Exhibit
10.1
COMMON STOCK SHARES PURCHASE
AGREEMENT
Common Stock Shares Purchase
Agreement dated as of August 14, 2009 (this “
Agreement ”) by and between Nature Vision, Inc., a
Minnesota corporation, with principal executive offices located at
1480 Northern Pacific Road, Brainerd, MN 56401 (the “
Company ”), and Swordfish Financial,
Inc. (“ Purchaser ”).
WHEREAS, Purchaser desires to purchase from the
Company, and the Company desires to issue and sell to Purchaser,
upon the terms and subject to the conditions of this Agreement,
10,987,417 shares of the Company’s restricted Common Stock
(the “ Common Stock ”);
NOW, THEREFORE, in consideration of the premises
and the mutual covenants contained herein, the parties hereto,
intending to be legally bound, hereby agree as follows:
I. PURCHASE AND SALE OF COMMON
STOCK
A. Transaction . Purchaser hereby
agrees to purchase from the Company, and the Company has offered
and hereby agrees to issue and sell to Purchaser in a transaction
exempt from the registration and prospectus delivery requirements
of the Securities and Exchange Act of 1933, as amended (the “
Securities Act ”), the Common Stock.
B. Purchase Price; Form of Payment
. The purchase price for the Common Stock to be
purchased by Purchaser hereunder shall be $3,500,000 (the “
Purchase Price ”) to be evidenced by a promissory note
from Purchaser as set forth in Exhibit A to this
Agreement.
II. PURCHASER’S REPRESENTATIONS
AND WARRANTIES
Purchaser represents and warrants to and
covenants and agrees with the Company as follows:
1. Purchaser is purchasing the Common Stock for
its own account, for investment purposes only and not with a view
towards or in connection with the public sale or distribution
thereof in violation of the Common Stock Shares Act.
2. Purchaser is (i) an “accredited
investor” within the meaning of Rule 501 of Regulation D
under the Common Stock Shares Act, (ii) experienced in making
investments of the kind contemplated by this Agreement, (iii)
capable, by reason of its business and financial experience, of
evaluating the relative merits and risks of an investment in the
Common Stock Shares, and (iv) able to afford the loss of its
investment in the Common Stock Shares.
3. Purchaser understands that the Common Stock
Shares are being offered and sold by the Company in reliance on an
exemption from the registration requirements of the Common Stock
Shares Act and equivalent state Common Stock Shares and “blue
sky” laws, and that the Company is relying upon the accuracy
of, and Purchaser’s compliance with, Purchaser’s
representations, warranties and covenants set forth in this
Agreement to determine the availability of such exemption and the
eligibility of Purchaser to purchase the Common Stock
Shares;
4. Purchaser understands that the Common Stock
Shares have not been approved or disapproved by the Securities and
Exchange Commission (the “ Commission ”) or any
state or provincial Securities Commission.
5. This Agreement has been duly and validly
authorized, executed and delivered by Purchaser and is a valid and
binding agreement of Purchaser enforceable against it in accordance
with its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors’ rights and remedies generally and except
as rights to indemnity and contribution may be limited by federal
or state securities laws or the public policy underlying such
laws.
6. Purchaser has read all of the public
disclosures regarding the Company in addition to interim data
received from the Company. Purchaser represents that
they have satisfactory information and data to move forward with
the transaction. Companies most current financial results (June 30,
2009) are attached as Schedule II.6.
7. The Purchaser understands that the company is
currently working with Mt. Yale to sell certain of their assets to
cover the line of credit at M&I Bank. See Schedule II.8 The
Company hereby agrees to continue the relationship with Mt Yale and
has signed the agreement to demonstrate their continued
support.
III. THE COMPANY’S
REPRESENTATIONS
The Company
represents and warrants as of the date hereof to the Purchaser
that, except as set forth on Schedule III attached hereto, the
statements contained in this Section 3 are complete and accurate as
of the date of this Agreement. As used in this Section
3, the term “Knowledge” shall mean the knowledge of the
members of the board of directors of the Company and/or the
officers or employees of the Company after reasonable
investigation.
A. Capitalization.
1. The authorized capital stock of the Company
consists of 25,000,000 shares of Common Stock of which 2,312,583
shares are issued and outstanding as of the date hereof and are
fully paid and no assessable. The amount, exercise,
conversion or subscription price and expiration date for each
outstanding option and other security or agreement to purchase
shares of Common Stock is accurately set forth on Schedule
III.A.1.
2. Except as disclosed the Company’s
Securities and Exchange Commission filings., there are no
preemptive, subscription, “call,” right of first
refusal or other similar rights to acquire any capital stock of the
Company or other voting Common Stock Shares of the Company that
have been issued or granted to any person and no other obligations
of the Company to issue, grant, extend or enter into any security,
option, warrant, “call,” right, commitment, agreement,
arrangement or undertaking with respect to any of their respective
capital stock.
B. Organization; Reporting Company
Status.
1. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the state
or jurisdiction in which it is incorporated and is duly qualified
as a foreign corporation in all jurisdictions in which the failure
so to qualify would reasonably be expected to have a material
adverse effect on the business, properties, prospects, condition
(financial or otherwise) or results of operations of the Company or
on the consummation of any of the transactions contemplated by this
Agreement (a “ Material Adverse Effect). .
2. The Company is subject to the reporting
requirements of the Securities and Exchange Act of 1934, as amended
(the “ Exchange Act ”). The Common
Stock is traded on the NASDAQ Capital Market. On August
6, 2009 a request was submitted by the Company to NASDAQ to be
dropped from the OTC capitol market and move to the OTC BB. A copy
of the request is attached as Schedule III.b.1.
C. Authorization . The Company
(i) has duly and validly authorized and reserved for issuance
shares of Common Stock, which is a number sufficient for the
issuance of the Common Stock contemplated by this Security Purchase
Agreement. The Company understands and acknowledges the
potentially dilutive effect on the issuance of the Common Stock
Shares.
D. Authority; Validity and Enforceability.
The Company has the requisite corporate power and
authority to enter into this Agreement (as such term is hereinafter
defined) and to perform all of its obligations hereunder and
thereunder (including the issuance, sale and delivery to Purchaser
of the Common Stock Shares). The execution, delivery and
performance by the Company of the Documents and the consummation by
the Company of the transactions contemplated hereby and thereby
have been duly and validly authorized by all necessary corporate
actions on the part of the Company and no further filing, consent,
or authorization is required by the Company, its board of
directors, or its stock Purchasers. Each of the
Documents has been duly and validly executed and delivered by the
Company and each Document constitutes a valid and binding
obligation of the Company enforceable against it in accordance with
its terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting
creditors’ rights and remedies generally and except as rights
to indemnity and contribution may be limited by federal or state
securities laws or the public policy underlying such
laws. The Common Stock Shares have been duly and validly
authorized for issuance by the Company. For purposes of
this Agreement, the term “ Documents ” means (i)
this Agreement.
E. Validity of Issuance of the Common Stock
Shares. The Common Stock Shares upon their issuance
will be validly issued and outstanding, fully paid and
nonassessable, and not subject to any preemptive rights, rights of
first refusal, tag-along rights, drag-along rights or other similar
rights.
F. Approvals. No authorization, approval or
consent of any court or public or governmental authority is
required to be obtained by the Company for the issuance and sale of
the Common Stock Shares to Purchaser as contemplated by this
Agreement, except such authorizations, approvals and consents as
have been obtained by the Company prior to the date
hereof, other than the requirements of the current lending
Agreement with M&I bank as attached in Schedule
III.f
G. Commission Filings. The
Company has properly and timely filed with the Commission all
reports, proxy statements, forms and other documents required to be
filed with the Commission under the Securities Act and the Exchange
Act since becoming subject to such Acts (the “ Commission
Filings ”). As of their respective dates, (i)
the Commission Filings complied in all material respects with the
requirements of the Securities Act or the Exchange Act, as the case
may be, and the rules and regulations of the Commission promulgated
thereunder applicable to such Commission Filings and (ii) none of
the Commission Filings contained at the time of its filing any
untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which
they were made, not misleading. The financial statements of the
Company included in the Commission Filings, as of the dates of such
documents, were true and complete in all material respects and
complied with applicable accounting requirements and the published
rules and regulations of the Commission with respect thereto, were
prepared in accordance with generally accepted accounting
principles in the United States (“ GAAP ”)
(except in the case of unaudited statements permitted by Form
10-QSB under the Exchange Act) applied on a consistent basis during
the periods involved (except as may be indicated in the notes
thereto) and fairly presented the consolidated financial position
of the Company and its Subsidiaries as of the dates thereof and the
consolidated results of their operations and cash flows for the
periods then ended (subject, in the case of unaudited statements,
to normal year-end audit adjustments that in the aggregate are not
material and to any other adjustment described therein).
H. Full Disclosure. There is no
fact known to the Company (other than general economic or industry
conditions known to the public generally) that has not been fully
disclosed in the Commission Filings that (i) reasonably could be
expected to have a Material Adverse Effect or (ii) reasonably could
be expected to materially and adversely affect the ability of the
Company to perform its obligations pursuant to the Documents.
EXHIBIT C
I. Absence of Events of Default.
No “ Event of Default ” (as defined
in any agreement or instrument to which the Company is a party) and
no event which, with notice, lapse of time or both, would
constitute an Event of Default (as so defined), has occurred and is
continuing.
J. Common Stock Shares Law Matters.
Assuming the accuracy of the representations and
warranties of Purchaser set forth in Article II, the offer and sale
by the Company of the Common Stock Shares is exempt from (i) the
registration and prospectus delivery requirements of the Securities
Act and the rules and regulations of the Commission thereunder and
(ii) the registration and/or qualification provisions of all
applicable state and provincial Securities and “blue
sky” laws. The Company shall not directly or
indirectly take, and shall not permit any of its directors,
officers or Affiliates directly or indirectly to take, any action
(including, without limitation, any offering or sale to any person
or entity of any security similar to the Common Stock Shares) which
will make unavailable the exemption from Securities Act
registration being relied upon by the Company for the offer and
sale to Purchaser of the Common Stock Shares, as contemplated by
this Agreement. No form of general solicitation or
advertising has been used or authorized by the Company or any of
its officers, directors or Affiliates in connection with the offer
or sale of the Common Stock Shares as contemplated by this
Agreement or any other agreement to which the Company is a
party. As used in the Documents,
“Affiliate” has the meaning ascribed to such
term in Rule 12b-2 under the Exchange Act.
K. Registration Rights. Except
as set forth in the Company’s Commission filings, no Person
has, and as of the Closing (as such term is hereinafter defined),
no Person shall have, any demand, “piggy-back” or other
rights to cause the Company to file any registration statement
under the Common Stock Shares Act relating to any of its Common
Stock Shares or to participate in any such registration
statement.
L. No Misrepresentation. No
representation or warranty of the Company contained in this
Agreement or any of the other Documents, any schedule, annex or
exhibit hereto or thereto or any agreement, instrument or
certificate furnished by the Company to Purchaser pursuant to this
Agreement contains any untrue statement of a material fact or omits
to state a material fact required to be stated therein or necessary
to make the statements therein not misleading.
M. Finder’s Fee. There is
no finder’s fee, brokerage commission or like payment in
connection with the transactions contemplated by this Agreement for
which Purchaser is liable or responsible. (Note. Mt Yale
is not entitled to any finder’s fee or commission associated
with this transaction.)
N. Subsidiaries. Other than the
Subsidiaries, the Company does not presently own or control,
directly or indirectly, any interest in any other corporation,
association, or other business entity. The Company is
not a participant in any joint venture, partnership, or similar
arrangement.
O. Litigation. Other than as
disclosed in the Commission Filings, there is no action, suit,
proceeding or investigation pending or, to the Company’s
knowledge, currently threatened against the Company or its
Subsidiaries that questions the validity of this Agreement, the
Documents, or the right of the Company to enter into such
agreements, or to consummate the transactions contemplated hereby
or thereby, or that might result, either individually or in the
aggregate, in any material adverse changes in the business, assets
or condition of the Company and its Subsidiaries, taken as a whole,
financially or otherwise, or any change in the current equity
ownership of the Company or its Subsidiaries. Neither
the Company nor its Subsidiaries are parties or subject to the
provisions of any order, writ, injunction, judgment or decree of
any court or government agency or instrumentality. There
is no action, suit, proceeding or investigation by the Company or
its Subsidiaries currently pending or that the Company or its
Subsidiaries intends to initiate. Disclosed litigation attachments
IV.o
P. Agreements. Except for
agreements explicitly contemplated hereby, or disclosed in the
Commission Filings, there are no agreements, understandings or
proposed transactions between the Company and any of its officers,
directors, Affiliates, or any affiliate thereof.
Q. Tax Returns. The Company and
each of its Subsidiaries has made and filed all federal and state
income and all other tax returns, reports and declarations required
by any jurisdiction to which it is subject and (unless and only to
the extent that the Company and each of its Subsidiaries has set
aside on its books provisions reasonably adequate for the payment
of all unpaid and unreported taxes) has paid all taxes and other
governmental assessments and charges that are material in amount,
shown or determined to be due on such returns, reports and
declarations, except those being contested in good faith and has
set aside on its books provision reasonably adequate for the
payment of all taxes for periods subsequent to the periods to which
such returns, reports or declarations apply. There are no unpaid
taxes in any material amount claimed to be due by the taxing
authority of any jurisdiction, and the officer