STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement") is entered into this 27th day
of October, 1998, by and among THE ACCORD GROUP, INC., a Delaware corporation
(hereinafter referred to as "Buyer"); and XXXXXX MASSNEK and W.E.R.E.
INTERNATIONAI, INC. and/or their assigns (hereinafter collectively referred to
as "Seller"), being the majority shareholder of THERMOTEK ENVIRONMENTAL, INC., a
Delaware corporation (hereafter referred to as "Company").
WHEREAS, Seller is the owner of record and beneficially owns Nine Million
(9,000,000) shares of the issued and outstanding shares of Common Stock of the
Company (the "Shares"); and
WHEREAS, Seller desires to sell all of the Shares to Buyer, and Buyer
desires to purchase the Shares, upon the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, and for other good and valuable consideration, the receipt,
adequacy and sufficiency of which are hereby acknowledged, and subject to the
accuracy of the representations and warranties of the parties, the parties
hereto agree as follows:
I
SALE AND PURCHASE OF THE SHARES
1.1 Sale and Purchase. Subject to the terms and conditions hereof, at the
Closing (as defined in paragraph 1.2 below), Seller agrees to sell, assign,
transfer, convey and deliver to Buyer, and Buyer agrees to purchase from Seller,
the Shares listed in Exhibit "A", attached hereto, which together constitute
99.94% of the issued and outstanding Shares of Common Stock of the Company.
1.2 Closing . The purchase shall be consummated at a closing ("Closing") to
take place at 9:00 o'clock a.m., at the offices of Buyer's counsel on December
15, 1998 ("Closing Date").
1.3 Purchase Price. The aggregate purchase price ("Purchase Price") for the
Shares shall be Forty-Three Million (43,000,000) shares of Common Stock of the
Buyer ("Buyer's Shares"). This portion of the Purchase Price shall be paid at
Closing, by issuance and delivery of Buyer's Shares to Seller against receipt of
certificates representing the Shares, duly endorsed for transfer to Buyer.
1.4 Allocation of Shares. All shares of stock of Buyer to be issued to
Seller pursuant to this Agreement shall be issued to the respective Sellers in
proportion to their respective ownership of stock of the Company as described in
Exhibit "X' hereto.
1.5 Other Agreements. At the Closing, the indicated parties shall execute
and deliver the following additional agreements in substantially the form
attached hereto:
(a) Employment Agreement between the Company and Xxxxxx Xxxxxxx
attached hereto as Exhibit "B".
(b) Stock certificates representing all of the Shares, duly
endorsed to Buyer and in blank or assignments separate from the
certificates, transferring the Shares from Seller to Buyer.
1.6 Basic Agreements and Transactions Defined. This Agreement and other
agreements listed in paragraph 1.5, are sometimes referred to as the "Basic
Agreement." The transactions contemplated by the Basic Agreement are sometimes
referred to as the "Transactions."
II
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of Seller. Seller represents and
warrants to Buyer as follows:
(a) Title to the Shares. At Closing, Seller shall own of record
and beneficially the number of the Shares listed in Exhibit "A", of
the Company, free and clear of all liens, encumbrances, pledges,
claims, options, charges and assessments of any nature whatsoever,
with full right and lawful authority to transfer the Shares to Buyer.
No person has any preemptive rights or rights of first refusal with
respect to any of the Shares. There exists no voting agreement, voting
trust, or outstanding proxy with respect to any of the Shares. There
are no outstanding rights, options, warrants, calls, commitments, or
any other agreements of any character, whether oral or written, with
respect to the Shares.
(b) Organization. The Company is a corporation duly incorporated,
validly existing and in good standing under the laws of the state of
Delaware. The Company has all requisite corporate power and authority
to own, lease and operate its properties and to carry on its business.
The Company is duly qualified and in good standing as a foreign
corporation in each jurisdiction where its ownership of property or
operation of its business requires qualification.
(c) Authorized Capitalization. The authorized capitalization of
the Company consists of 100,000,000 Million (100,000,000) shares of
Common Stock, $.001 par, of which Nine Million Five Thousand
(9,005,000) shares have been issued and are outstanding. The Shares
have been duly authorized, validly issued, are fully paid and non
assessable with no personal liability attaching to the ownership
thereof and were offered, issued, sold and delivered by the Company in
compliance with all applicable state and federal laws. The Company
does not have any outstanding rights, options, warrants, calls,
commitments, conversion or any other agreements of any character,
whether oral or writer, obligating it to issue any shares of its
capital stock, whether authorized or not. The Company is not a party
to and are not bound by any agreement, contract, arrangement or
understanding, whether oral or written, giving any person or entity
any interest in, or any right to share, participate in or receive any
portion of, the Company's income, profits or assets, or obligating the
Company to distribute any portion of its income, profits or assets,
(d) Authority. Seller has full power and lawful authority to
execute and deliver the Basic Agreements and to consummate and perform
the Transactions contemplated thereby. The Basic Agreements constitute
(or shall, upon execution, constitute) valid and legally binding
obligations upon Seller, enforceable in accordance with their terms.
Neither the execution and delivery of the Basic Agreements by Seller,
nor the consummation and performance of the Transactions contemplated
thereby, conflicts with, requires the consent, waiver or approval of,
results in a breach of or default under, or gives to others any
interest or right of termination, cancellation or acceleration in or
with respect to, any agreement by which Seller or the Company is a
party or by which Seller or the Company or any of their respective
properties or assets are bound or affected.
(e) Company Financial Statements. The Company Financial
Statements are complete, were prepared in accordance with generally
accepted accounting principles applied on a basis consistent with
prior periods and fairly present the financial position of the Company
as of August 31, 1998.
(f) No Undisclosed Liabilities. Except as set forth in the
Company Financial Statements previously delivered to Buyer and as set
forth on Exhibit "C", Seller is not aware of any liabilities for which
the Company is liable or will become liable in the future.
(g) Taxes. The Company has filed all federal, state, local tax
and other returns and reports which were required to be filed with
respect to all taxes, levies, imposts, duties, licenses and
registration fees, charges or withholdings of every nature whatsoever
("Taxes"), and their exists a substantial basis in law and fact for
all positions taken in such reports. No waivers of periods of
limitation are in effect with respect to any taxes arising from and
attributable to the ownership of properties or operations of the
business of the Company.
(h) Properties. The Company has good and marketable title to all
its personal property, equipment, processes, patents, copyrights,
trademarks, franchises, licenses and other properties and assets
(except for items leased or licensed to the Company), including all
property reflected in the Company Financial Statements (except for
assets reflected therein which have been sold in the normal course of
its business where the proceeds from such sale or other disposition
have been properly accounted for in the financial statements of the
Company), in each case free and clear of all liens, claims and
encumbrances of every kind and character, except as set forth in
Exhibit "Y'. The Company has no ownership interest in any real
property. The assets and properties owned, operated or leased by the
Company and used in its business are in good operating condition,
reasonable wear and tm excepted, and suitable for the uses for which
intended.
(i) Books and Records. The books and records of the Company are
complete and correct in all material respects, have been maintained in
accordance with good business practices and accurately reflect in all
material respects the business, financial condition and results of
operations of the Company as set forth in the Company Financial
Statements.
(j) Material Contracts. The Company has no purchase, sale,
commitment, or other contract, the breach or termination of which
would have a materially adverse effect on the business, financial
condition, results of operations, assets, liabilities, or prospects of
the Company.
(k) Employment Matters. Exhibit "E" contains a list of all
officers, their base salaries, accrued vacation pay, sick pay, and
severance pay through August 31, 1998, The Company is not a party to
any employment agreement, or any pension, profit sharing, retirement
or other deferred compensation plan or agreement. The Company has not
incurred any unfunded deficiency or liability within the meaning of
the Employee Retirement Income Security Act of 1974 ("ERISA"), has not
incurred any liability to the Pension Benefit Guaranty Corporation
established under ERISA in connection with any employee benefit plan
and has no outstanding obligations or liabilities under any employee
benefit plan. The Company has not been a party to a "prohibited
transaction," which would subject the Company to any tax or penalty.
There is no collective bargaining agreement or negotiations therefore,
labor grievance or arbitration proceeding against the Company pending
or threatened, and to the knowledge of the Seller, there are no union
organizing activities currently pending or -threatened against or
involving the Company.
(m) Compliance with Laws. The Company is not in violation of any
federal, state, local or other law, ordinance, rule or regulation
applicable to its business, and have not received any actual or
threatened complaint, citation or notice of violation or investigation
from any governmental authority.
(n) No Litigation. There are no actions, suits, claims,
complaints or proceedings pending or threatened against the Company,
at law or in equity, or before or by any governmental department,
commission, court, board, bureau, agency or instrumentality; and there
are no facts which would provide a valid basis for any such action,
suit or proceeding There are no orders, judgments or decrees of any
governmental authority outstanding which specifically apply to the
Company or any of its assets.
(o) Validity. All contracts, agreements, leases and licenses to
which the Company is a party or by which it or any of its properties
or assets are bound or affected, are valid and in full force and
effect; and no breach or default exists, or upon the giving of notice
or lapse of time, or both would exist, on the part of the Company or
by any other party thereto.
[P] No adverse Changes. Since September 30,1998, there have been
no actual or threatened developments of a nature that is materially
adverse to or involves any materially adverse effect upon the
business, financial condition results of operations, assets,
liabilities, or prospects of the Company.
(q) Full Disclosure. All statements of Seller contained in the
Basic Agreements and in any other written documents delivered by or on
behalf of the Company or Seller to Buyer are true and correct in all
material respects and do not omit any material fact necessary to make
the statements contained therein not misleading in light of the
circumstances under which they were made. There are no facts known to
Seller which could have a materially adversely affect upon the
business, financial condition, results of operations, assets,
liabilities, or prospects of the Company, which have not been
disclosed to Buyer in the Basic Agreements.
2.2 Representations and Warranties of Buyer. Buyer represents and warrants
to Seller as follows:
(a) Organization . Buyer is a corporation duly incorporated,
validly existing and in good standing under the laws of the state of
Delaware. Buyer has all requisite corporate power and authority to
own, lease and operate its properties and to carry on its business.
Buyer is duly qualified and in good standing as a foreign corporation
in each jurisdiction where its ownership of property or operation of
its business requires qualification. The Certificate of Incorporation
and the Bylaws of Buyer presently provide that the number of members
of the Board of Directors shall be five (5).
(b) Authorized Capitalization. The authorized capitalization of
the Buyer consists of One Hundred Million (100,000,000) shares of
Common Stock, of which Seven Hundred Fifty-Three Thousand Three
Hundred Seventy-Five (753,375) shares have been issued and are
outstanding. The Shares have been duly authorized, validly issued, are
fully paid and non assemble with no personal liability attaching to
the ownership thereof and were offered, issued, sold and delivered by
the Buyer in compliance with all applicable state and federal laws.
Except as set forth on Exhibit "F", the Buyer does not have any
outstanding rights, options, warrants, calls, commitments, conversion
or any other agreements of any character, whether oral or written,
obligating it to issue any shares of its capital stock, whether
authorized or not. The Buyer is not a party to and are not bound by
any agreement, contract, arrangement or understanding, whether oral or
written, giving any person or entity any interest in, or any right to
share, participate in or receive any portion of, the Buyers income,
profits or assets, or obligating the Buyer to distribute any portion
of its income, profits or assets.
(c) Authority. Buyer has full power and lawful authority to
execute and deliver the Basic Agreements and to consummate and perform
the Transactions contemplated thereby. The Basic Agreements constitute
(or shall, upon execution, constitute) valid and legally binding
obligations upon Buyer, enforceable in accordance with their terms.
Neither the execution and delivery of the Basic Agreements by Buyer,
nor the consummation and performance of the Transactions contemplated
thereby, conflicts with, requires the consent, waiver or approval of,
results in a breach of or default under, or gives to others any
interest or right of termination, cancellation or acceleration in or
with respect to, any agreement by which Buyer is a party or by which
Buyer or any of its properties or assets are bound or affected.
(d) No Undisclosed Liabilities. Except as set forth in the Buyer
Financial Statements previously delivered to Buyer and as set forth on
Exhibit "9', Seller is not aware of any liabilities for which the
Buyer is liable or will become liable in the future.
(e) Investment Intent. Buyer is acquiring the Shares for its own
account, for investment purposes only, and not with a view to the sale
or distribution of any part thereof, and Buyer has no present
intention of selling, granting participation ill, or otherwise
distributing the same. Buyer understands the specific risks related to
an investment in the Shares, especially as it relates to the financial
performance of the Company.
III.
COVENANTS
3.1 Covenants of Seller. Seller covenants and agrees that from the date
hereof to the Closing without the prior written consent of Buyer:
(a) Ordinary Course of Business. Seller will operate the
business of the Company only in the ordinary course and will use their
best efforts to preserve the Company's business, organization, goodwill
and relationships with persons having business dealings with them.
(b) Maintain Properties. Seller will maintain all of the
Company's properties in good working order, repair and condition
(reasonable wear and use excepted) and cause the Company to take all
steps reasonably necessary to maintain in full force and effect its
patents, trademarks, service marks, trade names, brand names,
copyrights and other intangible assets.
(c) Compensation. Seller will not permit the Company to (1)
enter into or after any employment agreements; (2) grant any increase
in compensation other than normal merit increases consistent with the
Company's general prevailing practices to any officer or employee; or
(3) enter into or alter any labor or collective bargaining agreement or
any bonus or other employee fringe benefit.
(d) No Indebtedness. Seller will not permit the Company to
create, incur, assume, guarantee or otherwise become liable with
respect to any obligation for borrowed money, indebtedness, capitalized
lease or similar obligation, except in the ordinary course of business
consistent with past practices where the entire net proceeds thereof
are deposited with and used by and in connection with the business of
the Company.
(e) Maintain Books. Seller will cause the Company to maintain
its books, accounts and records in the usual regular ordinary and sound
business manner and in accordance with generally accepted accounting
principles applied on a basis consistent with past practices.
(f) No Amendments. Seller will not permit the Company to amend
its corporate charter or bylaws (or similar documents) without prior
consent of Buyer and will cause the Company to maintain their
corporate existence, licenses, permits, powers and rights in full
force and effect.
(g) Taxes and Accounting Matters. Seller will cause the
Company to file when due all federal, state and local tax returns and
reports which shall be accurate and complete, including but not limited
to income, franchise, excise, and valorem, and other taxes with respect
to its business and properties, and to pay as they become due all taxes
or assessments, except for taxes for which adequate reserves are
established and which are being contested in good faith by appropriate
proceedings. Seller will not permit the Company to change their
accounting methods or practices or any depreciation, amortization or
inventory valuation policies or practices.
(h) No Disposition or Encumbrance. Except in the ordinary course
of business consistent with past practice, Seller will not permit the
Company to (1) dispose of or encumber any of its properties and
assets, (2) discharge or satisfy any lien or encumbrance or pay any
obligation or liability (fixed or contingent) except for previously
scheduled repayment of debt, (3) cancel or compromise any debt or
claim, (4) transfer or grant any rights under any concessions, leases,
licenses, agreements, patents, inventions, proprietary, technology or
process, trademarks, service marks or copyrights, or with respect to
any know-how, or (5) enter into or modify in any material respect or
terminate any existing license, lease, or contract.
(i) Insurance. Seller will cause the Company to maintain in
effect all its current insurance policies.
(j) No Securities Issuances. Seller will not permit the Company
to issue any shares of any class of capital stock, or enter into any
contract, option, warrant or right calling for the issuance of any
such shares of capital stock, or create or issue any securities
convertible into any securities of the Company except for the
transactions contemplated herein.
(k) No Dividends. Seller will not permit the Company to declare,
set aside or pay any dividends or other distributions of any nature
whatsoever.
(1) Contracts. Seller will not permit the Company to enter into
or assume any contract, agreement, obligation, lease, license, or
commitment except in the ordinary course of business consistent with
past practice or as contemplated by this Agreement.
(m) No Breach. Seller will not permit the Company to do any act
or omit to do any act which would cause a breach of any contract,
commitment or obligation of the Company.
(n) Due Compliance. Seller will cause the Company to comply with
all laws, regulations, rules and ordinances applicable to it and to
the conduct of its business.
(o) No Waivers of Rights. Seller will not permit the Company to
amend, terminate of waive any material right whether or not in the
ordinary course of business.
(p) Capital Commitments. Seller will not permit the Company to
make or commit to make any capital expenditure, capital addition or
capital improvement.
(q) No Related Party Transactions. Seller will not permit the
Company to make any loans to, or enter into any transaction,
agreement, arrangement or understanding or any other nature with, any
officer, director or employee of the Company.
(r) Notice of Change. Seller will promptly advise Buyer in
writing of any material adverse change, or the occurrence of any event
which involves any substantial possibility of a material adverse
change, in the business, financial condition, results of operations,
assets, liabilities or prospects of the Company.
(s) Consents. Seller will use their, and will cause the Company
to use its, best good faith efforts to obtain the consent or approval
of each person or entity whose consent or approval is required for the
consummation of the Transactions contemplated hereby and to do all
things necessary to consummate the Transactions contemplated by the
Basic Agreements.
IV
CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF BUYER TO CLOSE
The obligation of the Buyer to close the Transactions contemplated hereby
is subject to the fulfillment by Seller prior to Closing of each of the
following conditions, which may be waived in whole or in part by Buyer:
4.1 Compliance with Representations, Warranties and Covenants. The
representations and warranties of Seller contained in this Agreement shall have
been true and correct when made and shall be true and correct as of the Closing
with the same force and effect as if made at the Closing. Seller shall have
performed all agreements, covenants and conditions required to be performed by
Seller prior to the Closing.
4.2 No Adverse Change. There shall have been no event which has had or may
have a material adverse effect upon the business, financial condition, results
of operation, assets, liabilities or prospects of the Company.
4.3 No Legal Proceedings. No suit, action or other legal or administrative
proceeding before any court or other governmental agency shall be pending or
threatened seeking to enjoin the consummation of the Transactions contemplated
hereby.
4.4 Documents to be Delivered by Seller. Seller shall have delivered the
following documents-
(a) Stock certificates representing all of the Shares, duly
endorsed to Buyer and in blank or accompanied by duly executed stock
powers, copies of which are attached as Exhibit "H".
(b) A copy of (i) the Certificate of Incorporation of the
Company, certified as correct by the Company-, and (ii) the Bylaws of
the Company certified as correct by the Company;
(c) All agreements referred to in paragraph 1.5 above, executed
by all parties thereto other than Buyer.
(d) Such other documents or certificates as shall be
reasonably required by Buyer or its counsel in order to close and
consummate this Agreement.
V.
CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF SELLER TO CLOSE
The obligation of Seller to close the Transactions is subject to the
fulfillment prior to Closing of each of the following conditions, any of which
may be waived in whole or in part by Seller:
5.1 Compliance with Representations, Warranties and Covenants. The
representations and warranties made by Buyer in this Agreement shall have been
true and correct when made and shall be true and correct in all material
respects at the Closing with the same force and effect as if made at the
Closing, and Buyer shall have performed all agreements, covenants and conditions
required to be performed by Buyer prior to the Closing.
5.2 No Legal Proceedings. 'No suit, action or other legal or administrative
proceedings before any court or other governmental agency shall be pending or
threatened seeking to enjoin the consummation of the Transactions contemplated
hereby.
5.3 Other Agreements. All parties other than Seller and the Company shall
have executed and delivered the Basic Agreements.
5.4 Payments. Seller shall have received from Buyer all Common Stock to be
issued at the Closing by Buyer pursuant to all the Basic Agreements.
VI.
MODIFICATION, WAIVERS, TERMINATION
AND EXPENSES
6.1 Modification. Buyer and Seller may amend, modify or supplement this
Agreement in any manner as they may mutually agree in writing.
6.2 Waivers. Buyer and Seller may in writing extend the time for or waive
compliance by the other with any of the covenants or conditions of the other
contained herein.
6.3 Termination and Abandonment. This Agreement may be terminated and the
purchase of the Shares may be abandoned before the Closing-.
(a) By the mutual consent of Seller and Buyer-,
(b) By Buyer, if the representations and warranties of Seller set
forth herein shall not be accurate, or- the conditions precedent set
forth in Article V shall have not have been satisfied, in all material
respects; or
(c) By Seller, if the representations and warranties of Buyer set
forth herein shall not be accurate, or the conditions precedent set
forth in Article V shall not have been satisfied in all material
respects.
Termination shall be effective on the date of receipt of written notice
specifying the reasons therefore.
VII.
MISCELLANEOUS
7.1 Representations and Warranties to Survive. Unless otherwise provided,
all of the representations and warranties contained in this Agreement and in any
certificate, exhibit or other document delivered pursuant to this Agreement
shall survive the Closing for a period of two (2) years. No investigation made
by any party hereto or their representatives shall constitute a waiver of any
representation or warranty, and no such representation or warranty shall be
merged into the Closing.
7.2 Binding Effect of the Basic Agreements. The Basic Agreements and
the certificates and other instruments delivered by or on behalf of the parties
pursuant thereto, constitute the entire agreement between the parties. The terms
and conditions of the Basic Agreements shall inure to the benefit of and be
binding upon the respective heirs, legal representatives, successor and assigns
of the parties hereto. Nothing in the Basic Agreements, expressed or implied,
confers any rights or remedies upon any party other than the parties hereto and
their respective heirs, legal representatives and assigns.
7.3 Applicable Law. The Basic Agreements are made pursuant to, and will be
construed under, the laws of the State of Delaware.
7.4 Notices. All notices, requests, demands and other communications
hereunder shall be in writing and will be deemed to have been duly given when
delivered or mailed, first class postage prepaid:
(a) If to Seller, to:
Xxxxxx Xxxxxxx
ThermoTek Environmental, Inc.
0000 Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
(b) If to Buyer, to:
Xxxx Xxxxxx, President
The Accord Group, Inc.
00 Xxxxxxx Xxxx.
Xxxx Xxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
These addresses may be changed from time to time by written
notice to the other parties.
7.5 Headings. The headings contained in this Agreement are for reference
only and will not affect in any way the meaning or interpretation of this
Agreement.
7.6 Counterparts. This Agreement may be executed in counterparts, each of
which will be deemed an original and all of which together will constitute one
instrument.
7.7 Severability. If any one or more of the provisions of this Agreement
shall, for any reason, be held to be invalid, illegal or unenforceable under
applicable law this Agreement shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein. The remaining
provisions of this Agreement shall be given effect to the maximum extent then
permitted by law.
7.8 Forbearance; Waiver. Failure to pursue any legal or equitable remedy or
right available to a party shall. not constitute a waiver of such right, nor
shall any such forbearance, failure or actual waiver imply or constitute waiver
of subsequent default or breach.
7.9 Attorneys' Fees and Expense . The prevailing party in any legal
proceeding based upon this Agreement shall be entitled to reasonable attorneys
fees and expenses and court costs.
7.10 Expenses . Each party shall pay all fees and expenses incurred by it
incident to this Agreement and in connection with the consummation of all
transactions contemplated by this Agreement.
