Exhibit 10.1
SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT ("Agreement") is made and entered
into this 4th day of November, 2003 by and between N. Xxxxxx Xxxx, an individual
("Seller"), and the XXXXXXX REVERSE MERGER FUND, LLC, a Delaware limited
liability company ("Purchaser").
R E C I T A L S
A. Seller owns 1,000,000 shares (the "Shares") of the $.001 par value
common stock ("Common Stock") of Micro Interconnect Technology, Inc. ("MITR"), a
Nevada corporation.
B. The Shares constitute at least a majority of the outstanding shares
of capital stock and voting equity of MITR.
C. Seller wishes to sell to Purchaser, and Purchaser desires to
purchase from Seller, the Shares subject to the terms and conditions hereinafter
set forth.
NOW, THEREFORE, the parties agree as follows:
A G R E E M E N T
1. Incorporation of Recitals. The foregoing Recitals are incorporated
herein by this reference.
2. Sale and Purchase of the Shares. Subject to the terms and conditions
hereof, at the Closing, Seller agrees to sell to Purchaser, and Purchaser agrees
to purchase from Seller, the Shares for an aggregate purchase price of
$165,000.00 (the "Purchase Price").
3. Conditions to Closing.
3.1 Satisfactory due diligence review of MITR by Purchaser.
3.2 Transfer of all assets and liabilities from MITR into Epic
Research Company, Inc. ("Epic"), a wholly-owned subsidiary of
MITR, and the distribution of all shares of Epic stock owned
by MITR to the MITR shareholders (the "Spin-Off") immediately
prior to Closing.
3.3 Delivery by each party to the other of a certificate
confirming the accuracy of such party's representations and
warranties as of the Closing and the satisfaction of all
conditions to such party's obligations to consummate the
transactions described herein.
4. Closing.
4.1 The purchase and sale of the Shares (the "Closing") shall
take place at 1:00 p.m., Colorado time, on November 4, 2003, or such other time
and date as the parties may agree. In no event shall the Closing take place
after December 31, 2003, unless the parties expressly agree otherwise in a
written amendment to this Agreement.
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4.2 At the Closing, Seller shall deliver to Purchaser a
certificate representing the Shares, accompanied by a duly endorsed stock power,
with signature medallion guaranteed, in form and substance satisfactory to
Purchaser. At the Closing, Purchaser shall deliver to Seller the Purchase Price
by wire transfer to an account designated by Seller for such purpose.
4.3 From time to time after the Closing, and without further
consideration, Seller will promptly execute and deliver such other instruments
of transfer and take such other actions as Purchaser may reasonably request in
order to more effectively transfer to Purchaser the Shares and otherwise
consummate the transactions contemplated by this Agreement.
5. Representations and Warranties of Seller. Seller hereby represents
and warrants to Purchaser as follows:
5.1 Enforceability. This Agreement shall constitute the valid
and legally binding obligation of Seller, enforceable in accordance with its
terms except as limited by the effect of bankruptcy, insolvency, reorganization,
moratorium and other similar laws relating to or affecting the rights of
creditors generally and by laws relating to the availability of specific
performance, injunctive relief, or other equitable remedies.
5.2 Validity; Title. The Shares, when 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
this Agreement and under applicable state and federal securities laws. Seller
owns, beneficially and of record, good and marketable title to the Shares, free
and clear of all security interests, liens, adverse claims, encumbrances,
proxies, options or stockholders' agreements. At the Closing, Seller will convey
to Purchaser good and marketable title to the Shares, free and clear of any
security interests, liens, adverse claims, encumbrances, proxies, options or
stockholders' agreements.
5.3 Organization and Good Standing. MITR is a corporation duly
organized, validly existing and in good standing under the laws of Nevada and is
qualified to do business as a foreign corporation in each jurisdiction where the
failure to be so qualified would have a material adverse effect on MITR.
5.4 Capitalization. MITR's authorized capital stock consists
of (a) 50,000,000 shares of common stock, $0.001 par value per share, 1,317,100
of which are issued and outstanding; and (a) 10,000,000 shares of preferred
stock, $0.001 par value per share, of which there are no issued and outstanding
shares. All of the issued and outstanding shares of MITR common stock were duly
authorized for issuance and are validly issued, fully paid and non-assessable.
There are no outstanding options, warrants or other rights to acquire MITR's
capital stock.
5.5 Subsidiaries.
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5.5.1 Except as set forth on Schedule 5.5, MITR does
not, directly or indirectly, own any shares of any capital stock or other
equity interest in, has not made any investment in, and does not control or have
any proprietary interest in, any corporation, partnership, joint venture or
other business association or entity (any such entity is referred to as a
"Subsidiary").
5.5.2 Schedule 5.5 indicates for each Subsidiary
the following information: its name, jurisdiction and date of incorporation, its
authorized capital stock, the number and type of its issued and outstanding
shares of capital stock, and the current ownership of such shares. Annexed to
Schedule 5.5 are true and complete copies of the charter, bylaws and other
similar organizational documents of each Subsidiary, as well as any shareholder
agreement relating to such Subsidiary, and any acquisition agreement relating to
any Subsidiary. All corporate or other action that has been taken by any
Subsidiary has been duly authorized and does not conflict with or violate of any
provision of its charter, bylaws or other organizational documents.
5.5.3 Except as set forth on Schedule 5.5, each
Subsidiary is duly organized and validly
existing under the laws of its jurisdiction of organization and is duly
qualified to do business as a foreign corporation in each jurisdiction where the
failure to be so qualified would have a material adverse effect on such
Subsidiary or MITR.
5.5.4 Except as set forth on Schedule 5.5, all
outstanding shares of capital stock of each Subsidiary are validly issued, fully
paid, nonassessable and free of preemptive rights and are owned (either directly
or indirectly) by MITR free and clear of all security interests, liens, adverse
claims, encumbrances, proxies, options or stockholders' agreements.
5.5.5 Except as set forth on Schedule 5.5,
there are no outstanding securities convertible into or exchangeable for the
capital stock of or other equity interests in any Subsidiary and no outstanding
options, rights, subscriptions, calls, commitments, warrants or rights of any
character for MITR, any Subsidiary or any other person to purchase, to subscribe
for or to otherwise acquire any shares of such stock or other securities of any
Subsidiary.
5.5.6 Except as set forth on Schedule 5.5, there are
no outstanding agreements affecting or relating to the voting, issuance,
purchase, redemption, repurchase or transfer of any capital stock of or other
equity interests in any Subsidiary.
5.6 No Conflicts. Neither the execution and delivery of this
Agreement by Seller nor the consummation by Seller of the transactions
contemplated hereby, nor compliance by Seller with any of the provisions hereof,
will (a) result in a violation or breach of, or constitute (with or without due
notice or lapse of time or both) a default (or give rise to any right of
termination, cancellation or acceleration) under, any of the terms, conditions
or provisions of any note, bond, mortgage, indenture, license, contract,
agreement or other instrument or obligation to which Seller is a party or by
which Seller or his property may be bound or (b) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to Seller.
5.7 SEC Documents. Seller hereby makes reference to the
following documents filed by MITR with the United States Securities and Exchange
Commission (the "SEC"), as posted on the SEC's website, xxx.xxx.xxx
(collectively, the "SEC Documents"): (a) Annual Reports on Forms 10-KSB and
10-KSB\A for the fiscal years ended December 31, 2002 and 2001; (b) Quarterly
Reports on Forms 10-QSB and 10-QSB\A for the periods ended September 30, 2003,
June 30, 2003, March 31, 2003, September 30, 2002, and June 30, 2002, and (c)
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Current Reports on Form 8-K filed with the SEC. The SEC Documents constitute all
of the documents and reports that MITR was required to file with the SEC
pursuant to the Securities Exchange Act of 1934 ("Exchange Act") and the rules
and regulations promulgated thereunder by the SEC since September 30, 2001. As
of their respective dates, the SEC Documents complied in all material respects
with the requirements of the Exchange Act and the rules and regulations
promulgated thereunder and none of the SEC Documents contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The financial
statements of MITR included in the SEC Documents comply as to form in all
material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, have been prepared in
accordance with generally accepted accounting principles in the United States
("U.S. GAAP") (except, in the case of unaudited statements, as permitted by the
applicable form under the Exchange Act) applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto) and fairly
present the financial position of MITR as of the dates thereof and its
statements of operations, shareholders' equity and cash flows for the periods
then ended (subject, in the case of unaudited statements, to normal and
recurring year-end audit adjustments which were and are not expected to have a
material adverse effect on MITR, its business, financial condition or results of
operations). Except as and to the extent set forth on the consolidated balance
sheet of MITR at September 30, 2003, including the notes thereto, and
liabilities and obligations incurred by MITR in the ordinary course of its
business since June 30, 2003, which do not exceed $25,000 in the aggregate, MITR
has no material liability or obligation of any nature (whether accrued,
absolute, contingent or otherwise and whether required to be reflected on a
balance sheet or not). Seller shall contribute the Purchase Price to Epic, which
shall promptly pay all current liabilities owed to non-affiliates of MITR or
Epic.
5.8 Financial Statements.
5.8.1 Included in the SEC Documents are the audited
consolidated balance sheet of MITR and its subsidiaries at December 31, 2002,
and the related consolidated statements of operations and shareholders' equity
(deficit), and cash flows for the year then ended, together with the unqualified
report thereon (except with respect to continuation as a going concern) of
Seller, independent auditor (collectively, "MITR's Audited Financials").
5.8.2 Included in the SEC Documents are the
unaudited balance sheet of MITR and its subsidiaries as of September 30, 2003
and the related consolidated statements of operations and shareholders' equity
(deficit) for the nine months ended September 30, 2003, as reviewed by Seller
("MITR's Interim Financials").
5.8.3 MITR's Audited Financials and MITR's Interim
Financials (collectively "MITR's Financial Statements") are (i) in accordance
with the books and records of MITR, (ii) correct and complete, (iii) fairly
present the financial position and results of operations of MITR as of the dates
indicated, and (iv) prepared in accordance with U.S. GAAP (except that (x)
unaudited financial statements may not be in accordance with U.S. GAAP because
of the absence of footnotes normally contained therein, and (y) interim
(unaudited) financials are subject to normal year-end audit adjustments that in
the aggregate will not have a material adverse effect on MITR, its business,
financial condition or results of operations).
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5.9 Events Subsequent to Financial Statements. Except as set
forth on Schedule 5.9 or as reflected in the Quarterly Reports on Form 10-QSB
for the periods ended September 30, 2003, June 30, 2003 and March 31, 2003,
since December 31, 2002:
(a) MITR has not entered into any transaction or contract or
conducted any business other than seeking a business combination or
other strategic transaction;
(b) MITR has not failed to pay and discharge its current
liabilities in the ordinary course of business consistent with past
practice;
(c) MITR has not incurred any indebtedness or liability or
assumed any obligations;
(d) MITR has not waived or released any right of any material
value;
(e) MITR has not paid any compensation or benefits to officers
or directors of MITR;
(f) MITR has not made or authorized any amendment in the
Certificate of Incorporation or Bylaws of MITR; and
(g) there has been no material adverse change in the condition
(financial or otherwise) of the properties, assets, liabilities or
business of MITR.
5.10 Public Listing of MITR. MITR has never been listed on any
national stock exchange or national market system in the United States or
elsewhere except the Nasdaq OTC Bulletin Board.
5.11 Litigation. Except as disclosed on Schedule 5.11, there
is no suit, action, proceeding, investigation, claim or order pending or, to the
knowledge of Seller, overtly threatened against MITR (or to the knowledge of
Seller, pending or threatened, against any of the officers or directors of MITR
with respect to their business activities on behalf of MITR), or to which MITR
is otherwise a party, before any court, or before any governmental department,
commission, board, agency, or instrumentality; nor to the knowledge of Seller is
there any reasonable basis for any such action, proceeding or investigation.
5.12 Governmental Consents. All consents, approvals, orders,
authorizations or registrations, qualifications, designations, declarations or
filings with any U.S., federal or state governmental authority on the part of
Seller required in connection with the consummation of the transactions
contemplated herein shall have been obtained prior to and be effective as of the
Closing, except that Seller shall be required to file with the SEC following the
Closing an amendment to his Schedule 13D.
5.13 Third Party Consents. All third party consents,
approvals, orders or authorizations required to be obtained by Seller in
connection with the consummation of the transactions contemplated herein have
been obtained.
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5.14 Disclosure. The representations and warranties and
statements of fact made by Seller in this Agreement are accurate, correct and
complete in all material respects and do not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements and information contained herein not false or misleading.
6. Representations and Warranties of Purchaser. Purchaser hereby
represents and warrants to Seller as follows:
6.1 Investment and Related Representations.
6.1.1 Shares as "Restricted" Securities.
Purchaser is aware that neither the Shares nor the offer or sale thereof to the
Purchaser have been registered under the Securities Act of 1933, as amended
("Securities Act"), or under any foreign or state securities law. Purchaser
further understands that no registration statement has been filed with the
Securities and Exchange Commission ("SEC"), nor with any other U.S. or foreign
regulatory authority and that, as a result, any benefit which might normally
accrue to an investor such as the Purchaser by an impartial review of such a
registration statement by the SEC or other regulatory commission will not be
forthcoming. Purchaser acknowledges that the Shares are being offered pursuant
to certain exemptions from Section 5 of the Securities Act for offers and sale
of securities not involving an issuer, underwriter or dealer. Purchaser
understands that the Shares are "restricted" securities under U.S. federal
securities laws inasmuch as they are being acquired from an affiliate of the
issuer and that under such laws and applicable regulations such securities may
be resold without registration under the Securities Act only in certain limited
circumstances. Purchaser represents that it is familiar in general with Rule 144
under the Securities Act (which provides generally for a one year holding period
and limitations on the amount of "restricted" securities that can be sold in
compliance with the rule upon completion of the holding period), and understands
the resale limitations imposed thereby and by the Securities Act. Purchaser
understands that each certificate representing the Shares and any other
securities issued in respect of the Shares upon any stock split, stock dividend,
recapitalization, merger or similar event (unless no longer required in the
opinion of counsel for MITR) shall be stamped or otherwise imprinted with
legends substantially in the following forms (in addition to any legend that may
now or hereafter be required by applicable state law):
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THEY
MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED IN
THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO SUCH
SECURITIES, OR DELIVERY OF AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER OF
SUCH SECURITIES THAT SUCH OFFER, SALE, TRANSFER, PLEDGE OR HYPOTHECATION IS IN
FULL COMPLIANCE WITH THE SECURITIES ACT OF 1933, AS AMENDED, OR UNLESS SOLD IN
COMPLIANCE WITH RULE 144 UNDER SUCH ACT."
Purchaser agrees that it will not sell any portion of Shares except pursuant to
registration under the Securities Act or pursuant to an available exemption from
registration under the Securities Act. Purchaser understands that MITR shall
refuse to transfer the Shares except in accordance with the restrictions and
agreements of Purchaser set forth in this Section 6.1.
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6.1.2 Investment Representation. The Shares are
being acquired by Purchaser pursuant to this Agreement for investment and not
with a view to the public resale or distribution thereof unless pursuant to an
effective registration statement or exemption under the Securities Act.
6.1.3 No Public Solicitation.Purchaser is acquiring
the Shares after private negotiation and has not been attracted to the
acquisition of the Shares by any press release, advertising or publication.
6.1.4 Investor Sophistication and Ability to Bear
Risk of Loss. Purchaser acknowledges that it is able to protect his 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. Purchaser otherwise has such knowledge and
experience in financial or business matters that Purchaser is capable of
evaluating the merits and risks of the investment in the Shares.
6.3 No Conflicts. Neither the execution and delivery of this
Agreement by Purchaser nor the consummation by Purchaser of the transactions
contemplated hereby, nor compliance by Purchaser with any of the provisions
hereof, will (a) result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation or acceleration) under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, license,
contract, agreement or other instrument or obligation to which Purchaser is a
party or by which Purchaser or its property may be bound or (b) violate any
order, writ, injunction, decree, statute, rule or regulation applicable to
Purchaser.
6.4 Governmental Consents. All consents, approvals, orders,
authorizations or registrations, qualifications, designations, declarations or
filings with any U.S., federal or state governmental authority on the part of
Purchaser required in connection with the consummation of the transactions
contemplated herein shall have been obtained prior to and be effective as of the
Closing, except that Purchaser shall be required to file with the SEC following
the Closing a Schedule 13D and such other documents as may be required by the
Exchange Act.
6.5 Third Party Consents. All third party consents, approvals,
orders or authorizations required to be obtained by Purchaser in connection with
the consummation of the transactions contemplated herein have been obtained.
7. Indemnification. Each of Seller and Purchaser hereby agrees to
indemnify and hold harmless the other and each of the other's affiliates and
each of their respective officers, directors, partners, members, managers,
shareholders, employees and agents from and against any and all losses, claims,
damages, judgments, penalties, liabilities and deficiencies, and agrees to
reimburse the other for all reasonable out-of-pocket expenses (including
reasonable fees and expenses of legal counsel), in each case promptly as
incurred by the other, to the extent arising out of or in connection with (a)
any material misrepresentation or material breach of any of his/its
representations or warranties contained in this Agreement; (b) any failure by
him/it to perform any of his/its covenants, agreements, undertakings or
obligations set forth in this Agreement, or (c) any operations of MITR or
transactions involving MITR or any Subsidiary occurring (i) in the case of the
indemnification by Seller, prior to the Closing, or (ii) in the case of the
indemnification by Purchaser, after the Closing.
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8. Miscellaneous.
8.1 Cumulative Remedies. Subject to Section 6, any person
having any rights under any provision of this Agreement will be entitled to
enforce such rights specifically, to recover damages by reason of any breach of
any provision of this Agreement, and to exercise all other rights granted by
law, which rights may be exercised cumulative and not alternatively.
8.2 Successors and Assigns. Except as otherwise expressly
provided herein, all covenants and agreements contained in this Agreement by or
on behalf of any of the parties hereto will bind and inure to the benefit of the
respective successors and assigns of the parties hereto whether so expressed or
not.
8.3 Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement or the other documents.
8.4 Counterparts. This Agreement may be executed in two or
more counterparts, any one of which need not contain the signatures of more than
one party, but all such counterparts when taken together will constitute one and
the same agreement.
8.5 Notices. Any approvals, consents or notices required or
permitted to be sent or given shall be delivered in writing personally or
mailed, certified mail, return receipt requested, to the following addresses and
shall be deemed to have been received within five days after such mailing:
If to PURCHASER: Xxxxxxx Reverse Merger Fund, LLC
0000 XXX Xxxxxxx, Xxxxx 0000
Xxxxxxxxx Xxxxxxx, XX 00000-0000
If to SELLER: N. Xxxxxx Xxxx
00 Xxxxxxx Xxxx Xxxx
Xxxxxxx, XX 00000
With copy to: Xxxxxxx X. Xxxxxxx
McLane, Graf, Xxxxxxxxx & Middleton,
Professional Association
000 Xxx Xxxxxx. X.X. Xxx 000
Xxxxxxxxxx, XX 00000-0000
8.6 Litigation Costs. If any legal action or any arbitration
or other proceeding is brought for the enforcement of this Agreement, or because
of an alleged dispute, breach, default, or misrepresentation in connection with
any of the provisions thereof, the successful or prevailing party shall be
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entitled to recover reasonable attorneys' fees and other costs incurred in that
action or proceeding, in addition to any other relief to which such party may be
entitled.
8.7 Entire Agreement. This Agreement constitutes the entire agreement
and understanding of the parties with respect to the subject matter thereof, and
supersedes all prior and contemporaneous agreements and understandings.
8.8 Governing Law. This Agreement shall be governed by and interpreted
and construed in accordance with the laws of the State of New Hampshire, without
regard to the conflicts of laws principles thereof.
8.9 Cooperation. Following the consummation of the transactions
contemplated hereunder, Seller and Purchaser shall each provide the other with
such assistance, and shall cause their officers, directors and accountants, as
applicable, to provide such assistance, as may reasonably be requested by the
other in connection with (i) the preparation of any tax return or the conduct of
any audit or examination by any taxing authority, or (ii) the preparation of any
periodic report or other filing required to be made to the Securities and
Exchange Commission.
[Signature Page Follows]
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IN WITNESS WHEREOF, each of the parties to this Securities Purchase
Agreement has executed or caused this Agreement to be executed as of the date
first above written.
"SELLER"
/s/ N. Xxxxxx Xxxx
--------------------------------------
N. XXXXXX XXXX, AN INDIVIDUAL
"PURCHASER"
/s/ Xxxxxxx X. Xxxxxxx
--------------------------------------
XXXXXXX X. XXXXXXX
MANAGER
XXXXXXX REVERSE MERGER FUND, LLC
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SCHEDULE 5.5 - MITR SUBSIDIARIES
MITR currently owns all the issued and outstanding shares of Epic Research
Company, Inc. ("Epic"), a New Hampshire corporation incorporated on June 10,
2003. Epic is authorized to issue ten million (10,000,000) shares of no par
value common stock of which 1,317,100 shares are issued and outstanding. Epic's
Articles of Incorporation and Bylaws are attached as Annex A and Annex B,
respectively.
Immediately prior to the Closing, all of MITR's assets and liabilities will be
transferred to and assumed by Epic and all of the Epic shares held by MITR will
be distributed to the MITR shareholders pro rata.
SCHEDULE 5.9 - EVENTS SUBSEQUENT TO FINANCIAL STATEMENTS
MITR has continued to incur additional rent, legal, accounting and interest
expenses and has not had any inflows of cash with which to pay and discharge
such liabilities; therefore, its indebtedness to its landlord, attorneys,
accountants and creditors has continued to increase.
As discussed in Section 3.2, all assets and liabilities of MITR will have been
transferred to Epic prior to the consummation of the transactions hereunder and
pursuant to an Asset Transfer And Assumption Of Liabilities Agreement between
MITR and Epic, a copy of which has been provided to Purchaser. At the time of
Closing, therefore, MITR has no liabilities or obligations.
SCHEDULE 5.11 - LITIGATION
In November 2001, Xxxx X. Agron as counsel for Xxxx XxXxxx (trustee of Growth
Ventures, Inc. Profit Sharing Plan and Trust) sent MITR a letter appearing to
allege that Seller had committed MITR to a spin-off of its assets and sale of
the resulting public shell and then failed to follow through on such commitment.
In January 2002, Counsel for MITR responded with a letter denying the factual
and legal basis for any such claim and Attorney Agron and Xx. XxXxxx have not
responded with any further claims, proof or correspondence of any kind.
As discussed in Section 3.2, all assets and liabilities of MITR will have been
transferred to Epic prior to the consummation of the transactions hereunder and
pursuant to an Asset Transfer And Assumption Of Liabilities Agreement (the
"Transfer Agreement") between MITR and Epic, a copy of which has been provided
to Purchaser. Pursuant to the Transfer Agreement, Epic has indemnified MITR
against all claims such as the one described above in this Schedule 5.11.
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