EXHIBIT 4
STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made and entered into as of the 30th day of April, 1997,
by and among National Environmental Service Co., an Oklahoma Corporation (the
"Company") whose principal offices are located at 00000 Xxxx 00xx Xxxxxx, Xxxxx,
Xxxxxxxx, 00000, Xxxxxx Xxxxxx Xxxxxx, whose address is 0 Xxxxxx Xxxx Xxxx,
Xxxxx, Xxxx, 00000; Xxxxx Xxxxxx, whose address is 0000 Xxxxx Xxxxxx Xxxxx, Xxxx
Xxxx Xxxx, Xxxx 00000; Callaway Enterprises whose address is 0000 Xxxxx Xxxxxx
Xxxxx, Xxxx Xxxx Xxxx, Xxxx 00000; and J. Xxxx Xxxxxxx, Trustee of the Xxxxx
Xxxxxx Family Trust whose address is 000 X. 000 X., Xxxx Xxxx Xxxx, Xxxx 00000
(collectively referred to herein as the "Purchasers").
WHEREAS, Purchasers desire to purchase from the Company, and the Company
desired to issue and sell to the Purchasers, 1,000,000 shares of the Company's
common stock, par value $.01 per share (the "Common Stock"), and options to
acquire an additional 500,000 shares of Common Stock (such shares of Common
Stock and such options are sometimes hereinreferred to as the "Securities");
NOW, THEREFORE, in consideration of the mutual agreements and commitments
set forth herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. AUTHORIZATION AND SALE OF THE SHARES
1.1 Authorization. The Company has authorized the issuance pursuant to
the terms and conditions hereof of up to 1,000,000 shares of its Common Stock
plus options to purchase an additional 500,000 shares of its Common Stock.
1.2 Sale. Subject to the terms and conditions hereof, the Company will
issue and sell to each Purchaser and each Purchaser will purchase from the
Company, that number of shares of Common Stock and options (the "Options") to
purchase that number of additional shares of Common Stock specified opposite his
name below at an aggregate purchase price indicated below.
Number of Shares Number of Shares Aggregate
Purchaser Purchased Subject to Option Purchase Price
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Xxxxxx Xxxxxx Xxxxxx 900,000 450,000 $900,000
Callaway Enterprises 50,000 25,000 $ 50,000
Xxxxx Xxxxxx 25,000 12,500 $ 25,000
J. Xxxx Xxxxxxx, 25,000 12,500 $ 25,000
Trustee of the Xxxxx
Xxxxxx Family Trust
1.3 Terms of Options. Each of the Purchasers is hereby granted option to
purchase the number of shares of Common Stock indicated in Section 1.2 above
(the "Option Shares"). No exercise as to a portion of the Option Shares shall
preclude a later exercise or exercises as to additional portions. The Option
shall be exercisable at any time or times on or prior to April 30, 1999. The
Options shall be subject to the following terms and conditions:
a. Exercise Price. The price to be paid for each of the Option
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Shares with respect to which the Option is exercised, shall be $1.50 per
share (the "Exercise Price"). Payment of the Exercise Price for the number
of Option Shares as to which the Option is being exercised shall be by cash
or check and in full on the date of exercise.
b. Notice of Exercise. The exercise of the Option shall be by
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written notice to the Company. Each such notice shall state the number of
Option Shares with respect to which the Option is being exercised and shall
specify a date, not less than five nor more than ten days after the date of
such notice, as the date on which the Shares will be delivered and payment
made therefor at the principal offices of the Company. If any law or
regulation requires the Company to take any action with respect to the
Shares specified in such notice, then the date for delivery of such Option
Shares against payment therefor shall be extended for the period necessary
to take such action.
c. Investment Representation. If the issuance of Option Shares
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issued pursuant to exercise of the Option has not been registered under the
Securities Act of 1933, as amended (the "Securities Act"), each Purchaser
agrees to represent and warrant in writing at the time of any exercise of
the Option or any portion thereof that the Option Shares are being
purchased only for investment and without any present intention to sell or
distribute such Shares, and further agrees that Option Shares so acquired
may be appropriately legended and will be sold or transferred only in
accordance with the rules and regulations of the Securities and Exchange
Commission or any applicable law, regulation, or rule of any governmental
agency.
d. Adjustment in the Event of Extraordinary Event. In the event of a
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merger, consolidation, reorganization, recapitalization, stock dividend,
stock split (other than the Stock Split) or other change in the structure
or capitalization of the Company, the number of Option Shares and the
exercise price shall be subject to appropriate adjustments.
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2. CLOSING DATE; DELIVERY
2.1 Closing Date. The closing of the purchase and sale of the Securities
shall be held at the offices of the Company, at 00000 Xxxx 00xx Xxxxxx, Xxxxx,
Xxxxxxxx, 00000, on April 30, 1997 or at such other time and place as the
Company and the Purchasers may agree. The closing referred to in this Section
2.1 is hereinafter referred to as a "Closing" and the date of the Closing is
hereinafter referred to as a "Closing Date."
2.2 Delivery. At the Closing, subject to the terms of this Agreement, the
Company will deliver to the Purchasers certificates evidencing the Common Stock
to be purchased from the Company, against payment at the Closing of the purchase
price therefor by a check or checks, payable to the order of the Company.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Purchasers as follows:
3.1 Organization and Standing; Articles and Bylaws. The Company is a
corporation duly organized and existing under, and by virtue of, the laws of the
State of Oklahoma and is in good standing under such laws. The Company has the
requisite corporate power to own and operate its properties and assets, and to
carry on its business as presently conducted and as proposed to be conducted.
The Company is qualified, licensed or domesticated as a foreign corporation in
all jurisdictions where the nature of its business conducted or the character of
its properties owned or leased makes such qualification, licensing or
domestication necessary at this time except in those jurisdictions where the
failure to be so qualified or licensed and in good standing does not and will
not have a materially adverse effect on the Company, the conduct of its business
or the ownership or operation of its properties.
3.2 Corporate Power. The Company has now, and will have at the Closing
Date, all requisite legal and corporate power to enter into this Agreement, to
sell the Securities hereunder, and to carry out and perform its obligations
under the terms of this Agreement.
3.3 Authorization
(a) All corporate action on the part of the Company, its officers,
directors, and shareholders necessary for the sale and issuance of the
Securities pursuant thereto and the performance of the Company's
obligations hereunder has been taken or will be taken prior to the Closing.
This Agreement is a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as
limited by
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bankruptcy, insolvency, reorganization, moratorium or similar laws of
general application affecting enforcement of creditors' rights, and except
as limited by application of legal principles affecting the availability of
equitable remedies.
(b) The Securities, when issued in compliance with the provisions of
this Agreement, will be validly issued, fully paid and nonassessable, and
will be free of any liens or encumbrances; provided, however, that such
shares will be subject to restrictions on transfer under state and/or
federal securities laws as set forth herein, and as may be required by
future changes in such laws.
(c) No shareholder of the Company has any right of first refusal or
any preemptive rights in connection with the issuance of the Securities or
of any other capital stock of the Company.
3.4 Disclosure Materials. The Company has provided to each Purchaser a
copy of the Annual Report on Form 10-KSB as filed with the Securities and
Exchange Commission for the year ended December 31, 1996, a copy of its Annual
Report to Shareholders of the Company covering the year ended December 31, 1996,
a copy of the Company's quarterly report on Form 10-QSB as filed with the
Securities and Exchange Commission for the three months ended March 31, 1997,
and a copy of the Company's Proxy Statement prepared in connection with the
Company's annual meeting of shareholders to be held June 12, 1997. The said
materials are referred to herein collectively as the "Disclosure Materials."
4. REPRESENTATIONS AND WARRANTIES OF PURCHASERS AND RESTRICTIONS ON TRANSFER
IMPOSED BY THE SECURITIES ACT
4.1 Representations and Warranties by Purchaser. Each Purchaser severally
represents and warrants to the Company as follows:
(a) He is experienced in evaluating and investing in companies such
as the Company.
(b) He has received and reviewed copies of the Disclosure Materials.
He has had the opportunity to discuss the Company's business, management
and financial affairs with its President and its Chief Financial Officer.
Each Purchaser understands that such discussions, as well as the Disclosure
Materials and any other written information issued by the Company, were
intended to describe certain aspects of the Company's business and
prospects which it believes to be material but were not necessarily a
thorough or exhaustive description.
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(c) The Securities are being acquired for such Purchaser's own
account, for investment purposes only and not with a view to, or for resale
in connection with, any distribution or public offering thereof within the
meaning of the Securities Act.
(d) Each Purchaser understands that the Securities have not been
registered under the Securities Act by reason of their issuance in a
transaction exempt from the registration and prospectus delivery
requirements of the Securities Act pursuant to Sections 3(b) or 4(2)
thereof, and that they must be held by him indefinitely and he must
therefore bear the economic risk of such investment indefinitely, unless a
subsequent disposition thereof is registered under the Securities Act or is
exempt from registration.
(e) Such Purchaser has the full right, power and authority to enter
into and perform this Agreement, and this Agreement constitutes a legal,
valid and binding obligation upon him except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws of
general application affecting enforcement of creditors' rights, and except
as limited by application of legal principles affecting the availability of
equitable remedies.
(f) Such Purchaser is an accredited investor as that term is defined
in Rule 501(a) of Regulation D promulgated by the Securities and Exchange
Commission.
4.2 Legends. Each certificate representing the shares of Common Stock
purchased hereby and each certificate representing shares of Common Stock which
may be issued pursuant to any exercise of the Option may be endorsed with the
following legends:
(a) THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
OKLAHOMA SECURITIES ACT. NEITHER THE RECORD NOR THE BENEFICIAL
OWNERSHIP OF SAID SHARES MAY BE SOLD OR TRANSFERRED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR SAID SHARES
UNDER BOTH OF SAID ACTS AND ANY OTHER APPLICABLE STATE SECURITIES
LAWS OR RULES UNLESS IN THE OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY EXEMPTIONS FROM THE REGISTRATION
REQUIREMENTS OF SAID ACTS ARE AVAILABLE WITH RESPECT TO SUCH SALE
OR TRANSFER AND SAID SALE OR TRANSFER IS MADE PURSUANT TO AND IN
STRICT COMPLIANCE WITH THE TERMS AND CONDITIONS OF SAID
EXEMPTIONS.
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(b) Any other legend required by any state securities laws.
The Company need not register a transfer of legended Securities, and may also
instruct its transfer agent not to register the transfer of the Securities,
unless one of the conditions specified in each of the foregoing legends is
satisfied.
5. MISCELLANEOUS
5.1 Waivers and Amendments. This Agreement or any provision hereof may be
changed, waived, discharged or terminated only by a statement in writing signed
by the party against which enforcement of the change, waiver, discharge or
termination is sought.
5.2 Governing Law. This Agreement shall be governed in all respects by
the laws of the State of Oklahoma.
5.3 Successors and Assigns. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto.
5.4 Entire Agreement. This Agreement and the other documents delivered
pursuant hereto constitute the full and entire understanding and agreement
between the parties hereto with regard to the subjects hereof and thereof.
5.5 Notices, etc. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by first class mail,
postage prepaid, addressed (a) if to a Purchaser, at such Purchaser's address
set forth above, or at such other address as such Purchaser shall have furnished
to the Company in writing, or (b) if to the Company, at its address set forth
above, or at such other address as the Company shall have furnished to you in
writing in accordance with this Section 5.5.
5.6 Separability. In case any provision of this Agreement not material to
the benefits intended to be conferred hereby shall be invalid, illegal, or
unenforceable, the validity, legality, and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
5.7 Other Documents. The parties to this Agreement shall in good faith
execute such other and further instruments, assignments or documents as may be
necessary or advisable to carry out the transactions contemplated by this
Agreement.
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5.8 Titles and Subtitles. The titles of the Sections and subsections of
this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement. References herein to exhibits to this
Agreement shall be deemed to incorporate such exhibits by reference.
5.9 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument, and which shall become effective when there
exist copies signed by the Company and by you.
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed by their duly authorized representatives effective as of the date set
forth on the first page hereof.
NATIONAL ENVIRONMENTAL SERVICE CO.
By /s/Xxxx Xxxxxxxxx
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Xxxx Xxxxxxxxx, President
/s/Xxxxxx Xxxxxx Xxxxxx
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Xxxxxx Xxxxxx Xxxxxx
/s/Xxxxx Xxxxxx
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Xxxxx Xxxxxx
CALLAWAY ENTERPRISES
By /s/Xxxxx Xxxxxx
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Name: Xxxxx Xxxxxx
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Position: General Partner
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/s/J. Xxxx Xxxxxxx
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J. Xxxx Xxxxxxx, Trustee of the Xxxxx Xxxxxx
Family Trust
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