STOCK-FOR-STOCK ACQUISITION AGREEMENT
This Stock-For-Stock Acquisition Agreement ("the Agreement"), entered into this
31st day of October 1995, by, between, and among Enviro Solutions International
Inc., a publicly held Nevada corporation (hereinafter the "Purchaser"), Custom
Pack, Inc., a privately held Mississippi corporation (hereinafter the
"Company"), and the shareholders of the Company whose names and signatures are
set forth upon the signature page of this Agreement (the "Shareholders").
Witnesseth
WHEREAS, the Purchaser wishes to acquire, and the shareholders are
willing to sell, all of the outstanding stock of the Company in the exchange
solely for a part of the voting stock of the Purchaser whereby the Shareholder
would acquire a controlling interest of the Purchaser;
NOW, THEREFORE, in consideration of the mutual terms and covenants set
forth herein, the Purchaser, the Company, and the Shareholders approve and adopt
this Agreement and mutually covenant and agree with each other as follows:
1. Shares to be Transferred and Shares to be issued.
1.1 On the closing date the Shareholders shall transfer to the
Purchaser certificates for the number of shares of the common stock of the
Company described in Schedule "A", attached hereto and incorporated herein,
which in the aggregate shall represent all of the issued and outstanding
shares of the common stock of the Company. Such certificates shall be duly
endorsed in blank by the Shareholder or accompanied by duly executed stock
powers in blank with signatures guaranteed.
1.2 In exchange for the transfer of the common stock of the Company
pursuant to subsection 1.1. hereof, the Purchaser shall, on the closing
date and contemporaneously with such transfer of the common stock of the
Company to it by the Shareholders, issue and deliver to the Shareholders
the number of shares of common stock of the Purchaser specified on Schedule
"A" hereof such that the Shareholders shall own not less than eighty
percent (80%) of the outstanding common stock of the Purchaser.
2. Representations and Warranties of the Shareholders. The Shareholders,
severally and not jointly represent and warrant as follows:
2.1 Ownership of Stock
a. Each of the Shareholders is the record owner and holder of the
number of fully paid and nonassessable shares of the common stock
of the Company listed in Schedule "A: hereto as of the date
hereof and will continue to own such shares of the common stock
of the Company until the delivery thereof to the Purchaser on the
closing date and all such shares of common stock are or will be
on the closing date owned free and clear of
all liens, encumbrances, charges and assessments of every nature
and subject to no restrictions with respect to transferablility.
Each of the Shareholders will have full power and authority to
assign and transfer his, her, or its shares of the Company in
accordance with the terms hereof.
b. Except for this Agreement, there are no outstanding options,
contracts, calls, commitments, agreements or demands of any
character relating to the stock of the Company owned by the
Shareholders or the stock of the Purchaser to be received by the
Shareholders.
3. Representations and Warranties of the Company. The Company represents
and warrants as follows:
3.1 Organization and Authority
a. The Company is a corporation duly organized, validly existing
and in good standing under the laws of the state of Mississippi
with the full power and authority to enter into and perform the
transactions contemplated by this Agreement.
b. The outstanding shares of the Company are legally and validly
issued, fully paid and nonassessable.
c. The minute book of the Company made available to the Purchaser
contains the Articles of Incorporation of the Company as amended,
Bylaws, and complete and accurate records of all meetings and
other corporate actions of the shareholders and the board of
directors (and any committee thereof) of the Company.
3.2 Financials. True copies of the Financial statements of the Company
for the years ended March 31, 1994 and 1993, and the period ended September
30, 1995, have been furnished to the Purchaser. Said financial statements
are true and correct in all material respects and present an accurate and
complete disclosure of the financial condition of the Purchaser as of
September 30, 1994, and the earnings for the periods covered, in accordance
with generally accepted accounting principles applied on a consistent
basis.
3.3 Liabilities. There are no material liabilities of the Company,
whether accrued, absolute, contingent, or otherwise, which arose or relate
to any transaction of the Company, its agents or servants occurring prior
to September 30, 1994, which are not disclosed by or reflected in said
financial statements.
3.4 Litigation. There are no legal, administrative or other
proceedings, investigations, or inquiries, product liability' or other
claims, judgments, injunctions, or restrictions, either threatened,
pending, or outstanding against involving the Company or its subsidiaries,
if any, or their assets, properties, or business, nor does the Company or
its subsidiaries know, or have reasonable grounds to know, of any basis for
any such proceedings, investigations or inquiries, product liability or
other claims, judgments, injunctions or restrictions, except as disclosed
in the disclosure schedule. In addition, there are no material proceedings
existing, pending or reasonably contemplated to which any officer,
director, or affiliate of the Company or as to which the Shareholder is a
party adverse to the Company or any of its subsidiaries or has a material
interest adverse to the Company or any of its subsidiaries.
3.5 Taxes. All federal, state, foreign, county and local income,
profits, franchise, occupation, property, sales, use, gross receipts and
other taxes (including any interest or penalties relating thereto) and
assessments which are due and payable have been duly reported, fully paid
and discharged as reported by the Company, and there are no unpaid taxes
which are, or could become a lien on the properties and assets of the
Company, except as provided for in the financial statements of the Company,
or have been incurred in the normal course of business of the company since
that date. All tax returns of any king required to be filed have been filed
and the taxes paid or accrued.
3.6 Accuracy of All Statements Made by Company. No representation or
warranty by the Company and the Shareholder in this Agreement, nor any
statement, certificate, schedule or exhibit hereto furnished or to be
furnished by or on behalf of the Company or the Shareholder pursuant to
this Agreement, nor any document or certificate delivered to the Purchaser
pursuant to this Agreement or in connection with actions contemplated
hereby, contains or shall contain any untrue statement of material fact or
omits or shall omit a material fact necessary to make the statement
contained therein not misleading.
4. Representations and Warranties of the Purchaser. The Purchaser
represents and warrants as follows:
4.1 Organization and Good Standing. The Purchaser is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Nevada with full power and authority to enter into and perform the
transactions contemplated by this Agreement. The Purchaser has
approximately 211 shareholders of record, each of whom is reasonably
believed to be the beneficial owner of his, hers, or its shares with no
prearrangement to sell such shares in connection with this transaction.
4.2 Performance of This Agreement. The execution and performance of
this Agreement and the issuance of stock contemplated hereby have been
authorized by the board of directors of the Purchaser.
4.3 Financials. True copies of the financial statements of the
Purchaser for the years ended May 31, 1993 and 1992, and the period ended
May 31, 1995, have been delivered by the Purchaser of the Company. Said
financial statements are true and correct in all material respects and
present an accurate and complete disclosure of the financial condition of
the Purchaser as of May 31, 1995 and the earnings for the periods covered,
in accordance with generally accepted accounting principles applied on a
consistent basis.
4.4 Liabilities. There are no material liabilities of the Purchaser,
whether accrued, absolute, contingent or otherwise, which arose or relate
to any transaction of the Purchaser, its agents or servants which are not
disclosed by or reflected in said financial statements. As of the date
hereof, there are no known circumstances, conditions, happenings, events or
arrangements, contractual or otherwise, which may hereafter give rise to
liabilities, except in the normal course of business of the Purchaser.
4.5 Litigation. There are no legal, administrative or other
proceedings, investigations or inquiries, product liability or other
claims, judgments, injunctions or restrictions, either threatened, pending
or outstanding against or involving the Purchaser or its subsidiaries, if
any, or their assets, properties, or business, nor does the Purchaser or
its subsidiaries know, or have reasonable grounds to know, of any basis for
any such proceedings, investigations or inquiries, product liability or
other claims, judgments, injunctions or restrictions.
4.6 Taxes. All federal, state, foreign, county and local income,
profits, franchise, occupation, property, sales, use, gross receipts and
other taxes (including any interest or penalties relating thereto) and
assessments which are due and payable have been duly reported, fully paid
and discharged as reported by the Purchaser, and there are no unpaid taxes
which are, or could become a lien on the properties and assets of the
Purchaser. All tax returns of any kind required to be filed have been filed
and the taxes paid or accrued.
4.7 Legality of Shares to be Issued. The shares of common stock of the
Purchaser to be delivered pursuant to this Agreement, when so delivered,
will have been duly and validly authorized and issued by the Purchaser and
will be fully paid and nonassessable.
4.8 No Covenant as to Tax Consequences. It is expressly understood and
agreed that neither the Purchaser nor its officers or agents has made any
warranty or agreement, expressed or implied, as to the tax consequences of
the transactions contemplated by this Agreement or the tax consequences of
any action pursuant to or growing out of this Agreement.
4.9 Accuracy of All Statements Made by the Purchaser. No
representation or warranty by the Purchaser in this Agreement, nor any
statement, certificate, schedule or exhibit hereto furnished or to be
furnished by the Purchaser pursuant to this Agreement, nor any document or
certificate delivered to the Company or the Shareholder pursuant to this
Agreement or in connection with actions contemplated hereby, contains or
shall contain any untrue statement of material fact or omits or shall omit
a material fact necessary to make the statement contained therein not
misleading.
5. Conditions Precedent to the Purchaser's Obligations. Each and every
obligation of the Purchaser to be performed on the closing date shall be subject
to the satisfaction prior thereto of the following conditions:
5.1 Truth of Representations and Warranties. The representations and
warranties made by the Company and the Shareholder in this Agreement or
given on their behalf hereunder shall be substantially accurate in all
material respects on and as of the closing date with the same effect as
though such representations and warranties had been made or given on and as
of the closing date.
5.2 No Material Adverse Change. As of the closing date there shall not
have occurred any material adverse change which materially impairs the
ability of the Company to conduct its business or the earning power thereof
on the same basis as in the past.
5.3 Accuracy of Financial Statements. The Purchaser and its
representatives shall be satisfied as to the accuracy of all balance
sheets, statements of income and other financial statements of the Company
furnished to the Purchaser herewith.
5.4 Time Limit on Closing. Closing shall have taken place by October
31, 1995.
6. Conditions Precedent to Obligations of the Company and the Shareholders.
Each and every obligation of the Company and the Shareholders to be performed on
the closing date shall be subject to the satisfaction prior thereto of the
following conditions:
6.1 Truth of Representations and Warranties. The representations and
warranties made by the Purchaser in the Agreement or given on its behalf
hereunder shall be substantially accurate in all material respects on and
as of the closing date with the same effect as though such representations
and warranties had been made or given on and as of the closing date.
6.2 No Material Adverse Change. As of the closing date there shall not
have occurred any material adverse change which materially impairs the
ability of the Purchaser to conduct its business.
6.3 Accuracy of Financial Statements. The Company and the Shareholder
shall be satisfied as to the accuracy of all balance sheets, statements of
income and other financial statements of the Purchaser furnished to the
Company herewith.
6.4 Time Limit on Closing. Closing shall have taken place by October
31, 1995.
7. Security Act Provisions.
7.1 Restrictions on Disposition of Shares. Each of the Shareholders,
severally and not jointly, covenants and warrants that the shares received
are acquired for his, her, or its own account and not with the present view
towards the distribution thereof and he, she, or it will not dispose of
such shares except (i) pursuant to an effective registration statement
under the Securities Act of 1933, as amended, or (ii) in any other
transaction which, in the opinion of counsel, acceptable to the Purchaser,
is exempt from registration under the Securities Act of 1933, as amended,
or the rules and regulations of The Securities and Exchange Commission
thereunder. In order to effectuate the covenants of this sub-section 6.1.,
an appropriate endorsement will be placed upon each of the certificates of
common stock of the Purchaser at the time of distribution of such shares by
the Company pursuant to this Agreement, and stop transfer instructions
shall be placed with the transfer agent for the securities.
7.2 Evidence of Compliance with Private Offering Exemption. Each of
the Shareholders, severally and not jointly, agrees to supply the Purchaser
with evidence of the financial sophistication of the Shareholder or
evidence of appointment of a sophisticated investment representative and
such other items as counsel for the Purchaser may require in order to
evidence the private offering character of the distribution of shares made
pursuant to the Agreement.
7.3 Notice of Limitation Upon Disposition. Each of the Shareholders,
severally and not jointly, represents that he, she, or it is aware that the
shares distributed to him, her or it will not have been registered pursuant
to the Securities Act of 1933, as amended; and, therefore, under current
interpretations and applicable rules, he, she, or it will probably have to
retain such shares for a period of at least two years and at the expiration
of such two year period his, her, or its sales may be confined to brokerage
transactions of limited amounts requiring certain notification filings with
the Securities and Exchange Commission and such disposition may be
available only if the Purchaser is current in its filings with the
Securities and Exchange Commission under the Securities Exchange Act of
1934, as amended, or other public disclosure requirements, and the other
limitations imposed thereby on the disposition of shares of the Purchaser.
8. Appointment of New Officers and Directors. Upon and as a condition of
closing this Agreement:
8.1 At closing the Purchaser will deliver the resignation of Xxxx
Xxxxxxx, Xxxxxxx Xxxxx and Xxxx Xxxxxxx Pausner as the officers and
directors of the Purchaser, and shall increase the number of directors to
persons.
8.2 Prior to closing the Company will furnish material information of
Xxxxx Xxxxxxxxx, Xxxx Xxxxxxxxx, and Xxxxx Xxxxxxxxx as nominees to be
appointed to fill the vacancies created by the foregoing resignation and
the increase in the number of directors.
9. Closing.
9.1 Time and Place. The closing of this transaction ("closing") shall
take place at _____________________at_______.m., October 31, 1995, or at
such other time and place as the parties hereto shall agree upon. Such date
is referred to in this agreement as the "closing date."
9.2 Documents To Be Delivered by the Company and the Shareholders. At
the closing the Company and the Shareholders shall deliver to the Purchaser
the following documents:
a. Certificates for the number of shares of common stock of the
Company in the manner and form required by sub-section 1.1 hereof
b. A certificate signed by the Company that the representations and
warranties made by the Company in this Agreement are true and correct
on and as of the closing date with the same effect as though such
representations and warranties had been made on or given on and as of
the closing date.
c. Such other documents of transfer, certificates of authority and
other documents as the Purchaser may reasonably request.
9.3 Documents To Be Delivered by the Purchaser. At the closing the
Purchaser shall deliver to the Company and the Shareholders the following
documents:
a. Certificates for the number of shares of common stock of the
Purchaser as determined in sub-section 1.2. hereof
b. A certificate signed by the Purchaser that the representations and
warranties made by the Purchaser in this Agreement are true and
correct on and as of the closing date with the same effect as though
such representations and warranties had been made on or given on and
as of closing date.
10. Finder's Fee. The parties hereto agree that there are no finder's fees
payable directly or indirectly in connection with this transaction by any party
hereto.
11. Default. Should any party to this Agreement default in any of the
covenants, conditions, or promises contained herein, the defaulting party shall
pay all costs and expenses, including a reasonable attorney's fee, which may
arise or accrue from enforcing this Agreement, or in pursuing any remedy provide
hereunder.
a. Financial Consultant Agreement. For a period of Two years following
the closing, PNC Investments LTD Inc. will be engaged by Enviro
Solutions International Inc. as the Investment Bankers for Enviro
Solutions International Inc.
12. Assignment. This Agreement may not be assigned in whole or in part by
the parties hereto without the prior written consent of the other party or
parties, which consent shall not be unreasonably withheld.
13. Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto, their heirs, executors,
administrators, successors and assigns.
14. Partial Invalidity. If any term covenant, condition or provision of the
Agreement or the application thereof to any person or circumstance shall to any
extent be invalid or unenforceable, the remainder of this Agreement or
application of such term or provision to persons or circumstances other than
those as to which it is held to be invalid or unenforceable shall not be
affected thereby and each term, covenant, condition or provision of this
Agreement shall be valid and shall be enforceable to the fullest extent
permitted by law.
15. No Other Agreements. This Agreement constitutes the entire Agreement
between the parties and there are and will be not oral representations which
will be binding upon any of the parties hereto.
16. Survival of Covenants. Etc. All Covenants, representations, and
warranties made herein to any parties or in any statement or document delivered
to any party hereto, shall survive the making of this Agreement and shall remain
in full force and effect until the obligations of such party hereunder have been
fully satisfied.
17. Further Action. The parties hereto agree to execute and deliver such
additional documents and to take such other and further action as may be
required to carry out fully the transaction(s) contemplated herein.
18. Amendment. This Agreement or any provision hereof may not be changed,
waived, terminated or discharged except by means of a written supplemental
instrument signed by the party or parties against whom enforcement of the
change, waiver, termination, or discharge is sought.
19. Headings. The descriptive headings of the various Sections or parts of
this Agreement are convenience only and shall not affect the meaning or
construction of any of the provisions hereof
20. Counterparts. This agreement may be executed in two or more partially
or fully executed counterparts, each of which shall be deemed an original and
shall bind the signatory, but all of which together shall constitute but one and
the same instrument.
IN WITNESS WHEREOF, the parties hereto executed the foregoing
Stock-For-Stock Acquisition Agreement as of the day and year first above
written.
PURCHASER: ENVIRO SOLUTIONS INTERNATIONAL INC.
By /s/ Xxxx Xxxxxxx
--------------------------------
Xxxx Xxxxxxx, President/Director
By /s/ Xxxx Xxxxxxx Pausner
---------------------------
Xxxx Xxxxxxx Pausner,
Secretary/Treasurer/Director
By /s/ Xxxxxxx Xxxxx 10/31/95
--------------------------------
Xxxxxxx Xxxxx, Director
SHAREHOLDERS:
/s/ Xxxxx X. Xxxxxxxxx
--------------------------
Xxxxx X. Xxxxxxxxx
/s/ Xxxxxxx X Xxxxxxxxx
--------------------------
Xxxxxxx X. Xxxxxxxxx
/s/ Xxxxx X. Xxxxxxxxx
--------------------------
Xxxxx X. Xxxxxxxxx
/s/ Xxxxx Xxxxxxxxx
--------------------------
Xxxxx Xxxxxxxxx
COMPANY: Custom Pack, Inc.
By /s/ Xxxxx Xxxxxxxxx, President
---------------------------------
Xxxxx Xxxxxxxxx
DEFINITIONS
1. Arrangement means any plan, contract, authorization or understanding,
whether or not set forth in a formal document.
2. Associate, as used throughout this questionnaire, means (a) any
corporation or organization (other than the Company or any of its subsidiaries)
of which I am an officer, director, or partner or of which I am, directly or
indirectly, the beneficial owner of 10 percent or more of any class of equity
securities, (b) any trust or other estate in which I have been a substantial
beneficial interest or as to which I serve as trustee or in a similar fiduciary
capacity, or (c) my spouse or any other member of my immediate family (see
definition).
3. Beneficially, when used in connection with the ownership of securities,
means (a) any interest in a security which entitles me to any of the rights or
benefits of ownership even though I may not be the owner of record, or (b)
securities owned by me directly or indirectly, including those held by me for my
own benefit (regardless of how registered) and securities held by others for my
benefit (regardless of how registered), such as custodians, brokers, nominees,
pledges, etc., and including securities held by an estate or trust in which I
have an interest as legatee or beneficiary, securities owned by a partnership of
which I am a member, securities held by a personal holding company of which I am
a stockholder, etc., and securities held in the name of my spouse or any other
member if my immediate family. (See definition.) A beneficial owner of a
security includes any person, who, directly or indirectly, through any contract,
arrangement understanding, relationship or otherwise has or shares
A. voting power which includes the power to vote, or to direct the
disposition, or such security.
B. investment power which includes the power to dispose, or to direct
the disposition of, such security.
In addition, you will be deemed to be the beneficial owner of any security
for which you have the right to acquire the voting or investment power within 60
days, including any right to acquire such security (a) through the exercise of
any option, warrant or right (b) through the conversion of a security, (c)
pursuant to the power to revoke a trust, discretionary account or similar
arrangement, or (d) pursuant to the automatic termination of a trust,
discretionary account or other similar arrangement.
4. Control means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a person,
whether through the ownership of voting securities, by contract or otherwise.
5. Family Relationship means any relationship by blood, marriage or
adoption, including spouses, parents, children, siblings, mothers and
fathers-in-law, sons and daughters-in-law, and brother and sisters-in-law.
6. Material when used in this questionnaire to qualify a requirement for
the furnishing of information as to any subject, limits the information required
to those matters as to which an average prudent investor ought reasonably to be
informed before purchasing the common stock of the Company.
7. Material relationship has not been defined by the Securities and
Exchange Commission. However, the Commission has indicated that it will probably
construe as a "material relationship" any dealings with a company, whether
arising from a close business connection or family relationship, a relationship
of control or otherwise. It seems prudent, therefore, to consider that I would
have such relationship, for example, with any organization of which I am an
officer, director, or trustee or partner or in which I own, directly or
indirectly, 10 percent or more of the outstanding voting stock, or in which I
have some other substantial interest, and with any person or organization with
whom I have, or with whom any relative or spouse (or any other person or
organization as to which I have any of the foregoing other relationships) has, a
contractual relationship.
8. Promoter is any person who, acting alone or in concert with one or more
persons, directly or indirectly takes initiative in founding and organizing the
business or enterprise of a company. It also includes any person who, in
connection with the founding and organizing of the business or enterprise of a
company, directly or indirectly receives in consideration of services or
property (or both) 10 percent or more of any class of securities of the company
or 10 percent or more of the proceeds from the sale of any class of securities.
However, a person who receives such securities or proceeds either solely as
underwriting commissions or solely in consideration of property shall not be
deemed a "promoter" if such person does not otherwise take part in founding and
organizing the enterprise.
9. Plan includes all plans, contracts, authorizations or arrangements,
whether or not set forth in any formal document.
SCHEDULE "A"
TO THE
STOCK-FOR-STOCK ACQUISITION AGREEMENT
NO. OF SHARES OF NO. OF SHARES OF
CUSTOM PACK, INC. ENVIRO SOLUTIONS INTL INC.
NAME OF SHAREHOLDER TO BE TRANSFERRED TO BE ISSUED
------------------- ----------------- ------------
Xxxxx Xxxxxxx Xxxxxxxxx 25 2,666,667
Xxxxxxx X. Xxxxxxxxx 25 2,666,666
Xxxxx and Xxxxx Xxxxxxxxx, 25 2,666,666
as joint tenants with full
rights of survivorship
----- ---------
TOTALS 75 8,000,000
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