Exhibit 10.1
AGREEMENT FOR THE PURCHASE OF COMMON STOCK
THIS COMMON STOCK PURCHASE AGREEMENT, (this "Agreement") made this 13th day of
March, 2014, by, between and among S. DOUGLAS HENDERSON, (hereinafter referred
to as ("HENDERSON" or "Seller), and REDFIELD HOLDINGS, LTD., a Virginia
corporation ("Purchaser"), setting forth the terms and conditions upon which the
Seller will sell Twenty Five Million (25,000,000) shares of FREE FLOW, INC.
("FREEFLOW" or the "Company") common stock (the "Shares"), personally owned by
Seller, to the Purchaser. The Seller and the Purchaser may be referred to herein
singularly as a "Party" and collectively, as the "Parties".
In consideration of the mutual promises, covenants, and representations
contained herein, THE PARTIES HERETO AGREE AS FOLLOWS:
WITNESSETH:
WHEREAS, the Purchaser has appointed John B. Lowy PC, Attorneys At Law, to
act as the Purchaser Escrow Agent ("Purchaser Escrow Agent") to receive and hold
all consideration received from the Purchaser for the purchase of the Shares,
and to deliver the consideration to the Seller in accordance with the Escrow
Agreement; and
WHEREAS, the Seller has appointed Karen Batcher, Esq. to act as the Seller
Escrow Agent ("Seller Escrow Agent") to receive and hold the Seller's stock
certificate and the other Documents referred to herein, and to deliver the stock
certificate and the Documents to the Purchaser in accordance with the Escrow
Agreement; and
WHEREAS, the Purchaser, Seller and Escrow Agents have entered into an
Escrow Agreement dated February 26, 2014.
NOW THEREFORE, in consideration of the mutual promises, covenants and
representations contained herein, the parties herewith agree as follows:
ARTICLE I
SALE OF SECURITIES
1.01 Sale. Subject to the terms and conditions of this Agreement, the
Seller agrees to sell the Shares, and the Purchaser shall purchase the
25,000,000 Shares, for a total of Two Hundred Fifty Five Thousand Dollars (U.S.)
($255,000) (the "Purchase Price" or "Funds"). This is a private transaction
between the Seller and Purchaser.
1.02 Deposit: Purchaser has previously made, by wire transfer, a deposit
(the "Deposit") in the amount of Twenty Five Thousand Dollars ($25,000.00), to
the Purchaser Escrow Agent's Escrow Account, toward the Shares being sold by the
Seller. The Deposit shall become non-refundable and will be released from escrow
in accordance with the terms set forth in the Escrow Agreement.
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1.03 Balance of Purchase Price. The Purchase agrees that the balance of the
Purchase Price will be wire transferred to the Purchaser Escrow Account on or
before March 28, 2014, and that the Closing will take place contemporaneous with
such payment, subject to the terms and conditions herein. It is agreed that all
of the Shares shall remain in escrow with the Seller Escrow Agent until the full
amount of $255,000 has been paid into the Purchaser Escrow Agent's Escrow
Account, after which the Closing on the sale of the Shares shall take place and
all stock certificates, stock powers and corporate documents listed in
paragraphs 2.12, 2.13 and 3.02 below shall be delivered as instructed by the
Purchaser, and the balance of the Purchase Price shall be wire transferred to
the Seller Escrow Agent.
Subject to the Seller and FREEFLOW satisfying the representations and
warranties set forth in Article II, this Agreement may be terminated
unilaterally by Seller if: (i) the balance of the Purchase Price for the Shares
is not paid in full to the Purchaser Escrow Agent's Escrow Account on or before
March 28, 2014, unless an extension of time is agreed to in writing by all
Parties; or (ii) Purchaser has failed to comply with all material terms of this
Agreement. Upon such termination, all consideration previously paid by Purchaser
shall be retained by Seller in accordance with the terms of the Escrow
Agreement. Upon the payment of the total Purchase Price of $255,000 by the
Purchaser to the Seller for the Shares, by wire transfer to the Seller Escrow
Account, and the receipt of all items outlined below which shall be provided by
the Seller, the Closing will take place immediately unless extended by the
parties signing this Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
The Seller and FREEFLOW, jointly and severally, represent and warrant to
the Purchaser the following:
2.01 Organization; FREEFLOW is a Delaware corporation duly organized,
validly existing, and in good standing under the laws of that state, has all
necessary corporate powers to own properties and carry on a business, and is
duly qualified to do business and is in good standing in the state Delaware and
elsewhere, if required. All actions taken by the incorporators, directors and/or
shareholders of FREEFLOW have been valid and in accordance with the laws of the
state of Delaware. FREEFLOW is a reporting company with the SEC pursuant to
Section 12(g) of the Securities Exchange Act of 1934; and FREEFLOW's common
stock is now, and as of the Closing will be, included for quotation on the
OTCBB, with the symbol FFLO. FREEFLOW's common stock is not DTC-eligible.
2.02 Capital. The authorized capital stock of FREEFLOW consists of
100,000,000 shares of Common Stock, $0.0001 par value, of which 26,200,000
shares of Common Stock are issued and outstanding. FREEFLOW has 20,000,000
shares of preferred shares authorized, $.0001 par value, no shares of which are
issued and outstanding. The 25,000,000 Shares being sold by Seller represent
approximately 95.4% of FREEFLOW's total issued and outstanding shares of Common
Stock. All outstanding shares are fully paid and non-assessable, free of liens,
encumbrances, options, restrictions and legal or equitable rights of others not
a party to this Agreement. At the Closing, there will be no outstanding
subscriptions, options, rights, warrants, convertible securities, or other
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agreements or commitments obligating FREEFLOW to issue or to transfer from
treasury any additional shares of its capital stock. None of the outstanding
shares of FREEFLOW are subject to any stock restriction agreements. There are
approximately 52 shareholders of record of FREEFLOW. All of such shareholders
have valid title to such Shares and received their shares as a dividend in a
registered distribution pursuant to a registration statement on Form S-1, which
was declared effective by the SEC on October 25, 2012.
2.03 Financial Statements. FREEFLOW's financial statements fairly present
the financial condition and operating results of FREEFLOW as of the dates, and
for the periods, indicated therein. Except as set forth in the Financial
Statements, and as set forth in Paragraph 2.05, FREEFLOW has no material
liabilities (contingent or otherwise). FREEFLOW is not a guarantor or indemnitor
of any indebtedness of any other person, firm, or corporation. Before the
Closing, FREEFLOW will have filed with the SEC its Annual Report on Form 10-K
for the fiscal year ended December 31, 2013, which Annual Report will include
audited financial statements for at least the fiscal years ended December 31,
2013 and December 31, 2012.
2.04 Filings with Government Agencies. FREEFLOW is a Section 12(g)
Reporting Issuer as that term is described by the Securities Act of 1933, and
files annual and quarterly reports with the SEC. FREEFLOW has made all required
filings with the SEC and the State of Delaware that might be required, and is
current in its filings and reporting with the SEC and to the State of Delaware.
FREEFLOW does not file its SEC reports as a "shell," as that term is defined in
the SEC's Rules and Regulations. At least 10 days before the Closing, Seller and
Purchaser will cooperate in the filing with the SEC, and the mailing to
FREEFLOW's shareholders, of the Notice pursuant to SEC Rule 14f-1. Upon the
purchase of the Shares by the Purchaser, the Purchaser will have the full
responsibility for filing any and all documents required by the Securities and
Exchange Commission, including the Form 8-K, and/or any other government agency
that may be required. The Purchaser understands that the Seller will have no
responsibility whatsoever for any filings made by FREEFLOW after the Closing,
either with the SEC, FINRA or with the State of Delaware.
2.05 Liabilities. It is understood and agreed that the purchase of the
Shares is predicated on FREEFLOW not having any liabilities as of the Closing.
FREEFLOW shall not, as of Closing, have any debt, liability, or obligation of
any nature, whether accrued, absolute, contingent, or otherwise that will not be
paid at Closing. Without limiting the foregoing, at or before the Closing, the
Seller will cancel any indebtedness owed to the Seller by FREEFLOW. Seller is
not aware of any pending, threatened or asserted claims, lawsuits or
contingencies involving the FREEFLOW or its Shares. To the best of knowledge of
the Seller, there is no dispute of any kind between FREEFLOW and any third
party, and no such dispute will exist at the Closing of this transaction and at
Closing, except as set forth herein, FREEFLOW will be free from any and all
liabilities, liens and claims.
2.06 Tax Returns. FREEFLOW has not filed Federal tax returns, and will not
have filed such tax returns for the year ended December 31, 2013 before the
Closing. Notwithstanding, FREE FLOW has never been profitable; and as of
Closing, there shall be no taxes of any kind, Federal, state or local, due or
owing by FREEFLOW.
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2.07 Ability to Carry Out Obligations. The Seller has the right, power, and
authority to enter into, and perform his obligations under this Agreement. The
execution and delivery of this Agreement by the Seller and FREEFLOW and the
performance by the Seller of his 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, bylaw, or other
agreement or instrument to which FREEFLOW its sole officer and director, or
Seller are a party, or by which they may be bound, nor will any consents or
authorizations of any party other than those hereto be required, (b) an event
that would cause FREEFLOW (and/or assigns) to be liable to any party, or (c) an
event that would result in the creation or imposition of any lien, charge, or
encumbrance on any asset of FREEFLOW or upon the shares of FREEFLOW to be
acquired by the Purchaser.
2.8 Contracts, Leases and Assets. Except as set forth in its SEC filings,
FREEFLOW is not a party to any contract, agreement or lease. No person holds a
power of attorney from FREEFLOW or the Seller. At the Closing, FREEFLOW and
Seller will cancel their lease, and FREEFLOW will have no liabilities or any
obligations which would give rise to a liability to the Seller for lease
obligations in the future.
2.9 Compliance with Laws. To the best of knowledge of the Seller, FREEFLOW
has complied in all material respects, with, and is not in violation of any,
federal, state, or local statute, law, and/or regulation pertaining. To the best
of the knowledge of the Seller, FREEFLOW has complied with all federal and state
securities laws in connection with the offer, sale and distribution of its
securities. At the time that FREEFLOW issued the Shares to the Seller, FREEFLOW
was entitled to use the exemption provided by the Securities Act of 1933
relative to the sale of its Shares. The Shares being sold herein are being sold
in a private transaction between the Seller and the Purchaser.
2.10 Litigation. FREEFLOW is not a party to any suit, action, arbitration,
or legal administrative or other proceeding, or pending governmental
investigation. To the best knowledge of the Seller, there is no basis for any
such action or proceeding and no such action or proceeding is threatened against
FREEFLOW. FREEFLOW is not a party to or in default with respect to any order,
writ, injunction, or decree of any federal, state, local, or foreign court,
department, agency, or instrumentality.
2.11 Conduct of Business. Prior to the Closing, FREEFLOW shall conduct its
business in the normal course, and shall not (without the prior written approval
of Purchaser) (i) sell, pledge, or assign any assets, (ii) amend its Certificate
of Incorporation or Bylaws, (iii) declare dividends, redeem or sell stock or
other securities (iv) incur any liabilities, except in the normal course of
business, (v) acquire or dispose of any assets, enter into any contract,
guarantee obligations of any third party, or (vi) enter into any other
transaction.
2.12 Corporate Documents. Each of the following documents, which shall be
true, complete and correct in all material respects, will be delivered to
Purchaser at the Closing:
(i) Certificate of Incorporation and all amendments thereto;
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(ii) Bylaws and all amendments thereto;
(iii) Minutes and Consents of Shareholders;
(iv) Minutes and Consents of the board of directors;
(v) List of officers and directors;
(vi) Certificate of Good Standing from the Secretary of State of Delaware;
(vii) Current Certified Shareholder list from the Transfer Agent;
(viii) All books and records of FREEFLOW, including, without limitation,
all accounting records and agreements; and
(ix) EDGAR filing codes.
2.13 Closing Documents. All minutes, consents or other documents pertaining
to FREEFLOW to be delivered at the Closing shall be valid and in accordance with
the laws of Delaware.
2.14 Title. The Seller has good and marketable title to all of the Shares
being sold by them to the Purchaser pursuant to this Agreement. The Shares will
be, at the Closing, free and clear of all liens, security interests, pledges,
charges, claims, encumbrances and restrictions of any kind, except for
restrictions on transfer imposed by federal and state securities laws. None of
the Shares are or will be subject to any voting trust or agreement. No person
holds or has the right to receive any proxy or similar instrument with respect
to such Shares. Except as provided in this Agreement, the Seller is not a party
to any agreement which offers or grants to any person the right to purchase or
acquire any of the Shares. There is no applicable local, state or federal law,
rule, regulation, or decree which would, as a result of the purchase of the
Shares by Purchaser, impair, restrict or delay voting rights with respect to the
Shares.
2.15 Transfer of Shares. The Seller will have the responsibility for
sending all certificates representing the Shares being purchased, along with the
proper Stock Powers with Bank Signature Medallion Guaranteed, to the Seller
Escrow Agent prior to the Closing, for release from escrow and delivery to the
Purchaser Escrow Agent at Closing.
The Purchaser will have the responsibility of sending the certificates
representing the Shares, along with stock powers to the Transfer Agent for
FREEFLOW to have the certificates transferred into the Purchaser's name, and the
Purchaser shall be responsible for all costs involved in such transfer.
2.16 Representations. All of Seller's and FREEFLOW's warranties and
representations made in this Agreement shall be true as of the Closing and shall
survive the Closing.
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ARTICLE III
CLOSING
3.01 Closing for the Purchase of Common Stock. The Closing (the "Closing")
of this transaction for the Shares of Common Stock being purchased will occur
when all of the documents and consideration described in Paragraphs 2.12 above
and in 3.02 below, have been delivered or other arrangements have been made and
agreed to by the Parties. The Closing shall occur on or before the close of
business on March 28, 2014.
This Agreement can be terminated in the event of any material breach by
either Purchaser or Seller.
3.02 Documents and Payments to be Delivered at Closing. As part of the
Closing of the Common Stock purchase, those documents listed in 2.12 of this
Agreement, as well as the following documents, in form reasonably acceptable to
counsel to the Purchaser, shall have been delivered in escrow at least 48 hours
prior to the Closing:
(a) By the Seller:
(i) stock certificate or certificates, along with stock powers with
signature medallion guarantee acceptable to the Transfer Agent,
representing the Shares, endorsed in favor of the name or names
as designated by Purchaser or left blank;
(ii) the resignations of the officers of FREEFLOW;
(iii)the resignations of the directors of FREEFLOW and the
appointment of new Directors as designated by the Purchasers;
(iv) all of the business and corporate records of FREEFLOW, including
but not limited to correspondence files, bank statements,
checkbooks, savings account books, minutes of shareholder and
directors meetings or consents, financial statements, shareholder
listings, stock transfer records, agreements and contracts that
exist, FINRA and SEC correspondence and filings for or on behalf
of FREEFLOW, EDGAR filing codes; and
(v) such other documents of FREEFLOW as may be reasonably required by
Purchaser.
(b) By Purchaser:
(i) wire transfer to the Seller Escrow Account of a total of $255,000, in
accordance with the Escrow Agent, representing the full payment of the
Purchase Price for the Shares.
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ARTICLE IV
INVESTMENT INTENT:
The Purchaser represents warrants and represents to the Seller the
following:
4.01 Transfer Restrictions. Purchaser agrees that the Shares being acquired
pursuant to this Agreement may be sold, pledged, assigned, hypothecated or
otherwise transferred, with or without consideration only pursuant to an
effective registration statement under the Securities Act of 1933, as amended
(the "Act"), or pursuant to an exemption from registration under the Act.
4.02 Investment Intent. The Purchaser is acquiring the Shares for its own
account for investment, and not with a view toward distribution thereof.
4.03 No Advertisement. The Purchaser acknowledges that the Shares have been
offered to them in direct communication between them and Seller, and not through
any advertisement of any kind.
4.04 Knowledge and Experience. The Purchaser acknowledges that it has its
own legal and financial counsel to assist them in evaluating this purchase. The
Purchaser acknowledges that it has sufficient business and financial experience,
and knowledge concerning the affairs and conditions of FREEFLOW so that it can
make a reasoned decision as to this purchase of the Shares and is capable of
evaluating the merits and risks of this purchase.
4.05 Restrictions on Transferability. The Purchaser is aware of the
restrictions of transferability of the Shares and further understands that the
certificates will bear a legend similar to the following:
THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), IN RELIANCE UPON THE EXEMPTION FROM REGISTRATION
PROVIDED IN SECTIONS 4(1) AND 4(2) AND REGULATION D UNDER THE
ACT. AS SUCH, THE PURCHASE OF THIS SECURITY WAS MADE WITH THE
INTENT OF INVESTMENT AND NOT WITH A VIEW FOR DISTRIBUTION.
THEREFORE, ANY SUBSEQUENT TRANSFER OF THIS SECURITY OR ANY
INTEREST THEREIN WILL BE UNLAWFUL UNLESS IT IS REGISTERED UNDER
THE ACT OR UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
4.06 Future Business of FREEFLOW. The Purchaser represents that after the
Closing of this transaction, the Purchaser intends that FREEFLOW will acquire
additional assets and/or businesses.
4.07 Anti-Money Laundering, Anti-Corruption and Anti-Terrorism Laws. The
Purchaser confirms that the funds representing the Purchase Price will not
represent proceeds of crime for the purpose of any applicable anti-money
laundering or anti-terrorist legislation or regulation; and the Purchaser is in
compliance with, and have not previously violated, the Patriot Act of 2001, as
amended through the date of this Agreement, to the extent applicable to the
Purchaser and all other applicable anti-money laundering, anti-corruption and
anti-terrorism laws and regulations.
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4.09 Representations. All of Purchaser's warranties and representations
shall be true as of the Closing and all such representations shall survive the
Closing.
ARTICLE V
REMEDIES
5.01 Arbitration. Any controversy of claim arising out of, or relating to,
this Agreement, or the making, performance, or interpretation thereof, shall be
settled by arbitration in New York, in accordance with the Rules of the U.S.
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.
5.02 Termination. In addition to any other remedies, the Purchaser may
terminate this Agreement, if at the Closing, the Seller has failed to comply
with all material terms of this Agreement, has failed to supply any documents
required by this Agreement unless they do not exist, or has failed to disclose
any material facts which could have a substantial effect on any part of this
transaction.
5.03 Indemnification. From and after the Closing, the parties, jointly and
severally, agree to indemnify the other against all actual losses, damages and
expenses caused by (i) any material breach of this Agreement by them or any
material misrepresentation contained herein, or (ii) any misstatement of a
material fact or omission to state a material fact required to be stated herein
or necessary to make the statements herein not misleading.
5.04 Indemnification Non-Exclusive The foregoing indemnification provision
is in addition to, and not derogation of any statutory, equitable or common law
remedy any party may have for breach of representation, warranty, covenant or
agreement.
ARTICLE VI
MISCELLANEOUS
6.01 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.
6.02 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.
6.03 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
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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, covenants, 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.
6.04 Time of Essence. Time is of the essence of this Agreement and of each
and every provision hereof.
6.05 Entire Agreement. This Agreement, including any and all attachments
hereto, if any, contain the entire Agreement and understanding between the
parties hereto, and supersede all prior agreements and understandings.
6.06 Partial Invalidity. In the event that any condition, covenant, or
other provision of this Agreement is held to be invalid or void by any court of
competent jurisdiction, it shall be deemed severable from the remainder of this
Agreement and shall in no way affect any other condition, covenant or other
provision of the Agreement. If such condition, covenant, or other provision is
held to be invalid due to its scope or breadth, it is agreed that it shall be
deemed to remain valid to the extent permitted by law.
6.07 Significant Changes The Seller understands that significant changes
may be made in the capitalization and/or stock ownership of FREEFLOW, which
changes could involve a reverse stock split and/or the issuance of additional
shares, thus possibly having a negative effect on the percentage of ownership
and/or number of shares owned by present shareholders of FREEFLOW.
6.08 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. Facsimile signatures will
be acceptable to all parties.
6.09 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, or on the second day if faxed, and properly addressed or faxed as
follows:
If to the Seller:
S. Douglas Henderson
9130 Edgewood Drive
La Mesa, CA 91941
If to the Purchaser:
Redfield Holdings, Ltd.
2301 Woodland Crossing Dr.
Suite 155, Herndon, VA 20171
Email: sabirsaleem@totalcare.us.com
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6.10 Binding Effect. This Agreement shall inure to and be binding upon the
heirs, executors, personal representatives, successors and assigns of each of
the parties to this Agreement
6.11 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 be true and
correct as of the Closing and shall survive the Closing of this Agreement.
6.12 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..
6.13 Governing Law. This Agreement and the rights of the Parties hereunder
shall be governed by and construed in accordance with the Laws of the State of
Delaware (regardless of its conflict of laws principles), including all matters
of construction, validity, performance and enforcement and without giving effect
to the principles of conflict of laws.
6.14 Exclusive Jurisdiction and Venue. The Parties agree that the Courts of
the State of California shall have sole and exclusive jurisdiction and venue for
the resolution of all disputes arising under the terms of this Agreement and the
Transactions contemplated herein.
6.15 Attorneys Fees. In the event any Party hereto shall commence legal
proceedings against the other to enforce the terms hereof, or to declare rights
hereunder, as the result of a breach of any covenant or condition of this
Agreement, the prevailing party in any such breach of an covenant or condition
of this Agreement, the prevailing party in any such proceeding shall be entitled
to recover from the losing party its costs of suit, including reasonable
attorneys' fees, as may be fixed by the court.
IN WITNESS WHEREOF, this Agreement has been duly executed by the Parties
hereto as of the date first written above.
SELLER: S. DOUGLAS HENDERSON
/s/ S. Douglas Henderson
------------------------------------
PURCHASER:
REDFIELD HOLDINGS, LTD.
By: /s/ Sabir Saleem
---------------------------------
Sabir Saleem, CEO
COMPANY:
FREE FLOW, INC.
/s/ S. Douglas Henderson
------------------------------------
S. Douglas Henderson, CEO
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