Exhibit 10.1
STOCK PURCHASE AGREEMENT
AMONG
NUMOBILE, INC.,
ENHANCE NETWORK COMMUNICATION, INC.
AND
THE SHAREHOLDERS OF ENHANCE NETWORK COMMUNICATION, INC.
DATED SEPTEMBER 9, 2009
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT is made as of September 17th, 2009 (the
"AGREEMENT"), among NuMobile, Inc., a corporation existing under the laws of
Nevada (the "PURCHASER"), Enhance Network Communication, Inc., a corporation
existing under the laws of California ("ENHANCE"), and the shareholders of
Enhance listed on SCHEDULE 1 hereof (collectively the "SELLERS").
W I T N E S S E T H:
WHEREAS, the Sellers own an aggregate of 1,500 shares of common stock,
$0.001 par value per share (the "Common Stock"), the "SHARES"), which constitute
100% of the issued and outstanding shares of capital stock of Enhance; and
WHEREAS, the Sellers desire to sell to Purchaser, and the Purchaser
desires to purchase from the Sellers, the Shares upon the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter contained, the parties hereby agree as
follows:
ARTICLE I SALE AND PURCHASE OF SHARES
1.1 SALE AND PURCHASE OF SHARES.
Upon the terms and subject to the conditions contained herein, on the
Closing Date each Seller shall sell, assign, transfer, convey and deliver to the
Purchaser, and the Purchaser shall purchase from each Seller, all Shares of
Enhance owned by such Seller set forth opposite such Seller's name on SCHEDULE 1
attached hereto. The sale and purchase are intended to be a tax-free
reorganization under Section 368(a)(1)(B) of the Internal Revenue Code.
ARTICLE II PURCHASE PRICE AND PAYMENT
2.1 AMOUNT AND PAYMENT OF PURCHASE PRICE.
On the Closing Date, the Purchaser shall issue an aggregate principal
amount of $5,000,000 notes with $1,000,000 due September 9th, 2010 and subject
to performance as set forth in Section 2.2 of this Agreement, $4,000,000 due
September 9th, 2014 in the form attached hereto as Exhibit 1 (the "Notes") to
the Sellers based on the percentages set forth on Schedule 1.
2.2 TERMS AND CONDITIONS OF PAYMENT.
The $4,000,000 payment due September 9th, 2014 is subject to specific
performance as set forth in this Section 2.2. Enhance anticipates entering into
a contract for its proprietary technology prior to April 1, 2011. That contract
is expected to contemplate the generation of in excess of $20,000,000 in revenue
and $8,000,000 in gross margin. If Enhance does not enter into a contract that
contemplates the generation of at least $20,000,000 in revenue and $8,000,000 in
gross margin (the "Performance Contract") prior to April 1, 2011, then the
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$4,000,000 note will be canceled and the $1,000,000 note due September 9th, 2010
will be considered payment in full for the 1,500 shares of common stock which
constitute 100% of the issued and outstanding shares of capital stock of
Enhance. If Enhance is successful in entering into the Performance Contract,
then $4,000,000 of the Notes will be due September 9th, 2014 (unless such Notes
shall have been cancelled in accordance with this Section 2.2), and the Sellers
will have an option to buy back 1,500 shares of common stock which constitute
100% of the issued and outstanding shares of capital stock of Enhance in
exchange for $5,000,000 in cash, and the cancelation of any outstanding notes
due the Sellers, if the cash payment is delivered prior to September 9, 2012.
ARTICLE III CLOSING AND TERMINATION
3.1 CLOSING DATE.
Subject to the satisfaction of the conditions set forth in Sections 7.1
and 7.2 hereof (or the waiver thereof by the party entitled to waive that
condition), the closing of the sale and purchase of the Notes provided for in
Section 2 hereof (the "CLOSING") shall take place at the offices of Sichenzia
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP, ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ (or at such other
place as the parties may designate in writing) on such date as the Sellers and
the Purchaser may designate. The Closing may also take place through the
delivery of documents in electronic or telefaxed format or through courier
delivery of actual signatures to counsel for the parties.
3.2 TERMINATION OF AGREEMENT.
This Agreement may be terminated prior to the Closing by either (a)
mutual written consent of the Sellers and the Purchaser or (b) the failure to
complete the Closing by September 30, 2009. In the event that this Agreement is
validly terminated as provided herein, then each of the parties shall be
relieved of their duties and obligations arising under this Agreement after the
date of such termination and such termination shall be without liability to the
Purchaser, Enhance or any Seller; PROVIDED, HOWEVER, that nothing in this
Section 3.2 shall relieve the Purchaser or any Seller of any liability for a
breach of this Agreement.
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Each of the Sellers represents and warrants to the Purchaser that as of
the Closing Date:
4.1 ORGANIZATION AND GOOD STANDING OF ENHANCE.
Enhance is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation as set forth
above.
4.2 AUTHORITY.
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(a) Enhance has full power and authority (corporate and otherwise)
to carry on its business and has all permits and licenses that
are necessary to the conduct of its business or to the
ownership, lease or operation of its properties and assets,
except where the failure to have such permits and licenses
would not have a material adverse effect on the Company's
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business or operations taken as a whole ("MATERIAL ADVERSE
EFFECT").
(b) The execution of this Agreement and the delivery hereof to the
Purchaser and the sale contemplated herein have been, or will
be prior to Closing, duly authorized by Enhance's Board of
Directors and, if necessary, by Enhance's stockholders having
full power and authority to authorize such actions.
(c) Neither the execution and delivery of this Agreement, the
consummation of the transactions herein contemplated, nor
compliance with the terms of this Agreement will violate,
conflict with, result in a breach of, or constitute a default
under any statute, regulation or other agreement to which
Enhance or any Seller is a party or by which it or any of them
is bound, any charter, regulation, or bylaw provision of
Enhance, or any decree, order, or rule of any court or
governmental authority or arbitrator that is binding on
Enhance or any Seller in any way, except where such would not
have a Material Adverse Effect.
4.3 SHARES.
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(a) Enhance's authorized capital stock consists of 1,500,000
shares of Common Stock of which 1,500 shares are issued and
outstanding. All of the Shares are duly authorized, validly
issued, fully paid and non-assessable.
(b) There are no authorized or outstanding subscriptions, options,
warrants, calls, contracts, demands, commitments, convertible
securities or other agreements or arrangements of any
character or nature whatever under which or Enhance is or may
become obligated to issue, assign or transfer any shares of
capital stock of Enhance. Based upon the representations and
warranties of the Sellers in this Agreement, upon the delivery
to Purchaser on the Closing Date of the certificate(s)
representing the Shares, Purchaser will have good, legal,
valid, marketable and indefeasible title to 100% of the then
issued and outstanding shares of capital stock of Enhance,
free and clear of any liens, pledges, encumbrances, charges,
agreements, options, claims or other arrangements or
restrictions of any kind, other than those imposed by
applicable securities laws.
4.4 BASIC CORPORATE RECORDS.
The copies of the Certificate of Incorporation of Enhance (certified by
the Secretary of State or other authorized official of the jurisdiction of
incorporation), and the Bylaws of Enhance, all of which have been delivered to
the Purchaser, are true, correct and complete as of the date of this Agreement.
The minute books of Enhance, which shall be exhibited to the Purchaser
between the date hereof and the Closing Date, each contain true, correct and
materially complete minutes and records of all meetings, proceedings and other
actions of the shareholders and Board of Directors of Enhance, except where such
would not have a Material Adverse Effect and, on the Closing Date, will, contain
true, correct and materially complete minutes and records of any meetings,
proceedings and other actions of the shareholders and the Board of Directors of
Enhance.
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4.5 SUBSIDIARIES AND AFFILIATES.
Any and all businesses, entities, enterprises and organizations in
which Enhance has any ownership, voting or profit and loss sharing percentage
interest (the "SUBSIDIARIES") are identified in Schedule 4.5 hereto, together
with Enhance's interest therein.
4.6 CONSENTS.
No consents or approvals of any public body or authority and no
consents or waivers from other parties to leases, licenses, franchises, permits,
indentures, agreements or other instruments are (i) required for the lawful
consummation of the transactions contemplated hereby, or (ii) necessary in order
that the business currently conducted by Enhance can be conducted by the
Purchaser in the same manner after the Closing as heretofore conducted by
Enhance, nor will the consummation of the transactions contemplated hereby
result in creating, accelerating or increasing any liability of Enhance, except
where the failure of any of the foregoing would not have a Material Adverse
Effect.
4.7 FINANCIAL STATEMENTS.
The Sellers have delivered, or will deliver prior to Closing, to the
Purchaser copies of the financial statements dated 06/30/2009 and the period
then ended, all of which are true, complete and correct, have been prepared from
the books and records of Enhance. The records and books of Enhance reflect all
material assets and liabilities.
There are no liabilities or obligations of Enhance of any kind
whatsoever exceeding $10,000, individually or in the aggregate, whether accrued,
fixed, absolute, contingent, determined or determinable, except as identified in
Schedule 4.14.
4.8 TAXES.
For purposes of this Agreement, "TAX" or "TAXES" refers to any and all
federal taxes, assessments and other governmental charges, duties, impositions
and liabilities relating to taxes, including taxes based upon or measured by
gross receipts, income, profits, sales, use and occupation, and value added, ad
valorem, transfer, franchise, withholding, payroll, recapture, employment,
excise and property taxes and escheatment payments, together with all interest,
penalties and additions imposed with respect to such amounts and any obligations
under any agreements or arrangements with any other person with respect to such
amounts and including any liability for taxes of a predecessor entity.
Enhance has timely filed all federal returns, estimates, information
statements and reports ("TAX Returns") relating to Taxes required to be filed by
Enhance with any Tax authority effective through the Closing Date. All such Tax
Returns are true, correct and complete in all respects, except for immaterial
amounts where such would not have a Material Adverse Effect.
Enhance has not been delinquent in the payment of any Tax nor is there
any Tax deficiency outstanding or assessed against Enhance. Enhance has not
executed any unexpired waiver of any statute of limitations on or extending the
period for the assessment or collection of any Tax.
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4.9 REAL PROPERTY MATTERS.
Enhance does not own any real property as of the date hereof and has
not owned any real property during the three years preceding the date hereof.
4.10 PATENTS, SOFTWARE, TRADEMARKS, ETC.
Enhance owns, or possesses adequate licenses or other rights to use,
all patents, software, trademarks, service marks, trade names and copyrights and
trade secrets, if any, necessary to conduct its Business as now operated by it.
The patents, software, trademarks, service marks, copyrights, trade names and
trade secrets, if any, registered in the name of or owned or used by or licensed
to Enhance and applications for any thereof, other than commercial,
off-the-shelf products, (hereinafter the "INTANGIBLES") are described or
referenced in SCHEDULE 4.10. Sellers hereby specifically acknowledge that all
right, title and interest in and to all patents and software listed on SCHEDULE
4.10 as patents owned by Enhance are owned by Enhance or Enhance has a right to
use same and that the ownership of such patents and software will be transferred
as part of Enhance to Purchaser as part of the transaction contemplated hereby,
subject to any filings required by the USPTO. No officer, director, shareholder
or employee of Enhance or any relative or spouse of any such person owns any
patents or patent applications or any inventions, software, secret formulae or
processes, trade secrets or other similar rights, nor is any of them a party to
any license agreement, used by or useful to Enhance or related to its business
except as listed in SCHEDULE 4.10.
All of said Intangibles are enforceable and are free and clear of all
liens, security interests, charges, restrictions and encumbrances of any kind
whatsoever, and have not been licensed to any third party except as described in
SCHEDULE 4.10. Enhance has not been charged with, nor has it infringed or is it
threatened to be charged with infringement of, any patent, proprietary rights or
trade secrets of others in the conduct of its business, and, to the date hereof,
neither the Sellers nor Enhance has received any notice of conflict with or
violation of the asserted rights in intangibles or trade secrets of others.
Enhance is not now manufacturing any goods under a present permit, franchise or
license. The consummation of the transactions contemplated hereby will not alter
or impair any rights of Enhance in any such Intangibles or in any such permit,
franchise or license, except as described in SCHEDULE 4.10. The Intangibles are
in such form and of such quality and will be maintained in such a manner that
Enhance can, following the Closing, design, produce, manufacture, assemble and
sell the products and provide the services heretofore provided by it so that
such products and services meet applicable specifications and conform with the
standards of quality and cost of production standards heretofore met by it.
Enhance has the sole and exclusive right to use its corporate and trade names in
the jurisdictions where it transacts business.
4.11 MACHINERY AND EQUIPMENT.
Except for items disposed of in the ordinary course of business, all
machinery, tools, furniture, fixtures, equipment, vehicles, leasehold
improvements and all other tangible personal property (hereinafter "FIXED
ASSETS") of the Company currently being used in the conduct of its business (the
"BUSINESS"), together with any machinery or equipment that is leased or operated
by the Company, are in fully serviceable working condition and repair. Schedule
4.11 describes all Fixed Assets owned by Enhance. All Fixed Assets owned, used
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or held by the Company are situated at its business premises and are currently
used in its Business.
4.12 LISTS OF CONTRACTS, ETC.
There is included in SCHEDULE 4.12 a list of the following items
(whether written or oral) relating to Enhance, which list identifies and fairly
summarizes each item (collectively, "CONTRACTS"):
(a) All joint venture contracts of Enhance or affiliates relating
to the Business;
(b) All contracts of Enhance relating to (a) obligations for
borrowed money and (b) obligations under capital leases, (e)
debt of others secured by a lien on any asset of Enhance, and
(f) debts of others guaranteed by Enhance;
(c) All agreements of Enhance relating to the supply of raw
materials for and the distribution of the products of its
business, including without limitation all sales agreements,
manufacturer's representative agreements and distribution
agreements of whatever magnitude and nature, and any
commitments therefor;
(d) All contracts that individually provide for aggregate future
payments to or from Enhance of $25,000 or more, to the extent
not included in (a) through (c) above;
(e) All contracts of Enhance that have a term exceeding one year
and that may not be cancelled without any liability, penalty
or premium, to the extent not included in (a) through (d)
above;
(f) All contracts, agreements and commitments of Enhance set forth
in SCHEDULE 4.12 are valid, binding and in full force and
effect, and (ii) neither Enhance nor, any other party to any
such contract, agreement, or commitment has materially
breached any provision thereof or is in default thereunder.
Immediately after the Closing, each such contract, agreement
or commitment will continue in full force and effect without
the imposition or acceleration of any burdensome condition or
other obligation on Enhance resulting from the sale of the
Shares by the Sellers.
4.13 COMPLIANCE WITH THE LAW.
Enhance is not in violation of any applicable federal, state, local or
foreign law, regulation or order or any other, decree or requirement of any
governmental, regulatory or administrative agency or authority or court or other
tribunal (including, but not limited to, any law, regulation order or
requirement relating to securities, properties, business, products,
manufacturing processes, advertising, sales or employment practices, terms and
conditions of employment, occupational safety, health and welfare, conditions of
occupied premises, product safety and liability, civil rights, or environmental
protection, including, but not limited to, those related to waste management,
air pollution control, waste water treatment or noise abatement), except where
such would not have a Material Adverse Effect. Enhance has not been and is not
now charged with, or to Enhance's knowledge under investigation with respect to,
any violation of any applicable law, regulation, order or requirement relating
to any of the foregoing, nor, to Enhance's knowledge after due inquiry, are
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there any circumstances that would or might give rise to any such violation.
Enhance has filed all reports required to be filed with any governmental,
regulatory or administrative agency or authority, except where the failure to
file such would not have a Material Adverse Effect.
4.14 LITIGATION.
Except as specifically identified on the Balance Sheet or footnotes
thereto or set forth in SCHEDULE 4.14:
(a) There are no legal, administrative, arbitration or other
proceedings or governmental investigations pending or, to
Enhance's knowledge, threatened, against the Sellers or
Enhance, relating to its Business or Enhance or its properties
(including leased property), or the transactions contemplated
by this Agreement, nor is there any basis known to Enhance for
any such action.
(b) There are no judgments, decrees or orders of any court, or any
governmental department, commission, board, agency or
instrumentality binding Enhance relating to its Business or
Enhance the effect of which is to prohibit any business
practice or the acquisition of any property or the conduct of
any business by Enhance or which limit or control or otherwise
would have a Material Adverse Affect on its method or manner
of doing business.
4.15 ABSENCE OF CERTAIN CHANGES OR EVENTS.
Enhance has not, since December 31, 2008:
(a) Incurred any material obligation or liability (absolute,
accrued, contingent or otherwise), except in the ordinary
course of its business consistent with past practice or in
connection with the performance of this Agreement;
(b) Disposed of or permitted to lapse any patents or trademarks or
any patent or trademark applications material to the operation
of its Business; or
(c) Issued any stocks, bonds, or other corporate securities, or
made any declaration or payment of any dividend or any
distribution in respect of its capital stock.
4.16 ABSENCE OF CERTAIN COMMERCIAL PRACTICES.
Enhance has not made any payment (directly or by secret commissions,
discounts, compensation or other payments) or given any gifts to another
business concern, to an agent or employee of another business concern or of any
governmental entity (domestic or foreign) or to a political party or candidate
for political office (domestic or foreign), to obtain or retain business for
Enhance or to receive favorable or preferential treatment, except for gifts and
entertainment given to representatives of customers or potential customers of
sufficiently limited value and in a form (other than cash) that would not be
construed as a bribe or payoff.
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4.17 ENVIRONMENTAL MATTERS.
The operations of Enhance are in compliance with all applicable laws
promulgated by any governmental entity which prohibit, regulate or control any
hazardous material or any hazardous material activity ("ENVIRONMENTAL LAWS") and
all permits issued pursuant to Environmental Laws or otherwise except for where
noncompliance or the absence of such permits would not, individually or in the
aggregate, have a Material Adverse Effect;
Enhance has obtained all permits required under all applicable
Environmental Laws necessary to operate its business, except for any failures of
such which would not have a Material Adverse Effect;
Enhance is not the subject of any outstanding written order or Contract
with any governmental authority or person respecting Environmental Laws or any
violation or potential violations thereof; and
Enhance has not received any written communication alleging either or
both that Enhance may be in violation of any Environmental Law, or any permit
issued pursuant to Environmental Law, or may have any liability under any
Environmental Law.
Each Seller, individually and not jointly, represents and warrants to
the Purchaser as of the Closing Date that:
4.18 INVESTMENT INTENT.
The Notes are being acquired hereunder by the Seller for investment
purposes only, for Seller's own account, not as a nominee or agent and not with
a view to the distribution thereof. The Seller has no present intention to sell
or otherwise dispose of the Notes and will not do so except in compliance with
the provisions of the Securities Act of 1933, as amended, and applicable law.
The Seller understands that the Notes which may be acquired hereunder must be
held by Seller indefinitely unless a subsequent disposition or transfer of any
of said Notes is registered under the Securities Act of 1933, as amended, or is
exempt from registration therefrom. The Seller further understands that the
exemption from registration afforded by Rule 144 (the provisions of which are
known to such Seller) promulgated under the Securities Act of 1933, as amended,
depends on the satisfaction of various conditions, and that, if and when
applicable, Rule 144 may afford the basis for sales only in limited amounts.
4.19 INVESTMENT EXPERIENCE; SUITABILITY.
The Seller is a sophisticated investor familiar with the type of risks
inherent in the acquisition of securities such as the Notes and the Seller's
financial position is such that the Seller can afford to retain the Notes for an
indefinite period of time without realizing any direct or indirect cash return
on Seller's investment.
4.20 OWNERSHIP
With respect to Seller's Shares, Seller is the lawful record and
beneficial owner of all the Seller's Shares, free and clear of any liens,
pledges, encumbrances, charges, claims or restrictions of any kind and has, or
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will have on the Closing Date, the absolute, unilateral right, power, authority
and capacity to enter into and perform this Agreement without any other or
further authorization, action or proceeding, except as specified herein.
4.21 OPTIONS AND RIGHTS
There are no authorized or outstanding subscriptions, options,
warrants, calls, contracts, demands, commitments, convertible securities or
other agreements or arrangements of any character or nature whatever under which
Seller is or may become obligated to assign or transfer any shares of capital
stock of Enhance. Upon the delivery to Purchaser on the Closing Date of the
certificate(s) representing the Shares, Purchaser will have good, legal, valid,
marketable and indefeasible title to all the Seller's Shares, free and clear of
any liens, pledges, encumbrances, charges, agreements, options, claims or other
arrangements or restrictions of any kind, other than those imposed by applicable
securities laws.
4.22 ABSENCE OF CERTAIN COMMERCIAL PRACTICES.
Seller has not made any payment (directly or by secret commissions,
discounts, compensation or other payments) or given any gifts to another
business concern, to an agent or employee of another business concern or of any
governmental entity (domestic or foreign) or to a political party or candidate
for political office (domestic or foreign), to obtain or retain business for
Enhance or to receive favorable or preferential treatment, except for gifts and
entertainment given to representatives of customers or potential customers of
sufficiently limited value and in a form (other than cash) that would not be
construed as a bribe or payoff.
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PURCHASER
The Purchaser represents and warrants to each Seller and to Enhance, as
of the Closing Date, that:
5.1 ORGANIZATION AND GOOD STANDING OF THE PURCHASER.
The Purchaser is a corporation duly organized, validly existing and in
good standing under the laws of the State of Nevada. Purchaser has, as of
September 3rd, 2009, 5,000,000,000 shares of common stock, $0.001 par value,
authorized, of which 28,901,534 shares are issued and outstanding, 5,000 shares
of Series A Preferred Stock, $0.001 par value, of which 2,656 are issued and
outstanding, 100,000 shares of Series B Preferred Stock, $0.001 par value, of
which 0 are issued and outstanding, 12,000,000 shares of Series C Preferred
Stock, $0.001 par value, of which 5,000 are issued and outstanding, 25,000
shares of Series D Preferred Stock, $0.001 par value, of which 11,575 are issued
and outstanding and 25,000 shares of Series E Preferred Stock, $0.001 par value,
of which 5,708 are issued and outstanding.
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5.2 AUTHORITY.
(a) The execution and delivery of this Agreement and the consummation
of the transactions contemplated herein have been, or will prior to Closing be,
duly and validly approved and acknowledged by all necessary corporate action on
the part of the Purchaser and the Agreement is enforceable in accordance with
its terms.
(b) The execution of this Agreement and the delivery hereof to the
Sellers and the purchase contemplated herein have been, or will be prior to
Closing, duly authorized by the Purchaser's Board of Directors having full power
and authority to authorize such actions.
5.3 CONSENTS.
(a) The execution and delivery of this Agreement, the acquisition
of the Shares by Purchaser and the consummation of the
transactions herein contemplated, and the compliance with the
provisions and terms of this Agreement, are not prohibited by
the Articles of Incorporation or Bylaws of the Purchaser and
will not violate, conflict with or result in a breach of any
of the terms or provisions of, or constitute a default under,
any court order, indenture, mortgage, loan agreement, or other
agreement or instrument to which the Purchaser is a party or
by which it is bound.
(b) No consent, waiver, approval, order, permit or authorization
of, or declaration or filing with, or notification to, any
person or governmental body is required on the part of the
Purchaser in connection with the execution and delivery of
this Agreement or any other agreement referenced herein or the
compliance by Purchaser with any of the provisions hereof or
thereof.
5.4 LITIGATION.
There are no legal proceedings pending or, to the best knowledge of the
Purchaser, threatened that are reasonably likely to prohibit or restrain the
ability of the Purchaser to enter into this Agreement or consummate the
transactions contemplated hereby.
5.5 INVESTMENT INTENT AND QUALIFICATION.
The Purchaser is acquiring the Shares for its own account, for
investment purposes only and not with a view to the distribution (as such term
is used in Section 2(11) of the Securities Act of 1933, as amended (the
"SECURITIES ACT")) thereof. Purchaser understands that the Shares have not been
registered under the Securities Act and cannot be sold unless subsequently
registered under the Securities Act or an exemption from such registration is
available. Purchaser has, or as of the Closing Date will have had, access to all
information Purchaser has requested and has, or will have, received satisfactory
answers to all questions Purchaser has regarding Enhance and the Shares.
Purchaser understands that the Shares which may be acquired hereunder must be
held by it indefinitely unless a subsequent disposition or transfer of any of
those Shares is registered under the Securities Act of 1933, as amended, or is
exempt from registration therefrom. Purchaser is a sophisticated investor
familiar with the type of risks inherent in the acquisition of securities such
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as the Shares and Purchaser can bear the full risk, including the entire loss,
of the investment.
5.6 DUE AUTHORIZATION OF NOTES.
The Notes, when delivered to the Sellers, shall be validly issued and
outstanding as fully paid and non-assessable, free and clear of any liens,
pledges, encumbrances, charges, agreements, options, claims or other
arrangements or restrictions of any kind.
5.7 ACCURACY OF INFORMATION.
Purchaser's filings with the Securities and Exchange Commission (i) are
true, complete, and accurate as of their dates and none contained any untrue
statement of a material fact or omitted to state a material fact necessary in
order to make the statements made in it, in light of the circumstances under
which they were made, not misleading, and (ii) comply with the applicable
requirements, and since the date of the most recently filed Form 10-Q, there
have been no material changes in the business or financial condition other than
changes that would not have a Material Adverse Effect. When Purchaser has filed
necessary periodic reports, including, without limitation, the Form 10-K for its
most recently completed fiscal year and any subsequent quarterly reports, those
reports will be true, complete, and accurate as of their dates and none will
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made in it, in light of the
circumstances under which they were made, not misleading.
ARTICLE VI COVENANTS
6.1 ACCESS TO INFORMATION.
Enhance agrees that, prior to the Closing Date, the Purchaser shall be
entitled, through its officers, employees and representatives (including,
without limitation, its legal advisors and accountants), to make such
investigation of the properties, businesses and operations of Enhance and such
examination of the books, records and financial condition of Enhance and its
Subsidiaries as it reasonably requests and to make extracts and copies of such
books and records.
Purchaser agrees that, prior to the Closing Date, Enhance shall be
entitled, through its officers, employees and representatives (including,
without limitation, its legal advisors and accountants), to make such
investigation of the properties, businesses and operations of the Purchaser and
such examination of the books, records and financial condition of the Purchaser
as it reasonably requests and to make extracts and copies of such books and
records.
No investigation prior to or after the date of this Agreement shall
diminish or obviate any of the representations, warranties, covenants or
agreements contained in this Agreement or any other agreement referenced herein.
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6.2 CONDUCT OF THE BUSINESS PENDING THE CLOSING.
(a) Except as otherwise expressly contemplated by this Agreement
or with the prior written consent of the Purchaser, prior to
the Closing the Sellers shall, and shall cause Enhance to:
(i) Conduct the business of Enhance only in the ordinary
course consistent with past practice;
(ii) Use its best efforts to (A) preserve its present
business operations, organization (including, without
limitation, management and the sales force) and
goodwill of Enhance and (B) preserve its present
relationship with parties having business dealings
with Enhance; and
(iii) Comply in all material respects with applicable laws.
(b) Except as otherwise expressly contemplated by this Agreement
or with the prior written consent of the Purchaser, prior to
the Closing the Sellers shall not, and shall cause Enhance not
to:
(i) Transfer, issue, sell or dispose of any shares of
capital stock or other securities of Enhance or grant
options, warrants, calls or other rights to purchase
or otherwise acquire shares of the capital stock or
other securities of Enhance;
(ii) Amend the Certificate of Incorporation or Bylaws of
Enhance;
(iii) Subject to any lien (except for leases that do not
materially impair the use of the property subject
thereto in their respective businesses as presently
conducted), any of the properties or assets (whether
tangible or intangible) of Enhance;
(iv) Acquire any material properties or assets or sell,
assign, transfer, convey, lease or otherwise dispose
of any of the material properties or assets (except
for fair consideration in the ordinary course of
business consistent with past practice) of Enhance;
(v) Enter into any commitment for capital expenditures
out of the ordinary course;
(vi) Permit Enhance to enter into any transaction or to
make or enter into any Contract which by reason of
its size or otherwise is not in the ordinary course
of business consistent with past practice;
(vii) Permit Enhance to enter into or agree to enter into
any merger or consolidation with any corporation or
other entity, and not engage in any new business or
invest in, make a loan, advance or capital
contribution to or otherwise acquire the securities
of any other party;
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(viii) Agree to do anything prohibited by this Section 6.2
or anything which would make any of the
representations and warranties of the Sellers in this
Agreement or any other agreement referenced herein
untrue or incorrect in any material respect as of any
time through and including the Closing.
6.3 OTHER ACTIONS.
Each of the Sellers and the Purchaser shall use its best efforts to (i)
take all actions necessary or appropriate to consummate the transactions
contemplated by this Agreement, and (ii) cause the fulfillment at the earliest
practicable date of all of the conditions to their respective obligations to
consummate the transactions contemplated by this Agreement.
6.4 USE OF NAME.
The Sellers hereby agree that upon the consummation of the transactions
contemplated hereby, the Purchaser and Enhance shall have the sole right to the
use of the name "Enhance, Inc." and the Sellers shall not, and shall not cause
or permit any affiliate to, use such name or any variation or simulation
thereof.
6.5 TAX MATTERS.
(a) Tax Periods Ending on or Before the Closing Date.
The Sellers shall prepare or cause to be prepared and file or cause to
be filed all Tax Returns for Enhance for all periods ending on or prior to the
Closing Date which are filed after the Closing Date as soon as practicable and
prior to the date due (including any proper extensions thereof).
(b) Tax Periods Beginning Before and Ending After the Closing Date.
Enhance or the Purchaser shall prepare or cause to be prepared and file
or cause to be filed any Tax Returns of Enhance for Tax periods that begin
before the Closing Date and end after the Closing Date.
6.6 SECURITIES LAW FILINGS
Purchaser shall make, in a timely manner, all filings under applicable
federal and state securities laws necessary in order to assure that exemptions
from registration are available for the transactions hereunder.
ARTICLE VII CONDITIONS TO CLOSING
7.1 CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER.
The obligation of the Purchaser to consummate the transactions
contemplated by this Agreement is subject to the fulfillment, on or prior to the
Closing Date, of each of the following conditions (any or all of which may be
13
waived by the Purchaser in whole or in part to the extent permitted by
applicable law):
(a) all representations and warranties of the Sellers contained
herein shall be true and correct as of the date hereof;
(b) the Sellers shall have performed and complied in all material
respects with all obligations and covenants required by this
Agreement to be performed or complied with by them on or prior
to the Closing Date;
(c) the Sellers shall have obtained all consents and waivers with
respect to the transactions contemplated by this Agreement;
(d) no legal proceedings shall have been instituted or threatened
or claim or demand made against the Sellers, Enhance, or the
Purchaser seeking to restrain or prohibit or to obtain
substantial damages with respect to the consummation of the
transactions contemplated hereby, and there shall not be in
effect any order by a governmental body of competent
jurisdiction restraining, enjoining or otherwise prohibiting
the consummation of the transactions contemplated hereby;
(e) the Purchaser shall have received the written resignations of
each director of Enhance.
Enhance may provide the Purchaser with information required by Article IV of
this Agreement within thirty days after the Closing Date. The Purchaser shall
consummate the transaction on the Closing Date without receiving that
information.
7.2 CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLERS.
The obligations of the Sellers to consummate the transactions
contemplated by this Agreement are subject to the fulfillment, prior to or on
the Closing Date, of each of the following conditions (any or all of which may
be waived by the Sellers in whole or in part to the extent permitted by
applicable law):
(a) all representations and warranties of the Purchaser contained
herein shall be true and correct as of the date hereof;
(b) the Purchaser shall have performed and complied in all
material respects with all obligations and covenants required
by this Agreement to be performed or complied with by
Purchaser on or prior to the Closing Date; and
(c) no legal proceedings shall have been instituted or threatened
or claim or demand made against the Sellers, Enhance, or the
Purchaser seeking to restrain or prohibit or to obtain
substantial damages with respect to the consummation of the
transactions contemplated hereby, and there shall not be in
effect any order by a governmental body of competent
jurisdiction restraining, enjoining or otherwise prohibiting
the consummation of the transactions contemplated hereby.
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ARTICLE VIII DOCUMENTS TO BE DELIVERED
8.1 DOCUMENTS TO BE DELIVERED BY THE SELLERS.
At or prior to the Closing, the Sellers shall deliver, or cause to be
delivered, to the Purchaser the following:
(a) stock certificates representing the Shares referred to in
Section 7.1(c) hereof, duly endorsed in blank or accompanied
by stock transfer powers and with all requisite stock transfer
tax stamps attached;
(b) certificate of good standing with respect to Enhance issued by
the Secretary of State of the State of incorporation, and for
each state, if any, in which Enhance is qualified to do
business as a foreign corporation, or other evidence of good
standing reasonably acceptable to the Purchaser; and
(c) such other documents as the Purchaser shall reasonably
request.
8.2 DOCUMENTS TO BE DELIVERED BY THE PURCHASER.
At or prior to the Closing, the Purchaser shall deliver to the Sellers
the following:
(a) The Notes to be delivered pursuant to 2.1(a) are delivered to the
Sellers; and
(b) such other documents as the Sellers shall reasonably request.
ARTICLE IX INDEMNIFICATION
9.1 INDEMNIFICATION. Each individual Seller hereby agrees to indemnify and
hold the Purchaser harmless from and against any losses, liabilities,
obligations, damages, costs and expenses based upon, attributable to or
resulting from the failure of any representation or warranty of that
individual Seller set forth in Section 4 hereof to be true and correct
in all respects as of the date made.
ARTICLE X MISCELLANEOUS
10.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
The parties hereto hereby agree that the representations and warranties
contained in this Agreement or in any certificate, document or instrument
delivered in connection herewith, shall survive the execution and delivery of
this Agreement, and the Closing hereunder, regardless of any investigation made
by the parties hereto, and continue in full force and effect for a period of one
year.
10.2 EXPENSES.
Except as otherwise provided in this Agreement, the Sellers and the
Purchaser shall each bear its own expenses incurred in connection with the
negotiation and execution of this Agreement and each other agreement, document
15
and instrument contemplated by this Agreement and the consummation of the
transactions contemplated hereby and thereby.
All sales, use, transfer, intangible, recordation, documentary stamp or
similar Taxes or charges, of any nature whatsoever, applicable to, or resulting
from, the transactions contemplated by this Agreement shall be borne by the
Sellers.
10.3 FURTHER ASSURANCES.
The Sellers and the Purchaser each agrees to execute and deliver such
other documents or agreements and to take such other action as may be reasonably
necessary or desirable for the implementation of this Agreement and the
consummation of the transactions contemplated hereby.
10.4 GOVERNING LAW; SUBMISSION TO JURISDICTION.
This Agreement shall be governed by and construed in accordance with
the laws of the United States of America and the State of New York, both
substantive and remedial, without regard to New York conflicts of law
principles. Any judicial proceeding brought against either of the parties to
this Agreement or any dispute arising out of this Agreement or any matter
related hereto shall be brought in the courts of the State of New York, New York
County, or in the United States District Court for the Southern District of New
York and, by its execution and delivery of this Agreement, each party to this
Agreement accepts the jurisdiction of such courts. The foregoing consent to
jurisdiction shall not be deemed to confer rights on any person other than the
parties to this Agreement
10.5 ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS.
This Agreement represents the entire understanding and agreement
between the parties hereto with respect to the subject matter hereof and can be
amended, supplemented or changed, and any provision hereof can be waived, only
by written instrument making specific reference to this Agreement signed by the
party against whom enforcement of any such amendment, supplement, modification
or waiver is sought. No action taken pursuant to this Agreement, including
without limitation, any investigation by or on behalf of any party, shall be
deemed to constitute a waiver by the party taking such action of compliance with
any representation, warranty, covenant or agreement contained herein. The waiver
by any party hereto of a breach of any provision of this Agreement shall not
operate or be construed as a further or continuing waiver of such breach or as a
waiver of any other or subsequent breach. No failure on the part of any party to
exercise, and no delay in exercising, any right, power or remedy hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of such
right, power or remedy by such party preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. All remedies
hereunder are cumulative and are not exclusive of any other remedies provided by
law.
10.6 COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of
which shall be enforceable against the parties actually executing such
counterparts, and all of which together shall constitute one instrument. In the
16
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.
10.7 NOTICES.
All notices and other communications under this Agreement shall be in
writing and shall be deemed given when delivered personally, mailed by certified
mail, return receipt requested, or via recognized overnight courier service with
all charges prepaid or billed to the account of the sender to the parties (and
shall also be transmitted by facsimile to the parties receiving copies thereof)
at the following addresses (or to such other address as a party may have
specified by notice given to the other party pursuant to this provision):
(a) Purchaser:
NuMobile, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ #▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Sichenzia ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP
▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) Sellers:
Enhance Networks, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: 1 800 290 7064
10.8 BINDING EFFECT; ASSIGNMENT; SEVERABILITY
This Agreement shall be binding upon and inure to the benefit of the
parties and their respective successors and permitted assigns. Nothing in this
Agreement shall create or be deemed to create any third party beneficiary rights
in any person or entity not a party to this Agreement except as provided below.
No assignment of this Agreement or of any rights or obligations hereunder may be
made by either the Sellers or the Purchaser (by operation of law or otherwise)
17
without the prior written consent of the other parties hereto and any attempted
assignment without the required consents shall be void.
If any provision of this Agreement is invalid or unenforceable, the
balance of this Agreement shall remain in effect.
[INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed or caused to be
duly executed this Stock Purchase Agreement as of the date first set forth
above.
NUMOBILE, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chief Executive Officer
ENHANCE NETWORK COMMUNICATION, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Director
SELLERS:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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SCHEDULE 1
---------------------------- --------------------------- -------------------
SELLER SHARES PERCENTAGE
---------------------------- --------------------------- -------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 1,500 100%
---------------------------- --------------------------- -------------------
TOTALS 1,500 100.00%
---------------------------- --------------------------- -------------------
SCHEDULE 4.5
SCHEDULE 4.5 LIST OF SUBSIDIARIES AND AFFILIATES
None
SCHEDULE 4.10
SCHEDULE 4.10: INTELLECTUAL PROPERTY
IP: software product
Description:
Enhance Network Communication, Inc. has under development a proprietary Internet
Access Provisioning And Denial technology that greatly strengthens the ability
to insure access to the Internet is granted to only those persons or entities
entitled to such access.
SCHEDULE 4.11
ENHANCE NETWORK COMMUNICATION, INC.
PROPERTY AND EQUIPMENT DETAIL
THE TOTAL ASSETS OF ENHANCE ARE IN EXCESS OF $450,000.00 BUT HAVE NOT BEEN
DETAILED IN THIS SCHEDULE AT THE INSISTENCE OF OUR CUSTOMERS AND IN AGREEMENT
WITH THE PURCHASER.
SCHEDULE 4.12
ARTICLE XI SCHEDULE 4.12: CONTRACTS
Reseller: See Document - 3Com Corporation
SCHEDULE 4.14
ACCRUED LIABILITIES LEDGER
This accrued liability ledger documents Enhance Network Communication, Inc.
liabilities in excess of $10,000:
1. Resource Operations of NG - $825K
There is no current litigation involving Enhance Networks, Inc.