EXHIBIT 99.2
AMENDED AND RESTATED
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STOCK PURCHASE AGREEMENT
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This AMENDED AND RESTATED STOCK PURCHASE AGREEMENT, dated as of May
15, 2001 (this "Agreement"), is made by and between Focal Corporation, a Utah
corporation (the "Company"), and United Native Depository Corporation, a Navajo
corporation (the "Purchaser"), with reference to the following:
RECITALS
WHEREAS, the parties hereto are the parties to that certain Stock
Purchase Agreement dated as of May 1, 2001 (the "Original Agreement");
WHEREAS, the parties wish to amend and restate the Original Agreement
in its entirety in the manner provided herein;
WHEREAS, as provided in the Original Agreement, the Company desires to
issue and sell to the Purchaser, and the Purchaser desires to purchase from the
Company, shares of the Company's authorized but unissued Common Stock, par value
$0.10 per share (the "Common Stock");
WHEREAS, upon the consummation of the transactions contemplated by
this Agreement, the Purchaser shall be the record and beneficial owner of at
least 51% of all of the issued and outstanding capital stock of the Company;
AGREEMENT
NOW, THEREFORE, in consideration of the conditions and promises herein
contained, the parties hereto agrees as follows:
1. DEFINITIONS. For purposes of this Agreement, unless the context
otherwise requires, the following terms shall have the following respective
meanings:
"AGREEMENT" has the meaning provided in the preamble.
"Articles of Incorporation" means the Articles of Incorporation of the
Company, as amended and in effect on the date of this Agreement.
"CLOSING" has the meaning provided in Section 2.2.
"COMMON STOCK" has the meaning provided in the second Recital above.
"COMPANY" has the meaning provided in the preamble.
"FINANCIAL STATEMENTS" has the meaning provided in Section 3.7.
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"GAAP" shall mean generally accepted accounting principles as in effect
on the date of this Agreement and consistently applied and maintained throughout
the period indicated. Whenever any accounting term is used herein which is not
otherwise defined, it shall have the meaning ascribed thereto under GAAP.
"MANAGEMENT AGREEMENT" has the meaning provided in Section 2.1.
"Material Adverse Effect" means a material adverse effect on the
Company's business, assets, condition (financial or otherwise), results of
operation or prospects, or on the ability of the Company to perform its
obligations under and consummate the transactions contemplated by this
Agreement.
"NEWCO" has the meaning provided in Section 4.6.
"ORIGINAL AGREEMENT" has the meaning provided in the first Recital
above.
"PERSON" means any natural person, corporation, partnership, limited
liability company, association, government, governmental agency or other entity,
whether acting in an individual, fiduciary or other capacity.
"PURCHASER" has the meaning provided in the preamble.
"RESTATED BY-LAWS" means the Restated By-Laws of the Company, as in
effect on the date of this Agreement.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"TRANSFER AGENT" means Transfer Online, having its principal office
address at 000 XX Xxxx Xxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxx 00000.
2. PURCHASE AND SALE OF STOCK.
2.1 SALE AND ISSUANCE OF COMMON STOCK. Subject to the terms
and conditions of this Agreement, the Purchaser agrees to purchase from the
Company at the Closing and the Company agrees to sell and issue to the Purchaser
at the Closing that number of shares of the Common Stock provided on Schedule
2.1, which amount represents at least 51% of the fully diluted issued and
outstanding shares of the capital stock of the Company at Closing. The purchase
price shall consist of:
(i) A cash payment of $10,000, the receipt of which by the Company
on May 1, 2001 is hereby acknowledged.
(ii) A promissory note made by the Purchaser in the amount of
$300,000 in favor of the Company, in substantially the form of
Exhibit A to this Agreement (the "Promissory Note").;
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(iii) The execution of a Management and Development Agreement by and
between the Company and the Purchaser (the "Management
Agreement"), pursuant to which the Company shall receive
twenty-five percent (25%) of the net profits of the Cabazon
Power Plant development for seven (7) years from the date of
such Management Agreement, as compensation for its services
provided thereunder. The terms and conditions of the
Management Agreement shall be set forth in a separate written
agreement between the parties to be entered into as of the
Closing.
2.2 CLOSING/DELIVERIES.
(a) CLOSING. The purchase and sale of the Common Stock (the "Closing")
shall take place at the offices of Xxxxxx & Xxxxxxxxxx located at 00000 Xxxxxxxx
Xxxx., Xxxxx 000, Xxx Xxxxxxx, Xxxxxxxxxx at 10:00 a.m. Pacific Time, on or
before May 15, 2001.
(b) DELIVERIES. At the Closing, the Purchaser shall execute and deliver
to the Company the Promissory Note and thereupon the Company shall instruct the
Transfer Agent to issue and deliver to the Purchaser a certificate representing
all of the shares of Common Stock that the Purchaser is purchasing pursuant to
this Agreement.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY.
The Company hereby represents, warrants and covenants to the Purchaser
as follows:
3.1 ORGANIZATION; GOOD STANDING; QUALIFICATION. The Company is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Utah, has all requisite corporate power and authority to
own and operate its properties and assets and to carry on its business as now
conducted and as presently proposed to be conducted, to execute and deliver this
Agreement, to issue and sell the Common Stock, and to carry out the provisions
of this Agreement. The Company is duly qualified and is authorized to transact
business and is in good standing as a foreign corporation in California and in
such other jurisdictions in which the failure to so qualify, individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect.
3.2 AUTHORIZATION. All corporate action on the part of the
Company, its officers, directors and shareholders necessary for the
authorization, execution and delivery by the Company of this Agreement, the
performance of all obligations of the Company hereunder and thereunder and the
authorization, issuance (or reservation for issuance), sale and delivery of the
Common Stock being sold hereunder has been taken, and this Agreement
constitutes, and when executed and delivered, will constitute, valid and legally
binding obligations of the Company, enforceable in accordance with their
respective terms except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors' rights generally, and (ii) as limited by laws relating
to the availability of specific performance, injunctive relief or other
equitable remedies.
3.3 VALID ISSUANCE OF COMMON STOCK. The Common Stock that is
being purchased by the Purchaser hereunder, when issued, sold and delivered in
accordance with the terms of this Agreement for the consideration expressed
herein, will be duly and validly issued, fully paid and nonassessable, and will
be free of restrictions on transfer other than restrictions on transfer under
applicable state and federal securities laws.
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3.4 CONSENTS. No consent, approval, qualification, order or
authorization of, or filing with, any Person is required on the part of the
Company in connection with the Company's valid execution, delivery or
performance of this Agreement, or the offer, sale or issuance of the Common
Stock.
3.5 CAPITALIZATION.
(a) The authorized capital of the Company consists,
or will consist immediately prior to the Closing, of:
(i) 100,000,000 shares of preferred stock,
no par value, all of which have been designated as Series A Preferred Stock, and
none of which are issued and outstanding.
(ii) 40,000,000 shares of Common Stock, of
which 19,392,271 shares are issued and outstanding and reserved for all
outstanding convertible securities.
(b) The outstanding shares of Common Stock have been
duly authorized and validly issued, are fully paid and nonassessable, and were
issued in accordance with the registration or qualification provisions of the
Securities Act and any relevant state securities laws or pursuant to valid
exemptions therefrom.
3.6 COMPLIANCE. The execution, delivery and performance by the
Company of this Agreement and the consummation of the transactions contemplated
hereby will not result in any violation or default of any provision of the
Articles of Incorporation or By-laws.
3.7 LITIGATION. There is no action, suit, proceeding or
investigation pending or, to the Company's knowledge, threatened against or
affecting the Company that questions the validity of this Agreement or the right
of the Company to enter into this Agreement, or to consummate the transactions
contemplated hereby, or that might result, either individually or in the
aggregate, in any Material Adverse Effect. The Company is not a party to or, to
the Company's knowledge, named in or subject to any order, writ, injunction,
judgment or decree of any court, government agency or instrumentality. There is
no action, suit, proceeding or investigation by the Company currently pending or
that the Company currently intends to initiate.
3.8 SEC FILINGS. Excepts as disclosed in Schedule 3.8, the
Company has timely filed all reports that it is required to file with the
Securities and Exchange Commission prior to the date hereof and such reports are
accurate in all material respects. The information set forth in the Form 10-KSB
for the year ended June 30, 2000 and Form 10-QSB for the three month period
ended December 31, 2000 (collectively, the "SEC Filings") as filed by the
Company with the Securities and Exchange Commission (the "SEC") is true, correct
and complete in all material respects as of the respective date of each such
filing and does not omit to state any material fact necessary in order to make
the statements therein not misleading. The financial statements of the Company
as set forth in the SEC Filings have been prepared in accordance with GAAP
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applied on a consistent basis throughout the periods covered thereby and fairly
present in all material respects the financial condition and results of
operations of the Company as of their respective dates. Since December 31, 2000,
there has not been any material adverse change in the business, financial
condition or results of operations of the Company. Except for the liabilities
set forth in the financial statements included in the SEC Filings and
liabilities that have arisen after March 31, 2000 in the ordinary course of
business, the Company has no material liability.
3.9 NO MATERIAL ADVERSE CHANGE. Since December 31, 2000, there
has not been with respect to the Company any change in the business, assets,
properties, liabilities, condition (financial or otherwise), results of
operations or prospects of the Company, except changes in the ordinary course of
business that have not had, and could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.
The Purchaser hereby represents and warrants to the Company as follows:
4.1 AUTHORIZATION. The Purchaser has full power and authority
to enter into this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. This Agreement constitutes, and
when executed and delivered, will constitute, a valid and legally binding
obligation of the Purchaser, enforceable in accordance with its terms except (i)
as limited by applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors' rights
generally, and (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies.
4.2 INVESTMENT. The Common Stock to be purchased by the
Purchaser will be purchased for investment for the Purchaser's own account, not
as a nominee or agent, and not with a view to the resale or distribution
thereof.
4.3 ACCREDITED INVESTOR. The Purchaser is an "Accredited
Investor" as that term is defined in Rule 501 of Regulation D promulgated under
the Securities Act, as amended. The Purchaser is able to bear the economic risk
of the purchase of the Common Stock pursuant to the terms of this Agreement,
including a complete loss of the Purchaser's investment in the Common Stock.
4.4 RESTRICTED SECURITIES. The Purchaser understands that the
Common Stock may not be sold, transferred or otherwise disposed of without
registration under the Securities Act or an exemption therefrom.
4.5 LEGEND. To the extent applicable, each certificate or
other document evidencing any of the Common Stock shall be endorsed with the
legend in the form set forth below:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS REGISTERED UNDER SUCH ACT, OR UNLESS
THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL OR OTHER EVIDENCE SATISFACTORY TO
THE COMPANY THAT AN EXEMPTION THEREFROM IS AVAILABLE."
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4.6 SPIN-OFF OF CERTAIN ASSETS. The Purchaser understands and
agrees that following the Closing, the Company will transfer its real estate
assets and will assign its rights under the Promissory Note to a wholly owned
subsidiary of the Company to be formed by the Company for the purpose of taking
title to such spin-off assets. Thereafter, the Company and its Board of
Directors will declare a stock dividend consisting of all of the issued and
outstanding shares of capital stock of Newco to the Company's shareholders;
provided, however, that in no event shall the Purchaser be entitled to more than
20% of the shares of Newco outstanding as of the record date fixed for such
share dividend. The Purchaser agrees to act in good faith and use its best
efforts to cause the Company to consummate the spin-off of the above-described
assets to Newco as soon as is reasonably practicable following the Closing. The
Purchaser acknowledges and agrees that the spin-off the Company's real estate
assets and its rights under the Promissory Note to Newco is a material
inducement for the Company to enter into this Agreement.
5. CONDITIONS OF THE PURCHASER'S OBLIGATIONS AT CLOSING. The
obligations of the Purchaser under Section 2.1 are subject to the fulfillment or
waiver on or before the Closing of each of the following conditions:
5.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company contained in Section 3 shall be true and correct in
all material respects on and as of the date of the Closing with the same effect
as though such representations and warranties had been made on and as of the
date of the Closing.
5.2 CONSENTS. All consents, authorizations, approvals and
permits of any Person that are required in connection with the issuance and sale
of the Common Stock pursuant to this Agreement shall have been duly obtained and
be effective as of the Closing.
5.3 BOARD OF DIRECTORS. Immediately prior to the Closing, the
Board of Directors of the Company shall tender their written resignations to the
Company and at the Closing the Purchaser shall elect new directors to fill the
vacancies created by such resignations..
5.4 OFFICERS. Immediately prior to the Closing, the officers
of the Company shall tender their written resignations to the Company and
immediately following the Closing the directors of the Company in office
immediately following the Closing shall appoint new officers to fill the
vacancies created by such resignations. Any management, employment and
consulting contracts in effect immediately prior to the Closing shall be
terminated as of the Closing.
6. CONDITIONS OF THE COMPANY'S OBLIGATIONS AT CLOSING. The obligations
of the Company to the Purchaser under Section 2.1 are subject to the fulfillment
or waiver on or before the Closing of each of the following conditions:
6.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Purchaser contained in Section 4 shall be true and correct in
all material respects on and as of the date of the Closing with the same effect
as though such representations and warranties had been made on and as of the
date of the Closing.
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6.2 CONSENTS. All consents, authorizations, approvals and
permits of any Person that are required in connection with the issuance and sale
of the Common Stock pursuant to this Agreement shall have been duly obtained and
be effective as of the Closing.
MISCELLANEOUS.
7.1 NOTICES. All notices and other communications required or
permitted under this Agreement shall be deemed to have been duly given and made
if in writing and if served either by personal delivery to the party for whom
intended (which shall include delivery by Federal Express or similar
nationally-recognized service) or three (3) business days after being deposited,
postage prepaid, certified or registered mail, return receipt requested, in the
United States mail bearing the following address for, or such other address as
may be designated in writing hereafter by, such party:
If to Purchaser
United Native Depository Corporation
000 Xxxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxxx, CEO
If to the Company:
Focal Corporation
0000 X. Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxx
with a copy to:
Xxxxxx & Xxxxxxxxxx
00000 Xxxxxxxx Xxxx.
Xxxxx 000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxx Xxxxx, Esq.
7.2 WAIVER. No delay on the part of any party hereto with
respect to the exercise of any right, power, privilege or remedy under this
Agreement shall operate as a waiver thereof, nor shall any exercise or partial
exercise of any such right, power, privilege or remedy preclude any further
exercise thereof or the exercise of any other right, power, privilege or remedy.
No modification or waiver by any party hereto of any provision of this
Agreement, or consent to any departure by any other party therefrom, shall be
effective other than in the specific instance and for the purpose for which
given.
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7.3 REMEDIES. The rights, powers, privileges and remedies
hereunder are cumulative and not exclusive of any other right, power, privilege
or remedy the parties hereto would otherwise have.
7.4 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement and understanding between the Purchaser and the Company, and
supersedes all prior agreements and understandings, relating to the subject
matter hereof.
7.5 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of california, without regard
to principles of conflicts of law.
7.6 COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
7.7 SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Agreement affecting the validity
or enforceability of such provision in any other jurisdiction.
7.8 CROSS REFERENCES. References in this Agreement to any
section are, unless otherwise specified, to such section of this Agreement.
7.9 HEADINGS. The various headings of this Agreement are
inserted for convenience only and shall not affect the meaning or interpretation
of this Agreement or any provisions hereof.
7.10 SCHEDULES INCORPORATED. The schedules to this Agreement
are incorporated into and constitute an integral part of this Agreement.
7.11 AMENDMENT AND WAIVER. Except as otherwise provided
herein, no modification, amendment or waiver of any provision of this Agreement
will be effective unless such modification, amendment or waiver is approved in
writing by all of the parties hereto; provided, however, that the Company must
submit to its shareholders for approval any proposed amendments to Section 4.6
of this Agreement. The failure of any party to enforce any of the provisions of
this Agreement will in no way be construed as a waiver of such provisions and
will not affect the right of such party thereafter to enforce each and every
provision of this Agreement.
7.12 BINDING EFFECT. Except as otherwise provided herein, the
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and permitted assigns of the parties
(including transferees of any shares of Common Stock sold hereunder). Neither
party shall be permitted to assign any of its rights or delegate any of its
obligations under this Agreement without the written consent of the other party.
Nothing in this Agreement, express or implied, is intended to confer upon any
party other than the parties hereto or their respective successors and permitted
assigns any rights, remedies, obligations or liabilities under or by reason of
this Agreement, except as expressly provided in this Agreement. Any attempted
assignment or delegation by a party hereto not in accordance with this Section
7.12 shall be void.
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7.13 EXECUTION KNOWING AND VOLUNTARY. In executing this
Agreement, the parties severally acknowledge and represent that each: (a) has
fully and carefully read and considered this Agreement; (b) has been or has had
the opportunity to be fully apprized by legal counsel of the effect and meaning
of this document and all terms and conditions hereof; and (c) is executing this
Agreement voluntarily, free from any influence, coercion or duress of any kind.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
FOCAL CORPORATION
By: /s/ Xxxxxx Xxxxxx
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Xxxxxx Xxxxxx
Its: Chairman and President
UNITED NATIVE DEPOSITORY CORPORATION
By: /s/ Xxxx Xxxxxxx
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Xxxx Xxxxxxx
Its: Chairman and President
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SCHEDULE 2.1
SHARE ISSUANCE
Shares Issued and Outstanding Per Transfer Agent Records 9,183,027
Reconciling items:
Shares issued to Management and Consultants 4,966,669
Shares issued related to Real Estate acquisitions 100,384
Shares reserved for convertible securities 4,142,191
Shares reserved for contingency 1,000,000
FULLY DILUTED NUMBER OF SHARES OF COMMON
STOCK OUTSTANDING IMMEDIATELY
BEFORE CLOSING 19,392,271 49%
TOTAL SHARES TO BE ISSUED TO PURCHASER
AT CLOSING PURSUANT TO SECTION 2.1 20,183,792 51%
FULLY DILUTED NUMBER OF SHARES OF COMMON
STOCK OUTSTANDING IMMEDIATELY AFTER CLOSING 39,576,063 100%
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