XXXXXXX INTERNATIONAL, INC.
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement ("Agreement") is made as of the 22nd day of
December, 2003, by and among Xxxxxxx Xxxxxx, an individual (the "Seller") and
Xxxxxxxxx Xxxxxxxxxx, an individual (the "Purchaser").
RECITALS
A. The Seller is the owner of 1,130,000 shares of common stock, par value
$0.001 per share (the "Common Stock") of Xxxxxxx International Inc., a Utah
corporation (the "Company").
B. The Seller desires to sell 800,000 shares (the "Shares") of Common
Stock of the Company to the Purchaser, and the Purchaser desires to purchase the
Shares from the Seller, on the terms and subject to the conditions set forth
herein.
C. The Seller and the Company further desire to cancel 300,000 shares of
Common Stock held by Seller, on the terms and subject to the conditions set
forth herein.
AGREEMENT
It is agreed as follows:
1. PURCHASE AND SALE OF SHARES.
1.1 Purchase and Sale of Shares. In reliance upon the
representations and warranties of the Seller and the Purchaser contained herein
and subject to the terms and conditions set forth herein, at Closing, the
Purchaser hereby agrees to purchase, and the Seller hereby agrees to sell to the
Purchaser, the Shares, at a purchase price of $0.34375 per Share (the "Purchase
Price").
1.2 Cancellation of 300,000 Shares. The Seller shall, at Closing,
submit 300,000 shares of Common Stock to the Company (or its transfer agent) for
cancellation.
1.3 Deliveries by Purchaser. The Purchaser shall deliver a check or
wire transfer to the Seller in the amount of the Purchase Price for each Share
purchased.
2. CLOSING(S).
2.1 Date and Time. The closing of the sale of Shares contemplated by
this Agreement (the "Closing") shall take place at the offices of the
Purchaser's counsel or at such other place as the Seller and the Purchaser shall
agree in writing concurrently with the execution of this Agreement (the "Closing
Date").
2.2 Deliveries. At the Closing, the Seller shall deliver the
following to the Purchaser:
2.2.1 The certificates representing the Shares, duly endorsed
or delivered with blank stock powers appropriately executed, in either case with
medallion signature guarantees, in the name of the Purchaser against payment of
the Purchase Price.
2.2.2 The certificate representing the 300,000 shares to be
cancelled pursuant to Section 1.2, along with irrevocable instructions to the
Company's transfer agent, jointly executed by the Seller and the Company, to
cancel the 300,000 shares represented by said certificate.
2.2.3 The articles of incorporation, bylaws, minutes, and
other corporate books and records of the Company.
2.2.4 Resignations of Xxxxxx Xxxxxxxx and Xxxxx Xxxxxxxxxxx
from their positions as officers and directors of the Company.
2.2.5 Resolutions of the board of directors appointing
Xxxxxxxxx Xxxxxxxxxx and Xxxx Xxxxx as directors of the Company.
2.2.6 A resignation of the Seller from his position as an
officer and director of the Company.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
As a material inducement to the Purchaser to enter into this Agreement and
to purchase the Shares, the Seller represents and warrants that the following
statements are true and correct in all respects as of the date hereof, except as
expressly qualified or modified herein.
3.1 Organization and Good Standing. The Company is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Utah and has full corporate power and authority to enter into and
perform its obligations under this Agreement, and to own its properties and to
carry on its business as presently conducted and as proposed to be conducted.
The Company is duly qualified to do business as a foreign corporation in every
jurisdiction in which the failure to so qualify would have a material adverse
effect upon the Company.
3.2 Capitalization. The Company is authorized to issue 40,000,000
shares of Common Stock of which, as of the date hereof, 1,857,500 shares were
issued and outstanding. All outstanding shares of Common Stock have been duly
authorized and validly issued, and are fully paid, nonassessable, and free of
any preemptive rights. There are no outstanding options, warrants, calls or
other rights (including conversion or pre-emptive rights and rights of first
refusal) or agreements for the purchase or acquisition of shares of Common Stock
from the Company. There are no outstanding contractual obligations of the
Company to repurchase, redeem or otherwise acquire any shares of Common Stock of
the Company.
2
3.3 Validity of Transactions. This Agreement, and each document
executed and delivered by the Seller in connection with the transactions
contemplated by this Agreement, have been duly authorized, executed and
delivered by the Seller and is each the valid and legally binding obligation of
the Seller, enforceable in accordance with its terms, except as limited by
applicable bankruptcy, insolvency reorganization and moratorium laws and other
laws affecting enforcement of creditor's rights generally and by general
principles of equity.
3.4 Valid Issuance of Shares. The Shares that are being sold to the
Purchasers hereunder are duly and validly issued, fully paid, nonassessable, and
free of restrictions on transfer, other than restrictions on transfer (a) under
this Agreement, (b) under applicable federal and state securities laws, and (c)
under a covenant granted by the Company to the National Association of
Securities Dealers that the Company will not allow the Shares to be freely
traded unless the sale of such Shares is first registered with the Securities &
Exchange Commission pursuant to the Securities Act of 1933, and will be free of
all other liens and adverse claims.
3.5 Title to Shares. The Seller is the sole record and beneficial
owner of the Shares, free and clear of all liens, encumbrances, equities,
assessments and claims, and, upon delivery of the Shares by the Seller and
payment of the Purchase Price in full by the Purchaser pursuant to this
Agreement, the Seller will transfer to the Purchaser valid legal title to the
Shares, free and clear of all liens, encumbrances, equities, assessments and
claims.
3.6 No Violation. The execution, delivery and performance of this
Agreement will not violate any law or any order of any court or government
agency applicable to the Company, as the case may be, or the Articles of
Incorporation or Bylaws of the Company, and will not result in any breach of or
default under, or, except as expressly provided herein, result in the creation
of any encumbrance upon any of the assets of the Company pursuant to the terms
of any agreement or instrument by which the Company or any of its assets may be
bound. No approval of or filing with any governmental authority is required for
the Company to enter into, execute or perform this Agreement.
3.7 SEC Reports and Financial Statements. The Seller has delivered
to the Purchaser the Company's Annual Report on Form 10-KSB for the fiscal year
ended December 31, 2002, along with its Quarterly Reports on Form 10-QSB for the
quarterly periods ended March 31, 2003, June 30, 2003, and September 30, 2003,
filed with the U.S. Securities and Exchange Commission (collectively, the "SEC
Reports"). The information in the SEC Reports, taken as a whole, is true and
correct in all material respects and does not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
3.8 Subsidiaries. Except as set forth in the SEC Reports, the
Company does not own, directly or indirectly, any equity or debt securities of
any corporation, partnership, or other entity.
3.9 Litigation. Except as set forth in the SEC Reports, there are no
suits or proceedings (including without limitation, proceedings by or before any
arbitrator, government commission, board, bureau or other administrative agency)
pending or, to the knowledge of the Seller, threatened against or affecting the
Company or any of its subsidiaries which, if adversely determined, would have a
material adverse effect on the consolidated financial condition, results of
operations, prospects or business of the Company, and neither the Company nor
any of its subsidiaries are subject to or in default with respect to any order,
writ, injunction or decree of any federal, state, local or other governmental
department.
3
3.10 Taxes. The Company has not filed Federal income tax returns or
state or local income tax returns for the fiscal years 1999, 2000, 2001, or
2002. On or before the Closing, the Seller shall cause the Company to file all
returns for such fiscal years as required by law. The Seller shall pay all taxes
as shown on such returns or on any assessment received subsequent to the filing
of such returns, any income tax resulting from assessments or adjustments to
such returns, and any penalties or fees assessed in connection with such
returns.
3.11 Securities Law Compliance. Assuming the accuracy of the
representations and warranties of the Purchaser set forth in Section 4 of this
Agreement, the offer, sale and delivery of the Shares will constitute an
exempted transaction under the Securities Act of 1933, as amended and now in
effect ("Securities Act"), and registration of the Shares under the Securities
Act is not required.
3.12 Liabilities. Except for obligations disclosed in the SEC
Reports, the Company has no liabilities, contingent or otherwise. The Company
maintains and will continue to maintain a standard system of accounting
established and administered in accordance with generally accepted accounting
principles. The Company will have no liabilities as of the Closing.
3.13 Qualifications, Legal and Investment. All authorizations,
approvals, or permits, if any, of any governmental authority or regulatory body
of the United States including "blue sky" filings in any state that are required
in connection with the lawful sale of the Shares pursuant to this Agreement have
been or will be, on a timely basis, duly obtained and are effective. No stop
order or other order enjoining the sale of the Shares have been issued and no
proceedings for such purpose are pending or, to the knowledge of the Seller,
threatened by the SEC, or any commissioner of corporations or similar officer of
any state having jurisdiction over this transaction. The sale of the Shares is
legally permitted by all laws and regulations to which the Purchaser, the
Seller, and the Company are subject.
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.
The Purchaser hereby represents, warrants and covenants with the Seller as
follows:
4.1 Legal Power. The Purchaser has the requisite power to purchase
the Shares hereunder, and to carry out and perform his obligations under the
terms of this Agreement.
4.2 Due Execution. This Agreement has been duly executed and
delivered by Purchaser, and, upon due execution and delivery by the Seller, this
Agreement will be a valid and binding agreement of the Purchaser.
4
4.3 Receipt and Review of SEC Reports. The Purchaser represents that
the Purchaser has received and reviewed the SEC Reports and has been given full
and complete access to the Company for the purpose of obtaining such information
as the Purchaser or his qualified representative has reasonably requested in
connection with the decision to purchase Shares. The Purchaser represents that
he has been afforded the opportunity to ask questions of the officers of the
Company regarding its business prospects and the Shares, all as the Purchaser or
the Purchaser's qualified representative have found necessary to make an
informed investment decision to purchase the Shares.
4.4 Restricted Securities. The Purchaser has been advised that the
Shares have not been registered under the Securities Act or any other applicable
securities laws and that the Shares are being offered and sold pursuant to
Section 4(1) of the Securities Act, and that the Company's reliance upon Section
4(1) is predicated in part on the Purchaser's representations as contained
herein.
4.4.1 The Purchaser is an "accredited investor" as defined
under Rule 501 under the Securities Act.
4.4.2 The Purchaser acknowledges that the sale of the Shares
contemplated by this Agreement has not been registered under the Securities Act
or the securities laws of any state and are being offered, and will be sold,
pursuant to applicable exemptions from such registration for nonpublic offerings
and will be issued as "restricted securities" as defined by Rule 144 promulgated
pursuant to the Securities Act. The Shares may not be resold in the absence of
an effective registration thereof under the Securities Act and applicable state
securities laws unless, in the opinion of the Company's counsel, an applicable
exemption from registration is available.
4.4.3 The Purchaser is acquiring the Shares for its own
account, for investment purposes only and not with a view to, or for sale in
connection with, a distribution, as that term is used in Section 2(11) of the
Securities Act, in a manner which would require registration under the
Securities Act or any state securities laws.
4.4.4 The Purchaser understands and acknowledges that the
Shares will bear the following legend:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS
OF ANY STATE. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE
SOLD OR TRANSFERRED FOR VALUE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
THEREOF UNDER THE SECURITIES ACT OF 1933 AND/OR THE SECURITIES ACT OF ANY STATE
HAVING JURISDICTION OR AN OPINION OF COUNSEL ACCEPTABLE TO THE CORPORATION THAT
SUCH REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR ACTS.
4.4.5 The Purchaser acknowledges that an investment in the
Shares is not liquid and is transferable only under limited conditions. The
Purchaser acknowledges that
5
such securities must be held indefinitely unless they are subsequently
registered under the Securities Act or an exemption from such registration is
available. Purchaser is aware of the provisions of Rule 144 promulgated under
the Securities Act, which permits limited resale of securities purchased in a
private placement subject to the satisfaction of certain conditions and that
such Rule is not now available and, in the future, may not become available for
resale of the Shares. Purchaser is further aware that the Company has covenanted
to the National Association of Securities Dealers that the Company will not
allow the Shares to be freely traded unless the sale of such Shares is first
registered with the Securities & Exchange Commission pursuant to the Securities
Act of 1933.
4.5 Purchaser Sophistication and Ability to Bear Risk of Loss. The
Purchaser acknowledges that he is able to protect its interests in connection
with the acquisition of the Shares and can bear the economic risk of investment
in such securities without producing a material adverse change in Purchaser's
financial condition. The Purchaser otherwise has such knowledge and experience
in financial or business matters that the Purchaser is capable of evaluating the
merits and risks of the investment in the Shares.
4.6 Purchases by Groups. The Purchaser represents, warrants and
covenants that he is not acquiring the Shares as part of a group within the
meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended.
4.7 SEC Compliance. The Purchaser covenants that he will use his
best efforts to cause the Company to comply with, and make all filings required
by, all federal and state securities laws and regulations, as well all
applicable laws, rules, and regulations.
5. COVENANTS.
5.1 Release by Seller. Specifically excepting therefrom the
indemnification provisions of Article IX of the Company's Restated Articles of
Incorporation filed on or about October 2, 2000 with the Utah Division of
Corporations and all applicable statutory indemnification provisions or any such
other indemnification provisions in the Company's Articles of Incorporation,
Bylaws, or corporate resolution, the Seller, on behalf of himself and each of
his respective agents, attorneys, insurers, heirs, assigns, beneficiaries,
executors, trustees, conservators, representatives, predecessors-in-interest,
successors-in-interest, and whomsoever may claim by, under or through them, and
all persons acting by, through, under or in concert with any of them (the
"Releasing Parties") hereby irrevocably and unconditionally forever release,
remise, acquit and discharge the Company from and against any and all debts,
obligations, losses, costs, promises, covenants, agreements, contracts,
endorsements, bonds, controversies, suits, actions, causes of action,
misrepresentations, defamatory statements, tortious conduct, acts or omissions,
rights, obligations, liabilities, judgments, damages, expenses, claims,
counterclaims, cross-claims, or demands, in law or equity, asserted or
unasserted, express or implied, foreseen or unforeseen, real or imaginary,
alleged or actual, suspected or unsuspected, known or unknown, liquidated or
non-liquidated, of any kind or nature or description whatsoever, arising from
the beginning of the world through the date of this Agreement which each of the
Releasing Parties ever had, presently have, may have, or claim or assert to
have, or hereafter have, may have, or claim or assert to have, against the
Company.
6
5.2 Indemnification by Seller. The Seller shall indemnify and hold
the Purchaser and the Company harmless in respect of any claim, demand, action,
cause of action, damage, loss, cost, liability or expense (hereinafter referred
to as "Claim"), including, but not limited to, the Released Claims, any
liability described in Section 3.10, or any Claim for any "finder's fee" or
similar fee (a "Finder's Fee Claim") against the Company, or, in the case of a
Finder's Fee Claim, the Purchaser, that existed, or is based on any action or
inaction that occurred, prior to the Closing Date.
5.3 Indemnification Purchaser. The Purchaser shall indemnify and
hold the Seller harmless in respect of any Claim arising out of a Finder's Fee
Claim that is based on action or inaction by the Purchaser.
6. MISCELLANEOUS.
6.1 Governing Law. This Agreement shall be governed by and construed
under the laws of the State of Utah.
6.2 Successors and Assigns. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors, and administrators of the
parties hereto.
6.3 Entire Agreement. This Agreement and the Exhibits hereto and
thereto, and the other documents delivered pursuant hereto and thereto,
constitute the full and entire understanding and agreement among the parties
with regard to the subjects hereof and no party shall be liable or bound to any
other party in any manner by any representations, warranties, covenants, or
agreements except as specifically set forth herein or therein. Nothing in this
Agreement, express or implied, is intended to confer upon any party, other than
the parties hereto and their respective successors and assigns, any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided herein.
6.4 Separability. In case any provision of this Agreement shall be
invalid, illegal, or unenforceable, it shall to the extent practicable, be
modified so as to make it valid, legal and enforceable and to retain as nearly
as practicable the intent of the parties, and the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
6.5 Amendment and Waiver. Except as otherwise provided herein, any
term of this Agreement may be amended, and the observance of any term of this
Agreement may be waived (either generally or in a particular instance, either
retroactively or prospectively, and either for a specified period of time or
indefinitely), with the written consent of the Company and the Purchasers, or,
to the extent such amendment affects only one Purchaser, by the Company and such
individual Purchaser. Any amendment or waiver effected in accordance with this
Section shall be binding upon each future holder of any security purchased under
this Agreement (including securities into which such securities have been
converted) and the Company.
7
6.6 Notices. All notices and other communications required or
permitted hereunder shall be in writing and shall be effective when delivered
personally, or sent by telex or telecopier (with receipt confirmed), provided
that a copy is mailed by registered mail, return receipt requested, or when
received by the addressee, if sent by Express Mail, Federal Express or other
express delivery service (receipt requested) in each case to the appropriate
address set forth below:
If to the Seller: Xxxxxxx Xxxxxx
000 Xxxxx Xxxx Xxxxxx, Xx. 0000
Xxxx Xxxx Xxxx, XX 00000
Fax No.: (000) 000-0000
If to a Purchaser: Xxxxxxxxx Xxxxxxxxxx
X.X. Xxx 0000
Xxxx 0X
Xxxxxx Xxxx
Xxxxxxxx of Panama
6.7 Titles and Subtitles. The titles of the paragraphs and
subparagraphs of this Agreement are for convenience of reference only and are
not to be considered in construing this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
8
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.
SELLER:
/s/ Xxxxxxx Xxxxxx
----------------------------------------
Name: Xxxxxxx Xxxxxx
Address: 000 Xxxxx Xxxx Xxxxxx,
Xx. 0000
Xxxx Xxxx Xxxx, XX 00000
Facsimile: (000) 000-0000
PURCHASER:
/s/ Xxxxxxxxx Xxxxxxxxxx
----------------------------------------
Name: Xxxxxxxxx Xxxxxxxxxx
Address: X.X. Xxx 0000, Xxxx 0X
Xxxxxx Xxxx
Xxxxxxxx of Panama
Facsimile: (000) 000-000-0000
9
