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Exhibit 4
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement") is entered into as of the
17th day of April, 1998, by and between XXXXXX X. XXXX, an individual ("Buyer")
and NATIONAL HEALTH AND SAFETY CORPORATION, a Utah corporation ("Seller" or
"Company").
RECITAL
WHEREAS, Seller desires to sell to the Buyer, and the Buyer desires to
purchase from Seller, 1,000,000 shares of the common stock of the Company on the
terms and subject to the conditions set forth in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and subject to
the conditions hereinafter set forth, the parties agree as follows:
1. PURCHASE AND SALE OF SHARES. Subject to the terms and conditions of this
Agreement, and in consideration for $.001 cents per share and the consulting and
advisory services, including without limitation mezzanine financing, provided by
Buyer to the Company, services which the Company affirmatively acknowledges were
of immense and considerable value to the ongoing operation of the Company, all
of which constitutes a recital under California Evidence Code Section 622, the
Buyer agrees to buy and the Seller agrees to sell to the Buyer 1,000,000 shares
of the common stock of the Company (the "Shares"), free and clear of all liens,
claims, security interests and other rights or interests.
2. REPRESENTATIONS AND WARRANTIES OF THE BUYER. Buyer represents, warrants and
covenants to Seller as follows:
2.1 Authority. If the Buyer is a corporation, partnership, trust or
other entity, it is authorized and qualified to become a shareholder and is duly
organized, validly existing and in good standing under the laws of the state of
it's incorporation. The Buyer has not been formed for the purpose of acquiring
the Shares and the Buyer has all requisite corporate power and authority
necessary to enter into this Agreement and perform its obligations hereunder.
2.2 Experience. The Buyer has such knowledge or experience in financial
and business matters as to be capable of evaluating the merits and risks of an
investment in the Shares and has evaluated the merits and risks of making an
investment in the Shares and has determined that the Shares are a suitable
investment.
2.3 Investment Intent. The Buyer is purchasing the Shares for the
Buyer's own account and without any present view toward the resale or other
distribution thereof; the Buyer understands that he must bear the economic risk
of an acquisition of Shares for an indefinite period of time. The Buyer has been
advised and is aware that: (i) it may not be readily possible to liquidate the
Buyer's investment; (ii) the Shares have not been registered under the
Securities Act of 1933, as amended ("1933 Act") and the applicable state
securities laws, and, therefor, cannot be sold unless they are subsequently
registered under the 1933 Act and the applicable state securities laws; (iii)
Rule 144
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under the 1933 Act will not be available as a basis for exemption from the
registration of the Shares under the 1933 Act except to the extent that
subsection (e) or (k) of Rule 144 may be available after the requisite holding
period; and (iv) a notation of the restrictions on transferability of the Shares
will be made in the appropriate records of the Seller.
2.4 Opportunity. During the course of this transaction and prior to the
date hereof, the Buyer has had the opportunity to ask questions of and receive
answers from the Seller concerning the Seller and its affiliates, and the terms
and conditions of the offering of the Shares.
3. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represents, warrants and
covenants to the Buyer as follows:
3.1 Good Title. Upon the sale and issuance of the Shares pursuant to the
provisions of this Agreement, the Buyer will receive good and marketable title
to all of said Shares, free and clear of all liens, claims, security interests,
options, purchase rights, charges and restrictions (other than those required by
applicable state and federal securities laws), and the Seller is not a party to
or bound by any agreement, obligation, commitment, order, judgment or decree
which prohibits the execution of this Agreement or which would prohibit or
restrict in any manner the transfer of the Shares in the manner contemplated
hereby.
3.2 Due Authorization. The Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of Utah. Upon
filing by the Company of its Amendment to Articles of Incorporation, Seller will
have all requisite corporate power and authority, and will have received all
statutory and regulatory consents and approvals necessary, to enter into this
Agreement and perform its obligations hereunder. Upon filing of the Amendment to
the Articles of Incorporation, Seller will have taken all corporate action
required for the execution and delivery of this Agreement and the consummation
of the transactions contemplated herein. Further, all corporate action on the
part of the Company, its directors and shareholders necessary for the
authorization, execution, delivery and performance of this Agreement by the
Company, the authorization, sale, issuance and delivery of the Shares and the
performance of all of the Company's obligations hereunder has been taken or will
be taken prior to the delivery of the Shares. The Shares are not subject to any
preemptive rights or rights of first refusal. This Agreement constitutes, and
each other such document, certificate or instrument executed in connection with
this Agreement when executed and delivered will constitute, a valid and binding
agreement of the Seller, enforceable against the Seller in accordance with its
terms. Upon the issuance of the Shares, such Shares shall be duly and validly
authorized and issued, and will be fully paid and non-assessable and issued in
full compliance with all federal, state and local laws, rules, regulations and
ordinances.
3.3 Financial statements. The Company's financial statements over the
past 3 years have been prepared in accordance with generally accepted accounting
principles consistently followed throughout this period and fairly presents the
financial condition of the Company.
3.4 Consents and Approvals; Conflicts. Neither the execution and
delivery of this Agreement, nor the consummation of the transactions
contemplated hereby, will violate, result in a breach of any of the terms or
provisions, constitute a default under or conflict with any agreement, indenture
or other instrument to which the Company is a party or by which it is bound, the
Articles
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of Incorporation or Bylaws of the Company, and judgment, decree, order or award
of any court, governmental body or arbitrator applicable to the Company or the
common stock of the Company or any law, rule or regulation applicable to the
Company or the common stock of the Company. No consent, approval or
authorization of or declaration, filing or registration with any governmental or
regulatory authority or any other person (either government or private) is
required in connection with the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby other than as described
herein.
3.5 Capitalization and Stockholdings. As of the date of this Agreement,
the authorized capitalization of the Company consists of 50,000,000 shares of
common stock and 14,636 shares of preferred stock. As of the date of this
Agreement and prior to giving effect to the transaction contemplated hereby, the
Company has issued and outstanding only 37,124,961 shares of common stock, all
of which are duly and validly authorized and issued, and are fully paid and
non-assessable and were issued in full compliance with all federal, state and
local laws, rules, regulations and ordinances. The Company further represents
and warrants that upon filing of the Amendment it will have a sufficient number
of authorized but unissued shares of common stock to consummate the transactions
contemplated by this Agreement. Further, the Company represents and warrants
that of the Convertible Debentures described in Note 6 of the Company's Annual
Report on Form 10-KSB for the fiscal year ended December 31, 1997, debentures
equal to $125,000 have not been converted or repaid; however the Company has an
executed agreement that grants it the right to repurchase the unconverted
debentures at a ten percent (10%) premium. No other such convertible debentures
are outstanding as of the date hereof.
3.6 Exemption. The transfer and conveyance of the Shares, pursuant to
the terms of this Agreement, is exempt from registration under the Securities
Act of 1933, as amended, by virtue of Section 4(2) thereof and from the
qualification requirements of the securities law of New York and California. The
Company agrees, immediately after the delivery of the Shares hereunder, to
prepare and cause to be filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form SB-2, or another appropriate form
pursuant to the provisions of the Securities Act of 1933 as Amended, relating to
the registration of the Shares. The Company agrees that it will file such
registration statement with the Commission within thirty (30) days from delivery
of the Shares, and will use its best efforts to facilitate the effectiveness of
the registration statement as soon as practical, and no event later than 120
days from such delivery.
4. INDEMNIFICATION.
4.1 Survival of Representations. All representations, warranties,
covenants and agreements contained in this Agreement or in any document,
exhibit, schedule or certificate delivered in connection herewith shall survive
the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby and remain in full force and effect,
notwithstanding any investigation at any time made by or on behalf of the
parties.
4.2 Seller's Indemnity of Buyer. The Seller shall indemnify, defend and
hold harmless the Buyer and any person directly or indirectly controlling or
controlled by the Buyer and its/their respective directors, officers, employees,
agents and representatives from and against any and all
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losses, costs, claims, damages, expenses or liabilities (including, without
limitation, reasonable attorneys' fees and expenses of investigation) to which
the Buyer or such person may become subject as a result of the untruth of any
representation or the breach of any warranty or covenant contained in this
Agreement, or otherwise arising from the execution and delivery of this
Agreement by Seller, the consummation of the transactions contemplated hereby by
Seller or the performance by the Seller of its obligations hereunder .
5. CLOSING CONDITIONS. The obligation of the Buyer to consummate the
transactions contemplated hereby are subject to the following:
5.1 Delivery of Stock Certificates Representing the Shares. The Seller
will deliver to the Buyer, upon the filing of the Amendment, the original stock
certificate(s) representing the Shares.
5.2 Authority. Any actions required to be taken by, or on the part of
the Company to authorize the consummation of the transactions contemplated
hereby, shall have been duly and validly taken by the Board of Directors of the
Company.
6. COVENANTS OF THE COMPANY.
6.1 Amendment to Organizational Documents. The Company covenants and
agrees, as soon as practicable, to amend its organizational documents to
authorize the issuance of 100,000,000 shares of common stock and 5,000,000
shares of preferred stock.
7. MISCELLANEOUS.
7.1 Costs. Each party hereto shall bear, pay and discharge all of its
respective expenses incurred in connection with the execution and performance of
this Agreement, except as otherwise provided specifically herein.
7.2 Successors and Assigns; Amendment and Waiver; Third Parties. The
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective executors, administrators, heirs, successors and
assigns of the parties. The provisions of this Agreement may not be amended or
waived except by a written instrument signed by each of the parties hereto.
Except as expressly provided herein, nothing in this Agreement, express or
implied, is intended to confer upon any party, other than the parties hereto,
any rights, remedies, obligations or liabilities under or by reason of this
Agreement.
7.3 Governing Law and Consent to Jurisdiction. This Agreement shall be
governed by and construed in accordance with the laws of the State of
California. The parties irrevocably (i) submit to the exclusive jurisdiction of
the state courts of the State of California over any action or proceeding
arising out of a breach of this Agreement, (ii) agree that all claims in respect
of such action or proceeding may be heard and determined in such courts, (iii)
waive, to the fullest extent they may effectively do so, the defense of an
inconvenient or inappropriate forum to the maintenance of such action or
proceeding, (iv) agree that any communication given in accordance with Section
7.6, to the fullest extent permitted by law, shall be taken and held to be valid
personal service and personal delivery to such party for the purposes set forth
in this Section, and (v) waive any defense based on lack of personal
jurisdiction for any such purpose.
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7.4 Legal Action and Fees. In the event of any controversy, claim or
dispute between the parties hereto arising out of or relating to this Agreement,
the prevailing party shall be entitled to recovery from the non-prevailing party
its reasonable expenses, including but not limited to its reasonable attorneys'
fees.
7.5 Headings. The headings of the sections of this Agreement are for
convenience only and shall not determine the interpretation of this Agreement.
7.6 Notices. Any notice required or permitted hereunder shall be given
in writing and shall be deemed effectively given upon personal delivery, 24
hours after transmission by telecopy, telex, or five (5) days after deposit in
the United States mail by registered or certified mail, addressed as set forth
below or at such other address as such party may designate by ten (10) days'
advance written notice to the other party:
If to Seller: National Health and Safety Corporation
000 Xxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
ATTENTION: XXXXXX XXXXXX
If to Buyer: XXXXXX X. XXXX
C/X XXXXX, XXXXXXX & XXXX
0000 Xxxxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
7.7 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
7.8 Legal Advice. The parties hereby acknowledge that they have received
independent legal advice from attorneys of their choice with respect to the
advisability of executing this Agreement and the related documents affecting
this transaction. Prior to the execution of this Agreement, each of the parties'
attorney reviewed this Agreement and discussed the Agreement with such party,
and each party made all desired changes. Each of the parties and their attorneys
have made such investigation of the facts pertaining to this Agreement and all
of the matters appertaining thereto as they deemed necessary. Each of the
parties certifies that it has read this Agreement, and fully understands this
Agreement and that it has executed it voluntarily, free of any duress, force or
undue influence of any party or any person.
7.9 Integration. The making, execution and delivery of this Agreement by
the parties hereto has not been induced by any representations, statements,
warranties or agreements other than those specifically expressed in this
Agreement. This Agreement embodies the entire understanding of the parties
hereto with respect to the subject matter hereof. Other than the terms expressly
set forth in this Agreement, there are no other agreements or understandings,
written or oral, in effect between the parties relating to the capital stock
which is the subject matter hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of
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the date first set forth above.
SELLER: NATIONAL HEALTH AND SAFETY CORPORATION
By: /s/ XXXXXX XXXXXX
_________________________________
Xxxxxx Xxxxxx
Its: President
BUYER:
By: /s/ XXXXXX X. XXXX
____________________________________
Xxxxxx X. Xxxx
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