Exhibit 10.6
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is made and
entered into this 20th day of December, 1998, by and between Aureus
Corporation (the "Corporation"), a corporation organized and
existing under the laws of the State of Utah, Xxxxxxx Xxxxx
("Xxxxx"), an individual residing in Orem, Utah , and Xxxxx X.
Xxxxxxxx ("Xxxxxxxx") and Xxxx Fine ("Fine"), individuals residing
in Orem, Utah.
RECITALS
The Corporation is currently authorized by its board of
directors to have 2 million shares of its common stock issued. The
Corporation currently has 1,352,862 shares of its common stock
issued to shareholders, 600,000 of which shares are held by Xxxxx.
Xxxxx desires to sell, and the Corporation desires to purchase
282,600 of such shares of common stock held by Xxxxx (the "Xxxxx
Stock"), which shall leave Xxxxx in possession of a total of 317,400
outstanding shares of Corporation common stock. Xxxxx desires to
sell the Xxxxx Stock, and The Corporation is willing to repurchase
the Xxxxx Stock back from Xxxxx for the purchase price of $110,000.00.
Xxxxxxxx and Fine desire to purchase 450,000 shares of original
issue (not Xxxxx stock) common stock from the Corporation and the
Corporation desires to issue such additional shares of its stock to
Xxxxxxxx and Fine pursuant to the terms of this Stock Purchase
Agreement and those certain financial accommodations as set forth
herein.
Now, therefore, in consideration of the premises, their mutual
covenants and promises, and other good and valuable consideration,
the receipt and adequacy of which is hereby acknowledged by the
parties hereto, the parties agree as follows:
Section One
Purchase of Xxxxx Stock
Xxxxx hereby agrees to sell, and the Corporation hereto agrees
to buy 432,600 shares of the common stock of the Corporation for the
total price of ONE HUNDRED TEN THOUSAND DOLLARS ($110,000.00,
hereafter referred to as the "Xxxxx Purchase Price"), payable at the
rate of $5,000.00 per month, commencing no later than two years from
the date of this Agreement, or earlier as determined by the
Corporation's board of directors. Once the monthly payments of
$5,000,00 are commenced by the Corporation to Xxxxx, such monthly
payments shall continue to be made to Xxxxx on the same day of each
successive month thereafter until the entire balance of the Xxxxx
Purchase Price has been paid in full. In the event any such monthly
payment to Xxxxx is not paid timely, Xxxxx agrees to provide a
written Notice of Default to the Corporation, whereupon the
Corporation shall have forth-five (45) calendar days within which to
cure such default and make the missed monthly payment. Xxxxx agrees,
upon the execution of this Agreement and approval of the transfer by
the directors of the Corporation, to immediately transfer the stock
certificate(s) evidencing the Xxxxx Stock to the Corporation, and to
relinquish all incidents of ownership, including voting rights, with
respect to the Xxxxx Stock. The Corporation's obligation to pay the
Purchase Price shall be evidenced by a Promissory Note issued by the
Corporation in favor of Xxxxx. Xxxxx hereby warrants that the Xxxxx
Stock now stands in Xxxxx'x name on the books of the Corporation,
and that any and all assessments to date are paid on the shares.
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Section Two
Sale of The Corporation Stock to Xxxxxxxx and Fine
For and in consideration of the financial accommodations and
consideration set forth below, and subject to the approval of the
Corporation's board of directors, the Corporation hereby agrees to
transfer a total of 450,000 shares of its common stock to Xxxxxxxx
and Fine, with 225,000 shares of such common stock to be held in the
name of each person, respectively. The consideration for the sale of
the Corporation's common stock to Xxxxxxxx and Fine is as follows:
1. Payment of $100,000. . Xxxxxxxx and Fine shall, upon
execution of this Agreement, pay the total sum of $100,000.00 to the
Corporation to be held and used by the Corporation as working
capital. (the parties hereby acknowledge and agree that prior to the
date of the execution of this Agreement, Xxxxxxxx and Fine have
already paid a total of $50,000.00 to the Corporation toward the
total sum of $100,000.00 to be paid by them under this paragraph 1.)
2. Personal Guaranty of $170,000 Primary Line of Credit. In
order to facilitate the issuance of a new line of credit, Xxxxxxxx
and Fine hereby agree to personally guarantee the Corporation's
payment of a maximum of $170,000.00 on a line of credit (the
"Primary Line of Credit") issued by Zions First National Bank, or
such other bank as the Corporation may choose, in favor of the
Corporation and secured by accounts receivable of the Corporation,
or such other corporation assets as the Corporation may approve. The
Primary Line of Credit is to be repaid by the Corporation in its
ordinary course of business, and pursuant to the terms of such line
of credit as established between the Corporation and the issuing
bank. Under no circumstances shall the combined personal liability
of Xxxxxxxx and Fine under their personal guaranty of the Primary
Line of Credit exceed the maximum, combined amount of $170,000.00
including principal, interest and legal cost, if any.
3. Additional Payroll Line of Credit for $100,000.00.
Xxxxxxxx and Fine further agree to provided an additional line of
credit in the total principal amount of $100,000.00 (the "Payroll
Line of Credit") to the Corporation. This additional Payroll Line of
Credit is to be used exclusively and solely, on a emergency basis as
may be needed by the Corporation, in order to insure the timely
payment of the monthly payroll obligation of the Corporation. At
such time as the Corporation itself has the financial ability to
arrange for a line of credit for this purpose, as determined by its
board of directors, the Corporation agrees to take out its own
emergency payroll line of direct and to allow the Payroll Line of
Credit established by Xxxxxxxx and Fine to be closed.
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Section Three
Full Disclosure to Buyers
The Corporation and Xxxxx each hereby represent and warrant
that they have fully disclosed the current financial condition of
the Corporation to Xxxxxxxx and Fine, including but not limited a
complete listing of the identity and amount of all obligations owed
by the Corporation to each of its creditors or obligations or
promises made by the Corporation or Xxxxx to other third parties
such as potential shareholders or investors. The Corporation and
Xxxxx further represent and warrant that Xxxxxxxx and Fine have been
given the right to examine and audit the complete financial books
and records of the Corporation to their satisfaction, prior to
purchasing the shares of Corporation stock described in this
Agreement. In the event it is determined that Xxxxx and the
Corporation have not complied with the disclosure provisions of this
Section, and that there exist liabilities or obligations, financial
or otherwise, of the Corporation to creditors or other third parties
which were not fully disclosed to Xxxxxxxx and Fine Xxxxx agrees
that he shall personally be liable for, and shall idemnify and hold
Xxxxxxxx, Fine, and the Corporation harmless from, the full and
complete payments so any such undisclosed liabilities and
satisfaction of other obligation, as well as any and all legal
expenses and fees which may be incurred by Xxxxxxxx, Fine, or the
Corporation in connection with such undisclosed liabilities or
obligations.
Section Four
Aureus Board of Directors
Xxxxx shall continue to his current capacity as a member of the
board of directors of the Corporation for the remainder of his term
as established by the Corporation's Bylaws. Xxxxxxxx and Fine shall
each also serve as members of the Corporation's Board of Directors,
effective as the date of the execution of this Agreement.
Section Five
Officers of Aureus
Effective as of the date of execution of this Agreement, Xxxxx
shall serve as President of the Corporation, and shall be paid an
annual salary of $112,000.00 by the Corporation for such service.
The terms and conditions of Xxxxx'x employment shall be evidenced by
an Employment Agreement to be executed together with this Agreement.
Effective as of the date of the execution of this Agreement,
Xxxxxxxx shall serve as the Chief Executive Officer and Chairman of
the Board of Directors of the Corporation. Xxxxxxxx shall be paid
the annual salary of $21,600 for such services, with the level of
such compensation to be adjusted in the future as deemed necessary
and appropriate by the Board of Directors of the Corporation. Among
his corporate responsibilities, Xxxxxxxx shall be responsible to
supervise a full-time Chief Financial Officer/Chief Operating
Officer to manage the daily operations and finances of the Corporation.
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Section Six
Entire Agreement
This Agreement constitutes the entire agreement between the
parties and supercedes any prior written or oral understandings,
agreements, or conditions. No change, modification, amendment or
additional hereto shall be valid unless it is in writing and signed
by the party against whom enforcement of any such change,
modification, amendment or addition is assigned. The terms of this
Agreement shall survive the transfer of the Xxxxx Stock to the
Corporation and the transfer of stock of the Corporation to Xxxxxxxx
and Fine.
Section Seven
Parties Bound; Assignment
All covenants, agreements, representations, and warranties set
forth in this Agreement are binding on and inure to the benefit of
the successors and assigns of the parties. Due to the personal
nature of the rights and obligations dealt with in this Agreement ,
the parties cannot assign this Agreement or any of their rights
under this Agreement except by operation of law to their personal
representatives or heirs in the event of their death, incapacity, or
dissolution, as the case may be, in which case this Agreement and
all of the parties' obligations and benefits hereunder will be
binding on and inure to the benefit of the party's personal
representatives, heirs and successors.
Section Eight
Governing Law
This Agreement shall be construed and enforced in accordance
with the laws of the State of Utah.
Section Nine
Legal Fees and Expenses
In the event that any legal action is filed in relation to this
Agreement, the prevailing party in the action or any related
settlement, arbitration or mediation shall be entitled to recover
from the other party all legal expenses incurred, including but not
limited to a reasonable attorney's fee, in addition to all other
recovery and relief.
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DATED this 20 day of December, 1998
AUREUS-CORPORATION
By: /s/ Xxxxxxx Xxxxx
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Its: President
/s/ Xxxxxxx Xxxxx
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Xxxxxxx Xxxxx
/s/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx
/s/ Xxxx Fine
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Xxxx Fine
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