STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (this "Agreement") is made this November 1,
2007 by and among each of the parties set forth on Schedule A attached hereto:
Pride Equities, Inc., a Colorado Corporation and Charles Calello, an individual,
(the "Sellers"), Ventana Capital Partners or its assignee (the "Buyer") and
Securities Law Institute (the "Escrow Agent"). Both Buyer and Sellers jointly
and severally referred to herein individually as a "Party" or collectively as
the "Parties".
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Purchase and Sale of Stock.
(a) Sale of Shares. Subject to the terms and conditions of this
Agreement, and in reliance upon the representations and warranties and covenants
contained herein, Buyer agrees to purchase from Sellers and Sellers agrees to
sell to Buyer three hundred and twenty eight thousand shares seven hundred and
fifty shares of common stock (328,750) held in the name of Pride Equities and an
additional one hundred and sixty five thousand (165,000) shares of common stock
held by Charles Calello (the "Shares"), and any rights attached to the shares as
of the date hereof (including any forward splits of stock or other dividends),
of American Telstar, Inc. (the "Company") for a total purchase price of Four
Hundred Thousand Dollars (USD$400,000.00), including related escrow and
transaction fees (the "Purchase Price").
(b) Effective Registration of Shares. If required by applicable
law, the sale and purchase of the Shares under this agreement is being made
pursuant to the Company's Registration Statement on Form 10-SB filed with the
Securities and Exchange Commission (the "SEC") on January 4, 2007, SEC File No.
799414, (the "Registration Statement"), as declared effective on March 4, 2007,
and the Sellers have delivered to the Buyer the definitive prospectus contained
therein.
2. Terms and Conditions Prior to Closing
(a) Prior to Closing the shares of the Company's common stock
must be approved for trading on the Over the Counter Bulletin Board (the
"OTCBB"). Seller agrees to provide all due diligence information to Buyer that
is required to facilitate the filing of the l5c2-11 by a sponsoring NASD Broker
Dealer.
(b) Seller will grant Buyer ninety (90) days from the first day
the Company's common stock starts to trade on the OTCBB to close on the
transactions contemplated under this Agreement.
(c) Closing.
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The Closing Date of the transactions contemplated hereunder
(the "Closing") shall take place at the office of the
Escrow Agent on such date and time as the parties hereto
may mutually agree upon but no later than ninety (90) days
after the first date the Company's common stock trades on
the OTCBB (the "Closing Date") unless such Closing Date is
extended in writing by mutual consent of both parties:
At the Closing:
(a) Sellers shall transfer to Buyer, good and
marketable title to the Shares, free and clear of any and
all liens, claims, encumbrances and adverse interests of
any kind, by delivering to Buyer the certificates
representing the Shares in negotiable form, duly endorsed
in blank, or with stock transfer powers (containing a
bank's signature guarantee or other signature guarantee
acceptable to the Company's transfer agent, if the transfer
agent requires such a guarantee) attached thereto (the
"Transaction Documents");
(b) The Company shall have zero assets and zero
liabilities at Closing.
(c) Buyer shall have delivered the Purchase Price
and Escrow Fee (as defined in Section 5, below) to Escrow
Agent in the amount set forth opposite each Sellers name on
Schedule A; and
(d) the Escrow Agent will take control of, and
will be entitled to payment of, the Escrow Fee (as defined
in Section 5, below).
3. Representations and Warranties of Seller. In order to induce the
Buyer to enter into this Agreement and purchase the Shares, the Seller hereby
represents and warrants to the Buyer that:
(a) Ownership of Shares. Seller is the record and beneficial
owner of the Shares and has sole power over the disposition of the Shares and
that: (i) the Shares are free and clear of any liens, claims, encumbrances, and
charges; and (ii) the Shares have not been sold, conveyed, encumbered,
hypothecated or otherwise transferred by Seller except pursuant to this
Agreement.
(b) Authority for Agreement. Seller has the requisite power and
authority to enter into and to consummate the transactions contemplated hereby
and otherwise to carry out its obligations hereunder. The execution, delivery
and performance by the Seller of this Agreement have been duly authorized by all
requisite action by the Seller, and the Agreement, when executed and delivered
by the Seller, constitutes a valid and binding obligation of the Seller,
enforceable against the Seller in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other similar laws affecting creditors' rights and remedies
generally, and subject, as to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a proceeding at law or in
equity).
(c) Experience and Knowledge. The Seller acknowledges and
agrees that he (i) has extensive knowledge and experience in financial and
business matters; (ii) has had access to all information as to the Company as he
has desired; (iii) has made its own inquiry and investigation into, and, based
thereon, has formed an independent judgment concerning, the operations of the
Company and its business; and (iv) has received sufficient and satisfactory
answers to all questions posed to the Company to evaluate the merits and risks
of the transactions contemplated by this Agreement.
(d) Disclosures by Seller. The Seller has satisfied himself
with respect to, and has no knowledge of, a material fact about the operations,
affairs, condition or prospects of the business or the financial condition of
the Company that has not been disclosed by the Company to Seller, including,
without limitation, the Company's limited operations; its audited and unaudited
financial statements; opinions of Company's auditors as to the status of the
Company as a going concern; management's decision to reevaluate the Company's
business model and plan; and the Company's search for a suitable financing
transaction and/or business ventures, such as mergers, acquisitions, joint
ventures, debt or equity placements and similar or other on-balance or
off-balance sheet corporate finance transactions, or to engage in any lawful act
or activity, or engage in any business, for which corporations may be
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organized under the laws of the State of Nevada. The Seller further represents
and warrants that if the Company were to make such changes to its business plan,
such changes would be expected to have a material positive effect on the future
value of the Company, and in particular of the Shares being purchased and sold
pursuant to tins Agreement.
(c) No Fiduciary Duty. The Seller hereby acknowledges and
agrees that (a) at present there is no regular public market for the Shares; (b)
the purchase and sale of Seller's Shares is taking place in a private
transaction between Seller and Buyer in an arm's-length commercial transaction
between the Seller, on the one hand, and the Buyer and any affiliate through
which it may be acting, on the other, at a price negotiated and agreed to by
Seller as the best possible current price for his Shares; (c) the Seller agrees
that he is solely responsible for making his own judgments in connection with
the Agreement (irrespective of whether the Company, its executive officers,
auditors, or other representatives have advised or arc currently advising the
Company or the Seller on related or other matters); and (d) the Seller agrees
that he will not claim that the Buyer have rendered advisory services of any
nature or respect, or owe an agency, fiduciary or similar duty to the Seller, in
connection with such transaction or the process leading thereto.
4. Representations and Warranties of the Buyer. Buyer hereby warrants
and represents to each Seller that;
(a) Authority. Buyer has the requisite power and authority to
enter into and to consummate the transactions contemplated hereby and otherwise
to carry out its obligations hereunder. The execution, delivery and performance
by the Buyer of this Agreement have been duly authorized by all requisite action
by the Buyer, and the Agreement, when executed and delivered by the Buyer,
constitutes a valid and binding obligation of the Buyer, enforceable against the
Buyer in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or other similar
laws affecting creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity).
5. Escrow Agent.
(a) Buyer Deliveries. On or before the Closing Date, the Buyer
shall have delivered to the Escrow Agent the Purchase Price for the Shares plus
related Escrow fees, as set forth in Section 5, below (the "Escrowed Funds") and
the Transaction Documents. The Buyer shall deliver the Escrowed Funds to the
Escrow Agent pursuant to the following wire transfer instructions: Wire Transfer
Instructions to be delivered prior to Closing.
(b) Intention to Create Escrow Over Escrowed Funds. The Sellers
intend that the Transaction Documents and the Escrowed Funds shall be held in
escrow by the Escrow Agent pursuant to this Agreement for their benefit and for
the benefit of the Buyer.
(c) Escrow Agent to Deliver Transaction Documents and Escrowed
Funds. The Escrow Agent shall hold and release the Escrowed Funds only in
accordance with the terms and conditions of this Agreement.
(d) Release of Escrow. On the Closing Date, pursuant to the
conditions set forth in Section l(c) above, the Escrow Agent will release the
Escrowed Funds, delivering (i) the respective Escrow Payment to Sellers pursuant
to Sellers' written instruction; and (ii) the Escrow Fee to the Escrow Agent. As
compensation for acting as Escrow Agent, the Escrow Agent shall receive its
Escrow Fee from each Buyer's Escrowed Funds, as set for opposite such Seller's
name on Schedule A. If the Closing Date does not occur within 120 days from the
date the Company's common stock trades on the OTCBB or such other date as the
parties may agree to in writing, the Escrow Agent may return the Escrowed Funds
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to the Buyer without incurring any liability to any party and terminating its
responsibilities under this Agreement.
(e) Duties and Responsibilities of the Escrow Agent. The Escrow
Agent's duties and responsibilities shall be subject to the following terms and
conditions:
(i) The Sellers and the Buyer acknowledge and agree that
the Escrow Agent (a) shall not be responsible for or bound by, and shall
not be required to inquire into whether either the Sellers or the Buyer
are entitled to receipt of the Transaction Documents or Escrowed Funds
pursuant to, any other agreement or otherwise; (b) shall be obligated
only for the performance or such duties as are specifically assumed by
the Escrow Agent pursuant to this Agreement: (c) may rely on and shall be
protected in acting or refraining from acting upon any written notice,
instruction, instrument, statement, request or document furnished to it
hereunder and believed by the Escrow Agent in good faith to be genuine
and to have been signed or presented by the proper person or party,
without being required to determine the authenticity or correctness of
any fact stated therein or the propriety or validity or the service
thereof; (d) may assume that any person believed by the Escrow Agent in
good faith to be authorized to give notice or make any statement or
execute any document in connection with the provisions hereof is so
authorized; (e) shall not be under any duty to give the property held by
Escrow Agent hereunder any greater degree of care than the Escrow Agent
gives its own similar property, but in no event less than a reasonable
amount of care; and (f) may consult with counsel satisfactory to the
Escrow Agent, the opinion of such counsel to be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by the Escrow Agent hereunder in good faith and in accordance
with the opinion of such counsel.
(ii) The Sellers and the Buyer acknowledge that the
Escrow Agent is acting solely as a stakeholder at their request and that
the Escrow Agent shall not be liable for any action taken by Escrow Agent
in good faith and believed by the Escrow Agent to be authorized or within
the rights or powers conferred upon the Escrow Agent by this Agreement.
The Sellers and the Buyer agree to indemnify and hold harmless the Escrow
Agent and any of the Escrow Agent's partners, employees, agents, and
representatives for any action taken or omitted to be taken by the Escrow
Agent or any of them hereunder, including the fees of outside counsel and
other costs and expenses of defending itself against any claim or
liability under this Agreement, except in the case of gross negligence or
willful misconduct on the part of the Escrow Agent committed in its
capacity as Escrow Agent under this Agreement. The Escrow Agent shall owe
a duty only to the Sellers and the Buyer under this Agreement and to no
other person.
(iii) The Buyer agrees to reimburse the Escrow Agent for
outside counsel fees, to the extent authorized hereunder and incurred in
connection with the performance of its duties and responsibilities
hereunder.
(iv) The Escrow Agent may at any time resign as Escrow
Agent hereunder by giving five (5) days prior written notice of
resignation to the Buyer. Prior to the effective date of the resignation
as specified in such notice, the Buyer will issue to the Escrow Agent an
Instruction authorizing delivery of the Escrowed Funds to a substitute
escrow agent selected by the Buyer. If no successor escrow agent is named
by the Company, the Escrow Agent may apply to a court of competent
jurisdiction in the State of New York for appointment of a successor
escrow agent, and to deposit the Escrowed Funds with the clerk of any
such court.
(v) This Agreement sets forth exclusively the duties of
the Escrow Agent with respect to any and all matters pertinent thereto
and no implied duties or obligations shall be read into this Agreement.
(vi) The provisions of this Section 5 shall survive the
resignation of the
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Escrow Agent or the termination of this Agreement.
6. Miscellaneous.
(a) Successors and Assigns. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
heirs, legal representatives, successors and assigns of the parties.
(b) Governing Law/Venue. This Agreement shall be governed by
and construed under the laws of the State of California as applied to agreements
entered into and to be performed entirely within New York. Any dispute or
controversy concerning or relating to this Agreement shall be exclusively
resolved in the federal or state courts located in the City of San Diego, and
State of California.
(c) Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(d) Default. Seller's failure, or failure of Seller's agents,
representatives, brokers ("Seller's Agents") to deliver to Buyer at Closing on
the Closing Date certificates representing any securities as required hereby
along with Seller's fully executed stock power with signature medallion
guaranteed, shall constitute a default under tins Agreement ("Default"). Nothing
herein shall limit the Buyer's right to protect and enforce its rights by an
action at law, suit in equity or other appropriate proceeding, whether for the
specific performance of any agreement contained herein for an injunction against
a violation of any of the terms hereof or thereof, or for the pursuit of any
other remedy which it may have by virtue of this Agreement, for the failure of
the Seller, Seller's Agents, or the Company and its transfer agent to deliver
certificates representing any securities as required hereby, and the Buyer shall
have the right to pursue all remedies available to it at law or in equity,
including, without limitation, a decree of specific performance and/or
injunctive relief. In the event of Default, Seller shall pay to the Buyer the
reasonable costs and expenses of collection and of any other actions referred to
in this paragraph (d), including without limitation reasonable attorneys' fees,
expenses and disbursements.
(e) Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
(f) Notices. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery to the party to be notified or sent by
overnight delivery by a nationally recognized overnight courier upon proof of
sending thereof and addressed to the party to be notified at the address
indicated for such party above and on Schedule A attached hereto, or at such
other address as such party may designate by written notice to the other
parties.
(g) Expenses. Each of the parties shall bear its own costs and
expenses incurred with respect to the negotiation, execution, delivery, and
performance of this Agreement.
(h) Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of Seller and Buyer.
(i) Entire Agreement. This Agreement represents and constitutes
the entire agreement and understanding between the parties with regard to the
subject matter contained herein. All prior agreements, understandings and
representations arc hereby merged into this Agreement.
[Signature Page to Follow]
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IN WITNESS WHEREOF, the undersigned have executed, or caused to be
executed on their behalf by an agent thereunto duly authorized, this Agreement
as of the date first above written.
SELLER:
/s/ Michael L. Schumacher
- ---------------------------------------
Name: Pride Equities, Inc.
By: Michael L. Schumacher - CEO
Address: 2525 15th Street Suite 3H
Denver, Colorado 80211
Number of Shares: 328,750
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SELLER:
/s/ Charles Calello
- ---------------------------------------
Name: Charles Calello
Address: 23368 Mirabella Circle
Boca Raton, Florida 33433
Number of Shares: 165,000
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BUYER:
By: /s/ Ralph Amato
------------------------------------
Name: Ventana Capital Partners, Inc.
By: Ralph Amato - CEO
Address: 5782 Caminito Empresa
La Jolla, CA 92037
ESCROW AGENT:
SECURITIES LAW INSTITUTE
By: /s/ Donald Stoecklein, ESQ.
------------------------------------
Name: Donald Stoecklein, ESQ.
Title: Managing Partner
Address: 770 East Wann Springs
Suite 250
Las Vegas, NV 89119
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SCHEDULE A
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Seller Shares Purchase Price Escrow Fee
- ------ ------ -------------- ----------
Pride Equities, Inc. 328,750 $283,038 Paid by Seller
- -------------------- ------- -------- --------------
Charles Calello 165,000 $116,962 Paid by Seller
- --------------- ------- -------- --------------
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