STOCK PURCHASE AND SALE AGREEMENT
This Stock Purchase and Sale Agreement (the "Agreement") is made and
entered into as of June 12, 2007, by and among Xxxxxx Xxxxxxxx ("Xxxxxxxx"),
Xxxx Xxxxx ("Navon"; and together with Xxxxxxxx, "Seller") and Xxxxxx Xxxxxxx
and the other signatories hereto (collectively, the "Buyer").
RECITALS
WHEREAS, each of Navon and Xxxxxxxx own 2,500,000 shares of common stock
par value $0.001 per share of PowerRaise Inc., a Nevada corporation (the
"Company");
WHEREAS, in contemplation of the transactions described herein, Navon
shall return 1,750,000 shares to the Company and Xxxxxxxx shall return 1,250,000
shares to the Company;
WHEREAS, Xxxxxxxx wishes to sell to Buyer 1,250,000 share of the Company
and Navon wishes to sell to Buyer 750,000 shares of the Company, and Buyer
wishes to buy from Seller all of the aforementioned 2,000,000 said shares
(collectively, the "Shares") for such consideration and on such terms as set out
below;
NOW THEREFORE, in consideration of the above premises and the mutual
representations, warranties, covenants and agreements hereinafter set forth and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties agree as follows:
1. Purchase Price; Closing Deliveries
(a) The purchase price for each Share shall be 20 cents ($0.20), for a
total aggregate purchase price of $400,000 (the "Purchase Price").
(b) At the closing of the transactions contemplated by this Agreement (the
"Closing"), Xxxxxxxx shall receive the sum total of $250,000 and Navon shall
receive the sum total of $150,000 from each Buyer in the amount indicated next
to his respective name on Schedule A annexed hereto.
(c) At the Closing, Seller shall deliver or cause to be delivered to Buyer
or a representative duly appointed by Buyer:
(i) the stock certificates evidencing the Shares, duly endorsed in
blank or accompanied by stock powers duly executed in blank, in proper
form for transfer;
(ii) a resignation letter from Navon, indicating her resignation as
President, CEO, treasurer and secretary and a director of the Company; and
(iii) a shareholders' list, dated no later than one business day
prior to the date of the Closing, including names and addresses of each
shareholder, certificate numbers and issue dates, including without
limitation evidence that the Company took all actions necessary to cancel
1,250,000 shares owned by Xxxxxxxx and 1,750,000 shares owned by Navon.
2. Representations of Seller.
Each of Navon and Xxxxxxxx hereby jointly and severally represent and
warrant to each Buyer the following:
(a) Other than the Shares, neither Seller has any interest, direct or
indirect, in any shares of capital stock or other equity in the Company or has
any other direct or indirect interest in any tangible or intangible property
which the Company uses or has used in the business conducted by the Company, or
has any direct or indirect outstanding indebtedness to or from the Company, or
related, directly or indirectly, to its assets.
(b) Each Seller has the absolute and unrestricted right, power, legal
capacity and authority to enter into and perform his/her obligations under this
Agreement, to carry out his/her obligations hereunder and to consummate the
transactions contemplated hereby. Assuming the due authorization, execution and
delivery by Buyer, this Agreement, when executed and delivered by Buyer, will be
a valid and binding obligation of Seller, enforceable against him in accordance
with its terms.
(c) Neither the execution and delivery of this Agreement, nor the
consummation of the transactions contemplated hereby, will conflict with, or
(with or without notice or lapse of time, or both) result in a termination,
breach or violation of (i) any instrument, contract or agreement to which either
Seller is a party or by which he is bound, or (ii) any federal, state, local or
foreign law, ordinance, judgment, decree, order, statute, or regulation, or that
of any other governmental body or authority, applicable to Seller or his assets
or properties.
(d) Xxxxxxxx is the sole record and beneficial owner of the 1,250,000 of
the Shares and Navon is the sole record and beneficial owner of 750,000 of the
Shares. Each Seller has good and marketable title to their respective Shares,
free and clear of any liens, pledges, hypothecations, charges, adverse claims,
options, preferential arrangements or restrictions of any kind, including,
without limitation, any restriction of the use, voting, transfer, receipt of
income or other exercise of any attributes of ownership (collectively,
"Encumbrances"), other than any Encumbrance expressly created by applicable
federal and state securities laws. Upon payment of the Purchase Price and the
execution and delivery of this Agreement, Buyer shall be the lawful record and
beneficial owner of the Shares, free and clear of all Encumbrances, other than
any Encumbrances expressly created by applicable federal and state securities
laws.
(e) There are no stockholders' agreements, voting trust, proxies, options,
rights of first refusal or any other agreements or understandings with respect
to the Shares.
2
(f) Neither Seller nor the Company is a party to or threatened with, any
litigation, suit, action, investigation, proceeding or controversy before any
court, administrative agency or other governmental authority, self-regulatory
organization or body. There are no outstanding judgments, UCC financing
instruments or UCCs filed against the Company.
(g) Seller has complied with all applicable rules and regulations of the
Securities and Exchange Commission in connection with his ownership of the
Shares, and will file all necessary filings, including without limitation, a
Schedule 13D and a Form 4, with respect to the transactions contemplated by this
Agreement.
(h) The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Nevada, with full power and
authority to own, lease, use and operate their respective properties and to
carry on their respective businesses as and where now owned, leased, used,
operated and conducted. The Company is duly qualified to do business and is in
good standing in every jurisdiction in which their respective ownership or use
of property or the nature of the business conducted by them makes such
qualification necessary. The Company does not own, directly or indirectly, any
capital stock of any corporation or any equity, profit sharing, participation or
other interest in any corporation, partnership, limited liability company, joint
venture or other entity.
(i) As of the date hereof (immediately prior to the cancellation of the
Shares pursuant to Section 1(b)(vi)), the Company's authorized capital consists
of (a) 100,000,000 authorized shares of common stock, par value $0.001 per share
(the "Common Stock"), of which 5,581,000 shares are issued and outstanding, (i)
with each holder thereof being entitled to cast one vote for each share held on
all matters properly submitted to the shareholders for their vote; and (ii)
there being no pre-preemptive rights and no cumulative voting; and (b) no shares
of preferred stock or any other class of security. All of the issued and
outstanding shares of capital stock of the Company are duly authorized, validly
issued, fully paid and nonassessable. No shares of capital stock of the Company
are subject to preemptive rights or any other similar rights. There are (i) no
outstanding options, warrants, scrip, rights to subscribe for, puts, calls,
rights of first refusal, agreements, understandings, claims or other commitments
or rights of any character whatsoever relating to, or securities or rights
convertible into or exchangeable for any shares of capital stock of the Company
or arrangements by which the Company is or may become bound to issue additional
shares of capital stock of the Company, (ii) no agreements or arrangements under
which the Company is obligated to register the sale of any of its securities
under the Securities Act of 1933, as amended (the "Act"), and (iii) no
anti-dilution or price adjustment provisions contained in any security issued by
the Company (or in any agreement providing any such rights). Prior to the
Closing, the 1,750,000 shares owned by Navon and the 750,000 shares owned by
Xxxxxxxx will have been duly and properly cancelled by the Company.
3
(j) Upon the cancellation of the shares owned by Navon and Xxxxxxxx, the
Company will have 2,581,000 shares of common stock issued and outstanding. Upon
consummation of the transactions contemplated by this Agreement, Buyer will own
in the aggregate 77.49% of the issued and outstanding share capital of the
Company on a fully-diluted basis, free and clear of any Encumbrances, other than
those created by applicable federal and state securities laws.
(k) The Company has timely filed all reports, schedules, forms, statements
and other documents required to be filed by it with the Securities and Exchange
Commission (the "SEC") pursuant to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the "1934 Act") (all of the foregoing filed
prior to the date hereof and all exhibits included therein and financial
statements and schedules thereto and documents (other than exhibits to such
documents) incorporated by reference therein, being hereinafter referred to
herein as the "SEC Documents"). As of their respective dates, the SEC Documents
complied in all material respects with the requirements of the 1934 Act and the
rules and regulations of the SEC promulgated thereunder applicable to the SEC
Documents, and none of the SEC Documents, at the time they were filed with the
SEC, contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. None of the statements made in any such SEC Documents is, or has
been, required to be amended or updated under applicable law (except for such
statements as have been amended or updated in subsequent filings prior the date
hereof). The Company has not received any communication from the SEC, NASD or
any other regulatory authority regarding any SEC Document or any disclosure
contained therein. As of their respective dates, the financial statements of the
Company included in the SEC Documents complied as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto. Such financial statements have been
prepared in accordance with United States generally accepted accounting
principles, consistently applied, during the periods involved (except (i) as may
be otherwise indicated in such financial statements or the notes thereto, or
(ii) in the case of unaudited interim statements, to the extent they may not
include footnotes or may be condensed or summary statements) and fairly present
in all material respects the consolidated financial position of the Company as
of the dates thereof and the consolidated results of their operations and cash
flows for the periods then ended (subject, in the case of unaudited statements,
to normal year-end audit adjustments).
(l) There are no liabilities of the Company of any kind whatsoever,
whether accrued, contingent, absolute, determined, determinable or otherwise,
and there is no existing condition, situation or set of circumstances which
could reasonably be expected to result in such a liability, other than as
indicated on Schedule 2(l) annexed hereto.
4
(m) Except as disclosed in the SEC Documents, the Company does not (i)
have any employees, (ii) owe any compensation of any kind, deferred or
otherwise, to any person, including without limitation, agents, representatives,
consultants, accountants and attorneys, (iii) have any written or oral
employment agreement with any person, nor (iv) is it a party to or bound by any
collective bargaining agreement. There are no loans or other obligations payable
to or owing by the Company to any stockholder, officer, director, agent,
representative, consultant, accountant, attorney or otherwise nor are there any
loans or debts payable or owing by any such persons to the Company or any
guarantees by the Company of any loan or obligation of any nature to which any
such person is a party.
(n) Except as disclosed in the SEC Documents, the Company does not use or
posses any licenses or rights to use any patents, patent applications, patent
rights, inventions, know-how, trade secrets, trademarks, trademark applications,
service marks, service names, trade names and copyrights ("Intellectual
Property"). There is no claim or action by any person pertaining to, or
proceeding pending, or to Seller's knowledge threatened, which challenges the
right of the Company with respect to any Intellectual Property.
(o) Except as disclosed in the SEC Documents, the Company is not a party
to any contract, arrangement or agreement, whether oral or in writing, including
without limitation, loan agreements, credit lines, promissory notes, mortgages,
pledges, guarantees, security agreements, factoring agreements, letters of
credit, powers of attorney or other arrangements, to loan or borrow money or
extend credit.
(p) The Company has made or filed all federal, state and foreign income
and all other tax returns, reports and declarations required by any jurisdiction
to which each is subject and have paid all taxes and other governmental
assessments and charges that are material in amount, shown or determined to be
due on such returns, reports and declarations. There are no and will be no taxes
due by the Company as a result of the transactions contemplated by this
Agreement. There are no unpaid taxes claimed to be due by the taxing authority
of any jurisdiction, and Seller knows of no basis for any such claim. The
Company has not executed a waiver with respect to the statute of limitations
relating to the assessment or collection of any foreign, federal, state or local
tax. None of the Company's tax returns is presently being audited by any taxing
authority. Seller expressly assumes and shall pay any taxes due by the Company
up to the date hereof.
(q) The Company is in possession of all franchises, grants,
authorizations, licenses, permits, easements, variances, exemptions, consents,
certificates, approvals and orders necessary to own, lease and operate its
properties and to carry on its business as it is now being conducted
(collectively, the "Permits"), and there is no action pending or, to the
knowledge of Seller, threatened regarding suspension or cancellation of any of
the Permits. The Company is not in conflict with, or in default or violation of,
any of the Permits. The Company has not received any notification with respect
to possible conflicts, defaults or violations of applicable laws, except for
notices relating to possible conflicts, defaults or violations.
5
(r) The Company does not own any real or personal property.
(s) The Company maintains a system of internal accounting controls
sufficient, in the judgment of the Company's board of directors, to provide
reasonable assurance that (i) transactions are executed in accordance with
management's general or specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset accountability,
(iii) access to assets is permitted only in accordance with management's general
or specific authorization, and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences. The books of account, corporate
records and minute books of the Company are complete and correct in all material
respects. Complete and accurate copies of all such books of account, corporate
records and minute books of the Company have been made available to Buyer and
his representatives.
(t) All information relating to or concerning the Company set forth in
this Agreement and otherwise in connection with the transactions contemplated
hereby is true and correct in all respects and Seller has not omitted to state
any fact necessary in order to make the statements made herein or therein, in
light of the circumstances under which they were made, not misleading. No event
or circumstance has occurred or exists with respect to the Company or its
business, properties, prospects, operations or financial conditions, which,
under applicable law, rule or regulation, requires public disclosure or
announcement by the Company but which has not been so publicly announced or
disclosed.
(u) The purchase of the Shares by Buyer from Seller will not give rise to
any dissenting shareholders' rights under Nevada Law, the Articles of
Incorporation or By-laws of the Company, or otherwise.
(v) All issuances by the Company of shares of Common Stock in past
transactions have been legally and validly effected, and all of such shares of
Common Stock are fully paid and non-assessable. All of the offerings were
conducted in strict compliance with the requirements of Regulation D, Rules 504,
505 and 506, as applicable, in full compliance with the requirements of the 1933
Act and the 1934 Act, as applicable, and in full compliance with and according
to the requirements of Nevada Law and the Articles of Incorporation and By-laws
of the Company.
(w) The Company does not have any plan, scheme, device or arrangement,
commonly or colloquially known as a "poison pill" or "anti-takeover" plan or
similar plan, scheme, device or arrangement. No other state takeover statute or
similar statute or regulation applies or purports to apply to this agreement or
the transactions contemplated hereby.
3. Buyers' Representations.
Each Buyer hereby represents and warrants to Seller the following:
6
(a) Buyer has the right, power, legal capacity and authority to enter into
and perform his respective obligations under this Agreement, to carry out his
obligations hereunder and to consummate the transactions contemplated hereby.
This Agreement has been duly executed and delivered by Buyer.
(b) No filing with, authorization from or consent or approval of any
governmental body, agency, official or authority or any other third party is
necessary or required to be made or obtained to enable Buyer to enter into, and
to perform his respective obligations under, this Agreement.
(c) Assuming the due authorization, execution and delivery by Seller, this
Agreement, when executed and delivered by Seller, will be a valid and binding
obligation of Buyer, enforceable against him in accordance with its terms.
(d) Neither the execution and delivery of this Agreement, nor the
consummation of the transactions contemplated hereby, will conflict with, or
(with or without notice or lapse of time, or both) result in a termination,
breach or violation of (i) any instrument, contract or agreement to which either
Buyer is a party or by which he is bound, or (ii) any federal, state, local or
foreign law, ordinance, judgment, decree, order, statute, or regulation, or that
of any other governmental body or authority, applicable to either Buyer or his
respective assets or properties.
(e) Buyer is acquiring the Shares for his own account, for investment
purposes only and not with a view to the resale or distribution of any part
thereof.
(f) Buyer is an "accredited investor" as that term is defined in Rule
501(a) of Regulation D promulgated under the Securities Act, and has been
provided with all materials and information requested by Buyer, including any
information requested to verify any information furnished, and the Buyer has
been provided the opportunity for direct communication between Seller and its
representatives and the Buyer regarding the purchase contemplated by this
Agreement, including the opportunity to ask questions and receive answers from
Seller.
(g) Buyer understands that the Shares are being offered and sold to him in
reliance upon specific exemptions from the registration requirements of United
States federal and state securities laws. (h) Buyer understands that the Shares
will bear a restrictive legend in substantially the following form (and a
stop-transfer order may be placed against transfer of the certificates for such
Shares):
"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended. The securities may not be
sold, transferred or assigned in the absence of an effective registration
statement for the offer and sale of the securities under said Act, or an
opinion of counsel to the Company, in form, substance and scope customary
for opinions of counsel in comparable transactions that registration is
not required under said Act."
7
(h) Buyer is (i) experienced in making investments of the kind described
in this Agreement and the related documents, (ii) able, by reason of the
business and financial experience of its officers (if an entity) and
professional advisors (who are not affiliated with or compensated in any way by
the Company or any of its affiliates or selling agents), to protect its own
interests in connection with the purchase of the Shares, and (iii) able to
afford the entire loss of its investment in the Shares.
(f) Buyer acknowledges his understanding that the sale of the Shares is
intended to be exempt from registration under the Securities Act. In furtherance
thereof, in addition to the other representations and warranties of the
undersigned made herein, Buyer further represents and warrants to and agrees
with the Company and its affiliates as follows:
(i) The basis for the exemption may not be present if, notwithstanding
such representations, the undersigned has in mind merely acquiring
the Shares for a fixed or determinable period in the future, or for
a market rise, or for sale if the market does not rise. Buyer does
not have any such intention;
(ii) Buyer has the financial ability to bear the economic risk of his
investment, has adequate means for providing for his current needs
and personal contingencies and has no need for liquidity with
respect to his investment in the Company;
(iii) Buyer has such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of the
prospective investment in the Shares. The undersigned also
represents it has not been organized for the purpose of acquiring
the Shares;
(iv) Buyer has been provided an opportunity for a reasonable period of
time prior to the date hereof to obtain additional information
concerning the offering of the Shares, the Company and all other
information to the extent the Company possesses such information or
can acquire it without unreasonable effort or expense; and
(v) Buyer has carefully reviewed all of the Company's filings under the
1934 Act.
8
4. Indemnification. Each of Seller, jointly and severally, shall indemnify
and hold harmless the Company, each Buyer and their respective officers,
directors, shareholders, employees, agents, beneficiaries, affiliates,
representatives and their respective successors and assigns (collectively, the
"Indemnified Persons") from and against any and all damages, losses,
liabilities, taxes and costs and expenses (including, without limitation,
attorneys' fees and costs) (collectively, "Losses") resulting directly or
indirectly from (a) any inaccuracy, misrepresentation, breach of warranty or
nonfulfillment of any of the representations and warranties of Seller in this
Agreement or in any certificate or document delivered by Seller or the Company
pursuant to this Agreement, or any actions, omissions or statements of fact
inconsistent with in any material respect any such representation or warranty,
(b) any failure by Seller or the Company to perform or comply with any
agreement, covenant or obligation in this Agreement or in any certificate or
document delivered herewith or to be performed by or complied with Seller or the
Company, (c) any claims made by a third party against the Company based upon an
obligation, act or omission of Seller or the Company prior to the date of
Closing, (d) taxes attributable to the Company or the ownership of its assets
prior to the date of Closing, (e) taxes attributable to the conduct by the
Company of its business or its operation or ownership of its assets prior to the
date of the Closing, (f) any claims for severance or any other compensation made
by any employee, representative, officer, director or agent of the Company prior
to the date of Closing, (g) any claim made at any time by any governmental body
in respect of the business of the Company prior to the date of Closing, (h) any
debt, claim, liability or obligation of the Company prior to the date of
Closing, or (i) any litigation, action, claim, proceeding or investigation by
any third party relating to or arising out of the business or operations of the
Company prior to the date of Closing.
5. Miscellaneous.
(a) This Agreement shall be governed by and construed in accordance with
the internal laws of the State of New York.
(b) If any covenant or agreement contained herein, or any part hereof, is
held to be invalid, illegal or unenforceable for any reason, such provision will
be deemed modified to the extent necessary to be valid, legal and enforceable
and to give effect of the intent of the parties hereto.
(c) This Agreement constitutes the entire agreement between the parties
with respect to the subject matter hereof. This Agreement supersedes all prior
agreements between the parties with respect to the subject matter hereof or
thereof. There are no representations, warranties, covenants or undertakings
with respect to the subject matter hereof other than those expressly set forth
herein or in the other agreements referenced herein.
(d) This Agreement may not be amended or modified except by the express
written consent of the parties hereto. Any waiver by the parties of a breach of
any provision of this Agreement shall not operate or be construed as a waiver of
any subsequent breach thereof or of any other provision.
9
(e) This Agreement shall be binding upon, inure to the benefit of, and be
enforceable by the parties hereto and their respective successors and permitted
assignees and heirs and legal representatives.
(f) The parties hereto intend that this Agreement shall not benefit or
create any right or cause of action in or on behalf of any person other than the
parties hereto.
(g) The parties agree that this Agreement shall be deemed to have been
jointly and equally drafted by them, and that the provisions of this Agreement
therefore shall not be construed against a party or parties on the ground that
such party or parties drafted or was more responsible for the drafting of any
such provision(s). The parties further agree that they have each carefully read
the terms and conditions of this Agreement, that they know and understand the
contents and effect of this Agreement and that the legal effect of this
Agreement has been fully explained to its satisfaction by counsel of its own
choosing. As used in this Agreement, the masculine, feminine or neuter gender
and the singular or plural numbers shall each be deemed to include the other
whenever the context so requires.
(h) The parties hereto agree to execute and deliver such further documents
and instruments and to do such other acts and things any of them, as the case
may be, may reasonably request in order to effectuate the transactions
contemplated by this Agreement.
(i) This Agreement may be executed in counterparts and by facsimile, each
of which shall be deemed an original and all of which together shall constitute
one and the same instrument.
[Remainder of Page Intentionally Omitted; Signature Page to Follow]
10
IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to
be executed by its duly authorized officer or representative as of the date
first above written.
SELLER:
/s/ Xxxxxx Xxxxxxxx
----------------------------
Name: Xxxxxx Xxxxxxxx
/s/ Xxxx Xxxxx
----------------------------
Name: Xxxx Xxxxx
BUYER:
/s/ Xxxxxx Xxxxxxx
----------------------------
Name: Xxxxxx Xxxxxxx
11