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EXHIBIT 6.14
COMMON STOCK PURCHASE AGREEMENT, DATED AUGUST 14, 1996,
BY AND BETWEEN THE COMPANY AND XXXXXXXX MANAGEMENT
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COMMON STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made as of the 14th
day of August, 1996, by and between KCD Holdings Incorporated, a Nevada
corporation ("KCD"), and Xxxxxx Xxxxxxxx, an individual ("Xxxxxxxx").
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. PURCHASE AND SALE OF STOCK.
1.1 SALE AND PURCHASE OF COMMON STOCK.
Subject to the terms and conditions of this Agreement,
Xxxxxxxx agrees to purchase at the Closing (as defined hereinbelow) and KCD
agrees to issue to Xxxxxxxx at the Closing 125,000 restricted shares of KCD's
common stock (the "Common Stock") in consideration for the full and complete
satisfaction of $250,000 of the principal balance of that certain Secured
Promissory Note dated October 17, 1995 by and between KCD and Xxxxxxxx (the
"Note").
1.2 CLOSING.
The closing (hereinafter "Closing") shall occur on the date first above
written. At the Closing, KCD shall deliver to Xxxxxxxx a certificate
representing the shares of Common Stock that Xxxxxxxx is purchasing against
satisfaction of $250,000 of the principal balance of the Note.
2. REPRESENTATIONS AND WARRANTIES OF KCD.
KCD hereby represents and warrants that:
2.1 ORGANIZATION; GOOD STANDING; QUALIFICATION.
KCD is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Nevada, has all requisite corporate
power and authority to own and operate its properties and assets and to carry on
its business as now conducted, to execute and deliver this Agreement, to issue
and sell the Common Stock at the Closing, and to carry out the provisions of
this Agreement. KCD is duly qualified to transact business and is in good
standing in each jurisdiction in which the failure to so qualify would have a
material adverse effect on its business, properties, prospects, or financial
conditions.
2.2 AUTHORIZATION.
All corporate action on the part of KCD, its officers, directors and
stockholders necessary for the authorization, execution and delivery of this
Agreement, the performance of all obligations of KCD hereunder at the Closing
and the authorization, issuance, sale, and delivery of the Common
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Stock being sold hereunder has been taken or will be taken prior to the Closing,
and this Agreement constitutes a valid and legally binding obligation of KCD,
enforceable in accordance with its terms except (i) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, and other laws of general
application affecting enforcement of creditors' rights generally, and (ii) as
limited by or relating to the availability of specific performance, injunctive
relief, or other equitable remedies.
2.3 VALID ISSUANCE OF COMMON STOCK.
The Common Stock that is being purchased by Xxxxxxxx hereunder, when
issued, 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.
2.4 GOVERNMENTAL CONSENTS.
No consent, approval, qualification, order or authorization of, or
filing with, any local, state or federal governmental authority is required on
the part of KCD in connection with KCD's valid execution, delivery, or
performance of this Agreement, the offer, sale or issuance of the Common Stock
by KCD, except such filings which will be made prior to the Closing, except that
any notices of sale required to be filed with the Securities Exchange Commission
under the Securities Act of 1933, as amended (the "Securities Act"), or such
post-closing filings as may be required under applicable state securities laws,
which will be timely filed within the applicable periods therefor.
2.5 LITIGATION.
There is no action, suit, proceeding, or investigation pending or
currently threatened against KCD that questions the validity of this Agreement,
or the consummation of the transactions contemplated hereby.
2.6 DISCLOSURE.
KCD has provided Xxxxxxxx with all the information reasonably available
to it without undue expense that Xxxxxxxx has requested for deciding whether to
purchase the Common Stock.
3. REPRESENTATIONS AND WARRANTIES OF XXXXXXXX.
Xxxxxxxx hereby represents and warrants that:
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3.1 AUTHORIZATION.
Xxxxxxxx has full power and authority to enter into this Agreement and
that this Agreement constitutes a valid and legally binding obligation of
Xxxxxxxx.
3.2 PURCHASE ENTIRELY FOR OWN ACCOUNT.
This Agreement is made with Xxxxxxxx in reliance upon Xxxxxxxx'x
representation to KCD, which by Xxxxxxxx'x execution of this Agreement Xxxxxxxx
hereby confirms, that the Common Stock to be purchased by Xxxxxxxx (sometimes
referred to herein as the "Securities"), will be acquired for investment for
Xxxxxxxx'x own account, not as a nominee or agent, and not with a view to the
resale or distribution of any part thereof, and that Xxxxxxxx has no present
intention of selling, granting any participation in, or otherwise distributing
the same. By executing this Agreement, Xxxxxxxx further represents that Xxxxxxxx
does not have any contract, undertaking, agreement or arrangement with any
person to sell, transfer or grant participation to such person or to any third
person, with respect to any of the Securities.
3.3 RELIANCE UPON XXXXXXXX'X REPRESENTATIONS.
Xxxxxxxx understands that the Common Stock is not registered under the
Securities Act on the ground that the sale provided for in this Agreement is
exempt from registration under the Securities Act pursuant to Sections 4(6) and
4(2) thereof and Regulation D promulgated thereunder, and that KCD's reliance on
such exemption is predicated on Xxxxxxxx'x representations set forth herein.
3.4 RECEIPT OF INFORMATION.
Xxxxxxxx acknowledges he has received all the information he considers
necessary or appropriate for deciding whether to purchase the Common Stock.
Xxxxxxxx further represents that he has had an opportunity to ask questions and
receive answers from KCD regarding the terms and conditions of the offering of
the Common Stock and the business, properties, prospects, and financial
condition of KCD and to obtain additional information (to the extent KCD
possessed such information or could acquire it without unreasonable effort or
expense) necessary to verify the accuracy of any information furnished to him or
which he had access.
3.5 INVESTMENT EXPERIENCE.
Xxxxxxxx represents that he is experienced in evaluating and investing
in securities of companies in the development stage and acknowledges that he is
able to fend for himself, can bear the economic risk of his investment, and has
such knowledge and experience in financial and business matters that he is
capable of evaluating the merits and risks of the investment in the Common
Stock.
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3.6 ACCREDITED INVESTOR.
(a) The term "Accredited Investor" as used herein refers to:
(1) A person or entity who is a director or executive
officer of the Company;
(2) Any bank as defined in Section 3(a)(2) of the
Securities Act, or any savings and loan association or other
institution as defined in Section 3(a)(5)(A) of the Securities Act
whether acting in its individual or fiduciary capacity; any broker or
dealer registered pursuant to Section 15 of the Securities Exchange Act
of 1934; any insurance company as defined in Section 2(13) of the
Securities Act; any investment company registered under the Investment
Company Act of 1940 or a business development company as defined in
Section 2(a)(48) of that Act; any Small Business Investment Company
licensed by the U.S. Small Business Administration under Section 301(c)
or (d) of the Small Business Investment Act of 1958; any plan
established and maintained by a state, its political subdivisions, or
any agency or instrumentality of a state or its political subdivisions,
for the benefit of its employees, if such plan has total assets in
excess of $5,000,000; any employee benefit plan within the meaning of
Title I of the Employee Retirement Income Security Act of 1974, if the
investment decision is made by a plan fiduciary, as defined in Section
3(21) of such Act, which is either a bank, savings and loan
association, insurance company, or registered investment adviser, or if
the employee benefit plan has total assets in excess of $5,000,000 or,
of a self-directed plan, with investment decisions made solely by
persons that are accredited investors;
(3) Any private business development company as
defined in Section 202(a)(22) of the Investment Advisers Act of 1940;
(4) Any organization described in Section 501(c)(3)
of the Internal Revenue Code, corporation, Massachusetts or similar
business trust, or partnership, not formed for the specific purpose of
acquiring the securities offered, with total assets in excess of
$5,000,000;
(5) Any natural person whose individual net worth, or
joint net worth with that person's spouse, at the time of his purchase
exceeds $1,000,000;
(6) Any natural person who had an individual income
in excess of $200,000 in each of the two most recent years or joint
income with that person's spouse in excess of $300,000 in each of those
years and has a reasonable expectation of reaching the same income
level in the current year;
(7) Any trust, with total assets in excess of
$5,000,000, not formed for the specific purpose of acquiring the
securities offered, whose purchase is directed by a person who has such
knowledge and experience in financial and business matters that he is
capable of evaluating the merits and risks of the prospective
investment; or
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(8) Any entity in which all of the equity owners are
accredited investors.
As used in this Section 3.6(a), the term "net worth" means the excess
of total assets over total liabilities. For the purpose of determining a
person's net worth, the principal residence owned by an individual should be
valued at fair market value, including the cost of improvements, net of current
encumbrances. As used in this Section 3.6(a), "income" means actual economic
income, which may differ from adjusted gross income for income tax purposes.
Accordingly, the undersigned should consider whether it should add any or all of
the following items to its adjusted gross income for income tax purposes in
order to reflect more accurately its actual economic income:
any amounts attributable to tax exempt income received, losses claimed as a
limited partner in any limited partnership, deductions claimed for depletion,
contributions to an XXX or Xxxxx retirement plan, and alimony payments.
(b) XXXXXXXX HEREBY REPRESENTS TO KCD THAT XXXXXXXX IS AN
ACCREDITED INVESTOR.
3.7 RESTRICTED SECURITIES.
Xxxxxxxx understands that the Securities may not be sold, transferred,
or otherwise disposed of without registration under the Securities Act or an
exemption therefrom, and that in the absence of an effective registration
statement covering the Securities or an available exemption from registration
under the Securities Act, the Securities must be held indefinitely. In
particular, Xxxxxxxx is aware that the Securities may not be sold pursuant to
Rule 144 promulgated under the Securities Act unless all of the conditions for
use of Rule 144 are satisfied. Xxxxxxxx is aware that one of the conditions for
use of Rule 144 is the availability of current information to the public about
KCD and that no assurance can be made that such information will be available in
the future.
3.8 LEGENDS.
To the extent applicable, each certificate or other document evidencing
any of the Common Stock shall be endorsed with the legend set forth below, and
Xxxxxxxx covenants that, except to the extent such restrictions are waived by
KCD, Xxxxxxxx shall not transfer the shares represented by any such certificate
without complying with the restrictions on transfer described in the legend
endorsed on such certificate:
(a) The following legend under the Securities Act:
"THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED, PLEDGED, OR HYPOTHECATED, ABSENT AN EFFECTIVE
REGISTRATION THEREOF UNDER SUCH ACT OR COMPLIANCE WITH RULE 144
PROMULGATED UNDER SUCH ACT, OR UNLESS THE COMPANY HAS RECEIVED AN
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OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT
SUCH REGISTRATION IS NOT REQUIRED."
4. CONDITIONS OF KCD'S OBLIGATIONS AT CLOSING.
The obligations of KCD to Xxxxxxxx under this Agreement are subject to
the fulfillment on or before the Closing of each of the following conditions by
Xxxxxxxx.
4.1 REPRESENTATIONS AND WARRANTIES.
The representations and warranties of Xxxxxxxx contained in Section 3
shall be true on and as of the Closing with the same effect as though such
representations and warranties had been made on and as of the date of the
Closing.
4.2 QUALIFICATIONS.
All authorizations, approvals, or permits, if any, of any governmental
authority or regulatory body of the United States or of any state that are
required in connection with the lawful sale of the Common Stock pursuant to this
Agreement shall be duly obtained and effective as of the Closing.
5. MISCELLANEOUS.
5.1 ENTIRE AGREEMENT.
This Agreement and the documents referred to herein constitute the
entire agreement among the parties and no party shall be liable or bound to any
other party in any manner by any warranties, representations, or covenants
except as specifically set forth herein or therein.
5.2 SURVIVAL OF WARRANTIES.
The warranties, representations, and covenants of KCD and Xxxxxxxx
contained in or made pursuant to this Agreement shall survive the execution of
this Agreement and the Closing.
5.3 SUCCESSORS AND ASSIGNS.
Except as otherwise provided herein, the terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties (including permitted transferees of any
shares of Common Stock sold hereunder). Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the parties hereto or
their respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
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5.4 GOVERNING LAW.
This Agreement shall be governed by and construed under the laws of the
State of California as applied to agreements among California residents entered
into and to be performed entirely within California.
5.5 COUNTERPARTS.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
5.6 TITLES AND SUBTITLES.
The titles and subtitles used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting this
Agreement.
5.7 NOTICES.
Unless otherwise provided, any notice required or permitted under this
Agreement shall be given in writing and shall be deemed effectively given upon
personal delivery to the party to be notified by hand or professional courier
service or five days after deposit with the United States Post Office, by
registered or certified mail, postage prepaid and addressed to the party to be
notified at the address indicated for such party on the signature page hereof,
or at such other address as such party may designate by ten (10) days' advance
written notice to the other parties.
5.8 FINDER'S FEES.
Each party represents that it neither is nor will be obligated for any
finder's fees or commission in connection with this transaction.
Xxxxxxxx agrees to indemnify and to hold harmless KCD from any
liability for any commission or compensation in the nature of a finder's fee
(and the cost and expenses of defending against such liability or asserted
liability) for which Xxxxxxxx or any of its officers, partners, employees, or
representatives is responsible.
KCD agrees to indemnify and hold harmless Xxxxxxxx from any liability
for any commission or compensation in the nature of a finder's fee (and the
costs and expenses of defending against such liability or asserted liability)
for which KCD or any of its officers, employees, or representatives is
responsible.
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5.9 ATTORNEY'S FEES.
If any action at law or in equity is necessary to enforce or interpret
the terms of this Agreement the prevailing party shall be entitled to reasonable
attorneys' fees, costs and disbursements in addition to any other relief to
which such party may be entitled.
5.10 AMENDMENTS AND WAIVERS.
Any terms 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 and either retroactively or prospectively), only with the written
consent of KCD and Xxxxxxxx.
5.11 SEVERABILITY.
If one or more provisions of this Agreement are held to be
unenforceable under applicable law, such provision shall be excluded from this
Agreement and the balance of the Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.
5.12 FURTHER ASSURANCE.
The undersigned will execute and deliver such agreements and all other
documents and things and will do or cause to be done all such acts or things as
may be necessary or desirable to give effect to the provisions of this Agreement
and to carry out the intent of this Agreement.
(SIGNATURES ON FOLLOWING PAGE)
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
KCD HOLDINGS INCORPORATED
By:
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Name: Wellington Ewen, President
Address: 0000 Xxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxx Xxxxxxx, XX 00000
XXXXXX XXXXXXXX
By:
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Xxxxxx Xxxxxxxx
Address: 0000 Xxxxxxxx Xxxxxx Xxxx
Xxxxx Xxxxxxx, XX 00000
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