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Exhibit 10.1
EXECUTION COPY
STOCK PURCHASE AGREEMENT
This AGREEMENT (this " Agreement ") is entered into as of
the 22nd day of December, 2008, by and between PETROALGAE INC., a
Delaware corporation (" Seller ," or the " Company
"), and VALENS U.S. SPV I, LLC, a Delaware limited liability
company (" Purchaser ").
W I T N E S S E T H :
WHEREAS, Seller desires to sell to Purchaser, and Purchaser
desires to purchase from Seller, 666,667 shares (the "
Shares ") of common stock, par value $0.001 per share, of
the Company (the " Common Stock "), upon the terms and
subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants, agreements,
undertakings and obligations set forth herein, and intending to be
legally bound hereby, the parties hereto agree as follows:
ARTICLE 1
SALE AND PURCHASE OF THE SHARES
Section 1.1 Sale and Purchase of the Shares . Upon
the terms and subject to the conditions set forth in this Agreement
and on the basis of the representations, warranties, covenants,
agreements, undertakings and obligations contained herein, at the
Closing (as defined in Section 2.1 hereof), Seller
hereby agrees to sell to Purchaser, and Purchaser hereby agrees to
purchase from Seller, the Shares, free and clear of any and all
Liens (as defined in Section 8.11 hereof), for the
consideration specified in this Article 1 .
Section 1.2 Purchase Price . The purchase price for
the Shares (the " Purchase Price ") shall be $2,100,000.
Section 1.3 Payment of Purchase Price . Purchaser
agrees to pay to Seller the Purchase Price at the Closing by wire
transfer or delivery of other immediately available funds to an
account of Seller designated to Purchaser prior to the Closing. For
purposes of this Agreement, the term " Business Day " shall
mean any day, other than a Saturday or a Sunday, that is neither a
legal holiday nor a day on which banking institutions are generally
authorized or required by law or regulation to close in the City of
New York.
ARTICLE 2
CLOSING AND DELIVERY
Section 2.1 Closing Date . The closing (the "
Closing ") of the sale and purchase of the Shares (the "
Stock Purchase ") shall take place at the offices of Torys
LLP, 237 Park Avenue, New York, New York 10017 at 10:00 A.M. (New
York City time) on the third (3rd) Business Day following
satisfaction or, if permissible, waiver of the conditions set forth
in Article 6 of this Agreement (excluding those
conditions which by their nature are to be satisfied as a part of
the Closing) or at such other place, time or date as the parties
hereto may agree (the time and date of the Closing being herein
referred to as the " Closing Date ").
Section 2.2 Deliveries by Seller to
Purchaser . On the Closing Date, Seller shall deliver, or cause
to be delivered, to Purchaser the following:
(a) a certificate or certificates evidencing all of the Shares,
duly endorsed in blank or accompanied by stock powers duly executed
in blank, in proper form for transfer;
(b) the certificates and other documents and instruments to be
delivered pursuant to Section 6.2 hereof; and
(c) such other closing documents as Seller and Purchaser shall
reasonably agree.
Section 2.3 Deliveries by Purchaser to Seller . On
the Closing Date, Purchaser shall deliver, or cause to be
delivered, to Seller the following:
(a) the Purchase Price, in accordance with
Section 1.3 hereof;
(b) the certificates and other documents and instruments to be
delivered pursuant to Section 6.3 hereof; and
(c) such other closing documents as Seller and Purchaser shall
reasonably agree.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
As used herein (i) any reference to any event, change or
effect being " material " with respect to the Company means
an event, change or effect which is material in relation to the
condition (financial or otherwise), properties, business,
operations, prospects, assets or results of operations of the
Company, and (ii) the term " Material Adverse Effect "
on the Company means a material adverse effect on the condition
(financial or otherwise), properties, business, operations,
prospects, assets or results of operations of the Company.
The Company hereby represents and warrants to Purchaser as
follows:
Section 3.1 Organization and Good Standing . The
Company is a corporation duly organized, validly existing and in
good standing under the laws of its respective jurisdiction of
incorporation with full corporate power and authority to conduct
its business as it is now being conducted. The Company is duly
qualified or licensed to do business as a foreign corporation and
is in good standing as a foreign corporation in each jurisdiction
in which either the ownership or use of the properties owned or
used by it, or the nature of the activities conducted by it,
requires such licensing, qualification or good standing, except for
any failure to so license, qualify or be in such good standing,
which, when taken together with all other such failures, has not
had, does not have and could not reasonably be expected to have a
Material Adverse Effect on the Company.
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Section 3.2 Capitalization
.
(a) The authorized capital stock of the Company consists solely
of 300,000,000 shares of Common Stock, and 25,000,000 shares of
Preferred Stock, of which 100,099,586 shares of Common Stock are
issued and outstanding and of which no shares of Preferred Stock
are issued and outstanding. All of the issued and outstanding
shares of capital stock of the Company have been duly authorized
and are validly issued, fully paid and nonassessable and have been
issued in compliance with all foreign, federal and state securities
laws.
(b) The unissued Shares to be issued and sold by the Company to
the Purchaser hereunder have been duly and validly authorized and,
when issued and delivered against payment therefore as provided
herein, will be duly and validly issued and fully paid and
non-assessable.
Section 3.3 Corporate Authority . The Company has
taken all corporate action necessary in order to execute, deliver
and perform fully, its obligations under this Agreement and to
consummate the Stock Purchase contemplated hereby. The execution
and delivery by the Company of this Agreement and the consummation
by the Company of the Stock Purchase contemplated hereby have been
duly authorized and approved by the Board of Directors of the
Company and no other corporate proceeding with respect to the
Company is necessary to authorize this Agreement or the Stock
Purchase contemplated hereby. This Agreement has been duly executed
and delivered by the Company and constitutes a valid and binding
agreement of the Company, enforceable against the Company in
accordance with its terms.
Section 3.4 No Violations . The execution and
delivery by the Company of this Agreement does not, and the
performance and consummation by the Company of the Stock Purchase
contemplated hereby will not, directly or indirectly (with or
without the giving of notice or the lapse of time or both):
(a) contravene, conflict with, or constitute or result in a
breach or violation of, or a default under (i) any provision
of the Company’s Certificate of Incorporation or By-laws or
(ii) any resolution adopted by the Board of Directors (or
similar governing body) of the Company; or
(b) contravene, conflict with, or constitute or result in a
breach or violation of any Law (as defined below), award, decision,
injunction, judgment, decree, settlement, order, process, ruling,
subpoena or verdict (whether temporary, preliminary or permanent)
entered, issued, made or rendered by any court, administrative
agency, arbitrator, Governmental Entity or other tribunal of
competent jurisdiction (" Order ") or give any Governmental
Entity or any other Person the right to challenge the Stock
Purchase contemplated hereby.
For purposes of this Agreement, the term " Law " shall
mean any federal, state, local, municipal, foreign, international,
multinational, or other constitution, law, rule, standard,
requirement, administrative ruling, order, ordinance, principle of
common law, legal doctrine, code, regulation, statute, treaty or
process.
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Section 3.5 Actions . There are no
civil, criminal, administrative, investigative or informal actions,
audits, demands, suits, claims, arbitrations, hearings,
litigations, disputes, investigations or other proceedings of any
kind or nature (" Actions ") or Orders issued, pending or,
to the knowledge of the Company, threatened, against the Company or
any of its assets, at law, in equity or otherwise, in, before, by,
or otherwise involving, any Governmental Entity, arbitrator or
other Person that individually or in the aggregate, (i) have
had, do have or could reasonably be expected to have a Material
Adverse Effect on the Company or (ii) question or challenge
the validity or legality of, or have the effect of prohibiting,
preventing, restraining, restricting, delaying, making illegal or
otherwise interfering with, this Agreement, the consummation of the
Stock Purchase contemplated hereby or any action taken or proposed
to be taken by the Company pursuant hereto or in connection with
the Stock Purchase contemplated hereby. To the knowledge of the
Company, no event has occurred or circumstance exists that could
reasonably be expected to give rise to or serve as a basis for the
commencement of any such Action or the issuance of any such
Order.
Section 3.6 SEC Reports . The Company has filed all
reports required to be filed by it under the Securities Act and the
Securities Exchange Act of 1934, as amended (the " Exchange
Act "), including pursuant to Section 13(a) or 15(d)
thereof (the foregoing materials being collectively referred to
herein as the " SEC Reports "), on a timely basis or has
received a valid extension of such time of filing and has filed any
such SEC Reports prior to the expiration of any such extension. As
of their respective dates, the SEC Reports complied in all material
respects with the requirements of the Securities Act and the
Exchange Act and the rules and regulations of the Securities and
Exchange Commission (the " Commission ") promulgated
thereunder, and none of the SEC Reports, when filed, contained 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.
Section 3.7 Internal Accounting Controls; Sarbanes-Oxley
Act of 2002 . The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with
management’s general or specific authorizations,
(ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to
maintain asset accountability, (iii) access to assets is
permitted only in accordance with management’s general or
specific authorization, and (iv) the recorded accountability
for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences. The Company has established disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) for the Company and designed such disclosures controls
and procedures to ensure that material information relating to the
Company, is made known to the certifying officers by others within
those entities, particularly during the period in which the
Company’s Form 10-K or 10-Q, as the case may be, is being
prepared. The Company’s certifying officers have evaluated
the effectiveness of the Company’s controls and procedures as
of the date of its most recently filed periodic report (such date,
the " Evaluation Date "). The Company presented in its most
recently filed periodic report the conclusions of the certifying
officers about the effectiveness of the disclosure controls and
procedures based on their evaluations as of the Evaluation
Date.
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Section 3.8 Trading With the Enemy Act;
Patriot Act . To the knowledge of the Company, no sale of the
Company’s securities by the Company nor the Company’s
use of the proceeds from such sale has violated the Trading with
the Enemy Act, as amended, or any of the foreign assets control
regulations of the United States Treasury Department (31 CFR,
Subtitle B, Chapter V, as amended) or any enabling legislation or
executive order relating thereto. Without limiting the foregoing,
the Company (a) is not a person whose property or interests in
property are blocked pursuant to Section 1 of Executive Order
13224 of September 23, 2001 Blocking Property and Prohibiting
Transactions With Persons Who Commit, Threaten to Commit, or
Support Terrorism (66 Fed. Reg. 49079 (2001)) and (b) to
the knowledge of the Company, does not engage in any dealings or
transactions, or be otherwise associated, with any such person. The
Company is in compliance with the USA Patriot Act of 2001 (signed
into law October 26, 2001).
Section 3.9 Listing of Common Stock . The Common
Stock is eligible to trade and be quoted on, and is quoted on, the
over-the-counter Bulletin Board market maintained by The Nasdaq
Stock Market (the " OTCBB ") and the Company has received no
notice or other communication indicating that such eligibility is
subject to challenge or review by any applicable regulatory agency,
electronic market administrator, or exchange. The Company has not,
and shall not take any action that would preclude, or otherwise
jeopardize, the inclusion of the Common Stock for quotation on the
OTCBB. The Company is, and has no reason to believe that it will
not in the foreseeable future continue to be, in compliance with
all listing requirements of the OTCBB.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Seller as
follows:
Section 4.1 Organization and Good Standing .
Purchaser is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of
Delaware.
Section 4.2 Corporate Authority . Purchaser has the
full legal right, requisite corporate power and authority and has
taken all corporate action necessary in order to execute, deliver
and perform fully, its obligations under this Agreement and to
consummate the Stock Purchase. The execution and delivery by
Purchaser of this Agreement and the consummation by Purchaser of
the Stock Purchase have been duly authorized and approved by the
governing body of Purchaser and no other corporate proceeding with
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