STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is made as of the 15th day
of July, 1996 by and between SELF-HEATING CONTAINER CORPORATION OF CALIFORNIA, a
California corporation (the "Company"), and MANHATTAN WEST, INC., a California
corporation ("MWI" or "Purchaser").
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. PURCHASE AND SALE OF STOCK.
1.1 SALE AND ISSUANCE OF COMMON STOCK. Subject to the terms and
conditions of this Agreement, Purchaser agrees, to acquire at the Closing and
the Company agrees to sell and issue to Purchaser Five Thousand Eighty-Nine
(5,089) shares of the Company's Common Stock (the "Common Stock") for the
purchase price of Nineteen Dollars and 65/100 ($19.65) per share for a total
purchase price of One Hundred Thousand Dollars ($100,000.00). Subject to the
terms and conditions of this Agreement, Purchaser agrees to acquire at the
Closing and the Company agrees to issue at the Closing that number of shares of
Common Stock set forth above.
1.2 CLOSING. The purchase and sale of the Common Stock shall take
place at the offices of the Company, at 10:00 a.m., on July 15, 1996, or at such
other time and place as the Company and Purchaser mutually agree upon, verbally
or in writing (which time and place are designated as the "Closing"). At the
Closing the Company shall deliver to Purchaser a certificate representing the
Common Stock which Purchaser is purchasing against delivery to the Company by
Purchaser of the purchase price by confirmed wire transfer or certified funds.
The Certificate(s) shall be in the name of Purchaser.
2. REPRESENTATIONS AND WARRANTIES OF PURCHASER. This Agreement is made
with Purchaser in reliance upon the following representation and warranties to
the Company by the Purchaser:
2.1 AUTHORIZATION. This Agreement constitutes Purchaser's valid
and legally binding obligation, enforceable in accordance with its terms.
2.2 PURCHASE ENTIRELY FOR OWN ACCOUNT. The Common Stock to be
received by Purchaser will be acquired for investment for Purchaser's own
account, not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof, and that Purchaser has no present intention of
selling, granting any participation in, or otherwise distributing the same. By
executing this Agreement, Purchaser further represents that Purchaser does not
have any contract, undertaking, agreement or arrangement with any person to
sell, transfer or grant participations to such person or to any third person,
with respect to any of the Common Stock.
2.3 DISCLOSURE OF INFORMATION. Purchaser believes it has received
all the information it considers necessary or appropriate for deciding whether
to acquire the Common Stock. Purchaser
further represents that it has had an opportunity to ask questions and receive
answers for the Company regarding the Company, its business and the terms and
conditions of the offering of the Common Stock.
2.4 DEVELOPMENT STAGE COMPANY. The undersigned recognizes the
Company is a development stage Company, that it has an accumulated deficit and a
working capital deficit, has not generated any revenue from operations and is
not expected to generate any revenue from operations for some time and perhaps
for years, and that proposed development expenditures are expected to result in
substantial and increasing losses over at least the next several years, and
possibly much longer. Investment in the Company involves substantial risk, and
the undersigned should not purchase the Common Stock unless it can afford the
complete loss of its investment. The undersigned has taken full cognizance of
and understands all of the risk factors related to the receipt of the Common
Stock.
2.5 CONFIDENTIALITY. Purchaser hereby represents, warrants and
covenants that it's officers, directors, shareholders or affiliates shall
maintain in confidence, and shall not use or disclose without the prior written
consent of the Company, any information identified as confidential that is
furnished to Purchaser by the Company in connection with this Agreement. This
obligation of confidentiality shall not apply, however, to any information (a)
in the public domain through no unauthorized act or failure to act by Purchaser,
or (b) lawfully disclosed to Purchaser by a third party who possessed such
information without any obligation of confidentiality. Purchaser further
covenants that it shall return to the Company all tangible materials containing
such information upon request by the Company.
2.6 INVESTMENT EXPERIENCE. Purchaser is an investor in securities
of companies in the development stage and acknowledges that it is able to fend
for itself, can bear the economic risk and complete loss of its investment and
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
Common Stock.
2.7 ADVICE OF PROFESSIONALS. The undersigned has carefully
considered and has been advised by the Company to have any material provided by
anyone regarding the Company, including but not limited to this Stock Purchase
Agreement, related documents and the acquisition of the Common Stock reviewed by
legal counsel prior to acquisition, and to discuss with professional tax and
financial advisers the suitability of Purchaser's acquisition of the Common
Stock for Purchaser's particular tax and financial situation, and it has
determined the Common Stock is a suitable investment. The Company specifically
disclaims any representations regarding the legal, tax, or financial
consequences of the purchase, other than the representation this is a high risk
transaction.
2.8 FINANCIAL STATUS. All information which the undersigned has
provided to the Company concerning the undersigned and its financial position is
correct as of the date set forth therein, and if there should be any change in
such information prior to Purchaser's acceptance as a shareholder of the
Company, the undersigned will immediately provide such information to the
Company and will promptly send confirmation of such information to the Company.
2.9 AUTHORITY. If this Stock Purchase Agreement is executed and
delivered on behalf of a partnership, corporation, trust, estate or other
entity, (i) the undersigned's execution, delivery and performance of and under
this Stock Purchase Agreement, and all documents ancillary hereto, and the
consummation of the transactions contemplated hereby and thereby have been duly
authorized, and the undersigned is duly authorized (a) to execute and deliver
this Stock Purchase Agreement and all other
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instruments executed and delivered on behalf of such partnership, corporation,
trust, estate or other entity, in connection with the issuance in its name of
the Common Stock; and (b) to acquire and hold the Common Stock, (ii) such entity
has not been formed for the specific purpose of acquiring the Common Stock; and
(iii) when executed and delivered by the Company, will constitute such
partnership's, corporation's, trust's, estate's or other entity's legal, valid
and binding obligation enforceable against it in accordance with its terms.
2.10 RESTRICTED SECURITIES. Purchaser understands that the shares
of Common Stock it is acquiring are characterized as "restricted securities"
under the federal securities laws inasmuch as they are being acquired from the
Company in a transaction not involving a public offering and that under such
laws and applicable regulations such securities may be resold without
registration under the Securities Act of 1933, as amended (the "Securities
Act"), only in certain limited circumstances. In this connection Purchaser
represents that it is familiar with Securities and Exchange Commission ("SEC")
Rule 144, as presently in effect, and understands the resale limitations imposed
thereby and by the Securities Act.
2.11 FURTHER LIMITATIONS ON DISPOSITION. Without in any way
limiting the representations set forth above, Purchaser further agrees not to
make any disposition of all or any portion of the Common Stock unless and until:
(a) There is then in effect a registration statement under
the Securities Act covering such proposed disposition and such disposition is
made in accordance with such registration statement; or
(b) (i) Purchaser shall have notified the Company of the
proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition and (ii) if
reasonably requested by the Company, Purchaser shall have the furnished the
Company with an opinion of counsel in a form satisfactory to Company or its
counsel in their sole discretion, that such disposition will not require
registration of such shares under the Securities Act.
2.12 LEGENDS. It is understood that the certificates evidencing the
Common Stock may bear one or all of the following legends:
(a) "THESE SECURITIES 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 A REGISTRATION STATEMENT IN EFFECT WITH RESPECT
TO THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE
144 OF SUCH ACT."
(b) Any legend required by the laws of the State of
California or other jurisdiction, including any legend required by the
California Department of Corporations and section 417 and 418 of the California
Corporations Code.
2.13 ACCREDITED OR FOREIGN PURCHASER. Purchaser is an accredited
investor as defined in Code of Federal Regulations Section 230.501(a)(Regulation
D), as amended, under the Securities Act.
2.14 REMOVAL OF LEGENDS; FURTHER COVENANTS.
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(a) Any legend endorsed on a certificate pursuant to
Section 2.12 hereof shall be removed (i) if the Common Stock represented by such
certificate shall have been effectively registered under the Securities Act or
otherwise lawfully sold in a public transaction, (ii) if the Common Stock may be
transferred in compliance with Rule 144(k) promulgated under the Securities Act,
or (iii) if Purchaser shall have provided the Company with an opinion of
counsel, in form and substance acceptable to the Company and its counsel in
their sole discretion and from attorneys reasonably acceptable to the Company
and its counsel, stating that a public sale, transfer or assignment of the
Common Stock may be made without registration.
(b) Any legend endorsed upon a certificate pursuant to
Section 2.12 hereof shall be removed if the Company receives an order of the
appropriate state authority authorizing such removal or if Purchaser provides
the Company with an opinion of counsel, in form and substance acceptable to the
Company and its counsel in their sole discretion and from attorneys reasonably
acceptable to the Company and its counsel, stating that such state legend may be
removed.
(c) Purchaser further covenants that Purchaser will not
transfer the Common Stock, in violation of the Securities Act, the Securities
and Exchange Act of 1934, as amended (the "Exchange Act"), or the rules of the
Commission promulgated thereunder, including Rule 144 under the Securities Act.
Further, Purchaser agrees that, prior to the closing of the Company's initial
public offering, Purchaser will not transfer any of the Common Stock in a public
offering without the Company's prior consent, even if Purchaser is otherwise
permitted to transfer them pursuant to Rule 144(k).
2.15 NO REPRESENTATIONS REGARDING FUTURE RESULTS. It never has been
represented, guaranteed or warranted by any broker, the Company, any of the
officers, directors, shareholders, partners, employees, legal counsel, auditor
or agents of the Company or its advisors, or any other persons, whether
expressly or by implication, that the past performance or experience of the
management of the Company, or of any other person, will in any way indicate the
future results of the ownership of the Common Stock or of the Company's
activities.
2.16 ACKNOWLEDGEMENT. The undersigned acknowledges he understands
the meaning and legal consequences of the representations and warranties
contained in this Agreement, and the undersigned hereby agrees the Company and
each officer, director, employee, agent, legal counsel and controlling person
thereof, past, present or future, may rely on each such representation and
warranty.
2.17 NON TRANSFERABILITY. Neither this Stock Purchase Agreement, nor
any of your interests herein, shall be assignable or transferable by the
undersigned in whole or in part except by operation of law.
2.18 NO ADVERTISEMENT. The undersigned is not purchasing the Common
Stock as a result of or subsequent to any advertisement, article, notice or
other communication published in any newspaper, magazine or similar media or
broadcast over television or radio, or presented at any seminar, or any
solicitation of a subscription by a person not previously known to the
undersigned.
2.19 EXPERIENCE OF PURCHASER. The undersigned and/or it's purchaser
representative currently have such knowledge and experience in finance, tax,
securities, investments and other business matters so as to be able to protect
the undersigned's interests in connection with the purchase of the Common Stock,
and the undersigned's investment in the Company hereunder is not material when
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compared to his total financial capacity.
2.20 SURVIVAL. The foregoing representations and warranties shall be
true and accurate as of the date of the acceptance hereof by the Company and
shall survive the execution and delivery of this Stock Purchase Agreement and
the issuance of the Common Stock thereafter.
2.21 INDEMNIFICATION. The undersigned shall indemnify and hold
harmless the Company and/or any of its officers, employees, directors or control
persons of any such entity who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of or
arising from any actual or alleged misrepresentation or misstatement of facts or
omission to represent or state facts made by the undersigned to the Company
concerning itself or its financial position in connection with the offering,
sale or issuance of the Common Stock to the undersigned which is not remedied by
timely notice to the Company as provided above, against losses, liabilities and
expenses for which the Company or any of its respective officers, employees,
agents, directors, legal counsel or control persons of any such entity which
have not otherwise been reimbursed (including attorneys' fees, judgments, fines
and amounts paid in settlement) as actually and reasonably incurred by such
person or entity in connection with such action, suit or proceeding.
2.22 DUE EXECUTION. The undersigned agrees to execute this Stock
Purchase Agreement in full and acknowledges the receipt and acceptance by the
Company of such stock purchase agreement shall be a condition precedent to the
issuance of the Common Stock.
3. CALIFORNIA CORPORATE SECURITIES LAW. THE SALE OF THE SHARES OF COMMON
STOCK WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE
COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH
COMMON STOCK OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR
PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF COMMON STOCK IS
EXEMPT FROM QUALIFICATION BY SECTIONS 25100, 25102 OR 25105 OF THE CALIFORNIA
CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY
CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO
EXEMPT.
4. CONDITIONS OF THE COMPANY'S OBLIGATIONS AT CLOSING. The obligations
of the Company to Purchaser under this Agreement are subject to the fulfillment
on or before the Closing of each of the following conditions by Purchaser:
4.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Purchaser contained in Section 2 hereof 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 Closing.
4.2 PAYMENT OF PURCHASE PRICE. The purchase price specified in
Section 1.1 shall have been delivered to the Company.
4.3 CALIFORNIA QUALIFICATION. The offer and sale to Purchaser of
the Common Stock shall be exempt from qualification under the California
Corporate Securities Law of 1968, as amended.
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of this Agreement shall be interpreted as if such provision were so excluded and
shall be enforceable in accordance with its terms.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
SELF-HEATING CONTAINER
CORPORATION OF CALIFORNIA
a California corporation
By:
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Xxxxx X. Xxxxxxx, President
PURCHASER:
MANHATTAN WEST, INC.
a California corporation
By:
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Xxxxx Xxxx, President
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