STOCK PURCHASE AGREEMENT by Lux Digital Pictures, Inc.

EXHIBIT 10.1

 

STOCK PURCHASE AGREEMENT

This Stock Purchase Agreement (the "Agreement") is made and entered into as of the 16th day of May 2012 by and among Lux Digital Pictures, Inc., a Wyoming corporation ("Lux"), Lux Digital Pictures GmbH Partners, a California partnership (the "Seller"), and Michael Hill, an individual (the "Buyer"), with respect to the following facts:

RECITALS

A.	Lux is a publicly held corporation fully compliant with all regulatory filings and in good standing, whose securities are quoted on the Bulletin Board and the OTC:QB exchanges under the trading symbol LUXD.OB.

B.	By filing a Certificate of Designation authorized by its Board of Directors, Lux is designating Series A Convertible Preferred Stock, a copy of which is attached to this Agreement as Exhibit A.

C.	Buyer owns the assets listed in Exhibit C of this Agreement (collectively, the "Assets"), and desires to convey the Assets to Lux in consideration for the shares of common stock of Lux to be transferred by the Seller to the Buyer, representing a controlling interest in Lux.

D.	Seller owns or controls 103,290,000 shares of outstanding common stock (the "Shares") or approximately 68% of the total issued and outstanding capital stock of Lux on a fully diluted basis.

E.

The Buyer desires to acquire from Seller and Seller desires to sell to the Buyer 103,290,000 Shares of the common stock of Lux in consideration for (i) the conveyance of the Assets by the Buyer to Lux, (ii) the issuance by Lux to the Seller of 100 shares of Series A Convertible Preferred Stock, convertible into a number of shares of Lux common stock equal to 10% of the total issued and outstanding shares of Lux common stock on a fully diluted basis, assuming the conversion of all outstanding convertible securities of Lux, including without limitation the conversion of the outstanding Series A Convertible Preferred Stock, and (iii) the covenants, terms and conditions contained in that certain binding Letter of Intent by and between Lux and Radio Loyalty, Inc., dated of even date herewith (the "LOI"), a copy of which is attached hereto as Exhibit F and incorporated herein by reference.

F.

Lux currently (prior to the Closing) has cash and owns securities, intellectual property, motion pictures, contracts, accounts receivable, trademarks, domain names, goodwill and any and all other tangible and intangible assets including those disclosed in Lux's consolidated financial statements (collectively, the "Lux Assets" being utilized in the "Lux Business").  As additional consideration for the conveyance of the Shares by the Seller to the Buyer on behalf of Lux in order to enable Lux to acquire the Assets, on the Closing Lux agrees to immediately convey all of the Lux Business and Lux Assets to the Seller, subject to the assumption by Seller of all liabilities of the Lux Business except those held by Asher Enterprises, as evidenced by the documents attached to this Agreement as Exhibit D, but including without limitation those listed in Exhibit E of this Agreement.

 

 

NOW, THEREFORE, for good and valuable consideration the receipt and sufficiency of which are hereby acknowledged by the parties to this Agreement, and in light of the above recitals to this Agreement, the parties to this Agreement hereby agree as follows:

1.	Sale and Purchase.

1.1           Sale and Purchase of Stock.  In consideration for the Purchase Price (as defined in Section 1.2 of this Agreement) and the other covenants of Lux and the Buyer in this Agreement, Seller hereby agrees to convey to the Buyer all of the Shares on the Closing Date (as defined in Section 3.1 of this Agreement).  On the Closing Date Lux will issue to Seller 100 shares of its Series A Convertible Preferred Stock (the "Lux Stock") so that upon its conversion, the Seller will beneficially own 10% of the total issued and outstanding shares of common stock of Lux on a fully diluted basis, assuming the conversion of all outstanding convertible securities of Lux, including without limitation the conversion of the outstanding shares of Series A Convertible Preferred Stock.  The issuance of the Lux Stock to the Seller is consideration for the Seller's sale of the Shares to the Buyer as payment of the Purchase Price on behalf of Lux so Lux can acquire the Assets pursuant to this Agreement.

1.2           Purchase Price.  As consideration for the sale by Seller of the Shares to the Buyer on the Closing Date, the Buyer will convey good title to the Assets to Lux on the Closing Date, free and clear of all claims, liens or encumbrances (the "Purchase Price").  As consideration for Seller's sale of the Shares to Buyer on behalf of Lux, Lux agrees to issue to the Seller, on the Closing Date, 100 shares of its Series A Convertible Preferred Stock, convertible into 10% of the total issued and outstanding shares of common stock of Lux on a fully diluted basis, assuming the conversion of all outstanding convertible securities of Lux, including without limitation the conversion of the outstanding shares of Series A Convertible Preferred Stock.  The Lux Stock will be allocated among the designees of the Seller as listed in Exhibit B of this Agreement.  The certificates evidencing the Shares and the Lux Stock will have the following legend affixed to them:

"THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS THEY HAVE BEEN REGISTERED UNDER THAT ACT OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE."

1.3           Conveyance of Lux Business to Seller.  As additional consideration for the conveyance of the Shares by the Seller to the Buyer on behalf of Lux in order to enable Lux to acquire the Assets, on the Closing Lux agrees to immediately convey all of the Lux Business and Lux Assets to the Seller, subject to the assumption by Seller of all liabilities of the Lux Business, including without limitation those liabilities listed in Exhibit E of this Agreement, but not including the liabilities owed by Lux to Asher Enterprises, as evidenced by the documents attached to this Agreement as Exhibit D.  Accordingly, on the Closing, Lux and the Seller covenant that Lux will have no liabilities other than those listed in Exhibit D of this Agreement, and Buyer acknowledges and agrees that Lux will have no material assets other than the Assets being acquired from Buyer.

1.4           Letter of Intent.  Simultaneously with the execution and Closing of this Agreement, Lux and Radio Loyalty, Inc. agree to execute the LOI and deliver it to each other and to the parties to this Agreement.  A copy of the LOI is attached hereto as Exhibit F, the terms and conditions of which are incorporated herein by reference in their entirety, and which are being relied upon by the Seller as a material inducement to its entering into this Agreement.

 

 

2.	Appointment of New Director.

Upon the Closing, the current director of Lux, Ingo Jucht, will appoint Michael Hill as the Chairman of the Board of Directors on Lux's Board of Directors, which will then appoint Michael Hill as the Chief Executive Officer of Lux to replace Ingo Jucht and T. Joseph Coleman, who will resign from all officer positions that they hold with Lux.  Michael Hill will have the ability to cast a deciding vote of the Board of Directors in the event that the Board of Directors is dead-locked on any decision, for as long as Michael Hill and Ingo Jucht are the only two directors of the Company.  Michael Hill may appoint all other executive officers of Lux to replace Ingo Jucht and T. Joseph Coleman.  On a date ten (10) days after the filing and mailing of Schedule 14f with the Securities and Exchange Commission by Lux, Ingo Jucht will resign as a director of Lux and Michael Hill may thereafter appoint any persons he chooses to fill the vacancies on the Lux Board of Directors.

3.	Closing and Further Acts.

3.1           Time and Place of Closing.  Upon satisfaction or waiver of the conditions set forth in Section 6 of this Agreement, the closing of the transactions between the Buyer, Lux, and the Seller contemplated by this Agreement (the "Closing") will take place at the law offices of Richardson & Associates at 1453 Third Street Promenade, Suite 315, Santa Monica, California 90401 at 1:00 p.m. (local time) on the date that the parties may mutually agree in writing, but in no event later than as of May 17, 2012 (the "Closing Date"), unless extended by the mutual written agreement of the parties.

3.2           Actions at the Closing.  At the Closing, the following actions will take place:

(a)      The Seller will tender to the Buyer certificates and stock powers evidencing the conveyance of the Shares to Buyer.

(b)      The Buyer will deliver to Lux a Bill of Sale, assignments in recordable form, where appropriate, and other documents necessary or appropriate in order to evidence the conveyance to Lux of all right, title and interest in and to the Assets, free and clear of all claims, liens or encumbrances.

(c)      Lux will deliver to Seller certificates evidencing the issuance of the Lux Stock to the designees of the Seller, allocated among such designees as indicated in Exhibit B of this Agreement.

(d)      Lux will deliver to Buyer and Seller copies of necessary resolutions of the Board of Directors of Lux authorizing the execution, delivery, and performance of this Agreement and the other agreements contemplated by this Agreement for  Lux's execution, and consummation of the transactions contemplated by this Agreement.

(e)      Lux will deliver to Seller a Bill of Sale, assignments in recordable form, where appropriate, and all other documents necessary or appropriate in order to evidence the conveyance to Seller of all right, title and interest in and to the Lux Assets and the Lux Business, and the assumption by Seller of the related liabilities as required by Section 1.3 of this Agreement.

(f)        Lux and Radio Loyalty, Inc. will execute and deliver to each other and to the parties to this Agreement executed copies of the LOI.

(g)      Lux will deliver to the Buyer true and complete copies of its Articles of Incorporation and a Certificate of Good Standing from the State of Wyoming.

(h)      Any additional documents or instruments as a party may reasonably request or as may be necessary to evidence and effect the transactions contemplated by this Agreement.

 

 

3.3           Conduct of Lux Business Prior to Closing.  After the execution of this Agreement by the Buyer and until the Closing, Lux will:

(a)      maintain the books, accounts and records of Lux using Lux's normal business practices consistently applied, including recognition of revenues and expenses, continue to collect accounts receivable and pay accounts payable utilizing normal procedures and without discontinuing or accelerating payment of such accounts and comply with all contractual and other obligations applicable to the Lux; and

(b)      not incur any indebtedness for borrowed money except in the ordinary course of business, and not pledge or grant liens or security interests in any of the Lux's assets; and

(c)      not sell, transfer or dispose of any assets except for sales in the ordinary course of business.

3.4           No Solicitation and Due Diligence of Lux.  Lux will not, nor will Lux encourage, facilitate, solicit, or authorize any of its shareholders, directors, officers, employees, agents or representatives to solicit or enter into any discussion (or continue any discussion) with any third party (including the provision of any information to a third party), or enter into any agreement or understanding of any kind regarding the purchase, sale, lease, assignment, conveyance or other disposition or acquisition of all or any portion of its assets, or any capital stock of Lux, for the period commencing on the date first above written and extending until May 17, 2012.  During this period and until the Closing or termination of this Agreement, Lux and Seller will fully cooperate with the Buyer and its representatives, and Buyer will fully cooperate with the Seller and its representatives, to enable them to conduct complete due diligence of Lux, its business and the books, records and documents relating to Lux and its business, and of the Assets being conveyed by the Buyer to Lux pursuant to this Agreement.

4.	Representations and Warranties of Lux and Seller.

Lux and Seller represent and warrant to Buyer as follows:

4.1           Power and Authority; Binding Nature of Agreement.  Lux and Seller have full power and authority to enter into this Agreement and to perform their obligations hereunder.  The execution, delivery, and performance of this Agreement by Lux have been duly authorized by all necessary action on its part.  Assuming that this Agreement is a valid and binding obligation of each of the other parties hereto, this Agreement is a valid and binding obligation of Lux and Seller.

4.2           Subsidiaries.  There is no corporation, general partnership, limited partnership, joint venture, association, trust or other entity or organization that Lux directly or indirectly controls or in which Lux directly or indirectly owns any equity or other interest, other than those interests and holdings disclosed in Lux's consolidated financial statements.

4.3           Good Standing.  Lux (i) is duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated, (ii) has all necessary power and authority to own its assets and to conduct its business as it is currently being conducted, and (iii) is duly qualified or licensed to do business and is in good standing in every jurisdiction (both domestic and foreign) where such qualification or licensing is required.

4.4           Charter Documents and Corporate Records.  Lux has delivered to Buyer complete and correct copies or provided Buyer with the right to inspect true and complete copies of all (i) the articles of incorporation, bylaws and other charter or organizational documents of Lux, including all amendments thereto, (ii) the stock records of Lux, and (iii) the minutes and other records of the meetings and other proceedings of the shareholders and directors of Lux.  Lux is not in violation or breach of (i) any of the provisions of its articles of incorporation, bylaws or other charter or organizational documents, or (ii) any resolution adopted by its shareholders or directors, as available.

 

4.5           Financial Statements.  Lux has delivered to Buyer the following financial statements relating to Lux prior to the Closing (the "Lux Financial Statements"):  (i) the unaudited balance sheet of Lux as of February 29, 2012 and (ii) the audited balance sheet and operating statements  for the year ended August 31, 2011.  Except as stated therein or in the notes thereto, the Lux Financial Statements:  (a) present fairly the financial position of Lux as of the respective dates thereof and the results of operations and changes in financial position of Lux for the respective periods covered thereby; and (b) have been prepared in accordance with Lux's normal business practices applied on a consistent basis throughout the periods covered.

4.6           Capitalization.  The authorized capital stock of Lux consists of 1,000,000,000 shares of common stock, par value $0.001 per share, of which, as of May 14, 2012, approximately 152,100,547 shares are issued and outstanding, and 10,000,000 shares of  preferred stock, par value $0.001 per share, of which none are issued or outstanding.  All of the outstanding shares of the capital stock of Lux are validly issued, fully paid and nonassessable, and have been issued in full compliance with all applicable federal, state, local and foreign securities laws and other laws.  Lux covenants not to issue any shares of its common or preferred stock from the date of this Agreement until the Closing Date, other than those contractually obligated to be issued by Lux pursuant to its outstanding convertible promissory notes payable to Asher Enterprises, Inc., copies of which are attached to this Agreement as Exhibit D.

4.7           Absence of Changes.  Except as otherwise set forth on Schedule 4.7 hereto or otherwise disclosed to Buyer in writing prior to the Closing, since February 29, 2012:

(a)      There has not been any material adverse change in the business, condition, assets, operations or prospects of Lux and no event has occurred or, to Lux's knowledge, is expected to occur after the Closing that might have a material adverse effect on the business, condition, assets, operations or prospects of Lux.

(b)      Lux has not (i) declared, set aside or paid any dividend or made any other contribution in respect of any shares of capital stock, nor (ii) repurchased, redeemed or otherwise reacquired any shares of capital stock or other securities.

(c)      Lux has not amended its articles of incorporation, bylaws or other charter or organizational documents, nor has it effected or been a party to any merger, recapitalization, reclassification of shares, stock split, reverse stock split, reorganization or similar transaction.

(d)      Lux has not formed any subsidiary or contributed any funds or other assets to any subsidiary.

(e)      Lux has not purchased or otherwise acquired any assets, nor has it leased any assets from any other person, except in the ordinary course of business consistent with past practice.

(f)       Lux has not made any capital expenditure outside the ordinary course of business or inconsistent with past practice, or in an amount exceeding twenty-five thousand dollars ($25,000) singly or in excess of fifty thousand dollars ($50,000) in the aggregate, without Buyer's consent.

(g)      Lux has not sold or otherwise transferred any assets to any other person, except in the ordinary course of business consistent with past practice and at a price equal to the fair market value of the assets transferred.

(h)     There has not been any material loss, damage or destruction to any of the properties or assets of Lux (whether or not covered by insurance).

(i)       Lux has not written off as uncollectible any indebtedness or accounts receivable, except for write offs that were made in the ordinary course of business consistent with past practice and that involved less than $25,000 singly and less than $50,000 in the aggregate.

(j)       Lux has not leased any assets to any other person except in the ordinary course of business consistent with past practice and at a rental rate equal to the fair rental value of the leased assets.

 

(k)      Lux has not mortgaged, pledged, hypothecated or otherwise encumbered any assets, except in the ordinary course of business consistent with past practice.

(l)       Lux has not entered into any contract, or incurred any debt, liability or other obligation (whether absolute, accrued, contingent or otherwise), except for (i) contracts that were entered into in the ordinary course of business consistent with past practice, and (ii) current liabilities incurred in the ordinary course of business consistent with the past practice.

(m)     Lux has not made any loan or advance to any other person, except for advances that have been made to customers in the ordinary course of business consistent with past practice and that have been properly reflected as "accounts receivables."

(n)      Other than annual raises or bonuses paid or provided consistent with past business practices, Lux has not paid any bonus to, or increased the amount of the salary, fringe benefits or other compensation or remuneration payable to, any of the directors, officers or employees of Lux.

(o)      No contract or other instrument to which Lux is or was a party or by which Lux or any of its assets are or were bound has been materially amended or terminated, except in the ordinary course of business consistent with past practice.

(p)      Lux has not discharged any lien or discharged or paid any indebtedness, liability or other obligation, except for current liabilities that (i) are reflected in the Lux Financial Statements as of February 29, 2012 or have been incurred since February 29, 2012 in the ordinary course of business consistent with past practice, and (ii) have been discharged or paid in the ordinary course of business consistent with past practice.

(q)      Lux has not forgiven any debt or otherwise released or waived any right or claim, except in the ordinary course of business consistent with past practice.

(r)       Lux has not changed its methods of accounting or its accounting practices in any respect.

(s)      Lux has not entered into any transaction outside the ordinary course of business or inconsistent with past practice.

(t)       Lux has not agreed or committed (orally or in writing) to do any of the things described in clauses (b) through (s) of this Section 4.7.

4.8           Absence of Undisclosed Liabilities.  Lux has no debt, liability or other obligation of any nature (whether due or to become due and whether absolute, accrued, contingent or otherwise) that is not reflected or reserved against in