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:
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The Company
shall deliver the following to Mr. Black:
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A stock
certificate representing the New Shares issued to Mr. Black
pursuant to Section 1.1 above;
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A copy of the
Subscription Agreement as set forth in Exhibit A, duly accepted by
the Company;
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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;
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Copies of the
promissory notes evidencing all outstanding Company debts and
obligations as set forth in Section 1.3 above; and
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Such other
documents or items reasonably requested by Mr. Black.
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Mr. Black shall
deliver the following documents or funds to the Company:
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The duly
executed Subscription Agreement as set forth in Exhibit
A;
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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;
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Such other
documents or items reasonably requested by the Company.
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ARTICLE III
Representations and Warranties of
the Company
The Company represents and warrants to Mr. Black
as follows:
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.
3.8
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