COMMON STOCK PURCHASE
AGREEMENT
Private
and Confidential
THIS COMMON STOCK PURCHASE AGREEMENT, (the
“Agreement”) made as of the last executed date below
(the “Effective Date”), by and among Charter Consulting
Corp. an entity with a principle address of 4770
Biscayne Blvd., Suite 1400, Miami, FL 33137 (the
“Buyer”) and Belmont Partners, LLC a Virginia limited
liability company with a principal address of 360 Main Street,
Washington Virginia 22747 (“Seller”), and Blue Gem
Enterprises a public vehicle organized in the state of Nevada and
traded under the symbol “BGEM” (the
“Company”) and Escrow, LLC (“Escrow Agent”)
(Buyer, Seller and Company each a “Party” and
collectively the “Parties”).
W I T N E S S E T H:
WHEREAS, the Company currently has
six million five hundred twenty thousand (6,520,000) common stock
shares issued and outstanding and no preferred shares issued and
outstanding;
WHEREAS, Seller owns a majority of
the Company’s capital stock consisting of five million
(5,000,000) restricted common stock shares (the
“Stock”); and
WHEREAS, Buyer wishes to purchase
the Stock from Seller;
NOW, THEREFORE, in consideration of the mutual
promises, covenants, and representations contained herein, and
subject to the terms and conditions hereof, the Parties agree as
follows:
1. Agreement to
Purchase and Sell . Seller will sell to Buyer and
Buyer agrees to purchase the Stock in exchange for:
a) two hundred
thirty five thousand U.S. dollars ($235,000.00) together with two
hundred U.S. dollars representing Buyer’s half of the Escrow
Fees (the “Purchase Price”), to be paid to Seller
according to the terms and conditions set forth in Section 3
herein.
b) five percent (5%)
of the issued and outstanding common stock of the Company according
to the terms and conditions set forth in Section 3(e) herein (the
“Position”).
2. Closing
. On or about five (5) business days from the Effective
Date (the “Closing”) the Parties shall perform, in
order :
a) Buyer shall
deliver to Seller a copy of this Agreement executed by
Buyer;
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b) Seller shall
deliver a fully executed copy of this Agreement to
Buyer;
c) The Escrowed
Funds (defined in Section 3(a) herein) shall be released to
Seller;
d) The Company shall
execute a resolution approving the terms of this Agreement through
which Buyer, or Buyer’s designee, is appointed as a Director
and Officer of the Company (the
“Appointment”);
e) Buyer shall
deliver to Escrow Agent the Proxy (as defined in Paragraph 4(a)
herein and attached as Exhibit 1); and,
f) Seller shall
deliver to Buyer the Appointment;
g) Seller shall
deliver to Buyer, to the extent reasonably available to Seller, and
after the full performance of Section 3(a), true and correct copies
of the Company’s business, financial and corporate records
including but not limited to: correspondence files, bank
statements, checkbooks, minutes of shareholder and directors
meetings, financial statements, shareholder listings, stock
transfer records, agreements and contracts; and,
h) Seller shall
deliver to Buyer, as soon as practicable after the full performance
of Sections 2(a) through 2(f) herein, the stock certificate(s)
evidencing the Stock.
3. Payment
Terms.
a) Buyer shall place
a deposit of one hundred thousand U.S. Dollars ($100,000.00) into
an escrow account with the Escrow Agent on behalf of the Seller
(the “Deposit”) on the Closing date. The
balance of the Purchase Price (the “Balance”) shall be
due and payable on the following date (“Maturity
Date”):
(i) Payment in the
amount of one hundred thirty five thousand U.S. dollars
($135,000.00) on or before twenty one (21) days from the Effective
Date.
b) Wire transfer of
all payments hereunder shall be made on or before each
payment’s respective Maturity Date by wire transfer of
immediately available funds to Seller’s account as
follows:
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Bank Name:
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Rappahannock National
Bank
Washington, Virginia
22747
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Account Name:
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Account Number:
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1089129
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Routing Number:
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051402974
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c) The Purchase Price
may be prepaid in whole or in part at any time, at the option of
Buyer without premium or penalty.
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d) If at anytime
during the term of this Agreement Buyer shall fail to pay a payment
on or before the payment’s respective Maturity Date, all
outstanding principal, any accrued and unpaid interest and any
other amounts due hereunder shall bear an interest rate of eighteen
percent (18%) per annum from the day such interest is due hereunder
through and including the final day of payment of all outstanding
principal, accrued interest and other amounts due hereunder.
The payments of interest hereunder shall not be required to
the extent that receipt of any such interest by the Seller would be
contrary to provisions of law applicable to the Seller limiting the
maximum rate of interest that may be charged or collected by the
Seller.
(i) In consideration
of the benefits provided to the Company hereby, Company shall issue
and deliver to Seller, such fully paid, non-assessable restricted
shares of the Company’s common stock equal to a five percent
(5%) post Merger (as defined in Section 15 herein) ownership
interest in the Company (the
“Position”). The Position shall be based on
the capital structure of the Company post Merger (taking into
account any and all shares issued relating to the Merger, initial
contracts, and initial acquisition of any assets), post reverse
stock split (if any), post initial financing (whether that initial
financing be a single round or in multiple tranches over a period
of time), and after any other initial issuance of stock (including
issuance to the Company’s directors and/or
officers). Buyer shall take all steps necessary to fully
effectuate the provisions of this Section 3.
(ii) Certificate(s)
evidencing the Position shall be issued and delivered to the Seller
immediately following the actions anticipated by Section 3(e)(i)
herein (the “Actions”), but in no case later than
eleven (11) months following the Effective Date
hereof. In the event that all Actions have not been
completed by the eleventh month anniversary of this Agreement,
Seller shall transfer to Buyer shares comprising the Position on
that date and shall issue additional shares as necessary following
completion of the Actions.
(iii) The effective
date of all Shares transferred pursuant to this Section 3 shall be
the Effective Date of this Agreement and shall be memorialized on
the face of the certificates evidencing such shares.
f) The Parties
acknowledge and agree that the Position shall be newly issued,
restricted common shares of the Company. Buyer and
Company agree to accept as valid any legal opinion of
Seller’s counsel regarding the removal of restrictions from
the Position. In the event that, in one year from the
date of the execution of this Agreement, the Position can not be
sold in accordance with Rule 144 of the Securities Act of 1933, the
Seller shall have demand registration rights on such Position at
such time. In the event that Buyer does not provide for the removal
of restrictions from the shares comprising the Position in
accordance with Rule 144, does not recognize any opinion of
Seller’s counsel regarding the removal of such restrictions,
or does not register such shares, the Company and the Buyer,
jointly and severally, shall pay to Seller liquidated damages in
the amount of the bid price per share as of the one year
anniversary of this Agreement (as reported by the national market
on which the shares trade) multiplied by the number of shares in
the Position. The Parties agree that the liquidated
damages hereunder are not a penalty.
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g) In consideration
of the benefits provided to the Company hereby, Company and Buyer
agree to be jointly and severally liable for all amounts due
hereunder and all other obligations of this Stock Purchase
Agreement.
4. Non-Dilutable
Control Position . In order to ensure full and
timely performance under Section 3 herein, Buyer agrees that the
Stock shall remain non-dilutable until full payment of the Purchase
Price has been received by Seller or for the life of the Agreement
to Prevent Resale and Dilution and Irrevocable Proxy Coupled with
an Interest (attached hereto as Exhibit 1) (the
“Proxy”), whichever is longer. Further,
Buyer and Company hereby expressly agree and understand that any
issuances of stock of any series or class by the Company to any
individual and/or entity whatsoever shall be subject to the
Proxy. All such newly issued shares shall prominently
bear on their face a ledger indicating that such shares are subject
to the Proxy. Buyer and Company hereby expressly agree
and understand that on the Closing date, Buyer, Company and Seller
will all jointly and separately notify the Transfer Agent of the
existence of the Proxy and the provisions of this Agreement
pertaining thereto. Buyer and Company further agree that
should the Company change transfer agents, any new transfer agent
will be promptly notified, prior to initiating the issuance of any
new shares, of the Proxy and the provisions of this Agreement
pertaining thereto.
5. Proxy
.
a) In order to
ensure performance under Section 3 of this Agreement, the Parties
hereby recognize the Proxy as being legally binding and fully
valid. The Proxy shall be held in escrow by the Escrow
Agent until such time as the Proxy may be released according to
Section 5(c) herein.
b) Escrow Agent's
Rights; Exculpation. The Proxy shall be held in the
possession of the Escrow Agent. The Escrow Agent shall have the
authority and power to take such actions and to exercise such
powers as are specifically delegated to the Escrow Agent by the
terms of this Agreement, together with such other powers as are
reasonably incidental thereto. The Escrow Agent shall be under no
duty with respect to the Proxy except to account therefore in due
course, pursuant to the terms and conditions hereof.
c) Upon notification
of Buyer’s Default (as defined in Section 6 herein), the
Escrow Agent shall release the Proxy to the Transfer Agent with a
copy to the Seller and Company.
d) The Escrow Agent
shall not be liable hereunder in its capacity as Escrow Agent,
agent or bailee for any action taken or omitted by it hereunder
except for its gross negligence or willful breach.
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6. Default.
The following conditions or events shall constitute
events of default ("Event(s) of Default"):
a) if the Buyer
shall default in the performance of or compliance with any term
contained in this Agreement;
b) if the Buyer
shall be in breach or otherwise default in the performance of, or
compliance with, any other term contained herein and such breach or
default is not remedied within three (3) days of either:
(i) an officer of the
Buyer obtaining knowledge of such default;
(ii) Buyer’s
Notification of such default; such notification shall be effective
upon the mailing of such Notification to Buyer’s last
address;
c) if any
representation or warranty made in writing by or on behalf of the
Buyer herein or in any instrument furnished in compliance with or
in reference hereto or otherwise in connection with the
transactions contemplated hereby shall prove to have been false or
incorrect in any material respect on the date as of which
made;
d) if the Buyer or
any Subsidiary shall be in default (as principal or as guarantor or
other surety) in the payment of any principal of or premium or
interest on any indebtedness with a principal amount in excess of
fifty thousand dollars ($50,000.00) (other than this Agreement) or
in the performance of or compliance with any term of any evidence
of any such indebtedness or of any mortgage, indenture or other
agreement relating thereto the effect of which is to cause such
indebtedness to become due and payable before its stated maturity
or before its regularly scheduled dates of payment, and such
default, event or condition shall continue for more than the period
of grace, if any, specified therein and shall not have been waived
pursuant thereto;
e) if the Buyer or
any Subsidiary shall:
(i) be generally not
paying its debts as they become due;
(ii) file, or consent
by answer or otherwise to the filing against it of, a petition for
relief or reorganization or arrangement or any other petition in
bankruptcy, for liquidation or to take advantage of any bankruptcy
or insolvency law of any jurisdiction;
(iii) make an
assignment for the benefit of its creditors;
(iv) consent to the
appointment of a custodian, receiver, trustee or other officer with
similar powers with respect to it or with respect to any
substantial part of its property;
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(v) be adjudicated an
insolvent or be liquidated; or,
(vi) take corporate
action for the purpose of any of the foregoing;
f) if a court or
governmental authority of competent jurisdiction shall enter an
order appointing, without consent by the Buyer or any Subsidiary, a
custodian, receiver, trustee or other officer with similar powers
with respect to it or with respect to any substantial part of its
property, or constituting an order for relief or approving a
petition for relief or reorganization or any other petition in
bankruptcy or for liquidation or to take advantage of any
bankruptcy or
