STOCK PURCHASE AGREEMENT
STOCK
PURCHASE AGREEMENT, dated as of April 15, 2008 but effective as of the Closing
Date (defined herein) (this “Agreement”),
by
and among Cyberspace Vita, Inc., a Nevada corporation (the “Company”),
Xxxxx
X. Xxxxxx (the “Seller”)
and
the entities listed on Exhibit
A
(the
“Purchaser”).
The
Company, the Seller and the Purchaser are individually referred to herein as
a
“Party”
and
collectively, as the “Parties”.
BACKGROUND
The
Seller is the owner of 4,000,000 shares of common stock of the Company (the
“Seller
Shares”).
The
Seller desires to sell and the Purchaser desires to purchase the Seller Shares
which represent approximately 80.8%
of
the issued and outstanding capital stock of the Company as of the date hereof
calculated on a fully-diluted basis pursuant to the terms hereof.
AGREEMENT
NOW,
THEREFORE, in consideration of the foregoing and the mutual promises and
covenants herein contained, the Company, the Seller and the Purchaser hereby
agree as follows:
1. Purchase
and Sale.
The
Seller shall sell, transfer, convey and deliver unto the Purchaser the Seller
Shares and the Purchaser shall acquire and purchase from the Seller, the Seller
Shares.
2. Purchase
Price.
(a) General.
The
purchase price (the “Purchase
Price”)
for
the Seller Shares, in the aggregate, is Four Hundred Thousand Dollars
($400,000.00) payable as specified in this Section
2
subject
to the other terms and conditions of this Agreement.
(b) Cash
Deposit.
At the
end of the Due Diligence Period (defined in Section
7),
the
Purchaser shall make a cash deposit into the trust account of Xxxxxx X. X.
Xxxxxx, Esq.(“Xxxxxx”),
in
the amount of Fifty Thousand Dollars ($50,000.00) (the “Cash
Deposit”)
which
shall be fully credited against the Purchase Price at the Closing (as defined
below). The Cash Deposit shall be wired to Seller by Xxxxxx by Federal funds
wire transfer on April, 15, 2008. If the Seller complies with all terms set
forth herein and the Closing does not occur solely due to the failure of the
Purchaser to perform its obligations hereunder, then the Cash Deposit shall
be
retained by the Seller as liquidated damages and shall become
non-refundable.
(c) Accounting
Payment.
At the
end of the Due Diligence Period, the Purchaser shall make a cash deposit into
the trust account of Xxxxxx in the amount of Twenty Two Thousand Three Hundred
Thirty Eight Dollars and Fifty Cents ($22,338.50) (the “Accounting
Payment”)
which
amount shall be fully credited against the Purchase Price at the Closing. The
Accounting Payment represents the total aggregate amounts due for certain
Liabilities (as defined under Section
2(e))
payable
to De
Xxxx
Xxxxxxxx & Company, LLC and Xxxxx Xxxxxx CPA by
the
Company.
On or
before, April 21, 2008, Xxxxxx shall cause the Accounting Payment to be
disbursed, by Federal funds wire transfers, to: De
Xxxx
Xxxxxxxx & Company, LLC ($8,021.00) and
Xxxxx
Xxxxxx CPA ($14,317.50).
(d) Payment
at Closing.
At the
Closing, the Purchaser shall, subject to Section
2(e),
pay to
the Seller the Purchase Price consisting of Three Hundred Twenty Seven Thousand
Six Hundred and Sixty-One Dollars and Fifty Cents ($327,661.50) (the
“Escrow
Deposit”),
the
Cash Deposit and the Accounting Payment.
(e) Adjustment
for Outstanding Liabilities.
If the
Company has any liability (whether known or unknown, whether asserted or
unasserted, whether absolute or contingent, whether accrued or unaccrued,
whether liquidated or unliquidated, and whether due or to become due), including
any liability for taxes (“Liability(ies)”),
as of
the Closing, the portion of the Purchase Price payable at the Closing shall
be
reduced on a dollar for dollar basis by the amount of such Liability and the
amounts payable by Purchaser hereunder shall be reduced accordingly. For the
purposes of this Agreement, Liabilities include shall the Accounting Payment
payable by the Company to De
Xxxx
Xxxxxxxx & Company, LLC and Xxxxx Xxxxxx CPA.
3. The
Closing.
(a) General.
The
closing of the transactions contemplated by this Agreement (the “Closing”)
shall
take place by exchange of documents among the Parties by fax or courier, as
appropriate, following the satisfaction or waiver of all conditions to the
obligations of the Parties to consummate the transactions contemplated hereby
(other than conditions with respect to actions the respective Parties will
take
at the Closing itself) on May 5, 2008 (the “Closing
Date”).
(b) Delivery
of Certificates and Escrow Deposit into Escrow.
The
Parties shall deliver the following to Xxxxxx Xxxx Xxxxx Raysman & Xxxxxxx
LLP (the “Law
Firm”)
by
April 30, 2008: (i) the Seller shall deliver certificates (the “Certificate(s)”)
evidencing all of the Seller Shares together with duly executed,
medallion-guaranteed Stock Powers with respect thereto; and (ii) the Purchaser
shall deposit by wire transfer the Escrow Deposit and the Broker Payments (as
defined in Section
8).
The Law
Firm shall hold the Certificate(s) and the Escrow Deposit in escrow pursuant
to
the Escrow Agreement (the “Escrow
Agreement”)
in the
form of Exhibit
B
being
entered into on the date hereof by the Law Firm, the Seller and the Purchaser
until the Closing at which time the Law Firm shall deliver the Certificates
to
the Purchaser against delivery to the Seller of the Escrow Deposit, less
Liabilities, if any, that are due at Closing.
(c) Deliveries
at the Closing.
At the
Closing: (i) the Seller shall deliver to the Purchaser the various certificates,
instruments, and documents referred to in Section
11(a)
below,
(ii) the Purchaser shall deliver to the Seller the various certificates,
instruments, and documents referred to in Section
11(b)
below,
(iii) the Law Firm shall deliver to the Purchaser the Certificates, endorsed
in
blank or accompanied by duly executed assignment documents and including a
Medallion Guarantee, including delivery by releasing the Certificates from
escrow, (iv) the Law Firm shall deliver to the Seller the Escrow Deposit less
any Liabilities by Federal funds wire transfer, and (v) the Law Firm shall
deliver the Broker Payments respectively to Excelsus Capital Partners LLC
($35,000.00) and Growth Direct, LLC ($35,000.00) by Federal funds wire
transfer.
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4. Representations
and Warranties of the Seller.
The
Seller represents and warrants to the Purchaser that the statements contained
in
this Section
4
are
correct and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date (as though made then and as though the Closing
Date were substituted for the date of this Agreement throughout this
Section
4).
(a) The
Seller has the power and authority to execute, deliver and perform such the
Seller’s obligations under this Agreement and to sell, assign, transfer and
deliver to the Purchaser the Seller Shares as contemplated hereby. No permit,
consent, approval or authorization of, or declaration, filing or registration
with any governmental or regulatory authority or consent of any third party
is
required in connection with the execution and delivery by the Seller of this
Agreement and the consummation of the transactions contemplated
hereby.
(b) Neither
the execution and delivery of this Agreement, nor the consummation of the
transactions contemplated hereby or compliance with the terms and conditions
hereof by the Seller will violate or result in a breach of any term or provision
of any agreement to which the Seller is bound or is a party, or be in conflict
with or constitute a default under, or cause the acceleration of the maturity
of
any obligation of the Seller under any existing agreement or violate any order,
writ, injunction, decree, statute, rule or regulation applicable to the Seller
or any properties or assets of the Seller.
(c) This
Agreement has been duly and validly executed by the Seller, and constitutes
the
valid and binding obligation of the Seller and the Company, enforceable against
the Seller and the Company in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency or other laws affecting
creditors’ rights generally or by limitations, on the availability of equitable
remedies.
(d) The
Seller Shares are owned beneficially and of record by the Seller and are validly
issued and outstanding, fully paid for and non-assessable with no personal
liability attaching to the ownership thereof. The Seller owns the Seller Shares
free and clear of all liens, charges, security interests, encumbrances, claims
of others,
options,
warrants, purchase rights, contracts, commitments, equities or other claims
or
demands of any kind
(collectively, “Liens”),
and
upon delivery of the Seller Shares to the Purchaser, the Purchaser will acquire
good, valid and marketable title thereto free and clear of all Liens.
The
Seller is not a party to any option, warrant, purchase right, or other contract
or commitment that could require the Seller to sell, transfer, or otherwise
dispose of any capital stock of the Company (other than pursuant to this
Agreement). The Seller is not a party to any voting trust, proxy, or other
agreement or understanding with respect to the voting of any capital stock
of
the Company.
(e) The
Sellers Shares were acquired by Seller free and clear of all Liens from the
following former stockholders of the Company, Xxxxxx X. Xxxxxxx and Xxxxxxx
Xxxxxxx (together, the “Yarbrays”)
on
November 7, 2006 (with the shares officially issued to Seller by the Company’s
transfer agent on October 1, 2007), as payment for certain legal services
provided on behalf of the Yarbrays by the Seller.
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(f) The
date
of acquisition of the Seller Shares are true and correct.
5. Representations
and Warranties of the Company.
The
Company and the Seller, jointly and severally, represent and warrant to the
Purchaser that the statements contained in this Section
5
are
correct and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date (as though made then and as though the Closing
Date were substituted for the date of this Agreement throughout this
Section
5).
(a) The
Company is a corporation in good standing duly incorporated in the State of
Nevada. The
Company is duly authorized to conduct business and is in good standing under
the
laws of each jurisdiction where such qualification is required. The Company
has
full corporate power and authority and all licenses, permits, and authorizations
necessary to carry on its business. The Company has no subsidiaries and does
not
control any other subsidiaries, directly or indirectly, or have any direct
or
indirect equity participation in any other entity.
(b) Neither
the execution and delivery of this Agreement, nor the consummation of the
transactions contemplated hereby or compliance with the terms and conditions
hereof by the Company will violate or result in a breach of any term or
provision of any agreement to which the Company is bound or is a party, or
the
Company’s Articles of Incorporation or By-Laws, or be in conflict with or
constitute a default under, or cause the acceleration of the maturity of any
obligation of the Company under any existing agreement or violate any order,
writ, injunction, decree, statute, rule or regulation applicable to the Company
or any of its properties or assets.
(c) This
Agreement has been duly and validly executed by the Company and constitutes
the
valid and binding obligation of the Company, enforceable against it in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency or other laws affecting creditors’ rights generally or by
limitations, on the availability of equitable remedies.
(d) The
Company’s authorized capital stock, as of the date of this Agreement and as of
the Closing, consists of 100,000,000 shares of common stock, $0.001 par value
per share (the “Common
Stock”),
of
which 4,951,000
shares are issued and outstanding and no shares of preferred stock. The Company
has not reserved any shares of its Common Stock for issuance upon the exercise
of options, warrants or any other securities that are exercisable or
exchangeable for, or convertible into, Common Stock. All of the issued and
outstanding shares of Common Stock are validly issued, fully paid and
non-assessable and have been issued in compliance with applicable laws,
including, without limitation, applicable federal and state securities laws.
There are no outstanding options, warrants or other rights of any kind to
acquire any additional shares of capital stock of the Company or securities
exercisable or exchangeable for, or convertible into, capital stock of the
Company, nor is the Company committed to issue any such option, warrant, right
or security. There are no agreements relating to the voting, purchase or sale
of
capital stock (i) between or among the Company and any of its stockholders,
(ii)
between or among the Seller and any third party, or (iii) to the best knowledge
of the Seller between or among any of the Company’s stockholders. The Company is
not a party to any agreement granting any stockholder of the Company the right
to cause the Company to register shares of the capital stock of the Company
held
by such stockholder under the Securities Act. The stockholder list provided
to
the Purchaser is a current shareholder list generated by its transfer agent,
and
such list accurately reflects all of the issued and outstanding shares of the
Company’s Common Stock.
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(e) The
Company does not have any restrictions in place relative to its ability to
implement any reverse split of its common stock.
(f) As
of the
date hereof, the Company has total Liabilities of no more than
$1,000.00, which
Liabilities will be paid off at or prior to the Closing and which Liabilities
shall in no event become Liabilities of the Purchaser or remain Liabilities
of
the Company following the Closing and, as of the Closing Date, will have no
assets.
(g) The
Seller is the beneficial holder of record of the Seller Shares.
(h) There
is
no legal, administrative, investigatory, regulatory or similar action, suit,
claim or proceeding which is pending or, to the Seller’s knowledge, threatened
against the Company.
(i) The
Company has one market
maker for its common shares and such market makers have obtained all permits
and
made all filings necessary in order for such market makers to continue as market
makers of the Company.
(j) During
the period from its inception through March 31, 2008, the Company has filed
or
furnished (i) all reports, schedules, forms, statements, prospectuses and
other documents required to be filed with, or furnished to, the Securities
and
Exchange Commission (the “SEC”)
by the
Company (all such documents, as amended or supplemented, are referred to
collectively as, the “Company
SEC Documents”)
and
(ii) all certifications and statements required by (x) Rule 13a-14 or
15d-14 under the Exchange Act, or (y) 18 U.S.C. §1350 (Section 906 of the
Xxxxxxxx-Xxxxx Act of 2002) with respect to any applicable Company SEC Document
(collectively, the “SOX
Certifications”).
The
Company has made available to the Purchaser all SOX Certifications and comment
letters received by the Company from the staff of the SEC and all responses
to
such comment letters by or on behalf of the Company. Through March 31, 2008,
the
Company complied in all respects with its SEC filing obligations under the
Exchange Act and the Securities Act. Each of the audited financial
statements and related schedules and notes thereto and unaudited interim
financial statements of the Company (collectively, the “Company
Financial Statements”)
contained in the Company SEC Documents (or incorporated therein by reference)
were prepared in accordance with United States generally accepted accounting
principles applied on a consistent basis (“GAAP”)
(except in the case of interim unaudited financial statements) except as noted
therein, and fairly present in all respects the consolidated financial position
of the Company and its consolidated subsidiaries as of the dates thereof and
the
consolidated results of their operations, cash flows and changes in
stockholders’ equity for the periods then ended, subject (in the case of interim
unaudited financial statements) to normal year-end audit adjustments (the effect
of which will not, individually or in the aggregate, be adverse) and, such
financial statements complied as to form as of their respective dates in all
respects with applicable rules and regulations of the SEC. The financial
statements referred to herein reflect the consistent application of such
accounting principles throughout the periods involved, except as disclosed
in
the notes to such financial statements. No financial statements of any Person
not already included in such financial statements are required by GAAP to be
included in the consolidated financial statements of the Company. As of
their respective dates, each of the Company SEC Documents was prepared in
accordance with and complied with the requirements of the Securities Act or
the
Exchange Act, as applicable, and the rules and regulations thereunder, and
the
Company SEC Documents (including all financial statements included therein
and
all exhibits and schedules thereto and all documents incorporated by reference
therein) did not, as of the date of effectiveness in the case of a registration
statement, the date of mailing in the case of a proxy or information statement
and the date of filing in the case of other the Company SEC Documents, contain
any untrue statement of a fact or omit to state a fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. Neither the Company
nor, to the Company’s knowledge, any of its officers has received notice from
the SEC or any other governmental authority questioning or challenging the
accuracy, completeness, content, form or manner of filing or furnishing of
the
SOX Certifications.
5
(k) The
Company has properly and timely filed all federal, state and local tax returns
and has paid all taxes, assessments and penalties due and payable. All such
tax
returns were complete and correct in all respects as filed, and no claims have
been assessed with respect to such returns. There are no present, pending,
or
threatened audit, investigations, assessments or disputes as to taxes of any
nature payable by the Company or its subsidiary, nor any tax liens whether
existing or inchoate on any of the assets of the Company or any of its
subsidiaries, except for current year taxes not presently due and payable.
No
IRS or foreign, state, county or local tax audit is currently in progress.
Neither the Company nor its subsidiary has waived the expiration of the statute
of limitations with respect to any taxes. There are no outstanding requests
by
the Company or its subsidiary for any extension of time within which to file
any
tax return or to pay taxes shown to be due on any tax return.
(l) The
Company does not have any ongoing operations and does not employ any employees
and does not maintain any employee benefit or stock option plans.
(m) Except
as
set forth in Schedule
5(m)
annexed
hereto, since March 31, 2008, there has not been any event or condition of
any
character which has adversely affected, or may be expected to adversely affect,
the Company’s business or prospects, including, but not limited to any adverse
change in the condition, assets, liabilities (existing or contingent) or
business of the Company from that shown in the financial statements of the
Company included in its quarterly report on Form 10-QSB filed for the fiscal
quarter ended March 31, 2008.
(n) The
Company has complied in all material respects with all applicable laws
(including rules, regulations, codes, plans, injunctions, judgments, orders,
decrees, rulings, and charges thereunder) of all governmental authorities,
and
no action, suit, proceeding, hearing, investigation, charge, complaint, claim,
demand, or notice has been filed or commenced against the Company alleging
any
failure so to comply. To the Seller’s knowledge, neither the Company, nor any
officer, director, employee, consultant or agent of the Company has made,
directly or indirectly, any payment or promise to pay, or gift or promise to
give or authorized such a promise or gift, of any money or anything of value,
directly or indirectly, to any governmental official, customer or supplier
for
the purpose of influencing any official act or decision of such official,
customer or supplier or inducing him, her or it to use his, her or its influence
to affect any act or decision of a governmental authority or customer, under
circumstances which could subject the Company or any officers, directors,
employees or consultants of the Company to administrative or criminal penalties
or sanctions.
6
(o) No
representation or warranty by the Company in this Agreement, nor in any
certificate, schedule or exhibit delivered or to be delivered pursuant to this
Agreement contains or will contain any untrue statement of material fact, or
omits or will omit to state a material fact necessary to make the statements
herein or therein, in light of the circumstances under which they were made,
not
misleading.
6. Representations
and Warranties of the Purchaser.
The
Purchaser represents and warrants to the Seller as follows:
(a) The
Purchaser has full power and authority to enter into this Agreement and to
carry
out the transactions contemplated hereby. This Agreement constitutes a valid
and
binding obligation of the Purchaser enforceable in accordance with its terms,
except as (i) the enforceability hereof may be limited by bankruptcy, insolvency
or similar laws affecting the enforceability of creditor’s rights generally and
(ii) the availability of equitable remedies may be limited by equitable
principles of general applicability.
(b) Neither
the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby, nor compliance by the Purchaser with any
of
the provisions hereof will: violate, or conflict with, or result in a breach
of
any provision of, or constitute a default (or an event which, with notice or
lapse of time or both, would constitute a default) under, or result in the
termination of, or accelerate the performance required by, or result in the
creation of any Lien upon any of the properties or assets of the Purchaser
under
any of the terms, conditions or provisions of any material note, bond,
indenture, mortgage, deed or trust, license, lease, agreement or other
instrument or obligation to which he is a party or by which he or any of his
properties or assets may be bound or affected, except for such violations,
conflicts, breaches or defaults as do not have, in the aggregate, any material
adverse effect; or violate any material order, writ, injunction, decree,
statute, rule or regulation applicable to the Purchaser or to any of its
properties or assets, except for such violations which do not have, in the
aggregate, any material adverse effect.
(c) The
Purchaser is acquiring the Seller Shares for its own account for investment
and
not for the account of any other person and not with a view to or for
distribution, assignment or resale in connection with any distribution within
the meaning of the Securities Act. The Purchaser agrees not to sell or otherwise
transfer the Seller Shares unless they are registered under the Securities
Act
and any applicable state securities laws, or an exemption or exemptions from
such registration are available. The Purchaser has the requisite knowledge
and
experience in financial and business matters such that it is capable of
evaluating the merits and risks of acquiring the Securities.
7
(d) No
permit, consent, approval or authorization of, or declaration, filing or
registration with any governmental or regulatory authority or the consent of
any
third party is required in connection with the execution and delivery by the
Purchaser of this Agreement and the consummation of the transactions
contemplated hereby.
(e) The
Purchaser is aware that the Seller is an affiliate of the Company and that
the
Seller Shares are restricted in accordance with Rule 144 of the Securities
Act.
7. Due
Diligence.
Prior
to
the Closing, the Purchaser has conducted a due diligence investigation relative
to the Company and the representations, warranties and covenants of the Seller
and the Company. The Seller and the Company have previously provided the
Purchaser and its agents and representatives with any and all due diligence
documents reasonably requested, including but not limited to financial
statements and evidence of the Company’s good standing in all jurisdictions
where it is authorized to do business. The Purchaser may, in its sole
discretion, terminate this transaction prior to the Closing during the due
diligence period starting April 1, 2008 and ending on April 14, 2008 (the
“Due
Diligence Period”)
without further liability if (i) the Purchaser shall determine that any
representation, warranty or covenant of the Seller or the Company is untrue
or
misleading or cannot be otherwise verified or (ii) the Purchaser shall determine
that the Company is unsuitable for its intend purposes.
8. Brokers
and Finders.
At
the
Closing, in addition to the payment of the Purchase Price, the Purchaser shall
be responsible for the payment of an aggregate of $70,000.00 to
Exelsus Capital Partners LLC and Growth Direct, LLC (the “Broker
Payments”).
The
Seller and the Company hereby represent and warrant to the Purchaser, that
other
than the foregoing, there are no other finders and no parties shall be
responsible for the payment of any finders’ fees other than as specifically set
forth herein and neither
the Seller nor the Company, nor any of their respective directors, officers
or
agents on their behalf, have incurred any obligation or liability, contingent
or
otherwise, for brokerage or finders’ fees or agents’ commissions or financial
advisory services or other similar payment in connection with this Agreement.
9. Pre-Closing
Covenants.
The
Parties agree as follows with respect to the period between the execution of
this Agreement and the Closing.
(a) General.
Each of
the Parties will use their best efforts to take all action and to do all things
necessary, proper, or advisable in order to consummate and make effective the
transactions contemplated by this Agreement (including satisfaction, but not
waiver, of the closing conditions set forth in Section
11
below).
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(b) Form
8-K Filing; Notices and Consents.
Concurrent with the Closing of this Agreement, the Company through the Purchaser
shall cause a Form 8-K to be filed with the SEC with respect to its having
entered into a “material
contract.”
The
Seller will cause the Company to give any notices to third parties, and will
cause the Company to use its best efforts to obtain any third party consents
that the Purchaser may reasonably request. Each of the Parties will (and the
Seller will cause the Company to) give any notices to, make any filings with,
and use its best efforts to obtain any authorizations, consents, and approvals
of governmental authorities necessary in order to consummate the transactions
contemplated hereby. The parties acknowledge that SEC Rule 14f-1 under the
Exchange Act requires that an information statement containing certain specified
disclosures be filed with the SEC and mailed to the Company’s shareholders at
least 10 days before any person designated by the Purchaser can become a
director of the Company. The Purchaser and the Seller agree to cooperate fully
with the Company in the preparation and filing of such information statement
and
to provide all information therefor respectively needed from them in a timely
manner, so as not to cause undue delay in the filing of the information
statement or any amendment thereto. Otherwise, neither the Company nor the
Seller is aware of any third party consent nor other filing or notice to third
parties that is necessary in respect of this Agreement.
(c) Prohibited
Activities.
The
Seller will not cause or permit the Company to engage in any practice, take
any
action, or enter into any transaction except for ministerial matters necessary
to maintain the Company in good standing and to arrange for the filing of all
necessary reports required to be filed by the Company under the Exchange Act.
Without limiting the generality of the foregoing, the Seller will not cause
or
permit the Company to (i) declare, set aside, or pay any dividend or make any
distribution with respect to its capital stock or redeem, purchase, or otherwise
acquire any of its capital stock except as otherwise expressly specified herein,
(ii) issue, sell, or otherwise dispose of any of its capital stock, or grant
any
options, warrants, preemptive or other rights to purchase or obtain (including
upon conversion, exchange, or exercise) any of its capital stock, (iii) make
any
capital expenditures, loans, or incur any other obligations or liabilities,
(iv)
enter into any agreements involving expenditures individually, or in the
aggregate, of more than $1,000 (other than as permitted hereunder or agreements
for professional services which will be paid in full at or prior to the
Closing), (v) enter into any agreement or incur any other commitment or (vi)
otherwise engage in any practice, take any action, or enter into any transaction
that is inconsistent with the transactions contemplated hereby.
(d) Notice
of Developments.
The
Seller shall give prompt written notice to the Purchaser of any material adverse
development causing a breach of any of the representations and warranties in
Section
5
above.
No disclosure by any Party pursuant to this Section, however, shall be deemed
to
amend or supplement the disclosures contained in the Schedules hereto or to
prevent or cure any misrepresentation, breach of warranty, or breach of
covenant.
(e) Exclusivity.
Prior
to the Closing Date, neither the Seller nor the Company shall, directly or
indirectly, (i) solicit, initiate, or encourage the submission of any proposal
or offer from any person relating to the acquisition of the Seller Shares or
any
capital stock or other voting securities, or any assets (including any
acquisition structured as a merger, consolidation, or share exchange) of the
Company or (ii) participate in any discussions or negotiations regarding,
furnish any information with respect to, assist or participate in, or facilitate
in any other manner any effort or attempt by any person to do or seek any of
the
foregoing. The Seller will vote the Seller Shares in favor of any such
acquisition structured as a merger, consolidation, or share exchange. The Seller
shall notify the Purchaser immediately if any person makes any proposal, offer,
inquiry, or contact with respect to any of the foregoing.
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10. Post-Closing
Covenants. The
Parties agree as follows with respect to the period following the
Closing.
(a) General.
In case
at any time after the Closing any further action is necessary or desirable
to
carry out the purposes of this Agreement, each of the Parties will take such
further action (including the execution and delivery of such further instruments
and documents) as any other Party may reasonably request, all at the sole cost
and expense of the requesting Party (unless the requesting Party is entitled
to
indemnification therefor under Section
12
below).
The Seller acknowledges and agrees that from and after the Closing the Purchaser
will be entitled to possession of all documents, books, records (including
tax
records), agreements, and financial data of any sort relating to the
Company.
(b) Litigation
Support.
In the
event and for so long as any Party actively is contesting or defending against
any action, suit, proceeding, hearing, investigation, charge, complaint, claim,
or demand in connection with (i) any transaction contemplated under this
Agreement or (ii) any fact, situation, circumstance, status, condition,
activity, practice, plan, occurrence, event, incident, action, failure to act,
or transaction on or prior to the Closing Date involving the Company, the other
Party will cooperate with him or it and him or its counsel in the contest or
defense, make available their personnel, and provide such testimony and access
to their books and records as shall be necessary in connection with the contest
or defense, all at the sole cost and expense of the contesting or defending
Party (unless the contesting or defending Party is entitled to indemnification
therefor under Section
12
below).
11. Conditions
to Obligation to Close.
(a) Conditions
to Obligation of the Purchaser.
The
obligation of the Purchaser to consummate the transactions to be performed
by
the Purchaser in connection with the Closing are subject to satisfaction of
the
following conditions:
(i) the
representations and warranties set forth in Sections
4
and
5
above
shall be true and correct in all material respects at and as of the Closing
Date;
(ii) the
Seller shall have performed and complied with all of his covenants hereunder
in
all material respects through the Closing;
(iii) the
Company shall have procured all of the third party consents required in order
to
effect the Closing;
(iv) no
action, suit, or proceeding shall be pending or threatened before any court
or
quasi-judicial or administrative agency of any federal, state, local, or foreign
jurisdiction or before any arbitrator wherein an unfavorable injunction,
judgment, order, decree, ruling, or charge would (A) prevent consummation of
any
of the transactions contemplated by this Agreement, (B) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation, (C) affect adversely the right of the Purchaser to own the Seller
Shares and to control the Company, or (D) affect adversely the right of the
Company to own its assets and to operate its businesses (and no such injunction,
judgment, order, decree, ruling, or charge shall be in effect);
10
(v) the
Seller shall have delivered to the Purchaser a certificate to the effect that
(A) each of the conditions specified above in Section
11(a)(i)-(iv)
is
satisfied in all respects, and (B) as of the Closing, the Company has no
Liabilities;
(vi) the
Purchaser shall have received the resignations, effective as of the tenth
(10th)
day
following the filing by the Company of a Schedule 14f-1 information statement
with the SEC, of each director of the Company and the Purchaser shall have
received the resignations, effective as of the Closing,
of each officer
of the Company.
The
designee(s) specified by the
Purchaser shall have been appointed as officers
of the
Company and any designee(s) of the Purchaser who may be lawfully appointed
to
the Board of Directors of the Company as of the Company shall have been
appointed;
(vii) there
shall not have been any occurrence, event, incident, action, failure to act,
or
transaction since January 1, 2008 which has had or is reasonably likely to
cause
a material adverse effect on the business, assets, properties, financial
condition, results of operations or prospects of the Company;
(viii) the
Purchaser shall have completed the business, accounting and legal due diligence
review of the Company, and the results thereof shall be satisfactory to the
Purchaser;
(ix) the
Purchaser shall have received such pay-off letters and releases relating to
Liabilities as they shall have requested and such pay-off letters shall be
in
form and substance satisfactory to the Purchaser;
(x) the
Purchaser shall have conducted UCC, judgment lien and tax lien searches with
respect to the Company, the results of which indicate no liens on the assets
of
the Company;
(xi) the
Company shall have delivered its Articles of Incorporation and By-Laws, both
as
amended to the Closing Date, certified by the Secretary of the Company,
resolutions adopted by the Board of Directors of the Company authorizing this
Agreement and the transactions contemplated hereby and the Company shall have
delivered to the Purchaser the Company’s original minute book and corporate seal
and all other original corporate documents and agreements;
(xii) the
Company shall have delivered to the Purchaser a Certificate of Good Standing
in
respect of the Company issued by the Secretary of State of the State of Nevada
dated no earlier than 5 days prior to the Closing;
(xiii) the
Company shall have maintained at and immediately after the Closing its status
as
a company whose Common Stock is quoted on the OTC Bulletin Board;
11
(xiv) all
actions to be taken by the Seller in connection with consummation of the
transactions contemplated hereby and all certificates, opinions, instruments,
and other documents required to effect the transactions contemplated hereby
will
be satisfactory in form and substance to the Purchaser, and
(xv) At
the
Closing, other than the Seller Shares, there shall be no more than 951,000
shares Common Stock of the Company issued and outstanding.
The
Purchaser may waive any condition specified in this Section
11(a)
at or
prior to the Closing in writing executed by the Purchaser.
(b) Conditions
to Obligation of the Seller.
The
obligations of the Seller to consummate the transactions to be performed by
it
in connection with the Closing are subject to satisfaction of the following
conditions:
(i) the
representations and warranties set forth in Section
6
above
shall be true and correct in all material respects at and as of the Closing
Date;
(ii) the
Purchaser shall have performed and complied with all of its covenants hereunder
in all material respects through the Closing including payment of the Purchase
Price;
(iii) no
action, suit, or proceeding shall be pending or threatened before any court
or
quasi-judicial or administrative agency of any federal, state, local, or foreign
jurisdiction or before any arbitrator wherein an unfavorable injunction,
judgment, order, decree, ruling, or charge would (A) prevent consummation of
any
of the transactions contemplated by this Agreement or (B) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation (and no such injunction, judgment, order, decree, ruling, or charge
shall be in effect);
(iv) the
Purchaser shall have delivered to the Seller a certificate to the effect that
each of the conditions specified above in Section
11(b)(i)-(iii)
is
satisfied in all respects; and
(v) all
actions to be taken by the Purchaser in connection with consummation of the
transactions contemplated hereby and all certificates, opinions, instruments,
and other documents required to effect the transactions contemplated hereby
will
be satisfactory in form and substance to the Seller.
The
Seller may waive any condition specified in this Section
11(b)
at or
prior to the Closing in writing executed by the Seller.
12
12. Remedies
for Breaches of This Agreement.
(a) Survival
of Representations and Warranties.
All of
the representations and warranties of the Parties shall survive the Closing
hereunder (even if a Party knew or had reason to know of any misrepresentation
or breach of warranty by another Party at the time of Closing) and continue
in
full force and effect for a period of twelve (12) months
thereafter.
(b) Indemnification
Provisions for Benefit of the Purchaser.
(i) In
the
event the Seller breaches (or in the event any third party alleges facts that,
if true, would mean the Seller has breached) any of its representations,
warranties, and covenants contained herein, and, if there is an applicable
survival period pursuant to Section
12(a)
above,
provided that the Purchaser makes a written claim for indemnification against
the Seller within such survival period, then the Seller shall indemnify the
Purchaser from and against the entirety of any Adverse Consequences the
Purchaser may suffer through and after the date of the claim for indemnification
(including any Adverse Consequences the Purchaser may suffer after the end
of
any applicable survival period) resulting from, arising out of, relating to,
in
the nature of, or caused by the breach (or the alleged breach). For purposes
of
this Agreement, “Adverse
Consequences”
means
all actions, suits, proceedings, hearings, investigations, charges, complaints,
claims, demands, injunctions, judgments, orders, decrees, rulings, damages,
dues, penalties, fines, costs, amounts paid in settlement, Liabilities,
obligations, taxes, Liens, losses, lost value, expenses, and fees, including
court costs and reasonable attorneys’ fees and reasonable expenses not to exceed
the amount of any such claim.
(ii) The
Seller shall indemnify the Purchaser from and against the entirety of any
Adverse Consequences the Purchaser or the Company may suffer resulting from,
arising out of, relating to, in the nature of, or caused by any Liability of
the
Company (whether or not accrued or otherwise disclosed) (x) for any taxes of
the
Company with respect to any tax year or portion thereof ending on or before
the
Closing Date (or for any Tax year beginning before and ending after the Closing
Date to the extent allocable to the portion of such period beginning before
and
ending on the Closing Date) and (y) for the unpaid taxes of any Person (other
than the Company) under Section 1.1502-6 of the Regulations adopted under the
Code (or any similar provision of state, local, or foreign law), as a transferee
or successor, by contract, or otherwise.
(iii) The
Seller shall indemnify the Purchaser from and against the entirety of any
Liabilities arising out of the ownership of the Seller Shares or operation
of
the Company prior to the Closing.
(iv) The
Seller shall indemnify the Purchaser from and against the entirety of any
Adverse Consequences the Purchaser or the Company may suffer resulting from,
arising out of, relating to, in the nature of, or caused by any indebtedness
or
other Liabilities of the Company existing as of the Closing Date.
(c) Indemnification
Provisions for Benefit of the Seller.
In the
event the Purchaser breaches (or in the event any third party alleges facts
that, if true, would mean the Purchaser has breached) any of its
representations, warranties, and covenants contained herein, and, if there
is an
applicable survival period pursuant to Section
12(a)
above,
provided that the Seller makes a written claim for indemnification against
the
Purchaser within such survival period, then the Purchaser shall indemnify the
Seller from and against the entirety of any Adverse Consequences the Seller
may
suffer through and after the date of the claim for indemnification (including
any Adverse Consequences the Seller may suffer after the end of any applicable
survival period) resulting from, arising out of, relating to, in the nature
of,
or caused by the breach (or the alleged breach).
13
(d) Matters
Involving Third Parties.
(i) If
any
third party shall notify any Party (the “Indemnified
Party”)
with
respect to any matter (a “Third
Party Claim”)
which
may give rise to a claim for indemnification against any other Party (the
“Indemnifying
Party”)
under
this Section
12,
then
the Indemnified Party shall promptly notify each Indemnifying Party thereof
in
writing; provided, however, that no delay on the part of the Indemnified Party
in notifying any Indemnifying Party shall relieve the Indemnifying Party from
any obligation hereunder unless (and then solely to the extent) the Indemnifying
Party thereby is prejudiced.
(ii) Any
Indemnifying Party will have the right to defend the Indemnified Party against
the Third Party Claim with counsel of its choice reasonably satisfactory to
the
Indemnified Party so long as (A) the Indemnifying Party notifies the Indemnified
Party in writing within 10 days after the Indemnified Party has given notice
of
the Third Party Claim that the Indemnifying Party will indemnify the Indemnified
Party from and against the entirety of any Adverse Consequences the Indemnified
Party may suffer resulting from, arising out of, relating to, in the nature
of,
or caused by the Third Party Claim, (B) the Indemnifying Party provides the
Indemnified Party with evidence reasonably acceptable to the Indemnified Party
that the Indemnifying Party will have the financial resources to defend against
the Third Party Claim and fulfill its indemnification obligations hereunder,
(C)
the Third Party Claim involves only money damages and does not seek an
injunction or other equitable relief, (D) settlement of, or an adverse judgment
with respect to, the Third Party Claim is not, in the good faith judgment of
the
Indemnified Party, likely to establish a precedential custom or practice adverse
to the continuing business interests of the Indemnified Party, and (E) the
Indemnifying Party conducts the defense of the Third Party Claim actively and
diligently.
(iii) So
long
as the Indemnifying Party is conducting the defense of the Third Party Claim
in
accordance with Section
12(d)(ii)
above,
(A) the Indemnified Party may retain separate co-counsel at its sole cost and
expense and participate in the defense of the Third Party Claim, (B) the
Indemnified Party will not consent to the entry of any judgment or enter into
any settlement with respect to the Third Party Claim without the prior written
consent of the Indemnifying Party (not to be withheld unreasonably), and (C)
the
Indemnifying Party will not consent to the entry of any judgment or enter into
any settlement with respect to the Third Party Claim without the prior written
consent of the Indemnified Party (not to be withheld unreasonably).
(iv) In
the
event any of the conditions in Section
12(d)(ii)
above is
or becomes unsatisfied, however, (A) the Indemnified Party may defend against,
and consent to the entry of any judgment or enter into any settlement with
respect to, the Third Party Claim in any manner it reasonably may deem
appropriate (and the Indemnified Party need not consult with, or obtain any
consent from, any Indemnifying Party in connection therewith), (B) the
Indemnifying Parties will reimburse the Indemnified Party promptly and
periodically for the costs of defending against the Third Party Claim (including
attorneys’ fees and expenses), and (C) the Indemnifying Parties will remain
responsible for any Adverse Consequences the Indemnified Party may suffer
resulting from, arising out of, relating to, in the nature of, or caused by
the
Third Party Claim to the fullest extent provided in this Section
12.
14
(v) Other
Indemnification Provisions.
The
Seller hereby indemnifies the Company against any and all claims that may be
filed by a current or former officer, director or employee of the Seller by
reason of the fact that such person was a director, officer, employee, or agent
of the Company or was serving the Company at the request of the Seller or the
Company as a partner, trustee, director, officer, employee, or agent of another
entity, whether such claim is for accrued salary, compensation, indemnification,
judgments, damages, penalties, fines, costs, amounts paid in settlement, losses,
expenses, or otherwise and whether such claim is pursuant to any statute,
charter document, bylaw, agreement, or otherwise) with respect to any action,
suit, proceeding, complaint, claim, or demand brought against the Company
(whether such action, suit, proceeding, complaint, claim, or demand is pursuant
to an agreement, applicable law, or otherwise).
(d) Limitation
on Indemnification.
Notwithstanding any other provision of this Section 12, the aggregate
indemnification to be paid by a Party hereunder with respect to breaches of
representations and warranties hereunder shall not exceed the Purchase Price.
13. Termination.
(a) Termination
of Agreement.
The
Parties may terminate this Agreement as provided below:
(i) the
Purchaser and the Seller may terminate this Agreement by mutual written
agreement at any time prior to the Closing;
(ii) the
Purchaser may terminate this Agreement by giving written notice to the Seller
at
any time prior to the Closing Date (A) pursuant to Section
7,
(B)
if
the
aggregate of the Liabilities exceeds $0; (C)
in
the
event the Seller has breached any material representation, warranty, or covenant
contained in this Agreement in any material respect and the Purchaser has
notified the Seller of the breach, and the breach has continued without cure
for
a period of two (2) days after the notice of breach; (D)
if the
Closing shall not have occurred in accordance with Section
3(a),
by
reason of the failure of any condition precedent under Section
11(a)
(unless
the failure results primarily from the Purchaser breaching any representation,
warranty, or covenant contained in this Agreement); and
(iii) the
Seller may terminate this Agreement by giving written notice to the Purchaser
at
any time prior to the Closing Date (A) in the event the Purchaser has breached
any material representation, warranty, or covenant contained in this Agreement
in any material respect, the Seller has notified the Purchaser of the breach,
and the breach has continued without cure for a period of two (2) days after
the
notice of breach or (B) if the Closing shall not have occurred in accordance
with Section
3(a),
by
reason of the failure of any condition precedent under Section
11(b)
(unless
the failure results primarily from the Seller breaching any representation,
warranty, or covenant contained in this Agreement).
15
(b) Effect
of Termination.
The
Seller shall in no event be permitted to terminate this Agreement pursuant
to
Section
13(a)(iii)
and
allowed to retain the Cash Deposit or be released from his obligation sell
the
Seller Shares to the Purchaser unless prior to or accompanying any notice of
termination delivered hereunder, the Seller have notified the Law Firm in
writing that the Escrow Deposit may released to the Purchaser. If the Purchaser
terminates this Agreement pursuant to any of Sections
13(a)(ii)(B) - (D),
then
the Seller shall immediately pay to the Purchaser any portion of the Purchase
Price theretofore paid by the Purchaser and the Seller shall immediately notify
the Law Firm in writing that any amounts held in escrow by it may released
to
the Purchaser. Except as aforesaid, if this Agreement terminates pursuant to
this Section
13,
all
rights and obligations of the Parties hereunder shall terminate without
any Liability of any Party to any other Party, except for any Liability of
a
Party that is then in breach.
(c) Termination
for Cause.
In the
event that the transaction would have closed but for the failure of the Seller
to close, then the Seller shall reimburse the Purchaser for its documented
reasonable legal fees and related out-of-pocket expenses the Purchaser has
incurred in connection with the transaction in an amount not to exceed a maximum
of $50,000. The Purchaser agrees that any damages payable on account of any
breach of this Agreement shall be expressly limited to such amount. In the
event
that the transaction would have closed but for the failure of the Purchaser
to
close, then the Seller shall retain the Cash Deposit as liquidated damages
regardless of his actual damages to the extent permitted under California
law.
14. Miscellaneous.
(a) Facsimile
Execution and Delivery.
Facsimile execution and delivery of this Agreement is legal, valid and binding
execution and delivery for all purposes.
(b) Confidentiality;
Press Releases and Public Announcements.
Except
as and to the extent required by law, no Party will disclose or use and will
direct its representatives not to disclose or use any information with respect
to the transaction which is the subject to this Agreement, without the consent
of the other Parties. Neither the Seller nor the Company shall issue any press
release or make any public announcement relating to the subject matter of this
Agreement without the prior written approval of the Purchaser; provided,
however, that the Company may make any public disclosure it believes in good
faith is required by applicable law or any listing or trading agreement
concerning its publicly-traded securities(in which case the Seller and the
Company will use their best efforts to advise the other Parties prior to making
the disclosure).
(c) No
Third-Party Beneficiaries.
This
Agreement shall not confer any rights or remedies upon any person other than
the
Parties and their respective successors and permitted assigns.
(d) Entire
Agreement.
This
Agreement (including the documents referred to herein) constitutes the entire
agreement among the Parties and supersedes any prior understandings, agreements,
or representations by or among the Parties, written or oral, to the extent
they
related in any way to the subject matter hereof.
16
(e) Succession
and Assignment.
This
Agreement shall be binding upon and inure to the benefit of the Parties named
herein and their respective successors and permitted assigns. No Party may
assign either this Agreement or any of their rights, interests, or obligations
hereunder without the prior written approval of the Purchaser and the Seller,
as
applicable; provided, however, that the Purchaser may (i) assign any or all
of
its rights and interests hereunder to one or more of its Affiliates, and (ii)
designate one or more of its Affiliates to perform its obligations hereunder,
but no such assignment shall operate to release the Purchaser or a successor
from any obligation hereunder unless and only to the extent that the Seller
agrees in writing.
(f) Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original but all of which together will constitute the same
instrument.
(g) Headings.
The
Section headings contained in this Agreement are inserted for convenience only
and shall not affect in any way the meaning or interpretation of this
Agreement.
(h) Notices.
All
notices, requests, demands, claims, and other communications hereunder will
be
in writing. Any notice, request, demand, claim, or other communication hereunder
shall be deemed duly given if (and then two business days after) it is sent
by
registered or certified mail, return receipt requested, postage prepaid, and
addressed to the intended recipient as set forth below:
If
to the
Seller (or the Company prior to the Closing):
Xxxxx
X.
Xxxxxx, Esq.
Law
Offices of Xxxxx X. Xxxxxx
El
Paseo
Professional Plaza
00000
Xx
Xxxxx, Xxxxx 000
Xxxx
Xxxxxx, Xxxxxxxxxx 00000
Tel:
(000) 000-0000
Fax:
(000) 000-0000 or (000) 000-0000
If
to the
Purchaser:
x/x
Xxxxxx X. X. Xxxxxx, Xxx.
000
Xxxxx
Xxxx Xxxx.
Xxxxx
000
Xxxxx
Xxxxxx, XX 00000
Tel:
(000) 000-0000
Fax:
(000) 000-0000
Any
Party
may send any notice, request, demand, claim, or other communication hereunder
to
the intended recipient at the address set forth above using any other means
(including personal delivery, expedited courier, messenger service, telecopy,
telex, ordinary mail, or electronic mail), but no such notice, request, demand,
claim, or other communication shall be deemed to have been duly given unless
and
until it actually is received by the intended recipient. Any Party may change
the address to which notices, requests, demands, claims, and other
communications hereunder are to be delivered by giving the other Parties notice
in the manner herein set forth.
17
(i) Governing
Law.
This
Agreement shall be governed by and construed in accordance with the domestic
laws of the State of California
without
giving effect to any choice or conflict of law provision or rule (whether of
the
State of California
or any
other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of California.
(j) Amendments
and Waivers.
No
amendment of any provision of this Agreement shall be valid unless the same
shall be in writing and signed by the Purchaser and the Seller or their
respective representatives. No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
(k) Severability.
Any
term or provision of this Agreement that is invalid or unenforceable in any
situation in any jurisdiction shall not affect the validity or enforceability
of
the remaining terms and provisions hereof or the validity or enforceability
of
the offending term or provision in any other situation or in any other
jurisdiction.
(l) Expenses.
Each of
the Parties and the Company will bear their own costs and expenses (including
legal fees and expenses) incurred in connection with this Agreement and the
transactions contemplated hereby. The Seller agrees that the Company has not
borne or will not bear any of the Seller’s costs and expenses (including any of
his legal fees and expenses) in connection with this Agreement or any of the
transactions contemplated hereby. At its option, the Purchaser may treat its
costs and expenses incurred in connection with this transaction as advances
to
the Company, with such costs and expenses being paid by the Company, for which
the Company will issue a promissory note to the Purchaser in the amount of
such
advances at the Closing. Such advances shall not be deemed a Liability of the
Company, as defined in this Agreement.
(m) Construction.
The
Parties have participated jointly in the negotiation and drafting of this
Agreement. In the event an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by the Parties
and no presumption or burden of proof shall arise favoring or disfavoring any
Party by virtue of the authorship of any of the provisions of this Agreement.
Any reference to any federal, state or local statute or law shall be deemed
also
to refer to all rules and regulations promulgated thereunder, unless the context
requires otherwise. The word “including”
shall
mean including without limitation. The Parties intend that each representation,
warranty, and covenant contained herein shall have independent significance.
If
any Party has breached any representation, warranty, or covenant contained
herein in any respect, the fact that there exists another representation,
warranty, or covenant relating to the same subject matter (regardless of the
relative levels of specificity) which the Party has not breached shall not
detract from or mitigate the fact that the Party is in breach of the first
representation, warranty, or covenant. Nothing in the disclosure Schedules
attached hereto shall be deemed adequate to disclose an exception to a
representation or warranty made herein, unless the disclosure Schedules
identifies the exception with particularity and describes the relevant facts
in
detail. Without limiting the generality of the foregoing, the mere listing
(or
inclusion of a copy) of a document or other item in the disclosure Schedules
or
supplied in connection with the Purchaser due diligence review, shall not be
deemed adequate to disclose an exception to a representation or warranty made
herein (unless the representation or warranty has to do with the existence
of
the document or other item itself).
18
(n) Incorporation
of Exhibits and Schedules.
The
Exhibits and Schedules identified in this Agreement are incorporated herein
by
reference and made a part hereof.
(o) Specific
Performance.
Each of
the Parties acknowledges and agrees that the other Parties would be damaged
irreparably in the event any of the provisions of this Agreement are not
performed in accordance with their specific terms or otherwise are breached.
Accordingly, each of the Parties agrees that the other Parties shall be entitled
to an injunction or injunctions to prevent breaches of the provisions of this
Agreement and to enforce specifically this Agreement and the terms and
provisions hereof in any action instituted in any court of the United States
or
any state thereof having jurisdiction over the Parties and the matter (subject
to the provisions set forth in Section
14(p)
below),
in addition to any other remedy to which they may be entitled, at law or in
equity.
(p) Submission
to Jurisdiction.
Each of
the Parties submits to the jurisdiction of any state or federal court sitting
in
Los Angeles County, California, in any action or proceeding arising out of
or
relating to this Agreement and agrees that all claims in respect of the action
or proceeding may be heard and determined in any such court. Each of the Parties
waives any defense of inconvenient forum to the maintenance of any action or
proceeding so brought and waives any bond, surety, or other security that might
be required of any other Party with respect thereto. Any Party may make service
on any other Party by sending or delivering a copy of the process to the Party
to be served at the address and in the manner provided for the giving of notices
in Section
14(h)
above.
Nothing in this Section
14(p),
however, shall affect the right of any Party to bring any action or proceeding
arising out of or relating to this Agreement in any other court or to serve
legal process in any other manner permitted by law or at equity. Each Party
agrees that a final judgment in any action or proceeding so brought shall be
conclusive and may be enforced by suit on the judgment or in any other manner
provided by law or at equity.
[signature
pages follow]
19
The
Seller Signature Page
IN
WITNESS WHEREOF, the undersigned the
Seller has
duly
executed this Agreement the date first above written.
| /s/ Xxxxx X. Xxxxxx | ||
|
Xxxxx X. Xxxxxx |
||
20
Purchaser
Signature Page
IN
WITNESS WHEREOF, the undersigned Purchaser
has
duly
executed this Agreement the date first above written.
| FOUNTAINHEAD CAPITAL MANAGEMENT LIMITED: | ||
| |
|
|
| By: |
/s/
Xxxxxx X.X. Xxxxxx
|
|
|
Name:
Xxxxxx X.X.Xxxxxx, Esq.
Title:
Attorney-in-fact
|
||
21
Company
Signature Page
IN
WITNESS WHEREOF, the Company
has duly
executed this Agreement the date first above written.
| CYBERSPACE VITA, INC. | ||
| |
|
|
| By: | /s/ Xxxxx X. Xxxxxx | |
|
Name:
Xxxxx X. Xxxxxx
Title:
President
|
||
22
Signature
Page for Principal Executive Officer of the Company
IN
WITNESS WHEREOF, the undersigned being the Principal
Executive Officer
of
the Company
has duly executed this Agreement as of the date first above
written.
| PRINCIPAL EXECUTIVE OFFICER: | ||
| /s/ Xxxxx X. Xxxxxx |
||
| Name:
Xxxxx X. Xxxxxx
Executing
this Agreement in his individual
capacity
in order to induce the Purchaser
to
enter into this
Agreement
|
||
23
SCHEDULE
A
A.
Seller Shares
|
Date
of Acquisition of Seller Shares
|
Number
of Seller Shares
|
||
|
11/7/2006
(issued on October 1, 2007)
|
4,000,000
|
24
EXHIBIT
A
|
NAME
OF PURCHASER
|
PERCENTAGE
|
|
Fountainhead
Capital Management Limited
|
100%
|
25
EXHIBIT
B
ESCROW
AGREEMENT
ESCROW
AGREEMENT, dated as of April 15, 2008 (“Agreement”),
among
Xxxxxx Xxxx Xxxxx Raysman & Xxxxxxx LLP (the “Escrow
Agent”),
Xxxxx
X. Xxxxxx (the “Seller”),
and
the entity listed on Schedule
I
(the
“Purchaser”).
The
Escrow Agent, the Seller and the Purchaser are sometimes individually referred
to herein as a “Party”
and
collectively, as the “Parties”.
BACKGROUND
The
Seller, Purchaser and Cyberspace Vita, Inc. (the “Company”)
have
entered into that certain Purchase Agreement dated as of April 15, 2008 but
effective as of the Closing Date (the “Purchase
Agreement”),
pursuant to which the Purchaser has agreed to purchase from the Seller and
the
Seller has agreed to sell 4,000,000 shares of the Company’s common stock (the
“Shares”)
representing all the shares owned by the Seller and which represents
approximately 80.8% of the issued and outstanding stock of the Company for
a
cash consideration in the aggregate amount of $400,000.00 (the “Purchase
Price”).
Defined terms used herein and which are not otherwise defined in this Agreement
are defined in the Purchase Agreement.
In
accordance with the terms and subject to the conditions of the Purchase
Agreement and to induce the consummation of the transactions contemplated
thereby, the Parties agree to deliver the following to the Escrow Agent on
April
30, 2008: (i) the Purchaser shall deposit the
Escrow Deposit and the Broker Payments by wire transfer to Escrow Agent and
(ii)
the Seller shall deliver the Certificates to the Escrow Agent. The Escrow
Deposit together with the Broker Payments and Certificates are hereinafter
referred to as the “Escrow
Deposits”.
This
Agreement governs the maintenance and release of the Escrow Deposits from
escrow.
NOW,
THEREFORE, the Parties hereto, intending to be legally bound, hereby agree
as
follows:
AGREEMENT
1. Appointment
of Escrow Agent.
The
Seller and the Purchaser hereby appoint the Escrow Agent as escrow agent and
the
Escrow Agent accepts that appointment and agrees to hold and dispose of the
Escrow Deposits in accordance with the terms of this Agreement. Escrow Agent
acknowledges receipt of fair and reasonable consideration for its
services.
2. Release
of the Escrow Deposits.
(a) If
any of
the following occur, then the Escrow Agent shall promptly (and in any event
within five (5) business days) release the Escrow Deposits and the Broker
Payment to the Purchaser and the Certificates to the Seller:
26
(i) The
Purchaser notifies the Escrow Agent in writing prior to the Closing that an
event as described in Section
13(a)(ii)
of the
Purchase Agreement has occurred which in the Purchaser’s sole opinion cannot be
resolved to the satisfaction of the Purchaser;
(ii) The
Seller notifies the Escrow Agent in writing prior to the Closing that an event
as described in Section
13(a)(iii)
of the
Purchase Agreement has occurred which in the Seller’s sole opinion cannot be
resolved to the satisfaction of the Seller;
(iii) The
Parties fail to execute a Purchase Agreement on or prior to the date of
execution of this Agreement;
(iv) A
Closing
fails to occur by the close of business on the Closing Date, as defined in
the
Purchase Agreement;
(v) Prior
to
the Closing, the Company fails in a timely manner to file any reports required
to be filed with the U.S. Securities and Exchange Commission;
(b) If
all of
the conditions of the Purchaser and Seller to the Closing that are specified
in
the Purchase Agreement (except those that have been waived by the parties)
occur
and the Purchaser pays the Purchase Price in accordance with the Purchase
Agreement, then the Escrow Agent shall promptly (and in any event within five
(5) business days) release (i) the Escrow Deposit less any Liabilities by wire
transfer to the Seller, (ii) the Certificates to the Purchaser in accordance
with the terms of the Purchase Agreement, (iii) the Broker Payments as set
forth
in the Purchase Agreement and (iv) if applicable, any payment of Liabilities
as
set forth in Purchase Agreement.
(c) Notwithstanding
any other provision of this Agreement, if at any time Escrow Agent shall receive
from the Purchaser and the Seller (prior to being directed to take action by
a
court) joint written instructions as to the delivery of the Escrow Deposits,
Escrow Agent shall deliver the Escrow Deposits in accordance with such joint
written instructions.
(d) The
Escrow Agent may at any time commence an action in the nature of interpleader
or
other legal proceedings and may deposit the Escrow Deposits with the clerk
of
the court. In the event of any dispute regarding who is entitled to the Escrow
Deposits at any time, the Escrow Agent shall not release the Escrow Deposits
to
either the Purchaser or the Seller and may commence an interpleader action
as
aforesaid or may cause the Purchase Price to be paid to and the Certificates
deposited with a court of competent jurisdiction whereupon it shall cease to
have any further obligation hereunder.
(e) Upon
any
delivery or deposit of the Escrow Deposits as provided in this Section 2, the
Escrow Agent shall be released and discharged from any further obligation under
this Agreement.
3. Concerning
the Escrow Agent.
(a) The
Escrow Agent shall not have any liability to any of the parties to this
Agreement or to any third party arising out of its services as Escrow Agent
under this Agreement, except for damages directly resulting from the Escrow
Agent's gross negligence or willful misconduct.
27
(b) The
Purchaser and the Seller shall jointly and severally indemnify the Escrow Agent
and hold it harmless against any loss, liability, damage or expense (including
reasonable attorneys' fees) that the Escrow Agent may incur as a result of
acting as escrow agent under this Agreement, except for any loss, liability,
damage or expense arising from its own gross negligence or willful misconduct.
As between the Purchaser and the Seller, such obligations shall be borne equally
by the Purchaser and the Seller. For this purpose, the term "attorneys' fees"
includes fees payable to any counsel retained by the Escrow Agent in connection
with its services under this Agreement and, with respect to any matter arising
under this Agreement as to which the Escrow Agent performs legal services,
its
standard hourly rates and charges then in effect.
(c) The
Escrow Agent shall be entitled to rely upon any judgment, notice, instrument
or
other writing delivered to it under this Agreement without being required to
determine the authenticity of, or the correctness of any fact stated in, that
document and irrespective of any facts the Escrow Agent may know or be deemed
to
know in any other capacity. The Escrow Agent may act in reliance upon any
instrument or signature believed by it to be genuine and may assume that any
person purporting to give any notice or receipt or advice or make any statement
or execute any document in connection with this Agreement has been duly
authorized to do so.
(d) The
Escrow Agent shall have no duties or responsibilities except those expressly
set
forth in this Agreement. The Escrow Agent shall not have any obligations arising
out of or be bound by the provisions of any other agreement, written or oral,
including, but not limited to, the Purchase Agreement.
(e) The
Seller acknowledges that it knows that the Escrow Agent has represented the
Purchaser in connection with the Purchase Agreement and this Agreement and
that
it may continue to represent Purchaser in that connection and in connection
with
the transactions contemplated by those agreements, including, but not limited
to, in connection with any disputes that may arise under either of those
agreements. The Escrow Agent shall not be precluded from or restricted from
representing the Purchaser or any of its respective affiliates or otherwise
acting as attorneys for the Purchaser or any of its affiliates in any matter,
including, but not limited to, any court proceeding or other matter related
to
the Purchase Agreement, this Agreement or the transactions contemplated by
the
Purchase Agreement or this Agreement or the Escrow Deposit, whether or not
there
is a dispute between Purchaser and Seller with respect to any such matter;
The
Seller irrevocably consents to any such representation and waives any conflict
or appearance of conflict with respect to any such representation.
(f) All
of
the Escrow Agent's rights of indemnification provided for in this Agreement
shall survive the resignation of the Escrow Agent, its replacement by a
successor Escrow Agent, its delivery or deposit of the Escrow Deposit in
accordance with this Agreement, the termination of this Agreement, and any
other
event that occurs after this date.
28
(g) The
Escrow Agent shall have no responsibility with respect to the sufficiency of
the
arrangements contemplated by this Agreement to accomplish the intentions of
the
Parties.
4. Representations.
The
Purchaser and the Seller represent and warrant to the Escrow Agent that each
of
them has full power and authority to enter into and perform this Agreement;
that
this Agreement was duly authorized by all necessary corporate or other action,
to the extent applicable; and that this Agreement is enforceable against each
of
them in accordance with its terms.
5. Resignation;
Successor Escrow Agent.
The
Escrow Agent (and any successor escrow agent) may at any time resign as such
upon 30 days prior notice to each of the other Parties. Upon receipt of a notice
of resignation, each of the other Parties shall use their best efforts to select
a successor agent within 15 days, but if within such 15 day period the Escrow
Agent has not received a notice signed by the Parties appointing a successor
escrow agent and setting forth its name and address, the Escrow Agent may (but
shall not be obligated to) select on their behalf a bank or trust company to
act
as successor escrow agent, for such compensation as that bank or trust company
customarily charges and on such terms and conditions not inconsistent with
this
Agreement as that bank or trust company reasonably requires. The fees and
charges of any successor escrow agent shall be payable out of the Escrow
Deposits. A successor escrow agent selected by the resigning Escrow Agent may
become the Escrow Agent by confirming in writing its acceptance of the position.
Purchaser and Seller shall sign such other documents as the successor escrow
agent reasonably requests in connection with its appointment.
6. Notices.
All
notices, instructions, objections or other communications under this Agreement
shall be in writing and shall be deemed given when sent by United States
registered mail, return receipt requested, to the respective Parties at the
following addresses (or at such other address as a party may specify by notice
given in accordance with this paragraph):
If
to
Purchaser:
x/x
Xxxxxx
X.
X. Xxxxxx, Xxx.
000
Xxxxx
Xxxx Xxxx.
Xxxxx
000
Xxxxx
Xxxxxx, XX 00000
Tel
(000)
000-0000
Fax
(000)
000-0000
29
If
to
the Seller:
Xxxxx
X.
Xxxxxx, Esq.
Law
Offices of Xxxxx X. Xxxxxx
Tel:
El
Paseo
Professional Plaza
00000
Xx
Xxxxx, Xxxxx 000
Xxxx
Xxxxxx, Xxxxxxxxxx 00000
Tel:
(000) 000-0000
Fax:
(000) 000-0000 or (000) 000-0000
If
to
the Escrow Agent:
Xxxxxx
Xxxx Xxxxx Raysman & Xxxxxxx LLP
000
Xxxxxx Xxxxxx, XX
Xxxxxxxxxx,
XX 00000
Tel:
(000) 000-0000
Fax:
(000) 000-0000
Attn:
Xxxxx X. Xxxxxxxxxx, Esq.
7. Miscellaneous.
(a) The
Escrow Agent shall serve under this Agreement without fee, but the Purchaser
and
the Seller shall jointly and severally pay to the Escrow Agent on demand, out
of
the Escrow Deposit or otherwise, all costs and expenses, including, without
limitation, the costs of any interpleader or similar action, incurred by the
Escrow Agent in performing its services under this Agreement.
As
between the Purchaser and the Seller, such obligations shall be borne equally
by
the Purchaser and the Seller.
(b) If
any
provision of this Agreement is determined by any court of competent jurisdiction
to be invalid or unenforceable in any jurisdiction the remaining provisions
of
this Agreement shall not be affected thereby, and the invalidity or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable that provision in any other jurisdiction. It is understood,
however, that the Parties intend each provision of this Agreement to be valid
and enforceable and each of them waives all rights to object to any provision
of
this Agreement.
(c) This
Agreement shall be binding upon and inure solely to the benefit of the Parties
and their respective successors and permitted assigns, and shall not be
enforceable by or inure to the benefit of any third party. No Party may assign
its rights or obligations under this Agreement or any interest in the Escrow
Deposit without the written consent of the other parties unless otherwise
specified herein, and any other purported assignment shall be void. In no event
shall the Escrow Agent be required to act upon, or be bound by, any notice,
instruction, objection or other communication given by a person other than,
nor
shall the Escrow Agent be required to deliver the Escrow Deposits to any person
other than, the Purchaser or the Seller.
(d) This
Agreement shall be governed by and construed in accordance with the law of
the
State of California applicable to agreements made and to be performed in
California.
(e) The
courts of State of California and the United States District Courts for State
of
California shall have exclusive jurisdiction over the Parties (and the subject
matter) with respect to any dispute or controversy arising under or in
connection with this Agreement. A summons or complaint or other process in
any
such action or proceeding served by mail in accordance with Section 6 of this
Agreement or in such other manner as may be permitted by law shall be valid
and
sufficient service.
30
(f) This
Agreement contains a complete statement of all of the arrangements among the
Parties with respect to its subject matter and cannot be changed or terminated
orally. Any waiver must be in writing.
(g) This
Agreement may be executed in any number of counterparts, each of which shall
be
deemed to be an original and all of which taken together shall constitute one
and the same instrument. Facsimile execution and delivery of this Agreement
is
legal, valid and binding for all purposes.
(h) The
section headings used herein are for convenience of reference only and shall
not
affect the construction or interpretation of this Agreement.
SIGNATURES
ON THE FOLLOWING PAGE
31
The
Seller Signature Page
IN
WITNESS WHEREOF, the undersigned the
Seller has
duly
executed this Agreement the date first above written.
| /s/ Xxxxx X. Xxxxxx | ||
|
Xxxxx X. Xxxxxx |
||
32
Purchaser
Signature Page
IN
WITNESS WHEREOF, the undersigned Purchaser
has
duly
executed this Agreement the date first above written.
| FOUNTAINHEAD CAPITAL MANAGEMENT LIMITED | ||
| |
|
|
| By: |
/s/
Xxxxxx X.X. Xxxxxx
|
|
|
Name:
Xxxxxx X.X.Xxxxxx, Esq.
Title:
Attorney-in-fact
|
||
33
Escrow Agent Signature Page
IN
WITNESS WHEREOF, the undersigned has duly executed this Agreement the date
first
above written.
|
ESCROW
AGENT:
XXXXXX
XXXX XXXXX RAYSMAN & XXXXXXX LLP
|
||
| |
|
|
| By: | /s/ Xxxxx X. Xxxxxxxxxx | |
|
For Xxxxx X. Xxxxxxxxxx, Esq. |
||
34
SCHEDULE
I
|
NAME
OF PURCHASER
|
PERCENTAGE
|
|
Fountainhead
Capital Management Limited
|
100%
|
35
DISCLOSURE
SCHEDULES
36
Schedule
5(m)
Adverse
Changes
None.
37
