Document:

ex10_4.htm

Exhibit 10.4

 

STOCK PURCHASE AGREEMENT

THIS STOCK PURCHASE AGREEMENT (“Agreement”) is entered into this 6th day of  March  2013, between Virtual Sourcing, Inc.. with a corporate address at 1200 G St NW, Suite 800, Washington, DC 20005,  a Nevada corporation (“Buyer”), and Gallant Acquisitions Corp., a Wyoming corporation,  ("Seller”).

WHEREAS, the Allied Recycling Corp. a wholly-owned subsidiary of Seller (the "Company") is engaged in the business of providing remediation services for the Fiberglass industry (the “Business”) located in the Mid Atlantic region of the United States of America; and

WHEREAS, the Company has licensing agreements for the production of conditioned recycled fiberglass and a Service and Sales Agreement with the Licensor; and

WHEREAS, Seller desires to sell, assign and transfer to Buyer eighty percent (80%) of the issued and outstanding capital stock of the Company (“Stock”), and Buyer desires to purchase the Stock from Seller,

NOW, THEREFORE, the parties hereto agree as follows:

ARTICLE I

Purchase and Sale of Stock

SECTION 1.01   Seller agrees to sell to Buyer, and Buyer agrees to purchase from Shareholders Four Thousand (4,000) common shares of the Company representing eighty percent (80%) of the issued and outstanding capital stock of the Company currently owned by Seller.

SECTION 1.02

 

(a)           Security Interest.   Seller warrants and covenants that at Closing (as defined by Section 1.03 hereof), the assets owned by the Company shall be held free and clear of all mortgages, liens, deeds of trust, security interests, pledges, restrictions, prior assignments, charges, claims, defects in title and encumbrances of any kind or type whatsoever (Collectively, the “Security Interests”) except for: (1) the Security Interests disclosed on Appendix 1.02; (2) liens for taxes, other than state, federal or local income taxes and other taxes of the Company that not yet due and payable, accruing before the Closing Date, and (3) the Continuing Liabilities described below.

 

(b)           Continuing Liabilities.   Except as otherwise provided herein and subject to the terms and conditions of this Agreement, Seller represent, warrant, and covenant that the Company shall have no liabilities at Closing except the following (collectively, the “Continuing Liabilities”):

 

	 	
(1)

	
All liabilities and obligations of the Company that are accrued or reserved against on the   Company’s balance sheet, dated February 28, 2013 (the “Interim Balance Sheet Date”) and as attached hereto as Appendix 102b1 (the “Interim Balance Sheet”), and which remain unpaid as of the Closing Date to the extent of any remaining reserve or accrual on the Company’s balance sheet, dated as of the Closing Date (the “Closing Balance Sheet”);

	 	
(2)

	
All liabilities of the Company that are incurred in the ordinary  course of the Business, consistent with past practice, subsequent to the Interim Balance Sheet Date and through the Closing Date, which remain unpaid as of the Closing Date and are accrued or reserved against in the Closing Balance Sheet, but only to the extent of such reserve accrual;

  

Exhibit 10.4 -- Page 1

  

	 	
(3)

	
Any liability or obligation arising before the Closing Date under the Vendor/ Consulting Contracts (as defined in Section 2.01(e) hereof) but only to the extent of any reserve or accrual on the Closing Balance Sheet and all liabilities and obligations arising after the Closing Date under the Vendor/ Consulting  Contracts.

 

(c)  Excluded Liabilities.   Buyer shall not assume, nor does Buyer agree to pay, any debts not specifically described in Section 1.02(a) and 1.02(b) and their appendices hereof.  Seller shall indemnify and hold Buyer harmless against any such debts.

 

SECTION 1.03  Closing.  The Closing of this transaction shall be held at Tampa, FL, on or before April 15, 2013 or at such other time, date and place as shall be fixed by agreement among the parties hereto (“Closing Date”).  At the Closing, the parties shall execute and deliver the documents referred to in Section 1.05 below.

 

SECTION 1.04  Purchase Price and Payment. The Purchase Price for the Seller’ Stock shall be 999 Series A Preferred Stock and 100 Series B Preferred Stock (designations attached) and 55,000,000 restricted common shares to the Seller or its assigns. The total stock value of the transaction is agreed to be  $2,500,000.

SECTION 1.05  Items to be delivered at Closing.

 

	 	
(a) 

	
Seller shall deliver the following to Buyer at Closing

	 	
1. 

	
fully executed certificates of the Stock of the Company, free and clear of all liens and encumbrances of any kind;

       

	 	
2.

	
all third party consents which may be necessary of desirable in connection with the transactions contemplated hereby, including the Contracts (as defined herein);

	 	
3.

	
a certificate, signed by a duly authorized officer of the Company and dated the Closing Date, representing that any conditions described herein is satisfied;

	 	
4. 

	
documents designated by Buyer sufficient to evidence the Company’s intellectual property rights of its products and services;

	 	
5.

	
employment agreements for any employee with an annual salary of $100,000 or greater or any and all officers;

	 	
6. 

	
fiberglass conditioning license agreements and any other agreements represented as serviced by the Company;

	 	
7. 

	
any other certificates, documents, and instruments reasonably required to complete the transaction.

	 	
(b) 

	
Buyer shall deliver to Seller the following:

	 	
1. 

	
a certificate, signed by an authorized officer of Buyer and dated the Closing Date, representing that any conditions represented in this agreement have been met;

 

	 	
2. 

	
copies of resolutions of the Board of Directors of Buyer with respect to the approval of this Agreement and the transactions contemplated hereby;

  

Exhibit 10.4 -- Page 2

  

	 	
3. 

	
any other certificates or other documents and instruments required herein to be delivered by Buyer in order to complete the transaction.

	 	
4. 

	
fully executed certificates for shares of the Buyer’s preferred and common stock required by the Purchase Price.

	 	
(c)

	
Notwithstanding anything contained herein to the contrary, neither the Seller nor the Buyer's obligations to deliver the respective shares to the other shall arise, until such time as the Buyer shall have effectively decreased its authorized shares. Buyer shall have  received from current Series B Preferred shareholders conversions of said shares and have had issued common shares to the holders or to third parties either through sales or other methods of conveyance. Upon receipt of the conversion notice the Buyer will issue all of the shares for the Purchase Price in preparation and proceed toward closing. No new holder of the converted shares  may hold more than 9.9% of the outstanding common shares. Once the Buyer can meet these terms the parties will be proceed to closing. In the event the Buyer is unable to deliver the Purchase Price or meet the terms of this paragraph on or before April 15, 2013,  the number and/or type of shares is agreed to be renegotiated.

ARTICLE II

Representations and Warranties

 

SECTION 2.01.                                Representations and Warranties of Seller.  In order to induce Buyer to enter into this Agreement and to consummate the transactions contemplated hereby, Seller represents and warrants to Buyer as follows:

 

(a)           Stock; Status of the Company.  The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada and is duly qualified to transact business in every state in the United State of America and every nation and political subdivision thereof, which the failure to be so qualified would have a material adverse affect on the Business.  The Company has the requisite power to carry on its Business as it is now being conducted and to own and operate the Business, and has the requisite power (corporate, financing and other) to enter into and complete the transactions contemplated by this Agreement.  The Company has no business other than as stated in this Stock Purchase Agreement.  No person has any option or right to acquire from Seller or the Company any of the Stock or other equity interest in the Company.  The Stock in the Company is validly issued, fully paid and non-assessable.  Attached as Appendix 201 are the Articles of Incorporation and Bylaws of the Company and all amendments thereto.

 

(b)           Authorization of Agreement; Non-Contravention; Consents and Approvals.

 

(1)           The execution, delivery and performance by Seller of this Agreement and each of the other agreements to be executed in connection with the consummation of the transactions contemplated hereby and thereby have been duly and validly authorized and approved by all necessary corporate action of the Company.  This Agreement has been duly executed and delivered by Seller and constitutes a valid and binding obligation of Seller enforceable against Seller in accordance with its terms.

  

Exhibit 10.4 -- Page 3

  

 

(2)           Neither the execution and delivery by Seller of this Agreement nor the consummation of the transactions contemplated hereby, nor compliance by Seller with any of the provisions hereof, will (i) conflict with or result in a breach of any provision of the Articles of Incorporation, as amended, or Bylaws, as amended, of the Company, (ii) result in the breach of, or conflict with, any of the terms and conditions of, or constitute a default (with or without the giving of notice or the lapse of time or both) with respect to, or result in the cancellation or termination of, or the acceleration of the performance of any obligations or of any indebtedness under any contract, agreement, lease, commitment, indenture, mortgage, note, bond, license or other instrument or obligation to which Seller or the Company is a party or by which Seller or the Company may be bound or affected, or (iii) violate any law or any rule or regulation of any administrative agency or governmental body (a “Governmental Entity”), or any order, writ, injunction or decree of any court or Governmental Entity to which Seller or the Company may be subject.

 

(c) Capitalization.  The issued and outstanding shares of capital stock of the Company are held beneficially and of record as set forth in Appendix 201c.  All issued and outstanding shares of capital stock of the Company have been validly issued and are fully paid and non-assessable.  Appendix 201c also sets forth all outstanding options, warrants, preemptive rights, convertible or exchangeable securities or other rights that could obligate the Company to issue or purchase shares of capital stock or other securities (including any phantom stock, stock appreciation rights or similar interests), and the holders thereof, and specifies the extent to which any options, warrants, securities or other rights are currently vested.  The offer, issuance and sale of the capital stock of the Company and the outstanding options, warrants, convertible securities or other rights to acquire such capital stock were made in compliance with applicable federal and state securities laws.  Except as set forth on Appendix 201c, there are no agreements, written or oral, relating to the acquisition, disposition, voting or registration of any security or interest of the Company.

 

(d)  Assets.  The Company has, or will have at the Closing, good, valid and marketable title to all assets shown on the Interim and Closing Balance Sheets, free and clear of any Liens, except as disclosed under Appendix 201d. The Company has not sold, transferred, assigned or conveyed any of its right, title and interest, or granted or entered into any option to purchase or acquire any of its right, title or interest, in and to any of the Assets or its Business.  No third party has any option or right to acquire the Company’s Business or any of the Assets.

 

(e)  Real Property.  The Company owns no real property.  Appendix 201e includes a complete list of the only real property leased by the Company (“Leased Real Property”).  The Company has a valid leasehold interest in the Leased Real Property and will deliver to Buyer at Closing, a certificate confirming that such lease is in full force and effect and that its leasehold interest will be transferred to Buyer at Closing without penalty or any condition that would be unacceptable to Buyer.

 

(f)  Contracts.  All Revenue Contracts (meaning contracts to which the Company is a party with its clients or customers by which the Company generates revenue) are listed on Appendix 201f.   All Vendor and Consulting Contracts (meaning standing contracts to which the Company is a party with third-party vendors from which the Company receives goods or services) are listed  on Appendix 201f .  All Other Contracts (meaning all other standing contracts to which the Company is a party which are essential to the operation of it business) are listed on Appendix 201f.   Except as disclosed on Appendix 201f (collectively, the “Contract Schedules”) each Contract will be enforceable after the Closing and sale of the Stock to Buyer without the consent of any party.   A complete and accurate copy of each Scheduled Contract has been delivered or made available to Buyer or, if oral, a complete and accurate summary thereof has been delivered to Buyer.  Except as set forth on Appendix 201f, the Scheduled Contracts are valid, binding and enforceable in accordance with their respective terms, are in full force and effect and were entered into in the ordinary course of business on an “arms-length” basis.  The Company is not in breach or default of any of the Scheduled Contracts and no occurrence or circumstance exists which constitutes a present breach or default by the other party thereto.  The Company has not been notified or advised by any party to a Scheduled Contract of such party's intention or desire to terminate or modify any such contract or agreement.  The Company has not granted any lien on any Scheduled Contract included in the Assets.

  

Exhibit 10.4 -- Page 4

  

 

(g)           Litigation.  There is no litigation, suit, proceeding, action, claim or investigation, at law or in equity, pending or, to the knowledge of Seller, threatened against, or affecting in any way the Seller, the Company or the Company’s ability to own or operate its Business, or which questions the validity of this Agreement or challenges any of the transactions contemplated hereby.  Neither the Company nor the Seller is subject to any judgment, order, writ, injunction or decree of any court or any federal, state, municipal or other Governmental Entity, department, commission, board, bureau, agency or other instrumentality.

 

(h)           Absence of Change or Events.  Since the Interim Balance Sheet Date, the Company has operated its business only in the ordinary course and there has not been any material adverse change in the financial condition, results of operations, business, assets or prospects of the Company or the value or condition of the Assets.

 

(i)           Compliance with Laws. The Company has at all time conducted its Business in compliance with all applicable laws, regulations, ordinances and other requirements of all Governmental Entities (including applicable federal, state and local laws, rules and regulations respecting occupational safety and health standards).  Neither Seller nor the Company has received any notice, advice, claim or complaint from any employee or Governmental Entity that the Company has not conducted, or is not presently conducting, its Business and operations in accordance with all applicable laws and other requirements of Governmental Entities.

 

(j)           Intellectual Property.

 

(1)           Company IP Property.  The Company owns, or has the valid right or license to use, possess, sell or license, all Intellectual Property (as defined below and more precisely enumerated in Appendix 201i1, necessary or required for the conduct of its business as presently conducted and as presently proposed to be conducted, (such Intellectual Property being hereinafter collectively referred to as the “Company IP Rights”), and such rights to use, possess, sell or license are sufficient for such conduct of such business.  As used herein, the term “Intellectual Property” means, collectively, all worldwide industrial and intellectual property rights, including, without limitation, patents, patent applications, rights to file for patent applications (including but not limited to continuations, continuations-in-part, divisional and reissues), trademarks, logos, service marks, trade names and service names (in each case whether or not registered) and applications for and the right to file applications for registration thereof, Internet domain name or application for an Internet domain name, Internet and World Wide Web URLs or addresses, copyrights (whether or not registered) and applications for and the right to file applications for registration thereof, franchises, licenses, inventions, trade secrets, trade dress, know-how, customer lists, supplier lists, proprietary processes and formulae, software source code and object code, algorithms, net lists, architectures, structures, screen displays, layouts, inventions, development tools, designs, blueprints, specifications, technical drawings (or similar information in electronic format), publicity and privacy rights and any other intellectual property rights arising under the laws of the United States of America, any State thereof, or any country or province, and all documentation and media (in whatever form) constituting, describing or relating to the foregoing, including, without limitation, manuals, programmers’ notes, memoranda and records.

 

(2)           No Default.  Neither the execution, delivery and performance of this Agreement nor the consummation of the transactions contemplated hereby will: (i) constitute a breach, violation or default of any instrument, contract, license or other agreement governing any Company IP Right to which the Company is a party; (ii) cause the forfeiture or termination of, or give rise to a right of forfeiture or termination of, any Company IP Right held or owned by the Company; or (iii)  impair the rights of the Company or Buyer or their subsidiaries to use, possess, sell or license any Company IP Right or portion thereof.  There are no royalties, honoraria, fees or other payments payable by the Company or any of its affiliates to any third person by reason of the ownership, use, possession, license, sale, marketing, advertising or disposition of any Company IP Rights by Company.

 

(3)           Protection of Proprietary Information.  The Company has taken all necessary and appropriate steps to protect, preserve and maintain the secrecy and confidentiality of the Company IP Rights and all Seller’ ownership interests and proprietary rights therein.

  

Exhibit 10.4 -- Page 5

  

 

 

(4)           Registered and Unregistered Intellectual Property.   Appendix 201i1 contains a true and correct list of (i) all worldwide registrations of any patents, copyrights, trademarks, service marks, Domain Names or Internet or World Wide Web URLs or addresses with any governmental or quasi-governmental authority; (ii) all applications, registrations, filings and other formal actions made or taken pursuant to federal, state and foreign laws by the Company to secure, perfect or protect its interest in the Company IP Rights, including, without limitation, all patent applications, copyright applications, and applications for registration of trademarks and service marks, (iii) all unregistered copyrights, trademarks and service marks and (iv) all 800- or 888- prefix phone numbers (or similar toll-free phone numbers) used by the Company in connection with the conduct of its business.  All patents, and all registered trademarks, service marks, Internet domain names, Internet or World Wide Web URLs or addresses and copyrights held by the Company are valid and enforceable.

 

(5)           No Infringement by Third Parties.  To the knowledge of Seller, there is no unauthorized use, disclosure, infringement or misappropriation of any Company IP Rights or any Intellectual Property Right of the Company by any third party, including any employee or former employee of the Company.  The Company has not agreed to indemnify any person for any infringement of any Intellectual Property of any third party by any product or service that has been sold, licensed, leased, supplied, marketed, distributed, or provided by the Company.

 

(k)           No Broker’s or Finder’s Fees.  No agent, broker, investment banker, person or firm acting on behalf of Seller is or will be entitled to any broker’s or finder’s fee or any other commission or similar fee in connection with any of the transactions contemplated herein except for the Seller as described in Appendix 201j.

 

(l)           Employee Benefit Plans.  Except as shown on Appendix 201k the Company has no plans in effect for pension, profit sharing, deferred compensation, severance pay, bonuses, stock options, stock purchases, or any other form of retirement or deferred benefit, or for any health, accident or other welfare plan, as to which Buyer will become liable as a result of the transactions contemplated hereby.

 

(m)           Environmental Matters.  There have been no private or governmental claims, citations, complaints, notices of violation or letters made, issued to or threatened against Seller or the Company by any Governmental Entity or private or other party for the impairment or diminution of, or damage, injury or other adverse effects to, the environment or public health resulting, in whole or in part, from the ownership, use of operation of any of the Company’s facilities (whether owned or leased) which will be occupied or operated by Buyer as a result of the transactions contemplated hereby (the "Property").

 

The Company has duly complied with, and to the best of Seller’s and the Company’s knowledge, the Property is in compliance with, the provisions of all federal, state and local environmental, health and safety laws, codes and ordinances and all rules and regulations promulgated hereunder.

 

Buyer has been provided with true, accurate and complete copies of any written information in the possession of Seller or the Company, which pertains to the environmental history of the Property.  Seller and the Company shall also promptly furnish to Buyer true, accurate and complete copies of any sampling and test results which may be obtained by Seller or the Company prior to the Closing from all environmental and/or health samples and tests taken at and around the Property.

  

Exhibit 10.4 -- Page 6

  

 

(n)           Financial Statements.  The Company has delivered to Buyer the Interim Balance Sheet of the Company at the offices of Buyer and the related statements of income.  Such financial statements, including the notes thereto, are in accordance with the books and records of the Company, have been prepared in conformity with generally accepted accounting principles applied on a consistent basis throughout the periods covered thereby and present fairly the financial position and the results of operations of the Company as of the dates and for the periods indicated.  On or before the Closing, the Company shall deliver to Buyer monthly financial statements in a form reasonably satisfactory to Buyer for all monthly periods after the Interim Balance Sheet Date for which financial information is available, including the Closing Balance Sheet, which financial statements shall be prepared on a consistent basis with the financial statements described above.

 

(o)           Taxes.

 

1)           Except as shown on Appendix 201n the Company has filed all Tax Returns (as defined below) that it was required to file.  All such Tax Returns were correct and complete in all respects.  To the best knowledge of Seller and the Company, all Taxes owed by the Company (whether or not shown on any Tax Return) 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 any Taxing Authority in a jurisdiction where the Company does not file Tax Returns that it is or may be subject to taxation by that jurisdiction which has not been resolved.  There are no security interests on any of the Assets that arose in connection with any failure (or alleged failure) to pay any Tax.  The Company has not waived any statute of limitations in respect of any Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency.  There is no pending or threatened action, audit, proceeding or investigation for the assessment of collection of any Taxes for which the Company could be liable, and no written or legally binding agreement has been entered into with any Taxing Authority relating to Taxes for which the Company could be liable.

 

(2)           To the actual knowledge of Seller, 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.

 

 (3)           For purposes of this Agreement, “Tax” means any federal, state, local or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental (including taxes under section 59A of the Internal Revenue Code, as amended), 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 or not disputed; “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; and “Taxing Authority” means any governmental authority responsible for the imposition or collection of any Tax.

 

(p)           Absence of Undisclosed Liabilities.  To the actual knowledge of Seller, the Company has no material liabilities or obligations, other than (a) those reflected in the Interim Balance Sheet, (b) those liabilities or obligations incurred, consistently with past business practice, in or as a result of the normal and ordinary course of business since the Interim Balance Sheet Date, and (c) those revealed in the Appendix and Schedules attached hereto or delivered at Closing.

 

(q)           Guarantees. The Company has not guaranteed or pledged any Assets with respect to any obligation or indebtedness of any person or entity and no person or entity has guaranteed any obligation or indebtedness of Seller.

 

(r)      Accuracy of Documents and Information.  The information provided to the Buyer by Seller in connection with its investigation of Seller and the Company, does not (and will not at the Closing Date) contain any statement of a material fact known to be untrue by the Seller.

 

SECTION 2.02    Representations and Warranties of Buyer.  Buyer represents and warrants to Seller as follows:

 

(a)           Organization. Buyer is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada.  Buyer has the full power and authority to enter into and perform this Agreement, to carry on its business as it is now being conducted, and to execute, deliver and perform its obligations under this Agreement and consummate the transactions contemplated hereby.

 

(b)           Capitalization.  The authorized capital stock of the Buyer consists of 9,978,000,000 shares of Common Stock and 22,000,000 shares of Preferred Stock.  As of the date hereof, there are in excess of 5,600,000 shares of Common Stock and  5,000 Series A Preferred Shares issued and outstanding.  Additional shares are to be issued and the Seller acknowledges agreement for such action. All outstanding shares of Buyer’s Common Stock have been duly authorized and validly issued and are fully paid and non-assessable, and none of such outstanding shares has been issued in violation of the preemptive rights of any person, firm or entity.

 

(c)           Binding Obligation.   The execution, delivery and performance by Buyer of this Agreement and the consummation of the transactions contemplated hereby and thereby have been duly and validly authorized and approved by all necessary corporate action of Buyer.  Neither the execution and delivery by Buyer of this Agreement nor the consummation by Buyer of the transactions contemplated hereby, nor compliance by the Buyer with any of the provisions hereof, will (i) conflict with or result in a breach of any provision of the Articles of Incorporation or Bylaws of Buyer, (ii) result in the breach of, or conflict with, any of the terms and conditions of, or constitute a default, or result in the cancellation or termination of, or the acceleration of the performance of any obligations or of any indebtedness under any contract, agreement, lease, commitment, indenture, mortgage, note, bond, license or other instrument or obligation to which Buyer is a party or by which its assets may be bound or affected, (iii) violate any law or any rule or regulation of any administrative agency or Governmental Entity, or any order, writ, injunction or decree of any court, administrative agency or Governmental Entity to which Buyer may be subject.

 

 

ARTICLE III

 

Covenants Relating to Conduct of Business

 

SECTION 3.01    Covenants of Seller.  During the period from the date of this Agreement and continuing until the Closing, Seller agrees (except as expressly contemplated by this Agreement or to the extent that Buyer shall otherwise consent in writing) that they will cause the business of the Company to take the following actions:

 

(a)           Ordinary Course.  From the date hereof until the Closing Date, the Company shall carry on its business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted and, to the extent consistent with such business, use all reasonable efforts consistent with past practice and policies to preserve intact its present business organization, keep available the services of its presents officers and key employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall be unimpaired as a result of the transactions contemplated hereby.

 

(b)           No Other Bids. Neither the Seller, nor any of their respective affiliates, shall directly or indirectly, through any officer, director, employee, shareholder, agent or otherwise, offer any of the Stock in the Company for sale to any other individual or entity other than Buyer, nor shall they solicit or enter into negotiations with any other party for the disposition of the Assets of the Company.

  

Exhibit 10.4 -- Page 7

  

 

ARTICLE IV

 

Additional Agreements

 

SECTION 4.01    Confidentiality and Access to Information.  The Seller shall afford to Buyer and to Buyer’s accountants, counsel and other representatives, reasonable access during normal business hours during the period prior to the Closing to all of the Company’s books and records, and during such period, the Company shall furnish promptly to Buyer all information concerning the Company’s Business, properties and personnel, as Buyer may reasonably request.  Buyer agrees that (except as may be required by law) it will not disclose or use any information revealed during this executory period with respect to Seller at any time or in any manner, and will not use such information other than in connection its preparation for Closing of the transactions contemplated by this Agreement.   In the event of termination of this Agreement for any reason, Buyer shall promptly return, or cause to be returned, to Seller all nonpublic documents obtained from Seller that it would not otherwise have been entitled to obtain; and shall not, in any manner, utilize any such information for Buyer’s benefit or in any manner harmful to Seller. The provisions of this Section 4.01 shall survive the termination of this Agreement.

 

 

SECTION 4.02   Expenses.  Whether or not the transactions contemplated hereby are consummated, all costs and expenses incurred by Buyer, and/or Seller in connection with this Agreement and the transactions contemplated hereby, including, without limitation, expenses of legal counsel, accountants and other advisers, shall be paid by the party incurring such costs.

 

              SECTION 4.03  Piggyback Rights.  In the event Buyer files a registration statement under the Securities Act of 1933, as amended, with respect to shares of the common shares received by Seller, prior to two years after the signing of this agreement, on a form appropriate for registering shareholders' common stock after conversion from preferred, Buyer shall give written notice to shareholders prior to filing, and shareholders shall have the right to request to have included such shares of Buyer common stock as shall be specified in the request; provided, however, that the inclusion of the shares shall not interfere with Buyer registration of its shares and that in no event shall Buyer be obligated (i) to file a registration statement at any time other than during the period ended February 28, 2014,  or (ii) to keep the prospectus with respect to the stock current for more than 30 days after the effective date of the registration statement; and provided, further, that all shares sold pursuant to the registration statement are effected within the 30 day period.  If Seller or its designees do not make a request for registration within 20 days after receipt of notice from Buyer, Buyer shall have no obligation to include any shares of Buyer common stock owned by Seller or its designees in the registration statement.

 

ARTICLE V

 

Conditions Precedent

 

SECTION 5.01    Conditions to Each Party’s Obligation.  The respective obligations of each of the parties to this Agreement shall be subject to the satisfaction prior to the Closing Date of the following conditions:

 

(a)           Approvals.  All authorizations, consents, orders or approvals of, or declarations or filings with, or expiration of waiting periods imposed by, any Governmental Entity necessary for the consummation of the transactions contemplated by this Agreement, if any, shall have been filed, occurred or been obtained.

 

(b)           Legal Action. No action, suit or proceeding by any person shall have been commenced and still be pending, no investigation by any governmental or regulatory authority shall have been commenced and still be pending, and no action, suit or proceeding by any person shall have been threatened against Buyer, Seller or the Company, (a) seeking to restrain, prevent or change the transactions contemplated hereby or questioning the validity or legality of any such transactions or (b) which if resolved adversely to any party, would materially and adversely affect the business or condition, financial or otherwise, of the Buyer, Seller or the Company.

 

  

Exhibit 10.4 -- Page 8

  

 

SECTION 5.02    Conditions of Obligations of Buyer.  The obligations of Buyer to effect the transactions contemplated hereby are subject to the satisfaction of the following conditions unless waived by Buyer in writing:

 

(a)           Representations and Warranties.  The representations and warranties of Seller set forth in this Agreement shall be true and correct in all material respects as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date, and Buyer shall have received a separate certificate signed by Seller to such effect.

 

(b)           Performance of Obligations of the Company.  Seller shall have performed all obligations required to be performed by them under this Agreement prior to the Closing Date, and Buyer shall have received a certificate signed by Seller to such effect. All proceedings to be taken by the Company in connection with the transactions contemplated hereby and all documents incident thereto shall be reasonably satisfactory in form and substance to the Buyer and its counsel, and Buyer and its counsel shall have received all such counterpart originals or certified or other copies of such documents as it or they may reasonably request.

 

(c)           No Material Adverse Change.  Unless this condition shall be waived in writing by Buyer, since the Interim Balance Sheet Date, there shall have been no material adverse change in the financial condition, results of operations, business or assets of the Company, and the Buyer shall have received a certificate signed by Seller to such effect.  For purposes of this Paragraph, the term “material change” shall mean some condition(s) or event(s) which, when taken individually or in total, shall have the effect of reducing the current net worth of the Company by greater than ten percent (10%) than as shown in the Interim Balance Sheet.

 

(d)           Consents and Actions.  All requisite consents of any third parties to the transactions contemplated by this Agreement shall have been obtained.

 

(e)           Other Documents.   Buyer shall have received such other documents, instruments or certificates as shall be reasonably requested by Buyer or its counsel.

 

 SECTION 5.03    Conditions and Obligations of Seller.  The obligations of Seller to close the transactions contemplated hereby are subject to the satisfaction of the following conditions unless waived by Seller in writing:

 

(a)           Representations and Warranties. The representations and warranties of Buyer set forth in this Agreement shall be true and correct in all material respects as of the date of this Agreement and as of the Closing Date as through made on and as of the Closing Date, and Seller shall have received a certificate signed by an authorized officer of Buyer to such effect.

 

(b)           Performance of Obligations of Buyer.  Buyer shall have performed all obligations required to be performed by it under this Agreement at and prior to the Closing Date, and Seller shall have received a certificate signed by an authorized officer of Buyer to such effect.

 

(c)           Consents and Actions.  All requisite consents of any third parties or governmental agencies to the transactions contemplated hereby shall have been obtained.

 

(d)           Other Documents.  Seller shall have received such other documents, instruments or certificates as shall be reasonably requested by Seller or its counsel.

 

  

Exhibit 10.4 -- Page 9

  

 

ARTICLE VI

 

Indemnification

 

 

SECTION 6.01

 

(a)           Indemnification.

 

(1)           Seller shall indemnify and hold harmless Buyer against all  loss, liability, damage or expense, including reasonable attorney's fees, net of any applicable insurance proceeds (“Losses”), for claims brought by a third party, which Buyer shall suffer, sustain or become subject to as a direct result of any breach of representation or  warranty of Seller  contained in this Agreement.

 

(2)           Subject to the provisions of Section 6.01(a) hereof, Buyer shall indemnify and hold harmless Seller against all Losses that Seller may suffer, sustain, or become subject to as a direct result of any breach or inaccuracy of any representation, warranty, covenant or other agreement of Buyer contained in this Agreement, or a claim by a third party which, without regard to the merits of the claim, would constitute a breach or misrepresentation.

 

(b)           Conditions of Indemnification for Third Party Claims.  The obligations and liabilities of the parties under this Article 6 shall be subject to the following conditions:

 

(1)           The party entitled to be indemnified hereunder (the “Indemnified Party”) shall give the party obligated to provide the indemnity (the “Indemnifying Party”) prompt notice of any Third Party Claim (the “Claim Notice”).   If the Indemnifying Party promptly acknowledges in writing its obligation to indemnify in accordance with the terms and subject to the limitations of such party's obligation to indemnify contained in this Agreement with respect to that claim, the Indemnifying Party shall have a reasonable time to assume the defense of the Third Party Claim at its expense and with counsel of its choosing, which counsel shall be reasonably satisfactory to the Indemnified Party.  Any Claim Notice shall identify, to the extent known to the Indemnified Party, the basis for the Third Party Claim, the facts giving rise to the Third Party Claim, and the estimated amount of the Third Party Claim (which estimate shall not be conclusive of the final amount of such claim or demand).  The Indemnified Party shall make available to the Indemnifying Party copies of all relevant documents and records in its possession.

 

 

(2)           If the Indemnifying Party, within a reasonable time after receipt of such Claim Notice, fails to assume the defense of any Third Party Claim in accordance with Section 6.01(b)(1), the Indemnified Party shall (upon further notice to the Indemnifying Party) have the right to undertake the defense, compromise or settlement of the Third Party Claim, at the expense and for the account and risk of the Indemnifying Party.

 

(3)           Anything in this Section 6.01 to the contrary notwithstanding, (i) the Indemnifying Party shall not without the written consent of the Indemnified Party, settle or compromise any Third Party Claim or consent to the entry of judgment which does not include as an unconditional term thereof the giving by the claimant or the plaintiff to the Indemnified Party of an unconditional release from all liability in respect of the Third Party Claim; (ii) if such Third Party Claim involves an issue or matter which the Indemnified Party believes will have a materially adverse effect on the Indemnified Party's business, operations, assets, properties or prospects of its business, the Indemnified Party shall have the right to control the defense or settlement of any such claim or demand, at the expense of the Indemnified Party without contribution from the Indemnifying Party; and (iii) the Indemnified Party shall have the right to employ its own counsel to defend any claim at the expense of the Indemnify Party if (x) the employment of such counsel by the Indemnified Party has been authorized by the Indemnifying Party, or (y) counsel selected by the Indemnifying Party shall have reasonably concluded that there may be a conflict of interest between the Indemnifying Party and the Indemnified Party in the conduct of the defense of such action or (z) the Indemnifying Party shall not have employed counsel to assume the defense of such claim in accordance with Section 6.01(b).

 

  

Exhibit 10.4 -- Page 10

  

 

 

(4)           Nothing herein shall be deemed to prevent any Indemnified Party from making a claim hereunder for potential or contingent claims or demands, provided that (i) the Claim Notice sets forth (A) the specific basis for any such potential or contingent claim or demand and (B) the estimated amount thereof (to the extent then feasible) and (ii) the Indemnified Party has reasonable grounds to believe that such a claim or demand will be made.

 

(5)        Notwithstanding any other provision of this Agreement, a party’s right to indemnification shall not arise until the aggregate claims (exclusive of attorney fees) exceed Twenty Five Thousand Dollars ($25,000).

 

(6) This Article VI shall survive the consummation of this Agreement and the transactions contemplated herein; PROVIDED HOWEVER that no claim for indemnification may be made after the one (1) year anniversary of the Closing of this transaction.

 

 

ARTICLE VII

 

Termination, Acknowledgement, Amendment and Waiver

 

 

SECTION 7.01   Termination.  This Agreement may be terminated at any time prior to the Closing:

 

(a)           by mutual consent of Buyer and all Seller;

 

(b)           by Buyer, on the one hand, and Seller, on the other hand, if there has been a material misrepresentation or breach of covenant or agreement contained in this Agreement on the part of the other and such breach of a covenant or agreement has not been promptly cured;

 

(c)           by Buyer if any of the conditions set forth in Sections 5.01 and 5.02 shall not have been satisfied before April 30, 2013 or such later date as the parties hereto shall mutually agree in writing;

 

(d)           by Seller  if any of the conditions set forth in Sections 5.01 and 5.03 shall not have been satisfied before April 30, 2013, or such later date as the parties hereto shall mutually agree in writing.

 

 

SECTION 7.02   Acknowledgement.  Buyer and Seller agree that the following items have been discussed and will be acted upon if and when milestones are met by the Seller or the Buyer has concluded by closing or terminating an agreement between it and another appropriate party.

 

(a)           Buyer will decrease the authorized common shares to 977,000,000 common shares and maintain the current level of Preferred shares immediately following the closing of the Stock Purchase Agreement.

  

Exhibit 10.4 -- Page 11

  

 

(b)           Buyer agrees that it will not interfere with the management of the subsidiary unless its management has committed a breach of fiduciary responsibility, acted in a fraudulent or deceptive manner, or withheld, omitted or misrepresented any material occurrence in its business or financial matters, failed to submit financial statements in a timely manner for inclusion in all required reporting to governmental or regulatory agencies, took risks deemed to be detrimental to the parent corporation or committed theft or any other item that then current law or court rulings deem not coverable for indemnification purposes.

 

(c)           Buyer will place two members on the board of directors selected by the Seller.

 

SECTION 7.03   Amendment.  This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto.

 

 

ARTICLE VIII

 

General Provisions

 

SECTION 8.01

 

(a)           Entire Agreement. This Agreement, together with all exhibits and schedules attached hereto, constitutes the entire agreement between and among the parties hereto pertaining to the subject matter hereof and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, of the parties, and there are no warranties, representations or other agreements between the parties in connection with the subject matter hereof except as set forth specifically herein or contemplated hereby.  No supplement, modification or waiver of this Agreement shall be binding unless executed in writing by the party to be bound thereby.  No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (regardless of whether similar), nor shall any such waiver constitute a continuing waiver unless otherwise expressly provided.

 

(b)           Survival of Covenants, Representations, Warranties and Agreements.  The covenants, agreements, representations and warranties of the parties hereto contained in this Agreement or in any certificate or other writing delivered pursuant hereto or in connection herewith shall not survive the Closing except for the covenants and agreements contained herein which contemplate or specifically provide for performance after the Closing Date.

 

(c)           Costs and Expenses.  Each of the parties to this Agreement shall bear his or its own expenses incurred in connection with the negotiation, preparation, execution and closing of this Agreement and the transactions contemplated hereby (the “Transaction Expenses”).

 

(d)           Notices.  Any notice, request, instruction, correspondence or other document to be given hereunder by any party hereto to another (herein collectively called “Notice”) shall be in writing and delivered personally or mailed by registered or certified mail, postage prepaid and return receipt requested, or by facsimile, as follows:

 

	
If to Buyer:

	
Virtual Sourcing, Inc.

	  	
1200 G St NW, Suite 800

	
 

	
 Washington, DC 20005

	  	  
	
If to Seller:

	
Gallant Acquisition Corp

 

  

Exhibit 10.4 -- Page 12

  

 

Each of the above addresses for notice purposes may be changed by providing appropriate notice hereunder.  Notice given by personal delivery or registered mail shall be effective upon actual receipt.  Notice given by facsimile shall be effective upon actual receipt if received during the recipient’s normal business hours’ or at the beginning of the recipient’s next normal business day after receipt if not received during the recipient’s normal business hours.  All Notices by facsimile shall be confirmed by the sender thereof promptly after transmission in writing by registered mail or personal delivery.

 

(e)           Governing Law.  This Agreement shall be governed in all respects, including validity, interpretation and effect, by the internal laws of the State of Nevada.

 

(f)           Counterparts.  This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other party, it being understood that all parties need not sign the same counterpart.

 

(g)           Severability.  If any provision of this Agreement (or any portion thereof) or the application of any such provision (or any portion thereof) to any person or circumstance shall be held invalid, illegal or unenforceable in any respect by a court of competent jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision hereof (or the remaining portion thereof) or the application of such provision to any other persons or circumstances.

 

(h)           Captions.  The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof.

 

IN WITNESS WHEREOF, Buyer, Seller and the Company have executed this Agreement as of the date first written above.

 

	 	
Gallant Acquisition Corp.

	 	 	
Virtual Sourcing, Inc.

	 	  	 	 	  
	 	  	 	 	  
	By:	 	 	By:	
 

	 	
Name: Mario Faraone

	 	 	
Name: Norman Birmingham

	 	
Title: President

	 	 	
Title:  President

  

Exhibit 10.4 -- Page 13

  

 

APPENDIX 102

(Security Interests)

APPENDIX 102b1

(Interim Balance Sheet)

APPENDIX 201

(Articles of Incorporation, Bylaws with any Amendments)

APPENDIX 201c

(Capitalization Schedule)

APPENDIX 201d

(Assets)

APPENDIX 201e

(Leased Real Property)

APPENDIX 201f

(Vendor/ Consulting Contracts)

(Revenue Contracts)

APPENDIX 201il

(Registered and Unregistered Intellectual Property)

APPENDIX 201j

(Brokers and Finders Fee)

None

APPENDIX 201k

(Employee Benefits Plan)

None

APPENDIX 201n

(Tax Returns)ex10_5.htm

Exhibit 10.5

 

 

The shares subscribed for may not be sold, offered for sale, pledged, hypothecated, or otherwise transferred in the absence of (a) an effective registration statement under the act and any applicable state securities laws, or (b) an opinion of counsel acceptable to counsel for the issuer that such registration is not required and that the proposed transfer may be made without violation of the act and any applicable state securities law.

THE ACQUISITION OF THE SECURITIES OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK AND SHOULD BE CONSIDERED ONLY BY PERSONS WHO CAN BEAR THE RISK OF THE LOSS OF THEIR ENTIRE INVESTMENT.  THE SHARES MAY BE SOLD IN JURISDICTIONS WHERE THEY MAY BE LAWFULLY SOLD.

SUBSCRIPTION AGREEMENT

Virtual Sourcing, Inc.

1200 G St. NW,

Suite 800

Washington, DC 21046

Virtual Sourcing, Inc., a Nevada corporation (the "Company"), is offering up to Twenty Five Million (25,000,000) shares of its Common Stock, which have been registered in the Company’s S-1 Registration Statement that became effective on _______________ at $1.00 per share, for total maximum sale proceeds of Twenty Five Million Dollars ($25,000,000).  This Offering shall be on a best efforts basis and the Company reserves the right to use the funds received immediately upon receipt.  There shall be no minimum purchase amount.  The Company desires to sell    shares of the Company’s Common Stock, (the “Shares”), par value $0.001, to the undersigned for an aggregate purchase price of $ ($1.00 per share).  The undersigned (the "Subscriber") desires to purchase the Shares for the purchase price, which is set forth on the signature page of this Subscription Agreement (the "Agreement").  Accordingly, the Company and Subscriber agree as follows:

1.           Sale and Purchase.  Subject to the terms and conditions set forth in this Agreement, Subscriber hereby tenders the amount set forth on the signature page of this Agreement for the purchase of the number of Shares set forth on said signature page.

2.           Representations, Warranties, and Agreements of Subscriber.  In connection with this subscription, Subscriber hereby makes the following representations, warranties, and agreements and confirms the following understandings, each of which are made or confirmed, as the case may be, with respect to the Shares subscribed for herein:

(a)           Investment Purpose.  Subscriber is acquiring Shares for Subscriber's own account and for investment purposes only and not with a view to or for sale in connection with any distribution of the shares.

 (b)           Review and Evaluation of Information Regarding the Company.

(i)           Subscriber is familiar with the Company’s financial condition and proposed operations.  Without limiting the foregoing, the Subscriber acknowledges that the undersigned has reviewed the corporate documents regarding the Company and the terms of this Offering.

  

Exhibit 10.5 -- Page 1

  

(ii)           In addition to the foregoing, Subscriber acknowledges that Subscriber has conducted, or has been afforded the opportunity to conduct, an investigation of the Company and has been offered the opportunity to ask representatives of the Company questions about the Company’s financial condition and proposed business and that Subscriber has obtained the available information as Subscriber has requested, to the extent Subscriber has deemed necessary, to permit Subscriber to fully evaluate the merits and risks of an investment in the Company.  Representatives of the Company have answered all inquiries that Subscriber has put to them concerning the Company and its activities, and the offering and issuance of the Shares.

(iii)           Subscriber has reviewed the Subscription Document and SEC Filings for Virtual Sourcing, Inc., including the Form S-1 Registration Statement that became effective on _____________ and Prospectus filed on ________________ on Form 424(b)(3), both of which may be found at www.sec.gov, or by contacting the Company and requesting a copy, and has been afforded the opportunity to ask any questions, or have addressed any concerns, that may have arisen from such review.  Subscriber acknowledges that he, she, or it is only relying on the information provided in the Subscription Agreement and SEC Filings, and understands, that he, she, or it shall contact the company’s President, Mario Faraone should he, she, or it be giving information that is contradictory to, or inconsistent with, the information set forth in this Subscription Agreement.   Subscriber further acknowledges that he, she, or it has not relied on any representations or warranties (written or oral) not contained in this Subscription Agreement.

(c)           Risks.  Subscriber recognizes that the purchase of Shares involves a high degree of risk and is suitable only for persons of adequate financial means who have no need for liquidity in this investment in that (i) Subscriber may not be able to liquidate the investment in the event of an emergency; (ii) transferability is limited; and (iii) in the event of a disposition, Subscriber could sustain a complete loss of his or her entire investment.  The Subscriber agrees that he or she acknowledges the risks and has reviewed the section titled “Risk Factors” in the Form S-1 Registration Statement that became effective on ________________.

(d)           Risk of Loss.  The Subscriber represents and warrants that the Subscriber: (a) is able to bear the loss of the Subscriber’s entire investment without any material adverse effect on the Subscriber’s economic stability; (b) understands that an investment in the Company involves substantial risks; and (c) has such knowledge and experience in financial and business matters that the Subscriber is capable of evaluating the merits and risks of the investment to be made by the Subscriber pursuant to this Agreement.

(e)           Accredited Investor Status.  Subscriber represents that Subscriber is an “accredited investor,” as the term is defined in Rule 501 of Regulation D promulgated under the ACT, pursuant to one or more of the following categories (please mark applicable categories):

 

	
  

	
(1)

	
o

	
a bank, insurance company, registered investment company, business development company, or small business investment company;

	
  

	
(2)

	
o

	
an employee benefit plan, within the meaning of the Employee Retirement Income Security Act, if a bank, insurance company, or registered investment adviser makes the investment decisions, or if the plan has total assets in excess of $5 million;

	
  

	
(3)

	
o

	
a charitable organization, corporation, or partnership with assets exceeding $5 million;

	
  

	
(4)

	
o

	
a director, executive officer, or general partner of the company selling the securities;

  

Exhibit 10.5 -- Page 2

  

	
  

	
(5)

	
o

	
a business in which all the equity owners are accredited investors;

	
  

	
(6)

	
o

	
a natural person who has individual net worth, or joint net worth with the person’s spouse, that exceeds $1 million at the time of the purchase, excluding the value of the primary residence of such person;

	
  

	
(7)

	
o

	
a natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year; or

	
  

	
(8)

	
o

	
a trust with total assets in excess of $5 million, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a “sophisticated person” as described in Section 230.506(b)(2)(ii) of Regulation D.

	
  

	
OR,   o   Subscriber is NOT an Accredited Investor, as that term is defined in Rule 501 of Regulation D promulgated under the ACT.

(f)           Subscriber's Financial Experience.  If Subscriber is not an accredited investor, Subscriber is sufficiently experienced in financial and business matters to be capable of evaluating the merits and risks of an investment in the Company.

(g)           Suitability of Investment. Subscriber has evaluated the merits and risks of Subscriber's proposed investment in the Company, including those risks particular to Subscriber's situation, and has determined that this investment is suitable for Subscriber.  Subscriber has adequate financial resources for an investment of this character, and at this time Subscriber can bear a complete loss of Subscriber's investment. Further, Subscriber will continue to have, after making an investment in the Company, adequate means of providing for Subscriber's current needs, the needs of those dependent on Subscriber, and possible personal contingencies.  Subscriber specifically represents that he has a net worth at least twenty times greater than the investment made herein.

(h)           Absence of Official Evaluation.  Subscriber understands that neither the securities regulatory agencies of any State, nor the United States Securities and Exchange Commission has made any finding or determination as to the fairness of the terms of an investment in the Company, or any recommendation for, or endorsement of, the Shares offered hereby.

(i)           Transferability of Securities.  The Subscriber understands that the Shares are illiquid and such securities may only be resold without registration under the Securities Act of 1933, as amended (the “Securities Act”) in certain limited circumstances.  In this regard, the Subscriber represents that he/she/it is familiar with Rule 144, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act.  Without in any way limiting the representations set forth above, the Subscriber agrees not to make any disposition of all or any portion of the Shares unless there is then in effect a registration statement under the Securities Act covering such proposed disposition and such disposition is made in accordance with such registration statement; or the Subscriber shall have notified the Company of the proposed disposition and shall have furnished the Company with a statement of the circumstances surrounding the proposed disposition, and, if reasonably requested by the Company, the Subscriber shall have furnished the Company with an opinion of counsel, reasonably satisfactory to the Company, that such disposition will not require registration of the Shares under the Securities Act.

  

Exhibit 10.5 -- Page 3

  

(j)           Additional Financing.  Subscriber further acknowledges that nothing hereunder shall preclude the Company from seeking and/or procuring additional equity and/or debt financing.  Subscriber understands that it may become necessary for the Company to seek additional financing in the future, which could dilute the Subscriber’s interest in the Company.

(k)           Professional Advice.  Subscriber has either secured independent tax advice with respect to an investment in the Shares, upon which he, she or it is relying, or he, she or it is sufficiently familiar with the income taxation of corporations and investments that he, she or it deemed such independent advice to be unnecessary.  The Subscriber has had the opportunity to consult with his, her, or its tax, legal, and financial adviser to determine the benefits and risks of subscribing for the Shares, and is not, in any way, relaying on the Company or its employees or agents, for advice in making this decision.

(l)           Acceptance.  Subscriber acknowledges that the Company shall, in its sole discretion, have the right to accept or reject this subscription, in whole or in part, for any reason or for no reason.  If Subscriber’s subscription is accepted by the Company, Subscriber shall, and Subscriber hereby elects to, execute any and all further documents necessary in the opinion of the Company to complete his subscription and become a shareholder of the Company.

(m)           Authority to Enter into Agreement.  Subscriber has the full right, power, and authority to execute and deliver this Agreement and perform Subscriber's obligations here­under.

(n)           Prohibitions on Cancellation, Termination, Revocation, Transferability, and Assignment.  Subscriber hereby acknowledges and agrees that, except as may be specifically provided herein or by applicable law, Subscriber is not entitled to cancel, terminate, or revoke this Agreement, and this Agreement shall survive Subscriber's death or disability or any assignment of Shares.  Subscriber further agrees that Subscriber may not transfer or assign Subscriber's rights under this Agreement, and Subscriber understands that, if Subscriber's subscription is accepted, the transferability of Shares will be restricted.

(o)           Obligation.  This Agreement constitutes a valid and legally binding obligation of Subscriber and neither the execution of this Agreement nor the consummation of the transactions contemplated herein will constitute a violation of or default under, or conflict with, any judgment, decree, statute or regulation of any governmental authority applicable to Subscriber, or any contract, commitment, agreement, or restriction of any kind to which Subscriber is a party or by which Subscriber's assets are bound.  The execution and delivery of this Agreement does not, and the consummation of the transactions described herein will not, violate applicable laws, or any mortgage, lien, agreement, indenture, lease or understanding (whether oral or written) of any kind outstanding relative to Subscriber.

(p)           Required Approvals.  No approval, authorization, consent, order, or other action of, or filing with, any person, firm or corporation or any court, administrative agency or other governmental authority is required in connection with the execution and delivery of this Agreement by Subscriber or the purchase of the Shares.

(q)           No Solicitation.  The Subscriber represents and warrants that the Subscriber was not solicited to purchase the Shares by any means of general solicitation, including but not limited to the following:  (a) any advertisement, article, notice or other communication published in any newspaper, magazine, or similar media, or broadcast over television or radio; or (b) any meeting where attendees were invited by any general solicitation or general advertising.

  

Exhibit 10.5 -- Page 4

  

3.           Representations, Warranties and Agreements of the Company.  In connection with this subscription, the Company makes the following representations, warranties and agreements and confirms the following understandings:

(a)           Company's Good Standing.  The Company is a corporation organized and validly existing under the laws of the State of Nevada, and it has all corporate authority and power to conduct its business and to own its properties.

(b)           Corporate Authority.  The issuance of the Shares to the Subscriber has been duly authorized by all necessary corporate action on the part of the Company.

(c)           Corporate Records.  The corporate records of the Company are complete and accurate and all corporate proceedings and actions reflected therein have been conducted or taken in compliance with all applicable laws and with the Certificate of Incorporation and Bylaws of the Company.

(d)           Litigation. Neither the Company, nor any of its affiliates or its executive officers or directors (in their capacity as executive officers or directors), is a party to any pending or, to the best knowledge of the Company, threatened, or unasserted but considered by it to be probable of assertion, claim, action, suit, investigation, arbitration or proceeding, or is subject to any order, judgment or decree that is reasonably expected by management of the Company to have, either individually or in the aggregate, a material adverse effect on the condition (financial or otherwise), earnings or results of operations of the Company. The Company is not, as of the date hereof, a party to or subject to any enforcement action instituted by, or any agreement or memorandum of understanding with any federal or state regulatory authority restricting its operations or requiring that actions be taken, and no such regulatory authority has threatened any such action, memorandum or order against the Company and the Company has not received any report of examination from any federal or state regulatory agency which requires that the Company address any problem or take any action which has not already been addressed or taken in a manner satisfactory to the regulatory agency.

(e)           Valid and Binding Obligation.  This Agreement and the transactions contemplated herein have been duly and validly authorized by all requisite corporate action of the Company.  The Company has full right, power and capacity to execute, deliver and perform its obligations under this Agreement.  No governmental license, permit or authorization and no registration or filings with any court, governmental authority or regulatory agency is required in connection with the Company's execution, delivery and/or performance of this Agreement, other than any filings required by applicable federal and state securities laws.  The execution, delivery and performance of this Agreement, the consummation of the transactions herein contemplated and the compliance with the terms of this Agreement by the Company will not violate or conflict with any provision of the Articles of Incorporation, as amended or By-laws of the Company, or any agreement, instrument, law or regulation to which the Company is a party or by which the Company may be bound.  This Agreement, upon execution and delivery by the Company, will represent the valid and binding obligation of the Company enforceable in accordance with its terms.

(f)           Taxes.  The Company has paid all taxes which are due and payable within the time required by applicable law, and has paid all assessments and reassessments it has received with respect to taxes.  There are no claims, actions, suits, audits, proceedings, investigations or other action pending or threatened in writing against the Company with respect to taxes.  The Company has filed or caused to be filed with the appropriate governmental entities, within the times and in the manner prescribed by applicable law, all federal and local foreign tax returns which are required to be filed by or with respect to it.

  

Exhibit 10.5 -- Page 5

  

(g)           Resale of Shares.  Subscriber acknowledges that the Shares may only be resold pursuant to a Registration Statement filed under the Act, to which the Shares are subject, or pursuant to an exemption from the Act, and under the terms set forth herein.  Subscribers are advised to consult with their own legal counsel or advisors to determine the resale restrictions that may be applicable to them.

(g)           Voting Trusts and Shareholder Agreements.  There are no voting trusts or shareholder agreements between any of the principals, employees or directors of the Company or among any shareholders representing, in the aggregate, voting control of the Company.

(h)           Other Material Agreements.  There are no internal or other agreements with third parties that are material in nature to the business of the Company which have not been disclosed herein.

4.           Survival of Representations, Warranties, Agreements and Acknowledgments. The representations, warranties, agreements, and acknowledgments of the Company and Subscriber shall survive the offering and purchase of Shares.

5.           Indemnification of the Company.  Subscriber agrees to indemnify and hold harmless the Company against and in respect of any and all loss, liability, claim, damage, deficiency, and all actions, suits, proceedings, demands, assessments, judgments, costs and expenses whatsoever (including, but not limited to, attorneys' fees reasonably incurred in investigating, preparing, or defending against any litigation commenced or threatened or any claim whatsoever through all appeals) arising out of or based upon any false representation or warranty or breach or failure by Subscriber to comply with any covenant or agreement made by Subscriber herein or in any other document furnished by Subscriber in connection with this subscription.

6.           Miscellaneous.

(a)           Entire Agreement.  This Agreement constitutes all of the understandings and agreements existing between the parties hereto concerning the specific subject matter hereof and the rights and obligations created hereunder.  Moreover, this Agreement supersedes and novates all prior agreements and communications, whether oral or written, and the parties have relied on no other material.

(b)           Amendment and Modification.  Subject to applicable law, this Agreement may be amended, modified or supplemented only by a written agreement signed by the Company and Subscriber.

(c)           Notices.  Any notice, demand, or other communication that any party hereto may be required, or may elect, to give to anyone interested hereunder shall be deemed given on the date initially received if delivered by facsimile transmission followed by registered or certified mail confirmation; on the date delivered by an overnight courier service; on the third business day after it is mailed if mailed by registered or certified mail, postage prepaid.

(d)           Agreement Binding.  This Agreement shall be binding upon the heirs, executors, administrators, successors and assigns of the parties hereto.

  

Exhibit 10.5 -- Page 6

  

(e)           Governing Law, Forum.  This Agreement and the rights and obligations of the parties shall be interpreted under and governed exclusively by the laws of the State of Nevada, without regard to its conflicts of laws principles.  Any and all matters of dispute of any nature whatsoever arising out of or in any way connected with this Agreement or in any way connected with the relationship of the parties to this Agreement, shall be subject to determination only by the State or Federal courts sitting in the State of Nevada.  The parties hereto do hereby consent and submit to the venue and jurisdiction of the State or Federal Courts sitting in Nevada as the sole and exclusive forum for such matters of dispute, and further agree that, in the event of any action or suit as to any matters of dispute between the parties, service of any process may be made upon the other party by mailing a copy of the summons and/or complaint to the other party and a party's refusal to accept any such notice shall be equivalent to service.  Without limiting the generality of the foregoing, the Company hereby specifically waives any claims of inconvenient forum (howsoever denominated) in agreeing to the forum and jurisdiction herein set forth.

(f)           Waiver of Compliance; Consents.                                                                Any failure of any party to comply with any obligation, covenant, agreement or condition herein may be waived by the party entitled to the performance of such obligation, covenant or agreement or who has the benefit of such condition, but such waiver or failure to insist upon strict compliance with such obligation, covenant, agreement or condition will not operate as a waiver of, or estoppel with respect to, any subsequent other failure.

Whenever this Agreement requires or permits consent by or on behalf of any party hereto, such consent will be given in a manner consistent with the requirements for a waiver of compliance as set forth above.

(g)           Severability.  The invalidity, illegality, or unenforceability of any provision or provisions of this Agreement will not affect any other provision of this Agreement, which will remain in full force and effect, nor will the invalidity, illegality, or unenforceability of a portion of any provision of this Agreement affect the balance of such provision.  In the event that any one or more of the provisions contained in this Agreement or any portion thereof shall for any reason be held to be invalid, illegal, or unenforceable in any respect, this Agreement shall be reformed, construed, and enforced as if such invalid, illegal, or unenforceable provision had never been contained herein.

(h)           Attorney Fees.  In the event suit or action is brought by any party under this Agreement to enforce any of its terms, and in any appeal therefrom, it is agreed that the prevailing party shall be entitled to reasonable attorney fees to be fixed by the trial court and/or appellate court.

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

(j)           Tax Liability.  Purchasing Shares under this Subscription Agreement could result in tax liability.  All Subscribers are responsible for any tax liability incurred pursuant to this Agreement, and each Subscriber should discuss any tax liability issues with his or her own attorney or tax specialist.

(k)           Further Assurances.  The Parties hereto will execute and deliver such further instruments and do such further acts and things as may be reasonably required to carry out the intent and purposes of this Agreement.

  

Exhibit 10.5 -- Page 7

  

The undersigned Subscriber recognizes that the sale of the Shares to the undersigned will be based upon the representations and warranties set forth hereinabove, information provided to the Company and the statements made herein, and the undersigned hereby agrees to indemnify the Company its attorneys, agents, representatives and each of its managers and to hold them harmless from and against any and all loss, damage, liability or expense, including costs and reasonable attorney’s fees, to which they may be put or which they may incur by reason of, or in connection with, any misrepresentation made in this Subscription Agreement, any breach by the undersigned of my warranties and/or failure by me to fulfill any of my covenants or agreements set forth herein or arising out of the sale or distribution of any Shares by me in violation of the Securities Act of 1933, as amended, or any other applicable securities or “Blue Sky” laws.

The undersigned Subscriber (1) attests he, she or it is a bona fide resident of, or is domiciled in, the state listed as subscriber’s address below; (2) certifies that the information contained in this Subscription Agreement is complete, true and correct; (3) affirms that the subscriber’s income is derived in no part from illegal or criminal activities; and (4) states that the investment will not be used for any type of money laundering or other such activities in violation of any state or Federal regulation.

[Signature Page To Follow]

  

Exhibit 10.5 -- Page 8

  

IN WITNESS WHEREOF, the undersigned has caused this Agreement to be executed as of the  day of , 2014.  By executing this Subscription Agreement, the Subscriber certifies that the Subscriber and any beneficial subscriber for whom the Subscriber is acting is a resident of the jurisdiction shown in the “Address” section below.

Total Number of Shares:                                          

 

Total Purchase Price:      $                                                                      

	 	 	 
	
(Name of Subscriber)

	  	
(Signature of Subscriber)

	 	 	 
	 	 	 
	 	 	 
	
(Name of Subscriber)

	  	
(Signature of Subscriber)

	 	 	 
	 	 	 
	 	 	 
	
(Address)

	  	
(Signature of Authorized Representative)

	 	 	 
	 	 	 
	 	 	 
	
(Address)

	  	
(Print Name and Title of

Authorized Representative)

	 	 	 
	 	 	 
	
(Telephone Number)

	  	  
	 	 	 
	 	 	 
	 	 	 
	
(E-mail Address)

	  	  
	 	 	 
	 	 	 
	 	 	 
	
(Social Security Number/

Federal Employer Identification Number)

	  	
 

 

The Subscriber hereby tenders to Virtual Sourcing, Inc., the amount above indicating the number of Shares subscribed for.  Checks should be made payable to “Virtual Sourcing, Inc.” Wire transfers are also acceptable and upon request, the Company will provide wiring instructions.

  

Exhibit 10.5 -- Page 9

  

 

ACCEPTANCE OF SUBSCRIPTION

APPROVED AND ACCEPTED in accordance with the terms of this Subscription Agreement on this   day of ______________, 2014.

 

	 	
VIRTUAL SOURCING, INC.

A Nevada Corporation

	 	 
	 	 
	 By:      	 
	 	Mario Faraone, President
	 	 

 

 

 

 

Exhibit 10.5 -- Page 10

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