Absence of Litigation from Securities Purchase Agreement
This SECURITIES PURCHASE AGREEMENT (the "Agreement"), dated as of May 22, 2015, by and between Wisdom Homes of America, Inc., a Nevada corporation, with headquarters located at 500 North Northeast Loop 323 Tyler, TX 75708 (the "Company"), and CAREBOURN CAPITAL, L.P., a Delaware limited partnership (the "Buyer").
Absence of Litigation. There is no action, suit, claim, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company or any of its Subsidiaries, threatened against or affecting the Company or any of its Subsidiaries, or their officers or directors in their capacity as such, that could have a Material Adverse Effect. The Company and its Subsidiaries are unaware of any facts or circumstances which might give rise to any of the foregoing. Notwithstanding the foregoing, in April 2014 a former employee filed a complaint against the Company, several of its Subsidiaries, and Pakulis (person) values">Jim Pakulis, one of the Company's directors and its President and Chief Executive Officer, in the Orange County Superior Court. The claims include disability discrimination, failure to accommodate, retaliation, wrongful termination, unpaid wages, overtime, failure to provide meal and rest periods, failure to provide accurate wage statements, unfair business practices and failure to reimburse for reasonable business expenses. Since then all claims against Mr. Pakulis have been dropped or dismissed, and several of the claims against the Company have also been dropped or dismissed. Discovery is currently underway. Under California law, an employee is entitled to recover legal fees and costs if a claim for overtime and/or minimum wage is successful, and thus the claim is currently in excess of $200,000. The Company believes most, if not all, of the remaining claims are without merit and are vigorously defending the case. The lawsuit has been tendered to the Company's insurance carrier.