THE SECURITIES THAT ARE THE SUBJECT OF THIS AGREEMENT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE
SECURITIES LAWS OF ANY STATE, AND WILL BE OFFERED AND SOLD IN RELIANCE ON
EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF FEDERAL AND STATE LAW BY VIRTUE
OF THE COMPANY'S INTENDED COMPLIANCE WITH SECTION 4(2) OF THE ACT, THE
PROVISIONS OF REGULATION D PROMULGATED THEREUNDER, AND PARALLEL EXEMPTIONS UNDER
STATE LAW. THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY ANY
REGULATORY AUTHORITY. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
STOCK PURCHASE AGREEMENT
Dynatec International, Inc.
Attn. Xxxxxxxxx X. Xxxxxxxxx, Xx.
0000 Xxxx Xxxxx Xxxxx Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Dear Sirs:
The undersigned hereby agree to purchase shares of the common stock of
Dynatec International, Inc., a Utah corporation ("Dynatec" or the "Company"),
according to the terms and conditions set forth in this Stock Purchase Agreement
(the "Agreement").
1. Purchase of Shares. Subject to the terms and conditions of this
Agreement, the undersigned hereby agree to acquire from the Company that number
of shares of the Company's common stock, par value $.01 per share (the
"Shares"), equal to ONE MILLION SIX HUNDRED THOUSAND DOLLARS (US $1,600,000)
(the "Purchase Price") divided by the greater of (i) $1.00 per share or (ii) One
Hundred Percent (100%) of the average of the closing bid prices of the Company's
common stock as quoted by the Nasdaq Stock Market for the five (5) trading days
immediately preceding the date the undersigned pays all or a portion of the
Purchase Price payable by it, him or her. The undersigned agree to purchase that
number of Shares, and pay that amount of the Purchase Price, as shall be set
forth in Schedule "A", which is attached to and incorporated into this Agreement
by this reference.
2. Closing; Issuance of Shares. The closing (the "Closing") of the
purchase and sale of the Shares as described in this Agreement shall occur upon
receipt by the Company of the Purchase Price, which closing shall occur on or
before 5:00 p.m., M.S.T. on February 11, 2000 or such later date as the parties
may agree (the "Closing Date"). The Company shall cause its stock transfer agent
to issue certificates representing the Shares as soon as possible after the
Closing Date, but in all events within five (5) business days after the Closing
Date. Payment of the Purchase Price to the Company on or before the Closing Date
shall be accomplished by wire transfer of the Purchase Price to the Company,
according to wire transfer instructions that shall be provided to the
undersigned on or before the Closing Date.
1
3. Representations and Warranties of the Company. The Company
represents and warrants to each of the undersigned as follows:
a. Organization and Qualification. The Company is a
corporation, duly incorporated, validly existing and in good standing
under the laws of the jurisdiction of its incorporation, with the
requisite corporate power and authority to own and use its properties
and assets and to carry on its business as currently conducted. The
Company has no subsidiaries other than those set forth on Schedule 3(a)
attached hereto (collectively the "Subsidiaries" and individually a
"Subsidiary"). Each of the Subsidiaries is a corporation, duly
incorporated validly existing and in good standing under the laws of
the jurisdiction of its incorporation, with the requisite corporate
power and authority to own and use its properties and assets and to
carry on its business as currently conducted. Each of the Company and
the Subsidiaries is duly qualified to do business and is in good
standing as a foreign corporation in each jurisdiction in which the
nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or
in good standing, as the case may be, does not, individually or in the
aggregate, (x) adversely affect the legality or validity of the Shares
or this Agreement, or (y) have or result in a material adverse effect
on the results of operations, assets, prospects, or condition
(financial or otherwise) of the Company and the Subsidiaries, taken as
a whole (either of (x) or (y) a "Material Adverse Effect").
b. Authorization; Enforcement. The Company has the requisite
corporate power and authority to enter into and to consummate the
transactions contemplated by this Agreement, and otherwise to carry out
its obligations hereunder. The execution and delivery of this Agreement
by the Company and the consummation by it of the transactions
contemplated hereby have been duly authorized by all necessary action
on the part of the Company and no further action is required by the
Company. This Agreement has been duly executed by the Company and, when
delivered in accordance with the terms hereof, will constitute the
legal, valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation or similar laws relating to or affecting
generally the enforcement of creditors' rights and remedies or by other
equitable principles of general application. Neither the Company nor
any Subsidiary is in material violation of any of the provisions of its
respective articles of incorporation, bylaws or other charter
documents.
c. Capitalization. The number of authorized, issued and
outstanding shares of capital stock of the Company is set forth in
Schedule 3(c) attached hereto. No shares of common stock are entitled
to preemptive or similar rights, nor is any holder of common stock
entitled to preemptive or similar rights arising out of any agreement
or understanding with the Company by virtue of this Agreement. Except
as disclosed in Schedule 3(c), there are no outstanding options,
warrants, script rights to subscribe to, calls or commitments of any
character whatsoever relating to, or, except as a result of the
purchase and sale of the Shares, rights or obligations convertible into
or exchangeable for, or giving any Person, as that term is defined
below, any right to subscribe for or acquire any common shares, or
2
contracts, commitments, understandings, or arrangements by which the
Company or any Subsidiary is or may become bound to issue additional
common shares, or securities or rights convertible or exchangeable into
common shares. "Person" means an individual or corporation,
partnership, trust, incorporated or unincorporated association, joint
venture, limited liability company, joint stock company, government (or
an agency or subdivision thereof) or other entity of any kind. The
amount of the Company's authorized but previously unissued common stock
is sufficient to allow for the issuance by the Company of the Shares.
d. Issuance of the Shares. The Shares are duly authorized,
and, when issued and paid for in accordance with the terms hereof,
shall have been validly issued, fully paid and nonassessable, free and
clear of all liens, encumbrances and rights of first refusal of any
kind (collectively, "Liens").
e. No Conflicts. The execution, delivery and performance of
this Agreement by the Company and the consummation by the Company of
the transactions contemplated hereby do not and will not (i) conflict
with or violate any provision of its Articles of Incorporation, By-laws
or other charter documents (each as amended through the date hereof),
(ii) subject to obtaining the Required Approvals (as defined below),
conflict with, or constitute a default (or an event which with notice
or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both) of, any
agreement, credit facility, indenture or instrument (evidencing a
Company debt or otherwise) to which the Company or any Subsidiary is a
party or by which any property or asset of the Company or any
Subsidiary is bound or affected, or (iii) result in a violation of any
law, rule, regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority to which the Company
is subject (including federal and state securities laws and
regulations), or by which any property or asset of the Company is bound
or affected, except in the case of each of clauses (ii) and (iii)
above, as does not, individually or in the aggregate, have or result in
a Material Adverse Effect, provided, that in the case of clauses (ii)
and (iii) above, the Company makes no representation or warranty about
the extent to which the transactions contemplated by this Agreement
will comply with the rules and regulations of the principal market or
exchange on which its common stock is listed or traded.
f. Consents and Approvals. Except as is set forth in the
Disclosure Materials, as hereafter defined, neither the Company nor any
Subsidiary is required to obtain any consent, waiver, authorization or
order of, give any notice to, or make any filing or registration with,
any court or other federal, state, local or other governmental
authority or other Person in connection with the execution, delivery
and performance by the Company of this Agreement, other than (i) an
application to the Nasdaq Stock Market for the listing therewith of the
Shares, (ii) the filing of a Form D with the U.S. Securities and
Exchange Commission, (iii) applicable state "Blue Sky" filings, and
(iv) in all other cases where the failure to obtain such consent,
waiver, authorization or order, or to give such notice or make such
filing or registration could not have or result in, individually or in
the aggregate, a Material Adverse Effect (the consents, waivers,
authorizations, orders, notices and filings
3
referred to in clauses (i)-(iv) of this Section 3(f)and identified in
the Disclosure Materials, collectively, the "Required Approvals").
g. Litigation; Proceedings. Except as specifically disclosed
in the Disclosure Materials (as hereinafter defined), there is no
action, suit, written notice of violation, proceeding or investigation
pending or, to the knowledge of the Company, threatened against or
affecting the Company or any of its Subsidiaries or any of their
respective properties before or by any court, governmental or
administrative agency or regulatory authority (federal, state, county,
local or foreign) which (i) adversely affects or challenges the
legality, validity or enforceability of this Agreement or the Shares or
(ii) could, individually or in the aggregate, have or result in a
Material Adverse Effect.
h. Private Offering. Assuming the accuracy of the
representations and warranties of each of the undersigned set forth in
Section 4, the offer, issuance and sale of the Shares to the
undersigned as contemplated hereby are exempt from the registration
requirements of the Securities Act of 1933, as amended (the "Securities
Act"). Neither the Company nor any Person acting on its behalf has
taken any action that could subject the offering, issuance or sale of
the Shares to the registration requirements of the Securities Act.
i. SEC Reports. The Company has filed all reports required to
be filed by it under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), including pursuant to Section 13(a) or 15(d)
thereof, for the one year preceding the date hereof (or such shorter
period as the Company was required by law to file such material) (the
foregoing materials being collectively referred to herein as the "SEC
Reports" and, together with the Schedules or other written disclosure
provided by the Company to the undersigned in connection with this
Agreement the "Disclosure Materials") on a timely basis or has received
a valid extension of such time of filing and has filed any such SEC
Reports prior to the expiration of any such extension. To the Company's
knowledge, as of their respective dates, the SEC Reports complied in
all material respects with the requirements of the Securities Act and
the Exchange Act and, the rules and regulations promulgated thereunder.
j. Patents and Trademarks. The Company has, or has rights to
use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, copyrights, licenses and
rights (collectively, the "Intellectual Property Rights") that are
necessary for use in connection with its business as currently
conducted, or which the failure to have would have a Material Adverse
Effect. To the best knowledge of the Company, all such Intellectual
Property Rights are enforceable and there is no existing infringement
by another Person of any of the Intellectual Property Rights. Except to
the extent described in the Disclosure Materials, no action for patent
infringement is pending or threatened against the Company in writing
and, to the Company's knowledge, the Company is not infringing on any
patent or other intellectual property rights of any third party.
k. Regulatory Permits. The Company and its Subsidiaries possess
all certificates, authorizations and permits issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct
their respective businesses as described in the SEC Reports, except
4
where the failure to possess such permits could not, individually or in
the aggregate, have or result in a Material Adverse Effect ("Material
Permits"), and neither the Company nor any such Subsidiary has received
any written notice of proceedings relating to the revocation or
modification of any Material Permit.
4. Representations and Warranties of Undersigned. To induce the
Company's acceptance of this Agreement, the undersigned each hereby severally
and not jointly represent and warrant to the Company and its agents and
attorneys as follows:
a. Organization; Authority. The undersigned, if not a natural
person, is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, with the requisite
corporate or other entity power and authority to enter into and to
consummate the transactions contemplated by this Agreement and
otherwise to carry out its obligations thereunder. The purchase by the
undersigned of the Shares hereunder has been duly authorized by all
necessary action on the part of the undersigned. This Agreement has
been duly executed and delivered by the undersigned and constitutes the
valid and legally binding obligation of the undersigned, enforceable
against it in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation or similar laws relating to or affecting
generally the enforcement of creditors' rights and remedies or by other
equitable principles of general application.
b. Accredited Status. The undersigned is an "accredited investor"
within the meaning of Section 501(a) of Regulation D under the
Securities Act.
c. Investment Intent. The undersigned is acquiring the Shares
for its own account for investment purposes only and not with a view to
or for distributing or reselling the Shares or any part thereof or
interest therein, without prejudice, however, to the undersigned's
right, subject to the provisions of this Agreement, at all times to
sell or otherwise dispose of all or any part of the Shares pursuant to
an effective registration statement under the Securities Act and in
compliance with all applicable state securities laws or under an
exemption from such registration requirements.
d. Access to Information. The undersigned acknowledges that
it, he or she has been afforded (i) the opportunity to ask such
questions as it, he or she has deemed necessary of, and to receive
answers from, representatives of the Company concerning the terms and
conditions of the offering of the Shares and the merits and risks of
investing in the Shares; (ii) access to information about the Company
and the Company's financial condition, results of operations, business,
properties, management and prospects sufficient to enable it to
evaluate its, his or her investment; and (iii) the opportunity to
obtain such additional information which the Company possesses or can
acquire without unreasonable effort or expense that is necessary to
make an informed investment decision with respect to the investment and
to verify the accuracy and completeness of the information contained in
the Disclosure Materials. The undersigned further acknowledges that it,
he or she understands that the Company is subject to the periodic
reporting requirements of the Exchange Act, and the undersigned has
5
reviewed or received copies of any such reports that have been
requested by it, her or him. Without limiting the generality of the
foregoing, the undersigned represents that it, he or she has read the
Company's Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1998, and the Company's Quarterly Reports on Form 10- QSB
for the periods ended March 31, June 30 and September 30, 1999.
e. Liquidity. The undersigned presently has sufficient liquid
assets to pay the Purchase Price to be paid by it. The undersigned's
overall commitments to investments that are not readily marketable is
not disproportionate to the undersigned's net worth, and the
undersigned's investment in the Company will not cause such overall
commitment to become excessive. The undersigned has adequate means of
providing for its current needs and contingencies and has no need for
liquidity in the undersigned's investment in the Company or for a
source of income from the Company. The undersigned is capable of
bearing the economic risk and the burden of this investment, including,
but not limited to, the possibility of the complete loss of the value
of the Shares and the limited transferability of the Shares, which may
make the liquidation of the Shares impossible in the near future.
f. Sole Party in Interest. The undersigned represents that it
is the sole and true party in interest with respect to that portion of
the Shares to be acquired by it, and no other person has or will have
upon the issuance of the Shares any beneficial ownership interest in
the Shares or any portion of the Shares, whether direct or indirect.
g. Knowledge and Experience. The undersigned, or its
management or agent, as the case may be, is experienced in evaluating
and making speculative investments, and has the capacity to protect the
undersigned's interests in connection with the acquisition of the
Shares. The undersigned, or its management, as the case may be, has
such knowledge and experience in financial and business matters that it
is capable of evaluating the merits and risks of the undersigned's
investment in the Company. The undersigned has been informed that an
investment in the Shares is speculative and has concluded that its
proposed investment is appropriate in light of its overall investment
objectives and financial situation.
h. Exclusive Reliance on this Agreement. In making the
decision to purchase the Shares, the undersigned has relied exclusively
upon information included in this Agreement or other information
contained in the Company's publicly available reports and other
materials that have been provided to the undersigned, and
investigations made by the undersigned or the undersigned's managers
and agents, and not on any other representations, promises or
information, whether written or verbal, by any person.
i. Advice of Counsel. The undersigned understands the terms
and conditions of this Agreement, has investigated all issues to the
undersigned's satisfaction, has consulted with such of the
undersigned's own legal counsel or other advisors as the undersigned
deems necessary, and is not relying, and has not relied on the Company
for an explanation of the terms or conditions of this Agreement. The
undersigned further acknowledges, understands and agrees that, in
arranging for the preparation of this Agreement, the Company has not
attempted to procure legal representation for the undersigned's
interests.
6
j. No Conflict With Other Instruments, Agreements or
Obligations. The undersigned's purchase of the Shares will not result
in the breach of any term or provision of, constitute an event of
default under, or require the consent or approval of any third-party
pursuant to any contract, agreement, instrument, relationship or legal
obligation to which the undersigned is subject or to which any of its
properties, operations or management are subject.
k. No Brokers or Finders. The undersigned agrees that no third
person has in any way brought the parties together or been instrumental
in the negotiation, execution, or consummation of this Agreement. The
undersigned agrees to indemnify the Company and its officers,
employees, agents and representatives from and against any claim by any
third person for any commission, brokerage fee, finders fee, or other
payment with respect to this Agreement or the transactions contemplated
hereby based upon any alleged agreement or understanding between such
party and such third person, whether expressed or implied, arising from
the actions of such party. The covenants set forth in this section 3(n)
shall survive the Closing Date and the consummation of the transactions
contemplated by this Agreement.
l. Source of Purchase Price. The undersigned represents that no
portion of the Purchase Price was obtained by a loan from any third
party.
m. Manner of Sale. At no time was the undersigned presented with
or solicited by or through any leaflet, public promotional meeting,
television advertisement or any other form of general solicitation or
advertising.
n. Restricted Shares. The undersigned understands and
acknowledges that the Shares have not been registered under the Act, or
any state securities laws, and will be issued in reliance upon certain
exemptions from the registration requirements of those laws, and thus
cannot be resold unless they are registered under the Act or unless the
Company has first received an opinion of competent securities counsel
that an exemption from registration is available for such resale. With
regard to the restrictions on resales of the Shares, the undersigned is
aware (i) of the limitations and applicability of Securities and
Exchange Commission Rule 144; (ii) that the Company will issue stop
transfer orders to its stock transfer agent in the event of attempts to
improperly transfer the Shares; and (iii) that a restrictive legend
will be placed on the certificates representing the Shares, which
legend will read substantially as follows:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ISSUED PURSUANT TO A CLAIM OF EXEMPTION FROM THE REGISTRATION
OR QUALIFICATION PROVISIONS OF THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), AND STATE SECURITIES LAWS AND THEREFORE
HAVE NOT BEEN REGISTERED UNDER THE ACT OR UNDER THE SECURITIES
LAWS OF ANY STATE. THESE SECURITIES MAY NOT BE OFFERED, SOLD,
TRANSFERRED, PLEDGED OR HYPOTHECATED WITHOUT COMPLIANCE WITH
7
THE REGISTRATION OR QUALIFICATION PROVISIONS OF THE ACT OR
APPLICABLE STATE LAWS, OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS. FURTHERMORE,
THE COMPANY WILL INSTRUCT ITS STOCK TRANSFER AGENT NOT TO
RECOGNIZE ANY SALE OF THESE SECURITIES UNLESS THE COMPANY HAS
FIRST RECEIVED AN OPINION OF COUNSEL, SATISFACTORY TO THE
COMPANY AND ITS SECURITIES COUNSEL, THAT AN EXEMPTION
FROM SUCH REGISTRATION REQUIREMENTS IS AVAILABLE.
o. Reliance. The undersigned understands and acknowledges that (i)
the Shares are being offered and sold to it, him or her without
registration under the Securities Act in a private placement that is
exempt from the registration provisions of the Securities Act and
(ii) the availability of such exemption depends in part on, and the
Company will rely upon the accuracy and truthfulness of, the
representations in this Section 4, and the undesigned hereby
acknowledges and consents to such reliance.
p. No Group. The undersigned presently have no agreement,
understanding or arrangement to act together for the purpose of
acquiring, holding or voting the Shares or any other voting capital
stock of the Company, or any other relationship, understanding or
agreement that would make them a "group" for purposes of Rule 13d-5(b)
under the Exchange Act, and the undersigned will not enter into any
such agreement or arrangement in writing or otherwise after the
Closing.
q. Residency. The undersigned, if an entity, represents that its
jurisdiction of incorporation is as indicated on Schedule A hereto,
and, if a natural person, represents that its state or country of
residences is as indicated on Schedule A hereto.
r. Accuracy of Representations and Information. All
representations made by the undersigned in this Agreement, and all
information provided by the undersigned to the Company or its agents or
representatives concerning the undersigned is correct and complete as
of the date hereof. If there is any material change in such information
before the actual issuance of the Shares, the undersigned immediately
will provide such information in writing to the Company.
5. Management Proxy.The parties acknowledge and agree that they intend
that this Agreement shall not result in a change of control with respect to the
ownership of voting control of the Company. In furtherance of such intent, the
parties agree that, to the extent any of the undersigned agree and are entitled
to obtain under this Agreement (i) in excess of 19.9% of the common stock of the
Company issued and outstanding immediately before the Closing Date, or (ii) that
number of Shares which, when aggregated with any shares of the Company's common
stock owned by such undersigned party immediately before the Closing Date, would
cause such undersigned party to own in excess of 19.9% of the common stock of
the Company issued and outstanding immediately before the Closing Date, such
undersigned party hereby grants an irrevocable proxy to the Company's Chief
8
Executive Officer to vote any shares of such undersigned party in excess of
the 19.9% limits specified in clauses (i) and (ii) above, which proxy shall
be executed by such officer in direct proportion to the voting of all of the
shares of the Company's common stock voted by the Company's shareholders on
any matter being submitted for the vote of the Company's shareholders. The proxy
granted by this Section 5 shall expire automatically at the earlier of the
following: (x) such time any of the undersigned who are deemed to grant a
proxy pursuant to this Section 5, or its, his or her successor, shall
beneficially own less than 19.9% of the Company's common stock; or (y) such
time as the Company's shareholders at an annual or special meeting of
shareholders, shall vote to approve the transactions contemplated by this
Agreement.
6. Indemnification.
a. Indemnification By the Company. The Company agrees to
indemnify each of the undersigned and hold each of the undersigned
harmless from and against any and all liability, damage, cost or
expense, including reasonable attorneys' fees, incurred on account or
arising out of: (i) any inaccuracy in the representations and
warranties of the Company set forth herein; and (ii) any action, suit
or proceeding based upon (A) the claim that said representations or
warranties were inaccurate or misleading or otherwise cause for
obtaining damages or redress from the undersigned; or (B) the
disposition of the Shares or any portion thereof.
b. Indemnification By the Undersigned. The undersigned
severally and not jointly agree to indemnify the Company and hold the
Company harmless from and against any and all liability, damage, cost
or expense, including reasonable attorneys' fees, incurred on account
or arising out of: (i) any inaccuracy in the representations and
warranties of the undersigned set forth herein; (ii) the disposition of
the Shares, or any portion thereof, by the undersigned contrary to the
representations and warranties set forth herein and any restrictions on
transfer that may be noted on the certificates representing the Shares;
and (iii) any action, suit or proceeding based upon (A) the claim that
said representations or warranties were inaccurate or misleading or
otherwise cause for obtaining damages or redress from the Company; or
(B) the disposition of the Shares or any portion thereof.
7. Use of Proceeds. The Company intends to use the proceeds of the
Purchase Price received from the undersigned as follows. Approximately
$1,500,000 will be used to retire the Company's obligations under a Convertible
Debenture and Private Equity Line of Credit Agreement dated as of May 22, 1998
by and among the Company, five separate investors and a placement agent,
pursuant to which the Company issued a total of $1,500,000 principal amount of
the Company's convertible debentures. Additionally, the Company intends to use
the remaining $100,000 of such proceeds for operating capital and for the
payment of trade payables and selling, general and administrative expenses.
8. Alternative Structure as Convertible Debt. If, and only if, the
Nasdaq Stock Market shall for any reason determine that approval of the
Company's shareholders shall be required as a precondition to the consummation
of the transactions contemplated by this Agreement in order to preserve the
listing of the Company's common stock on the Nasdaq Stock Market, the
9
undersigned agree that the Company shall proceed as follows: (i) the Company
shall issue to the undersigned, pro rata, as many shares of common stock as
shall be allowed by the Nasdaq Stock Market and shall receive therefor a pro
rata portion of the Purchase Price anticipated by this Agreement; and (ii) the
Company shall receive any additional portion of the total Purchase Price
anticipated by this Agreement as an unsecured loan ("Provisional Loans") from
the undersigned in the amount of Purchase Price received from each of the
undersigned as indicated in Schedule "A" and for which the undersigned will not
receive shares of the Company's common stock. The Provisional Loans shall bear
simple interest at the lowest applicable federal rate of imputed interest as
determined by reference to the Internal Revenue Code of 1986, as amended, which
interest shall be calculated by reference to a 360-day year. Interest on the
Provisional Loans shall be payable only in cash. The principal amount of
the Provisional Loans shall be automatically converted into the number
of shares of common stock otherwise issuable (but not yet issued) under this
Agreement upon the approval by the Company's shareholders of the transactions
contemplated by this Agreement. The Company agrees, if Provisional Loans
are made pursuant to this Section 8, to seek the approval of its shareholders on
the transactions contemplated by this Agreement at the earliest practical
opportunity. In the event the Company's shareholders shall refuse to approve
the transactions contemplated by this Agreement, the Provisional Loans shall
become immediately due and payable at any time after the annual or special
meeting of the Company's shareholders at which such shareholders refuse to
approve such transactions.
9. Miscellaneous Provisions.
a. Attorneys' Fees. In the event of a default in the performance
of this Agreement, the defaulting party or parties, in addition to all
other obligations of performance hereunder, shall pay reasonable
attorneys' fees and costs incurred by the non-defaulting party or
parties to enforce performance of this Agreement.
b. Choice of Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Utah, without
regard to choice of law rules. Each of the parties consents to the
exclusive jurisdiction and venue of the U.S. District Court sitting
in the District of Utah or the state courts of the State of Utah
located in Salt Lake City, Salt Lake County, Utah, in connection with
any dispute arising under this Agreement and hereby waives, to the
maximum extent permitted by law, any objection including any
objection based on forum non conveniens, to the bringing of any such
proceeding in such jurisdictions.
c. Counterparts. This Agreement may be executed in one or more
counterparts, which when signed shall constitute a single contract.
d. Entire Agreement. This Agreement contains the entire agreement
between the parties relating to the purchase of the Shares, and may be
amended only by a written document signed by all of the parties hereto.
e. Headings. The headings of the sections and paragraphs of this
Agreement have been inserted for convenience of reference only and do
not constitute a part of this Agreement.
10
f. Severability. Should any one or more of the provisions of this
Agreement be determined to be illegal or unenforceable, all other
provisions of this Agreement shall be given effect separately from the
provision or provisions determined to be illegal or unenforceable and
shall not be affected thereby.
g. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the undersigned and undersigned's
successors, but shall not be assignable by the undersigned without the
prior written consent of the Company. The undersigned's subscription
shall inure to the benefit of the Company, and upon its acceptance
by the Company, shall be binding upon the Company and its successors
and assigns.
h. Warranties Survive Closing. All warranties, representations,
indemnities and agreements hereunder shall survive the date of this
Agreement and the offering of the Shares by the Company.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
February 11, 2000.
XXXXXX AGENTS LIMITED TERRANO INVESTMENTS LIMITED
By: /s/ Illegible By: /s/ Illegible
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Its: Principal Its: Director
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CYBERWORLD LIMITED GOLD DRAGON INDUSTRIES LIMITED
By: /s/ Illegible By: /s/ Illegible
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Its: Sole Director Its: Director
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/s/ Xxxxxxx Xxxxxxx /s/ Xxxxxx Xxxxxxxx
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XXXXXXX XXXXXXX XXXXXX XXXXXXXX
/s/ Xxxxx Xxxxx Xxxxxxx
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XXXXX XXXXX XXXXXXX
DYNATEC INTERNATIONAL, INC.
By: /s/ Xxxxxxxxx X. Xxxxxxxxx, Xx.
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Xxxxxxxxx X. Xxxxxxxxx, Xx.
Chairman and Chief Executive Officer
12
Schedule A
Per Share Total
Funding Purchase Purchase Price
Name and Address of Investor Date Price No. of Shares Paid
XXXXXX AGENTS LIMITED 1/20/00 $1.0188 19,265 $ 19,626.91
00xx Xxxxx 00-00 Xxxxxxxx Xxxx 2/9/00 $1.3156 74,591 98,134.54
Wanchai 2/10/00 $1.3250 111,096 147,201.82
Hong Kong 2/11/00 $1.4000 35,048 49,067.27
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240,000 $ 314,030.54
TERRANO INVESTMENTS LIMITED 1/20/00 $1.0188 16,055 $16,355.76
12th Floor 2/9/00 $1.3156 62,159 81,778.79
000 Xxxxxx Xxxx 2/10/00 $1.3250 92,580 122,668.18
Central 2/11/00 $1.4000 29,207 40,889.39
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Hong Kong 200,000 $ 261,692.12
CYBERWORLD LIMITED 1/20/00 $1.0188 19,265 $ 19,626.91
0xx Xxxxx, 000 Xxx Xxxxx X. Xxxx 2/9/00 $1.3156 74,591 98,134.54
Xxxxxxx 0, Xxxxxx 2/10/00 $1.3250 111,096 147,201.82
TAIPEI 2/11/00 $1.4000 35,048 49,067.27
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240,000 $ 314,030.54
Gold Dragon Industries Limited 1/20/00 $1.0188 19,265 $ 19,626.91
00 Xxxxxxx Xxxxx 2/9/00 $1.3156 74,591 98,134.54
#00-00 XXX Xxxxx 0 2/10/00 $1.3250 111,096 147,201.82
000000 XXXXXXXXX 2/11/00 $1.4000 35,048 49,067.27
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240,000 $ 314,030.54
Xxxxxxx Xxxxxxx 1/20/00 $1.0188 8,027 $ 8,177.88
Xxxxxxxxx 0, 0xx Xxxxx 2/9/00 $1.3156 31,079 40,889.39
000 Xx Xxxx Xxxx Xxxx 2/10/00 $1.3250 46,290 61,334.09
Taipei, TAIWAN 2/11/00 $1.4000 14,603 20,444.70
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100,000 $ 130,846.06
Xxxxxx Xxxxxxxx 1/20/00 $1.0188 8,027 $ 8,177.88
Apartment 1205 2/9/00 $1.3156 31,079 40,889.39
Peria Mansion 2/10/00 $1.3250 46,290 61,334.09
Xxxxxx Xxxxxxx 2/11/00 $1.4000 14,603 20,444.70
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Makati Metro Manilla 100,000 $ 130,846.06
PHILIPPINES
Xxxxx Xxxxx Xxxxxxx 1/20/00 $1.0188 8,253 $ 8,407.76
00-00 Xxxxxxxxxx Xxxxxx 2/9/00 $1.3156 31,953 42,038.79
Timog Park 2/10/00 $1.3250 47,591 63,058.19
Pampanga 2/11/00 $1.4000 15,014 21,019.40
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PHILIPPINES 102,811 $ 134,524.14
13
Schedule 3(a)
Subsidiaries of Dynatec International, Inc.
Nordic Technologies, Inc., a Utah corporation
Softalk, Inc., a Utah corporation
Softalk Communications, Inc., a Utah corporation
Arnco Marketing, Ltd., a California corporation
14
Schedule 3(b)
Capitalization
Shares outstanding as of 2/11/00 3,721,418
Adjustments:
Convertible debenture shares 94,500
Private placement shares 1,222,811
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1,317,311
Total shares outstanding after adjustments 5,038,729
Options:
1996 Fixd Options @$2.50 77,000
1996 Variable Options @$2.00 180,000
1996 Fixed Options @$1.46 516,750
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773,750
Total potential shares outstanding 5,812,479
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