EX-99.1 2 v110778_ex99-1.htm
Exhibit 99.1
 
STOCK PURCHASE AGREEMENT
 
STOCK PURCHASE AGREEMENT, dated as of _________, 2008 (the "Agreement"), by and between Jonathan White (“White”), residing at 2396 The Woods Lane, Lexington, Kentucky 40502, and Vision Opportunity China LP (“Vision”), a Guernsey registered limited partnership with its principal office located at Sarnia House, Suites 13 and 15, Le Truchot, St Peter Port, Guernsey GY1 4NA.
 
WITNESSETH:
 
WHEREAS, White is the owner of 7,000,000 shares of common stock, par value $.000001 per share (the “Shares”), of City Language Exchange, Inc. (“CLE”), a Delaware corporation with an office located at 2114 Robie Street, Unit 1, Halifax, Nova Scotia B3K 4M4, Canada; and
 
WHEREAS, White desires to sell, and Vision desires to purchase, all of the Shares on the terms and conditions set forth herein;
 
NOW, THEREFORE, in consideration of the mutual representations, warranties, agreements and indemnities herein contained and other good and valuable consideration, the receipt and sufficiency of which is hereby mutually acknowledged, the parties agree as follows:
 
1. Purchased Shares
 
Subject to the terms and conditions herein stated, White hereby sells, assigns, transfers and delivers to Vision, and Vision hereby purchases from White, all right, title and interest of White in and to the Shares for a total purchase price of $345,000 (inclusive of $20,000 in expenses, disbursements and legal fees incurred in connection herewith).
 
2. Payment of Consideration
 
In furtherance of the consummation of the transactions contemplated hereby, simultaneously with the execution and delivery of this Agreement, Vision is (a) paying the purchase price by delivering to Greenberg Traurig, LLP, with offices at The MetLife Building, 200 Park Avenue, 15th Floor, New York, New York 10166, as escrow agent (the “Escrow Agent”), (i) Vision's check in the amount of $25,000 payable to the order of White, or by wire transferring such amount in immediately available funds to the Escrow Agent’s designated account, as an initial deposit, and (ii) the balance of the purchase price in the amount of $320,000 by check or wire transfer, at the Closing, and (b) White is delivering to the Escrow Agent (i) the stock certificate(s) representing the Shares, properly endorsed and/or accompanied by instruments of transfer duly executed in blank, medallion guaranteed, and (ii) the opinion of counsel for White, dated on the Closing Date, in substantially the form provided in Exhibit A hereto.
 

 
3. Closing Date
 
The consummation of the transactions contemplated by this Agreement (the “Closing”) is taking place simultaneously with the execution and delivery of this Agreement on __________, 2008 (the “Closing Date”), at the offices of the Escrow Agent in New York, New York.
 
4. Representations and Warranties
 
4.1 By White. White represents and warrants as follows and acknowledges that Vision is relying upon such representations and warranties in connection with the purchase by Vision of the Shares:
 
 
(a)
CLE is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware;
 
 
(b)
The authorized capital stock of CLE consists of 1,000,000,000 shares of common stock and 20,000,000 shares of preferred stock; and of such authorized capital, only 7,189,000 shares of common stock (inclusive of the Shares) have been duly issued and are outstanding and are fully paid and non-assessable;
 
 
(c)
No person, corporation or other entity has any agreement, option or warrant, or any right or privilege (whether by law, pre-emptive or contractual, or whether by means of any exercise, conversion or other right or action) which has the effect of or is capable of becoming an agreement, option or warrant, for the purchase from CLE of any securities (including convertible securities) of CLE;
 
 
(d)
All of the Shares are owned by White as the registered and beneficial owner of record, with good and marketable title thereto, free and clear of all mortgages, liens, charges, security interests, adverse claims, pledges, encumbrances, restrictions and demands whatsoever (other than restrictions imposed by federal or state securities laws);
 
 
(e)
No person, corporation or other entity (other than Vision pursuant to this Agreement) has any agreement, option or warrant, or any right or privilege (whether by law, pre-emptive or contractual, or whether by means of any exercise, conversion or other right or action) which has the effect of or is capable of becoming an agreement, option or warrant, for the purchase of any of the Shares;
 
 
(f)
Neither White nor CLE is party to, bound or affected by or subject to any indenture, mortgage, lease, agreement, instrument, charter or by-law provision, statute, regulation, order, judgment, decree or law which would be violated, contravened or breached by, or under which any default would occur as a result of, the consummation of the transactions provided for herein;
 

 
 
(g)
White has all requisite power and authority to execute, deliver and perform his obligations under this Agreement; the execution, delivery and performance of this Agreement by White has been duly authorized by all necessary action on the part of White; and this Agreement constitutes the legal, valid and binding obligation of White, enforceable against him in accordance with its terms;
 
 
(h)
None of the reports, notices, statements and other filings made by CLE with the SEC (the “SEC Documents”) since March 22, 2007, as of their respective dates, contained any untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements contained therein not misleading. Nothing has occurred with respect to which the Company would be required to file any current report on Form 8-K since March 22, 2007. The balance sheets and statements of income, changes in financial position and stockholders’ equity contained in any of the SEC Documents have been prepared in accordance with generally accepted accounting principles applied on a basis consistent with prior periods (and, in the case of unaudited financial information, on a basis consistent with year-end audits); and without limitation of the foregoing, CLE has no material liabilities, fixed or contingent, known or unknown, except to the extent reflected in such financial statements or thereafter incurred in the ordinary course of business.
 
 
(i)
CLE has not been informed that its shares of common stock fail to qualify or will be delisted from the OTC Bulletin Board.
 
 
(j)
Since January 1, 2007, (i) the business of CLE has been operated in the ordinary course, (ii) there has been no material adverse change in the financial condition, operations or business of CLE from that reflected in the aforesaid financial statements, and CLE has not incurred any material obligation or liability except in the ordinary course of business, and (iii) there has not been any (A) declaration, setting aside the payment of any dividend or other distribution with respect to the capital stock of CLE, (B) direct or indirect redemption, purchase or other acquisition by CLE of any of its capital stock, or (C) increase in the rate of salary or compensation paid or payable by CLE to White or any other officer, director or employee of CLE;
 
 
(k)
CLE is not in material default of any of its obligations (including but not limited to all leases to which CLE is a party or by which CLE is bound, whether for realty or personalty);
 
 
(l)
CLE has, to the date hereof, filed all tax returns and paid or made adequate reserve on its books for all taxes, assessments and other impositions as and to the extent required by law;
 

 
 
(m)
CLE is in compliance in all material respects with all laws, statutes, regulations, rules and ordinances applicable to the conduct of its business, and has in full force and effect all licenses, permits and other authorizations required for the conduct of its business as presently constituted;
 
 
(n)
CLE does not own any real estate or any interest therein, and White has previously delivered to Vision true and complete copies of all leases respecting real estate to which CLE is a party or by which CLE may be bound;
 
 
(o)
CLE maintains, has in full force and effect, and has paid all premiums in respect of insurance covering its business and assets against such hazards and in such amounts as are normal and customary for similar businesses of similar size in the locality;
 
 
(p)
CLE is not a party to or bound by any collective bargaining agreement, employment agreement, consulting agreement or other commitment for the employment or retention of any person;
 
 
(q)
CLE does not maintain and is not required to make any contributions to any pension, profit-sharing, retirement, deferred compensation or other such plan or arrangement for the benefit of any employee, former employee or other person;
 
 
(r)
there is no pending or, to White’s knowledge, threatened litigation, arbitration, administrative proceeding or other legal action or proceeding against or relating to CLE’s business;
 
 
(s)
CLE has the valid right to utilize all trade names and other intellectual property utilized in its business, and has not received notice of any claimed infringement of such intellectual property with the rights or property of any other person; and
 
 
(t)
neither White nor CLE has any knowledge of any fact, event, circumstance or condition that would materially impair CLE’s ability to continue its normal operations as heretofore conducted (other than general, industry-wide conditions).
 
4.2 By Vision. Vision represents and warrants as follows and acknowledges that White is relying upon such representations and warranties in connection with the sale by White of the Shares:
 
 
(a)
Vision is a registered limited partnership validly existing and in good standing under the laws of Guernsey;
 
 
(b)
Vision has all requisite power and authority to execute, deliver and perform its obligations under this Agreement; the execution, delivery and performance of this Agreement by Vision has been duly authorized by all necessary action on the part of Vision; and this Agreement constitute the legal, valid and binding obligation of Vision, enforceable against Vision in accordance with its terms;
 

 
 
(c)
Vision is not a party to, bound or affected by or subject to any indenture, mortgage, lease, agreement, instrument or charter provision, statute, regulation, order, judgment, decree or law which would be violated, contravened or breached by, or under which any default would occur as a result of, the consummation of the transactions provided for herein; and
 
 
(d)
Vision is purchasing the Shares for its own account for investment purposes, and not with a view to the distribution thereof in violation of any applicable securities laws.
 
5. Survival of Representations and Warranties
 
5.1 White. The representations and warranties of White contained in this Agreement, or any agreement, certificate or other document delivered or given pursuant to this Agreement, shall survive the consummation of the transactions contemplated by this Agreement and, notwithstanding such completion or any investigation made by or on behalf of Vision, shall continue in full force and effect for the benefit of Vision and any claim in respect thereof shall be made in writing:
 
 
(a)
with respect to representations and warranties of White, relating to matters other than tax matters, for a period of 18 months after the Closing Date; and
 
 
(b)
with respect to representations and warranties of White, relating to tax liability or other tax matters, within the period commencing on the Closing Date and expiring on the date on which the last applicable limitation period (without giving effect to any voluntary extension(s) hereafter granted by or on behalf of CLE) under any applicable taxation legislation expires with respect to any fiscal year of CLE which is relevant in determining any relevant tax liability of CLE.
 
5.2 Vision. The representations and warranties of Vision contained in this Agreement, or any agreement, certificate or other document delivered or given pursuant to this Agreement, shall survive the completion of the transactions contemplated by this Agreement and, notwithstanding such completion or any investigation made by or on behalf of White, shall continue in full force and effect for the benefit of White and any claim in respect thereof shall be made in writing for a period of 18 months after the Closing Date.
 
5.3 General. The provisions of this Section 5 respecting the expiration of claims periods is expressly subject to Section 8.3 hereof.
 

 
6. Transfer and Escrow
 
6.1 Transfer. This Agreement shall operate as an immediate and effective transfer and assignment of the Shares by White to Vision as at the date hereof. The parties agree to do all such other acts and things as may be necessary to give effect to the provisions hereof, and without limiting the generality of the foregoing, to validly and effectively transfer the Shares from White to Vision as at the Closing Date, and to disclose the resulting change in control of CLE in a current report on Form 8-K to be filed with the U.S. Securities and Exchange Commission (“SEC”) following the Closing. This Agreement will constitute, and may be presented to CLE and its transfer agent and registrar as, White’s irrevocable authorization to transfer the record ownership of the Shares to Vision on the stock transfer ledger of CLE.
 
6.2 Escrow. The Escrow Agent shall not be obligated to see to the proper application of the escrow funds and stock certificate(s), but shall merely be obligated to disburse and deliver same to White and Vision at their request, as more fully set forth in the Escrow Agreement attached as Exhibit B hereto. The Escrow Agent shall not be liable for its actions as such except for gross negligence or willful misconduct.
 
7. Additional Agreements
 
7.1 White shall remain the President, Chief Executive Officer, Chief Financial Officer and a member of the Board of Directors of CLE following the Closing. As such, White shall cause CLE to prepare and file with the SEC its Annual Report on Form 10-KSB for the year ended December 31, 2007, together with audited financial statements as of and for the year then ended, and any related management reports and certifications, as soon as practicable after the date hereof, but in no event later than March 31, 2008; and to prepare and file any quarterly reports on Form 10-Q for the quarters ended thereafter and any current reports on Form 8-K, as required, so long as he remains an executive officer of CLE.
 
7.2 Each of White and Vision shall take or cause to be taken all necessary or desirable actions, steps and corporate proceedings to approve or authorize the transactions contemplated by this Agreement and the execution and delivery of this Agreement and other agreements, understandings and documents contemplated hereby, and shall cause all necessary meetings of directors and stockholders to be held for such purpose.
 
8. Indemnification
 
8.1 Each party hereto agrees to indemnify and hold harmless the other party from and in respect of any cost, claim, loss, damage, liability or expense which such other party may suffer or incur, whether at law or in equity, arising out, resulting from or in connection with the inaccuracy of any representation or warranty contained herein, for the time periods provided in Section 4.1 hereof.
 

 
8.2 No claim for indemnification will arise until written notice thereof is given to the party from whom indemnification is sought or claimed (the “Indemnitor”). Such notice shall be sent within a reasonable time following the determination by the party seeking indemnification (the "Indemnitee") that a claim for indemnity may exist. In the event that any legal proceedings shall be instituted or any claim or demand is asserted by any third person in respect of which either party may seek any indemnification from the other party, the Indemnitee shall give or cause to be given to the Indemnitor written notice thereof and the Indemnitor shall have the right, at its option and expense, to be present at the defense of such proceedings, claim or demand, but not to control the defense, negotiation or settlement thereof, which control shall at all times remain with the Indemnitee, unless the Indemnitor irrevocably acknowledges full and complete responsibility for indemnification of the Indemnitee in respect of the subject claim, in which case the Indemnitor may assume such control through counsel of its choice; provided however, that no settlement shall be entered into without the Indemnitee's prior written consent (which shall not be unreasonably withheld). The parties agree to cooperate fully with each other in connection with the defense, negotiation or settlement of any such third party legal proceeding, claim or demand.
 
8.3 Notwithstanding anything in this Agreement to the contrary, the indemnity provided for in this Section 8 shall apply to any loss, claim, cost, damage, expense or liability, whether or not the actual amount thereof shall have been ascertained prior to the final day upon which a claim for indemnity with respect thereto may be made hereunder in accordance with Section 5 hereof, so long as written notice thereof shall have been given to the party from whom indemnification is sought prior to said date, setting forth specifically and in reasonable detail, so far as is known, the matter as to which indemnification is being sought, but nothing herein shall be construed to require payment of any claim for indemnity until the actual amount payable shall have been finally ascertained.
 
9. Notices
 
Notices required or permitted to be given under this Agreement shall be in writing and shall be deemed to be sufficiently given when sent by certified or registered mail or by hand, addressed to the addresses set forth on the first page of this Agreement or to such other address furnished by notice given in accordance with this Section 9. A copy of any notice sent to Vision shall also be sent to Vision Capital Advisors LLC, 20 West 55th Street, 5th Floor, New York, New York 10019, Attention: Kim Gabriel, Esq., Legal and Operations.
 
10. Governing Law
 
This Agreement shall be governed by and construed in accordance with the laws of the State of New York. In the event there is any dispute between the parties as to their rights and obligations under this Agreement, the parties submit to the jurisdiction of any state or federal court sitting in the State and City of New York, and waive any defense of inconvenient forum to the maintenance of any action so brought.
 
11. Entire Agreement
 
This Agreement constitutes the entire agreement between the parties relating to the subject matter hereof. There are no verbal statements, representations, warranties, undertakings or agreements between the parties. This agreement may be amended only by an instrument in writing signed by both parties.
 
12. Time of the Essence
 
Time shall be of the essence of this Agreement.
 
13. Assignment
 
Neither this Agreement nor any rights or obligations hereunder may be assigned by either party without the prior written consent of the other party, which consent may be withheld in either party's sole and absolute discretion, except that Vision may assign its rights hereunder to CLE without White’s consent.
 
14. Binding Effect
 
This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. This Agreement may be executed in counterparts.
 
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.
 
 
     
 
Jonathan White
   
  VISION OPPORTUNITY CHINA LP
 
 
 
 
 
 
  By:    
 
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