EXHIBIT 10.3
STOCK PURCHASE AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into as of this 11th day of
May, 1999, between Xxxxxxx Xxxxx (the "Purchaser") and Xxxx X. Xxxxxx and Xxxxx
X. Xxxxxxxxx (collectively the "Sellers").
R E C I T A L S
WHEREAS, Growtex Inc., a Nevada corporation, (the "Company") is a corporation
with 25,000,000 shares of $.001 par value common stock authorized (the
"Stock"); and
WHEREAS, the Purchaser desires to purchase and the Sellers desire to sell
500,000 (the "Shares") of the 2,500,000 shares of issued and outstanding Stock,
all pursuant to the terms and conditions of this Agreement.
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
1. Sale and Purchase of Shares.
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Subject to the provisions of this Agreement, the Sellers agree to sell, and
Purchaser agrees to buy, the Shares, consisting of 500,000 shares of Stock,
which will at Closing constitute 20% of the issued and outstanding shares of
Stock of the Company.
2. Purchase Price.
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Purchaser agrees to pay to the Sellers, as the purchase price for the Shares,
the sum of Thirty-Three Thousand Dollars ($33,000.00) at closing.
3. Closing.
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The Closing shall occur at 5:00 p.m. on May 12, 1999, (the "Closing Date") at
the offices of Xxxxxxxxx Xxxxxxx & Xxxxxxx, 000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxxxxxx, or at such other time and place as is mutually agreeable to
Purchaser and the Sellers. Purchaser shall deliver the
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consideration set forth in Section 2 above. The Sellers shall deliver to the
Purchaser at Closing the following:
(a) Stock certificates together with stock powers representing the Shares;
(b) The corporate minute books and such other books, papers and records of the
Company as relate to its assets and operations;
(c) The written resignations of all officers and directors of the Company;
(d) A certificate from the officers and directors of the Company, certifying
that on the Closing Date, there were 2,500,000 shares of Stock issued and
outstanding;
(e) A shareholders' certificate, in the form of Exhibit 3(e) hereto, duly
executed by the shareholders of the Company set forth thereon; and
(f) A duly executed amendment to that certain License Agreement (the "License
Agreement") dated April 5, 1999, by and between Xxxxx X. Xxxxxxxxx &
Associates and the Company, in the form of Exhibit 3(f) hereto.
4. Representations, Warranties and Covenants of the Sellers.
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The Sellers hereby represent and warrant to the Purchaser that the following
are and will be true and correct on the Closing Date and such representations
and warranties shall survive the Closing:
(a) Organization of Company. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Nevada. The Company has full power and lawful authority to own, or to hold
under lease, property and to engage in any lawful business.
(b) Authorization of Agreement. This Agreement constitutes a valid
obligation, legally binding upon the Sellers in accordance with its terms.
The execution and delivery of this Agreement and the consummation of the
transaction do not and will not result in any breach of, or default under,
any agreement, license or other obligation of the Sellers or the Company.
(c) Stock Ownership. The Company's entire authorized and issued capital stock
consists of 2,500,000 shares of common stock. There are not now, and will
not be on the Closing Date, any
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outstanding subscriptions, options, rights, warrants, convertible shares,
debts or other agreements or commitments obligating the Company to issue
any other shares of its capital stock. Upon issuance and on the Closing
Date, the Shares were fully paid, non-assessable, free and clear of all
restrictions, liens, security interests, hypothecations, pledges and
encumbrances of every kind and nature whatsoever. There are no
restrictions in the Articles of Incorporation, Bylaws or other corporate
documents of the Company prohibiting the free transferability of the
Shares.
(d) Financial Information. The Sellers have furnished to Purchaser the
balance sheet and income statement for the period ending March 31, 1999 of
the Company (the "Financial Information"). All of the Financial
Information is true and accurate, has been taken from the Company's books
of account, was prepared in accordance with generally accepted accounting
principles applied on a consistent basis, and does not omit any
information which would make the Financial Information materially
misleading.
(e) Liabilities. On the Closing Date, the Company shall have no liabilities of
any kind, fixed or contingent, including but not limited to accounts
payable, taxes, debts, obligations, leases, employment related
obligations, fringe benefits, employment taxes and contributions to
industrial or unemployment insurance funds, or any other indebtedness or
leasehold interest of any nature. There are no amounts due for the payment
of all federal, state, county, local or foreign taxes of the Company which
are or may become payable by the Company for all periods ending prior to
the Closing Date. The Company has filed all federal, state, county, local
and foreign income, excise, corporate license or franchise, property,
sales or retail occupation taxes and other tax returns required to be
filed by it, and such returns are true and correct.
(f) Compliance with Law. The Company complies and will, as of the Closing
date, comply in all material respects with all applicable federal and
state laws, including but not limited to those relating to environmental
regulation and hazardous materials, and all rules, regulations and orders
of local governing authorities. The Company has not received any notice
with which it has not complied from any governmental authority or agency
or from any inspection body stating that the Company fails or may fail to
comply with any applicable law, ordinance, regulation, building or zoning
law, or requirements of any public authority or body.
(g) Litigation. There is no pending or threatened suit, action or litigation,
administrative, arbitration or other proceeding or governmental
investigation or inquiry to which the Company or its officers or directors
are a party or subject.
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(h) Employees. The Company has no employees (other than its officers, who
serve without compensation) and has no obligation, contractual or
otherwise, to anyone regarding employment or consulting services. The
Company has not taken any actions with respect to any person which would
give rise to any claims of discrimination on the basis of age, sex, race,
disability or any other status protected by federal or local law, any
violation of the Fair Labor Standards Act, or any other state or federal
law related to the rights of employees.
(i) Environmental Liability. The Company has not manufactured, stored,
handled, disposed, transferred, produced, or processed "hazardous
substances" or other dangerous or toxic substances, except in compliance
with all federal, state or local regulations .
(j) Existing Contracts. Except for the License Agreement, the Company is
not a party to any contracts for services or otherwise.
(k) Licenses. The assets acquired by issuance of shares, rights under the
License Agreement, are properly valued in the Financial Information, the
assets exist and the Company holds proper title to those assets.
(l) Status of Affiliates. None of the officers, directors, promoters,
underwriters or beneficial owners of 10% or more of any class of equity
security of the Company: (A) has, within the last five years, (1) filed a
registration statement which is the subject of a currently effective
registration stop order entered by the United States Securities and
Exchange Commission or any state securities administrator, or (2) been
convicted of any criminal offense in connection with the offer, purchase,
or sale of any security, or involving fraud or deceit, or (B) is currently
subject to (1) any state or federal administrative enforcement order or
judgment, entered within the last five years, finding fraud or deceit in
connection with the purchase or sale of any security, or (2) any order,
judgment or decree of any court of competent jurisdiction, entered within
the last five years, temporarily, preliminarily or permanently restraining
or enjoining such party from engaging in or continuing to engage in any
conduct or practice involving fraud or deceit in connection with the
purchase or sale of any security.
(m) Status of Certain Investors. The ten Subscription Agreements dated April
28, 1999 are true and correct in all respects, including specifically the
assertions contained therein that each investor is an "accredited
investor" as that term is defined in Rule 501 of Regulation D under the
Securities Act of 1933, as amended. None of the ten investors purchased
their shares with a view to distribution or resale except pursuant to a
registration statement effective under the Texas Securities Act, (S) 7, or
to an accredited investor pursuant to an exemption available under the
Texas Securities
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Act or rules of the State Securities Board of Texas.
(n) License Agreement. Xxxxx X. Xxxxxxxxx & Associates (the "Partnership") is
a Texas general partnership, and Xxxxx Xxxxxxxxx is an authorized
signatory of the Partnership with full power and authority to bind it.
Xxxxx Xxxxxxxxx is authorized to execute Amendment No. 1 to that certain
License Agreement dated April 5, 1999, by and between the Partnership and
the Company, as contemplated by Section 3(f) of the Stock Purchase
Agreement. The License Agreement attached to the April 28, 1999 minutes of
the Company and dated April 5, 1999 supersedes and replaces in its
entirety any prior License Agreement by and between Xxxxx X. Xxxxxxxxx &
Associates and Growtex Inc.
5. Indemnification by the Sellers.
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The Sellers, their successors and assigns, jointly and severally, shall
indemnify, defend and hold Purchaser harmless from any and all losses, claims,
damages or liabilities, including any costs of recovery, suffered by Purchaser
as a result of:
(a) The failure of any representation or warranty of the Sellers contained in
this Agreement to be true and accurate when made and as of the Closing
Date;
(b) The failure of the Sellers to comply with any obligations, agreements or
covenants contained in this Agreement;
(c) Any accounts payable, liabilities, debts, taxes, leases or other
obligations of the Company with respect to any period prior to the Closing
Date.
The Sellers, their successors and assigns, shall reimburse Purchaser for any
legal or other expense reasonably incurred by Purchaser in connection with any
loss, claim, damage or liability indemnified hereby. This indemnification shall
benefit and inure to the successors and assigns of Purchaser, including the
Company, and shall survive the Closing. In the event Purchaser, his successors
or assigns, believe they are entitled to indemnification hereunder, they shall
give the Sellers written notice of the basis for the claim for indemnification.
6. Representations, Warranties of Purchaser.
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The Purchaser hereby represents and warrants to the Sellers, which shall
survive the
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Closing, that this Agreement constitutes a valid obligation, legally binding
upon Purchaser in accordance with its terms. The Purchaser hereby represents and
warrants to the Sellers that he is an "accredited investor" as that term is
defined in Rule 501 of Regulation D under the Securities Act of 1933, as
amended, and is purchasing their Shares for investment and not with a view to
resale.
7. Indemnification by Purchaser.
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Purchaser, his successors and assigns, shall indemnify, defend and hold the
Sellers harmless from any and all losses, claims, damages or liabilities
suffered or incurred by the Sellers as a result of:
(a) The failure of any representation or warranty of Purchaser contained in
this Agreement to be true and accurate when made and as of the Closing
Date;
(b) The failure of Purchaser to comply with any obligations, agreements or
covenants contained in this Agreement;
(c) The conduct of the Company's business after the Closing Date; and
(d) Any accounts payable, liabilities, debts, taxes, leases or other
obligations of the Company arising with respect to any transaction or
occurrence occurring completely after the Closing Date.
Purchaser, his successors or assigns, shall reimburse the Sellers for any legal
or other expense reasonably incurred by them in connection with any loss, claim,
damage or liability indemnified hereby. This indemnification obligation will
survive the Closing.
8. Conditions to Purchaser's Obligations.
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The obligations of Purchaser under this Agreement are subject to satisfaction
of each of the following conditions, unless waived in writing by Purchaser, at
or prior to Closing:
(a) Representations True; Compliance with Covenants. The representations and
warranties of the Sellers contained in this Agreement shall be true in all
material respects on and as of Closing with the same force and effect as
though made on and as of said date. The Sellers shall have performed and
complied in all material respects with all covenants contained herein
required to be
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performed or complied with at or prior to Closing.
(b) No Litigation. There shall not be pending or threatened any claim, suit,
action, proceeding, investigation or inquiry by any person, governmental
body or authority or other entity seeking to restrain or prohibit this
transaction, to obtain damages in connection with this Agreement, or any
claim of any nature filed or commenced against the Company.
(c) No Material Adverse Change. There shall have been no material adverse
change in the Company since the date of the Financial Information
presented to Purchaser, March 31, 1999.
(d) Additional Documents. The Company shall have delivered or caused to be
delivered to Purchaser all additional instruments and copies of
instruments required to complete the Closing and as Purchaser may
otherwise reasonably request.
9. Miscellaneous.
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(a) Notice. All notices and other communications required to be given by the
parties shall be in writing and sent to the respective parties at the
following addresses:
The Sellers: Xxxxx X. Xxxxxxxxx
0000 Xxxx 00, #0000
Xxxxx, XX 00000
Purchaser: Xxxxx X. Xxxxxxxxx
Xxxxxxxxx Xxxxxxx & Xxxxxxx
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
(b) Washington Law. This Agreement shall be construed in accordance with the
laws of the State of Washington.
(c) Attorney' Fees. In any action brought to enforce this Agreement, or to
seek damages for breach thereof, the prevailing party shall be entitled to
recover a reasonable attorney's fee (including a reasonable attorney's fee
on any appeal thereof) and reasonable costs of litigation in addition to
any other award or decree granted or given by the court.
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(d) Entire Agreement. This Agreement supersedes all prior agreements of the
parties, constitutes the entire agreement and understanding between the
parties and may only be modified or amended by a subsequent written
agreement executed by both parties.
(e) Assignment. Each party hereto may assign its rights hereunder, but may
not, without the prior written consent of the other party hereto, such
consent not to be unreasonably withheld, delegate any or all of its
obligations hereunder. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors
and assigns.
(f) No Waiver. No failure on the part of either party to exercise and no
delay in exercising any rights hereunder shall operate as a waiver
thereof; nor shall any waiver or acceptance of a partial, single or
delayed performance of any term or condition of this Agreement operate as
a continuing waiver or a waiver of any subsequent breach thereof.
(g) Severability. If any provision of this Agreement is held to be illegal,
invalid or unenforceable, such provision shall be fully severable and this
Agreement shall be continued and enforced if such illegal, invalid or
unenforceable provision were never a part hereof; and in lieu of such
provision, there shall be added automatically as part of this Agreement a
provision as similar in terms to such illegal, invalid or unenforceable
provision as may be possible to make such provision legal, valid and
enforceable.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first set forth above.
SELLERS: PURCHASER:
/s/ Xxxx X. Xxxxxx /s/ Xxxxxxx Xxxxx
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Xxxx X. Xxxxxx Xxxxxxx Xxxxx
Xxxxx X. Xxxxxxxxx
/s/ Xxxxx X. Xxxxxxxxx
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Exhibit 3(e)
FORM OF
SHAREHOLDERS' CERTIFICATE
Each undersigned hereby represents and warrants to Xxxxxxx Xxxxx, the
"Purchaser" under that certain Stock Purchase Agreement dated as of May 11, 1999
by and between the Purchaser and Xxxx X. Xxxxxx and Xxxxx X. Xxxxxxxxx (the
"Sellers"), as follows:
1. My Subscription Agreement dated April 28, 1999 is true and correct in all
respects, including specifically the assertions contained therein that I am an
"accredited investor" as that term is defined in Rule 501 of Regulation D under
the Securities Act of 1933, as amended. I did not purchase my shares with a
view to distribution or resale except pursuant to a registration statement
effective under the Texas Securities Act, (S) 7, or to an accredited investor
pursuant to an exemption available under the Texas Securities Act or rules of
the State Securities Board of Texas.
2. Xxxxx X. Xxxxxxxxx & Associates (the "Partnership") is a Texas general
partnership, and Xxxxx Xxxxxxxxx is an authorized signatory of the Partnership
with full power and authority to bind it. I hereby confirm that Xxxxx Xxxxxxxxx
is authorized to execute Amendment No. 1 to that certain License Agreement dated
April 5, 1999, by and between the Partnership and Growtex Inc., as contemplated
by Section 3(f) of the Stock Purchase Agreement. I hereby confirm that the
License Agreement attached to the April 28, 1999 minutes of the Company and
dated April 5, 1999 supersedes and replaces in its entirety any prior License
Agreement by and between the Partnership and Growtex Inc.
This Certificate is delivered pursuant to Section 3(e) of the Stock Purchase
Agreement, and it is effective, true and correct as of the Closing Date
thereunder.
/s/ Xxxxx X. Xxxxxxxxx Xxxxx X. Xxxxxxxxx
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/s/ Xxxxx Xxxxxx Xxxxx Xxxxxx
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/s/ Xxxxxx X. Xxxxxxxxx Xxxxxx X. Xxxxxxxxx
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/s/ Laurent R. Barbudaux Laurent R. Barbudaux
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/s/ Xxxxx X. Xxxxxxx Xxxxx X. Xxxxxxx
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/s/ X.X. Xxxxxx X.X. Xxxxxx
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/s/ Xxx Xxxxxxx Xxxxxx, Xx. Xxx Xxxxxxx Xxxxxx, Xx.
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/s/ Xxxxx X. Xxxxxxx Xxxxx X. Xxxxxxx
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/s/ Xxxx X. Xxxxxxx Xxxx X. Xxxxxxx
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/s/ Xxxxxx X. Xxxxxxx Xxxxxx X. Xxxxxxx
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