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COMMON STOCK SHARES PURCHASE AGREEMENT

Purchase and Sale Agreement

COMMON STOCK SHARES PURCHASE AGREEMENT | Document Parties: NATURE VISION, INC. | Swordfish Financial, Inc You are currently viewing:
This Purchase and Sale Agreement involves

NATURE VISION, INC. | Swordfish Financial, Inc

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Title: COMMON STOCK SHARES PURCHASE AGREEMENT
Governing Law: Minnesota     Date: 9/4/2009
Industry: Photography     Sector: Consumer Cyclical

COMMON STOCK SHARES PURCHASE AGREEMENT, Parties: nature vision  inc. , swordfish financial  inc
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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.

 

 

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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.

 

 

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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.

 

 

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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


 
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