STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT, dated as of August 31st, 1998 (the
"Agreement"), is between Abacus Capital, L.L.C. ("Seller"), and Baywood
International, Inc., a Nevada corporation ("Buyer").
WHEREAS Seller and Buyer have entered into a Memorandum of Agreement of
even date herewith (the "Memorandum"), pursuant to which the parties have agreed
to enter into a business relationship through an acquisition company;
WHEREAS Seller is the holder of Eighty-Five Thousand (85,000) shares of
Class A common stock and Fifteen Thousand (15,000) shares of Class B common
stock of BII Acquisition Company, a Washington corporation ("Company"); and
WHEREAS Seller desires to sell and Buyer desires to purchase from the
Seller all of Seller's shares of Class B common stock of Company (the "Purchased
Stock"), on the terms and subject to the conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and intending to be legally bound hereby, the parties agree as follows:
1. THE TRANSACTION
1.1 SALE AND PURCHASE OF STOCK. On the terms and subject to the conditions
set forth in this Agreement, on the Closing Date (as hereafter defined), the
Seller shall sell the Purchased Stock to the Buyer and the Buyer shall purchase
the Purchased Stock from the Seller.
1.2 CONSIDERATION. At the closing Buyer shall pay to Seller total
consideration of Seventy-Five Thousand Dollars ($75,000) in cash (the "Purchase
Price"). Buyer shall receive credit against the Purchase Price for Ten Thousand
Dollars ($10,000) previously deposited pursuant to the Authorization to Proceed
dated as of July 27, 1998.
2. REPRESENTATION AND WARRANTIES OF THE BUYER
2.1 BUYER'S SOPHISTICATION. The Buyer, with the assistance of its
professional advisors, has such knowledge and experience in financial and
business matters that Buyer is capable of evaluating and has evaluated the
merits and risks of this purchase of the Purchased Stock for Buyer's own
account.
2.2 INVESTMENT OBJECTIVE. Buyer is acquiring the Purchased Stock pursuant
to this Agreement for investment for its own account and not with a view to the
sale or distribution of any part thereof. Buyer has no present intention of
selling, granting participation in or otherwise distributing the same. Buyer
acknowledges that the Purchased Stock has been offered and sold pursuant to
exemptions from registration under the Securities Act of 1933 and relevant state
securities laws and that the reliance of the Seller upon such exemptions is
predicated on the accuracy of Buyer's representations and
warranties herein. Buyer has no current intention with respect to any such
future sale.
2.3 AUTHORIZATION AND ENFORCEABILITY. Buyer has all requisite power and
authority to execute, deliver and perform this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
authorized, executed and delivered by Buyer and constitutes the valid and
binding obligation of Buyer, fully enforceable in accordance with its terms.
2.4 NO FINDER. Buyer has not taken any action which would give to any firm,
corporation, agency or other person a right to a consultant's or finder's fee or
any type of brokerage commission in relation to or connection with the
transactions contemplated by this Agreement.
2.5 EFFECTIVE AGREEMENT. The execution, delivery, and performance of this
Agreement by Buyer and the consummation of the sale contemplated hereby will
not, with or without the giving of notice or lapse of time or both, result in
the breach of or conflict with any terms, covenant, condition or provision of,
result in the modification or termination of, constitute a default under, or
result in the creation or imposition of any lien, security interest, charge, or
encumbrance upon any of the properties or assets of the Buyer pursuant to any
charter, bylaw, commitment, contract or other agreement or instrument, to which
Buyer is a party or by which any of its assets or properties is or may be bound
or affected or from which it derives a benefit.
2.6 RESTRICTIONS, BURDENSOME AGREEMENTS. Buyer is not a party to any
contract, commitment or agreement, and Buyer or any of its properties and assets
is not subject to or bound or affected by any charter, bylaw or other corporate
restriction, or any order, judgment, decree, law, statute, ordinance, rule,
regulation or other restriction of any kind or character, which would prevent
Buyer from entering into this Agreement or from consummating the sale
contemplated hereby.
3. REPRESENTATION AND WARRANTIES OF THE SELLER
Seller represents and warrants to Buyer that, except as otherwise set forth
herein, or otherwise specifically disclosed:
3.1 ALL AUTHORIZED CAPITALIZATION, OUTSTANDING SHARES, TITLE. Seller is the
record and beneficial owner of and has legal and valid title to the Purchased
Stock, free and clear of all liens, pledges, charges, claims and other
encumbrances, actual or alleged. Delivery of the shares to Buyer upon execution
of this Agreement will transfer to Buyer legal and valid title to the shares
sold hereunder, free and clear of any liens, pledges, charges, claims and other
encumbrances. As of the date hereof, Seller is the sole shareholder of Company,
and the total issued and outstanding stock of Company is 85,000 shares of Class
A common stock and 15,000 shares of Class B common stock.
3.2 AUTHORIZATIONS AND ENFORCEABILITY. Seller has all requisite power and
authority to execute, deliver and perform this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
authorized, executed and delivered by Seller and constitutes the
valid and binding obligation of Seller fully enforceable in accordance with its
terms.
3.3 EFFECTIVE AGREEMENT. The execution, delivery, and performance of this
Agreement by Seller and the consummation of the sale contemplated hereby will
not, with or without the giving of notice or lapse of time or both, result in
the breach of or conflict with any terms, covenant, condition or provision of,
result in the modification or termination of, constitute a default under, or
result in the creation or imposition of any lien, security interest, charge, or
encumbrance upon any of the properties or assets of the Seller pursuant to any
charter, bylaw, commitment, contract or other agreement or instrument, to which
Company or Seller is a party or by which any of either's assets or properties is
or may be bound or affected or from which either derives a benefit, which
violation would have a material adverse affect on the value of the shares being
purchased.
3.4 RESTRICTIONS, BURDENSOME AGREEMENTS. Seller is not a party to any
contract, commitment or agreement, and neither Company nor the Seller or any of
their respective properties and assets are subject to or bound or affected by
any charter, bylaw or other corporate restriction, or any order, judgment,
decree, law, statute, ordinance, rule, regulation or other restriction of any
kind or character, which would prevent Seller from entering into this Agreement
or from consummating the sale contemplated hereby.
3.5 ADDITIONAL STOCK ISSUANCES. Until such time as a Target (as defined in
the Memorandum of Agreement) is acquired, Abacus will not permit the Company to
issue any additional stock or other equity, or interest convertible into stock
or other equity, without the prior consent of Buyer. After the acquisition of a
Target, Abacus agrees that it will not vote its stock in the Company to permit
the Company to engage in an Extraordinary Common Stock Event as described in
paragraph 3.4(d)(i), (ii) or (iii) of the Company's Articles of Incorporation
without the prior consent of Buyer.
4. EXEMPTION FROM REGISTRATION-DISCLOSURE-ACCESS TO INFORMATION
4.1 INFORMATION AVAILABLE TO BUYER. A partial inducement to the Seller to
enter into this Agreement is the representation by Buyer that it has a high
degree of business and financial sophistication concerning the industry and the
business operations and prospects of Company. Buyer has available to itself and
its advisors all business and financial data of Company. Although Seller has
made such information available, based on its knowledge of relevant operating
data, the scope and examination by and on behalf of Buyer has been determined by
Buyer, based on its own sophistication and experience. Buyer has received all of
the information regarding Company and its business which has been requested.
4.2 RISK OF LOSS. Buyer recognizes that the Purchased Stock being purchased
hereunder involves a high degree of risk and that the entire amount of the
purchase price might be lost.
5. ACCESS TO INFORMATION
Buyer represents that its access to information has been as set forth
above. Without limiting the general nature of the representation, Buyer
acknowledges and represents that it has had access to certain specific matters
and the opportunity to consider in detail the business and investment
ramifications of information obtained.
6. CLOSING; ISSUANCE OF CERTIFICATES
The purchase and sale contemplated hereunder shall take place at the
offices of Xxxxxxx & Xxxxx, P.L.L.C., 000 Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, XX
00000, at such time and within thirty (30) days of the execution hereof on such
date as is mutually agreed by the parties, and such date shall be the "Closing
Date." Issuance and delivery of the consideration to be paid to Seller pursuant
to the Consulting Agreement between Buyer and Seller of even date herewith (the
"Consulting Agreement") shall be a condition precedent to Seller's obligations
to close. Such issuance and delivery may be conducted simultaneously with the
closing hereunder. In addition to any other rights or remedies available at law
or in equity, Seller shall have the right to terminate this Agreement and its
rights and obligations hereunder if the closing shall not have occurred as
provided herein.
7. OTHER PROVISIONS
7.1 NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given when
personally delivered or, if mailed, three days after mailed by United States
first-class, certified or registered mail, postage prepaid, to the other party
at the following addresses (or at such other address as shall be given in
writing by any party to the other):
7.1.1 If to Buyer, then to:
Baywood International, Inc.
Attn: Xxxx Xxxxxxxxxx, President
00000 Xxxxx 00xx Xxxxx, Xxxxx 0
Xxxxxxxxxx, XX 00000
Fax: (000) 000-0000
With a copy to:
Xxxxx, Xxxxxxxxx & Xxxxx
Attn: Xxx Xxxxx
Scottsdale Center
0000 Xxxxx Xxxxxxxxxx Xxxx, Xxxxx X-000
Xxxxxxxxxx, XX 00000
Fax: (000) 000-0000
7.1.2 If to Seller, then to:
ABACUS CAPITAL, L.L.C.
Attn: Xxxxx X. Xxxxx
00000 XX 0xx Xx., Xxxxx 000
Xxxxxxxx, XX 00000
Fax: (000) 000-0000
with a copy to:
XXXXXXX & BIAGI, P.L.L.C.
Attn: Xxxxx X. Xxxx
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000-0000
Fax:(000) 000-0000
7.2 SUCCESSORS AND ASSIGNS. This Agreement, and all rights and powers
granted hereby, shall bind and inure to the benefit of the parties and their
respective successors and assigns.
7.3 GOVERNING LAW. This Agreement has been made, executed and delivered in
and is to be governed and construed in accordance with the laws of the State of
Washington.
7.4 CAPTIONS. The captions in this Agreement are inserted solely for
convenience of reference and do not constitute a part of this Agreement, nor
shall they affect its meaning, construction or effect.
7.5 FURTHER ASSURANCES. Each party shall cooperate and take such action as
may be reasonably requested by another party in order to carry out the
provisions and purposes of this Agreement and the transactions contemplated
hereby.
7.6 AMENDMENT AND WAIVER. The parties may by mutual agreement amend this
Agreement in any respect, and any party, but only as to such party, may (a)
extend the time for the performance of any of the obligations of any other
party; (b) waive any inaccuracies in representations by any other party; (c)
waive compliance by any other party with any of its agreements contained herein
and the performance of any obligations by such other party; and (d) waive the
fulfillment of any condition that is precedent to the performance by such party
of any of its obligations under this Agreement. To be effective, all such
amendments or waivers must be in writing and be signed by the party against whom
enforcement of the amendment or waiver is sought.
7.7 ENTIRE AGREEMENT. This Agreement, the Memorandum and the Consulting
Agreement set forth all of the promises, covenants, agreements, conditions and
undertakings between the parties hereto with respect to the subject matter
hereof, and supersede all prior and contemporaneous agreements and
understandings, and inducements or conditions, if any, expressed or implied, and
whether oral or written.
7.8 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, and by facsimile transmission, each of which shall be deemed an
original and all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, each of the parties has executed this Stock Purchase
Agreement as of the date first above written.
DATED this 31st day of August, 1998.
ABACUS CAPITAL, L.L.C.:
By /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx, Manager
BAYWOOD INTERNATIONAL, INC.
By /s/ Xxxx Xxxxxxxxxx
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Xxxx Xxxxxxxxxx, President
NUMBER SHARES
2B 15,000
See the restrictions on transfer
as provided for on the reverse
of this certificate
BII ACQUISITION COMPANY
a Washington corporation
The corporation is authorized to issue 2,000,000 shares of common stock -
no par value
This Certifies that Baywood International, Inc. is the
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registered holder of Fifteen Thousand and no/100 Shares
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fully paid and nonassessable shares
of the Class B Common Stock of BII Acquisition Company, no par value
transferable only on the books of the Corporation by the holder hereof in
person or by Attorney upon surrender of this Certificate properly endorsed.
In Witness Whereof, the said Corporation has caused this Certificate to be
signed by its duly authorized officers and its Corporate Seal to be hereunto
affixed this Fifteenth day of September A.D. 1998
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/s/ Xxxxx X. Xxxxx /s/ Xxxxx X. Xxxx
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President Secretary
