EXHIBIT 10.1
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is entered into this 7th
day of February 2003 (the "Effective Date"), by and between Pride, Inc., and
Xxxxx Xxxx ("Sellers"), collectively owning Two Million Two Hundred Nineteen
Thousand Four Hundred Twenty Five (2,219,425) common shares ("Shares") of stock
of Commonwealth Equities, Inc., a fully reporting publicly traded company under
the symbol CWEQ ("CWEQ") and Sun Vacation Properties Corporation ("Purchaser").
WHEREAS, Purchaser desires to purchase from Sellers said Shares for Three
Hundred Ten Thousand ($310,000 USD) ("Consideration"); and
WHEREAS, Sellers hereby agrees to deliver the Shares for the Consideration
(as defined below) to be paid by Purchaser, subject to the terms and conditions
set forth below.
NOW, THEREFORE, for and in consideration of the mutual promises herein, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
1. PURCHASE AND SALE
On the basis of the representations and warranties herein contained,
subject to the terms and conditions set forth herein, Purchaser hereby
agrees to purchase the Shares for Three Hundred Ten Thousand Dollars
($310,000 USD).
2. CLOSING
A. Transactions and Document Exchange at Closing. Prior to or at the
Closing, the following transactions shall occur and documents shall be
exchanged, all of which shall be deemed to occur simultaneously:
(1) By Purchaser. Purchaser will deliver, or cause to be delivered,
to Sellers:
(i) The Consideration, in One Hundred Seventy Five Thousand
($175,000) immediately available cash on February 11, 2003
and Twenty Five Thousand ($25,000) in immediately available
funds on February 26, 2003 and a promissory note in the
amount of One Hundred Ten Thousand ($110,000) due sixty days
from February 7, 2003. Such note shall be payable from
Commonwealth Equities, Inc., Sun Vacation Properties
Corporation, and personally guaranteed by Von X. Xxxxxxxx;
(ii) Such other documents, instruments, and/or certificates, if
any, as are required to be delivered pursuant to the
provisions of this Agreement, or which are reasonably
determined by the parties to be required to effectuate the
transactions contemplated in this Agreement, or as otherwise
may be reasonably requested by Sellers in furtherance of the
intent of this Agreement;
(2) By Sellers. Sellers will deliver, or cause the following to be
delivered to Purchaser:
(i) The Shares properly endorsed and stamped with the Medallion
Signature Guarantee;
(ii) Such other documents, instruments, and/or certificates, if
any, as are required to be delivered pursuant to the
provisions of this Agreement, or which are reasonably
determined by the parties to be required to effectuate the
transactions contemplated in this Agreement, or as otherwise
may be reasonably requested by Purchaser in furtherance of
the intent of this Agreement.
B. Post-Closing Documents. From time to time after the Closing, upon the
reasonable request of any party, the party to whom the request is made
shall deliver such other and further documents, instruments, and/or
certificates as may be necessary to more fully vest in the requesting
party the Consideration or the Shares, as provided for in this
Agreement, or to enable the requesting party to obtain the rights and
benefits contemplated by this Agreement.
3. PRIVATE OFFERING
A. Private Offering. Purchaser and Sellers understand each that the sale
and exchange of securities contemplated herein constitutes a private,
arms-length transaction between a willing seller and a willing buyer
without the use or reliance upon a broker, distribution or securities
underwriter.
B. Purchase for Investment. Neither Purchaser nor Sellers are
underwriters of, or dealers in the rights and securities to be sold
and exchanged hereunder.
C. Investment Risk. Because of their financial position and other
factors, the exchange contemplated by this Agreement may involve a
high degree of financial risk, including the risk that one or both
parties may lose its entire investment, and both parties shall execute
and deliver at Closing an investment letter in substance similar to
the letter attached as Exhibit "B" (the "Investment Letter").
D. Access to Information. Purchaser and Sellers and their advisors have
been afforded the opportunity to discuss the transaction with legal
and accounting professionals and to examine and evaluate the financial
impact of the sale and exchange contemplated herein.
4. TERMINATION
This Agreement may be terminated at anytime prior to the date of Closing by
either party if (a) there shall be any actual or threatened action or
proceeding by or before any court or any other governmental body which
shall seek to restrain, prohibit, or invalidate the transaction
contemplated by this Agreement, and which, in the judgment of such party
giving notice to terminate and based upon the advice of legal counsel,
makes it inadvisable to proceed with the transaction contemplated by this
Agreement, or (b) if this Agreement has not been approved and properly
executed by the parties by January 31, 2003.
5. MISCELLANEOUS
A. Authority. The officers of Purchaser and Sellers executing this
Agreement are duly authorized to do so and each party has taken all
action required by law or otherwise to properly and legally execute
this Agreement.
B. Notices. Any notice under this Agreement shall be deemed to have been
sufficiently given if sent by registered or certified mail, postage
prepaid, addressed as follows:
To Purchaser: Sun Vacation Properties Corporation
000 X. Xxxx Xxxxxx #0, Xxxxx 000
Xxxx Xxxxxxx, Xxxxxxxxxx 00000
Residence Telephone:000-000-0000
To Sellers: 000 Xxxx Xxxxxx Xxx
Xxxxxxxxxx, Xxxxxxx 00000
Residence Telephone: 000-000-0000
Office Telephone: 000-000-0000
or to any other address which may hereafter be designated by either
party by notice given in such manner. All notices shall be deemed to
have been given as of the date of receipt.
C. Entire Agreement. This Agreement sets forth the entire understanding
between the parties hereto and no other prior written or oral
statement or agreement shall be recognized or enforced.
D. Severability. If a court of competent jurisdiction determines that any
clause or provision of this Agreement is invalid, illegal or
unenforceable, the other clauses and provisions of the Agreement shall
remain in full force and effect and the clauses and provision which
are determined to be void, illegal or unenforceable shall be limited
so that they shall remain in effect to the extent permissible by law.
E. Assignment. None of the parties hereto may assign this Agreement
without the express written consent of the other parties and any
approved assignment shall be binding on and inure to the benefit of
such successor or, in the event of death or incapacity, on assignor's
heirs, executors, administrators and successors.
F. Applicable Law. This Agreement has been negotiated and is being
contracted for in Texas, County of Dallas, it shall be governed by the
laws of the United States and Texas, notwithstanding any
conflict-of-law provision to the contrary.
G. Attorney's Fees. If any legal action or other preceding
(non-exclusively including arbitration) is brought for the enforcement
of or to declare any right or obligation under this Agreement or as a
result of a breach, default or misrepresentation in connection with
any of the provisions of this Agreement, or otherwise because of a
dispute among the parties hereto, the prevailing party will be
entitled to recover actual attorney's fees (including for appeals and
collection) and other expenses incurred in such action or proceeding,
in addition to any other relief to which such party may be entitled.
H. No Third Party Beneficiary. Nothing in this Agreement, expressed or
implied, is intended to confer upon any person, other than the parties
hereto and their successors, any rights or remedies under or by reason
of this Agreement, unless this Agreement specifically states such
intent.
I. Counterparts. It is understood and agreed that this Agreement may be
executed in any number of identical counterparts, each of which may be
deemed an original for all purposes.
J. Further Assurances. At any time, and from time to time after the
Closing, each party hereto will execute such additional instruments
and take such action as may be reasonably requested by the other party
to confirm or perfect title to the Shares to be transferred hereunder,
or otherwise to carry out the intent and purposes of this Agreement.
K. Amendment or Waiver. Every right and remedy provided herein shall be
cumulative with every other right and remedy, whether conferred
herein, at law, or in equity, and may be enforced concurrently
herewith, and no waiver by any party of the performance of any
obligation by the other shall be construed as a waiver of the same or
any other default then, theretofore, or thereafter occurring or
existing. At any time prior to Closing, this Agreement may be amended
by a writing signed by all parties hereto.
L. Headings. The section and subsection headings in this Agreement are
inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.
M. Facsimile. A facsimile, telecopy or other reproduction of this
instrument may be executed by one or more parties hereto and such
executed copy may be delivered by facsimile or similar instantaneous
electronic transmission device pursuant to which the signature of or
on behalf of such party can be seen, and such execution and delivery
shall be considered valid, binding and effective for all purposes. At
the request of any party hereto, all parties agree to execute an
original of this instrument as well as any facsimile, telecopy or
other reproduction hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first written above.
"PURCHASER"
Signed by: /s/ Von X. Xxxxxxxx Date:2/7/03
Print Name: Von X. Xxxxxxxx
"Sellers"
Pride, Inc.
By: /s/ Xxxxxxx Xxxxxxxxxx Date:2/7/03
Name: Xxxxxxx Xxxxxxxxxx
Title:President
Representing 1,999,960 Shares
Xxxxx Xxxx
/s/ Xxxxx Xxxx Date:2/7/03
Representing 219,425 Shares
INVESTMENT LETTER
The Undersigned hereby represents to each other:
1. The shares of common stock of CWEQ (the "Shares"), which are being
acquired by the undersigned, are being acquired by the undersigned for its own
account and for investment.
2. The undersigned acknowledges that the shares are being issued by the
Sellers in reliance on exemptions from registration, including but not limited
to Section 4(2) of the United States Securities Act, of 1933, as attended (the
"Securities Act") and applicable state securities laws, and the undersigned
agrees not to sell, transfer or otherwise dispose of the shares except in
compliance with the Securities Act, and applicable state Securities laws. The
representations and warranties by the undersigned in this Investment Letter will
be used and relied upon by the Sellers to deliver the Shares, and the
undersigned will notify CWEQ Immediately of any material changes to the
representations made herein.
3. The undersigned acknowledges that it has been furnished with disclosure
documents which it feels adequate and necessary to make an economic decision to
acquire the shares, including but not limited to a copy of CWEQ's most recent
Annual Report on Form 10-KSB and all reports or documents required to be filed
by CWEQ under sections 13(a), 14(a), and 15(d) of the United States Securities
Exchange Act of 1934 (the "Exchange Act"), and quarterly reports on form 10-QSB,
Current Reports on Form 8-K, and proxy statements (collectively the "Disclosure
Documents"). In addition, the undersigned has been furnished with a description
of CWEQ's capital structure and any material changes in the CWEQ's financial
condition that may not have been disclosed in the Disclosure Documents.
4. The undersigned further acknowledges that it has had an opportunity to
ask questions of and receive answers from duly designed representatives of CWEQ
concerning the terms and conditions pursuant to which the shares are being
purchased. The undersigned has also had the opportunity to obtain any additional
information which it possesses or can acquire without unreasonable effort or
expense necessary to verify the accuracy of the information furnished by CWEQ
undersigned has been afforded an opportunity to examine such documents and other
information which it has requested for the purpose of verifying the financial
stability of the CWEQ.
5. The undersigned is fully aware of the applicable limitations on its
resale of any securities such as the shares, and that the shares, and any and
all certificates issued in replacement thereof or in exchange therefore will
bear a restrictive transfer legend in the following form:
"The obligations represented by this certificate and right to acquire shares of
CWEQ's common stock contained herein, have not been registered under the
Securities Act of 1933 (the `Act') and are "restricted securities" as that term
is defined in Rule 144 under the Act. Neither this debt instrument nor the
shares for which this obligation may be exchanged may be offered for sale, sold
or otherwise transferred except pursuant to an effective Registration Statement
under the act or pursuant to an exemption from registration under the Act the
availability of which is to be established to the satisfaction of CWEQ."
6. By reason of the undersigned's knowledge and experience in financial and
business matters in general, and investments in particular, the undersigned is
capable of evaluating the merits and bearing the economic risks of an investment
in the shares and fully understands the speculative nature of the shares and the
possibility of loss of the undersigned's entire investment.
7. The present financial condition of the undersigned is such that it is
under no present or contemplated future need to dispose of any portion of the
shares to satisfy an existing or contemplated undertaking, need or indebtedness.
Very truly yours,
By: /s/ Von X. Xxxxxxxx
Print Name: Von X. Xxxxxxxx
Print Address: 000 X Xxxx Xxxxxx #0, Xxxxx 000
Xxxx Xxxxxxx, Xxxxxxxxxx 00000
Date: February 7, 2003
