Exhibit 10.1
MEMBERSHIP UNIT PURCHASE
AGREEMENT
This Membership Unit Purchase Agreement ("
Agreement "), is made and entered into as of the
21st day of September 2009 by and among Universal Holdings,
Inc. , a corporation organized under the laws of the State of
Nevada (“ Universal ”); Lanny
M. Roof and Judith Lee (the “ Universal Principal
Stockholders ”); and Michael Hlavsa
(“Hlavsa” or the “ Coronado Unitholder
”). Universal, the Universal Principal
Stockholders and Hlavsa are hereinafter sometimes
individually referred to as a “ Party ” and
collectively referred to as the “ Parties
.”
RECITALS:
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A.
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Universal desires to purchase from Hlavsa all of
the shares of capital stock of Coronado Acquisitions, LLC ,
a Nevada limited liability company, (“ Coronado
”) that are owned of record and beneficially by
Hlavsa.
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B.
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Hlavsa is the record and beneficial owner of
21,000 membership units of Coronado (the “ Subject
Units ”), representing 100% of the issued and outstanding
membership units of Coronado (the “ Coronado Outstanding
Units ”).
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C.
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Hlavsa is willing to sell the
Subject Units to Universal, all upon the terms and subject to the
conditions hereinafter set forth.
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D.
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The board of directors of Universal, the
Universal Principal Stockholders and Hlavsa each deem it to be in
the best interests of Universal and Hlavsa to consummate
the sale and purchase of the Subject Units, as a result of which
Universal shall acquire 100% of all of the issued and outstanding
Coronado Outstanding Units and Hlavsa shall receive the Purchase
Price (as hereinafter defined).
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E.
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On May 31, 2009, Coronado issued a Non-Interest
Bearing Promissory Note in the principal amount of $3,250,000 (the
“ Coronado Note ”) to Matthew Jennings as agent
for Capital Asset Lending, Inc., a California corporation,
Westmoore Lending, LLC, a California limited liability company,
Westmoore Lending Opportunities, LLC, a California limited
liability company with an address at c/o Matthew Jennings, 1353 Old
Temescal Road, Suite 108, Corona, California 92881 (the “
Coronado Noteholders ”). Pursuant to the
Coronado Note, Coronado may satisfy the principal amount of the
Coronado Note by issuing shares of a publicly listed company at the
conversion price of $1.55 per share.
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D.
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In connection with this Agreement, Universal
shall issue 2,100,000 shares of its Common Stock to the Coronado
Noteholders in complete and full satisfaction of the Coronado
Note.
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NOW, THEREFORE,
in consideration of the mutual
covenants, agreements, representations and warranties
contained in this Agreement, the parties hereto agree as
follows:
DEFINITIONS
As used in this Agreement, the
following terms shall have the meanings set forth below:
“ Applicable Law” means any
domestic or foreign law, statute, regulation, rule, policy,
guideline or ordinance applicable to the businesses of the Parties,
the Share Exchange and/or the Parties.
“ Affiliate
” means any one or more Person controlling, controlled by or
under common control with any other Person or their
affiliate.
“ Business Day ” shall mean
any day, excluding Saturday, Sunday and any other day on which
national banks located in New York, New York shall be closed for
business.
“ Closing Date ”
shall mean the date upon which the purchase and sale of the Subject
Units shall be consummated.
“ Common Stock ” shall mean the shares of common
stock of Universal Holdings, Inc., par value $0.0001 per
share.
“ Coronado ” shall have the meaning ascribed to
it in the Recitals.
“ Coronado Note ” shall have the meaning
ascribed to it in the Recitals.
“ Coronado Noteholders ” shall have the meaning
ascribed to it in the Recitals.
“ Coronado Outstanding Units ” means the 21,000
membership units that are issued and outstanding as at the date of
this Agreement and as at the Closing Date.
“ Dollar” and
“ $” means lawful money of the United States of
America.
“ Exchange
Act” means the Securities Exchange Act of
1934.
“ Financial
Statements ” shall have the meaning as is defined in
Section 2.4 of this Agreement.
“ GAAP ” means generally
accepted accounting principles in the United States of America as
promulgated by the American Institute of Certified Public
Accountants and the Financial Accounting Standards Board or any
successor Institutes concerning the treatment of any accounting
matter.
“Hlavsa”
shall have the meaning ascribed to
it in the preamble.
“ Knowledge ” means the knowledge after
reasonable inquiry.
“ Lien ” means, with respect
to any property or asset, any mortgage, lien, pledge, charge,
security interest, encumbrance or other adverse claim of any kind
in respect of such property or asset.
“ Material Adverse Effect ”
with respect to any entity or group of entities means any event,
change or effect that has or would have a materially adverse effect
on the financial condition, business or results of operations of
such entity or group of entities, taken as a consolidated
whole.
“ National Securities Exchange
” means the collective reference to the New York Stock
Exchange, the NYSE Alternext Exchange, the Nasdaq Stock Exchange,
the FINRA OTC Bulletin Board or any other recognized national
securities exchange in the United States.
“ Person ” means any
individual, corporation, partnership, trust or unincorporated
organization or a government or any agency or political subdivision
thereof.
“ Purchase Price ” shall mean Thirty Two
Thousand Five Hundred United States Dollars (U.S.
$32,500).
“ SEC ” means the
Securities and Exchange Commission.
“ Securities Act
” means the Securities Act of 1933.
“ Universal Common Stock ”
shall mean the 100,000,000 shares of common stock of Universal,
$0.0001 par value per share, that are authorized for issuance
pursuant to the certificate of incorporation of
Universal.
“ Universal Preferred Stock”
means the 10,000,000 shares of preferred stock of Universal,
$0.0001 par value per share, that are authorized for issuance
pursuant to the certificate of incorporation of Universal, and
containing such rights, privileges and designations as the board of
directors of Universal may, from time to time determine.
“ Sale of Control
” means the sale or transfer of all or
substantially all of the shares of capital stock or assets of
Universal and its consolidated Subsidiaries, whether through
merger, consolidation, asset sale, tender offer or like combination
or consolidation, to any Person who is not an Affiliate of
Universal immediately prior to such Sale of Control.
“ Subject Units ” shall mean
an aggregate of 21,000 of the Coronado Outstanding Units that are
owned of record and beneficially by Hlavsa as at the date hereof
and as at the Closing Date.
“ Subsidiary ” of any Person
means another Person, an amount of the voting securities, other
voting ownership or voting partnership interests of which is
sufficient to elect at least a majority of its Board of Directors
or other governing body (or, if there are no such voting interests,
50% or more of the equity interests of which) is owned directly or
indirectly by such first Person.
“ Tax ”
(and, with correlative meaning, “ Taxes ” and
“ Taxable ”) means:
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(i)
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any income, alternative or add-on minimum tax,
gross receipts tax, sales tax, use tax, ad valorem tax, transfer
tax, franchise tax, profits tax, license tax, withholding tax,
payroll tax, employment tax, excise tax, severance tax, stamp tax,
occupation tax, property tax, environmental or windfall profit tax,
custom, duty or other tax, impost, levy, governmental fee or other
like assessment or charge of any kind whatsoever together with any
interest or any penalty, addition to tax or additional amount
imposed with respect thereto by any governmental or Tax authority
responsible for the imposition of any such tax (domestic or
foreign), and
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(ii)
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any liability for the payment of any amounts of
the type described in clause (i) above as a result of being a
member of an affiliated, consolidated, combined or unitary group
for any Taxable period, and
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(iii)
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any liability for the payment of any amounts of
the type described in clauses (i) or (ii) above as a result of any
express or implied obligation to indemnify any other
person.
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“ Tax Return ” means any
return, declaration, form, claim for refund or information return
or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
“ Trading Days ”
means any day on which the New York Stock Exchange or other
National Securities Exchange on which Universal Common Stock trades
is open for trading.
SECTION 1. PURCHASE AND SALE
OF THE SUBJECT UNITS
1.1
Sale of the Subject Units .
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(a)
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On the Closing Date and subject to and upon the
terms and conditions of this Agreement, Hlavsa shall sell,
assign, transfer and exchange (collectively, “
Transfer ”) to Universal all, and not less than
all, of the Subject Units, consisting of 21,000 of the Coronado
Outstanding Units that are owned of record and beneficially by
Hlavsa, and representing 100% of the Coronado Outstanding Units at
the Closing Date.
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(b)
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On the Closing Date, Hlavsa shall deliver to
Universal one or more membership unit certificates evidencing the
Subject Units, duly endorsed in blank for transfer and with the
signature of the record owner appropriately notarized or guaranteed
by a member of the New York Stock Exchange, Inc. or a national bank
(the “ Subject Units Certificates ”).
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1.2 Payment of
Purchase Price . Within a reasonable period of time
following the Closing Date, against delivery of the Subject Units
Certificates, Universal shall pay to Hlavsa the $32,500 Purchase
Price. Such Purchase Price shall be paid by wire
transfer of immediately available funds to a bank account
designated by Hlavsa.
The closing of the sale and purchase of the
Subject Units (the “ Closing ”) will take place
immediately following the conversion of the Coronado Note to common
stock of Universal under the terms of the Coronado Note, at the
offices of Anslow & Jaclin, LLP, counsel to Coronado, at its
office in New Jersey, within five (5) Business Days following the
delivery of satisfaction or waiver of the conditions precedent set
forth in Section 4 or at such other date as Universal and the
Coronado Unitholder shall agree (the “ Closing Date
”), but in no event shall the Closing Date occur later than
October 31, 2009, unless such date shall be extended by mutual
agreement of Universal and Hlavsa.
SECTION 2. REPRESENTATIONS AND
WARRANTIES OF HLAVSA .
Hlavsa
hereby represents and warrants to
Universal as follows:
2.1
Authority and Ownership of Subject Units.
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(a)
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Hlavsa has approved the execution delivery and
performance of this Agreement by him. Hlavsa individually has the
power and authority to enter into this Agreement and to perform his
obligations hereunder. The execution and delivery of
this Agreement and the consummation of the transaction contemplated
hereby have been and hereby is duly authorized by Hlavsa and is
hereby authorized by Hlavsa. The execution and
performance of this Agreement will not constitute a material breach
of any agreement, indenture, mortgage, license or other instrument
or document to which Hlavsa is a party and will not violate any
judgment, decree, order, writ, rule, statute, or regulation
applicable to Hlavsa or his properties.
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(b)
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As at the date of this Agreement and the Closing
Date, Hlavsa is the record and beneficial owner of all, and not
less than all, of the Subject Units. The Subject Units are owned of
record and beneficially by Hlavsa free and clear of all rights,
claims, liens and encumbrances, and have not been sold, pledged,
assigned or otherwise transferred except pursuant to this
Agreement.
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As at the date of this Agreement,
and as at the Closing Date, Hlavsa is the owner of 21,000 Subject
Units of Coronado , representing 100% of the Coronado
Outstanding Units.
2.3
Financial Statements, Books and Records.
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(a)
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Schedule 2.3(a)
consists of the audited
consolidated financial statements (balance sheet, income statement,
statements of cash flows and shareholder equity and notes thereto)
of Coronado for all applicable periods (the “ Coronado
Annual Financial Statements ”).
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(b)
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The Coronado Financial Statements fairly
represent the financial position of Coronado as at such dates and
the results of their operations for the periods then
ended. The Financial Statements were prepared in
accordance with generally accepted accounting principles applied on
a consistent basis with prior periods except as otherwise stated
therein. The books of account and other financial records of
Coronado are in all respects complete and correct in all material
respects and are maintained in accordance with good business and
accounting practices.
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(c)
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The Coronado Annual Financial Statements were
audited in accordance with generally accepted accounting principles
and Regulation S-X, as promulgated under the Securities
Act.
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(d)
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In addition to the Coronado Annual Financial
Statements, the auditors engaged pursuant to Section 2.3(c)
above shall review, and assist Coronado in the preparation of, an
unaudited consolidated balance sheet and statement of income of
Coronado as may be required for the fiscal quarter ended June 30,
2009 (collectively, the “ Additional Financial
Statements ”).
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2.4
Access to Records. The corporate financial
records, minute books and other documents and records of Coronado
have been made available to Universal prior to the Closing
hereof.
2.5 No
Material Adverse Changes. Except as otherwise
described on Schedule 2.5 hereto, since December 31, 2008
there has not been:
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(a)
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any material adverse change in the financial
position of Coronado, except changes arising in the ordinary course
of business, which changes will in no event materially and
adversely affect the financial position of Coronado;
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(b)
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any damage, destruction or loss
materially affecting the assets, prospective business, operations
or condition (financial or otherwise) of Coronado whether or not
covered by insurance;
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(c)
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any declaration, setting aside or
payment of any dividend or distribution with respect to any
redemption or repurchase of the Coronado Outstanding
Units;
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(d)
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any sale of an asset (other than in the ordinary
course of business) or any mortgage or pledge by Coronado of any
properties or assets, other than as set forth in Section 2.12
below; or
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(e)
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adoption of any pension, profit
sharing, retirement, stock bonus, stock option or similar plan or
arrangement.
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2.6 Taxes.
Coronado as of December 31, 2008, has filed all
material tax, governmental and/or related forms and reports (or
extensions thereof) due or required to be filed and has (or will
have) paid or made adequate provisions for all taxes or assessments
which had become due as of December 31, 2008, and there are no
deficiency notices outstanding.
2.7
Compliance with Laws. Except as set forth on
Schedule 2.8,
Coronado has complied with all federal, state, county and local
laws, ordinances, regulations, inspections, orders, judgments,
injunctions, awards or decrees applicable to it or its business
which, if not complied with, would materially and adversely affect
the business of
Coronado.
2.8 No
Breach. The execution, delivery and performance of
this Agreement and the consummation of the transactions
contemplated hereby will not:
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(a)
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violate any provision of the
Articles of Incorporation or By-Laws of Coronado;
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(b)
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violate, conflict with or result in the breach
of any of the terms of, result in a material modification of,
otherwise give any other contracting party the right to terminate,
or constitute (or with notice or lapse of time, or both constitute)
a default under any contract or other agreement to which Coronado
is a party or by or to which it or any of its assets or properties
may be bound or subject;
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(c)
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violate any order, judgment, injunction, award
or decree of any court, arbitrator or governmental or regulatory
body against, or binding upon, Coronado or upon the properties or
business of Coronado; or
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(d)
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violate any statute, law or regulation of any
jurisdiction applicable to the transactions contemplated herein,
which could have a materially adverse effect on the business or
operations of Coronado.
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2.9
Actions and Proceedings. Coronado is not a party to
any material pending litigation or, to Hlavsa’s knowledge,
any governmental investigation or proceeding not reflected in the
Coronado Financial Statements, and to Hlavsa’s knowledge, no
material litigation, claims, assessments or Non-governmental
proceedings are threatened against Coronado except as set forth on
Schedule 2.9 attached hereto and made a part hereof.
2.10
Agreements. Schedule 2.10 sets forth any
material contract or arrangement to which Coronado is a party or by
or to which it or its assets, properties or business are bound or
subject, whether written or oral.
2.11 Brokers or
Finders. No broker's or finder's fee will be
payable by Coronado in connection with the
transactions contemplated by this Agreement nor will any such fee
be incurred as a result of any actions by Hlavsa.
2.12 Real
Estate. Except as set forth on Schedule 2.12,
Coronado owns no real property nor is a party to any leasehold
agreement.
2.13
Tangible Assets. Except as set forth on Schedule
2.13 hereto,
Coronado has full title and interest in all machinery, equipment,
furniture, leasehold improvements, fixtures, projects, owned or
leased by Coronado, any related capitalized items or other tangible
property material to the business of Coronado (the " Tangible
Assets "). Coronado holds all rights,
title and interest in all the Tangible Assets owned by it on the
Balance Sheet or acquired by it after the date on the Balance Sheet
free and clear of all liens, pledges, mortgages, security
interests, conditional sales contracts or any other
encumbrances. All of the Tangible Assets are in good
operating condition and repair and are usable in the ordinary
course of business of Coronado and conform to all
applicable laws, ordinances and government orders, rules and
regulations relating to their construction and operation, except as
set forth on Schedule 2.13 hereto.
2.14
Liabilities. Coronado did not have any
direct or indirect indebtedness, liability, claim, loss, damage,
deficiency, obligation or responsibility, known or unknown, fixed
or unfixed, liquidated or unliquidated, secured or unsecured,
accrued or absolute, contingent or otherwise, including, without
limitation, any liability on account of taxes, any governmental
charge or lawsuit (all of the foregoing collectively defined to as
" Liabilities "), which are not fully, fairly and adequately
reflected on the Financial Statements except for a specific
Liabilities set forth in the Unaudited Financial Statements or on
Schedule 2.14 attached hereto and made a part
hereof. As of the date of Closing, Coronado will not have any
Liabilities, other than Liabilities fully and adequately reflected
on the Financial Statements except for Liabilities incurred in the
ordinary course of business and as set forth in Schedule
2.14 . There is no circumstance, condition, event or
arrangement which may hereafter give rise to any Liabilities not in
the ordinary course of business.
2.15 Operations
of Coronado
. From December 31, 2008 through the Closing
Date, Coronado has not and will not have:
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(a)
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declared or paid any dividend or declared or
made any distribution of any kind to any unitholder, or made any
direct or indirect redemption, retirement, purchase or other
acquisition of any of its units;
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(b)
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except in the ordinary course of
business, incurred or assumed any indebtedness or liability
(whether or not currently due and payable);
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(c)
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disposed of any assets of
Coronado
except in the ordinary course of business, except as described in
Schedule 2.15 ;
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(d)
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materially increased the annual
level of compensation of any executive employee of
Coronado;
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(e)
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increased, terminated, amended or
otherwise modified any plan for the benefit of employees of
Coronado; or
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(f)
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issued any equity securities or
rights to acquire such equity securities.
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2.16 Full
Disclosure. No representation or warranty by
Hlavsa in this
Agreement or in any document or schedule to be delivered by him
pursuant hereto, and no written statement, certificate or
instrument furnished or to be furnished by Hlavsa pursuant hereto or in
connection with the negotiation, execution or performance of this
Agreement contains or will contain any untrue statement of a
material fact or omits or will omit to state any fact necessary to
make any statement herein or therein not materially misleading or
necessary to a complete and correct presentation of all material
aspects of Coronado.
SECTION
3. REPRESENTATIONS AND WARRANTIES OF UNIVERSAL HOLDINGS,
INC. AND THE UNIVERSAL PRINCIPAL STOCKHOLDERS
Universal
and the Universal Principal
Stockholders each hereby represents and warrants jointly and
severally to Hlavsa, as follows:
3.1
Organization and Good Standing. Universal is a
corporation duly organized, validly existing and in good standing
under the laws of State of Nevada. Universal has the
corporate power to own its own property and to carry on its
business as now being conducted and is duly qualified to do
business in any jurisdiction where so required except where the
failure to so qualify would have no material negative
impact.
3.2
Authority. The Universal Principal Stockholders
have approved the execution delivery and performance of this
Agreement by Universal. The Universal Principal
Stockholders have the power and authority, and Universal has the
corporate power to enter into this Agreement and to perform its
obligations hereunder, including payment of the Purchase
Price. The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby have been
duly authorized by the Board of Directors and stockholders of
Universal as required
by Nevada law. The execution and performance of this
Agreement will not constitute a material breach of any agreement,
indenture, mortgage, license or other instrument or document to
which U
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