EXHIBIT 10.1
STOCK ACQUISITION AGREEMENT
This Stock Acquisition Agreement (hereinafter "Agreement") is entered into as of
the 2nd day of February, 2000 by and among TRADER XXXXXXX.XXX formerly known as
CLEANWAY CORPORATION, a Nevada corporation (the "Company"); NATIONAL LIGHTING
CORP., a company incorporated in the Province of British Columbia and having
offices in Vancouver, British Columbia ("NLC"), and Xxx Xxxxxx and Xxxx
Xxxxxxxxx (collectively, the "Sellers" and individually a "Seller", who are the
holders of all of the issued and outstanding shares of NLC.
RECITALS
WHEREAS, the Company is interested in the acquisition and operation of Internet
companies;
WHEREAS, NLC has been formed as an Internet company that will provide user
services in the Internet telephony business;
WHEREAS, the Company desires to acquire from sellers all of the outstanding
shares of NLC, so as to constitute NLC as a 100% owned subsidiary of the Company
in exchange for shares of the voting common shares of the Company (the "Company
Shares") comprising of Non-escrowed Shares and Escrow Shares (both as
hereinafter defined).
NOW, THEREFORE, in consideration of the promises and the mutual covenants,
agreements and provisions hereinafter contained, the parties hereto do hereby
adopt a plan of reorganization and agree as follows;
ARTICLE I - THE EXCHANGE/REORGANIZATION
1. PLAN OF REORGANIZATION. The Sellers are the owners of all of the issued
and outstanding shares of NLC, consisting of 100 shares of common
shares which shares are owned by the Sellers as follows:
Name of Seller Number of Shares
-------------- ----------------
Xxx Xxxxxx 50
Xxxx Xxxxxxxxx 50
It is the intention of the parties that all of such issued and
outstanding shares of NLC be transferred by the Sellers to the Company
in exchange for shares of the voting common shares of the Company, so
that NLC shall become a wholly owned subsidiary of the Company and the
Sellers shall become shareholders of the Company.
2. EXCHANGE OF SHARES
(a) The Company shall issue and deliver to the Sellers and
aggregate of Five Hundred Thousand (500,000) shares of voting
common shares of the Company (the "Non-escrowed Shares") which
shall be issued and delivered as follows:
Seller's Name Number of Shares to be Issued
------------- -----------------------------
Xxx Xxxxxx 140,000
Xxxx Xxxxxxxxx 120,000
Xxxxx Xxxxxxxx 120,000
Xxx Xxxxxxxx 120,000
(b) The Sellers shall deliver to the Company certificates
representing all of the issued and outstanding shares of NLC,
registered in the name of such Seller and duly endorsed for
transfer to the Company.
3. CERTAIN RESALES OF COMPANY SHARES. The Sellers may in their sole
discretion sell or otherwise transfer the Company Shares in such public
or private transactions and on such terms and conditions as the
Sellers, respectively, deem appropriate, subject only to compliance
with all applicable securities laws and rules, including without
limitation the Securities Act of 1933, as amended (the "1933 Act"). In
connection with any such sale or transfer, compliance with the 1933 Act
and the rules and regulations thereunder shall be conclusively
established by the delivery to the Company of a legal opinion of the
Company's U.s. attorney, or other counsel experienced in securities law
matters which counsel is reasonably acceptable to the Company stating
that such sale or transfer complies with the 1933 Act and the rules and
regulations thereunder.
4. ESCROW SHARES. Immediately upon the effective date of this Agreement,
the Company and the Sellers will cause a mutually acceptable Escrow
Agent to be appointed for the purpose of holding 5,000,000 issued
common shares of the Company (the "Escrow Shares"). The Escrow Shares
are to be issued as follows:
Name of Escrow Shareholder Number of Shares to be Issued
-------------------------- -----------------------------
Xxx Xxxxxx 2,500,000
Xxxx Xxxxxxxxx 2,500,000
The Escrow Shares will be released to the holders in accordance with
the following time-based formula:
(a) 1,000,000 Escrow Shares shall be released to the holders, in
proportion to the percentages set out opposite the names
above, within 10 business days of December 31, 2000 subject to
foreiture determined as follows:
(a) the gross sales revenues for the year 2000 shall be
calculated (the "Calculation Revenue");
(b) the difference between CAN$1,000,000 and the
Calculated Revenue shall be calculated (the
"Difference");
(c) the Difference shall be pro-rated among every Escrow
Shareholder by multiplying the Difference by the
percentages described in this paragraph above
opposite the name of such holder (the "Pro-rated
Difference");
(d) for every CAN$1.00 of Pro-rated Difference allocated
to each Escrow Shareholder, 1 Escrow Share shall be
forefeited by such Escrow Shareholder and at the
Company's option, either returned to treasury or
cancelled.
For Example, should NLC reach only $600,000 in gross sales by
December 31, 2000, then the Escrow Agent shall release 600,000
shares from escrow to the holders in the percentages set
opposite their names above, and the remaining 400,000 shares
shall be forfeited and returned to the Company for
cancellation.
(b) The remaining 4,000,000 Escrow shares shall be released to the
holders, in proportion to the percentages set opposite their
respective names above, within 10 business days of December
31, 2001 subject to forfeiture determined as follows:
(e) the gross sales revenues for the year 2001 shall be
calculated (the "Calculated Revenue");
(f) the difference between $4,000,000 and the Calculated
Revenue shall be calculated (the "Difference");
(g) the Difference shall be pro-rated among every escrow
Shareholder by multiplying the Difference by the
percentages described in this paragraph above
opposite the name of such holder (the "Pro-rated
Difference");
(h) for every CAN$1.00 of Pro-rated Difference allocated
to each Escrow Shareholder, 1 Escrow Share shall be
forfeited by such Escrow Shareholder and at the
Company's option, either returned to treasury or
cancelled
The Company and the holders shall enter into an escrow agreement with a
mutually agreed upon escrow holder to set out the terms of the release
of the Escrow Shares to the holder prior to the Closing of this
Agreement.
Any shares of the Company shall only be sold in compliance with all
applicable securities laws and rules, including without limitation, the
1933 Act. In connection with any such sale or transfer, compliance with
the 1933 Act and the rules and regulations thereunder shall be
conclusively established by the delivery to the Company of a legal
opinion of the Company's U.S. attorney, or other counsel experienced in
securities law matters which counsel is reasonably acceptable to the
Company stating that such sale or transfer complies with the 1933 Act
and the rules and regulations thereunder.
5. FINANCING. The Company acknowledges that NLC requires a minimum of
CDN$50,000 in financing over the five to ten days in order to start the
project. The financing needed in the next 30 to 60 days is
approximately $250,000 dollars for building, advertising and marketing
services for NLC. The Company undertakes to use its best efforts to
raise such $250,000 for NLC within 30 to 60 days from the date of
Closing of this Agreement. The Company hereby agrees that it will use
its best efforts to contribute up to an additional $500,000 to the
capital of NLC over the following nine months if necessary, and subject
to approval of budget and approval of the board of directors.
6. INVESTMENT REPRESENTATIONS.
(i) Each of the Sellers acknowledges, agrees and represents
severally, and not jointly, that:
(a) (i) none of the shares of the Company being
acquired hereunder has been registered under
the 1933 Act;
(ii) all of the shares acquired hereunder are
being, and will be, acquired and held for
investment, not for resale or distribution
to the public and not for the purchase of
effecting or causing to be effected a public
offering of such securities and, further,
that none of such securities will be sold,
transferred, assigned or disposed of except
in accordance wit the 1933 Act and any other
applicable securities laws;
(b) by reason of the foregoing investment representations
and restrictions upon transfer: (i) the shares
acquired must be held indefinitely unless registered
under the 1933 Act and the BC Securities Act or an
exemption from Acts are available; (ii) if Rule 144
of the Rules and Regulations promulgated by the SEC
is applicable to future sales of Company Shares, such
sale may be limited in amounts in accordance with the
terms and conditions of that rule; (iii) in the case
of securities to which that rule is not applicable,
compliance with some other applicable exemption, if
any be available, will be required; and (iv) all of
the issued shares will bear a legend restricting
transfer thereof unless such transfer is either
qualified by registration or prospectus or is exempt
from such filings.
(c) he has relied upon his own investigation into the
Company and its financial condition, and the
warranties and representations made by the Company
herein, for the purposes of deciding to enter into
and consummate the transaction contemplated by the
agreement and to accept the Company Shares in
exchange for shares of NLC. Except for the express
representations and warranties set forth herein, he
has not relied upon any other oral or written
representation made by the Company or any of its
officers or directors or representations. No
representations or statements shall survive the
Closing with the exception of the representations and
warranties contained in this Agreement or otherwise
made in writing.
(ii) The Company acknowledges, agrees and represents that:
(a) all of the shares of NLC acquired hereunder are
being, and will be, acquired and held for investment,
not for resale or distribution to the public and not
for the purchase of effecting or causing to be
effected a public offering or such securities and,
further, that none of such securities will be sold,
transferred, reassigned or disposed of except in
accordance with all applicable securities laws,
including without limitation, the 1933 Act.
(b) it has relied upon its own investigation into NLC and
its financial condition, and the warranties and
representations made by the Sellers herein, for the
purposes of deciding to enter into and consummate the
transaction contemplated by this Agreement and to
accept shares of NLC in exchange for shares of the
Company. Except for the express representations and
warranties set forth herein, it has not relied upon
any other oral or written representations made by the
Sellers or any of their representatives. No
representation, warranties or covenants shall survive
the Closing with the exception of the
representations, warranties and covenants contained
in this Agreement or otherwise made in writing.
7. CLOSING
(a) The closing of the transactions contemplated by this Agreement
shall take place at the offices of the Company, or at such
other location as is acceptable to the parties, and at the
time as the parties may approve.
(b) The obligation of the Sellers to consummate the transactions
contemplated by this Agreement are subject to the fulfillment
or satisfaction at or before Closing of the following
conditions:
(i) The Sellers shall have been satisfied with due
diligence investigation of the Company.
(ii) The Company shall have made all of the deliveries
required of it under this Agreement.
(c) At the Closing, the Sellers shall deliver or cause to be
delivered to the Company the following instruments and other
documents;
(i) Certified resolutions of the Board of Directors of
NLC approving this execution and delivery of this
Agreement by NLC;
(ii) Certificate of good standing of NLC from the Province
of British Columbia, reflecting that NLC is a
corporation in good standing under the laws of the
jurisdiction of its incorporation.
(iii) Any and all other documents which the Company may
reasonably request.
(d) The obligation of the Company to consummate the transactions
contemplated by this Agreement are subject to the fulfillment
or satisfaction at or before the closing of the following
conditions;
(i) The Company shall have been satisfied with its due
diligence investigation of NLC
(ii) The Sellers shall have made all of the deliveries
required of them under this Agreement.
(e) At the Closing, the Company shall deliver or use to be
delivered to the Sellers the following instruments and other
documents;
(i) Certified resolutions of the Board of Directors of
the Company approving the execution, delivery and
performance of this Agreement by the Company and
authorizing the issuance of shares of the Company to
the Sellers;
(ii) Any and all other documents which the Sellers may
reasonably request.
8. OFFICERS AND DIRECTORS. Immediately after Closing, Mr. Xxxxxx Xxxxxx
will become President, and the Company after closing shall have a Board
of Directors consisting of Xxxx Xxxxxxxxx, Xxxxx Xxxxxxxx and Xxx
Xxxxxxxx
9. EMPLOYMENT CONTRACT. Prior to Closing, the Company agrees to enter into
an employment and non-competition contract with Xxx Xxxxxx setting out
the terms of his employment with the Company, which contract shall be
in writing.
10. NAME CHANGE. After Closing, the Company shall forthwith change its name
to VOIP Technology, Inc., or such other name as is acceptable to the
board of directors of the Company and the regulatory authorities and it
shall obtain a new CUSIP number and in furtherance of same shall file
all instruments which the Company is required to file with the
regulatory authorities.
11. REPORTING COMPANY. It is the intent of the parties that within 90 to
120 days NLC will expeditiously provide to the Company audited
financial statements and all other necessary documentation and
information necessary to enable the Company to become a reporting
public Company. Forthwith upon the receipt of the necessary information
from NLC, the Company will promptly prepare, file and prosecute
diligently to effectiveness a registration statement on Form 10 or Form
10-SB to be filed with the Securities and Exchange Commission to
register the Company's shares under the Securities Exchange Act of
1934, as amended (the "1934 Act"). Once such registration statement is
effective, the Company agrees to file on or before the date due all
reports and other instruments which the Company is required to file
pursuant to 1934 Act, so long as any Seller holds any Company shares.
12. ADJUSTMENTS IN COMPANY COMMON SHARES. In the event of changes in the
outstanding shares of the Company by reason of stock dividends, stock
splits, reverse stock splits, recapitalization, consolidations,
combinations, exchanges of shares, separations, reorganizations,
liquidations or any similar events having similar consequences, the
number and class of shares as to which Agreement relates, including
shares issuable upon exercise of stock options or performance shares,
shall be correspondingly adjusted.
ARTICLE II
REPRESENTATION, WARRANTIES, AND AGREEMENTS OF COMPANY
The Company, intending the Sellers to rely thereon, represents, warrants and
agrees as follows:
1. The Company is, as of the date of this Agreement, a validly existing
corporation in good standing, duly organized pursuant to the laws of
Nevada with all legal and corporate authority and power to conduct its
business and to enter into the transactions contemplated by this
Agreement.
2. Pursuant to its Articles of Incorporation, as amended, the Company is
authorized to issue 100,000,000 shares with par value of $0.001 per
share, of which 5,123,000 shares are outstanding as of the date of this
Agreement, all of which are validly issued, fully paid and
non-assessable. The Company is not obligated to issue any other shares
of any class of shares, other than pursuant to this Agreement.
3. Any shares issued by the Company pursuant to this Agreement shall be
duly authorized, validly issued, fully paid and non-assessable.
4. The execution and delivery of this Agreement, the consummation of the
transactions herein contemplated and compliance with the terms of this
Agreement will not result in a breach of any of the terms or provisions
of, or constitute a default under the Articles of Incorporation or
Bylaws of the Company or any agreement to which the Company or any of
its business subsidiaries is a party.
5. The Company is not a party to any written or oral agreement, which
obligates the Company to issue any shares, other than the issuance of
shares to the Sellers pursuant to this Agreement. The Company is not a
party to any agreement that affects the voting rights of any of the
issued and outstanding shares of the Company
6. The execution, delivery and performance of this Agreement and the
transactions contemplated hereby do not require the consent, authority
or approval of any other person or entity except such as have been
obtained.
7. The corporate records of the Company are complete and correct and
contain the Articles of Incorporation and Bylaws of the Company, as
amended to date, and all minutes of meetings of directors and
shareholders.
8. The financial statements of the Company as at and for the year ended
December 31, 1999 including notes thereto, fairly present the financial
condition and results of operations of the Company and its consolidated
subsidiaries, if any, at the dates and for the periods indicated and
were prepared in accordance with generally accepted accounting
principles consistently applied.
9. Since December, 1999, the Company has had no operations and has
incurred no liabilities or obligations except for nominal amounts of
expenses associated with the administration of the affairs of an
inactive Company.
10. Since the date of the most recent Company consolidated balance, the
Company has operated only in the ordinary course of business and has
experienced no material adverse changes in their consolidated financial
condition or results of operations.
11. On the date hereof the Company has, and on the date of Closing, the
Company will have no liabilities or obligations, absolute or contingent
as specifically provided for in the balance sheet of the Company as of
December 31, 1999 referred to in this Article II or as specifically
identified on the notes thereto.
12. The representations and warranties in this Agreement and in all other
documents delivered to the Sellers by the Company were true and correct
when delivered and shall be true and correct at the time of Closing.
The representations and warranties made by the Company herein contain
no untrue statements of material facts and do not omit to state a
material fact necessary to make the statements contained herein not
misleading.
ARTICLE III
REPRESENTATIONS, WARRATIES AND AGREEMENTS OF THE SELLERS
The Sellers intending the Company to rely thereon, represent, warrant and agree
as follows:
1. NLC is, as of the date of this Agreement, a validly existing
corporation in good standing, duly organized pursuant to the laws of
British Columbia with all legal and corporate authority and power to
conduct its business, to enter into the transactions contemplated by
this Agreement and to beneficially and legally own the assets described
in Schedule "A" attached hereto.
2. Pursuant to its Articles of Incorporation, NLC is authorized to issue
the shares which are now issued and are outstanding. There are no other
authorized or outstanding securities of NLC or any class or of any kind
or character, and there are no outstanding subscriptions, options,
warrants, rights or other commitments obligating NLC to issue or sell
any additional shares of NLC or any NLC securities convertible into any
shares of NLC shares of any class.
3. The execution and delivery of this Agreement, the consummation of the
transaction herein contemplated and compliance with the terms of this
Agreement will not result in a breach of any of the terms or provisions
of, or constitute a default under the Articles of Incorporation or
Bylaws of NLC or any agreement to which NLC is a party.
4. NLC is not a party to any written or oral agreement which obligates the
Company to issue any shares or grant any right of first refusal or
other arrangement to acquire any shares of NLC or to any agreement that
affects the voting rights of any of the issued and outstanding NLC
shares. NLC has not made any commitment as to issuance of any of its
shares, by subscription, right of conversion, option or otherwise.
5. The execution, delivery and performance of this Agreement and the
transactions contemplated hereby do not require the consent, authority
or approval of any other person or entity except such as have been
obtained.
6. The execution, delivery and performance of this Agreement by the
Sellers and NLC has been authorized by all required corporate and other
action and does not require any consents other than such as have been
obtained.
7. The NLC shares being acquired by the Company from the Sellers are duly
and validly authorized, issued and outstanding and are fully paid and
non-assessable. The Sellers are legal and beneficial owners of such
shares, and there are no adverse claims, liens or encumbrances against
such shares. There are no agreements among the Sellers or among the
Sellers and any other individuals or entities which would adversely
affect the consummation of transactions contemplated by this Agreement.
8. The corporate records of NLC are complete and correct and contain the
Articles of Incorporation and the Bylaws of the Company, as amended to
date, and all minutes of meetings of directors and shareholders.
ARTICLE IV - MISCELLANEOUS
1. WAIVER. Any condition to the performance of the Sellers or the Company
which legally may be waived on or prior to the Closing Date may be
waived at any time by the party entitled to the benefit therefore by an
instrument in writing executed by the party or parties to be bound
thereby. The failure of any party at any timer or times to require
performance of any provision hereof shall in no manner affect the right
of such party at a later time to enforce the same or any other
provision of this Agreement. No waiver by any party of the breach of
any term, covenant, representation or warranty contained in this
Agreement as a condition to such party's obligations hereunder shall
release or affect any liability resulting from such breach, and no
waiver of any nature, whether by conduct or otherwise, in any one or
more instances, shall be deemed to be or constructed as a further or
continuing waiver of any such condition or of any breach of any other
term, covenant, representation or warranty of this Agreement.
ARTICLE V- MISCELLANEOUS
1. ENTIRE AGREEMENT. This Agreement contains the final, complete and
exclusive statement of the agreement between the parties with respect
tot the transactions contemplated herein, and all prior or
contemporaneous written or oral agreements or other communications with
respect to the subject matter hereof are hereby superseded.
2. AMENDMENTS. No change, amendment, qualification or cancellation hereof
shall be effective unless in writing and duly executed by each party
hereto.
3. ASSIGNABILITY. This Agreement shall not be assignable by any of the
parties hereto without the prior written consent of all of the other
parties.
4. BENEFITS AND BINDING EFFECT. This Agreement shall be binding on and
shall inure to the benefit of the parties hereto and their respective
permitted successors and assigns. This Agreement shall not confer any
rights or benefits upon any person or entity other than the parties
hereto and their respective permitted successors and assigns.
5. NOTICES. All notices, requests and demands and other communications
hereunder must be in writing and shall be deemed to have been duly and
personally delivered; three business days after placed in the Canadian
mail, registered or certified, return receipt requested, postage
prepaid; one business day after delivered by Federal Express or other
overnight delivery service of national standing; or when transmitted by
telex or telescope, answer back received, and addressed to party to
whom such notice is being given at the following addresses:
If to the Company: #000 0000 Xxxxxxxxxx Xxxxxxxx
Xxxxxxxxx, XX
X0X 0X0
If to the Seller: 0000 Xxxxxxxx Xxxx
Xxxx Xxxxxxxxx, XX
X0X 0X0
Any party may change the address to which notices are being sent by
giving notice of such change to the other party in accordance with this
Section.
7. CAPTIONS. The captions herein are for convenience of reference only and
shall not be construed as part of this Agreement.
8. EXHIBITS AND SCHEDULES. All of the recitals, exhibits and schedules
hereto referred to in the Agreement are hereby incorporated herein by
reference and shall be deemed and construed to be a part of this
Agreement for all purposes. Disclosures made in the Schedules, or any
part thereof, shall be deemed to be disclosures with respect to all
representations and warranties made by disclosing party with respect to
this Agreement.
9. SEVERABILITY. The invalidity of enforceability of any or more clauses
or provisions of this Agreement shall not affect the validity or
enforceability of the remaining portions of this Agreement or any part
thereof. In the event any clause or provision of this Agreement shall
be found to be invalid or unenforceable, it shall, if possible in
effectuation the Intent of the parties hereto, be deemed to be modified
to the minimum extend necessary to render it valid and enforceable.
10. COUNTERPARTS/FACSIMILE. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of
which together shall constitute one and the same instrument. The
execution of this Agreement may be evident by the transmission of
facsimile signatures with full binding effect.
11. TIME. Time is of the essence.
12. EFFECTIVE DATE. The parties hereto agree that the effective date of
this Agreement shall be the 2nd day of February, 2000, even though one
or more of the parties may execute this Agreement on a different date.
EXECUTED On the date stated below, with an effective date of February 2, 2000.
TRADER XXXXXXX.XXX formerly CLEANWAY CORPORATION
/s/ Xxxxxx Xxxxxxxx )
------------------------------------ )
Per: Authorized Signatory )
)
SELLERS )
)
/s/ Xxx Xxxxxx )
------------------------------------ )
Xxx Xxxxxx )
)
/s/ Xxxx Xxxxxxxxx )
------------------------------------ )
Xxxx Xxxxxxxxx )
)
/s/ Xxxxxxx Xxxxxx ) /s/ Xxxxx Xxxxx
------------------------------------ ) ---------------------
Xxxxxxx Xxxxxx ) Xxxxx Xxxxx, Witness
