Exhibit 10.1

 

 

STOCK PURCHASE AGREEMENT

 

 

STOCK PURCHASE AGREEMENT, dated as of November 16, 2012 (this “Agreement”), by
and among the person(s) identified on Schedule I to this Agreement as the buyers
(each a “Buyer” and collectively, the “Buyers”; provided, however, that if there
is only one Buyer, then references to the plural “Buyers” will be deemed
references to the singular “Buyer”), the person(s) identified on Schedule I to
this Agreement as the seller (each a “Seller”) and FORECLOSURE SOLUTIONS, INC.,
a Nevada corporation (the “Company”).  The Buyers, the Seller and the Company
are referred to collectively herein as the “Parties”.

 

BACKGROUND

 

The Seller collectively owns 5,000,000 shares (the “Shares”) of the issued and
outstanding Common Stock, no par value per share (“Common Stock”),f the Company.
 The Buyers desire to purchase the Shares from the Seller, and the Seller
desires to sell the Shares to the Buyers in return for cash on the terms set
forth herein.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the premises and the mutual promises herein
made, and in consideration of the representations, warranties, and covenants
herein contained, the Parties, intending to be legally bound, hereby agree as
follows.

 

1.       Definitions.  Capitalized terms used, but not otherwise defined, herein
have the meanings ascribed to such terms in Appendix A hereto.

 

2.       Purchase and Sale of Shares.

 

(a)       Basic Transaction.  On and subject to the terms and conditions of this
Agreement, the Buyers will purchase from the Seller, and the Seller will sell to
the Buyers, the Shares in the amounts set forth opposite their respective names
on Schedule I hereto, for the consideration specified below in this Section 2.

 

(b)       Escrow Accounts.  The Buyers has deposited One Hundred Forty Thousand
Dollars ($140,000) (the “Escrow Amount”) into an escrow account with William R.
Barker, P.A. (the “Cash Escrow Agent”) and have entered into an escrow agreement
with the Cash Escrow Agent dated as of November 5, 2012 (the “Cash Escrow
Agreement”), attached hereto as Exhibit A. The Seller have deposited
certificates representing 5,000,000 shares of common stock of the Company and
the original corporate books and records of the company (the “Escrowed
Documents”) into an escrow account with Procopio, Cory, Hargreaves & Savitch LLP
(the “Document Escrow Agent”) and have entered into an escrow agreement with the
Document Escrow Agent dated as of November 5, 2012 (the “Document Escrow
Agreement”), attached hereto as Exhibit B. Pursuant to the Cash Escrow
Agreement, the Cash Escrow Agent will hold the Escrow Amount in trust for the
benefit of the Buyers until returned to the Buyers or delivered to the Seller as
herein required. Pursuant to the Document Escrow Agreement, the Document Escrow
Agent will hold the Escrowed Documents in trust for the benefit of the Seller
until returned to the Seller or delivered to the Buyers as herein required. The
Escrow Amount will be considered 100% of the Purchase Price (as defined below)
and will be delivered as set forth in the Cash Escrow Agreement and this Section
2.  

 

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(c)       Purchase Price.  The Buyers will pay to the Seller, in the aggregate,
at the Closing, One Hundred Forty Thousand Dollars ($140,000) (which amount
constitutes the Escrow Amount), subject to adjustment as provided in Section
2(f) below, by release of the Escrow Amount to the Seller (collectively, the
“Purchase Price”).

 

(d)       The Closing.  The closing of the transactions contemplated by this
Agreement (the “Closing”) will take place by exchange of documents among the
Parties by fax or electronic transmission, as appropriate, following the
satisfaction or waiver of all conditions to the obligations of the Parties to
consummate the transactions contemplated hereby on such other date as the Buyers
and the Seller may mutually determine (the “Closing Date”).  Once the Buyers and
Seller each have made the respective deliveries called for herein, the Closing
will be deemed to have occurred.

 

(e)       Deliveries at the Closing.  At the Closing, (i) the Seller will
deliver to the Buyers a duly executed copy of this Agreement and the various
certificates, instruments, and documents referred to in Section 7(a)(iii) and
(iv) below, including the Escrowed Documents (ii) the Buyers will deliver to the
Seller a duly executed copy of this Agreement, (iii) the Document Escrow Agent
will deliver to the Buyers stock certificates representing all of the Shares
registered in the names of the respective Buyers as specified in Schedule I or
endorsed in blank or accompanied by duly executed assignment documents and
including a Medallion Guarantee, and (iv) the Cash Escrow Agent will deliver to
the Seller the consideration specified in Section 2 above.

 

(f)       Adjustment for Outstanding Indebtedness.  The Purchase Price will be
decreased by the amount of any outstanding Indebtedness of the Company existing
as of the Closing Date. If, as of the Closing Date, there exists outstanding
Indebtedness, the Buyers will pay off such Indebtedness directly in accordance
with a disbursement letter to be mutually agreed upon among the Buyers and the
Seller.  In no event will the Buyers be required to make any payments in excess
of the Purchase Price payable hereunder.

 

3.       Representations and Warranties Concerning the Transaction.

 

(a)       Representations and Warranties of the Seller.  The Seller jointly and
severally represents and warrants to the Buyers that the statements contained in
this Section 3(a) are correct and complete as of the date of this Agreement,
except as set forth in Annex I attached hereto.

 

i)       Authorization of Transaction.   Seller has full power and authority to
execute and deliver this Agreement and to perform his, her or its obligations
hereunder.  This Agreement constitutes the valid and legally binding obligation
of the Seller, enforceable in accordance with its terms and conditions.  No
Seller need give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any Governmental Authority in order to
consummate the transactions contemplated by this Agreement.

 

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(ii)       Noncontravention.  Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(A) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any Governmental
Authority to which any of the Seller is subject, or (B) conflict with, result in
a breach of, constitute a default under, result in the acceleration of, create
in any party the right to accelerate, terminate, modify, or cancel, or require
any notice under any agreement, contract, lease, license, instrument, or other
arrangement to which Seller is a party or by which Seller is bound or to which
any of Seller’s assets is subject.

 

(iii)       Brokers' Fees.  The Seller does not have any Liability or obligation
to pay any fees or commissions to any broker, finder, or agent with respect to
the transactions contemplated by this Agreement for which any Buyers or the
Company could become liable or obligated.  The Seller specifically represents
and warrants to the Buyers that none of the Buyers nor the Company is or will
become obligated to any finder, broker or agent, by reason of any actions taken
or to be taken by the Seller or the Company.

 

(iv)       Shares.   Seller is the owner of record and the beneficial owner of
the number of Shares set forth opposite his name on Schedule I, free and clear
of any restrictions on transfer (other than any restrictions under the
Securities Act and state securities laws), Taxes, Security Interests, options,
warrants, purchase rights, contracts, commitments, equities, claims, and
demands.   Seller is not a party to any option, warrant, purchase right, or
other contract or commitment that could require any Seller to sell, transfer, or
otherwise dispose of any capital stock of the Company (other than this
Agreement).   Seller is not a party to any voting trust, proxy, or other
agreement or understanding with respect to the voting of any capital stock of
the Company.  The Shares were duly and validly issued and are fully-paid and
non-assessable.  Upon delivery of the Shares to the Buyers pursuant to this
Agreement, the Buyers will acquire valid title thereto, free and clear of any
Security Interests.

 

(b)       Representations and Warranties of the Buyers.  The Buyers jointly and
severally represent and warrant to the Seller that the statements contained in
this Section 3(b) are correct and complete as of the date of this Agreement,
except as set forth in Annex II attached hereto.

 

(i)       Authorization of Transaction.  Each of the Buyers has full power and
authority to execute and deliver this Agreement and to perform his or its
respective obligations hereunder, and the execution, delivery and performance of
this Agreement has been authorized by all requisite corporate action (if any) on
the part of any corporate Buyers. This Agreement constitutes the valid and
legally binding obligation of the Buyers, enforceable against each of them in
accordance with its terms and conditions.  The Buyers need not give any notice
to, make any filing with, or obtain any authorization, consent, or approval of
any Governmental Authority in order to consummate the transactions contemplated
by this Agreement.

 

(ii)       Noncontravention.  Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(A) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any Governmental
Authority to which any Buyer is subject, or (B) conflict with, result in a
breach of, constitute a default under, result in the acceleration of, create in
any party the right to accelerate, terminate, modify, or cancel, or require any
notice under any agreement, contract, lease, license, instrument, or other
arrangement to which any Buyer is a party or by which it is bound or to which
any of its assets are subject.

 

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(iii)       Brokers' Fees.  The Buyers have no Liability or obligation to pay
any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which Seller could become liable
or obligated.

 

(iv)       Status of the Buyer.  Each Buyer represents and warrants that (A)
such Buyer is acquiring the Shares for his or its own account for investment and
not for the account of any other person and not with a view to or for
distribution, assignment or resale in connection with any distribution within
the meaning of the Securities Act, (B) such Buyer agrees not to sell or
otherwise transfer the Shares unless they are registered under the Securities
Act and any applicable state securities laws, or an exemption or exemptions from
such registration are available, (C) such Buyer represents that it has knowledge
and experience in financial and business matters such that it is capable of
evaluating the merits and risks of acquiring the Shares, (D) such Buyer has had
access to all documents, records, and books of the Company pertaining to the
investment and was provided the opportunity ask questions and receive answers
regarding the terms and conditions of the acquisition of the Shares and to
obtain any additional information which the Company possesses or was able to
acquire without unreasonable effort and expense, and such Buyer received
information concerning the Company, the Seller and the Shares equivalent to that
which would have been included in a registration statement prepared under the
Securities Act of 1933, as amended, and (E) such Buyer has no need for the
liquidity in its investment in the Company and could afford the complete loss of
such investment.

 

(iv)       Buyers not Insolvent.  No Buyer is insolvent or bankrupt and no Buyer
will be insolvent or bankrupt after purchasing the Shares, and Closing of the
transactions herein contemplated will constitute each Buyer’s acknowledgment
that the Shares’ value are equal to the Purchase Price.  

 

(vi)       No General Solicitation.  No Buyer was solicited by any Seller or
anyone else on any Seller’s behalf to enter into any transaction whatever by any
form of general solicitation or general advertising, as those terms are defined
in Regulation D under the Securities Act.

 

(vii)       Risk Acknowledgment.  Each Buyer acknowledges that at the time of
the Closing the Company will have no assets or operating business and that the
Shares are speculative and involve a high degree of risk, including among many
other risks that the Shares will be restricted as elsewhere described in this
Agreement and will not be transferable unless first registered under the
Securities Act or pursuant to an exemption from such act's registration
requirements.

 

(viii)       Restrictive Legend and Stop Order.  The Shares when delivered to
Buyers will not be registered under the Securities Act or applicable state laws,
but will be transferred in reliance upon the exemptions from registration
provided by Section 4(1) of the Securities Act and under analogous state
securities laws, on the grounds that the sale of the Shares does not involve any
public offering and that Seller is not thereby acting as an issuer, underwriter
or dealer.  The Shares are "restricted securities" as that term is defined in
Rule 144(a) of the General Rules and Regulations under the Securities Act and
must be held indefinitely, and the prior written consent of the Company will be
necessary for their resale or other transfer, unless they are subsequently
registered under the Act or an exemption from the Act’s registration
requirements is available for their resale or transfer. All certificates
delivered evidencing the Shares will bear a restrictive legend that refers to
the Securities Act.

 

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4.       Representations and Warranties Concerning the Company.  The Seller
represents and warrants to the Buyers that the statements contained in this
Section 4 are correct and complete as of the date of this Agreement, except as
set forth in the disclosure schedule attached hereto, if any (the “Disclosure
Schedule”).  The Disclosure Schedule will be arranged in paragraphs
corresponding to the lettered and numbered paragraphs contained in this Section
4.

 

(a)       SEC Reports.  The Company has filed all reports, registration
statements, definitive proxy statements and other documents and all amendments
thereto and supplements thereof required to be filed by it with the U.S.
Securities and Exchange Commission since July 29, 2011 (the “SEC Reports”), all
of which have complied in all material respects with the applicable requirements
of the Securities Act, the Exchange Act and the rules and regulations
promulgated thereunder.  As of the respective dates of filing in final or
definitive form (or, if amended or superseded by a subsequent filing, then on
the date of such subsequent filing), none of the Company’s SEC Reports 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 in which they were made, not misleading.

 

(b)       Organization of Company.  The Company is a corporation duly organized,
validly existing, and in good standing under the laws of the State of Nevada.
 The Company is duly authorized to conduct business and is in good standing
under the laws in every jurisdiction in which the ownership or use of property
or the nature of the business conducted by it makes such qualification necessary
except where the failure to be so qualified or in good standing would not have a
Material Adverse Effect.  “Material Adverse Effect” means any material adverse
effect on the business, operations, assets, financial condition or prospects of
the Company or its Subsidiaries, if any, taken as a whole or on the transactions
contemplated hereby or by the agreements or instruments to be entered into in
connection herewith.  The Company has full corporate power and authority and all
licenses, permits, and authorizations necessary to carry on its business. The
Company has no subsidiaries and does not control any entity, directly or
indirectly, or have any direct or indirect equity participation in any other
entity.  The Seller has delivered to the Buyers true, correct and complete
copies of the Articles of Incorporation and Bylaws of the Company, as amended
through the date hereof.

 

(c)       Capitalization; No Restrictive Agreements.  

 

(i)       The Company’s authorized capital stock, as of the date of this
Agreement, consists of 190,000,000 shares of Common Stock, $0.0001 par value per
share, of which 7,000,000 shares are issued and outstanding.  

 

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(ii)       The Company has not reserved any shares of its Common Stock for
issuance upon the exercise of options, warrants or any other securities that are
exercisable or exchangeable for, or convertible into, Common Stock.  All of the
issued and outstanding shares of Common Stock are validly issued, fully paid and
non-assessable and have been issued in compliance with applicable laws,
including, without limitation, applicable federal and state securities laws.
 There are no outstanding options, warrants or other rights of any kind to
acquire any additional shares of capital stock of the Company or securities
exercisable or exchangeable for, or convertible into, capital stock of the
Company, nor is the Company committed to issue any such option, warrant, right
or security.  There are no agreements relating to the voting, purchase or sale
of capital stock (i) between or among the Company and any of its stockholders,
(ii) between or among the Seller and any third party, or (iii) to the best
knowledge of the Seller between or among any of the Company’s stockholders.  The
Company is not a party to any agreement granting any stockholder of the Company
the right to cause the Company to register shares of the capital stock of the
Company held by such stockholder under the Securities Act.

 

(d)       Financial Statements.  The Seller has provided the Buyers with audited
balance sheets and statements of operations, changes in stockholders; deficit
and cash flows for the years ended December 31, 2010 and 2011 (collectively, the
"Financial Statements").  The Financial Statements have been prepared in
accordance with United States generally accepted accounting principles applied
on a consistent basis, fairly present the financial condition, results of
operations and cash flows of the Company as of the respective dates thereof and
for the periods referred to therein and are consistent with the books and
records of the Company.  The Company does not have any Liability (whether known
or unknown, whether asserted or unasserted, whether absolute or contingent,
whether accrued or unaccrued, whether liquidated or unliquidated, and whether
due or to become due), including any Liability for Taxes, except for Liabilities
expressly specified in the Financial Statements (none of which results from,
arises out of, relates to, is in the nature of, or was caused by any breach of
contract, breach of warranty, tort, infringement, or violation of law).

 

(e)       Absence of Certain Changes.  Since December 31, 2011, there has not
been any event or condition of any character which has materially adversely
affected, or may be expected to materially adversely affect, the Company’s
business or prospects, including, but not limited to any material adverse change
in the condition, assets, Liabilities (existing or contingent) or business of
the Company from that shown in the Financial Statements.

 

(f)       Legal Proceedings.  As of the date of this Agreement, there is no
legal, administrative, investigatory, regulatory or similar action, suit, claim
or proceeding which is pending or, to the Seller’s knowledge, threatened against
the Company which, if determined adversely to the Company, could have,
individually or in the aggregate, a Material Adverse Effect.

 

(g)       Legal Compliance.  The Company has complied in all material respects
with all applicable laws (including rules, regulations, codes, plans,
injunctions, judgments, orders, decrees, rulings, and charges thereunder) of all
Governmental Authorities, and no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, demand, or notice has been filed or
commenced against the Company alleging any failure so to comply.  To the
Seller’s knowledge, neither the Company, nor any officer, director, employee,
consultant or agent of the Company has made, directly or indirectly, any payment
or promise to pay, or gift or promise to give or authorized such a promise or
gift, of any money or anything of value, directly or indirectly, to any
governmental official, customer or supplier for the purpose of influencing any
official act or decision of such official, customer or supplier or inducing him,
her or it to use his, her or its influence to affect any act or decision of a
Governmental Authority or customer, under circumstances which could subject the
Company or any officers, directors, employees or consultants of the Company to
administrative or criminal penalties or sanctions.

 

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(h)       Tax Matters.

 

(i)       The Company has filed all Tax Returns that it was required to file.
 All such Tax Returns were correct and complete in all material respects.  All
Taxes owed by the Company have been paid. The Company is not currently the
beneficiary of any extension of time within which to file any Tax Return.  No
claim has ever been made by an authority in a jurisdiction where the Company
does not file Tax Returns that it is or may be subject to taxation by that
jurisdiction.  There are no Security Interests on any of the assets of the
Company that arose in connection with any failure (or alleged failure) to pay
any Tax.

 

(ii)       The Company has withheld and paid all Taxes required to have been
withheld and paid in connection with amounts paid or owing to any employee,
independent contractor, creditor, stockholder, or other third party.

 

(iii)       The Seller does not expect any authority to assess any additional
Taxes for any period for which Tax Returns have been filed.  There is no dispute
or claim concerning any Liability with respect to any Taxes (a “Tax Liability”)
of the Company either (A) claimed or raised by any authority in writing or (B)
as to which the Seller has Knowledge based upon personal contact with any agent
of such authority.  No tax returns of the Company have ever been audited or are
currently the subject of an audit. The Seller has delivered to the Buyers
correct and complete copies of all federal and state income and other material
Tax Returns, examination reports, and statements of deficiencies assessed
against or agreed to by the Company since inception.

 

(i)       Liabilities of the Company.  As of the date hereof, the Company has
total Liabilities of $0.00. In no event will any Liability of the Company
existing prior to or at the time of the Closing become the Liability of the
Buyers or remain the Liability of the Company following the Closing.

 

(j)       Market Maker.  The Company has at least one market maker for its
Common Stock and such Market Maker has obtained all permits and made all filings
necessary in order for such market maker to continue as a market maker in the
Company’s Common Stock.

 

(k)       Shell Company.  The Company is not now and has never been a Shell
Company as defined in Rule 12(b)(2) promulgated under the Exchange Act.  

 

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(l)       Disclosure.  No representation or warranty by the Seller contained in
this Agreement, and no statement contained in the any document, certificate or
other instrument delivered or to be delivered by or on behalf of the Seller
pursuant to this Agreement, contains or will contain any untrue statement of a
material fact or omit or will omit to state any material fact necessary, in
light of the circumstances under which it was or will be made, in order to make
the statements herein or therein not misleading.

 

5.       [reserved].  

 

 

6.       Post-Closing Covenants.  The Parties agree as follows with respect to
the period following the Closing.

 

(a)       General.  In case at any time after the Closing any further action is
necessary or desirable to carry out the purposes of this Agreement, each of the
Parties will take such further action (including the execution and delivery of
such further instruments and documents) as any other Party may reasonably
request, all at the sole cost and expense of the requesting Party (unless the
requesting Party is entitled to indemnification therefor under Section 8 below).
 The Seller acknowledges and agrees that from and after the Closing the Buyers
will be entitled to possession of all documents, books, records (including Tax
records), agreements, and financial data of any sort relating to the Company.

 

(b)       Litigation Support.  In the event and for so long as any Party
actively is contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand in connection with
(i) any transaction contemplated under this Agreement or (ii) any fact,
situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction on or prior
to the Closing Date involving the Company, the other Party will cooperate with
him or it and his or its counsel in the contest or defense, make available their
personnel, and provide such testimony and access to their books and records as
will be necessary in connection with the contest or defense, all at the sole
cost and expense of the contesting or defending Party (unless the contesting or
defending Party is entitled to indemnification therefor under Section 8 below).

 

(c)       Transition.  The Seller will not take any action that is designed or
intended to have the effect of discouraging any lessor, licensor, customer,
supplier, or other business associate of the Company from maintaining the same
business relationships with the Company after the Closing as it maintained with
the Company prior to the Closing.

 

(d)       Name Change. It is understand, acknowledged and agreed that promptly
after the Closing, the Company will change its corporate name to “General Hemp,
Inc.”, and the parties will cooperate and facilitate such name change as well as
cooperate and take all action necessary to change the Company’s ticker symbol in
accordance with the Company’s name.

 

7.       Conditions to Obligation to Close.

 

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(a)       Conditions to Obligation of the Buyers.  The obligation of the Buyers
to consummate the transactions to be performed by them in connection with the
Closing is subject to satisfaction of the following conditions:

 

(i)       the representations and warranties set forth in Section 3(a) and
Section 4 above will be true and correct in all material respects;

 

(ii)       the Seller will have performed and complied with all of the covenants
hereunder in all material respects through the Closing;

 

(iii)       the Buyers will have received the resignations, effective
immediately, of each officer of the Company and the designees specified by the
Buyers will have been appointed as officers of the Company;

 

(iv)       will have delivered evidence reasonably satisfactory to Buyers of the
Company’s corporate organization and proceedings and its existence in each
jurisdiction in which it is incorporated or qualified to do business, including
the Escrowed Documents; and

 

(v)       all actions to be taken by the Seller in connection with consummation
of the transactions contemplated hereby and all certificates, opinions,
instruments, and other documents required to effect the transactions
contemplated hereby will be satisfactory in form and substance to the Buyers.

 

The Buyers may waive any condition specified in this Section 7(a) at or prior to
the Closing, and its delivery to Seller of the things required in Section 2(e)
will constitute Buyers’ declaration that all conditions precedent to its
obligation to close have been satisfied.

 

(b)       Conditions to Obligation of the Seller.  The obligation of the Seller
to consummate the transactions to be performed by them in connection with the
Closing is subject to satisfaction of the following conditions:

 

(i)       the representations and warranties set forth in Section 3(b) above
will be true and correct in all material respects at and as of the Closing Date;

 

(vi)       the Buyers will have performed and complied with all of its covenants
hereunder in all material respects through the Closing; and

 

(iii)       all actions to be taken by the Buyers in connection with
consummation of the transactions contemplated hereby and all certificates,
opinions, instruments, and other documents required to effect the transactions
contemplated hereby will be satisfactory in form and substance to the Seller.

 

The Seller may waive any condition specified in this Section 7(b) at or prior to
the Closing and their delivery to Buyers of the things required in Section 2(e)
will constitute Seller’s declaration that all conditions precedent to its
obligation to close have been satisfied.

 

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8.       Remedies for Breaches of this Agreement.

 

(a)       Survival of Representations and Warranties.  All of the
representations and warranties of the Parties will survive the Closing hereunder
(even if a Party knew or had reason to know of any misrepresentation or breach
of warranty by another Party at the time of Closing) and continue in full force
and effect for a period of three years thereafter; provided, however, that the
representations and warranties contained in Sections 3(a), 3(b) and 4(c), (h)
and (i) will survive the Closing hereunder (even if a Party knew or had reason
to know of any misrepresentation or breach of warranty by another Party at the
time of Closing) and continue in full force and effect for a period equal to the
applicable statute of limitations.

 

(b)       Indemnification Provisions for Benefit of the Buyer.

 

(i)       In the event of a breach or inaccuracy of (or in the event any third
party alleges facts that, if true, would mean the Seller have breached) any of
Seller’s representations, warranties, and covenants contained herein, and, if
there is an applicable survival period pursuant to Section 8(a) above, provided
that the Buyers make a written claim for indemnification against the Seller
pursuant to Section 10(h) below within such survival period, then the Sellers
will indemnify the Buyers from and against the entirety of any Adverse
Consequences the Buyers may suffer through and after the date of the claim for
indemnification (including any Adverse Consequences the Buyers may suffer after
the end of any applicable survival period) resulting from, arising out of,
relating to, in the nature of, or caused by the breach (or the alleged breach).

 

(ii)       The Seller will indemnify the Buyers from and against the entirety of
any Adverse Consequences the Buyers may suffer resulting from, arising out of,
relating to, in the nature of, or caused by any Liability of the Company
(whether or not accrued or otherwise disclosed) (x) for any Taxes of the Company
with respect to any Tax year or portion thereof ending on or before the Closing
Date ((or for any Tax year beginning before and ending after the Closing Date to
the extent allocable (determined in a manner consistent with Section 9) to the
portion of such period beginning before and ending on the Closing Date)) and (y)
for the unpaid Taxes of any Person (other than the Company) under Reg. §1.1502-6
(or any similar provision of state, local, or foreign law), as a transferee or
successor, by contract, or otherwise.

 

(iii)       The Seller will indemnify the Buyers from and against the entirety
of any Liabilities arising out of the ownership of the Shares or operation of
the Company prior to the Closing.

 

(iv)       The Seller will indemnify the Buyers from and against the entirety of
any Adverse Consequences the Buyers may suffer resulting from, arising out of,
relating to, in the nature of, or caused by any Indebtedness of the Company
existing as of the Closing Date.

 

(c)       Indemnification Provisions for Benefit of the Seller.  In the event
the Buyers breach (or in the event any third party alleges facts that, if true,
would mean the Buyers has breached) any of their representations, warranties,
and covenants contained herein, and, if there is an applicable survival period
pursuant to Section 8(a) above, provided that the Seller make a written claim
for indemnification against the Buyers pursuant to Section 10(h) below within
such survival period, then the Buyers will, jointly and severally, indemnify the
Seller from and against the entirety of any Adverse Consequences the Seller may
suffer through and after the date of the claim for indemnification (including
any Adverse Consequences the Seller may suffer after the end of any applicable
survival period) resulting from, arising out of, relating to, in the nature of,
or caused by the breach (or the alleged breach).

 

-10-

 

(d)       Matters Involving Third Parties.

 

(i)       If any third party will notify any Party (the “Indemnified Party”)
with respect to any matter (a “Third Party Claim”) which may give rise to a
claim for indemnification against any other Party (the “Indemnifying Party”)
under this Section 8, then the Indemnified Party will promptly notify each
Indemnifying Party thereof in writing; provided, however, that no delay on the
part of the Indemnified Party in notifying any Indemnifying Party will relieve
the Indemnifying Party from any obligation hereunder unless (and then solely to
the extent) the Indemnifying Party thereby is prejudiced.

 

(ii)       Any Indemnifying Party will have the right to defend the Indemnified
Party against the Third Party Claim with counsel of its choice reasonably
satisfactory to the Indemnified Party so long as (A) the Indemnifying Party
notifies the Indemnified Party in writing within 10 days after the Indemnified
Party has given notice of the Third Party Claim that the Indemnifying Party will
indemnify the Indemnified Party from and against the entirety of any Adverse
Consequences the Indemnified Party may suffer resulting from, arising out of,
relating to, in the nature of, or caused by the Third Party Claim, (B) the
Indemnifying Party provides the Indemnified Party with evidence reasonably
acceptable to the Indemnified Party that the Indemnifying Party will have the
financial resources to defend against the Third Party Claim and fulfill its
indemnification obligations hereunder, (C) the Third Party Claim involves only
money damages and does not seek an injunction or other equitable relief, (D)
settlement of, or an adverse judgment with respect to, the Third Party Claim is
not, in the good faith judgment of the Indemnified Party, likely to establish a
precedential custom or practice adverse to the continuing business interests of
the Indemnified Party, and (E) the Indemnifying Party conducts the defense of
the Third Party Claim actively and diligently.

 

(ii)       So long as the Indemnifying Party is conducting the defense of the
Third Party Claim in accordance with Section 8(d)(ii) above, (A) the Indemnified
Party may retain separate co-counsel at its sole cost and expense and
participate in the defense of the Third Party Claim, (B) the Indemnified Party
will not consent to the entry of any judgment or enter into any settlement with
respect to the Third Party Claim without the prior written consent of the
Indemnifying Party (not to be withheld unreasonably), and (C) the Indemnifying
Party will not consent to the entry of any judgment or enter into any settlement
with respect to the Third Party Claim without the prior written consent of the
Indemnified Party (not to be withheld unreasonably).

 

(iv)       In the event any of the conditions in Section 8(d)(ii) above is or
becomes unsatisfied, however, (A) the Indemnified Party may defend against, and
consent to the entry of any judgment or enter into any settlement with respect
to, the Third Party Claim in any manner it reasonably may deem appropriate (and
the Indemnified Party need not consult with, or obtain any consent from, any
Indemnifying Party in connection therewith), (B) the Indemnifying Parties will
reimburse the Indemnified Party promptly and periodically for the costs of
defending against the Third Party Claim (including attorneys' fees and
expenses), and (C) the Indemnifying Parties will remain responsible for any
Adverse Consequences the Indemnified Party may suffer resulting from, arising
out of, relating to, in the nature of, or caused by the Third Party Claim to the
fullest extent provided in this Section 8.

 

-11-

 

(e)       Other Indemnification Provisions.  Each Seller hereby agrees that he
will not make any claim for indemnification against the Company by reason of the
fact that he was a director, officer, employee, or agent of the Company or was
serving at the request of the Company as a partner, trustee, director, officer,
employee, or agent of another entity (whether such claim is for judgments,
damages, penalties, fines, costs, amounts paid in settlement, losses, expenses,
or otherwise and whether such claim is pursuant to any statute, charter
document, bylaw, agreement, or otherwise) with respect to any action, suit,
proceeding, complaint, claim, or demand brought by the Buyers against such
Seller (whether such action, suit, proceeding, complaint, claim, or demand is
pursuant to this Agreement, applicable law, or otherwise).

 

9.       Tax Matters.  

 

(a)       The following provisions will govern the allocation of responsibility
as between the Buyers and the Seller for certain tax matters following the
Closing Date.  Seller has caused or will cause federal and applicable state tax
returns to be filed for the Company covering the year ended December 31, 2011,
and no taxes were owed under any such returns.  Buyers will cause the Company to
prepare and file all tax returns due for 2012 and subsequent years.

 

(b)       Seller agrees to provide to Buyers copies of all tax returns in
Seller’s possession filed by the Company and of all books and records of the
Company in Seller’s possession.   Seller also agrees to cooperate with Buyers
and the Company to answer their questions regarding all tax returns filed by the
Company while any Seller was an executive officer and director of the Company.

 

(c)       All transfer, documentary, sales, use, stamp, registration and other
such Taxes and fees (including any penalties and interest) incurred in
connection with this Agreement will be paid by the Seller when due, and Seller
will, at their own expense, file all necessary Tax Returns and other
documentation with respect to all such transfer, documentary, sales, use, stamp,
registration and other Taxes and fees, and, if required by applicable law, the
Buyers will, and will cause its affiliates to, join in the execution of any such
Tax Returns and other documentation.

 

10.       [reserved].       

 

11.       Miscellaneous.

 

(a)       Facsimile Execution and Delivery.  Facsimile execution and delivery of
this Agreement is legal, valid and binding execution and delivery for all
purposes.

 

-12-

 

(b)       Press Releases and Public Announcements.  Until the Closing, no Party
will issue any press release or make any public announcement relating to the
subject matter of this Agreement without the prior written approval of the other
Party; provided, however, that any Party may make any public disclosure it
believes in good faith is required by applicable law or any listing or trading
agreement concerning its publicly-traded securities (in which case the
disclosing Party will use its best efforts to advise the other Parties prior to
making the disclosure).

 

(c)       No Third-Party Beneficiaries.  This Agreement will not confer any
rights or remedies upon any Person other than the Parties and their respective
successors and permitted assigns.

 

(d)       Entire Agreement.  This Agreement (including the documents referred to
herein) constitutes the entire agreement among the Parties and supersedes any
prior understandings, agreements, or representations by or among the Parties,
written or oral, to the extent they related in any way to the subject matter
hereof.

 

(e)       Succession and Assignment.  This Agreement will be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted assigns.  No Party may assign either this Agreement or any of his
or its rights, interests, or obligations hereunder without the prior written
approval of the Buyers and the Seller; provided, however, that the Buyers may
(i) assign any or all of its rights and interests hereunder to one or more of
its Affiliates, and (ii) designate one or more of its Affiliates to perform its
obligations hereunder, but no such assignment will operate to release Buyers or
a successor from any obligation hereunder unless and only to the extent that the
Seller agrees in writing.

 

(f)       Counterparts.  This Agreement may be executed in one or more
counterparts, each of which will be deemed an original but all of which together
will constitute one and the same instrument.

 

(g)       Headings.  The section headings contained in this Agreement are
inserted for convenience only and will not affect in any way the meaning or
interpretation of this Agreement.

 

(h)       Notices.  All notices, requests, demands, claims, and other
communications hereunder will be in writing.  Any notice, request, demand,
claim, or other communication hereunder will be deemed duly given if (and then
two business days after) it is sent by registered or certified mail, return
receipt requested, postage prepaid, and addressed to the intended recipient at
its address as specified on Schedule I hereto. Any Party may send any notice,
request, demand, claim, or other communication hereunder to the intended
recipient at the address set forth above using any other means (including
personal delivery, expedited courier, messenger service, telecopy, telex,
ordinary mail, or electronic mail), but no such notice, request, demand, claim,
or other communication will be deemed to have been duly given unless and until
it actually is received by the intended recipient.  Any Party may change the
address to which notices, requests, demands, claims, and other communications
hereunder are to be delivered by giving the other Parties notice in the manner
herein set forth.

 

-13-

 

(i)       Governing Law.  This Agreement will be governed by and construed in
accordance with the domestic laws of the State of California without giving
effect to any choice or conflict of law provision or rule that would cause the
application of the laws of any jurisdiction other than the State of California.

 

(j)       Amendments and Waivers.  No amendment of any provision of this
Agreement will be valid unless the same will be in writing and signed by the
Buyers and the Seller.  No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, will be deemed to extend to any prior or subsequent default,
misrepresentation, or breach of warranty or covenant hereunder or affect in any
way any rights arising by virtue of any prior or subsequent such occurrence.

 

(k)       Severability.  Any term or provision of this Agreement that is invalid
or unenforceable in any situation in any jurisdiction will not affect the
validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.

 

(l)       Expenses.  Each of the Parties and the Company will bear his or its
own costs and expenses (including legal fees and expenses) incurred in
connection with this Agreement and the transactions contemplated hereby.  The
Seller agrees that the Company has not borne nor will it bear any of the
Seller’s costs and expenses (including any legal fees and expenses) in
connection with this Agreement or any of the transactions contemplated hereby.

 

(m)       Construction.  The Parties have participated jointly in the
negotiation and drafting of this Agreement.  In the event an ambiguity or
question of intent or interpretation arises, this Agreement will be construed as
if drafted jointly by the Parties and no presumption or burden of proof will
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement.  Any reference to any federal, state or local
statute or law will be deemed also to refer to all rules and regulations
promulgated thereunder, unless the context requires otherwise.  The word
“including” means including without limitation.  The Parties intend that each
representation, warranty, and covenant contained herein will have independent
significance.  If any Party has breached any representation, warranty, or
covenant contained herein in any respect, the fact that there exists another
representation, warranty, or covenant relating to the same subject matter
(regardless of the relative levels of specificity) which the Party has not
breached will not detract from or mitigate the fact that the Party is in breach
of the first representation, warranty, or covenant. Nothing in the Disclosure
Schedule will be deemed adequate to disclose an exception to a representation or
warranty made herein, however, unless the Disclosure Schedule identifies the
exception with particularity and describes the relevant facts in detail.
 Without limiting the generality of the foregoing, the mere listing (or
inclusion of a copy) of a document or other item will not be deemed adequate to
disclose an exception to a representation or warranty made herein (unless the
representation or warranty has to do with the existence of the document or other
item itself).

 

(n)       Incorporation of Exhibits, Annexes, and Schedules.  The Exhibits,
Annexes, and Schedules identified in this Agreement are incorporated herein by
reference and made a part hereof.

 

-14-

 

(o)       Specific Performance.  Each of the Parties acknowledges and agrees
that the other Parties would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached.  Accordingly, each of the Parties agrees that
the other Parties will be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Agreement and to enforce specifically this
Agreement and the terms and provisions hereof in any action instituted in any
court of the United States or any state thereof having jurisdiction over the
Parties and the matter (subject to the provisions set forth in Section 10(p)
below), in addition to any other remedy to which they may be entitled, at law or
in equity.

 

(p)       Submission to Jurisdiction.  Each of the Parties submits to the
jurisdiction of any state or federal court sitting in California, in any action
or proceeding arising out of or relating to this Agreement and agrees that all
claims in respect of the action or proceeding may be heard and determined in any
such court. Each of the Parties waives any defense of inconvenient forum to the
maintenance of any action or proceeding so brought and waives any bond, surety,
or other security that might be required of any other Party with respect
thereto.  Any Party may make service on any other Party by sending or delivering
a copy of the process to the Party to be served at the address and in the manner
provided for the giving of notices in Section 10(h) above.  Nothing in this
Section 10(p), however, will affect the right of any Party to bring any action
or proceeding arising out of or relating to this Agreement in any other court or
to serve legal process in any other manner permitted by law or at equity.  Each
Party agrees that a final judgment in any action or proceeding so brought will
be conclusive and may be enforced by suit on the judgment or in any other manner
provided by law or at equity.

 

 

 

 

 

[SIGNATURE PAGE FOLLOWS]

 

-15-

 

 

 

IN WITNESS WHEREOF, the undersigned Parties have executed this Agreement as of
the date first above written.

 

 

 

  SELLER:               By:        /s/ H.J. Cole                              
H.J. COLE           COMPANY:       FORECLOSURE SOLUTIONS, INC.           By:
       /s/ H. J. Cole                               Name (print):        H.J.
Cole                            Title:
       President                            

 

 

 

 

-16-

 

 

 

  BUYERS:       MERCIA HOLDINGS, LLC           By:        /s/ Bart
Mackay                            Name: Bart Mackay                            
      Its: Manager           MAI DUN LIMITED, LLC           By:        /s/ Bart
Mackay                            Name: Bart Mackay                            
      Its: Manager       GENERAL HEMP, INC.           By:        /s/ Stuart W.
Titus                            Name: Stuart Titus                            
      Its: President           BAMBURGH HOLDINGS LLC           By:        /s/
Nicholas R. Filardo                     Name: Nicholas
Filardo                            Its: Manager

 

 

-17-

 

 

 

APPENDIX A

 

DEFINITIONS

 

 

 

As used herein, the following terms have the respective meanings set forth
below:

 

“Adverse Consequences” means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, amounts paid
in settlement, Liabilities, obligations, Taxes, liens, losses, lost value,
expenses, and fees, including court costs and attorneys' fees and expenses.

 

“Affiliate” has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.

 

“Buyer” has the meaning set forth in the preface above.

 

“Closing” has the meaning set forth in Section 2(d) above.

 

“Closing Date” has the meaning set forth in Section 2(d) above.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Company” means Foreclosure Solutions, Inc. and its subsidiaries, if any.

 

“Disclosure Schedule” has the meaning set forth in Section 4 above.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Financial Statements” has the meaning set forth in Section 4(d) above.

 

“GAAP” means United States generally accepted accounting principles as in effect
from time to time.

 

“Governmental Authority” means any federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
or any court of the United States of America or any political subdivision
thereof, or of any other country.

 

“Indebtedness” of any Person means, in each case whether or not accrued on the
books of such Person, (a) all indebtedness of such Person for borrowed money or
for the deferred purchase price of property or services, (b) all obligations of
such Person upon which interest charges are customarily paid or which are
evidenced by notes, bonds, debentures, credit agreements or similar agreements
or investments, (c) all obligations of such Person under conditional sale or
other title retention agreements relating to property or assets purchased by
such Person, (d) all obligations of such Person under capitalized leases, (e)
all obligations of such Person in respect of acceptances, letters of credit or
letters of guaranty issued or created for the account of such Person, and (f)
all liabilities secured by any Security Interest on any property owned by such
Person, whether or not such Person has assumed or otherwise become liable for
the payment thereof.

 

-18-

 

 

 

“Indemnified Party” has the meaning set forth in Section 8(d)(i) above.

 

“Indemnifying Party” has the meaning set forth in Section 8(d)(i) above.

 

“Liability” means any liability (whether known or unknown, whether asserted or
unasserted, whether absolute or contingent, whether accrued or unaccrued,
whether liquidated or unliquidated, and whether due or to become due), including
any liability for Taxes.

 

“Ordinary Course of Business” means the ordinary course of business consistent
with past custom and practice (including with respect to quantity and
frequency).

 

“Parties” has the meaning set forth in the preface above.

 

“Person” means an individual, a partnership, a corporation, a limited liability
company, an association, a joint stock company, a trust, a joint venture, an
unincorporated organization, or a governmental entity (or any department,
agency, or political subdivision thereof).

 

“Purchase Price” has the meaning set forth in Section 2(b) above.

 

“SEC” means the U.S. Securities and Exchange Commission.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Security Interest” means any adverse claim, mortgage, pledge, lien,
encumbrance, option, restriction on transfer, easement, right of way, matter of
survey, charge, or other security interest.

 

“Seller” has the meaning set forth in the preface above.

 

“Shares” has the meaning set forth in the recitals above.

 

“Subsidiary” means any corporation with respect to which a specified Person (or
a Subsidiary thereof) owns a majority of the common stock or has the power to
vote or direct the voting of sufficient securities to elect a majority of the
directors.

  

“Tax” means any federal, state or local income, gross receipts, license,
payroll, employment, excise, severance, stamp, occupation, premium, windfall
profits, environmental (including taxes under Code §59A), customs duties,
capital stock, franchise, profits, withholding, social security (or similar),
unemployment, disability, real property, personal property, sales, use,
transfer, registration, value added, alternative or add-on minimum, estimated,
or other tax of any kind whatsoever, including any interest, penalty, or
addition thereto, whether disputed or not.

  

“Tax Liability” has the meaning set forth in Section 4(h)(iii) above.

 

“Tax Return” means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.

 

“Third Party Claim” has the meaning set forth in Section 8(d)(i) above.

 

-19-

 

SCHEDULE I

 

PURCHASE AND SALE OF SHARES

 

 

 

 

 

SELLER:

 

FORECLOSURE SOLUTIONS, INC. Restricted No. of Shares Purchase Price price per
share H.J. COLE 5,000,000 $140,000 $         0.02800 TOTAL (restricted):
5,000,000 $140,000  

 

 

BUYERS:

 

FORECLOSURE SOLUTIONS, INC. Restricted No. of Shares Purchase Price price per
share Mercia Holdings, LLC 2,050,000  $57,400 $         0.02800 Mai Dun Limited
LLC 2,050,000 $57,400 $         0.02800 General Hemp, LLC 450,000 $12,600
$         0.02800 Bamburgh Holdings LLC 450,000 $12,600 $         0.02800 TOTAL
(restricted): 5,000,000 $140,000  

 

 

 

 

 

-20-