EXHIBIT 10.1
UNIT PURCHASE AGREEMENT
THIS UNIT PURCHASE AGREEMENT ("Agreement") is entered into this 21st of
March, 2006, by and among IDEA SPORTS ENTERTAINMENT, INC., a Delaware
corporation (hereinafter referred to as "Buyer"); and XXXXX XXXXXXX, AGENT
(hereinafter referred to as "Seller"), representing a majority of the unit
holders of HEALTH STRIP SOLUTIONS, LLC. a Nevada limited liability corporation
(the "Company").
WHEREAS, Seller represents certain owners of record and which own Eight
Hundred (800) membership units of the Company (the "Units"); and
WHEREAS, Seller desires to sell all of the Units to Buyer, and Buyer
desires to purchase the Units, upon the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, and for other good and valuable consideration, the receipt,
adequacy and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
I.
SALE AND PURCHASE OF THE SHARES
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1.1 SALE AND PURCHASE. Subject to the terms and conditions hereof, at
the Closing (as defined in paragraph 1.2 below), Seller agrees to sell, assign,
transfer, convey and deliver to Buyer, and Buyer agrees to purchase from Seller,
the Units listed in Exhibit "A", attached hereto.
1.2 CLOSING. The purchase shall be consummated at a closing ("Closing")
to take place at 11:00 o'clock a.m., at the offices of Seller's counsel on March
22, 2006("Closing Date").
1.3 PURCHASE PRICE. The aggregate purchase price ("Purchase Price") for
the Units shall be One Hundred Million (100,000,000) shares of Common Stock of
the Buyer ("Buyer's Shares"). The Purchase Price shall be paid at Closing, by
issuance and delivery of Buyer's Shares to Seller against receipt of
certificates representing the Units, duly endorsed for transfer to Buyer.
1.4 OTHER AGREEMENTS. At the Closing, the indicated parties shall
execute and deliver the following additional agreements in substantially the
form attached hereto:
(a) Employment Agreement between Xxxxx Xxxxxxx and the Company, a
copy of which is attached hereto as Exhibit "B".
(b) Membership certificates representing all of the Units, duly
endorsed to Buyer and in blank or assignments separate from
the certificates, transferring the Units from Seller to
Buyer".
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1.5 BASIC AGREEMENTS AND TRANSACTIONS DEFINED. This Agreement and other
agreement listed in paragraph 1.4, are sometimes referred to as the "Basic
Agreements". The transactions contemplated by the Basic Agreements are sometimes
referred to as the "Transactions".
II.
REPRESENTATIONS AND WARRANTIES
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2.1 REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represents and
warrants to Buyer, with respect to the Units owned by Seller, as follows:
(a) TITLE TO THE SHARES. At Closing, Seller shall own of
record and beneficially the number of the Units listed in Exhibit "A",
of the Company, free and clear of all liens, encumbrances, pledges,
claims, options, charges and assessments of any nature whatsoever, with
full right and lawful authority to transfer the Units to Buyer. No
person has any preemptive rights or rights of first refusal with
respect to any of the Units. There exists no voting agreement, voting
trust, or outstanding proxy with respect to any of the Units. There are
no outstanding rights, options, warrants, calls, commitments, or any
other agreements of any character, whether oral or written, with
respect to the Units.
(b) INVESTMENT INTENT. Seller is acquiring the shares of Buyer
for his or her own account, for investment purposes only, and not with
a view to the sale or distribution of any part thereof, and Seller has
no present intention of selling, granting participation in, or
otherwise distributing the same. Seller understands the specific risks
related to an investment in the shares of Buyer, especially as it
relates to the financial performance of Buyer.
2.2 REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and
warrants to Seller as follows:
(a) ORGANIZATION. Buyer is a corporation duly incorporated,
validly existing and in good standing under the laws of the state of
Delaware. Buyer has all requisite corporate power and authority to own,
lease and operate its properties and to carry on its business. Buyer is
duly qualified and in good standing as a foreign corporation in each
jurisdiction where its ownership of property or operation of its
business requires qualification, except where the failure to be
qualified would not have a material adverse effect on the Company.
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(b) AUTHORIZED CAPITALIZATION. The authorized capitalization
of Buyer consists of Five Hundred Million (500,000,000) shares of
$.0001 par value Common Stock, of which One Hundred Twenty-Seven
Million Nine Hundred Seventeen Thousand Seven Hundred Eighty-Two
(127,917,782) shares have been issued and are outstanding. Buyer's
Shares have been duly authorized, validly issued, are fully paid and
nonassessable with no personal liability attaching to the ownership
thereof and were offered, issued, sold and delivered by Buyer in
compliance with all applicable state and federal laws. Buyer is not a
party to and is not bound by any agreement, contract, arrangement or
understanding, whether oral or written, giving any person or entity any
interest in, or any right to share, participate in or receive any
portion of, Buyer's income, profits or assets, or obligating Buyer to
distribute any portion of its income, profits or assets.
(c) AUTHORITY. Buyer has full power and lawful authority to
execute and deliver the Basic Agreements and to consummate and perform
the Transactions contemplated thereby. The Basic Agreements constitute
(or shall, upon execution, constitute) valid and legally binding
obligations upon Buyer, enforceable in accordance with their terms.
Neither the execution and delivery of the Basic Agreements by Buyer,
nor the consummation and performance of the Transactions contemplated
thereby, conflicts with, requires the consent, waiver or approval of,
results in a breach of or default under, or gives to others any
interest or right of termination, cancellation or acceleration in or
with respect to, any material agreement by which Buyer is a party or by
which Buyer or any of its material properties or assets are bound or
affected.
(d) INVESTMENT INTENT. Buyer is acquiring the Units for its
own account, for investment purposes only, and not with a view to the
sale or distribution of any part thereof, and Buyer has no present
intention of selling, granting participation in, or otherwise
distributing the same. Buyer understands the specific risks related to
an investment in the Units, especially as it relates to the financial
performance of the Company.
(e) RESCISSION RIGHTS. In the event Buyer is unable to cause a
minimum of $4,000,000 of its outstanding liabilities to convert into
its common stock by May 15, 2006, Seller shall have the right to
rescind this Transaction by May 31, 2006.
III.
COVENANTS
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1. COVENANTS OF BUYER. Buyer covenants and agrees to perform the following acts:
(a) NO INDEBTEDNESS. Buyer will not create, incur, assume, guarantee or
otherwise become liable with respect to any obligation for borrowed money,
indebtedness, capitalized lease or similar obligation, except in the ordinary
course of business consistent with past practices, where the entire net proceeds
thereof are deposited with and used by and in connection with the business of
Buyer.
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(b) NO SECURITIES ISSUANCES. Buyer will not issue any
membership units, or enter into any contract, option, warrant or right
calling for the issuance of any such membership units of capital stock,
or create or issue any securities convertible into any securities of
Buyer except for the transactions contemplated herein.
(c) NO DISTRIBUTIONS. Buyer will not declare, set aside or pay
any distributions of any nature whatsoever.
(d) CONTRACTS. Buyer will not enter into or assume any
contract, agreement, obligation, lease, license, or commitment except
in the ordinary course of business consistent with past practice or as
contemplated by this Agreement.
(e) CAPITAL COMMITMENTS. Buyer will not make or commit to make
any material capital expenditure, capital addition or capital
improvement.
(f) CONSENTS. Buyer will use its best good faith efforts to
obtain the consent or approval of each person or entity whose consent
or approval is required for the consummation of the Transactions
contemplated hereby and to do all things necessary to consummate the
Transactions contemplated by the Basic Agreements.
IV.
CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF BUYER TO CLOSE
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The obligation of Buyer to close the Transactions contemplated hereby
is subject to the fulfillment by Seller prior to Closing of each of the
following conditions, which may be waived in whole or in part by Buyer:
4.1 COMPLIANCE WITH REPRESENTATIONS, WARRANTIES AND COVENANTS. The
representations and warranties of Seller contained in this Agreement shall have
been true and correct when made and shall be true and correct as of the Closing
with the same force and effect as if made at the Closing. Seller shall have
performed all agreements, covenants and conditions required to be performed by
Seller prior to the Closing.
4.2 DOCUMENTS TO BE DELIVERED BY SELLER. The Company and Seller shall
have delivered the following documents:
(a) Membership certificates representing all of the Units,
duly endorsed to Buyer and in blank or accompanied by duly executed
stock powers.
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(b) Such other documents or certificates as shall be
reasonably required by Buyer or its counsel in order to close and
consummate this Agreement.
V.
CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF SELLER TO CLOSE
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The obligation of Seller to close the Transactions is subject to the
fulfillment prior to Closing of each of the following conditions, any of which
may be waived in whole or in part by Seller:
5.1 COMPLIANCE WITH REPRESENTATIONS, WARRANTIES AND COVENANTS. The
representations and warranties made by Buyer in this Agreement shall have been
true and correct when made and shall be true and correct in all material
respects at the Closing with the same force and effect as if made at the
Closing, and Buyer shall have performed all agreements, covenants and conditions
required to be performed by Buyer prior to the Closing.
5.2 OTHER AGREEMENTS. All parties other than Seller shall have executed
and delivered the Basic Agreements.
5.3 PAYMENTS. Seller shall have received from Buyer all Common Stock to
be issued at the Closing by Buyer pursuant to all the Basic Agreements.
VI.
MODIFICATION, WAIVERS, TERMINATION
AND EXPENSES
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6.1 MODIFICATION. Buyer and Seller may amend, modify or supplement this
Agreement in any manner as they may mutually agree in writing.
6.2 WAIVERS. Buyer and Seller may in writing extend the time for or
waive compliance by the other with any of the covenants or conditions of the
other contained herein.
6.3 TERMINATION AND ABANDONMENT. This Agreement may be terminated and
the purchase of the Shares may be abandoned before the Closing:
(a) By the mutual consent of Seller and Buyer;
(b) By Buyer, if the representations and warranties of Seller
set forth herein shall not be accurate, or the conditions precedent set
forth in Article V shall have not have been satisfied, in all material
respects; or
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(c) By Seller, if the representations and warranties of Buyer
set forth herein shall not be accurate, or the conditions precedent set
forth in Article V shall not have been satisfied in all material
respects.
Termination shall be effective on the date of receipt of written notice
specifying the reasons therefor.
VII.
MISCELLANEOUS
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7.1 REPRESENTATIONS AND WARRANTIES TO SURVIVE. Unless otherwise
provided, all of the representations and warranties contained in this Agreement
and in any certificate, exhibit or other document delivered pursuant to this
Agreement shall survive the Closing for a period of two (2) years. No
investigation made by any party hereto or their representatives shall constitute
a waiver of any representation or warranty, and no such representation or
warranty shall be merged into the Closing.
7.2 BINDING EFFECT OF THE BASIC AGREEMENTS. The Basic Agreements and
the certificates and other instruments delivered by or on behalf of the parties
pursuant thereto, constitute the entire agreement between the parties. The terms
and conditions of the Basic Agreements shall inure to the benefit of and be
binding upon the respective heirs, legal representatives, successor and assigns
of the parties hereto. Nothing in the Basic Agreements, expressed or implied,
confers any rights or remedies upon any party other than the parties hereto and
their respective heirs, legal representatives and assigns. Whenever Seller is
authorized to act hereunder, any action authorized by members of Seller holding
a majority of the Units shall be deemed the act of and binding on all members of
Seller.
7.3 APPLICABLE LAW. The Basic Agreements are made pursuant to, and will
be construed under, the laws of the State of Nevada.
7.4 NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and will be deemed to have been duly given when
delivered or mailed, first class postage prepaid:
(a) If to Seller, to:
Xxxxx Xxxxxxx, Agent
000 Xxxx Xxxx Xxxx
Xxxxxxxx, XX 00000
Telephone: (000) 000-0000
Fax: ( )
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(b) If to Buyer, to:
G. Xxxxx Xxxxxx, Esquire
0000 Xxxx 00xx Xxxxx, Xxxxx 000
Xxxxx, XX 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
These addresses may be changed from time to time by written notice to
the other parties.
7.5 HEADINGS. The headings contained in this Agreement are for
reference only and will not affect in any way the meaning or interpretation of
this Agreement.
7.6 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which will be deemed an original and all of which together will constitute
one instrument.
7.7 SEVERABILITY. If any one or more of the provisions of this
Agreement shall, for any reason, be held to be invalid, illegal or unenforceable
under applicable law this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein. The
remaining provisions of this Agreement shall be given effect to the maximum
extent then permitted by law.
7.8 FORBEARANCE; WAIVER. Failure to pursue any legal or equitable
remedy or right available to a party shall not constitute a waiver of such
right, nor shall any such forbearance, failure or actual waiver imply or
constitute waiver of subsequent default or breach.
7.9 ATTORNEYS' FEES AND EXPENSES. The prevailing party in any legal
proceeding based upon this Agreement shall be entitled to reasonable attorneys'
fees and expenses and court costs.
7.10 EXPENSES. Each party shall pay all fees and expenses incurred by
it incident to this Agreement and in connection with the consummation of all
transactions contemplated by this Agreement.
7.11 INTEGRATION. This Agreement and all documents and instruments
executed pursuant hereto merge and integrate all prior agreements and
representations respecting the Transactions, whether written or oral, and
constitute the sole agreement of the parties in connection therewith. This
Agreement has been negotiated by and submitted to the scrutiny of both Seller
and Buyer and their counsel and shall be given a fair and reasonable
interpretation in accordance with the words hereof, without consideration or
weight being given to its having been drafted by either party hereto or its
counsel.
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IN WITNESS WHEREOF, the undersigned parties hereto have duly executed this
Agreement on the date first written above.
"BUYER"
IDEA SPORTS ENTERTAINMENT, INC.
BY: /S/ XXXXXXX X. XXXXX
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XXXXXXX X. XXXXX, PRESIDENT
"SELLER"
BY: /S/ XXXXX XXXXXXX
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XXXXX XXXXXXX, AGENT
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