AGREEMENT FOR PURCHASE AND SALE OF STOCK AND PLAN OF REORGANIZATION
EXHIBIT
99.1
AGREEMENT
FOR PURCHASE AND SALE OF STOCK
AND
PLAN OF REORGANIZATION
THIS AGREEMENT IS MADE this
22nd day of December, 2009 by and among KAHZAM, INC. a Delaware
Corporation with its principal office at ▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (hereinafter referred to as "Purchaser"); ▇▇▇▇▇▇.▇▇▇, LLC, a Tennessee
Limited Liability Company with its principal office at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (hereinafter referred to as "Acquired Company"); and
the Selling Shareholders of Acquired Company set forth in Exhibit "A" attached
hereto (hereinafter "Selling Shareholders").
WITNESSETH:
WHEREAS,
the parties desire that Purchaser shall acquire 100% of the issued and
outstanding capital stock of the Acquired Company from the
Selling Shareholders, in exchange for the capital stock of Purchaser in the
amount and series as set forth in Exhibit "A" attached hereto; and
WHEREAS, it is the intention
of all parties that the exchange of the capital stock contemplated herein shall
constitute a "reorganization" as defined in Section 368(a)(1)(B) of the Internal
Revenue Code of 1986;
NOW, THEREFORE, in
consideration of these premises, the parties hereto agree as
follows:
1. EXCHANGE OF
SHARES. The Selling Shareholders and the Acquired Company
agree to exchange with the Purchaser 100% of the issued and outstanding capital
stock of the Acquired Company in exchange of 2,000,000 Shares of fully-paid and
non-assessable Common Stock of the Purchaser. All 2,000,000 Shares
will be delivered to the Selling Shareholders on the closing date of this
agreement. Each shareholder will be allowed to sell one third of their shares
over a three year period at the anniversary date of this closed
agreement.
2. TAX-FREE
EXCHANGE. It is intended by all parties hereto that the
exchange of capital stock contemplated herein shall constitute a
"reorganization" as defined in Section 368(a)(1)(B) of the Internal Revenue Code
of 1986.
3. DELIVERY OF THE STOCK
AT CLOSING. At the time of the closing of this transaction,
the Selling Shareholders and the Acquired Company shall deliver to Purchaser the
stock certificates representing the Shares purchased herein duly issued to
Purchaser together with such Revenue Stamps as may be
required. Purchaser shall deliver to Selling Shareholders written
instructions in the form of a "window ticket" to Signature Stock Transfer
Company, as Transfer Agent for the Purchaser, for the issuance and delivery of
the Shares of Common Stock of the Purchaser to the Selling
Shareholders.
4. REPRESENTATIONS OF THE
ACQUIRED COMPANY. The Acquired Company
represents and warrants to the Purchaser as follows:
4.1.
That the Acquired Company was duly organized in the manner set forth below and
that the Certificates of Organization have not been revoked or canceled nor has
the Corporation been dissolved;
4.2. Other
than as disclosed on Exhibit attached hereto (if any), there are no lawsuits
pending against the Acquired Company or its Officers or Directors, nor are
there any such lawsuits threatened or anticipated, nor are there any
judgments, warrants, or levies outstanding against the Acquired
Company, its subsidiaries, or its property, nor are there any tax
examinations or proceedings pending relating to taxes or other assessments
against the Acquired Company, nor has the Acquired Company at any time taken any
insolvency or bankruptcy actions;
4.3. That
the Acquired Company has entered into certain lease(s) of real and personal
property, which lease(s) are attached hereto as an Exhibit, and that said
lease(s) are in full force and effect and that there are no defaults thereunder,
and that all payments require to be made thereunder have been made as of the
date of this Agreement;
4.4. That
all of the chattels, trade fixtures, motor vehicles, and equipment
owned or utilized by the Acquired Company are free and clear of all liens and
encumbrances, except for such liens or security agreements as are set forth in
the Balance Sheet of the Acquired Company heretofore provided to
Purchaser;
4.5. The
Consolidated Balance Sheet of the Acquired Company as of November 30, 2009, a
copy of which has heretofore been provided to Purchaser, has been prepared in
accordance with generally accepted accounting principles consistently applied
and accurately and fairly presents the financial condition and liabilities of
the Acquired Company as of such date, and that the Selling Shareholders and the
Acquired Company shall be liable to Purchaser for any undisclosed
liabilities or claims which may appear or be made subsequent to the Closing
Date;
4.6. The
Acquired Company is duly qualified and entitled to own or lease its
respective properties and to carry on its business all as and in the places
where such properties are now owned or such businesses are
conducted;
4.7. The
Acquired Company has good marketable title to all of the property and assets
(including title in fee simple to all real property) included in the Balance
Sheet of the Acquired Company, except, however, property and assets in
non-material amounts sold in the ordinary course of business since the date of
such Balance Sheet, and that all of the properties and assets are free of all
liens, encumbrances, or claims except as set forth in the Balance
Sheet;
4.8. The
Acquired Company is not party to any pending or threatened litigation which
might adversely affect the financial condition, business operations, or
properties of the Acquired Company, nor to the knowledge of the Acquired
Company is there any threatened or pending governmental or regulatory
investigation, inquiry, or proceeding involving the Acquired Company except
as disclosed herein;
4.9. All
returns for income taxes, surtaxes, and excess profits taxes of the
Acquired Company for all periods up to the date of Closing have been duly
prepared and filed in good faith and all taxes and assessments shown thereon
have been paid or accrued on the Acquired Company's books; all state franchise
taxes and real and personal property taxes have been paid as of the dates due;
and no proceeding or other action has been taken for the assessment or
collection of additional taxes for any such periods;
4.10. The
business, properties and assets of the Acquired Company have not, since the
date of the Balance Sheet, been materially and adversely affected as the result
of any fire, explosion, natural disaster, governmental act, cancellation of
contracts, or any other event;
4.11. No
representation by the Acquired Company, the Selling Shareholders or by its
Officers made in this Agreement and no statement made in any certificate
furnished in connection with this transaction contains or will contain any
knowingly untrue statement of a material fact or omits or will omit to state any
material fact necessary to make such statement, representation or warranty not
misleading to a prospective purchaser of the stock of the Acquired Company
who is seeking full information as to the Acquired Company and its business
affairs.
4.12. The
Acquired Company is a Limited Liability Company duly organized and existing
under the laws of the State of Tennessee, with an authorized capitalization as
set forth in its Certificate of Organization attached hereto as an Exhibit; that
at the time of Closing it will have issued and outstanding capital stock as set
forth in Exhibit "A" attached hereto; it does not have authorized, issued, or
outstanding any other shares of stock of any class or any subscription or other
rights to the issuance or receipt of shares of its capital stock; all voting
rights are vested exclusively in such capital stock.
5. DELIVERY OF CORPORATE
RECORDS AT CLOSING. The Selling Shareholders and the Acquired
Company shall cause to be delivered to Purchaser at the time of closing the
Corporate Minute Books, Stock Certificate Ledgers and unissued
Certificates, and the Corporate Seals of the Acquired Company.
6. RESIGNATION OF OFFICERS
AND DIRECTORS OF ACQUIRED COMPANY. At the time of closing, the
Acquired Company shall provide to the Board of Directors of the Purchaser
written resignations of the Directors and Officers of the Acquired Company,
effective immediately, and shall cause to be elected as Directors of the
Acquired Company those persons nominated by the Board of Directors of the
Purchaser.
7. UNDERTAKINGS BY
THE ACQUIRED COMPANY AND PURCHASER.
7.1. The
Officers and Directors of the Acquired Company shall not cause, suffer or
permit the Acquired Company, subsequent to the date hereof and prior to the
delivery of the Shares as contemplated hereunder, to issue any additional shares
or securities; make any distribution to its shareholders; mortgage, pledge, or
subject to lien or encumbrance any of its properties or assets except in the
ordinary course of its business; sell or transfer any of its assets,
tangible or intangible, except in the ordinary or usual course of business;
incur or become liable for any obligations or liabilities except for
current liabilities incurred in the ordinary and usual course of business;
or increase the rate of compensation of its Officers;
7.2. During
the period prior to the closing date hereunder the Acquired Company and the
Purchaser shall conduct its business operations in the usual and normal
course.
8. REPRESENTATIONS BY THE
PURCHASER. The Purchaser represents and warrants to the
Acquired Company as follows:
8.1.
The Purchaser was incorporated in 2008 pursuant to the laws of the State of
Delaware, with an authorized capitalization of 80,000,000 Shares of Common Stock
($.0001 par value).
8.2. The
audited financial statements for the year ended August 30, 2009 and the
unaudited financial statements for the three months ended November 30, 2009
heretofore provided to the Acquired Company fully and accurately set forth the
stockholdings, capitalization, obligations, management structure, business
operations, and financial condition of the Purchaser, and no material changes
have occurred that would materially affect said statements.
8.3.
The Purchaser's securities have been registered for public sale pursuant to a
Registration Statement filed under the Securities Act of 1933, as amended, and
declared effective by the Securities and Exchange Commission, and that all
reports required to be filed by the Purchaser pursuant to the requirements of
the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934
have been duly filed as of the date of the Closing.
9. CONDITIONS PRECEDENT TO
CLOSING. All obligations of Purchaser under this
Agreement are subject to the fulfillment, on or prior to the closing date, of
each of the following conditions:
9.1.
That the representations of the Acquired Company and of the Purchaser shall be
true at and as of the closing date as though such representations were made
at and as of such time;
9.2. That
Purchaser shall have received a written opinion, dated on the closing date, of
counsel representing the Acquired Company, to the effect that the Acquired
Company has been duly incorporated and is in good standing under the laws of the
State of its organization with a capitalization as represented in this
Agreement; that the Acquired Company is duly licensed or qualified to do
business in any and all States or jurisdictions in which it does business or
where in the opinion of Counsel such qualification is required; that
such counsel knows of no litigation, investigation, or governmental proceeding
pending or threatened against the Acquired Company which might result in any
material adverse change in the business, properties, or financial condition of
the Acquired Company or in any liability on the part of the Acquired Company;
and that the assignment and delivery of the Shares of the Acquired Company
pursuant to this Agreement will vest in Purchaser all right, title and
interest in and to such Shares, free and clear of all liens, encumbrances and
equities.
9.3. That
Purchaser shall have received a certificate dated on the closing date and signed
by the President of the Acquired Company, that since the date of this
Agreement the Acquired Company has not done or permitted to be done any of
the acts or things prohibited by this Agreement;
9.4.
That the auditors and accountants appointed by the Purchaser to examine the
books and records of the Acquired Company shall not as of the closing date have
rendered a report to Purchaser stating that the financial condition of Acquired
Company is not substantially as represented herein or that in their opinion
the Acquired Company has contingent liabilities material in amount beyond that
described in the Balance Sheet annexed hereto or as disclosed
herein;
9.5.
That no claim or liability not fully covered by insurance shall have been
asserted against the Acquired Company nor has it suffered any loss on account of
fire, flood, accident or other calamity of such a character as to materially
adversely affect their financial condition, regardless of whether or not
such loss shall have been insured, and that Purchaser shall have received on the
closing date a certificate signed by the President of the Acquired Company
so stating;
9.6.
That all covenants and indemnifications made herein by the Acquired Company
which are to be performed at or prior to closing shall have been duly
performed;
10. APPROVALS AND
RATIFICATIONS. All transactions contemplated by this
Agreement shall be subject to the approval and ratification of the Boards of
Directors and Shareholders of the Acquired Company and of the Purchaser, and to
the approval of Counsel for the Acquired Company and Purchaser.
11. CLOSING
DATE. The closing under this Agreement shall take place at the
offices of Purchaser on or about December 31, 2009, and that all other required
approvals and ratifications shall be obtained by the respective parties at least
48 hours prior thereto.
12. NOTICES. All
notices under this Agreement shall be in writing and addressed to the parties at
the addresses hereinabove set forth, and shall be mailed by certified mail,
return receipt requested.
13. SUCCESSORS AND
ASSIGNS. This Agreement shall bind and inure to the benefit of
the parties hereto and their respective legal representatives, successors and
assigns, provided, however, that this Agreement cannot be assigned by any party
except by or with the written consent of all parties hereto. Nothing
herein expressed or implied is intended or shall be construed to confer upon or
give any person, firm or corporation other that the parties hereto and their
respective legal representatives, successors and assigns any rights or
benefits under or by reason of this Agreement.
14. LAW
GOVERNING. This Agreement shall be governed by and construed
in accordance with the laws of the State of Florida.
15. COUNTERPARTS. This
Agreement may be executed in any number of counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
16.
ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties and supersedes and cancels any and all prior
discussion, negotiations, undertakings and agreements between the parties
relating to the subject matter hereof.
17. CAPTIONS. The
captions used herein are for convenience only and shall not control or affect
the meaning or construction of any of the provisions of this
Agreement.
18. WAIVER, AMENDMENT or
MODIFICATION. The conditions of this Agreement which may be waived may
only be waived by notice to the other party waiving such condition. The failure
of any party at any time or times to require performance of any provision hereof
(other than by written waiver) shall in no manner affect the right at a later
time to enforce the same. This Agreement may not be amended or modified except
by a written document duly executed by all of the parties hereto.
19. RULES OF CONSTRUCTION.
Unless the context otherwise requires: (a) a term has the meaning assigned to
it; (b) an accounting term not otherwise defined has the meaning assigned to it
in accordance with generally accepted accounting principles; (c) "or" is not
exclusive; and (d) words in the singular may include the plural and in the
plural include the singular.
EXHIBIT
“A”
"EXHIBIT
"A"
LIST
OF SELLING SHAREHOLDERS
|
▇▇▇▇▇▇.▇▇▇
|
Percentage
|
|
|
STOCKHOLDER
|
Ownership
|
|
|
▇▇▇▇▇▇▇
|
▇▇▇▇▇
|
0.▇▇▇▇▇▇▇
|
|
▇▇▇▇▇
|
▇▇▇▇▇▇
|
0.1776547
|
|
▇▇▇▇
|
▇▇▇▇▇▇▇
|
0.1776547
|
|
▇▇▇▇
|
▇▇▇▇▇▇
|
0.1776547
|
|
▇▇▇
|
▇▇▇▇▇▇▇▇
|
0.▇▇▇▇▇▇▇▇
|
|
▇▇▇▇▇
|
▇▇▇▇▇
|
0.035479
|
|
▇▇▇▇▇▇
|
▇▇▇▇▇
|
▇.▇▇▇▇▇▇
|
|
▇▇▇▇▇
|
▇▇▇▇▇▇▇
|
0.039479
|
|
▇▇▇▇
|
▇▇▇▇▇
|
0.021609
|
|
▇▇▇▇▇▇▇
|
▇▇▇▇▇▇
|
0.0250291
|
|
TOTAL
|
1%
|
|