STOCK PURCHASE AGREEMENTAMONG DAVI SKIN, INC. AS SELLERS ANDArtist House Holdings, Inc. AS PURCHASER March 27, 2006
DAVI
SKIN, INC. AS SELLERS
ANDArtist
House Holdings, Inc. AS PURCHASER
March
27, 2006
THIS
STOCK PURCHASE AGREEMENT ("Agreement") has been made and entered into as of
this
27th day of March, 2006, between Davi Skin, Inc., a Nevada Corporation
("Sellers" or “DAVN” or “the Company”), and Artist House Holdings, Inc., a
_______ Corporation (the "Purchaser").
R
E C I T
A L S:
A. The
parties hereto desire to effect a stock sale (the "Stock Sale") pursuant to
which Purchaser will purchase from the Sellers 283,333 Securities Units,
consisting of 566,667 shares of DAVN common stock and a warrant to purchase
an
additional 283,333 shares of DAVN common stock at $4.50 per shares exercisable
in 24 months (the "Transferred Shares") for the consideration and under the
terms as set forth herein.
B. Pursuant
to the Stock Sale, the Sellers will sell, and Purchaser will purchase, the
Transferred Shares.
NOW,
THEREFORE,
in
consideration of the mutual agreements and covenants contained herein, the
parties hereto agree as follows and do thereby adopt this
Agreement.
ARTICLE
I
DEFINITIONS
The
terms
defined in this Article (except as otherwise expressly provided in this
Agreement) for all purposes of this Agreement shall have the respective meanings
specified in this Article.
"Affiliate"
shall
mean any entity controlling or controlled by another person, under common
control with another person, or controlled by any entity which controls such
person.
"Agreement"
shall
mean this Agreement, and all the exhibits, schedules and other documents
attached to or referred to in the Agreement, and all amendments and supplements,
if any, to this Agreement.
"Closing"
shall
mean the closing of the Transaction at which the Closing Documents shall be
exchanged by the parties and payment of the Purchase Price shall be made, except
for those documents or other items specifically required to be exchanged at
a
later time.
"Closing
Date"
shall
mean the date of Closing, which shall be no later than five business days from
the date this agreement is signed, or such other date as agreed in writing
to by
the parties on which the Closing actually occurs.
"Closing
Documents"
shall
mean the papers, instruments and documents required to be executed and delivered
at the Closing pursuant to this Agreement.
"Code"
shall
mean the Internal Revenue of 1986, or any successor law, and regulations issued
by the Internal Revenue Service pursuant to the Internal Revenue Code or any
successor law.
"Encumbrance"
shall
mean any charge, claim, encumbrance, community property interest, condition,
equitable interest, lien, option, pledge, security interest, right of first
refusal, or restriction of any kind, including any restriction on use, voting
(in the case of any security), transfer, receipt of income, or exercise of
any
other attribute of ownership other than (a) liens for taxes not yet due and
payable, or (b) liens that secure the ownership interests of lessors of
equipment.
"Exchange
Act"
shall
mean the Securities Exchange Act of 1934, as amended.
"GAAP"
shall
mean United States generally accepted accounting principles applied in a manner
consistent with prior periods.
"Investment
Letter"
shall
mean the investment letter in the form attached hereto as
Appendix A.
"Material
Adverse Effect"
means
any change (individually or in the aggregate) in the general affairs,
management, business, goodwill, results of operations, condition (financial
or
otherwise), assets, liabilities or prospects (whether or not the result thereof
would be covered by insurance) that would be material and adverse to the
designated party.
"Ordinary
Course of Business"
shall
mean actions consistent with the past practices of the designated party which
are similar in nature and style to actions customarily taken by the designated
party and which do not require, and in the past have not received, specific
authorization by the Board of Directors of the designated party.
"SEC"
shall
mean the Securities and Exchange Commission.
"Securities
Act"
shall
mean the Securities Act of 1933, as amended.
"Taxes"
shall
include federal, state and local income taxes, capital gains tax, value-added
taxes, franchise, personal property and real property taxes, levies,
assessments, tariffs, duties (including any customs duty), business license
or
other fees, sales, use and any other taxes relating to the assets of the
designated party or the business of the designated party for all periods up
to
and including the Closing Date, together with any related charge or amount,
including interest, fines, penalties and additions to tax, if any, arising
out
of tax assessments.
"Transaction"
shall mean the Stock Sale contemplated by this Agreement.
ARTICLE
II
THE
TRANSACTION1.
Stock Sale.Subject
to the terms and conditions of the Closing Documents, the Sellers hereby agree
to sell, transfer and deliver to Purchaser, and Purchaser hereby agrees to
purchase and accept, the Transferred Shares, in consideration for the delivery
of $1,700,000 (One Million Seven Hundred Thousand Dollars and No Cents) (the
“Purchase Price”) to be used and distributed under the terms and conditions
contained below.
2.
Securities Law Matters.
The
Parties understand that the Transferred Shares to be acquired and delivered
to
the Sellers pursuant to the terms of this Agreement will not be registered
under
the Securities Act, but will be transferred in reliance upon exemptions
available for private transactions, and that each is relying upon the truth
and
accuracy of the representations set forth in the Investment Letter signed by
each of the Sellers and delivered concurrently with the execution of this
Agreement. Each certificate representing the Transferred Shares in the name
of
the Sellers pursuant to the terms of this Agreement shall bear the following
legend:
THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED PURSUANT TO
THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, AND
MAY
NOT BE TRANSFERRED UNLESS THEY ARE SO REGISTERED OR, IN THE OPINION OF COUNSEL
ACCEPTABLE TO THIS CORPORATION, SUCH TRANSFER IS EXEMPT FROM
REGISTRATION.
ARTICLE
III
REPRESENTATIONS
AND
WARRANTIES
1.
Representations and Warranties of the Sellers. The Sellers hereby
represent and warrant to Purchaser that:
a.
Organization
of the Company; Foreign Qualification.
The
Company is duly organized, validly existing, and in good standing under the
laws
of the state of Nevada and has all requisite corporate power, franchises, and
licenses to own its property and conduct the business in which it is engaged.
The Company has the full power and authority (corporate or otherwise) to
execute, deliver and perform its obligations under this Agreement. The Company
is duly qualified and in good standing as a foreign corporation in every
jurisdiction in which such qualification is necessary, except to the extent
the
failure to be so qualified is not reasonably expected to result in a Material
Adverse Effect.
b.
Capitalization;
Ownership of Transferred Shares.
The
Company has an authorized capital stock consisting of 100,000,000 (One Hundred
Million) common shares par value $0.001.
c.
Authority
Relative to the Closing Documents; Enforceability.
The
Sellers are not suffering from any legal disability which would: (a) prevent
them from executing, delivering or performing their obligations under the
Closing Documents or consummating the Transaction, (b) make such execution,
delivery, performance or consummation voidable or subject to necessary
ratification, and (c) require the signature or consent of any third party in
connection therewith for the Transaction to be binding and enforceable against
the Sellers and their property. The Closing Documents have been duly and validly
executed and delivered by the Sellers and each constitutes the legal, valid
and
binding obligation of the Sellers, enforceable against them in accordance with
their respective terms, except insofar as the enforcement thereof may be limited
by the Insolvency/Equity Exceptions.
d.
Title
to Assets.
The
Company has good and marketable title free and clear of any Encumbrance in
and
to all of the assets and properties identified to Purchaser.
e.
Compliance
with Other Instruments; Consents.
Neither
the execution of any Closing Document nor the consummation of the Transaction
will conflict with, violate or result in a breach or constitute a default (or
an
event which, with notice or lapse of time or both, would constitute a default),
or result in a termination of, or accelerate the performance required by, or
result in the creation of any Encumbrance upon any assets of the Company under
any provision of the Articles of Incorporation, Bylaws, indenture, mortgage,
lien, lease, agreement, contract, instrument, order, judgment, decree, statute,
ordinance, regulation or any other restriction of any kind or character to
which
the Company is bound.
f.
Officers
Shares and Salaries.
To date
none of the officers have sold any of their shares and the officers’ salaries
have not increased since January 1, 2006.
ARTICLE
IV
CLOSING
1.
The Closing.
The
Closing shall take place upon receipt of funds representing the Purchase Price
from Purchaser, which shall be wired into a Company account by Purchasers.
This
Purchase Price shall be held in a separate interest bearing account requiring
for any withdrawal or payment, either: (a) the signature of both the Chairman
of
the Board of the Company and the CEO of Purchaser, Mr. Kusube; or (b) the
unanimous approval of the Company’s Board of Directors.
2.
Deliveries on Closing.
Within 5
business days of Closing, Sellers will deliver to Purchasers stock and warrant
certificates representing the Transferred Shares.
ARTICLE
V
CONDITIONS
SUBSEQUENT TO
CLOSING
Following Closing the Company shall be obligated to perform the following within the thirty (30) days of the Closing, unless otherwise indicated:
1. Director
Xxxx XxXxxx shall vacate his office and this office shall be
sublet.
2. President
Xxxxxx Xxxxxxxx shall have agreed to modify his stock option agreement so that
any voluntary resignation within the first two years of service by Xx. Xxxxxxxx
shall immediately terminate his right to exercise the options.
3. Within
the next three (3) months the Company shall hire a new experienced person,
knowledgeable in the operations of a small cosmetic company.
4. Within
the next two (2) months the
Company shall hire a new CFO.
5. The
Company shall agree to expand its Board of Directors to seven individuals and
have appointed the following new board members:
a.
Xxx
Mondavib.
b.
Taro Yamakawac.
c.
Takashi
Kusubed.
d.
Xxxxxx Xxxxxxxx
6. The
Company shall implement the following policies and rules:
a. No
officers shall receive raises within the next twelve (12) months and thereafter
no officers shall receive raises without board approval.
b. Board
meetings shall be held via telephone conference for those board members not
living near the Company offices, except for one in person meeting which shall
be
held annually.
c. All
books
and records of the Company shall be open for inspection at all times by all
board members.
d. All
business expenses must be reasonable and for legitimate Company purposes and
require prior approval. Prior to payment, there must be submission of receipts,
an explanation of expenses and proof of payment.
7. The
Company shall hold a shareholder meeting within 4 months of receipt of funds,
with appropriate notice as required by law.
8. The
Company shall discontinue and close its credit card and not reopen one without
board’s unanimous approval.
9. The
Company shall file a registration statement for the 566,667 shares of common
stock sold hereunder within 45 days of Closing. Any failure to file this
registration statement within the time frame described shall cause the Company
to incur a late fee of 1,000 shares per day to be issued to
Purchasers.
10. Purchasers
shall be made the licensing agent for the Company in Japan under the same
conditions as provided in the Company’s agreement with Constellation (i.e., 1/3
of the monies received by the Company are to go to Purchasers for licensing
deals Purchasers create).
11. Any
future fundraising by the Company must be on terms equal or higher than the
terms provided herein. In the event that shares are sold at a lower cost within
a one year period, then Purchaser shall be entitled to receive additional shares
equivalent to what would have been received at the new lower price
terms.
12.
Board
of Directors and Officers insurance will be obtained for all Board
members.
13. Shareholders
Xxxxx Xxxxxxx and Xxxx XxXxxx agree to vote for the board of directors listed
in
Article V paragraph 5 and further agree, for the next 2 years, to vote against
a
change in the constitution of the board without the agreement of one of the
following Board Members: Xxxx Xxxxxxxx, Takashi Kusube, or Xxxxxx Xxxxxxxx.
Shareholders Xxxxx Xxxxxxx and Xxxx XxXxxx will enter into a formal shareholder
agreement evidencing the same within the next forty five (45) days.
ARTICLE
VI
SURVIVAL
OF REPRESENTATIONS
Representations
to Survive Closing.
The
representations and warranties of the Sellers and Purchaser contained herein
or
in any document furnished pursuant hereto shall survive the Closing of the
Transaction for a period of three year following the Closing. Each party
acknowledges and agrees that, except as expressly set forth in this Agreement
or
any Closing Document, no party has made (and no party is relying on) any
representation or warranties of any nature, express or implied, regarding any
or
relating to any of the transactions contemplated by this Agreement.
ARTICLE
VII
MISCELLANEOUS
Notices.
All
notices, requests, demands and other communications hereunder shall be in
writing and shall be deemed delivered if delivered by hand, by telecopier,
by
courier or mailed by certified or registered mail, postage prepaid, addressed
to
the parties at their last know or provided address.
Assignability
and Parties in Interest.
This
Agreement shall not be assignable by any of the parties hereto without the
consent of all other parties hereto. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective successors.
Nothing in this Agreement is intended to confer, expressly or by implication,
upon any other person any rights or remedies under or by reason of this
Agreement.
Expenses.
Each
party shall bear its own expenses and costs, including the fees of any attorney
retained by it, incurred in connection with the preparation of the Closing
Documents and consummation of the Transaction.
Governing
Law. This
Agreement shall be governed by, and construed and enforced in accordance with,
the laws of the State of Nevada. Each of the parties hereto consents to the
personal jurisdiction of the federal and state courts in the State of Nevada
in
connection with any action arising under or brought with respect to this
Agreement.
Counterparts.
This
Agreement may be executed as of the same effective date in one or more
counterparts, each of which shall be deemed an original; and any fax copy of
this agreement shall be consider valid and enforceable and to the same effect
as
the original.
Headings.
The
headings and subheadings contained in this Agreement are included solely for
ease of reference, and are not intended to give a full description of the
contents of any particular Section and shall not be given any weight whatever
in
interpreting any
provision
of this Agreement.
Pronouns,
Etc. Use
of
male, female and neuter pronouns in the singular or plural shall be understood
to include each of the other pronouns as the context requires. The word "and"
includes the word "or". The word "or" is disjunctive but not necessarily
exclusive.
Complete
Agreement. This
Agreement, the Appendices hereto, and the documents delivered pursuant hereto
or
referred to herein or therein contain the entire agreement between the parties
with respect to the Transaction and, except as provided herein, supersede all
previous negotiations, commitments and writings.
Modifications,
Amendments and Waivers.
This
Agreement shall not be modified or amended except by a writing signed by each
of
the parties hereto. Prior to the Closing, the Sellers may amend any of the
disclosure schedules referenced herein by giving the other party notice of
such
amendments. If such amended disclosures reveal material adverse information
about the Company, Purchaser may terminate this Agreement without liability
to
the Sellers.
Severability.
If any
term or other provision of this Agreement is invalid, illegal, or incapable
of
being enforced by any rule of law or public policy, all other terms and
provisions of this Agreement will nevertheless remain in full force and effect
so long as the economic or legal substance of the Transaction is not affected
in
any manner adverse to any party hereto. Upon any such determination that any
term or other provision is invalid, illegal, or incapable of being enforced,
the
parties hereto will negotiate in good faith to modify this Agreement so as
to
effect the original intent of the parties as closely as possible in any
acceptable manner to the end that the Transaction are consummated to the extent
possible.
[Signature
Page Follows]
IN
WITNESS WHEREOF,
the
parties have executed this Agreement as of the day and year first above
written.
PURCHASER:
Artist
House Holding, Inc.
/s/
Takashi Kusube
By:
Takashi Kusube
Its:
President
SELLERS:
Davi
Skin, Inc.
/s/
Xxxxxx Xxxxxxxx
By:
Xxxxxx Xxxxxxxx
Its:
President
Agreed
and Approved:
/s/
Carlo Monavi
Xxxxx
Xxxxxxx
/s/
Xxxx XxXxxx
Xxxx
XxXxxx
/s/
Xxxxxx Xxxxxxxx
Xxxxxx
Xxxxxxxx
/s/
Xxx Xxxxxxx
Xxx
Xxxxxxx