***PRIVATE***
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STOCK PURCHASE AGREEMENT
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FOR THE SALE OF COMMON STOCK
BY THE ISSUER TO A LIMITED NUMBER OF INVESTORS
RPM TECHNOLOGIES, INC.
COMMON STOCK
***RESTRICTED***
THIS COMMON STOCK PURCHASE AGREEMENT is made as of January 4, 2000, by and
between RPM TECHNOLOGIES, INC., a Colorado corporation (the "Company"), and the
persons listed on Exhibit 1 who are signatories to this Agreement (the
"Investors").
The Parties Hereby Agree as Follows:
1. PURCHASE AND SALE
1.1 Sale and Issuance of Common Stock. Subject to the terms and
conditions of this Agreement, each of the Investors agrees to
purchase at the Closing, and the Company agrees to sell and issue
to each of the investors at the Closing, severally and not
jointly, against cash payment, the number of shares of Common
Stock (the "Shares") of the Company set forth opposite each
Investor's name in Exhibit 1 to this Agreement at a purchase
price of $0.50 per share.
1.2 Closing. The initial purchase and sale of the Shares being
purchased by the Investors shall take place at the offices of
Company,
RPM TECHNOLOGIES, INC.
TWO XXX XXXXXXX XXXXX
0XX XXXXX
XXXXXXXX XXXXXXX, XX 00000
at 11:00 o'clock a.m. on January 11, 2000, or at such other time
and place as the Company and the Investors mutually agree upon
(which time and place are designated the "Closing").
At the Closing, the Company shall deliver to each of the
Investors a certificate representing the number of Shares which
each such Investor is purchasing against delivery to the Company
by each such Investor of cash or a certified bank cashier's or
other check reasonably acceptable to the Company, or by
cancellation of indebtedness in the amounts set forth in Exhibit
1, for the total amount of US$0.50 per Share for _________
Shares.
1.3 Use of Proceeds. The Company agrees to use the proceeds from the
sale of the Shares for the repayment of outstanding obligations,
for financing and recapitalization fees, and for working capital
purposes necessary to market and sell the Company's plastic
pallet products.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth on Exhibit 2, the Company hereby represents
and warrants to the Investors that:
2.1 Incorporation. The Company is a corporation duly organized and
validly existing, is in good standing under the laws of the state
of Colorado, has all requisite corporate power and authority to
carry on its business as now conducted and as proposed to be
conducted, and the Company is qualified as a foreign corporation
in each jurisdiction where the failure so to qualify would have a
material adverse effect on its business or operations. True and
accurate copies of the Company's Certificate of Incorporation,
all amendments thereto, and Bylaws as presently in effect are
attached hereto as Exhibit 3.
2.2 Capitalization. The authorized capital of the Company consists of
twenty million (20,000,000) shares of Common Stock, of which at
Closing not more than eleven million shares (11,000,000) will be
issued and outstanding.
2.3 Subsidiaries. The Company does not presently control, directly or
indirectly, any other corporation, association or business
entity.
2.4 Authorization. All corporate action on the part of the Company,
its officers and directors necessary for the authorization,
execution, delivery and performance of all obligations of the
Company under this Agreement and for the authorization, issuance
and delivery of the Shares being sold hereunder has been or shall
be taken prior to the Closing, and this Agreement, when executed
and delivered, shall constitute a valid and legally binding
obligation of the Company. Issuance of the Shares is not subject
to preemptive rights or other preferential rights of any present
or future stockholders in the Company.
2.5 Validity of Securities. The Shares to be purchased and sold
pursuant to this Agreement, when issued, sold and delivered in
accordance with its terms for the consideration expressed herein,
shall be duly and validly issued.
2.6 Governmental Consents. All consents, approvals, orders,
authorizations or registration, qualification, designation and
declaration or filing with and federal or state governmental
authority on the part of the Company required in connection with
the consummation of the transactions contemplated herein shall
have been obtained prior to, and be effective as of, the Closing
or will be timely filed thereafter.
2.7 Compliance With Other Instruments. The Company is not in
violation of any provisions of its respective Certificate of
Incorporation, its Bylaws, any material mortgage, indenture,
lease, agreement or other instrument to which it is a party, or
of any provision of any federal or state judgment, writ, decree,
order, statute, rule or governmental regulation applicable to the
Company . The execution, delivery and performance of this
Agreement will not result in any such violation or be in conflict
with or constitute a default under any such provision.
2.8 Litigation. There are no actions, proceedings or investigations
ending, or to the knowledge of the Company threatened, which
question the validity of this Agreement or which might result,
either individually or in the aggregate, in any material adverse
change in the assets, conditions, affairs or prospects of the
Company, nor, to the knowledge of the Company , has there
occurred any event or does there exist any condition which might
properly be the basis therefor.
2.9 Patents. The Company owns or has a valid right to use the
patents, patent rights, licenses, trade secrets, trademarks,
trademark rights, trade names or trade name rights or franchises,
copyrights, inventions, and intellectual property rights being
used to conduct their businesses as now operated and as now
proposed to be operated; and the conduct of business as now
operated and as now proposed to be operated does not and will not
conflict with valid patents, patent rights, licenses, trade
secrets, trademarks, trademark rights, trade names or trade name
rights or franchises, copyrights, inventions, and intellectual
property rights of others. The Company has no obligation to
compensate any person or entity for the use of any such patents
or rights and have granted to no person or entity any license or
other rights to use in any manner any of the patents or rights of
the Company, whether requiring the payment of royalties or not.
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2.10 Financial Statements. The Company has provided true and complete
copies of the following financial statements for the Company on a
consolidated basis, as set forth in Exhibit 4:
(a.) Certified Statements of financial condition as of
December 31, 1998, and the related statements of operations
and statements of changes in financial position for the year
then ended, all prepared by _____________________ independent
accountants, and Certified Statements of financial condition
as of December 31, 1999, and the related statements of
operations and statements of changes in financial position for
the year then ended, all prepared by ________________________,
independent accountants.
(b.) All such financial statements have been prepared in
conformity with generally-accepted accounting principles
applied on a basis consistent with prior periods (except for
the omission of notes to the certified financial statements),
fairly present the consolidated financial condition of the
Company as of dates thereof, and the consolidated results of
operations of the Company for the periods indicated, and, in
the case of certified statements, subject to normal and
recurring year-end adjustments.
(c.) Specifically, without limitation, such financial
statements reflect, as of their respective dates, all material
accrued liabilities and adequate reserves for all material
unaccrued liabilities and for all reasonably anticipated
material losses of the Company. The books of account of the
Company fully and fairly reflect all of the transactions of
such companies and are complete and accurate.
2.11 Tax Returns and Reports. All federal income tax and state
franchise tax returns and tax reports required to be filed by the
Company will be filed with the appropriate governmental agencies
in all jurisdictions in which such returns or reports are
required to be filed. All such returns and reports will
constitute complete and accurate representations, in all material
respects, of the tax liabilities of the Company. All federal
income tax and state franchise and other taxes (including
interest and penalties) due from the Company will be fully paid
or adequately provided for on the books and financial statements
of the Company. None of the proposed federal income tax returns
of the Company have been audited by the Internal Revenue Service.
The Company knows of no additional assessments or adjustments
pending or threatened for any period, nor of any basis for any
such assessment or adjustment. The Company and its affiliates
have not entered into any agreements with federal and state
taxing authorities extending the statute of limitations with
respect to the assessment of federal and state taxes for any
period.
2.12 Properties. The Company has good and marketable title to its
respective real and personal properties and assets and valid
leasehold interests in its respective leased properties as and to
the extent carried on its books, including those reflected on the
certified statements of financial condition as of September 30,
1999 referred to in paragraph 2.10 above, except properties and
assets disposed of in the ordinary course of business since
September 30, 1999 or referred to on Exhibit 2 attached hereto,
and none of such properties or assets is subject to any mortgage,
pledge, charge, lien, security interest, encumbrance of joint
ownership interest, except (a) liens for taxes, assessments, or
governmental charges or levies if the same shall not at the time
be delinquent or thereafter can be paid without penalty, or are
being contested in good faith and by appropriate proceedings, or
(b) as shown on Exhibit 2 attached hereto.
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The use of any property of the Company for the purpose for which
it was acquired is not now, and, based upon the laws, regulations
and ordinances in effect on the date of Closing, in the future
will not be, curtailed to a material degree by any violations
prior to the Closing by the Company or any of the subsidiaries of
any law, regulation or ordinance (including, without limitation,
laws, regulations or ordinances relating to zoning, environmental
protection, city planning, or similar matters). The Company enjoy
peaceful and undisturbed possession under all leases under which
they are operating, and all said lease are valid and subsisting
and in full force and effect.
2.13 Agreements. Except as set forth in Exhibit 2, the Company has not
breached, nor has any such entity received oral or written notice
of any claim or threatened claim that the Company has breached,
any of the terms or conditions of any agreement, contract, lease,
commitment or understanding, whether oral or written, the breach
or breaches of which singly or in the aggregate could materially
or adversely affect the financial condition, operations, business
or prospects of the Company considered as a whole.
2.14 Pension Benefit Plan. The Company does not have or make
contributions to any pension, defined benefit or defined
contribution plans which are subject to the Federal Employee
Retirement Income Security Act of 1974, as amended ("ERISA").
2.15 Registration Rights. Except as set forth in this Agreement, no
person or entity has demand or other rights to cause the Company
to file any registration statement under the Securities Act of
1933, as amended (the "Act") relating to any securities of the
Company or any right to participate in any such registration
statement.
2.16 Disclosure. To the best of the Company's knowledge and belief,
neither this Agreement, the financial statements referred in
Exhibit 4, nor any other agreement, document, certificate or
written statement furnished to the Purchasers or their special
counsel by or on behalf of the Company in connection with the
transactions contemplated hereby contains any untrue statement of
a material fact or omits to state a material fact necessary in
order to make the statements contained herein or therein not
misleading.
Most of the Company's executive officers have only been employed
by the Company for a short period of time. To the best knowledge
of the Company's executive officers, but without having made any
independent investigation, there is no fact within the special
knowledge of any of the executive officers of the Company which
has not been disclosed herein or in writing by them to the
Investors and which materially adversely affects, or in the
future in their opinion may, insofar as they can now foresee,
materially adversely affect the business, properties, assets or
condition, financial or other, of the Company .
Without limiting the foregoing, the Company has no knowledge or
belief that there exists, or there is pending or planned, any
patent, invention, device, application or principle or any
statute, rule, law, regulation, standard or code which would
materially adversely affect the condition, financial or other, or
the operations of the Company .
3. REPRESENTATIONS AND WARRANTIES OF THE INVESTORS.
Each of the Investors represents and warrants to the Company as follows:
3.1 Authorization. When executed and delivered by such Investor,
this Agreement will constitute the valid and legally binding
obligation of such Investor.
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3.2 Accredited Investor. Such Investor (other than those identified
in writing to counsel for the Company prior to the Closing) is
an "accredited investor" as that term is defined in Rule 501
promulgated under the Act.
4. SECURITIES ACT OF 1933.
4.1 Investment Representation.
(a) This Agreement is made with each of the Investors in reliance
upon their respective representations to the Company, which by
its acceptance hereof each of the Investors hereby confirms, that
the Shares to be received will be acquired for investment for an
indefinite period for its own account and not with a view to the
sale or distribution of any part thereof, and that it has no
present intention of selling or otherwise distributing the same,
but subject, nevertheless, to any requirement of law that the
disposition of its property shall at all times be within its
control. By executing this Agreement, each of the Investors
further represents that it does not have any contract,
undertaking, agreement or arrangement with any person to sell or
transfer to such person any of the Shares or any Common Stock
acquired on conversion of the Shares (all of such securities are
hereinafter collectively referred to as the "Securities").
(b) Each of the Investors understands that the Securities are not
and may never be registered under the Act on the ground that the
sale provided for in this Agreement and the issuance of
securities is exempt pursuant to Section 4(2) of the Act and/or
Rule 506 of Regulation D thereunder, and that the Company's
reliance on such exemption is predicated on its representations
set forth herein.
(c) Each of the Investors agrees that in no event will it make a
disposition of any of the Securities, unless the Securities shall
have been registered under the Act, unless and until (i) it shall
have notified the Company with a statement of the circumstances
surrounding the proposed disposition and (ii) it shall have
furnished the Company with an opinion of counsel reasonably
satisfactory to the Company to the effect that (A) such
disposition will not require registration of such securities
under the Act, and (B) that appropriate action necessary for
compliance with the Act has been taken. Notwithstanding the
foregoing, each Investor may distribute any of the Securities to
the owners of its equity.
(d) Each of the Investors represents that it is able to fend for
itself in the transactions contemplated by this Agreement, has
such knowledge and experience in financial and business matters
as to be capable of evaluating the merits and risks of its
investment, has the ability to bear the economic risks of its
investment and has been furnished with and has had access to such
information as would be made available in the form of a
registration statement together with such additional information
as is necessary to verify the accuracy of the information
supplied and to have all questions which have been asked by the
Investors answered by the Company.
(e) Each of the investors understands that if a registration
statement covering the Securities under the Act is not in effect
when it desires to sell any of the Securities, it may be required
to hold such Securities for an indeterminate period. Each of the
Investors also acknowledges that it understands that any sale of
the Securities which might be made by it in reliance upon Rule
144 under the Act may be made only in limited amounts in
accordance with the terms and conditions of that Rule.
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4.2 Legends. All certificates for the Securities shall bear
substantially the following legend: "THE SHARES EVIDENCED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND HAVE BEEN ACQUIRED BY THE ISSUEE FOR
INVESTMENT PURPOSES. SAID SHARES MAY NOT BE SOLD OR TRANSFERRED
UNLESS (A) THEY HAVE BEEN REGISTERED UNDER SAID ACT, OR (B) THE
TRANSFER AGENT (OR THE COMPANY IF THEN ACTING AS ITS TRANSFER
AGENT) IS PRESENTED WITH EITHER A WRITTEN OPINION SATISFACTORY TO
COUNSEL FOR THE COMPANY OR A `NO-ACTION' OR INTERPRETIVE LETTER
FROM THE SECURITIES AND EXCHANGE COMMISSION TO THE EFFECT THAT
SUCH REGISTRATION IS NOT REQUIRED UNDER THE CIRCUMSTANCES OF SUCH
SALE OR TRANSFER."
4.3 Rule 144. The Company covenants and agrees that: (i) at all times
while it is subject to the reporting requirements of Section 13
or 15(d) of the Securities Exchange Act of 1934 it will use its
best efforts to comply with the current public information
requirements of Rule 144(c)(1) under the Act; and (ii) it will
furnish the Investors upon request with all information about the
Company required for the preparation and filing of Form 144.
5. CONDITIONS TO INVESTORS' OBLIGATIONS AT CLOSING.
The obligations of the Investors under paragraphs 1.1 and 1.2 of
this Agreement are subject to the fulfillment at or before the
Closing of each of the following conditions:
5.1 Representations and Warranties. The representations and
warranties contained in Paragraph 2 hereof, subject to the
disclosures contained in Exhibit 2, shall be true on and as of
the Closing.
5.2 Performance. The Company shall have performed and complied with
all agreements and conditions contained herein required to be
performed or complied with by it on or before the Closing.
5.3 State Securities Laws. The Company intends to comply with all
requirements under all the state of Colorado securities laws with
respect to the offer and sale of the Shares and the Common Stock
to be issued upon the conversion thereto.
5.4 Compliance Certificate. There shall have been delivered to each
of the Investors a certificate, dated the Closing Date, signed by
the Company's president, certifying that the conditions specified
in paragraphs 5.1, 5.2, 5.3, 5.4, and 5.8 have been fulfilled.
5.5 Opinion of Counsel. There shall have been delivered to each of
the Investors an opinion of counsel for the Investors, to the
effect that
(i) the Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Colorado;
(ii) this Agreement has been duly authorized, executed, and
delivered by the Company and constitutes a valid and enforceable
obligation of the Company in accordance with its terms and, after
investigation deemed reasonable by such counsel under the
circumstances, such counsel has no knowledge of any breach by the
Company of its representations, warranties and covenants under
this Agreement (except as noted in Exhibit 2);
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(iii) the Shares have been duly authorized, issued and delivered
and are validly outstanding;
(iv) upon issuance and sale of the Shares, the Company shall have
outstanding an aggregate of ______________________ (___________)
shares of Common Stock;
(v) such issue and sale is exempt, and no approval or
authorization of any other public body is necessary for the
issuance and sale by the Company of the Shares, and based in part
upon the representations of the Investors, the offer, sale, and
delivery of the Shares under the circumstances contemplated by
this Agreement constitutes an exempt transaction under the Act.
5.6 Proceedings and Documents. All corporate and other proceedings in
connection with the transactions contemplated at the Closing
hereby and all documents and instruments incident to such
transactions will be reasonably satisfactory in substance and
form to the Investors and their counsel, and the Investors and
their counsel will have received all such counterpart originals
or certified or other copies of such documents as they may
reasonably request.
6. CONDITIONS OF THE COMPANY'S OBLIGATIONS AT CLOSING.
The obligations of the Company under paragraphs 1.1 and 1.2 of this Agreement
are subject to the fulfillment at or before the Closing of each of the following
conditions:
6.1 Warranties True on the Closing Date. The representations and
warranties of each of the Investors contained in paragraphs 3 and
4 hereof shall be true on and as of the Closing with the same
effect as though said representations and warranties had been
made on and as of the Closing.
7. COVENANTS
7.1 Financial Statements. The Company promptly shall deliver to each
holder of Shares annual financial statements (See Exhibit 4).
8. MISCELLANEOUS
8.1 Agreement is Entire Contract. Except as specifically referenced
herein, this Agreement constitutes the entire contract between
the parties hereto concerning the subject matter hereof and no
party shall be liable or bound to the other in any manner by any
warranties, representations or covenants except as specifically
set forth herein. Any previous agreement among the parties
related to the transactions described herein is superseded
hereby. The terms and conditions of this Agreement shall inure to
the benefit of and be binding upon the respective successors and
assigns of the parties hereto. Nothing in this Agreement, express
or implied, is intended to confer upon any party, other than the
parties hereto, and their respective successors and assigns, any
rights, remedies, obligations, or liabilities under or by reason
of this Agreement, except as expressly provided herein.
8.2 Governing Law. This Agreement shall be governed by and construed
under the laws of the State of Colorado, country of the United
States of America.
8.3 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
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8.4
Title and Subtitles. The titles of the paragraphs and
subparagraphs of this Agreement are for convenience and are not
to be considered in construing this Agreement.
8.5 Notices. Any notice required or permitted hereunder shall be
given in writing and shall be deemed effectively given upon
personal delivery or upon deposit in the United States Post
Office, by registered or certified mail, addressed to a party at
its address hereinafter shown below its signature or at such
other address as such party may designate by ten (10) days
advance written notice to the other party.
TO THE INVESTORS:
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TO THE COMPANY:
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RPM TECHNOLOGIES, INC.
TWO XXX XXXXXXX XXXXX
0xx XXXXX
XXXXXXXX XXXXXXX, XX 00000
ATTN: XXXXXXX XXXXX, PRESIDENT
8.6 Finder's Fee. Each party hereto represents that it is not, and
will not be, obligated for any finder's fee or commission payable
in cash in connection with this transaction. Each of the
Investors hereby agrees to indemnity and to hold harmless the
Company from any liability for any commission or compensation in
the nature of a finder's fee (and the costs and expenses of
defending against such liability or asserted liability) for which
any such Investor or any of its employees or representatives is
responsible. The Company agrees to indemnify and hold harmless
the Investors from any liability for any commission and
compensation in the nature of a finder's fee (and the costs and
expenses of defending against such liability or asserted
liability) for which the Company or any of its officers,
employees or representatives is responsible.
8.7 Legal Fees and Expenses. The Company agrees upon the Closing to
pay its legal fees and expenses of counsel, incurred in
connection with the negotiation and execution of this Agreement
and related documents and with obtaining any governmental
consents and taking such compliance actions, including, without
limitation, securities law filing as are required in connection
therewith.
8.8 Survival of Warranties. The warranties and representations of the
Company contained in or made pursuant to this Agreement shall
survive the execution and delivery of this Agreement and the
Closing hereunder.
8.9 Amendment of Agreement. Except as expressly provided herein, any
provision of this Agreement may be amended or waived on behalf of
all Investors by a written instrument signed by the Company and
by Investors holding at least a majority of the aggregate of the
shares of Common Stock issuable and issued upon conversion of the
Shares.
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be signed as of
the day and year first above written.
RPM TECHNOLOGIES INC. INVESTORS:
By: By:
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Xx. Xxxxxxx Xxxxx
President Individually, For Investors
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Date Date
ATTEST: ATTEST:
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Exhibit 1
LIST OF PURCHASERS
NAME AMOUNT # OF SHARES DATE
---- ------ ----------- ----
TOTAL $__________ _______ Shares
10
Exhibit 2
COMPANY
REPRESENTATIONS & WARRANTIES
11
Exhibit 3
COMPANY
CERTIFICATE OF INCORPORATION
AMENDMENTS
BYLAWS
12
Exhibit 4
COMPANY
FINANCIAL STATEMENTS
