EXHIBIT
10.1
CHANGE OF CONTROL
AGREEMENT
THIS CHANGE OF CONTROL
AGREEMENT (the “ Agreement ”), entered into
effective this the 31 st 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:
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.
2
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
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
