1
Exhibit 8.3
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement ("Agreement") is dated this 15th day of
October 1999, and is made by and among ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇ who are all of the shareholders of Paradigm
Manufacturing, Inc., a Florida corporation (hereinafter collectively referred to
as the "Seller"), Paradigm Manufacturing, Inc. ("Paradigm") and SATX, Inc., a
Nevada corporation ("Buyer").
The Seller currently own all of the issued and outstanding shares of
the common stock of Paradigm as follows:
▇▇▇▇▇▇ ▇▇▇▇▇ 152,124 shares
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 100,000 shares
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 52,124 shares
▇▇▇▇▇▇▇ ▇▇▇▇▇ 104,248 shares
The Seller desires to sell and the Buyer desires to purchase, 408,496
shares of Paradigm stock ("Stock") pursuant to the terms of this Agreement as
hereinafter set forth.
It is the intention of the parties hereto that, upon consummation of
the purchase and sale of the Stock pursuant to this Agreement, Buyer shall own
all of the outstanding shares of capital stock of Paradigm pursuant to a "tax
free reorganization" pursuant to Section 368(a) of the Internal Revenue Code
("IRC").
1. SALE AND TRANSFER OF STOCK
1.1 Purchase and Sale. On the Closing Date, Seller shall sell, issue,
transfer, deliver and convey to Buyer the Stock, and Buyer shall purchase the
Stock in exchange for up to 2,300,000 unregistered and restricted shares of the
common stock of Buyer ("Purchase Price Stock"). On the Closing Date, Buyer shall
deliver to Seller 1,000,000 shares of its common stock pursuant to Section 1.2
below. The remaining Purchase Price Stock, if any, shall be delivered to Seller
no later than 60 days after the first anniversary of the Closing Date in
accordance with Schedule 1.1. The Purchase Price Stock issued by the Buyer will
not be registered under the Securities Act of 1933 and will be "restricted
shares" within the meaning of Rule 144 under the 1933 Securities Act. The
certificates evidencing the shares issued to Seller will bear restrictive
legends as appropriate and will be subject to appropriate stop transfer orders
to the respective transfer agents. The Buyer shall be under no obligation to
register the shares under the 1933 Securities Act or any state securities law
for resale by the Seller.
2
1.2 Share Certificates. At the Closing Date, the Seller shall deliver
to Buyer the share certificates representing ownership of the Stock, free and
clear of all liens and encumbrances issued in the name of Buyer and Buyer shall
deliver to Seller 1,000,000 shares of the Purchase Price Stock as follows:
▇▇▇▇▇▇▇ ▇▇▇▇▇ 372,400 shares
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 244,800 shares
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 127,600 shares
▇▇▇▇▇▇▇ ▇▇▇▇▇ 255,200 shares
2. REPRESENTATIONS AND WARRANTIES BY SELLER
AND
PARADIGM AND ITS SUBSIDIARY
Paradigm, on behalf of itself and its wholly owned subsidiary, Creative
Engineering, Inc., a Florida corporation and the Seller in their individual
capacities and as officers and directors of Paradigm hereby represent and
warrant to the Buyer, as of the Closing Date that:
2.1 Organization and Good Standing. Paradigm and its subsidiary are "C"
corporations duly organized, validly existing and in good standing under the
laws of the State of Florida, and have all requisite corporate power and
authority to conduct business as now operated. Further, Paradigm and its
subsidiary are duly qualified to do business in each jurisdiction in which the
nature of its business or character of its properties makes qualification
necessary.
2.2 Subsidiaries. Other than sole ownership of Creative Engineering,
Inc., Paradigm does not own, directly or indirectly, an equity or debt interest
in any corporation, partnership, business, trust, joint venture, association or
other entity.
2.3 Capitalization. Paradigm is authorized to issue 1,000,000 shares of
common stock, of which 200,000 shares are issued and outstanding. At the Closing
Date, there will be no other classes of stock authorized or outstanding. All of
the issued and outstanding shares of common stock are duly authorized, validly
issued, fully paid and nonassessable, with no personal liability attaching to
the ownership thereof. Further, there are no outstanding options, warrants
and/or agreements obligating Seller to issue stock to any individual or entity.
2.4 Financial Statements. Paradigm and its subsidiary shall cause to be
delivered to Buyer certain financial statements for calendar years 1996, 1997
and 1998 and a balance sheet dated June 30, 1999 which have been prepared by
Paradigm's Certified Public Accountant. The financial statements and balance
sheet are in accordance with the books and records of Seller, prepared in
accordance with generally accepted accounting principles consistently applied,
are in all material respects true, correct and complete and reflect all
activities of Seller as of the dates thereof.
3
2.5 Corporate Records. The minute books and stock ledgers of Paradigm
and its subsidiary shall be made available to buyer to review and contain
complete and accurate records of all meeting and other corporate actions taken
by the Board of Directors and the shareholders of Paradigm and its subsidiary.
All actions reflected in said books were duly and validly taken in compliance
with the laws of applicable jurisdictions.
2.6 Stock Options and Rights. There are no outstanding options,
warrants, agreements or other rights (i) obligating Paradigm or its subsidiary
to issue, (ii) permitting others to purchase or convert any obligation into, or
(iii) requiring Paradigm to purchase, redeem or retire securities of Paradigm or
its subsidiary.
2.7, Absence of Undisclosed Liabilities. At the Closing Date, Paradigm
will have no liabilities or obligations of any nature, except those shown on the
Financial Statements, whether accrued, absolute, contingent or otherwise, except
liabilities or obligations arising out of customary transactions in the ordinary
course of business, none of which individually or in the aggregate, would have a
material adverse effect on the financial condition of the business, prospects,
assets, property or results of operations of Paradigm and/or its subsidiary.
2.8 Accounts Receivable. All of the accounts receivable reflected on
the Financial Statements and all amounts which have arisen since the date of the
Financial Statements are valid and enforceable claims, and the goods and
services sold and delivered which gave rise to such accounts were sold and
delivered in conformity with the applicable purchase orders, agreements and
specifications.
2.9 Title to Personal Properties and Assets. Paradigm and its
subsidiary has good title to all of its personal properties, accounts
receivable, assets, fixtures, machinery, tools and equipment (collectively
"Assets"). None of the Assets are subject to any lien, encumbrance, charge,
security interest or restriction except for those Assets set forth on Schedule
2.9.
2.10 Contracts and Agreements. Any and all contracts, leases and all
purchase orders with vendors for goods and services, or any and all other
obligations, whether written or oral, to which Paradigm, as of the Closing Date
is bound are set forth in Schedule 2.10. All of the agreements and or
obligations set forth therein are in full force and effect and are binding and
enforceable obligations of the parties thereto in accordance with their
respective terms. There are, and as of the Closing Date will be, no liabilities
arising from any breach or default of any provision of any such contract or
agreement by any party thereto.
2.11 Benefit Plans and Employees. As of the Closing Date, Paradigm
shall have no employees, employee benefit plan or any labor or employment
agreements except for those agreements previously disclosed to Buyer during the
course of the due diligence
4
investigation and set forth in Schedule 2.11. The names, positions, and rates of
compensation of all employees is set forth on Schedule 2.11.
2.12 Litigation. There is no suit, action or legal, administrative,
arbitration or other proceeding pending, filed or initiated by or against
Paradigm or its subsidiary or pending or threatened against Paradigm except as
otherwise disclosed in Schedule 2.12. Paradigm, its subsidiary and Seller have
no knowledge of any facts which may give rise to any such suit, arbitration,
claim or proceeding against Paradigm, its officers, directors, employees or
subsidiary.
2.13 Compliance with Law. The business and operation of Paradigm has
been and is being conducted without violation of or in less than full compliance
with all applicable laws, ordinances, rules and regulations of all authorities,
violation of which, individually or in the aggregate, would materially and
adversely affect the business of Paradigm. Paradigm has received no notice of
any violation of any such law, ordinance, rule or regulation from any
governmental authority.
2.14 Intellectual Property. Paradigm shall deliver to Buyer copies of
any and all patents, patent applications, copyrights, trademarks or documents
indicating rights otherwise necessary or beneficial to Paradigm's or its
subsidiary's business. Any and all patents, patent applications, copyrights,
trademarks, or rights otherwise necessary or beneficial to the conduct of
Paradigm's business or that of its subsidiary are in the name of Paradigm and/or
the name of its subsidiary of Paradigm and/or its subsidiary has the right to
utilize same for at least five (5) years.
2.15 Rights to Manufacture. Paradigm and its subsidiary have the means,
rights and information required to have manufactured, process, sell, offer for
sale and use the items and perform the services as presently being manufactured,
processed, offered for sale, sold or used or performed by Paradigm and its
subsidiary.
2.16 Taxes. Paradigm and its subsidiary have duly and timely filed all
federal, state and local tax returns required to be filed since the inception of
Seller and all such returns are complete and correct in all respects. Paradigm
and its subsidiary have duly and timely paid or made adequate provision for the
payment of all taxes, assessments, penalties and interest which have been
incurred or are due and payable.
2.17 Bank Accounts. Paradigm and its subsidiary will provide to Buyer a
complete list showing the name of each bank or other financial institution in
which Paradigm and its subsidiary has an account or safety deposit box together
with a list of all persons authorized to draw thereon or have access thereto.
2.18 Survival of Representations. The representations and warranties of
Paradigm, its subsidiary and the Seller contained in this Agreement shall
survive the
5
consummation of the transaction contemplated herein and any examination on
behalf of the Buyer in accordance with the terms of this Agreement.
2.19 Indemnification. Paradigm, its subsidiary and the Seller shall
indemnify the Buyer with respect to all liabilities of Paradigm and its
subsidiary of any nature, whether accrued, absolute, contingent, or otherwise,
existing at the Closing Date, to the extent not reflected or reserved against in
Paradigm's balance sheet of that date including, without limitation, any tax
liabilities to the extent not so reflected or reserved against, accrued in
respect of, or measured by Paradigm's income up to and including June 30, 1999.
This indemnity shall be joint and several with respect to Seller and shall
include reimbursement for any and all damages, liabilities, losses, costs or
expenses (including attorneys' fees) sustained by Buyer for any reason.
3. REPRESENTATIONS AND WARRANTIES BY BUYER
Buyer represents and warrants to Seller that as of the Closing Date:
3.1 Organization and Good Standing The Buyer is a corporation
organized, validly existing and in good standing under the laws of the State of
Nevada, and has all requisite corporate power and authority to own, lease and
operate their properties and assets and to conduct its business as now
conducted. The Buyer is duly qualified to do business in each jurisdiction in
which the nature of its business or character of its properties makes
qualification necessary.
3.2 Authorization. Buyer is a sophisticated and accredited investor and
has the power and authority to enter into this Agreement.
3.3 Authority of Buyer. The transactions contemplated by this Agreement
have been duly approved by the Board of Directors of Buyer, and this Agreement
has been, and instruments to be executed and delivered under this Agreement by
Buyer to Seller have been duly executed and delivered on behalf of Buyer and are
or will be binding and enforceable agreements in accordance with their terms.
Buyer has full power and lawful authority to consummate the transaction
contemplated herein on the terms and conditions set forth and no permit,
consent, approval, authorization or other order of or filing with any
governmental authority or any other person is required in connection with such
authorization, execution, delivery and consummation.
3.4 Subsidiaries. At the Closing Date, the Buyer will have two
subsidiaries, namely, DebitFone International, Inc., a Florida corporation and
J.F.A. Tech, Inc., a California corporation. The subsidiaries have been duly
organized, are validly existing and in good standing under the laws of their
incorporating jurisdiction.
6
4. CONDITIONS TO OBLIGATIONS OF BUYER
The obligation of Buyer to consummate the transaction set forth herein
is expressly subject to satisfaction on or prior to the Closing Date of each and
every of the following conditions, any of which may be waived in writing by the
Buyer.
4.1 Representations and Warranties. All representations and warranties
by Paradigm, its subsidiary and Seller contained in this Agreement shall be true
and correct in all material respects as of the Closing Date.
4.2 Due Diligence Investigation. Prior to the Closing Date, Buyer shall
conduct a customary due diligence investigation and in its sole discretion shall
elect to go forward or cancel the transaction after the completion of the
investigation.
4.3 No Material Change. There shall have been no material change in the
financial condition, business, prospects, assets, properties, results of
operations or capitalization of Paradigm and its subsidiary from that reflected
in the financial statements provided by Paradigm to Buyer.
4.4 Employment Agreements. ▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall each
have entered into employment contracts with Buyer that are mutually acceptable
to the respective individuals and Buyer.
4.5 Loans. All loans by Seller or any of Paradigm's or its subsidiary's
officers, directors or employees to Paradigm shall have been repaid in full.
4.6 Minute Books. On or prior to the Closing Date, the Corporate
Minute Books, Articles of Incorporation, Bylaws, Corporate Seal, and Stock
Transfer Books of Paradigm and its subsidiary shall have been delivered to buyer
for review.
4.7 Continuation of Contracts. Buyer's determination, to its reasonable
satisfaction, that any material contract, agreement, lease, license, and other
instrument shall as a result of the consummation of the transactions specified
herein or otherwise, not be canceled or materially impaired or modified, but
shall remain in full force and effect. In addition, consent of any party to any
such material contract, agreement, lease, license or other agreement to the
assumption thereof by Buyer shall have been obtained, if so required.
4.8 Approval of Documentation. The form and substance of all certified
instruments of conveyance, assignments, and other documents to be delivered to
Buyer hereunder shall be satisfactory in all respects to Buyer and its counsel.
5. CONDITIONS TO OBLIGATIONS OF SELLER
The obligations of Seller to consummate the transaction set forth
herein is expressly subject to satisfaction on or prior to the Closing Date of
each and every of the following conditions, any of which may be waived in
writing by Seller.
7
5.1 Representations and Warranties of Buyer. Except as otherwise
permitted by this Agreement, all representations and warranties of Buyer
contained in this Agreement shall be true and correct in all material respects
on the Closing Date.
5.2 Approval of Documentation. The form and substance of all certified
instruments of conveyance, assignments and other documents to be delivered to
Seller hereunder shall be satisfactory in all reasonable respects to Seller and
their counsel.
6. CLOSING DATE AND TRANSFER DATE
6.01 Closing Date. The Closing Date shall be October ____ 1999 at 10:00
a.m. at the offices of the Buyer located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇-▇,
▇▇▇▇▇, ▇▇▇▇▇▇▇, or such other date, time and place as the parties may agree upon
in writing.
6.02 Obligations of Seller. At the Closing, the Seller shall deliver or
cause to be delivered to Buyer:
(a) Share certificates representing the Stock, which is paid for in
full as of such date, free and clear of all liens and encumbrances, dated as of
the Closing Date.
(b) The Corporate Minute Books, Articles of Incorporation, Bylaws,
Corporate Seal and Stock Transfer Books of Paradigm and its subsidiary.
(c) Such other documents, instruments and agreements as may be
required to consummate the transactions described herein.
6.03 Obligations of Buyer. At the Closing, Buyer shall deliver or cause
to be delivered to Seller:
(a) Share certificates representing 1,000,000 shares of the Purchase
Price Stock in accordance with Section 1.1 and Section 1.2 above.
(b) Such other documents, instruments and agreements as may be required
to consummate the transactions described herein.
7. CONFIDENTIALITY AND NONCOMPETITION
7.1 Confidentiality. Except as required in the ordinary course of
Buyer's business, each party hereto shall hold in confidence and not disclose to
any person or entity without the express written authorization of Buyer, either
during the term of this Agreement or any time thereafter, the Proprietary
Technology, the names or addresses of any of Buyers customers; Buyers past or
prospective dealings with its customers, the parties, dates or terms of any of
Buyer's contracts, any information, trade secrets, systems, processes or
business methods, or any secret or confidential matter relating to the customers
or the business affairs of Buyer or any companies affiliated with Buyer. The
parties acknowledge that they each may have access, to confidential information,
the ownership and confidential status of which are highly important to Buyer and
each agrees
8
to comply with all known policies and procedures of Buyer for the protection of
said confidential information. The term "confidential information" as used in
this Agreement means (1) proprietary information of Buyer including, but not
limited to, the Proprietary Technology, patents, patents pending, formulas,
procedures, processes, materials, client lists and vendor lists (2) information
marked or designated by Buyer as confidential (3) information whether or not in
written form which is known by any party hereto to be treated by Buyer as
confidential and (4) information provided to any party hereto by third parties
which Buyer is obligated to keep confidential. Each party hereto agrees as
follows: (a) that he will not copy, transmit, reproduce, summarize, quote or
make any commercial or other use whatsoever of Buyer's confidential information
except as may be necessary in the performance of his duties for Buyer; (b) that
he will exercise the highest degree of care in safeguarding Buyer's confidential
information against loss, theft or other inadvertent disclosure and agree
generally to take all steps necessary to ensure the maintenance of
confidentiality; (c) upon termination of his employment, or other relationship
with Buyer, or as otherwise requested by Buyer, will deliver promptly to Buyer
all of Buyees confidential information in whatever form that may be in their
possession or under their control; (d) each party hereto agrees not to disclose
Buyer's confidential information directly or indirectly under any circumstances
or by any means to any third person without the express written consent of
Buyer.
7.2 Non-Competition. Each party hereto shall not, without the prior
written consent of Buyer, compete with Buyer, its subsidiaries, successors or
assigns, either directly or indirectly, as an owner, member, partner, employee,
officer, director or agent of any kind of any sole proprietorship, association,
limited liability company, partnership, corporation or any other entity. For the
purposes of this Agreement "compete" and "competition" and "competitor" shall
refer to the development, design, manufacture or wholesale distribution of
remote wireless switching or paging or of any product marketed by DebitFone
International or any of Buyer's current or future subsidiaries. Should any term
or condition of these covenants against competition be found to be unreasonable
or excessive by any court of competent jurisdiction, the parties agree to accept
as binding in lieu thereof any lesser restrictions which said court may deem
reasonable. The parties hereto recognize that no adequate remedy at law exists
in which to enforce the terms and conditions of this Agreement. Therefore, in
the event that any party hereto breaches the confidentiality or covenant
not-to-compete provisions of this Agreement, then Buyer shall be entitled to
injunctive relief prohibiting the continued breaches of the Agreement by such
party.
8. LOANS
8.1 Return of Deposit. Buyer has loaned the sum of $250,000.00 to
Paradigm to be utilized for working capital with $100,000.00 having been
advanced on June 22, 1999 and $150,000.00 having been advanced on June 28, 1999.
Seller and Paradigm agree that should the contemplated transaction not close for
any reason whatsoever, said sums shall immediately be returned to Buyer upon
written demand by Buyer.
9
8.2 Further Loan. Buyer has agreed to loan Paradigm an additional
$250,000 over the next few months to be utilized for working capital should the
transaction contemplated herein be consummated. Buyer has agreed to provide said
sum for working capital as and when needed.
9. MISCELLANEOUS
9.1 Nomination to the Board of Directors. Buyer agrees that at its next
Board of Directors' Meeting following the Closing of this transaction, ▇▇▇▇▇▇
▇▇▇▇▇ will be nominated to fill the vacant seat on the Board of Directors.
9.2 Survival of Provisions. All representations, warranties, covenants
and indemnification provisions in this Agreement, including, but not limited to
Article 2, Article 3 and Article 7 shall be deemed and construed to be
continuing representations, warranties, covenants and indemnifications which
shall survive the Closing Date and the execution and delivery of all instruments
and documents herein provided for and any investigation at any time made by or
on behalf of Buyer.
9.3 Notices. All notices, demands and other communications which are
required or permitted to be given hereunder shall be in writing and shall have
been sufficiently given on the date of personal delivery, or on the third
business day following due deposit in the United States mail at a post office or
mail box, with certification and postal charges prepaid, addressed as follows:
If to Buyer: SATX, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇-▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
If to Seller: Paradigm Manufacturing, Inc.
▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
If to Paradigm: Same as above.
9.4 Severability. If any term, provision, covenant or condition of this
Agreement is held by a court of competent jurisdiction to be invalid or
unenforceable, then the remainder of the provisions shall remain in full force
and effect and shall in no way be affected, impaired or invalidated.
9.5 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida.
10
9.6 Waiver. Waiver of any default or breach of this Agreement or
misrepresentation of any warranty, representation, covenant or obligation
contained herein shall not be construed as a waiver of any subsequent breach,
default or misrepresentation.
9.7 Amendment. This Agreement cannot be modified or amended except by a
writing signed by an authorized officer of the Seller and the Buyer.
9.8 Counterparts. This Agreement may be executed in one or more
counterparts, all of which together shall constitute a single agreement.
9.9 Attorneys' Fees. If any party hereto, including the spouse of
Seller, bring an action as a result of any breach by any other party of its
warranties or representations or such party's failure to fulfill or perform any
of its covenants or obligations hereunder, then in such event, the prevailing
party in any such action shall be entitled to its reasonable attorneys' fees in
addition to any other relief to which it may be entitled.
9.10 Counterparts. This Agreement maybe executed in one or more
counterparts, all of which, together shall constitute a single agreement.
9.11 Section Headings. The various section headings are inserted for
convenience and reference only and shall not affect the meaning or
interpretation of the Agreement or any section thereof.
9.12 Schedules a Part of this Agreement. The schedules attached hereto
are incorporated into this Agreement by reference and are hereby made a part
hereof.
9.13 Construction of Agreement. In determining the meaning of, or
resolving any ambiguity with respect to any word, phrase or provision of this
Agreement, no uncertainty or ambiguity shall be construed or resolved against
any party under any rule of construction, including the party primarily
responsible for the drafting and preparation of this Agreement.
9.14 Expenses. The parties hereto shall each pay their own expenses
incurred in connection with the consummation of the transaction herein
specified, including without limitation, transfer fees, permit fees and fees and
expenses of legal counsel, accountants and other advisors.
9.15 Successors. This Agreement shall be binding upon, and inure to the
benefit of the respective legal representatives, successors, and assigns of the
parties.
9.16 Further Assistance. The parties hereto, including the spouse of
Seller, hereby agree to execute and deliver all such documents and provide such
information and
11
IN WITNESS WHEREOF, the parties have duly executed this Agreement on the date
first above written.
SELLER
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇
PARADIGM MANUFACTURING, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇, President
BUYER
SATX, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, President