Series C Convertible Preferred Stock Purchaser Agreement -UCT
Series C Convertible Preferred Stock Purchaser Agreement - UCT
UTAH CLAY TECHNOLOGIES, INC.
SERIES C CONVERTIBLE PREFERRED STOCK
PURCHASE AGREEMENT
This Agreement is made as of December 24, 2003, by and between Utah Clay
Technologies, Inc., a Utah corporation (the "Company"), and the Shareholders of
NeWave, Inc. (the "Purchaser").
RECITALS
On the terms and conditions set forth herein, the Company desires to sell
to the Purchaser, and the Purchaser desires to purchase from the Company, shares
of the Company's Series C Convertible Preferred Stock (the "Series C Preferred
Stock") which are convertible into shares of the Company's common stock (the
"Common Stock"), on the terms and conditions set forth in the Certificate of
Designation of Series C Convertible Preferred Stock in the form attached hereto
as Exhibit A (the "Designation");
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NOW, THEREFORE, in consideration of the foregoing recitals, the mutual
promises hereinafter set forth, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
AGREEMENTS
SECTION 1
AUTHORIZATION AND SALE OF THE SHARES
1.1 AUTHORIZATION OF THE SHARES.
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(a) The Company has authorized, or before the Closing (as defined in
Section 2.1 below) will have authorized, a new series of preferred stock,
designated as "Series C Convertible Preferred Stock", which shall have the
rights, preferences and privileges provided for in the Designation.
(b) In addition, prior to the Closing, the Company shall have authorized the
issuance and sale to the Purchaser of ninety-five (95) shares (the "Shares") of
the Series C Preferred Stock, which shall have the rights, preferences and
privileges provided for in the Designation.
1.2 ISSUANCE OF THE SHARES. Subject to the terms and conditions
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hereof, at the Closing, the Company will issue and transfer the Shares to the
Purchaser and the Purchaser will accept such Shares from the Company as
consideration pursuant to the Plan of Reorganization between the Company and
NeWave, Inc. The Common Stock issued or issuable upon conversion of the
Shares is referred to as the "Conversion Stock." The Shares, the Conversion
Stock and any other securities issued or issuable in respect of the Shares are
sometimes collectively referred to herein as the "Securities."
SECTION 2
CLOSING DATE; DELIVERY
2.1 CLOSING DATE. The closing date shall be the date upon which this
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Agreement is executed by the parties to this Agreement (the "Closing Date").
2.2 DELIVERY. On the Closing Date, the Company shall deliver to the
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Purchaser a certificate registered in the Purchaser's name and representing the
Shares, against delivery to the Company of a check or wire transfer payable to
the order of the Company in the amount of the Purchase Price. The Shares shall
be delivered free of any claims, liens or encumbrances.
SECTION 3
COMPANY REPRESENTATIONS AND WARRANTIES
Except as disclosed in the Schedules attached hereto, the Company makes the
following representations and warranties to the Purchaser:
3.1 ORGANIZATION AND STANDING. Each of the Company and its
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subsidiaries (i) is a corporation duly organized and validly existing under the
laws of its respective jurisdiction of incorporation and is in good standing as
a domestic corporation under the laws of said state or country, (ii) has all
requisite corporate power and authority to own and lease its properties and to
conduct its business as presently conducted, and (iii) is duly qualified or
licensed to do business as a foreign corporation and is in good standing in each
jurisdiction in which the nature of its business or its ownership or leasing of
property requires such qualification, except where the failure to be so
qualified does not and is not reasonably expected to (x) individually or in the
aggregate, have a material adverse effect on the properties, business, results
of operations, condition (financial or otherwise), affairs or prospects of the
Company and its subsidiaries, taken as a whole, (y) interfere with or impair the
Company's ability to perform its obligations under this Agreement, or (z)
interfere with or prevent the consummation of any of the transactions
contemplated by said instruments (any of the events set forth in clauses (x),
(y) or (z), a "Material Adverse Effect").
3.2 CORPORATE POWER. The Company has all requisite legal and corporate
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power to execute and deliver this Agreement, to sell and issue the Shares, to
issue the Conversion Stock issuable upon conversion of the Shares, and to carry
out and perform its obligations under the terms of this Agreement and under the
terms of all other agreements and other documents executed in connection
herewith.
3.3 CAPITALIZATION. The authorized capital stock of the Company upon
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the filing of the Designation with the Secretary of State of the State of Utah
will consist of (a) 300,000,000 shares of Common Stock of which _____________
shares are issued and outstanding, and (b) 10,000,000 shares of Preferred Stock
of which (i) ninety-five (95) shares shall be designated as "Series C
Convertible Preferred Stock", 95 of which shall be issued and transfered to the
Purchaser at the Closing. All of the outstanding shares of Common Stock and all
of the shares of Series C Preferred Stock when issued and sold, will be, validly
issued, fully paid and non-assessable, and free of any liens or encumbrances.
The Series C Preferred Stock shall have the rights, preferences, privileges and
restrictions set forth in the Designation. Except as set forth in Schedule 3.3,
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no subscription, warrant, option or other right to purchase or acquire any
shares of any class of capital stock of the Company or securities convertible
into or exchangeable for such capital stock are outstanding. Except as set
forth in Schedule 3.3, no securities of the Company have any anti-dilution
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rights, preemptive rights or rights of first refusal.
3.4 AUTHORIZATION. The execution, delivery and performance of this
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Agreement, and any other agreements related to this Agreement, by the Company
have been properly and duly authorized by all requisite corporate action. In
addition, all other actions taken by the Company in connection with the
transactions contemplated by this Agreement were properly and duly authorized by
all requisite corporate action. This Agreement and all documents and agreements
executed in connection herewith, constitute valid and binding obligations of the
Company. The issuance and sale of the Shares will not give rise to any
preemptive rights or rights of first refusal on behalf of any person in
existence on the date hereof.
3.5 CONVERSION STOCK. The Conversion Stock has been duly and validly
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reserved for issuance.
3.6 ACCURACY OF REPORTS. All reports (the "SEC Reports") required to
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be filed by the Company during the period from January 1, 2003 to the date of
this Agreement under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), have been duly filed, complied in all material respects with
the Exchange Act and the requirements of their respective forms (as of their
respective filing dates), were complete and correct in all material respects as
of the dates at which the information was furnished, and none contains (as of
their respective dates of filing) any untrue statement of a material fact nor
omitted to state a material fact necessary in order to make the statements made
therein, in light of the circumstances in which made, not misleading.
3.7 FINANCIAL STATEMENTS AND CHANGES. Since January 1, 2003, the
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financial statements of the Company included in the SEC Reports (the "Financial
Statements") 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 U.S. generally accepted
accounting principles ("GAAP") (except, in the case of unaudited statements as
permitted by Form 10-Q of the SEC) applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto) and fairly
present the consolidated financial position of the Company and its consolidated
subsidiaries as of the dates thereof and the consolidated results of their
operations and cash flows (or changes in financial position prior to the
approval of Financial Accounting Standards Board Statement of Financial
Accounting Standards No. 95) for the periods then ending in accordance with GAAP
(subject, in the case of the unaudited statements, to normal year end audit
adjustments). Except as set forth in the filed SEC Reports, neither the Company
nor any of its subsidiaries has any liabilities or obligations of any nature
(whether accrued, absolute, contingent or otherwise) required by GAAP to be set
forth on a consolidated balance sheet of the Company and its consolidated
subsidiaries or in the notes thereto and which could reasonably be expected to
have a Material Adverse Effect.
3.8 NO CONFLICT. The provisions of each of this Agreement and the
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Designation do not constitute any violation, or conflict with or constitute a
default under, any indenture, mortgage, deed of trust or other agreement,
instrument, court order, judgment, decree, statute, rule or regulation (each a
"Term" and collectively the "Terms") to which the Company or any of its
subsidiaries is a party or by which it is bound. The execution, delivery and
performance of and compliance with this Agreement, the issuance of the
Securities pursuant to the terms hereof and the performance of the Company's
obligations hereunder and thereunder (i) will not result in any violation or be
in conflict with or constitute a default under any Term, (ii) will not result in
the creation of any mortgage, pledge, lien, encumbrance or charge upon any of
the properties or assets of the Company or its subsidiaries pursuant to any such
Term, and (iii) will not conflict with or violate any applicable law, rule,
regulation, judgment, order or decree of any government, governmental
instrumentality or court having jurisdiction over the Company, any of its
subsidiaries, or any of the Company's or subsidiaries' assets or properties,
subject to such exceptions as would not have a Material Adverse Effect.
3.9 GOVERNMENTAL CONSENTS. No consent, approval or authorization of,
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or designation, declaration or filing with, any federal, state or foreign
governmental authority is required on the part of the Company in connection with
the valid execution and delivery of this Agreement, the offer, sale or the
issuance of the Securities or the consummation of any other transaction
contemplated hereby, except (i) the filing of the Designation in the office of
the State of Utah, and (ii) if required, qualifications or filings in connection
with exemptions under any applicable state "blue sky" laws and Federal
securities laws, which qualifications or exemptions, if required, will have been
obtained and will be effective on the Closing Date, or will be obtained or filed
after the Closing Date within the prescribed time in order to secure such
exemptions or qualifications.
3.10 PATENTS, TRADEMARKS, ETC. The Company and its subsidiaries own or
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have the right, or prior to the Closing will own or have the right, to use all
patents, trademarks, service marks, trade names, copyrights, licenses and rights
necessary to their business as now conducted, as conducted at the time of the
Closing and as contemplated being conducted thereafter, and, are not infringing
upon any person's or company's rights under or with respect to any of the
foregoing. Neither the Company nor any of its subsidiaries has received any
written communications alleging that the Company or a subsidiary has violated
any patent, trademark, service xxxx, trade name, copyright or trade secret or
other proprietary right of any other person or entity.
3.11 LITIGATION. Except as set forth on Schedule 3.11, there is no
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suit, action or proceeding pending or affecting the Company or any of its
subsidiaries, nor is there any judgment, decree, injunction, rule or order of
any governmental entity or arbitrator outstanding against the Company or any of
its subsidiaries.
3.12 COMPLIANCE WITH LAWS. The Company is not in violation of any
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applicable statute, rule, regulation, order or restriction of any domestic or
foreign government or any instrumentality or agency thereof in respect of the
conduct of its business or the ownership of its properties, which could
reasonably be expected to have a Material Adverse Effect.
3.13 OFFERING OF THE SHARES. Neither the Company nor any person acting
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on its behalf has taken or will take any action (including, without limitation,
any offering of any securities of the Company under circumstances which would
require, under the Securities Act of 1933, as amended (the "Securities Act"),
the integration of such offering with the offering and sale of the Securities)
which might subject the offering, issuance or sale of the Securities to the
registration requirements of the Securities Act.
3.14 FINDER'S FEE. The Company represents and warrants that no finders
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or brokers have been retained or used in connection with the transactions
contemplated by this Agreement.
3.15 TAX MATTERS. Except as set forth on Schedule 3.15, the Company and
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each of its subsidiaries has timely filed with the appropriate taxing authority
all tax returns required to be filed by it or has timely requested extensions
and any such request has been granted and has not expired. Each such tax return
is complete and accurate in all respects. All taxes shown as owed by the
Company or any of its subsidiaries on any tax return or claimed or asserted to
be due, from or with respect to any of them, have been paid, except for taxes
being contested in good faith and for which adequate reserves have been taken.
The Company and each of its subsidiaries have properly made due and sufficient
accruals for all taxes for such periods subsequent to the periods covered by
such tax returns as required by GAAP. None of the Company or any of its
subsidiaries are being audited or examined by any taxing authority with respect
to any tax or is a party to any pending action or proceedings by any taxing
authority for assessment or collection of any tax, and no claim for assessment
or collection of any tax has been asserted against it or any of its
subsidiaries. No claim has been made by any authority in a jurisdiction where
the Company or any of its subsidiaries does not file tax returns that it is or
may be subject to taxation by that jurisdiction. There is no dispute or claim
concerning any tax liability.
3.16 ENVIRONMENTAL MATTERS. Each of the Company and its subsidiaries
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has obtained, and now maintains as currently valid and effective, all permits,
certificates of financial responsibility, and other governmental authorizations
(collectively, "Environmental Permits") that are required to be obtained by the
Company or any of its subsidiaries under any state, federal, municipal, foreign
or other environmental laws, rules or regulations applicable to any aspect of
the Company or such subsidiary, including, but not limited to, in connection
with the operation of its businesses and properties ("Environmental Laws").
Each of the Company and its subsidiaries has been in compliance with all terms
and conditions of the Environmental Permits and all Environmental Laws and no
liability exists under any Environmental Laws or otherwise with respect to prior
operations or activities.
SECTION 4
PURCHASER REPRESENTATIONS AND WARRANTIES
The Purchaser represents and warrants to the Company, as follows:
4.1 INVESTMENT INTENT.
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(a) Purchaser has substantial experience in business and financial
matters and is capable of evaluating the merits and risks of its investment in
the Company and is able to bear the economic risks of its investment.
(b) Purchaser is an "accredited investor" as defined in Rule 501(a)(3)
of Regulation D of the Securities Act.
(c) Purchaser is acquiring the Securities for investment for its own
account and not with a view to, or for resale in connection with, any
distribution thereof. Purchaser understands that the Securities have not been
registered under the Securities Act by reason of a specific exemption from the
registration provisions of the Securities Act, which depends upon, among other
things, the bona fide nature of the investment intent as expressed herein.
(d) Purchaser acknowledges that the Securities must be held
indefinitely unless 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 ("Rule 144") which
permit limited resale of securities purchased in a private placement subject to
the satisfaction of certain conditions, including the existence of a public
market for the shares, the availability of certain current public information
about the Company, the resale occurring not less than one year after a party has
purchased and paid for the security to be sold, the sale being through a
"broker's transaction" or in a transaction directly with a "market maker" (as
provided by Rule 144(f)) and the number of shares being sold during any
three-month period not exceeding specified limitations.
4.2 CORPORATE POWER. Purchaser has all requisite legal and corporate power
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to execute and deliver this Agreement and to carry out and perform its
obligations under the terms of this Agreement.
4.3 AUTHORIZATION. The execution, delivery and performance of this
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Agreement by the Purchaser has been duly authorized by all requisite corporate
action, and this Agreement constitutes a valid and binding obligation of
Purchaser enforceable in accordance with its terms, subject to laws of general
application relating to bankruptcy, insolvency and the relief of debtors, and
rules of law governing specific performance, injunctive relief or other
equitable remedies.
4.4 FINDER'S FEE. Purchaser represents and warrants that no finders or
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brokers have been retained or used in connection with the transactions
contemplated by this Agreement.
SECTION 5
CONDITIONS TO CLOSING
5.1 CONDITIONS TO PURCHASER'S OBLIGATIONS. The obligation of the
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Purchaser to purchase the Shares at the Closing is subject to the fulfillment to
the reasonable satisfaction of the Purchaser, on or prior to the Closing Date,
of the following conditions any of which may be waived in writing, in whole or
in part, by the Purchaser:
(a) The representations and warranties made by the Company in Section 3
hereof shall be true and correct in all material respects when made, and shall
be true and correct in all material respects on the Closing Date;
(b) All covenants, agreements and conditions contained in this
Agreement to be performed by the Company on or prior to the Closing Date shall
have been performed or complied with in all material respects; and
(c) The Designation shall have been filed with and accepted by the Utah
Secretary of State.
5.2 CONDITIONS TO COMPANY'S OBLIGATIONS. The Company's obligation to
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sell and issue the Shares to the Purchaser at the Closing is subject to the
fulfillment to the Company's reasonable satisfaction, on or prior to the Closing
Date, of the following conditions, any of which may be waived in writing, in
whole or in part, by the Company:
(a) The representations and warranties made by the Purchaser in Section
4 hereof shall be true and correct in all material respects when made, and shall
be true and correct in all material respects on the Closing Date;
(b) All covenants, agreements and conditions contained in this
Agreement to be performed by the Purchaser on or prior to the Closing Date shall
have been performed or complied with in all material respects; and
SECTION 6
COVENANTS
6.1 ADDITIONAL DOCUMENTS AND FURTHER ASSURANCES. Each party hereto, at
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the request of the other party hereto, shall execute and deliver such other
instruments and do and perform such other acts and things as may be necessary or
desirable for effecting completely the consummation of this Agreement and the
transactions contemplated hereby.
SECTION 7
INDEMNIFICATION
7.1 INDEMNIFICATION. The parties hereby agree to indemnify, defend and
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hold each other and their affiliates harmless from and against any and all
costs, losses, liabilities, damages, lawsuits, deficiencies, claims and
expenses, including without limitation, interest, penalties, reasonable
attorneys' fees and all amounts paid in investigation, defense or settlement of
any of the foregoing (, incurred in connection with, arising out of, resulting
from, or incident to, any breach of any representation or warranty made by such
party in this Agreement
SECTION 8
MISCELLANEOUS
8.1 DELAYS OR OMISSIONS. No delay or omission to exercise any right,
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power or remedy accruing to the Company or the Purchaser, upon any breach or
default under this Agreement, shall impair any such right, power or remedy, nor
shall it be construed to be a waiver of any such breach or default, or any
acquiescence therein, or of any similar breach or default thereafter occurring;
nor shall any waiver of any single breach or default be deemed a waiver of any
other breach or default theretofore or thereafter occurring. Any waiver,
permit, consent or approval of any kind or character by the Company or the
Purchaser of any breach or default under this Agreement, or any waiver by the
Company or the Purchaser of any provisions or conditions of this Agreement, must
be in writing and shall be effective only to the extent specifically set forth
in writing, and all remedies, either under this Agreement, or by law or
otherwise afforded to the Company or the Purchaser, shall be cumulative.
8.2 WAIVERS AND AMENDMENTS. This Agreement and the provisions hereof
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may not be waived or amended except pursuant to a written instrument signed by
the required party or parties as aforesaid.
8.3 SEVERABILITY. In the event that any provision of this Agreement
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shall be deemed to be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions hereof shall not in any way be
affected or impaired thereby.
8.4 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
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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.
8.5 NOTICES, ETC. All notices and other communications required or
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permitted hereunder shall be in writing and shall be delivered either (i)
personally, (ii) by facsimile transmission, or (iii) by a nationally recognized
overnight courier, in each case with all delivery or postal charges pre-paid,
and in each case, addressed attention: President. All notices and
communications shall be sent or delivered to the address or fax number, as
applicable, for the applicable party as set forth on the signature page of this
Agreement, or at such other address or fax number as the applicable party shall
have furnished in writing to the other party (or its transferees). Each such
notice or communication, addressed and posted as aforesaid, shall for all
purposes of this Agreement be treated as effective or having been given (i) when
delivered, if delivered personally, (ii) the business day on which the notice or
communication is sent, if delivered by facsimile transmission, or (iii) upon the
earlier of its receipt or two (2) business days after the business day of
deposit with a nationally recognized overnight courier, if delivered by such
means.
8.6 ENTIRE AGREEMENT. This Agreement and the other documents delivered
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pursuant hereto constitute the full and entire understanding and agreement among
the parties with regard to the subject matters hereof and thereof, and supersede
any and all prior agreements and understandings among the parties.
8.7 GOVERNING LAW. This Agreement shall be governed by and construed
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and enforced in accordance with the laws of the State of Utah as they apply to
contracts entered into and wholly to be performed within such state, and without
reference to its principles of conflicts of law or choice of law.
8.8 ATTORNEYS' FEES. In the event of any litigation in a court of
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competent jurisdiction arising in connection with this Agreement and the
transactions contemplated hereby, the prevailing party in judgment shall be
entitled to recover reasonable legal fees and costs in connection with such
action including any appeals.
8.9 INDEPENDENT ADVICE OF COUNSEL. The parties represent and declare that,
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in executing this agreement, they relied solely upon their own judgment, belief
and knowledge, and had the ability to seek the advice of their own independently
selected counsel concerning the nature, extent and duration of their duties and
rights contained in this agreement. The parties further represent and agree
that they have not been influenced by any representations or statements
concerning any matters made by any other party or by any person or attorney
representing any other party.
8.10 COUNTERPARTS. This Agreement may be executed in any number of
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counterparts, each of which shall be an original and all of which together shall
constitute one instrument.
[Signatures on following page]
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
and delivered by their proper and duly authorized officers as of the day and
year first written above.
COMPANY
UTAH CLAY TECHNOLOGIES, INC., a Utah corporation
By:
Xxxxxx Xxxx,
President
Address: 0000 Xxxxx 000 Xxxx
Xxxx Xxxx Xxxx, XX 00000
Fax: (000) 000-0000
PURCHASER
[______________________________]
By:
Print Name: ______________________
Print Title: _______________________
Address: _______________________
_______________________
Fax: (___) __-___
SCHEDULES TO SERIES C CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
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Schedule 3.3
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OUTSTANDING RIGHTS
The Company currently has Convertible Debentures outstanding in the amount of
$165,000, which are convertible into Common Stock of the Company pursuant to the
terms of the Debenture Agreement.
Schedule 3.11
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LITIGATION
None.
Schedule 3.15
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TAX MATTERS
None.
Exhibit A
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CERTIFICATE OF DESIGNATION FOR SERIES C CONVERTIBLE PREFERRED STOCK
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UTAH CLAY TECHNOLOGIES, INC.
____________________________
SERIES C CONVERTIBLE PREFERRED STOCK
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PURCHASE AGREEMENT
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DECEMBER 24, 2003
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