Exhibit 99
Item 7(a)
STOCK ACQUISITION AGREEMENT
AGREEMENT dated October 29, 1999, between Xxx Xxxxx, as agent for
certain principals, whose names and addresses are attached hereto as "Exhibit A"
(hereinafter collectively referred to as the "Buyer") and Phoenix Resources
Technologies, Inc., a Nevada corporation (hereinafter the "Company").
This Agreement sets forth the terms and conditions upon which the
Company is today selling to the Buyer, and the Buyer is today purchasing from
the Company 9,000,000 post reverse split "restricted" shares of common stock
(the "Shares"), $0.001 par value per share, when issued will represent
approximately 95.7% of the issued and outstanding shares of capital stock of the
Company.
In consideration of the mutual agreement contained herein, the parties
hereby agree as follows:
I. SALES OF THE SHARES.
1.01 Shares being Sold. Subject to the terms and conditions of this
Agreement, the Company is selling and delivering the Shares to the Buyer at the
closing provided for in Section 1.03 hereof (the "Closing"), free and clear of
all liens, charges, or encumbrances of whatsoever nature.
1.02 Consideration. At the Closing, the Buyer is delivering to the
Company US$300,000 which will be wire transferred to the account of Xxxxxx
Xxxxx, attorney at law as escrow agent.
1.03 Closing. The Closing of the transactions provided for in this
Agreement is taking place upon satisfaction of terms set forth in paragraph
1.04.
1.04 Escrow. The Buyer will deliver to Xxxxxx Xxxxx, attorney at
law, as escrow agent ("Escrow Agent"), the sum of US$300,000 as follows:
US$100,000 on December 6, 1999 and the balance of $200,000 on or before April 1,
2000. Upon execution of this agreement, the 9,000,000 shares of common stock
will be issued and held by Xxxxxx Xxxxx, Attorney at Law, as Escrow Agent
pending receipt of $300,000. Said shares will be released on a prorated basis as
full or partial payments are received. In no event will more than 2,000,000
shares be released until payment is made in full.
1.05 Reverse Stock Split. Prior to Closing, the Company has cause
the issued and outstanding shares of the Company's common stock to be reverse-
split on that basis on 1 for 100. All shares to be issued to the Buyer will be
on a post reverse-split basis.
II. RELATED TRANSACTIONS.
2.01 Finder. There are no finders with respect to the transaction
contemplated herein with the exception of Xxxxxx Xxxxxx who has been paid a fee
of $15,000.
III. REPRESENTATIONS AND WARRANTIES BY THE COMPANY.
The Company hereby jointly and severally represent and warrant as
follows:
3.01 Organization, Capitalization, etc.
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(a) The Company is a corporation duly organized, validly existing, and
in good standing under the laws of the state of Nevada, and is qualified to
transact business in no other state.
(b) The authorized capital stock of the Company consists of
100,000,000 shares, $0.001 par value per share, 27,000,000 pre-split shares
of which are validly issued and outstanding, fully paid and nonassessable.
All of the shares owned by the Company are owned free and clear of any
liens, claims, options, charges, restrictions, or encumbrances of
whatsoever nature. The Company have the unqualified right to sell, assign,
and deliver the Shares, and, upon consummation of the transactions
contemplated by this Agreement, the Buyer will acquire good and valid title
to the Shares, free and clear of all liens, claims, options, charges,
restrictions, and encumbrances of whatsoever nature. The Shares being
acquired by the Buyers from the Company are "restricted securities" as that
term is defined in Rule 144 of the Securities Act of 1933 (the "Act") and
will contain an appropriate legend as to the foregoing. There are no
outstanding options or other agreements of any nature whatsoever relating
to the issuance by the Company of any shares of its capital stock.
(c) The Company has the corporate power and authority to carry on its
business as presently conducted.
3.02 No Violation. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will
constitute a violation or default under any term or provision of the Certificate
of Incorporation or Bylaws of the Company, or of any contract, commitment,
indenture, other agreement or restriction of any kind or character to which the
Company or any of the Company is a party or by which the Company or any of the
Company is bound.
3.03 Financial Statement. The Company have delivered to the Buyer
all financial statements (audited and unaudited) that have been filed with the
United States Securities and Exchange Commission.
3.04 Tax Returns. The Company has duly filed all tax reports and
returns required to be filed by it and has fully paid all taxes and other
charges claimed to be due from it by federal, state, or local taxing authorities
(including without limitation those due in respect of its properties, income,
franchises, licenses, sales, and payrolls); there are no liens upon any of the
Company's property or assets; there are not now any pending questions relating
to, or claims asserted for, taxes or assessments asserted against the Company.
3.05 Title to Properties; Encumbrances. The Company owns no
property, either real or personal.
3.06 Accounts Receivable. The Company owns no accounts receivable.
3.07 Liabilities. The Company has no liabilities except 1) a
judgment in the amount of approximately $313,276 which will be paid and released
of record prior to November 6, 1999; and 2) a judgment in the amount of
$3,177,300.74 which is subject to a Forbearance Agreement with the judgment
creditor. The Company will pay $100,000 to the judgment creditor as required by
the Forbearance Agreement as amended from the proceeds paid by the Buyer.
Satisfactory evidence of the release and satisfaction of the judgment will be
presented by the Company and reflect that the same has been filed with the Court
where the judgment was rendered and satisfactory evidence will be
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obtained by the Company and delivered to the Buyer to reflect that the
consideration for the Forbearance Agreement has been paid in full.
3.08 Absence of Certain Changes. The Company has not since inception
committed any of the following acts since inception except as disclosed in
filings made with the Securities and Exchange Commission:
(a) Suffered any material adverse change in financial condition,
assets, liabilities, business, or prospects;
(b) Incurred any obligation or liability (whether absolute, accrued,
contingent, or otherwise) other than in the ordinary course of business and
consistent with past practice;
(c) Paid any claim or discharged or satisfied any lien or encumbrance
or paid or satisfied any liability (whether absolute, accrued, contingent,
or otherwise) other than liabilities shown or reflected in the Company's
financial statements, in the ordinary course of business and consistent
with past practices;
(d) Permitted or allowed any of its assets, tangible or intangible, to
be mortgaged, pledged, or subjected to any liens or encumbrances;
(e) Written down the value of any inventory or written-off as
uncollectible any notes or accounts receivable or any portion thereof;
(f) Cancelled any other debts or claims or waived any rights of
substantial value, or sold or transferred any of its assets or properties,
tangible or intangible, other than sales of inventory or merchandise made
in the ordinary course of business and consistent with past practice;
(g) Made any capital expenditures or commitments for additions to
property, plant or equipment;
(h) Declared, paid, or set aside for payment to its stockholders any
dividend or other distribution in respect of its capital stock or redeemed
or purchased or otherwise acquired any of its capital stock or any options
relating thereto or agreed to take any such action;
(i) Made any material change in any method of accounting or accounting
practice.
3.09 Litigation. There are no actions, proceedings, or
investigations pending or, to the knowledge of the Company, threatened against
the Company, and the Company know or have any reason to know of any basis for
any such action, proceeding, or investigation, except as disclosed in Section
3.07 above. There is no event or condition of any kind or character pertaining
to the business, assets, or prospects of the Company that may materially and
adversely affect such business, assets or prospects.
3.10 Disclosure. The Company has disclosed to the Buyer all facts
material to the assets, prospects, and business of the Company. No
representation or warranty by the Company contained in this Agreement, and no
statement contained in any instrument, list, certificate, or writing furnished
to the Buyer pursuant to the provisions hereof or in connection with the
transaction contemplated hereby, contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements
contained herein or therein not misleading
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or necessary in order to provide a prospective purchaser of the business of the
Company with proper information as to the Company and its affairs.
3.11 SEC Filings. The Company files reports with the Securities and
Exchange Commission (hereinafter the "SEC") and is current in all respects with
its reporting obligations, including, but not limited to those required by
Section 16(a) of the Securities Exchange Act of 0000 (xxx "Xxxxxxxx Xxx").
3.12 Bulletin Board Listing. The Company's common stock is currently
traded on the Bulletin Board operated by the National Association of Securities
Dealers, Inc. (the "Bulletin Board") under the symbol "PRTI." The common stock
will be trading on the Bulletin Board at Closing and the Company warrants that
this transaction will not cause the shares of common stock to be delisted from
the Bulletin Board and the Company will take all steps necessary to assure that
the Company's common stock will continue to trade thereon.
IV. REPRESENTATIONS AND WARRANTIES BY THE BUYER.
The Buyer hereby represents and warrants as follows:
4.01 Organization, etc. The Buyer is an agent acting on behalf of
certain principals and represents that he has full authority to act on their
behalf.
4.02 Authority. The execution and delivery of this Agreement by the
Buyer and the consummation by the Buyer of the transactions contemplated hereby
have been duly authorized by the Buyers.
4.03 Representations Regarding the Acquisition of the Shares.
(a) The Buyer understands that the SHARES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES AGENCIES;
(b) The Buyer is not an underwriter and is acquiring the Seller's
Shares solely for investment for the account of the Buyers and not with a
view to, or for, resale in connection with any distribution with in the
meaning of the federal securities act, the state securities acts or any
other applicable state securities acts;
(c) The Buyer understands the speculative nature and risks of
investments associated with the Company and confirms that the Shares are
suitable and consistent with his or her investment program and that his or
her financial position enables him or her to bear the risks of this
investment; and that there may not be any public market for the Shares
subscribed for herein;
(d) The Shares subscribed for herein may not be transferred,
encumbered, sold, hypothecated, or otherwise disposed of to any person,
without the express prior written consent of the Company and the prior
opinion of counsel for the Company that such disposition will not violate
federal and/or state securities acts. Disposition shall include, but is not
limited to acts of selling, assigning, transferring, pledging, encumbering,
hypothecating, gibing, and any form of conveying, whether voluntary or not;
(e) To the extent that any federal, and/or state securities laws shall
require, the Buyer hereby agrees that any Shares acquired pursuant to this
Agreement shall be without preference as to assets;
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(f) The Company or the Company are under no obligation to register or
seek an exemption under any federal and/or state securities acts for any
stock of the Company or to cause or permit such stock to be transferred in
the absence of any such registration or exemption and that the Buyer herein
must hold such stock indefinitely unless such stock is subsequently
registered under any federal and/or state securities acts or an exemption
from registration is available;
(g) The Buyer represents that it is sophisticated and has had the
opportunity to ask questions of the Company and the Seller and receive
additional information from the Company and the Company to the extent that
the Company and the Company possessed such information, or could acquire it
without unreasonable effort or expense necessary to evaluate the merits and
risks of any investment in the Company. Further, the Buyer has been given:
(1) All material books and records of the Company; (2) all material
contracts and documents relating to the Company and this proposed
transaction; (3) an opportunity to question the Company and the appropriate
executive officers of the Company; and, (4) has received and reviewed all
reports filed with the Securities and Exchange Commission.
(h) The Buyer has satisfied the suitability standards imposed by the
laws of his/hers/its domicile. The Shares being acquired from the Company
have not been registered under federal, state or foreign laws.
V. SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION.
5.01 Survival of Representations. All representations, warranties,
and agreements made by any party in this Agreement or pursuant hereto shall
survive the execution and delivery hereof and any investigation at any time made
by or on behalf of any party.
5.02 Indemnification. The Company, jointly and severally, agrees to
indemnify the Buyer and hold it harmless from and in respect of any assessment,
loss, damage, liability, cost, and expense (including without limitation
interest, penalties, and reasonable attorneys' fees) in excess of $100 in the
aggregate, imposed upon or incurred by the Buyer resulting from a breach of any
agreement, representation, or warranty of the Company. Assertion by the Buyer
of their right to indemnification under this Section 5.02 shall not preclude the
assertion by the Buyer of any other rights or the seeking of any other remedies
against the Company.
VI. MISCELLANEOUS.
6.01 Expenses. All fees and expenses incurred by the Company in
connection with the transactions contemplated by this Agreement shall be borne
by the respective parties hereto.
6.02 Further Assurances. From time to time, at the Buyer's request
and without further consideration, the Company, at its own expense, will execute
and transfer such documents and will take such action as the Buyer may
reasonably request in order to effectively consummate the transactions herein
contemplated.
6.03 Parties in Interest. All the terms and provisions of this
Agreement shall be binding upon, shall inure to the benefit of, and shall be
enforceable by the prospective heirs, beneficiaries, representatives,
successors, and assigns of the parties hereto.
6.04 Shares to Price. On April 1, 2000, the Company will issued
300,000 "restricted" shares of
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common stock to Xxxxxx Xxxxx in consideration of services rendered in connection
with this transaction. The foregoing shares may not be registered and may only
be sold in compliance with Reg. 144 of the Securities Act of 1933.
6.05 Resignations. On or before November 3, 1999, the current
officers and directors of the Company will resign and cause of the persons,
whose names and addresses are attached hereto as "Exhibit B", to be appointed to
the Company's Board of Directors.
6.06 Prior Agreements; Amendments. This Agreement supersedes all
prior agreements and understandings between the parties with respect to the
subject matter hereof. This Agreement may be amended only by a written
instrument duly executed by the parties hereto or their respective successors or
assigns.
6.07 Headings. The section and paragraph headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretations of this Agreement.
6.08 Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the state of Nevada,
without regard to its conflict-of-laws rules and venue of any actions brought
under this Agreement will be in the federal or state courts of Nevada.
6.09 Notices. All notices, requests, demands, and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if delivered or mailed (registered or certified mail, postage
prepaid, return receipt requested) as follows:
If to the Company: Xxxxxx Xxxxx, Attorney at Law
00000 Xxxxxxx Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxxx 00000
Tel: (000) 000-0000
If to the Buyer: Xxx Xxxxx
240 - 00000 000xx Xxxxxx
Xxxxx Xxxxx, Xxxxxxx Xxxxxxxx
Xxxxxx X0X 0X0
Tel: (000) 000-0000
6.10 Agent. The Company, hereby expressly authorizes Xxxxxx Xxxxx to
have full authority to execute all documents and receive and disburse all monies
referred to herein and deliver the Shares described herein.
6.11 Effect. In the event any portion of this Agreement is deemed to
be null and void under any state or federal law, all other portions and
provisions not deemed void or voidable shall be given full force and effect.
6.12 Counterparts. This Agreement may be executed simultaneously in
several counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
6.13 Default. In the event that the Buyer defaults on the payments
described herein, the Seller has the right to terminate this agreement by
written notice to the Buyer. Upon receipt of said notice, Buyer will return any
unsold portion of the 9,000,000 shares to the Company. Any money paid by Buyer
will be forfeited as total liquidated
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damages and the Company will not seek nor be entitled to any further damages.
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the Company and the Buyer, on the date first above written.
BUYER:
/s/ Xxx Xxxxx
_________________________________________
Xxx Xxxxx, Agent
COMPANY:
Phoenix Resources Technologies, Inc.
BY: /s/ Xxxxxxx Xxxxxxx
______________________________________
Xxxxxxx Xxxxxxx, President
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