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STOCK PURCHASE
AGREEMENT
This STOCK PURCHASE AGREEMENT (this
"Agreement") is executed effective as of August __, 2006 (the "
Effective Date "), by and among HARRELL
HOSPITALITY GROUP, INC. , a Delaware corporation ("
HHG ") and Paul L.
Barham , an individual (" Barham "), Clive
Russell , an individual (" Russell "),
Geoffrey Dart , an individual (" Dart "), and
Apsley Estates, Ltd . (" Apsley ")
(collectively, Barham, Russell, Dart and Apsley are called the "
Purchasers ")
P R E M I S E S:
WHEREAS , HHG is the owner of
100% of the issued and outstanding common stock of Hotel Management
Group, Inc., a Texas corporation (the " Company ");
WHEREAS , HHG owes the
Purchasers individually various amounts for accrued but unpaid
compensation (in the aggregate, the " Payables ").
Specifically, HHG owes (i) Barham approximately $164,875 for unpaid
salary and automobile allowance; (ii) Russell $70,574 for unpaid
directors fees and for the principal and accrued interest owing on
a loan made from Russell to HHG, (iii) Dart $11,290 for unpaid
directors fees, and (iv) Apsley $94,125 for unpaid consulting fees.
In addition, HHG has liabilities to certain employees for accrued
vacation that total $38,538 (the " Liabilities
").
WHEREAS , in exchange for cancellation of the Payables,
assumption of the Liabilities and for other consideration, HHG
desires to sell to Purchasers and Purchasers desire to purchase
from HHG all of the Stock of the Company, and certain other
incidental assets of the Company.
A G R E E M E N T:
NOW, THEREFORE , in
consideration of the foregoing premises and the mutual covenants
hereinafter contained and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged,
Purchasers and HHG hereby agree as follows:
ARTICLE
I
PURCHASE AND SALE OF
STOCK AND OTHER ASSETS
1.01 Purchase of the Stock
. Subject to this Agreement, HHG hereby agrees to sell, assign,
transfer, convey and deliver, or cause to be sold, assigned,
transferred, conveyed and delivered, to Purchasers, and Purchasers
agree to purchase, accept and acquire from HHG, on the Closing Date
(as defined in Section 3.01 hereof), the Stock.
1.02 Incidental Hospitality
Assets . In the event that there are any
other assets identified by the Purchasers used in connection with
the hospitality business of the Company (the " Incidental
Assets "), HHG agrees to sell, transfer and convey such
incidental assets to Purchasers. HHG agrees that it will change its
corporate name within ninety (90) days after the Closing Date, and
thereafter HHG relinquishes and assigns to Purchasers any rights it
might have in the "Harrell Hospitality" name.
ARTICLE II
PURCHASE
PRICE
2.01 Purchase Price . The
purchase price for the Stock and the Incidental Assets (the "
Purchase Price ") shall be a total purchase price of Six
Hundred and Twenty-nine Thousand Four Hundred and Two and No/100
Dollars ($629,402.00) in the aggregate. The Purchase Price shall be
payable at the Closing by cancellation of the Payables, assumption
of the Liabilities and by delivery by Purchasers of a promissory
note payable to HHG in the principal amount of $250,000.00 (the "
Note ").
2.02 Terms of the Note . The Note
shall bear interest at the rate of ten percent (10%) per annum and
shall have a final maturity date of September 30, 2016. The Note
shall be payable in quarterly payments of principal and interest in
the amount of $9,959.06, and may be prepaid at any time without
premium or penalty. Payment of the Note shall be secured by the
Stock, shares of Red Leopard Holdings or other collateral
acceptable to HHG. The Purchasers shall be jointly and severally
liable for payment of the Note.
ARTICLE III
CLOSING
3.01 Closing . The closing of
the transactions contemplated by this Agreement (the "
Closing ") shall take place at the offices of Thomas,
Cinclair & Beuttenmuller, P.C., 5335 Spring Valley Road,
Dallas, Texas 75254, on or before September 29, 2006 (the "
Closing Date "). The Closing shall be deemed and construed
to have occurred upon (i) the execution and delivery of all of the
Closing documents by the respective signatory parties thereto and
(ii) delivery to HHG of the Note and the cancellation of the
Payables signed by the Purchasers.
3.02 Documents of Sale and
Conveyance . At the Closing, HHG shall execute and deliver to
Purchasers such documents conveying to Purchasers the Stock, free
and clear of any and all liens, security interests, or encumbrances
whatsoever, and shall be effected by delivery by HHG to Purchasers
of one or more stock certificates properly endorsed to Purchasers
(the " Stock Certificate ") together with an appropriate
stock assignment. At the Closing, the Purchasers shall execute and
deliver to HHG such documents and instruments as may reasonably
requested by HHG to effect the transaction, including the Note,
documents evidencing cancellation of the Payables, assumption of
the Liabilities, and a security agreement securing the
Note.
3.03 Further Assurance . Each party hereto shall, at any
time and from time to time on or after the Closing Date, upon
request of the other party hereto and without further cost or
expense to the requesting party, prepare, execute and deliver such
instruments of conveyance and assignment and shall take such action
as the requesting party may reasonably request to more effectively
carry out the transactions contemplated by this Agreement.
ARTICLE IV
REPRESENTATIONS AND
WARRANTIES
4.01 Representations and Warranties
of HHG . As an inducement to Purchasers to enter into this
Agreement and to consummate the transactions contemplated hereby,
as of the date hereof and as of the Closing Date, HHG represents
and warrants to Purchasers that to the best of its
knowledge:
(a) Authority . The
execution, delivery and performance by HHG of this Agreement and
any other agreements contemplated hereby, and the consummation of
the transactions contemplated hereby and thereby, have been duly
authorized by the board of directors of HHG.
(b) Conflicts; Defaults . The
execution and delivery of this Agreement and the other agreements
and instruments executed or to be executed in connection herewith
by HHG do not, and the performance by HHG of his obligations
hereunder and thereunder and the consummation by HHG of the
transactions contemplated, hereby or thereby, will not violate,
conflict with, or constitute a breach or default under any of the
terms of HHG's obligations thereunder.
(c) Title to Stock . All of the
Corporation's issued and outstanding stock is owned by HHG. HHG has
good and marketable title to all of the Stock and the Stock is, and
will be transferred on the Closing Date, free and clear of all
liens, claims, security interests and encumbrances.
4.02 Representations and Warranties
of Purchasers . As an inducement to HHG to enter into this
Agreement and to consummate the transactions contemplated hereby,
Purchasers represent and warrant to HHG that:
(a) Conflicts; Defaults . The
execution and delivery of this Agreement and the other agreements
and instruments executed or to be executed in connection herewith
by Purchasers do not, and the performance by Purchasers of its
ob
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