Exhibit 3.04
STATE OF NORTH CAROLINA
STOCK PURCHASE AGREEMENT
COUNTY OF XXXXXX
THIS STOCK PURCHASE AGREEMENT, made and entered into as of this 1st day
of August, 1997 by and among Xxxxxxx X. Xxxx, as agent for the Sellers
(hereinafter called "Sellers"), and Li-Xxx Xx (hereinafter called "Buyer").
W I T N E S S E T H
WHEREAS, the Sellers are the owners and holders of 50,000 shares of the
issued and outstanding common stock (the "Stock") of CardGuard International,
Inc., a North Carolina corporation (the "Company"); and
WHEREAS, Buyer desires to acquire from Sellers and Sellers desire to
sell the Stock, as hereinafter provided;
NOW THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, the parties agree to bind themselves
as follows:
1. SALE OF STOCK. Sellers agree to sell, assign and transfer the Stock
to Buyer and Buyer agrees to purchase from Sellers all of the Sellers' right,
title, and Interest in and to the Stock.
2. PURCHASE PRICE. The purchase price to be paid to each of Sellers for
his portion of the Stock shall be $3.00 per share for an aggregate purchase
price for the Stock of One Hundred Fifty Thousand Dollars ($150,000.00), and
shall be paid at closing in cash.
3. SELLERS' REPRESENTATION AND WARRANTIES. Sellers, severally, make the
following representations and warranties, which shall survive closing, to Buyer,
which shall be true and correct as of the date hereof and as of the closing:
A. Each of the Sellers is the sole record and beneficial owner
of the Stock owned by him with full authority and capacity to sell, transfer and
deliver such Stock in accordance with the terms of this Agreement and has good
and marketable title to such Stock, free and clear of all liens, pledges, claims
and encumbrances of any kind whatsoever. Each of Sellers has full power and
authority to convey all of his right, title and interest in and to the Stock
owned by him. The Stock owned by him is subject to no calls, puts or other
options.
B. Upon transfer of the Stock to Buyer, Buyer will receive
good and marketable title thereto, free and clear of all liens, pledges, claims
and encumbrances of any kind whatsoever.
C. The sale of the Stock by Sellers and the warranties,
representations, covenants and other terms contained herein are not in violation
of any provision of any loan or other agreement entered into by any of Sellers
in his individual capacity.
X. Xxxxxxx have made no knowing misrepresentations of fact
concerning the affairs of the Company or failed to state any fact material to
the affairs of the Company.
E. There are no actions, suits or proceedings pending, or
threatened against or affecting any of Sellers or the Company or the Stock.
F. The Company is a corporation duly organized and existing in
good standing under the laws of the State of North Carolina.
4. CLOSING. The closing shall occur on August 1st, 1997, and at closing
Sellers shall deliver to Buyer:
A. The certificates evidencing the Stock, duly endorsed in
blank.
B. Such other documents as Buyer may reasonably request.
5. PAYMENT FOR STOCK. At the closing, Buyer shall deliver to Sellers
cash in payment of the purchase price for the Stock.
6. SURVIVAL OF REPRESENTATIONS. The representations of the parties
shall survive closing and shall be regarded as continuing representations and
warranties.
7. EXPENSES. Each party hereto will pay the expenses incurred by him
under or in connection with this Agreement, including attorneys' and
accountants' fees and expenses of his representation.
8. SPECIAL PROVISIONS. Sellers hereby grant to Buyer the option to
purchase up to 50,000 shares of Common Stock of the Company at a purchase price
of $5.00 per share. Such option shall expire on August 1. 2002. Sellers shall
deposit in escrow with Xxxxxxxxx & Xxxxx PLLC, Raleigh, North Carolina
certificates representing such option shares, (along with blank stock powers
executed by Sellers) until the option is exercised in full or the option period
has expired.
9. MISCELLANEOUS.
A. This Agreement represents the entire agreement of the
parties and all other prior written or oral agreements or representations
concerning the subject matter hereof are hereby cancelled and terminated.
B. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective heirs, representatives,
administrators, successors, and assigns.
C. This Agreement is executed pursuant to and shall be
governed by the laws of the State of North Carolina.
D. Each of the parties hereto shall execute such documents and
take such action as may be reasonably requested by the other party to carry out
the provisions and purposes of this Agreement.
E. This Agreement my be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument, and this Agreement shall be of no force
or effect until it has been executed by all parties hereto.
F. Any modifications to this Agreement must be in writing and
signed by all parties to this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first above written.
SELLERS:
/s/ Xxxxxxx X. Xxxx (SEAL)
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Xxxxxxx X. Xxxx, agent for Sellers
BUYER:
/s/ Li-Xxx Xx (SEAL)
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Name: Li-Xxx Xx
Title:
ADDENDUM TO STOCK PURCHASE AGREEMENT
THIS ADDENDUM TO STOCK PURCHASE AGREEMENT is attached to and made a
part of that certain Stock Purchase Agreement (the "Stock Purchase Agreement' )
dated as of August 1, 1997 between Xxxxxxx X. Xxxx, as agent for the Sellers
("Sellers"), and Li-Xxx Xx ("Buyer"). For purposes of the provisions hereinbelow
captioned "Right of First Refusal" and "Registration Rights," CardGuard
International, Inc., a North Carolina company (the "Company"), for valuable
consideration the receipt and sufficiency of which are hereby acknowledged,
shall be deemed a party to the Stock Purchase Agreement and this Addendum and
such provisions shall be binding upon and enforceable against the Company.
The following provisions are hereby added to and included as part of
the Stock Purchase Agreement:
RIGHT OF FIRST REFUSAL. If at any time or from time to time the Company
shall be desire to issue or to Sell shares of its common or preferred stock, the
Company shall provide Buyer with written notice (the "Notice") of the Company's
intention to do so. For ten (10) business days after the receipt of the Notice
by Buyer, with respect to 86.3% of the aggregate number of shares of common
stock the Company desires to issue or sell at such time, Buyer shall have the
first right, but not the obligation, to purchase or subscribe to purchase up to
the number of shares represented by an aggregate purchase price of
$1,000,000.00. The per share purchase price to be paid by Buyer shall be equal
to the lowest purchase price paid by any other purchaser of the shares proposed
to be issued or sold by the Company. This right should not apply to (a) any
shares of Common Stock issuable upon conversion of shares of preferred stock of
the Company; (b) securities of the Company issued pursuant to options, warrants
or rights issued in favor of employees, directors, officers or consultants of
the Company; (c) securities issued pursuant to the acquisition by the Company of
any product, technology, know-how or another corporation by merger, purchase of
all or substantially all of the assets, or any other reorganization whereby the
Company owns over 50% of the voting power of such corporation; or (d) securities
issued in connection with any stock split, stock dividend or recapitalization by
the Company.
REGISTRATION RIGHTS. If at any time or from time to time the Company
shall determine to register any of its common stock, either for its own account
or for the account of a security holder or holders, other than a registration
relating solely to an employee benefit plan (Form S-8 or any successor form) or
the merger with another entity (Form S-4 or any successor form), the Company
shall:
(i) promptly give Buyer written notice of its determination; and
(ii) include in such registration and any related qualification under
blue sky laws or other compliance, and in any underwriting in connection with
the registrations, all the shares of common stock which Buyer has specified in a
written request, including shares of common stock subject to the option granted
pursuant to Section 8(A) of the Stock Purchase Agreement, shall be made within
ten (10) business days after Buyer's receipt of such written notice from the
Company.
If the underwriters' representative advises the Company that marketing
factors require limitation on the number of shares to be underwritten, the
securities requested to be included in the registration by Buyer and by other
shareholders with piggyback registration rights shall be excluded on a pro rata
basis to the extent so required by such limitation. Securities requested by the
Company to be included in the registration shall be excluded last.
All expenses (which term does not include underwriting discounts or
commissions or fees and disbursements of counsel for Buyer) incurred in
connection with any registration, qualification or other compliance, including
without limitation, all registration, filing, qualification fees, printing
expenses, fees and disbursements of counsel for the Company, and accounting fees
incidental to or required by such registration, shall be borne by the Company.
NOTIFICATION UPON CONSOLIDATION OR MERGER AGREEMENT. In the event that
Company shall enter into an agreement to consolidate with, or merge into or
acquire any other corporation or entity or any other agreement having a similar
effect thereto, the Company shall promptly upon execution of any such agreement,
and in no event less than ten (10) business days prior to the date for which
shares of the Company's stock must be tendered in connection with any such
consolidation, merger, acquisition or other such transaction, notify Buyer in
writing or such contemplated consolidation, merger, acquisition or other
transaction so as to allow Buyer significant time to exercise the option granted
pursuant to Section 8(A) of the Stock Purchase Agreement. Should the Company
fail to provide Buyer with such ten (10) business days prior written notice for
whatever reason, the Company shall pay to Buyer the difference between the
option exercise price set forth in Section 8(A) of the Stock Purchase Agreement,
determined as if Buyer had exercised his option as to all such option shares,
and the then fair market value of the consideration to be paid for such number
of shares of Company common stock in connection with any such consolidation,
merger, acquisition or other transaction.
DESIGNATION OF ESCROW HOLDER. Notwithstanding the designation in
Section 8(A) of the Stock Purchase Agreement of Xxxxxxxxx & Xxxxx PLLC, Raleigh,
North Carolina, as escrow holder of the certificates representing option shares
as described in such section, Law Offices of Maan-Xxxx Xxxx, Los Angeles,
California, shall be designated escrow holder, or such other person as Buyer
shall designate as escrow holder in the future, to hold such certificates (along
with blank stock powers executed by Sellers) until the option is exercised in
full or the option period has expired.
STOCK SPLIT AND COMBINATIONS. If the Company shall at any time prior to
Buyer's exercise of the hereinbelow described option subdivide or combine its
outstanding shares of common stock subject to the option granted to Buyer
pursuant to Section 8(A) of the Stock Purchase Agreement, the option right
granted Buyer therein shall, after that subdivision or combination, evidence the
right to purchase the number of shares of common stock issued as a result to
purchase the number of shares of common stock issued as a result of that
purchasable under Buyer's option immediately before that subdivision or
combination. If the Company shall at any time subdivide or combine the
outstanding shares of common stock, the option purchase price shall be
proportionately increased or decreased, as appropriate.
ASSIGNMENT. Buyer may freely and at any time assign, convey, give or
otherwise transfer the option rights to purchase shares of common stock of the
Company granted to Buyer pursuant to Section 8(A) of the Stock Purchase
Agreement to any person, partnership, association, trust, corporation or entity
of any sort.
IN WITNESS WHEREOF, the undersigned have executed this Addendum to
Stock Purchase Agreement as of August 1, 1997.
SELLERS:
/s/ Xxxxxxx X. Xxxx
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Xxxxxxx X. Xxxx, agent for Sellers
BUYER:
/s/ Li-Xxx Xx
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Li-Xxx Xx
COMPANY:
CardGuard International, Inc.
By: /s/ Xxxxxxx X. Xxxx
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Xxxxxxx X. Xxxx, President
