EXHIBIT 10.12 Buy-Sell Agreement with Xxxxxxxxxxxxxxxxx.xxx
BUY-SELL AGREEMENT
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BUY-SELL AGREEMENT AGREEMENT, made this 19th day of September, 2002, by and
between Xxxxxxxxxxxxxxxxx.xxx LLC, hereinafter separately referred to as
"Stockholder", and jointly as "Stockholders", and Humitech International Group,
Inc., a Nevada corporation, hereinafter referred to as the "Corporation",
W I T N E S S E T H :
WHEREAS, the Stockholders together own 100% of the outstanding shares of capital
stock of Overstock Xxxxxxxx.xxx, LLC, and
WHEREAS, as used herein, the term "shares" shall mean all shares of common
stock, at $0.001 par value, of the Corporation now owned or hereafter acquired
by the parties, and
WHEREAS, the Stockholders are actively engaged in the conduct of the business of
the Corporation, and it is contemplated that success or failure of the corporate
enterprise will at all times depend in large measure on the personal abilities
of the Stockholders, and
WHEREAS, there is not now, nor is there likely in the future to be a substantial
market for the shares of the Corporation, and
WHEREAS, for the foregoing reasons, the parties desire to provide for the
purchase by another Stockholder or by the Corporation of the stock of any party
desiring to sell the same; and for the purchase by the Corporation of the stock
of a deceased party.
IT IS THEREFORE AGREED, in consideration of the mutual promises and covenants
hereinafter set forth, as follows:
1. Restriction During Life. No stockholder shall transfer or encumber any of his
shares of capital stock of the Corporation during his lifetime to any person,
firm or corporation, without the consent of the Corporation and the other
Stockholder, unless the Stockholder desiring to make the transfer or encumber
(hereinafter referred to also as the "Transferor") shall have first made the
offer hereinafter described and such offer shall not have been accepted.
A. Offer by the Transferor: The offer shall be given pro rata initially to the
other Stockholder(s) and shall consist of an offer to sell or encumber all of
the shares of the capital stock of the Corporation owned by the Transferor, to
which shall be attached a statement of intention to transfer, the name and
address of such prospective transferee, the number of shares of capital stock
involved, and the terms of such transfer or encumbrance.
B. Acceptance of Offer: Within thirty (30) days after the receipt of such offer
the other Stockholder(s) may, at their option, elect to accept the offer. If
such offer is not accepted by the other Stockholder(s), the Corporation may
within thirty (30) days after the rejection of such offer, at its option, elect
to accept the offer. The Corporation shall exercise its election to purchase by
giving notice thereof to the Transferor and to the other Stockholder(s). The
other Stockholder(s) shall exercise the election to purchase by giving notice
thereof to the Transferor and to the Corporation. In either event, the notice
shall specify a date for the closing of the transaction, which shall not be more
than thirty (30) days after the date of the giving of such notice.
C. Purchase Price: The purchase price for, or the consideration for the
encumbrance of the shares of the capital stock of the Corporation owned by the
Transferor shall be set forth in paragraph 3 hereof.
D. Closing of Transaction: The closing of the transaction shall take place at
the principal office of the Corporation. The consideration shall be paid as
provided for in paragraph 3 hereof. Certificates for all shares sold or
encumbered hereunder, property endorsed to the Corporation or to the purchasing
Stockholder, as the case may be, shall be delivered by the transferor not later
than the date of closing.
E. Release from Restriction: If the offer is neither accepted by the Corporation
nor by the other Stockholder(s), the Transferor may make a bona fide transfer to
the prospective transferee named in the statement attached to the offer, such
transfer to be made only in strict accordance with the terms therein stated.
However, if the Transferor shall fail to make such transfer within 30 days
following the expiration of the election period by the other Stockholder(s),
such shares of capital stock shall again become subject to all of the
restrictions of this Agreement, provided, however, that nothing contained herein
shall be construed as releasing any shares of this Corporation from any
restriction or requirement of law concerning transfer of such shares.
F. Termination of Employment: Any shareholder whose employment in any capacity
with the company or its subsidiaries terminates for any reason whatsoever,
voluntarily or involuntarily, shall be considered as of the date of such
termination of employment to have made an offer of all of his shares of stock
subject to the terms of this Agreement, at the purchase price stated in
paragraph 3 hereof.
G. Subchapter "S" Election: If at the time of a transfer of stock permitted
hereunder, the Corporation then is an "S" corporation, the transferee and new
stockholder shall be required to consent in writing not to revoke such "S"
election without the unanimous approval of all other stockholders. Such written
consent shall be executed and delivered prior to the delivery of the shares to
the transferee at the closing of such sale and transfer.
2. Purchase Upon Death. Upon the death of a Stockholder (hereinafter referred to
as Decedent), all of the shares of the capital stock of the Corporation owned by
him, and to which he or his estate shall be entitled, shall be sold and
purchased as hereinafter provided:
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A. Obligation of the Corporation to Purchase: It shall be for the Corporation to
purchase from the Decedent's Personal Representative, and the Decedent's
Personal Representative shall be obligated to sell to the Corporation, all of
the shares of the capital stock of the Corporation owned by the Decedent and to
which the Decedent or his Personal Representative shall be entitled, at the
price set forth in paragraph 3 hereof.
B. Closing: The closing of such purchase and sale shall take place at the
offices of the Corporation, at a date selected by the Corporation upon one days
notice to the Transferor which date shall be not more than seven days following
the date of the qualification of the Personal Representative and not less than
ten days following such date.
C. Insurance: To insure or partially insure its obligation under this Agreement
to purchase from the estate of a deceased Stockholder the shares owned by him
prior to his death, the Corporation shall have the option to purchase policies
of insurance covering the lives of each Stockholder in any amount deemed
desirable. In the event any Stockholder ceases to be a Stockholder of the
Corporation, the Corporation shall terminate any such insurance on such
Stockholder's life and in the event any Stockholder increases his holdings of
the shares of the Corporation, the Corporation shall procure and maintain, if so
desired by it, additional insurance on the life of such Stockholder
proportionate to the increase in the holdings of such Stockholder.
If the corporation shall receive any proceeds of any policy on the life of the
Decedent, such proceeds shall be used by the Corporation to pay the Decedent's
Personal Representative to the extent of the purchase price of the Decedent's
stock, such payment to be deemed made on account of such purchase price.
D. Balance of Purchase Price: If the amount of any insurance proceeds is
insufficient to pay the purchase price of any Decedent's shares, then the
balance of the purchase price remaining after credit for any insurance proceeds
shall be payable as follows: _(14)_% of the balance due to be paid shall be paid
in cash, and the balance shall be represented by a promissory note executed by
the purchaser payable in twenty-four (24) installments, which note shall be
secured by the stock of the deceased Stockholder.
E. "S" Election: If the corporation is an "S" corporation at the time of the
transfer and sale of its stock, the transferee and new stockholder shall be
required to consent in writing not to revoke such "S" election without the
unanimous approval of all other stockholders. Such written consent shall be
submitted prior to the delivery of the shares to the transferee.
3. Consideration.
A. Unless the parties agree to another price in writing, the price for each
share of capital stock to be sold under this Agreement shall be equal to its
fair market value as an on-going business concern as determined in the sole
discretion of the company's Certified Public Accountant, (CPA) and such
determination by the CPA shall be binding and conclusive upon the parties
hereto.
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B. Unless the parties agree otherwise, the purchase price shall be paid as
follows:
i. One hundred percent (100%) of the amount determined to be due as the price to
be paid at the closing in addition to any insurance proceeds and the balance to
be payable by the execution of a promissory note in such amount to be repaid in
no (0) installments, such note to be secured by the stock being sold.
ii. The promissory note shall bear interest until paid in full at the prime rate
as determined from time to time by Chase Manhattan Bank or any other bank as
determined by and agreed upon by the Stockholders. iii. In the event that suit
shall be required to collect on the promissory notes above referred to, then in
such event, the defaulting Stockholder or the Corporation shall pay for attorney
fees, and courts costs, incurred in such action.
4. Limitation on Stockholder's Right to Pledge Stock. The restrictions of
paragraph 1 above shall not apply to encumbrances as collateral for a note or
notes in favor of the company or any one or more of the other Stockholders or in
favor of a recognized lending institution, but only if the proceeds of such loan
are used in their entirety to purchase shares of the Corporation and the
borrowing Stockholder delivers to the Corporation and the other Stockholder(s)
the written commitment of the lender, in form acceptable to the Corporation that
such lender will not dispose of such shares without first affording the
Corporation and the other Stockholder(s) the right for a period of thirty days
to purchase shares at a price satisfactory to the Corporation and the other
Stockholder(s).
5.Corporate Restrictions After Purchase. So long as any part of the purchase
price of shares of capital stock sold in accordance with this Agreement remains
unpaid, the Corporation shall not:
A. declare or pay dividends on its capital stock;
B. reorganize its capital structure;
C. merge or consolidate with any other corporation, or sell any of its assets
except in the regular course of business;
D. increase the salary of any officer or executive employee of the Corporation;
E. allow any of its obligations to become in default; or
F. allow any judgments against the Corporation or any liens against the
Corporation's property to remain unsatisfied.
So long as any part of such purchase price remains unpaid, the Transferor, or
the Personal Representative of the Decedent shall have the right to examine the
books and records of the Corporation from time to time and to receive copies of
all accounting reports and tax returns prepared for the Corporation. If the
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Corporation breaches any of its obligations under this paragraph, the Transferor
or the Personal Representative, in addition to any other remedies available, may
elect to declare the entire unpaid purchase price due and payable forthwith. 6.
Purchase By Stockholder. Whenever a Stockholder purchases shares of capital
stock under this Agreement, such purchaser (unless he shall have paid the entire
purchase price in cash) shall, following the delivery of the purchased stock,
endorse the new certificates of stock issued to such purchaser, execute a UCC-1
Financing Statement (for recording), and deliver the same to the Seller as
collateral security for the payment of the unpaid purchase price; and such
capital stock shall be so held until the entire purchase price shall be paid.
While such capital shall be so held as collateral security and so long as the
Purchaser is not in default, the Purchaser shall be entitled to all voting
rights with respect thereto. Dividends paid shall be applied to the
indebtedness.
7. Purchase By Corporation. Whenever the Corporation shall, pursuant to this
Agreement, be required to purchase shares of the capital stock of the
Corporation, the Stockholders and the Personal Representative of any Decedent
shall do all things and execute and deliver all papers as may be necessary to
consummate such purchase. Any note required to be given hereunder by the
Corporation as part of the purchase price shall be endorsed and guaranteed by
the remaining or surviving Stockholders, who shall not be discharged from such
liability by reason of the subsequent extension, modification or renewal of any
such note. Until all amounts due are paid, the stock certificates and a UCC-1
Financing Statement (to be recorded) shall be delivered to Seller.
8. Endorsement On Stock Certificates. Each certificate representing shares of
capital stock of the Corporation now or hereafter held by the Stockholders shall
contain with a legend insubstantially the following form: "The transfer or
encumbrance of the shares of stock represented by the within certificate is
restricted under the terms of an Agreement dated September 19, 2002, a copy of
which is on file at the Corporation office."
9. Value of Purchase Price for Tax Purposes. It is understood that the purchase
price, determined as set forth hereinabove, shall be the value of the purchased
shares for all tax purposes. In the event such value is later increased by any
federal or state taxing authority, any tax liability resulting from such
increase shall be borne by the selling Stockholder or his Personal
Representative, as the case may be.
10. Amendments. This Agreement may be amended or altered by execution of a
written agreement authorized by corporate resolution and signed by all the
parties hereto.
11. Notices. Any and all notices, designations, consents, offers, acceptances,
or any other communication provided for herein, shall be given in writing by
registered or certified mail addressed, in the case of the Stockholders, to his
address appearing on the stockbooks of the Corporation, or to his residence, or
to such other address as may be designated by him, and in the case of the
Corporation, to the principal office of the Corporation, postage prepaid, by
United States Mail, and shall be considered to have been delivered on the 2nd
day following the date stamped by the post office.
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12. Invalid Provision. The invalidity or unenforceability of any particular
provision of this Agreement shall not affect the other provisions hereof and the
Agreement shall be construed in all respects as if such invalid or unenforceable
provision had been omitted.
13. Modification. It is understood between the parties that this Agreement
contains the entire understanding of the parties and no change or modification
of this Agreement shall be valid unless the same be in writing and signed by all
the parties hereto.
14. Binding Effect. This Agreement shall bind and, unless inconsistent with its
provisions, shall inure to the benefit of the Executor, Administrator or
Personal Representative, and the heirs and assigns of each of the Stockholders.
15. Prior Agreement. This Agreement supersedes any prior Agreement of the
parties.
16. Deadlock. If at any time the Stockholders cannot agree on the Certified
Public Accountant of the company and therefore are unable to establish an
acceptable price for purchase, the matter shall be submitted to arbitration in
the following manner:
A. Each Stockholder shall, within fifteen (15) days after notice of such
deadlock, appoint a Certified Public Accountant, and the two accountants shall
then appoint a third Certified Public Accountant within seven (7) days after the
two accountants are selected, and the average of purchase price determined by
them shall be final, conclusive and binding upon the Stockholders, their
executors, administrators and personal representatives, and a judgment on such
determination may be obtained in any court of proper jurisdiction. The cost of
such accounting shall be borne equally by the parties unable to reach agreement
hereunder.
In the event any one of the Stockholders shall fail within the given time to
select a Certified Public Accountant to represent him to resolve the dispute,
then and in such event, the remaining Stockholder shall have the right to
institute suit for specific performance under this Agreement, and the defaulting
Stockholder shall pay for all attorney fees and court costs of such action.
17. Indebtedness of a Stockholder. In the event that there is a purchase and
sale of shares of stock or interest therein, pursuant to the provisions
hereinabove, and there is any indebtedness owed by the selling Stockholder or
his estate to any party to this Agreement, then, notwithstanding the said
provisions relating to the payment of the purchase price, and any amount to be
paid for the stock being purchased shall be applied first to reduce and satisfy
any indebtedness owed by the Selling Stockholder or his estate to any party
under this Agreement.
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18. Default. In the event of a default in the payment of any installment of the
purchase price, the covenants and conditions of this Agreement, or any Security
Agreement given to Sellers, Sellers may declare the entire unpaid portion of the
purchase price to be immediately due and payable, and may proceed to enforce
payment of same and to exercise any and all rights and remedies provided by the
Uniform Commercial Code as well as any other rights and remedies either at law
or in equity available to them, and Seller may assign, sell or transfer all or
any part of the collateral in such manner, at such price, and on such terms and
conditions as Sellers, in their sole and absolute discretion, may determine.
Sellers or the Corporation shall have the right to purchase any or all of the
collateral, apply any unpaid indebtedness on account thereof, and have a claim
against Purchaser for the balance of such indebtedness in addition to any and
all remedies available to them at law or in equity.
19. Voting. It is understood and agreed that until the purchase price shall have
been paid in full, the Purchaser shall have no voting rights whatsoever.
20. Termination of Agreement. This Agreement shall terminate upon the occurrence
of one of the following events:
A. The written agreement of the parties hereto or their successors in interest
to that effect;
B. The bankruptcy, receivership, or dissolution of the Corporation;
C. The disposal of all the shares of stock of any Stockholder during his
lifetime or by his Personal Representative or estate upon his death, shall
terminate this Agreement as to such retiring or deceased Stockholder; or
D. All of the issued and outstanding stock of the Corporation becoming owned by
one of the Stockholders of the Corporation.
21. Laws Governed By. This Agreement is executed in and shall be construed by
and governed under the laws of the State of Texas.
22. Withdrawal from Corporation. Any Shareholder may withdraw from participation
in the Corporation at any time in accordance with the following provisions:
A. Notice to Corporation. Such Stockholder ("Withdrawing Stockholder") shall
give notice to the Corporation at least twenty (20) days prior to the date
(he)(she)wants to withdraw ("Withdrawal Date") which notice shall set forth the
Withdrawal Date.
B. Offer to Corporation. Within thirty (30) days after receipt of such notice,
the Corporation may, at its option, elect to purchase all, but not less than
all, of the Withdrawing Stockholder's shares. The Corporation shall exercise its
option to purchase by giving written notice thereof to the Withdrawing
Stockholder within said fifteen (15) day period. Such written notice shall
specify a date for the closing of the purchase, which shall not be more than
twenty (20) days after the date of the giving of such notice. The purchase price
for the shares to be paid by the Corporation and terms of payment therefor shall
be as set forth in Paragraph 3 hereof.
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C. Acceptance by Stockholders. If the Corporation fails to exercise said option
within said thirty (30) day period, then for a five (5) day period thereafter
the other Stockholder(s) of the Corporation shall have the option to purchase
such shares, such option to be exercised in the same manner as that of the
Corporation, and the purchase price and terms of payment to be the same for the
Stockholder(s) as for the Corporation as set forth in Paragraph 3 hereof. The
option may be exercised by the Stockholders pro rata (based on that proportion
which the number of shares owned by each other Stockholder bears to the total
number of shares then outstanding, not counting the shares proposed to be sold),
and if one (or more) of the Stockholders does not desire to exercise his option,
then his option shall be exercisable on a pro rata basis by the other
Stockholders (not counting for any purpose, the shares proposed to be sold or
the shares owned by any Stockholder who does not desire to exercise his option);
or the option may be exercised by the other Stockholders on such basis as they
may agree upon.
D. Dissolution and Liquidation. In the event that neither the Corporation nor
the other Stockholder(s) purchase the shares of the Withdrawing Stockholder, the
other Stockholder(s)agree to execute a consent voluntarily dissolving the
Corporation. In addition, the Stockholder(s) agree to liquidate the assets of
the Corporation as soon as practicable thereafter.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and seals
the day and year first above written. Signed, Sealed and Delivered in the
Presence of:
"STOCKHOLDERS"
Xxxxxxxxxxxxxxxxx.xxx LLC By: /S/ XXXX X. XXXX
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Xxxx X. Xxxx, Partner
By: /S/ XXXX XXXXXXX, PARTNER
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Xxxx Xxxxxxx, Partner
"CORPORATION"
Humitech International Group, Inc. By: /S/ X.X. COMU
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Chairman of the Corporation
ATTEST: /S/ XXXXXXX XXXXX, Secretary of the Corporation
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(CORPORATE SEAL)
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