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STOCK PURCHASE AGREEMENT between FORTUNE INDUSTRIES,
INC. AND FISBECK-FORTUNE DEVELOPMENT, LLC
STOCK PURCHASE AGREEMENT THIS STOCK PURCHASE
AGREEMENT (this "Agreement") is entered into effective as of the
30th day of November 2008 (“Effective Date”) by
and among Fortune Industries, Inc. (“the
Seller”) and Fisbeck-Fortune Development, LLC ("the
Buyer"). BACKGROUND Commercial Solutions, Inc. (the
“Company”) is currently a subsidiary of the
Seller. The parties hereto desire to provide for the
acquisition by the Buyer of the Company through the sale by the
Seller to the Buyer of all the outstanding shares of capital stock
of the Company, which are owned beneficially and of record by the
Seller, all on the terms and conditions set forth in this
Agreement.
NOW THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants and agreements herein
contained, the parties hereto, intending to be legally bound, agree
as follows:
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SECTION 1.
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ACQUISITION OF SHARES.
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1.1 Sale and
Purchase of Shares of the Company. Subject to the terms
and conditions of this Agreement, at the Closing (as herein
defined), the Seller shall sell, transfer and deliver to the Buyer
100 shares of the common stock, no par value, of the Company
constituting all of the outstanding shares of the
Company’s capital stock (the
“Shares”), and the Buyer shall purchase the
Shares for the consideration set forth in Section 1.2.
1.2 Purchase
Price. The purchase price (the “Purchase
Price”) for the Shares shall be Five Hundred Thousand and
00/100 Dollars ($500,000.00). The Seller, the Buyer,
Carter Fortune and John Fisbeck (pursuant to the Consent to Setoff
attached hereto as Exhibit 1.2(a)) agreed that the Purchase Price
will be paid as an offset against part of the Ten Million and
00/100 Dollar ($10,000,000.00) principal payment to be made
effective the Effective Date by the Seller to Carter
Fortune. The $10,000,000.00 principal payment to be made
is a payment on the Term Loan Note between the Seller and Carter
Fortune dated May 30, 2008. The Purchase Price shall not be paid in
cash. As additional consideration, the Buyer shall cause
Carter Fortune and John Fisbeck to execute and deliver to the
Seller the Debt Payment and Stock Conversion Agreement, a copy of
which is attached as Exhibit 1.2(b).
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SECTION 2.
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REPRESENTATIONS AND WARRANTIES REGARDING THE
SELLER.
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The Seller hereby represents and warrants to the Buyer as follows:
2.1 Organization
and Good Standing. The Seller is a corporation duly
organized, validly existing and in good standing under the laws of
the State of Indiana and has all necessary corporate power and
authority to carry on its business as presently conducted, to own
and lease the assets which it owns and leases and to perform all
its obligations under each agreement and instrument by which it is
bound.
2.2 Power and
Authorization. The Seller has full capacity, legal
right, power and authority to enter into and perform its
obligations under this Agreement and under the other agreements and
documents (collectively "the Seller Transaction Documents")
required to be executed and delivered by it prior to or at the
Closing. The execution, delivery and performance by the Seller of
the Seller Transaction Documents have been duly authorized by all
necessary corporate action. The Seller Transaction
Documents have been duly and validly executed and delivered by the
Seller and constitutes the legal, valid and binding obligation of
the Seller enforceable against the Seller in accordance with its
terms except as the same may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other laws
affecting the enforcement of creditor's rights in general, and
except that the enforceability of the Seller Transaction Documents
is subject to general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or law)
and of public policy. When executed and delivered as
contemplated herein, and assuming enforceability thereof against
all other parties, each of the Seller Transaction Documents shall
constitute the legal, valid and binding obligation of the Seller,
enforceable against the Seller in accordance with its terms except
as the same may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other laws
affecting the enforcement of creditor's rights in general, and
except that the enforceability of the Seller Transaction Documents
is subject to general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or law)
and of public policy.
2.3 No
Conflicts.
(a) The
execution, delivery and performance of the Seller Transaction
Documents do not and will not (with or without the passage of time
or the giving of notice):
(i) violate or
conflict with the Articles of Incorporation or Bylaws of the Seller
or any law binding upon the Seller;
(ii) violate
or conflict with, result in a breach of, or constitute a default or
otherwise cause any loss of benefit under any material agreement or
other material obligation to which the Seller is a party or by
which it or any of its assets are bound, or give to others any
rights (including rights of termination, foreclosure, cancellation
or acceleration), in or with respect to the Seller or any of its
assets, including, without limitation, any of the Shares;
(iii) result
in, require or permit the creation or imposition of any
restriction, mortgage, deed of trust, pledge, lien, security
interest or other charge, claim or encumbrance of any nature upon
or with respect to the Shares; or - 2 -
(iv) violate
any resolution adopted by the board of directors or stockholders of
the Seller.
(b) Each
consent or approval of, or registration, notification, filing
and/or declaration with, any court, government or governmental
agency or instrumentality, creditor, lessor or other person
required to be given or made by the Seller in connection with the
execution, delivery and performance of the Seller Transaction
Documents or which are to be obtained or made in order for transfer
of the Shares to be effective as contemplated herein, has been
obtained or made, or will be obtained or made prior to the Closing.
(c) There are
no judicial, administrative or other governmental actions,
proceedings or investigations pending or, to the knowledge of the
Seller, threatened, that question any of the transactions
contemplated by, or the validity of the Seller Transaction
Documents or which, if adversely determined, would materially
interfere with the Seller’s ability to enter into or
perform its obligations under the Seller Transaction
Documents. The Seller has not received any request from
any governmental agency or instrumentality for information with
respect to the transactions contemplated hereby.
2.4 Ownership
of the Shares. The Seller owns the Shares beneficially
and of record, free and clear of any restriction, mortgage, deed of
trust, pledge, lien, security interest or other charge, claim or
encumbrance. There are no shareholder or other
agreements affecting the right of the Seller to convey the Shares
to the Buyer or any other right of the Seller with respect to the
Shares, and the Seller has the right, authority, power and capacity
to sell, assign and transfer the Shares to the Buyer free and clear
of any restriction, mortgage, deed of trust, pledge, lien, security
interest or other charge, claim or encumbrance (except for
restrictions imposed generally by applicable securities
laws). Upon delivery to the Buyer of the certificates
for the Shares at the Closing, the Seller will transfer good, valid
and marketable title to the Shares, free and clear of any
restriction, mortgage, deed of trust, pledge, lien, security
interest or other charge, claim or encumbrance.
2.5 Brokers. No
person acting on behalf of the Seller or under the authority of the
Seller is or will be entitled to any brokers' or finders' fee or
any other commission or similar fee, directly or indirectly, from
any of such parties in connection with any of the transactions
contemplated by this Agreement.
2.6 Full
Disclosure. All documents and other papers (or copies
thereof) delivered by or on behalf of the Seller in connection with
the transactions contemplated by this Agreement are in the same
form as maintained by the Seller, without alteration and are
accurate and complete as to items in the custody of the Seller.
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SECTION 3.
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REPRESENTATIONS AND WARRANTIES REGARDING THE
COMPANY
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The Seller hereby represents and warrants to the Buyer as follows:
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3.1 Organization
and Good Standing. The Company is a corporation duly
organized and validly existing and in good standing under the laws
of the State of Indiana and has all necessary corporate power and
authority to carry on its business as presently conducted, to own
and lease the assets which it owns and leases, and to perform all
of its obligations under each agreement and instrument by which it
is bound.
3.2 No
Conflicts.
(a) The
execution, delivery and performance of the Seller Transaction
Documents do not and will not (with or without the passage of time
or the giving of notice):
(i) violate or conflict
with the Articles of Incorporation or Bylaws of the Company or any
law binding upon the Company;
(ii) violate
or conflict with, result in a breach of, or constitute a default or
otherwise cause any loss of benefit under any material agreement or
other material obligation to which the Company is a party or by
which it or its assets are bound, or give to others any rights
(including rights of termination, foreclosure, cancellation or
acceleration), in or with respect to the Company or any of its
assets;
(iii) result
in, require or permit the creation or imposition of any
restriction, mortgage, deed of trust, pledge, lien, security
interest or other charge, claim or encumbrance of any nature upon
or with respect to the Shares or, upon or with respect to the
Company or the Company’s assets; or
(iv) violate
any resolution adopted by the board of directors or stockholders of
the Company.
(b) Each
consent or approval of, or registration, notification, filing
and/or declaration with, any court, government or governmental
agency or instrumentality, creditor, lessor or other person
required to be given or made by the Company in connection with the
execution, delivery and performance of the Seller Transaction
Documents has been obtained or made, or will be obtained or made
prior to the Closing.
(c) There
are no judicial, administrative or other governmental actions,
proceedings or investigations pending or, to the knowledge of the
Seller, threatened that question any of the transactions
contemplated by, or the validity of, the Seller Transaction
Documents or which, if adversely determined, would materially
interfere with the Company’s ability to perform its
obligations under the Seller Transaction Documents. The
Company has not received any request from any governmental agency
or instrumentality for information with respect to the transactions
contemplated hereby. - 4 -
3.3 Capitalization. Schedule
3.3 fully and accurately describes the authorized, issued and
outstanding capital stock and other securities of the
Company. No person has any preemptive or other right
with respect to any such equity interests or other
securities. There are no offers, options, warrants,
rights, agreements or commitments of any kind (contingent or
otherwise) relating to the issuance, conversion, registration,
voting, sale or transfer of any equity interests or other
securities of the Company (including, without limitation, the
Shares) or obligating the Company or any other person to purchase
or redeem any such equity interests or other
securities. The Shares constitute all of the issued and
outstanding shares of capital stock of the Company and have been
duly authorized and are validly issued and outstanding, fully paid
and nonassessable, and have been issued in compliance with
applicable securities and other laws.
3.4 Investments
and Subsidiaries. Except as described on Schedule 3.4,
the business of the Company is and has been conducted solely by and
through the Company and no other person. Except as
described on Schedule 3.4, the Company does not directly or
indirectly own, control or have any investment or other interest in
any corporation, partnership, joint venture, business trust or
other entity.
3.5 Due To and
Due From. The Seller and the Buyer agree, as of the
Effective Date, that (i) the Company does not have any amount due
to or due from the Seller; and (ii) the Seller does not have any
amount due to or due from the Company.
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SECTION 4.
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REPRESENTATIONS AND WARRANTIES OF BUYER
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The Buyer hereby represents and warrants to the Seller as
follows:
4.1 Organization
and Good Standing. The Buyer is a corporation duly
organized, validly existing and in good standing under the laws of
the State of Indiana and has all necessary corporate power and
authority to carry on its business as presently conducted, to own
and lease the assets which it owns and leases and to perform all
its obligations under each agreement and instrument by which it is
bound.
4.2 Power
and Authorization. The Buyer has full capacity, legal
right, power and authority to enter into and perform its
obligations under this Agreement and under the other agreements and
documents (collectively "the Buyer Transaction Documents") required
to be executed and delivered by it prior to or at the
Closing. The execution, delivery and performance by the
Buyer of the Buyer Transaction Documents have been duly authorized
by all necessary corporate action. The Buyer Transaction
Documents have been duly and validly executed and delivered by the
Buyer and constitutes the legal, valid and binding o
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