STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement ("Agreement") is made and entered into as of
December 27, 2001, by and among Xxxxx Xxxxxx Xx., an individual of 0000 Xxxxxx
Xxxxxxx Xxxxx 000 Xxxxxx, XX 00000 ("Buyer"), and The Vermont Witch Xxxxx Co., a
Vermont corporation and Xxxxxxx Xxxxx of 0000 X. Xxxxxxxx Xxx., Xxxxxxx, XX
00000-0000 ("Seller").
RECITALS
A. Seller is the owner of 7,016,500shares of the common stock of The
Vermont Witch Xxxxx Co. ("Company").
B. Buyer wishes to acquire from Seller 6,027,000 shares of the common stock
of the Company (approximately 51% of the total issued and outstanding shares of
the Company), which represents a controlling interest in the Company
(hereinafter the "Shares"), pursuant to the terms and conditions of this
Agreement.
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 Shares by Buyer. 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 Buyer, free and clear of all
adverse claims, security interests, liens, claims and encumbrances (other than
restrictions under state and federal securities laws) and Buyer shall purchase,
accept and acquire from Seller, the Shares.
2. Purchase Price. The total purchase price for the Shares is ONE HUNDRED
TWENTY THOUSAND FIVE HUNDRED DOLLARS. ($120,540.00)
3. Closing. Subject to the conditions precedent set forth herein, the
purchase of the Shares shall take place either (i) at a place to be mutually
agreed upon between the parties or (ii) by the exchange of documents via
courier, on or before December 28, 2001. Such date is herein referred to as the
"Closing Date".
4. Representations and Warranties of Buyer. Unless specifically stated
otherwise, Buyer 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. Agreement's Validity. This Agreement has been duly executed and
delivered by Buyer and constitutes legal, valid and binding obligations of
Buyer, enforceable against Buyer 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 Buyer 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 Buyer is a party or
by which he is bound nor, to the best of Buyer'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 Buyer.
C. Investment Intent. Buyer is acquiring the Shares for his 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. Buyer acknowledges that he or his
representatives have been furnished with information regarding the Company and
its business, assets, results of operations, and financial condition to allow
Buyer to make an informed decision regarding an investment in the Shares. Buyer
further represents that he has had an opportunity to ask questions of and
receive answers from the Company regarding the Company and its business, assets,
results of operation, and financial condition.
E. Investment Experience. Buyer acknowledges that he is a
sophisticated investor and can bear the economic risk of his investment in the
Shares and that he has such knowledge and experience in financial and business
matters that he is capable of evaluating the merits and risks of an investment
in the Shares.
F. Restricted Securities. Buyer 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
applicable regulations the Shares cannot be sold or otherwise disposed of
without registration under the Securities Act or an exemption therefrom. In this
connection, Buyer represents that he 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. Stop transfer
instructions may be issued to the transfer agent for securities of the Company
(or a notation may be made in the appropriate records of the Company) in
connection with the Shares.
G. Legend. It is agreed and understood by Buyer that the
certificates representing the Shares shall each conspicuously set forth on the
face or back thereof a legend in substantially the following form:
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THESESECURITIES 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. On the Closing Date, Seller will be the sole
registered owners 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. Specifically, there are no beneficial owners of such shares or of
any interest in or to any such shares other than Seller. Upon delivery of the
Shares to Buyer for the considerations set forth herein, Buyer shall be deemed
to have obtained good and merchantable title to the Shares.
B. Authorization and Validity. The execution, delivery and
performance by Seller of this Agreement and the consummation of the transaction
contemplated hereby, has been duly authorized by Seller. 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 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
Seller.
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:
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A. Organization and Good Standing; Qualification. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of its state of incorporation, with all requisite corporate power and authority
to carry on the business in which it is engaged, to own the properties it owns,
and is duly qualified and licensed to do business and is in good standing in all
jurisdictions where the nature of its business makes such qualification
necessary.
B. Capitalization. As of the execution date of this Agreement, the
authorized capital stock of the Company consists of 75,000,000 shares of common
stock, $2.00 par value per share, of which 11,817,250 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 Buyer, 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 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. From the date of this Agreement through
the Closing Date, the Company shall conduct its business in the ordinary and
usual course without unusual commitments and in compliance with all applicable
laws, rules, and regulations. Furthermore, the Company will not, without the
prior written consent of Buyer, (i) make any changes in its capital structure,
(ii) incur any liability or 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, or 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 any investment of a
capital nature, (x) issue any options to purchase the capital stock of the
Company, or (xi) pay any wages or salary to any employee.
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F. Consents/Approvals/Conflict. Except for compliance with
applicable federal and state securities laws and approval of 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 consent to
entering 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 Buyer
its audited balance sheet, statements of income and retained earnings,
statements of cash flows, and notes to the financial statements relevant
thereto, as of July 31, 2001, with said financial statements reflecting the then
current assets and liabilities of the Company pursuant to generally accepted
accounting principles. The Company has no liabilities of any kind or nature
whatsoever as of December 18, 2001 and will have no liabilities of any kind or
nature as of the Closing Date.
H. Taxes. To the best knowledge and belief of the Company all
income, excise, unemployment, social security, occupational, franchise 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, and all required tax returns or reports
concerning any such items have been duly filed.
I. Guarantees or Indebtedness to Affiliates. There are no contracts
or commitments by the Company directly or indirectly guaranteeing the payment or
performance (or both) of any obligations of any third person including the
Company's shareholders. The Company is not now, and will not be as of the
Closing Date, 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.
K. 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 to Buyer pursuant to the provisions hereof or in
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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.
L. Contracts. As of the Closing Date, there will be no contracts,
agreements, arrangements or understandings entered into by the Company, which
cannot be immediately terminated by the Company, except for the transfer agent
agreement with Securities Transfer Corporation, Dallas, Texas.
7. Conditions to Obligations of Buyer. All obligations of Buyer under this
Agreement are subject to the fulfillment, prior to the Closing Date, of each of
the following conditions (any one or more of which may, in the absolute
discretion of Buyer, be waived by Buyer):
A. Documents to be Delivered to Buyer. At the Closing, the following
documents shall be delivered to Buyer:
(i) Certificate(s) representing the Shares of The Vermont Witch Xxxxx
Co. 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.
(iii) Resignations executed by all of the Company's officers and
directors, and a certificate of 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
Buyer as directors of the Company; and
(iv) All original corporate books and records of the Company, which
are in the possession of Seller.
(v) The Company's 10-K for the year ending July 31, 2000 as filed
with the Securities and Exchange Commission on or before December 11,
2001.
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8. Conditions to Obligations of Seller. All obligations of Seller under
this Agreement are subject to the fulfillment, prior to 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 to be Delivered to Seller. At the Closing, the
following documents shall be delivered to Seller:
(i) A certificate executed by Buyer dated the Closing Date,
certifying that:
(a) The representations and warranties of Buyer contained in
this Agreement are then true in all respects; and
(b) Buyer has complied with all agreements and conditions
required by this Agreement to be performed or complied with by it.
(ii) A cashier's check or a wire transfer in the amount of $120,540.00
9. Indemnification by Buyer. Buyer hereby agrees to indemnify and hold
harmless Seller and the Company 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 representations and warranties made by Buyer in this Agreement,
and (ii) any failure of Buyer to perform any covenant in this Agreement which
are to be performed by Buyer.
10. Indemnification by Seller. Seller hereby agrees to indemnify and hold
harmless Buyer and his 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
representations and warranties made by Seller and the Company in this Agreement,
and (ii) any failure of Seller and the Company to perform any covenant in this
Agreement which are to be performed by them or either of them.
11. Additional Indemnification by Seller. Seller further agrees to
indemnify and hold harmless Buyer and his 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) Claims by shareholders of the Company arising from acts or
omissions by the Company, its officers, directors, agents and
employees prior to and including the date hereof;
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12. 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
or in any agreement entered into in connection with the transactions
contemplated 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. Neither this
Agreement nor any other Agreement contemplated hereby shall be deemed to confer
upon any person not a party hereto or thereto any rights or remedies hereunder
or thereunder.
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, exhibit or other
instrument delivered by or on behalf of SELLER, the Company, or Buyer, 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 ENFORCED IN ACCORDANCE
WITH THE SUBSTANTIVE LAWS (BUT NOT THE RULES GOVERNING CONFLICTS OF LAWS) OF THE
STATE OF TEXAS.
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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. Reference to Agreement. Use of the words "herein", "hereof",
"hereto" and the like in this Agreement shall be construed as references to this
Agreement as a whole and not to any particular Article, Section or provision in
this Agreement, unless otherwise noted.
K. 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 is to be mailed. For purposes of
giving notice, the addresses of the parties shall be:
If to Buyer: Xxxxx Xxxxxx Xx.
0000 Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attn: Xx. Xxxxx X. Xxxxxx, Xx.
If to Seller: The Vermont Witch Xxxxx Co.
0000 X. Xxxxxxxx Xxx.
Xxxxxxx, XX 00000-0000
Attn: Ms. Xxxxxxx Xxxxx
L. 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 and all required documents as stipulated in 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.
M. Further Assurances. From Seller to Seller 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.
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Buyer: Xxxxx Xxxxxx Xx.
By: /s/ Xxxxx Xxxxxx Xx.
----------------------
Xxxxx Xxxxxx Xx.
Seller:
By: /s/ Xxxxxxx Xxxxx
----------------------
Xxxxxxx Xxxxx
The Vermont Witch Xxxxx Co.
By: /s/ Xxxxxxx Xxxxx
----------------------
Xxxxxxx Xxxxx,
President
