STOCK PURCHASE AGREEMENT
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THIS AGREEMENT ( "Agreement" ) , dated as of the 18th day of February,
2004, by and between Xxxxxx Xxxxxx ("Seller") and Xxxx Xxxxx ("Buyer").
W I T N E S S E T H:
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WHEREAS, Seller owns 2,224, 436 restricted shares (the "Shares") of the
common stock ("Common Stock") of P.D.C. Innovative Industries, Inc., a Nevada
corporation (the "Corporation");
WHEREAS, Seller desires to sell, and Buyer desires to buy, as provided
for in this Agreement, one half of all of Seller's Shares, 1112,218, as set
forth below;
NOW, THEREFORE, in consideration of the mutual representations,
warranties and agreements herein contained and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
1. Recitals; Certain Matters. The recitals as set forth above are true and
correct. No representations or warranties are expressed or implied other than as
expressly set forth herein.
2. Common Stock Sold and Purchased; Assumption of Rights.
(a) Subject to the terms and conditions hereinafter set forth, Seller
agrees to sell, and Buyer agrees to buy the Shares;
(b) Assumption of Rights. Buyer shall assume all rights granted to
Seller as a shareholder of the Corporation.
3. Purchase Price.
(a) Buyer shall pay to Seller through the delivery in U.S. dollars, the
amount of $55,000 for such Shares payable as follows:
(i) Promissory Note. At Closing, Buyer will execute and
deliver to Seller a promissory note ("Promissory Note"), the form of which is
attached hereto as Exhibit A and made a part hereof, in favor of Seller in the
principal amount of Fifty-Five Thousand Dollars ($55,000.00), without interest (
"Principal Amount" ). Such Promissory Note shall provide for payment in the
amount of $1,000 per month commencing on March 18, 2004 and continuing on the
18th day of each consecutive month thereafter, subject to a grace period as
provided for therein, through and including February 18, 2006, with the balance
of $31,000 to be due and payable in full on March 18, 2006, unless earlier
prepaid (in which case without any prepayment penalty).
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(b) Closing Date; Termination.
(i) The closing (the "Closing") shall take place at 9:00 a.m.
eastern daylight time at the offices of Xxxxxxx Xxxxxxx & Xxxxxxxx ("TLV")
located at 000 Xxxxxxxxx Xxxxx Xxxxxx, Xxxxx 000, Xxxx Xxxxxxxxxx, XX 00000 on
February 18, 2004 (the "Closing Date").
(ii) All documentary stamp taxes and any other taxes, charges,
fees, assessments applicable to the transaction described herein shall be borne
by Buyer.
(iii) Termination. If Closing has not occurred by the Closing
Date, Seller may terminate this Agreement at any time thereafter by giving
written notice of termination to Buyer, and the parties shall thereupon be
relieved of any further obligation to each other.
4. Escrow of Shares. The Buyer agrees that until such time as he has paid to
Seller the Principal Amount in full, pursuant to the terms set forth in
paragraph 3 hereof, such Shares shall be held in escrow by Xxxxxxx Xxxxxxx &
Xxxxxxxx, P.A. ("TLV"), pursuant to the escrow agreement by and between the
Seller, Buyer and "TLV", a copy of which is attached hereto and made a part
hereof (the "Escrow Agreement").
(a) Deposit of Shares by Xxxxxx . Pursuant to the terms of the Escrow
Agreement, Xxxxxx will deposit the Shares to the escrow account. Xxxxxx shall
deliver all of the physical stock certificates representing the Shares, together
with a stock power executed in blank with her signature medallion guaranteed for
each physical stock certificate delivered (with her name executed in blank in
each such stock power exactly as it appears on the corresponding stock
certificate) at the time of execution of the Escrow Agreement. To the extent all
of the Shares cannot be physically delivered by Xxxxxx concurrent with her
execution of the Escrow Agreement for any reason, Xxxxxx shall promptly arrange
at her sole cost and expense for the balance of the Shares not contemporaneously
delivered upon execution to be promptly delivered in physical form to the Escrow
Agent together with a stock power executed in blank and medallion guaranteed for
each such certificate so delivered.
(b) Voting and Other Rights. Unless and until such time as Xxxxx may be
in breach of this Agreement, the Escrow Agreement and/or the Promissory Note,
while the Shares are held in escrow, Xxxxx shall be solely deemed to be the
beneficial owner of the Shares and any dividends and/or any other distributions
thereon for any and all purposes, and shall solely be entitled to vote the
Shares and any dividends and/or any other distributions thereon (if same
constitute voting securities). Notwithstanding the foregoing, while the Shares
and any dividends and/or any other distributions thereon are held in escrow,
Xxxxx shall not dispose or attempt to dispose of the Shares and any dividends
and/or any other distributions thereon in any manner whatsoever, or create or
attempt to create or permit any lien, claim, and/or encumbrance of any kind
whatsoever thereon. Likewise, while the Shares and any dividends and/or any
other distributions thereon are held in escrow, Xxxxxx shall not be entitled to
vote any of the Shares and any dividends and/or any other distributions thereon,
and shall not dispose or attempt to dispose of the Shares and any dividends
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and/or any other distributions thereon in any manner whatsoever, or create or
attempt to create or permit any lien, claim, and/or encumbrance of any kind
whatsoever thereon.
5. Seller's Representations, Warranties and Covenants. Seller represents,
warrants, and covenants as follows as of the date hereof and as of the Closing
Date:
(a) Title to Shares. Seller owns the Shares, which are fully paid and
non-assessable, free and clear of any liens, claims and/or other encumbrances,
limitations or restrictions.
(b) Due Authorization. Seller has the power to enter into this
Agreement and to carry out her obligations hereunder. This Agreement has been
duly executed by the Seller, and constitutes the valid and binding obligation of
Seller and is enforceable against Seller in accordance with its terms except as
such enforcement may be limited by bankruptcy, insolvency or other similar laws
affecting the enforcement of creditors' rights generally or by general
principles of equity.
6. Buyer's Representations, Warranties and Covenants. Buyer represents,
warrants, and covenants jointly and severally as follows as of the date hereof
and as of the Closing Date:
(a) Due Authorization. Buyer has the power to enter into this Agreement
and to carry out his obligations hereunder. This Agreement has been duly
executed by the Buyer, and constitutes the valid and binding obligation of the
Buyer and is enforceable against the Buyer in accordance with its terms except
as such enforcement may be limited by bankruptcy, insolvency or other similar
laws affecting the enforcement of creditors' rights generally or by general
principles of equity.
(b) Investment Representations. Buyer: (i) acknowledges that the Shares
are "restricted securities" as that term is defined in Rule 144 of the general
rules and regulations under the Securities Act of 1933, as amended (the
"Securities Act"); (ii) is acquiring the Shares for his own account; (iii) will
not sell, transfer or otherwise dispose of the Shares except in compliance with
the Securities Act; (iv) is an accredited investor, as such term is defined
under the Securities Act and/or has sufficient knowledge or experience in
financial, investment and business matters that he/it is capable of evaluating
the merits and risks of his/its investment in the Shares being offered on the
terms and conditions as set forth herein; in connection therewith, Buyer has
consulted with such independent legal counsel and/or other advisers considered
appropriate to assist Buyer in evaluating his/its investment in the Corporation;
Buyer represents that he/it has adequate means of providing for his/its current
financial needs and possible personal contingencies, and has no need for
liquidity of his/its investment in the Corporation and can afford: (a) to hold
unregistered securities for an indefinite period of time and (b) sustain a
complete loss of the entire amount of his/its investment; and (v) has not made
an overall commitment to investments which are not readily marketable which is
disproportionate so as to cause such overall commitment to become excessive.
Buyer has been afforded the opportunity to ask questions of, and receive answers
from the officers and directors of the Corporation on a confidential basis
concerning the Corporation and to obtain any additional information, to the
extent that the Corporation possesses such information or can acquire it without
unreasonable effort or expense, necessary to verify the accuracy of the
information furnished; and
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has availed himself/itself of such opportunity to the extent he/it considers
appropriate in order to permit him/it to evaluate the merits and risks of an
investment in the Corporation; and (vi) Buyer acknowledges and understands that
the Shares have not been registered under the Securities Act and must be held
indefinitely unless subsequently registered under the Securities Act or an
exemption from such registration is available and that the Corporation is under
no obligation whatsoever to register the Shares for public resale under the
Securities Act.
(c) Legend on Shares. Buyer further agrees that each certificate
evidencing the Shares will bear a restrictive legend substantially similar to
the following:
THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT") AND MAY NOT BE OFFERED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR
OTHERWISE TRANSFERRED UNLESS (1) THEY ARE REGISTERED UNDER THE ACT OR
(2) THE HOLDER HAS DELIVERED TO THE ISSUER AN OPINION OF COUNSEL, WHICH
OPINION SHALL BE SATISFACTORY TO THE ISSUER, TO THE EFFECT THAT THERE
IS AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT AND ANY
APPLICABLE STATE SECURITIES LAWS OR THAT REGISTRATION IS OTHERWISE NOT
REQUIRED.
(d) No Restrictions. Buyer will at Closing not be subject to any
restriction which would prevent consummation of the transactions contemplated by
this Agreement.
(e) Best Efforts. Buyer represents that he shall use his best efforts
to close pursuant to the terms of this Agreement by the Closing Date or as soon
thereafter as possible.
7. Remedies Available to Buyer and Seller in the Event of Breach or Default. In
the event of any breach or default of this Agreement by Buyer or Seller,
including the representations and warranties set forth herein, Buyer and Seller
may pursue any and all legal and/or equitable remedies then available to them,
respectively. It is expressly acknowledged and agreed by Buyer that a default by
Buyer of any of the terms and conditions of the Promissory Note shall be deemed
to constitute a default under this Agreement as well.
8. Term of Agreement; Survival of Representatives and Warranties. The term of
this Agreement shall expire upon the payment in full of all monies due and owing
to the Seller under the Promissory Note. Notwithstanding the foregoing, the
representations, warranties and covenants of Seller shall terminate upon the
Closing and the representations, warranties and covenants of Buyer shall
terminate when the Promissory Note has been paid in full.
9. Successors and Assigns. Buyer may not assign this Agreement or the Promissory
Note or any of his obligations hereunder or thereunder without the prior written
consent of Seller, which consent may be withheld in the sole discretion of and
without any liability whatsoever to the Seller.
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This Agreement shall be binding upon and inure to the benefit of the permitted
assignees of the parties hereto and their respective successors. No permitted
assignment shall relieve Buyer of his obligations under this Agreement, and
Buyer shall guarantee the performance of this Agreement by any permitted
assignees.
10. Applicable Law: Jurisdiction and Venue; Service of Process; Waiver of Trial
by Jury; Attorney's Fees. This Agreement, the Promissory Note and the legal
relations between the parties hereto shall be deemed made in, governed by, and
construed solely in accordance with, the substantive laws of the State of
Florida, without giving effect to the principles of choice or conflict of laws
thereof. Jurisdiction and venue for any action or proceeding brought by or
between Buyer or Seller relating to this Agreement, shall be solely in the
federal and/or state courts located in Broward County, Florida. Buyer and Seller
hereby consent to the jurisdiction and venue of such courts, and agree that they
shall not contest or challenge the jurisdiction or venue of such courts. Each of
Buyer and Seller agrees that service of any process, summons, notice or
document, by United States registered or certified mail, to its address as set
forth herein or as may otherwise be changed pursuant to the notice provisions
hereof, shall be effective service of process for any action, suit or proceeding
brought against it in any such court. In recognition of the fact that the issues
which would arise under this Agreement and/or the Promissory Note are of such a
complex nature that they could not be properly tried before a jury, each of the
Buyer and Seller waives trial by jury. The prevailing party shall be entitled to
recover from the other party its reasonable attorneys' fees and costs.
11. Notices. Any notice or other communication provided for herein to Seller or
Buyer shall be in writing and delivered personally or sent by certified or
registered mail or via a nationally recognized overnight courier service or via
telecopier as follows:
To Seller: Xx. Xxxxxx Xxxxxx
0000 XX 000xx Xxxxxxx
Xxxxx Xxxxxxx, XX 00000
Telecopier No. (000) 000-0000
To Buyer: Mr. Xxxx Xxxxx
000 Xxxxx Xxxxxx Xxxxxx,
Xxxxx 0
Xxxxx, XX 00000
Telecopier No. (000) 000-0000
Any party may change the address to which notices under this Agreement
are to be sent to it by giving written notice of a change of address in the
manner provided in this Agreement for giving notice. Any notice delivered
personally shall be deemed to have been given on the date it is so delivered,
and any notice delivered by registered or certified mail or via a nationally
recognized overnight courier service or via telecopier shall be deemed to have
been given on the date it is actually received (and in the case of telecopier,
upon receipt by sender of a printed confirmation of receipt).
12. Waiver. No provision of this Agreement shall be deemed waived by course of
conduct, including the act of closing, unless such waiver is made in a writing
signed by both parties stating
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that it is intended specifically to modify this Agreement, nor shall any course
of conduct operate or be construed as a waiver of any subsequent breach of this
Agreement, whether of a similar or dissimilar nature.
13. Further Assurances. Each of the parties hereto agrees to execute all
documents and instruments and to take or to cause to be taken all actions which
are necessary or appropriate to complete the transactions contemplated by this
Agreement.
14. Entire Agreement. This Agreement together with the Promissory Note
represents the entire understanding of the parties hereto, supersedes all other
and prior memoranda and agreements between the parties hereto and their
affiliates and may not be modified or amended, except by a written instrument
executed by each of the parties hereto designating specifically the terms and
provisions so modified and amended.
15. Captions; Rule of Construction That Ambiguities are to be Construed Against
the Drafter Not Applicable. This Agreement is to be construed fairly and simply
and not strictly for or against either of the parties hereto. The section
headings contained herein are for convenience of reference only, and shall not
affect the meaning or interpretation of any provision hereof. The parties to
this Agreement acknowledge that they have each carefully read and reviewed this
Agreement with their respective counsel, and therefore, agree that the rule of
construction that ambiguities shall be construed against the drafter shall not
be applicable.
16. Counterparts; Facsimile Copies. This Agreement may be executed in one or
more counterparts and via facsimile. All executed counterparts shall constitute
one Agreement, notwithstanding that all parties are not signatories to the
original or the same counterpart.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the
day and year first above written.
SELLER:
/s/ Xxxxxx Xxxxxx
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Xxxxxx Xxxxxx
BUYER:
/s/ Xxxx Xxxxx
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Xxxx Xxxxx
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