1
EXHIBIT 00.00.XX; PAGE 1
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is made and entered into
as of the 28th day of August, 2001, by and between XXXXXXX X. XXXXX XXXXX PLAN
XXX XXXXXXX XXXXXX & CO., INC. (hereinafter referred to as "Buyer") and
ELECTROPURE, INC., a California corporation (hereinafter referred to as
"Electropure" or the "Company").
1. PURCHASE AND SALE OF SHARES
(a) Effective on the date hereof, the Company hereby sells to
Buyer and Buyer hereby purchases Three Hundred Thirty Three Thousand Three
Hundred Thirty Four (333,334) Shares of Electropure, Inc. Common Stock (the
"Shares") with an aggregate value equal to One Hundred Thousand Dollars
($100,000).
(b) The Shares shall have the rights, preferences, privileges,
restrictions and other terms set forth in the By-laws of the Company.
2. REPRESENTATIONS AND WARRANTIES OF BUYER Buyer represents and warrants
to the Company:
(a) The Shares are being acquired by Buyer for investment for an
indefinite period, for Buyer's own account, not as a nominee or agent, and not
with a view to the sale or distribution of any part thereof, and the Buyer has
no present intention of selling, granting participations in, or otherwise
distributing the same except as may be permitted by the Securities Act of 1933,
as amended (the "Act").
(b) Buyer does not have any contract, undertaking, agreement or
arrangement with any person to sell, transfer, or grant participation to such
person or to any third person, with respect to the Shares.
(c) That Buyer understands that the Shares have not been
registered under the Securities Act of 1933, as amended (the "Act"), in reliance
upon the exemptions from the registration provisions of the Act contained in
Section 4 (2) thereof, and any continued reliance on such exemption is
predicated on the representations of the Buyer set forth herein.
(d) Buyer understands that the Shares must be held indefinitely
unless the sale or other transfer thereof is subsequently registered under the
Act, as amended, or an exemption from such registration is available. Buyer
further understands that the Company is under no obligation to register the
Securities on its behalf or to assist him in complying with any exemption from
registration except as otherwise provided herein.
(e) Buyer (i) has adequate means of providing for his current
needs and possible contingencies, (ii) has no need for liquidity in this
investment, (iii) is able to bear the substantial economic risks of an
investment in the Shares for an indefinite period, (iv) at the present time, can
afford a complete loss of such investment, and (v) does not have an overall
commitment to
2
EXHIBIT 00.00.XX; PAGE 2
investments which are not readily marketable that is disproportionate to Buyer's
net worth, and Buyer's investment in the Shares will not cause such overall
commitment to become excessive.
(f) Buyer is an "accredited investor" (as defined in Regulation
D promulgated under the Act) and the undersigned's total investment in the
Shares does not exceed 10% of the Buyer's net worth.
(g) Buyer recognizes that the Company has had only limited
revenues to date and that the Shares as an investment involve significant risks.
(h) Buyer will not transfer the Shares without registering them
under applicable federal and state securities laws unless the transfer is exempt
from registration. Buyer realizes that the Company may not allow a transfer of
Shares unless the transferee is also an "accredited investor". Buyer understands
that legends will be placed on certificates representing the Shares, with
respect to the above restrictions on resale or other disposition of the Shares
and that stop transfer instructions have or will be placed with respect to the
Shares so as to restrict the assignment, resale or other disposition thereof.
(i) The Company will direct its transfer agent to, or will
itself, place such a stop transfer order in its books respecting transfer of the
Shares, and the certificate or certificates representing the Shares will bear
the following legend or a legend substantially similar thereto:
"THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933. THEY MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE
OF: (1) AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES
UNDER THE ACT, OR (2) AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED."
(j) That Buyer understands that Rule 144, promulgated by the
Securities and Exchange Commission under the Act, may not be currently available
for sale of the Shares, and there is no assurance that it will be available at
any particular time in the future. If and when Rule 144 is available for sale of
the Common Stock underlying the Shares, such sales in reliance upon Rule 144 may
only be (i) in limited quantities after the Shares have been held for one (1)
year after being sold by the Company, or (ii) in unlimited quantities by
non-affiliates after the Shares have been held for two (2) years after being
sold by the Company, in each case in accordance with the conditions of the Rule,
all of which must be met (including the requirement, if applicable, that
adequate information concerning the Company is then available to the public).
The Company and Buyer acknowledges that the Company has no obligation to supply
the information required for sales under Rule 144.
(k) The Purchase Price to be paid by Buyer to Company for the
Shares has been determined by Buyer as fair and appropriate based solely upon
Buyer's independent investigation and due diligence of the Company, and neither
Buyer nor the Company nor any of their agents, including, without limitation,
any of their officers, directors, employees, accountants and attorneys, has made
any representations or warranties whatsoever in connection with the sale of the
Shares by
3
EXHIBIT 00.00.XX; PAGE 3
the Company to Buyer. Buyer has had sufficient opportunity in connection with
the sale of the Shares to review the Company's business and affairs (including,
without limitation, the Company's financial statements and other information).
The Buyer has had answered to his satisfaction any questions with respect to the
Company's business and affairs. Buyer further has had the opportunity to obtain
independent financial, legal, accounting, business, tax and other appropriate
advice with respect to the transactions contemplated by this Agreement, and is
not relying upon the Company or any of its agents in any manner in connection
with same.
3. REGISTRATION RIGHTS The Company agrees to register under the Act all
of the Common Stock issuable upon conversion of the Shares by the Buyer in
connection with the next Registration Statement filed by the Company with the
Securities and Exchange Commission.
4. REPRESENTATIONS AND WARRANTIES OF ELECTROPURE
(a) Electropure is a corporation duly organized and validly existing
under the laws of the State of California without limit as to duration of its
existence, and is authorized and in good standing to do business in no other
state; Electropure has the corporate power and adequate authority, rights and
franchise to own its property and to carry on its business as now conducted;
and, subject to ratification by its Board of Directors, Electropure has the
corporate power and adequate authority to enter into this Agreement.
(b) The execution and delivery of this Agreement and subject to (1)
ratification by the Board of Directors of the Company and (2) filing the
Certificate with the California Secretary of State, the performance of the
provisions of this Agreement are not in contravention of or in conflict with any
law or regulation or any term or provision of Electropure's Articles of
Incorporation or By-Laws and are duly authorized and do not require the consent
or approval of any governmental body or other regulatory authority; and this
Agreement is a valid, binding and legal obligation of Electropure, enforceable
in accordance with the terms herein.
5. ENTIRE AGREEMENT This Agreement embodies the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior and contemporaneous agreements and
understandings relating to such subject matter.
6. AMENDMENT This Agreement may not be amended except by written
document executed by the parties.
7. SUBJECT HEADINGS Subject headings are included for convenience only
and shall not be deemed part of this Agreement.
8. SEVERABILITY If any provision of this Agreement shall be held
unenforceable as applied to any circumstance, the remainder of this Agreement
and the application of such provision to other circumstances shall be
interpreted so as best to effect the intent of the parties. The parties further
agree to replace any such unenforceable provision with an enforceable provision
(and to take such other action) which will achieve, to the extent possible, the
purposes of the unenforceable provision.
4
EXHIBIT 00.00.XX; PAGE 4
9. GOVERNING LAW This Agreement shall be governed by and construed under
the laws of the State of California in force from time to time.
10. PARTIES BOUND This Agreement is binding on and shall inure to the
benefit of the parties and their respective successors, assign, heirs, and legal
representatives.
11. SURVIVAL The representations, warranties, covenants, and agreements
contained in this Agreement shall survive the consummation of the transactions
contemplated hereby.
12. COUNTERPARTS This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
COMPANY: ELECTROPURE, INC.
By: /S/ XXXXX X. XXXXXXX
-------------------------------------
Xxxxx X. Xxxxxxx, President
00000 Xxxxx Xxxxxx Xxxxx
Xxxxxx Xxxxx, XX 00000-0000
BUYER: By: /S/ XXXXXXX X. XXXXX
-------------------------------------
XXXXXXX X. XXXXX
000 Xxxxxxxxx Xxxxx
Xxxxxxxx Xxxx, XX 00000-0000
