purchase of Future Now Stock.
Each of the Stockholders agrees to sell and the Purchaser agrees
to
purchase all of the Future Now Stock owned by such Stockholders
upon the
terms and conditions herein contained. The number of shares of
Future Now
Stock owned by each of the Stockholders is provided under Schedule
2.1.
|
SECTION
3
PURCHASE
PRICE
3.1 |
Consideration;
Share Exchange.
At the Closing (as defined in Section 3.2 below) upon surrender
of the
certificates evidencing the Future Now Stock duly endorsed for
transfer to
the Purchaser, the Purchaser will cause 50,394,190 shares of the
common
voting stock (“Common Stock”), par value $0.001 of the Purchaser to be
issued to the Stockholders, in full satisfaction of any right or
interest
which each Stockholder held in the Future Now Stock (the “Purchase
Price”). The Purchaser Stock will be issued to the Stockholders on a
pro
rata basis, in the same proportion as the percentage of their ownership
interest in the Future Now Stock, per share and percentage details
are
provided on Schedule 2.1. As a result of the exchange of the Future
Now
Stock in exchange for the Purchaser Stock, the Company will become
a
wholly-owned subsidiary (the “Subsidiary”) of the Purchaser.
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3.2 |
Closing.
The parties to this Agreement will hold a closing (the “Closing”) for the
purpose of executing all of the documents contemplated by this
Agreement
(collectively, the “Transaction Documents”) and otherwise effecting the
transactions contemplated by this Agreement, at 12:00 pm on October
__,
2007, or such other date and time mutually agreed upon by the parties.
The
Closing will be held at the offices of Xxxxxxx, Savage LLP, located
at 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other place
as the
Company and the Stockholders may reasonably agree. The date on
which the
Closing actually occurs is referred to as the “Closing Date.”
|
3.3 |
Description
of Common Stock.
The Common Stock possesses all such rights and privileges that
are
afforded to common stock by Chapter 78 of the Nevada Revised Statutes.
|
3.4 |
Transfer
Agent Order:
The Stockholders acknowledge that the Purchaser Common Stock will
be
issued at the time of Closing. A treasury order will be executed
directing
the transfer agent to issue shares as described in paragraph 3.1.
|
2
3.5 |
Restructuring
provision:
Other than; (i) the issuance of stock options under the Company’s
2007 Stock Incentive Plan as properly adopted by the Purchaser
along with
this Agreement, and (ii) the issuance of Common Stock (or equity-like
security) for a future financing or acquisition, the Stockholders
undertake that on the Closing Date and for a period of not less
than one
(1) year there will be no restructuring of the company, such restructuring
shall include and not be limited to any issuances of preferred
shares,
reverse splits or forward splits or changes in rights of the Common
Stock
of the Purchaser other than as described herein.
|
3.6 |
Cancellation
of stock:
Concurrently with the issuance of the Common Stock as described
above,
32,000,000 of the 36,000,000 shares of the Purchaser’s Common Stock
currently held by the Purchaser’s directors and former directors (the
“Former Directors Stock”), will be cancelled with the remaining 4,000,000
shares re-registered as
follows:
|
NAME
OF STOCKHOLDER
|
NO.
OF COMPANY SHARES
|
|||
Xxxxxx
Xxxxxx
|
1,057,144
|
|||
MRE
Holdings Ltd.
|
1,032,143
|
|||
Xxxxxxxx
Xxxxxxxx
|
1,032,143
|
|||
Xxxxx
Xxxxx
|
150,000
|
|||
Xxxxxx
Xxxxxxxx
|
150,000
|
|||
Xxxx
Xxxxxxx
Professional
Offshore Opportunity Fund Ltd.
Professional
Traders Fund, LLC
|
150,000
357,142
71,428
|
|||
Total
|
4,000,000
|
3.7 |
Piggy
Back Rights.
Other than any registration rights the investors in the New Financing,
defined below, and the Company Note Holders, as defined below,
may
require, the Common Stock described in paragraphs 3.6 and 3.1 will
have
piggyback rights for registration on the first financing undertaken
by the
Purchaser on a registration statement.
|
3.8 |
Financing:
As provided for in Section 11, at the Closing, the Purchaser shall
have
completed a financing whereby it has in excess of One Million dollars
($1,000,000) (the “New Financing”) in available cash on financing terms
acceptable to the Company. Furthermore, as needed, the Purchaser
will
ensure that all appropriate regulatory filings, such as a Form
D or state
blue sky are completed.
|
SECTION
4
BOARD
OF DIRECTORS OF THE PURCHASER
4.1 |
Change
in Control.
On the Closing Date, every member of the Current Board of the Directors
of
the Purchaser will resign and members of management of the Company,
consisting of Xxxxxxx Xxxxxxxxx, Xxxxx Xxxxxxxxx and Xxxxxxx Xxxxxxx,
will
be appointed to the board of directors (“Post-Closing Directors”). The
Post-Closing Directors will decide upon officers upon the closing
of the
transaction contemplated by this Agreement. At the Closing all
resignation
letters and consent to act documents will be executed.
|
3
SECTION
5
REPRESENTATIONS
AND WARRANTIES OF THE STOCKHOLDERS
5.1 |
Representations
and Warranties of the Stockholders.
To induce the Purchaser to enter into and complete the transactions
contemplated by this Agreement, each of the Stockholders individually
represent and warrant, as of the date hereof and as of the Closing
Date,
that:
|
(a) |
such
Stockholder has due and sufficient right and authority to enter
into this
Agreement on the terms and conditions herein set forth and to sell
and
transfer the legal and beneficial title and ownership of the Future
Now
Stock to the Purchaser;
|
(b) |
none
of the Stockholders are non-residents of the United States of America
within the meaning of the United States Internal Revenue Code of
1986, as
amended;
|
(c) |
the
execution, delivery and performance of this Agreement and the completion
of the transactions contemplated hereby will to the best of his
knowledge
and belief:
|
(i) |
not
constitute a breach by such Stockholder of any statute, bylaw or
regulation or of the Company's by-law or articles of
incorporation;
|
(ii) |
not
result in a breach of any terms or provisions, or constitute a
default
under any agreement, indenture, mortgage, instrument, judgment
or decree
to which such Stockholder is a party or by which such Stockholder
is
bound; and
|
(iii) |
not
result in the creation of any lien, encumbrance or other charge
on the
Future Now Stock;
|
(d) |
such
Stockholder is the registered and beneficial owner of his respective
Future Now Stock and has good and marketable title to the Future
Now
Stock, and such Future Now Stock is free and clear of all liens,
claims,
charges and encumbrances of every nature and kind
whatsoever;
|
(e) |
the
execution and delivery of this Agreement and the completion of
the
transaction contemplated hereby will not cause or otherwise result
in any
tax liability relating to the Future Now
Stock.
|
(f) |
such
Stockholder has no information or knowledge of any facts relating
to the
Company or the business which, if known to the Purchaser, might
reasonably
be expected to deter the Purchaser from completing the transaction
of
purchase and sale herein contemplated;
|
4
(g) |
no
certificate furnished by or on behalf of the Stockholders to the
Purchaser
at the Closing in respect of the representations, warranties, and
covenants of the Stockholders herein will contain any untrue statement
of
a material fact or omit to state a material fact necessary to make
the
statements contained therein not
misleading;
|
(h) |
such
Stockholder acknowledges and agrees that the Purchase Price it
is going to
receive in the Transaction is the Purchaser Stock and the Stockholder
has
the capacity to protect its own interest in connection with the
acquisition of the Purchaser Stock and is capable of evaluating
the merits
and the risks of an investment in the Purchaser by reason of its
business
and financial knowledge and
experience;
|
(i) |
such
Stockholder is acquiring the Purchaser Stock for investment for
its own
account and not as a nominee or agent and not with a view to, or
for
resale in connection with, any distribution thereof.
|
(j) |
such
Stockholder represents and acknowledges that it has been solely
responsible for its own due diligence investigation of the Purchaser,
its
management and business, for its own analysis of the merits and
risks of
this investment and for its own analysis of the terms of investment
and
that in taking any action or performing any role relative to the
proposed
investment, it has acted solely in its own interest and that neither
it,
nor any of its agents and employees have acted as agents, employees,
partners or fiduciaries of any other person or as an agent of the
Purchaser or as an issuer, underwriter, broker, dealer or investment
adviser relative to this
investment;
|
(k) |
such
Stockholder understands that the Purchaser has a limited operating
history
and that investment in the Purchaser involves substantial risks.
Such
Stockholder further understands that the acquisition of the Purchaser
Stock would be a highly speculative
investment.
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5.2 |
Representations
and Warranties in Closing Documents.
All statements contained in a certificate or other instrument delivered
by
or on behalf of the Stockholders pursuant hereto or in connection
with the
transactions contemplated hereby shall be deemed to be representations
and
warranties by the Stockholders
hereunder.
|
5.3 |
Survival
of Representations and Warranties.
The representations and warranties of the Stockholders contained
in this
Agreement shall survive the Closing and the payment of the Purchase
Price
and, notwithstanding the Closing and the payment of the Purchase
Price,
the representations and warranties of the Stockholders shall continue
in
full force and effect for the benefit of the
Purchaser.
|
5.4 |
Reliance.
The Stockholders acknowledge and agree that the Purchaser has entered
into
this Agreement relying on the warranties and representations and
other
terms and conditions of this Agreement as a portion of the information
the
Purchaser is relying on in making the decision to enter into this
Agreement.
|
5
SECTION
6
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
6.1 |
Representations
and Warranties of the Company.
To induce the Purchaser to enter into and complete the transactions
contemplated by this Agreement, the Company represents and warrants,
as of
the date hereof and as of the Closing Date,
that:
|
(a) |
the
authorized capital of the Company consists of 10,000,000 common
shares
with par value of $0.001 of which 5,448,021 common shares are issued
and
outstanding, of which 209,916 additional shares are held in escrow
(“Escrowed Shares”) for Xxxx Xxxxxx xxx-Xxxxxxx, which Escrowed Shares
will be fully vested and converted as part of the Closing. All
of the
issued shares of the Company are held by the
Stockholders;
|
(b) |
the
Future Now Stock is duly authorized, validly issued and outstanding
as
fully paid and non-assessable shares and constitutes 100% of all
of the
issued and outstanding shares in the capital of the
Company;
|
(c) |
Other
than items (i)-(iii) below; no person, firm or corporation has
any
agreement or option or a right capable of becoming an agreement
for the
purchase of the Purchaser Stock, any other shares in the capital
of the
Company owned by the Stockholders or any right capable of becoming
an
agreement for the purchase, subscription or issuance of any of
the
un-issued shares in the capital of the
Company.
|
(i) |
The
bridge note holders (the “Note Holders”), as part of their investment (the
“Bridge Financing”) of $675,000 into the Company, were issued 10.5%
convertible promissory notes (the “Notes”). The Notes are convertible into
shares of the Company’s Common Stock, unless otherwise paid off by the
Company or converted by the Note Holders. $200,000 face value of
the Notes
have been converted into the Company’s Common Stock. The remaining balance
of $475,000 in principal of the Notes and the related accrued interest
will be assumed by the Purchaser as part of this Agreement. As
part of the
Bridge Financing, the Note Holders also received seven-year stock
purchase
warrants exercisable at a price of $0.75 (the “Original Warrants”). In
aggregate a total of 216,000 Original Warrants were issued. Prior
to the
Closing, 112,000 of the Original Warrants have been exercised for
additional capital of $84,000. For more information on the Notes
and
Original Warrants refer to Schedule
6.1(d)(i)
Both the Notes and the Original Warrants will be assumed by the
Purchaser.
Certain terms and conditions of the Notes and Original Warrants
have been
adjusted based upon required terms and conditions of the New Financing.
For such adjustments, the Note Holders received additional warrants
equal
to 100% of their outstanding Original Warrants. These adjustments
reflect
a change to the registration rights of the Note Holders as well
as the
conversion price of the Notes and exercise price of the Original
Warrants.
The adjustments are collectively referred to herein as the “Arrangements.”
Refer to Schedule 6.1 (d)(ii) for Form of
Arrangement.
|
6
(ii) |
As
part of the Bridge Financing, the Company also issued 34,367 five-year
placement agent warrants (the “Placement Agent Warrants”) exercisable at
$0.75 into the Common Stock of the Company. As consideration for
similar
adjustments as made to the Notes in section (i) above, the Placement
Agent
Warrant holders received additional warrants equal to 100% of the
then-outstanding Placement Agent Warrants. Upon Closing and as
part of the
New Financing, additional Placement Agent Warrants exercisable
at a post
Transaction price of $0.35 will be issued. The amount of such additional
Placement Agent Warrants on a pre- Transaction basis is 56,525;
and
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(iii) |
815,750
stock options have been granted under the 2007 Stock Option Plan
to key
employees and consultants (“Grantees”) of the Company. 255,556 of the
granted stock options have been exercised (“Option Exercises”). As part of
the Option Exercises, the Company received promissory notes from
Xxxxxxx
X. Xxxxxxx and Xxxxxx Xxxxxx for a total of $95,000. As part of
this
transaction contemplated by this Agreement, the Grantees of the
remaining
560,194 stock options outstanding have all agreed to reset the
exercise
price of their Options to the five (5) day average closing price
of the
Purchaser’s Stock immediately following the Closing Date. As consideration
for this adjustment to the exercise price, the Grantees have received
additional stock options representing 25% of their still outstanding
options. For details of such options refer to Schedule
6.1(d)(iii).
|
(d) |
the
Company and the Subsidiary hold all licenses and permits as may
be
requisite for carrying on its business in the manner in which it
has
heretofore been carried on and are in good standing with the state
of
their incorporation as well as their states of
operations;
|
(e) |
the
Company has never owned any real property and the premises are
leased to
the Company from Probuild LLC (the "Landlord") under a five year
lease
that ends on July 31, 2009. On September 22, 2007, the Company
notified
the Landlord of its intention to vacate the facility on or before
January
31, 2008. On October 12, 2007, the Company executed a new lease
with a
landlord for a period of three years for approximately 3,800 square
feet
in Brooklyn, NY;
|
(f) |
no
dividend declared by the Company or the Subsidiary has remained
unpaid;
|
(g) |
except
for the payment of salaries, bonuses, sales commission and reimbursement
for out-of-pocket expenses in the ordinary course, at Closing the
Company
or the Subsidiary will not be indebted to any of the Stockholders,
or any
director, officer or employee of the Company, any affiliate or
associate
or any of them, on any account whatsoever;
|
7
(h) |
Schedule
6.1(d)(i)
contains a true and complete list of all obligations, commitments
and
indebtedness of, and security given by, the Company and the Subsidiary
and
the Company and the Subsidiary will not have any other outstanding
indebtedness or any other liabilities other than the normal accounts
payable associated with the business of the
Company;
|
(i) |
all
accounts receivable of the Company and the Subsidiary recorded
in the
books of the Company and the Subsidiary are bona fide, good and
collectible without set-off or
counterclaim;
|
(j) |
other
than the increase in authorized shares, including the creation
of a
preferred share class of stock and the change of name of the Subsidiary,
the articles of the Company and the Subsidiary have not been altered
since
the incorporation of the Company and the registers of members,
registers
of directors, and the minutes of shareholders and directors’ meetings of
the Company and the Subsidiary contained in the minute book of
the Company
and the Subsidiary are accurate and complete and document all material
occurrences and actions of the Company and the Subsidiary since
incorporation, and all meetings of directors and shareholders have,
since
incorporation, been duly
held;
|
(k) |
Schedule
6.1(l)
contains a true and complete list of all the employees and key
independent
contractors of the Company and the Subsidiary. The Employees are
not
unionized, there is no collective bargaining agreement between
the Company
or the Subsidiary and their Employees and the Stockholder is not
aware of
any formal attempts to organize or unionize the Employees of the
Company
or the Subsidiary. There have not been any labor difficulties or
work
stoppages or threats thereof affecting the business;
|
(l) |
the
Company and the Subsidiary maintain insurance against loss or damage
to
its property and, with respect to public liability, as is in accordance
with prudent business
practice;
|
(m) |
there
is no basis for and there are no actions, suits, judgments, investigations
or proceedings outstanding or pending or to the knowledge of the
Company,
the Subsidiary or any of the Stockholders threatened against or
affecting
the Company or the Subsidiary at law or in equity or before or
by any
federal, provincial, municipal or other governmental department,
commission, board, bureau or
agency;
|
(n) |
to
the best of the Stockholders' knowledge, the Company or the Subsidiary
are
not in breach of any laws, ordinances, statutes, regulations, by-laws,
orders or decrees to which they are subject or which apply to
them;
|
(o) |
attached
hereto as Schedule
6.1(p)
are true and complete copies of the Company and the Subsidiary’s audited
financial statements for the fiscal year ended December 31, 2005
and 2006
(the “Company Financial
Statements”);
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8
(p) |
since
the date of the most recent Company Financial Statements there
has not
been:
|
(i) |
any
changes in the condition or operations of the business, assets
or
financial affairs of the Company or the Subsidiary which are or
may be,
individually or in the aggregate, materially adverse or which are
outside
the ordinary and normal course of business;
and
|
(ii) |
any
damage, destruction or loss, labor trouble or other event, development
or
condition (whether or not covered by insurance) which has not been
disclosed to the Purchaser, which has or may adversely affect the
business, assets, properties or future prospects of the Company
or the
Subsidiary;
|
(q) |
the
Company and the Subsidiary do not have any guarantees with respect
to the
obligations of any other person and has no indemnities or contingent
or
indirect obligations with respect to the obligation of any other
person;
|
(r) |
Schedule
6.1(s)
contains a true and complete list of the domain names, patents,
service
marks, trade names, trademarks, industrial designs, or industrial
property
rights (collectively, "Intellectual Property") held by or registered
in
the name of the Company or the Subsidiary;
|
(s) |
the
Company has entered into written Arrangements with its Note Holders;
and
|
(t) |
other
than the contracts and agreements disclosed under Schedule
6.1(u)
and the Employment Agreements, the Company or the Subsidiary do
not have
any material contracts or
agreements.
|
6.2 |
Representations
and Warranties in Closing Documents.
All statements contained in a certificate or other instrument delivered
by
or on behalf of the Company pursuant hereto or in connection with
the
transactions contemplated hereby shall be deemed to be representations
and
warranties by the Company.
|
6.3 |
Survival
of Representations and Warranties.
The representations and warranties of the Company contained in
this
Agreement shall survive the Closing and the payment of the Purchase
Price
and, notwithstanding the Closing and the payment of the Purchase
Price,
the representations and warranties of the Company shall continue
in full
force and effect for the benefit of the
Purchaser.
|
6.4 |
Reliance.
The Company acknowledges and agrees that the Purchaser has entered
into
this Agreement relying on the warranties and representations and
other
terms and conditions of this Agreement as a portion of the information
the
Purchaser is relying on in making the decision to enter into this
Agreement.
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9
SECTION
7
COVENANTS
OF THE STOCKHOLDERS
7.1 |
Stockholders’
Covenants.
Each of the Stockholders individually covenants and agrees with
the
Purchaser that, from and after the date of execution of this Agreement
to
the Closing Date, each of the Stockholders will to the best of
his ability
ensure the execution and delivery of all documents and instruments
required to be executed and delivered by the Stockholders hereunder
and
will take all steps and proceedings and execute such further assurances
and documents as may be required to effect the transfer to and
register
the Future Now Stock in the name of the Purchaser and to fulfill
the terms
and conditions of this Agreement.
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7.2 |
Indemnity
by the Stockholders.
Without prejudicing any other remedy available to the Purchaser
at law or
in equity, the Stockholders shall indemnify and save harmless the
Purchaser from and against any and all costs, losses, damages or
expenses
suffered or incurred by the Purchaser in any manner arising out
of or
relating to:
|
(a) |
any
representation or warranty of the Stockholders set forth in this
Agreement
being untrue or incorrect or the failure of the Stockholders to
observe or
perform any of their obligations pursuant
hereto;
|
(b) |
any
misrepresentation in or omission from any certificate or other
instrument
furnished to the Purchaser hereunder;
and
|
(c) |
any
and all actions, suits, proceedings, demands, assessments, judgments,
costs and legal and other expenses incident to any of the
foregoing.
|
SECTION
8
COVENANTS
OF THE COMPANY
8.1 |
Company’s
Covenants.
The Company covenants and agrees with the Purchaser that, from
and after
the date of execution of this Agreement to the Closing Date, the
Company
will to the best of its
ability:
|
(a) |
conduct
and cause the Subsidiary to conduct its business in the ordinary
and
normal course and will not do or fail to do anything that would
result in
the representations and warranties of the Company herein not to
be true
and correct at the time of
Closing;
|
(b) |
execute
and deliver all documents and instruments required to be executed
and
delivered by the Company hereunder and will take all steps and
proceedings
and execute such further assurances and documents as may be required
to
effect the transfer to and register the Future Now Stock in the
name of
the Purchaser and to fulfill the terms and conditions of this Agreement;
|
10
(c) |
obtain
all necessary shareholders and directors’ resolutions to effect the
transactions contemplated by this Agreement and do all other things
reasonably necessary to facilitate the transactions contemplated
herein;
|
(d) |
maintain
all existing insurance coverage with respect to the business and
premises
in full force and effect until completion of the
Closing;
|
(e) |
ensure
that Xxxxxxx Xxxxxxxxx, Xxxxx Xxxxxxxxx, Xxxxxxx Xxxxxxx, Xxxxxx
Xxxxxx
and Xxxx Xxxxxx Xxx-Xxxxxxx (collectively “Key Employees”) enter into
management agreements made effective as of the Closing Date and
that will
survive the Closing, on the terms and conditions satisfactory to
the
Company and the Key Employees in the general form as provided under
Schedule 8.1(e).
|
8.2 |
Indemnity
by the Company.
Without prejudicing any other remedy available to the Purchaser
at law or
in equity, the Company shall indemnify and save harmless the Purchaser
from and against any and all costs, losses, damages or expenses
suffered
or incurred by the Purchaser in any manner arising out of or relating
to:
|
(a) |
any
representation or warranty of the Company set forth in this Agreement
being untrue or incorrect or the failure of the Company to observe
or
perform any of its obligations pursuant
hereto;
|
(b) |
any
and all indebtedness or liability of the Company existing at the
time of
the Closing which was not disclosed in writing to the Purchaser
by the
Company;
|
(c) |
any
misrepresentation in or omission from any certificate or other
instrument
furnished to the Purchaser hereunder;
and
|
(d) |
any
and all actions, suits, proceedings, demands, assessments, judgments,
costs and legal and other expenses incident to any of the
foregoing.
|
SECTION
9
REPRESENTATIONS
AND WARRANTIES OF THE PURCHASER
9.1 |
Representations
and Warranties of the Purchaser.
The Purchaser represents and warrants, as of the date hereof and
the
Closing Date, that:
|
11
(a) |
Each
report delivered to the Company is a true and complete copy of
such
document as filed by the Company with the Securities and Exchange
Commission (the “SEC”). The Purchaser has filed in a timely manner all
documents that the Purchasser was required to file with the SEC,
such
documents, together with the exhibits thereto (the “SEC Documents”), under
the Securities Exchange Act of 1934, as amended (the “Exchange Act”)
during the twelve calendar months preceding the date hereof.
As of their
respective filing dates, all SEC Documents complied in all material
respects with the requirements of the Exchange Act. None of the SEC
Documents as of their respective dates contained any untrue statement
of
material fact or omitted to state a material fact required to
be stated
therein or necessary to make the statements made therein, in
light of the
circumstances under which they were made, not misleading. The
financial statements of the Purchaser included in the SEC Documents
(the
“Financial Statements”) comply in all material respects with applicable
accounting requirements and with the published rules and regulations
of
the SEC with respect thereto. The Financial Statements have been
prepared in accordance with generally accepted accounting principles
consistently applied and fairly present the consolidated financial
position of the Purchasser and its subsidiaries, if any, at the
dates
thereof and the consolidated results of their operations and
consolidated
cash flows for the periods then ended (subject, in the case of
unaudited
statements, to normal, recurring adjustments or to the extent
that such
unaudited statements do not include footnotes);
|
(b) |
the
Purchaser has full and absolute right power and authority to
enter into
this Agreement on the terms and conditions herein set forth
and to enter
into the transactions contemplated hereby and to issue the
Purchaser Stock
to the Stockholders on the Closing Date;
|
(c) |
the
Agreement, once duly executed, and delivered by the Purchaser will
constitute a legal, valid and binding obligation of the Purchaser
in force
or against the Purchaser in accordance with the terms
herein;
|
(d) |
no
proceedings have been taken or authorized by the Purchaser or to
the
knowledge of the Purchaser by any person with respect to the bankruptcy,
insolvency, liquidation, dissolution or winding up of the Purchaser
or
with respect to any amalgamation, merger, consolidation, arrangement
or
reorganization related to the
Purchaser;
|
(e) |
the
authorized capital stock of the Purchaser consists of 900,000,000
shares
of Common Stock, without par value and 50,000,000 shares of Preferred
Stock with a par value of $0.001, of which 52,848,000 shares of
Common
Stock are issued and outstanding as of the date hereof, all of
which have
been duly and validly authorized to be issued in accordance with
the
applicable laws and validly outstanding, fully paid and
non-assessable;
|
(f) |
as
of the Closing Date there will be:
|
(i) |
no
outstanding options, warrants, rights of first refusals, other
rights to
purchase any shares of the Purchaser or any other securities;
and
|
12
(ii) |
no
other commitments of any kind for the issuance of additional shares
of the
Purchaser, other than disclosed
herein;
|
(g) |
all
the Purchaser Stock will be issued to the Stockholders hereunder
in
compliance with applicable laws and articles of the Purchaser and
would be
issued as fully paid and non-assessable and free and clear of all
liens,
charges, encumbrances and trading restrictions other than as may
be
imposed by securities
regulators;
|
(h) |
the
directors and officers of the Purchaser are as
follows:
|
Name
|
Positions
Held
|
|
Xxxxxx
Xxxxxx
|
President,
CFO and Director
|
(i) |
attached
hereto as Schedule
9(i)
are true and complete copies of the Purchaser’s audited financial
statements for the two fiscal years ended June 30, 2007, and June
30, 2006
(the “Purchaser’s Financial
Statements”);
|
(j) |
the
Purchaser’s Financial Statements are prepared in accordance with the US
GAAP and present fairly the financial position, results of operations
and
statements of changes in the Purchaser’s financial position for the period
indicated;
|
(k) |
no
adverse material changes in the affairs of the Purchaser have occurred
since June 30, 2007 and there are no liabilities contingent or
otherwise
of the Purchaser which are not disclosed or reflected in the Purchaser’s
Financial Statements.
|
(l) |
there
are no litigation proceedings or investigations, planned or threatened
against the Purchaser nor does the Purchaser know or have grounds
to know
of any basis for any litigation proceeding or investigation against
the
Purchaser except as disclosed in writing to the
Stockholders;
|
(m) |
since
December 31, 2006, the Purchaser’s business has been operated
substantially in accordance with all laws, rules, regulations,
and orders
the regulatory authorities and there has not
been:
|
(i) |
any
event or change in the circumstances or liabilities of the Purchaser
that
has had, or which the Purchaser may expect to have, a material
adverse
effect on the Purchaser or its business;
|
(ii) |
any
change in liabilities of the Purchaser that has had, or which the
Purchaser may expect to have, a material adverse effect on the
Purchaser;
|
13
(iii) |
any
incident, assumption or guarantee of any indebtedness for borrowed
money
by the Purchaser;
|
(iv) |
any
payments by the Purchaser in respect of any indebtedness of the
Purchaser
for borrowed money or in satisfaction for any liabilities of the
Purchaser
other than in the ordinary course of
business;
|
(v) |
the
creation, assumption or sufferance of the existence of any lien
or any
assets reflected on the Purchaser’s Financial
Statements;
|
(vi) |
any
transaction or commitment made, or any contract entered into by
the
Purchaser;
|
(vii) |
any
grant of any severance, continuation or termination paid to any
directors,
officers, stockholders or employees of the Purchaser or the entering
into
of any employment deferred compensation or other similar agreement
or
amendment or variation to any such existing
agreement;
|
(viii) |
any
change by the Purchaser in its accounting principles, methods or
practices
or in the manner it keeps its books and
records;
|
(ix) |
any
distribution, dividend, bonus, management fee or other payment
by the
Purchaser to any of its respective officers, directors, stockholders
or
affiliates or any of their respective affiliates or associates;
and
|
(x) |
any
material capital expenditures or commitment by the Purchaser or
material
sale, assignment, transfer, lease or other dispositions of or agreement
to
sell, assign, transfer, lease or otherwise dispose of any assets
of
property by the Purchaser other than in the ordinary course of
business;
|
(n) |
there
are no contracts or indebtedness between the Purchaser and any of
its
shareholders, affiliates, or associates of any of its shareholders
other
than disclosed herein;
|
(o) |
there
are no material contracts to which the Purchaser is a party other
than as
specified in this Agreement;
|
(p) |
the
operation of the Purchaser’s business has not violated or infringed any
securities laws or
regulations;
|
(q) |
the
information contained in the documents, certificates and written
statements, including this Agreement and the attachments thereto,
furnished by the Purchaser to the Stockholders, is true and complete
in
all material respects and does not omit to state any material facts
necessary in order to make the statements therein not
misleading;
|
14
(r) |
there
are no facts known to the Purchaser that have not been disclosed
to the
Stockholders in writing that could reasonably have a material adverse
effect on the Purchaser;
|
(s) |
the
Purchaser is acquiring the Future Now Stock for investment in its
own
account and not as a nominee or agent and not with a view to or
for resale
in connection with any distributions thereof in the United States.
The
Purchaser understands that the Future Now Stock has not been and
will not
be registered under the US securities laws and the applicable state
laws
by reason of a specific exemption from the registration provisions
of the
US securities laws and the state laws, the availability of which
depends
upon, among other things, the bona fide nature of the investment
intent
and the accuracy of the Purchaser’s representations as expressed
herein;
|
(t) |
the
Purchaser is a U.S. Company and is not acquiring the Future Now
Stock for
the account or benefit of any U.S. person;
|
SECTION
10
COVENANTS
OF THE PURCHASER
10.1 |
Covenants
of the Purchaser.
The Purchaser covenants and agrees with the Company and the Stockholders
that:
|
(a) |
it
will pay on the Closing Date the Purchase Price in the manner described
in
this Agreement;
|
(b) |
from
and after the date of this Agreement until the Closing, as soon
as the
Purchaser has determined that a state of facts exists which results
in or
will result in any representation or warranty contained in this
Agreement
being untrue or incorrect in any material respect on the Closing
Date, the
Purchaser will notify the Company and the Stockholders of such
state of
facts; and
|
(c) |
it
will attend to obtaining shareholders’ approval of this
Agreement.
|
10.2 |
Indemnity
by the Purchaser.
The Purchaser shall indemnify and save harmless the Company and
the
Stockholders from and against any and all costs, losses, damages
or
expenses suffered or incurred by the Company and the Stockholders
in any
manner arising out of or relating
to:
|
(a) |
any
misrepresentation or non-fulfillment of any covenant on the part
of the
Purchaser under this Agreement;
and
|
(b) |
any
and all actions, suits, proceedings, demands, assessments, judgments,
costs and legal and other expenses incident to any of the
foregoing.
|
15
SECTION
11
CLOSING
CONDITIONS
11.1 |
Conditions
Precedent to Closing by the Purchaser.
The Purchaser’s obligation to consummate the transactions contemplated by
this Agreement is subject to the satisfaction of the conditions
set forth
below and/or the delivery of all of the documents, items, certificates
and
instruments described below, all of which documents, items, certificates
and instruments must be in form and substance satisfactory to
the
Purchaser, unless any such condition is waived by the Purchaser
at the
Closing. The Closing of the Transaction contemplated by this
Agreement
will be deemed to mean a waiver of all conditions to Closing.
|
(a)
|
Representations
and Warranties.
The representations and warranties of the Stockholders and the Company
set
forth in this Agreement will be true, correct and complete in all
respects
as of the Closing Date, as though made on and as of the Closing Date.
The
representations and warranties of the Stockholders and Company in
this
Agreement, subject to any supplement to the schedules of this Agreement,
will be true, correct and complete in all material respects as of
the date
hereof and as of the Closing Date, as though made on and as of such
dates
and the Stockholders and the Company will each have delivered to
the
Purchaser a certificate dated as of the Closing Date, to the effect
that
the representations and warranties made by the Stockholders and the
Company in this Agreement are true and correct, or if they are not
true
and correct, including a description of the extent to which they
are no
longer true and correct.
|
(b)
|
Supplement
to Schedules.
Any additional disclosures made in the supplemental Schedules of
the
Stockholders and Company made pursuant to this Agreement will be
acceptable to the Purchaser in its sole
discretion.
|
(c) |
Performance.
All of the covenants and obligations that the Stockholders and
Company are
required to perform or to comply with pursuant to this Agreement
at or
prior to the Closing (considered collectively), and each of these
covenants and obligations (considered individually), must have
been
performed and complied with in all material respects. The Stockholders
and
the Company must have delivered each of the documents required
to be
delivered by it pursuant to this Agreement and any other documents
reasonably requested by the Stockholders or the Company and all
such
documents are satisfactory to the
Purchaser.
|
(d) |
Secretary’s
Certificate - Company.
The Purchaser will have received: (i) a certificate of the Secretary
or Assistant Secretary of the Company attaching (a) a copy of the
Company’s certificate of incorporation, as amended through the Closing
Date certified by the Secretary of State of the State of Delaware,
(b) a true and correct copy of the Company’s bylaws, as amended and
(c) true and correct copies of resolutions of the Company’s board of
directors and Stockholders authorizing this Agreement and the Transaction
contemplated herein; and (ii) a certificate of the Secretary or
Assistant Secretary of the Company as to the incumbency and signatures
of
the officers of the Company executing this Agreement and the Transaction
documents executed by the Company on the Closing Date as contemplated
by
this Agreement.
|
16
(e) |
Transfer
of Certificates; Release of Liens.
The Purchaser will have received the certificates representing
the issued
and outstanding Future Now Stock, duly endorsed in blank (or accompanied
by duly executed stock powers duly endorsed in blank), in each
case in
proper form for transfer, with signatures guaranteed, and, if applicable,
with all stock transfer and any other required documentary stamps
affixed
thereto or appropriate instructions or agreements from the Stockholders
to
allow the shares of Future Now Stock to be legally and beneficially
transferred into the name of the Purchaser. The Purchaser will
receive
evidence to its satisfaction that any liens or encumbrances on
the Future
Now Stock have been released as of the Closing
Date.
|
(f) |
Financing.
The Purchaser will have received evidence from the Purchaser’s deposit
agent for the New Financing (as defined in Section 3.8) that (i) it
is holding signed investment documents from offerees for at least
$1,000,000 in readily available funds from such offerees, and
(ii) there are appropriate instructions in effect so that,
immediately after the Closing Date, the Purchaser will receive
net
proceeds from the New Financing of at least $1,000,000, net of
any and all
fees and other New Financing obligations, including, but not limited
to,
prepaid interest, commissions, placement
fees.
|
(g) |
No
Material Adverse Change.
As of the Closing Date, there will have been no material adverse
change in
the business, operations, properties, prospects, assets, or condition
of
the Company or its Subsidiary and no event will have occurred or
circumstance will have arisen that may result in such a material
adverse
change.
|
(h) |
Employment
Agreement.
The Purchaser, the Company, or the Company’s Subsidiary will have entered
into an employment agreement with each of Xxxxxxx Xxxxxxxxx, Xxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxx, Xxxx Xxxxxx Xxx-Xxxxxxx and Xxxxxx
Xxxxxx, in
substantially the form of Schedule
11.1(h)
attached to this Agreement (each, the “Employment Agreement” and
collectively, the “Employment Agreements”).
|
(i) |
Post-Closing
Directors and Resolutions.
The Post-Closing Directors (as defined in Section 4) will have
been
identified and/or approved by the relevant parties and duly appointed
to
the Purchaser’s Board of Directors as described in Section 4. The
Post-Closing Directors of the Purchaser will execute the Closing
Date
Resolutions.
|
(j) |
Adjustment
to the Company’s Note Holders Notes and Warrants.
The Purchaser will have received documentation to its satisfaction
evidencing the adjustment to the Company’s Note Holder Notes and Original
Warrant agreements (collective the “Investment Agreements”) related to the
reset of the conversion and exercise price as well as their registration
rights.
|
17
11.2 Conditions
Precedent to Closing by the Stockholders.
The
Stockholders’ obligation to consummate the Transaction contemplated by this
Agreement is subject to the satisfaction of the conditions set forth below
and/or the delivery of all of the documents, items, certificates and instruments
described below, all of which documents, items, certificates and instruments
must be in form and substance satisfactory to the Stockholders, unless such
condition is waived by the Stockholders at the Closing. The Closing of the
Transaction contemplated by this Agreement will be deemed to mean a waiver
of
all conditions to Closing.
(k) |
Representations
and Warranties.
The representations and warranties of the Purchaser set forth in
this
Agreement will be true, correct and complete in all respects as
of the
Closing Date, as though made on and as of the Closing Date. The
representations and warranties of the Purchaser in this Agreement,
subject
to any supplement to the schedules made pursuant to this Agreement,
will
be true, correct and complete in all material respects as of the
date
hereof and as of the Closing Date, as though made on and as of
such dates
and the Purchaser will have delivered to the Stockholders a certificate
dated the Closing Date, to the effect that the representations
and
warranties made by the Purchaser in this Agreement are true and
correct,
or if they are not true and correct, including a description of
the extent
to which they are no longer true and correct.
|
(l) |
Supplement
to Schedules.
Any additional disclosures made in the supplemental schedules of
the
Purchaser made pursuant to this Agreement will be acceptable to
the
Stockholders in their sole
discretion.
|
(m) |
Performance.
All of the covenants and obligations that the Purchaser is required
to
perform or to comply with pursuant to this Agreement at or prior
to the
Closing (considered collectively), and each of these covenants
and
obligations (considered individually), must have been performed
and
complied with in all material respects. The Purchaser must have
delivered
each of the documents required to be delivered by it pursuant to
this
Agreement.
|
(n) |
Secretary’s
Certificate.
The Stockholders will have received (i) a certificate of the
Secretary or Assistant Secretary of the Purchaser attaching (a) a
copy of the Purchaser’s certificate of incorporation, as amended through
the Closing Date certified by the Secretary of State of the State
of
Nevada, (b) a true and correct copy of the Purchaser’s bylaws, as
amended and (c) true and correct copies of resolutions of the
Purchaser’s board of directors authorizing this Agreement and the
transactions contemplated herein; and (ii) a certificate of the
Secretary or Assistant Secretary of the Purchaser as to the incumbency
and
signatures of the officers of the Purchaser executing this Agreement
and
any other Transaction documents executed by the Purchaser on the
Closing
Date as contemplated by this Agreement.
|
(o) |
Certificates
for Purchaser Stock.
The Stockholders will have received the certificates representing
the
Purchaser Stock, duly executed (or accompanied by duly executed
stock
powers) or evidence that the Purchaser has given written instructions
to
the Purchaser’s transfer agent for the delivery of the certificates to the
Stockholders.
|
18
(p) |
Financing.
The Stockholders will have received evidence from the Purchaser’s deposit
agent for the New Financing (as defined in Section 3.8) that (i) it
is holding signed Investment Documents from offerees for at least
$1,000,000 in readily available funds from such offerees, and
(ii) there are appropriate instructions in effect so that,
immediately after the Closing Date, the Purchaser will receive
net
proceeds from the New Financing of at least $1,000,000, net of
any and all
fees and other New Financing obligations, including, but not limited
to,
prepaid interest, commissions, placement
fees.
|
(q) |
No
Action.
No suit, action, or proceeding will be pending or threatened before
any
governmental or regulatory authority wherein an unfavorable judgment,
order, decree, stipulation, injunction or charge would (i) prevent
consummation of any of the transactions contemplated by this Agreement
as
reasonably determined by the Stockholders; (ii) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation; or (iii) adversely affect the right of the Purchaser to
own, operate or control the business or assets of the
Purchaser.
|
(r) |
Post-Closing
Directors and Resolutions.
The Post-Closing Directors (as defined in Section 4) will have
been
identified and/or approved by the relevant parties and duly appointed
to
the Purchaser’s Board of Directors as described in Section 4. The
Post-Closing Directors of the Purchaser will execute the Closing
Date
resolutions.
|
(s) |
Reporting
Company.
The Purchaser will be up to date with all of its regulatory filing
obligations with the SEC and any information required to maintain
the
reporting of trades in the common stock on the OTC Bulletin Board
(“OTCBB”).
|
(t) |
Due
Diligence Review.
The Stockholders will be reasonably satisfied in all respects with
their
due diligence investigation of the
Purchaser.
|
10.3 |
Closing
Escrow.
All documents, New Financing proceeds and checks shall be delivered
in
escrow and all matters of payment, execution, delivery of closing
documents shall be deemed to be concurrent requirements and it
is
specifically agreed that nothing will be complete at the Closing
until
everything required to complete the Closing has been paid, executed,
delivered or fully registered, as the case may
be.
|
SECTION
12
RELEASE
OF CLAIMS
12.1
|
By
executing this Agreement, each Stockholder voluntarily releases the
Company, its directors and affiliates and assigns from any and all
manner
of actions, causes of actions, suits, proceedings, debts, dues, profits,
expenses, contracts, damages, claims, demands and liabilities whatsoever,
in law or equity, whether known or unknown, suspected or unsuspected,
which the Stockholders ever had, now have, or may have against the
Company
for or by reason of any matter, cause or thing whatsoever done or
omitted
to be done by the Company up to the Closing. Each Stockholder hereby
declares that in making this release it is understood and agreed
that it
relies wholly on his/her own judgment, belief and knowledge and the
nature
of this release has not been influenced to any extent whatsoever
in making
this release by any representation or statement regarding the rights
of
the parties hereto made by the Company or any person or persons
representing the Company and the terms of this release are contractual
and
not a mere recital.
|
19
SECTION
13
GENERAL
PROVISIONS
13.1 |
Time
of Essence.
Time shall be of the essence in this
Agreement.
|
13.2
|
No
Merger and Survival.
The representations, warranties, covenants, indemnities and agreements
contained in this Agreement or pursuant hereto shall not merge at
the
Closing and shall survive and continue in full force and effect from
the
Closing Date.
|
13.3
|
Notice.
All notice, waiver or other communication required or permitted to
be
given hereunder shall be in writing and signed by or on behalf of
such
party and shall be given to the other party by delivery thereto,
or by
sending by prepaid registered mail, telex or facsimile to the address
of
the other party as herein set forth or to such other address of which
notice is given, and any notice shall be deemed not to have been
sufficiently given until it is received. Any notice or other communication
contemplated herein shall be deemed to have been received on the
day
delivered, if delivered; on the fourth business day following the
mailing
thereof, if sent by registered mail; and the second business day
following
the transmittal thereof, if sent by telex or facsimile. If normal
mail,
telex or facsimile service shall be interrupted by strike, slowdown,
force
majeure or other cause, the party sending the notice shall utilize
any of
such services which have not been so interrupted or shall deliver
such
notice in order to ensure prompt receipt of same by the other
party.
|
13.4
|
Waiver.
No waiver of any of the provisions of this Agreement will be deemed
or
will constitute a waiver of any other provision (whether or not similar)
nor will any waiver constitute a continuing waiver unless otherwise
expressly provided.
|
13.5
|
Regulatory
Approval.
This Agreement is subject to incorporation and review by SEC regulators
on
a Form 8-K. Form 8-K is to be substantially completed by the Purchaser
in
a form as acceptable to the
Company.
|
13.6
|
Modifications
and Approvals.
No amendment, modification, supplement, termination or waiver of
any
provision of this Agreement will be effective unless in writing signed
by
the appropriate party and then only in the specific instance and
for the
specific purpose given.
|
20
13.7
|
Further
Assurances.
Each of the parties hereby covenants and agrees to execute any further
and
other documents and instruments and to do any further and other things
that may be necessary to implement and carry out the intent of this
Agreement.
|
13.8
|
Inurement
and Assignment.
This Agreement will inure to the benefit of and will be binding upon
the
Stockholders and the Company and the Purchaser, and their respective
personal representatives, heirs, executors, administrators, successors
and
permitted assigns. Neither party will assign its rights or obligations
under this Agreement or any part
thereof.
|
13.9
|
Counterparts.
This Agreement may be executed in counterparts or by facsimile and
each
such Agreement or facsimile so executed shall be deemed to be an
original
and such counterparts together shall constitute one and the same
Agreement.
|
13.10
|
Severability.
If any one or more of the provisions contained in this Agreement
should be
invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of such provision or provisions shall not in any
way be
affected or impaired thereby in any other jurisdiction and the validity,
legality, and enforceability of the remaining provisions shall not
in any
way be affected or impaired thereby in any other jurisdiction and
the
validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired
thereby.
|
13.11
|
Included
Words.
Words importing the singular include the plural and vice-versa, and
words
importing gender include all
genders.
|
13.12
|
Entire
Agreement.
This Agreement, together with the Schedules hereto, constitutes the
entire
agreement between the parties pertaining to the subject matter hereof
and
supersedes all prior agreements, understandings, negotiations and
discussions whether oral or written, of the parties and there are
no
warranties, representations or other agreements between the parties
in
connection with the subject matter hereof except as specifically
set forth
herein.
|
13.13
|
Headings.
The section and subsection headings are included solely for convenience,
are not intended to be full or accurate descriptions of the content,
or to
be considered part of this
Agreement.
|
13.14
|
Governing
Law.
This Agreement shall be construed and enforced in accordance with
the laws
of the State of Nevada.
|
13.15
|
Confidentiality.
In the event that the transactions contemplated in this Agreement
are not
concluded, the parties hereto agree that all information received
or
obtained hereunder or pursuant thereto shall be kept confidential
except
such information as may be required to be disclosed or published
by
regulatory bodies having jurisdiction and any and all material received
by
the Purchaser from the Stockholders relating to the business of the
Company shall be returned to the
Stockholders.
|
[Rest
of Page Intentionally Left Blank - Signature Page to
Follow]
21
IN
WITNESS WHEREOF the parties have executed this Agreement on the date first
above
written.
Company Stockholders |
Shares
Held/Escrowed
|
|
Xxxxxxxxx Holdings, LLC By:
Xxxxxxx Xxxxxxxxx, Member As Authorized
|
Shares
Held: 3,965,609
|
|
Xxxx Xxxxxx-vonTivadar |
Shares
Held: 244,706
Shares
Escrowed: 209,916
|
|
Xxx
& Xxxxxx Xxxxxxxx
|
Shares
Held: 454,622
|
|
Xxxx X. Xxxxx |
Shares
Held: 90,924
|
|
Xxxxxxx
X. Xxxxxxx
|
Shares
Held: 218,929
|
|
L.
Xxxxxx Xxxxx
|
Shares
Held: 151,670
|
|
Xxxxxxx
X. Xxxxxxx
|
Shares
Held: 8,000
|
|
Xxxxx
Xxxxxx
|
Shares
Held: 32,000
|
|
Xxxxxx
Xxxxxx
|
Shares
Held: 55,556
|
|
Xxxxxx
Xxxx 1999 Revocable Trust
|
Shares
Held: 8,000
|
|
Xxxxx
Xxxxxxx
|
Shares
Held: 8,000
|
22
The
Purchaser:
|
|
By:
Authorized
Signatory
Name:
_____________________________
Title:
______________________________
|
|
The
Company:
|
|
FUTURE
NOW, INC.
Per:
Authorized
Signatory
Name: Xx.
Xxxxxxx Xxxxxxxxx
Title:
Chief Executive Officer
|
23
List
of Schedules to Share Purchase Agreement
Schedule
|
Page
of Agreement
|
Content
of Schedule
|
||
2.1
|
Company
Stockholders
|
|||
6.1(d)(i)
|
Obligations,
indebtedness and security given of the Company
|
|||
6.1(d)
(ii)
|
Form
of Arrangement with Original Bridge Investors
|
|||
6.1(d)(iii)
|
List
of outstanding options and warrants
|
|||
6.1(l)
|
List
of employees and key independent contractors
|
|||
6.1(p)
|
Company’s
consolidated audited Financial Statements
|
|||
6.1(s)
|
Intellectual
property list
|
|||
6.1(u)
|
Material
agreements of the Company and the Subsidiary
|
|||
8.1
(e)
9.1(i)
11.1(h)
|
Form
of Management Agreement with Key Employees
Purchaser’s
audited Financial Statements
Form
of employment agreements
|
24
SCHEDULE
2.1 - COMPANY STOCKHOLDERS
Company
Shareholders
|
Pre-RTO
Shares Held
|
Pre-Reverse
% Undiluted
|
Post-RTO
Shares Held
|
|||||||
Xxxxxxxxx
Holdings, LLC.
|
3,965,609
|
72.8
|
%
|
36,681,883
|
||||||
Xxxx
Xxxxxx Xxx-Xxxxxxx
|
454,622
|
8.3
|
%
|
4,205,254
|
||||||
Xxx
& Xxxxx Xxxxxxxx
|
454,622
|
8.3
|
%
|
4,205,254
|
||||||
Xxxx
X Xxxxx
|
90,924
|
1.7
|
%
|
841,047
|
||||||
Xxxxxxx
X. Xxxxxxx
|
218,929
|
4.0
|
%
|
2,025,093
|
||||||
L.
Xxxxxx Xxxxx
|
151,759
|
2.8
|
%
|
1,403,771
|
||||||
Xxxxxxx
X Xxxxxxx
|
8,000
|
0.1
|
%
|
74,000
|
||||||
Xxxxx
Xxxxxx
|
32,000
|
0.6
|
%
|
296,000
|
||||||
Xxxxx
Xxxxxxx
|
8,000
|
0.1
|
%
|
74,000
|
||||||
Xx.
Xxxxxx Xxxx
|
8,000
|
0.1
|
%
|
74,000
|
||||||
Xxxxxx
Xxxxxx
|
55,556
|
1.0
|
%
|
513,889
|
||||||
|
||||||||||
|
5,448,021
|
100
|
%
|
50,394,190
|
Addresses:
Certificate
Holder
|
Address
|
|
Xxxx
Xxxxxx-vonTivadar
|
000
Xxxxxx Xxx
Xxxxxxxx,
XX 00000
|
|
Xxxxxxx
X. Xxxxxxx
|
00
Xxxxxxxx Xxxxxx Xx
Xxxxxxxxx,
XX 00000
|
|
Xxxxxxxxx
Holdings LLC
|
c/o
Xxxxxxx Xxxxxxxxx
0000
Xxxx 00xx
Xxxxxx
Xxxxxxxx,
XX 00000
|
|
Xxxxx
Xxxxxx
|
000
Xxxxxxxxx Xxxx
Xxxxxxxxx,
XX. 00000
|
|
Xxxxxx
Xxxx 1999 Revocable Trust
|
c/o
Xx. Xxxxxx Xxxx
000
Xxxxxx Xxx Xxxxx
Xxxxxxx
Xxxxx, XX 00000
|
|
Xxxxxxxx
X Xxxxx
|
X.X.
Xxx 0000
Xxxxxxx,
XX. 00000
|
|
Xxxxxxx
X. Xxxxxxx
|
000
Xxx Xxxxxxx Xx, Xxxx 0
Xxx
Xxxxxx, XX 00000
|
Xxxx
X Xxxxx
|
000
Xxxx Xxxxx
Xxxxxx,
XX 00000
|
|
Xxx
and Xxxxxx Xxxxxxxx
|
00000
Xxxxxxx Xxxxx Xxxxx
Xxxxxx,
XX 00000
|
|
Xxxxx
Xxxxxxx
|
0000
Xxxxxx Xxx, Xxx 0
Xxxxxxxxxx,
XX 00000
|
|
Xxxxxx
Xxxxxx
|
000
Xxxxxxx Xxxxxx
Xxxxxxxx,
XX 00000
|
25
SCHEDULE
6.1(d)(i) - COMPANY OBLIGATIONS, INDEBTEDNESS AND SECURITY
GIVEN
Description
|
$
Obligation
|
|
Computer
Equipment Lease dated January 25, 2007 for 48 months at $870 per
month
|
Face
amount financed
$28,219.27
|
|
$675,000
face value convertible promissory notes, warrant agreement and
registration rights agreement (collectively, the “Investment Agreements”)
- 18 separate note holders
|
Original
Face amount of $675,000 - Balance as of Closing
$475,000
|
|
Issued
in Units (“Unit”), each unit consisting of; $50,000 Face Value Promissory
Notes and Warrants to Purchase 16,000 shares of the Company’s Common Stock
(or like security issued in a Qualified Financing or Acquisition),
at
$0.75 per share. If the Note conversion option is elected, each Unit
will
convert into a minimum of 15,385 shares of the Company’s Common Stock at
$3.25 per share
|
||
The
Notes will be automatically repaid by the Company on a pro-rata basis
through the following: To the extent that the Company generates revenues
the holders of the Notes shall receive re-payment of a portion of
their
investment amount at the end of each semi-annual period until they
have
received their entire investment amount plus the ten and one-half
percent
(10.5%) annual coupon. In order to provide for such redemption, the
Company will place three and one-half percent (3.5%) of the gross
revenues
derived by the Company into a separate bank account (the “Redemption
Funds”). The Redemption Funds will be distributed pro-rata among the
holders of the Notes within thirty (30) business days after the end
of
each semi-annual measurement period.
|
||
Unless
otherwise paid off through the Gross Sales Escrow Account, all the
principal and interest on the Notes will be due and payable upon
the
earlier of (i) upon demand made any time after the date that is 36
months from initial issuance of a Note, (ii) the date upon which the
Company completes the sale of Common Stock (or like security) for
aggregate gross proceeds of at least $2.5 million (a “Qualified
Financing”),
or (iii) the closing of an acquisition of the Company, and Change of
Control, as defined, whether by material merger, reorganization,
sale of
assets or other similar material transaction (an “Acquisition”).
Note; (ii), (iii) and (iv) collectively referred to as “Maturity
Events.”
|
||
At
the Note holder’s option, all or a portion of, the principal and accrued
interest on the Notes may be converted into shares of Common Stock
(or a
like security); (i) issued in a Qualified Financing at the closing of
the Qualified Financing (determined as if such conversion were gross
proceeds to the Company of such financing); or (ii) at the market
value of an Acquisition. The number of shares into which the Notes
are
convertible will be equal the quotient of the converted principal
and
interest divided by the Lower or (i) the price per share issued in
the Qualified Financing or the Acquisition, at a 20% discount or
(ii) $3.25. Each Note shall also convert into securities of the
Company on any other terms agreed upon by the Company and the holders
of a
majority of the outstanding principal amount of the Notes (a “Majority”).
|
||
Interest
shall accrue on all outstanding principal amounts of the Notes at
a rate
of 10.5% per annum based on a 365-day year. Interest shall be due
and
payable semi-annually, in arrears.
|
||
The
Warrants are seven year warrants and are exercisable into one share
of the
Company’s Common Stock (or like security) issued with a Qualified
Financing or Acquisition. Exercise price is $0.75 and contains a
cashless
exercise provision.
|
26
SCHEDULE
6.1(d)(ii) - FORM OF ARRANGEMENT WITH ORIGINAL BRIDGE
INVESTORS
October
6, 2007
RE:
Letter Agreement for additional consideration and addendums to Convertible
Note
(“Note Agreement”), Warrant (“Warrant Agreement”), and Registration Rights
Agreements (“Reg Rights Agr”), (all three collectively, the “Investment
Document”) with Future Now, Inc. (the “Company”)
We
are
pleased to inform you that we are in the final stages of our transaction whereby
the Company will effectively merge into Future Now Group, Inc (“FNGI”), a fully
reporting public entity, traded on the NASDAQ Over the Counter Bulletin Board
under the symbol FUTR (the “Transaction”). This Transaction will provide the
Company access to the public capital markets to accelerate its business
expansion and financing plans. Following the closing of the Transaction, the
Company and its management will take over control of FNGI. Furthermore, on
or
about the closing date of the Transaction, FNGI is expected to close on
additional funding which we anticipate will provide FNGI with approximately
$1
million in capital, net of fees, including, but not limited to, commissions,
placement and legal fees (the “New Financing”)
The
Transaction or the New Financing do not qualify as a redemption event as
provided for under Section 2(b) of your Note Agreement, which states; “the Notes
shall be redeemed at the earlier of (i) three years from issuance date, or;
(ii)
the date upon which the Company completes the sale of Common Stock (or like
security, including convertible debt instruments) for aggregate proceeds of
at
least $2,500,000 (“Qualified Financing”), or; (iii) the closing of a material
acquisition of the Company and Change of Control, as defined, whether by merger,
recapitalization, sale of assets or other similar material transaction
(“Acquisition”). Change of Control shall mean the sale and/or transfer of in
excess of 50% of then outstanding voting stock of the Company.” However, please
note that this New Financing will be credited toward the aggregate proceed
calculation for a Qualified Financing that would trigger Note
repayment.
To
facilitate with the closing of the New Financing and the success of the
Transaction, please acknowledge your agreement to the following addendums (the
“Addendums”). THESE
ADDENDUMS ONLY RELATE TO THE TRASACTION DISCUSSED HEREIN AND IF NO CLOSING
SHOULD OCCUR THIS LETTER AGREEMENT WILL BECOME NULL AND
VOID.
a) |
To
Note Agreement - Section 2(2) will be amended as follows; ““Conversion
Price” means the lower of the (i) price per share in a Qualified Financing
or Acquisition, at a 20% discount, or (ii) the five (5) day average
closing price of FNGI stock from the day of Closing, or (iii) the
conversion price of the convertible note as provided for in with
the New
Financing, at a 20% discount.”
|
b) |
To
the Warrant Agreement - Section 1(b) will be amended as follows;
“Subject
to the adjustments contained in Paragraph 8, the “Exercise Price” per
Warrant Share shall be at the lower of the (i) exercise price granted
for
any warrant issued as part of the New Financing, or (ii) the five
(5)
trading day average closing price of FNGI stock from the day of
Closing.”
|
c) |
To
the Registration Rights Agreement - Section 1(a) will be amended
as
follows; “The Holders agree to amended their piggyback registration rights
such that they allow for any required registration provisions applicable
to the New Financing to be first
met.
|
27
As consideration (the “Consideration”) for your agreement to the above Addendums, you will receive: Additional warrant certificates equal to 100% of the current warrants presently in your possession priced at the same discounted terms as described in item (a) above.
Please
note that all other terms and conditions of your Investment Documents will
remain the same including the Note Redemption Feature which calls for the
automatic redemption of the Notes in an amount applied which represents three
and one-half percent (3.5%) of the Company’s gross revenue. Some of you have
received your first six month interest coupon with others based upon investment
date will be receiving theirs shortly.
As
we are
in the process of gathering all closing documents, please sign below and return
in the self-addressed express mail envelope enclosed. Please feel free to
contact Xxxxxxx X. Xxxxxxx, our Chief Financial Officer or myself with any
questions. We look forward to closing this Transaction and continuing to
maximize our shareholders value. As required per the Investment Document you
will receive new Investment Documents reflecting the above Addendums and
Consideration. For your reference we have also attached hereto the Consolidated
Audited Financial Statements for the Company as of December 31, 2005 and
2006.
If
you
have any further questions on this, please also note that we will be having
a
general conference call with our current investors on Thursday, October 11,
2007
at 11:00 eastern standard time. To attend this discussions please follow the
instructions below:
Call
into:
|
000-000-0000
|
When
prompted code
|
|
In
the following:
|
12342154#
|
We
appreciate your continued support and look forward to much success in the
future.
Sincerely,
Xxxxxxx
Xxxxxxxxx
Chief
Executive Officer
28
SCHEDULE
6.1(d)(iii) - LIST OF STOCK OPTIONS & WARRANTS
Instrument
& Name
|
Pre-Transaction
Options Outstanding
|
Add'l
Issuances for Agreed Upon Adjustments
|
Total
Closing
|
|||||||
Stock
Options Grants:
|
||||||||||
Xxxxxxx
Xxxxxxx
|
293,750
|
32,500
|
326,250
|
|||||||
Xxxxxx
Xxxxxx
|
144,444
|
17,361
|
161,806
|
|||||||
Xxxxx
Buhcanan
|
50,000
|
12,500
|
62,500
|
|||||||
Xxxxxxx
Xxxxxx
|
50,000
|
12,500
|
62,500
|
|||||||
Xxxxxxx
Xxxxxx
|
2,000
|
500
|
2,500
|
|||||||
Xxxxxxx
Xxxx
|
10,000
|
2,500
|
12,500
|
|||||||
Xxxxx
Xxxx
|
10,000
|
2,500
|
12,500
|
|||||||
Total
Options
|
560,194
|
80,361
|
640,556
|
|||||||
Note
Holder Warrants:
|
||||||||||
Stock
Purchase Warrants
|
104,000
|
104,000
|
208,000
|
|||||||
Various
Note Holders
|
||||||||||
Other
Warrant Holders:
|
||||||||||
|
||||||||||
Placement
Agent Warrants
|
34,367
|
90,892
|
125,259
|
29
SCHEDULE
6.1(l) - LIST OF EMPLOYEES AND KEY INDEPENDENT CONTRACTORS OF THE
COMPANY
Active
Employee/Contractor
Xxxxxxxxx,
Xxxxx
Xxxxxx,
Xxxxxxx
Xxxxxx,
Xxxxxxx
Xxxxxx,
Xxxx
Xxx,
Xxxxx
XxXxxxxx,
Xxxxxx
Xxxxxxx,
Xxxxxx
Xxx
Xxxxxxxxxx
Xxxxx,
Xxxx
Xxxx,
Xxxxx
Xxxxxxxxx
Xxxxxx
Xxxxxx,
Xxxxxx
Quarto-vonTivadar,
Xxxx
Xxxxxxxxx,
Xxxxx
Xxxxx,
Xxxxx
Xxxxxx,
Xxxxx
Xxxxxxxxx,
Xxxxxx
Xxxxx,
Xxxxx
Xxxxxxx,
Xxxxx
Xxxxxxxxx,
Xxxx
Xxxxxxx,
Xxxxxxx
Xxxxxx
Xxxxxx
30
SCHEDULE
6.1(p) - COMPANY’S CONSOLIDATED FINANCIAL STATEMENTS
31
SCHEDULE
6.1(s) INTELLECTUAL PROPERTY LIST
URLS:
xxx.xxxxxxxxxxxxxxxxxxxxxxxxx.xxx; xxx.xxxxxxxxxxxx.xxx;
xxx.xxxxxxxxxx.xxx
PATENTS:
None presently pending.
TRADEMARKS:
“PERSUASION ARCHITECTURE” presently pending.
32
SCHEDULE
6.1(u) - MATERIAL CONTRACTS OF THE COMPANY & SUBSIDIARY (OTHER THAN
EMPLOYMENT AGREEMENTS)
- |
Office
Lease Agreement Dated October 17, 2007 for Occupancy December 15,
2007.
|
- |
Promissory
Notes with Xxxxxxx X Xxxxxxx and Xxxxxx
Xxxxxx
|
33
SCHEDULE
8.1(e) - FORM OF MANAGEMENT AGREEMENT WITH KEY EMPLOYEES
34
SCHEDULE
9.1(i) - PURCHASER’S AUDITED ANNUAL FINANCIAL STATEMENTS
35
SCHEDULE
11.1(h) - DRAFT FORM OF EMPLOYMENT AGREEMENTS
36