1
EXHIBIT 10(d)
STOCK PURCHASE AGREEMENT
BETWEEN
INNOVA HOLDINGS LLC
AND
INNOVA/PURE WATER, INC.
2
STOCK PURCHASE AGREEMENT
BETWEEN
INNOVA HOLDINGS, LLC,
A DELAWARE LIMITED LIABILITY COMPANY,
AND
INNOVA/PURE WATER, INC.,
A FLORIDA CORPORATION
OCTOBER [30], 1997
3
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made as of ___ day
of October, 1997 by and between Innova Holdings, LLC, a Delaware limited
liability company ("Holdings"), with its principal office at
______________________________________, and Innova/Pure Water, Inc., a Florida
corporation (the "Company"), with its principal office at ▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
WHEREAS, Holdings and the Company previously entered into a certain
Warrant Purchase Agreement dated as of October 31, 1996 pursuant to which
Holdings acquired certain Common Stock, Purchase Warrants of the Company for
$500,000;
WHEREAS, the parties desire to terminate the Warrant Purchase Agreement
and exchange the outstanding Common Stock Purchase Warrants currently held by
Holdings for 1,500,000 restrictive shares of the Company's common stock, par
value $.001.
NOW, THEREFORE, in consideration of the premises and other good and
value consideration, the receipt and sufficiency of which are hereby
acknowledge, the parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE OF COMMON STOCK
1.1 PURCHASE AND SALE OF COMMON STOCK. Subject to the terms and
conditions of this Agreement, Holdings agrees to purchase, and the Company
agrees to issue and sell to Holdings, 1,500,000 shares (the "Shares") of Common
Stock, [$.001] par value per share (the "Common Stock"), of the Company.
1.2 THE CLOSING. The purchase and sale of the Common Stock shall take
place at such date, time and place (which date and time may be simultaneous with
the execution and delivery of this Agreement) as Holdings and the Company shall
mutually agree (which place and time are designated as the "Closing"). At the
Closing, the Company shall deliver to Holdings a certificate (or certificates)
representing the restricted Common Stock against payment of the Purchase Price
(as defined below).
1.3 PURCHASE PRICE. As consideration for the issuance and sale of the
Common Stock, Holdings shall surrender the Common Stock Purchase Warrants issued
in connection with the Warrant Purchase Agreement in exchange for the Shares.
The Shares, upon issuance to Holdings, shall be fully paid and nonassessable.
4
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Holdings as follows:
2.1 ORGANIZATION; GOOD STANDING; QUALIFICATION. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Florida, has all requisite corporate power and authority to own
and operate its properties and assets and to carry on its business as now
conducted, to execute and delivery this Agreement, to issue and sell the Common
Stock and to carry out the provisions of this Agreement. The Company is in good
standing and is qualified to transact business as a foreign corporation in all
states in which the nature of its business or the properties owned by it require
it to qualify to transact business.
2.2 AUTHORIZATION. All corporate action on the part of the Company, its
officers, directors, and stockholders necessary for the authorization, execution
and delivery of this Agreement, and the authorization, issuance, sale and
delivery of the Common Stock being sold hereunder constitutes a valid and
legally binding obligation of the Company, enforceable in accordance with its
terms except (a) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws of general application affecting
enforcement of creditors' rights generally, (b) as limited by laws relating to
the availability of specific performance, injunctive relief, or other equitable
remedies, and (c) to the extent any indemnification provisions contained in this
Agreement may be limited by applicable federal or state law.
2.3 VALID ISSUANCE OF COMMON STOCK. The Shares being purchased by
Holdings hereunder, when issued, sold and delivered in accordance with the terms
of this Agreement, will be duly and validly issued, fully paid, non-assessable,
not subject to any preemptive rights, and free and clear of all liens, claims
and encumbrances.
2.4 GOVERNMENTAL CONSENTS. To the best of the Company's knowledge, no
consent, approval, qualification, order or authorization of, or filing, with,
any local, state, or federal governmental authority is required on the part of
the Company in connection with the Company's valid execution, delivery, or
performance of this Agreement or the offer, sale or issuance of the Shares by
the Company, except for filings that shall be made at or prior to Closing and
routine securities law filings after the Closing.
2.5 FINANCIAL STATEMENTS. The Company has delivered to Holdings its
audited financial statements (balance sheet, statement of operations, statement
of stockholders' equity, and statement of cash flows) at December 31, 1996 and
for the fiscal period then ended and its unaudited financial statements at [June
30], 1997 for the quarter then ended (collectively, the "Financial Statements").
The Financial Statements have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis throughout the
period indicated. The Financial Statements fairly present the financial
condition and operating results of
2
5
the Company as of the dates, and for the periods, indicated therein subject, in
the case of the unaudited financial statements, to year-end audit adjustments,
which, with respect to each individual adjustment and all of the adjustments
taken as a whole, adjustments will not have a material adverse impact on the
financial condition or operating results of the Company as reflected in the
unaudited Financial Statements provided to Holdings.
2.6 COMPLIANCE WITH OTHER INSTRUMENTS. The Company is not in violation
of default of any provision of its Certificate of Incorporation, By-laws, or of
any material provision of any mortgage, indenture, agreement, instrument, or
contract to which it is a party or by which it is bound or, to the best of its
knowledge, of any federal or state judgment, order, writ, decree, statute, rule
or regulation applicable to the Company. The execution, delivery, and
performance by the Company of this Agreement and the consummation of the
transactions contemplated hereby will not result in any such violation or be in
material conflict with or constitute, with or without the passage of time or
giving of notice, either a material default under any such provision or an event
that results in the creation of any material lien, charge, or encumbrance upon
any assets of the Company or the suspension, revocation, impairment, forfeiture,
or non-renewal of any material permit, license, authorization, or approval
applicable to the Company, its business or operations, or any of its assets or
properties.
2.7. LITIGATION. Except as set forth in Schedule 2.7, there is and
within the prior twenty-four (24) months there has been, no action, suit,
proceeding, investigation, arbitration, claim or counterclaim pending against
or, to the best of the Company's knowledge, currently threatened or affecting
the Company in any court or before any arbitration panel or before or by any
federal, state or other governmental department or agency. Except as set forth
in Schedule 2.7, the Company has no knowledge of any facts which might
reasonably be believed to be a basis for any such action, suit, proceeding,
investigation, arbitration, claim, or counterclaim. Neither the Company nor its
properties is subject to or directly affected by any order, judgment, decree or
ruling in the nature of an injunctive or consent order or order for specific
performance of any court or governmental agency, other than those affecting the
public generally. There are no existing material violations of federal, state or
local laws, ordinances, rules, regulations or orders by the Company or
materially affecting the business or property of the Company or the possession,
use, occupancy or operation of the Company's facilities. Except as set forth in
Schedule 2.7, there is no action, suit, or proceeding by the Company currently
pending or that the Company currently intends to initiate.
2.8 DISCLOSURE DOCUMENTS. This Agreement, Schedules, and the other
documents, certificates, and statements delivered to Holdings in connection
herewith or with the transactions contemplated hereby, when read together as a
single disclosure, do not contain any untrue statement of a material fact and do
not omit to state a material fact necessary in order to make the statements
contained herein and therein not misleading. Having regard for the ordinary
nature of the various segments of the business of the Company, there is no
material fact known to the Company which materially adversely affects or in the
future, as a result of existing material facts whose impact has not yet been
experienced, may (so far as the Company can now reasonably foresee) materially
adversely affect the business of the Company which has not been set forth in
3
6
this Agreement, the Schedules, or the other documents, certificates, and written
statements furnished or to be furnished to Holdings by the Company.
2.9 OFFERING. Subject in part to the truth and accuracy of Holdings'
representations and warranties set forth in this Agreement, the offer, sale and
issuance of the Common Stock as contemplated by this Agreement are exempt from
the registration requirements of the Securities Act, and neither the Company nor
any authorized agent acting on its behalf will take any action hereafter that
would cause the loss of such exemption.
2.10 ABSENCE OF UNDISCLOSED LIABILITIES. Except as specifically
reserved against or reflected in the Financial Statements or described in
Schedule 2.7 or another Schedule hereto, the Company is not subject to any
material liability or financial obligation (known or unknown, direct or
indirect, absolute, contingent, accrued or otherwise), other than liabilities or
financial obligations arising in the ordinary course of business since the date
of the Financial Statements. The Company is not in default with respect to any
term or condition of any indebtedness or liability (including any current or
deferred trade payable). For purposes of this Section 2.10, any individual
liability, or all such liabilities in the aggregate, should be deemed to be
material if the individual or aggregate value is greater than $50,000.
2.11 DIVIDENDS. Since December 31, 1996, the Company has not declared,
paid or set aside for payment, or agreed to declare or pay, any dividend or
other distribution in respect of its capital stock.
2.12 INSOLVENCY. The Company is not the subject of any existing,
pending or threatened insolvency or bankruptcy proceedings under the laws of any
jurisdiction.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF HOLDINGS
Holdings hereby represents and warrants to the Company as follows:
3.1 AUTHORIZATION. Holdings is a limited liability Company duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Holdings has full power and authority to enter into this Agreement and
this Agreement and the Option Agreement constitute valid and legally binding
obligations of Holdings. Holdings is the owner of the Warrants, free of any
liens, claims, or encumbrances and has the full legal authority to surrender the
Warrants for the Shares.
3.2 INVESTMENT EXPERIENCE. Holdings has sufficient knowledge and
experience in financial and business matters so as to be capable of evaluating
the merits and risks of its investment in the Shares. Holdings has the ability
to bear the economic risks of its investment and understands that an investment
in the Shares is speculative and involves a high degree of risk. Holdings is an
"accredited investor" as such term is defined in Regulation D promulgated under
the Securities Act.
4
7
3.3 PURCHASE ENTIRELY FOR OWN ACCOUNT. The Shares are being acquired
for investment purposes only for the account of Holdings, and not with a view to
the resale or distribution of any part thereof, neither Holdings has any present
intention of selling, granting any participation in, or otherwise distributing
the same.
3.4 RESTRICTED SECURITIES. Holdings is aware of and understands the
following:
(a) That no federal or state agency has made a finding or
determination as to the advisability or fairness of an investment in the Shares
or any recommendation or endorsement of the Shares;
(b) That the Shares have not been registered for sale under the
Securities Act or any state blue sky law; and
(c) That, unless and until the Shares are registered for sale
under the Securities Act and any applicable state blue sky law, there will be
substantial restrictions on the transferability of the Shares; there will be no
public market for the Shares in the United States; and Holdings will not be able
to avail itself of the provisions of Rule 144 adopted by the Securities and
Exchange Commission (the "SEC") under the Securities Act, unless all of the
conditions of Rule 144 are met.
(d) The Shares are subject to a two (2) year "lock-up" and may
not be sold, transferred, assigned or pledged before October ___, 1999.
3.5 LEGEND. Holdings understands and agrees that, until registered
under all applicable securities laws, all certificates evidencing any of the
Shares, whether upon initial issuance or any transfer thereof, shall bear the
following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED
PURSUANT TO A NON-PUBLIC OFFERING UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR UNDER ANY STATE SECURITIES LAWS, AND
THEREFORE CANNOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR
ASSIGNED UNLESS THEY ARE REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND UNDER ALL APPLICABLE STATE SECURITIES LAWS,
OR UNLESS AN EXEMPTION THEREFROM IS AVAILABLE. THE SHARES
REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A CERTAIN LOCK-UP
PROVISIONS SET FORTH IN THAT CERTAIN AGREEMENT OF EVEN DATE
THEREWITH BETWEEN THE ORIGINAL HOLDER HEREOF AND THE COMPANY.
5
8
ARTICLE IV
INDEMNIFICATION
4.1 INDEMNIFICATION. Holdings and the Company each hereby agrees to
indemnify the other and its representatives, subcontractors, consultants and
agents, and to hold the other and its representatives, subcontractors,
consultants and agents harmless from and against, any and all loss, damage or
liability (including but not limited to attorneys' fees and costs( due to, or
arising out of, any breach of any representation, warranty or covenant of
Holdings or the Company, as the case may be, contained in this Agreement.
4.2 INDEMNIFICATION PROCEDURES. Each party entitled to indemnification
under this Agreement (the "Indemnified Party") shall give notice to the party
required to provide indemnification (the "Indemnifying Party") promptly after
such Indemnified Party has actual knowledge of any claim as to which indemnity
may be sought, and (if the claim is made by a third party) shall permit the
Indemnifying Party to assume the defense of any such claim or any litigation
resulting therefrom, provided that counsel for the Indemnifying Party, who shall
conduct the defense of such claim or any litigation resulting therefrom, shall
be approved by the Indemnified Party (whose approval shall not unreasonably be
withheld), and the Indemnified Party may participate in such defense at such
party's expense, as provided further that the failure of any Indemnified Party
to give notice as provided herein shall not relieve the Indemnifying Party of
its indemnification obligations to the extent such failure is not prejudicial.
No Indemnifying Party, in the dense of any such claim or litigation, shall,
except with the consent of the Indemnified Party, consent to entry of any
judgment or enter into any settlement that does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such Indemnified Party
of a release from all liability in respect to such claim or litigation. Each
Indemnified Party shall furnish such information regarding itself of the claim
in question as an Indemnifying Party may reasonably request in writing and as
shall be reasonably required in connection with the defense of such claim and
litigation resulting therefrom.
ARTICLE V
CONDITIONS TO CLOSING
5.1 CONDITIONS TO HOLDINGS' OBLIGATION TO CLOSE. The obligation of
Holdings to close the transaction as described in Article I of this Agreement
shall be subject to the fulfillment, on or before the Closing, of each of the
following conditions:
(a) The representations and warranties of the Company set
forth in Section 2 of this Agreement shall be true on and as of the Closing with
the same effect as though such representations and warranties had been made on
and as of the date of the Closing except for representations and warranties
expressly limited to a specific date;
6
9
(b) The Company shall have performed and complied with all
agreements, obligations, and conditions contained in this Agreement that are
required to be performed or complied with by it on or before the Closing;
(c) Holdings shall have received from Johnson, Blakely, Pope,
Bokor, ▇▇▇▇▇▇ & ▇▇▇▇▇, P.A. counsel for the Company, an opinion or opinions,
dated the date of the Closing, in form and substance satisfactory to counsel of
Holdings, substantially to the effect that:
(i) The Company has been duly incorporated and organized
and is a validly existing corporation in good standing under the laws of the
State of Florida and has the requisite corporate power to own its property and
assets and to conduct its business as it is currently being conducted;
(ii) This Agreement has been duly and validly authorized,
executed and delivered by the Company and constitutes a legally, valid and
binding obligation of the Company, enforceable in accordance with its terms,
subject to bankruptcy, insolvency, preferential transfer, reorganization,
moratorium and similar laws or general applicability relating to or affecting
creditors' rights and to general equity principles and to the extent any
indemnification provisions contained thereon may be limited by applicable
federal or state law;
(iii) The Common Stock to be issued pursuant to the
Agreement has been duly authorized and upon receipt of the Purchase Price will
be validly issued, fully paid and non-assessable Common Stock of the Company and
free and clear of any liens, claims and encumbrances on the party of the
Company;
(iv) The certificates representing the Common
Stock are in due and proper form and have been validly executed;
(v) Subject in part to the truth and accuracy
of the representations and warranties set forth in this Agreement, the offer and
sale of the Common Stock is exempt from the registration requirements of the
Securities Act.
5.2 CONDITIONS TO THE COMPANY'S OBLIGATION TO CLOSE. The
obligation of the Company to close shall be subject to the fulfillment, on or
before the Closing, of the following condition:
(a) The representations and warranties of Holdings set forth
in Section III of this Agreement shall be true on and as of the Closing with the
same effect as though such representations and warranties had been made on and
as of the date of the Closing.
(b) Holdings shall have performed and complied with all
agreements, obligations, and conditions contained in this Agreement, including
the payment of the Purchase Price by surrendering the Warrants, that are
required to be performed or complied with by it on or before the Closing.
7
10
ARTICLE VI
MISCELLANEOUS
6.1 PUBLIC ANNOUNCEMENT. Each party hereto shall furnish a copy of any
announcement to the other in advance of the issuance of any press release
relating to the matters set forth in this Agreement.
6.2 ASSIGNMENT OR TRANSFER. Neither the Company nor Holdings shall
assign its rights or transfer its obligations under this Agreement in whole or
in part without first obtaining the written consent of the other party hereto.
Notwithstanding the foregoing, Holdings may, without the consent of the Company,
and subject to the two (2) year lock-up, assign its rights hereunder, to any
affiliate of Holdings or any trust, partnership, corporation or other entity
established for the benefit of Holdings or a member of his immediate family (a
"Family Trust"). For the purpose of this Section 6.2, the term "affiliate" shall
mean any person or entity directly or indirectly controlling or controlled by or
under direct or indirect common control with Holdings.
6.3 GOVERNING LAW. This Agreement shall be construe in accordance
with and governed by the laws of the State of Florida.
6.4 BENEFIT. This Agreement shall be binding upon Holdings and the
Company, and their respective administrators, legal representatives, successors,
and permitted assigns. Nothing in this Agreement, expressed or implied, is
intended to confer upon any person, other than the parties hereto, any rights or
remedies under or by reason of this Agreement (except as provided in Section 6.2
hereof).
6.5 SPECIFIC PERFORMANCE.
(a) The parties to this Agreement hereby agree that an award
of damages alone is inadequate to remedy a breach of the terms of this Agreement
and that specific performance, injunctive relief or other equitable remedy is
the only way by which the intent of this Agreement may be adequately realized
upon breach by one or more of the parties hereto. Such remedy shall, however, be
cumulative and not exclusive, and shall be in addition to any other remedy which
the parties may have.
(b) In furtherance of and not in limitation of paragraph ___
of this Section ___, should any dispute arise concerning a sale, encumbrance,
pledge, transfer, hypothecation, assignment or other disposition of any of the
Common Stock or Option Shares which is alleged to contravene the provisions of
this Agreement, an injunction may be issued restraining any such transaction
pending the determination of such controversy.
6.6 WAIVER. Failure by either party to insist upon strict compliance
with any of the terms, covenants or conditions of this Agreement shall not be
deemed a waiver of such terms, covenants or conditions, nor shall any waiver or
relinquishment of any right or power hereunder
8
11
at any one time or more times be deemed a waiver or relinquishment of such right
or power at any other time or times.
6.7 NOTICE. All notices, demands, requests, offers, acceptances,
deliveries or other communications required or permitted to be given or
delivered under this Agreement, shall be in writing and shall be deemed
delivered when served personally, via courier, via facsimile, or on the third
business day after being deposited in the United States mail, certified or
registered mail, postage prepaid, addressed as follows:
If to Company:
Innova/Pure Water, Inc.
▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
With copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Johnson, Blakely, Pope, Bokor, ▇▇▇▇▇▇ & ▇▇▇▇▇, P.A.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to Holdings:
Innova Holdings LLC
▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
With copy to:
------------------------------------
------------------------------------
------------------------------------
------------------------------------
Each party to this Agreement may from time to time change the address
to which notices are to be delivered or mailed by giving notice of such change
to the other party as provided herein.
6.8 SURVIVAL OF TERMS. All of the terms, conditions, warranties and
representations contained in this Agreement shall survive the execution hereof
and the Closing. This Agreement supersedes the Warrant Purchase Agreement which
shall be considered terminated upon the Closing.
9
12
6.9 ENTIRE AGREEMENT. This Agreement represents the entire contract
between the parties hereto with respect to the subject matter hereof and may be
amended only by a writing executed by all of the parties hereto. This Agreement
supersedes all offers, proposals, statements, representations and agreements
with respect to the subject matter hereof, including but not limited to the
Warrant Purchase Agreement.
6.10 SEVERABILITY. The invalidity or unenforceability of any provision
of this Agreement shall in no way affect the validity or enforceability of any
other provision hereof.
6.11 HEADINGS. The headings to the sections of this Agreement are used
for reference only and are not to be construed as limiting or extending the
provisions hereof.
6.12 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which together shall be considered an original but all of
which shall constitute the agreement by and among the parties.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
INNOVA HOLDINGS, LLC
By: /s/ ▇▇▇ ??????
------------------------
Title: Managing Member
--------------------
INNOVA/PURE WATER, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇
------------------------
Title: President & CEO
--------------------
10
