STOCK PURCHASE AGREEMENT
This Agreement made as of this 7th date of November, 1983 by and
between MAS, Inc, .(herein called "Seller"), and .Xxxxxx Xxxxx, and Xxxxxx
Xxxxxxx, Inc., a corporation in formation to be 100% owned by Xxxxxx Xxxxx
(herein called "Buyer").
WITNESSETH: Seller owns and desires to sell to Buyer certain shares of
the common stock of Sports Arenas, Inc., (herein called "Sports") and Buyer is
willing to purchase said certain shares of the common stock of Sports on the
terms and conditions herein provided. Accordingly, Seller and Buyer do covenant,
represent, warrant and agree as follows:
1. SALE OF SHARES
Upon the terms and subject to the conditions set forth in this agreement,
Seller shall sell to Buyer and Buyer shall purchase from Seller 21,808,267
shares of common stock of Sports, subject to adjustments herein described.
2. PURCHASE PRICE
The purchase price to be paid by Buyer for said shares of common stock of
Sports shall be SIX MILLION (S6,000,000.00 ) DOLLARS, or 50% of any and all
dividends including without limitation liquidation dividends declared and paid
by Sports on the certain shares of stock of Sports subject to the purchase and
sale described herein, whichever is greater, and subject to adjustments herein
described. The purchase price will be deemed to include interest:
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3. PAYMENT
3.1 Purchase Price. The purchase price payable hereunder shall be paid by
Buyer to Seller as follows:
Buyer may pay all or any part of $6,000,000 at any time prior to November 7,
2003; but Buyer shall pay 50% of any and all dividends including without
limitation liquidation dividends declared and paid by Sports on the certain
shares of stock of Sports from the date hereof until November 7, 2003 subject to
the purchase and sale described herein. Buyer shall deliver or cause to be
delivered all of the issued and outstanding shares, common, preferred or
otherwise of Xxxxxx Xxxxxxx, Inc. to secure Buyer's obligation hereunder.
3.2. Adjusted Shares. In the event that Seller is unable to deliver
21,808,267 shares of common stock of Sports free and clear of all encumbrances,
Buyer shall accept such shares of said common stock of Sports as Seller is able
to deliver free and clear of all encumbrances (herein called "adjusted shares")
provided however, that the adjustment contemplated herein shall not exceed
2,000,000 shares of said common stock of Sports; and provided, further, that
Seller shall deliver said adjusted shares as soon as is reasonably practicable
after release of such adjusted shares from encumbrance; and provided, further,
that Buyer shall have a junior security interest in such adjusted shares. 3.3.
Adjusted purchase price. The purchase price described in this Section 3 may be
adjusted as follows:
(a) in the event that Buyer pays $3,500,000 to Seller within two years
of the execution hereof, the purchase price of $6,000,000 shall be
discounted by $2,500,000 and shall be deemed fully paid.
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(b) in the event that Buyer does not pay $3,500,000 within two years
of the execution hereof, but does pay $4.,000,000 to Seller within three
years of the execution hereof, the purchase price of $6,000,000 shall be
discounted by $2,000,000 and shall be deemed fully paid; and
(c) in the event that Seller does not pay $3,500,000 within two years
of the execution hereof, or $4,000,000 within three years of the execution
hereof, but does pay $4,500,000 within four years of the execution hereof,
the purchase price of $6,000,000 shall be discounted by $1,500,000, and
shall be deemed fully paid.
The parties intend that these adjustments to purchase price shall not
obligate Buyer to the terms thereof, but that said adjustments shall be an
incentive to Buyer to liquidate Buyer's obligations as soon as practicable.
3.4. Release. Upon each payment by Buyer of $1,000,000, whether in lump sum
or in the aggregate, pursuant to the agreement, Seller shall release one sixth
(1/6) of the security to be delivered by Buyer hereunder within thirty (30) days
of such payment. In the event that Buyer does not qualify for the benefits of
adjusted purchase price of Section 3.3 hereof, but it is able to obtain release
of all security securing Seller's obligations hereunder, Seller shall continue
to pay dividends as provided in this purchase and sale.
3.5. Default. The failure by Buyer to make any payment due to Seller
pursuant to this Section 3 within 30 days of declaration and payment of
dividends by Sports, on or before November 7, 2003, or the failure by Buyer to
deliver security to Seller in accordance with this Section 3, shall constitute a
default by Buyer, and upon such default (whether by reason of the nonpayment of
money or the nondelivery of security), Seller shall have the right, at its
election and without notice, to demand payment for any and all sums due and
unpaid up to the sum of $6,000,000. The obligation of Buyer in respect of its
undelivered security shall be evidenced solely by-this contract.
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4. REPRESENTATIONS AND WARRANTIES OF SELLER Seller represents; warrants;
and agrees as follows:
4.1. Corporate.
(a) Seller is the owner of the shares of common stock to be sold under
this agreement, free and clear of all encumbrances, except as described
herein, with complete and unrestricted power to sell and deliver the same;
(b) Seller is a corporation, duly organized, validly existing and in
good standing under the laws of the state of its incorporation.
(c) Seller has the power to own its property and carry on its business
as and where such are now conducted.
4.2. Seller makes no representation or warranty, express or implied
regarding the financial condition; commitments, contractual or otherwise,
litigation or adverse facts affecting; or insurance coverage of or on behalf of;
or inventory held or controlled by; or patents and trademarks relating to; or
disclosures made by Sports. Seller has provided Buyer with copies of Sports'
Form 10-K for the years 1981, 1982, 1983; however, provision by Seller of such
documents shall not constitute a representation or warranty by Seller to Buyer
or any other person or entity which may claim rights hereunder.
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4.3. Seller shall not institute, bring or commence any action at law or in
equity against Xxxxxx Xxxxx for any damages that Seller may sustain from and on
account of any default hereunder, except as may be sustained by reason of
nondelivery of security; provided, however, that Seller does not waive any
rights against Xxxxxx Xxxxxxx, Inc., and specifically preserves all rights
against Xxxxxx Xxxxxxx, Inc.
5. REPRESENTATIONS AND WARRANTIES BY BUYER
Buyer represents and warrants as follows:
5.1. Corporate. Buyer shall be a corporation duly organized, validly
existing and in good standing under the laws of the state of Nevada.
5.2. Buyer has received and reviewed copies of Sports' Form 10-K for the
years 1981, 1982 and 1983; and is satisfied as to the accuracy of disclosures
made therein.
5.3. Authorization for Agreement. The execution and performance of this
agreement shall have been authorized by the board of directors of Buyer.
5.4. Validity of Security. The security to be delivered to Seller by Buyer
shall have been duly authorized and valid.
5.5. Xxxxxx Xxxxxxx, Inc. shall not change, modify or amend its articles of
incorporation, by-laws, corporate or stock structure at an time during the term
hereof without the prior written consent of the Seller
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5.6. Buyer shall use its best efforts to expand the business and maximize
the profits of Sports.
6. CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS
Each and every obligation of Buyer to be performed shall be subject to the
satisfaction of the following conditions:
6.1. Representations and Warranties True Date. The representations and
warranties made by Seller in this agreement shall be substantially accurate in
all material respects on and as of the date of delivery.
6.2. Compliance with Agreement. Seller shall have performed and
complied with all obligations under this agreement which are to be performed or
complied with prior to or on the date of delivery.
7. CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS
Each and every obligation of Seller to be performed on the closing date shall be
subject to the satisfaction prior thereto of the following conditions:
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7.1 Representations and Warranties True. Buyer's representations and
warranties contained in this agreement shall be true at and as of the date of
delivery.
7.2. Compliance with Agreement. Buyer shall have performed and complied
with its obligations under this agreement which are to be performed with its
obligations under this agreement which are to be performed or complied with by
it prior to or on the date of delivery.
8. DATE OF DELIVERY
The sales and purchases provided for in this agreement, shall take place as soon
as is reasonably practicable after the execution hereof, but not later. than
seven days after the execution hereof at a time and place as Buyer and Seller
may mutually agree.
8.1. Deliveries by Seller at Date of Delivery. On the date of delivery
Seller shall deliver to Buyer:
(a) Certificates for the shares of common stock of Sports to be sold
by Seller hereunder, properly endorsed by Seller with all requisite stock
transfer stamps attached thereto and accompanied by such powers of attorney
and other documents as may be necessary or convenient to permit Buyer to
effect the transfer of the shares to be purchased hereunder.
(b) A certificate executed by Seller and certifying in such detail as
Buyer may specify that the conditions set forth in Section 6 have been
fulfilled.
8.2. Deliveries by Buyer at the Date of Delivery. On the date of delivery
Buyer shall deliver to Seller:
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(a) Certified copies of the resolutions of the board of the board of
directors of Buyer authorizing the execution and performance of this
agreement and authorizing or ratifying the acts of Buyer's officers and
employees in carrying out the terms and provisions hereof.
(b) Buyer's security in accordance with the provisions of Section 3 of
this Agreement.
9. PAYMENT OF LEGAL AND AUDIT FEES
Each party hereto shall bear his, her or its legal and auditing expenses.
10. SURVIVAL AND EFFECT OF WARRANTIES, REPRESENTATIONS AND COVENANTS.
All statements contained in any certificate, instrument or document delivered by
or on behalf of any of the parties pursuant to this agreement and the
transactions contemplated hereby shall be deemed representations and warranties
by the, respective parties hereunder and shall survive for one (1) year
following the date of delivery.
11. DELIVERY OF ADDITIONAL DOCUMENTS
Following the closing, Seller will from time to time, upon reasonably
request of Buyer, execute, acknowledge and deliver in proper form any
instruments, and do such further acts as may be necessary or desirable for
perfecting in Buyer title to the common stock of Sports to be sold and purchased
pursuant to this agreement.
12. ORAL MODIFICATION AND TERMINATION
This agreement may not be modified or terminated orally.
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13. ASSIGNMENT
This agreement or any right hereunder shall not be assigned by Seller or by
Buyer.
14. AMENDMENT AND MODIFICATION
This agreement may be amended, modified and supplemented in such manner as may
be agreed upon in writing by Seller and Buyer pursuant to authorization of their
respective boards of directors.
15. TERMINATION AND ABANDONMENT
This agreement may be terminated and the sale and purchase provided for by this
agreement may be abandoned without liability on the part of either party to the
other, but not later than the date of delivery.
(a) By mutual consent of Buyer and Seller;
(b) By Buyer if any of the conditions provided for in Section 6 of the
agreement have not been met and have not been waived by Buyer in writing;
(c) By Seller if any conditions of Section 7 of this agreement have
not been met and have not been waived in writing by Seller.
In the event of termination and abandonment by either party as above provided in
this section 15, written notice shall forthwith be given to the other party, and
each party shall pay its own expenses incident to preparation for the
consummation of this agreement and the transactions contemplated hereunder.
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In the event that this agreement is terminated pursuant to subparagraphs (a) or
(b) of this Section 15, neither party hereto shall have any other or further
rights or claims against the other.
17. NOTICES
All notices requests, demands and other communications hereunder shall be deemed
to have been duly given, if delivered by hand or mailed, certified or registered
mail with postage prepaid:
(a) If to the Seller (1) to MAS, Inc., 000 Xxxxx Xx., Xx. Xxxxx, XX 00000
(address), and (2) to Seller at such address as Seller shall furnish
to Buyer in writing; or
(b) If to Buyer, to Xxxxxx Xxxxxxx, Inc., 000 X. Xxxxxxx Xxx, #000, Xx.
Xxxxx, XX (address) attention of secretary, or to such other person
and place as Buyer shall furnish to sellers in writing.
18. FEES
Seller and Buyer represent and warrant to each other that the negotiations
relative to this agreement and the transactions contemplated hereby have been
carried on by each directly with the other and in such manner as not to give
rise to any valid claims against Seller or any of the parties hereto for a
brokerage commission or finder's fee.
19. SALES TAX
It is agreed that any tax imposed upon the sale and transfer of the shares to be
sold hereunder shall be borne by Buyer.
20. ENTIRE AGREEMENT
This instrument embodies the entire agreement between the parties hereto with
respect to the transactions contemplated herein, and there have been and are not
agreements, representations or warranties between the parties other than those
set forth or provided for herein.
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21. COUNTERPARTS
This agreement may be executed simultaneously 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.
22. HEADINGS
The headings in the sections of this agreement are inserted for convenience only
and shall not constitute a part hereof.
23. INVESTMENT REPRESENTATION
Buyer hereby represents and warrants that that the shares of Sports to be
received by it pursuant to the terms of this agreement will be acquired for
investment and not with a view to the distribution thereof. Buyer shall give a
written representation to that effect prior to each delivery of shares of Sports
to them hereunder. To implement the foregoing, the following legend shall be
placed on all certificates of Sports common stock delivered hereunder:
"The shares of common stock of Sports Arenas, Inc., represented by
this certificate have not been registered with the Securities and
Exchange Commission and are therefore subject to an agreement
prohibiting their transfer, a copy of which is on file at the office
of the Secretary of Sports, X.X. Xxx 0000, Xxxxx Xxxxx, XX 00000."
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
duly executed as of the day and year first above written.
MAS, INC.
Seller:
/S/ XXXXXX X. XXXXXXX
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Xxxxxx X. Xxxxxxx, President
Buyer:
/s/ XXXXXX X. XXXXX
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XXXXXX XXXXXXX, INC. A CORPORATION IN
FORMATION BY XXXXXX X. XXXXX
By: /S/ XXXXXX X. XXXXX
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Xxxxxx X. Xxxxx, President
