EXHIBIT 10.1
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement ("Agreement") has been entered into as of April
11th, 2000, by and between Xxxx Xxxxxxx ("Controlling Shareholder"), Safetek
International, Inc., a Delaware corporation ("Company") and Halter Capital
Corporation, a Texas corporation ("HCC").
RECITALS
A. Controlling Shareholder on the Closing Date (as defined
herein) will be the legal and equitable owner of 26,889,261 shares of common
stock, par value $.00001 per share, of the Company (which now represents
approximately 74.39% of the issued and outstanding shares of the Company's
common stock).
B. HCC desires to purchase from the Controlling Shareholder
18,434,303 shares of the Company's common stock (the "Purchased Shares")
representing 51% of the issued and outstanding shares of the Company as of
closing date.
C. The Company desires to join in the execution of the
Agreement for the purpose of evidencing its consent to the consummation of the
foregoing transaction and for the purpose of making certain representations and
warranties to and covenants and agreements with HCC.
NOW, THEREFORE, for and in consideration of the mutual promises and covenants
contained herein, and for other good and valuable consideration, the parties
hereto agree as follows:
1. Purchase of the Purchased Shares by HCC. Subject to and upon the
terms and conditions contained herein, on the Closing Date (as defined herein),
Controlling Shareholder shall sell, transfer, assign, convey and deliver the
Purchased Shares to HCC, free and clear of all adverse claims, security
interests, liens, claims and encumbrances (other than restrictions under state
and federal securities laws) and HCC shall purchase, accept and acquire the
Purchased Shares from the Controlling Shareholder.
The aggregate purchase price payable to Controlling Shareholder for the
Purchased Shares shall be One Hundred Ten Thousand Dollars ($110,000.00) (the
"Purchase Price"). The Purchase Price shall be payable on the Closing Date and
delivered in the form of a check for $110,000.00 payable to the Controlling
Shareholder.
1
2. Escrow Agreement. The Purchase Price shall be placed into Escrow
under a separately executed Escrow Agreement (Exhibit A) until the following
conditions are met:
a. Controlling Shareholder will cause to be delivered to
the Company's stock transfer agent a minimum of
1,000,000 shares of the Company's preferred stock
("Preferred Stock") requesting to be exchanged for
the Company's common stock under the terms and
conditions as defined on the Preferred Stock
certificates.
b. A document from the landlord releasing the Company
from any further obligations under an operating lease
agreement for the Company's office and warehouse
space in Henderson, Nevada, which is to expire in
2003.
2. Closing. Subject to the conditions precedent set forth herein, the
purchase of the Purchased Shares shall take place at the offices of HCC in
Dallas, Texas or at any other place mutually agreed to, at a date selected by
HCC which is on or before April 12, 2000. Such date is herein referred to as the
"Closing Date".
3. Representations and Warranties of HCC. HCC hereby represents and
warrants that the following are true and correct as of the date hereof and will
be true and correct through the Closing Date as if made on that date:
A. Authorization and Validity. The execution, delivery and
performance by HCC of this Agreement and the consummation of the transaction
contemplated hereby have been duly authorized by HCC. This Agreement has been
duly executed and delivered by HCC and constitutes legal, valid and binding
obligations of HCC, enforceable against HCC in accordance with its respective
terms, except as may be limited by applicable bankruptcy, insolvency or similar
laws affecting creditors' rights generally or the availability of equitable
remedies.
B. Consents/Approvals/Conflict. Except for compliance with
applicable federal and state securities laws, no consent, approval,
authorization or order of any court or governmental agency or other body is
required for HCC to consummate the purchase of the Purchased Shares. Neither the
execution, delivery, consummation or performance of this Agreement shall
conflict with or constitute a breach of any agreement to which HCC is a party or
by which it is bound nor, to the best of HCC's knowledge and belief, any
existing law, rule, regulation, or any decree of any court or governmental
department, agency, commission, board or bureau, domestic or foreign, having
jurisdiction over HCC.
C. Investment Intent. HCC is acquiring the Purchased Shares
for its own account for investment and not with a view to, or for sale or other
disposition in connection with, any distribution of all or any part thereof,
except (i) in an offering covered by a registration statement filed with the
Securities and Exchange Commission under the Securities Act covering the
Purchased Shares, or (ii) pursuant to an applicable exemption under the
Securities Act.
D. Disclosure of Information. HCC acknowledges that it has
been furnished with sufficient information regarding the Company and its
business, assets, results of operations and financial condition to allow HCC to
make an informed decision regarding an investment in the Purchased Shares. HCC
further represents that it has had an opportunity to ask questions of and
receive answers from the Company regarding the Company and its business, assets,
results of operation and financial condition.
2
E. Investment Experience. HCC acknowledges that it is able to
fend for itself, can bear the economic risk of its investment in the Purchased
Shares, and has such knowledge and experience in financial and business matters
that it is capable of evaluating the merits and risks of an investment in the
Purchased Shares.
F. Restricted Securities. HCC understands that the Purchased
Shares will not have been registered pursuant to the Securities Act or any
applicable state securities laws, that the Purchased Shares will be
characterized as "restricted securities" under federal securities laws, and that
under such laws and applicable rules and regulations the Purchased Shares cannot
be sold or otherwise disposed of without registration under the Securities Act
or pursuant to an exemption therefrom. In this connection, HCC represents that
it is familiar with Rule 144 promulgated under the Securities Act, as currently
in effect, and understands the resale limitations imposed thereby and by the
Securities Act. Stop transfer instructions may be issued to the transfer agent
for the Company's stock (or a notation may be made in the appropriate records of
the Company) in connection with the Purchased Shares.
G. Legend. It is agreed and understood by HCC that the
certificates representing the Purchased Shares shall each conspicuously set
forth on the face or back thereof a legend in substantially the following form:
THESE SECURITIES HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933. THEY MAY
NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THE SECURITIES
UNDER SAID ACT OR PURSUANT TO AN EXEMPTION
FROM REGISTRATION OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
4. Representations and Warranties of the Controlling Shareholder. The
Controlling Shareholder represents and warrants that the following are true and
correct as of the date hereof and will be true and correct through the Closing
Date as if made on that date:
A. Title to Stock. On the Closing Date, the Controlling
Shareholder will be the sole legal and equitable owner and will have full right,
power and authority to sell and convey the Purchased Shares and such shares will
be free and clear of any and all liens, mortgages, pledges, or other rights or
encumbrances whatsoever, disclosed or undisclosed. Specifically, there are no
beneficial owners of such shares or of any interest in or to any such shares
other than the Controlling Shareholder. Upon surrender of the certificates
representing the Purchased Shares (accompanied by appropriate stock powers duly
endorsed and guaranteed) to HCC for the consideration set forth herein, HCC
shall be deemed to have obtained good and merchantable title to the Purchased
Shares.
3
B. Authorization and Validity. This Agreement has been duly
executed and delivered by the Controlling Shareholder and constitutes legal,
valid and binding obligations of the Controlling Shareholder, enforceable
against the Controlling Shareholder in accordance with its respective terms,
except as may be limited by applicable bankruptcy, insolvency or similar laws
affecting creditors' rights generally or the availability of equitable remedies.
C. Consents/Approvals/Conflict. Except for compliance with
applicable federal and state securities laws, no consent, approval,
authorization or order of any court or governmental agency or other body is
required for the Controlling Shareholder to consummate the sale of the Purchased
Shares. Neither the execution, delivery, consummation or performance of this
Agreement shall conflict with or constitute a breach of any agreement to which
the Controlling Shareholder is a party or by which he is bound nor, to the best
of the Controlling Shareholder's knowledge and belief, any existing law, rule,
regulation, or any decree of any court or governmental department, agency,
commission, board or bureau, domestic or foreign, having jurisdiction over the
Controlling Shareholder, nor result in the creation of any lien or other
encumbrance upon the Purchased Shares.
5. Representations and Warranties of the Company. The Company, and the
Controlling Shareholder to the extent that he has the legal ability to take or
cause or refrain from taking or causing any such actions, hereby represent and
warrant that the following are true and correct as of the date hereof and will
be true and correct through the Closing Date as if made on that date:
A. Organization and Good Standing; Qualification. The Company
is a corporation duly organized, validly existing and in good standing under the
laws of State of Delaware, with all requisite corporate power and authority to
carry on the business in which it is engaged, to own the properties it owns, and
is duly qualified and licensed to do business and is in good standing in all
jurisdictions where the nature of its business makes such qualification
necessary.
B. Capitalization. As of the execution date of this Agreement,
the authorized capital stock of the Company consists of 50,000,000 shares of
common stock, par value $.00001 per share, of which exactly 36,145,694 shares
are now issued and outstanding. All of the issued and outstanding shares of
capital stock of the Company are duly authorized, validly issued, fully paid and
nonassessable. The Company is not a party to or bound by, nor does it have any
knowledge of, any agreement, instrument, arrangement, contract, obligation,
commitment or understanding of any character, whether written or oral, express
or implied, relating to the sale, assignment, encumbrance, conveyance, transfer
or delivery of any capital stock of the Company.
C. Documents Genuine. All originals and/or copies of the
Company's articles of incorporation and bylaws, each as amended to the date of
this Agreement, and all minutes of meetings and written consents in lieu of
meetings of shareholders, the Board of Directors and committees of that Board,
of the Company, filings with the Securities and Exchange Commission, financial
data, and any and all other documents, instruments, data, files, or information
which have been or will be furnished to HCC, are true, complete, correct and
unmodified originals and/or copies of such documents, information, data, files
or instruments..
4
D. Authorization and Validity. The execution, delivery and
performance by the Company of this Agreement and the consummation of the
transaction contemplated hereby has been duly authorized by the Company. This
Agreement has been duly executed and delivered by the Company and constitutes
legal, valid and binding obligations of the Company, enforceable against the
Company in accordance with its respective terms, except as may be limited by
applicable bankruptcy, insolvency or similar laws affecting creditors' rights
generally or the availability of equitable remedies.
E. Restrictive Covenants. Prior to the consummation of the
proposed transaction described herein, the Company shall conduct its business in
the ordinary and usual course (without any unusual commitments) and in
compliance with all applicable laws, rules, and regulations. Furthermore, the
Company will not, without the prior written consent of HCC: (i) make any changes
in its capital structure; (ii) make any changes in its articles of incorporation
or bylaws; (iii) incur any liability or obligation other than current
liabilities incurred in the ordinary and usual course of business; (iv) incur
any indebtedness for borrowed money; (v) make any loans or advances to any
persons or legal entities; (vi) declare or pay any dividend or make any other
distribution with respect to its capital stock; (vii) issue, sell, deliver or
purchase or otherwise acquire for value any of its stock or other securities;
(viii) mortgage, pledge, or subject to encumbrance any of its assets or
properties; (ix) sell or transfer any of its assets or properties; (x) make any
investment of a capital nature; (xi) enter into any contract, agreement, or
other commitment which is material to the business, assets, properties or
financial position of the Company; or (xii) issue any options or other
instruments enabling anyone to purchase any of the capital stock of the Company.
F. Consents/Approvals/Conflict. Except for compliance with
applicable federal and state securities laws, no consent, approval,
authorization or order of any court or governmental agency or other body is
required for the Company to execute or enter into this Agreement. Neither the
execution, delivery, consummation or performance of this Agreement shall
conflict with or constitute a breach of the Company's articles of incorporation
or bylaws, as amended to date, or of any note, mortgage, indenture, deed of
trust or other agreement or instrument to which the Company is a party or by
which it is bound nor, to the best of the Company's knowledge and belief, any
existing law, rule, regulation, or any decree of any court or governmental
department, agency, commission, board or bureau, domestic or foreign, having
jurisdiction over the Company.
G. Financial Statements. The Company has furnished to HCC its
audited balance sheet, statements of income and retained earnings, statements of
cash flows, and notes to the financial statements relevant thereto, as of and
for the fiscal year ending December 31, 1999. Said financial statements
accurately reflect the then assets and liabilities of the Company and have been
prepared in accordance with generally accepted accounting principles. The
Company has not entered into or incurred any type of indebtedness or conducted
any kind of business whatsoever since December 31, 1999 and the financial
statements delivered to HCC accurately reflect the financial condition of the
Company in all material respects as of the Closing Date and reflect that the
Company has no debts or liabilities of any kind.
5
H. Taxes. All income, excise, unemployment, social security,
occupational, franchise and any and all other taxes, duties, assessments or
charges levied, assessed or imposed upon the Company by the United States or by
any state or municipal government or subdivision or instrumentality thereof
which are due and payable as of the Closing Date have been duly paid and all
required tax returns or reports concerning any such items have been duly filed.
I. Guarantees or Indebtedness to Affiliates. There are no
contracts or commitments by the Company, directly or indirectly, guaranteeing
the payment or performance (or both) of any obligations of any third person or
entity whatsoever including any of the Company's officers, directors, employees
or shareholders. Further, the Company will not be indebted to any of its
officers, directors, employees, or shareholders as of the Closing Date.
J. Pending or Threatened Litigation. There are no actions,
governmental investigations, suits, arbitrations or other administrative,
criminal or civil actions or proceedings pending or threatened against the
Company. In addition, to the best of the Company's knowledge, the Company does
not know of any basis that exists for any such action, suit, investigation,
arbitration or proceeding.
K. Contracts. There are no contracts, agreements, arrangements
or understandings entered into by the Company which cannot be terminated by the
Company upon 30 days written notice to the other party or parties to such
contracts.
6. Conditions to Obligations of HCC. All obligations of HCC under this
Agreement are subject to the fulfillment, prior to or on the Closing Date, of
each of the following conditions (any one or more of which may, in HCC's
absolute discretion, be waived):
A. Documents to be Delivered to HCC. At the Closing, the
following documents shall be delivered to HCC:
(i) Certificate(s) representing the Purchased Shares to be
delivered pursuant to this Agreement, duly endorsed or
accompanied by duly executed stock powers upon which the
signer's signature shall be subject to a Medallion Guarantee;
(ii) A certificate executed by the Controlling Shareholder and
the Company, dated the Closing Date, certifying that:
6
(A) The representations and warranties of the
Controlling Shareholder and the Company contained in this
Agreement are then true in all respects; and
(B) The Controlling Shareholder and the Company have
complied with all agreements and conditions required by this
Agreement to be performed or complied with by either of them.
(iii) Certified resolutions of the Company's Board of
Directors authorizing the execution and delivery of this
Agreement and the performance of its agreements and
obligations hereunder.
(iv) Certificate of Good Standing for the Company, issued by
the Secretary of State of Delaware and dated as of the most
recent practicable date (if HCC purchases this, the
Controlling Shareholder agrees to reimburse HCC);
(v) Resignations from all of the Company's officers and
directors, and a certificate of the Company setting forth the
Board resolution pursuant to which new directors have been
elected for the Company, dated the Closing Date, electing
those persons designated by HCC as directors of the Company;
(vi) All of the Company's original corporate books and
records, including the Company's articles of incorporation and
bylaws, minutes of meetings of the shareholders, the Board of
Directors and committees of the Board, of the Company, all
contracts which are currently in effect or otherwise binding
upon the Company, and any other document or instrument which
in the opinion of HCC, or the Ultimate Purchaser, is necessary
or appropriate to properly continue the business and corporate
status of the Company;
(vii) An affidavit signed by Xxxx Xxxxxxx as President of the
Company certifying that, based on his personal knowledge, the
Company has not engaged in any kind of business whatsoever
after December 31, 1999 and that as of the Closing Date the
Company has no indebtedness of any kind and no liabilities of
any kind which were not disclosed in the December 31, 1999
audited financial statements.("Affidavit") which shall be in
the form of Exhibit C attached hereto; and
(viii) An indemnity agreement in the form of Exhibit A,
attached hereto, executed by Xxxx Xxxxxxx for the benefit of
HCC. ("Indemnity Agreement").
7
7. Conditions to Obligations of Controlling Shareholder. All
obligations of Controlling Shareholder under this Agreement are subject to the
fulfillment, prior to or on the Closing Date, of each of the following
conditions (any one or more of which may, in the absolute discretion of the
Controlling Shareholder, be waived by the Controlling Shareholder):
A. Documents to be Delivered to the Controlling Shareholder.
At the Closing, the following documents shall be delivered to the Controlling
Shareholder:
(i) A certificate executed by HCC, dated the Closing Date,
certifying that:
(A) The representations and warranties of HCC
contained in this Agreement are then true in all respects; and
(B) HCC has complied with all agreements and
conditions required by this Agreement to be performed or
complied with by it.
(ii) Certified resolutions of the Board of Directors of HCC
authorizing the execution and delivery of this Agreement and
the performance of its agreements and obligations hereunder;
B. Payment of the Purchase Price. The Purchase Price of
$110,000.00 shall be paid by delivering to the Controlling Shareholder a check
made payable to the Controlling Shareholder.
8. Indemnification by the Controlling Shareholder. The Controlling
Shareholder hereby agrees to indemnify and hold harmless HCC for the full amount
of all losses, claims, expenses or liabilities (including without limitation
reasonable attorneys' fees) arising from or relating to (i) any breach of the
representations and warranties made by the Controlling Shareholder or the
Company in this Agreement, (ii) any failure of the Controlling Shareholder to
perform any covenant, obligation or agreement in this Agreement to be performed
by him, and (iii) any misrepresentation or other breach or violation of the
Indemnity Agreement.
9. Miscellaneous.
A. Amendment. This Agreement may be amended, modified, or
supplemented only by an instrument in writing executed by all the parties
hereto.
B. Assignment. Neither this Agreement nor any right created
hereby shall be assignable by any party hereto without the written consent of
the party not seeking assignment.,
C. Parties In Interest. The Parties hereto expressly agree and
understand that HCC has entered into this Agreement for itself. All of the terms
and conditions of this Agreement shall inure to the benefit of and be binding
upon the respective heirs, legal representatives, successors and assigns of the
parties hereto. Except as specified in this Section none of the terms and
conditions or benefits of this Agreement shall be deemed to confer upon any
person not a party hereto.
8
D. Entire Agreement. This Agreement and the agreements
contemplated hereby constitute the entire agreement of the parties regarding the
subject matter hereof, and supersede all prior agreements and understandings,
both written and oral, among the parties, or any of them, with respect to the
subject matter hereof.
E. Severability. If any provision of this Agreement is held to
be illegal, invalid or unenforceable under present or future laws effective
during the term hereof, such provision shall be fully severable and this
Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision never comprised a part hereof; and the remaining
provisions hereof shall remain in full force and effect and shall not be
affected by the illegal, invalid or unenforceable provision or by its severance
herefrom. Furthermore, in lieu of such illegal, invalid or unenforceable
provision, there shall be added automatically as part of this Agreement a
provision as similar in its terms to such illegal, invalid, or unenforceable
provision as may be possible and be legal, valid and enforceable.
F. Survival of Representations, Warranties and Covenants. The
representations, warranties and covenants contained herein and in the Affidavit
and the Indemnity Agreement shall survive the Closing and all statements
contained in any certificate, exhibit or other instrument delivered by or on
behalf of HCC, the Company or the Controlling Shareholder, as the case may be,
and, notwithstanding any provision in this Agreement to the contrary, shall
survive the Closing.
G. Governing Law. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
H. Captions. The captions in this agreement are for
convenience of reference only and shall not limit or otherwise affect any of the
terms or provisions hereof.
I. References to this Agreement. Use of the words "herein",
"hereof", "hereto" and the like in this Agreement shall be construed as
references to this Agreement as a whole and not to any particular Article,
Section or provision in this Agreement, unless otherwise noted.
J. Notice. Any notice or communication which may be given
hereunder shall be in writing and given by depositing the same in the United
States mail, addressed to the party to be notified, postage prepaid and
certified with return receipt requested, or by delivering the same in person.
Such notice shall be deemed received on the date on which it is hand delivered
or on the third business day following the date on which it was mailed. For
purposes of notice, the addresses of the parties shall be:
9
If to the Controlling Shareholder: Xxxx Xxxxxxx
0000 Xxxxxxxx Xxxxxxx Xxxxx
Xxx. 000
Xxxxxxxxx, XX 00000
If to HCC: Halter Capital Corporation
00000 Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: Xx. Xxxxx X. Xxxxxx
K. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument. Execution and delivery of
facsimile copies bearing the facsimile signature of a party shall constitute a
valid and binding execution and delivery of this Agreement by such party. Such
facsimile copies shall constitute enforceable original documents.
Safetek International, Inc. Controlling Shareholder:
By: /s/ Xxxx Xxxxxxx /s/ Xxxx Xxxxxxx
------------------ ------------------
Xxxx Xxxxxxx Xxxx Xxxxxxx
President
Halter Capital Corporation
By: /s/ Xxxxx X. Xxxxxx
--------------------------------
Xxxxx X. Xxxxxx, President
10
