EXHIBIT 10.1
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement ("Agreement") is made and entered into as of
September 30, 1998, by and among Xxxxxx Xxx Xxxxxxx III ("Seller"); Donnebrooke
Corporation, a Delaware corporation (the "Company"); and Halter Capital
Corporation, a Texas corporation ("HCC").
RECITALS
A. Seller is the owner of 19,490,735 shares of the common stock, par
value $.00001 per share, of the Company (which represents approximately 51% of
the total number of issued and outstanding shares of the Company) which he is
willing to sell to HCC (the "Shares") and Seller is currently the control
shareholder of the Company;
X. Xxxxxx Capital Corporation is willing to acquire from Seller the
controlling interest in the Company's common stock represented by the Shares
pursuant to the terms and conditions of this Agreement; and
C. The Company desires to join in the execution of the Agreement for
the purpose of evidencing its consent to the consummation of the foregoing
transaction and for the purpose of making certain representations and warranties
to and covenants and agreements with HCC.
NOW, THEREFORE, for and in consideration of the mutual promises and covenants
contained herein, and for other good and valuable consideration, the parties
hereto agree as follows:
1. Purchase of the Shares by HCC. Subject to and upon the terms and
conditions contained herein, on the Closing Date (as defined herein), Seller
shall sell, transfer, assign, convey and deliver to HCC, free and clear of all
adverse claims, security interests, liens, claims and encumbrances (other than
restrictions under state and federal securities laws) and HCC shall purchase,
accept and acquire from Seller, the Shares.
2. Purchase Price. The Purchase Price for the Shares is $20,000. On the
Closing Date HCC shall deliver to Seller the sum of $20,000. in the form of a
cashier's check payable to the order of the Seller.
3. Closing. Subject to the conditions precedent set forth herein, the
purchase of the Shares shall take place either (i) on a date and at a place to
be mutually agreed upon between the parties or
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(ii) by the exchange of documents via courier, on or before October 16, 1998.
Such date is herein referred to as the "Closing Date".
4. Representations and Warranties of HCC. Unless specifically stated
otherwise, HCC represents and warrants that the following are true and correct
as of the date hereof and will be true and correct through the Closing Date as
if made on that date:
A. Authorization and Validity. The execution, delivery and
performance by HCC of this Agreement and the consummation of the transaction
contemplated hereby have been duly authorized by HCC. This Agreement has been or
will be as of the Closing Date duly executed and delivered by HCC and
constitutes or will constitute legal, valid and binding obligations of HCC,
enforceable against HCC in accordance with its respective terms, except as may
be limited by applicable bankruptcy, insolvency or similar laws affecting
creditors' rights generally or the availability of equitable remedies.
B. Consents/Approvals/Conflict. Except for compliance with
applicable federal and state securities laws, no consent, approval,
authorization or order of any court or governmental agency or other body is
required for HCC to consummate the purchase of the Shares. Neither the
execution, delivery, consummation or performance of this Agreement shall
conflict with, constitute a breach of any agreement to which HCC is a party or
by which it is bound nor, to the best of HCC's knowledge and belief, any
existing law, rule, regulation, or any decree of any court or governmental
department, agency, commission, board or bureau, domestic or foreign, having
jurisdiction over HCC.
C. Investment Intent. HCC is acquiring the Shares for its
own account for investment and not with a view to, or for sale or other
disposition in connection with, any distribution of all or any part thereof,
except (i) in an offering covered by a registration statement filed with the
Securities and Exchange Commission under the Securities Act covering the Shares,
or (ii) pursuant to an applicable exemption under the Securities Act.
D. Disclosure of Information. HCC acknowledges that it or its
representatives have been furnished with information regarding the Company and
its business, assets and financial condition to allow HCC to make an informed
decision regarding an investment in the Shares. HCC has had an opportunity to
ask questions of and receive answers from the Company regarding the Company and
its business, assets and financial condition.
E. Investment Experience. HCC acknowledges that it is able to
fend for itself, can bear the economic risk of its investment in the Shares, and
has such knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risks of an investment in the Shares.
F. Restricted Securities. HCC understands that the Shares have
not been registered pursuant to the Securities Act or any applicable state
securities laws, that the Shares will be characterized as "restricted
securities" under federal securities laws, and that under such laws and
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applicable regulations the Shares cannot be sold or otherwise disposed of
without registration under the Securities Act or an exemption therefrom. In this
connection, HCC represents that it is familiar with Rule 144 promulgated under
the Securities Act, as currently in effect, and understands the resale
limitations imposed thereby and by the Securities Act.
G. Legend. It is agreed and understood by HCC that the
certificates representing the Shares shall each conspicuously set forth on the
face or back thereof a legend in substantially the following form:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR PURSUANT TO AN
EXEMPTION FROM REGISTRATION OR AN OPINION OF COUNSEL SATISFACTORY
TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
5. Representations and Warranties of Seller. Unless specifically stated
otherwise, Seller represents and warrants that the following are true and
correct as of the date hereof and will be true and correct through the Closing
Date as if made on that date:
A. Title to Stock. Prior to the Closing Date the Seller will
cause the Shares to be transferred from the current form of registration into
his name so that on the Closing Date Seller will be the sole registered owner
and will have full right, power and authority to sell and convey the Shares and
such Shares will be free and clear of any and all liens, mortgages, pledges, or
other rights or encumbrances whatsoever, disclosed or undisclosed. On the
Closing Date there will be no beneficial owners of such Shares or of any
interest in or to any such Shares other than Seller. Upon delivery of the
certificates representing the Shares to HCC for the consideration set forth
herein, HCC shall be deemed to have obtained good and merchantable title to the
Shares.
B. Authorization and Validity. This Agreement has been or will
be as of the Closing Date duly executed and delivered by Seller and constitutes
or will constitute legal, valid and binding obligations of Seller, enforceable
against Seller in accordance with its respective terms, except as may be limited
by applicable bankruptcy, insolvency or similar laws affecting creditors' rights
generally or the availability of equitable remedies.
C. Consents/Approvals/Conflict. Except for the compliance with
applicable federal and state securities laws, no consent, approval,
authorization or order of any court or governmental agency or other body is
required for Seller to consummate the sale of the Shares. Neither the execution,
delivery, consummation or performance of this Agreement shall conflict with,
constitute a breach of any agreement to which Seller is a party or by which they
are bound nor, to the best of Seller's knowledge and belief, any existing law,
rule, regulation, or any decree of any court or
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governmental department, agency, commission, board or bureau, domestic or
foreign, having jurisdiction over Seller, nor result in the creation of any lien
or other encumbrance upon the Shares.
D. Seller's Personal Affidavit. Based on the fact that the
Seller has been the President and a Director of the Company and the owner of the
Shares, the Seller shall execute and deliver to HCC at the Closing the seller's
personal affidavit, in the form of Exhibit A hereto, stating that based on his
personal knowledge the Company: (1) has conducted no business of any kind
whatsoever for a period in excess of five years; (2) the Company is not indebted
to any person in any amount, has no liability in any amount or legal obligation
of any kind to any person, and has not created by contract or implication a
lien, security interest or other encumbrance of any form in favor of any person;
(3) the Company has paid all taxes or governmental charges of any kind,
including fines and penalties imposed by any governmental unit, which it is
obligated to pay, except franchise taxes due to the State of Delaware; and (4)
that the Company's books of account and corporate records, as delivered to HCC,
are true, accurate and complete.
6. Representations and Warranties of the Company. Unless specifically
stated otherwise, the Company and Seller jointly and severally hereby represent
and warrant that the following are true and correct as of the date hereof and
will be true and correct through the Closing Date as if made on that date:
A. Organization of the Company. The Company was incorporated
under the laws of the State of Delaware on April 19, 1988.
B. Capitalization. As of the execution date of this
Agreement, the authorized capital stock of the Company consists of one billion
shares of common stock, par value $.00001 per share, of which 37,333,000 shares
are issued and outstanding. All of the issued and outstanding shares of capital
stock of the Company are duly authorized, validly issued, fully paid and
nonassessable. The Company is not a party to or bound by, nor does it have any
knowledge of, any agreement, instrument, arrangement, contract, obligation,
commitment or understanding of any character, whether written or oral, express
or implied, relating to the sale, assignment, encumbrance, conveyance, transfer
or delivery of any capital stock of the Company. The Company has no subsidiaries
and no ownership of the securities of any other entity.
C. Documents Genuine. All originals and/or copies of the
Company's articles of incorporation and bylaws, each amended to date, and all
minutes of meetings and written consents in lieu of meetings of Shareholders,
directors and committees of directors of the Company, financial data, and any
and all other documents, material, data, files, or information which have been
or will be furnished to HCC, are, to the best of the Company's knowledge, true,
complete, correct and unmodified originals and/or copies of such documents,
information, data, files or material.
D. Authorization and Validity. The execution, delivery and
performance by the Company of this Agreement and the consummation of the
transaction contemplated hereby has been
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duly authorized by the Company. This Agreement has been or will be as of the
Closing Date duly executed and delivered by the Company and constitutes or will
constitute legal, valid and binding obligations of the Company, enforceable
against the Company in accordance with its respective terms, except as may be
limited by applicable bankruptcy, insolvency or similar laws affecting
creditors' rights generally or the availability of equitable remedies.
E. Restrictive Covenants. At all times though and including
the Closing Date, the Company shall conduct no business, make no commitments,
but comply with all applicable laws, rules, and regulations. Furthermore, the
Company will not, without the prior written consent of HCC, (i) make any changes
in its capital structure, (ii) incur any liability in any amount or other form
of obligation, (iii) incur any indebtedness for borrowed money, (iv) make any
loans or advances, (v) declare or pay any dividend or make any other
distribution with respect to its capital stock, (vi) issue, sell, deliver, or
purchase or otherwise acquire for value any of its stock or other securities,
(vii) mortgage, pledge, or subject to encumbrance any of its assets, (viii) sell
or transfer any of its assets, (ix) make an investment of any kind, (x) issue
any options to purchase the capital stock of the Company, or (xi) employ any
person or pay any wages or salary to any person.
F. Consents/Approvals/Conflict. Except for compliance with
applicable federal and state securities laws and approval by the Company's Board
of Directors, no consent, approval, authorization or order of any court or
governmental agency or other body is required for the Company to execute and
enter into this Agreement. Neither the execution, delivery, consummation or
performance of this Agreement shall conflict with, constitute a breach of the
Company's respective articles of incorporation or bylaws, as amended to date, or
any note, mortgage, indenture, deed of trust or other agreement or instrument to
which the Company is a party or by which it is bound nor, to the best of the
Company's knowledge and belief, any existing law, rule, regulation, or any
decree of any court or governmental department, agency, commission, board or
bureau, domestic or foreign, having jurisdiction over the Company.
G. Financial Statements. The Company shall have furnished to
HCC prior to the Closing Date a true, correct and complete copy of the last set
of financial statements generated for the Company as set forth in the report on
Form 10-K or 10-Q which the Company most recently filed with the Securities and
Exchange Commission. The Company had no liabilities of any kind or nature
whatsoever as of December 31, 1997 and will have no liabilities of any kind or
nature whatsoever as of the Closing Date.
H. Taxes. All income, excise, unemployment, social security,
occupational, sales or use taxes, and any and all other taxes, duties,
assessments or charges levied, assessed or imposed upon the Company by the
United States or by any state or municipal government or subdivision or
instrumentality thereof which are due and payable as of the Closing Date have
been duly paid, except for franchise taxes due to the State of Delaware, and all
required tax returns or reports concerning any such items have been duly filed.
I. Guarantees or Indebtedness. There are, and as of the
Closing Date there will
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be, no contracts or commitments by the Company directly or indirectly
guaranteeing the payment or performance (or both) of any obligations of any
third party whatsoever including the Company's shareholders. As of the Closing
Date the Company is not indebted to any of its officers, directors, employees or
shareholders.
J. Pending or Threatened Litigation. There are no actions,
governmental investigations, suits, arbitrations or other administrative,
criminal or civil actions pending or threatened against the Company. In
addition, to the best of the Company's knowledge, the Company does not know of
any basis that exists for any such action, suit, investigation, arbitration or
proceeding.
L. Disclosure. No representations or warranties by the Company
in this Agreement and no statement contained in any document (including, without
limitation, financial statements), certificate, or other writing furnished or to
be furnished by the Company or the Seller to HCC pursuant to the provisions
hereof or in connection with the transactions contemplated hereby, contains or
will contain any untrue statement of material fact or omits or will omit to
state any material fact necessary, in light of the circumstances under which it
was made, in order to make the statements herein or therein not misleading.
M. Contracts; Hidden Liabilities. As of the Closing Date there
will be no contracts, agreements, arrangements or understandings entered into
by, or binding upon, the Company which cannot be immediately terminated. As of
the Closing Date the Company will have no obligations or liabilities of any kind
which have been hidden.
7. Conditions to Obligations of HCC. All obligations of HCC under this
Agreement are subject to the fulfillment, prior to or on the Closing Date, of
each of the following conditions (any one or more of which may, in the absolute
discretion of HCC, be waived by HCC):
A. Documents Delivered to HCC. At the Closing, the following
documents shall be delivered to HCC:
(i) Certificate(s) representing the Shares to be delivered
pursuant to this Agreement duly endorsed or accompanied by
duly executed stock powers;
(ii) A certificate executed by Seller and the Company dated
the Closing Date, certifying that:
(A) The representations and warranties of Seller and
the Company contained in this Agreement are then true in all
respects; and
(B) Seller and the Company have complied with all
agreements and conditions required by this Agreement to be
performed or complied with by it;
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(iii) The Seller's personal affidavit in the form of Exhibit A
hereto, as required by subsection 5.D. of this Agreement;
(iv) Resignations signed by all of the Company's officers and
directors, and a certificate in the form of Exhibit B hereto,
duly executed by the Company setting forth the resolution
pursuant to which new directors have been elected for the
Company, dated the Closing Date, electing those persons
designated by HCC as directors of the Company; and
(v) All original corporate books and records, including the
Company's certified financial statements, minute books and
corporate seal as requested by HCC or which may be appropriate
or necessary for HCC to continue the business of the Company.
8. Conditions to Obligations of Seller. All obligations of Seller under
this Agreement are subject to the fulfillment, prior to or on the Closing Date,
of each of the following conditions (any one or more of which may, in the
absolute discretion of Seller, be waived by Seller):
A. Documents Delivered to Seller. At the Closing, the
following documents shall be delivered to Seller:
(i) a cashier's check payable to the order of the Seller for
$20,000; and
(ii) a certificate executed by HCC dated the Closing Date,
certifying that:
(A) The representations and warranties of HCC
contained in this Agreement are then true in all respects; and
(B) HCC has complied with all agreements and
conditions required by this Agreement to be performed or
complied with by it.
9. Indemnification by HCC. HCC hereby agrees to indemnify and hold
harmless Seller for the full amount of all losses, claims, expenses or
liabilities (including without limitation reasonable attorneys' fees) arising
from or relating to (i) any breach of the representations and warranties made by
HCC in this Agreement, and (ii) any failure of HCC duly to perform any covenant
in this Agreement to be performed by HCC.
10. Indemnification by Seller. Seller hereby agrees to indemnify and
hold harmless HCC and its successors and assigns for the full amount of all
losses, claims, expenses or liabilities (including without limitation reasonable
attorneys' fees) arising from or relating to (i) any breach of the
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representations and warranties made by Seller and the Company in this Agreement,
and (ii) any failure of Seller and the Company duly to perform any covenant in
this Agreement to be performed by them.
11. Miscellaneous.
A. Amendment. This Agreement may be amended, modified, or
supplemented only by an instrument in writing executed by all the parties
hereto.
B. Assignment. Neither this Agreement nor any right created
hereby shall be assignable by any party hereto without the written consent of
the party not seeking assignment.
C. Parties In Interest; No Third Party Beneficiaries. Except
as otherwise provided herein, the terms and conditions of this Agreement shall
inure to the benefit of and be binding upon the respective heirs, legal
representatives, successors and assigns of the parties hereto. This Agreement
shall not be deemed to confer upon any person not a party hereto any rights or
remedies hereunder.
D. Entire Agreement. This Agreement constitutes the entire
agreement of the parties regarding the subject matter hereof and supersedes all
prior agreements and understandings, both written and oral, among the parties,
or any of them, with respect to the subject matter hereof.
E. Severability. If any provision of this Agreement is held to
be illegal, invalid or unenforceable under present or future laws effective
during the term hereof, such provision shall be fully severable and this
Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision never comprised a part hereof; and the remaining
provisions hereof shall remain in full force and effect and shall not be
affected by the illegal, invalid or unenforceable provision or by its severance
herefrom. Furthermore, in lieu of such illegal, invalid or unenforceable
provision, there shall be added automatically as part of this Agreement a
provision as similar in its terms to such illegal, invalid, or unenforceable
provision as may be possible and be legal, valid and enforceable.
F. Survival of Representations, Warranties and Covenants. The
representations, warranties and covenants contained herein shall survive the
Closing and all statements contained in any certificate, affidavit or other
instrument delivered by or on behalf of Seller, the Company, or HCC, as the case
may be, and, notwithstanding any provision in this Agreement to the contrary,
shall survive the Closing.
G. Governing Law. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED BY AND CONSTRUED AND
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ENFORCED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS (BUT NOT THE RULES GOVERNING
CONFLICTS OF LAWS) OF THE STATE OF TEXAS.
H. Captions. The captions in this agreement are for
convenience of reference only and shall not limit or otherwise affect any of the
terms or provisions hereof.
I. Gender and Number. When the context requires, the gender of
all words used herein shall include the masculine, feminine and neuter and the
number of all words shall include the singular and plural.
J. Notice. Any notice or communication hereunder must be in
writing and given by depositing the same in the United States mail, addressed to
the party to be notified, postage prepaid and registered or certified with
return receipt requested, or by delivering the same in person. Such notice shall
be deemed received on the date on which it is hand delivered or on the third
business day following the date on which it was mailed. For purposes of notice,
the addresses of the parties shall be:
If to Seller: 000 Xxxxxxxxxx
Xxxxxxx, Xxxxx 00000
If to HCC: 00000 Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: Xx. Xxxxx X. Xxxxxx, Xx.
K. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument. Execution and delivery of
this Agreement by exchange of facsimile copies bearing facsimile signature of a
party shall constitute a valid and binding execution and delivery of this
Agreement by such party. Such facsimile copies shall constitute enforceable
original documents.
L. Further Assurances. From time to time subsequent to the
execution of this Agreement, the parties hereto and each of them agree to take
all such further action, and to execute and deliver all such additional
documents, as are reasonably necessary to effect the transactions contemplated
by this Agreement.
SELLER: /s/ Xxxxxx Xxx Xxxxxxx III
--------------------------------------
Xxxxxx Xxx Xxxxxxx III
Donnebrooke Corporation
By: /s/ Xxxxxx Xxx Xxxxxxx III
---------------------------------------
Xxxxxx Xxx Xxxxxxx III, President
Halter Capital Corporation
By: /s/ Xxxxx X. Xxxxxx, Xx.
----------------------------------------
Xxxxx X. Xxxxxx, Xx, Vice-President
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