ex-10_1.htm


    STOCK
      REDEMPTION AGREEMENT

     

    
      


    

    THIS
      STOCK REDEMPTION AGREEMENT is entered into as of November 13, 2007 (the
“Agreement”), by and between AFH Holding II, Inc., a Delaware
      corporation (the “Company”) and Lauren Scott (the
“Seller”).  Each party to this Agreement is referred to herein as a
“Party,” and they are all referred to collectively as “Parties.”

     

    W
      I T N E
      S S E T H:

     

    WHEREAS,
      the Company has agreed to redeem 5,000,000 shares (the “Shares”) of the
      Company’s common stock, $0.001 par value per share (the “Common Stock”),
      currently held by the Seller, which shall constitute 100% of the total
      outstanding shares of the Common Stock of the Company on a fully-diluted basis
      immediately prior to the Closing (as defined below), and the Seller has agreed
      to sell such Shares on the terms and conditions set forth herein;

     

    NOW,
      THEREFORE, in consideration of the premises and of the mutual representations,
      warranties and agreements set forth herein, the Parties hereto agree as
      follows:

     

    ARTICLE
      I

     

     

    SALE
      AND
      PURCHASE OF SHARES

     

    1.1           Incorporation
      of Recitals.  The provisions and recitals set forth above are
      hereby referred to and incorporated herein and made a part of this Agreement
      by
      reference.

     

    1.2           Sale
      and Purchase of Shares.  Subject to the terms and conditions of
      this Agreement, at the Closing, the Seller hereby agrees to sell to the Company
      and the Company agrees to purchase from the Seller the Shares for an aggregate
      purchase price of $12,500 (the “Purchase Price”).  On the Closing Date
      (as defined below), the Purchase Price shall be delivered to the
      Seller.

     

    1.3           Closing.  Subject
      to the terms and conditions of this Agreement, the closing of the transactions
      contemplated by this Agreement (the “Closing”) shall take place on November 13,
      2007 (the “Closing Date”).  On the Closing Date, the Seller shall
      deliver to the Company: (a) stock certificate evidencing the Shares in
      negotiable form, duly endorsed in blank, or with stock transfer powers attached
      thereto (the “Share Certificate”).  On the Closing Date, the Company
      shall deliver to the Seller the Purchase Price for the purchase of the
      Shares.

     

    ARTICLE
      II

     

    


     

    REPRESENTATIONS
      AND WARRANTIES OF THE SELLER

     

    Except
      as
      set forth under the corresponding section of the disclosure schedules (the
      “Disclosure Schedules”) attached hereto as Exhibit A, which Disclosure
      Schedules shall be deemed a part hereof, the Seller hereby represents and
      warrants to Company that now and as of the Closing:

     

    (a)           The
      Seller is the lawful owner of the Shares and has full power and authority to
      sell the Shares, free and clear of any liens or encumbrances
      whatsoever;

    


    (b)           The
      sale of the Shares contemplated by this Agreement do not conflict with, or
      result in a breach of, or a default under, or give rise to a right of
      acceleration 

    under,
      any agreement or instrument to which the Seller is a party;

    


    (c)           No
      broker or finder has acted for the Seller in connection with this Agreement
      or
      the transactions contemplated hereby, and no broker or finder is entitled to
      any


    brokerage
      or finder’s fee or other commissions in respect of such transactions based upon
      agreements, arrangements or understandings made by or on behalf of the
      Seller;

     

    (d)           The
      Seller acknowledges that she (i) has had the opportunity to be advised by legal
      counsel of her own choosing with respect to the transactions contemplated


    by
      this
      Agreement and (ii) is aware the Company contemplates the sale of shares of
      common stock to an identified buyer at a price per share greater than she is
      receiving hereunder; and

     

    (e)           The
      representations and warranties of the Seller included in this Agreement and
      any
      list, statement, document or information set forth in, attached to any


    Schedule
      provided pursuant to this Agreement or delivered hereunder, are true and
      complete in all material respects and do not contain any untrue statement of
      a
      material fact or omit to state a material fact required to be stated herein
      or
      therein or necessary to make the statements contained herein or therein not
      misleading, under the circumstance under which they were made and shall survive
      after Closing as set forth herein.

    
       

       

    

    


    ARTICLE
      III

     

     

    REPRESENTATIONS
      AND WARRANTIES OF THE COMPANY

     

    The
      Company hereby represents and warrants to the Seller that now and as of the
      Closing:

     

    (a)           The
      Company has the full rights, power and authority to enter into and perform
      its
      obligations under this Agreement;

    


    (b)           This
      Agreement has been duly authorized by all necessary corporate or other action
      of
      the Company and has been duly executed and delivered, and this 

    Agreement
      is the valid, legal and binding obligation of the Company, enforceable in
      accordance with its terms;

    


    (c)           The
      Company is not in violation of its Articles of Incorporation or Bylaws as of
      the
      date hereof.  The execution, delivery and performance of this
      Agreement and 

    the
      transactions contemplated hereby (i) do not require any approval or consent
      of,
      or filing with, any governmental agency or authority in the United States of
      America or otherwise which has not been obtained and which is not in full force
      and effect as of the date hereof, (ii) will not conflict with or constitute
      a
      breach or violation of the Articles of Incorporation or Bylaws of the Company,
      and (iii) will not result in a violation of any law or regulation to which
      the
      Company is subject;

    


    (d)           The
      Company is not, and the performance of this Agreement by the Company will not
      render the Company insolvent within the meaning of applicable law or


    bankrupt
      under applicable bankruptcy laws;

    


    (e)           The
      Company is not a party to, subject to or bound by any agreement or any
      judgement, order, writ, prohibition, injunction or decree of any court or other
      

    governmental
      body or any law or regulation which would prevent the execution or performance
      of this Agreement by the Company;

    


    (f)           No
      broker or finder has acted for the Company in connection with this Agreement
      or
      the transactions contemplated hereby, and no broker or finder is entitled to
      

    any
      brokerage or finder’s fee or other commissions in respect of such transactions
      based upon agreements, arrangements or understandings made by or on behalf
      of
      the Company;

    


    (g)           The
      redemption of the Shares contemplated by this Agreement does not conflict with,
      or result in a breach of or a default under, or give rise to a right of


    acceleration
      under, any agreement or instrument to which the Company is a party or by which
      it is bound; and

    


    (h)           The
      representations and warranties of the Company included in this Agreement and
      any
      list, statement, document or information set forth in, attached to any


    Schedule
      provided pursuant to this Agreement or delivered hereunder, are true and
      complete in all material respects and do not contain any untrue statement of
      a
      material fact or omit to state a material fact required to be stated herein
      or
      therein or necessary to make the statements contained herein or therein not
      misleading, under the circumstance under which they were made and shall survive
      after Closing as set forth herein.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ARTICLE
      IV

     

    Reserved.

     

    


    
       

    

    
      


    

    ARTICLE
      V

     

    


     

    DELIVERIES
      & CONDITIONS

     

    5.1           Items
      to be delivered to the Company at the Closing by the
Seller.  The Company’s obligation to purchase the
      Shares hereunder is conditioned on the following closing conditions and
      deliveries:

     

    (a)           Delivery
      by the Seller of the following:

     

    (i)           All
      applicable schedules hereto;

     

    (ii)          A
      duly executed copy of this Agreement;

     

    (iii)         The
      Share Certificate; and

     

    (iv)         Any
      other document reasonably requested by the Company that the Company deems
      necessary for the consummation of this transaction; and

     

    (b)           The
      representations and warranties set forth in Article II of this Agreement shall
      be true and correct in all material respects.

     

    5.2           Items
      to be delivered to the Seller at the Closing by the Company.  The
      Seller’s obligations to sell the Shares hereunder are conditioned on the
      following closing conditions and deliveries by the Company:

     

    (a)           Delivery
      by the Company of the following:

     

    (i)           All
      applicable exhibits and schedules hereto;

     

    (ii)          A
      duly executed copy of this Agreement;

     

    (iii)         The
      Seller is satisfied with her due diligence investigation of the Company, in
      her
      sole discretion;

     

    (iv)         Any
      other document reasonably requested by the Seller that she deems necessary
      for
      the consummation of this transaction; and

     

    (v)          The
      Purchase Price.

     

    (b)           The
      representations and warranties set forth in Article III of this Agreement shall
      be true and correct in all material respects.

     

    
      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    ARTICLE
      VI

     

    


     

    TERMINATION

     

    
      


    

    6.1           Termination.  This
      Agreement may be terminated:

     

    (a)           at
      any time before, or at, Closing by written notice of the Company;
      and

     

    (b)           prior
      to the Closing by any Party at any time if any provision (including, but not
      limited to, the representations and warranties) of this Agreement that is


    applicable
      to or required
      to be performed by the other Party shall be materially untrue or shall become
      incapable of being accomplished or if any conditions set forth in Article V
      hereof have not been fully satisfied as of the Closing Date.

     

    Upon
      termination of this Agreement for any reason, in accordance with the terms
      and
      conditions set forth in this paragraph, each Party shall bear its own costs
      and
      expenses.

     

    ARTICLE
      VII

     

    INDEMNIFICATION

    


    7.1           Indemnification.

     

    (a)           Obligation
      of Seller to Indemnify.  The Seller agrees to indemnify, defend
      and hold harmless the Company (and its directors, officers, employees,
      affiliates, stockholders, debenture holders, agents, attorneys, successors
      and
      assigns) from and against all losses, liabilities, damages, deficiencies, costs
      or expenses (including interest, penalties and reasonable attorneys’ and
      consultants’ fees and disbursements) (collectively, “Losses”) based upon,
      arising out of or otherwise in respect of any (i) inaccuracy in any
      representation or warranty of the Seller contained in this Agreement, or (ii)
      breach by the Seller of any covenant or agreement contained in this
      Agreement.

     

    (b)           Obligation
      of Company to Indemnify.  The Company agrees to indemnify, defend
      and hold harmless the Seller from and against all Losses based upon, arising
      out
      of or otherwise in respect of any (i) inaccuracy in any representation or
      warranty of the Company contained in this Agreement, or (ii) breach by the
      Company of any covenant or agreement contained in this Agreement.

     

    (c)           Notice
      and Opportunity to Defend.  Promptly after receipt by any person
      entitled to indemnity under this Agreement (an “Indemnitee”) of notice of any
      demand, claim or circumstances which, with the lapse of time, would or might
      give rise to a claim or the commencement (or threatened commencement) of any
      action, proceeding or investigation (an “Asserted Liability”) that may result in
      a Loss, the Indemnitee shall give notice thereof (the “Claims Notice”) to any
      other party (or parties) who is or may be obligated to provide indemnification
      pursuant to Section 7.1(a) (the “Indemnifying Party”).  The Claims
      Notice shall describe the Asserted Liability in reasonable detail and shall
      indicate the amount (estimated, if necessary and to the extent feasible) of
      the
      Loss that has been or may be suffered by the Indemnitee.

     

    (d)           The
      Indemnifying Party may elect to compromise or defend, at its own expense and
      by
      its own counsel, any Asserted Liability.  If the Indemnifying Party
      elects to compromise or defend such Asserted Liability, it shall within 30
      days
      after the date the Claims Notice is given (or sooner, if the nature of the
      Asserted Liability so requires) notify the Indemnitee of its intent to do so,
      and the Indemnitee shall cooperate, at the expense of the Indemnifying Party,
      in
      the compromise of, or defense against, such Asserted Liability.  If
      the Indemnifying Party elects not to compromise or defend the Asserted
      Liability, fails to notify the Indemnitee of its election as herein provided
      or
      contests its obligation to indemnify under this Agreement, the Indemnitee may
      pay, compromise or defend such Asserted Liability and all reasonable expenses
      incurred by the Indemnitee in defending or compromising such Asserted Liability,
      all amounts required to be paid in connection with any such Asserted Liability
      pursuant to the determination of any court, governmental or regulatory body
      or
      arbitrator, and amounts required to be paid in connection with any compromise
      or
      settlement consented to by the Indemnitee, shall be borne by the Indemnifying
      Party.  Except as otherwise provided in the immediately preceding
      sentence, the Indemnitee may not settle or compromise any claim over the
      objection of the Indemnifying Party.  In any event, the Indemnitee and
      the Indemnifying Party may participate, at their own expense, in (but the
      Indemnitee may not control) the defense of such Asserted
      Liability.  If the Indemnifying Party chooses to defend any claim, the
      Indemnitee shall make available to the Indemnifying Party any books, records
      or
      other documents within its control that are necessary or appropriate for such
      defense.

     

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ARTICLE
      VIII

     

    


     

    MISCELLANEOUS

     

    8.1           Survival
      of Representations, Warranties and Agreements.  All
      representations, warranties and statements made by a Party in this Agreement
      or
      in any document or certificate delivered pursuant hereto shall survive the
      Closing Date.  Each of the Parties hereto is executing and carrying
      out the provisions of this Agreement in reliance upon the representations,
      warranties and covenants and agreements contained in this Agreement or at the
      Closing of the transactions herein provided for and not upon any investigation
      which it might have made or any representation, warranty, agreement,
      promise or information, written or oral, made by the other Party or any other
      person other than as specifically set forth herein.

     

    
      


    

    8.2           Access
      to Books and Records.  During the course of this transaction
      through Closing, the Company agrees to make available for inspection all Company
      corporate books, records and assets, and otherwise afford the Seller and its
      representatives, reasonable access to all documentation and other information
      concerning the business, financial and legal conditions of the Company for
      the
      purpose of conducting a due diligence investigation thereof.  Such due
      diligence investigation shall be for the purpose of satisfying each Party as
      to
      the business, financial and legal condition of the Company for the purpose
      of
      determining the desirability of consummating the proposed
      transaction.  The Parties further agree to keep confidential and not
      use for their own benefit, except in accordance with this Agreement any
      information or documentation obtained in connection with any such
      investigation.

     

    8.3           Further
      Assurances.  If, at any time after the Closing, the Parties hereby
      mutually agree that any further deeds, assignments or assurances in
      law or any other things are necessary, desirable or proper to complete the
      transactions contemplated hereby in accordance with the terms of this Agreement
      or to vest, perfect or confirm, of record or otherwise, the title to any
      property or rights of the Parties hereto, the Parties agree that their proper
      officers and directors shall execute and deliver all such proper deeds,
      assignments and assurances in law and do all things necessary, desirable or
      proper to vest, perfect or confirm title to such property or rights and
      otherwise to carry out the purpose of this Agreement, and that the proper
      officers and directors the Parties are fully authorized to take any and all
      such
      action.

     

    8.4           Notice.  All
      communications, notices, requests, consents or demands given or required under
      this Agreement shall be in writing and shall be deemed to have been duly given
      when delivered to, or received by prepaid registered or certified mail or
      recognized overnight courier addressed to, or upon receipt of a facsimile sent
      to, the Party for whom intended, as follows, or to such other address or
      facsimile number as may be furnished by that Party by notice in the manner
      provided herein:

     

    If
      to the
      Company:

     

    AFH
      Holding II, Inc.

    9595
      Wilshire Boulevard, Suite 900

    Beverly
      Hills, California 90212

    Attn:
      Amir F. Heshmatpour, President

    Tel:  (310)
      300-3431

    Fax:  (310)
      300-3412

    


    If
      to the
      Seller:

    


    Lauren
      Scott

    P.O.
      Box
      152112

    San
      Diego, California 92195

    Tel:
      (619) 659-9663

    Fax:
      (619) 393-5900

    


    


    8.5           Entire
      Agreement.  This Agreement, the Exhibits and Schedules hereto and
      any instruments and agreements to be executed pursuant to this Agreement, set
      forth the entire understanding of the Parties hereto with respect to its subject
      matter, merges and supersedes all prior and contemporaneous understandings
      with
      respect to its subject matter and may not be waived or modified, in whole or
      in
      part, except by a writing signed by each of the Parties hereto.  No
      waiver of any provision of this Agreement in any instance shall be deemed to
      be
      a waiver of the same or any other provision in any other
      instance.  Failure of any Party to enforce any provision of this
      Agreement shall not be construed as a waiver of its rights under such
      provision.

     

    8.6           Successors
      and Assigns.  This Agreement shall be binding upon, enforceable
      against and inure to the benefit of, the Parties hereto and their respective
      heirs, administrators, executors, personal representatives, successors and
      assigns, and nothing herein is intended to confer any right, remedy or benefit
      upon any other person.  This Agreement may not be assigned by
      the Seller except with the prior written consent of the
      Company.  This Agreement and all of the obligations of the Seller
      may be assigned by the Company without the prior notice to the Seller or written
      consent of the Seller and upon assignment, all of the rights and obligations
      of
      Company shall be the rights and obligations of the Company’s designated
      assignee.

     

    8.7           Governing
      Law.  This Agreement shall in all respects be governed by and
      construed in accordance with the laws of the State of California, USA that
      are
      applicable to agreements made and fully to be performed in such state, without
      giving effect to conflicts of law principles.

     

    8.8           Counterparts.  This
      Agreement may be executed in multiple counterparts, each of which shall be
      deemed an original, but all of which together shall constitute one and the
      same
      instrument.

     

    8.9           Construction.  Headings
      contained in this Agreement are for convenience only and shall not be used
      in
      the interpretation of this Agreement.  References herein to Articles,
      Sections and Exhibits are to the articles, sections and exhibits, respectively,
      of this Agreement.  The Schedules hereto are hereby incorporated
      herein by reference and made a part of this Agreement.  As used
      herein, the singular includes the plural, and the masculine, feminine and neuter
      gender each includes the others where the context so indicates.

     

    8.10           Severability.  If
      any provision of this Agreement is held to be invalid or unenforceable by a
      court of competent jurisdiction, this Agreement shall be interpreted and
      enforceable as if such provision were severed or limited, but only to the extent
      necessary to render such provision and this Agreement enforceable.

     

    8.11           Confidentiality;
      Public Disclosure.  Each of the parties hereto hereby agrees that
      the information obtained pursuant to the negotiation and execution of this
      Agreement shall be treated as confidential and not be disclosed to third parties
      who are not agents of one of the Parties to this Agreement.

     

    8.12           Notification
      of Certain Matters.  Each Party shall give prompt notice to the
      other of (i) the occurrence or non-occurrence of any event, the occurrence
      or
      non-occurrence of which is likely to cause any representation or warranty of
      such party contained in this Agreement to be untrue or inaccurate and (ii)
      any
      failure of such Party to comply with or satisfy any covenant, condition or
      agreement to be complied with or satisfied by it hereunder; provided,
however, that the delivery of any notice pursuant to this
      Section shall not limit or otherwise affect any remedies available to the
      Party receiving such notice.  Further, disclosure pursuant to this
      Section shall not be deemed to amend or supplement the Schedules
      hereto or prevent or cure any misrepresentations, breach of warranty or
      breach of covenant.

     

    8.13           Currency.  The
      parties hereto agree that all monetary amounts set forth herein are referenced
      in United States dollars, unless otherwise stated.

     

    8.14           Rules
      of Construction.  The parties hereto agree that they have been
      represented by counsel during the negotiation and execution of this Agreement
      and, therefore, waive the application of any law, regulation, holding or rule
      of
      construction providing that ambiguities in an agreement or other document will
      be construed against the Party drafting such agreement or document.

     

    8.15           Counterparts.  This
      Agreement may be executed in counterparts and by facsimile
      signatures.  In the event that any signature is delivered by facsimile
      transmission, such signature shall create a valid and binding obligation of
      the
      Party executing (or on whose behalf such signature is executed) with the same
      force and effect as if such facsimile signature page were an original
      thereof.  All such counterparts shall together constitute one and the
      same instrument.

     
      
        

      

    

    
 

    IN
      WITNESS WHEREOF, each of the Parties
      hereto has executed this Agreement as of the date first set forth
      above.

    


    COMPANY:

    


    


    AFH
      HOLDING II, INC,

    a
      Delaware corporation

    


    


    


    By: 
      /s/   Amir
      F. Heshmatpour

            Amir
      F. Heshmatpour, President

    


    


    


    SELLER:
      /s/ Lauren Scott

    Lauren
      Scott

    


    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    Schedule
      A

    


    Schedule
      of Liabilities

    


    None.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Exhibit
      A

    


    Disclosure
      Schedules

    


    


    None.