EXHIBIT 10.12
STOCK AGREEMENT
THIS AGREEMENT (the "Agreement") is made as of the 6th day of July 2001.
AMONG:
xxxxxxxxxxxxxx.xxx, Inc., a body corporate formed pursuant to the laws of
the State of Delaware and having an office for business located at Xxxxx
00, 0000 Xxxxxxxx Xxxx, Xxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0
(the "Company")
AND:
XXXX XXXXXX, Businessman, of 000 Xxxxxxxxxx Xxxxxxx, Xxxxxxxx Xxx, XX X0X
0X0
("Xxxxxx")
AND:
XXX XXXXXXXX, Businessman, of 0000 Xxxxxxxxx Xxx, Xxxxxxxxxx, Xxxxxxx
Xxxxxxxx, X0X 0X0
("Perraton")
AND:
XXX XXXXXX, Businessman of 0000 - 000xx Xxxxxx, Xxxxxxx, Xxxxxxx Xxxxxxxx,
X0X 0X0
("Xxxxxx")
AND:
TEACO PROPERTIES LTD., a body corporate formed pursuant to the laws of the
Province of British Columbia and having an office for business located
at5299 Xxxx Xxxxxxxx, Xxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0
("Teaco")
WHEREAS:
A. xxxxxxxxxxxxxx.xxx, Inc. (the "Company") is a body corporate formed
pursuant to the laws of state of Delaware and engaged in the business of
providing direct customer service and support to businesses, individuals
and organizations within the forest and wood product industries;
B. Xxxx Xxxxxx ("Xxxxxx") and Xxx Xxxxxx ("Xxxxxx") are Businessmen who have
agreed to become directors of the Company in exchange for holding majority
ownership in the Company along with Xxx Xxxxxxxx ("Perraton") a current
Director;
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C. Teaco Properties Ltd. ("Teaco") owns 1,000,000 shares of the issued and
outstanding common shares in the capital stock of the Company of which they
have agreed to sell 900,000 common shares (the "Teaco Shares") which
represent 58% of the issued and outstanding common stock of the Company;
D. The Company believes it is in its best interest to have each Director
acquire equal parts of the majority ownership and therefore the Teaco
Shares will be divided equally among its Directors;
E. The Company currently has outstanding debt with one creditor (the
"creditor") for CDN$155,710. In order to retain senior management, the
Company has agreed to enter into a debt settlement agreement with the one
creditor concurrent with this Agreement on terms and conditions to be
negotiated between the Company and creditor; and,
F. This Agreement is entered into for the sole purpose of facilitating the
matters described in it and nothing in it should be construed as an
admission or description of any preexisting fact, obligation, liability,
right, or other matter for any purpose other than the construction and
enforcement of this Agreement.
NOW THEREFORE THIS AGREEMENT WITNESSETH THAT in consideration of the premises
and the mutual covenants, agreements, representations and warranties contained
herein, the parties hereto hereby agree as follows:
ARTICLE I
TERMS
1) Sale of Shares. Teaco hereby agree to sell the Teaco Shares to Xxxxxx,
Perraton and Xxxxxx, or their nominees, individually 300,000 common shares
in the capital stock of the company, for $10, receipt of which is hereby
acknowledged. The Teaco Shares will be transferred in title to Xxxxxx,
Perraton and Xxxxxx (collectively "the Directors"), within 10 business days
upon the execution of this Agreement. The Company has agreed to authorize
this transaction through a directors resolution and deliver same to the
Company's transfer agent. The sale of the Teaco Shares will be considered
private in nature and involves investors who are not residents of the
United States. Accordingly, the issuances may be deemed to be exempt from
registration by Regulation S and the stock is deemed to be restricted
securities.
2) Resale Restriction. Xxxxxx, Perraton and Xxxxxx acknowledge that they are
acquiring the Teaco Shares for investment purposes only and agree that they
each will not offer, sell or otherwise transfer, pledge or hypothecate any
of the Teaco Shares (other than pursuant to an effective Registration
Statement under the Securities Act of 1933, as amended), and in particular
shall not during the first 90 days of this Agreement, directly or
indirectly unless:
(a) the sale is to the Company;
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(b) the sale is made pursuant to the exemption from registration under the
Securities Act of 1933 provided by Rule 144 thereunder; or
(c) the Shares are sold in a transaction that does not require
registration under the Securities Act of 1933 or any applicable laws
and regulations governing the offer and sale of securities, and Xxxxxx
has furnished to the Company an opinion of counsel to that effect or
such other written opinion as may be reasonably required by the
Company; and
Xxxxxx, Perraton and Xxxxxx further acknowledge that trades of any Shares
within British Columbia will be subject to restrictions imposed by the
Securities Act (British Columbia) and that the Shares may not be traded
within British Columbia unless the trade is made solely through a
registered dealer and a prospectus is filed with the British Columbia
Securities Commission in respect of the Shares (and a final receipt
obtained for such prospectus) or an exemption from the registration and
prospectus requirements may be relied upon.
3) Legend. Xxxxxx, Perraton and Xxxxxx acknowledge that the certificate
representing the Teaco Shares shall bear the following legend:
NO SALE, OFFER TO SELL, OR TRANSFER OF THE SHARES REPRESENTED BY THIS
CERTIFICATE SHALL BE MADE UNLESS A REGISTRATION STATEMENT UNDER THE
FEDERAL SECURITIES ACT OF 1933, AS AMENDED, IN RESPECT OF SUCH SHARES
IS THEN IN EFFECT OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF SAID ACT IS THEN IN FACT APPLICABLE TO SAID SHARES.
4) Piggyback Rights. The Company hereby agrees to grant piggyback rights to
register Teaco's 100,000 common shares for a period of one (1) year. Teaco
must provide written notification to the Company that they wish a portion
or all of their common shares be included on the Company's next
registration statement.
5) Financing of Company. Xxxxxx shall, concurrent with this Agreement, provide
written confirmation that a third party is willing to assist the Company on
a best efforts basis to finance the Company on terms acceptable by the
Company and such financing will be no less than USD$250,000 ("third party
financing").
6) Mutual Release. Teaco and the Company hereby agree to execute a Mutual
Release agreement, attached hereto as Exhibit "A", on the other party's
behalf, concurrent with this Agreement.
7) Appointment of Xxxxxx. Xxxxxx hereby accepts in writing the appointment as
a Director of the Company, attached hereto as Exhibit "B".
8) Appointment of Xxxxxx. Xxxxxx hereby accepts in writing the appointment as
a Director of the Company, attached hereto as Exhibit "C".
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9) Confidentiality. All parties agree that the existence and terms of this
Agreement are confidential and shall not be disclosed to any person or
entity except as required to comply with applicable statutory disclosure
requirements, and then only in the degree required to comply with such
requirements.
10) Expenses Teaco. Teaco shall provide the Company with a detailed invoice for
legal and/or accounting expenses, not to exceed CDN$7,500, which invoices
shall be paid by the Company within 30 days of receipt of third party
financing.
11) Expenses Xxxxxx and Xxxxxx. Xxxxxx and Xxxxxx shall provide the Company
with a detailed invoice for legal and/or accounting expenses incurred in
connection with this Agreement, not to exceed CDN$10,000, which invoice
shall be paid by the Company within 30 days of receipt of third party
financing.
12) Conditions Precedent.
i. The Teaco Shares are sold to Xxxxxx, Xxxxxx and Perraton within 10
days of the date of this Agreement;
ii. Xxxxxx provides written confirmation that a third party is willing to
assist the Company on a best efforts basis to finance the Company on
terms acceptable by the Company and such financing will be no less
than USD$250,000.
iii. The Company executes a debt settlement agreement with their creditor
within 90 days of this Agreement.
13) Nature of Conditions Precedent. The conditions precedent set forth in this
Agreement are conditions of completion of the transactions contemplated by
this Agreement and are not conditions precedent to the existence of a
binding agreement. Each party acknowledges receipt of the sum of $1.00 and
other good and valuable consideration as separate and distinct
consideration for agreeing to the conditions of precedent in favour of the
other party or parties set forth in this Article.
14) Termination. Notwithstanding any provision herein to the contrary, if the
conditions precedent do not occur within 90 days of the date first written
above this Agreement will be at an end and will have no further force or
effect, unless otherwise agreed upon by the parties in writing. If this
Agreement terminates, the following shall occur:
x. Xxxxxx and Xxxxxx shall immediately resign as directors of the Company
and the Company will accept their resignations.
ii. The Company will indemnify Xxxxxx and Xxxxxx of all liability related
to the Company and its business by way of an indemnity agreement.
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iii. Xxxxxx, Xxxxxx and Perraton shall return the Teaco Shares to the
Company immediately by signing the certificate representing the Teaco
Shares and delivering the Teaco Shares in full to the Board of
Directors of the Company.
ARTICLE II
REPRESENATIONS AND WARRANTIES
1) Good Title. Teaco represent that they are the owners of the Teaco Shares
and that they have good and marketable title to the Shares and that the
Shares are free and clear of all liens, security interests or pledges of
any kind whatsoever.
2) Authority. The Parties represent and warrant that they, through the
signatories indicated below, are duly authorized to enter into this
Agreement, to make its warranties and representations, to give its
releases, and to fulfill its conditions, and that none of the rights,
claims, or obligations being released under this Agreement, have been
conveyed, assigned, or otherwise transferred.
3) Reading. Each of the Parties represents that it has carefully read and
understood This entire Agreement before executing it.
4) Legal Representation. Each of the Parties acknowledges and agrees that it
has been represented in the preparation of this Agreement by legal counsel
of its choosing. Each of the Parties further acknowledges the receipt of
the advice of independent legal counsel prior to the execution of this
Agreement, and that it fully understands the terms and provisions of this
Agreement, its nature, and its effect. Each of the Parties further
represents that it is relying solely on the advice of its own counsel in
executing this Agreement and has neither received nor relied upon any
representation or opinion of any of the other Parties or of the counsel of
any of the other Parties, except for the representations contained in this
Agreement.
5) No Other Representations. The Parties represent that none of the other
Parties to this Agreement or their representatives have given them any
legal, factual, or other representations or opinions relating to this
Agreement other than those expressly contained in it.
ARTICLE III
GENERAL PROVISIONS
1) Further Acts. The Parties to this Agreement shall promptly take such
further acts and execute such other documents as shall be necessary to
carry out the manifest intent of this Agreement.
2) Notice. Except as may be provided otherwise elsewhere in this Agreement,
any election, delivery, notice, or other communication required or
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permitted under this Agreement shall be in writing and shall be deemed to
have been given if placed in the regular mail to the following addresses,
or such other addresses as the Parties may later specify in writing. Except
as may be provided otherwise elsewhere in this Agreement, notwithstanding
any defect in the method of delivery that prevents it from being effective
upon mailing, such an election, delivery, notice, or other communication,
if it is in writing, shall be deemed given if and when it is actually
received by such of the Parties as are entitled to receive it.
If to Teaco, to:
Teaco Properties Ltd.
0000 Xxxx Xxxxxxxx
Xxx 0, Xxxx 0
Xxxxxxx, X.X. X0X 0X0
Attn: Xxxx Xxxxx
If to forestindustry to:
xxxxxxxxxxxxxx.xxx, Inc.
Xxxxx 00, 0000 Xxxxxxxx Xxxx
Xxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
Attn: Xxx Xxxxxxxx
If to Xxxxxx to:
Xxxx Xxxxxx
000 Xxxxxxxxxx Xxxxxxx
Xxxxxxxx Xxx, X.X. X0X 0X0
If to Perraton to:
Xxx Xxxxxxxx
0000 Xxxxxxxxx Xxx
Xxxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0
If to Xxxxxx to:
Xxx Xxxxxx
0000 - 000xx Xxxxxx
Xxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0
3) Integration. This Agreement constitutes the entire Agreement among the
Parties concerning its subject matter and supersedes all prior or
contemporaneous contracts, agreements, understandings, negotiations, and
discussions of the Parties, whether oral or written, concerning its subject
matter.
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4) Expenses of Matters Settled. Each of the Parties shall bear its own costs,
attorneys' fees, and other expenses related to the matters referred to
herein except as agreed upon in section 1, item 8 and 9, and no Party shall
make any payment or reimbursement, or provide any consideration, other than
what may be described in this Agreement.
5) No Other Agreements. There are no other contracts, agreements, or
understandings among the Parties, whether oral or written, other than this
Agreement.
6) No Oral Modification. No amendment, modification, waiver, or termination of
this Agreement shall be binding unless it is contained in a writing signed
by the party against whom it is sought to be enforced.
7) Successors and Assigns. This Agreement shall be binding on and inure to the
benefit of the heirs, executors, administrators, successors, and assigns of
the respective parties.
8) Drafting. Each of the Parties represents that this Agreement has been
negotiated and jointly drafted and agrees that any ambiguity in it shall
not be construed against any of them.
9) Counterparts. This Agreement may be executed in counterparts (including by
facsimile signature), each of which executed counterparts shall be deemed
to be a duplicate original of this Agreement, and all of which together
shall constitute one and the same instrument.
IN WITNESS WHEREOF each party has caused this Agreement to be executed
individually or by a duly authorized officer.
Teaco Properties Ltd.
DATED: By: /s/ Xxxx Xxxxx
Xxxx Xxxxx
Teaco Properties Ltd.
DATED: By: /s/ Xxxx XxXxxxxx
Xxxx XxXxxxxx
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Xxxx Xxxxxx
DATED: By: /s/ Xxxx Xxxxxx
Authorized Signatory
xxxxxxxxxxxxxx.xxx, Inc.
DATED: By: /s/ Xxx Xxxxxxxx
Xxx Xxxxxxxx, President
Xxx Xxxxxx
DATED: By: /s/ Xxx Xxxxxx
Authorized Signatory
Xxx Xxxxxxxx
DATED: By: /s/ Xxx Xxxxxxxx
Authorized Signatory
