EXHIBIT 10
SAN JUAN FINANCIAL, INC.
AGREEMENT FOR SALE OF COMMON STOCK
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INDEX
Page
ARTICLE I - SALE OF STOCK ...................................... 4
ARTICLE II - REPRESENTATIONS AND WARRANTIES OF
SAN JUAN FINANCIAL, INC. ......... ................ 4
2.01 - Organization ........................................ 4
2.02 - Capital ............................................. 4
2.03 - Directors and Officers' Compensation; Banks ......... 4
2.04 - Financial Statements ................................ 4
2.05 - Absence of Changes .................................. 5
2.06 - Absence of Undisclosed Liabilities .................. 5
2.07 - Tax Returns ......................................... 5
2.08 - Investigation of Financial Condition................. 5
2.09 - Trade Names and Rights .............................. 5
2.10 - Contracts and Leases ................................ 5
2.11- Insurance Policies .................................. 5
2.12 - Compliance with Laws ................................ 6
2.13 - Litigation .......................................... 6
2.14 - Ability to Carry Out Obligations ................. 6
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF
THE SHAREHOLDERS .................................. 6
ARTICLE IV - OBLIGATIONS BEFORE AND CONDITIONS TO CLOSING ....... 7
ARTICLE V - CLOSING ............................................. 7
5.0l - Closing .............................................. 7
5.02 - Shares and License ................................... 7
5.03 - Promissory Note ...................................... 7
5.04 - Deposit to Checking Account .......................... 7
5.05 - Officers and Directors ............................... 7
ARTICLE VI - MISCELLANEOUS ...................................... 7
6.0l - Arbitration ....................................... 7
6.02 - Costs.............................................. 8
6.03 - Termination ....................................... 8
6.04 - Captions and Headings ............................. 8
6.05 - No Oral Change .................................... 8
6.06 - Non-Waiver ........................................ 8
6.07 - Time of Essence ................................... 8
6.08 - Entire Agreement .................................. 9
6.09 - Governing Law ..................................... 9
6.10 - Counterparts ...................................... 9
6.11 - Notices ........................................... 9
6.12 - Binding Effect .................................... 9
6.13 - Effect of Closing ................................. 9
6.14 - Mutual Cooperation ................................ 9
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INDEX
Exhibit A - Options, Warrants and Convertible Securities....
Exhibit B - Officers and Directors .........................
Exhibit C - Financial Statements - Changes in Financial Condition
Exhibit D - Trademarks, Trade Names and Copyrights .........
Exhibit E - Material Contracts .............................
Exhibit F - Insurance Policies..............................
Exhibit G - Promissory Note ................................
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AGREEMENT
This AGREEMENT made this 4th day of April 2006 by and between San Juan
Financial, Inc. ("SJF") and Rex Doyle, John Ippolito, David Reynolds, Dana
Walters, and Joseph Lindquist (collectively the "Shareholders") is made for the
purpose of setting forth the terms and conditions upon which SJF will sell
shares of its common stock to the Shareholders.
In consideration of the mutual promises, covenants, and representations
contained herein, THE PARTIES HERETO AGREE AS FOLLOWS:
ARTICLE I
SALE OF STOCK
Subject to the terms and conditions of this Agreement, SJF agrees to sell:
o 20,000,000 shares of its common stock to Rex Doyle for $200;
o 20,000,000 shares of its common stock to John Ippolito for $200;
o 2,000,000 shares of its common stock to David Reynolds for $200;
o 1,000,000 shares of its common stock to Dana Walters for $10; and
o 1,000,000 shares of its common stock to Joseph Lindquist for $10.
ARTICLE IIREPRESENTATIONS AND WARRANTIES OF SJF
SJF represents and warrants to the Shareholders that:
2.0l Organization. SJF is a corporation duly organized, validly existing,
and in good standing under the laws of Colorado, has all necessary corporate
powers to own its properties and to carry on its business as now owned and
operated by it, and is duly qualified to do business and is in good standing in
each of the states where its business requires qualification.
2.02 Capital. The authorized capital stock of SJF consists of 750,000,000
shares of common stock and 10,000,000 shares of preferred stock, of which
5,260,000 shares of common stock and no shares of preferred stock will be issued
and outstanding at closing. At closing, there will be no outstanding
subscriptions, options, rights, warrants, convertible securities, or other
agreements or commitments obligating SJF to issue or to transfer from treasury
any additional shares of its capital stock of any class other than as set forth
on Exhibit A.
2.03 Directors and Officers' Compensation; Banks. Exhibit B to this
Agreement contains: (i) the names and titles of all directors and officers of
SJF and all persons whose compensation from SJF as of the date of this Agreement
will equal or its expected to equal or exceed, at an annual rate, the sum of
$1,000; (ii) the name and address of each bank with which SJF has an account or
safety deposit box, the identification number thereof, and the names of all
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persons who are authorized to draw thereon or have access thereto; and (iii) the
names of all persons who have a power of attorney from SJF and a summary of the
terms thereof.
2.04 Financial Statements. Exhibit C to this Agreement is the balance
sheets of SJF as of September 30, 2005, and the related statements of income for
the period then ended. The financial statements have been prepared in accordance
with generally accepted accounting principles consistently followed by SJF
throughout the periods indicated and fairly present the financial position of
SJF as of the dates of the balance sheets included in the financial statements,
and the results of its operations for the periods indicated.
2.05 Absence of Changes. Since September 30, 2005 there has not been any
change in the financial condition or operations of SJF, except changes reflected
on Exhibit C or changes in the ordinary course of business, which changes have
not in the aggregate been materially adverse.
2.06 Absence of Undisclosed Liabilities. SJF did not as of September 30,
2005 have any debt, liability, or obligation of any nature, whether accrued,
absolute, contingent, or otherwise, and whether due or to become due, that is
not reflected on Exhibit C.
2.07 Tax Returns. Within the times and in the manner prescribed by law,
SJF has filed all federal, state, and local tax returns required by law and has
paid all taxes, assessments, and penalties due and payable. No federal income
tax returns of SJF have been audited by the Internal Revenue Service. The
provision for taxes, if any, reflected in SJF's balance sheet as of September
30, 2005, is adequate for any and all federal, state, county, and local taxes
for the period ending on the date of that balance sheet and for all prior
periods, whether or not disputed. There are no present disputes as to taxes of
any nature payable by SJF.
2.08 Investigation of Financial Condition. Without in any manner reducing
or otherwise mitigating the representations contained herein, the Shareholders
will have the opportunity to meet with SJF's accountants and attorneys to
discuss the financial condition of SJF. SJF shall make available to the
Shareholders the books and records of SJF. The minutes of SJF are a complete and
accurate record of all meetings of the shareholders and directors of SJF and
accurately reflect all actions taken at such meetings. The signatures of the
directors and/or officers on such minutes are the valid signatures of SJF's
directors and/or officers who were duly elected or appointed on the dates that
the minutes were signed by such persons. The stock book of SJF contains an
accurate record of all transactions with respect to the capital stock of SJF.
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2.09 Trade Names and Rights. Exhibit D attached hereto and made a part
hereof lists all trademarks, trademark registrations or applications, trade
names, service marks, copyrights, copyright registrations or applications which
are owned by SJF. No person other than SJF owns any trademark, trademark
registration or application, service mark, trade name, copyright, or copyright
registration or application the use of which is necessary or contemplated in
connection with the operation of SJF's business.
2.10 Contracts and Leases. Exhibit E attached hereto and made a part
hereof contains a summary of the provisions of all material contracts, leases,
and other agreements of SJF presently in existance or which have been agreed to
by SJF (whether written or oral). Except as disclosed on Exhibit E, SJF is not
in default under of these agreements or leases.
2.11 Insurance Policies. Exhibit F to this Agreement is a description of
all insurance policies held by SJF concerning its business and properties. All
these policies are in the respective principal amounts set forth in Exhibit F
and are in full force and effect.
2.12 Compliance with Laws. SJF has complied with, and is not in violation
of, applicable federal, state, or local statutes, laws, and regulations
affecting the operation of its business, including but not limited to applicable
federal and state securities laws. SJF does not have any employee benefit plan
which is subject to the provisions of the Employee Retirement Income Security
Act of 1974.
2.13 Litigation. SJF is not a party to any suit, action, arbitration, or
legal, administrative, or other proceeding, or governmental investigation
pending or, to the best knowledge of SJF threatened, against or affecting SJF or
its business, assets, or financial condition. SJF is not in default with respect
to any order, writ, injunction, or decree of any federal, state, local, or
foreign court, department, agency, or instrumentality. SJF is not engaged in any
legal action to recover moneys due to SJF or damages sustained by SJF.
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2.14 Ability to Carry Out Obligations. SJF has the right, power, and
authority to enter into, and perform its obligations under, this Agreement. The
execution and delivery of this Agreement by SJF and the performance by SJF of
its obligations hereunder will not cause, constitute, or conflict with or result
in (a) any breach or violation or any of the provisions of or constitute a
default under any license, indenture, mortgage, charter, instrument, articles of
incorporation, by-law, or other agreement or instrument to which SJF is a party,
or by which it may be bound, nor will any consents or authorizations of any
party other than those hereto be required, (b) an event that would permit any
party to any agreement or instrument to terminate it or to accelerate the
maturity of any indebtedness or other obligation of SJF, or (c) an event that
would result in the creation or imposition or any lien, charge, or encumbrance
on any asset of SJF or would create any obligation for which SJF would be
liable, except as contemplated by this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
The Shareholders have the right, power, and authority to enter into, and
perform their obligations under, this Agreement. The Shareholders understand
that the shares being acquired from SJF represent restricted securities as that
term is defined in Rule l44 of the Securities and Exchange Commission.
ARTICLE IV
OBLIGATIONS BEFORE AND CONDITIONS TO CLOSING
Prior to the closing, and except as contemplated by this Agreement (i) SJF
will conduct its business in the normal course, (ii) will not sell, pledge, or
assign any assets, without the prior written approval of the Shareholders,
except in the regular course of business and (iii) will not amend its Articles
of Incorporation or By-laws, declare dividends, redeem or sell stock or other
securities, incur additional or newly-funded material liabilities, acquire or
dispose of fixed assets, change senior management, change employment terms,
enter into any material or long-term contract, guarantee obligations of any
third party, settle or discharge any balance sheet receivable for less than its
stated amount, pay more on any liability than its stated amount, or enter into
any other transaction other than in the regular course of business.
Prior to the closing date:
o SJF will not have any liabilities; and
o SJF will have cash on hand of $300,000
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ARTICLE V
CLOSING
5.0l Closing. Unless the closing of this transaction takes place before
April 10, 2006, either party may terminate this Agreement without liability to
the other party:
5.02 Shares. On the closing date:
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o SJF will issue 20,000,000 shares of its common stock to Rex Doyle,
20,000,000 shares of its common stock to John Ippolito, and 2,000,000
shares of its common stock to David Reynolds.
o Rex Doyle, as payment for the 20,000,000 shares, will deliver a check
to SJF in the amount of $200.
o John Ippolito, as payment for the 20,000,000 shares, will deliver a
check to SJF in the amount of $200.
o David Reynolds, as payment for the 2,000,000 shares, will deliver a
check to SJF in the amount of $20.
o Dana Walters, as payment for the 1,000,000 shares, will deliver a
check to SJF in the amount of $10.
o Joseph Lindquist, as payment for the 1,000,000 shares, will deliver a
check to SJF in the amount of $10.
5.03 Promissory Note. Rex Doyle, John Ippolito and David Reynolds will
deliver a Promissory Note to SJF in the form of Exhbit G. The Promissory Note
will not be valid until the wire transfer described in Section 5.04 of this
Agreement has been received.
5.04. Deposit to Checking Account. SJF will establish a bank account. As
soon as practicable, the parties hereto will cooperate with each other such that
$300,000 will be wire transferred into this bank account. This Agreement will
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not be considered to have closed until the $300,000 wire transfer has been
received.
5.05 Officer and Directors. At the closing of this Agreement SJF will
cause Rex Doyle, John Ippolito and David Reynolds to be appointed as directors
of SJF. Following such appointment, all present officers and directors of SJF
will resign.
ARTICLE VI
MISCELLANEOUS
6.01 Arbitration. Any controversy or claim arising out of, or relating to,
this Agreement, or the making, performance, or interpretation thereof, shall be
settled by arbitration in Denver, Colorado in accordance with the rules of the
American Arbitration Association then existing, and judgment on the arbitration
award may be entered in any court having jurisdiction over the subject matter of
the controversy.
6.02 Costs. If any legal action or any arbitration or other proceeding is
brought for the enforcement of this Agreement, or because of an alleged dispute,
breach, default, or misrepresentation in connection with any of the provisions
of this Agreement, the successful or prevailing party or parties shall be
entitled to recover reasonable attorney's fees and other costs incurred in that
action or proceeding, in addition to any other relief to which it or they may be
entitled.
6.03 Termination. In addition to the other remedies, SJF or the
Shareholders may on or prior to the closing date terminate this Agreement,
without liability to the other party:
(i) If the legality and sufficiency of all steps taken and to be taken by
each party in carrying out this Agreement shall not have been approved by the
respective party's counsel, which approval shall not be unreasonably withheld.
(ii) If a party breaches any representation, warranty, covenant or
obligation of such party set forth herein and such breach is not corrected
within ten days of receiving written notice from the other party of such breach.
6.04 Captions and Headings. The Article and paragraph headings throughout
this Agreement are for convenience and reference only, and shall in no way be
deemed to define, limit, or add to the meaning of any provision of this
Agreement.
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6.05 No Oral Change. This Agreement and any provision hereof, may not be
waived, changed, modified, or discharged orally, but only by an agreement in
writing signed by the party against whom enforcement of any waiver, change,
modification, or discharge is sought.
6.06 Non-Waiver. Except as otherwise expressly provided herein, no waiver
of any covenant, condition, or provision of this Agreement shall be deemed to
have been made unless expressly in writing and signed by the party against whom
such waiver is charged; and (i) the failure of any party to insist in any one or
more cases upon the performance of any of the provisions, covenants, or
conditions of this Agreement or to exercise any option herein contained shall
not be construed as a waiver or relinquishment for the future of any such
provisions, convenants, or conditions, (ii) the acceptance of performance of
anything required by this Agreement to be performed with knowledge of the breach
or failure of a covenant, condition, or provision hereof shall not be deemed a
waiver of such breach or failure, and (iii) no waiver by any party of one breach
by another party shall be construed as a waiver with respect to any other or
subsequent breach.
6.07 Time of Essence. Time is of the essence of this Agreement and of each
and every provision hereof.
6.08 Entire Agreement. This Agreement contains the entire Agreement and
understanding between the parties hereto, and supersedes all prior agreements,
understandings and the letters of intent between the parties.
6.09 Governing Law. This Agreement and its application shall be
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governed by the laws of Colorado.
6.10 Counterparts. This Agreement may be executed simultaneously in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
6.11 Notices. All notices, requests, demands, and other communications
under this Agreement shall be in writing and shall be deemed to have been duly
given on the date of service if served personally on the party to whom notice is
to be given, or on the third day after mailing if mailed to the party to whom
notice is to be given, by first class mail, registered or certified, postage
prepaid, and properly addressed as follows:
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San Juan Financial, Inc. Shareholders
----------------------- ------------
Mark Moniak Rex Doyle
1240 India Street, #1907 30 Fernglen
San Diego, CA 92101 Woodlands, TX 77380
John Ippolito
9007 Deerwick Ct.
Tomball, TX 77375
David Reynolds
4311 Candlewood Park
Katy, TX 77494
Dana Walters
11286 Crystal Oaks Way
San Diego, CA 92101
Joseph Lindquist
5765 Friars Road #197
San Diego, CA 92110
6.12 Binding Effect. This Agreement shall inure to and be binding
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upon the heirs, executors, personal representatives, successors and assigns
of each of the parties to this Agreement.
6.13 Effect of Closing. All representations, warranties, covenants, and
agreements of the parties contained in this Agreement, or in any instrument,
certificate, opinion, or other writing provided for in it, shall survive the
closing of this Agreement.
6.14 Mutual Cooperation. The parties hereto shall cooperate with each
other to achieve the purpose of this Agreement, and shall execute such other and
further documents and take such other and further actions as may be necessary or
convenient to effect the transaction described herein. Neither party will
intentionally take any action, or omit to take any action, which will cause a
breach of such party's obligations pursuant to this Agreement.
Except as provided above, each of the parties hereto agrees to pay all of
its own expenses (including without limitation, attorneys' and accountants'
fees) incurred in connection with this Agreement, the transactions contemplated
herein and negotiations leading to the same and the preparations made for
carrying the same into effect. Each party agrees to indemnify and hold the other
party harmless from any commission, fee or claim of any person, firm or
corporation employed or retained by such party (or claiming to be employed or
retained by such party) to bring about or represent such party in the
transactions contemplated by this Agreement.
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AGREED TO AND ACCEPTED as of the date first above written.
SAN JUAN FINANCIAL, INC.
By /s/ Mark W. Moniak
------------------------------------
Mark W. Moniak, Chief Executive Officer
/s/ Rex Doyle
------------------------------------
Rex Doyle
/s/ John Ippolito
------------------------------------
John Ippolito
/s/ David Reynolds
------------------------------------
David Reynolds
/s/ Dana Walters
------------------------------------
Dana Walters
/s/ Joseph Lindquist
------------------------------------
Joseph Lindquist
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