Exhibit 10.42
STOCK PURCHASE AGREEMENT
This agreement ("Agreement") is dated April 23, 2003 between Vertical
Ventures Investments, LLC ("Purchaser"), and HiEnergy Technologies, Inc.
("Company").
1. PURCHASE AND SALE. Purchaser agrees to buy and the Company agrees to
sell and issue to Purchaser 700,000 shares of the Company's common stock (the
"Shares") for an aggregate purchase price of approximately $ 249,000 the
"Purchase Price").
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
makes the following representations and warranties to the Purchaser:
(a) Registered Offering. The offer and sale of the Shares have been
registered on a Form 58-2 registration statement, Registration No. 333-101055
("Registration Statement"), which Registration Statement has been declared
effective by the Securities and Exchange Commission (the "Commission") and the
Company has not received notice that the Commission has issued or intends to
issue a stop order with respect to the Registration Statements or that the
Commission otherwise has suspended or withdrawn the effectiveness of the
Registration Statements, either temporarily or permanently, or intends or has
threatened in writing to do so. The Company shall deliver to Purchaser the
prospectus that constitutes a part of the Registration Statements and a
prospectus supplement regarding the sale of the Shares pursuant hereto.
(b) Organization and Qualification. The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware with the requisite corporate power and authority to own and use its
properties and assets and to carry on its business as currently conducted. The
Company is duty qualified to conduct business and is in good standing as a
foreign corporation or other entity in each jurisdiction in which the nature of
the business conducted or property owned by it makes such qualification
necessary.
(c) Authorization. The Company has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by this
Agreement and otherwise to carry out its obligations hereunder. The execution
and delivery of this Agreement by the Company and the consummation of the
transaction contemplated hereby have been duly authorized by all necessary
action on the part of the Company and no further action is required by the
Company or its shareholders for the Company to execute and consummate this
Agreement and the transactions contemplated hereby. This Agreement has been duly
executed by the Company and, when delivered in accordance with the terms hereof,
and assuming the valid execution hereof by the Purchaser, will constitute the
valid and binding obligation of the Company enforceable against the Company in
accordance with its terms, except (a) as such enforceability may he limited by
bankruptcy, insolvency, reorganization or similar laws affecting creditors'
rights generally, (b) as enforceability of any indemnification and contribution
provisions may be limited under the federal and state securities laws and public
policy, and (c) that the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefore may be brought
(d) No Conflicts. The execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated hereby does not and will not: (i) conflict with or violate any
provision of the Company's certificate of incorporation or bylaws (each as
amended through the date hereof), or (ii) conflict with, or constitute a default
(or an event which with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment or acceleration
(with or without notice, lapse of time or both) of, any material agreement or
indebtedness to which the Company is a party or by which any material property
or asset of the Company is bound or affected, or (iii) result in a violation of
any law, rule, regulation, order, judgment, decree or other restriction of any
court, governmental authority or stock market to which the Company or the Common
Stock is subject. No assurance is intended as to the potential effects of the
Company's Series A Preferred Stock Most Favored Nation provision.
(e) Issuance of the Shares. The Shares are duly authorized and, when
issued and paid for in accordance with the terms hereof, will be legally issued,
fully paid and nonassessable, free and clear of all liens and encumbrances
(other than any that are the result of any action or inaction of the Purchaser).
(f) Disclosure. Neither the Company nor any other Person acting on its
behalf has provided the Purchaser or their agents or counsel with any
information that constitutes or may, in the Company's opinion, constitute
material non-public information.
(g) SEC Reports: Financial Statements. The Company has filed all
reports required to be filed by it under the Securities Exchange Act of 1934, as
amended, for the twelve months preceding the date hereof (collectively, "SEC
Reports"). Except as disclosed in the Prospectus, and except as set forth in
changes in subsequent amendments of SEC Reports, as of their respective dates,
the SEC Reports complied in all material respects with the requirements of the
Securities Act and the Exchange Act and the rules a regulations of the
Commission promulgated thereunder, and none of the SEC Reports, when filed,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Except as set forth in changes in subsequent amendments of the
financial statements included in SEC Reports, the financial statements of the
Company included in the SEC Reports comply in all material respects with
applicable accounting requirements and the rules and regulations of the
Commission with respect thereto as in effect at the time of filing. Such
financial statements, as amended, have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis during
the periods involved, except as may be otherwise specified in such financial
statements or the notes thereto, and fairly present in all material respects the
financial position of the Company and its consolidated subsidiaries as of and
for the dates thereof and the results of operations and cash flows for the
periods then ended, subject, in the case of unaudited statements, to normal
year-end audit adjustments.
3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The Purchaser
hereby represents and warrants to the Company as follows:
(a) Organization; Authorization. The Purchaser has been organized and
is in good standing under the laws of the jurisdiction of its formation. The
Purchaser has the requisite right, power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby. Upon the
execution and delivery of this Agreement, and assuming the valid execution
thereof by the Company, this Agreement shall constitute the valid and binding
obligation of the Purchaser, enforceable against the Purchaser in accordance
with its terms, except (a) as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally, (b) as enforceability of any indemnification and contribution
provisions may be limited under the federal and state securities laws and public
policy, and (c) that the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefore
may be brought.
(b) No Conflicts. The execution, delivery and performance of this
Agreement by the Purchaser and the consummation by the Purchaser of the
transactions contemplated hereby does not and will not (1) conflict with or
violate any provision of the Purchaser's or Company's certificate of
incorporation or bylaws (each as amended through the date hereof), or (ii)
conflict with, or constitute a default (or an event which with notice or lapse
of time or both would become a default) under, or give to others any rights of
termination, amendment or acceleration (with or without notice, lapse of time or
both) of, any material agreement or indebtedness to which the Purchaser is a
party or by which any material property or asset of the Purchaser is bound or
affected, or (iii) result in a violation of any order, judgment or decree of any
court to which the Purchaser is subject.
(c) Investment Representation. The Purchaser is not party to any
agreement or arrangement with respect to a disposition of Shares other than this
Agreement. The Purchaser is not registered as a broker-dealer under the Exchange
Act. The Purchaser is purchasing the Shares for the Purchaser's own account, for
investment purposes only and not with a view to distribute or participate in a
distribution thereof; provided that the foregoing representation and warranty is
not an agreement by the Purchaser to hold the Shares for any period of time.
4. PAYMENT. The parties are entering into the Escrow Agreement attached
as Exhibit A, and the Purchaser will wire funds prior to the Closing to the
Escrow Agent. On the Closing Day: (x) the Company will deliver to the Purchaser,
via the Purchaser's DTC Account through the Depository Trust Company DWAC
system, the number Shares set forth in the Purchaser Agreement; and (y) the
Escrow Agent will deliver to the Company an amount in United States dollars
equal to the product of the number of Shares that it is acquiring at the
Closing, multiplied by the Per Share Purchase Price for such Shares, via wire
transfer of immediately available funds to an account designated in writing by
the Company for such purpose. The Closing Day shall be the date of this
Agreement or the first date that the Company can DWAC shares, but not later than
April 25, 2003. The Company will reimburse $10,000 to the Purchaser for such
Purchaser's due diligence and related expenses incurred with connection with the
transactions contemplated hereby. At the Closing, such payments will be withheld
from the Purchase Price payable to the Company by the Purchaser.
5. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party. This Agreement, once executed by a party, may be
delivered to the other party hereto by facsimile transmission of a copy of this
Agreement bearing the signature of the party so delivering this Agreement.
6. ENTIRE AGREEMENT. This Agreement contains the entire understanding
of the parties with respect to the matters covered herein and, except as
specifically set forth herein, neither the Company nor the Purchaser make any
representation, warranty, covenant or undertaking with respect to such matters.
No provision of this Agreement may be amended other than by an instrument in
writing signed by the Company and Purchaser.
7. SEVERABILITY. In the event that any provision of this Agreement
shall be determined to be invalid or unenforceable by any court of competent
jurisdiction, the remainder of this agreement shall not be affected thereby, and
any invalid or unenforceable provision shall be reformed so as to be valid and
enforceable to the full extent permitted by law.
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SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have caused this Stock Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
COMPANY: HIENERGY TECHNOLOGIES, INC.
By: /s/ XXXXXX X. XXXXXXX
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Name: Xxxxxx X. Xxxxxxx
Title: Chairman, Chief Executive Officer and Treasurer
PURCHASER: VERTICAL VENTURES
INVESTMENTS, LLC
By: /s/ X. XXXXXXXXX
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Name: XXXXXX XXXXXXXXX
Title: MANAGER
Address: 000 XXXXX XXX. 0XX XXXXX
XX, XX 00000
