Notes: 1. Did Kannapolis get an independent business appraisal or independent business valuation of the GEM business to determine it’s actual value prior to expending $475,000 in taxpayer money on the stock, name, trademark, trade name, and tangible personal property? 2. Did City Manager Mike Legg recuse himself from this matter, particularly from the pricing negotiations, given his close friendship with Morris? If he did not recuse himself, how was the conflict of interest managed? . If the GEM stock, name, trademark, trade name, and tangible personal property were so valuable; why wasn’t there other private businessmen making offers to purchase the stock, name, trademark, trade name, and tangible personal property? w 4. It could appear to taxpayers, that friends got together and secretly decided (colluded) to enrich one of them with taxpayer money (fraud). What do you say to that?STATE OF NORTH CAROLINA STOCK PURCHASE AGREEMENT COUNTY OF CABARRUS. THIS STOCK PURCHASE AGREEMENT (hereinafter the "Agreement”) is made and entered into as of the Ist day of July, 2022, (the “Effective Date”) by and between CITY OF KANNAPOLIS, a North Carolina municipal corporation (hereinafter referred to as “Buyer”) and STEPHEN M, MORRIS (hereinaller referred to as "Shareholder"); and GEM THEATRE, INC,, (hereinafter "Corporation”). WITNESSETH: WHEREAS, Corporation is engaged in the provision of family oriented motion picture and entertainment services tothe public (hereinafter the "Corporation Business"), with an office located at _ Laureate Way (formerly111 West First Sire’), Kannapolis, North Carolina 28081 (hereinafter the “Premises and WHEREAS, Sharcholder is the owner and holder of ninety-cight (98) shares of stock (the "Shares") of the Corporation which Shareholder desires to sell the Shares to Buyer upon the terms and conditions hereinafter provided; and WHEREAS, pursuant to North Carolina General Statutes Section 28A-13-3, Shareholder is authorized to enter into this Agreement and has the authority to perform the terms, conditions and provisions hereof; and WHEREAS, Buyer wishes to purchase the Shares offered by Shareholder, and enter into the other agreements referred to hereinabove, upon the terms and conditions hereinafter set forth; NOW, THEREFORE, in consideration of the premises and the covenants and mutual agreements, contained herein and upon other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto (hereinafter collectively, the "Parties") agree as follows: 1 SALE AND PURCHASE 1.0 Purchased Stock. Buyer shall purchase and Shareholder shall sell ninety-eight (98) shares of common stock of the Corporation which shares of stock Seller represents and warrants comprises one hundred percent (100%) of all outstanding stock of the Corporation. ‘The consideration for the shares is $100.00 (the “Purchase Consideration”), payable as provided in paragraph 2.1 hereinafter 1.1 Warranty. All outstanding shares of the Corporation have been validly issued and are fally paid and nonassessable. There are no outstanding subscriptions, options or other agreements obligating, Corporation to issue additional shares or any other securities of any class, There are no treasury shares held by the Corporation, There are no preemptive rights with respect tothe issuance or sale of shares of capital stock of the Corporation, ‘The Corporation has no obligations to acquire any ofits issued and outstanding shares of common stock or any other security issued by it from any holder thereof,n CLOSING 2.0 Closing; Closing Date, ‘The Closing of the transactions contemplated by this Agreement (the Closing") shall take place at a date, time and place to be agreed upon by the partes, but no sooner than July 1, 2022, (the "Closing Date"). 2.1 Closing Deliveries. At he Closing: 2.1.1 Buyer shall pay in cash the sum of One Hundred Fifty Thousand Dollars ($150,000.00) as one-haif ofthe consideration for the transfer ofall stock of the corporation, The balance of $150,000.00 shall be paid fo Saller one year from the date of this Closing. 2.1.2 Buyer shall pay in cash the sum of One Hundred Seventy-five Thousand Dollars ($175,000.00) for the Gem Theatre name, trademark and trade name, all tangible ‘personal property and all intangible personal property, intellectual property, and all business rights, agreements and contracts. 2.1.3 Shareholder shall deliver to Buyer a cetificate or certificates of the Shares fully executed in blank, and otherwise in a form and condition reasonably satisfactory to Buyer, as are necessary to transfer, assign and! deliver to Buyer the Shares being sold hereunder or es are otherwise necessary to comply with the terms of this agreement, and such other documents as reasonably requited by Buyer’s counsel. 2.14 Cash on hand and in banks in the name of the Gem Theatre, Inc. shall be distributed to the Shareholder. 2.1.5 All daily operating ob ‘through the Closing Date and paid outside of Closing. 2.2 Shareholder Proceeds. There are no unpaid shareholder dividends, 23 Lease for the Premises. The month-to-month lease for the Premises shalt terminate as of the Effective Date , and shall not be renewed, Rent for the month of operation on the ‘Commencement Date shall be pro-rated. m REPRESENTATION AND WARRANTIES 3.0. Representation and Warranties of Shareholder. Shareholder represents, warrants and agrees to and with the Buyer as follows:3.0.1 Authority; Validity. The Shareholder is not subject to any disability or to any restriction contained in any mortgage, lien, lease, agreement, instrument, order, judgment or decree which would prevent or restrict the sale and transfer contemplated by this Agreement, ‘and this Agreement and any other agreement or obligation entered into or undertaken by Shareholder in connection with the transactions contemplated hercby constitute, or when ‘executed and delivered pursuant hereto will constitute, the valid and legally binding obligation ‘of Shareholder, enforceable against him in accordance with its respective terms except as ‘enforceability may be limited by bankruptcy, insolvency or other laws for the protection of ‘reditors generally and except as to the availability of specific performance, injunctive relief ‘or other equitable or discretionary remedies. 3.02 Tile to Property. Shareholder has good and marketable tile to, and is the sole beneficial owner and shareholder of record of ninety-cight (98) shares, being all ‘outstanding Shares of common stock of Corporation free and clear of all encumbrances and he bas the absolute, unlimited right to sell and transfer the Shares 3.1 Representations and Warranties of Buyer. Buyer warrants, represents and agrees to and with Corporation and Shercholder as follows: 3.1.1 Authority; Validity. Buyer is not subject to any disability orto any restriction contained in any charter, bylaw, mortgage, lien, ease, agreement, instrument, order, judgment or dectee wihich would prevent or restrict Buyer's purchase of the stock contemplated by this Agreement, and this Agreement end any other agreement or obligation entered into or undertaken by Buyer in connection with the transactions contemplated hereby constitute, or when executed and delivered pursuant hereto will constitute, the valid and legally binding obligation of Buyer, enforceable against it in aveondance with their respective terms except as enforceability may be limited by bankruptcy, insolvency or other laws for the protection of creditors generally and except as to the availability of specific performanes, injunctive relief or other equitable or discretionary remedies. 3.2. Investment Bankers! and Brokers’ Fees. Neither of the Parties has an obligation to pay any fees or commissions to any investment banker, broker, finder or agent with respect to the transactions contemplated by this Agreement. 3.3. Survival of Representations and Warranties. ‘The representations, warranties, covenants end agreements given or made by the parties hereto which are contained inthis Agreement shall survive the Closing, 3.4 Options for Shares. Corporation and Shareholder warrant that there are no options forthe sale of the Shares established by prior agreements or actions. Vv INDEMNIFICATION 4.0 Indemnification by Shareholder. Shareholder agrees to defend, indemnify and hold Buyer harmless against any and all damage, liability, loss, cost, expense, penalty or deficiency, including, without 3limitation, reasonable attomeys' fees and other costs and expenses incident to investigation and defense of any such matter (hereinafter referred to collectively as "Damages") to which Buyer may become subject by virtue of third party claim within five years after the execution of this Agreement insofar as such Damages arise out of orare based upon (a) any failire of Shareholder to perform or discharge when and as due any commitment, indebtedness, liability oF obligation, or (b) any mistepresentation or breach of warranty herein or the failure o fulfill any covenant on the part of Shareholder under or in connection with this Agreement. 4.1.1 Continuing Business Liabilities. Buyer further specifically agrees to defend, indemnify and hold harmless Shareholder for any existing and future liabilities of the Corporation, {rom and after the date ofthis Agreement, whether known or unknown, for operating expenses, leases, taxes and assessments, employer or employee claims, transfer fees and contractual obligations including filing all unfied tax retwms andl payment of all prior taxes for the Corporation or as it may relate to Corporation employees reporting and withholding, In the event Shareholder shall incur any income tax or other tax liabilities as a sharehokier, officer, employee or agent of the corporation, ‘corporation shall pay or advance cash payment to Shareholder for all such liabilities, 4.1.2 Current Vendor Agreements. Shareholder and Buyer will agree as to which vendor, insurance or other operating agreements will be assigned, otherwise continued or terminated. Buyer will cooperate with Buyer by assisting with such assignments or ‘terminations 4.13 Waiver of Interest in Names, Shareholier hereby conveys and releases 10 ‘Corporation and Buyer, any and all ownership interest in the Corporation's name, trade name, any assumed name, logos or trademarks, v FURTHER AGREEMENTS: 5.0 Breach. In the event Buyer or Shareholder ("Non-defaulting Party") brings an action or suit against the other Party horeto ("Defaulting Party”) by reason of the breach of any of the covenants, conditions, agreements or provisions set forth inthis Agreement the Non-defaulting Party shall be entitled to recover from such Defaulting party all costs and expenses of such action or suit, including reasonable attomey's fees. Moreover, the Non-defaulting Party may, without limiting other remedies and claims available to it, apply any Payments required to be made after the Closing Date under this Agreement toward the satisfaction of its damages resulting from any such breach, 5.1 Notices, Any notice or other communication required or permitted hereunder shall be sufficiently given ifsent by certified or registered mail, postage prepaid, addressed as follows Ito Shareholder, to: Stephen M, Morris 49 Georgia Street, NW Concord, North Carolina 28025If to Buyer, to: City Manager City of Kannapolis 401 Laureate Way Kannapolis, North Carolina 28081 with copy to: City Attomey City of Kannapolis 401 Laureate Way Kannapolis, North Carolina 28081 or to such other address as shall have been furnished in writing to the sender by the person or corporation to ‘whom it is addressed. Any such notice or communication shell be deemed to have been given on the fourth business day after the date it is so mailed, 5.2 Further Cooperation, Without farther consideration, each Paity shall at any time, and from timeto time, execute and deliver to any other Party such further documents, and tae such other action, as any other Party may reasonably request in order to effectuate the purposes of this Agreement. Shareholder will assign all contract rights as requested by Buyer. 5.3 Entire Agreement, Allunderstandings and agreements heretofore had between the Parties are ‘merged in this Agroement and the related agreements executed in conjunction with this Agreement, all of which together fully and completely express their agreement, and no representations or warranties have been made ty any Party to another Purty except as are herein expressly set forth or required pursuant to this Agreement and the related agreements executed in conjunction with this Agreement. 3.4 Headings. ‘The headings in this Agreement are for purposes of reference only and shall not limit or otherwise affect any of the terms hereof. 5.5 Parties Bound, This Agreement shall be binding upon and shall inure to the benefit of the Parties hereto and their respective heirs, legal representatives, successors and assigns. 3.6 Counterparts. This Agreement may be executed in one or more counterparts, all of which {akea together shall constitute one instrument, 5.7 Waiver, Waiver by a Party of a Breach of any provision of this Agreement shall not operate «as nor be construed as a waiver of any subsequent breach thereof. 5.8 Amendment, This Agreement shall not be amended except by awriting executed by all Partcs. 5.9 Severability. If any provision of this Agreement is determined by a court of competent jurisdiction to be illegal or unenforceable, such provision shall be automatically reformed andl construed s0 as to be valid, operative and enforceable to the maximum extent permitted by law or equity while preserving its original intect. ‘The invalidity of any part of this Agreement shall not render invalid the remainder of this Agreement.5.10 Law. This Agreement shall be governed by and construed in accordance with the laws of the State of North Carolina, Time of the Essence. Time is of the essence in all parts of this agreement. [THE REMAINING PORTION OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY]IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement pursuant 10 appropriate and lawful authority granted to them on the date first waitten above. BUYER: (SEAL) ‘Michael B, Legg, Cy Manager SHAREHOLDER: (SEAL) ‘Stephen M. Morris ‘CORPORATION: Pye se eese eres eee ee eeeeeeeeese eeeeese Settee (SRA), Stephen M. Mors, PresidentExhibit B MORRIS COMPENSATION Provided that Morris is notin breach of this Agreement and has satisfactorily performed the services, duties, and obligations required by City hereunder, City will pay Morris the sum of $6,250.00 Dollars for each month of the Term that Morris renders and completes Services pursuant to the terms of this Agreement. AAI] compensation for the performance of Mortis’ Services will be processed by City as “1099” income. a