SECURITIES PURCHASE AGREEMENT

A CLEAN SLATE, INC.

AND

FRANK CASTELLANO
 
 
 

 

 

 

 

 

 

 

January 30, 2012

 

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Table of Contents

 

ARTICLE 1.

OPTION TO PURCHASE PREFERRED STOCK

3

ARTICLE 2.

REPRESENTATIONS AND WARRANTIES

3

ARTICLE 3.

COVENANTS     

5

ARTICLE 4.

CONDITIONS

5

ARTICLE 5.

STOCK CERTIFICATE LEGEND

6

ARTICLE 6.

INDEMNIFICATION     

7

ARTICLE 7.

MISCELLANEOUS     

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SECURITIES PURCHASE AGREEMENT

This SECURITIES PURCHASE AGREEMENT (the “Agreement”) is dated as of January 30,
2012 by and between A Clean Slate, Inc., a Delaware corporation (the “Company”),
and Frank Castellano (the “Purchaser”).

RECITALS

A.     

The Company, Newco (the Company’s wholly owned subsidiary) and Distressed Asset
Acquisition Group, Inc. (“DAAG”) entered into a Securities Purchase and Option
Agreement dated January 30, 2012 (the “Option Agreement”) in which Newco
purchased DAAG shares of common stock and has the option (the “Option”), in
part, to acquire the remaining equity in DAAG in exchange for shares of common
stock of the Company. A copy of the Option Agreement is attached hereto.

B.     

A precondition of Purchaser’s option herein, and of Newco’s option to purchase
the remaining equity in DAAG, is that the Company shall have fully paid that
certain promissory note currently outstanding to Mr. Richard Astrom in the
principal amount of $450,000.

C.     

Upon exercise of the Option, Frank Castellano shall be granted the option to
purchase Five Million (5,000,000) shares of the Company’s Series B Preferred
Stock as set forth herein.

NOW THEREFORE, in consideration of covenants and agreements set forth herein and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the Parties hereto agree each with the other as follows:

ARTICLE 1.      OPTION TO PURCHASE PREFERRED STOCK

1.1       Option to Purchase. At such time that Newco exercises the Option
described above, the Purchaser shall have the corresponding option (the
“Preferred Option”) to purchase from the Company 5,000,000 shares of its Series
B Preferred Stock (the “Preferred Stock”) in exchange for $500,000, payable in
cash, services rendered, a promissory note or combination of each at the
discretion of the board of directors. A precondition of Purchaser’s option
herein, and of Newco’s option to purchase the remaining equity in DAAG, is that
the Company shall have fully paid that certain promissory note currently
outstanding to Mr. Richard Astrom in the principal amount of $450,000.

1.2       Exercise of Option. The Purchaser shall exercise the Preferred Option
by providing written notice to the Company within 5 days from Newco’s exercise
of its Option; otherwise the Option shall expire.

1.3       Closing. The closing of the purchase and sale of the Preferred Stock
(the “Closing”), shall take place at the offices of Legal & Compliance, LLC ,
330 Clematis Street, Suite 217, West Palm Beach, FL 33401, or such other
location mutually agreed upon by the parties, contemporaneously with the closing
of transaction set forth in the Option Agreement (the “Closing Date”). Subject
to the terms and conditions of this Agreement, at the Closing the Company shall
deliver or cause to be delivered to the Purchaser: (i) a certificate for the
Preferred Stock and (ii) any other documents required to be delivered pursuant
to Article IV hereof. At the Closing, the Purchaser shall deliver or cause to be
delivered to the Company: (i) the consideration for the purchase and (ii) any
other documents required to be delivered pursuant to Article IV hereof.

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ARTICLE 2.      REPRESENTATIONS AND WARRANTIES

2.1       Representations and Warranties of the Company. The Company hereby
represents and warrants to the Purchaser, as of the date hereof and the Closing
Date (except as set forth on the Company Schedule of Exceptions attached
hereto), as follows:

(a)     Organization, Good Standing and Power. The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware and has the requisite corporate power to own, lease and operate its
properties and assets and to conduct its business as it is now being conducted.

(b)     Authorization; Enforcement. The Company has the requisite corporate
power and authority to enter into and perform this Agreement and to issue and
sell the Preferred Stock in accordance with the terms hereof. The execution,
delivery and performance of the Agreement by the Company and the consummation by
them of the transactions contemplated hereby and thereby have been duly and
validly authorized by all necessary corporate action, and no further consent or
authorization of the Company or its Board of Directors or stockholders is
required. This Agreement has been duly executed and delivered by the Company.
The Agreement constitutes, or shall constitute when executed and delivered, a
valid and binding obligation of the Company enforceable against them in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation,
conservatorship, receivership or similar laws relating to, or affecting
generally the enforcement of, creditor’s rights and remedies or by other
equitable principles of general application.

(c)     Issuance of Stock. The Preferred Stock to be issued at the Closing has
been duly authorized by all necessary corporate action and, when paid for or
issued in accordance with the terms hereof, shall be validly issued and
outstanding, fully paid and nonassessable.

(d)     SEC Documents, Financial Statements. The Company has filed all reports,
schedules, forms, statements and other documents required to be filed by it with
the Securities and Exchange Commission pursuant to the reporting requirements of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”)

2.2       Representations and Warranties of the Purchaser. Purchaser hereby
represents and warrants to the Company, as of the date hereof and the Closing
Date (except as set forth on the Purchaser Schedule of Exceptions attached
hereto), as follows:

(a)     Authorization; Enforcement. The Purchaser has the requisite power and
authority to enter into and perform this Agreement in accordance with the terms
hereof. This Agreement has been duly executed and delivered by the Purchaser.
The Agreement constitutes, or shall constitute when executed and delivered, a
valid and binding obligation of the Purchaser enforceable against it in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation,
conservatorship, receivership or similar laws relating to, or affecting
generally the enforcement of, creditor’s rights and remedies or by other
equitable principles of general application.

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(b)     Acquisition for Investment. Purchaser is acquiring the Preferred Stock
solely for its own account for the purpose of investment and not with a view to
or for sale in connection with distribution. Purchaser does not have a present
intention to sell the Preferred Stock, nor a present arrangement (whether or not
legally binding) or intention to effect any distribution of the Preferred Stock
to or through any person or entity; provided, however, that by making the
representations herein, Purchaser does not agree to hold the Preferred Stock for
any minimum or other specific term and reserves the right to dispose of the
Preferred Stock at any time in accordance with Federal and state securities laws
applicable to such disposition. Purchaser acknowledges that it is able to bear
the financial risks associated with an investment in the Preferred Stock and
that it has been given full access to such records of the Company and to the
officers of the Company and received such information as it has deemed necessary
or appropriate to conduct its due diligence investigation and has sufficient
knowledge and experience in investing in companies similar to the Company in
terms of the Company’s stage of development so as to be able to evaluate the
risks and merits of its investment in the Company.

(c)     Opportunities for Additional Information. Purchaser acknowledges that it
has had the opportunity to ask questions of and receive answers from, or obtain
additional information from, the executive officers of the Company concerning
the financial and other affairs of the Company.

(d)     No General Solicitation. Purchaser acknowledges that the Preferred Stock
was not offered to Purchaser by means of any form of general or public
solicitation or general advertising, or publicly disseminated advertisements or
sales literature, including (i) any advertisement, article, notice or other
communication published in any newspaper, magazine, or similar media, or
broadcast over television or radio, or (ii) any seminar or meeting to which such
Purchaser was invited by any of the foregoing means of communications.

(e)     Rule 144. Purchaser understands that the Preferred Stock must be held
indefinitely unless such Shares are registered under the Securities Act or an
exemption from registration is available. Purchaser acknowledges that it is
familiar with Rule 144 of the rules and regulations of the Securities and
Exchange Commission, as amended, promulgated pursuant to the Securities Act
(“Rule 144”), and that such person has been advised that Rule 144 permits
resales only under certain circumstances. Purchaser understands that to the
extent that Rule 144 is not available, Purchaser will be unable to sell any
Preferred Stock without either registration under the Securities Act or the
existence of another exemption from such registration requirement.

(f)     General. Purchaser understands that the Preferred Stock are being
offered and sold in reliance on a transactional exemption from the registration
requirement of Federal and state securities laws and the Company is relying upon
the truth and accuracy of the representations, warranties, agreements,
acknowledgments and understandings of Purchaser set forth herein in order to
determine the applicability of such exemptions and the suitability of Purchaser
to acquire the Preferred Stock.

ARTICLE 3.      COVENANTS

3.1       Best Efforts and Further Assurances. Each of the Parties shall use its
best efforts to effectuate the transactions contemplated hereby and to fulfill
and cause to be fulfilled the conditions to Closing under this Agreement. Each
Party hereto, at the reasonable request of another Party hereto, shall execute
and deliver such other instruments and do and perform such other acts and things
as may be necessary or desirable for effecting completely the consummation of
this Agreement and the transactions contemplated hereby.

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3.2       Officers and Director. Immediately after Closing, Frank Castellano
shall be appointed president and director of the Company.

ARTICLE 4.     CONDITIONS

4.1       Conditions to the Obligation of the Company. Unless otherwise waived
in writing by the Company, the obligation hereunder of the Company to issue and
sell the Preferred Stock to the Purchaser is subject to the satisfaction or
waiver, at or before each Closing, of each of the conditions set forth below.

(a)     Accuracy of Purchaser Representations and Warranties. The
representations and warranties of Purchaser in this Agreement shall be true and
correct in all material respects as of the date when made and as of the Closing
Date as though made at that time, except for representations and warranties that
are expressly made as of a particular date, which shall be true and correct in
all material respects as of such date.

(b)     Performance by the Purchaser. Purchaser shall have performed, satisfied
and complied in all respects with all covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by
Purchaser at or prior to the respective Closing.

(c)     No Injunction. No statute, rule, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, promulgated or endorsed
by any court or governmental authority of competent jurisdiction which prohibits
the consummation of any of the transactions contemplated by this Agreement.

4.2       Conditions to the Obligation of the Purchaser. Unless otherwise waived
in writing by the Purchaser, the obligation hereunder of the Purchase is subject
to the satisfaction or waiver, at or before each Closing, of each of the
conditions set forth below.

(a)     Accuracy of Purchaser Representations and Warranties. The
representations and warranties of the Company in this Agreement shall be true
and correct in all material respects as of the date when made and as of the
Closing Date as though made at that time, except for representations and
warranties that are expressly made as of a particular date, which shall be true
and correct in all material respects as of such date.

(b)     Performance by the Company. The Company shall have performed, satisfied
and complied in all respects with all covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by the
Company at or prior to the respective Closing.

(c)     No Injunction. No statute, rule, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, promulgated or endorsed
by any court or governmental authority of competent jurisdiction which prohibits
the consummation of any of the transactions contemplated by this Agreement.

ARTICLE 5.      STOCK CERTIFICATE LEGEND

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(a)     Legend. Each certificate representing the Preferred Stock shall be
stamped or otherwise imprinted with a legend substantially in the following form
(in addition to any legend required by applicable state securities or “blue sky”
laws):

THESE SECURITIES REPRESENTED BY THIS CERTIFICATE (THE “SECURITIES”) HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”) OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE
STATE SECURITIES LAWS OR THE COMPANY SHALL HAVE RECEIVED AN OPINION OF COUNSEL
THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE
PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.

ARTICLE 6.      INDEMNIFICATION

6.1       General Indemnity. The Company agrees to indemnify and hold harmless
the Purchaser from and against any and all losses, liabilities, deficiencies,
costs, damages and expenses (including, without limitation, reasonable
attorneys’ fees, charges and disbursements) incurred by the Purchaser as a
result of any inaccuracy in or breach of the representations, warranties or
covenants made by the Company herein. Purchaser agrees to indemnify and hold
harmless the Company and their directors, officers, affiliates, agents,
successors and assigns from and against any and all losses, liabilities,
deficiencies, costs, damages and expenses (including, without limitation,
reasonable attorneys’ fees, charges and disbursements) incurred by the Company
as a result of any inaccuracy in or breach of the representations, warranties or
covenants made by Purchaser herein.

ARTICLE 7.      MISCELLANEOUS

7.1       Fees and Expenses. Except as otherwise set forth in this Agreement,
each party shall pay the fees and expenses of its advisors, counsel, accountants
and other experts, if any, and all other expenses, incurred by such party
incident to the negotiation, preparation, execution, delivery and performance of
this Agreement.

7.2       Jurisdiction. All questions concerning the construction, validity,
enforcement and interpretation of the Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of
Florida, without regard to the principles of conflicts of law thereof. Each
Party agrees that all legal proceedings concerning the interpretations,
enforcement and defence of the transactions contemplated by this Agreement
(whether brought against a party hereto or its respective a ffiliates,
directors, officers, shareholders, employees or agents) shall be submitted to
binding arbitration with the American Arbitration Association in Marion County,
Florida.

7.3       Entire Agreement; Amendment. This Agreement contains the entire
understanding and agreement of the parties with respect to the matters covered
hereby and, except as specifically set forth herein, neither the Company nor the
Purchaser makes any representations, warranty, covenant or undertaking with
respect to such matters and they supersede all prior understandings and
agreements with respect to said subject matter, all of which are merged herein.
No provision of this Agreement may be waived or amended other than by a written
instrument signed by the Company and the Purchaser, and no provision hereof may
be waived other than by an a written instrument signed by the party against whom
enforcement of any such amendment or waiver is sought.

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7.4       Notices. Any notice, demand, request, waiver or other communication
required or permitted to be given hereunder shall be in writing and shall be
effective (a) upon hand delivery by telex (with correct answer back received),
telecopy or facsimile at the address or number designated below (if delivered on
a business day during normal business hours where such notice is to be
received), or the first business day following such delivery (if delivered other
than on a business day during normal business hours where such notice is to be
received) or (b) on the second business day following the date of mailing by
express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The addresses for
such communications shall be:

If to the Company:

A Clean Slate, Inc. 
11415 NW 123 Lane
Reddick, FL 32686     

Copy to:

Legal & Compliance, LLC
330 Clematis Street, Suite 214, 
West Palm Beach, FL 33401 
Facsimile: (561) 514-0832
Attn: Laura E. Anthony, Esq.

If to Purchaser:      

Frank Castellano

                         

Any party hereto may from time to time change its address for notices by giving
at least ten (10) days written notice of such changed address to the other party
hereto.

7.5       Waivers. No waiver by any party of any default with respect to any
provision, condition or requirement of this Agreement shall be deemed to be a
continuing waiver in the future or a waiver of any other provisions, condition
or requirement hereof, nor shall any delay or omission of any party to exercise
any right hereunder in any manner impair the exercise of any such right accruing
to it thereafter.

7.6       Headings. The article, section and subsection headings in this
Agreement are for convenience only and shall not constitute a part of this
Agreement for any other purpose and shall not be deemed to limit or affect any
of the provisions hereof.

7.7       Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties and their successors and assigns.

7.8       No Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.

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7.9       Survival. The representations and warranties of the Company and the
Purchaser shall survive the execution and delivery hereof and the Closing
hereunder for a period of two years following the Closing Date.

7.10       Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and, all of which taken together shall constitute one and the same Agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other parties hereto, it being understood that all parties need
not sign the same counterpart. In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid binding obligation
of the party executing (or on whose behalf such signature is executed) the same
with the same force and effect as if such facsimile signature were the original
thereof.

7.11       Publicity. The Company agrees that it will not disclose, and will not
include in any public announcement, the name of the Purchaser without the
consent of the Purchaser unless and until such disclosure is required by law or
applicable regulation, and then only to the extent of such requirement.

7.12       Severability. The provisions of this Agreement are severable and, in
the event that any court of competent jurisdiction shall determine that any one
or more of the provisions or part of the provisions contained in this Agreement
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision or part of a provision of this Agreement and such provision
shall be reformed and construed as if such invalid or illegal or unenforceable
provision, or part of such provision, had never been contained herein, so that
such provisions would be valid, legal and enforceable to the maximum extent
possible.

7.13       Attorney’s fees. Notwithstanding the foregoing, if any Party hereto
initiates any legal action arising out of or in connection with this Agreement,
the prevailing party in such legal action shall be entitled to recover from the
other Party all reasonable attorneys’ fees, expert witness fees and expenses
incurred by the prevailing party in connection therewith.

7.14       Further Assurances. From and after the date of this Agreement, upon
the request of Purchaser or the Company, each of the Company and the Purchaser
shall execute and deliver such instrument, documents and other writings as may
be reasonably necessary or desirable to confirm and carry out and to effectuate
fully the intent and purposes of this Agreement.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officer as of the date first above
written.

A Clean Slate, Inc.:

By: /s/ Richard Astrom
Name: Richard Astrom
Title: President             

By: /s/ Frank Castellano
Frank Castellano

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