Document:

f8k100813ex10ii_geliagroup.htm

Exhibit 10.2

 

GELIA GROUP, CORP.

SUBSCRIPTION AGREEMENT

As of October __, 2013         

 

Ms. Kim Leadford

Chief Executive Officer

Gelia Group, Corp.

140 Rowayton Avenue, 2nd Floor

Rowayton, Connecticut 06854

 

	
1.

	
Subscription; Escrow Arrangement.

 

	 	
(a)

	

The undersigned subscriber (the “Subscriber”) hereby irrevocably subscribes for and agrees to purchase the number of shares (the “Shares” or “Securities”) of the Company’s common stock, par value $.001 per share (“Common Stock”), set forth on the signature page hereto from Gelia Group, Corp., a Nevada corporation (the “Company”) for the purchase price of $0.83 per share in connection with the Company’s offering of up to $900,000 in Common Stock, or such other anount as may be determined by the Company’s board of directors (the “Offering”).

 

This Subscription Agreement (the “Subscription Agreement”) together with the Exhibits and Schedules thereto constitutes the “Offering Documents.”

 

This subscription is based solely upon the information provided in the Offering Documents and upon the Subscriber’s own investigation as to the merits and risks of this investment.  The Subscriber shall deliver herewith duly executed copies of the signature pages to the following documents: (i) the Subscription Agreement, and (ii) the Accredited Investor Questionnaire & Form W-9.

The Offering may be consummated at more than one closing to occur on a date as may be determined by the Company. Each such closing is referred to as a “Closing” and the date of each such Closing is referred to as the “Closing Date.”  A final Closing shall be held by the Company on or before September 30, 2013 (the “Final Closing Date”).  At each Closing with respect to the Shares subscribed for hereby and accepted by the Company, the Escrow Agent shall release and turn over the subscription payments for the Shares to the Company and the Company shall promptly thereafter deliver to the Subscriber, the stock certificate for the Shares.  If the Company does not accept this subscription, in whole or in part, the Escrow Agent will promptly refund to the Subscriber, without deduction therefrom, any subscription payment received from the Subscriber for the Shares, the subscription for which was not accepted by the Company.

 

	 	

(b)

	

Subject to the terms and conditions hereinafter set forth, the Subscriber hereby subscribes for and agrees to purchase the number of Shares from the Company set forth on the signature page hereof, and when this Agreement is accepted and executed by the Company, the Company agrees to issue such Shares to the Subscriber.  The subscription price is payable by wire transfer to “Ofsink PLLC” pursuant to the following wire instructions.

 

  

1

  

 

WIRING INSTRUCTIONS

 

	Bank’s Name and Address: 	JP Morgan Chase N.A.	 	 
	 	919 Third Avenue	 	 
	 	New York, NY 10022	 	 
	Account #:	3011704177	 	 
	ABA Routing #: 	021000021	 	 
	SWIFT:	CHASUS33 (for overseas transfers)	 	 
	Account Title: 	Gelia Group, Corp. Escrow Account	 	 

                                                                                             

 

	
2.

	
Subscriber Representations, Warranties and Agreements.  The Subscriber hereby acknowledges, represents and warrants as follows (with the understanding that the Company will rely on such representations and warranties in determining, among other matters, the suitability of this investment for the Subscriber in order to comply with federal and state securities laws):

	 	
(a)

	

In connection with this subscription, the Subscriber has read this Subscription Agreement and the other Offering Documents.  The Subscriber acknowledges that this Subscription Agreement is not intended to set forth all of the information which might be deemed pertinent by an investor who is considering an investment in the Securities.  It being the responsibility of Subscriber (i) to determine what additional information he desires to obtain in evaluating this investment and (ii) to obtain such information from the Company.

 

	 	
(b)

	

THIS OFFERING IS LIMITED TO PERSONS WHO ARE “ACCREDITED INVESTORS,” AS THAT TERM IS DEFINED IN REGULATION D UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND WHO HAVE THE FINANCIAL MEANS AND THE BUSINESS, FINANCIAL AND INVESTMENT EXPERIENCE AND ACUMEN TO CONDUCT AN INVESTIGATION AS TO, AND TO EVALUATE, THE MERITS AND RISKS OF THIS INVESTMENT. THE SUBSCRIBER HEREBY REPRESENTS THAT HE HAS READ, IS FAMILIAR WITH AND UNDERSTANDS RULE 501 OF REGULATION D UNDER THE ACT.  THE SUBSCRIBER IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(A) OF REGULATION D.

 

	 	
(c)

	

The Subscriber has had full access to all the information which the Subscriber (or the Subscriber’s advisor) considers necessary or appropriate to make an informed decision with respect to the Subscriber’s investment in the Securities.  The Subscriber acknowledges that the Company has made available to the Subscriber and the Subscriber’s advisors the opportunity to examine and copy any contract, matter or information which the Subscriber considers relevant or appropriate in connection with this investment and to ask questions and receive answers relating to any such matters including, without limitation, the financial condition, management, employees, business, obligations, corporate books and records, budgets, business plans of and other matters relevant to the Company.  To the extent the Subscriber has not sought information regarding any particular matter, the Subscriber represents that he or she had and has no interest in doing so and that such matters are not material to the Subscriber in connection with this investment.  The Subscriber has accepted the responsibility for conducting the Subscriber’s own investigation and obtaining for itself such information as to the foregoing and all other subjects as the Subscriber deems relevant or appropriate in connection with this investment.  The Subscriber is not relying on any representation other than that contained herein.  The Subscriber acknowledges that no representation regarding projected financial performance or a projected rate of return has been made to it by any party.

 

  

2

  

 

	 	
(d)

	

The Subscriber understands that the offering of the Securities has not been registered under the Securities Act of 1933, as amended (the “Securities Act”), in reliance on an exemption for private offerings provided pursuant to Section 4(2) of the Securities Act and that, as a result, the Shares will be “restricted securities” as that term is defined in Rule 144 under the Securities Act.  The Subscriber further understands that the Offering of the Securities has not been qualified or registered under any foreign or state securities laws in reliance upon the representations made and information furnished by the Subscriber herein and any other documents delivered by the Subscriber in connection with this subscription; that the Offering has not been reviewed by the Commission or by any foreign or state securities authorities; and that the Subscriber’s rights to transfer the Securities will be restricted, which includes restrictions against transfers unless the transfer is not in violation of the Securities Act and applicable state securities laws (including investor suitability standards).

	 	
(e)

	

The Subscriber is empowered and duly authorized to enter into this Subscription Agreement which constitutes a valid and binding agreement of the Subscriber enforceable against the Subscriber in accordance with its terms; and the person signing this Subscription Agreement on behalf of the Subscriber is empowered and duly authorized to do so.

 

	 	
(f)

	

The Subscriber has liquid assets sufficient to assure that the purchase price of the Securities will cause no undue financial difficulties and that, after purchasing the Securities the Subscriber will be able to provide for any foreseeable current needs and possible personal contingencies; the Subscriber is able to bear the risk of illiquidity and the risk of a complete loss of this investment.

 

	 	
(g)

	

The information in any documents delivered by the Subscriber in connection with this subscription, including, but not limited to the Investor Questionnaire, is true, correct and complete in all respects as of the date hereof.

 

	 	
(h)

	

The offering and sale of the Securities to the Subscriber were not made through any advertisement in printed media of general and regular paid circulation, radio or television or any other form of advertisement, or as part of a general solicitation.

 

	 	
(i)

	

The Subscriber recognizes that an investment in the Securities involves significant risks. The Subscriber has read and understands such risks and that such risks, and others, can result in the loss of the Subscriber’s entire investment in the Securities.

 

	 	
(j)

	

The Subscriber is acquiring the Securities, as principal, for the Subscriber’s own account for investment purposes only, and not with a present intention toward or for the resale, distribution or fractionalization thereof, and no other person has a beneficial interest in the Securities.  The Subscriber has no present intention of selling or otherwise distributing or disposing of the Securities, and understands that an investment in the Securities must be considered a long-term illiquid investment.

 

  

3

  

 

	
3.

	
Representations, Warranties and Covenants of the Company.  As a material inducement of the Subscribers to enter into this Subscription Agreement and subscribe for the Securities, the Company represents and warrants to the Subscriber, as of the date hereof, as follows:

 

	 	
(a)

	

Organization and Standing.  The Company is a duly organized corporation, validly existing and in good standing under the laws of the State of Nevada, has full power to carry on its business as and where such business is now being conducted and to own, lease and operate the properties and assets now owned or operated by it and is duly qualified to do business and is in good standing in each jurisdiction where the conduct of its business or the ownership of its properties requires such qualification except where the failure to be so qualified would not have a Material Adverse Effect on the Company.  “Material Adverse Effect” means any circumstance, change in, or effect on the Company that, individually or in the aggregate with any other similar circumstances, changes in, or effects on, the Company taken as a whole: (i) is, or is reasonably expected to be, materially adverse to the business, operations, assets, liabilities, employee relationships, customer or supplier relationships, prospects, results of operations or the condition (financial or otherwise) of the Company taken as a whole, or (ii) is reasonably expected to adversely affect the ability of the Company to operate or conduct the Company’s business in the manner in which it is currently operated or conducted or proposed to be operated or conducted by the Company; provided, however, that none of the following shall be deemed in and of themselves, either alone or in combination, to constitute, and none of the following shall be taken into account in determining whether there has been or will be, a Material Adverse Effect: (i) any change, event, state of facts or development generally affecting the general political, economic or business conditions of the United States; (ii) any change, event, state of facts or development generally affecting the medical device industry; (iii) any change, event, state of facts or development arising from or relating to compliance with the terms of this Subscription Agreement; (iv) acts of war (whether or not declared), the commencement, continuation or escalation of a war, acts of armed hostility, sabotage or terrorism or other international or national calamity or any material worsening of such conditions; (v) changes in laws or Generally Accepted Accounting Principles after date hereof or interpretation thereof; or (vi) any matter set forth in the Offering Documents or other  Schedules or Exhibits provided thereunder.

 

  

4

  

 

	 	
(b)

	

Subsidiaries.  Except for Starstream Entertainment, LLC, a Delaware limited liability company (“SSE”), Starstream Films, LLC, a Delaware limited liability company, and Starstream ELP, LLC, a Delaware limited liability company, as of the date herein immediately after the effectiveness of the business combination between the Company and SSE (the “Reverse Acquisition”), the Company does not own or control any subsidiaries. For purposes of this Agreement, “Subsidiary” means, with respect to any entity at any date, any corporation, limited or general partnership, limited liability company, trust, estate, association, joint venture or other business entity of which more than 51% of (i) the outstanding capital stock having (in the absence of contingencies) ordinary voting power to elect a majority of the board of directors or other managing body of such entity, (ii) in the case of a partnership or limited liability company, the interest in the capital or profits of such partnership or limited liability company or (iii) in the case of a trust, estate, association, joint venture or other entity, the beneficial interest in such trust, estate, association or other entity business is, at the time of determination, owned or controlled directly or indirectly through one or more intermediaries, by such entity.

 

	 	
(c)

	

Authority.  The execution, delivery and performance of this Subscription Agreement and the other Offering Documents by the Company and the consummation of the transactions contemplated hereby have been duly authorized by the Board of Directors of the Company. Each of the documents contained in the Offering Documents has been (or upon delivery will be) duly executed by the Company is or, when delivered in accordance with the terms hereof, will constitute, assuming due authorization, execution and delivery by each of the parties thereto, the valid and binding obligation of the Company enforceable against the Company in accordance with its terms.

 

	 	
(d)

	

No Conflict.  The execution, delivery and performance of this Subscription Agreement and the consummation of the transactions contemplated hereby do not (i) violate or conflict with the Company’s Certificate of Incorporation, By-laws or other organizational documents, (ii) conflict with or result (with the lapse of time or giving of notice or both) in a material breach or default under any material agreement or instrument to which the Company is a party or by which the Company is otherwise bound, or (iii) violate any order, judgment, law, statute, rule or regulation applicable to the Company, except where such violation, conflict or breach would not have a Material Adverse Effect on the Company.  This Subscription Agreement when executed by the Company will be a legal, valid and binding obligation of the Company enforceable in accordance with its terms (except as may be limited by bankruptcy, insolvency, reorganization, moratorium and similar laws and equitable principles relating to or limiting creditors’ rights generally).

 

	 	
(e)

	

Authorization.  Issuance of the Securities to Subscriber has been duly authorized by all necessary corporate actions of the Company.

 

	 	
(f)

	

Litigation and Other Proceedings.  There are no actions, suits, proceedings or investigations pending against the Company at law or in equity before or by any court or Federal, state, municipal or their governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign (an “Action”) which adversely affects or challenges the legality, validity or enforceability of any of the Offering Documents or could materially adversely affect the Company.  The Company is not subject to any continuing order, writ, injunction or decree of any court or agency against it which would have a material adverse effect on the Company. Neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty.

 

  

5

  

 

	 	
(g)

	

Use of Proceeds.  The proceeds of this Offering and sale of the Securities, net of payment of placement expenses, will be used by the Company for working capital and general corporate purposes.

 

	 	
(h)

	

Consents/Approvals.  No consents, filings (other than Federal and state securities filings relating to the issuance of the Securities pursuant to applicable exemptions from registration, which the Company hereby undertakes to make in a timely fashion), authorizations or other actions of any governmental authority are required to be obtained or made by the Company for the Company’s execution, delivery and performance of this Subscription Agreement which have not already been obtained or made or will be made in a timely manner following the initial Closing.

 

	 	
(i)

	

Placement Agents.  The Company may engage finders, brokers or placement agents in connection with the transactions contemplated hereby and pay to such brokers fees not to exceed eight (8) percent of the gross proceeds of the Offering and shares of Common Stock representing eight (8) percent of shares of Common Stock sold in the Offering.

 

	 	
(j)

	

Capitalization. A capitalization table illustrating the authorized and outstanding capital stock of the Company as of the date hereof after giving effect to the Reverse Acquisition is attached as Schedule 3(j).  All of such outstanding shares have been, or upon issuance will be, validly issued, fully paid and nonassessable.  As of the date hereof, except as disclosed in Schedule 3(j), and except for Securities issued in the Offering (i) no shares of the Company’s capital stock are subject to preemptive rights or any other similar rights or any liens or encumbrances suffered or permitted by the Company, (ii) there are no outstanding debt securities, (iii) there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, any shares of capital stock of the Company or any of its subsidiaries, or contracts, commitments, understandings or arrangements by which the Company or any of its subsidiaries is or may become bound to issue additional shares of capital stock of the Company or any of its subsidiaries or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, any shares of capital stock of the Company or any of its subsidiaries, (iv) there are no outstanding securities of the Company or any of its subsidiaries which contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company or any of its subsidiaries is or may become bound to redeem a security of the Company or any of its subsidiaries, and (v) there are no securities or instruments containing anti-dilution or similar provisions that will be triggered by the issuance or exercise of the Securities as described in this Subscription Agreement.  The Company has furnished to the Subscriber true and correct copies of the Company’s Certificate of Incorporation, as amended and as in effect on the date hereof (the “Certificate of Incorporation”), and the Company’s By-laws, as in effect on the date hereof (the “By-laws”), and the terms of all securities convertible or exchangeable into or exercisable for Common Stock and the material rights of the holders thereof in respect thereto.  Schedule 3(j) also lists all outstanding debt of the Company with sufficient detail acceptable to Subscriber.

 

  

6

  

 

	 	
(k)

	

Intellectual Property Rights. The Company owns or possesses adequate rights or licenses to use all trademarks, trade names, service marks, service mark registrations, service names, patents, patent rights, copyrights, inventions, licenses, approvals, governmental authorizations, trade secrets and rights necessary to conduct its businesses as now conducted.  The Company does not have any knowledge of any infringement by the Company of trademark, trade name rights, patents, patent rights, copyrights, inventions, licenses, service names, service marks, service mark registrations, trade secret or other similar rights of others, or of any such development of similar or identical trade secrets or technical information by others and there is no claim, action or proceeding being made or brought against, or to the Company’s knowledge, being threatened against, the Company regarding trademarks, trade name rights, patents, patent rights, inventions, copyrights, licenses, service names, service marks, service mark registrations, trade secrets or other infringement.

 

	 	
(l)

	

Disclosure. No representation or warranty by the Company in this Subscription Agreement, the other Offering Documents, nor in any certificate, Schedule or Exhibit delivered or to be delivered pursuant to this Subscription Agreement or the  other Offering Documents: contains or will contain any untrue statement of material fact or omits or will omit to state a material fact necessary to make the statements contained herein or therein not misleading.  To the knowledge of the Company at the time of the execution of this Subscription Agreement and at each Closing, there is no information concerning the Company which has not heretofore been disclosed to the Subscribers that would have a Material Adverse Effect.

 

	 	
(m)

	

Title.  The Company has good and marketable title to all personal property owned by it which is material to the business of the Company, in each case free and clear of all liens, encumbrances and defects. 

 

	 	
(n)

	

Tax Status.  The Company has made or filed all United States federal and state income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject and all such returns, reports and declarations are true, correct and accurate in all material respects.  The Company has paid all taxes and other governmental assessments and charges, shown or determined to be due on such returns, reports and declarations, except those being contested in good faith, for which adequate reserves have been established, in accordance with generally accepted accounting principles (“GAAP”), and except where the failure to do so would not constitute a Material Adverse Effect on the Company. 

 

  

7

  

 

	 	
(o)

	

Compliance with Laws. The business of the Company has been and is presently being conducted so as to comply with all applicable material federal, state and local governmental laws, rules, regulations and ordinances.

 

	 	
(p)

	

Restrictions on Business Activities.  There is no judgment, order, decree, writ or injunction binding upon the Company or any subsidiary that has or could prohibit or impair the conduct of their respective businesses as currently conducted or any business practice of the Company or any subsidiary, including the acquisition of property, the provision of services, the hiring of employees or the solicitation of clients, in each case either individually or in the aggregate.

 

	 	
(r)

	

Issuances. The Shares will be validly issued, fully paid and nonassessable.

 

	 	
(s)

	

USA PATRIOT Act and Money Laundering Laws. The operations of the Company are and have been conducted at all times in compliance with the money laundering requirements of all applicable governmental authorities and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental authority (collectively, the “Money Laundering Laws”) and the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Title III of Pub. L. 107-56 (signed into Law October 26, 2001) (the “USA PATRIOT Act”) and no action, suit or proceeding by or before any court or governmental authority or any arbitrator involving any of the Company or any of its Subsidiaries with respect to the Money Laundering Laws or USA PATRIOT Act is pending or, to the best knowledge of the Company, threatened.

 

	
4.

	
Legends.

 

	 	
(a)

	

The Subscriber understands and agrees that the Company will cause any necessary legends to be placed upon any instruments(s) evidencing ownership of the Securities, together with any other legend that may be required by federal or state securities laws or deemed necessary or desirable by the Company.

	 	
(b)

	

Certificates evidencing the Shares shall not contain any legend (i) while a registration statement covering the resale of such security is effective under the Securities Act, or (ii) following any sale of such Shares pursuant to Rule 144. The Company, at its own expense, shall cause its counsel to issue a legal opinion to the transfer agent promptly if required by the transfer agent to effect the removal of the legend hereunder. The Company may not make any notation on its records or give instructions to the transfer agent that enlarge the restrictions on transfer set forth in this Agreement. Certificates for Securities subject to legend removal hereunder shall be transmitted by the transfer agent to the Subscriber by crediting the account of the Subscriber’s prime broker with the Depository Trust Company System as directed by such Subscriber (in each case subject to representation letters from a broker and/or Subscriber required by the transfer agent or the Company).

 

  

8

  

 

	
5.

	
Registration Rights.

 

	 	
(a)

	

Registration Statement Requirements.  If at any time after the Closing, when there is not an effective Registration Statement providing for the resale of the Shares (the “Registrable Securities”), and any of the Registrable Securities may not be sold pursuant to Rule 144 under the Securities Act, and the Company shall determine to prepare and file with the U.S. Securities and Exchange Commission (the “Commission”) a Registration Statement relating to an offering for its own account or the account of others under the Securities Act of any of its equity securities (other than for an underwritten offering or on Form S-4 or Form S-8, each as promulgated under the Securities Act, or their then equivalents), the Company shall send to each holder of Registrable Securities written notice of such determination.  If within fifteen (15) days after receipt of such notice, or within such shorter period of time as may be specified by the Company in such written notice as may be necessary for the Company to comply with its obligations with respect to the timing of the filing of such Registration Statement, any such holder shall so request in writing, (which request shall specify the Registrable Securities intended to be registered), the Company shall use commercially reasonable efforts to cause the registration under the Securities Act of all Registrable Securities which the Company has been so requested to register by the holder.

 

	 	
(b)

	

Registration Procedures. When the Company effects the registration of any Registrable Securities under the Securities Act, the Company will, as expeditiously as possible:

 

	 	
 

	

(i)      prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective until such registration statement has been effective for the earlier of (a) a period of one (1) year, or (b) until the Shares can be sold by the Subscriber pursuant to Rule 144 without volume restrictions;

 

(ii)      furnish to the Subscriber, at the Company’s expense, such number of copies of the registration statement and the prospectus included therein (including each preliminary prospectus) as the Subscriber reasonably may request in order to facilitate the public sale or their disposition of the securities covered by such registration statement or make them electronically available;

 

(iii)    use its reasonable best efforts to register or qualify the Registrable Securities covered by such registration statement under the securities or “blue sky” laws of such jurisdictions as the Subscriber shall request in writing, provided, however, that  the Company shall not for any such purpose be required to qualify generally to transact business as a foreign corporation in any jurisdiction where it is not so qualified or to consent to general service of process in any such jurisdiction; and

 

(iv)     list the Registrable Securities covered by such registration statement with any securities exchange on which the common stock of the Company is then listed.

 

  

9

  

 

	 	
(c)

	

 
Provision of Documents.  It shall be a condition precedent to the obligations of the Company to complete the registration pursuant to this Agreement with respect to the Registrable Securities of a particular Subscriber that such Subscriber shall furnish to the Company in writing such information and representation letters, including a completed selling securityholder questionnaire in the form acceptable to the Company, with respect to itself and the proposed distribution by it as the Company may reasonably request to assure compliance with federal and applicable state securities laws.

 

	 	
(d)

	

Expenses.  All expenses incurred by the Company in complying with Section 5, including, without limitation, all registration and filing fees, printing expenses (if required), fees and disbursements of counsel and independent public accountants for the Company, fees and expenses (including reasonable counsel fees) incurred in connection with complying with state securities or “blue sky” laws, fees of FINRA, transfer taxes, and fees of transfer agents and registrars, are called “Registration Expenses.” The Company will pay all Registration Expenses in connection with any registration statement described in Section 5.

 

	 	
(e)

	

Indemnification and Contribution.

 

	 	
 

	

(i)       In the event of a registration of any Registrable Securities under the Securities Act pursuant to this Section 5, the Company will, to the extent permitted by law, indemnify and hold harmless the Subscriber, each of the officers, directors, agents, affiliates, members, managers, control persons, and principal shareholders of the Subscriber, each underwriter of such Registrable Securities thereunder and each other person, if any, who controls such Subscriber or underwriter within the meaning of the Securities Act, against any losses, claims, damages or liabilities, joint or several, to which the Subscriber, or such underwriter or controlling person may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any registration statement under which such Registrable Securities was registered under the Securities Act pursuant to Section 5, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereof, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances when made, and will subject to the provisions of Section 5(e)(iii) reimburse the Subscriber, each such underwriter and each such controlling person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the Company shall not be liable to the Subscriber to the extent that any such damages arise out of or are based upon an untrue statement or omission made in any preliminary prospectus if (i) the Subscriber failed to send or deliver a copy of the final prospectus delivered by the Company to the Subscriber with or prior to the delivery of written confirmation of the sale by the Subscriber to the person asserting the claim from which such damages arise, (ii) the final prospectus would have corrected such untrue statement or alleged untrue statement or such omission or alleged omission, or (iii) to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission so made in conformity with information furnished by any such Subscriber in writing specifically for use in such registration statement or prospectus.

 

  

10

  

 

	 	
 

	

(ii)      In the event of a registration of any of the Registrable Securities under the Securities Act pursuant to Section 5, the Subscriber will, to the extent permitted by law, indemnify and hold harmless the Company, and each person, if any, who controls the Company within the meaning of the Securities Act, each officer of the Company who signs the registration statement, each director of the Company, each underwriter and each person who controls any underwriter within the meaning of the Securities Act, against all losses, claims, damages or liabilities, joint or several, to which the Company or such officer, director, underwriter or controlling person may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the registration statement under which such Registrable Securities were registered under the Securities Act pursuant to Section 5, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereof, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse the Company and each such officer, director, underwriter and controlling person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action, provided, however, that the Subscriber will be liable hereunder in any such case if and only to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in reliance upon and in conformity with information pertaining to the Subscriber, as such, furnished in writing to the Company by such Subscriber specifically for use in such registration statement or prospectus, and provided, further, however, that the liability of the Subscriber hereunder shall be limited to the net proceeds actually received by the Subscriber from the sale of Registrable Securities pursuant to such registration statement.

 

	 	
 

	

(iii)    Promptly after receipt by an indemnified party hereunder of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party hereunder, notify the indemnifying party in writing thereof, but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to such indemnified party other than under this Section 5(e)(iii) and shall only relieve it from any liability which it may have to such indemnified party under this Section 5(e)(iii), except and only if and to the extent the indemnifying party is prejudiced by such omission. In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the

 

  

11

  

 

	 	
 

	

           indemnifying party shall be entitled to participate in and, to the extent it shall wish, to assume and undertake the defense thereof with counsel satisfactory to such indemnified party, and, after notice from the indemnifying party to such indemnified party of its election so to assume and undertake the defense thereof, the indemnifying party shall not be liable to such indemnified party under this Section 5(e)(iii) for any legal expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation and of liaison with counsel so selected, provided, however, that, if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnifying party shall have reasonably concluded that there may be reasonable defenses available to indemnified party which are different from or additional to those available to the indemnifying party or if the interests of the indemnified party reasonably may be deemed to conflict with the interests of the indemnifying party, the indemnified parties, as a group, shall have the right to select one separate counsel, reasonably satisfactory to the indemnified and indemnifying party, and to assume such legal defenses and otherwise to participate in the defense of such action, with the reasonable expenses and fees of such separate counsel and other expenses related to such participation to be reimbursed by the indemnifying party as incurred.

 

	 	
 

	

(iv)     In order to provide for just and equitable contribution in the event of joint liability under the Securities Act in any case in which either (i) the Subscriber, or any controlling person of the Subscriber, makes a claim for indemnification pursuant to this Section 5(e) but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case notwithstanding the fact that this Section 5(e) provides for indemnification in such case, or (ii) contribution under the Securities Act may be required on the part of the Subscriber or controlling person of the Subscriber in circumstances for which indemnification is not provided under this Section 5(e); then, and in each such case, the Company and the Subscriber will contribute to the aggregate losses, claims, damages or liabilities to which they may be subject (after contribution from others) in such proportion so that the Subscriber is responsible only for the portion represented by the percentage that the public offering price of its securities offered by the registration statement bears to the public offering price of all securities offered by such registration statement, provided, however, that, in any such case, (y) the Subscriber will not be required to contribute any amount in excess of the public offering price of all such securities sold by it pursuant to such registration statement; and (z) no person or entity guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any person or entity who was not guilty of such fraudulent misrepresentation and provided, further, however, that the liability of the Subscriber hereunder shall be limited to the net proceeds actually received by the Subscriber from the sale of Registrable Securities pursuant to such registration statement.

 

  

12

  

 

	
6.

	
General Provisions.

 

	 	
(a)

	

Confidentiality.  The Subscriber covenants and agrees that it will keep confidential and will not disclose or divulge any confidential or proprietary information that such Subscriber may obtain from the Company pursuant to financial statements, reports, and other materials submitted by the Company to such Subscriber in connection with this offering or as a result of discussions with or inquiry made to the Company, unless such information is known, or until such information becomes known, to the public through no action by the Subscriber; provided, however, that a Subscriber may disclose such information (i) to its attorneys, accountants, consultants, and other professionals to the extent necessary in connection with his or her investment in the Company so long as any such professional to whom such information is disclosed is made aware of the Subscriber’s obligations hereunder and such professional agrees to be likewise bound as though such professional were a party hereto, (ii) if such information becomes generally available to the public through no fault of the Subscriber, or (iii) if such disclosure is required by applicable law or judicial order.

 

	 	
(b)

	

Successors.  The covenants, representations and warranties contained in this Subscription Agreement shall be binding on the Subscriber’s and the Company’s heirs and legal representatives and shall inure to the benefit of the respective successors and assigns of the Company.  The rights and obligations of this Subscription Agreement may not be assigned by any party without the prior written consent of the other party.

 

	 	
(c)

	

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

 

	 	
(d)

	

Execution by Facsimile.  Execution and delivery of this Agreement by facsimile transmission (including the delivery of documents in Adobe PDF format) shall constitute execution and delivery of this Agreement for all purposes, with the same force and effect as execution and delivery of an original manually signed copy hereof.

 

	 	
(e)

	

Governing Law and Jurisdiction.  This Subscription Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts to be wholly performed within such state and without regard to conflicts of laws provisions.  Any legal action or proceeding arising out of or relating to this Subscription Agreement and/or the other Offering Documents may be instituted in the courts of the State of New York sitting in New York County or in the United States of America for the Southern District of New York, and the parties hereto irrevocably submit to the jurisdiction of each such court in any action or proceeding.  Subscriber hereby irrevocably waives and agrees not to assert, by way of motion, as a defense, or otherwise, in every suit, action or other proceeding arising out of or based on this Subscription Agreement and/or the other Offering Documents and brought in any such court, any claim that Subscriber is not subject personally to the jurisdiction of the above named courts, that Subscriber’s property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum or that the venue of the suit, action or proceeding is improper

 

  

13

  

 

	     (f)	

 (i)

	
Indfemnification Generally.  The Company shall indemnify the Subscriber from and against any and all losses, damages, liabilities, claims, charges, actions, proceedings, demands, judgments, settlement costs and expenses of any nature whatsoever (including, without limitation, reasonable attorneys’ fees and expenses) resulting from any breach of a representation and warranty, covenant or agreement by the Company and all claims, charges, actions or proceedings incident to or arising out of the foregoing.

 

	
  

	
(ii)

	
Indemnification Procedures.  The Subscriber shall give notice as promptly as reasonably practicable to the Company of any action commenced against or by it in respect of which indemnity may be sought hereunder, but failure to so notify the Company shall not release the Company from any liability that it may have, otherwise than on account of this indemnity agreement so long as such failure shall not have materially prejudiced the position of the Company.  Upon such notification, the Company shall assume the defense of such action if it is a claim brought by a third party, and, if and after such assumption, the Company shall not be entitled to reimbursement of any expenses incurred by it in connection with such action except as described below.  In any such action, the Company shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of the Company unless (i) the Company and the Subscriber shall have mutually agreed to the contrary or (ii) the named parties in any such action (including any impleaded parties) include both the Company and the Subscriber and representation of both parties by the same counsel would be inappropriate due to actual or potential differing or conflicting interests between them.  The Company shall not be liable for any settlement of any proceeding effected without its written consent (which shall not be unreasonably withheld or delayed), but if settled with such consent or if there be final judgment for the plaintiff, the Company shall indemnify the Subscriber from and against any loss, damage or liability by reason of such settlement or judgment.

 

	 	
(g)

	

Notices.  All notices, requests, demands, claims and other communications hereunder shall be in writing and shall be delivered by certified or registered mail (first class postage pre-paid), guaranteed overnight delivery, or facsimile transmission if such transmission is confirmed by delivery by certified or registered mail (first class postage pre-paid) or guaranteed overnight delivery, to the following addresses and facsimile numbers (or to such other addresses or facsimile numbers which such party shall subsequently designate in writing to the other party):

 

	
  

	 	
(i)

	
if to the Issuer:

 

	
  

	 	
 

	
Gelia Group, Corp.

	
  

	 	
 

	

140 Rowayton Avenue, 2nd Floor

	
  

	 	
 

	

Rowayton, Connecticut 06854

	 	 	
 

	

Tel.: 203-803-1995

	
  

	 	
 

	

Facsimile: 212-656-1735

	
  

	 	
(ii)

	
if to the Subscriber to the address set forth next to its name on the signature page hereto.

 

  

14

  

 

	 	
(h)

	

Entire Agreement.  The Offering Documents delivered at  a Closing pursuant hereto, contain the entire understanding of the parties in respect of its subject matter and supersede all prior agreements and understandings between or among the parties with respect to such subject matter.  The Exhibits and schedules constitute a part hereof as though set forth in full above.

 

	 	
(i)

	

Amendment; Waiver.  This Subscription Agreement may not be modified, amended, supplemented, canceled or discharged, except by written instrument executed by the Company and the holders of not less than a majority of the Shares at the time such consent is sought.  No failure to exercise, and no delay in exercising, any right, power or privilege under this Subscription Agreement shall operate as a waiver, nor shall any single or partial exercise of any right, power or privilege hereunder preclude the exercise of any other right, power or privilege.  No waiver of any breach of any provision shall be deemed to be a waiver of any proceeding or succeeding breach of the same or any other provision, nor shall any waiver be implied from any course of dealing between the parties.  No extension of time for performance of any obligations or other acts hereunder or under any other agreement shall be deemed to be an extension of the time for performance of any other obligations or any other acts.  The rights and remedies of the parties under this Subscription Agreement are in addition to all other rights and remedies, at law or equity, that they may have against each other.

 

	 	
(j)

	

No Impairment.  At all times after the date hereof, the Company will not take or permit any action, or cause or permit any subsidiary to take or permit any action that materially impairs or adversely affects the rights of the Subscribers under the this Subscription Agreement or any of the other Offering Documents

[SIGNATURE PAGES FOLLOW]

 

  

15

  

IN WITNESS WHEREOF, the Company has executed this Subscription Agreement as of the date first written above.

	 	GELIA GROUP, CORP.	 
	 	 	 	 
	
 

	
By: 

	 	 
	 	Name:	
Kim Leadford

	 
	 	Title:	
Chief Executive Officer

	 
	 	 	 	 

 

 

16

 

                                                                                     

SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT

INFORMATION IN RESPONSE TO THIS SECTION WILL BE KEPT STRICTLY CONFIDENTIAL

DOLLAR AMOUNT INVESTED $_____________________________

NUMBER OF SHARES SUBSCRIBED FOR _____________________________

NAME IN WHICH SHARES SHOULD BE ISSUED: _____________________________

_____________________________

 

AMOUNT INVESTED TO BE SENT VIA:                                                                            o Check (enclosed)   o Wire

Address Information

For individual subscribers this address should be the Subscriber’s primary legal residence.  For entities other than individual subscribers, please provide address information for the entities primary place of business.  Information regarding a joint subscriber should be included in the column at right.

	
 

_________________________________

Legal Address

	
 

_________________________________

Legal Address

	
 

_________________________________

City, State, and Zip Code

	
 

_________________________________

City, State, and Zip Code

Alternate Address Information

Subscribers who wish to receive correspondence at an address other than the address listed above should complete the Alternate Address section on the following page.

	
 

_________________________________

Tax ID # or Social Security #

 

	
 

_________________________________

Tax ID # or Social Security #

 

	
AGREED AND SUBSCRIBED

 

 

This __ day of ______________________, 2013

 

By:_________________________________

Name:

Title (if any):

	
AGREED AND SUBSCRIBED

SIGNATURE OF JOINT SUBSCRIBER (if any)

 

This __ day of ______________________, 2013

 

By:_________________________________

Name:

Title (if any):

 

	
 

__________________________________

Subscriber Name (Typed or Printed)

	
 

__________________________________

Additional Subscriber Name (Typed or Printed)

 

  

17

  

 

	
ACCEPTED:

GELIA GROUP, CORP.

 

By:_________________________________

Name: Kim Leadford

Title: Chief Executive Officer

 

Date of Acceptance:  ____________________

 

	  

Alternate Address Information (if applicable)

	
 

_________________________________

Alternate Address for Correspondence

	
 

_________________________________

Alternate Address for Correspondence

	
 

_________________________________

City, State and Zip Code

	
 

_________________________________

City, State and Zip Code

	
 

_________________________________

Telephone

	
 

_________________________________

Telephone

	
 

_________________________________

Facsimile

	
 

_________________________________

Facsimile

	
 

_________________________________

Tax ID # or Social Security #

 

	
 

_________________________________

Tax ID # or Social Security #

 

  

18

  

 

CERTIFICATE OF SIGNATORY

(To be completed if the Shares are

being subscribed for by an entity)

                      I, ___________________________ , am the ___________________________ of _____________________________________________ (the “Entity”).

           I certify that I am empowered and duly authorized by the Entity to execute and carry out the terms of the Subscription Agreement and to purchase and hold the Shares, and certify further that the Subscription Agreement has been duly and validly executed on behalf of the Entity and constitutes a legal and binding obligation of the Entity.

           IN WITNESS WHEREOF, I have set my hand this ____ day of ______________, 2013.

                                                                                                      

	
 

	
 

	 	 
	 	 	(Signature)	 

                                                                                     

19Unassociated Document

Exhibit 10.3

 

SECURITIES PURCHASE AGREEMENT

 

This Securities Purchase Agreement (this “Agreement”) is made and entered into as of October 8, 2013 among Yulia Marach (the “Seller”), with her addresses at Klenovy Blvd, 6-7, Moscow, Russia 115470, and Starstream Entertainment, LLC, a Delaware limited liability company (the “Purchaser”).

 

WHEREAS, the Seller is the sole record and beneficial owner of 4,000,000 shares (the “Shares”) of common stock, par value $.001 per share (“Common Stock,” such shares, the “Shares”), of Gelia Group, Corp., a Nevada corporation (the “Company”);

 

WHEREAS, the Purchaser(s) desire to acquire from the Seller, and the Seller desire to sell to the Purchasers the Shares in the manner and on the terms and conditions hereinafter set forth; and

 

WHEREAS, the Shares represent 77.37% of the total outstanding shares of the Company’s Common Stock.

 

NOW, THEREFORE, in consideration of these premises, the mutual covenants and agreements herein contained and for other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto agree as follows:

 

DEFINITIONS.

 

The following terms when used in this Agreement have the following respective meanings:

 

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

 

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

 

“Affiliate” means with respect to any Person, any (i) officer, director, partner or holder of more than 10% of the outstanding shares or equity interests of such Person, (ii) any relative of such Person, or (iii) any other Person which directly or indirectly controls, is controlled by, or is under common control with such Person.  A Person will be deemed to control another Person if such Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of the “Controlled” Person, whether through ownership of voting securities, by contract, or otherwise.

 

“Acquisition Proposal” means any offer or proposal for, or indication of interest in, any acquisition of all or a portion of the Shares or any other assets or securities of the Company, whether by way of a purchase, merger, consolidation or other business combination.

 

“Articles of Incorporation” means the Articles of Incorporation of the Company, as amended, and as on file with the Secretary of State of the State of Nevada on the date of this Agreement.

 

“Business Day” means a day other than Saturday, Sunday or statutory holiday in the State of New York and in the event that any action to be taken hereunder falls on a day which is not a Business Day, then such action shall be taken on the next succeeding Business Day.

 

 “Closing Date” has the meaning set forth in Section 2.1 hereof.

 

“Closing” has the meaning set forth in Section 2.1 hereof.

 

“Common Stock” has the meaning set forth in the recitals hereto.

 

  

  

  

 

“Company” has the meaning set forth in the recitals hereto.

 

“Corporate Records” shall have the meaning as used in Section 3.2(n) hereof.

 

 “Encumbrances” shall have the meaning as used in Section 3.1(b) hereof.

 

“Escrow Agreement” shall mean or relate to a formal escrow agreement to be entered into among Ofsink, LLC and the Purchasers as necessary to close the transaction and otherwise ensure that the Seller receives the Purchase Price and the Purchasers receive the Shares.

 

“GAAP” means generally accepted accounting principles in the United States.

 

“Governmental Authority” means the United States, any state or municipality, the government of any foreign country, any subdivision of any of the foregoing, or any authority, department, commission, board, bureau, agency, court, or instrumentality of any of the foregoing.

 

“Indemnification” shall have the meaning as used in Section 4.7 hereof.

 

“Indebtedness” shall have the meaning as used in Section 3.2(j) hereof.

 

“Knowledge” means the actual knowledge of such Person or its Affiliates.

 

“Lien” means any mortgage, lien, pledge, security interest, easement, conditional sale or other title retention agreement, or other encumbrance of any kind.

 

“Material Adverse Effect” means a change or effect in the condition (financial or otherwise), properties, assets, liabilities, rights or business of the Company which change or effect, individually or in the aggregate, could reasonably be expected to be materially adverse to such condition, properties, assets, liabilities, rights, operations or business.

 

“Material Changes” shall have the meaning as used in Section 3.2(g) hereof.

 

“Minute Books” shall have the meaning as used in Section 3.2(n) hereof.

 

“Obligations” shall have the meaning as used in Section 3.2(j) hereof.

 

“OTCBB” has the meaning set forth in Section 3.2(m) hereof.

 

“Person” means an individual, corporation, limited liability company, partnership, joint venture, trust, unincorporated organization, or Governmental Authority.

 

“Purchase Price” means One Hundred Thousand U.S. Dollars (US$100,000), which does not include any escrow fees, all of which shall be borne by the Sellers.

 

“Returns” shall have the meaning as used in Section 3.2(l) hereof.

 

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

 

“SEC Filings” means the Company’s annual reports, quarterly reports and other publicly-available filings made by the Company with the SEC under Section 13 or Section 15(d) of the 1934 Act.

 

“Securities” shall mean the Shares.

 

  

2

  

 

“Shares” shall have the meaning set forth in the recitals hereto.

 

“Stockholders” mean the record holders of shares of the Company’s Common Stock.

 

“Tax” or “Taxes” means any and all federal, state, local and foreign taxes, including, without limitation, gross receipts, income, profits, sales, use, occupation, value added, ad valorem, transfer, franchise, withholding, payroll, recapture, employment, excise and property taxes, assessments, governmental charges and duties together with all interest, penalties and additions imposed with respect to any such amounts and any obligations under any agreements or arrangements with any other person with respect to any such amounts and including any liability of a predecessor entity for any such amounts.

 

SECTION I  PURCHASE AND SALE OF COMMON STOCK.

 

1.1           Purchase of Shares.  At the Closing, based upon the representations, warranties, covenants and agreements of the parties set forth in this Agreement, the Purchaser(s) shall acquire from the Seller, and the Seller shall sell to the Purchaser(s), the Shares for an aggregate purchase price of One Hundred Thousand U.S. Dollars (US$100,000)(the “Purchase Price”).

 

SECTION II  THE CLOSING.

 

2.1           Closing.

 

(a)           The closing of the sale of the Shares pursuant to Section 1.1 hereof and certain of the other transactions contemplated hereby (the “Closing”) shall take place at the offices of the Purchasers’ counsel, Ofsink, LLC, located at 900 Third Avenue, 5th Floor, New York, New York 10022 on the next Business Day (or such later date as the parties hereto may agree) following the satisfaction or waiver of the conditions set forth in Section V hereof(the “Closing Date”).

 

2.2           Deliveries by the Seller.  At the Closing, the Seller shall advance and settle fees of any broker, finder or in any other similar capacity in connection with this Agreement or the transactions contemplated hereby and deliver or cause to be delivered to the Purchasers the following items (in addition to any other items required to be delivered to the Purchasers pursuant to any other provision of this Agreement):

 

(a)           original certificates representing the Shares being sold by the Seller to the Purchasers pursuant to Section 1.1 hereof, duly recorded on the books of the Company, along with duly notarized stock powers and indemnification letter for such certificates duly executed in blank;

 

(b)           a full and complete release by the Seller from any and all liabilities, claims and obligations, arising prior to the Closing, that the Seller may have against the Company, in a form reasonably acceptable to the Purchasers.

 

(c)           resignations of such of the current directors and officers from all of their positions as directors and officers of the Company as requested by the Purchasers;

 

(d)           duly executed corporate actions accepting any resignations pursuant to Section 2.2(c), appointing Charles Bonan, Kim Leadford, and Abraxas Discala as directors of the Board of the Company and appointing Kim Leadford as the Company’s Chief Executive Officer and Daniel McCarney as the Company’s Chief Financial Officer; and

 

  

3

  

 

(e)           duly executed agreements or any such documentations pursuant to Section 3.2(j), cancelling the loan advanced Yulia Marach to the Company, in the principal amount of $5,437, dated as of October__, 2013; and

 

(f)           An affidavit executed by the Seller, in form and substance reasonably satisfactory to the Buyer, with respect to the business operations and activities of the Company prior to the date of this Agreement;

 

(g)           all records and documents relating to the Company, wherever located, including, but not limited to, all books, records, government filings, tax returns, consent decrees, orders, and correspondence, financial information and records, electronic files containing any financial information and records, and other documents used in or associated with the Company, to the extent such records and documents have not been previously delivered to the Purchasers.

 

2.3           Deliveries by the Purchasers.  At the Closing, the Purchasers shall deliver or cause to be delivered the payment of the Purchase Price by check or wire transfer to the account designated by the Seller as set forth on  Schedule I attached herein (in addition to any other items required to be delivered to the Seller pursuant to any other provision of this Agreement).

 

SECTION III  REPRESENTATIONS AND WARRANTIES.

 

3.1           Representations and Warranties of the Seller with respect to the Securities.  The Seller represents and warrants to the Purchasers with respect to the Securities that:

 

(a)         Capacity of the Seller; Authorization; Execution of Agreements.  The Seller has all requisite power, authority and capacity to enter into this Agreement and to perform the transactions and obligations to be performed by it hereunder.  This Agreement constitutes a valid and legally binding agreement of the Seller, enforceable in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws of the United States (both state and federal), affecting the enforcement of creditors’ rights or remedies in general from time to time in effect and the exercise by courts of equity powers or their application of principles of public policy.

 

(b)         Title to Securities.  The Seller is the sole record and beneficial owner of the Securities and has sole managerial and dispositive authority with respect to the number of shares as set forth in the recital.  None of the Seller has granted any person a proxy with respect to any of the Shares that has not expired or been validly withdrawn.  The sale and delivery by the Seller of the Shares to the Purchasers pursuant to this Agreement will vest in the Purchasers legal and valid title to the Shares, free and clear of all liens, security interests, adverse claims or other encumbrances of any character whatsoever, other than encumbrances created by the Purchasers and restrictions on the resale of the Securities under applicable securities laws(“Encumbrances”).

 

(c)         Brokers, Finders, and Agents.  Seller is obligated to any fees of any broker, finder or in any other similar capacity in connection with this Agreement or the transactions contemplated hereby. No Person has or, immediately following the consummation of the transactions contemplated by this Agreement, will have, any right, interest or valid claim against the Company, the Seller or the Purchasers for any commission, fee or other compensation as a finder or broker in connection with the transactions contemplated by this Agreement, nor are there any brokers’ or finders’ fees or any payments or promises of payment of similar nature, however characterized, that have been paid or that are or may become payable in connection with the transactions contemplated by this Agreement, as a result of any agreement or arrangement made by the Seller.

 

  

4

  

 

(d)         Disclosure.  The Seller acknowledges and agrees that the representations and warranties by such Seller in this Section 3.1 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 therein or necessary to make the statements contained therein not misleading, under the circumstance under which they were made.  The Seller acknowledges and agrees that the Purchasers does not make and has not made (i) any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 3.3, or (ii) any statement, commitment or promise to the Seller or any of their representatives which is or was an inducement to the Seller to enter into this Agreement, other than as set forth in this Agreement.

 

3.2           Representations and Warranties of the Seller with respect to the Company.  The Seller represents and warrants to the Purchasers, with respect to the Company, that:

 

(a)         Organization and Standing.  The Company is duly incorporated and validly existing under the laws of the State of Nevada, and has all requisite corporate power and authority to own or lease its properties and assets and to conduct its business as it is presently being conducted.  The Company does not own any equity interest, directly or indirectly, in any other Person or business enterprise. The Company is in good standing in the State of Nevada. The Company is qualified to do business and is in good standing in each jurisdiction in which the failure to so qualify could reasonably be expected to have a Material Adverse Effect upon its assets, properties, financial condition, results of operations or business. The Company has no subsidiaries.

 

(b)         Capitalization.  At the date of this Agreement, the authorized capital stock of the Company consists of 75,000,000 shares of Common Stock, par value $.001 per share, with 5,170,000 shares of Common Stock issued and outstanding.  The Company has no other class or series of equity securities authorized, issued, reserved for issuance or outstanding. The Seller represents and warrants that there are (x) no outstanding options, offers, warrants, conversion rights, contracts or other rights to subscribe for or to purchase from the Company, or agreements obligating the Company to issue, transfer, or sell (whether formal or informal, written or oral, firm or contingent), shares of capital stock or other securities of the Company (whether debt, equity, or a combination thereof) or obligating the Company to grant, extend, or enter into any such agreement and (y) no agreements or other understandings (whether formal or informal, written or oral, firm or contingent) which require or may require the Company to repurchase any of its Common Stock.  There are no preemptive or similar rights granted by the Company with respect to the Company’s capital stock.  There are no anti-dilution or price adjustment provisions contained in any security issued by the Company.  The Company is not a party to, and, to the Knowledge of the Seller, without inquiry, no Stockholder is a party to, any registration rights agreements, voting agreements, voting trusts, proxies or any other agreements, instruments or understandings with respect to the voting of any shares of the capital stock of the Company, or any agreement with respect to the transferability, purchase or redemption of any shares of the capital stock of the Company.  The sale of the Shares to the Purchasers does not obligate the Company to issue any shares of capital stock or other securities to any Person (other than the Purchasers) and will not result in a right of any holder of Company securities, by agreement with the Company, to adjust the exercise, conversion, exchange or reset price under such securities.  The outstanding Common Stock is all duly and validly authorized and issued, fully paid and nonassessable.  The Seller will cause the Company not to issue, or resolve or agree to issue, any securities to any party, other than the Purchasers, prior to the Closing.  The Shares represent 77.37% of the outstanding Common Stock of the Company.

 

(c)         Status of Securities.  The Shares (i) have been duly authorized, validly issued, fully paid and are nonassessable, and will be such at the Closing, (ii) were issued in compliance with all applicable United States federal and state securities laws, and will be in compliance with such laws at the Closing, (iii) subject to restrictions under this Agreement, and applicable United States federal and state securities laws, have the rights and preferences set forth in the Articles of Incorporation, as amended, and will have such rights and preferences at the Closing, and (iv) are free and clear of all Encumbrances and will be free and clear of all Encumbrances at the Closing (other than Encumbrances created by the Purchasers and restrictions on the resale of the Shares under applicable securities laws).

 

  

5

  

 

(d)         Conflicts; Defaults.  The execution and delivery of this Agreement by the Seller and the performance by the Seller of the transactions and obligations contemplated hereby and thereby to be performed by it do not (i) violate, conflict with, or constitute a default under any of the terms or provisions of, the Articles of Incorporation, as amended, or any provisions of, or result in the acceleration of any obligation under, any contract, note, debt instrument, security agreement or other instrument to which the Company is a party or by which the Company, or any of the Company’s assets, is bound; (ii) result in the creation or imposition of any Encumbrances or claims upon the Company’s assets or upon any of the shares of capital stock of the Company; (iii) constitute a violation of any law, statute, judgment, decree, order, rule, or regulation of a Governmental Authority applicable to the Company; or (iv) constitute an event which, after notice or lapse of time or both, would result in any of the foregoing.

 

(e)         Securities Laws.  The Company has complied in all material respects with applicable federal securities laws, rules and regulations, including the Sarbanes-Oxley Act of 2002, as amended, as such laws, rules and regulations apply to the Company and its securities.  To the Knowledge of the Seller, all shares of capital stock of the Company have been issued in accordance with applicable federal securities laws, rules and regulations.  There are no stop orders in effect with respect to any securities of the Company that have been communicated to the Company’s transfer agent.

 

(f)          SEC Filings.  The SEC Filings, when filed, complied in all material respects with the requirements of Section 13 or Section 15(d) of the 1934 Act, as such sections were applicable as of the dates when filed, and did not, as of the dates when filed, contain an untrue statement of material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.  The financial statements of the Company included in the SEC Filings complied in all material respects with the rules and regulations of the SEC with respect thereto as in effect at the time of filing.  Such financial statements were prepared in accordance with GAAP applied on a consistent basis during the periods covered by such financial statements, except as may be otherwise specified in such financial statements or the notes thereto, and fairly present in all material respects the financial position of the Company as of and for the dates thereof and for the periods indicated, and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.  All material agreements to which the Company is a party or to which the property or assets of the Company are subject and which are required to be disclosed pursuant to the 1934 Act are included as part of or specifically identified in the SEC Filings. There are no outstanding comments from the SEC on any of the Company’s registration statements.

 

(g)         Material Changes. Since the date of the latest financial statements included within the SEC Filings, except as specifically disclosed in the SEC Filings, (i) there has been no event that could result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of the business consistent with past practice, and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP as required to be disclosed in filings made with the SEC, (iii) the Company has not altered its method of accounting or the identity of its auditors, except as disclosed in its SEC Filings, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock, and (v) the Company has not issued any equity securities (“Material Changes”).

 

  

6

  

 

(h)         Absence of Litigation.  There is no action, suit, claim, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or threatened in writing against or affecting the Company.

 

(i)          Brokers, Finders, and Agents.  The Company is not, directly or indirectly, obligated to anyone acting as broker, finder or in any other similar capacity in connection with this Agreement or the transactions contemplated hereby.  No Person has or, immediately following the consummation of the transactions contemplated by this Agreement, will have, any right, interest or valid claim against the Company, the Seller or the Purchasers for any commission, fee or other compensation as a finder or broker in connection with the transactions contemplated by this Agreement, nor are there any brokers’ or finders’ fees or any payments or promises of payment of similar nature, however characterized, that have been paid or that are or may become payable in connection with the transactions contemplated by this Agreement, as a result of any agreement or arrangement made by the Company.

 

(j)          Absence of Businesses and Liabilities.  The Company is not engaged in any business and as of the Closing Date, the Company shall have no liabilities (contingent or otherwise) or indebtedness outstanding (“Indebtedness”).The Company is not a guarantor or indemnitor of any indebtedness of any other person, firm or corporation (together with the “Indebtedness”, the “Obligations”).

 

(k)         No Agreements.  Except as set forth on Schedule 3.2(k) hereto, the Company is not a party to any agreement, commitment or instrument, whether oral or written, which imposes any obligations or liabilities on the Company after the Closing.

 

(l)          Taxes.

 

                                              (i)            The Company has timely filed all federal, state, local and foreign returns, estimates, information statements and reports relating to Taxes (“Returns”) required to be filed by the Company with any Tax authority prior to the date hereof, except such Returns which are not material to the Company.  All such Returns are true, correct and complete and the Company has no basis to believe that any audit of the Returns would cause a Material Adverse Effect upon the Company or its financial condition.  The Company has paid all Taxes shown to be due on such Returns.

 

                                              (ii)           All Taxes that the Company is required by law to withhold or collect have been duly withheld or collected, and have been timely paid over to the proper governmental authorities to the extent due and payable.

 

                                              (iii)          The Company has no material Tax deficiency outstanding, proposed or assessed against the Company, and the Company has not executed any unexpired waiver of any statute of limitations on or extending the period for the assessment or collection of any Tax.

 

                                              (iv)          No audit or other examination of any Returns of the Company by any Tax authority is known by the Company to be presently in progress, nor has the Company been notified of any request for such an audit or other examination.

 

                                              (v)           No adjustment relating to any Returns filed by the Company has been proposed in writing, formally or informally, by any Tax authority to the Company or any representative thereof.

                                              (vi)          The Company has no liability for any Taxes for its current fiscal year, whether or not such Taxes are currently due and payable.

 

  

7

  

 

(m)        OTC Bulletin Board Quotation.  The Common Stock is currently quoted on the Over-the-Counter Bulletin Board (the “OTCBB”).  There is no known action or known proceeding pending or threatened in writing against the Company by the Financial Industry Regulatory Authority with respect to any intention by such entities to prohibit or terminate the quotation of the Common Stock on the OTCBB.

 

(n)         Corporate Records.  All records and documents relating to the Company known to the Seller, including, but not limited to, the books, shareholder lists, government filings, Tax Returns, consent decrees, orders, and correspondence, financial information and records (including any electronic files containing any financial information and records), and other documents used in or associated with the Company (the “Corporate Records”) are true, complete and accurate in all material respects to the best Knowledge of the Seller.  The minute books of the Company known to the Seller contain true, complete and accurate records of all meetings and consents in lieu of meetings of the Board of Directors of the Company (and any committees thereof), similar governing bodies and shareholders (the “Minute Books”).  Copies of such Corporate Records of the Company and the Minute Books currently in the possession of the Company, have been heretofore delivered to the Purchasers; the original Corporate Records and Minute Books, to the extent such original Corporate Records and Minute Books exist, will be delivered to the Purchasers at Closing.

 

(o)         Disclosure.  The Seller, to her best Knowledge, acknowledges and agrees that the representations and warranties by the Seller in this Section 3.2 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 therein or necessary to make the statements contained therein not misleading, under the circumstance under which they were made.

 

3.3           Representations and Warranties of the Purchasers.  Each Purchaser hereby represents and warrants to the Seller that:

 

(a)         Organization and Standing.  The Purchaser has all requisite corporate power and authority to own or lease its properties and assets and to conduct its business as it is presently being conducted.  The Purchaser is qualified to do business and is in good standing in each jurisdiction in which the failure to so qualify could reasonably be expected to have a Material Adverse Effect upon its assets, properties, financial condition, results of operations or business.

 

(b)         Capacity of the Purchasers; Authorization; Execution of Agreements.  The Purchaser has all requisite power, authority and capacity to enter into this Agreement and to perform the transactions and obligations to be performed by it hereunder.  The execution and delivery of this Agreement by such Purchaser, and the performance by such Purchaser of the transactions and obligations contemplated hereby, including, without limitation, the purchase of the Securities from the Seller hereunder, have been duly authorized by all requisite corporate action of such Purchaser.  This Agreement constitutes a valid and legally binding agreement of the Purchaser, enforceable in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws of the United States (both state and federal), affecting the enforcement of creditors’ rights or remedies in general from time to time in effect and the exercise by courts of equity powers or their application of principles of public policy.

 

(c)         Investment Intent.  The Securities being purchased hereunder by the Purchaser are being purchased for its own account and are not being purchased with the view to, or for resale in connection with, any distribution or public offering thereof within the meaning of the 1933 Act.

 

  

8

  

 

(d)         Brokers, Finders, and Agents.  The Purchaser is not, directly or indirectly, obligated to anyone acting as broker, finder, or in any other similar capacity in connection with this Agreement or the transactions contemplated hereby.  No Person has or, immediately following the consummation of the transactions contemplated by this Agreement, will have, any right, interest or valid claim against the Company, the Seller or the Purchaser for any commission, fee or other compensation as a finder or broker in connection with the transactions contemplated by this Agreement, nor are there any brokers’ or finders’ fees or any payments or promises of payment of similar nature, however characterized, that have been paid or that are or may become payable in connection with the transactions contemplated by this Agreement, as a result of any agreement or arrangement made by the Purchasers.

 

(e)         Disclosure.  Each Purchaser acknowledges and agrees that the representations and warranties by the Purchasers in this Section 3.3 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 therein or necessary to make the statements contained therein not misleading, under the circumstance under which they were made.  Each Purchaser acknowledges and agrees that the Seller do not make and have not made (i) any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Sections 3.1 and 3.2, or (ii) any statement, commitment or promise to the Purchasers or any of its representatives which is or was an inducement to the Purchasers to enter into this Agreement, other than as set forth in this Agreement.

 

SECTION IV  COVENANTS OF THE PARTIES.

 

4.1           Commercially Reasonable Efforts.  Subject to the terms and conditions hereof, each party shall use commercially reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate the transactions contemplated by this Agreement as promptly as practicable after the date hereof, including (i) preparing and filing as promptly as practicable all documentation to effect all necessary SEC filings and other documents and to obtain as promptly as practicable all consents, waivers, licenses, orders, registrations, approvals, permits and authorizations necessary or advisable to be obtained from any Person and/or any Governmental Authority in order to consummate any of the transactions contemplated by this Agreement, (ii) executing and delivering such other documents, instruments and agreements as any party hereto shall reasonably request, and (iii) taking all reasonable steps as may be necessary to obtain all such material consents, waivers, licenses, orders, registrations, approvals, permits and authorizations.  Notwithstanding the foregoing, in no event shall any party have any obligation, in order to consummate the transactions contemplated hereby, to: (i) take any action(s) that would result in Material Adverse Changes in the benefits to the Seller on the one hand or to the Purchasers on the other of this Agreement, or (ii) dispose of any material assets or make any material change in its business other than as contemplated by this Agreement, or (iii) expend any material amount of funds or otherwise incur any material burden other than those contemplated by this Agreement.

 

4.2           Certain Filings; Cooperation in Receipt of Consents.

 

(a)         The Seller and the Purchaser shall reasonably cooperate with one another in (i) determining whether any other action by or in respect of, or filing with, any Governmental Authority is required, or any actions, consents, approvals or waivers are required to be obtained from parties to any material contracts, in connection with the consummation of the transactions contemplated hereby, and (ii) taking or seeking any such other actions, consents, approvals or waivers or making any such filings, furnishing information required in connection therewith.  Each party shall permit the other party to review any communication given by it to, and shall consult with each other in advance of any meeting or conference with, any Governmental Authority or, in connection with any proceeding by a private party, with any other Person, and to the extent permitted by the applicable Governmental Authority or other Person, give the other party the opportunity to attend and participate in such meetings and conferences, in each case in connection with the transactions contemplated hereby.

 

  

9

  

 

(b)         The Company shall timely file all reports required to be filed by it pursuant to Section 13 of the 1934 Act and all other documents required to be filed by it with the SEC under the 1933 Act or the 1934 Act from the date of this Agreement to the Closing.

 

4.3           Public Announcements.  The parties shall consult with each other before issuing, and provide each other a reasonable opportunity to review and comment upon, any press release or public statement with respect to this Agreement and the transactions contemplated hereby and, except as may be required by applicable law, shall not issue any such press release or make any such public statement prior to such consultation.

 

4.4           Access to Information; Notification of Certain Matters.

 

(a)         From the date hereof to the Closing and subject to applicable law, the Seller shall (i) give to the Purchaser or its counsel reasonable access to the books and records of the Company, and (ii) furnish or make available to the Purchasers and their counsel such financial and operating data and other information about the Company as such Persons may reasonably request.

 

(b)         Each party hereto shall give notice to each other party hereto, as promptly as practicable after the event giving rise to the requirement of such notice, of:

 

                                              (i)            any communication received by such party from, or given by such party to, any Governmental Authority in connection with any of the transactions contemplated hereby;

 

                                              (ii)           any notice or other communication from any Person alleging that the consent of such Person is or may be required in connection with the transactions contemplated by this Agreement; and

 

                                              (iii)          any actions, suits, claims, investigations or proceedings commenced or, to its Knowledge, threatened against, relating to or involving or otherwise affecting such party or any of its Affiliates that, if pending on the date of this Agreement, would have been required to have been disclosed, or that relate to the consummation of the transactions contemplated by this Agreement; provided, however, that the delivery of any notice pursuant to this Section 5.4(b) shall not limit or otherwise affect the remedies available hereunder to the party receiving such notice.

 

4.5           Board of Directors and Officers.  The Seller shall cause the Company to appoint the designees of the Purchasers listed in Section 2.2(d) as the Company’s directors and officers at the Closing and obtain any necessary resignations from members of the Board of Directors and current officers of the Company.

 

  

10

  

 

4.6           Interim Operations of the Company.  During the period from the date of this Agreement to the Closing, the Seller shall cause the Company to conduct its business only in the ordinary course of business consistent with past practice, except to the extent otherwise necessary to comply with the provisions hereof and with applicable laws and regulations.  Additionally, during the period from the date of this Agreement to the Closing, except as required hereby in connection with this Agreement, the Seller shall not permit the Company to do any of the following without the prior consent of the Purchasers: (i) amend or otherwise change its Articles of Incorporation, (ii) issue, sell or authorize for issuance or sale (including, but not limited to, by way of stock split or dividend), shares of any class of its securities or enter into any agreements or commitments of any character obligating it to issue such securities, other than in connection with the exercise of outstanding warrants or outstanding stock options granted to directors, officers or employees of the Company prior to the date of this Agreement; (iii) declare, set aside, make or pay any dividend or other distribution (whether in cash, stock or property) with respect to its common stock, (iv) redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, (v) enter into any material contract or agreement or material transaction or make any material capital expenditure other than those relating to the transactions contemplated by this Agreement, (vi) create, incur, assume, maintain or permit to exist any indebtedness except as otherwise incurred in the ordinary course of business, consistent with past practice, or except for the Company Closing Obligations, (vii) pay, discharge or satisfy claims or liabilities (absolute, accrued, contingent or otherwise) other than in the ordinary course of business consistent with past practice, (viii) cancel any material debts or waive any material claims or rights, (ix) make any loans, advances or capital contributions to, or investments in financial instruments of any Person, (x) assume, guarantee, endorse or otherwise become responsible for the liabilities or other commitments of any other Person, (xi) alter in any material way the manner of keeping the books, accounts or records of the Company or the accounting practices therein reflected other than alterations or changes required by GAAP or applicable law, (xii) enter into any indemnification, contribution or similar contract pursuant to which the Company may be required to indemnify any other Person or make contributions to any other Person, (xiii) amend or terminate any existing contracts in any manner that would result in any material liability to the Company for or on account of such amendment or termination, or (xiv) or change any existing or adopt any new tax accounting principle, method of accounting or tax election except as provided herein or agreed to in writing by the Purchasers.

 

4.7           Indemnification.  The Seller hereby agrees to indemnify and hold harmless the Purchaser and the Company (the “Indemnified Parties”) from and against any and all liabilities, obligations, claims, losses, expenses, damages, actions, liens and deficiencies (including reasonable attorneys’ fees) which exist, or which may be imposed on, incurred by or asserted against the Indemnified Parties due to or arising out of any breach or inaccuracy of any representation or warranty of the Seller under Sections 3.1 and 3.2 hereof, or any covenant, agreement or obligation of the Seller hereunder or in any other certificate, instrument or document contemplated hereby or thereby (“Damages”), for a period of twelve (12) months from the Closing Date (the “Indemnification,” and the period herein is referred to as the “Indemnification Period”). Notwithstanding the forgoing, in no event will the Indemnified Parties be entitled to indemnification hereunder for Damages in an aggregate amount which exceeds $300,000.The Seller shall not be obligated to make any payment for Indemnification in respect of any claims for Damages that are made by the Indemnified Parties after the expiration of the Indemnification Period; provided, however, that the obligations of the Seller under the Indemnification shall remain in full force and effect in respect of any claims for Damages which are made prior to, and remain pending at, the expiration of the Indemnification Period. The indemnification provided by this Section 4.7 shall be the sole pecuniary remedy of the Indemnified Parties for any Damages; provided, however, that no other remedies of the Indemnified Parties for any breach by the Seller of the representations and warranties contained in Section 3.1 shall be limited in any way by this Section 4.7.

 

4.8           Payment of Liabilities.  Prior to or at the Closing, the Seller shall pay, or shall cause the Company to pay, in full any of the Company outstanding Indebtedness, as well as any additional liabilities or obligations incurred by the Company since the date of this Agreement, including any and all liabilities or obligations incurred by the Company in connection with the transactions contemplated by this Agreement.

 

  

11

  

 

4.9           Interim Actions of the Parties.

 

(a)          Until the earlier of the Closing Date or the termination of this Agreement pursuant to Section VI hereof, neither the Seller nor any of its respective Affiliates shall, directly or indirectly (i) take any action to solicit or initiate any Acquisition Proposal, or (ii) continue, initiate or engage in negotiations concerning any Acquisition Proposal with, or disclose any non-public information relating to the Company, or afford access to the properties, books or records of the Company to, any corporation, partnership, person or other entity (except the Purchasers and its Affiliates) that may be considering or has made an Acquisition Proposal.

 

(b)         Until the earlier of the Closing Date or the termination of this Agreement pursuant to Section VI hereof, neither the Seller nor any of its respective Affiliates shall engage directly or indirectly in any transaction involving any of the securities of the Company other than as contemplated by this Agreement.

 

SECTION V  CONDITIONS.

 

5.1           Conditions to the Obligations of Each Party.  The obligations of the Seller and the Purchaser to consummate the transactions contemplated by this Agreement are subject to the satisfaction of the following conditions:

 

(a)          No Governmental Authority of competent authority or jurisdiction shall have issued any order, injunction or decree, or taken any other action, that is in effect and restrains, enjoins or otherwise prohibits the consummation of the transactions contemplated hereby; and

 

(b)         The parties shall have obtained or made all consents, approvals, actions, orders, authorizations, registrations, declarations, announcements and filings contemplated by this Agreement.

 

5.2           Conditions to the Obligations of the Seller.  The obligations of the Seller to consummate the transactions contemplated by this Agreement are subject to the satisfaction of the following further conditions:

 

(a)         The Purchasers shall have performed in all material respects all of its obligations hereunder required to be performed by it at or prior to the Closing;

 

(b)         The representations and warranties of the Purchaser contained in this Agreement shall have been true and correct when made and in all material respects at and as of the time of the Closing as if made at and as of such time (except to the extent any such representation or warranty expressly speaks as of an earlier date, in which case it shall be true and correct as of such date); and

 

5.3           Conditions to the Obligations of the Purchaser.  The obligations of the Purchaser to consummate the transactions contemplated by this Agreement are subject to the satisfaction of the following further conditions:

 

(a)         The Seller shall have performed in all material respects all of its obligations hereunder required to be performed by them at or prior to the Closing;

 

(b)         The representations and warranties of the Seller contained in this Agreement shall have been true and correct when made and at and as of the time of the Closing as if made at and as of such time (except to the extent any such representation or warranty expressly speaks as of an earlier date, in which case it shall be true and correct as of such date); and

 

(c)         The Shares being sold to the Purchasers hereunder for the Purchase Price shall represent 77.37% of the issued and outstanding shares of the Company’s Common Stock.

 

  

12

  

 

SECTION VI  TERMINATION.

 

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

 

(a)         by mutual written agreement of the Purchasers and the Seller;

 

(b)         by either the Purchasers or by the Seller, if

 

                                              (i)           the transactions contemplated by this Agreement shall not have been consummated by the Closing Deadline or otherwise extended by further agreement of the parties; provided, however, that the right to terminate this Agreement under this Section 6.1(b)(i) shall not be available to any party whose breach of any provision of or whose failure to perform any obligation under this Agreement has been the cause of, or has resulted in, the failure of the transactions to occur on or before the Closing Deadline; or

                                              (ii)           a judgment, injunction, order or decree of any Governmental Authority having competent jurisdiction enjoining either the Seller or the Purchasers from consummating the transactions contemplated by this Agreement is entered and such judgment, injunction, judgment or order shall have become final and nonappealable and, prior to such termination, the parties shall have used their respective commercially reasonable efforts to resist, resolve or lift, as applicable, such judgment, injunction, order or decree; provided, however, that the right to terminate this Agreement under this Section 6.1(b)(ii) shall not be available to any party whose breach of any provision of or whose failure to perform any obligation under this Agreement has been the cause of such judgment, injunction, order or decree.

 

(c)         by the Purchaser:

 

                                              (i)           if a breach of or failure to perform any representation, warranty, covenant or agreement on the part of any of the Seller set forth in this Agreement shall have occurred which would cause the conditions set forth in Section 5.3 not to be satisfied, and any such condition is incapable of being satisfied by the Closing Deadline or such breach or failure to perform has not been cured within ten (10) days after notice of such breach or failure to perform has been given by the Purchasers to the Seller.

 

6.2           Effect of Termination.  If this Agreement is terminated pursuant to Section 6.1, there shall be no liability or obligation on the part of the Purchasers or the Seller, or any of their respective officers, directors, shareholders, agents or Affiliates, except that the provisions of this Section 6.2, Section 6.3 and Section VII of this Agreement shall remain in full force and effect and survive any termination of this Agreement and except that, notwithstanding anything to the contrary contained in this Agreement, no party shall be relieved of or released from any liabilities or damages arising out of its material breach of or material failure to perform its obligations under this Agreement.

 

6.3           Expenses. Whether or not the transactions contemplated by this Agreement are consummated, all fees and expenses of any party hereto incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such fees and expenses.

 

  

13

  

 

SECTION VII  MISCELLANEOUS.

 

7.1           Waivers and Amendments.  This Agreement may be amended or modified in whole or in part only by a writing which makes reference to this Agreement executed by all of the parties hereto.  The obligations of any party hereunder may be waived (either generally or in a particular instance and either retroactively or prospectively) only with the written consent of the party claimed to have given the waiver; provided, however, that any waiver by any party of any violation of, breach of, or default under any provision of this Agreement or any other agreement provided for herein shall not be construed as, or constitute, a continuing waiver of such provision, or waiver of any other violation of, breach of or default under any other provision of this Agreement or any other agreement provided for herein.

 

7.2           Entire Agreement.  This Agreement (together with any Schedules and/or any Exhibits hereto)by and between the Seller and the Purchasers, the Escrow Agreement and the other agreements and instruments expressly provided for herein, together set forth the entire understanding of the parties hereto and supersede in their entirety all prior contracts, agreements, arrangements, communications, discussions, representations, and warranties, whether oral or written with respect to the subject matter hereof.

 

7.3           Governing Law and Arbitration.  This Agreement shall in all respects be governed by and construed in accordance with the internal substantive laws of the State of New York without giving effect to the principles of conflicts of law thereof. Disputes arising from the performance of this Agreement shall be submitted to American Arbitration Association and resolved by arbitration, pursuant to the rules of the Association, which are in force at the time of the arbitration application. The arbitral award shall be final and binding on both parties.

 

7.4           Public Announcements.  The parties shall consult with each other before issuing, and provide each other a reasonable opportunity to review and comment upon, any press release or public statement, including necessary Company’s filings with the SEC with respect to this Agreement and the transactions contemplated hereby and, except as may be required by applicable law, will not issue any such press release or make any such public statement prior to such consultation.

 

7.5           Notices.  Any notice, request or other communication required or permitted hereunder shall be in writing and be deemed to have been duly given (a) when personally delivered or sent by facsimile transmission (the receipt of which is confirmed in writing), (b) one Business Day after being sent by a nationally recognized overnight courier service or (c) five Business Days after being sent by registered or certified mail, return receipt requested, postage prepaid, to the parties at their respective addresses set forth below.

 

	
If to the Seller:

	
Yulia Marach

Klenovy Blvd, 6-7

Moscow, Russia 115470

Tel: (702) 605-4165

 

	
with a copy to:

	
Szaferman Lakind Blumstein & Blader, PC

Attn: Gregg Jaclin

101 Grovers Mill Road

Second Floor

Lawrenceville, NJ 08648

 

  

14

  

 

	
if to the Purchasers:

	
Starstream Entertainment, LLC

100 Sky Park Drive

Monterey, CA 93940

Attn: Charles Bonan

cbonan@sbcglobal.net

 

	
with a copy to:

	
Ofsink, LLC

900 Third Avenue, 5th Floor

New York, New York 10022

Attn: Darren L. Ofsink, Esq.

Facsimile: (646) 224-9844

	  	
And

	  	
Any party by written notice to the other may change the address or the persons to whom notices or copies thereof shall be directed.

 

7.6           Counterparts; Facsimile and Electronic Signatures.  This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, and all of which together will constitute one and the same instrument.  The signature pages hereto in facsimile copy or other electronic means, including e-mail attachment, shall be deemed an original for all purposes.

 

7.7           Successors and Assigns.  This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns, except that the Seller may not assign or transfer its rights hereunder without the prior written consent of the Purchasers, and the Purchasers may not assign or transfer its rights under this Agreement without the consent of the Seller.

 

7.8           Third Parties.  Nothing expressed or implied in this Agreement is intended, or shall be construed, to confer upon or give any Person other than the parties hereto and their successors and assigns any rights or remedies under or by reason of this Agreement.

 

7.9           Schedules.  The Schedules and Exhibits attached to this Agreement are incorporated herein and shall be part of this Agreement for all purposes.

 

7.10         Headings.  The headings in this Agreement are solely for convenience of reference and shall not be given any effect in the construction or interpretation of this Agreement.

 

7.11         Interpretation.  Whenever the context may require, any pronoun used herein shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa.

 

  

15

  

 

IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement as of the date first above written.

 

	 	 	THE SELLER:	 
	 	 	 	 
	 	 	 	 
	 	 	Name: Yulia Marach	 
	 	 	 	 
	 	 	  

THE PURCHASER:

	 
	 	 	 	 
	 	 	 	 
	 	 	
Starstream Entertainment, LLC

	 
	 	 	 	 
	 	 	 	 
	 	 	
Name:  Charles Bonan

	 
	 	 	Title:    Managing Member	 

 

  

16

  

 

Schedule 3.2(k)

Gelia Group, Corp. and Alexey Hramtsov entered into a Referral Agreement on November 8, 2012, pursuant to which Hramtsov agreed to refer potential clients to the Company and the Company will pay 5% of the net value of services sold by the Company as a direct result of a referral.

 

  

  

  

 

Schedule I

Seller Wire Instruction

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00222-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00222-of-00352.parquet"}]]