EXHIBIT 1
STOCK PURCHASE AGREEMENT
THIS AGREEMENT made the 21st day of December, 1996, by and between
GATEWAY INDUSTRIES, INC., a Delaware Corporation, having an address c/o Xxxxxx
X. Xxxxxxxxxxxx, 750 Lexington Avenue, New York, New York, hereinafter the
"Seller", and XXXXXXX X. XXXXXXXX, of X.X. Xxx 000, Xxxxx, Xxx Xxxx, hereinafter
the "Purchaser".
WHEREAS, the Seller owns all of the issued and outstanding shares of
MARSEL MIRROR AND GLASS PRODUCTS, INC. (hereinafter the "Company"), a New York
Corporation, having its principal place of business at 000 Xxxxxx Xxxxxx,
Xxxxxxxx, Xxx Xxxx; and
WHEREAS, the Seller desires to sell and the Purchaser desires to
purchase such shares on the terms herein stated;
NOW, THEREFORE, the parties agree as follows:
1. Sale of Shares:
The Seller shall sell and transfer to the Purchaser, and the Purchaser
purchases and acquires from the Seller, all of the outstanding shares of the
Company consisting of 200 shares of common stock and 2600 shares of preferred
stock simultaneously with the execution hereof.
2. Purchase Price:
The purchase price for said shares is One Dollar ($1.00).
3. Seller's Representations and Warranties:
The Seller represents and warrants to the Purchaser as follows:
a. Corporate Status: The Company is, and will be on the closing date, a
corporation duly organized, validly existing and in good standing under the laws
of the State of New York; copies of the Company's certificate of incorporation
and all amendments thereof to date are annexed hereto and made a part hereof.
b. Title to Shares: The Seller is, and will be on the closing date, the
owner, free and clear of any encumbrances, of all of the outstanding shares of
the common and preferred stock of the Company.
c. Seller's Authority to Sell: The sales of the shares of the company
as aforesaid has been authorized by a vote of the Board of Directors of the
Seller. A copy of the resolution authorizing such sale is annexed hereto and
made a part hereof and the original shall be delivered to the Purchaser at
closing.
d. Payroll Taxes: To the best of the Seller's knowledge, the Company
has paid all taxes commonly known as "payroll taxes" due and payable up to and
including the date of closing. The Seller shall indemnify and hold harmless the
Purchaser at all times after the date of this agreement against and in respect
of all payroll taxes arising prior to the date hereof for which the Purchaser
may become liable.
4. Option to Re-Purchase:
The Purchaser, individually and on behalf of the Company, hereby grants
to the Seller the right to purchase Fifty Percent (50%) of all of the then
issued and outstanding shares of stock of the Company for the sum of Two Dollars
($2.00), said option to expire three (3) years from the date of this agreement.
The said option shall be exercised by the Seller giving notice thereof to the
Purchaser at the addresses set forth herein for notices. Promptly following the
exercise of the option, Purchaser shall cause the Company to issue a stock
certificate for such shares.
5. Closing:
The closing of the sale shall take place at 000 Xxxxxx Xxxxxx,
Xxxxxxxx, Xxx Xxxx, simultaneously with the execution hereof. At closing, the
Seller shall deliver to the Purchaser, free and clear of all encumbrances,
certificates for the shares which it is required to sell in negotiable form. The
Seller shall also deliver the original certificate of incorporation, together
with any amendments thereto, and any and all minutes, by-laws, resolutions and
the like.
6. Escrow Account and Guarantees to Vendors:
The Seller has deposited with Fleet Bank the sum of $75,000.00 to be
held in escrow pursuant to the conditions of a certain loan from Fleet Bank to
the Company. The Seller has also issued its guarantees, contingent or otherwise,
on behalf of the Company not exceeding $250,000.00. Any sums not returned to
Seller from the escrow or paid by Seller under the guarantees shall be payable
by the Company from the sale or liquidation of the Company, or by the Purchaser
from the proceeds of the sales of any equity in the Company by either the
Purchaser or the Company. The remaining sums from the sale or liquidation as
aforesaid shall be divided equally between the parties. In the event that the
Company is not sold or liquidated, any portion of the escrow account forfeited
to the bank or any payment made by the Seller to the vendors pursuant to the
guarantees, will be repaid to the Seller from excess cash flow beginning two
years from the date of the sale or at such earlier time as the Purchaser, in his
discretion, may determine.
The Company shall be liable for the obligations created in this
paragraph and the Seller shall not be personally obligated therefor except as
expressly provided for herein.
7. Survival of Representations and Warranties:
All representations and warranties contained herein shall survive the
closing.
8. Notices:
All notices, requests, demands and other communications hereunder shall
be in writing and shall be deemed to have been duly given if delivered by mail
or facsimile transmission.
If to the Seller: Xxxxxx X. Xxxxxxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000-000-0000)
With a copy to: Xxxxxx X. Xxxxxx, Esq.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000-000-0000)
If to the Purchaser: Xxxxxxx X. Xxxxxxxx
X.X. Xxx 000
Xxxxx, Xxx Xxxx 00000
Fax: (000-000-0000)
With a copy to: Xxxxxxxx and Xxxxxxxx
000 Xxxxxxxx, X.X. Xxx 000
Xxxxxxxx Xxxxxxx, Xxx Xxxx 00000
Fax: (000-000-0000)
9. Release:
Upon transfer of the shares at closing, the Purchaser shall cause the
Company to release Gateway and its officers, directors, agents, employees and
affiliates, except as provided for herein.
10. Assignability:
This agreement may be assigned by the Purchaser to his wife and/or
children who, upon such assignment, shall become bound by the terms of this
agreement.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals
the day and date first above written.
GATEWAY INDUSTRIES, INC.
By: /s/ XXXXXX X. XXXXXXXXXXXX
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XXXXXX X. XXXXXXXXXXXX
/s/ XXXXXXX X. XXXXXXXX
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XXXXXXX X. XXXXXXXX
