STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement") is entered into effect the 7th.
day of September, 1999, by and among PROTALEX, INC., a New Mexico corporation
and its assigns (hereinafter referred to as "Buyer"); and XXX XXXXXX,
(hereinafter referred to as "Seller"), being a shareholder of ENERDYNE CORP., a
New Mexico corporation (hereafter referred to as "Company").
WHEREAS, Seller is the owner of record and beneficially owns Eight Hundred
Eight-five Thousand Four Hundred Eight (885,408) shares of the issued and
outstanding shares of Common Stock of the Company ("Shares"); and
WHEREAS, Seller desires to sell the Shares to Buyer, and Buyer desires to
purchase the Shares, upon the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, and for other good and valuable consideration, the receipt,
adequacy and sufficiency of which are hereby acknowledged, and subject to the
accuracy of the representations and warranties of the parties, the parties
hereto agree as follows:
I.
SALE AND PURCHASE OF THE SHARES
1.1 SALE AND PURCHASE. Subject to the terms and conditions hereof, at the
Closing (as defined in paragraph 1.2 below), Seller agrees to sell, assign,
transfer, convey and deliver to Buyer, and Buyer agrees to purchase from Seller,
the Shares listed in Exhibit "A", attached hereto.
1.2 CLOSING. The purchase shall be consummated at a closing ("Closing")
to take place at 9:00 o'clock a.m., at the offices of Buyer's counsel on
September 30, 1999 ("Closing Date").
1.3 PURCHASE PRICE. The purchase price ("Purchase Price") for the Shares
shall be a cash payment of Three Hundred Sixty-eight Thousand Five Hundred
Forty-six Dollars ($368,546.00) payable to the Seller in certified funds on or
before September 7, 2001 as defined in the Promissory Note ("Promissory Note")
attached herein as Exhibit B .
1.4 OTHER AGREEMENTS. At the Closing, the indicated parties shall
execute and deliver the following additional agreements in substantially the
form attached hereto:
(a) The Directors of the Company shall deliver to Buyer
Minutes appointing Xxxx X. Xxxxxxx, Xxx X. Xxxx MD, Xxxx X. Xxxx Ph.D.,
Xxxxx X. Xxxxxxxxx and Xxxxxx X. Xxxxxxxxx MD as the new directors and
Seller shall submit to Buyer his resignation as an officer and director of
the Company at closing;
(b) Seller shall deliver to Buyer s counsel stock
certificates representing all of the Shares, duly endorsed to Buyer in
blank or assignments separate from the certificates with medallion
guarantees, transferring the Shares from Seller to Buyer upon receipt of
the Promissory Note.
(c) Buyer shall deliver to Seller the Promissory Note along
with a Continuing and Unconditional Guaranty from each of the following
individuals: Xxxx X. Xxxxxxx, Xxxxx X. Xxxxxx, Xxxxx X.
1.
Xxxxxxxxx and Xxxxx X. Xxxxxx Xx..
1.5 TRANSACTIONS DEFINED. This Agreement and other agreements listed in
paragraph 1.4, are sometimes referred to as the "Basic Agreements". The
transactions contemplated by the Basic Agreement are sometimes referred to as
the "Transactions".
II.
REPRESENTATIONS AND WARRANTIES
2.1 REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represent and
warrant to Buyer as follows:
(a) TITLE TO THE SHARES. At Closing, Seller shall own of
record and beneficially the number of the Shares listed in Exhibit "A", of
the Company, free and clear of all liens, encumbrances, pledges, claims,
options, charges and assessments of any nature whatsoever, with full right
and lawful authority to transfer the Shares to Buyer. No person has any
preemptive rights or rights of first refusal with respect to any of the
Shares. There exists no voting agreement, voting trust, or outstanding
proxy with respect to any of the Shares. There are no outstanding rights,
options, warrants, calls, commitments, or any other agreements of any
character, whether oral or written, with respect to the Shares.
(b) ORGANIZATION. The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of the
state of New Mexico. The Company has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its
business. The Company is duly qualified and in good standing as a foreign
corporation in each jurisdiction where its ownership of property or
operation of its business requires qualification.
(c) AUTHORIZED CAPITALIZATION. The authorized
capitalization of the Company consists of Four Million (4,000,000) shares
of Common Stock, of which One Million Eight Hundred Eighteen Thousand Nine
Hundred Seventeen (1,818,917) shares have been issued and are outstanding.
The Shares have been duly authorized, validly issued, are fully paid and
nonassessable with no personal liability attaching to the ownership thereof
and were offered, issued, sold and delivered by the Company in compliance
with all applicable state and federal laws. The Company does not have any
outstanding rights, options, warrants, calls, commitments, conversion or
any other agreements of any character, whether oral or written, obligating
it to issue any shares of its capital stock, whether authorized or not. The
Company is not a party to and is not bound by any agreement, contract,
arrangement or understanding, whether oral or written, giving any person or
entity any interest in, or any right to share, participate in or receive
any portion of, the Company's income, profits or assets, or obligating the
Company to distribute any portion of its income, profits or assets.
(d) AUTHORITY. Seller has full power and lawful authority
to execute and deliver the Basic Agreements to which he is a party and to
consummate and perform the Transactions contemplated thereby. The Basic
Agreements to which he is a party constitute (or shall, upon execution,
constitute) valid and legally binding obligations upon Seller, enforceable
in accordance with their terms. Neither the execution and delivery of the
Basic Agreements to which he is a party by Seller, nor the consummation
and performance of the Transactions contemplated thereby, conflicts with,
requires the consent, waiver or approval of, results in a breach of or
default under, or gives to others any interest or right of termination,
cancellation or acceleration in or with respect to, any agreement by which
Seller or the Company is a party or by which Seller or the Company or any
of their respective properties or assets are bound or affected.
(e) NO ASSETS. Prior to the Closing Date, and the request
of the Buyer, the Company shall divest itself of all its assets. Buyer
waives any right or claim it or the Company may have
2.
Resulting from the divestiture of the assets. At Closing, the Company will
not own or have rights to any assets.
(f) NO UNDISCLOSED LIABILITIES. Seller is not aware of any
liabilities for which the Company is liable or will become liable in the
future other than liabilities to be satisfied at or prior to the Closing.
(g) TAXES. The Company has filed all federal, state, local
tax and other returns and reports which were required to be filed with
respect to all taxes, levies, imposts, duties, licenses and registration
fees, charges or withholdings of every nature whatsoever ("Taxes"), and
their exists a substantial basis in law and fact for all positions taken in
such reports. No waivers of periods of limitation are in effect with
respect to any taxes arising from and attributable to the ownership of
properties or operations of the business of the Company.
(h) BOOKS AND RECORDS. To the Seller's knowledge, the
books and records of the Company are complete and correct in all material
respects, have been maintained in accordance with good business practices
and accurately reflect in all material respects the business, financial
condition and results of operations of the Company as set forth in the
Company Financial Statements.
(i) NO LITIGATION. To the Seller's knowledge, there are no
actions, suits, claims, complaints or proceedings pending or threatened
against the Company, at law or in equity, or before or by any governmental
department, commission, court, board, bureau, agency or instrumentality;
and there are no facts which would provide a valid basis for any such
action, suit or proceeding. There are no orders, judgments or decrees of
any governmental authority outstanding which specifically apply to the
Company or any of its assets.
(j) FULL DISCLOSURE. All statements of Seller contained in
this Agreement and in any other written documents delivered by or on behalf
of Seller to Buyer are true and correct in all material respects and do not
omit any material fact necessary to make the statements contained therein
not misleading in light of the circumstances under which they were made.
There are no facts known to Seller which could have a materially adversely
affect upon the business, financial condition, results of operations,
assets, liabilities, or prospects of the Company, which have not been
disclosed to Buyer in the Basic Agreements to which Seller is a party.
2.2 REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and
warrants to Seller as follows:
(a) ORGANIZATION. Buyer is a corporation, validly existing
and in good standing under the laws of the State of New Mexico. Buyer has
all rtequisites corporate power and authority to own, lease and operate its
properties and to carry on its business. Buyer is duly qualified and in
good standing as a foreign corporation in each jurisdiction where its
ownership of property or operation of its business requires qualification.
(b) AUTHORITY. Buyer has full power and lawful
authority to execute and deliver the Basic Agreements to which Buyer is
a party and to consummate and perform the Transactions contemplated
thereby. The Basic Agreements to which Buyer is a party constitute (or
shall, upon execution, constitute) valid and legally binding obligations
upon Buyer, enforceable in accordance with their terms. Neither the
execution and delivery of the Basic Agreements to which Buyer is a party
by Buyer, nor the consummation and performance of the Transactions
contemplated thereby, conflicts with, requires the consent, waiver or
approval of, results in a breach of or default under, or gives to others
any interest or right of termination, cancellation or acceleration in or
with respect to, any agreement by which Buyer is a party or by which
Buyer or any of its properties or assets are bound or affected.
3.
(c) DUE DILIGENCE. Buyer has conducted its own due
diligence investigation on the Company. During its investigation, Buyer has
had an opportunity to review the books and records of the Company and had
an opportunity to ask questions of the officers of the Company, which
questions were answered to Buyer's satisfaction.
(d) INVESTMENT INTENT. Buyer is acquiring the Shares for
its own account, for investment purposes only, and not with a view to the
sale or distribution of any part thereof, and Buyer no has present
intention of selling, granting participation in, or otherwise distributing
the same. Buyer understands the specific risks related to an investment in
the Shares, especially as it relates to the financial performance of the
Company.
III.
COVENANTS
3.1 COVENANTS OF SELLER. Seller covenants and agrees that from the date
hereof to the Closing without the prior written consent of Buyer:
(a) MAINTAIN BOOKS. Seller will cause the Company to
maintain its books, accounts and records in the usual, regular ordinary and
sound business manner and in accordance with generally accepted accounting
principles applied on a basis consistent with past practices.
(b) NO SECURITIES ISSUANCES. Seller will not permit the
Company to issue any shares of any class of capital stock, or enter into
any contract, option, warrant or right calling for the issuance of any such
shares of capital stock, or create or issue any securities convertible into
any securities of the Company except for the transactions contemplated
herein.
(c) CONTRACTS. Seller will not permit the Company to enter
into or assume any contract, agreement, obligation, lease, license, or
commitment except in the ordinary course of business consistent with past
practice or as contemplated by this Agreement.
(d) NOTICE OF CHANGE. Seller will promptly advise Buyer in
writing of any material adverse change, or the occurrence of any event
which involves any substantial possibility of a material adverse change, in
the business, financial condition, results of operations, assets,
liabilities or prospects of the Company.
IV.
CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF BUYER TO CLOSE
The obligation of Buyer to close the Transactions contemplated hereby is
subject to the fulfillment by Seller prior to Closing of each of the following
conditions, which may be waived in whole or in part by Buyer:
4.1 COMPLIANCE WITH REPRESENTATIONS, WARRANTIES AND COVENANTS. The
representations and warranties of Seller contained in this Agreement shall have
been true and correct when made and shall be true and correct as of the Closing
with the same force and effect as if made at the Closing. Seller shall have
performed all agreements, covenants and conditions required to be performed by
Seller prior to the Closing.
4.
4.2 NO ADVERSE CHANGE. There shall have been no event which has had or
may have a material adverse effect upon the business, financial condition,
results of operation, assets, liabilities or prospects of the Company.
4.3 NO LEGAL PROCEEDINGS. No suit, action or other legal or
administrative proceeding before any court or other governmental agency shall be
pending or threatened seeking to enjoin the consummation of the Transactions
contemplated hereby.
4.4 DOCUMENTS TO BE DELIVERED BY SELLER. Seller shall have delivered the
following documents to Buyer's counsel at closing:
(a) Stock certificates representing all of the Shares,
duly endorsed to Buyer in blank or accompanied by duly executed stock
powers with a medallion guarantee, copies of which are attached as
Exhibit "A".
(b) A copy of (i) the Certificate of Incorporation of the
Company, certified as correct by the Company; and (ii) the Bylaws of the
Company certified as correct by the Company;
(c) All agreements referred to in paragraph 1.4 above to
which Seller or the Company is a party, executed by all parties thereto
other than Buyer.
(d) All corporate and other records of or applicable to the
Company included but not limited to, current and up-to-date minute books,
stock transfer books and registers, books of accounts, leases and material
contracts.
V.
CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF SELLER TO CLOSE
The obligation of Seller to close the Transactions is subject to the
fulfillment prior to Closing of each of the following conditions, any of which
may be waived in whole or in part by Seller:
5.1 COMPLIANCE WITH REPRESENTATIONS, WARRANTIES AND COVENANTS. The
representations and warranties made by Buyer in this Agreement shall have been
true and correct when made and shall be true and correct in all material
respects at the Closing with the same force and effect as if made at the
Closing, and Buyer shall have performed all agreements, covenants and conditions
required to be performed by Buyer prior to the Closing.
5.2 NO LEGAL PROCEEDINGS. No suit, action or other legal or
administrative proceedings before any court or other governmental agency shall
be pending or threatened seeking to enjoin the consummation of the Transactions
contemplated hereby.
5.3 OTHER AGREEMENTS. All parties other than Seller and the Company shall
have executed and delivered the Basic Agreements.
5.4 PAYMENTS. Seller shall have received from Buyer the executed
Promissory Note and Personal Guarantees.
5.
VI.
MODIFICATION, WAIVERS, TERMINATION
AND EXPENSES
6.1 MODIFICATION. Buyer and Seller may amend, modify or supplement this
Agreement in any manner as they may mutually agree in writing.
6.2 WAIVERS. Buyer and Seller may in writing extend the time for or waive
compliance by the other with any of the covenants or conditions of the other
contained herein.
6.3 TERMINATION AND ABANDONMENT. This Agreement may be terminated and the
purchase of the Shares may be abandoned before the Closing:
(a) By the mutual consent of Seller and Buyer;
(b) By Buyer, if the representations and warranties of
Seller set forth herein shall not be accurate, or the conditions precedent
set forth in Article IV shall have not have been satisfied, in all material
respects; or
(c) By Seller, if the representations and warranties of
Buyer set forth herein shall not be accurate, or the conditions precedent
set forth in Article V shall not have been satisfied in all material
respects.
Termination shall be effective on the date of receipt of written notice
specifying the reasons therefor.
VII.
MISCELLANEOUS
7.1 REPRESENTATIONS AND WARRANTIES TO SURVIVE. Unless otherwise provided,
all of the representations and warranties contained in this Agreement and in any
certificate, exhibit or other document delivered pursuant to this Agreement
shall survive the Closing for a period of two (2) years. No investigation made
by any party hereto or their representatives shall constitute a waiver of any
representation or warranty, and no such representation or warranty shall be
merged into the Closing.
7.2 BINDING EFFECT OF THE BASIC AGREEMENTS. The Basic Agreements and the
certificates and other instruments delivered by or on behalf of the parties
pursuant thereto, constitute the entire agreement between the parties. The
terms and conditions of the Basic Agreements shall inure to the benefit of and
be binding upon the respective heirs, legal representatives, successor and
assigns of the parties hereto. Nothing in the Basic Agreements, expressed or
implied, confers any rights or remedies upon any party other than the parties
hereto and their respective heirs, legal representatives and assigns.
7.3 APPLICABLE LAW. The Basic Agreements are made pursuant to, and will
be construed under, the laws of the State of New Mexico.
7.4 NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and will be deemed to have been duly given when
delivered or mailed, first class postage prepaid:
6.
(a) If to Seller, to:
Xxx Xxxxxx
00000 Xxxxxxx Xxxxxxxxx
Xxxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
(b) If to Buyer, to:
Protalex, Inc.
Xxxx X. Xxxxxxx, President
0000 Xxxxxxx Xx. X.X.
Xxxxxxxxxxx, Xxx Xxxxxx 00000
Telephone: (000) 000-0000
These addresses may be changed from time to time by written notice to the
other parties.
7.5 HEADINGS. The headings contained in this Agreement are for reference
only and will not affect in any way the meaning or interpretation of this
Agreement.
7.6 COUNTERPARTS. This Agreement may be executed in counterparts, each of
which will be deemed an original and all of which together will constitute one
instrument.
7.7 SEVERABILITY. If any one or more of the provisions of this Agreement
shall, for any reason, be held to be invalid, illegal or unenforceable under
applicable law this Agreement shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein. The remaining
provisions of this Agreement shall be given effect to the maximum extent then
permitted by law.
7.8 FORBEARANCE; WAIVER. Failure to pursue any legal or equitable remedy
or right available to a party shall not constitute a waiver of such right, nor
shall any such forbearance, failure or actual waiver imply or constitute waiver
of subsequent default or breach.
7.9 ATTORNEYS' FEES AND EXPENSES. The prevailing party in any legal
proceeding based upon this Agreement shall be entitled to reasonable attorneys'
fees and expenses and court costs.
7.10 EXPENSES. Each party shall pay all fees and expenses incurred by it
incident to this Agreement and in connection with the consummation of all
transactions contemplated by this Agreement.
7.11 EXHIBITS. All of the following Exhibits to this Agreement are
incorporated herein in the places referenced in this Agreement as if fully set
forth herein:
7.12 INTEGRATION. This Agreement and all documents and instruments
executed pursuant hereto merge and integrate all prior agreements and
representations respecting the Transactions, whether written or oral, and
constitute the sole agreement of the parties in connection therewith. This
Agreement has been negotiated by and
7.
submitted to the scrutiny of both Seller and Buyer and their counsel and shall
be given a fair and reasonable interpretation in accordance with the words
hereof, without consideration or weight being given to its having been drafted
by either party hereto or its counsel.
IN WITNESS WHEREOF, the undersigned parties hereto have duly executed this
Agreement on the date first written above.
"BUYER"
PROTALEX, INC.
A NEW MEXICO CORPORATION
BY: /s/ Xxxx X. Xxxxxxx
-----------------------
XXXX X. XXXXXXX, PRESIDENT
"COMPANY"
ENERDYNE CORP.
A NEW MEXICO CORPORATION
BY: /s/ Xxx Xxxxxx
-----------------------
XXX XXXXXX, PRESIDENT
"SELLER"
/s/ Xxx Xxxxxx
--------------------------
XXX XXXXXX
8.
