SECURITIES PURCHASE AGREEMENT
W
I T N E
S S E T H:
WHEREAS,
the Sellers are the aggregate owners of 5,461,000 shares (the “Shares”) of the
common stock, par value $0.001 per share (the “Common Stock”), of Driftwood
Ventures, Inc., a Nevada corporation (the “Company”), which, constitutes
approximately 94% of the total outstanding shares of the Common Stock of the
Company on a fully-diluted basis immediately prior to the Closing (as defined
below); and
WHEREAS,
the Sellers desire to sell and the Buyers desire to purchase from the Sellers
the Shares on the terms and conditions set forth herein.
NOW,
THEREFORE, in consideration of the premises and of the mutual representations,
warranties and agreements set forth herein, the Parties hereto agree as
follows:
ARTICLE
I
SALE
AND
PURCHASE OF SHARES
1.1 Incorporation
of Recitals.
The
provisions and recitals set forth above are hereby referred to and incorporated
herein and made a part of this Agreement by reference.
1.2 Sale
and Purchase of Shares.
Subject
to the terms and conditions of this Agreement, at the Closing, the Sellers
hereby agree to sell to Buyers and Buyers agree to purchase from the Sellers
the
Shares for an aggregate purchase price of seven hundred fifty thousand dollars
($750,000) (the “Purchase Price”), pro rata in proportion to the number of
shares owned by such Seller, as set forth on Schedule
A
attached
hereto. On the Closing Date (as defined below), the Purchase Price shall be
delivered to the bank account of ▇▇▇▇▇ ▇▇▇▇▇, the Sellers’ duly authorized
representative for receipt of the Purchase Price for and on behalf of the
Sellers (the “Sellers Authorized Representative”), Tel: (▇▇▇) ▇▇▇-▇▇▇▇, at the
following bank:
|
Bank:
Account Name:
Account #:
SWIFT BIC Address:
|
Bank
of Montreal
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇,
▇.▇., ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
D.K.
Financial Consultants
00044610221
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1.3 Closing.
Subject
to the terms and conditions of this Agreement, the closing of the transactions
contemplated by this Agreement (the “Closing”) shall take place on October 1,
2007 (the “Closing Date”). On the Closing Date, the Sellers shall deliver to the
Buyers: (a) stock certificate(s) evidencing the Shares in negotiable form,
duly
endorsed in blank, or with stock transfer powers attached thereto (the “Share
Certificates”); (b) resignations of the officers and directors of the Company
and their written appointment of one or more persons designated by Buyers as
successor officers and directors; and (c) all corporate documents (minutes,
resolutions, agreements and contracts), bank accounts, check books, common
seals, memorandum and articles and amendments, etc. of the Company. On the
Closing Date, the Buyers shall deliver to the Sellers Authorized Representative
the Purchase Price for the purchase of the Shares.
1.4 Payments
at Closing.
On or
before the Closing Date, the Company shall pay and discharge all outstanding
liabilities (collectively, “Company Liabilities”). Such payments shall be made
utilizing cash on hand on the Closing Date and the Purchase Price. Giving effect
to these payments, it is the parties’ intent that the Company shall, on the
Closing Date and as of the Closing, have no liabilities and no assets.
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES OF THE SELLERS
Except
as
set forth under the corresponding section of the disclosure schedules (the
“Disclosure Schedules”) attached hereto as Exhibit
A,
which
Disclosure Schedules shall be deemed a part hereof, the Sellers hereby, jointly
and severally, represent and warrant to Buyer that now and as of the Closing:
2.1 Due
Organization and Qualification; Subsidiaries; Due Authorization.
(a) The
Company is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of formation, with full corporate
power and authority to own, lease and operate its business and properties and
to
carry on its business in the places and in the manner as presently conducted.
The Company is duly qualified and in good standing as a foreign corporation
in
each jurisdiction in which the properties owned, leased or operated, or the
business conducted, by it requires such qualification except for any failure
to
qualify, which when taken together with all other failures to qualify, is not
likely to have a material adverse effect on the business of the
Company.
(b) The
Company does not have, and has never had, any subsidiaries and does not own,
directly or indirectly, any capital stock, equity or interest in any
corporation, firm, partnership, joint venture or other entity.
(c) Sellers
are the record and beneficial owner of their respective Shares and have sole
power and authority over the disposition of their respective Shares. The Shares
are free and clear of any liens, claims, encumbrances, and charges. The Shares
have not been sold, conveyed, encumbered, hypothecated or otherwise transferred
by Sellers except pursuant to this Agreement. Sellers have the legal right
to
enter into and to consummate the transactions contemplated hereby and otherwise
to carry out their obligations hereunder. This Agreement constitutes the valid
and binding obligation of Sellers. The execution, delivery and performance
by
the Sellers of this Agreement does not violate any contractual restriction
contained in any agreement which binds or affects or purports to bind or affect
the Sellers. No Seller is a party to any agreement, written or oral, creating
rights in respect of any of such Shares in any third party or relating to the
voting of its Common Stock. No Seller is a party to any outstanding or
authorized options, warrants, rights, calls, commitments, conversion rights,
rights of exchange or other agreements of any character, contingent or
otherwise, providing for the purchase, issuance or sale of any of the Shares,
and there are no restrictions of any kind on the transfer of any of the Shares
other than (a) restrictions on transfer imposed by the Securities Act of 1933,
as amended (the “Securities Act”) and (b) restrictions on transfer imposed by
applicable state securities or “blue sky” laws. Those creditors listed in the
Disclosure Schedules are the only individuals or entities with any claims
against the Company. Other than as set forth on the Disclosure Schedules, the
Company does not have any obligations or liabilities of any nature (matured
or
unmatured, fixed or contingent).
2.2 No
Conflicts or Defaults.
The
execution and delivery of this Agreement by the Sellers and the consummation
of
the transactions contemplated hereby do not and shall not (a) contravene the
Certificate of Incorporation or By-laws of the Company or (b) with or without
the giving of notice or the passage of time (i) violate, conflict with, or
result in a breach of, or a default or loss of rights under, any material
covenant, agreement, mortgage, indenture, lease, instrument, commitment,
arrangement, permit or license to which the Sellers or the Company is a party
or
by which the Sellers or the Company is bound (each a “Contract”), or any
judgment, order or decree, or any federal, state or other statute, law,
ordinance, rule or regulation to which the Sellers or the Company is subject,
(ii) result in the creation of, or give any party the right to create, any
mortgage, security interest, lien, charge, easement, lease, sublease, covenant,
option, claim, restriction or encumbrance or any other right or adverse interest
(“Liens”) upon any of the properties or assets of the Company, (iii) terminate
or give any party the right to terminate, amend, abandon or refuse to perform,
any Contract to which the Sellers or the Company is a party or by which the
Company’s assets are bound, or (iv) accelerate or modify, or give any party the
right to accelerate or modify, the time within which, or the terms under which,
the Sellers or the Company is to perform any duties or obligations or receive
any rights or benefits under any material agreement, arrangement or commitment
to which it is a party.
2.3 Capitalization.
On the
Closing Date, the authorized capital stock of the Company consists of 75,000,000
shares of Common Stock, par value $0.001 per share, of which 5,807,000 shares
are, as of the date hereof, issued and outstanding (the “Company Shares”).
The
Company has no issued and outstanding shares of preferred stock. All
of
the Company Shares are duly authorized, validly issued, fully paid and
nonassessable, and have not been issued in violation of any purchase option,
call option, right of first refusal, preemptive right, subscription right,
or
any similar right of stockholders. The Company Shares are not, and the Shares
are not and will not be as of the Closing, subject to any preemptive or
subscription right. There is no outstanding voting trust agreement or other
Contract, agreement, arrangement, option, warrant, call, commitment or other
right of any character obligating or entitling the Company to issue, sell,
redeem or repurchase any of its securities, and there is no outstanding security
of any kind convertible into or exchangeable for the Common Stock of the
Company, nor has the Company, or any of its agents orally agreed to issue any
of
the foregoing. There
are
no declared or accrued unpaid dividends with respect to any shares of the
Company’s Common Stock. There are no agreements, written or oral, between the
Company and any of its stockholders or among any stockholders relating to the
acquisition (including without limitation rights of first refusal or preemptive
rights), or disposition, or registration under the Securities Act or voting
of
the capital stock of the Company. There are no outstanding shares of Common
Stock that are subject to vesting. The Company has no capital stock other than
the Common Stock authorized, issued or outstanding.
2.4 Financial
Statements.
. (a)SEC
Documents.
The
Sellers hereby make reference to the following documents filed with the United
States Securities and Exchange Commission (the “SEC”), as posted on the SEC’s
website, ▇▇▇.▇▇▇.▇▇▇: (collectively, the “SEC Documents”): (a) Registration of
Securities Of Small Business Issuers on Form SB-2 as filed on May 12, 2005
and
all amendments thereto; (b) Annual Report on Form 10-KSB for the period ended
December 31, 2006; and (c) Quarterly Reports on Form 10-QSB for the periods
ended June 30, 2006, September 30, 2006, March 31, 2007, and June 30, 2007
and
all amendments thereto. The SEC Documents constitute all of the documents and
reports that the Company was required to file with the SEC pursuant to the
Securities Act of 1933, as amended (“Securities Act”), and the Securities
Exchange Act of 1934, as amended (“Exchange Act”), and the rules and regulations
promulgated thereunder by the SEC. The
financial statements included in the SEC Documents include copies of the balance
sheets of the Company at December 31, 2006, and the related statements of
operations and stockholders’ cash flows for the fiscal years then ended,
including the notes thereto, as audited by ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇▇
LLP, Chartered Accounts, certified, independent accountants, and the balance
sheet of the Company at March 31, 2007 and June 30, 2007 and the related
statements of operations and stockholders’ cash flows for the three and
six-month periods, respectively, then ended prepared by the Company’s management
(all such statements being referred to collectively as the “Company Existing
Financial Statements”). All the Company Existing Financial Statements, together
with the notes thereto, have been prepared in accordance with U.S. generally
accepted accounting principles applied on a basis consistent throughout all
periods presented. These Company Existing Financial Statements present fairly
the financial position of the Company as of the dates and for the periods
indicated. The books of account and other financial records of the Company
have
been maintained in accordance with U.S. GAAP.
(b) Since
the
date of the latest Company Existing Financial Statements (the “Most Recent
Date”), there has been no material adverse change in the condition, financial or
otherwise, net worth, prospects or results of operations of the Company. Without
limiting the foregoing, since the Most Recent Date:
(i) the
Company has not sold, leased, transferred or assigned any of its assets,
tangible or intangible, other than in the ordinary course of
business;
(ii) the
Company has not entered into any agreement, Contract, commitment, lease or
license (or series of related agreements, Contracts, commitments, leases and
licenses);
(iii) no
party
(including the Company) has accelerated, terminated, modified or canceled any
agreement, Contract, lease or license (or series of related agreements,
Contracts, leases and licenses) to which the Company is a party or by which
the
Company or its assets are bound;
(iv) the
Company has not made any capital expenditure (or series of related capital
expenditures) of whatever nature;
(v) the
Company has not made any capital investments in, any loans to, or any
acquisitions of the securities or assets of any other person (or a series of
related capital investments, loans and acquisitions);
(vi) declared
or paid any dividends or made any other distribution to its stockholders whether
or not upon or in respect of any shares of its capital stock;
(vii) redeemed
or otherwise acquired any shares of its capital stock (except upon the exercise
of outstanding options) or any option, warrant or right relating
thereto;
(viii) the
Company has not issued any notes, bonds or other debt securities, or created,
incurred, assumed or guaranteed any liabilities, obligations or indebtedness
for
borrowed money or capitalized lease obligation;
(ix) the
Company has not canceled, compromised, waived or released any right or claim
(or
series of related rights and claims) or material indebtedness;
(x) the
Company has not made any loans to, or entered into any other transactions with,
any of its directors, officers, or employees; and
(xi) the
Company has not committed to do any of the foregoing.
2.5 Further
Financial Matters.
The
Company does not have any (a) assets of any kind or (b) liabilities or
obligations, whether secured or unsecured, accrued, determined, absolute or
contingent, asserted or unasserted or otherwise, which are required to be
reflected or reserved in a balance sheet or the notes thereto under generally
accepted accounting principles, and which are not reflected in the Company
Existing Financial Statements.
2.6 Taxes.
The
Company has filed all United States federal, state, county, local and foreign,
national, provincial and local returns and reports which were required to be
filed on or prior to the Closing Date hereof in respect of all income,
withholding, franchise, payroll, excise, property, sales, use, value-added
or
other taxes or levies, imposts, duties, license and registration fees, charges,
assessments or withholdings of any nature whatsoever (together, “Taxes”), and
has paid all Taxes (and any related penalties, fines and interest) which have
become due pursuant to such returns or reports or pursuant to any assessment
which has become payable, or, to the extent its liability for any Taxes (and
any
related penalties, fines and interest) has not been fully discharged, the same
have been properly reflected as a liability on the books and records of the
Company and adequate reserves therefor have been established. All such returns
and reports filed on or prior to the date hereof have been properly prepared
and
are true, correct (and to the extent such returns reflect judgments made by
the
Company, as the case may be, such judgments were reasonable under the
circumstances) and complete in all material respects. The amount shown on the
Company’s most recent balance sheet in the Company Existing Financial Statements
as provision for taxes is sufficient in all material respects to pay all accrued
and unpaid federal, state, local and foreign taxes for the period then ended
and
all prior periods. No tax return or tax return liability of the Company has
been
audited or, is presently under audit. The Company has not given or been
requested to give waivers of any statute of limitations relating to the payment
of any Taxes (or any related penalties, fines and interest). There are no claims
pending or, to the knowledge of the Sellers, threatened, against the Company
for
past due Taxes. All payments for withholding taxes, unemployment insurance
and
other amounts required to be paid for periods prior to the date hereof to any
governmental authority in respect of employment obligations of the Company,
including, without limitation, amounts payable pursuant to the Federal Insurance
Contributions Act, have been paid or shall be paid prior to the Closing and
have
been duly provided for on the books and records of the Company and in the
Company Existing Financial Statements. All such amounts and penalties are set
forth in the Company’s most recent balance sheet in the Company Existing
Financial Statements.
2.7 Indebtedness;
Contracts; No Defaults; Liabilities.
(a) The
Company has no instruments, agreements, indentures, mortgages, guarantees,
notes, commitments, accommodations, letters of credit or other arrangements
or
understandings, whether written or oral, to which the Company is a party.
(b) Neither
the Company, nor, to the Sellers’ knowledge, any other person or entity, is in
breach of, or in default under any Contract, agreement, arrangement, commitment
or plan to which the Company is a party, and no event or action has occurred,
is
pending or is threatened, which, after the giving of notice, passage of time
or
otherwise, would constitute or result in such a breach or default by the Company
or, to the knowledge of the Sellers, any other person or entity. The Company
has
not received any notice of default under any Contract, agreement, arrangement,
commitment or plan to which it is a party, which default has not been cured
to
the satisfaction of, or duly waived by, the party claiming such default on
or
before the date hereof.
(c) Other
than the Company Liabilities set forth on Schedule
C,
which
shall be paid off immediately upon the closing, the Company has no
liabilities.
2.8 Real
Property.
The
Company does not own or lease any real property.
2.9 Compliance.
(a) The
Company is not conducting its respective business or affairs in violation of
any
applicable federal, state or local law, ordinance, rule, regulation, court
or
administrative order, decree or process, or any requirement of insurance
carriers. The Company has not received any notice of violation or claimed
violation of any such law, ordinance, rule, regulation, order, decree, process
or requirement.
(b) The
Company is in compliance with all applicable federal, state, local and foreign
laws, rules and regulations. There are no claims, notices, actions, suits,
hearings, investigations, inquiries or proceedings pending or, to the knowledge
of the Sellers, threatened against the Company, and there are no past or present
conditions that the Company has reason to believe are likely to give rise to
any
liability or other obligations of the Company under any
circumstances.
2.10 Permits
and Licenses.
The
Company has all certificates of occupancy, rights, permits, certificates,
licenses, franchises, approvals and other authorizations as are reasonably
necessary to conduct its business and to own, lease, use, operate and occupy
its
assets, at the places and in the manner now conducted and operated. The Company
has not received any written or oral notice or claim pertaining to the failure
to obtain any material permit, certificate, license, approval or other
authorization required by any federal, state or local agency or other regulatory
body, the failure of which to obtain would materially and adversely affect
its
business.
2.11
Litigation.
(a) There
is
no claim, dispute, action, suit, inquiry, proceeding or investigation pending
or, to the knowledge of the Sellers, threatened, against or affecting the
business of the Company, or challenging the validity or propriety of the
transactions contemplated by this Agreement, at law or in equity or admiralty
or
before any federal, state, local, foreign or other governmental authority,
board, agency, commission or instrumentality, nor has any such claim, dispute,
action, suit, proceeding or investigation been pending or threatened during
the
12 month period preceding the date hereof;
(b) There
is
no outstanding judgment, order, writ, ruling, injunction, stipulation or decree
of any court, arbitrator or federal, state, local, foreign or other governmental
authority, board, agency, commission or instrumentality, against or affecting
the business of the Company; and
(c) The
Company has not received any written or verbal inquiry from any federal, state,
local, foreign or other governmental authority, board, agency, commission or
instrumentality concerning the possible violation of any law, rule or regulation
or any matter disclosed in respect of its business.
2.12 Insurance.
The
Company does not currently maintain any form of insurance.
2.13
Articles
of Incorporation and By-laws; Minute Books.
Copies
of the Company’s Articles of Incorporation and its By-laws have been provided to
the Buyer. Such copies of the Articles of Incorporation and By-laws (or similar
governing documents) of the Company, and all amendments to each as provided
are
true, correct and complete. The minute books of the Company as forwarded to
the
Buyer contain true, correct and complete records of all meetings and consents
in
lieu of meetings of its Board of Directors (and any committees thereof), or
similar governing bodies, since the time of its organization. The stock books
of
the Company as forwarded to the Buyer are true, correct and
complete.
2.14
Employee
Benefit Plans.
The
Company does not maintain, nor has the Company maintained in the past, any
employee benefit plans (“as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”)), or any plans, programs,
policies, practices, arrangements or contracts (whether group or individual)
providing for payments, benefits or reimbursements to employees, officers or
consultants of the Company, former employees, officers or consultants of the
Company, their beneficiaries and dependents under which such employees, officers
or consultants, former employees, officers or consultants, their beneficiaries
and dependents are covered through an employment relationship with the Company,
any entity required to be aggregated in a controlled group or affiliated service
group with the Company for purposes of ERISA or the Internal Revenue Code of
1986 (the “Code”) (including, without limitation, under Section 414(b), (c), (m)
or (o) of the Code or Section 4001 of ERISA, at any relevant time (“Benefit
Plans”).
2.15
Patents;
Trademarks and Intellectual Property Rights.
The
Company does not own or possess any patents, trademarks, service marks, trade
names, copyrights, trade secrets, licenses, information, Internet web site(s)
or
proprietary rights of any nature. The business conducted by the Company has
not
and will not cause the Company to infringe or violate any of the patents,
trademarks, service marks, trade names, copyrights, mask-works, licenses, trade
secrets, processes, data, know-how or other intellectual property rights of
any
other person.
2.16
Brokers.
The Company or the Sellers have not agreed to or incurred any obligation or
other liability that could be claimed against the Company, Sellers or Buyers
or
any other person for any finder’s fee, brokerage commission or similar payment,
other than as set forth in a Financial Services Agreement between ▇▇▇▇▇▇ Capital
Master Fund, Ltd. and RP Capital, LLC.
2.17
Affiliate
Transactions.
No
officer, director, employee or other affiliate of the Company (or any of the
relatives or affiliates of any of the aforementioned persons) is a party to
any
agreement, Contract, commitment or transaction with the Company or affecting
the
business of the Company, or has any interest in any property, whether real,
personal or mixed, or tangible or intangible, used in or necessary to the
Company which will subject the Company to any liability or obligation from
and
after the Closing Date.
2.18
Quotation
on OTCBB.
The
Company’s Common Stock is currently eligible for quotation on the OTC Bulletin
Board (the “Bulletin Board”), and the Company has not received any notices that
its Common Stock will not be eligible for quotation on the Bulletin
Board.
2.19
Compliance.
The
Company has complied with the requirements of the Exchange Act and the
Securities Act, and is current in its filings under the Exchange Act and the
Securities Act.
2.20
Filings.
None of
the filings made by the Company under the Exchange Act or the Securities Act
contain any untrue statement of a material fact or omit to state a material
fact
necessary in order to make the statements made, in light of the circumstances
under which they were made, not misleading.
2.21
Consents.
Other
than any applicable Current Report on Form 8-K under the Exchange Act, any
Section 13(a) or 15(d) filings and the Information Statement contemplated by
Section 4.1(b) hereof, no consent, waiver, approval, order or authorization
of,
or registration, declaration or filing with, any court, administrative agency
or
commission or other federal, state, county, local or other foreign governmental
authority, instrumentality, agency or commission (“Governmental Entity”) is
required by or with respect to the Sellers in connection with the execution
and
delivery of this Agreement and any related agreements to which the Sellers
are a
party or the consummation of the transactions contemplated hereby and thereby,
except for such consents, waivers, approvals, orders, authorizations,
registrations, declarations and filings as may be required under applicable
securities laws.
2.22
Schedules.
All
lists or other statements, information or documents set forth in, or attached
to
any Schedule provided pursuant to this Agreement or delivered hereunder shall
be
deemed to be representations and warranties by the Company with the same force
and effect as if such lists, statements, information and documents were set
forth herein. Any list, statement, document or any information set forth in,
or
attached to any Schedule provided pursuant to this Agreement or delivered
hereunder shall not be deemed to constitute disclosure for the purposes of
any
other Schedule provided pursuant to this Agreement unless specific cross
reference is made and shall survive after closing.
2.23
Environmental
Matters.
The
Company has never: (i) operated any underground storage tanks at any
property that the Company has at any time owned, operated, occupied or leased;
or (ii) illegally released any material amount of any substance that has
been designated by any Governmental Entity or by applicable foreign, federal,
state, or local law to be radioactive, toxic, hazardous or otherwise a danger
to
health or the environment, including, without limitation, PCBs, asbestos,
petroleum, and urea-formaldehyde and all substances listed as hazardous
substances pursuant to the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as amended, or defined as a hazardous waste pursuant
to the United States Resource Conservation and Recovery Act of 1976, as amended,
and the regulations promulgated pursuant to said laws), but excluding office
and
janitorial supplies properly and safely maintained.
2.24
Representations
and Warranties.
The
representations and warranties of the Sellers included in this Agreement and
any
list, statement, document or information set forth in, attached to any Schedule
provided pursuant to this Agreement or delivered hereunder, are true and
complete in all material respects and do not contain any untrue statement of
a
material fact or omit to state a material fact required to be stated herein
or
therein or necessary to make the statements contained herein or therein not
misleading, under the circumstance under which they were made and shall survive
after closing as set forth herein.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF THE BUYERS
Each
of
the Buyers hereby represents and warrants to the Company, severally and not
jointly, that now and as of the Closing:
3.1
Authority
Relative to this Agreement.
Such
Buyer has the requisite power and/or authority to enter into this Agreement
and
carry out his/her obligations hereunder. This Agreement has been duly and
validly executed and delivered by the Buyer and constitutes a valid and binding
obligation of the Buyer, enforceable in accordance with its terms, except as
such enforcement may be limited by bankruptcy, insolvency or other similar
laws
affecting the enforcement of creditors' rights generally or by general
principles of equity.
3.2
Buyer
Representation Regarding the Securities.
Such
Buyer understands that the Shares are “restricted securities” and have not been
registered under the Securities Act or any applicable state securities law
and
such Buyer is acquiring the Shares as principal for its own account and not
with
a view to or for distributing or reselling such Shares or any part thereof,
has
no present intention of distributing any of such Shares and has no arrangement
or understanding with any other persons regarding the distribution of such
Shares (this representation and warranty not limiting such Buyer’s right to sell
the Shares pursuant to the Registration Statement or otherwise in compliance
with applicable federal and state securities laws). The Buyer is acquiring
the
Shares hereunder in the ordinary course of its business. The Buyer does not
have
any agreement or understanding, directly or indirectly, with any person to
distribute any of the Shares.
3.3 Buyer
Status.
At the
time the Buyer receives any of the Shares, the Buyer will be an “accredited
investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under
the Securities Act.
3.4
Experience
of the Buyer.
Such
Buyer, either alone or together with its representatives, have such knowledge,
sophistication and experience in business and financial matters so as to be
capable of evaluating the merits and risks of the prospective investment in
the
Shares, and has so evaluated the merits and risks of such investment. The Buyer
is able to bear the economic risk of an investment in the Shares and, at the
present time, is able to afford a complete loss of such investment.
3.5
General
Solicitation.
The
Buyer is not receiving the Shares as a result of any advertisement, article,
notice or other communication regarding the Shares published in any newspaper,
magazine or similar media or broadcast over television or radio or presented
at
any seminar or any other general solicitation or general
advertisement.
ARTICLE
IV
COVENANTS
OF THE SELLERS
4.1
Resignation
and Appointment of the Company’s Officers and Directors.
(a) Effective
as of the Closing Date, or such later date as agreed to between the Buyers
and
Sellers, (i) the Sellers will cause the Company’s officers to resign and be duly
replaced by the Buyer’s designees; and (ii) the Sellers will cause the Company
to cause the Buyer’s director designees to be duly appointed.
(b) As
directed by Buyers, the Sellers will use best efforts to ensure that the
Company’s current directors will remain directors of the Company until the
expiration of the 10-day period beginning on the date of the filing of the
Information Statement relating to a change in majority of directors of the
Company with the SEC pursuant to Rule 14f-1 promulgated under the Exchange
Act
(“Information Statement”).
ARTICLE
V
DELIVERIES
& CONDITIONS
5.1
Items
to be delivered to the Buyers at the Closing by the Sellers.
The
Buyers’ obligations to purchase the Shares hereunder is conditioned on the
following closing conditions and deliveries:
(a) Delivery
by the Sellers of the following:
(i) copies
of
the Company’s Articles of Incorporation and amendments thereto, By-laws and
amendments thereto;
(ii) all
minutes and resolutions of the board of directors and of the stockholders (and
meetings of stockholders) in possession of the Company;
(iii) stockholder
list of the Company;
(iv) all
financial statements and tax returns in possession of the Company;
(v) all
applicable schedules hereto;
(vi) Letters
of resignation from the Company’s current officers and directors to be effective
upon Closing and confirming that they have no claim against the Company in
respect of any outstanding remuneration or fees of whatever nature to be
effective upon closing and after the appointments, with the resignation of
the
directors to take effect on the expiration of the 10-day period beginning on
the
date of the filing of the Information Statement;
(vii) Executed
board resolutions authorizing and approving the actions to be performed by
the
Company hereunder and appointing designees of the Buyers as members of the
board
of directors or officers of the Company as set forth in Schedule
D;
(viii) A
certificate of the Secretary or Assistant Secretary of the Company, dated as
of
the Closing Date, certifying as to (i) the incumbency of officers of the Company
executing this Agreement and all exhibits and schedules hereto and all other
documents, instruments and writings required pursuant to this Agreement (the
“Transaction Documents”), (ii) a copy of the Articles of Incorporation and
By-Laws of the Company, as in effect on and as of the Closing Date, and (iii)
a
copy of the resolutions of the Board of Directors of the Company authorizing
and
approving the Company’s execution, delivery and performance of the Transaction
Documents, all matters in connection with the Transaction Documents, and the
transactions contemplated thereby;
(ix) A
certificate, executed by the President of the Company as of the Closing Date,
certifying to the fulfillment of all of the conditions to the Buyers’
obligations under this Agreement and certifying that each of the representations
and warranties of the Sellers as set forth in Section 2 of this Agreement are
true and correct in all material respects as of the Closing Date as though
made
on and as of the Closing Date;
(x) A
duly
executed copy of this Agreement;
(xi) The
Share
Certificates;
(xii) Good
standing and existence certificates for the Company from the State of Nevada;
(xiii) An
instruction letter issued by the Company to the Company’s transfer agent
authorizing and instructing the transfer of the Shares from the Sellers to
the
Buyer pursuant to this Agreement and the signed instruments of transfer in
the
Share Certificates;
(xiv) A
duly
executed agreement by and between Mr. ▇▇▇▇▇▇ ▇▇▇▇ (“▇▇. ▇▇▇▇”) and the Company
in which ▇▇. ▇▇▇▇ agrees to the cancellation of the $54,789 in loans owed to
▇▇.
▇▇▇▇ by the Company at the Closing (as set forth in Schedule
C
hereto);
and
(xv) Any
other
document reasonably requested by the Buyers that the Buyers deem
necessary for the consummation of this transaction.
(b) The
Buyers
are satisfied with their due diligence investigation of the Company, in their
sole discretion;
(c) The
Buyers’ designees for the officer and director positions of the Company shall
have been duly appointed; and
(d) The
representations and warranties set forth in Article 2 of this Agreement shall
be
true and correct in all material respects.
5.2 Items
to
be delivered at Closing by Buyers. The Seller’s obligations to sell the Shares
hereunder are conditioned on the following closing conditions and deliveries
by
the Buyers:
(a) All
applicable exhibits and schedules hereto;
(b) A
duly
executed copy of this Agreement;
(c) An
authorized officer of the Buyers shall deliver to the Sellers at the Closing
a
certificate certifying that each of the representations and warranties of the
Buyers as set forth in Section 3 of this Agreement are true and correct in
all
material respects as of the Closing Date as though made on and as of the Closing
Date;
(d) Any
other
document reasonably requested by the Sellers that they deem necessary for the
consummation of this transaction;
and
(e) The
Purchase Price.
ARTICLE
VI
TERMINATION
6.1
Termination.
This
Agreement may be terminated:
(a) at
any
time before, or at, Closing by written notice of the Buyers;
(b) prior
to
the Closing by any Party at any time if
any
provision (including, but not limited to, the representations and warranties)
of
this Agreement that is applicable to or required to be performed by the other
Party shall be materially untrue or shall become incapable of being accomplished
or if any conditions set forth in Article 5 hereof have not been fully satisfied
as of the Closing Date;
Upon
termination of this Agreement for any reason, in accordance with the terms
and
conditions set forth in this paragraph, each Party shall bear its own costs
and
expenses.
ARTICLE
VII
INDEMNIFICATION
7.1
Indemnification.
(a) Obligation
of Sellers to Indemnify.
Sellers
agree to indemnify, defend and hold harmless Buyers (and their directors,
officers, employees, affiliates, stockholders, debenture holders, agents,
attorneys, successors and assigns) from and against all losses, liabilities,
damages, deficiencies, costs or expenses (including interest, penalties and
reasonable attorneys’ and consultants’ fees and disbursements) (collectively,
“Losses”) based upon, arising out of or otherwise in respect of any (i)
inaccuracy in any representation or warranty of the Sellers contained in this
Agreement; (ii) breach by the Sellers of any covenant or agreement contained
in
this Agreement; (iii) Losses with respect to that certain Purchase and Sale
Agreement dated December 15, 2004 between Driftwood Ventures, Inc. and ▇▇▇▇▇▇
▇▇▇; and (iv) Losses with respect to that certain Retainer Agreement between
Driftwood Ventures, Inc. and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇.
(b) Obligation
of Buyers to Indemnify.
Buyers
agrees to indemnify, defend and hold harmless Sellers from and against all
Losses based upon, arising out of or otherwise in respect of any (i) inaccuracy
in any representation or warranty of the Buyers contained in this Agreement
or
(ii) breach by the Buyers of any covenant or agreement contained in this
Agreement.
(c) Notice
and Opportunity to Defend.
Promptly after receipt by any person entitled to indemnity under this Agreement
(an “Indemnitee”) of notice of any demand, claim or circumstances which, with
the lapse of time, would or might give rise to a claim or the commencement
(or
threatened commencement) of any action, proceeding or investigation (an
“Asserted Liability”) that may result in a Loss, the Indemnitee shall give
notice thereof (the “Claims Notice”) to any other party (or parties) who is or
may be obligated to provide indemnification pursuant to Section 7.1(a) (the
“Indemnifying Party”). The Claims Notice shall describe the Asserted Liability
in reasonable detail and shall indicate the amount (estimated, if necessary
and
to the extent feasible) of the Loss that has been or may be suffered by the
Indemnitee.
(d) The
Indemnifying Party may elect to compromise or defend, at its own expense and
by
its own counsel, any Asserted Liability. If the Indemnifying Party elects to
compromise or defend such Asserted Liability, it shall within 30 days after
the
date the Claims Notice is given (or sooner, if the nature of the Asserted
Liability so requires) notify the Indemnitee of its intent to do so, and the
Indemnitee shall cooperate, at the expense of the Indemnifying Party, in the
compromise of, or defense against, such Asserted Liability. If the Indemnifying
Party elects not to compromise or defend the Asserted Liability, fails to notify
the Indemnitee of its election as herein provided or contests its obligation
to
indemnify under this Agreement, the Indemnitee may pay, compromise or defend
such Asserted Liability and all reasonable expenses incurred by the Indemnitee
in defending or compromising such Asserted Liability, all amounts required
to be
paid in connection with any such Asserted Liability pursuant to the
determination of any court, governmental or regulatory body or arbitrator,
and
amounts required to be paid in connection with any compromise or settlement
consented to by the Indemnitee, shall be borne by the Indemnifying Party. Except
as otherwise provided in the immediately preceding sentence, the Indemnitee
may
not settle or compromise any claim over the objection of the Indemnifying Party.
In any event, the Indemnitee and the Indemnifying Party may participate, at
their own expense, in (but the Indemnitee may not control) the defense of such
Asserted Liability. If the Indemnifying Party chooses to defend any claim,
the
Indemnitee shall make available to the Indemnifying Party any books, records
or
other documents within its control that are necessary or appropriate for such
defense.
ARTICLE
VIII
MISCELLANEOUS
8.1
Survival
of Representations, Warranties and Agreements.
All
representations, warranties and statements made by a Party in this Agreement
or
in any document or certificate delivered pursuant hereto shall survive the
Closing Date. Each of the Parties hereto is executing and carrying out the
provisions of this Agreement in reliance upon the representations, warranties
and covenants and agreements contained in this Agreement or at the Closing
of
the transactions herein provided for and not upon any investigation which it
might have made or any representation, warranty, agreement, promise or
information, written or oral, made by the other Party or any other person other
than as specifically set forth herein.
8.2
Access
to Books and Records.
During
the course of this transaction through Closing, the Sellers agrees to make
available for inspection all Company corporate books, records and assets, and
otherwise afford the Buyers and their respective representatives, reasonable
access to all documentation and other information concerning the business,
financial and legal conditions of the Company for the purpose of conducting
a
due diligence investigation thereof. Such due diligence investigation shall
be
for the purpose of satisfying each Party as to the business, financial and
legal
condition of the Company for the purpose of determining the desirability of
consummating the proposed transaction. The Parties further agree to keep
confidential and not use for their own benefit, except in accordance with this
Agreement any information or documentation obtained in connection with any
such
investigation.
8.3
Further
Assurances.
If, at
any time after the Closing, the Parties hereby mutually agree
that any further deeds, assignments or assurances in law or any other things
are
necessary, desirable or proper to complete the transactions contemplated hereby
in accordance with the terms of this Agreement or to vest, perfect or confirm,
of record or otherwise, the title to any property or rights of the Parties
hereto, the Parties agree that their proper officers and directors shall execute
and deliver all such proper deeds, assignments and assurances in law and do
all
things necessary, desirable or proper to vest, perfect or confirm title to
such
property or rights and otherwise to carry out the purpose of this Agreement,
and
that the proper officers and directors the Parties are fully authorized to
take
any and all such action.
8.4
Notice.
All
communications, notices, requests, consents or demands given or required under
this Agreement shall be in writing and shall be deemed to have been duly given
when delivered to, or received by prepaid registered or certified mail or
recognized overnight courier addressed to, or upon receipt of a facsimile sent
to, the Party for whom intended, as follows, or to such other address or
facsimile number as may be furnished by that Party by notice in the manner
provided herein:
If
to the
Sellers:
▇▇.
▇▇▇▇▇
▇▇▇▇▇
P.
O. ▇▇▇ ▇▇
▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇ ▇▇▇
Tel:
▇▇▇-▇▇▇-▇▇▇▇
Fax:
▇▇▇-▇▇▇-▇▇▇▇
If
to
Buyers:
▇▇▇▇▇▇
Capital Master Fund, Ltd.
▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn:
▇▇▇
▇▇▇▇
Tel:
▇▇▇-▇▇▇-▇▇▇▇
Fax:
▇▇▇-▇▇▇-▇▇▇▇
With
a
copy to:
Mintz,
Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
Chrysler
Center
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇▇▇▇ ▇▇▇▇, Esq.
Fax:
▇▇▇-▇▇▇-▇▇▇▇
8.5
Entire
Agreement.
This
Agreement, the Exhibits and Schedules hereto and any instruments and agreements
to be executed pursuant to this Agreement, set forth the entire understanding
of
the Parties hereto with respect to its subject matter, merges and supersedes
all
prior and contemporaneous understandings with respect to its subject matter
and
may not be waived or modified, in whole or in part, except by a writing signed
by each of the Parties hereto. No waiver of any provision of this Agreement
in
any instance shall be deemed to be a waiver of the same or any other provision
in any other instance. Failure of any Party to enforce any provision of this
Agreement shall not be construed as a waiver of its rights under such
provision.
8.6
Successors
and Assigns.
This
Agreement shall be binding upon, enforceable against and inure to the benefit
of, the Parties hereto and their respective heirs, administrators, executors,
personal representatives, successors and assigns, and nothing herein is intended
to confer any right, remedy or benefit upon any other person. This Agreement
may
not be assigned by the Sellers except with the prior written consent of the
Buyers. This Agreement and all of the obligations of the Sellers may be assigned
by the Buyers without the prior notice to the Sellers or written consent of
the
Sellers and upon assignment, all of the rights and obligations of Buyer shall
be
the rights and obligations of the Buyers’ designated assignee.
8.7
Governing
Law.
This
Agreement shall in all respects be governed by and construed in accordance
with
the laws of the State of California, USA that are applicable to agreements
made
and fully to be performed in such state, without giving effect to conflicts
of
law principles.
8.8
Counterparts.
This
Agreement may be executed in multiple counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the
same
instrument.
8.9
Construction.
Headings contained in this Agreement are for convenience only and shall not
be
used in the interpretation of this Agreement. References herein to Articles,
Sections and Exhibits are to the articles, sections and exhibits, respectively,
of this Agreement. The Schedules hereto are hereby incorporated herein by
reference and made a part of this Agreement. As used herein, the singular
includes the plural, and the masculine, feminine and neuter gender each includes
the others where the context so indicates.
8.10
Severability.
If any
provision of this Agreement is held to be invalid or unenforceable by a court
of
competent jurisdiction, this Agreement shall be interpreted and enforceable
as
if such provision were severed or limited, but only to the extent necessary
to
render such provision and this Agreement enforceable.
8.11
Arbitration.
Any
controversy arising out of, connected to, or relating to any matters herein
of
the transactions with the Parties hereto on behalf of the undersigned, or this
Agreement, or the breach thereof, including, but not limited to any claims
of
violations of federal and/or state securities laws, banking statutes, consumer
protection statutes, federal and/or state anti-racketeering (e.g. RICO) claims
as well as any common law claims and any state law claims of fraud, negligence,
negligent misrepresentations, and/or conversion, or the laws of any territory,
country or jurisdiction, shall be settled by arbitration; and in accordance
with
this paragraph any judgment on the arbitrator’s award may be entered in any
court having jurisdiction thereof. In the event of such a dispute, each Party
agrees to arbitration conducted through the auspices of American Arbitration
Association. Venue for any action shall lie in Nevada, USA.
8.12
Confidentiality;
Public Disclosure.
Each of
the parties hereto hereby agrees that the information obtained pursuant to
the
negotiation and execution of this Agreement shall be treated as confidential
and
not be disclosed to third parties who are not agents of one of the Parties
to
this Agreement.
8.13
Notification
of Certain Matters.
Each
Party shall give prompt notice to the other of (i) the occurrence or
non-occurrence of any event, the occurrence or non-occurrence of which is likely
to cause any representation or warranty of such party contained in this
Agreement to be untrue or inaccurate and (ii) any failure of such Party to
comply with or satisfy any covenant, condition or agreement to be complied
with
or satisfied by it hereunder; provided,
however,
that
the delivery of any notice pursuant to this Section shall not limit or
otherwise affect any remedies available to the Party receiving such notice.
Further, disclosure pursuant to this Section shall not be deemed to amend
or supplement the Schedules hereto or prevent or cure any
misrepresentations, breach of warranty or breach of covenant.
8.14
Currency.
The
parties hereto agree that all monetary amounts set forth herein are referenced
in United States dollars, unless otherwise stated.
8.15
Rules
of Construction.
The
parties hereto agree that they have been represented by counsel during the
negotiation and execution of this Agreement and, therefore, waive the
application of any law, regulation, holding or rule of construction providing
that ambiguities in an agreement or other document will be construed against
the
Party drafting such agreement or document.
8.16
Counterparts.
This
Agreement may be executed in counterparts and by facsimile signatures. In the
event that any signature is delivered by facsimile transmission, such signature
shall create a valid and binding obligation of the Party executing (or on whose
behalf such signature is executed) with the same force and effect as if such
facsimile signature page were an original thereof. All such counterparts shall
together constitute one and the same instrument.
IN
WITNESS WHEREOF, each of the Parties hereto has executed this Agreement as
of
the date first set forth above.
SELLERS:
[Signatures
set forth on Schedule A]
BUYERS:
[Signatures
set forth on Schedule B]
| SELLERS AUTHORIZED REPRESENTATIVE: | ||
| |
|
|
| By: /s/ ▇▇▇▇▇ ▇▇▇▇▇ | ||
|
▇▇▇▇▇ ▇▇▇▇▇ |
||
Schedule
A
Sellers
|
Sellers
|
Shares
|
Signature
|
|
▇▇▇
▇▇▇▇▇▇▇▇
|
8,000
|
/s/
▇▇▇ ▇▇▇▇▇▇▇▇
|
|
▇▇▇▇▇▇▇
Atford
|
40,000
|
/s/
▇▇▇▇▇▇▇ Atford
|
|
Vic
Brothers
|
60,000
|
/s/
Vic Brothers
|
|
▇▇▇▇▇▇
▇▇▇▇
|
3,400,000
|
/s/
▇▇▇▇▇▇ ▇▇▇▇
|
|
Winch
Chung
|
40,000
|
/s/
Winch Chung
|
|
▇▇▇▇▇▇▇
▇▇▇
|
50,000
|
/s/
▇▇▇▇▇▇▇ ▇▇▇
|
|
▇▇▇
▇▇▇▇▇▇▇
|
60,000
|
/s/
▇▇▇ ▇▇▇▇▇▇▇
|
|
▇▇▇▇▇
▇▇▇▇▇▇
|
40,000
|
/s/
▇▇▇▇▇ ▇▇▇▇▇▇
|
|
▇▇▇▇
▇▇▇▇
|
40,000
|
/s/
▇▇▇▇ ▇▇▇▇
|
|
▇▇▇▇
▇▇▇▇▇▇▇
|
10,000
|
/s/
▇▇▇▇ ▇▇▇▇▇▇▇
|
|
▇▇▇▇
▇▇▇▇▇
|
10,000
|
/s/
▇▇▇▇ ▇▇▇▇▇
|
|
▇▇▇▇▇▇
▇▇▇▇
|
60,000
|
/s/
▇▇▇▇▇▇ ▇▇▇▇
|
|
▇▇
▇▇▇▇▇▇
|
50,000
|
/s/
▇▇ ▇▇▇▇▇▇
|
|
▇▇▇▇▇▇▇
▇▇▇▇▇
|
9,000
|
/s/
▇▇▇▇▇▇▇ ▇▇▇▇▇
|
|
▇▇▇
▇▇▇▇▇
|
12,000
|
/s/
▇▇▇ ▇▇▇▇▇
|
|
▇▇▇▇▇▇
▇▇▇▇▇
|
10,000
|
/s/
▇▇▇▇▇▇ ▇▇▇▇▇
|
|
▇▇▇▇▇
▇▇▇▇▇▇
|
10,000
|
/s/
▇▇▇▇▇ ▇▇▇▇▇▇
|
|
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
|
40,000
|
/s/
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
|
|
▇▇▇▇▇
▇▇▇▇▇
|
1,500,000
|
/s/
▇▇▇▇▇ ▇▇▇▇▇
|
|
▇▇▇▇
▇▇▇▇▇▇
|
12,000
|
/s/
▇▇▇▇ ▇▇▇▇▇▇
|
|
TOTAL:
|
5,461,000
|
Schedule
B
Buyers
|
Buyers
|
Shares
|
Consideration
|
Signature
|
|
▇▇▇▇▇▇
Capital Master Fund, Ltd.
|
5,461,000
|
$750,000
|
/s/
▇▇▇ ▇▇▇▇
|
|
TOTAL:
|
5,461,000
|
$750,000
|
Schedule
C
Schedule
of Liabilities
● A
total
of $54,789.00 in loans (the “Loans”) to the Company by Mr. ▇▇▇▇▇▇ ▇▇▇▇,
president of the Company, which Loans will be cancelled in their entirety by
▇▇.
▇▇▇▇ at the Closing.
Schedule
D
Officer
and Director Appointments
Officers:
|
Name:
|
Position:
|
|
|
▇▇▇▇▇▇
▇. ▇▇▇▇▇
|
Chief
Executive Officer and President
|
|
|
▇▇▇▇▇▇▇
▇▇▇▇▇
|
Chief
Financial Officer and Treasurer
|
|
|
▇▇▇▇▇▇
▇▇▇
|
Controller
|
|
|
▇▇▇
▇▇▇▇
|
Secretary
|
Directors:
|
▇▇▇▇▇▇
▇. ▇▇▇▇▇
|
|
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
|
Exhibit
A
Disclosure
Schedules
Schedule
2.7(a) - Company Agreements
The
Company is a party to the following agreements:
1. Agreement
for transfer agent services with Empire Stock Transfer Inc. (no amounts are
currently owed under this agreement)
4127762v.4
(DFTW FINAL 9-27-07)