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CHANGE OF CONTROL AGREEMENT

Change of Control Agreement

CHANGE OF CONTROL AGREEMENT | Document Parties: BROWNSHIRE HOLDINGS, INC. You are currently viewing:
This Change of Control Agreement involves

BROWNSHIRE HOLDINGS, INC.

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Title: CHANGE OF CONTROL AGREEMENT
Governing Law: Nevada     Date: 1/5/2009

CHANGE OF CONTROL AGREEMENT, Parties: brownshire holdings  inc.
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EXHIBIT 10.1

 

CHANGE OF CONTROL AGREEMENT

 

 

THIS CHANGE OF CONTROL AGREEMENT (the “ Agreement ”), entered into effective this 31st day of December 2008, is by and between Brownshire Holdings, Inc., a Nevada corporation (the “ Company ”), and Steven G. Black, an individual (“ Mr. Black ”).

 

RECITALS:

 

WHEREAS, the Company is a non-operating public shell company the common stock of which is registered under Section 12(g) of the Exchange Act;

 

WHEREAS, Mr. Black desires to assume control of the Company for the purpose of locating a suitable business combination for the Company (the “ Reverse Acquisition ”) to maximize the value of the Company for its shareholders; and

 

WHEREAS, the Company is willing to issue sufficient shares of its common stock to Mr. Black to transfer control of the Company to him pursuant to the terms and conditions of this Agreement.

 

NOW, THEREFORE, in consideration of the mutual terms and conditions of the parties set forth in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the parties, the parties hereto agree as follows:

 

ARTICLE I

Change of Control Transaction

 

1.1            Sale of Stock .  At Closing, the Company agrees to sell, and Mr. Black agrees to purchase, 20,000,000 shares of the Company’s common stock for $20,000 (the “ New Shares ”).  The New Shares shall be issued pursuant to Section 4(2) of the Securities Act and Mr. Black shall provide such information and documentation as shall be reasonably requested by the Company to comply with such exemption from registration, including, but not limited to, a Subscription Agreement in the form of Exhibit A attached hereto.

 

1.2            Appointment to Board; Election of Officers .  At Closing, all officers and directors of the Company shall resign, except for Steven A. Rothstein who shall remain a director of the Company.  At Closing Mr. Black shall be elected as the President, Chief Executive Officer, Secretary and Treasurer of the Company.  Also, at Closing, Mr. Black and Joseph Nemelka shall be elected as directors of the Company effective immediately upon compliance with Rule 14f-1 under the Exchange Act.

 

1.3            Company Debts .  As a condition of Closing, the Company shall convert all outstanding debts, accounts payable and liabilities, whether contingent or otherwise, of the Company at Closing into one or more promissory notes payable to the debt holders.  The promissory note or notes shall bear simple interest at 2.0% per annum, shall be unsecured, will not be convertible, and will be due and payable at the closing of the Reverse Acquisition or in the event of a subsequent change of control of the Company (other than if GDSC Acquisitions LLC (“ GDSC ”) exercises its right to purchase stock from Mr. Black and 1 st Orion Corp. (“ 1 st Orion ”) as set forth in the letter agreement of even date herewith between GDSC and 1 st Orion (the “ Letter Agreement ”)).

 

 

 


 

 

ARTICLE II

Closing

 

2.1            Closing Date .  The closing of this Agreement (the “ Closing ”) shall take place at the law offices of counsel for Mr. Black, Ronald N. Vance, P.C., 1656 Reunion Avenue, Suite 250, South Jordan, Utah at 10:00 a.m., mountain time, on January 20, 2008, or as soon as practicable after the satisfaction or waiver of the conditions set forth in ARTICLE V of this Agreement, or such other date, time and place as each of the parties hereto may otherwise agree in writing (the “ Closing Date ”).  The parties are not required to attend the Closing in person but may be permitted to participate in the Closing by telephone, provided that the Closing documents and other items are delivered at or prior to Closing.  Documents or funds provided prior to the Closing shall be held in trust by counsel for Mr. Black until delivered at Closing.

 

2.2            Deliveries upon Closing .  Prior to or at Closing the parties shall deliver or cause to be delivered the following documents or other items:

 

 

a.

The Company shall deliver the following to Mr. Black:

 

 

i.

A stock certificate representing the New Shares issued to Mr. Black pursuant to Section 1.1 above;

 

 

ii.

A copy of the Subscription Agreement as set forth in Exhibit A, duly accepted by the Company;

 

 

iii.

Resignation of Norman S. Lynn as a director of the Company and of each person who is an officer of the Company, a board consent or minutes appointing Mr. Black as the President, Chief Executive Officer, Secretary and Treasurer of the Company, and a board consent or minutes appointing Mr. Black and Joseph Nemelka as directors of the Company upon compliance with Rule 14f-1 of the Exchange Act;

 

 

iv.

Copies of the promissory notes evidencing all outstanding Company debts and obligations as set forth in Section 1.3 above; and

 

 

v.

Such other documents or items reasonably requested by Mr. Black.

 

 

b.

Mr. Black shall deliver the following documents or funds to the Company:

 

 

i.

The duly executed Subscription Agreement as set forth in Exhibit A;

 

 

ii.

Immediately available funds representing the $20,000 payable to the Company for the purchase of the 20,000,000 shares as provided in Section 1.1 above;

 

 

iii.

Such other documents or items reasonably requested by the Company.

 

ARTICLE III

Representations and Warranties of the Company

 

The Company represents and warrants to Mr. Black as follows:

 

 

2


 

 

3.1            Due Incorporation .  The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada, with all requisite power and authority to own, lease and operate its properties and to carry on its businesses as they are now being owned, leased, operated and conducted.  The Company has no subsidiaries.

 

3.2            Capitalization .   The entire authorized capital stock of the Company consists of 100,000,000 shares, of which 80,000,000 are designated as common shares and of which 10,002,400 are issued and outstanding as of the date of this Agreement, and 20,000,000 authorized preferred shares, none of which are outstanding (the “ Company Shares ”).  No Company Shares are held in treasury.  All of the issued and outstanding Company Shares have been duly authorized, are validly issued, fully paid, and non-assessable.  There are no outstanding or authorized options, warrants (except for warrants exercisable into 500,000 shares of common stock at $0.001 per share), purchase rights, subscription rights, conversion rights, exchange rights, or other contracts or commitments that could require the Company to issue, sell, or otherwise cause to become outstanding any of its capital stock.  Other than the Company Shares, there are no outstanding or authorized stock appreciation, phantom stock, profit participation, or similar rights with respect to the Company.

 

3.4            Financial Statements .  The Company’s financial statements for the years ended December 31, 2007 and 2006, and for the six months ended June 30, 2008 and 2007, copies of which have been furnished to Mr. Black (the “ Company Financial Statements ”), have been prepared from, are in accordance with, and accurately reflect the books and records of the Company, and have been prepared in accordance with U.S. GAAP applied on a consistent basis during the periods involved (except as may be stated in the notes thereto), and fairly present the financial position and the results of operations and cash flows of the Company as of the times and for the periods referred to therein.  The Company Financial Statements do not reflect any transactions which are not bona fide transactions and do not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements contained therein, in light of the circumstances in which they were made, not misleading.  The Company Financial Statements make full and adequate disclosure of, and provision for, all obligations and liabilities of the Company as of the times and for the periods referred to therein; provided that no provision for any adjustments have been made in the financial statements that might result from the failure of the Company as a “going concern.”

 

3.5            No Adverse Effect .  Except as reflected in the Company Financial Statements, since June 30, 2008, the Company has not suffered any material adverse effect.  For purposes of this Agreement, “material adverse effect” shall mean any change or effect that is, or is reasonably likely to be, materially adverse to the business, assets and liabilities (taken together), financial condition or operations or results of operations of the Company.

 

3.6            Taxes .  All federal, state, foreign, county, and local income, withholding, profits, franchise, occupation, property, sales, use, gross receipts and other taxes (including any interest or penalties relating thereto) and assessments which are due and payable have been duly reported by the Company, and there are no unpaid taxes which are, or could become a lien on the properties and assets of the Company, except as provided for in the Company Financial Statements or have been incurred in the normal course of business of the Company since that date.  There are no disputes as to taxes of any nature payable by the Company.

 

3.7            Litigation .  To the best knowledge and reasonable belief of the Company, there are no legal, administrative or other proceedings, investigations or inquiries, product liability or other claims, judgments, injunctions or restrictions, either threatened, pending, or outstanding against or involving the Company or its assets, properties, or business, nor does the Company know, or have reasonable grounds to know, of any basis for any such proceedings, investigations or inquiries, product liability or other claims, judgments, injunctions or restrictions.  In addition, there are no material proceedings existing, pending or reasonably contemplated to which any officer, director, or affiliate of the Company is a party adverse to the Company or has a material interest adverse to the Company.

 

 

3


 

 

3.8            SEC Filings .  As of their respective filing dates, each and every filing made by the Company with the Securities and Exchange Commission (the “SEC”) complied as to form in all material respects with the applicable requirements of the Exchange Act and the Securities Act, and to the knowledge of the Company did not contain a misstatement of a material fact or an omission of a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading as of the time such documents were filed.  There is no other document or report required to be filed by the Company with the SEC that has not been filed and, with the exception of the transactions contemplated hereby, no event or transaction has occurred or is presently contemplated which is required to be disclosed by the Company in any filing with the SEC.

 

3.9            Undisclosed Liabilities .  The Company has no material liability (whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, and whether due or to become due, including any liability for taxes), except for liabilities set forth on the face of the balance sheet included with the Company Financial Statements (rather than in any notes thereto) or as otherwise disclosed in writing to Mr. Black prior to the date of this Agreement.

 

3.10          Legal Compliance .  To the best of its knowledge, the Company has complied with all applicable laws (including rules, regulations, codes, plans, injunctions, judgments, orders, decrees, rulings, and charges thereunder) of federal, state, local, and foreign governments (and all agencies thereof), and no action, suit, proceeding, hearing, investigation, charge, complaint, claim, demand, or notice has been filed or commenced against any of them alleging any failure so to comply, except where the failure to comply would not have a material adverse effect.

 

3.11          Issuance of Shares .  The New Shares to be issued to Mr. Black upon receipt of the $20,000 as provided in Section 1.1 hereof, shall be deemed legally issued, fully paid and non-assessable outstanding shares of the Company.

 

3.12          Full Disclosure .  No representation or warranty by the Company contained in this Agreement contains any untrue statement of material fact or omits to state a material fact necessary, in light of the circumstances under which it was made, to make any of the representations and warranties therein not misleading.

 

ARTICLE IV

Covenants

 

4.1            Access to Information .  Mr. Black and his authorized representatives shall have full access during normal business hours to all properties, books, records, contracts, and documents of the Company, and the Company shall furnish or cause to be furnished to Mr. Black and his authorized representatives all information with respect to its affairs and business as Mr. Black may reasonably request.  Mr. Black shall hold, and shall cause his representatives to hold confidential, all such information and documents, other than information that (i) is in the public domain at the ti


 
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